EXHIBIT 10.1
8/20/97
OFFICE/WAREHOUSE
AND MANUFACTURING/ASSEMBLY LEASE
THIS LEASE, made in triplicate, dated, for reference purposes only
August 27th, 1997, by and between F&G Incorporated, a Minnesota corporation
(hereinafter called "Landlord") and Jer-Neen Manufacturing Co., Inc., a
Minnesota corporation (hereinafter called "Tenant", whether singular or plural).
WITNESSETH:
1. PREMISES:
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, that certain space (herein the "Demised Premises") as outlined in red
on Exhibit "A" attached hereto, containing approximately 25,000 square feet
being all of the rentable space within that certain building (herein the
"Building") known as Xxxx Lakes Business Center, 000 Xxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxxx 00000 (Phase II).
2. TERM:
The Term of this Lease shall commence upon the "Commencement Date,"
which shall be late of (i) November 1, 1997, and (ii) 60 days following the date
the Landlord delivers possession of the Demised Premises to Tenant with
Landlord's Work substantially completed in accordance with Exhibits "B" and "C";
provided that if Tenant commences conducting business in any portion of the
Demised Premises prior thereto, the Commencement Date shall be the date Tenant
so commences conducting business. Following the Commencement Date the term of
this lease shall continue for five years and no months plus, if the Commencement
Date is not the first day of a calendar month, the partial calendar month in
which the Commencement Date occurs. Any entry by Tenant prior to the
Commencement Date shall be subject to all of the terms and conditions of this
Lease other than the obligation to pay any rent.
3. RENT:
Tenant agrees to pay Landlord as rent for the Demised Premises the
annual sum of One Hundred Two Thousand Five Hundred and No/100 dollars
($102,500.00) payable in monthly installments of Eight Thousand Five Hundred
Forty One and 67/100 Dollars ($8,541.67), each in advance on the first day of
each and every month of said Term, without deduction or offset, at the office of
Landlord, as Landlord may form time to time designate. The Landlord acknowledges
receipt of the Tenant's check in the amount of $25,416.67, of which $12,708.33
is to be applied toward the base rent and operating costs due with of the term
$4,166.67 is to be applied to the second month's rent under the terms hereof,
and $8,541.67 is to be held as a security deposit for Tenant's compliance with
the terms, covenants and conditions of this Lease.
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4. USE:
Tenant shall use the Demised Premises for any legally permitted use
including without limitation manufacturing and assembly purposes and
office/warehouse purposes and shall not use or permit the Demised Premises to be
used for any other purpose without the prior written consent of Landlord.
Tenant shall not do or permit anything to be done in or about the Demised
Premises or bring or keep anything therein which will in any way increase the
existing or available rate of fire or other insurance upon the Building or any
of its contents or cause cancellation of any insurance policy covering the
Building or any part thereof or any of its contents, but the parties agree that
Tenant's proposed manufacturing, assembly, office and warehouse use shall be
deemed not to violate this provision. Tenant shall not do or permit anything to
be done in or about the Demised Premises that will unreasonably obstruct or
interfere with the rights of other tenants or occupants of the Building or
injure them or use or allow the Demised Premises to be used for any unlawful
purpose, nor shall Tenant cause, maintain, or permit any nuisance in, on or
about the Demise Premises, including, without limitation, any unreasonable
noise, vibration or offensive odor or act, whether or not the same be of a
continuous nature, Tenant shall not commit or suffer to be committed any waste
in or upon the Demised Premises.
5. POSSESSION:
If construction of the Demised Premises is not completed at the time of
execution of this Lease, Landlord agrees to complete such construction in
accordance with an Outline Specification and floor plan, which shall be attached
hereto, marked Exhibit "B" and exhibit "C" respectively, and made a part hereof.
The Demised Premises shall be considered to be ready to be delivered to the
Tenant when the Demised Premises are substantially completed and generally
suitable for occupancy. Landlord shall permit Tenant to occupy the Demised
Premises prior to the Commencement Date; such occupancy shall be subject to all
of the provisions of this Lease, but such early possession shall not advance the
expiration date set forth herein. Tenant shall complete the construction of the
Demised Premises using such contractors, subcontractors and suppliers as it
shall select in its sole discretion and in accordance with plans and
specifications selected by it, and Landlord hereby consents to such selections
and to the plans and specifications proposed by Tenant
6. COMPLIANCE WITH LAW:
Tenant shall not use the Demised Premises or permit anything to be done
in or about the Demised Premises which will in any way conflict with any law,
statue, ordinance, or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances, and governmental rules,
regulation, or requirements now in force or which may hereafter be in force
relating to or affecting the condition, use or occupancy of the Demised
Premises, excluding structural changes not related to or affected by Tenant's
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improvements or acts or other matters addressing Tenant's specific use of the
Demised Premises. Landlord warrants to Tenant that the base building provided by
Landlord does not violate any applicable building code, regulation, or ordinance
in effect at the time this Lease is executed. Except as provided in Paragraph 5
hereof and in the preceding sentence of this date of execution hereof, subject
to deficiencies noted within 90 days of the date of acceptance of the Demised
Premises by the Tenant or latent defects.
7. ALTERATIONS AND ADDITIONS:
Except for the initial improvements to the Demised Premises, Tenant
shall not make or suffer to be made any alterations, additions, or improvements
to or of the Demised Premises or any part thereof without the prior written
consent of landlord, except for alterations that do not have a material adverse
effect on the structure or any building system of the Building or alterations
that cost, in the aggregate, less than $10,000, which (in either case) shall not
require the consent of the Landlord. If landlord consents to the making of any
alterations, additions, or improvements to the Demised Premises by Tenant, the
same shall be made by Tenant at Tenant's sole cost and expense, and Tenant
agrees to obtain reasonable security against mechanic's liens. If any mechanic's
lien is filed against the Demise Premises for work done for, or materials
provided to, Tenant, such mechanic's lien shall be discharged by Tenant within
ten days thereafter, at Tenant's sole cost and expense, by the payment thereof
or by making any deposit required by law.
8. REPAIRS AND TERMINAL CONDITION; SERVICES AND UTILITIES:
Tenant shall, at Tenant's sole cost and expense, keep in good order,
condition, and repair the Demised Premises and every part thereof, including,
without limiting the generality of the foregoing, all heating and air
conditioning units, plumbing, electrical, and lighting fixtures and equipment,
fixtures, interior wall and ceilings, floors, windows, doors, plate glass and
skylights located within the Demised Premises, but excluding all other
structural repairs. Landlord shall make all necessary repairs to the outer
walls, roof, downspouts, gutters and structural elements of the Building.
Landlord shall keep the plumbing, sewage, electrical, natural gas and telephone
services to the Building in good order and repair, and shall keep the common
areas of the facility (including without limitation the grounds and parking
areas) in good order and repair. Landlord's obligations hereunder shall include
an obligation to contract for preventative maintenance to heating and air
conditioning equipment with at least four (4) annual inspections including
filter changes, oil and grease work, etc. Tenant may install in the Demised
Premises from time to time fixtures, trade fixtures and personal property. Trade
fixtures and personal property installed in the Demised Premises by Tenant may
be removed from the Demised Premises at any time. Upon the expiration or sooner
termination of this Lease and recovery of possession by Landlord, Tenant shall
leave the Demised Premises, including the leasehold improvements therein, in
broom clean condition, without any obligation to remove or restore any
alterations or to patch, repair or replace finish work, such as wallcoverings,
paint and carpeting, or to patch, repair or cover holes in the walls or floor
left by the removal of Tenant's property (unless such removal caused
extraordinary damage to the Demised Premises), or to restore the same to any
particular condition existing prior thereto. Notwithstanding the foregoing,
Tenant agrees not to remove any lighting fixtures or bulbs from the Demised
Premises. Thirty day prior to the
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end of the term of this Lease, Landlord and Tenant, or their representatives,
shall inspect the Demised Premises and settle any differences in accordance with
the terms of this Lease, and arrange for termination of utilities and adjustment
of Tenant's pro rata share of Operating Expenses, as set forth in Paragraph 34
hereof.
During the Term of this Lease, Landlord shall furnish the following to the
Building and the Demised Premises:
(a) heat, ventilation and air conditioning services to the
Building in good operating condition;
(b) water and sewer service, electrical power and telephone
service to the Building in good operating condition;
(c) maintenance, repair and replacement obligations as set
out in this Lease;
(d) exterior cleaning of the Building, including without
limitation window washing as necessary;
(e) maintenance and repair of the grounds, including without
limitation plowing of the parking area and sidewalks,
trimming of shrubs and trees, watering and cutting of
grass, removal of trash and debris, and all related
maintenance and repairs.
All such services and utilities shall be provided in a manner consistent
with those in first class office/warehouse and manufacturing facilities in the
Minneapolis/St. Xxxx metropolitan area.
9. INSURANCE:
Tenant agrees, at Tenant's expense, to maintain in force continuously
throughout the term of this Lease and any extension thereof (a) public liability
insurance covering all acts of Tenant, its employees, representatives and guests
on or about the Demise Premises, with a combined single limit of liability of
$1,000,000.00 for any one occurrence for bodily injury and property damage, and
(b) "all risk" property insurance covering Tenant's leasehold improvements,
trade fixtures and personal property within the Demised Premises. Such policy or
policies shall name Landlord as an additional insured. Memorandum copies or
certificates of all such insurance policies procured by Tenant shall be
delivered to Landlord, together with satisfactory evidence of payment of
premiums thereon, before the commencement date of the term demised herein or
Tenant's occupancy of the Demised Premises, whichever occurs first. All such
policies shall provide for notice of cancellation to be given in writing to
Landlord at least thirty (30) days before the effective date of such
cancellation. All renewal policies or memorandum copies or certificates thereof
shall be delivered to Landlord at least ten (10) days before the expiration date
of the policy then in force. Landlord agrees to purchase in advance, and to
carry in full force and effect (a) "all risk" property insurance coverage on the
Building, exclusive of Tenant's leasehold improvements, for the full replacement
cost of the Building, and (b) comprehensive general public liability insurance
covering
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the Xxxx Lakes Business Center, in a combined single limit of not less than
$1,000,000, and written on an "occurrence" Lease.
10. WAIVER OF SUBROGATION:
Landlord and Tenant each waives any and all rights of recovery against
the other or against the officers, employees, agents, and representatives of the
other, for loss of or damage to such waiving party or its property or the
property of other under its control, where such loss or damage is insured
against under any insurance policy in force at the time of such loss or damage,
or is insurable pursuant to the provisions of this Lease.
11. INDEMNITY AND HOLD HARMLESS:
Tenant shall indemnify and hold harmless Landlord against and from any
and all claims arising out of Tenant's use of the Demised Premises for the
conduct of its business or from any activity, work or other thing done,
permitted, or suffered by the Tenant in and about the Building, and shall
further indemnify and hold harmless Landlord against and from any and all claims
arising from any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease or arising from any
negligence of Tenant, or any officer, agent, employee, guest, or invitee of
Tenant, and from all costs, attorneys' fees, expenses, and liabilities incurred
in connection with any such claim or any action or proceeding brought thereon,
and in case any action or proceeding be brought against Landlord by reason of
any such claim, Tenant, upon notice from Landlord, shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord, Tenant hereby
assumes all risk of damage to property or injury to persons in, upon, or about
the Demised Premises from any cause other than Landlord's negligence, and Tenant
hereby waives all claims in respect thereof against Landlord, In addition,
Landlord shall indemnify and hold harmless Tenant, or any officer, agent,
employee, guest, or invitee of Tenant, against and from any and all claims
arising out of the use of the common areas in the vicinity of the Building by
persons other than Tenant, or any officer, agent, employee, guest, or invitee of
Tenant, and shall further indemnify and hold harmless Tenant against and from
any and all claims arising from any breach or default in the performance of any
obligation on Landlord's part to be performed under the terms of this Lease or
arising from any negligence of Landlord, or any officer, agent, employee, guest
or invitee of Landlord, and from all cost, attorneys' fees, expenses, and
liabilities incurred in connection with any claim or any action or proceeding
brought thereon.
Landlord, its agents, and its employees, shall not be liable for any damage to
property entrusted to employees of the Building or for loss or damage to any
property by theft or otherwise, or for any injury to or damage to persons or
property resulting from fire, smoke, explosion, falling ceilings or wall
coverings, gas leakage, electrical malfunction or failure, dampness, water or
rain which may leak from any part of the Building or from pipes, appliances, or
plumbing works therein or from the roof, street, or subsurface or from any other
place or resulting from any other cause whatsoever, unless caused by the
negligence of Landlord, its agent, servants, or employees.
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Tenant shall give prompt notice to Landlord in case of fire or accidents in the
Demised Premises or in the Building or defects therein or in the fixtures or
equipment thereof.
12. FIRE OR OTHER CASUALTY:
If the Demised Premises or the Building, or any part thereof is damaged
by fire or other casualty, Landlord shall repair such damage, and this lease
shall remain in full force and effect, except that Tenant shall be entitled to a
proportionate reduction of rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which such damage and the
making of such repairs shall interfere materially with the business carried on
by Tenant in the Demised Premises; provided, however, that if the Demised
Premises or the Building are damaged to such extent that damage cannot, in
either Landlord's or Tenant's reasonable determination, be repaired within
ninety (90) days after the date of such damage, then either landlord or Tenant
my terminate this Lease and the term herein granted by giving the other party
written notice of such termination as of the date specified in such notice,
which date shall be no less than thirty (30) days and not more than sixty (60)
days after the giving of such notice, and the rent payable hereunder, reduced by
the proportionate amount described above, shall be paid up to the date of such
termination. Landlord shall be required to restore the Demised Premises to
substantially the same condition as they were in when possession was first
delivered to Tenant.
13. CONDEMNATION:
If the whole of the Demised Premises is taken under power of eminent
domain or is sold to any entity having the power of eminent domain under the
threat of condemnation, this Lease shall terminate on the day on which the
condemnor or buyer takes possession thereof. In the event of such a taking or
sale of only a part of the Demised Premises which shall substantially interfere
with Tenant's use or occupancy thereof, Tenant my terminate this lease by giving
Landlord written notice thereof not more than ninety (90) days after the
condemnor or buyer takes possession of the part taken or sold. If a partial
taking or sale shall not substantially interfere with Tenant's use or occupancy
of the Demised Premises, or if Tenant does not terminate the lease as
hereinbefore provided, then, on the day on which the condemnor or buyer takes
possession of the part taken or sold, the rent payable hereunder thereafter
accruing shall be reduced in proportion to the value of the part of the Demised
Premises so taken or sold, and Tenant shall, to the extent partial, restore the
remaining portion of the Demised Premises to its condition prior to such partial
taking or sale, at Tenant's expense, anything elsewhere in this lease regarding
repair or replacement to the contrary notwithstanding. Landlord shall reimburse
Tenant for such part of the cost of such restoration which is not in excess of
the award or sales price received by Landlord for such partial taking or sale of
a portion of the Demised Premises. Tenant shall not otherwise by entitled to any
part of the award made or sales price received for such taking or sale of all or
any part of the Demised Premises and will assign, and does hereby assign, any
and all award or sales price received for such taking or sale and will execute
any assignments or other documents necessary to effect the transfer of such
award or sales price to Landlord. The foregoing shall not affect or limit the
right of the Tenant to reimbursements, if any, payable by the
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condemnor or buyer for relocation expenses incurred or paid by the Tenant as the
result of such taking or sale.
14. ASSIGNMENT:
Tenant shall not assign or sublet the Demised Premises without the prior
consent of Landlord, which consent shall not be unreasonably withheld or
delayed. In the event Tenant request that Landlord consent to such assignment of
subletting, Tenant agrees:
a) To pay Landlord $100 toward the costs incurred by
Landlord in connection with the review of such request,
and
b) That neither such assignments or subletting nor
Landlord's consent thereto shall in any way affect,
impair, or terminate Tenant's continuing covenant and
obligation to perform fully the obligations of Tenant
for the full remaining term of this Lease, and in
consideration of Landlord's consent to any such
assignment, Tenant hereby guarantees the performance of
all of the covenants and conditions contained in this
Lease for the full remaining term thereof.
Notwithstanding anything to the contrary in this paragraph 14, Tenant
may assign, sublease or otherwise transfer its rights under this Lease without
Landlord's consent to any entity controlled by, controlling or under common
control with Tenant, or any entity that acquires all or substantially all of the
assets of Tenant. Any such assignment sublease or other transfer shall not in
any way affect, impair or terminate Tenant's covenant and continuing obligation
to perform fully the obligations of Tenant for the full remaining term of this
Lease. In addition, the Tenant shall not be required to obtain Landlord's
consent to any such subleases or transfers of all or any portion of the
Expansion Building (as defined in paragraph 45 of this Lease).
At the time Tenant requests Landlord's consent to any proposed
assignment or subletting, Tenant shall provide Landlord with the terms of such
proposed assignment or subletting.
15. INSPECTION AND DESPLAY BY LANDLORD:
Landlord or its agents may, at any reasonable time or times, inspect any
part of the Demised Premises and make repairs thereon for the protection and
preservation thereof; provided, however, that such right shall not impose upon
Landlord any duty or obligation to make any such repairs. Any inspections and
repairs shall occur only after provision of reasonable and proper notice and
during normal business hours, except for emergency repairs. Tenant reserves the
right to accompany Landlord during any inspections and take other measures to
protect Tenant's trade secrets. Landlord shall have the right during the term of
this Lease to place and maintain on the grounds adjacent to the building
reasonable "For Sale" signs and to exhibit the Demised Premises to prospective
purchasers. Landlord shall have the right during the last three (3) months of
the term of
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this Lease to place and maintain on the grounds adjacent to the building
reasonable "For Rent" signs and to exhibit the Demised Premises to prospective
tenants.
16. INSOLVENCY
Any of the following:
a) Tenant filing a voluntary petition in bankruptcy, or
b) The filing of an involuntary petition in bankruptcy or
the filing of a petition for the appointment of a
receiver against Tenant, either of which is not
dismissed with thirty (30) days after such filing,
shall constitute a breach of this Lease by Tenant.
17. DEFAULTS:
Should Tenant breach any of the terms of this Lease, other than the
covenant to pay rent or the provisions contained in the paragraph captioned
"Insolvency or Assignment", Landlord shall give Tenant notice of such breach and
Tenant shall commence to cure such breach within thirty (30) days following the
giving of such notice and shall diligently proceed with and complete the curing
of such breach within a reasonable time.
If Tenant (a) fails to pay the rent herein reserved within 10 days of the due
date therefor, and said rent remains unpaid for 72 hours after notice form
Landlord to Tenant, (b) commits or suffers any act in violation of the covenants
contained in the paragraph captioned "Insolvency", or (c) breaches any of the
other covenants or obligations of this Lease and fails to cure such breach after
notice as hereinabove provided, Landlord shall have the option to terminate this
Lease or to re-enter and take possession of the Demised Premises without
terminating this Lease. If Landlord elects to re-enter and take possession
without terminating this Lease, Landlord may relet the Demised Premises or any
part thereof upon such terms and conditions as Landlord in its sole discretion
shall deem advisable.
All rent received by Landlord as a result of such reletting shall be
applied as follows:
a) to reimburse landlord for all expenses incurred in
re-entering and reletting;
b) To reimburse Landlord for cost of curing any breach of
this Lease by Tenant, including Landlord's legal fee;
c) To arrearages in rent due hereunder;
d) Any remainder shall be retained by Landlord.
Such re-entry shall not be deemed to relieve Tenant form any covenant contained
in or any obligation arising out of this Lease, provided, however, that Landlord
may itself
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perform or fulfill such covenant or obligation, and Tenant shall pay Landlord
the cost of same upon demand. No re-entry or retaking of possession shall be
deemed to constitute a termination of this Lease unless Landlord gives Tenant
notice to that effect either prior to or subsequent to such re-entry or retaking
of possession. Landlord shall be required to make all reasonable effort to relet
the Demised Premises and to otherwise mitigate its damages. In the event that
any advance rental has been paid hereunder, the entire amount thereof shall be
retained by Landlord and applied the same as rent received by Landlord as a
result of such reletting.
18. SUBORDINATION:
At Landlord's option, this Lease shall be subordinate to or prior to any
existing mortgage on the Demised Premises and to any future mortgage which may
be place upon the Demised Premises, and Tenant shall execute any and all
documents necessary to establish whether this Lease is subordinate or prior,
provided, however, that this Lease shall not be subordinate to a future mortgage
unless the mortgagee thereunder consents in writing to permit Tenant's quiet
enjoyment of the Demised Premises so long as Tenant observes and performs all of
the obligations and covenants herein contained.
19. NOVATION IN EVENT OF SALE OR TRANSFER:
In the event of the sale of the Building or the transfer of the title
thereto, Landlord shall be relieved of all of the covenants and obligations
created by this Lease, except as to breaches thereof occurring prior to such
sale or transfer, and such sale or transfer shall automatically result in the
purchaser or transferee assuming and agreeing to carry out all of the covenants
and obligations of Landlord herein form and after such sale or transfer.
20. NOTICE
Whenever notice is required or permitted by the terms hereof, it shall
be given in writing by certified or registered mail addressed to Tenant at the
Demised Premises and to Landlord at the place designated by Landlord for the
payment of rent. As in all provisions herein, times is of the essence.
21. ESTOPPEL STATEMENT:
Either Landlord or Tenant shall at any time, and from time to time, upon
not less than ten (10) days prior written notice from the other party, execute,
acknowledge, and deliver to such other party a statement in writing (a)
certifying that this Lease is unmodified and in full force and effect or, if
modified, stating the nature of such modification and certifying that this
lease, as so modified, is in full force and effect, and the date to which the
rent and other charges hereunder are paid in advance, if any, and (b)
acknowledging that, to such party's knowledge, there are no uncured defaults on
the part of the requesting party hereunder or specifying such defaults if any
are claimed. And such statement may be relied upon by any prospective purchaser
or encumbrances of all or any portion of the real property of which the Demised
Premises are a part
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22. WAIVERS:
The waiver by Landlord or Tenant of any term, covenant, or condition
herein contained shall not be deemed to be a waiver of such term, covenant, or
condition on a subsequent breach of the same or of any other term, covenant, or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any then existing breach by
Tenant of any term, covenant, or condition of this Lease, other than the failure
of Tenant to pay the rent so accepted, regardless of Landlord's knowledge of any
such existing breach at the time of the acceptance of such rent.
23. DISPLAYS:
Tenant shall not display or suffer to display on the outside of the
Demised Premises, on the outside of the Building or on the sidewalks, driveways,
or parking areas adjoining the Building any goods or merchandise whatsoever,
except with Landlord's written consent.
24. CONDITION OF DEMISED PREMISES:
Tenant shall not allow any ashes, refuse, garbage, or other loose or
objectionable material to accumulate in or about the Demised Premises and will,
at all time, keep the Demised Premises in a clean and wholesome condition.
25. HOLDING OVER:
In the event that Tenant shall continue to occupy the Demised Premises
following the expiration of the term of this Lease, Landlord may, at its option,
convert such occupancy into either a holding over from month to month under the
same terms and conditions as prevailed during the last month of the term
demised, with the exception of rent, which shall be at a monthly rate of 1.5
times that payable during the last month of the term demised. Landlord may give
to Tenant notice of its intention to convert such continued occupancy into a
holding over from month to month or a holding over for a three-month period
within ten (10) days following the expiration of the term of this Lease, which
notice shall be effective notwithstanding that Tenant may have vacated the
Demised Premises prior to the giving of such notice. If such notice is not given
by Landlord, such holding over shall give Tenant no right of Possession or right
to receive notice to vacate, and Tenant shall pay Landlord an amount equal to a
prorate share of the last month's rent for the period of actual occupancy. In
any such event, Tenant shall also be liable to Landlord for any damage which
Landlord may incur as a result of such holding over, including, but not limited
to, damages incurred because of loss of a prospective successor tenant. In the
event that Tenant is a month-to-month hold-over Tenant, if Tenant should
continue to occupy the Demised Premises following the termination of such
hold-over period (by proper notice as to such month-to-month tenancy), then the
foregoing provisions of this paragraph shall apply in the same manner as when
Tenant continued in occupancy following the expiration of the original term of
the Lease.
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26. INTERRUPTION OF SERVICES:
No liability shall attach to Landlord for any inconvenience, loss, or
damage sustained by Tenant or any other person, or to the property of Tenant or
such other person, due to interruption of electric power, water, or gas to the
Building or to the Demised Premises or by reason of the failure of any piping,
wiring, or apparatus in the Building or any inconvenience, loss, or damage
sustained by Tenant as a result of any of the causes set forth in the paragraph
captioned "Indemnify and Hold Harmless", or caused by any act or thing done or
suffered to be done by any other tenant of the Building or any servant,
employee, agent, invites, or customer of Tenant. However, the Landlord shall
make all reasonable effort to remedy such interruption of service and shall
diligently pursue the re-establishment of all services.
27. DELINQUENCIES:
Landlord shall be entitled to assess interest at the rate of 1.5% per
month on all sums due from Tenant to Landlord from the date any such payment is
due until the date of payment thereof. Such interest charges shall be payable
within ten (10) days after receipt of invoice from Landlord.
28. RULES AND REGULATIONS:
Tenant shall abide by, keep, and observe all reasonable rules and
regulations which Landlord may make from time to time for the management,
safety, care, and cleanliness of the Building and grounds, the parking of
vehicles, and the preservation of good order therein, as well as for the
convenience of other tenants, occupants, and visitors to the Building, provided
that a copy of the same is delivered to Tenant. Landlord acknowledges that no
such rules or regulations exist as of the date of this Lease. Landlord hereby
approves Tenant's use of the rear service area near the building for exclusive
parking for its employee.
29. ZONING:
The Landlord covenants that the Demised Premises are properly zoned to
permit the Tenant's intended use of the Demised Premises. Any changes with
respect to the interior finishing of the premises in order to comply with any
local or municipal by-law shall be at the sole expense of the Tenant.
30. QUIET ENJOYMENT:
Conditional upon the faithful performance of the terms, covenant and
provisions herein contained by the Tenant, Landlord covenants that Tenant shall
quietly have, hold and enjoy the Demised Premises for the term hereof except or
otherwise herein provided.
31. ENTRY DURING CONSTRUCTION:
It is understood that the Landlord, its agents, contractors or employees
may at any reasonable time during the currency of this lease, enter the Demised
Premises for
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purposes of undertaking any reasonable construction work which may be necessary
to facilitate the occupancy of adjacent premises by tenants.
32. UTILITIES:
Tenant shall pay for all water, gas, heat, light, power, and other
utilities and services supplied to the Demised Premises, together with any taxes
thereon. If any such services are not separately metered to Tenant, then Tenant
shall pay a ratable share of all charges jointly metered with other portions of
the Building, such ratable share to be calculated as the percent the Tenant's
gross rentable area is of the total gross rentable area of the "Building".
Gas and Power are separately metered while Sewer and Water and "Common Area"
lighting charges are to be pro-rated as above.
33. JANITORIAL SERVICES:
Tenant shall provide all janitorial and refuse removal services for the
Demised Premises, at the expense of Tenant.
34. OPERATING EXPENSES:
As used herein, "Operating Expenses" means all costs paid or incurred by
Landlord with respect to the Building and with respect to the entire parcel of
land on which the Building is situated, including, but not limited to, the
following: operation; maintenance, management fees; repairing; lighting;
cleaning; removal of refuse, garbage, trash, snow and ice; landscape
maintenance; supervising; policing and security; maintenance, replacement and
operation of common areas and facilities, sidewalks, driveways, parking areas,
lighting standards, and exterior of Building; property insurance premiums; real
estate taxes and assessments (which shall be paid over the longest period
permitted by such taxing authority); and any other municipal taxes assessed
against the Building or Land; cost of contesting tax assessments; labor;
materials and supplies; and water sewer charges, and the cost of any capital
improvement made by Landlord to the Building or the parcel of land on which the
Building is situated which will result in a reduction of Operating Expenses
amortized over such a reasonable period of time as Landlord shall determine,
provided that the annual amount of such capital costs includable in any Lease
Year's Operating Expenses shall not exceed the actual reduction in Operating
Expenses, with any excess payable solely by Landlord. The Landlord warrants to
act as a prudent owner would in making decisions regarding management of common
areas. Notwithstanding anything to the contrary in this paragraph 34, Operating
Expenses shall not include: (a) any costs or expenses for goods or services that
exceed average competitive costs for comparable goods or for such services
rendered by persons of similar skill, competence and experience, other than by a
subsidiary or affiliate of Landlord; (b) depreciation and amortization, except
as expressly provided for above; (c) costs of a capital nature, except as
expressly provided for above; (d) the costs or correcting defects in, of
inadequacy of, the design or construction of the Building or the materials used
in the construction of the Building, all costs and expenses directly or
indirectly resulting from or relating to fire, windstorm or other casualty
damage (whether
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insured or insurable); and (e) costs or expenses resulting from the negligence
or intentional misconduct of Landlord or its employees, agents or contractors.
Tenant covenants to pay, within thirty (30) days from the date of receipt of
invoice therefore from Landlord, its ratable share of such Operating Expenses,
determined by application of the following formula:
Gross Rentable Area
Of Demised Premises Total Tenant's
------------------- X Operating = Ratable
Total Gross Rentable Expenses Share
Area of Building
At the time of such invoicing, Landlord shall also provide Tenant with a
statement showing in reasonable detail the total Operating Expenses and the
computation used in determining Tenant's share.
If the premiums on the building insurance increase as a direct result of
Tenant's use of the Demised Premises, Tenant shall pay landlord the amount of
such increase, provided, however, that Tenant shall not be required to pay any
portion of any increase in such insurance premiums resulting from the use made
by any other tenant of the space in the Building occupied by such other tenant.
In the event that the Landlord determines that the Tenant is using a
disproportionate share (as defined by its square footage relative to the total
Building square footage) of any common area charge, including energy and water
charges, then the Landlord reserves the right to make a reasonable determination
of the actual cost of such disproportionate use and assess the Tenant separately
for such disproportionate use prior to pro-rating the balance of such charges to
all Tenants in common. Notwithstanding anything to the contrary in paragraphs 34
to 37 of this Lease, Landlord and Tenant hereby agree that during the first four
(4) years of the Lease Term the Operating Expenses for the Demised Premises
shall be $50,000 per year. In addition, if at any time during the fifth lease
year Landlord receives any benefit from any tax increment financing arrangement
with the City of Xxxx Lakes, then the Operating Expenses payable by Tenant shall
be $50,000 for such fifth year. In the event that Landlord receives no such
benefit during the fifth lease year, Landlord shall be obligated to demonstrate
to Tenant's satisfaction that Landlord has derived no such benefit, and in such
event Tenant's share of Operating Expenses shall be calculated in accordance
with this paragraph 34 and paragraph 37. During any extension term, Tenant shall
pay Operating Expenses in accordance with said Paragraphs 34 and 37.
35. SIGNS AND LETTERING:
Tenant shall place no signs or lettering on or in the Building, except
flat lettering of a size and color as approved by the Landlord and on the
designated sign areas on the outside of the Building or as Landlord may
otherwise approve in writing. Landlord acknowledges that it has approved of
Tenant's proposed sign. Tenant may use the outside walls or roof of the Building
or the grounds near the building for reasonably acceptable signs or canopy
identifying Tenant, provided that said signs are in compliance
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with applicable city codes. Landlord shall at its sole expense, install and
maintain the structural elements of a monument sign for Tenant's exclusive use
during the term of this Lease.
36. HEAT:
Tenant shall, for such time during the term of this Lease as shall be
necessary, keep the Demised Premises properly and sufficiently heated and warm.
37. MONTHLY PAYMENT ON PRO-RATED EXPENSES:
The Tenant agrees to pay an estimated share of all pro-rated charges on
a monthly basis (as per Sections 32 and 34 of this Agreement). At least once per
annum the Landlord shall reasonably estimate to the Tenant such charges and the
Tenant shall include a monthly amount with the monthly rental payment. At least
once per year the Landlord shall adjust such payments against actual charges and
either reimburse the Tenant for any over-payments or invoice the Tenant for
additional charges still owing.
38. DEFINITIONS:
Whenever used herein, the singular shall include the plural unless the
contest otherwise requires, and the word "its" shall mean "his", "her", or
"their" as the contest may require.
39. MEMORANDUM:
Upon the request of either Landlord or Tenant, the parties shall enter
into a memorandum, in recordable form, setting forth a summary of the terms
hereof relating only to the description of the Demised Premises, the term
hereof, and the conditions of assignment or subletting.
40. HEADINGS:
The captions and paragraph headings hereof have been inserted for
convenience only and shall not be construed to modify, limit, or amplify the
meaning of the terms and provisions hereof.
41. BINDING EFFECT:
All of the covenants, obligations, and agreements contained in this
Lease shall be binding upon and shall inure to the benefit of the successors and
assigns of Landlord and Tenant, except as set forth in the paragraph captioned
"Novation in Event of Sale or Transfer", and except that this paragraph shall
not be deemed to authorize any assignment of Tenant's interest in this Lease
without Landlord's prior written consent.
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42. TENANT ALLOWANCES:
Landlord agrees to pay to Tenant an allowance (the "Allowance") on
account of all direct and indirect costs and expenses (including both so-called
"hard" and "soft" costs) incurred by Tenant in connection with the design and
construction of the improvements (including without limitation all architectural
fees, design fees and construction and supply costs, and changes to the standard
ceiling, core and shell that are not Landlord's responsibility under this Lease)
and furnishing of the Demised Premises for occupancy and the conduct of business
therein, including without limitation leasehold improvements, trade fixtures,
equipment, machinery, decorating, furniture, furnishings and personal property,
purchased by Tenant for use in the Demised Premises (collectively, "Qualifying
Costs"). The Allowance shall be in an amount equal to the lessor of (a)
$62,000.00 or (b) the aggregate amount of Qualifying Costs incurred by Tenant.
The Allowance shall be paid from time to time as Tenant respect to the Demised
Premised. Payment of the Allowance shall be paid by Landlord directly to Tenant
or, at the request of Tenant, to Tenant's contractor or others as to whom Tenant
owes any Qualifying Costs. The amounts paid to Tenant pursuant to this Section
42 shall be in addition to the amounts loaned to Tenant pursuant to Section 43
hereof. Tenant shall have the right, at Tenant's expense, to construct leasehold
improvement to the Demised Premises to accommodate its manufacturing operations.
43. LEASEHOLD IMPROVEMENT COSTS:
In addition to the allowances described in Section 42 herein, Landlord
agrees to provide funds for Tenant's use as set forth in this Section 43.
Landlord agrees to provide to Tenant an amount equal to 75% of all Qualifying
Costs, not to exceed $300,000.00. The amount so provided to Tenant shall be
designated as "10% Leasehold Improvement Costs'" and Tenant shall pay to
Landlord, as additional rent due under this Lease, the 10% Leasehold Improvement
Costs (plus an amount equal to 1% of the 10% Leasehold Improvement Costs) on a
monthly basis, amortized over a five year period at an interest rate of 10% per
annum. In addition, an amount equal to 1% of the 10% Leasehold Improvement Costs
shall be payable at the time the 10% Leasehold Improvement Costs are provided to
Tenant. The aggregate 2% fee represents Landlord's fee for supplying such finds.
If the full $300,000.00 is provided to Tenant pursuant to this Section 43, 1% of
such amount is $3,000.00 and the monthly amortized payment due to Landlord will
be $6,437.85. In addition to the 10% Leasehold Improvement Costs, Landlord shall
provide to Tenant, at Tenant's request, an amount up to $50,000 (the amount so
provided shall hereinafter be referred to as the "12% Leasehold Improvement
Costs"). This $50,000.00 will be made available to Tenant if the Qualifying
Costs exceed $400,000.00 but the amount so provided shall not be more than 75%
of the amount of Qualifying Costs in excess of $400,000.00. Tenant shall pay to
Landlord, as additional rent due under this Lease, the 12% Leasehold Improvement
costs (plus an amount equal to 1% of the 12% Leasehold Improvement Costs) on a
monthly basis, amortized over a five year period at an interest rate of 12% per
annum. In addition, an amount equal to 1% of the 12% Leasehold Improvement Costs
shall be payable at the time the 12% Leasehold Improvement Costs are provided to
Tenant. The aggregate 2% fee represents Landlord's fee for supplying such finds.
If the full $50,000.00 is provided to Tenant pursuant to this
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Section 43, 1% of such amount is $500.00 and the monthly amortized payment due
to Landlord will be $1,123.34.
44. OPTION TO EXPAND:
Landlord proposes to construct a second building, of similar type and
quality, adjacent to the Building (the "Expansion Building"). Landlord agrees
that it shall not commence construction on the Expansion Building prior to May
1, 1998, or to enter into any leases or other contracts related to the Expansion
Building that are inconsistent with the rights granted to Tenant hereunder.
Attached hereto as Exhibit D are plans and specifications for the Expansion
Building, or, if no Exhibit D is attached, Landlord agrees that any plans and
specifications for the Expansion Building are subject to Tenant's prior
approval, which shall not be unreasonably withheld. In any event, Landlord
agrees that the Expansion Building shall not contain more that 20,000 rentable
square feet without the Tenant's prior written approval.
On or before May 1, 1998, Tenant may notify Landlord that it desires to lease
all of the space in the Expansion Building, in which event (a) Landlord shall
promptly commence and diligently pursue to completion the construction of the
Expansion Building, (b) the Expansion Building shall be constructed in a
location selected by Tenant, which location may be abutting the Building, and
(c) upon substantial completion of the Expansion Building, this Lease shall be
amended to include all of the rentable space in the Expansion Building, and all
references in this Lease to the Demised Premises shall be deemed to include all
of the rentable space in the Expansion Building, and all references in this
Lease to the Building shall be deemed to include the Expansion Building, except
that the base rent for space within the Expansion Building shall be calculated
at a rate of $4.40 per square foot per year until the end of the initial Term of
this Lease. (The base rent for space within the original Building shall remain
at$4.10 per square foot per year.)
If the Tenant does not deliver such notice to Landlord on or before May 1, 1998,
Landlord shall nevertheless promptly commence and diligently pursue to
completion the construction of the Expansion Building, but such Expansion
Building need not about the Building. Tenant shall have a right of first refusal
(the "Refusal Option") to lease all or any portion of the Expansion Building
that landlord from time to time intends to lease to third parties. Tenant's
Refusal Option shall be continuous and shall apply as often and to every lease
intended to be made by Landlord of the Expansion Building whether or not Tenant
exercises or fails to exercise the Refusal Option as to the space in question.
Landlord shall not lease any of the Expansion Building, or grant any superior
rights in the Expansion Building, except subject to the provisions in this
paragraph 44. Whenever and as often as Landlord will lease any of the Expansion
Building to a third party, Landlord shall make such lease expressly contingent
on the non-exercise by Tenant of its Refusal Option with respect thereto and
shall offer such space to Tenant in writing (the "Notice"). The Notice shall
identify the prospective tenant and include a copy of the executed letter of
intent between Landlord and the prospective tenant. Tenant may, by giving
written notice of such election to Landlord within ten days after receipt of any
Notice, elect to exercise the Refusal Option to lease the space in question at
the base rental rate of $4.40 per square foot per year and on all of the other
terms and conditions of this Lease, including without limitation the Term of
this Lease. If the Refusal Option is exercised
16
with respect to any space in the Expansion Building, all references in this
Lease to the Demised Premises shall be deemed to include all of the space in the
Expansion Building affected by such exercise and all references in this Lease to
the Building shall be deemed to include the Expansion Building.
45. BROKERAGE FEE:
Upon occupancy of the Demised Premises by Tenant pursuant to this Lease,
Landlord agrees to pay a brokerage fee of $12,812.50 to Xxxxxx X. Xxxxx of
Northco Real Estate Services.
46. OPTION TO RENEW:
Providing Tenant is not in default of any of the Lease terms and
conditions, Tenant shall have the right to renew the lease for a five year
period at a flat base (net) rental rate of $4.50 per square foot per year.
Tenant shall notify Landlord in writing prior to the Lease expiration of its
intent to execute its option hereunder. In addition to the original Demised
Premises, said option may include any space in the Expansion Building leased by
Tenant.
IN WITNESS THEREOF, Landlord and Tenant have caused this lease to be executed in
form and manner sufficient in law.
LANDLORD: TENTANT:
F&G INCORPORATED JER-NEEN MANUFACTURING CO.
INC.
By_________________________ By__________________________
Its______________________ Its_______________________
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EXHIBIT B
Outline Specifications for Landlord's Work
------------------------------------------
Landlord shall provide the following base building conditions:
Concrete Slab: A concrete slab with a minimum depth of 5" and suitably flat
for operation of a forklift
Natural Gas: A natural gas manifold suitable for the building, fitted
with a single meter.
Waste Lines: Prior to pouring concrete slab, Landlord shall install waste
lines to the areas designated by Tenant.
Sprinklers: Sprinklers distributed throughout the Demised Premises at a
standard of Ordinary Hazard Group #2 as defined in NFPA 13.
Landlord will provide Tenant with results from water float
tests conducted on the Building.
Electrical: 1000 Amp main fusible distribution panel at 208 volt-3 phase
and 4 wire in accordance with the attached riser diagram.
12 exterior wall pack security lights
Prior to pouring concrete slab, Landlord shall install 3"
empty PVC conduit to five locations designated by Tenant and
one electrical/telephone floor box (Xxxxxxx FB1) with 2 -
3/4" PVC conduit.
Service Doors: Furnish and install 1 - 10' x 10' drive in door at location
identified by Tenant. Furnish and install 2 - 8' x 10'dock
doors at locations shown on plans.
Landlord shall block in any unused overhead service doors
and man door openings
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