Exhibit No. 4
Form 10-SB
Century Controls, Inc.
THIS LEASE made this by and between
DDBD, Inc. ("Landlord"), and Century Controls, Inc. ("Tenant").
WITNESSETH:
For and in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto do hereby
agree as follows:
SECTION I - LEASED PREMISES
1.1 Leased Premises. Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, those certain premises
located in Suite 226 (the "leased premises") with an area of
approximately 1,380 rentable square feet (1,200 usable square
feet) as defined below. The leased premises are more particularly
described and located on Exhibit A (Legal Description) and
Exhibit B (Demised Premises), respectively, attached hereto and
by this reference incorporated herein. The building located on
the real property described in Exhibit A is referred to herein as
the "building." "Rentable square feet" shall mean the product of
the usable square feet within a tenant's leased premises (as
measured from the inside face of the corridor wall and the inside
face of the exterior wall or glass wall and from the centerline
of each demising wall without deductions for any pillars or
vertical penetrations of a tenant's leased premises) multiplied
by the building common area factor or Rentable/Usable factor
("R/U factor") of 1.15. "Building rentable area" shall be
computed from the inside surface of the dominant portion of the
permanent outer building walls, without deductions for any
pillars or vertical penetrations within the building. The RIU
factor is subject to change from time to time to reflect changes
in common areas, and is the quotient of the building rentable
area divided by the sum of all usable areas in the building
whether occupied or vacant.
1.2 Reserved to Landlord. Landlord reserves all air rights over
the leased premises, the use of the exterior walls, the roof, and
the right to install, maintain, use, repair and replace pipes,
ducts, conduits and wires leading through the leased premises in
locations which will not materially interfere with Tenant's use
thereof to serve other parts of the building, and the right to
use the land below the leased premises in any manner not
interfering with the Tenant's use of the leased premises.
1.3 Changes to the Building. Landlord reserves the right at any
time to make alterations or additions to the building in which
the leased premises are contained and to build adjoining the
same. Landlord also reserves the right from
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time to time to construct other structures or improvements in the
building, to make alterations thereof or additions thereto and to relocate
the various structures, parking and other common areas comprising
the buildings. Provided, however, Landlord shall at all times maintain
the general quality and character of the Building, and provided, further
that none of the rights fin this section reserved to the Landlord may be
exercised in such a manner or fashion as will or does unreasonably
interfere with the Tenant's use and possession of the leased premises
for the purposes herein contemplated.
SECTION II - TERM/OCCUPANCY
2.1 Lease Term. The term of this Lease shall commence upon the
"Commencement Date," which shall be the anticipated date of
occupancy of August 15, 1999; provided that if Tenant commences
conducting business in any portion of the leased 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 a
term of three (3) years plus, if the Commencement Date is not the
first day of a calendar month, the partial calendar month in
which the Commencement Date occurs. The leased premises shall be
"substantially completed" on or before the Commencement, which
means complete in all respects as provided in the approved plans
and specifications for Landlord's work, save and except for such
defects and omissions therein which do not materially interfere
with or prevent the use and enjoyment of the leased premises. The
term "lease year" shall mean a fiscal year commencing January 1st
and ending December 31st of any given year, and (unless the
context in which used otherwise requires) the-term "year" shall
mean the 365 or 366 days (as the case may be) from one date in
one calendar year through the date immediately prior to it in the
following calendar year.
SECTION III - RENT
3.1 Minimum Rent. Tenant shall pay to Landlord, without any off
set or deduction whatsoever, as fixed minimum rental ("Base"),
Eight Hundred Twenty One and 37/100 dollars ($821.37) which rent
shall be paid in advance on or before the first day of each
calendar month of the lease term. The first months rental shall
be made before possession of the leased premises is given to the
Tenant and shall be prorated if the first month of rental is a
partial month pursuant to Section 3.4.
3.2 Additional Rent. In addition to minimum rent, all other
sums to be paid are reimbursed by Tenant to the Landlord, whether
or not so designated, shall be "additional rent" for the purposes
of this lease. If Tenant defaults in the performance of any of
its obligations hereunder, Landlord may, but shall not be
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obligated to, perform under such obligations, and the cost
thereof to Landlord shall also be additional rent. Unless
otherwise specifically provided herein, Tenant shall pay Landlord
all additional rent upon demand and in no event later than the
date on which the next rent payment hereunder in due and payable.
3.3 Tenant's Contribution. In December of each calendar year,
Landlord will notify Tenant in writing of the Landlord's
reasonable or good faith estimate of the amount of the
contributions due for the following twelve months pursuant to
Sections 5.1, 5.3, 9.3 and 10.4, which amounts Tenant shall pay
in advance in twelve (12) equal, monthly installments on the
first day of each month of such lease year. At the end of each
lease year, or at the expiration or sooner termination of the
lease term, Landlord will compute Tenant's contributions for such
year and, if total amount of contributions paid for such year is
less than the amounts of the contributions due for such lease
year, the Tenant shall immediately pay Landlord any deficiency.
If the total amount of contributions paid for. such year exceeds
the amount which Tenant is required to contribute pursuant to
said Sections, then Landlord shall credit or refund such excess
to Tenant as requested by Tenant; provided, however, upon
expiration or sooner termination of the lease term, if Tenant has
otherwise complied with all other terms of this Lease, Landlord
shall refund such excess to Tenant. If this Lease commences on a
date other than the first day of January, Landlord shall estimate
Tenant's contributions for that portion of the lease year, and
Tenant shall pay such charge in equal monthly installments on the
first day of the remaining months of the lease year. If at any
time Landlord obtains additional information regarding the actual
amounts of the contributions, Landlord shall adjust the amount of
monthly installments due during the balance of the year to
reflect such additional information by giving Tenant written
notice thereof, which notice shall also state the amount of the
excess or deficiency, it any, in the prior monthly payments for
the lease year. Landlord shall immediately refund any excess
Tenant, and Tenant shall pay deficiency within twenty (20) days
of its receipt of the notice and shall make the adjusted monthly
payments for the remainder of the lease year. Tenant, at its
expense, shall have the right during and within one year after
the end of the Term, to annually inspect, copy and audit
Landlord's books and records relating to the costs payable
pursuant to Sections 5.1, 5.3, 9.3 and 10.4 and other matters
arising under this lease during the Term. Landlord shall keep and
maintain true, correct and complete books and records with
respect to the operation of the building or otherwise related to
any building operating costs and shall retain at Landlord's
office all books and records relating to such costs for a period
of three years after the calendar year of which they accrue.
Notwithstanding anything contained in this Lease to the contrary,
Tenant shall pay a minimum of Three Dollars ($3.00) per square
foot of leased premises per year, throughout the lease term
(including any extensions thereof), as Tenant's Contribution
pursuant to Sections 5.1, 5.3, 9.3 and 10.4 hereof.
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3.4 Pro-rata Share. Notwithstanding anything contained in this
Lease to the contrary, if the lease term commences on a day other
than the first day of a calendar month, the minimum rental, all
additional rental, all Tenants Contributions, and all other
charges with respect to the leased premises and the use thereof
for such month or months shall be the full monthly amount thereof
multiplied by a fraction the numerator of which is the number of
days within the particular month contained within the lease term
and the denominator of which is the number of days within said
month.
3.5 Default Charge. if Tenant fails to pay within ten days
(twenty days for the first occurrence in any lease year) of the
appropriate due date, a late charge equal to five percent (5%) of
the unpaid amount shall be imposed and immediately due and
payable. Thereafter, interest shall accrue on past rent due plus
late charge at an annual rate of twelve percent (12%) from the
due date until paid.
SECTION IV - CONDUCT OF BUSINESS
4.1 Use of Leased Premises. Tenant shall have use of the leased
premises for the following purposes and for no other purposes,
to-wit General Office Use.
4.2 Appearance of leased premises. Tenant shall maintain the
premises in a clean, orderly and neat fashion to conform with the
high standards of appearance of the building, permitting no odors
to be emitted from the lease premises and/or permit any
accumulation of trash. Tenant shall store all trash, refuse and
waste material so as not to constitute a health or environmental
or fire hazard or nuisance problem, in adequately covered and
labeled containers which are located within the leased premises
so as not to be visible to the general public or which are
located in areas designated by Landlord. No sale, storage or
display of merchandise, by vending machine or otherwise, shall be
permitted outside or in front of the leased premises. Any
loudspeakers used shall not be audible from outside the leased
premises.
4.3 Unlawful Use. Tenant shall not use or permit the leased
premises or any part thereof to be used for any purpose in
violation of any municipal, county, state or federal law,
ordinance or regulation, or for any purpose offensive to the
standards of the community of which the building is a part.
Tenant shall promptly comply, at its sole cost and expense, with
all laws, ordinances, and regulations now in force or hereafter
adopted and with the requirements of any board of fire
underwriters or similar body relating to or affecting the
condition, use or occupancy of the leased premises.
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4.4 Liens and Encumbrances. Tenant shall keep the leased
premises free and clear of all liens and encumbrances arising out
of any labor performed at or materials furnished to the leased
premises or the Building at Tenant's request.
4.5 Signs. Tenant shall not erect or place, or permit to be
erected or placed, or maintain any signs of any nature or kind,
including but not limited to decorations, lettering or
advertisement, either on the exterior walls of the leased
premises or elsewhere in the building (including signs placed in
the interior of the premises for exterior view) without
Landlord's prior written consent.
SECTION V - UTILITIES AND OTHER CHARGES
5.1 Utility Charges. Tenant shall be solely responsible for and
shall promptly pay all charges for heat, water, light, gas,
electricity, sewer, garbage, fire/security protection and any
other utility used or consumed on the ' leased premises for which
there is a separate meter monitoring the consumption of said
utility within the leased premises alone. If Landlord shall elect
to supply the service or services used, or if said services are
invoiced to Tenant through Landlord, Tenants shall accept and use
the same as tendered by Landlord and pay Landlord as additional
rent its proportionate share of said utilities in the manner
provided in Section 3.3 hereof. Tenant's share of utilities shall
be determined by multiplying such utility costs by a fraction,
the numerator of which is the rentable square feet of the leased
premises and the denominator of which is the building rentable
area on the first day of such prior lease month. In no event
shall Landlord be liable for an interruption of the supply of any
such utilities to the leased premises due to causes beyond the
Landlord's control. Tenant agrees to keep the temperature of the
leased premises at such level as may be reasonably required by
Landlord to protect the building and prevent the dissipation of
heat or air conditioning on the areas adjacent to such premises.
5.2 Licenses and Taxes. Tenant shall be liable for, and shall
pay throughout the lease term all license, excise fees, permits,
occupation taxes and any other taxes or business expenses
covering the business conducted on the leased premises and all
personal property taxes levied with respect to all personal
property located at the leased premises.
5.3 Tenant's Participation in Real Estate Taxes and special
assessments. Tenant shall pay Landlord as additional rent its
proportionate share of taxes and special assessments on the
building in the same manner provided in Section 3.3 hereof.
Tenant's share of taxes shall be an amount equal to the real
estate taxes, including installments of special assessments,
actually paid by Landlord during each lease year of the lease
term (excluding penalties and interest on penalties thereon),
with respect to the lands
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and improvements comprising the
building, multiplied by a fraction, the numerator of which is the
rentable square feet of the leased premises and the denominator
of which is the building rentable area on the first day of such
lease year. If, at any time after the date hereof, the methods
of taxation shall be altered so that in lieu of or a substitute
for the whole or any part of the real estate taxes or assessments
levied, assessed or imposed on or with respect to the leased
premises or building, there should be levied, assessed or imposed
an income or franchise tax as a capital levy on the rents
received, or the rate thereof shall be increased, then such new
tax or the amount attributable to the increase shall be included
for purposes of computing Tenant's share of real estate taxes
hereunder. Landlord shall use best efforts to exercise any
election available to it to pay any special assessments over the
longest period available to it.
SECTION VI - DEPOSIT
6.1 Deposit. Tenant has deposited with Landlord the sum of one
months net rent ($821.37 dollars). Landlord shall pay Tenant the
balance thereof less any damages caused by the Tenant's breach of
any of its obligations hereunder, within thirty (30) days after
the twelfth full month of rental or prior termination of the
lease term. Landlord shall be entitled to withdraw from the
deposit the amount of any unpaid rent or additional rent or other
charges not paid to Landlord when due, and Tenant shall
immediately redeposit an amount equal to that so withdrawn
SECTION VII - COMPLETION AND ALTERATIONS
7.1 Completion of leased premises. Landlord shall construct the
leased premises in accordance with the outline, descriptions and
specifications set forth in Paragraph 22.1 hereto. Upon delivery
of the leased premises, Tenant shall inspect the improvements and
shall be determined to have accepted them in their present
condition unless it notifies Landlord within thirty (30) days
thereafter of any defects.
7.2 Alterations by Tenant. Tenant shall not make any
alterations, additions, or improvements, greater than $1,000 in
value, in or to the leased premises, without prior written
consent of Landlord, which consent shall not be unreasonably
withheld, all such alterations, additions, or improvements being
made at Tenants sole expense. Tenant shall secure any and all
governmental permits required in connection with any such work
and perform such work in accordance with all applicable
governmental requirements and restrictions. Tenant shall hold
Landlord harmless from and indemnity Landlord against any and all
losses, liabilities (including without limitation the expenses
described in Section 10. 1), costs, and expenses and any and all
liens resulting from such work. Upon expiration or sooner
termination of this lease, and recovery of
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possession by Landlord, all alterations, additions and improvements
(except Tenant Fixtures) shall immediately become the property of
Landlord without any obligation to pay there for.
SECTION VIII - MAINTENANCE OF LEASED PREMISES
8.1 Maintenance and Repair by Tenant. Tenant at Tenant's expense
shall at all times throughout the lease term keep the [eased
premises clean and in good condition. Those fixtures,
appurtenances, mechanical and other building systems serving the
leased premises and also serving other portions of the building
(such as electrical, heating, ventilating, air conditioning and
plumbing systems) shall be maintained pursuant to paragraph 9.3.
Landlord shall be responsible for the repair of the foundation
and structural aspects of the buildings exterior and load bearing
walls, roofs and floors, so long as any repairs or maintenance
thereto is not necessitated by any action or omission or
negligence of Tenant, in which event Tenant shall be solely
responsible for such repairs.
8.2 Failure to Maintain. It Tenant fails to keep and maintain
the leased premises in the condition set forth in Section 8.1 and
such failure continues for a period of ten (10) days following
the receipt of written notice thereof from Landlord, Landlord
may, at its option, put or cause the same to be put in the
condition agreed upon, and in such case, upon receipt of written
statements from Landlord, Tenant shall promptly pay the entire
cost thereof as additional rent. Landlord shall have the right to
enter the leased premises for the purpose of making such repairs
upon the failure of Tenant to do so.
8.3 Surrender of leased premises. At the expiration or sooner
termination of this Lease, Tenant shall return the leased
premises to Landlord in the same condition in which received (or,
if altered by Landlord or by Tenant with Landlord's consent, then
the leased premises shall be returned in such altered condition)
reasonable wear and tear and insured loss excepted. Prior to such
return Tenant may remove all its personal property and trade
fixtures from the leased premises, and shall restore the leased
premises to the condition they were in prior to the installation
of said items, reasonable wear and tear and insured loss
excepted. Tenant's obligation to perform this covenant shall
survive the expiration or termination of this lease.
SECTION IX - COMMON AREAS
9.1 Control of Common Areas by Landlord. Landlord shall at all
times have the exclusive control and management of all parking
areas, access roads, driveways, entrances, retaining walls and
exits thereto, truck ways, loading docks, package pickup
stations, pedestrian malls, courts, sidewalks and ramps,
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expense incurred in operating, lighting, policing, cleaning, managing,
maintaining the common areas and facilities actually used or
available for use by Tenant, but specifically including, without
limitation, the cost of gardening; re-carpeting, re-tiling or any
other floor resurfacing; the cost of public liability and
property damage insurance and vandalism insurance: the cost of
fire and extended coverage insurance and plate glass insurance in
common areas; utility expenses for lighting; personal property
taxes, maintenance cost for equipment and building systems
including replacement when necessary; minor roof repair and
patching; subsidies and other payments which the building may be
required to pay public bodies, including those for traffic
signals and controls for fire protection; repairs; the cost of
resurfacing, painting and sanitary control; the cost of snow,
trash, rubbish, garbage refuse removal; and the cost of personnel
to implement all such services, including policing and
maintaining traffic control on the common areas and facilities
and resurfacing of common areas. Also included are any future
improvement costs to common areas which may be required under the
Americans with Disabilities Act. Tenant is not responsible for
any initial upgrades or betterments to common areas that Landlord
elects to make to bring the existing common areas, at the time of
Landlords purchase of the building, up to Landlords desired level
of appearance and performance. Notwithstanding anything to the
contrary in the lease and only to the extent that the operating
cost of the common area and facilities, common fixtures and
building systems exceeds the minimum charge of $3.00 per square
foot of leased premises pursuant to Section 3.3 hereof, Tenant's
Contributions shall not include (i) payments of principal and
interest on any mortgages, -deeds of trust or other encumbrances
upon the building: (ii) depreciation of the capital costs related
to the building except when made (a) to reduce operating costs or
limit increases therein, (b) as required by landlord's insurance
carrier, or (c) as required by any law, rule, regulation or order
of any governmental authority; (iii) costs and disbursements and
any other cost or expense incurred in connection with
negotiations or disputes with tenants, other occupants or
prospective tenants or other occupants of the building, including
any leasing commissions or brokerage fees; (iv) costs incurred in
renovation or otherwise improvements or decorating or
redecorating space for tenants or other occupants in the building
or vacant space leased or held or designated for lease in the
building or costs related thereto, including but not limited to
any alterations to the building in connection with, or which are
required by reason of, any lease or agreement with any tenant or
other occupant; (v) costs of any removal or abatement of
hazardous substances or asbestos other than those placed or
released by Tenant; (vi) Landlord's executive salaries and other
overhead costs; and (vii) management fees in excess of market
rates (viii) cost of correcting defects in, or inadequacy of, the
building shelf or the materials used in the construction of the
building shell.
9.2 License. All common, areas and facilities which Tenant maybe
permitted to use and occupy are to be used and occupied under an
irrevocable non-exclusive license. However, if the amount of such
areas of facilities be diminished due to causes beyond the
Landlord's control, such diminution shall not , be deemed
constructive or actual eviction, and Landlord shall not be
subject to any liability, nor shall Tenant be entitled to any
compensation or diminution or abatement of rent.
9.3 Maintenance Charge. Tenant shall pay to Landlord, as
additional rent in the manner provided in Section 3.3, a monthly
maintenance charge to defray the operating cost of the common
areas and facilities. The amount of the monthly maintenance
charge shall be equal to Tenant's pro-rata share of the operating
costs for the prior calendar month, which share shall be
determined by multiplying such costs by a fraction, the numerator
of which is the rentable square feet of the leased premises and
the denominator of which is the total occupied building rentable
area on the first day of such prior lease month. For purposes of
this paragraph, the term "operating cost of the common area and
facilities, common fixtures and building systems" means the total
cost and
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expense incurred in operating, lighting, policing, cleaning, managing,
maintaining the common areas and facilities actually used or available
for use by Tenant, but specifically including, without limitation, the
cost of gardening; re-carpeting, retiling or any other floor resurfacing;
the cost of public liability and property damage insurance and vandalism
insurance; the cost of fire and extended coverage insurance and
plate glass insurance in common areas; utility expenses for
lighting; personal property taxes; maintenance cost for equipment
and building systems including replacement when necessary; minor
roof repair and patching; subsidies and other payments which the
building may be required to pay public bodies, including those
for traffic signals and controls for fire protection; repairs;
the cost of resurfacing, painting and sanitary control; the cost
of snow, trash, rubbish, garbage refuse removal; and the cost of
personnel to implement all such services, including policing and
maintaining traffic control on the common areas and facilities
and resurfacing of common areas, Also included are any future
improvement costs to common areas which may be required under the
Americans with Disabilities Act. Tenant is not responsible for
any initial upgrades or.betterments to common areas that Landlord
elects to make to bring the existing common areas, at the time of
Landlords purchase of the building, up to Landlords desited level
of appearance and performance. Notwithstanding anything to the
contrary in the lease and only to the extent that the operating
cost of the common area and facilities, common fixtures and
building systems exceeds the minimum charge of $3.00 per square
toot of leased premises pursuant to Section 3.3 hereof, Tenant's
Contributions shall not include (i) payments of principal and
interest on any mortgages, deeds of trust or other encumbrances
upon the building; (H) depreciation of the capital costs related
to the building except when made (a) to reduce operating'costs or
limit increases therein, (b) as required by landlord's insurance
carrier, or (c) as required by any law, rule, regulation or order
of any governmental authority: (iii) costs and disbursements and
any other cost or expense incurred in connection with
negotiations or disputes with tenants, other occupants or
prospective tenants or other occupants of the building, including
any leasing commissions or brokerage fees; (iv) costs incurred in
renovation or otherwise improvements or decorating or
redecorating space for tenants or other occupants in the building
or vacant space leased or held or designated for lease in the
building or costs related thereto, including but not limited to
any alterations to the building in connection with, or which are
required by reason of, any lease or agreement with any tenant or
other occupant; (v) costs of any removal or abatement of
hazardous substances or asbestos other than those placed or
released by Tenant; (vi) Landlord's executive salaries and other
overhead costs; and (vii) management fees in excess of market
rates (viii) cost of correcting defects in, or inadequacy of, the
building shell or the materials used in the construction of the
building shell.
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9.4 Solicitation of Business. Tenant and its employees and
agents shall not solicit business, nor distribute handbills or
other advertising matter in the parking or other common areas.
SECTION X - INSURANCE AND INDEMNITY
10.1 Indemnification. Landlord shall not be liable for any injury
to any person, or for any loss of or damage to any property
(including property of Tenant) occurring in or about the leased
premises from any cause whatsoever, except when caused by the
Landlord's own negligent or intentional acts or omissions. Tenant
shall indemnify and save Landlord, its officers, agents,
employees and contractors and other tenants and occupants of the
building harmless from all loss, damage, liability, or expense
including but not limited- to legal and other fees, resulting
from any actual or alleged injury to any person or from any
actual or alleged loss, or damage to any property arising out of
Tenant's operation or occupation of the leased premises, or from
Tenant's breach of its other obligations hereunder. Landlord
shall indemnify and save Tenant, its officers, agents, employees
and contractors harmless from all laws, damage, liability or
expense including but not limited to legal and other fees,
resulting from any actual or alleged injury to any person or from
any actual or alleged loss, or damage to any property arising out
of the operation or occupation of the building (except for
Tenant's operation or occupation of the leased premises), or from
Landlord' breach of its other obligations hereunder. The
indemnification provided for in this section with respect to any
acts or omissions during the term of this Lease shall survive any
termination or expiration of this Lease. Tenant shall promptly
notify Landlord of casualties or accidents occurring in or about
the leased premises
10.2 Insurance. Tenant shall, at its own expense, maintain
adequate liability insurance with a reputable insurance company
or companies, in minimum amounts of $200,000 for property damage
and minimum amounts of $1,000,000 (per individual) and $2,000,000
(per accident) for personal injuries, to indemnify both Landlord
and Tenant against any such claims, demands, losses, damages,
liabilities and expenses. Landlord shall be named as one of the
insured and shall be furnished a copy of such policy or policies
of insurance which shall be an endorsement that the same shall
not be canceled without ten (10) days prior written notice to
Landlord. 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, in
such amount as Landlord deems prudent, and (b) comprehensive
general public liability insurance covering the building, in a
combined single limit amount of not less than $1,000,000 and
written on an "occurrence" basis.
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10.3 Increase in Insurance Premium. Tenant shall not keep,
use, sell or offer for sale in or upon the leased premises any
article which may be prohibited by the standard form of fire
insurance policy. Tenant shall pay immediately any increase in
Landlord's premiums for casualty and fire (including extended
coverage) and rent loss insurance during the term of this Lease
which directly result from Tenant's occupancy of the leased
premises, or from the type of merchandise which the Tenant stores
or sells on the leased premises whether or not Landlord has
consented thereto. In determining whether increased premiums are
the result of Tenant's use of leased premises, a schedule issued
by the organization selling the insurance rate on the leased
premises, showing the various components of such rate, shall be
conclusive evidence of the several items and charges which make
up the insurance rates on the leased premises.
10.4 Tenant's Participation in Cost of Insurance. Tenant
shall pay Landlord as additional rent its proportionate share of
insurance for the building in the manner provided in Section 3.3
hereof. Tenant's share of insurance shall be an amount equal to
all insurance premiums paid by Landlord with respect to the
building (but excluding all premiums paid by Tenant under terms
of Section 10.3 and by other tenants of the building under
similar provisions in their leases) during each lease year of the
lease term, multiplied by a fraction, the numerator of which is
the rentable square feet of the leased premises and the
denominator of which is the building rentable area on the first
day of such lease year,
10.5 Waiver of Subrogation. Landlord and Tenant hereby waive any
rights each may have against the other, and Tenant hereby waives
any rights it may have against Landlord's lender(s), on account
of any loss or damage occasioned to the Landlord or Tenant, as
the case may be, or their respective property, the leased
premises, its contents or to other portions of the building,
arising from any risk generally covered by fire and extended
coverage insurance-, and the parties each, on behalf of their
respective insurance companies insuring the property of either
Landlord or Tenant against any such loss, waive any right of
subrogation that it may have against Landlord or Tenant, as the
case may be. The Tenant, on behalf of its insurance companies
insuring the premises, its contents, Tenant's other property or
other portions of the building, waives any right of subrogation
which such insurer or insurers may have against any of Landlord's
lenders. The foregoing waivers of subrogation shall be operative
only so long as available in the State where the building is
situated and provided further that no such policy is invalidated
thereby.
SECTION XI - ASSIGNMENT AND SUBLEASING
11. 1 Assignment or Sublease. Tenant shall not assign the
whole or any part of the leased premises, nor shall this Lease or
any interest thereunder be assignable or transferable by
operation of law or any process or proceeding of
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any court, or otherwise, without prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed by
Landlord. Any assignment or sublease without Landlord's prior
written consent shall, at Landlord's option, be void.
Notwithstanding anything to the contrary in this Section 11. 1,
Tenant shall have the right to assign this lease (upon written
notice to Landlord, but without Landlord's consent) to an entity
controlled by, controlling or under common control with Tenant,
or to an entity which acquires all or substantially all of the
assets of Tenant.
Each assignment to which there has been consent shall be by an
instrument in writing in a form satisfactory to Landlord, and
shall be executed by the transferor, assignor, sublessor,
licensor, concessionaire, hypothecator or mortgagor and the
transferee, assignee, sublessee, licensee, concessionaire or
mortgagee in such instance, as the case may be and each such
transferee, assignee, sublessee, licensee, concessionaire or
mortgagee shall agree in writing for the benefit of the Landlord
herein to assume, to be bound by, and to perform the terms,
covenants, and conditions of this Lease to be done, kept and
performed by Tenant, including the payment of all amounts due or
to become due under this Lease directly to Landlord. One (1)
executed copy of such written instrument shall be delivered to
Landlord. Failure to first obtain in writing Landlord's consent
or failure to comply with the provisions of this Section shall
operate to prevent any such Assignment from becoming effective.
If Tenant assigns its interest in this Lease, or sublets the
leased premises, then the rent due hereunder shall be increased,
effective as of the date of such assignment or subletting, to the
rental payable by the assignee or sublessee pursuant to such
assignment or sublease, if greater than the rent otherwise due
hereunder. In no event shall the monthly rental after such
assignment or subletting be less than the monthly rental
specified in Article III hereof. Tenant shall also pay all legal
fees and other costs incurred by Landlord in connection with
Landlord's consideration of Tenant's request for approval of
assignments or subleases.
11.2 Corporate Ownership. If Tenant is a corporation, then any
transfer of this Lease by merger, consolidation or liquidation,
or any change or ownership of, or power to vote the majority of
Tenant's outstanding stock, shall not constitute an assignment
for the purposes of this section as long as the transferee is the
Tenant's shareholder or another corporation or entity in which at
least 50% of the equity securities or ownership is owned or
possessed, by the Tenant's shareholders or its subsidiaries.
11.3 Assignment by Landlord. If Landlord sells the building (s)
or a portion thereof containing the leased premises, or if
Landlord assigns its interest in this Lease, and to the extent
that such purchaser, tenant or an assignee
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thereof assumes Landlord's obligations hereunder and is reasonably
responsible therefor, the Landlord shall thereupon be relieved of
all liabilities hereunder, and this Lease shall remain in full force
and effect.
SECTION XII - DESTRUCTION OF PREMISES
12.1 Casualty. In the event of total or partial destruction of
the Building or the Leased premises by fire or other casualty,
Landlord agrees to promptly restore and repair the Leased
Premises at Landlord's expense; provided, however, that
Landlord's obligation hereunder shall be limited to the
reconstruction of such of the tenant finish improvements as were
originally required to be made by Landlord, if any. Any insurance
proceeds riot used by Landlord in restoring or repairing the
Leased Premises shall be the sole property of Landlord. Rent
shall proportionately xxxxx during the time that the Leased
Premises or part thereof are unusable because of any such damage
thereto. The usable portion of the Leased Premises shall be
determined as that part of the Leased Premises that remain
weather tight or that are actually used by Tenant.
Notwithstanding the foregoing, if the Leased Premises are (1) so
destroyed that they cannot be repaired or rebuilt within 180 days
from the date on which the insurance claim is adjusted; or (ii)
destroyed by a casualty which is not covered by the insurance
required hereunder or, if covered, such insurance proceeds are
not released by any mortgagee entitled thereto or are
insufficient to rebuild the Building and the Leased Premises;
then is case of a clause (1) casualty, either Landlord or Tenant
may, or, in the case of a clause (ii) casualty, then Landlord
may, upon 30 days written notice to the other party, terminate
and cancel this Lease; and all further obligations hereunder
shall thereupon cease and terminate.
SECTION XIII - EMINENT DOMAIN
13.1 Total Taking. If all of the leased premises are taken by
eminent domain, this Lease shall terminate as of the date Tenant
is required to vacate the leased premises and all rentals shall
be paid to that date. The term "Eminent domain" shall include the
taking or damaging of property by, through or under any
governmental authority, and by purchase or acquisition in lieu
thereof.
13.2 Partial Taking. If in the event of a taking of all or any
part of the leased premises by eminent domain or a taking of a
portion of the building which adversely and materially affects
Tenant's use of the leased premises, renders the remainder
thereof unusable for the business of Tenant, this Lease may, at
the option of either party, be terminated by written notice given
to the other party not more than thirty (30) days after Landlord
received notice of the taking, and such termination shall be
effective as of the date when Tenant is required to vacate the
portion of the leased premises so taken. If this Lease is so
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thereof assumes Landlord's obligations hereunder and is
reasonably responsible therefor, the Landlord shall thereupon be
relieved of all liabilities hereunder, and this Lease shall
remain in full force and effect, terminated, all rent shall be
paid to the date of termination. Whenever any portion of the
leased premises is taken by eminent domain and this Lease is not
terminated, Landlord shall at its expense proceed with all
reasonable dispatch to restore the remainder or the leased
premises to the condition it was in immediately prior to such
taking, and Tenant shall at its expense proceed with all
reasonable dispatch to restore its fixtures, furniture
furnishings, floor coverage, and equipment to the same condition
they were in immediately prior to such taking. The rent payable
hereunder shall be equitably adjusted in accordance with the
effect of such taking on the leased premises.
13.3 Damages. Landlord reserves all right to the entire
damage award or payment for any taking by eminent domain or a
transfer in lieu thereof, and Tenant waives all claim whatsoever
against Landlord for damages for termination of its leasehold
interest in the remises or for interference with its business.
Tenant hereby grants and assigns to Landlord any right Tenant may
now have or hereafter acquire to such damages and agrees to
execute and deliver such further instruments of assignment as
Landlord may from time to time request. Tenant shall, however,
have the right to claim from the condemning authority all
compensation that may be recoverable by Tenant on account of any
loss incurred by Tenant in removing Tenant's merchandise,
furniture, trade fixtures and equipment or for damage to Tenant's
business; provided however, that Tenant may claim such damages
only if they are awarded separately in the eminent domain
proceeding and not as part of Landlord's damages.
SECTION XIV - DEFAULT OF TENANT
14.1 Defaults. Time is of the essence hereof, and if Tenant
violates or breaches or fails to keep or perform any covenant,
term or condition of this Lease, and if such default or violation
continues for or is not remedied within thirty (30) days (or, if
default in the rent is involved, within ten (10) days after
receipt of notice in writing thereof given by Landlord to Tenant
specifying the matter claimed to be in default, or for a default
or violation that cannot be remedied within said thirty (30) days
if Tenant has not commenced to remedy the same within thirty (30)
days following receipt of said notice, Landlord, at its option,
may immediately declare Tenant's rights under this Lease
terminated, or re-enter and attempt to relet without terminating
this Lease, and remove all persons and property from the leased
premises, and such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of
Tenant, all without service of notice or resort to legal process
and without being deemed guilty of any trespass, or becoming
liable for any loss or damage caused thereby. If Landlord,
without terminating this Lease, either (a) elects to re-enter and
attempts to relet as herein before provided, or (b) takes
possession pursuant to legal proceedings, or (c) takes possession
pursuant to any notice provided by law, then it may re-let the
leased premises or any part
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thereof for such term or terms (which may be for a term extending
beyond the term of this lease) and at such rental or rentals and
upon such other terms and conditions as Landlord in is sole
discretion deems advisable. Upon each such re-letting, all rentals
received by Landlord from such re-letting
shall be applied, first, to the payment of any indebtedness other
than rent due hereunder from Tenant to Landlord; second, to the
payment of any costs and expenses of such re-letting, including
brokerage fees and attorneys' fee; third, to the payment of rent
due and unpaid hereunder; and the residue, if any, shall be held
by Landlord and applied to payment of future rent as the same may
become due and payable hereunder. If rentals received from such
re-letting, during any month are less than that to be paid during
that month by Tenant hereunder, Tenant shall pay any such
deficiency to Landlord.
No such re-entry or taking possession of the leased premises by
Landlord shall be construed as an election on its part to
terminate this Lease unless Landlord so notified Tenant in
writing or unless the termination thereof is found by a court of
competent jurisdiction. Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to
terminate this Lease for such previous breach. If Landlord at any
time terminates this Lease, in addition to any other remedies
which it may have, it shall have the right to recover from Tenant
(a) an amount equal to the excess, if any, of the aggregate
amount of rent and additional rent reserved in this Lease for the
remainder of the stated term over the aggregate of the then
reasonable rental value of the leased premises under a lease
substantially similar to this Lease for the remainder of the
stated term both reduced to the then present worth, and (b) all
other damages and expenses, including reasonable attorneys'fees
and the cost of recovering the lease premises, that Landlord has
sustained because of Tenant's default. In determining the
aggregate amount of such rent and additional rent, the annual
rent for each year of the unexpired term of this Lease shall be
equal to the average annual minimum rent paid by Tenant from the
commencement of the term of this Lease to the time of default, or
during the preceding three (3) full calendar years, whichever
period is shorter.
14.2 Remedies Cumulative; Waiver. Landlord's remedies hereunder
are cumulative, and Landlord's exercise of any right or remedy
due to a default or breach by Tenant shall not be deemed a waiver
of, or alter, affect or prejudice any other fight or remedy which
Landlord may have under this Lease or by law. Neither the
acceptance of rent nor any other acts or omissions of Landlord at
any time or times after the happening of any event authorizing
the cancellation or forfeiture of this Lease shall operate as a
waiver of any past or future violation, breach or failure to keep
or perform any covenant, agreement, term or condition hereof or
to deprive Landlord of its right to cancel or forfeit this Lease
upon the written notice provided for herein at any time that
cause for cancellation or forfeiture may exist, or be construed
so as at any future time to stop Landlord
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from promptly exercising any other option, right or remedy that
it may have under any term or provision of this Lease.
SECTION XV - ACCESS BY LANDLORD
15.1 Right of Entry. Landlord and its agents shall have the right
to enter the leased premises at any time to examine the same, and
to show them to prospective purchasers or tenants, and to make
such repairs, alterations, improvements or additions as may be
necessary. In non emergency situations Landlord shall give 24
hours notice of intent to enter and be accompanied by a
representative of Tenant (if Tenant so requests), If Tenant is
not personally present to permit entry and an entry is necessary
or permissible, Landlord may enter the same by master key,
without rendering Landlord liable therefor. Nothing contained
herein shall be construed. to impose upon Landlord any duty of
repair of the building except as specifically provided for
herein. Landlord shall at all times in connection with any such
entry use reasonable efforts not to unreasonably interfere with
the conduct of Tenant's business and to give utmost attention and
consideration to the security of the leased premises and the
protection of Tenant's trade secrets.
15.2 Default of Landlord. If Landlord defaults in the performance
of any covenant required to be performed by Landlord, Tenant may
serve upon Landlord a written notice specifying the default. If
Landlord does not remedy the default within sixty (60) days
following receipt thereof or, in the case of a default which
takes more than sixty (60) days to cure if Landlord has not
commenced to remedy the same within sixty (60) days following
receipt thereof, Tenant may, following the giving of the notice
required under terms of Section 1 S. 1 hereof, give Landlord
notice of termination of this Lease, with unearned rent being
prorated to the date of termination. If Landlord fails to timely
cure the default after ' notice has been given, in lieu of
termination of this Lease, Tenant, at its sole option, may cure
Landlord's default and offset the reasonable expense thereof
against rent thereafter accruing.
SECTION XVI - SURRENDER OF LEASED PREMISES
16.1 Surrender of Possession. Tenant shall promptly yield and
deliver to Landlord possession of the leased premises upon the
expiration or earlier termination of this Lease. Landlord may
place and maintain a "For Rent" sign in conspicuous places on the
leased premises for sixty (60) days prior to the expiration or
earlier termination of this Lease.
16.2 Holding Over. In the event of a holding over by Tenant after
expiration or termination of this Lease without the consent in
writing of Landlord, Tenant shall be deemed a Tenant at
sufferance and shall pay rent for such
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occupancy at the rate of
twice the last-current aggregate Base and Additional Rent,
prorated for the entire holdover period, plus all attorney's fees
and expenses incurred by Landlord in enforcing its rights
hereunder, plus any other damages occasioned by such holding
over. Except as otherwise agreed, any holding over with the
written consent of Landlord shall constitute Tenant a
month-to-month Tenant.
SECTION XVII - QUIET ENJOYMENT
17.1 Landlord's Covenant. Tenant, upon fully complying with and
promptly performing all of the terms, covenants and conditions of
this Lease on its part to be performed, shall have and quietly
enjoy the leased premises for the term set forth herein, if its
performance of such terms, covenants and conditions continues for
such period.
SECTION XVIII - MISCELLANEOUS
18.1 Notices. Any notices required in accordance with any of the
provisions herein shall be delivered or mailed by registered or
certified mail to the Landlord at X.X. Xxx 00000, Xx. Xxxx, XX
00000-0-000, or to such other place as Landlord may from time to
time direct in writing, and to Tenant at 0000 Xxxx Xxxxxxxxx
Xxxx., Xxxxx 000, Xxxxx, XX 00000, or to such place as the Tenant
may from time to time direct in writing. If Tenant is a
partnership or joint enterprise, any notice required or permitted
hereunder may be given by or to any one partner thereof P with
the same force and effect as if given by or to all thereof. A
notice shall be deemed received two (2) days after the postmark
affixed on the envelope by the United States Post Office.
18.2 Successors or Assigns. All the terms, conditions, covenants,
and agreements of this Lease shall extend to and be binding upon
Landlord, Tenant, and their respective heirs, administrators,
executors, successors, and permitted assigns, and upon any person
or persons coming into ownership or possession of any interest in
the leased premises by operation of law or otherwise, and shall
be construed as covenants running with the land.
18.3 Insolvency. If a petition is filed under the United States
Bankruptcy Act or other law to have Tenant dissolved or
liquidated, or if a trustee or receiver is appointed for Tenant's
assets under said Bankruptcy Act or other law or if a proceeding
is commenced to foreclose any mortgage or any other lien on
Tenant's interest in the leased premises or on personal property
kept or maintained thereon, or if Tenant makes an assignment for
the benefit of creditors, the Tenant shall be deemed in default
hereunder.
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18.4 Tenant Defined. The word "Tenant" as used herein shall mean
each and every person, partnership or corporation who is
mentioned as a Tenant herein or who executes this Lease as
Tenant- If there shall be more than one Tenant, they shall be
bound jointly and severally by the terms, covenants and
agreements herein.
18.5 Brokers' Commission. Tenant agrees to indemnify and hold
Landlord harmless from all damages, liability and expense
(including reasonable attorneys' fees) arising from any claims or
demands of any broker(s) or finders, for any commission alleged
to be due in connection with its having introduced Tenant to the
premises or participating in the negotiations with the Tenant of
this lease.
18.6 Partial Invalidity. If any term, covenant or condition of
this Lease or the application thereof to any person or
circumstances is, to any extent, invalid or unenforceable, the
remainder of this Lease, or the application of such term,
covenant or condition to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term, covenant or condition of this
Lease shall be valid and be enforceable to the fullest extent
permitted by law. Furthermore, in lieu of invalid or
unenforceable provisions, there shall be automatically added as
part of this Lease a provision as similar in intent and effect to
the stricken provision as may be possible while still being valid
and enforceable.
18.7 Recording. Tenant shall not record this Lease without the
prior written consent of Landlord. However, upon the request of
either party hereto, both parties shall execute a memorandum of
this Lease, in a form customarily used for the purpose of
recordation. Said memorandum of this Lease shall describe the
parties, the leased premises and the term of this Lease and shall
incorporate this lease by reference.
18.8 Subordination. Notice to Mortgagee; Attornment. This Lease
shall be subordinate to any existing or future mortgages or deeds
of trust on the building or on the leasehold interest held by the
Landlord, and to any extensions, renewals, or replacements
thereof; provided, however, that the Tenant's possession of the
leased premises, use of common areas and facilities, and all the
Tenant's other rights and benefits hereunder shall not be
disturbed or in any way interfered with so long as the Landlord
has no right to terminate this Lease or re-enter the leased
premises pursuant to Section XIV of this Lease during the
original lease term or any extension thereof. Tenant shall,
within ten (10) days of Landlord's request, execute and deliver
to or as directed by the Landlord instrument or certificates
stating the terms of the foregoing subordination and estoppel
certificates reciting facts regarding the existence and status of
this Lease, prepared by or at the request of the Landlord or any
mortgagee or
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secured party. The Tenant shall mail duplicate copies of all notices
of default it is giving to the Landlord to the first five (5)
mortgagees or secured parties who request in writing that the Tenant
do so, which writing shall be actually received by the Tenant prior
to the Tenant giving its notice of default to the Landlord and which
writing shall designate the address to which the Mortgagee's or secured
party's duplicate copy is to be mailed- Tenant agrees to attorn to
Landlord's successor following any foreclosure, sale or transfer in lieu
thereof.
18.9 Force Majeure. Neither Landlord nor Tenant shall be in
default hereof nor liable for damages from their failure to
perform their duties or obligations hereunder if due to causes
beyond their reasonable control, including, but not limited to,
acts of God, acts of civil or military authorities, fire, floods,
windstorm, earthquake, strikes or other labor disturbances, civil
commotion, or war; provided, however, that the foregoing shall
not excuse Tenant from its failure to pay amounts due under terms
of sections 3.1, 3.2, 3.3, 5.1, 5.2, 5.3, 9.3, or 10.4, 19-1
hereof or its failure to perform its obligations under terms of
sections 8.1 or 10.2 hereof, which failure shall constitute
default by Tenant.
18.10 Smoking. Smoking is prohibited in the building common areas
and in the leased premises.
SECTION XIX - ENVIRONMENTAL
19.1 Tenant agrees to indemnify and hold landlord harmless from
all claims which may be asserted against landlord resulting from
the release of any hazardous or toxic substance placed or caused
to be placed on the premises by tenant. In the event that any
cleanup or other response is required on the premises as a result
of any such substance release, tenant shall be responsible for
performing and paying for such cleanup. If the tenant does not
perform the necessary cleanup in a timely manner the lessor can
perform the cleanup at the tenants expense. Tenant is also agrees
to notify Landlord of any spill or environmental problem. Tenant
will allow Landlord reasonable environmental inspection. Tenant
will not be responsible for any environmental problem preexisting
its tenancy. Landlord agrees to indemnify and hold Tenant
harmless from all claims which may be asserted against Tenant
resulting form the release of any hazardous or toxic substance
located at the building, unless such hazardous or toxic
substances are present solely as a result of the actions of
Tenant, its officers, agents, employees, invitees and
contractors.
SECTION XX - EXECUTION OF LEASE
20.1 Execution by Landlord and Tenant- Approval of Lender.
Landlord shall not be deemed to have made an offer to Tenant by
furnishing Tenant with a
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copy of the Lease with particulars inserted. Notwithstanding that
Landlord has received a deposit and a copy of the Lease which Tenant
has executed, no contractual or other rights shall exist or be created
between Landlord and Tenant until all parties hereto have executed this
Lease and, if so indicated by Landlord, until it has been approved in
writing by Landlord's lender(s) and fully executed copies have been
delivered to Landlord and Tenant. Tenant agrees to make such
changes herein as may be requested by Landlord's lender(s) so
long as such do not increase amounts due from Tenant hereunder or
otherwise substantially alter its rights hereunder.
SECTION XXI - ENTIRE AGREEMENT-APPLICABLE LAW
21.1 Entire Agreement-Applicable Law. This Lease, and the
Exhibits attached hereto this reference incorporated herein, set
forth the entire agreement, of Landlord and Tenant concerning the
leased premises, and there are no other agreements or
understanding, oral or written, between Landlord and Tenant
concerning the leased premises. Any subsequent modification or
amendment of this Lease shall be binding upon Landlord and Tenant
only if reduced to writing and signed by them. This Lease shall
be governed by, and construed in accordance with the laws of the
State where the premises are located.
SECTION XXII - IMPROVEMENTS
22.1 Improvements. Landlord, at its cost, will complete the
tenant improvements as outlined in Exhibit C attached hereto and
made a part hereof. The tenant improvements shall include all
work necessary to provide Tenant with finished space ready for
occupancy, except for telephone outlets and wiring. The finished
space shall include the following: basic electrical wiring,
outlets (does not include dedicated circuits), non-parabolic
standard florescent lighting, sprinkler relocation, all dernising
walls finished and painted as shown on Exhibit C (uninsulated 9
interior walls and insulated to deck common walls), heating and
cooling ventilation, W look ceiling tiles, upgraded carpet (solid
color chosen from Landlord's samples) and base, metal framed
solid core doors (with one side light on the entry door), and one
lock set for the main entrance door.
SECTION XXIII - RELOCATION
23.1 Relocation. Tenant agrees that Landlord may relocate Tenant
to other space in the building containing substantially the same
amount of rentable square feet as is contained in the premises,
provided that the actual cost of physically relocating Tenant
(excluding any and all consequential or other costs to Tenant)
and the cost of altering the new space to make it comparable to
the premises is borne by the Landlord; provided, however, that
Landlord may not
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exercise said right to relocate Tenant if the premises consist of
more than ten percent of the rentable square feet in the building.
In addition, Landlord shall pay costs incurred by Tenant as a result
of the relocation, including without limitation costs incurred in
changing addresses on stationary, business cards, directories,
advertising and other such items, but in no event shall Landlord's
obligation to pay costs imposed in this sentence exceed the sum of
$500. In the event that the new premises in which the Tenant is
relocated does not consist of the identical number of rentable square
feet as specified in this Lease, the parties shall execute an instrument
specifying the new number of square feet in the premises and the
change in the number of square feet contained in the premises
shall be effective as of the date on which the Tenant occupies
the new premises in which it is relocated.
TENANT: LANDLORD:
_____________________________ DDBD, Inc.
By:__________________________ By:
ITS:__________________________ ITS:
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EXHIBIT A
(LEGAL DESCRIPTION)
Xxx 0, Xxxxx 0, Xxxxxxxxx Xxxxxxxxx Xxxxxx, according to the
recorded plat thereof in Dakota County, Minnesota.
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Exhibit B
Demised Premises
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Exhibit C
Unnsulated 9 interior walls and insulated to deck common walls
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