LEASE AGREEMENT
This LEASE AGREEMENT, made as of this 14th day of April, 1999, between Xxxx
Companies US, Inc., a Minnesota corporation ("Landlord"), and D56, Inc., a
Minnesota corporation ("Tenant");
WITNESSETH, THAT
1.1 PREMISES: Landlord, subject to the terms and conditions hereof,
hereby leases to Tenant, its successors and assigns, certain premises
("Premises") consisting of the building to be built at Xxxxxxx Xxxx North and
Commerce Boulevard, Rogers, Minnesota ("Building"), the land underlying and
contiguous thereto together with any appurtenant easements and all
improvements thereon. The legal description of the land is attached hereto as
Exhibit A. A schematic depiction of the Project is attached hereto as Exhibit
B. The Premises are subject to certain easements, restrictions, reservations
and encumbrances as set forth on Exhibit A (the "PERMITTED EXCEPTIONS").
Landlord represents that it is the fee simple owner of the Premises subject
only to the Permitted Exceptions, and that it will not subject the Premises
to new or additional Permitted Exceptions without the written consent of
Tenant.
1.2 OPTION TO EXPAND INTO ADDITIONAL SPACE: Tenant may from time to time
elect to expand the Building (such expansion referred to as the "Expansion
Space"). Tenant's election shall be exercised by written notice to Landlord
specifying the approximate size, location and general design requirements of
the proposed expansion, delivered no less than one (1) year prior to the date
on which Tenant desires to occupy the Expansion Space (the "Election
Notice"). The area designated Expansion on Exhibit B depicts the maximum
anticipated expansion of the Building.
(a) Within thirty (30) days of receipt of the Election Notice,
Landlord and Tenant will meet two (2) times to discuss and attempt to agree
upon schematic plans and specifications for the Expansion Space (the
"SCHEMATICS"). Following the written approval of the Schematics by Landlord
and Tenant, Landlord will proceed with the preparation of the "EXPANSION
SPACE OUTLINE PLANS AND SPECIFICATIONS" which will be developed from the
Schematics. The Expansion Space Outline Plans and Specifications will be
submitted to Tenant for its approval within thirty (30) days of said approval
of the Schematics and will contain similar detail as are contained in the
Outline Plans and Specifications attached hereto as Exhibit D.
Within twenty (20) days following receipt of the Expansion Space
Outline Plans and Specifications, Tenant will either approve the same or
request such changes as it deems appropriate, which changes will then be
incorporated into the Expansion Space Outline Plans and Specifications by
Landlord. Landlord and Tenant will use reasonable efforts to agree upon the
Expansion Space Outline Plans and Specifications within sixty (60) days of
their approval of the Schematics. During the development of the Expansion
Space Outline Plans and Specifications, Landlord will make application for
all required governmental approvals for the Expansion Space, (the "EXPANSION
SPACE PERMITS") and will diligently pursue the issuance of the Expansion
Space Permits. Landlord shall prepare the Schematics, the Expansion Space
Outline Plans and Specifications and the
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Expansion Space Final Plans and Specifications (as defined below) at
Landlord's initial cost, but to be included in the Expansion Space Total
Project Cost.
(b) Upon the approval of the Expansion Space Outline Plans and
Specifications, Landlord will inform Tenant of the proposed increase in Base
Rent attributable to the Expansion Space (the "EXPANSION SPACE BASE Rent")
and the Landlord's "EXPANSION SPACE TOTAL PROJECT COST", which shall include
all costs in the categories identified on Exhibit "C", but not including any
land costs. To determine the Expansion Space Total Project Cost, Landlord or
Landlord's designated general contractor shall solicit bids from no less than
two (2) financially responsible subcontractors in each of the major
subcontract categories, including, by way of example, earthwork concrete,
steel, steel erection, roofing, mechanical and electrical. The Expansion
Space Base Rent, beginning on the date of Substantial Completion of the
Expansion Space and continuing for five (5) years thereafter, shall be equal
to the Expansion Space Total Project Cost, (minus any savings) plus an amount
equal to six percent (6%) of the "EXPANSION SPACE ACTUAL CONSTRUCTION COSTS"
which shall be calculated in the same manner as Actual Construction Costs are
calculated pursuant to Exhibit C but only with respect to the Expansion
Space, and which shall be reduced by the amount of any savings, multiplied by
a commercially reasonable mortgage constant plus fifty (50) basis points. For
purposes of the Expansion Space, the term "Substantial Completion" will have
the same meaning as set forth in Exhibit C. Landlord and Tenant shall
cooperatively make a reasonable effort to secure commercially reasonable
financing containing terms no less favorable to Landlord as borrower than (i)
a twenty (20) year amortization schedule, (ii) an eighty percent (80%) loan
to value ratio and (iii) a mortgage constant no greater than eleven and
one-half percent (11.5%). Tenant shall not be obligated for the payment of
Expansion Space Base Rent, or other charges with respect to the Expansion
Space until the Expansion Space has been Substantially Completed.
At the same time Landlord informs Tenant of the Expansion Space Base Rent and
the Expansion Space Total Project Cost, Landlord shall also advise Tenant
whether, in Landlord's reasonable judgment, the Expansion Space can be
Substantially Completed on or before the date which is five (5) full calendar
years prior to the expiration of the Term, as it may have been previously
extended and, if not, Landlord will advise Tenant when the Landlord estimates
that the Expansion Space will be Substantially Completed.
(c) If Tenant is dissatisfied with the Expansion Space Total
Project Costs and/or the Expansion Space Base Rent, it may retract its
Election Notice.
(d) If Tenant elects to proceed to have Landlord construct the
Expansion Space, as specified above, then Landlord and Tenant shall enter
into an amendment to this Lease (the "EXPANSION AMENDMENT") in form and
content reasonably acceptable to Landlord and Tenant, which will be prepared
by Landlord and which will provide as follows:
(i) a summary of the Expansion Space Base Rent; and
(ii) if, pursuant to the Landlord's completion estimate, as
specified in Section 1.2(b) above, the Expansion Space cannot be Substantially
Completed on or before a date which is five (5) full calendar years prior to the
expiration of the Term, as it may have been previously extended, an extension of
the then current Term so that the Term shall expire on the last day of the
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month which is five (5) years from the date of Substantial Completion of the
Expansion Space (the "EXPANSION EXTENSION").
The Expansion Extension shall be in lieu of any portion of the
Term which would have existed upon the date of Substantial Completion of the
Expansion Space; provided, however, the exercise of the Expansion Extension
shall not eliminate any unexercised Extended Terms. The extension of the Term
or any Extended Term due to an Expansion Extension will not adjust the rent
schedule for any space not subject to the Expansion Extension then being
exercised, and the Base Rent for any such space will adjust at the same time
it would have absent such expansion (as though options to extend had been
exercised). In the event that there would not be at least two (2) three (3)
year Extended Terms remaining following the Expansion Extension, the
Expansion Amendment shall also include the addition of a sufficient number of
Extended Terms to provide for at least two (2) three (3) year Extended Terms
following the Expansion Extension.
(e) Upon the execution by Landlord and Tenant of the Expansion
Amendment, Landlord shall immediately commence the preparation of the
"EXPANSION SPACE FINAL PLANS AND SPECIFICATIONS" to be consistent with the
approved Expansion Space Outline Plans and Specifications, to satisfy any
physical requirements of the site. Landlord shall submit the Expansion Space
Final Plans and Specifications to Tenant for review and approval. Landlord
shall construct the Expansion Space in a good and workmanlike manner,
consistently with the best practices of the industry in accordance with the
Expansion Space Final Plans and Specifications and Landlord agrees to
complete the construction thereof in accordance with all applicable legal
requirements.
(f) Upon execution of the Expansion Amendment and approval of the
Expansion Space Final Plans and Specifications, Landlord shall, subject to
Excused Delay, (as such term is defined in Section 3.7 of Exhibit C attached
hereto) diligently proceed with the construction of the Expansion Space and
complete the same and deliver possession thereof to Tenant within a
reasonable time thereafter. Landlord will give Tenant written notice of any
such Excused Delay specifying the nature and the period of such Excused Delay
within fifteen (15) days after the occurrence thereof. The time of completion
of said construction shall be extended for the additional time caused by such
Excused Delay.
(g) During the period of construction of the Expansion Space,
Tenant or its designated agent or agents shall have the right of inspection
and Landlord shall cooperate with Tenant or its designated agent or agents
with respect to any such inspection and facilitate the same as long as such
inspection does not interfere with the work of Landlord in completing the
Expansion Space.
(h) At least five (5) days prior to Substantial Completion of the
Expansion Space, Landlord and Tenant will agree upon a list of all Punchlist
Items (as such term is defined in Section 3.9 of Exhibit C attached hereto)
not completed in accordance with the Expansion Space Final Plans and
Specifications, and Landlord shall forthwith complete said Punchlist Items.
The acceptance of possession of the Expansion Space by Tenant shall be deemed
conclusively to establish that the Expansion Space has been Substantially
Completed, subject to any Punchlist Items; provided, however, that Tenant may
supplement the Punchlist Items by identifying Punchlist Items which Tenant
establishes were deficiencies in the Expansion Space as of the date of
Substantial Completion, so long as such supplemental Punchlist Items are
identified for Landlord within one hundred twenty (120) days following
Substantial Completion.
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(i) Landlord guarantees the Expansion Space and such other items
as are covered by the Expansion Space Final Plans and Specifications against
defective workmanship and/or defective materials for a period of two (2)
years from the date of Substantial Completion of the Expansion Space.
Landlord does further agree, at its sole cost and expense to repair or
replace any defective item occasioned by defective workmanship and/or
defective materials during said two (2) year period.
From and after the expiration of the two (2) year guaranty of
Landlord against defective workmanship and materials, Landlord agrees to
cooperate with Tenant in the enforcement by Tenant, at Tenant's sole cost and
expense, of any excess warranties or guaranties of workmanship or materials
given by subcontractors or materialmen that guarantee or warrant against
defective workmanship or materials for a period of time in excess of the two
(2) year period described above and to cooperate with Tenant in the
enforcement by Tenant, at Tenant's sole cost and expense, of any service
contracts that provide service, repair or maintenance to any of the Expansion
Space for a period of time in excess of such two (2) year period. Upon
expiration of the two (2) year guaranty of Landlord, Landlord will assign to
Tenant any then unexpired warranties which Landlord received from any
subcontractors performing work with respect to the Expansion Space.
(j) Notwithstanding the foregoing, in the event the sum of the
mortgage constant plus fifty (50) basis points is greater than twelve percent
(12%), and Landlord does not elect, at its option, to offer Tenant an
Expansion Space Base Rent constant no greater than twelve percent (12%), then
Tenant shall have the option to purchase the Premises. If Tenant exercises
such option to purchase the Premises, Landlord shall sell the Premises to
Tenant and Tenant shall purchase the Premises from Landlord pursuant to the
terms and conditions contained in Section 1.3 hereof except that the closing
date shall be postponed pending the determination of Fair Market Value to the
extent necessary, and except that the purchase price shall be the greater of
(i) the sum of (a) the Total Project Cost plus (b) the Expansion Space Total
Project Cost for any previous expansions plus (c) the sum of $150,000.00 or
(ii) the Fair Market Value of the Premises as of the date of Tenant's
exercise of this option reduced by the sum of (a) the Rent Credit Amount (as
defined in Section 13.3 of this Lease) not yet realized by Tenant in the form
of a cash payment or as an offset against Base Rent or Additional Rent plus
(b) the amount of any accrued Offsets (as defined in Section 3.2 herein,
other than those included in (a) above). Tenant's option to purchase under
the terms of this Section 1.2(j) shall expire ninety (90) days following
written notice from Landlord as to the Expansion Space Base Rent and the
Expansion Space Total Project Cost.
The "Fair Market Value" is defined as the cash price which would
be obtained for the Premises, subject to this Lease, in an arm's length
transaction between a willing buyer and a willing seller under no compulsion
to do so. If the parties have not agreed in writing upon the Fair Market
Value within thirty (30) days of Tenant's exercise of its option to purchase,
(the "APPRAISAL PERIOD"), Fair Market Value shall be determined by the
appraisal process described below.
Within fifteen (15) days after the expiration of the Appraisal
Period, the parties shall either (1) jointly appoint an appraiser for this
purpose or (2) failing this joint action, separately designate a
disinterested appraiser. No person shall be appointed or designated an
appraiser unless he or she has at least five (5) years experience in
appraising major commercial property in the Minneapolis - St. Xxxx
Metropolitan area and is a member of a recognized society of real estate
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appraisers. If, within thirty (30) days after their appointment, the two
appraisers reach agreement on the Fair Market Value, that value shall be
binding and conclusive upon the parties. If the two appraisers thus appointed
cannot reach agreement on the question presented within thirty (30) days
after their appointment, then the appraisers thus appointed shall, within
fifteen (15) days thereafter appoint a third disinterested appraiser having
like qualifications. Within ten (10) days after the appointment of the third
appraiser, the two appraisers appointed by the parties shall each submit to
the third appraiser and to the parties their independent appraisal of the
Fair Market Value of the Premises for the purchase in question. Within thirty
(30) days after receipt of the two independent appraisals, the third
appraiser shall select one of the two appraisals submitted by the two
appraisers appointed by the parties as the appraisal closest to the Fair
Market Value of the Premises. The appraisal of the Fair Market Value so
selected by the third appraiser shall be binding and conclusive upon the
parties. Each party shall pay the fees and expenses of the appraiser
appointed by it and shall share equally the fees and expenses of the third
appraiser. If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser within the fifteen (15) day period
referenced above, they or either of them shall give notice of such failure to
agree to the parties and if the parties fail to agree upon the selection of
such third appraiser within ten (10) days after the appraisers appointed by
the parties give such notice, then either of the parties, upon notice to the
other party may request such appointment by the American Arbitration
Association, or on its failure, refusal or inability to act, may apply for
such appointment to the presiding judge of the District Court of Hennepin
County, Minnesota.
Notwithstanding anything contained herein to the contrary, in the
event Tenant is dissatisfied with the determined Fair Market Value, Tenant
shall have the right, upon written notice to Landlord, to rescind its notice
of its option to purchase the Premises which notice must be given, if at all,
within thirty (30) days of the date Tenant is notified in writing of the Fair
Market Value. In the event Tenant elects to rescind its notice, Tenant shall
promptly reimburse Landlord for the fees and expenses incurred by Landlord
for Landlord's appraiser and Landlord's share of the third appraiser.
1.3 INITIAL OPTION TO PURCHASE: Tenant shall have the further option
to purchase the Premises (i) on the date of Substantial Completion (the
"FIRST OPTION") and (ii) on the last day of the twenty fourth (24th) full
month of the Initial Term (the "SECOND OPTION") (the "Purchase Date"),
provided that as of the Purchase Date no event of default shall have occurred
and be continuing beyond any applicable notice and cure period provided for
under Section 17 herein. Tenant shall exercise its option to purchase by
giving written notice thereof to Landlord not later than forty five (45) days
prior to the Purchase Date, time being of the essence. If Tenant exercises
the First Option, the price to be paid by Tenant shall be the "Final Total
Project Cost" as defined in Exhibit "C", reduced by the sum of (a) the Rent
Credit Amount (as defined in Section 13.3 of this Lease) not yet realized by
Tenant in the form of a cash payment or as an offset against Base Rent or
Additional Rent, plus (b) the amount of any accrued Offsets (other than those
included in (a) above). If Tenant exercises the Second Option, the price to
be paid by Tenant shall be the Final Total Project Cost plus $300,000.00,
reduced by the sum of (a) the Available Gross Rent Credit (as defined in
Section 13.1) of this Lease not yet realized by Tenant in the form of a cash
payment or as an offset against Base Rent or Additional Rent, plus (b) the
amount of any accrued Offsets (other than those included in (a) above). On
the Purchase Date, Tenant shall pay the applicable purchase price to Landlord
and Landlord shall execute and deliver to Tenant a Limited Warranty Deed,
with State Deed Tax paid thereon, conveying fee title to the Premises to
Tenant, it being understood that
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the title to the Premises will be free and clear of any Mortgage and shall be
subject only to the following encumbrances:
(i) the Permitted Exceptions;
(ii) any encumbrances resulting from Tenant's failure to keep
or perform its obligations under this Lease;
(iii) any encumbrances created by Tenant or anyone claiming
under Tenant;
(iv) any encumbrances or takings resulting from a proceeding
in eminent domain or threat thereof;
(v) any non-monetary encumbrances consented to in writing by
Tenant; and
(vi) unpaid taxes and special assessments which are the
obligation of Tenant to pay pursuant to this Lease.
Within ten (10) days after Tenant exercises its option to
purchase, Landlord shall furnish to Tenant a commitment for an ALTA Owner's
Title Insurance Policy covering title to the Premises, with extended coverage
in the amount of the purchase price, reasonably acceptable to Tenant, showing
title to the Premises in Landlord and subject only to the exceptions
described above. Landlord shall simultaneously furnish an as-built survey of
the Premises and Landlord shall pay all costs of the preparation and issuance
of such survey and commitment and any policy issued in connection therewith.
Tenant shall be allowed twenty (20) days after receipt thereof for
examination of title and notifying Landlord in writing of any objections
thereto. If any objection to title is not made and Landlord notified as
herein provided, such objection shall be deemed waived. If objections to
title are made and Landlord is notified thereof as herein provided, Landlord
shall have until the Purchase Date to cure such objections and Landlord shall
use its best efforts to cure any such objections. If such objections are not
cured prior to the Purchase Date, Tenant may at its option (i) elect not to
purchase the Premises, in which event this Lease shall remain in full force
and effect, or (ii) close the purchase in the same manner as if there had
been no title objections, in which event the purchase shall be closed on the
Purchase Date and Landlord shall convey title to the Premises subject to the
matters as to which objections were made but Tenant shall not be deemed to
have waived any rights to damages hereunder, or (iii) attempt to cause such
encumbrances to be removed. However, if Tenant elects alternative (iii)
above, closing shall be postponed until the encumbrances in question are
removed and, if Tenant is unable within a further period of sixty (60) days
to cause such encumbrances to be removed, Tenant may then elect either
alternative (i) or (ii) above. No such postponement shall alter the purchase
price. All costs and expenses incurred by Tenant in causing or attempting to
cause such encumbrances to be removed, including reasonable attorneys' fees,
shall be payable by Landlord. Objections which can be remedied by the payment
of money shall be paid from Landlord's proceeds at the closing. In the event
Landlord defaults in its obligations hereunder, Tenant shall have the right
to seek specific performance.
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If, subsequent to the exercise of Tenant's election to purchase,
but prior to the closing of the subject purchase, any proceedings in
condemnation or eminent domain are commenced, Tenant may elect to rescind its
purchase election by giving written notice to Landlord of such intent within
thirty (30) days following the commencement of such proceedings.
At closing, Landlord shall deliver to Tenant the following:
(a) Originals or copies of all governmental permits
obtained in connection with the construction of
Landlord's Work;
(b) A certificate executed by Landlord that the
Landlord's Work has been constructed to date in
substantial compliance with the applicable Final
Plans and Specifications as amended by agreement by
the parties;
(c) A limited warranty xxxx of sale and assignment of all
personal property owned by Landlord which is located
on the Premises at the time of closing; and
(d) Such additional documents or instruments in form
reasonably acceptable to Tenant which are necessary
to convey to Tenant all of Landlord's right, title
and interest in and to the Premises and any personal
property located thereon or appurtenant thereto.
The Purchase Price shall not be reduced by reason of damages or
destruction by fire or other causes. Landlord shall, however, deliver to
Tenant at closing, all of Landlord's right, title and interest in any
property insurance proceeds arising out of such damage or destruction to the
Premises.
1.4 RIGHT OF FIRST OFFER: If during the term hereof, Landlord elects to
offer the Premises for sale, it shall notify Tenant thereof. Tenant shall
have seven (7) business days thereafter in which to notify Landlord of its
interest to purchase the Premises, time being of the essence. If Tenant so
notifies Landlord of its interest to purchase the Premises, then the purchase
price shall be determined in accordance with the appraisal process described
in Section 1.2 hereof.
Landlord shall, within fifteen (15) days of the date Landlord is
notified in writing of the Fair Market Value, notify Tenant in writing of the
price for which it is willing to sell the Premises (the "OFFER PRICE"). Tenant
shall have thirty (30) days thereafter in which to notify Landlord of its
agreement to purchase the Premises for the Offer Price, time being of the
essence. If Tenant so notifies Landlord of its agreement to purchase the
Premises, then Landlord shall sell the Premises to Tenant and Tenant shall
purchase the Premises from Landlord pursuant to the terms and conditions
contained in Section 1.3 hereof, except that (a) the purchase price shall be the
Offer Price reduced by the sum of (i) the Rent Credit Amount (as defined in
Section 13.3 of this Lease) not yet realized by Tenant in the form of a cash
payment or as an offset against Base Rent or Additional Rent, plus (ii) the
amount of any accrued offsets (other than those included in (i) above, and (b)
the Purchase Date shall be the date which is ninety (90) days subsequent to the
date of Tenant's notice to Landlord (or, if such date is not a Business Day, the
next Business Day thereafter). The Premises shall be conveyed to Tenant pursuant
to this Section 1.4 free from any mortgage and free from all
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title matters other than Permitted Exceptions. If Tenant does not so notify
Landlord of its agreement to purchase the Premises for the Offer Price within
such thirty (30) day period, then Landlord may at any time within one (1)
year after the date of Tenant's notice to Landlord agree to sell the Premises
to a third party (and thereafter close such sale), subject to this Lease, for
a sale price which is not less than one hundred percent (100%) of the Offer
Price. In the event of such a sale of the Premises to a third party, all of
the Tenant's right to purchase the Premises under this Section 1.4 shall
terminate and Tenant shall have no further purchase rights under this Section
1.4. If Landlord does not sell the Premises to a third party for one hundred
percent (100%) of the Offer Price within such twelve (12) month period,
Tenant's First Offer Rights, as herein set forth, will be reinstated.
Notwithstanding the provisions of this Section, in the event that
Landlord offers to sell the Premises or any part thereof to a Permitted
Affiliate (as defined herein), then such offer to sell shall not be subject
to Tenant's right of first offer as set forth in this Section. Any transfer
of title to the Premises or any part thereof pursuant to the foregoing
provisions of this Section shall not cause Tenant's right of first offer
under this Section to terminate, and the right of first offer set forth in
this Section shall remain in full force and effect with respect to the
Premises following any such transfer. As used above, the term "PERMITTED
AFFILIATE" means (i) any entity controlling, controlled by or under common
control with Landlord; (ii) any (a) officer or director of or (b) member,
partner, shareholder or other equity holder, in either such event with an
entity interest of ten percent (10%) or more in any of the foregoing entities
or (iii) any combination of (i) and (ii).
1.5 OPTION TO TERMINATE PRIOR TO EXPANSION: Provided that the Building
has not been expanded by a total amount exceeding 50,000 square feet,
pursuant to Section 1.2, Tenant shall have the option to terminate this Lease
effective as of either the last day of the seventy fifth (75th) full calendar
month of the Term or the last day of the ninety ninth (99th) full calendar
month of the Term, at Tenant's option. Tenant shall exercise its option by
giving written notice thereof to Landlord not later than ten calendar months
prior to the elected termination date. No later than five (5) calendar months
prior to the elected termination date, Tenant shall pay to Landlord a sum
equal to (i) nine (9) months Base Rent if the elected termination date is the
last day of the seventy fifth (75th) full calendar month of the Term or (ii)
seven (7) months Base Rent if the elected termination date is the last day of
the ninety ninth (99th) full calendar month of the Term. Time is of the
essence. If Tenant fails to timely exercise its right hereunder, or fails to
deliver in a timely manner the sum due, Tenant's notice shall have no force
or effect.
1.6 OPTION TO TERMINATE FOLLOWING EXPANSION:
A. In the event the Building is expanded by a total amount exceeding
50,000 square feet pursuant to Section 1.2, and Substantial Completion of such
expansion(s) occurs between the last day of the fifteenth (15th) full calendar
month of the Term and the last day of twenty seventh (27th) full calendar month
of the Term, Tenant shall have the option to terminate this Lease as of the last
day of the eighty seventh (87th) full calendar month of the Term. Tenant shall
exercise its option by giving written notice thereof to Landlord not later than
ten (10) full calendar months prior to the elected termination date. No later
than five (5) full calendar months prior to the elected termination date, Tenant
shall pay to Landlord a sum equal to nine (9) months Base Rent.
B. In the event the Building is expanded by a total amount exceeding
50,000 square feet pursuant to Section 1.2, and Substantial Completion of such
expansion(s) occurs between the
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last day of the thirty ninth (39th) full calendar month of the Term and the
last day of fifty first (51st) full calendar month of the Term, Tenant shall
have the option to terminate this Lease as of the last day of the one hundred
eleventh (111th) full calendar month of the Term. Tenant shall exercise its
option by giving written notice thereof to Landlord not later than ten (10)
full calendar months prior to the elected termination date. No later than
five (5) full calendar months prior to the elected termination date, Tenant
shall pay to Landlord a sum equal to seven (7) months Base Rent.
Simultaneously with Tenant's written notice to Landlord of any
termination right under Section 1.5 or Section 1.6, Tenant shall submit a
Lease termination agreement (the "TERMINATION AGREEMENT") which shall
memorialize the fact that the Lease shall be terminated from and after the
effective date of termination selected by Tenant, and that neither Landlord
or Tenant shall have any further obligations under the Lease except for any
that accrue prior to such effective termination date, and containing any
further provisions reasonably requested by Landlord or Tenant. Landlord shall
promptly execute the Termination Agreement and return the same to Tenant.
Tenant shall have no obligation to pay any termination "fee" referenced
herein until Tenant has received the executed Termination Agreement.
If Tenant fails to timely exercise its right hereunder, or fails to
deliver in a timely manner the sum due, Tenant's notice shall have no force or
effect.
2.1 TERM: The initial term of this Lease (the "INITIAL TERM") shall
commence on the date of "Substantial Completion" (as defined in Section 3.8
of Exhibit C) of the Landlord's Work (including, for this purpose, the Fire
Protection associated with coverage in and under the Mezzanines, the
mechanical ventilation related to the Mezzanines and the electrical lighting
systems and any basic electrical requirements (convenience power) in and
under the Mezzanine) (collectively, the "MEZZANINE MECHANICALS"), and shall
end on the last day of the one hundred twenty third (123rd) full calendar
month after the date of Substantial Completion. The date of Substantial
Completion of the Landlord's Work and the Mezzanine Mechanicals is sometimes
referred to as the Commencement Date. The Commencement Date may not occur
prior to November 1, 1999.
2.2. OPTION TO EXTEND: Tenant shall have the option to extend the Term of
this Lease with respect to the entire Premises for five (5) additional terms
of three (3) years each, (collectively, the "Extended Terms", and
individually, an "Extended Term"). Each Extended Term shall be upon the same
terms as provided in this Lease for the Term, except for the Base Rent which
shall be as set forth in Exhibit C for each Extended Term. Tenant shall
exercise its option by giving written notice of such exercise to Landlord,
not less than nine (9) months prior to the end of the Term, or the then
current Extended Term, as the case may be. Should Tenant fail to exercise any
option to extend the term of this Lease within the time provided in this
Section, all of Tenant's rights to further extend the term hereof shall
expire.
3.1 MONTHLY BASE RENT: Tenant agrees to pay to Landlord during the Term
a monthly Base Rent ("Base Rent") as specified on Exhibit C hereto payable on
the first day of each month in advance, without deduction or setoff of any
kind, except as specifically authorized herein, to Landlord and delivered to
Landlord's managing agent , Xxxx Properties, Inc., 700 International Centre,
000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other place
as may from time to time be designated by Landlord. Notwithstanding the
foregoing, Tenant shall not be
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liable to Landlord for the payment of any Base Rent, Additional Rent or other
sums due hereunder until the Landlord's Work and the Mezzanine Mechanicals
are Substantially Complete.
3.2 OFFSETS: Notwithstanding anything herein to the contrary, Tenant may
offset the following sums against Tenant's obligation to pay Base Rent (but not
Additional Rent):
(i) If Tenant demands a "Rent Credit Amount" (as defined in
Section 13.3 hereof), said Rent Credit Amount may be offset
against Base Rent payable commencing on the Commencement Date;
(ii) If Tenant exercises its right of self help under Section 7 of
this Lease, any amount spent by Tenant pursuant to that
Section 7 may be offset against Base Rent payable commencing
on the Commencement Date; and
(iii) Any Landlord Payments not received by Tenant as required by
Section 4.2 hereof may be offset against Base Rent payable
commencing on the Commencement Date.
4.1. USE: Tenant may use the Premises for any lawful business use.
4.2 LANDLORD PAYMENTS: Subject to the conditions that:
(i) Within sixty (60) days after the initial occupancy of the
Building by Tenant, there are (and will be for the succeeding
12 month period) at least sixty (60) full time employees
employed at the Premises, and Tenant furnishes Landlord with
reasonably satisfactory evidence thereof; and
(ii) Within twelve (12) months after the commencement of the
Initial Term hereof, Tenant has created (and will maintain for
a period of at least 12 months) at least two (2) new permanent
full-time employment positions in the State of Minnesota (as
opposed to transfers of positions already existing in the
State) in addition to those existing on the date hereof, at a
wage at least equal to $9.00 per hour, and Tenant furnishes
Landlord with reasonably satisfactory evidence thereof; and
(iii) Tenant is not in default hereunder,
then Landlord shall pay the following amounts (the "Landlord Payments")
to Tenant at the following times:
(a) At such time as the conditions contained in (i) and
(ii) hereof have been satisfied, an amount equal to
the then present value (determined using a discount
rate of 10.07% per annum) of the following stream of
payments:
AMOUNT DATE
------ ----
$32,225 August 1, 2001
$32,225 February 1, 2002
$32,225 August 1, 2002
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$32,225 February 1, 2003
$32,225 August 1, 2003
$32,225 February 1, 2004
$32,225 August 1, 2004
$32,225 February 1, 2005
$32,225 August 1, 2005
$32,225 February 1, 2006
(b)(i) At such time as Tenant no longer has the right
to terminate this Lease as of the last day of the
75th calendar month, pursuant to either Section 1.5
or Section 1.6 hereof, an amount equal to the then
present value (determined using a discount rate of
10.07% per annum) of the following stream of
payments:
AMOUNT DATE
------ ----
$32,225 August 1, 2006
$32,225 February 1, 2007
(b)(ii) At such time as Tenant no longer has the right
to terminate this Lease as of the last day of the
87h calendar month, pursuant to either Section 1.5
or Section 1.6 hereof, an amount equal to the then
present value (determined using a discount rate of
10.07% per annum) of the following stream of
payments:
$32,225 August 1, 2007
$32,225 February 1, 2008
(b)(iii) At such time as Tenant no longer has the right
to terminate this Lease as of the last day of the
99th calendar month, pursuant to either Section 1.5
or Section 1.6 hereof, an amount equal to the then
present value (determined using a discount rate of
10.07% per annum) of the following stream of
payments:
$32,225 August 1, 2008
$32,225 February 1, 2009
(b)(iv) At such time as Tenant no longer has the right
to terminate this Lease as of the last day of the
111th calendar month, pursuant to either Section 1.5
or Section 1.6 hereof, an amount equal to the then
present value (determined using a discount rate of
10.07% per annum) of the following stream of
payments:
$32,225 August 1, 2009
$32,225 February 1, 2010
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(c) If Tenant exercises an option to terminate this Lease
pursuant to Section 1.5 or Section 1.6 hereof, then
at the expiration of the term, the total of the
payments set forth in (b) above for the dates prior
to the expiration date, plus interest thereon at the
rate of 10.07% per annum.
(d) At such time as Tenant purchases the Premises from
Landlord pursuant to Section 1.3 or Section 1.4
hereof, an amount equal to the then present value
(determined using a discount rate of 10.07% per
annum) of any payments not yet due, but to be made
pursuant to (a) and (b) hereof.
5. OPERATING COSTS: Tenant shall, for the entire Term, pay to Landlord
as an item of additional rent, without any setoff or deduction therefrom,
except as expressly provided in this Lease, all costs ("Operating Costs")
which Landlord may incur in maintaining and operating the Premises during
each calendar year of the Term. "OPERATING COSTS" are defined to include all
reasonable expenses and costs (but not specific costs which are separately
billed to and paid by Tenant) which the Landlord shall pay or become
obligated to pay because of or in connection with the operation and
maintenance of the Premises, including but not limited to all real estate
taxes and annual installments of special assessments due and payable in such
calendar year with respect to the Premises; costs of any contest of such
taxes, including reasonable attorney's fees; management fees, insurance
premiums, utility costs, security costs, costs of wages, maintenance costs
(relating to the Premises including sidewalks, landscaping and parking or
service areas, common areas, service contracts, equipment and supplies) which
for federal tax purposes may be expensed rather than capitalized, all in
accordance with Generally Accepted Accounting Principles ("GAAP"),
consistently applied but exclusive of legal fees, leasing commissions,
depreciation, costs of leasehold improvements and all costs of a capital
nature except as provided in the next sentence and payments of principal and
interest on any mortgages, deeds of trusts, or other security devices
covering the Premises. Operating Costs shall also include the yearly
amortization of capital costs (amortized over the useful life of the
improvement as reasonably determined by Landlord in accordance with GAAP)
incurred by the Landlord for improvements to the Premises required to comply
with any change (after the Commencement Date) in the laws, rules or
regulations of any governmental authority having jurisdiction, or, for
purposes of reducing Operating Costs, which costs shall be amortized over the
useful life of such improvements as reasonably estimated by the Landlord in
accordance with GAAP, but in no event shall the annual amortization be in
excess of the savings.
Notwithstanding anything contained in this Lease to the contrary,
the following shall apply with respect to real estate taxes and assessments:
A. Provided Tenant pays when due the taxes and assessments specified
above, Landlord agrees that it shall pay all taxes and installments of
special assessments on or prior to the date the same are due to the taxing
authority and shall provide Tenant with evidence of payment thereof upon
request of Tenant. Tenant shall have no obligation to pay or reimburse
Landlord for any penalties imposed for the late payment of any real estate
tax or assessment, provided Tenant pays the same to Landlord when due under
the terms hereof. Upon any request by Landlord for payment of any taxes or
installments of assessments, Landlord shall provide Tenant with a copy of the
then current real estate tax xxxx for the Premises.
12
B. Landlord shall, at its sole cost and expense (and without
reimbursement as an Operating Cost), pay as and when due all special
improvement or betterment assessments which were pending in existence or
levied or which were due and payable on or prior to the Commencement Date,
and for any assessments for on or off-site improvements which arise, in whole
or in part, due to the development of the Premises. Notwithstanding the
foregoing, Tenant shall be responsible to pay to Landlord, as part of
Operating Costs, installments of assessments due solely to the paving, with
curb and gutter, of Xxxxxxx Xxxx North and the installation of sanitary
sewers, water lines and storm sewers therein from the center of extended
Commerce Boulevard to the north line of the Premises. The extension of
Commerce Boulevard shall be the sole responsibility of Landlord, and the cost
thereof shall neither be assessed to the Premises nor included in the Actual
Construction Costs.
C. Whether or not Landlord shall take the benefit of the provisions
of any statute or ordinance permitting any assessment for public betterments
or improvements to be paid over a period of time, Landlord shall,
nevertheless, be deemed to have taken such benefits so that the term "taxes
and assessments" shall include only the current annual installment of any
such assessments.
D. Tenant shall have the right, at its own cost and expense and in
its own name or in the name of Landlord, to seek to have reviewed, reduced,
equalized, or abated any taxes or assessments payable by Tenant hereunder.
Landlord shall join with Tenant and execute any and all documents,
applications, petitions, instruments, or complaints necessary for any such
protest, contest, review or other proceedings, desired or conducted by
Tenant. During the period of any such proceedings, Tenant shall continue to
pay such taxes and assessments or shall provide to Landlord such security as
Landlord deems reasonably necessary to insure that such payment will be made
all to the end that the interest of Landlord in the Premises shall in no way
be injured or diminished by any such proceedings.
The following shall be excluded from Operating Costs:
A. Landlord's costs and obligations under Sections 7.A and 7.D;
B. Costs directly or indirectly resulting from or relating to
(including repairs, restoration, security measures, emergency
or temporary services, inspection and, during the period of
such repair or restoration, any increase in operating expenses
resulting from) fire, windstorm or other casualty or damage or
destruction from any other cause, whether or not insured or
insurable;
C. Costs of correcting defects in, or inadequacy of, the design
or construction of the Building or the materials used in the
construction of the Building or in the Building equipment or
appurtenances thereto, except that, for the purposes of this
paragraph, conditions resulting from ordinary wear and tear
and use shall not be deemed defects;
D. Financing and refinancing costs, interest or debt or
amortization payments on any mortgage or mortgages and rental
under any ground or underlying leases or lease, together with
all costs incidental thereto;
13
E. Costs of Landlord's general corporate overhead and general
administrative expenses (including costs and expenses paid to
third parties to collect rents, prepare tax returns and
accounting reports and obtain financing);
F. Costs resulting from the negligence or misconduct of Landlord
or its employees, agents or contractors;
G. Travel, entertainment and related expenses incurred by
Landlord or its personnel.
H. Special assessments levied or pending as of the date of this
Lease except for those specifically permitted as Operating
Costs as set forth above;
I. Reserves for anticipated future expenses;
J. Any management and/or administrative fee which, in the
aggregate (regardless of how characterized) exceeds 15% of
Operating Costs, exclusive of insurance costs and real estate
taxes and assessments.
As soon as reasonably practicable prior to the Commencement Date and
the commencement of each calendar year during the Term, Landlord shall, with
input and direction from Tenant, determine an estimate of, and budget for,
Operating Costs for the ensuing calendar year. All levels of service,
operation and maintenance, to the extent controllable, shall be determined
from time to time by Tenant in its reasonable discretion, but at all times
consistent with similar Premises in the Minneapolis/St. Xxxx metropolitan
area. The budget, as initially established for any year, shall be adjusted to
reflect Tenant's determinations as to such levels. No expenditure in excess
of any line item in the budget (or which will, with reasonably anticipated
expenses, cause such excess) shall be made without Tenant's consent and an
adjustment to the budget, except in case of emergency where Landlord may take
reasonable necessary action without such prior authorization. Tenant shall
pay, as additional rent hereunder together with each installment of Base
Rent, one-twelfth (1/12th) of estimated Operating Costs less real estate
taxes and installments of special assessments. Real estate taxes and
installments of special assessments shall be due on or before the later of
(a) twenty (20) days after receipt of Landlord's invoice or (b) twenty (20)
days prior to the last date such taxes and installments of special
assessments are due without penalty. As soon as reasonably practicable after
the end of each calendar year during the Term (but in no event more than
ninety (90) days thereafter), Landlord shall furnish to Tenant a statement of
the actual Operating Costs for the previous calendar year, and within twenty
(20) days thereafter Tenant shall pay to Landlord, or Landlord shall credit
to the next rent payments due Landlord from Tenant, as the case may be, any
difference between the actual Operating Costs and the estimated Operating
Costs paid by Tenant. Operating Costs for the years in which this Lease
commences and terminates shall be prorated by multiplying the actual
Operating Costs by a fraction the numerator of which is the number of days of
that year of the Term and the denominator of which is 365.
For a period of one (1) year following Tenant's receipt of Landlord's
statement of actual Operating Costs (provided that if Tenant commences an
audit, as specified below, within such one (1) year period, such period shall
be extended by the amount of time reasonably necessary for Tenant to complete
such audit), Landlord shall keep available for Tenant's inspection and/or
audit complete books and records relating to Operating Costs. During this
period Tenant may
14
copy, inspect and/or audit Landlord's Operating Costs books and records upon
reasonable notice to Landlord. The audit must be performed during regular
business hours in the offices where Landlord maintains its accounting
records. An assignee may have the right to audit as provided herein, however,
such right shall only apply to the assignee's term pursuant to the Lease. In
the event a discrepancy of five percent (5%) or more is found in favor of
Tenant, Landlord shall pay the cost of such audit. If the audit discloses an
overcharge by Landlord, Landlord shall reimburse Tenant for such overcharge
within twenty (20) days, unless Landlord reasonably and in good faith
disputes the result of the audit.]
6. ADDITIONAL TAXES: Tenant shall pay as additional rent to Landlord,
together with each installment of Base Rent, the amount of any gross receipts
tax, sales tax or similar tax (but excluding therefrom any income, estate,
inheritance, corporate or franchise tax), payable by Landlord.
7. OBLIGATIONS OF LANDLORD: Landlord agrees that Tenant shall quietly enjoy
the Premises in accord with the provisions hereof, subject only to Section
17. Landlord shall:
A. Keep the structure of the Building, and all structural
components thereof, including without limitation, footings,
foundations, columns, exterior walls, interior weight bearing
walls, floor and ceiling slabs, and roof (and all elements of
the roof, whether structural or non-structural), in good
condition and repair, ordinary wear and tear excepted, and
make all necessary or appropriate replacements thereto, all at
Landlord's sole cost and without inclusion in Operating Costs;
and
B. Keep all Building systems, including HVAC, life safety, fire
suppression sprinkler systems and utility lines and conduits
in good condition and repair, ordinary wear and tear excepted,
and make all necessary or appropriate replacements thereto.
The cost thereof shall be deemed an Operating Cost.
C. Provide mains and conduits to supply water, gas, electricity
and sanitary sewer service to the Premises; and
D. Consistent with the budget approved by Tenant, operate,
maintain and manage the Premises, including grounds and
parking areas in a manner reasonably satisfactory to Tenant.
All such maintenance which is provided by Landlord shall be
provided as reasonably necessary for the comfortable use and
occupancy of the Premises, upon the condition that the
Landlord shall not be liable for damages for failure to do so
due to causes beyond its reasonable control; and
E. Maintain in full force and effect during the term hereof, a
policy of all-risk insurance, including Difference in
Conditions, insuring the improvements for their full
replacement value.
15
It is understood that Landlord does not warrant that any of the
services and utilities referred to above will be free from interruption from
causes beyond the reasonable control of Landlord. Such interruption of
service or utilities shall never be deemed an eviction or disturbance of
Tenant's use and possession of the Premises or any part thereof or render
Landlord liable to Tenant for damages by abatement of rent or otherwise or
relieve Tenant from performance of Tenant's obligations under this Lease,
provided Landlord uses all reasonable efforts to restore such services and
utilities as soon as possible.
Tenant may, at its option, upon no less than ninety days written notice
to Landlord, elect to perform obligations of Landlord contained in Section 7B,
7C, 7D and 7E. Upon such election, Tenant shall provide Landlord with
verification of its performance in a form reasonably satisfactory to Landlord.
In the event Landlord shall be in default of any of the terms and
conditions of this Lease then, after Tenant has sent a written notice to
Landlord of such default and Landlord and the holder of any mortgage against
the Premises (but only if Tenant has been previously notified of the
existence of such mortgage) has failed to cure such default within thirty
(30) days after Landlord's receipt of such written notice, Tenant shall have
the right to cure such default; provided, however, that if the failure set
forth in Tenant's written notice is such that it requires more than thirty
(30) days to correct, Tenant shall not be entitled to exercise the foregoing
self-help right if Landlord (i) promptly and diligently commences curing the
failure within thirty (30) days after the written notice is received by
Landlord and (ii) diligently prosecutes to cure to completion such default.
Notwithstanding the foregoing sentence, emergency repairs which are
Landlord's responsibility pursuant to a specific provision of this Lease and
which shall be necessary to prevent imminent injury or damage to persons or
Tenant's property may be made by Tenant after Tenant has notified Landlord of
the need for such emergency repair, if such notice is reasonably practical
under the circumstances, in Tenant's reasonable opinion, and Landlord has
failed to commence such repair within such period of time as is reasonable
under the circumstances. If notice is not reasonably practical under the
circumstances, Tenant may make such repairs without notice. Notwithstanding
the foregoing provisions, despite such notices and the expiration of such
cure periods, except as expressly provided in this Lease, no rent or other
payments due from Tenant hereunder may be offset by Tenant, and Tenant shall
have no right to perform any obligation of Landlord. In the event Tenant has
exercised a self-help right pursuant to the foregoing provisions of this
Section 7, Landlord shall reimburse Tenant for its reasonable out-of-pocket
expenditures within thirty (30) days of presentation of invoice in detail
reasonably satisfactory to Landlord together with interest from the date that
is twenty (20) days following presentation of invoice until the date such
charges have been paid at an annual equal to the rate specified in Section 22
herein.
8. COVENANTS OF TENANT: Tenant agrees that it shall:
A. Give Landlord access to the Premises at all reasonable times,
without charge or diminution of rent or interference with
Tenant's business, to enable Landlord to examine the same and
to make such repairs as Landlord may deem advisable, and
during the nine (9) months prior to the expiration of the
Term, to exhibit the Premises to prospective tenants and to
place upon the Project or Premises any usual or ordinary "For
Lease" signs.
16
B. Upon the termination of this Lease in any manner whatsoever,
remove Tenant's personal property and such of its equipment
and trade fixtures as it desires and those of any other person
claiming under Tenant, and quit and deliver up the Premises to
Landlord peaceably and quietly in as good order and condition
as the same are now in or hereafter may be put in by Landlord
or Tenant, reasonable use and wear thereof and repairs which
are Landlord's obligation and damage by fire or other casualty
excepted. Goods and effects not removed by Tenant at the
termination of this Lease, however terminated, shall be
considered abandoned and Landlord may dispose of the same as
it deems expedient. Tenant shall not be required to repair
damage to the Premises caused by removal of such items
provided that it uses reasonable means to remove the same.
C. Except as permitted herein, not assign this Lease or sublet
all or any part of the Premises voluntarily, involuntarily or
by operation of law, without first obtaining Landlord's
written consent thereto. Landlord shall, within ten (10) days
of its receipt of Tenant's request, approve or reject the
assignment or sublease and, if rejected, Landlord shall
specify its reason(s) for withholding approval. Landlord's
failure to respond within ten (10) days shall be deemed
approval. Landlord's consent will not be withheld provided
that (i) the proposed use of the assignee or sublessee is not
inconsistent with the use specified in Section 4.1 herein;
(ii) such assignee (but not any sublessee) shall assume in
writing the performance of the covenants and obligations of
Tenant hereunder which arise after the effective date of the
assignment; and (iii) a fully executed copy of any such
assignment or sublease shall be delivered to Landlord within
ten (10) days after the execution thereof , but the making of
such assignment or sublease shall not be deemed to release
Tenant from the payment and performance of any of its
obligations under this Lease.
Notwithstanding anything in this Lease to the contrary, Tenant
may, without consent of Landlord, at any time assign or
otherwise transfer this Lease or any portion thereof to any
parent, subsidiary or affiliate corporation or entity; or any
corporation resulting from the consolidation or merger of
Tenant into or with any other entity, or to any person, firm,
entity or corporation acquiring a majority of Tenant's issued
and outstanding capital stock or a substantial part of
Tenant's physical assets, or at any time form a privately-held
corporation or subsequently make a public offering of its
stock. As used herein, the expression "affiliate corporation
or entity" means a person or business entity, corporation or
otherwise, that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under
common control with Tenant. The word "control" means the right
and power, direct or indirect, to direct or cause the
direction of the management and policies of an ownership or
voting securities, by contract or otherwise. Further,
notwithstanding anything in this Lease to the contrary, the
following shall not be deemed an assignment or violation of
17
this Lease or give rise to any right of Landlord to terminate
this Lease: (a) any public offering of stock of Tenant or
Tenant's parent company, if any; or (b) the conversion of
Tenant or Tenant's parent company, if any, from a publicly
held corporation to a privately held corporation. In addition,
any change in ownership of stock of Tenant shall not be
considered an assignment of this Lease.
D. Tenant may, at its sole expense, erect exterior signage and a
decorative Building facade not in excess of that permitted by
applicable code and regulation for the Premises.
E. Not do any act which may make void or voidable any insurance
on the Premises, or which may render an increased or extra
premium payable for any insurance deemed necessary or
advisable by Landlord, provided, however, that upon notice
from Landlord, Tenant may elect to pay such additional cost.
F. Tenant shall not make structural changes or alterations to the
Premises without the prior written approval of Landlord, which
approval shall not be unreasonably withheld or delayed.
Landlord agrees to cooperate with Tenant in obtaining licenses
and permits to make such alterations from the applicable
governmental authorities.
Tenant may, at its own cost and expense, without the prior
approval of Landlord make non-structural changes to the
Premises, including but not limited to, mechanical system,
electrical system, HVAC, installation of fixtures and
equipment, painting, papering or changing floor coverings in
and to the interior of the Premises, provided that the
structural integrity of the Building shall not be adversely
affected or diminished.
All fixtures, equipment and property of any nature which may
be installed or placed in or upon the Premises by Tenant shall
remain the property of Tenant. Landlord waives any right or
lien it may have in said fixtures, equipment and property.
Tenant may assign, lien, encumber, mortgage or create a
security interest in or upon its equipment, fixtures or other
property in the Premises without the consent of Landlord. Upon
the request of Tenant, Landlord agrees to provide Tenant,
within ten (10) days of each such request, a written waiver in
form reasonably satisfactory to Landlord and Tenant evidencing
Landlord's waiver of any rights it has or may have in Tenant's
fixtures, equipment and other property.
All alterations, additions or improvements (including
carpeting or other floor covering which has been glued or
otherwise affixed to the floor) which may be made by either of
the parties hereto upon the Premises, shall be the property of
Landlord, and shall remain upon and be surrendered with the
Premises, as a part thereof, at the termination of this Lease.
Notwithstanding the foregoing, office furniture, trade
fixtures and
18
equipment (even if bolted or fastened to the Building for
stabilization purposes) shall be the property of Tenant and
may be removed by Tenant and the termination of this Lease.
G. Except for the initial construction which is the obligation of
Landlord under Exhibits "C" and "D", and except for any other
work performed by Landlord on the Premises including, without
limitation, any expansion of the Building, keep the Premises
free from any mechanics', materialmen's, contractors' or other
liens arising from, or any claims for damages growing out of,
any work performed, materials furnished or obligations
incurred by or on behalf of Tenant.
Tenant shall have the right to contest any such lien, in which
event such lien shall not be considered a default under this
Lease until the existence of the lien has been finally
adjudicated and all appeal periods have expired. Tenant shall
indemnify and hold harmless Landlord from and against any such
lien, or claim or action thereon, reimburse Landlord promptly
upon demand therefor by Landlord for costs of suit and
reasonable attorneys' fees incurred by Landlord in connection
with any such lien, claim or action, and, upon written request
of Landlord if Landlord reasonably deems itself insecure with
the prospect for payment by Tenant, provide Landlord with a
bond, letter of credit, cash deposit or other reasonable
security in an amount necessary to obtain a release of the
Premises from such lien if the lien claimant ultimately
prevails.
H. Tenant shall, at its own expense, comply with the
requirements, as to Tenant's particular use, of insurance
underwriters and insurance rating bureaus and governmental
authorities having jurisdiction.
I. Maintain in full force and effect during the term hereof, a
policy of public liability insurance under which Landlord is
named as additional insured. The minimum limits of liability
of such insurance shall be $5,000,000.00 combined single limit
as to bodily injury and property damage. Tenant agrees to
deliver a certificate of insurance evidencing such coverage to
Landlord. Such policy shall contain a provision requiring
thirty (30) days written notice to Landlord before
cancellation of the policy can be effected.
9. AMERICANS WITH DISABILITIES ACT: The parties agree that the liabilities
and obligations of Landlord and Tenant under that certain federal statute
commonly known as the Americans With Disabilities Act as well as the regulations
and accessibility guidelines promulgated thereunder as each of the foregoing is
supplemented or amended from time to time (collectively, the "ADA") shall be
apportioned as follows:
A. If the Premises as initially constructed as Landlord's
responsibility does not conform to the requirements of the
ADA in effect at the time of Substantial Completion
thereof, then in any such case such nonconformity shall be
promptly made to comply by Landlord at its sole expense.
19
B. From and after the Commencement Date of the Lease, Tenant
covenants and agrees to conduct its operations within the
Premises in compliance with the ADA.
10. INTENTIONALLY OMITTED.
11. CASUALTY LOSS: If the Building is damaged in part or whole from any
cause and the Building can be substantially repaired and restored within the
Repair Period (as defined below) from the date of the damage using standard
working methods and procedures, Landlord shall at its expense promptly and
diligently repair and restore the Building, including all leasehold
improvements, to substantially the same condition as existed before the
damage. This repair and restoration shall be made promptly and diligently,
subject only to delays by causes beyond Landlord's reasonable control. As
soon as reasonably possible and in any event within thirty (30) days after
the damage, Landlord shall notify Tenant in writing of the number of days
reasonably estimated by Landlord to complete repairs from the date of the
damage. As used herein, the "REPAIR PERIOD" means a period of three hundred
and sixty-five (365) days.
If the Building cannot be repaired and restored within the Repair Period,
then either party may, within ten (10) days after the date Tenant receives
Landlord's notice of the estimated repair completion period as provided
above, cancel the Lease by giving notice to the other party. If Landlord does
not commence repairs within 30 days after the damage or continue to prosecute
such repair continuously with reasonable diligence, or if the Building is not
repaired and restored within the Repair Period, then Tenant may cancel the
Lease at any time thereafter and prior to completion of the repair. Tenant
shall not be able to cancel this Lease if its willful misconduct caused the
damage unless Landlord is not promptly and diligently repairing and restoring
the Premises.
The Base Rent and Additional Rent shall xxxxx to the extent fair and
equitable and the abatement shall include any period that Tenant is unable to
occupy or use the Building, or its occupancy or use is materially adversely
affected by reason of any casualty or cause. The abatement shall consider the
nature and extent of interference to Tenant's ability to conduct business in
the Premises and the need for access and essential services. The abatement
shall continue from the date the damage occurred to the date Landlord
completes the repairs and restoration, or until Tenant again uses the
Premises or the part rendered unusable, whichever is first.
Notwithstanding anything else in Section 11, Landlord is not obligated to
repair or restore damage to Tenant's trade fixtures, furniture, equipment, or
other personal property.
If the Lease is in the last twenty four (24) months of its Term when
"material" damage to the Building occurs, either party may elect to terminate
this Lease provided that Landlord's election to terminate shall be vitiated
if Tenant gives notice within ten (10) days after receipt of notice of such
cancellation from Landlord of its election to extend the Term of the Lease
for the next available Extended Term, if any. Material is defined as costing
more than 25% of the replacement cost of the Building. To cancel, Landlord
must give notice to Tenant within ten (10) days after the Landlord knows of
the damage and Tenant must give notice within ten (10) days of receipt of
notice from Landlord as to whether or not the damage is material, which
notice Landlord shall give to Tenant within thirty (30) days after the
damage. The notice must specify the cancellation date, which shall be at
least thirty (30) but not more than sixty (60) days after the date notice is
given.
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12. CONDEMNATION: If the entire Premises is taken by eminent domain or
transferred under threat of such taking, this Lease shall automatically
terminate as of the date of taking. If a portion of the Premises, or portion
of the Building, or good and sufficient access thereto or a material portion
of the parking, is taken by eminent domain and it is unfeasible, in Tenant's
reasonable judgment, for Tenant to continue to operate its business in the
portion of the Premises remaining, Tenant shall have the right to terminate
this Lease as of the date of taking by giving written notice thereof to
Landlord within ninety (90) days after the date of taking. If a material
portion of the Building is taken by eminent domain (i.e. more than
twenty-five percent (25%), Landlord shall have the right to terminate this
Lease as of the date of taking by giving written notice thereof to Tenant
within ninety (90) days after the date of taking. If neither Landlord nor
Tenant elects to terminate this Lease, Landlord shall, at its expense,
restore the Premises, including any improvements or other changes made
therein by Tenant, to as near the condition which existed immediately prior
to the date of taking as reasonably possible, and to the extent that the
Premises or the Building , including the access thereto or the use thereof by
Tenant is adversely affected, the rent shall equitably xxxxx. All damages
awarded for a taking under the power of eminent domain shall belong to and be
the exclusive property of Landlord, whether such damages be awarded as
compensation for diminution in value of the leasehold estate hereby created
or to the fee of the Premises; provided, however, that Landlord shall not be
entitled to any separate award made to Tenant for the value and cost of its
personal property and fixtures or for relocation benefits.
13.1 DELAY IN COMPLETION: If "Phase I" (as defined on Exhibit "C") of the
Landlord's Work is not "Substantially Complete" (as defined on Exhibit "C")
by August 23, 1999, the Landlord will be in default hereunder (a "PHASE I
COMPLETION DEFAULT").
If "Phase II" (as defined on Exhibit C) of the Landlord's Work is not
Substantially Complete by October 15, 1999, the Landlord will be in default
hereunder (a "PHASE II COMPLETION DEFAULT").
If the entirety of the Landlord's Work (including the Mezzanine Mechanicals)
is not Substantially Complete by March 1, 2000, the Landlord will be in
default hereunder (a "SUBSTANTIAL COMPLETION DEFAULT").
If Phase I of the Landlord's Work is Substantially Complete by July 5, 1999
and if Phase II of the Landlord's Work is Substantially Complete by August 1,
1999 and if the entirety of the Landlord's Work (including the Mezzanine
Mechanicals) is Substantially Complete by December 1, 1999, then Landlord
will have earned a "SUCCESS FEE" in the amount of $100,000.00 which will be
included in the calculation of Final Project Cost as set forth in Section 2.1
of Exhibit C to this Lease.
All dates in this Section 13.1 will be adjusted one (1) day for each day of
"Excused Delay" (as set forth on Exhibit "C").
13.2 REMEDY FOR DELAYED COMPLETION. In the event of a Phase I Completion
Default, Tenant may terminate this Lease by giving notice of such termination
to Landlord at any time following August 23, 1999 and prior to 5:00 p.m. on
August 30, 1999. In the event of a Phase II Completion Default, Tenant may
terminate this Lease by giving notice of such termination to Landlord at any
time following October 15, 1999 and prior to 5:00 p.m. on October 22, 1999.
In
21
the event of a Substantial Completion Default, Tenant may terminate this
Lease by giving notice of such termination to Landlord at any time following
March 1, 2000 and prior to 5:00 p.m. on March 8, 2000. In the event that
Tenant gives any such termination notice, this Lease shall, upon receipt of
that notice, be deemed terminated and of no further force and effect and
neither party shall, following such termination, have further liability to
the other by reason hereof or by reason of that certain Interim Agreement
between the parties dated January 28, 1999, as amended other than as set
forth in the immediately following sentence. Within five (5) days of Tenant's
notice to terminate this Lease, Landlord will pay Tenant $400,000.00 (the
"TERMINATION PAYMENT") to assist Tenant in paying the cost of removing
Tenant's fixtures and equipment from the Premises and other costs associated
with the failure to complete Landlord's Work. The parties agree that the
actual damages which will be incurred by Tenant on account of a Phase I
Completion Default, a Phase II Completion Default or a Substantial Completion
Default will be significant and very difficult to calculate and have,
therefor, agreed upon the Termination Payment as a liquidated sum to
compensate Tenant for such damage. Such termination, if exercised by Tenant,
and the Landlord's payment of the Termination Fee shall be Tenant's sole
remedy for Landlord's failure to Substantially Complete the Landlord's Work
(or any Phase thereof) as herein required.
If Phase I of the Landlord's Work is not Substantially Complete by July 5, 1999,
or if Phase II of the Landlord's Work is not Substantially Complete by August 1,
1999 or if the entirety of the Landlord's Work (including the Mezzanine
Mechanicals) is not been Substantially Complete by December 1, 1999, and
provided that Tenant has not terminated this Lease as herein provided, Tenant
may exercise the remedy provided for in Section 13.3 hereof. If Tenant does
exercise the remedy provided for in Section 13.3, such exercise shall be
Tenant's sole remedy for Landlord's failure to Substantially Complete the
Landlord's Work, or any Phase thereof, as herein required.
13.3 SATISFACTION GUARANTY: Landlord has delivered a "SATISFACTION
GUARANTY" to Tenant in the amount of Three Hundred Thousand and 00/100
($300,000.00) Dollars. In the event Phase I is not Substantially Complete by
July 5, 1999, or Phase II is not Substantially Complete by August 1, 1999 or
Landlord's Work is not Substantially Complete by December 1, 1999, the amount
of the Satisfaction Guaranty will be deemed to be $400,000.00. Landlord and
Tenant agree that Tenant may make demand for payment under the Satisfaction
Guaranty if, for any reason, Tenant is dissatisfied with Landlord's
performance hereunder (including, without limitation, the circumstances
addressed in the immediately preceding paragraph). If Tenant makes such
demand for payment, the amount demanded by Tenant (the "RENT CREDIT AMOUNT")
will be treated in the manner set forth in Section 2.5 of Exhibit C to this
Lease. If Tenant is dissatisfied with Landlord's performance hereunder, the
parties acknowledge Tenant's damages on account of that dissatisfaction will
be difficult to measure. If, under those circumstances, the Tenant makes a
demand for a Rent Credit Amount, the parties agree that the Rent Credit
Amount demanded by Tenant (up to the maximum amount of $300,000.00) will be
deemed a reasonable liquidated sum intended to compensate Tenant for such
damages.
All dates in this Section 13.3 will be adjusted one (1) day for each day of
Excused Delay (as set forth in Exhibit C).
14. LIABILITY AND INDEMNITY: Save for its negligence and willful acts
and that of its agents, Landlord shall not be responsible or liable to Tenant
for any loss or damage (i) that may be occasioned by or through the acts or
omissions of persons occupying any part of the Building or
22
any persons transacting any business in or about the Building or persons
present in or about the Building for any other purpose or (ii) for any loss
or damage resulting to Tenant or its property from burst, stopping or leaking
water, sewer, sprinkler or steam pipes or plumbing fixtures or from any
failure of or defect in any electric line, circuit or facility. Subject to
Section 15, Tenant shall defend, indemnify and save Landlord harmless from
and against all liabilities, damages, claims, costs, charges, judgments and
expenses, including, but not limited to, reasonable attorneys' fees, which
may be imposed upon or incurred or paid by or asserted against Landlord, the
Premises or any interest therein or in the Building by reason of or in
connection with any negligent or tortious act on the part of Tenant or any of
its agents, contractors, servants, employees, licensees or invitees, any
accident, injury, death or damage to any person or property occurring in the
Premises or any part thereof, or any default of Tenant of its obligations
under this Lease provided, however, that nothing contained in this paragraph
shall be deemed to require Tenant to indemnify Landlord with respect to any
negligence or tortious act or omission committed by Landlord or its agents or
any other tenant, occupant, licensee or invitee, or to any extent prohibited
by law.
Subject to Section 15, Landlord shall defend, indemnify and save Tenant
harmless from and against all liabilities, damages, claims, costs, charges,
judgments and expenses, including, but not limited to, reasonable attorneys'
fees, which may be imposed upon or incurred or paid by or asserted against
Tenant, the Premises or any interest therein or in the Building by reason of
or in connection with any negligent or tortious act on the part of Landlord
or any of its agents, contractors, servants, employees, licensees or
invitees, any accident, injury, death or damage to any person or property
occurring in the Premises or any part thereof, or any default by Landlord of
its obligations under this Lease, provided, however, that nothing contained
in this paragraph shall be deemed to require Landlord to indemnify Tenant
with respect to any negligence or tortious act or omission committed by
Tenant or its agents or any other tenant, occupant, licensee or invitee, or
to any extent prohibited by law.
15. MUTUAL RELEASE/WAIVER OF SUBROGATION: Each of Landlord and Tenant
hereby releases the other from any and all liability or responsibility to the
other or anyone claiming through or under them by way of subrogation or
otherwise for any loss or damage to property caused by any of the all risk
casualties insurable under an all risk property insurance policy, even if
such casualty shall have been caused by the fault or negligence of the other
party, or anyone for whom such party may be responsible.
16.1 HAZARDOUS SUBSTANCES: Tenant shall at all times and in all respects
comply with all federal, state and local laws, ordinances and regulations
("HAZARDOUS MATERIALS LAWS") relating to the industrial hygiene,
environmental protection or the use, analysis, generation, manufacture,
storage, presence, disposal or transportation of any oil, petroleum products,
flammable explosives, asbestos, urea formaldehyde, polychlorinated biphenyls,
radioactive materials or waste, or other hazardous toxic, contaminated or
polluting materials, substances or wastes, including without limitation any
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" under any such laws, ordinances or regulations (collectively,
"HAZARDOUS MATERIALS").
Tenant shall at its own expense procure, maintain in effect and
comply with all conditions of any and all permits, licenses and other
governmental and regulatory approvals required for Tenant's use of the
Premises, including without limitation, discharge of (appropriately treated)
23
materials or waste into or through any sanitary sewer system serving the
Premises. Tenant shall in all respects, handle, treat, deal with and manage
any and all Hazardous Materials in, on, under or about the Premises in
complete conformity with all applicable Hazardous Materials Laws and prudent
industry practices regarding the management of such Hazardous Materials.
Tenant may utilize such Hazardous Materials as are used by Tenant in the
ordinary course of its business so long as Tenant complies with the
requirement hereof. Upon written notice from Landlord requesting the identity
of such substances or materials, Tenant will provide Landlord with a list of
same. If any lender or governmental agency shall ever require testing to
ascertain whether or not there has been any release of Hazardous Materials,
then the reasonable costs thereof shall be reimbursed by Tenant to Landlord
upon demand as additional charges if such requirement applies to the Premises
and if the results of such testing confirm that Hazardous Materials are
present on the Premises in violation of the provisions hereof and that Tenant
has caused such release of Hazardous Materials at the Premises. In addition,
Tenant shall certify on a reasonable basis from time to time at Landlord's
request concerning Tenant's best knowledge and belief, without the necessity
of inquiry, regarding the presence of Hazardous Materials brought by Tenant
on to the Premises. Tenant shall indemnify Landlord in the manner elsewhere
provided in this Lease from any violation by Tenant.
16.2 To Landlord's knowledge as of the date hereof and as of the
Commencement Date, Landlord is not aware of any Hazardous Materials which
exist or are located on or in the Premises. Further, Landlord represents to
Tenant that: (i) to the best of its knowledge, Landlord has not caused the
generation, storage or release of Hazardous Materials upon the Premises; (ii)
any Hazardous Materials located on the Premises during construction of the
Improvements will, by the Commencement Date, be removed therefrom in
compliance with Hazardous Materials Laws; and (iii) the Improvements will
contain no asbestos or asbestos-containing materials. Landlord will indemnify
Tenant from any violation by Landlord of its obligations under this Section
16.2.
17. DEFAULT: Tenant hereby agrees that in case Tenant shall default in
making its payments hereunder or any of them or in performing any of the
other agreements, terms and conditions of this Lease and such default
continues for five days after written notice thereof as to the payment of
Base Rent or Additional Rent (a "Monetary Default") or thirty (30) days (or
such longer period as Tenant, acting diligently, may reasonably require)
after written notice thereof as to all other defaults, then, in any such
event, Landlord, in addition to all other rights and remedies available to
Landlord by law or by other provisions hereof, may after five days written
notice, with due process, re-enter immediately into the Premises and remove
all persons and property therefrom, and, at Landlord's option, annul and
cancel this Lease as to all future rights of Tenant and Tenant hereby
expressly waives the service of any notice in writing of intention to
re-enter as aforesaid (other than the notices specified above). Tenant
further agrees that in case of any such termination Tenant will indemnify the
Landlord against all loss of rents and other actual pecuniary loss which
Landlord incurs by reason of such termination, including, but not being
limited to, reasonable costs of restoring and repairing the Premises as
required by this Lease, costs of renting the Premises to another tenant, loss
or diminution of rents and other damage which Landlord may incur by reason of
such termination, and all reasonable attorney's fees and expenses incurred in
enforcing any of the terms of the Lease. Neither acceptance of rent by
Landlord, with or without knowledge of breach, nor failure of Landlord to
take action on account of any breach hereof or to enforce its rights
hereunder shall be deemed a waiver of any breach, and absent written notice
or consent, said breach shall be a continuing one.
24
18. NOTICES: All bills, statements, notices or communications which
Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing and sent by registered or
certified mail, or sent by a nationally recognized overnight courier service
addressed to Tenant at Xxx Xxxxxxx Xxxxx, 0000 Xxxx Xxxx Xxxxxxx, Xxxx
Prairie, Minnesota 55344, or, as to Monetary Default, by facsimile, with a
copy to Xxxx X. Xxxxxxx, Esq., Parsinen, Kaplan, Levy, Rosberg & Xxxxxxx,
P.A., Suite 1100, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000. The
giving of such notice or communication shall be deemed to be the third (3rd)
day following the time when the same is deposited in the mail or the day
following deposit with such overnight courier as herein provided or, as to
notice by facsimile, upon receipt. Any notice by Tenant to Landlord must be
served by registered or certified mail, or sent by a nationally recognized
overnight courier service addressed to Landlord at the address where the last
previous rental hereunder was payable, or in case of subsequent change upon
notice given, to the latest address furnished, and the giving of such notice
shall be deemed to occur in the same manner as notices from Landlord to
Tenant as specified above. Either Landlord or Tenant may, upon ten (10) days
prior written notice to the other as herein provided, change its address for
notices under this Lease.
19. HOLDING OVER: Should Tenant continue to occupy the Premises after
expiration or termination for any reason of the Term or any renewal or
renewals thereof such tenancy shall be from month to month and in no event
from year to year or for any longer term, and shall be on all the terms and
conditions hereof applicable to a month to month tenancy except that Base
Rent shall equal one hundred percent (100%) if in the Initial Term (and one
hundred twenty-five percent (125%) if in an Extended Term) of the Base Rent
payable at the time of such expiration or termination. In addition, Tenant
shall continue to pay Operating Costs. Nothing in this Section 19, however,
shall prevent Landlord from removing Tenant forthwith and seeking all
remedies available to Landlord in law or equity.
20. SUBORDINATION: Subject to the non-disturbance provided for below,
the rights of Tenant shall be and are subject and subordinate at all times to
the lien of any first mortgage now or hereafter in force against the
Premises, and Tenant shall, within twenty days (20) after request, execute
such further instruments subordinating this Lease to the lien of any such
mortgage as shall be requested by Landlord, which shall include agreement by
Tenant to attorn to the holder of such mortgage, covenant of nondisturbance
of Tenant's occupancy by such holder in the event that such holder, its
successors or assigns, succeeds to the interest of Landlord and such holder
consent to the application of insurance proceeds to restoration of casualty
loss damage, subject to such reasonable conditions as such holder may impose.
All such instruments shall be in form and substance satisfactory to Landlord
and Tenant, both acting reasonably.
21. ESTOPPEL CERTIFICATE: Tenant and Landlord shall each at any time and
from time to time, upon not less than ten (10) days prior written notice from
the other, execute, acknowledge and deliver to the other and any other
parties designated by the other, a statement in writing certifying (a) that
this Lease is in full force and effect and is unmodified (or, if modified,
stating the nature of such modification), (b) the date to which the rental
and other charges payable hereunder have been paid in advance, if any, and
(c) that there are, to such party's actual knowledge, no uncured defaults on
the part of the other hereunder (or specifying such defaults if any are
claimed).
25
Any such statement may be furnished to and relied upon by any prospective
purchaser or encumbrancer, assignee or sublessee of all or any portion of the
Project.
22. SERVICE CHARGE: Tenant agrees to pay interest at the per annum rate
equal to two percent (2%) plus the prime rate announced as such from time to
time in the Wall Street Journal under the section "Money Rates" of any
payment of monthly Base Rent or additional charge payable by Tenant hereunder
which is not paid within five (5) days from the date due.
23. BINDING EFFECT: The word "Tenant", wherever used in this Lease,
shall be construed to mean tenants in all cases where there is more than one
tenant, and the necessary grammatical changes required to make the provisions
hereof apply to corporations, partnerships or individuals, men or women,
shall in all cases be assumed as though in each case fully expressed. Each
provision hereof shall extend to and shall, as the case may require, bind and
inure to the benefit of Landlord and Tenant and their respective heirs, legal
representatives, successors and assigns.
24. TRANSFER OF LANDLORD'S INTEREST: In the event of any transfer or
transfers of Landlord's interest in the Premises, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Landlord accruing from and
after the date of such transfer, provided that the transferee assumes this
Lease and agrees to pay and perform the obligations of Landlord which accrue
thereafter; provided, however, that Landlord may not transfer its interest in
the Premises prior to the Commencement Date hereof and further provided, that
following such transfer Landlord will not be relieved of any obligation it
has to Tenant by reason of any events occurring prior to the date of such
transfer.
25. LIMITATION OF LIABILITY: In the event that Landlord is ever adjudged
by any court to be liable to Tenant in damages, Tenant specifically agrees to
look solely to Landlord for the recovery of any judgment from Landlord, it
being agreed that if Landlord is a partnership, its partners whether general
or limited, or if Landlord is a corporation, its directors, officers, or
shareholders, shall never be personally liable for any judgment. The
provision contained in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord or Landlord's successor in interest, or to maintain
any other action not involving the personal liability of Landlord (or if
Landlord is a partnership, its partners whether general or limited, or if
Landlord is a corporation, requiring its directors, officers or shareholders
to respond in monetary damages from assets other than Landlord's in the
Building) or to maintain any suit or action in connection with enforcement or
collection of amounts which may become owing or payable under or on account
of insurance maintained by Landlord.
26. ADDITIONAL RENT AMOUNTS: Any amounts in addition to Base Rent
payable to Landlord by Tenant hereunder, including without limitation amounts
payable pursuant to Sections 5, 14, 16.1 and EXHIBIT C, and hereof
("Additional Rent") shall be an obligation of Tenant hereunder and all such
Additional Rent shall be due and payable on the date expressly set forth
herein or, if no date has been specified, within twenty (20) days after
receipt of written demand thereof, accompanied by reasonable substantiation
in case of amounts which are not fixed under this Lease.
27. INCORPORATION OF EXHIBITS: The following exhibits to this Lease are
hereby incorporated by reference for all purposes as fully set forth at length
herein:
26
Exhibit A-1 Legal Description and Permitted Exceptions
Exhibit B Site Plan
Exhibit C Additional Terms and Conditions
Exhibit D Outline Plans and Specifications
Exhibit E Construction Schedule
Exhibit F Phase I Completion
Exhibit G Project Cost Estimate
Exhibit H Memorandum of Lease Agreement
28. BROKERS: Landlord acknowledges and agrees that it is obligated to
pay a brokerage fee of $440,000.00 to Xxxx Xxxx and United Properties,
payable one-half upon Lease execution, one-fourth upon occupancy, and
one-fourth upon the earlier of (1) the release of Tenant from its obligations
for its existing facilities in Bloomington and Eden Prairie or (ii) December
31, 2000.
Except as specifically provided for in this Section 28, Landlord and
Tenant each represent and warrant to the other that no brokerage fee,
commission or finders fee of any kind is due any party by reason of this
transaction.
29. GENERAL: The submission of this Lease for examination does not
constitute the reservation of or an option for the Premises, and this Lease
becomes effective only upon execution and delivery hereof by Landlord and
Tenant. This Lease does not create the relationship of principal and agent or
of partnership, joint venture or any association between Landlord and Tenant,
the sole relationship between Landlord and Tenant being that of lessor and
lessee. No waiver of any default of Tenant hereunder shall be implied from
any omission by Landlord to take any action on account of such default if
such default persists or is repeated, and no express waiver shall affect any
default other than the default specified in the express waiver and that only
for the time and to the extent therein stated. The topical headings of the
several paragraphs and clauses are for convenience only and do not define,
limit or construe the contents of such paragraphs or clauses. All preliminary
negotiations are merged into and incorporated in this Lease. This Lease can
only be modified or amended by an agreement in writing signed by the parties
hereto, their successors or assigns. All provisions hereof shall be binding
upon the heirs, successors and assigns of each party hereto.
Tenant may exercise and continue to exercise all of its rights under
this Lease upon the occurrence and during the continuance of any default
under this Lease up to the point of termination of this Lease.
Time is of the essence under this Lease.
30. SEVERABILITY: The invalidity of any provision, clause or phrase
herein contained shall not serve to render the balance of this Lease
ineffective or void and the same shall be construed as if such had not been
herein set forth.
31. LEASE ASSUMPTION: INTENTIONALLY DELETED
32. AUTHORITY:
27
A. Landlord represents and warrants to Tenant that:
(i) Landlord has good title to the Premises free and
clear of any encumbrances that materially affects
Tenant's rights or obligations undethis Lease.
(ii) Landlord has full power, right and authority to
execute and perform this Lease and all corporate
action necessary so to do has been duly taken.
(iii) Provided Tenant is not in default hereunder, Tenant
shall and may peaceably and quietly occupy the
Premises during the Term of this Lease and any
renewal or extension thereof.
B. Tenant represents and warrants to Landlord that:
(i) Tenant has full power, right and authority to execute
and perform this Lease and all corporate action
necessary so to do has been duly taken.
33. ANTENNA INSTALLATION: Subject to the provisions of this Section 33,
Landlord grants Tenant the right to install, operate and maintain, at
Tenant's expense and risk, and without rent or other charge therefor, a
lawfully permitted antenna, satellite dish and associated equipment (the
"Antenna Equipment") at a location on the Building to be determined by Tenant
and reasonably acceptable to Landlord (the "Antenna Premises"):
a) Tenant shall submit to Landlord for its approval,
plans and specifications for the proposed Antenna Equipment
installation, such approval not to be unreasonably withheld,
conditioned or delayed;
b) Tenant shall make all required conduit or cable
connections between Tenant's equipment in the Premises and the
Antenna Equipment, subject to approval of such connections by
Landlord, which approval shall not be unreasonably withheld,
conditioned, or delayed:
c) Tenant shall obtain necessary municipal, state and
federal permits and authorizations required to install,
maintain and operate the Antenna Equipment and pay any charges
levied by government agencies which are the sole result of
Tenant having the Antenna Equipment. Landlord agrees to fully
cooperate with Tenant in obtaining all such permits and
authorizations, at no cost or expense to Landlord;
d) Tenant agrees to maintain the Antenna Equipment and
Antenna Premises in a good state of repair and to save
Landlord harmless from any claims, liability or expenses
resulting from the erection, maintenance, existence or removal
of the Antenna Equipment, provided that such loss, costs or
damages are not due, in whole or in part, to the negligence or
willful misconduct of Landlord, its agents, employees or
contractors;
e) At the conclusion of the Term, Tenant shall remove
the Antenna Equipment and surrender and restore the Antenna
Premises to Landlord in substantially as good condition as
when entered, except for loss or damages resulting from
casualty,
28
condemnation, act of God or ordinary wear and tear.
34. MEMORANDUM OF LEASE: If requested by either party. Landlord and Tenant
shall enter into and record a Memorandum of Lease Agreement, in the form of
Exhibit H.
IN WITNESS WHEREOF, the respective parties hereto have caused this Lease to be
executed the day and year first above written.
LANDLORD:
XXXX COMPANIES US, INC.
BY: /s/ Xxxxxxx XxXxxxx
---------------------------------
Its: Vice President
--------------------------------
TENANT:
D56, INC.
BY: /s/ Xxxxxx Xxxx
---------------------------------
Its: Vice President
--------------------------------
29
