EXHIBIT 10.2
6/8/06
LAND AND BUILDING LEASE AGREEMENT
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JUNE 15, 2006
LANDLORD:
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MDSC PARTNERS, LLP,
A MINNESOTA LIMITED LIABILITY COMPANY
TENANT:
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RESISTANCE TECHNOLOGY, INCORPORATED,
A MINNESOTA CORPORATION
PREMISES LOCATION:
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0000 XxXXXXXX XXXXXX
XXXXXXX XXXXXXX, XXXXXXXXX
LAND AND BUILDING LEASE AGREEMENT
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS..........................................................1
1.1. Lease Year..................................................1
1.2. Hazardous Material..........................................1
1.3. Environmental Laws..........................................2
2. PREMISES.............................................................2
3. TERM.................................................................2
3.1. Initial Term................................................2
3.2. Renewal Term................................................2
3.3. Surrender of Premises; Holding Over.........................3
4. BASE RENT............................................................3
4.1. Net-Net-Net Lease...........................................3
4.2. Base Rent for Initial Term..................................3
4.3. Base Rent For Renewal Term..................................4
5. USE OF THE PREMISES; COMPLIANCE......................................5
5.1. Use of the Premises.........................................5
5.2. Compliance..................................................5
5.3. Permitted Contests..........................................5
6. PROPERTY TAXES, OTHER CHARGES, ASSESSMENTS AND UTILITIES.............6
6.1. Tenant's Required Payments..................................6
6.2. Payments Not Required by Tenant.............................7
6.3. Assessments.................................................7
6.4. Utility Payments............................................7
6.5. Tenant's Right to Contest Utility Charges, Contest Taxes
and Seek Reduction of Assessed Valuation of the Premises....7
6.6. Landlord Not Required to Join in Proceedings or Contest
Brought by Tenant...........................................8
6.7. Partial Lease Years and Adjustment of Taxes.................8
6.8. Monthly Installments of Property Taxes......................8
7. FURNITURE, FIXTURES AND EQUIPMENT....................................8
7.1. Furniture, Fixtures, and Equipment..........................8
7.2. Landlord's Waiver...........................................9
7.3. Removal of Tenant's Personal Property at Expiration of
Lease.......................................................9
7.4. Right to Affix Signs........................................9
8. MAINTENANCE AND REPAIRS OF THE PREMISES..............................9
8.1. Obligation to Maintain the Premises.........................9
8.2. Obligation to Keep the Premises Clear......................10
9. ALTERATIONS AND IMPROVEMENTS........................................10
9.1. Right to Make Alterations..................................10
9.2. Tenant Shall Not Render Premises Liable For Any Lien.......11
10. INDEMNITY AND INSURANCE.............................................11
10.1. Indemnification............................................11
10.2. Insurance Company Requirement..............................12
(i)
10.3. Insurance Certificate Requirements.........................12
10.4. Minimum Acceptable Insurance Coverage Requirements.........12
10.5. Additional Insureds........................................14
10.6. Mortgage Endorsement.......................................14
10.7. Renewals, Lapses or Deficiencies...........................14
10.8. Blanket Policies...........................................15
10.9. Waiver of Subrogation......................................15
11. PARTIAL AND TOTAL DESTRUCTION OF THE PREMISES.......................15
12. CONDEMNATION........................................................16
12.1. Condemnation Damages.......................................16
12.2. Termination of Lease Due to Condemnation...................16
13. ASSIGNMENT AND SUBLETTING...........................................17
13.1. Tenant's Right of Assignment and Subletting................17
13.2. Landlord's Option to Preserve Subtenancies.................17
13.3. Tenant's Assignment of All Rent from Subletting as
Security for Tenant's Obligations..........................17
13.4. Continuing Obligation of Tenant............................18
13.5. Fees and Costs with Regard to Proposed Assignment or
Sublease...................................................18
13.6. Mortgage of Leasehold......................................18
13.7. Landlord's Right of Assignment.............................21
14. DEFAULT AND TERMINATION.............................................21
14.1. Event of Default...........................................21
14.2. Landlord's Remedies........................................22
14.3. Right of Landlord to Re-Enter..............................25
14.4. Surrender of Premises......................................25
14.5. Interest Charges...........................................25
14.6. Tenant's Default...........................................25
14.7. Default by Landlord........................................26
15. RIGHT OF INSPECTION.................................................26
16. WAIVER OF BREACH....................................................26
17. NOTICES.............................................................26
17.1. Notice Requirements........................................26
17.2. Payments Under Lease.......................................27
18. RELATIONSHIP OF THE PARTIES.........................................27
19. SUBORDINATION, ATTORNMENT AND ESTOPPEL..............................27
19.1. Subordination and Non-Disturbance..........................27
19.2. Attornment.................................................28
19.3. Estoppel Certificate.......................................28
20. ATTORNEYS' FEES.....................................................29
20.1. Recovery of Attorneys' Fees and Costs of Suit..............29
20.2. Party to Litigation........................................29
21. AUTHORITY TO MAKE LEASE; COVENANT OF QUIET ENJOYMENT................29
21.1. Full Power and Authority to Enter Lease....................29
21.2. Quiet Enjoyment............................................29
21.3. No Violation of Covenants and Restrictions.................29
22. HAZARDOUS MATERIAL..................................................30
(ii)
22.1. Environmental Compliance...................................30
23. GENERAL PROVISIONS..................................................30
23.1. Recitals...................................................30
23.2. Gender; Number.............................................31
23.3. Captions...................................................31
23.4. Exhibits...................................................31
23.5. Entire Agreement...........................................31
23.6. Drafting...................................................31
23.7. Modification...............................................31
23.8. Joint and Several Liability................................31
23.9. Governing Law..............................................31
23.10. Attorneys' Fees............................................32
23.11. Time of Essence............................................32
23.12. Severability...............................................32
23.13. Successors and Assigns.....................................32
23.14. Independent Covenants......................................32
23.15. Information Provided.......................................32
23.16. Limitation of Landlord's Liability.........................33
23.17. Waiver of Trial by Jury....................................33
23.18. No Lease Until Accepted....................................33
23.19. Characterization of Lease..................................33
23.20. Counterparts...............................................34
Exhibit "A" - Legal Description of Real Property
Exhibit "B" - Memorandum of Lease
Exhibit "C" - Subordination, Non-Disturbance and Attornment Agreement
Exhibit "D" - Tenant Estoppel Certificate
Exhibit "E" - Guaranty
(iii)
LAND AND BUILDING LEASE AGREEMENT
This Land and Building Lease Agreement ("LEASE") is executed as of the
15th day of June, 2006 (the "EFFECTIVE DATE"), by and between MDSC Partners,
LLP, a Minnesota limited liability partnership ("LANDLORD"), and Resistance
Technology, Incorporated, a Minnesota corporation ("TENANT"), with reference to
the recitals set forth below.
RECITALS
A. Landlord is the owner of that certain real property, together
with all the improvements thereon, including a building containing approximately
35,276 square feet (the "BUILDING"), and appurtenances thereunto belonging (the
"PREMISES"), the legal description of which is attached hereto and incorporated
herein as Exhibit "A," commonly known as:
0000 XxXxxxxx Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxxx
provided, however, that the "Premises" does not include any shelving, displays,
equipment, trade fixtures or personal property of Tenant.
B. Landlord desires to lease the Premises to Tenant, and Tenant
desires to lease the Premises from Landlord pursuant to the provisions of this
Lease.
1. DEFINITIONS
The following terms, when used in this Lease, shall have the meaning
set forth in this Section.
1.1. Lease Year
The term "LEASE YEAR" shall mean the first twelve (12) full calendar
months after the Commencement Date (as defined in Section 3.1) and each
subsequent twelve (12) month period thereafter during the Term and any
extensions. If the Commencement Date is other than the first day of the month,
then the first Lease Year also will include the partial month in which the
Commencement Date occurs.
1.2. Hazardous Material
The term "HAZARDOUS MATERIAL" means any substance, material, or waste
which is toxic, ignitable, reactive, or corrosive and which is or becomes
regulated by the local or state governmental authority or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste," "restricted hazardous waste," "hazardous substance," or
"hazardous material," by any federal local or state law rule or regulation, (ii)
oil and petroleum products and their by-products, (iii) asbestos, or
asbestos-containing materials, (iv) designated as a "hazardous substance"
pursuant to the Federal Water Pollution Control Act, (v) defined as a "hazardous
waste" pursuant to the Federal Resource Conservation and Recovery Act, or (vi)
defined as a "hazardous substance" pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act.
PAGE 1
1.3. Environmental Laws
The term "ENVIRONMENTAL LAWS" shall mean any law, statute, regulation,
order, or rule now or hereafter promulgated by any governmental entity, whether
local, state, or federal, relating to air pollution, water pollution, noise
control, and/or transporting, storing, handling, discharge of or disposal of
Hazardous Material, including, without limitation, the following: the Clean Air
Act; the Resource Conservation and Recovery Act, as amended by the Hazardous
Waste and Solid Waste Amendments of 1984; the Comprehensive Environmental
Response Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986; the Toxic Substances Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act, as amended; the Safe Drinking Water
Act; OSHA; the Hazardous Liquid Pipeline Safety Act; the Hazardous Materials
Transportation Act; and the National Environmental Policy Act, as the same may
be amended from time to time.
2. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord the Premises
in its "AS IS, WHERE IS, WITH ALL FAULTS" condition with no representations or
warranties whatsoever and on the terms and conditions set forth in this Lease.
3. TERM
3.1. Initial Term
This Lease will be effective on the EFFECTIVE DATE. The term ("TERM")
of this Lease will commence on July 1, 2006 (the "COMMENCEMENT DATE") and will
end on June 30, 2016 ("EXPIRATION DATE"). The parties hereby acknowledge that
Tenant is currently in possession of the Premises and that Tenant will have the
right to continue to occupy the Premises prior to the Commencement Date so long
as Tenant complies with the terms and conditions of this Lease, other than the
obligation to pay Base Rent. Except as otherwise expressly stated, the terms and
conditions of this Lease shall remain in effect during any extension or holdover
of the Term. Concurrently with the execution of this Lease, Tenant may record
the Memorandum of Lease, a copy of which is attached hereto and incorporated
herein as Exhibit "B".
3.2. Renewal Term
Tenant is hereby granted three (3) options (each, a "Renewal Option")
to extend the Term for successive periods of five (5) years (each, a "Renewal
Period"), upon the same terms and conditions as applicable during the initial
Term except that Base Rent shall be adjusted as provided in Section 4.3. If
Tenant desires to extend the Term, Tenant must exercise its applicable Renewal
Option by giving Landlord written notice thereof not less than nine (9) months
prior to the expiration of the then current Term, and the giving of such notice
shall be sufficient to make this Lease binding for the applicable Renewal Period
without further act of the parties. Each Renewal Period shall constitute an
extension of the Term hereof, so that this Lease and each and every covenant,
agreement and provision thereof shall be and remain in full force and effect
during the Term as extended and with the same force and effect as if the Term of
this Lease were originally for such extended period. If Tenant exercises its
first Renewal Option,
PAGE 2
then upon the commencement of the first Renewal Period, Landlord shall provide a
refurbishment allowance to Tenant in the amount of $50,000.
3.3. Surrender of Premises; Holding Over
On the last day or sooner termination of this Lease, Tenant shall quit
and surrender the Premises, together with all alterations, vacant and free of
all tenancies and any leasehold rights therein and in the condition required
under this Lease, normal wear and tear and damage by casualty excepted, and
shall remove fixtures, equipment and all debris and surrender all keys for the
Premises to Landlord at the place then fixed for the payment of Base Rent. If
Tenant does not do so, then after expiration of this Lease, it will be a tenant
at will upon the applicable conditions of this Lease. In such event the Base
Rent payable shall be increased by twenty five percent (25%) over the Base Rent
payable during the last full month of the Term. If the Premises is not
surrendered as and when aforesaid, Tenant shall indemnify Landlord from and
against loss or liability resulting from the delay by Tenant in so surrendering
the Premises, including without limitation, any claims made by any succeeding
occupant or purchaser founded on such delay. Tenant's obligations under this
Section shall survive the expiration or earlier termination of this Lease.
4. BASE RENT
4.1. Net-Net-Net Lease
Except as expressly provided otherwise herein, it is the intention of
Landlord and Tenant that the Base Rent (as defined below) and other sums and
charges provided herein shall be absolutely net to Landlord.
4.2. Base Rent for Initial Term
During the Term, Tenant shall pay to Landlord as base rent ("BASE
RENT") the amounts set forth below:
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PERIOD ANNUAL BASE RENT MONTHLY BASE RENT
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Months 1-12 $207,247 $17,270.58
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Months 13-24 $210,356 $17,529.67
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Months 25-36 $213,511 $17,792.58
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Months 37-48 $216,714 $18,059.50
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Months 49-60 $219,964 $18,330.33
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Months 61-72 $223,264 $18,605.33
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Months 73-84 $226,613 $18,884.42
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Months 85-96 $230,012 $19,167.67
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Months 97-108 $233,462 $19,455.17
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Months 109-120 $236,964 $19,747.00
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Base Rent shall be payable by Tenant to Landlord in advance commencing upon the
Commencement Date and on the first day of each calendar month thereafter,
without prior notice, invoice, demand, deduction, or offset whatsoever. Any Base
Rent payments received
PAGE 3
after the 5th day from which it is due shall be subject to a late charge of five
percent (5%) of the amount due. Landlord shall have the right to accept all rent
and other payments, whether full or partial, and to negotiate checks and
payments thereof without any waiver of rights, irrespective of any conditions to
the contrary sought to be imposed by Tenant. Base Rent shall be paid to Landlord
at the address to which notices to Landlord are given or to such other address
as Landlord may designate in writing from time to time. Base Rent for any
partial month shall be prorated based upon the actual number of days in the
period subject to proration.
Tenant shall deposit with landlord at time the first month's rent is
due a Security Deposit equal to one (1) month's rent of the then Base Rent for
the Premises. ("Security Deposit"), to be held for the performance and
observance by Tenant of all its obligations of the terms, conditions,
obligations and covenants throughout the Term of the Lease. Landlord shall
return the Security Deposit or balance thereof then held by Landlord, to Tenant
within thirty (30) days after expiration of the Lease Term or after Tenant
surrenders possession of the Premises, whichever is later.
4.3. Base Rent For Renewal Term
If Tenant exercises its first Renewal Option, the Base Rent for the first
Renewal Period shall be as follows:
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PERIOD ANNUAL BASE RENT MONTHLY BASE RENT
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Months 1-12 $240,518 $20,043.17
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Months 13-24 $244,126 $20,343.83
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Months 25-36 $247,788 $20,649.00
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Months 37-48 $251,505 $20,958.75
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Months 49-60 $255,278 $21,273.17
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If Tenant exercises its second or third Renewal Option, the Base Rent for each
Renewal Period shall equal the Market Rental Rate (as hereinafter defined).
Within thirty (30) days of Landlord's receipt of Tenant's exercise of its second
or third Renewal Option, Landlord agrees to provide Tenant with Landlord's
initial estimate of Market Rental Rate for the applicable Renewal Period. If
Tenant agrees with Landlord's estimate of Market Rental Rate, Tenant may accept
such estimate by delivering written notice to Landlord in which event Market
Rental Rate for the applicable Renewal Period shall equal Landlord's estimate of
Market Rental Rate. If Tenant disagrees with Landlord's estimate of Market
Rental Rate, Landlord and Tenant shall negotiate in good faith to determine
Market Rental Rate for the thirty (30) day period following Landlord's initial
estimate. If after such period, Landlord and Tenant are still unable to agree on
Market Rental Rate, the Market Rental Rate shall be settled by arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof. For purposes hereof,
"Market Rental Rate" means the net annual rent per for square foot for the
Premises as of the commencement of the applicable Renewal Period that a willing
tenant would pay, and a willing landlord would accept, in arms-length bona fide
negotiations, if the same were leased to a single tenant for a five (5) year
period commencing on the day after the last day of the then-current Term and
otherwise taking into account any other pertinent factors, including, but
PAGE 4
not limited to, the net effective annual rates per leasable square foot for
office/manufacturing leases recently or then being entered into in the Xxxxxxx
Heights, Minnesota area ("Comparable Rates"). In determining the Market Rental
Rate and using Comparable Rates in connection with such determination, the
following factors (and any other factors then known to be pertinent) shall be
considered: the size of the Premises; the length of term; use; quality of
services provided; location; definition of area; existing leasehold
improvements; leasehold improvements to be provided by Landlord, whether
directly or by allowance; the quality, age and location of the Building;
financial strength of the applicable tenant; rental concessions (such as rental
abatements, "free rent" periods and rent assumptions); inducements (such as
signing bonuses, equity participation, tax benefits or other participation in
ownership); the manner in which the rents are then subject to escalation and the
time the particular rate under consideration became or will become effective. In
no event shall Base Rent be less than the Annual Base Rent for the last Lease
year prior to the Renewal Term.
5. USE OF THE PREMISES; COMPLIANCE
5.1. Use of the Premises
Tenant may use and occupy the Premises for any lawful business purpose
which is permitted under applicable use and zoning ordinances, provided that
Tenant shall not use the Premises for any uninsurable activity (based on
standard commercial insurance policies), or overload the electrical or
structural capacities of the Premises.
5.2. Compliance
Tenant, at Tenant's sole expense, shall comply with all applicable
statutes, ordinances, rules, regulations, orders, covenants and restrictions of
record, and requirements in effect during the Term, regulating the use by Tenant
of the Premises, including, without limitation, the obligation, at Tenant's
cost, to alter, maintain, or restore the Premises in compliance and conformity
with all laws relating to the condition, use or occupancy of the Premises by
Tenant during the Term (including, without limitation, any and all requirements
as set forth in the Americans with Disabilities Act).
5.3. Permitted Contests
5.3.1. So long as no Event of Default has occurred and is continuing,
Tenant shall not be required to comply with any legal
requirement so long as Tenant shall contest, in good faith and
at its expense, the existence, validity thereof, the amount of
the damages caused thereby, or the extent of its or Landlord's
liability therefore, by appropriate proceedings which shall
operate during the pendency thereof to prevent (i) the sale,
forfeiture or loss of any of the Premises, any Base Rent to
satisfy the same or to pay any damages caused by the violation
of any such legal requirement or by any such violation, (ii)
any interference with the ownership, use or occupancy of any
of the Premises, (iii) any interference with the payment of
any Base Rent, and (iv) the cancellation of any property or
other insurance policy. As a condition to any such contents,
Tenant shall
PAGE 5
furnish Landlord with such security as Landlord shall
reasonably request to insure compliance with any legal
requirements so contested.
5.3.2. In no event shall Tenant pursue any contest with respect to
any legal requirement or violation referred to above in such a
manner that exposes Landlord to (i) criminal liability,
penalty or sanction, (ii) any civil liability, penalty or
sanction for which Tenant has not made provisions reasonably
acceptable to Landlord, or (iii) defeasance of its interest
the Premises.
5.3.3. Tenant agrees that each such contest shall be promptly and
diligently prosecuted to a final conclusion except that Tenant
shall have the right to attempt to settle or compromise such
contest through negotiations. Tenant shall pay and save
Landlord harmless against any and all losses, judgments,
decrees and costs (including all attorneys' fees and expenses)
in connection with any such contest and shall, promptly after
the final determination of such contest, fully pay and
discharge the amounts which shall be determined to be payable
therein or in connection therewith, together with all
penalties, fines, interest, costs and expenses thereof or in
connection therewith, and perform all acts the performance of
which shall be ordered or decreed as a result thereof or which
shall be necessary to comply (and cause the Premises to
comply) with the legal requirements so contested.
6. PROPERTY TAXES, OTHER CHARGES, ASSESSMENTS AND UTILITIES
6.1. Tenant's Required Payments
Tenant is required to (i) pay at least fifteen (15) days before
delinquency, all Property Taxes and Other Charges (as such terms are defined
herein) that accrue during or are otherwise allocable to the Term and become due
and payable during the term; and (ii) upon request from Landlord, provide
Landlord with evidence of payment thereof. Property Taxes and Other Charges
together are referred to herein as "TAXES."
6.1.1. "PROPERTY TAXES" means all taxes, assessments, excises,
levies, fees, and charges (and any tax, assessment, excise,
levy, fee, or charge levied wholly or partly in lieu thereof
or as a substitute therefor or as an addition thereto) of
every kind and description, general or special, ordinary or
extraordinary, foreseen or unforeseen, secured or unsecured,
whether or not now customary or within the contemplation of
Landlord and Tenant, that are levied, assessed, charged,
confirmed, or imposed on or against, or otherwise with respect
to, the Premises or any part thereof or any personal property
used in connection with the Premises. It is the intention of
Landlord and Tenant that all new and increased taxes,
assessments, levies, fees and charges be included within the
definition of Property Taxes for the purpose of this Lease.
6.1.2. "OTHER CHARGES" means all taxes, assessments, excises, levies,
fees, and charges (including, without limitation, common area
maintenance charges,
PAGE 6
charges relating to the cost of providing facilities or
services, and charges relating to documents or instruments of
record affecting or encumbering the Premises), whether or not
now customary or within the contemplation of Landlord and
Tenant, that are levied, assessed, charged, confirmed, or
imposed upon, or measured by, or reasonably attributable to
(a) the Premises; (b) the cost or value of Tenant's furniture,
fixtures, equipment, or personal property located in the
Premises or the cost or value of any leasehold improvements
made in or to the Premises by or for Tenant, regardless of
whether title to such improvements is vested in Tenant or
Landlord; (c) Base Rent payable under the Lease; (d) the
possession, leasing, operation, management, maintenance,
alteration, repair, use, or occupancy by Tenant of the
Premises; and (e) this transaction or any document to which
Tenant is a party creating or transferring an interest or an
estate in the Premises.
6.2. Payments Not Required by Tenant
Notwithstanding the provisions of Section 6.1, Tenant shall not be
required to pay any state or federal income or franchise taxes of Landlord, or
any state or federal estate, succession, inheritance, or transfer taxes of
Landlord, or any mortgage, deed, or transfer taxes of Landlord.
6.3. Assessments
If any assessment for a capital improvement made by a public or
governmental authority shall be levied or assessed against the Premises, and the
assessment is payable either in a lump sum or on an installment basis, then
Tenant shall have the right to elect the basis of payment; provided however,
throughout the entire Term, Tenant shall pay all assessments that accrue during
or are otherwise allocable to the Term. All Special Assessments, due levied,
pending or constituting a lien on the Premises as of the Effective Date shall be
paid in full by Tenant as installments become due but in no event over a period
greater than the lease Term.
6.4. Utility Payments
Tenant shall promptly pay when due all charges for water, gas,
electricity, and all other utilities furnished to or used upon the Premises,
including all charges for installation, termination, and relocations of such
service. Landlord, at its option, may require Tenant to furnish Landlord with
evidence of payment of such charges.
6.5. Tenant's Right to Contest Utility Charges, Contest Taxes and Seek
Reduction of Assessed Valuation of the Premises
Tenant, at Tenant's sole cost and expense, shall have the right, at any
time, to seek a reduction in the assessed valuation of the Premises or to
contest any taxes or utility charges that are to be paid by Tenant; provided
however, Tenant shall (i) give Landlord written notice of any such intention to
contest at least thirty (30) days before any delinquency could occur; (ii)
indemnify and hold Landlord harmless from all liability on account of such
contest; (iii) take such action as is necessary to remove the effect of any lien
which attached to the Premises or the improvements thereon due to such contest,
or in lieu thereof, at Landlord's election, furnish
PAGE 7
Landlord with adequate security for the amount of the Taxes due plus interest
and penalties; and (iv) in the event of a final determination adverse to Tenant,
prior to enforcement, foreclosure or sale, pay the amount involved together with
all penalties, fines, interest, costs, and expenses which may have accrued.
Tenant may use any means allowed by statute to protest Taxes or utility charges
as long as Tenant remains current as to all other terms and conditions of this
Lease. If the protested Taxes have not been paid and Landlord's interest in the
Premises is in threat of material jeopardy, then at Landlord's request Tenant
shall furnish to Landlord a surety bond issued by an insurance company qualified
to do business in the state where the Premises are located. The amount of bond
shall equal one hundred ten percent (110%) of the total amount of Taxes in
dispute. The bond shall hold Landlord and the Premises harmless from any damage
arising out of the proceeding or contest and shall insure the payment of any
judgment that may be rendered. If Tenant seeks a reduction or contests any Taxes
or utility charges, the failure on Tenant's part to pay the Taxes or utility
charges shall not constitute a default as long as Tenant complies with the
provisions of this Section.
6.6. Landlord Not Required to Join in Proceedings or Contest Brought by
Tenant
Landlord shall not be required to join in any proceeding or contest
brought by Tenant unless the provisions of the law require that the proceeding
or contest be brought by or in the name of Landlord or the owner of the
Premises. In that case, Landlord shall join in the proceeding or contest or
permit it to be brought in Landlord's name as long as Landlord is not required
to bear any cost or is reimbursed by Tenant for such cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or discharge
any decision or judgment rendered, together with all costs, charges, interest,
and penalties incidental to the decision or judgment.
6.7. Partial Lease Years and Adjustment of Taxes
Property Taxes (and Other Charges, as may be applicable) payable by
Tenant in accordance with the terms of this Lease shall be appropriately
adjusted for any partial Lease Year. Upon the Expiration Date, Taxes which have
accrued prior to the Expiration Date and are payable after the Expiration Date,
shall be prorated and apportioned as of the Expiration Date based upon the
actual number of days in the period subject to proration such that Tenant shall
bear all expenses with respect to the Premises up through and including the
Expiration Date. Any amount payable by Tenant shall be remitted to Landlord
within ten (10) business days following the Expiration Date. Any excess prepaid
Taxes shall be refunded to Tenant by Landlord within ten (10) business days of
the Expiration Date. Taxes which cannot be ascertained with certainty as of the
Expiration Date shall be prorated on the basis of the parties' reasonable
estimates of such amount(s) and shall be the subject of a final proration as
soon thereafter as the precise amounts can be ascertained. The provisions of
this paragraph shall survive the expiration or termination of this Lease.
6.8. Monthly Installments of Property Taxes
At Landlord's option and upon prior written notice to Tenant, at any
time following a material Event of Default, and without in any way limiting
Tenant's obligations under this Lease, Property Taxes, Other Charges, utilities
and other expenses to be paid by Tenant shall be paid by Tenant as additional
rent to Landlord in monthly installments for the remaining Term of this
PAGE 8
Lease on the same day that Base Rent is due hereunder. Such monthly installments
shall be an estimated amount equal to one-twelfth (1/12) of the Property Taxes
for the immediate preceding year, subject to adjustment when the actual amount
of Property Taxes is determined. At such time as the actual amount of Property
Taxes is determined, Landlord shall furnish to Tenant a statement indicating the
actual amount of Property Taxes. Within thirty (30) days after receipt of such
statement by Tenant, Tenant shall pay to Landlord any deficiency due. Any
surplus paid by Tenant shall, at Tenant's option, be credited against the next
installment(s) of Base Rent or other charges due from Tenant or be refunded to
Tenant forthwith.
7. FURNITURE, FIXTURES AND EQUIPMENT
7.1. Furniture, Fixtures, and Equipment
During the Term Tenant may, at Tenant's expense, place or install such
furniture, trade fixtures, equipment, machinery, furnishings, face plates of
signage and other articles of movable personal property (collectively, "TENANT'S
PERSONAL PROPERTY") on the Premises as may be needed for the conduct of Tenant's
business. It is expressly understood that the term Tenant's Personal Property as
used herein shall in no event extend to leasehold improvements, fixtures or
similar "vanilla shell" items such as light fixtures, HVAC equipment, or other
fixtures and equipment permanently affixed to the Premises.
7.2. Landlord's Waiver
Tenant may finance Tenant's Personal Property at any time and from time
to time during the term of this Lease. Upon request of Tenant, Landlord shall
execute and deliver to any lender a Landlord's Waiver, so long as it is
commercially reasonable. Tenant may remove or replace Tenant's Personal Property
periodically during the Term.
7.3. Removal of Tenant's Personal Property at Expiration of Lease
At the expiration or earlier termination of the Lease, Tenant's
Personal Property shall be removed by Tenant. If, at the expiration or earlier
termination of the Lease, Tenant fails to remove Tenant's Personal Property
within a reasonable time following receipt of written notice from Landlord, any
of Tenant's Personal Property not so removed shall be deemed abandoned, and
Landlord may cause such property to be removed from the Premises and disposed
of, but the reasonable cost of any such removal shall be borne by Tenant..
Tenant shall be responsible for reasonable repairs and restoration of the
Premises as may be necessary to repair any material damage to the Premises from
the removal of Tenant's Personal Property. The provisions of this paragraph
shall survive the expiration or termination of this Lease.
7.4. Right to Affix Signs
Tenant shall have the right to decorate the Premises and affix signs
customarily used in its business upon the windows, doors, interior and exterior
walls of the Premises, and such free-standing signs as may seem appropriate to
Tenant and are authorized by any governmental authority having jurisdiction over
the Premises and permitted by any covenants, conditions and restrictions
encumbering the Premises. Upon the expiration or earlier termination of the
Lease, Tenant shall remove such signs within a reasonable time following receipt
of written notice from
PAGE 9
Landlord; provided, however, in no event may Tenant remove free-standing signage
(such as pole-mounted or monument signs) from the Premises, although Tenant may
remove or obliterate its name from any such sign. Tenant promptly shall make
such repairs and restoration of the Premises as are necessary to repair any
damage to the Premises from the removal of the signs.
8. MAINTENANCE AND REPAIRS OF THE PREMISES
8.1. Obligation to Maintain the Premises
During the Term, Tenant will, at its own expense, keep and maintain the
entire Premises in good order and repair, including, but not limited to, the
interior, exterior, foundations, floors, walls, roof, and structure of the
building; the sidewalks, curbs, trash enclosures, landscaping with sprinkler
system (if installed), light standards, and parking areas that are a part of the
Premises. Tenant shall make such repairs and replacements as may be necessary,
regardless of whether the benefit of such repair or replacement extends beyond
the term of this Lease. The Premises shall be returned to Landlord at the
termination or expiration of this Lease in the condition required under this
Lease, ordinary wear and damage by casualty excepted. For as long as Tenant is
not in default of any of the terms and conditions of this Lease, Landlord hereby
assigns to Tenant all building contractor, subcontractor, and manufacturer's
warranties and guarantees, if any, applicable to the Premises; and Landlord
shall cooperate with Tenant at Tenant's request and sole cost in any action to
enforce such warranties and guarantees. In the event of destruction of the
Premises by fire or other casualty, the condition of Premises upon termination
of this Lease shall be governed by Section 11. Landlord shall have no obligation
whatsoever to alter, remodel, improve, repair, renovate, retrofit or maintain
the Premises or any portion thereof.
Notwithstanding any other provision of this Lease, Tenant agrees that
Tenant will, at its sole cost and expense, fully and completely replace the roof
of the building located on the Premises and resurface the parking lots located
on the Premises at least one time during the Term (as may be extended from time
to time pursuant to Section 3.2). Such replacement and resurfacing shall be
performed in a manner reasonably acceptable to Landlord, and such roof
replacement shall be of a grade and quality that has at least a ten-year
warranty and shall be installed by a roofing contractor reasonably acceptable to
Landlord. Landlord and Tenant hereby acknowledge that this provision was
bargained for at the time of Landlord's purchase of the Premises from Tenant at
a present value of $350,000.
8.2. Obligation to Keep the Premises Clear
Tenant shall keep the Premises, including sidewalks adjacent to the
Premises and loading area allocated for the use of Tenant, clean and free from
rubbish and debris at all times. Tenant shall store all trash and garbage within
the Premises and arrange for regular pickup and cartage of such trash and
garbage at Tenant's expense.
9. ALTERATIONS AND IMPROVEMENTS
9.1. Right to Make Alterations
At all times during the term of this Lease, except as provided in
Section 14, Tenant shall have the right to make alterations, additions and
improvements ("ALTERATIONS") to the interior or
PAGE 10
exterior of the Premises and parking areas adjacent to the Building.
Nevertheless, any Alterations that are over Fifty Thousand Dollars ($50,000) for
any one improvement (or in the aggregate over the course of any consecutive 12
month period) or are structural in nature shall not be made by Tenant without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld. Any Alterations made or installed by Tenant shall remain upon the
Premises and, at the expiration or earlier termination of this Lease, shall be
surrendered with the Premises to Landlord. Alterations shall be accomplished by
Tenant in a good, expeditious, quality workmanlike manner, in conformity with
applicable laws, regulations, ordinances, orders and covenants, conditions and
restrictions encumbering the Premises, and by a licensed contractor; and with
respect to Alterations requiring Landlord's consent, the contractor shall be
reasonably approved by Landlord. Prior to commencement of any such work, Tenant
shall provide to Landlord copies of all required permits and governmental
approvals. Within 30 days of completion of any such work, Tenant shall provide
to Landlord final "as-built" plans, copies of all construction contracts,
inspection reports and proof of payment of all labor and materials (including
final unconditional lien waivers from the general contractor and all
subcontractors). Tenant shall pay when due all claims for such labor and
materials and shall give Landlord at least 10 days' prior written notice of the
commencement of any such work. Landlord may enter upon the Premises, in such
case, for the purpose of posting appropriate notices, including, but not limited
to, notices of non-responsibility. Notwithstanding anything to the contrary
herein, Tenant shall have the right, at any time during the Term or any Renewal
Period, to expand the size of the Building, so long as such expansion complies
with all applicable governmental laws, rules and regulations and the plans and
specifications for such expansion are reasonably acceptable to Landlord. In the
event that Tenant desires to expand the size of the Building, if upon the date
that the expansion of the Building (the "Expansion") is completed (the
"Expansion Date") there are less than ten (10) years remaining in the Term of
this Lease (as extended by Tenant through such date), then the Term shall be
automatically extended for an additional period commencing on the Expansion Date
and ending on the tenth anniversary of the Expansion Date. In that event Base
Rent for the original Premises shall continue at the rates and increases set
forth in paragraphs 4.2 and 4.3 hereof. As of the Expansion Date, the additional
rent payable by Tenant each month for the Expansion space constructed as part of
the Expansion (the "Expansion Rent") shall be an amount equal to all of the
costs paid or incurred by Landlord to complete the Expansion multiplied by ten
percent (10%) and then divided by twelve. Such Expansion Rent shall be payable
on monthly basis beginning on the first day of the month following the Expansion
Date and continuing thereafter for the remainder of the Term (as extended) with
the Base Rent. Landlord agrees to pay all costs incurred by Tenant in connection
with the Expansion directly to the service providers upon request by Tenant and
in any event before any such payments are delinquent. In addition, on the
Expansion Date Tenant agrees to pay to Landlord an amount equal to the Interest
on all payments made by Landlord pursuant to the preceding sentence, to and
until the Expansion Date. As used herein, "Interest" shall be equal to the
prevailing market interest rate for construction financing, as quoted by Xxxxx
Fargo Bank, N.A., for the Minneapolis market from time to time.
9.2. Tenant Shall Not Render Premises Liable For Any Lien
Tenant shall have no right, authority, or power to bind Landlord, or
any interest of Landlord in the Premises, nor to render the Premises liable for
any lien or right of lien for the payment of any claim for labor, material, or
for any charge or expense incurred to maintain, to
PAGE 11
repair, or to make Alterations to the Premises. Tenant shall in no way be
considered the agent of Landlord in the construction, erection, modification,
repair, or alteration of the Premises. Notwithstanding the above, Tenant shall
have the right to contest the legality or validity of any lien or claim filed
against the Premises. No contest shall be carried on or maintained by Tenant
after the time limits in the sale notice of the Premises for any such lien or
claim unless Tenant (i) shall have duly paid the amount involved under protest;
(ii) shall have procured and recorded a lien release bond from a bonding company
acceptable to Landlord in an amount not less than one and one-half (1-1/2) times
the amount involved; or (iii) shall have procured a stay of all proceedings to
enforce collection. Upon a final adverse determination of any contest, Tenant
shall pay and discharge the amount of the lien or claim determined to be due,
together with any penalties, fines, interest, cost, and expense which may have
accrued, and shall provide proof of payment to Landlord.
10. INDEMNITY AND INSURANCE
10.1. Indemnification
Tenant shall indemnify, defend, and protect Landlord, and hold Landlord
harmless from any and all loss, cost, damage, expense and/or liability
(including, without limitation, court costs and reasonable attorneys' fees)
incurred in connection with any cause whatsoever in or about the Premises, other
than damages proximately caused by reason of the negligence or willful
misconduct of Landlord or its agents and employees, including, without limiting
the generality of the foregoing: (i) any default by Tenant in the observance or
performance of any of the terms, covenants, or conditions of this Lease on
Tenant's part to be observed or performed; (ii) the use or occupancy of the
Premises by Tenant or any person claiming by, through, or under Tenant; (iii)
the condition of the Premises or any occurrence or happening on the Premises
from any cause whatsoever; or (iv) any acts, omissions, or negligence of Tenant
or any person claiming by, through, or under Tenant, or of the contractors,
agents, servants, employees, visitors, or licensees of Tenant or any such
person, in, on, or about the Premises, either prior to or during the Term,
including, without limitation, any acts, omissions, or negligence in the making
or performance of any Alterations.
Landlord shall indemnify, defend, and protect Tenant, and hold Tenant
harmless from any and all loss, cost, damage, expense and/or liability
(including, without limitation, court costs and reasonable attorneys' fees)
incurred in connection with any default by Landlord in the observance or
performance of any of the terms, covenants, or conditions of this Lease on
Landlord's part to be observed or performed and any acts, omissions, or
negligence of Landlord or any person claiming by, through, or under Landlord, or
of the contractors, agents, servants, employees, visitors, or licensees of
Landlord.
The provisions of this Section shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination, and shall not be limited by reason of
any insurance carried by Landlord and Tenant.
10.2. Insurance Company Requirement
Insurance required by this Lease shall be issued by companies holding a
general policyholder's rating of A-VIII or better as set forth in the most
current issue of Best's Insurance
PAGE 12
Guide and authorized to do business in the state in which the Premises are
located. If this publication is discontinued, then another insurance rating
guide or service generally recognized as authoritative shall be substituted by
Landlord.
10.3. Insurance Certificate Requirements
10.3.1. Tenant shall at least annually deliver to Landlord evidence of
the existence and amounts of the insurance with additional
insured endorsements and loss payable clauses as required
herein. Tenant shall deliver to Landlord an XXXXX Form 25
Certificate of Liability Insurance in connection with Tenant's
liability policy(ies), and an XXXXX Form 28 Evidence of
Commercial Property Insurance in connection with Tenant's
property policy(ies). No policy shall be cancelable or subject
to material reduction of coverage or other material
modification except after thirty (30) days' prior written
notice to Landlord. Neither the issuance of any insurance
policy required hereunder, nor the minimum limits specified
herein with respect to any insurance coverage, shall be deemed
to limit or restrict in any way the liability of Tenant
arising under or out of this Lease.
10.3.2. The insurance required to be maintained herein may be carried
under blanket policies. The property insurance required to be
maintained herein shall provide for payment of loss jointly to
Landlord and Tenant.
10.4. Minimum Acceptable Insurance Coverage Requirements
10.4.1. Tenant shall, at Tenant's expense, obtain and keep in full
force during the term of this Lease a policy of combined
single limit bodily injury and property damage insurance
written on an occurrence basis insuring Tenant (with Landlord
as an additional insured) against liability arising out of
ownership, use, occupancy or maintenance of the Premises and
all of its appurtenant areas. The policy shall provide blanket
contractual liability coverage. The insurance shall be in an
amount not less than Four Million Dollars ($4,000,000) per
occurrence; provided however, following receipt of written
notice from Landlord the limits of such insurance shall be
increased from time to time during the term of the Lease to
such amount as may be deemed commercially reasonable by
Landlord in its reasonable business judgment. The insurance to
be maintained by Tenant pursuant to this Section 10.4.1 may be
procured in any combination of primary, umbrella and/or excess
coverage, but in any event shall be primary and not
contributory to any other insurance maintained by Landlord. In
no event shall the limits of insurance maintained by Tenant
limit any liability of Tenant under this Lease.
10.4.2. Tenant shall, at Tenant's expense, obtain and keep in force
during the term of this Lease a "Special Form" (as such term
is used in the insurance industry) policy of property
insurance covering loss or damage to the Premises, including
but not limited to signage, lighting and other exterior
fixtures. The insurance shall be in an amount not less than
the full
PAGE 13
guaranteed replacement cost of the building(s) (less slab,
foundation, supports and other customarily excluded
improvements), as such replacement cost is reasonably
determined by Landlord. The policy shall contain only standard
printed exclusions; include an agreed value endorsement
waiving any co-insurance penalty, and an ordinance or law
coverage endorsement covering increased costs resulting from
changes in laws or codes, and demolition and removal of the
damaged structure. In addition, the policy shall include a
"Loss Payable Provisions" endorsement (ISO Form CP 12 18 06 95
or equivalent) naming Landlord as "Loss Payee" thereunder for
the property insurance on the building. In no event shall any
deductible payable in connection with such policy exceed Fifty
Thousand Dollars ($50,000). The proceeds from the property
insurance policy covering the Premises shall be utilized only
for restoration and repair of the Premises in compliance with
Tenant's obligations set forth in this Lease (including,
without limitation, as set forth in Section 8.1 and Section
11).
10.4.3. If the Premises is located in Flood Zone A or V as defined by
the Federal Emergency Management Agency (FEMA), Tenant shall,
at Tenant's expense, obtain and keep in force during the term
of this Lease a policy of insurance covering loss or damage
due to flood with respect to the Premises.
10.4.4. If the county in which the Premises is located is classified
as being in an earthquake territory 1 through 11 by Insurance
Services Office ("ISO") or an earthquake zone of 1 through 3
by ISO, Tenant shall, at Tenant's expense, obtain and keep in
force during the term of this Lease a policy of insurance
covering loss or damage due to earthquake with respect to the
Premises.
10.4.5. Tenant shall also obtain and keep in force during the term of
this Lease a worker's compensation policy, insuring against
and satisfying Tenant's obligations and liabilities under the
worker's compensation laws of the state in which the Premises
are located, including Employer's Liability insurance, in an
amount of not less than One Million Dollars ($1,000,000).
10.5. Additional Insureds
Tenant shall name as additional insureds (by way of a CG 20 26
endorsement or similar endorsement) on all general liability insurance and loss
payees on all property insurance, Landlord, Landlord's successor(s),
assignee(s), nominee(s), nominator(s), and agents with an insurable interest as
follows:
MDSC PARTNERS, LLP, ITS OFFICERS, DIRECTORS, MEMBERS (IF
APPLICABLE), AND ALL SUCCESSOR(S), ASSIGNEE(S), SUBSIDIARIES,
CORPORATIONS, PARTNERSHIPS, PROPRIETOR-SHIPS, JOINT VENTURES,
FIRMS, AND
PAGE 14
INDIVIDUALS AS HERETOFORE, NOW, OR HEREAFTER CONSTITUTED ON
WHICH THE NAMED INSURED HAS THE RESPONSIBILITY FOR PLACING
INSURANCE AND FOR WHICH SIMILAR COVERAGE IS NOT OTHERWISE MORE
SPECIFICALLY PROVIDED.
10.6. Mortgage Endorsement
If requested by Landlord, the policies of insurance required to be
maintained hereunder shall bear a standard first mortgage clause in favor of any
holder or holders of a first mortgage lien or security interest in the Premises
with loss payable to such holder or holders as their interests may appear.
10.7. Renewals, Lapses or Deficiencies
Tenant shall within ten (10) days prior to the expiration of such
policies, furnish Landlord with renewal certificates of insurance or renewal
binders. Should Tenant fail to provide to Landlord the renewals or renewal
binders, or in the event of a lapse or deficiency of any insurance coverage
specified herein for any reason, Landlord may immediately replace the deficient
insurance coverage with a policy of insurance covering the Premises of the type
and in the limits set forth above. Upon written notice from Landlord of the
placement of insurance, Tenant shall immediately pay to Landlord, as Additional
Rent, an amount equal to the total cost of premiums and expense of such
insurance placement plus reasonable handling fees. Tenant shall not do or permit
to be done anything which shall invalidate the insurance policies. If Tenant
does or permits to be done anything which shall increase the cost of the
insurance policies, then upon Landlord's demand Tenant shall immediately pay to
Landlord, as additional rent, an amount equal to the additional premiums
attributable to any acts or omissions or operations of Tenant causing the
increase in the cost of insurance.
10.8. Blanket Policies
Anything in this Section 10 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Section 10 may be
carried under a "blanket" policy or policies covering other properties or
liabilities of Tenant; provided, that such "blanket" policy or policies
otherwise comply with the provisions of this Section 10. In the event any such
insurance is carried under a blanket policy, Tenant shall deliver to Landlord
evidence of the issuance and effectiveness of the policy, the amount and
character of the coverage with respect to the Premises and the presence in the
policy of provisions of the character required in the above sections of this
Section 10.
10.9. Waiver of Subrogation
Tenant hereby waives and releases any and all right of recovery against
Landlord, including but not limited to employees and agents, arising during the
term of the Lease for any and all loss (including but not limited to loss of
rental) or damage to property located within or constituting a part of the
Premises. This waiver is in addition to any other waiver or release contained in
this Lease. Tenant shall have its insurance policies issued in such form as to
waive
PAGE 15
any right of subrogation that might otherwise exist, and shall provide written
evidence thereof to Landlord upon written request.
11. PARTIAL AND TOTAL DESTRUCTION OF THE PREMISES
In the event any part or all of the Premises shall at any time during
the Term be damaged or destroyed, regardless of cause, Tenant shall give prompt
notice to Landlord. Subject to the provisions herein, Landlord shall promptly
and with all diligence, commence and complete the restoration of the Premises,
to the extent insurance proceeds are made available from Tenant to Landlord, all
in accordance with plans and specifications therefor first reasonably approved
in writing by Tenant. Unless Tenant otherwise consents, the replacement
improvement(s) to be constructed shall have a usable area which is not less than
the improvement(s) existing immediately prior to date of such damage. Tenant,
and not Landlord, shall be responsible for paying for any cost of repairs and
restoration in excess of the proceeds available from insurance policies procured
by Tenant. In case of any "material damage or destruction" to or of the
Premises, either party may terminate this Lease by giving written notice thereof
to the other party within sixty (60) days after the date of such occurrence.
Such termination shall be effective on the earlier of the date of the damage or
destruction. The term "material damage or destruction" shall mean any damage or
destruction which cannot be reasonably be repaired within nine (9) months after
the date of the damage or destruction, or any damage or destruction for which
the cost of repair exceeds fifty percent (50%) of the construction replacement
cost of the Premises. In the event neither party elects to terminate this Lease
and Landlord commences to repair the Premises but fails to substantially
complete such restoration within one hundred eighty (180) days after the date of
the damage or destruction, then Tenant may, at its option, terminate this Lease
upon 30 days written notice to Landlord, provided that the Lease will not
terminate if Landlord substantially completes such restoration within said
thirty (30) days.
12. CONDEMNATION
12.1. Condemnation Damages
If the whole or any part of the Premises shall be taken for public or
quasi-public use by a governmental authority under the power of eminent domain
or shall be conveyed to a governmental authority in lieu of such taking, and if
a part of the Premises shall be taken or conveyed but the remaining part is
tenantable and adequate for Tenant's use, then this Lease shall be terminated as
to the part taken or conveyed as of the date Tenant surrenders possession;
Landlord shall make such repairs, alterations and improvements as may be
necessary to render the part not taken or conveyed tenantable; and the rent
shall be reduced in proportion to the part of the Premises so taken or conveyed.
All compensation awarded for such taking or conveyance shall be the property of
Landlord without any deduction therefrom for any present or future estate of
Tenant, and Tenant hereby assigns to Landlord all its right, title and interest
in and to any such award. However, Tenant shall have the right to recover from
the governmental authority, but not from Landlord, such compensation as may be
awarded to Tenant on account of the interruption of Tenant's business, moving,
and
PAGE 16
relocation expenses and depreciation to and removal of Tenant's trade fixtures
and personal property.
12.2. Termination of Lease Due to Condemnation
In the event the Condemnation materially adversely affects the use of
the Premises as defined in Section 5, Tenant may terminate the Lease by giving
Landlord written notice of its intention to terminate the Lease within sixty
(60) days of receipt of notice of the Condemnation; provided, however, if such
notice fails to substantially disclose the material nature, scope and extent of
the Condemnation, then such 60-day notice period shall only commence to run on
such later date that Tenant obtains such disclosures. The effective date of the
termination shall be the date upon which fee simple interest is vested in the
condemning authority, and Tenant shall be released from further obligations or
liabilities arising under the Lease thereafter. In the event of termination,
Base Rent, Property Taxes and Other Charges (collectively, "RENT AND CHARGES")
shall be prorated based upon the actual number of days in the period to be
prorated. Within thirty (30) days following the termination, Landlord shall
refund to Tenant any Rent and Charges paid to Landlord in advance of the
termination.
13. ASSIGNMENT AND SUBLETTING
13.1. Tenant's Right of Assignment and Subletting
Tenant shall not voluntarily or by operation of law assign or encumber
its interest in this Lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person or entity to occupy or use any part of
the Premises, without first obtaining the written consent of Landlord, which
consent shall not be unreasonably withheld. Any assignment, encumbrance, or
sublease without Landlord's consent shall be voidable and, at Landlord's
election, shall constitute a default. It shall not be unreasonable for Landlord
to withhold its consent to any proposed assignment or subletting if the proposed
transferee does not meet certain criteria, including, but not limited to, the
transferee's financial condition, the nature, quality, and character of the
transferee, the identity or business character of the transferee, the nature of
the use and occupancy and the transferee's business experience. Notwithstanding
the foregoing, Tenant shall have the right, without obtaining Landlord's consent
and without triggering any termination, recapture or rent-sharing rights on the
part of the Landlord, to transfer, sublet or assign Tenant's interest in this
Lease, in whole or in part, to any "Affiliate". For the purposes of this
paragraph, "Affiliate" means any parent company, subsidiary, or company-wide
unit of Tenant, any surviving corporation or business entity in a statutory
merger, consolidation, or reorganization of Tenant, any corporation or other
business entity which acquires all or substantially all or the stock or assets
of Tenant or the assets of the division or unit of Tenant operating in the
Premises, or any corporation or other business entity controlled by or
controlling Tenant. "Controlled by or controlling" shall mean that Tenant or
another corporation or business entity, as the case may be, holds a controlling
percentage or more of the voting stock of Tenant or another corporation or other
business entity, as the case may be. In no event shall the sale of any stock or
securities of Tenant, either in conjunction with a registered securities
offering or on any public securities exchanges, constitute a change of ownership
or transfer with respect to this section.
PAGE 17
13.2. Landlord's Option to Preserve Subtenancies
In the event of Tenant's surrender of this Lease or the termination of
this Lease in any other manner, Landlord may, at its option, either terminate
any or all subtenancies or succeed to the interest of Tenant as sublandlord
thereunder. No merger shall result from Tenant's sublease of the Premises under
this Section, Tenant's surrender of this Lease, or the termination of this Lease
in any other manner.
13.3. Tenant's Assignment of All Rent from Subletting as Security for
Tenant's Obligations
Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this Lease, all rent from any subletting of all or a
part of the Premises as permitted by this Lease. In the event of a default by
Tenant, Landlord, as assignee or a receiver for Tenant appointed on Landlord's
application, may collect the rent and apply it toward Tenant's obligations under
this Lease.
13.4. Continuing Obligation of Tenant
No transfer, subletting or assignment permitted by this Section 13
(including a transfer to an affiliate) shall release Tenant or change Tenant's
primary liability to pay the rent and to perform all other obligations of Tenant
under this Lease. Landlord's acceptance of rent from any other person is not a
waiver of any provision of this Section. Consent to one transfer is not a
consent to any subsequent transfer. If Tenant's transferee defaults under this
Lease, Landlord may proceed directly against Tenant without pursuing remedies
against the transferee. Landlord may consent to subsequent assignments or
modifications of this Lease by Tenant's transferee, without notifying Tenant or
obtaining its consent. Such action shall not relieve Tenant's liability under
this Lease.
13.5. Fees and Costs with Regard to Proposed Assignment or Sublease
If Tenant requests Landlord to consent to a proposed assignment or
sublease, Tenant shall pay to Landlord, whether or not consent is ultimately
given, Landlord's reasonable attorneys' fees and other costs incurred in
connection with each such request, up to a maximum of $2,500.00.
13.6. Mortgage of Leasehold
13.6.1. Definitions. For purposes of this Section 13.6, the following
terms shall have the meanings hereinafter set forth:
"Assignment For Security" shall mean a transaction in
which Tenant:
(A) assigns its interest hereunder to an
Institutional Lender for the purpose of security; and/or
(B) executes a first priority leasehold deed of
trust, mortgage or deed to secure debt with respect to its
interest hereunder for the benefit of an Institutional Lender.
PAGE 18
"Institutional Lender" shall mean a bank, insurance
company, a bank affiliate or wholly owned subsidiary of any
such bank, or any other financial or lending institution
organized under the laws of the United States or any state
thereof or Canada or any province thereof with a net worth of
at least $25,000,000, including, a real estate investment
trust and/or trust, corporation or other Person engaged in
so-called conduit lending, or a public or private pension plan
or institutionally managed fund having gross assets of at
least $100,000,000.
"Leasehold Mortgage" shall mean any first priority
leasehold mortgage, deed of trust, deed to secure debt or
other security instrument given by Tenant pursuant to an
Assignment For Security and encumbering Tenant's interest in
the Leased Premises.
"Leasehold Mortgagee" shall mean any Institutional
Lender which is the holder of a Leasehold Mortgage from time
to time.
"Mortgaged Premises" shall mean Tenant's leasehold
interest in the Premises arising pursuant to this Lease.
13.6.2. Permitted Assignments For Security. Tenant shall have the
right, without the consent of Landlord (but with not less than
fifteen (15) days prior written notice to Landlord before such
encumbrance), to enter into an Assignment for Security so long
as Tenant remains liable for performance of all obligations on
Tenant's part to be performed hereunder.
13.6.3. No Termination By Reason Of Foreclosure, Sale Or Surrender.
This Lease shall not be subject to termination by Landlord
solely by reason of or upon the happening of a judicial or
non-judicial foreclosure of any Leasehold Mortgage, or the
acquisition by a Leasehold Mortgagee of the Mortgaged
Premises, or Tenant's interest therein, by resort to any
remedy for default under or pursuant to a Leasehold Mortgage
or an Assignment For Security, or conveyance in lieu of
foreclosure thereof (unless such Leasehold Mortgagee fails to
comply with any of the provisions set forth in Section 13.6.4
or 13.6.5). If Landlord has received written notice from
Tenant that a Leasehold Mortgage is in effect, then so long as
such Leasehold Mortgage remains in effect Landlord shall not
accept an early surrender or other early voluntary termination
of this Lease by Tenant, except where such early surrender or
early termination is a result of Tenant's default hereunder.
13.6.4. Leasehold Mortgagee Succeeds to Tenant's Interest; Liability
of Leasehold Mortgagee Limited. Upon taking possession of the
Mortgaged Premises for any purpose, a Leasehold Mortgagee
shall be required to assume the obligations of Tenant under
this Lease pursuant to an assumption agreement in form
reasonably acceptable to Landlord, and thereafter shall have
all of the rights of Tenant and the duty to perform all of
Tenant's obligations hereunder, but any such Leasehold
Mortgage shall
PAGE 19
not be liable for the performance of such obligations after it
has assigned this Lease to a third party acceptable to
Landlord in accordance with the provisions of Sections 13.1 to
13.5 of this Lease.
13.6.5. Right of Leasehold Mortgagee To Cure Default. If a Leasehold
Mortgagee has given Landlord prior written notice of its
Leasehold Mortgage and an address to which notices of default
under this Lease are to be sent to such Leasehold Mortgagee,
then Landlord agrees to give such Leasehold Mortgagee copies
of any and all written material notices of default given to
Tenant in connection therewith concurrently with (or promptly
after) the giving of such notices of default to Tenant;
provided, that the failure by Landlord to so notify such
Leasehold Mortgagee shall not toll the running of any grace
and cure periods in favor of Tenant set forth in this Lease or
limit any of Landlord's rights and remedies against Tenant
under this Lease, at law, in equity or otherwise; provided,
further, however, that Landlord agrees for the benefit of any
such Leasehold Mortgagee, that notwithstanding anything set
forth above in this sentence, Landlord shall not terminate
this Lease as a result of an Event of Default of Tenant
unless:
(A) Landlord shall have first given written notice of
such default to such Leasehold Mortgagee; and
(B) such Leasehold Mortgagee has failed or refused to
correct or cure the default complained of within the time
permitted Tenant hereunder, plus a reasonable time thereafter.
For purposes of this Subpart (B) only, "reasonable time" shall
mean (1) five (5) days with respect to defaults that may be
cured by payment of money or (2) fifteen (15) days with
respect to defaults not curable by payment of money; provided,
however, that in the case of defaults not curable by the
payment of money and where cure cannot be commenced without
first recovering possession, the cure period shall be extended
to include the period reasonably required for the Leasehold
Mortgagee to obtain possession of the Mortgaged Premises so
long as such Leasehold Mortgagee has commenced such
proceedings to obtain possession within said fifteen (15) day
period and thereafter diligently pursues such proceedings to
completion and the Leasehold Mortgagee cures the default as
diligently as possible thereafter. To secure the benefits of
the right to extend the period for curing a non-monetary
default beyond fifteen (15) days, there must not be any
monetary defaults under this Lease and the Leasehold Mortgagee
must first give written notice to Landlord within the initial
fifteen (15) day period for cure of non-monetary defaults
stating that it cannot cure the default without possession of
the Mortgaged Premises and stating its intent to proceed to
obtain possession and to cure such default, and must commence
such proceedings within such fifteen (15) day period and
diligently pursue such proceedings to completion thereafter.
PAGE 20
13.6.6. Assignment After Cure. So long as a Leasehold Mortgagee has
cured all of the outstanding defaults of Tenant hereunder
(unless such default is of the type described in Section
14.1.3 of this Lease and cannot be cured by Leasehold
Mortgagee) and has performed the obligations to be performed
by it hereunder during the period of its possession, such
Leasehold Mortgagee shall have the right to assign this Lease
subject to and in accordance with the provisions of Sections
13.1 to 13.5 hereof to a person or entity who shall assume in
a written instrument reasonably satisfactory to Landlord the
obligations of Tenant hereunder and go into possession and
occupancy of the Mortgaged Premises for the uses and purposes
permitted pursuant to this Lease, whereupon such Leasehold
Mortgagee shall be relieved of all further liability for
performance of the obligations hereof arising from and after
the date of such assignment.
13.6.7. New Lease. If a Leasehold Mortgagee has cured all of the
outstanding defaults of Tenant, or taken action to cure all
such defaults of Tenant, as provided in Section 13.6.5 and
this Lease nonetheless shall be terminated as a result of any
default by Tenant, or be rejected or disaffirmed pursuant to
any bankruptcy law or other law affecting creditors' rights, a
Leasehold Mortgagee shall have the right, exercisable by
written notice to Landlord and execution and delivery of a new
lease by such Leasehold Mortgagee within ten (10) business
days after the effective date of such termination, to enter
into a new lease of the Premises with Landlord. The term of
said new lease shall begin on the date of the termination of
this Lease and shall continue for the remainder of the Term of
this Lease. Such new lease shall otherwise contain the same
terms and conditions as those set forth herein.
13.6.8. Landlord's Rights. Except as expressly set forth in Section
13.6.5, nothing contained in this Section 13.6 shall limit
Landlord's right to terminate this Lease upon the occurrence
of an Event of Default.
13.7. Landlord's Right of Assignment
Landlord shall be free at all times, without need of consent or
approval by Tenant, to assign its interest in this Lease and/or to convey fee
title to the Premises. Each conveyance by Landlord of Landlord's interest in the
Lease or the Premises prior to expiration or termination hereof shall be subject
to this Lease and shall relieve the grantor of any further obligations or
liability as Landlord, and Tenant shall look solely to Landlord's successor in
interest for all future obligations of Landlord. Tenant hereby agrees to attorn
to Landlord's successors in interest, whether such interest is acquired by sale,
transfer, foreclosure, deed in lieu of foreclosure, or otherwise. The term
"Landlord" as used in this Lease, so far as covenants and obligations on the
part of Landlord are concerned, shall be limited to mean and include only the
owner at the time in question of the fee title of the Premises. Without further
agreement, the transferee of such title shall be deemed to have assumed and
agreed to observe and perform any and all obligations of Landlord hereunder
during its ownership of the Premises.
PAGE 21
14. DEFAULT AND TERMINATION
14.1. Event of Default
The occurrence of any of the following events (each an "EVENT OF
DEFAULT") shall constitute a default by Tenant:
14.1.1. Failure by Tenant to pay Base Rent or any other sum due under
this Lease (including but not limited to payments for taxes,
utilities, maintenance and repairs, or insurance) within ten
(10) days following written notice from Landlord.
14.1.2. Failure by Tenant to perform or comply with any provision of
this Lease (other than as set forth in Subsection 14.1.1) if
the failure is not cured within thirty (30) days after notice
has been given to Tenant. If, however, the failure cannot
reasonably be cured within the cure period, Tenant shall not
be in default of this Lease if Tenant commences to cure the
failure within the cure period and diligently and in good
faith continues to cure the failure but in no event shall such
failure to cure exceed 90 days..
14.1.3. To the extent permitted by law, a general assignment by Tenant
or any guarantor of the Lease for the benefit of creditors, or
the filing by or against Tenant or any guarantor of any
proceeding under any insolvency or bankruptcy law, unless in
the case of a proceeding filed against Tenant or any guarantor
the same is dismissed within sixty (60) days, or the
appointment of a trustee or receiver to take possession of all
or substantially all of the assets of Tenant or any guarantor,
unless possession is restored to Tenant or such guarantor
within (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's
assets located upon the Premises or of Tenant's interest in
this Lease, unless such seizure is discharged within thirty
(30) days.
14.2. Landlord's Remedies
Landlord shall have any one or more of the following remedies after the
occurrence of a default by Tenant. These remedies are not exclusive; they are
cumulative in addition to any remedies now or later allowed by law, in equity,
or otherwise:
14.2.1. Terminate this Lease by giving written notice of termination
to Tenant, in which event Tenant immediately shall surrender
the Premises to Landlord. If Tenant fails to so surrender the
Premises, then Landlord, without prejudice to any other remedy
it has for possession of the Premises or arrearages in rent or
other damages, may re-enter and take possession of the
Premises and expel or remove Tenant and any other person or
entity occupying the Premises or any part thereof, without
being liable for any damages, whether caused by negligence of
Landlord or otherwise.
PAGE 22
14.2.2. No act by Landlord other than giving notice of
termination to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises,
or the appointment of a receiver on Landlord's
initiative to protect Landlord's interest under this
Lease shall not constitute a termination of this
Lease. On termination of the Lease, Landlord shall
have the right to recover from Tenant:
(i) The worth at the time of the award of the
unpaid rent that had been earned at the time
of termination of this Lease; and
(ii) The worth at the time of the award of the
amount by which the unpaid rent that would
have been earned after the date of
termination of this Lease until the time of
award exceeds the amount of the loss of rent
that Tenant proves reasonably could have
been avoided; and
(iii) The worth at the time of the award of the
amount by which the unpaid rent for the
balance of the term after the time of award
exceeds the amount of the loss of rent that
Tenant proves reasonably could have been
avoided; and
(iv) Any other amount, including, without
limitation, attorneys' fees and court costs,
necessary to compensate Landlord for all
detriment proximately caused by Tenant's
default.
The phrase "WORTH AT THE TIME OF THE AWARD"
as used in clauses (i) and (ii) above is to
be computed by allowing interest at the rate
of twelve percent (12%) per annum, but not
to exceed the then legal rate of interest.
The same phrase as used in clause (iii)
above is to be computed by discounting the
amount at the discount rate of the Bank of
America N.A. at the time of the award, plus
one percent (1%).
Landlord agrees to act reasonably to
mitigate any damages hereunder.
14.2.3. Landlord may re-enter and take possession of the Premises
without terminating this Lease and without being liable for
any damages, whether caused by the negligence of Landlord or
otherwise. Landlord may relet the Premises, or any part of
them, to third parties, but has no obligation to do so.
Landlord may relet the Premises on whatever terms and
conditions Landlord, in its sole discretion, deems advisable.
Reletting can be for a period shorter or longer than the
remaining term of this Lease. Landlord's action under this
Subsection is not considered an acceptance of Tenant's
surrender of the Premises unless Landlord so notifies Tenant
in writing. Tenant shall be immediately liable to Landlord for
all costs Landlord incurs in reletting the Premises, including
brokers' commissions, expenses of remodeling the Premises
required by the reletting, and like costs.
PAGE 23
Tenant shall pay to Landlord the rent due under this Lease on
the dates the rent is due, less the rent Landlord receives
from any reletting.
If Landlord elects to relet the Premises without terminating
this Lease, any rent received will be applied to the account
of Tenant, not to exceed Tenant's total indebtedness to
Landlord; no reletting by Landlord is considered to be for its
own account unless Landlord has notified Tenant in writing
that the Lease has been terminated. If Landlord elects to
relet the Premises, rent that Landlord receives from reletting
will be applied to the payment of: (i) first, any indebtedness
from Tenant to Landlord other than rent due from Tenant; (ii)
second, all costs, including maintenance, incurred by Landlord
in reletting; and (iii) third, rent due and unpaid under the
Lease. After deducting the payments referred to in this
Subsection, any sum remaining from the rent Landlord receives
from reletting will be held by Landlord and applied in payment
of future rent as rent becomes due under this Lease. If, on
the date rent is due under this Lease, the rent received from
the reletting is less than the rent due on that date, Tenant
will pay to Landlord, in addition to the remaining rent due,
all costs, including maintenance, Landlord incurred in
reletting which remain after applying the rent received from
the reletting. Tenant shall have no right to or interest in
the rent or other consideration received by Landlord from
reletting to the extent it exceeds Tenant's total indebtedness
to Landlord.
14.2.4. Re-enter the Premises without terminating this Lease and
without being liable for any damages, whether caused by the
negligence of Landlord or otherwise, and do whatever Tenant is
obligated to do under the terms of this Lease. The expenses
incurred by Landlord in effecting compliance with Tenant's
obligations under this Lease immediately shall become due and
payable to Landlord as additional rent.
14.2.5. In all events, Tenant is liable for all damages of whatever
kind or nature, direct or indirect, suffered by Landlord as a
result of the occurrence of an Event of Default. If Tenant
fails to pay Landlord in a prompt manner for the damages
suffered, Landlord may pursue a monetary recovery from Tenant.
Included among these damages are all expenses incurred by
Landlord in repossessing the Premises (including, but not
limited to, increased insurance premiums resulting from
Tenant's vacancy), all expenses incurred by Landlord in
reletting the Premises (including, but not limited to, those
incurred for advertisements, brokerage fees, repairs,
remodeling, and replacements), all concessions granted to a
new tenant on a reletting, all losses incurred by Landlord as
a result of Tenant's default (including, but not limited to,
any unamortized commissions paid in connection with this
Lease), a reasonable allowance for Landlord's administrative
costs attributable to Tenant's default, and all attorneys'
fees incurred by Landlord in enforcing any of Landlord's
rights or remedies against Tenant.
PAGE 24
14.2.6. Pursuit of any of the foregoing remedies does not constitute
an irrevocable election of remedies nor preclude pursuit of
any other remedy provided elsewhere in this Lease or by
applicable law, and none is exclusive of another unless so
provided in this Lease or by applicable law. Likewise,
forbearance by Landlord to enforce one or more of the remedies
available to it on an Event of Default does not constitute a
waiver of that default or of the right to exercise that remedy
later or of any rent, damages, or other amounts due to
Landlord hereunder.
14.2.7. Whether or not Landlord elects to terminate this Lease or
Tenant's right to possession of the Premises on account of any
default by Tenant, Landlord shall have all rights and remedies
at law or in equity, including, but not limited to, the right
to re-enter the Premises and, to the maximum extent provided
by law, Landlord shall have the right to terminate any and all
subleases, licenses, concessions, or other consensual
arrangements for possession entered into by Tenant and
affecting the Premises or, in Landlord's sole discretion, may
succeed to Tenant's interest in such subleases, licenses,
concessions, or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such
subleases, licenses, concessions, or arrangements, Tenant
shall have no further right to or interest in the rent or
other consideration receivable thereunder as of the date of
notice by Landlord of such election.
14.3. Right of Landlord to Re-Enter
In the event of any termination of this Lease, Landlord shall have the
immediate right to enter upon and repossess the Premises, and any personal
property of Tenant may be removed from the Premises and stored in any public
warehouse at the risk and expense of Tenant.
14.4. Surrender of Premises
No act or thing done by Landlord or any agent or employee of Landlord
during the Lease term shall be deemed to constitute an acceptance by Landlord or
a surrender of Premises unless such intent is specifically acknowledged in a
writing signed by Landlord. The delivery of keys to the Premises to Landlord or
any agent or employee of Landlord shall not constitute a surrender of the
Premises or effect a termination of this Lease, whether or not the keys are
thereafter retained by Landlord and, notwithstanding such delivery, Tenant shall
be entitled to the return of such keys at any reasonable time upon request until
this Lease shall have been terminated properly. The voluntary or other surrender
of this Lease by Tenant, whether accepted by Landlord or not, or a mutual
termination hereof, shall not work a merger, and at the option of Landlord shall
operate as an assignment to Landlord of all subleases or subtenancies affecting
the Premises.
14.5. Interest Charges
Except as otherwise provided herein, any amount not paid by one party
to the other when due to the other party will bear interest from the date due at
the lesser of (i) the prime commercial rate being charged by the Bank of America
N.A. in effect on the date due plus two
PAGE 25
percent (2%) per annum; or (ii) the maximum rate permitted by law. If Bank of
America N.A. is no longer in existence, then another comparable bank or
financial institution shall be substituted by Landlord.
14.6. Tenant's Default
If Tenant is in default of the Lease, then:
14.6.1. For so long as Landlord does not terminate Tenant's right to
possession of the Premises, if Tenant obtains Landlord's
consent, Tenant will have the right to assign or sublet its
interest in the Lease, but Tenant will not be released from
liability.
14.6.2. No structural changes to the improvements at any cost shall be
permitted without the prior written approval of Landlord.
14.6.3. All costs of de-identification of the Premises shall be paid
by Tenant whether or not Landlord terminates this Lease.
14.7. Default by Landlord
Landlord shall be in default if Landlord fails to perform any provision
of this Lease required of it and the failure is not cured within thirty (30)
days after notice has been given to Landlord. If, however, the failure cannot
reasonably be cured within the cure period, Landlord shall not be in default of
this Lease if Landlord commences to cure the failure within the cure period and
diligently and in good faith continues to cure the failure. Notices given under
this Section 14.7 shall specify the alleged breach and the applicable Lease
provisions. If Landlord shall at any time default beyond the applicable notice
and cure period, Tenant shall have the right to cure such default on Landlord's
behalf. Any sums expended by Tenant in doing so, and all reasonably necessary
incidental costs and expenses incurred in connection therewith, shall be payable
by Landlord to Tenant within thirty (30) days following demand therefor by
Tenant.
15. RIGHT OF INSPECTION
Landlord and Landlord's authorized representatives shall have the right
(but not the obligation) after written notice to Tenant, to enter upon the
Premises at all reasonable hours for the purpose of inspecting the Premises or
of making repairs, additions, or Alterations in or upon the Premises, and, for
the purpose of exhibiting the Premises to prospective tenants, purchasers, or
others. Provided Tenant is not in default beyond any applicable cure period,
Landlord shall not exhibit any "for sale" or "for lease" signs during the Term.
16. WAIVER OF BREACH
No waiver by Landlord of any breach of any one or more of the terms,
covenants, conditions, or agreements of this Lease shall be deemed to imply or
constitute a waiver of any succeeding or other breach. Failure of Landlord to
insist upon the strict performance of any of the terms, conditions, covenants,
and agreements of this Lease shall not constitute or be considered as a waiver
or relinquishment of Landlord's rights to subsequently enforce any
PAGE 26
default, term, condition, covenant, or agreement, which shall all continue in
full force and effect. The rights and remedies of Landlord under this Lease
shall be cumulative and in addition to any and all other rights and remedies
which Landlord has or may have.
17. NOTICES
17.1. Notice Requirements
All notices, requests, or demands herein provided to be given or made,
or which may be given or made by either party to the other, shall be given or
made only in writing and shall be deemed to have been duly given: (i) when
delivered personally at the address set forth below, or to any agent of the
party to whom notice is being given, or if delivery is rejected when delivery
was attempted; or (ii) on the date delivered when sent via Overnight Mail,
properly addressed and postage prepaid; or (iii) on the date sent via facsimile
transmission; or (iv) upon delivery, or if delivery is rejected when delivery
was attempted of properly addressed first class mail, postage prepaid with
return receipt requested. Notwithstanding the prescribed methods of delivery set
forth above, actual receipt of written notice by a party designated below shall
constitute notice given in accordance with this Lease on the date received,
unless deemed earlier given pursuant to the foregoing methods of delivery. The
proper address to which notices, requests, or demands may be given or made by
either party shall be the address set forth at the end of this Section or to
such other address or to such other person as any party shall designate. Such
address may be changed by written notice given to the other party in accordance
with this Section.
IF TO LANDLORD:
MDSC Partners, LLP
0000 Xxxxxxxxxx Xxx X.
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx Xxxxxx
IF TO TENANT:
Resistance Technology, Incorporated
0000 Xxx Xxx Xxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
17.2. Payments Under Lease
All payments due to Landlord under this Lease shall be paid in lawful
money of the United States of America without offset or deduction to the name
and at the address first given above or to such other persons or parties or at
such other places as Landlord may from time to time designate in writing.
18. RELATIONSHIP OF THE PARTIES
This Lease shall not be deemed or construed by the parties, nor by any
third party, as creating the relationship of (i) principal and agent, (ii)
partnership, or (iii) joint venture between
PAGE 27
the parties. Neither the method of computation of rent nor any other provision
of this Lease, nor any acts of the parties are other than in the relationship of
Landlord and Tenant.
19. SUBORDINATION, ATTORNMENT AND ESTOPPEL
19.1. Subordination and Non-Disturbance
Subject to the provisions of this Section, this Lease and the leasehold
estate created hereby shall be, at the option and upon written declaration of
Landlord, subject, subordinate, and inferior to the lien and estate of any
liens, trust deeds, and encumbrances ("Mortgages"), and all renewals,
extensions, or replacements thereof, now or hereafter imposed by Landlord upon
the Premises; provided, however, that this Lease shall not be subordinate to any
Mortgage arising after the date of this Lease, or any renewal, extension, or
replacement thereof, unless and until Landlord provides Tenant with a
subordination, non-disturbance and attornment agreement ("NON-DISTURBANCE
AGREEMENT"), substantially in the form of Exhibit "C," attached hereto and
incorporated hereby, in recordable form, which Non-Disturbance Agreement also
shall include such commercially reasonable modifications and additional
provisions as are customarily requested by secured lenders with liens
encumbering real property similar to the Premises, including, without
limitation, Tenant's agreement to attorn as set forth in Section 19.2 below.
Tenant shall, promptly following a request by Landlord and after receipt of the
Non-Disturbance Agreement, execute and acknowledge any subordination agreement
or other documents required to establish of record the priority of any such
encumbrance over this Lease, so long as such agreement does not otherwise
increase Tenant's obligations or diminish Tenant's rights hereunder.
19.2. Attornment
In the event of foreclosure of any Mortgage, whether superior or
subordinate to this Lease, then (i) this Lease shall continue in force; (ii)
Tenant's quiet possession shall not be disturbed if Tenant is not in default
hereunder; (iii) Tenant shall attorn to and recognize the mortgagee or purchaser
at foreclosure sale ("SUCCESSOR LANDLORD") as Tenant's landlord for the
remaining term of this Lease; and (iv) the Successor Landlord shall not be bound
by (a) any payment of rent for more than one month in advance; (b) any
amendment, modification, or ending of this Lease without the Successor
Landlord's consent after the Successor Landlord's name is given to Tenant,
unless the amendment, modification, or ending is specifically authorized by the
original Lease and does not require Landlord's prior agreement or consent; and
(c) any liability for any act or omission of a prior Landlord. At the request of
the Successor Landlord, Tenant shall execute a new lease for the Premises,
setting forth all of the provisions of this Lease except that the term of the
new lease shall be for the balance of the term of this Lease.
19.3. Estoppel Certificate
Landlord and Tenant shall execute and deliver to the other party,
within twenty (20) days after receipt of a request, an estoppel certificate or
other statement to be furnished to any prospective purchaser of, assignee of, or
lender against the Lease or the Premises ("ESTOPPEL CERTIFICATE"), substantially
in the form of Exhibit "D," attached hereto and incorporated hereby, which
Estoppel Certificate also shall include such commercially reasonable
modifications and additional provisions as are customarily requested by
purchasers, assignees or lenders, including,
PAGE 28
without limitation, any or all of the following matters, to the extent each may
be true: that the Lease is in effect and not subject to any rental offsets,
claims, or defenses to its enforcement; the commencement and expiration dates of
the term; that Tenant is paying rent on a current basis; that any improvements
required to be furnished under the Lease have been completed in all respects;
that the Lease constitutes the entire agreement between Tenant and Landlord
relating to the Premises; that Tenant has accepted the Premises and is in
possession thereof; that the Lease has not been modified, altered, or amended
except in specified respects by specified instruments; that the certifying party
has no notice of any prior assignment, hypothecation, or pledge of rents or the
Lease; and such other matters as reasonably may be requested. Tenant shall also,
upon request of Landlord, certify and agree for the benefit of any lender
against the Premises or the building ("Lender") that Tenant will not look to
such Lender: as being liable for any act or omission of Landlord; as being
obligated to cure any defaults of Landlord under the Lease which occurred prior
to the time Lender, its successors or assigns, acquired Landlord's interest in
the Premises by foreclosure or otherwise, as being bound by any payment of rent
or Additional Rent by Tenant to Landlord for more than one (1) month in advance;
or as being bound by Landlord to any amendment or modification of the Lease
without Lender's written consent. Failure to deliver the documents required
under this Section 19 in the time period required shall constitute an Event of
Default without the need for any notice or cure period.
20. ATTORNEYS' FEES
20.1. Recovery of Attorneys' Fees and Costs of Suit
Tenant shall reimburse Landlord, upon demand, for any costs or expenses
incurred by Landlord in connection with any breach or default under this Lease,
whether or not suit is commenced or judgment entered. Such costs shall include
legal fees and costs incurred for the negotiation of a settlement, enforcement
of rights, or otherwise. Furthermore, if any action for breach of or to enforce
the provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. Such attorneys' fees and costs shall be paid by the
losing party in such action.
20.2. Party to Litigation
Tenant shall indemnify Landlord against and hold Landlord harmless from
all costs, expenses, demands, and liability incurred by Landlord if Landlord
becomes or is made a party to any claim or action (i) instituted by Tenant, or
by any third party against Tenant, or by or against any person holding any
interest under or using the Premises by license of or agreement with Tenant;
(ii) for foreclosure of any lien for labor or material furnished to or for
Tenant or such other person; (iii) otherwise arising out of or resulting from
any action or transaction of Tenant or such other person; or (iv) necessary to
protect Landlord's interest under this Lease in a bankruptcy proceeding, or
other proceeding under Title 11 of the United States Code, as amended. Tenant
shall defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse Landlord for any legal fees or costs incurred by Landlord in any
such claim or action.
PAGE 29
21. AUTHORITY TO MAKE LEASE; COVENANT OF QUIET ENJOYMENT
21.1. Full Power and Authority to Enter Lease
The parties covenant and warrant that each has full power and authority
to enter into this Lease.
21.2. Quiet Enjoyment
Landlord covenants and warrants that Tenant shall have and enjoy full,
quiet, and peaceful possession of the Premises, its appurtenances and all rights
and privileges incidental thereto during the term, as against all persons
claiming by, through, or under Landlord, subject to the provisions of this Lease
and any title exceptions or defects in existence on the Commencement Date.
21.3. No Violation of Covenants and Restrictions
Tenant leases the Premises subject to (i) all encumbrances, covenants,
conditions, restrictions, easements, rights of way, and all other matters of
record affecting the Premises; (ii) all matters known to Tenant as of the
Commencement Date and (iii) any state of facts which a current survey or
physical inspection of the Premises might disclose. Tenant shall not violate,
permit a violation, or cause Landlord to violate any recorded covenants and
restrictions affecting the Premises. Tenant shall defend, indemnify, and hold
harmless Landlord from any costs or expenses incurred from such a violation.
22. HAZARDOUS MATERIAL
22.1. Environmental Compliance
Except for (i) de minimus amounts used in compliance with all
Environmental Laws, and (ii) amounts packaged for retail sale and held for sale
by Tenant in compliance with all Environmental Laws, Tenant shall not cause or
permit any Hazardous Material to be brought upon, or used in or about the
Premises by Tenant, its agents, employees, contractors, or invitees, without the
prior written consent of Landlord (which Landlord shall not unreasonably
withhold as long as Tenant demonstrates to Landlord's reasonable satisfaction
that such Hazardous Material is necessary or useful to Tenant's business and
will be used, kept, and stored in a manner that complies with all Environmental
Laws relating to such Hazardous Material). If Tenant breaches the obligations
stated in the preceding sentence, if the presence of Hazardous Material on the
Premises caused or permitted by Tenant results in contamination of the Premises,
or if contamination of the Premises by Hazardous Material otherwise occurs and
Landlord is not responsible for the contamination, then Tenant shall indemnify,
defend, and hold Landlord harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities, or losses (including, without limitation,
diminution in value of the Premises, damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Premises, damages arising
from any adverse impact on marketing of space of the Premises, and sums paid in
settlement of claims, attorneys' fees, consultation fees, and expert fees) which
arise during or after the term of the Lease as a result of such contamination.
This indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation or site
PAGE 30
conditions or any cleanup, remedial, removal, or restoration work required by
any federal, state, or local governmental agency or political subdivision
because of Hazardous Material present in the soil or ground water on or under
the Premises. Without limiting the foregoing, if the presence of any Hazardous
Material on the Premises caused or permitted by Tenant results in any
contamination of the Premises, Tenant shall promptly take all actions at its
sole expense as are recommended by environmental engineers hired by Tenant and
are necessary to return the Premises to the condition existing prior to the
introduction of any such Hazardous Material to the Premises; provided that
Landlord's approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld so long as such actions would not potentially
have any material adverse long-term or short-term effect on the Premises.
Provisions of this Section 22 shall survive termination of tenancy.
23. GENERAL PROVISIONS
23.1. Recitals
The Recitals set forth on Page 1 above are incorporated herein by this
reference.
23.2. Gender; Number
The use of (i) the neuter gender includes the masculine and feminine
and (ii) the singular number includes the plural, whenever the context requires.
23.3. Captions
Captions in this Lease are inserted for the convenience of reference
only and do not define, describe, or limit the scope or the intent of this Lease
or any of its terms.
23.4. Exhibits
All attached exhibits are a part of this Lease and are incorporated in
full by this reference. Except as specifically provided herein, if any provision
contained in any exhibit hereto is inconsistent or in conflict with any
provisions of this Lease, the provisions of this Lease shall supersede the
provisions of such exhibit and shall be paramount and controlling.
23.5. Entire Agreement
This Lease contains the entire agreement between the parties relating
to the transactions contemplated hereby and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are
merged into this Lease.
23.6. Drafting
This Lease shall not be construed more strictly against one party than
the other because it may have been drafted by one of the parties or its counsel,
each having contributed substantially and materially to the negotiation and
drafting hereof.
PAGE 31
23.7. Modification
No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless it is in writing and signed by the party against which the
enforcement of the modification, waiver, amendment, discharge, or change is or
may be sought.
23.8. Joint and Several Liability
If any party consists of more than one person or entity, the liability
of each such person or entity signing this Lease shall be joint and several.
23.9. Governing Law
This Lease shall be construed and enforced in accordance with the laws
of the state in which the Premises are located. Notwithstanding the foregoing,
Tenant warrants and represents that the terms of this Lease are fully
enforceable in the locality in which the Premises is located. In the event any
provision contained in this Lease is inconsistent or in conflict with local law,
custom, or practice, the provisions of this Lease shall supersede and shall be
paramount and controlling.
23.10. Attorneys' Fees
With respect to Section 21 and any other provision in this Lease
providing for payment or indemnification of attorneys' fees, such fees shall be
deemed to include reasonable fees incurred through any applicable appeal
process, and shall include fees attributable to legal services provided by any
in-house counsel and staff to the prevailing or indemnified party. For purposes
hereof, the services of in-house counsel and their staff shall be valued at
rates for independent counsel prevailing in the metropolitan area in which such
counsel and staff practice.
23.11. Time of Essence
Time is of the essence of every provision of this Lease.
23.12. Severability
In the event any term, covenant, condition, or provision of this Lease
is held to be invalid, void, or otherwise unenforceable by any court of
competent jurisdiction, the fact that such term, covenant, condition, or
provision is invalid, void, or otherwise unenforceable shall in no way affect
the validity or enforceability of any other term, covenant, condition, or
provision of this Lease.
23.13. Successors and Assigns
Except as provided in Article 13, Tenant may not assign its rights
under this Agreement without the consent of Landlord. Except as otherwise
provided herein, all terms of this Lease shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective legal
representatives, successors, and assigns.
PAGE 32
23.14. Independent Covenants
This Lease shall be construed as though the covenants herein between
Landlord and Tenant are independent and not dependent, and Tenant hereby
expressly waives the benefit of any statute to the contrary and agrees that if
Landlord fails to perform its obligations set forth herein, Tenant shall not be
entitled to make any repairs or perform any acts hereunder at Landlord's expense
or to any offset of the rent or other amounts owing hereunder against Landlord;
provided, however, the foregoing shall in no way impair the right of Tenant to
commence a separate action against Landlord for any violation by Landlord of the
provisions hereof so long as notice is first given to Landlord and any holder of
a mortgage or deed of trust covering the Premises (of whose address Tenant has
theretofore been notified) and an opportunity is granted to Landlord and such
holder to correct such violation as provided above.
23.15. Information Provided
Tenant warrants and represents that all information Tenant has provided
to Landlord is accurate and correct and Tenant acknowledges that Landlord has
relied upon such information in entering into this Lease.
23.16. Limitation of Landlord's Liability
Notwithstanding anything contained in this Lease to be contrary,
Landlord shall not incur any liability beyond Landlord's interest in the
Premises upon a breach of this Lease, and Tenant shall look exclusively to such
interest in the Premises for the payment and discharge of any obligations
imposed upon Landlord under this Lease.
23.17. Waiver of Trial by Jury
Landlord and Tenant do hereby waive trial by jury in any action,
proceeding or counterclaim brought by either party against the other, upon any
matters whatsoever arising out of or in any way connected with this Lease,
Tenant's use or occupancy of the Premises and/or any claim of injury or damage.
It further is agreed that in the event Landlord commences any summary proceeding
for non-payment of rent or Additional Rent, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceeding.
23.18. No Lease Until Accepted
Landlord's delivery of unexecuted copies or drafts of this Lease is
solely for the purpose of review by the party to whom delivered and is in no way
to be construed as an offer by Landlord nor in any way implies that Landlord is
under any obligation to lease the Premises. When this Lease has been executed by
both Landlord and Tenant, it shall constitute a binding agreement to lease the
Premises upon the terms and conditions provided herein and Landlord and Tenant
agree to execute all instruments and documents and take all actions as may be
reasonably necessary or required in order to consummate the lease of the
Premises as contemplated herein.
23.19. Characterization of Lease
Landlord and Tenant intend that:
PAGE 33
23.19.1. this Lease is a "true lease" and not a financing lease,
capital lease, mortgage, equitable mortgage, deed of trust,
trust agreement, security agreement or other financing or
trust arrangement, and the economic realities of this Lease
are those of a true lease; and
23.19.2. the business relationship created by this Lease and any
related documents is solely that of a commercial lease between
landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained
herein.
THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY.
PAGE 34
23.20. Counterparts
This Lease may be executed in any number of counterparts, each of which
shall be deemed an original. The counterparts shall together constitute but one
agreement. Any signature on a copy of this Lease or any document necessary or
convenient thereto sent by electronic transmission or facsimile shall be binding
upon transmission and the electronic or facsimile copy may be utilized for the
purposes of this Lease.
LANDLORD: TENANT:
--------- -------
MDSC PARTNERS, LLP RESISTANCE TECHNOLOGY, INCORPORATED
By:/s/Xxxxx Xxxxxx Xxxxxx By:/s/Xxxx X. Xxxxxx
Its: Partner Its: President
Date: June 15, 2006 Date: June 15, 2006
-------------------------------------------------------------------------------
PAGE 35
EXHIBIT "A"
LEGAL DESCRIPTION OF REAL PROPERTY
Legal Description of the Land
-----------------------------
That part of the Northwest Quarter of Section 00, Xxxxxxxx 00, Xxxxx 00, Xxxxxx
Xxxxxx, Xxxxxxxxx, as described as follows:
Beginning at a point on the West line of said Northwest Quarter, distance
2023.23 feet South of the Northwest corner thereof; thence Easterly at right
angles a distance of 421.00 feet; thence Northerly at right angles, parallel
with said West line, a distance of 293.16 feet; thence Westerly at right angles
a distance of 421.00 feet to said West line; thence Southerly, along said West
line, a distance of 293.16 feet to the point of beginning.
Xxxxxx County, Minnesota
Abstract Property
EXHIBIT "A"
EXHIBIT "B"
Recording requested by, and |
after recording return to: |
|
_________________________ |
_________________________ |
_________________________ |
_________________________ |
|
-------------------------------------------------------------------------------
MEMORANDUM OF LEASE
This Memorandum of Lease is made and entered into as of ____________,
2006 by and between __________________, a _________________ ("LANDLORD") and
Resistance Technology, Incorporated, a Minnesota corporation ("TENANT") who
agree as follows:
1. Terms and Premises. Landlord leases to Tenant and Tenant leases from
Landlord that certain real property, together with all the improvements thereon
and appurtenances thereunto belonging (the "PREMISES"), which legal description
is attached hereto and incorporated herein as EXHIBIT "A," commonly known as:
0000 XxXxxxxx Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxxx
for an initial term of ten (10) years, commencing on July 1, 2006 and expiring
on June 30, 2016.
2. Options to Extend. The Lease grants Tenant three, five year options
to extend the term of the Lease.
3. Purpose of Memorandum of Lease. This Memorandum of Lease is prepared
for the purpose of recordation and does not modify the provisions of the lease
dated ____________, 2006 and entered into by and between Landlord and Tenant
(the "LEASE"). The Lease is incorporated herein by reference. If there are any
conflicts between the Lease and this Memorandum of Lease, the provisions of the
Lease shall prevail.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
EXHIBIT "B"
[LANDLORD'S SIGNATURE PAGE]
Signed, sealed and delivered in the presence of:
Witnesses: LANDLORD:
------------------------------- -------------------------------
First Witness
By:
--------------------------
-------------------------------
Printed Name of First Witness Its:
--------------------------
------------------------------- Address:
Second Witness ----------------------
----------------------
-------------------------------
Printed Name of Second Witness
(ACKNOWLEDGMENT)
STATE OF ____________ )
) SS.
COUNTY OF __________ )
On ____________________, 2006, before me personally appeared
________________________________________ personally known to me to be the person
who executed the foregoing instrument as the ___________________________________
of _________________, a _______________, and acknowledged to me that s/he
executed said instrument for the purposes and consideration therein expressed,
and as the act of said ___________________.
WITNESS my hand and official seal.
-------------------------------
Notary Public
EXHIBIT "B"
[TENANT'S SIGNATURE PAGE]
Witnesses: TENANT:
RESISTANCE TECHNOLOGY, INCORPORATED,
------------------------------- a Minnesota corporation
First Witness
------------------------------- By:
Printed Name of First Witness ------------------------------
Its:
------------------------------- ------------------------------
Second Witness Address:
--------------------------
--------------------------
-------------------------------
Printed Name of Second Witness
(ACKNOWLEDGMENT)
STATE OF ____________ )
) SS.
COUNTY OF __________ )
On ____________________, 2006, before me personally appeared
________________________________________ personally known to me to be the person
who executed the foregoing instrument as the ___________________________________
of Resistance Technology, Incorporated, a Minnesota corporation, and
acknowledged to me that s/he executed said instrument for the purposes and
consideration therein expressed, and as the act of said corporation.
WITNESS my hand and official seal.
-------------------------------
Notary Public
EXHIBIT "B"
Exhibit A to
Memorandum of Lease
Legal Description of the Land
-----------------------------
That part of the Northwest Quarter of Section 00, Xxxxxxxx 00, Xxxxx 00, Xxxxxx
Xxxxxx, Xxxxxxxxx, as described as follows:
Beginning at a point on the West line of said Northwest Quarter, distance
2023.23 feet South of the Northwest corner thereof; thence Easterly at right
angles a distance of 421.00 feet; thence Northerly at right angles, parallel
with said West line, a distance of 293.16 feet; thence Westerly at right angles
a distance of 421.00 feet to said West line; thence Southerly, along said West
line, a distance of 293.16 feet to the point of beginning.
Xxxxxx County, Minnesota
Abstract Property
EXHIBIT "B"
EXHIBIT "C"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(hereinafter referred to as the "Agreement"), made and entered into this _____
day of ____________, by and among ________________ (hereinafter referred to as
the "OWNER"), having an address of ____________________ and
______________________ (hereinafter referred to as the "LENDER"), having an
address of _______________________________ and ______________________________,
(hereinafter referred to as the "TENANT") having an address of
________________________.
R E C I T A L S:
----------------
A. The Owner owns or is purchasing and will own all right, title and
interest in that certain real property being, lying and situate in
________________, and more particularly described as set forth on Exhibit "A"
attached hereto and by this reference made a part hereof as (the "PROPERTY");
and
B. Tenant is the owner and holder of a lease made by
_______________________, and assigned or to be assigned to the Owner, to the
Tenant dated _____________ (the "LEASE"), whereby the Tenant has agreed to lease
the Property (the "LEASED PREMISES"); and
C. A mortgage and security agreement has or will be given by the Owner
to the Lender (the "MORTGAGE") for the purpose of securing a loan by Lender to
Owner, which Mortgage is secured, in part, by the Property; and
D. It is the desire and intention of the parties hereto to subordinate
the operation of the Lease for the full term thereof to the lien and operation
of the Mortgage, so that the Mortgage shall and will become a lien upon the
Leased Premises and the Lease will be unconditionally subordinated thereto in
every manner whatsoever.
NOW, THEREFORE, the parties hereto intending to be legally bound
hereby, for and in consideration of the mutual covenants contained herein, the
sum of Ten and No/100 Dollars ($10.00) and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
1. Recitals. All of the above Recitals are hereby incorporated herein by
reference and are made a part hereof.
2. Subordination. The Lease, together with all rights, options, liens and
charges created thereby, is and shall be junior, inferior, subject and
unconditionally subordinate in each and every respect to the lien,
operation and effect of the Mortgage (and all other documents executed
in conjunction with the loan transaction evidenced thereby) and to any
and all advancements made thereunder and to any renewals,
modifications, consolidations, replacements, additional advances,
future advances and extensions thereof.
EXHIBIT "C"
3. Non-Disturbance. The Lender does hereby agree with the Tenant that, so
long as the Tenant complies with the terms, conditions and covenants of
the Lease and performs its obligations under the Lease, (a) the Lender
will take no action which will interfere with or disturb the Tenant's
possession or lawful use of the Leased Premises or other rights under
the Lease, and (b) in the event the Lender becomes the owner of the
Property by foreclosure, conveyance in lieu of foreclosure or
otherwise, the Property shall be subject to the Lease and the Lender
shall recognize the Tenant as a tenant on the Property for the
remainder of the term of the Lease in accordance with the provisions
thereof; provided, however, that the Lender shall not be liable for any
act or omission of any prior landlord, or subject to any offsets or
defenses which the Tenant might have against any prior landlord, nor
shall the Lender be bound by any rent or Additional Rent which the
Tenant might have paid for more than the current month to any prior
landlord nor shall it be bound by any amendment or modification of the
Lease made without its written consent.
4. Attornment. The Tenant does hereby agree with the Lender that, in the
event the Lender becomes the owner of the Property by foreclosure,
conveyance in lieu of foreclosure or otherwise, then the Tenant shall
attorn to and recognize the Lender (its designees, assigns, or
successor owner of the Property) as the landlord under the Lease for
the remainder of the term thereof, and the Tenant shall perform and
observe its obligations thereunder, subject only to the terms and
conditions of said Lease. The Tenant further covenants and agrees to
execute and deliver upon request of the Lender, or its successors or
assigns, an appropriate agreement of attornment to any subsequent title
holder of the Property.
5. Notices Under Lease. So long as the Mortgage remains outstanding and
unsatisfied, the Tenant shall deliver to the Lender, at the address and
in the manner hereinbelow provided, a copy of all notices permitted or
required to be given to the landlord by the Tenant under and pursuant
to the terms and provisions of the Lease. At any time before the rights
of the landlord shall have been forfeited or adversely affected because
of any default of the landlord, or within the time permitted the
landlord for curing any default under the Lease as therein provided,
the Lender may, but shall have no obligation to, pay any taxes and
assessments, make any repairs and improvements, make any deposits or do
any other act or thing required of the landlord by the terms of the
Lease; and all payments so made and all things so done and performed by
the Lender shall be as effective to prevent the rights of the landlord
from being forfeited or adversely affected because of any default under
the Lease as the same would have been if done and performed by the
landlord.
6. Assignment of Lease. The Tenant acknowledges that the Owner may execute
and deliver to the Lender an assignment of the Lease and any guaranty
thereof as security for the loan which the Mortgage secures, and the
Tenant hereby expressly consents to any such assignment and agrees to
pay any rents under the Lease directly to Lender upon Lender's Notice
to Tenant to make payments directly to Lender or at the direction of
Lender. The Owner hereby authorizes and directs the Tenant (upon
written direction to Tenant by the Lender) to pay the above sums
directly to the Lender, or at the direction of Lender and agrees to
hold Tenant harmless for any monies so paid directly to or at the
direction of the Lender. Tenant agrees that neither Lender's demanding
or receiving any such
EXHIBIT "C"
payments, nor Lender exercising any other right, remedy, privilege,
power, or immunity granted by the Mortgage (or other documents executed
in conjunction therewith), will operate to impose any liability upon
Lender or performance of any obligation of Owner under the Lease unless
and until Lender elects otherwise in writing and for only such period
(after such election by the Lender) as Lender is in possession.
7. Estoppel. The Owner and the Tenant hereby certify to the Lender that
the Lease is in full force and effect; that the Lease and any
modifications and amendments specified herein or therein are a complete
statement of the agreement between the Owner and the Tenant with
respect to the leasing of the Premises, and the Lease has not been
modified or amended except as specified herein; that to the knowledge
of the Owner and the Tenant, no party to the Lease is in default
thereunder; that no rent under the Lease has been paid more than thirty
(30) days in advance of its due date; that the Tenant, as of this date,
has no charge, lien or claim of offset under the Lease, or otherwise,
against the rents or other charges due or to become due thereunder; the
Tenant's interest in the Lease has not been conveyed, assigned,
hypothecated or mortgaged and Tenant is not involved in any bankruptcy,
reorganization arrangement or insolvency proceedings.
8. Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement shall be in writing, signed by
the party giving such notice, election or demand and will be deemed
delivered or made upon the earlier of actual receipt if sent by
overnight courier or hand delivered or three (3) days after same is
mailed by registered or certified mail, return receipt requested, with
sufficient postage affixed, and addressed to the parties as follows:
Lender:
_________________________
_________________________
_________________________
(___) _____________
(___) _____________ fax
Owner:
_________________________
_________________________
_________________________
(___) _____________
(___) _____________ fax
Tenant:
_________________________
_________________________
_________________________
(___) _____________
(___) _____________ fax
EXHIBIT "C"
Such addresses may be changed by notice pursuant to this paragraph; but
notice of change of address is effective only upon receipt. Each party
jointly and severally agrees that it will furnish the other parties
with copies of all notices relating to the Lease.
9. Binding Effect. This Agreement shall be binding upon all the parties
hereto, their heirs, successors and assigns and all of those holding
title under any of them, and the pronouns herein shall include, where
appropriate, either gender or both, singular and plural.
10. Non-Waiver. No indulgence, waiver, election or non-election by the
Lender under the Mortgage or any other loan documents associated with
the Mortgage shall affect this Agreement.
11. Modification of Agreement. The parties hereby agree that this document
contains the entire agreement between the parties, and this Agreement
shall not be modified, changed, altered or amended in any way except
through written amendments signed by all of the parties hereto.
12. Governing Law. It is agreed that the laws of the State of Minnesota
shall govern the construction and interpretation of this Agreement and
the rights and obligations set forth herein.
13. Attorneys' Fees. In the event of any legal or equitable action,
including any appeals or bankruptcy proceedings, which may arise
hereunder between or among the parties hereto, the prevailing party
shall be entitled to recover its costs and its reasonable attorneys'
fees and paralegals' fees.
14. Severance. The invalidity or unenforceability of any portion of this
Agreement shall not affect the remaining provisions and portions
hereof.
15. Exculpation. In the event the Lender or any affiliate of the Lender
(for purposes of this paragraph the term "LENDER" shall include any
corporation or partnership owned or controlled by the Lender) acquires
title to the Leased Premises and succeeds to the interest of Owner
under the Lease, then, anything in the Lease to the contrary
notwithstanding, Lender shall have no personal liability for any
damages resulting from its default under the terms of this Lease, and
Tenant agrees that it shall look solely to the estate and interest of
the Lender in the Leased Premises for the collection of any judgment
(or other judicial process) requiring the payment of money by Lender in
the event of any default or breach by Lender with respect to any of the
terms, covenants and conditions of this Lease to be observed and/or
performed by Lender, and no other assets of the Lender shall be subject
to levy, execution or other procedures for the satisfaction of Tenant's
remedies.
16. Prevailing Clause. The Tenant agrees that any and all right of first
refusal or rights to purchase, if any, to purchase any portion or all
of the Property granted to it under the Lease is and are in all manner
and respect unconditionally subordinate and inferior to the Mortgage
and other Loan Documents in favor of Lender.
EXHIBIT "C"
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to
be duly executed as of the day and year, first above written.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
EXHIBIT "C"
[TENANT'S SIGNATURE PAGE]
Signed, sealed and delivered in
the presence of:
Witnesses: TENANT:
------------------------------- -------------------------------
First Witness -------------------------------
-------------------------------
-------------------------------
Printed Name of First Witness
By:
-------------------------
------------------------------- Name:
Second Witness Title:
------------------------------- Address:
Printed Name of Second Witness -----------------------
-----------------------
-----------------------
(ACKNOWLEDGMENT)
STATE OF ____________ )
) SS.
COUNTY OF __________ )
On __________________________________________, before me personally
appeared ________________________________________ personally known to me to be
the person who executed the foregoing instrument as the ________________________
of ___________________________________, a _____________________________________,
and acknowledged to me that s/he executed said instrument for the purposes and
consideration therein expressed, and as the act of said corporation.
WITNESS my hand and official seal.
-------------------------------
Notary Public
EXHIBIT "C"
[OWNER'S SIGNATURE PAGE]
Witnesses: OWNER:
------------------------------- -------------------------------
First Witness -------------------------------
-------------------------------
-------------------------------
Printed Name of First Witness
By:
-------------------------
------------------------------- Name:
Second Witness Title:
------------------------------- Address:
Printed Name of Second Witness -----------------------
-----------------------
-----------------------
(ACKNOWLEDGMENT)
STATE OF ____________ )
) SS.
COUNTY OF __________ )
On __________________________________________, before me personally
appeared ________________________________________ personally known to me to be
the person who executed the foregoing instrument as the _______________________
of _______________________, a _____________________________________, and
acknowledged to me that s/he executed said instrument for the purposes and
consideration therein expressed, and as the act of said corporation.
WITNESS my hand and official seal.
-------------------------------
Notary Public
EXHIBIT "C"
[LENDER'S SIGNATURE PAGE]
Witnesses: LENDER:
------------------------------- -------------------------------
First Witness -------------------------------
-------------------------------
-------------------------------
Printed Name of First Witness
By:
-------------------------
------------------------------- Name:
Second Witness Title:
------------------------------- Address:
Printed Name of Second Witness -----------------------
-----------------------
-----------------------
(ACKNOWLEDGMENT)
STATE OF ____________ )
) SS.
COUNTY OF __________ )
On __________________________________________, before me personally
appeared ________________________________________ personally known to me to be
the person who executed the foregoing instrument as the ________________________
of ________________________, a _____________________________________, and
acknowledged to me that s/he executed said instrument for the purposes and
consideration therein expressed, and as the act of said corporation.
WITNESS my hand and official seal.
-------------------------------
Notary Public
EXHIBIT "C"
EXHIBIT "D"
FORM OF ESTOPPEL CERTIFICATE
The undersigned hereby certifies to ______________________________ as
follows as of the date hereof:
1. The term "LEASE" as used herein refers to that certain Land and Building
Lease Agreement dated ____________________ by and between
________________________, as "LANDLORD," and ________________________, as
"TENANT," as amended or assigned by the following:
2. A true and correct copy of the Lease is attached hereto as Exhibit "A."
Pursuant to the Lease, Landlord leased to Tenant and Tenant leased from Landlord
that certain real property (the "Premises") more particularly described on
Exhibit "A" to the Lease. Except as set forth above, the Lease has not been
modified, supplemented or amended in any other way and there are no other
agreements between Landlord and Tenant concerning the Premises.
3. Tenant has accepted possession of the Premises pursuant to the terms of the
Lease. The primary term of the Lease commenced on ___________ and expires on
_____________, subject to the provisions of the Lease. Tenant has _____ (__)
options to extend the term of the Lease for _______ (__) years each.
4. Tenant has no right of first refusal or option to purchase the Premises, nor
does Tenant claim any right, title or interest in and to the Premises other than
pursuant to the Lease.
5. The minimum monthly rent base rent payable by Tenant under the Lease is
____________________ Dollars ($__________). Such minimum base rent has been paid
through _________________.
6. No security deposit has been deposited with Landlord by Tenant.
7. The Lease is valid and in full force and effect and, to the best of Tenant's
knowledge, neither Landlord nor Tenant is in default thereunder.
8. Tenant has no current claims or defenses against Landlord, nor has Tenant
asserted any current offsets against rent or other amounts payable by Tenant
under the Lease.
Executed under seal this __________ day of ____________________.
[SIGNATURE APPEARS ON FOLLOWING PAGE]
EXHIBIT "D"
TENANT:
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By:
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Name:
Title:
Address:
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EXHIBIT "D"
