LEASE BETWEEN
XXX X. XXXXXXXX AND XXXXXX
XXXXXXXX, LANDLORD
AND
DecisionOne, TENANT
DATED _______________, 1997
LEASE INDEX
Section Title Page
------- ----- ----
1 The Premises 1
2 Base Term 1
3 Rent 1
4 Acceptance of Premises 2
5 Replacement, Maintenance, Repair, Capital Replacement,
and All Other Expenses 2
a. Replacement Expenses of Landlord 2
b. Maintenance and Repair Expenses of Tenant 3
c. Capital Replacement Expenses of Tenant 3
d. Tenant's Approval Needed for Certain Expenses; Dispute
Resolution 3
e. All Other Expenses 4
6 Intent of Lease; Operating Expenses 5
a. Intent of Lease 5
b. Operating Expenses 5
7 Utilities 5
8 Taxes and Assessments 6
9 Tenant's Improvements 7
10 Insurance 8
a. (1) Fire and All Risk 8
b. (1) Public Liability and Property Damage 9
(2) Business Interruption 9
(3) Content Insurance 9
c. (1) Additional Insureds/Loss Payees 9
(2) Deductibles 9
(3) Waiver of Subrogation 10
(4) No Impairment of Coverage 10
(5) Review of Coverage 10
11 Damage, Destruction, Obligation to Rebuild 10
a. Insurance Proceeds 11
b. Abatement of Rent 11
12 Abatement 11
13 Usage; Compliance with Laws, Etc. 11
14 Waste; No Liens; Use; No Hazardous Materials or Uses 12
a. No Toxics 13
b. No Storage Tanks 13
c. Indemnification 14
d. Asbestos 14
15 Tenant Representations 14
a. No Hazardous Materials 14
16 Landlord's Performance of Tenant's Duties 15
a. Performance at Tenant's Sole Expense 15
b. Interest on Past Due Amounts 15
c. Late Charge 15
d. Purpose of Interest and Late Charge 15
17 Notice to Mortgagee 16
18 Subletting and Assignment 16
a. No Release 17
b. Acceptance of Rent or Performance 17
c. No Need to Exhaust Security 17
d. Provisions to be Included in Sublease 17
(1) Assignment of Rents 17
(2) Attornment 18
(3) Consent of Landlord Required 18
(4) Conditions of Sublease 18
19 Condemnation 18
20 Mutual Indemnification 19
21 Inspection of Premises 20
22 Default 20
23 Landlord's Remedies Upon Default 21
a. Entry by Landlord 21
b. Performance by Landlord 21
c. Repossession; Damages 21
d. Termination of Right of Possession 22
e. Suit for Specific Performance or Damages 22
f. Remedies are Cumulative 22
24 Condition of Premises on Termination 23
25 Successors and Assigns 23
26 Notices 24
27 No Oral Agreements 25
28 No Waiver 25
29 Warranties of Tenant; Estoppel Certificate 25
30 Carding 26
31 Landlord and Tenant 26
32 Time of Essence 26
33 Definition 26
34 Mortgage 26
35 Zoning 27
36 Landlord's Consent 27
37 Legal Expense 27
38 Title of Landlord 28
39 Limitations on Landlord's Liability 28
40 Option to Extend Lease 28
41 Governing Law 31
42 Headings 31
43 Holding Over 31
44 Memorandum of Lease 31
45 Authority to Sign Lease 31
46 Invalidity 31
47 Security 32
48 Interpretation 32
49 Assignment 32
50 Tenant Improvements: Plans; Tenant Improvement
Allowance; Possible Loan 32
a. Plans 32
b. Tenant Improvement Allowance 32
c. Additional Advance 33
d. Tenant Draws Against the T.I. Advances 34
51 Signage 36
52 Access 36
53 Satellite Dish 36
54 Janitorial Services 36
55 Brokerage Fees 36
56 Security Deposit 37
57 Conversion of Warehouse 37
58 Execution 38
Exhibit "A" Legal Description of Leased Premises 39
Exhibit "B" Landlord Responsible Punchlist 40
LEASE
THIS LEASE, is entered into and effective as of ________ , 1997, between
Xxx X. Xxxxxxxx and Xxxxxx Xxxxxxxx, husband and wife (hereinafter called
"Landlord") and DecisionOne, a Delaware corporation (hereinafter called
"Tenant").
The parties mutually agree as follows:
1. THE PREMISES.
Landlord, for and in consideration of the rents, covenants, agreements and
stipulations hereinafter mentioned, reserved and contained, to be paid, kept and
performed by Tenant, does hereby Lease and rent unto Tenant, and Tenant hereby
agrees to Lease approximately 64,480 square feet of office area and
approximately 18,880 square feet of warehouse area (the "Building"), together
with all other improvements including but not limited to the driveways,
sidewalks, parking ramp, and lawn areas situated on the hereinafter described
parcel of land (the "Land") located at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000 and legally described on Exhibit "A" attached hereto, subject to
the terms and requirements of the restrictions and easements of record.
The Land and Building together constitute the "Leased Premises" hereunder.
2. BASE TERM.
The Base Term of this Lease (the "Term") shall be eight (8) years commencing
June 1, 1998 (the "Commencement Date") and ending May 31, 2006 (the "Expiration
Date") unless sooner terminated pursuant to any provision hereof.
Said Commencement Date may be advanced to an earlier date upon the written
approval of both Landlord and Tenant, but in no event shall the same be later
than the aforementioned June 1, 1998 date. In the event of advancement, the
Lease Term shall be extended to correspond to the advanced date and all
provisions of this Lease (with the singular exception that there shall be no
Base Rent during the advanced period) shall automatically apply to the advanced
Lease Term portion. Regardless of any advancement, the Expiration Date shall
remain as May 31, 2006 as aforestated.
3. RENT.
Tenant hereby covenants and agrees to pay Landlord as monthly fixed rent
(hereinafter referred to as "Base Rent") for the Leased Premises during the Term
the sums set forth below:
Year Annual Year Monthly Rent
1 $813,816.00 $67,818.00
2 $813,816.00 $67,818.00
3 $813,816.00 $67,818.00
4 $813,816.00 $67,818.00
5 $813,816.00 $67,818.00
6 $813,816.00 $67,818.00
7 $813,816.00 $67,818.00
8 $829,936.00 $69,161.33
Such Base Rent shall be payable in advance and without demand on the first day
of every calendar month commencing on the Commencement Date. Base Rent shall be
prorated for any partial month at the beginning or end of the Term. Tenant shall
pay Base Rent and all other sums or additional rent due hereunder (collectively,
"rent") to Landlord at the following address unless otherwise notified in
writing by Landlord:
Xxx X. Xxxxxxxx
0000 000xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
4. ACCEPTANCE OF PREMISES.
Landlord shall deliver the Premises free of debris, furniture and inventory and
ready for Tenant construction by January 1, 1998. Landlord shall further assure
that all mechanical systems shall be in good operating order. Tenant completed
an inspection of the Leased Premises prior to the Commencement Date. Except for
those items listed on Exhibit "B" hereto entitled "Landlord Responsible
Punchlist" (hereinafter referred to as the "Punchlist Items") which were
identified in the course of the inspection and which Landlord has agreed to
repair and/or replace, and subject to the terms of this paragraph, Tenant
accepts the Leased Premises in its condition as of the date of this Agreement.
Other than the Punchlist Items and the provisions of this paragraph, Landlord
shall not be liable for any visible omissions or defects. Landlord shall
reasonably proceed with taking the corrective action needed to remedy the
Punchlist Items.
5. REPLACEMENT, MAINTENANCE, REPAIR, CAPITAL REPLACEMENT, AND ALL OTHER
EXPENSES.
a. Replacement Expenses of Landlord. The following expenses shall be paid by
Landlord and shall not be included (i.e. "passed through" from Landlord to
Tenant) as an Operating Expense:
(1) Replacement of the roof, roof membrane, foundation, structural
components, and exterior glass of the subject Building; and
(2) Replacement of the loading docks, parking structure, parking lot
surfaces, and driveway surfaces servicing the subject Building.
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b. Maintenance and Repair Expenses of Tenant. The following expenses shall be
advanced by Landlord but shall be included (i.e. "passed through" from Landlord
to Tenant) as an Operating Expense:
(1) Maintenance of the roof, roof membrane, structural components,
foundation, and exterior glass of the subject Building;
(2) Maintenance of the loading docks, parking structure, parking lot
surfaces, and driveway surfaces servicing the subject Building;
(3) All repair expenses of any heating, ventilation, air conditioning,
electrical, plumbing, or any other building system appliance, attachment,
equipment, line, accessory, or fixture servicing the subject Building or
Premises.
Upon advancement of any maintenance or repair expense set forth in this
paragraph b by Landlord, Landlord shall submit notification of the same to
Tenant and Tenant shall immediately reimburse Landlord for the same.
c. Capital Replacement Expenses of Tenant. The following capital replacement
expenses shall be advanced by Landlord but shall be included (i.e. "passed
through" from Landlord to Tenant) as an Operating Expense:
(1) All capital replacement expenses for the replacement of any heating,
ventilation, air conditioning, electrical, plumbing, or any other building
system appliance, attachment, equipment, line, accessory, or fixture servicing
the subject Building or Premises.
Upon advancement of any replacement expense set forth in this paragraph c by
Landlord, Landlord shall submit notification of the same to Tenant and shall
further indicate the time period over which the useful life of the item for
which the respective expense has been incurred will be capitalized, and,
thereafter, commencing with the next monthly base rental payment, and continuing
on a monthly basis thereafter, Tenant shall pay to Landlord as an additional
Operating Expense that sum needed to pay such replacement expense in equal
monthly installments amortized over the stated respective useful life for the
expense in question.
d. Tenants Approval Needed for Certain Expenses; Dispute Resolution. All
expenses referred to in the preceding paragraphs b and c shall require Tenants
prior written approval (except for emergency such repairs wherein no such
approval shall be needed), which such approval shall not be unreasonably
withheld. Within one week of a request from Landlord for the same, Tenant shall
provide its such approval or provide its written reasoning as to why the
approval is being denied. In the event of a dispute between Landlord and Tenant
concerning whether Landlord shall be entitled to charge Tenant for the
particular expense in question in accordance with paragraph b or c above, or of
a dispute as to whether the respective expense constitutes a maintenance or
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repair expense (paragraph b above) or a capital replacement expense (paragraph c
above), or of a dispute as to the useful life time period as referred to at
paragraph c above, the same shall be immediately resolved by the decision of any
engineer mutually approved by Landlord and Tenant whose decision shall be
binding and controlling. If Landlord and Tenant cannot mutually agree to such an
engineer within seven days, then each party shall select an engineer and said
two engineers shall select the third "ruling" engineer whose decision shall be
binding and controlling. Any such decision to be made by such engineer shall be
governed by the principle that the subject Building and Premises constitute a
first class, highly maintained, modern professional office building and that all
reasonable and prudent maintenance, repair, and replacement measures should be
taken so as to maintain said building in such a condition at all times. The
costs for the engineer making the decision shall be borne equally by Landlord
and Tenant.
e. All Other Expenses. Except as controlled by the provisions of paragraphs a,
b, and c above, Tenant agrees at its expense (and Landlord shall have no
obligation) to keep and maintain the entire Leased Premises, both Building and
Land, in a first class professional office building status, order, condition and
repair, including but not limited to maintenance and repair of all components,
parts, fixtures and equipment, mowing, watering, fertilizing, trimming and
maintaining lawns and plantings, winterizing and maintaining of lawn and
planting sprinkler systems, mowing of lawns, care of plantings, striping of
walkways, driveways and parking areas, removal of snow and ice from the Premises
and adjacent public sidewalks, removal of trash, maintenance of utility lines
and exterior lighting, painting of interior and exterior portions of the
Building and other improvements, replacing of wallpapering or other wall
covering, and replacing of carpeting or other floor coverings. Tenant must make
all such repairs, corrections, improvements or alterations, and perform all such
maintenance, necessitated by age, Tenant's use, the elements or required
pursuant to governmental order or mandate. Tenant's requirement to so maintain,
replace, correct, improve, alter, repair, redecorate and paint shall be such
that Tenant at all times during the effective period of this Lease maintains the
physical condition of the entire Leased Premises in all manners in a condition
equivalent to that which existed as of the Commencement Date of this Lease.
Tenant shall retain at Tenant's expense a professional party or parties
acceptable to both Landlord and Tenant to professionally maintain at a frequency
in keeping with the standard of the system in question, the elevator, heating,
electrical, air conditioning, plumbing, and other mechanical systems servicing
the Leased Premises. Records of such maintenance shall be kept by Tenant and the
same shall be made available for copying at all reasonable times by Landlord.
If Tenant fails to perform its obligations under this Section 5, or under any
other provision of this Lease, Landlord may at its option (but shall not be
required to) enter upon the Leased Premises after thirty (30) days prior written
notice to Tenant (except in the case of any emergency, in which case no notice
shall be required), perform such obligations on Tenant's behalf and put the same
in good order, condition and repair, and the cost thereof, together with
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interest at two percent (2%) per annum over the "Prime Rate" established by the
Wall Street Journal (or if the Wall Street Journal no longer publishes its Prime
Rate, then the Prime Rate announced by Norwest Bank Minnesota, N.A.) on the date
of invoice from Landlord to Tenant (but in no event more than the maximum rate
then allowed by law) (the "Default Rate") shall become due and payable as
additional rental to Landlord together with Tenant's next rental installment.
6. INTENT OF LEASE; OPERATING EXPENSES.
a. Intent of Lease. It is the intention of this Lease and the agreement of the
parties that Landlord shall receive the rent set forth in Section 3 free and
clear of any and all other impositions, taxes, liens, charges or expenses of any
nature whatsoever in connection with the ownership and operation of the Leased
Premises with the exception of certain expenses referred to at Section 5 above.
b. Operating Expenses. In addition to the Base Rent to be paid pursuant to
Section 3, Tenant shall pay all impositions, insurance premiums, operating
charges, maintenance and repair expenses, capital replacement expenses,
construction costs, other charges, and all other expenses which are Tenant's
responsibility to pay in accordance with this Lease, all of the same
collectively referred to as "Operating Expenses". One-twelfth of such Operating
Expenses shall be paid by Tenant to Landlord on a monthly basis in advance based
on Landlord's estimates of the same. Annually, Landlord shall provide a
statement of such actual Operating Expenses and Tenant shall pay any shortfall
within fifteen (15) days of the receipt of notice of the same, or, receive a
credit in the ensuing Base Rent for any overage, as the case may be. Such
impositions, premiums, costs, charges, and expenses shall constitute additional
rent, and upon the failure of Tenant to pay any of the same including, without
limitation, maintenance and repair, capital replacement, and other expenses
pursuant to Section 5 b, c, and e, utilities pursuant to Section 7, taxes and
assessments pursuant to Section 8, insurance pursuant to Section 10, and tenant
improvements pursuant to Section 50, Landlord shall have the same rights and
remedies as otherwise provided in this Lease for the failure of Tenant to pay
rent including but not limited to the remedies provided in Section 5 e hereof
relating to Landlords right (but not obligation) to perform Tenant's obligations
hereunder. It is the intention of the parties except as expressly provided
herein that this Lease shall not be terminable for any reason by Tenant, and
that Tenant shall in no event be entitled to any abatement of, or reduction in,
rent payable under this Lease, except as otherwise expressly provided herein.
Any present or future law to the contrary shall not alter this agreement of the
parties.
7. UTILITIES.
Tenant shall pay on time and hold Landlord free and harmless from all bills or
assessments for light, heat, water, gas, electric, telephone, sewer rentals or
charges, and any other expenses arising out of or incidental to the occupancy of
said Building and Leased Premises. No full or partial utility deprivation
including, but not limited to, blackout, brownout, or rationing shall give rise
to any abatement of rent nor give rise to any right of Tenant to offset rent or
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to terminate this Lease. Tenant shall provide verification of such payment
within ten (10) days of a request from Landlord for the same.
8. TAXES AND ASSESSMENTS.
As additional rent, Tenant agrees and covenants to pay directly to the proper
governmental agency, on or before the date each installment becomes due and
payable, an amount equal to all "Real Property Taxes" including but not limited
to (i) the ad valorem or property taxes [covered below], and all other taxes
including commercial rental taxes and other similar taxes levied against the
Leased Premises, excepting income taxes, which become due and payable during the
Term of this Lease, and (ii) all installments of general, special, ordinary or
extraordinary assessments including interest, if any. Any special assessment
against the Leased Premises shall be amortized over the useful life of the
improvement represented by said assessment, so that Tenant pays for only that
portion of the useful life of the improvement which corresponds to the Term of
the Lease and any extensions thereof. Landlord shall have the obligation to, if
possible, (i) have a copy of the tax bills mailed directly to Tenant by the
proper governmental agency; and (ii) for the first and last lease year of the
Term hereof, furnish an apportionment between Landlord and Tenant based on the
number of days of Tenant's first or last lease year, as the case may be, which
fall within the then current calendar year. Tenant may, in good faith and in a
lawful manner and upon giving thirty (30) days prior written notice to Landlord
of its intention so to do, contest in Landlord's name any tax assessment or
charge against the Leased Premises, but all costs and expenses incidental to
such contest shall be paid by Tenant, and in case of an adjudication adverse to
Tenant, then Tenant shall promptly pay such tax, assessment or charge including
penalties or late charges, if any. Tenant shall indemnify and save Landlord
harmless against any loss or damage arising from such contest and shall, if
necessary to prevent a sale or other loss or damage to Landlord, pay such tax,
assessment or charge under protest and take such other steps as may be necessary
to prevent any sale or loss. Tenant agrees, if requested by Landlord or
Landlord's lender, to pay on a monthly basis in advance its estimated share of
Real Property Taxes into an interest bearing escrow account.
Tenant shall promptly furnish Landlord with satisfactory evidence that all taxes
have been paid. If Tenant shall fail to pay any such taxes, Landlord shall have
the right to pay the same, in which case Tenant shall repay in full such amount
to Landlord with Tenant's next rent installment together with interest at the
Default Rate. As used herein, the term "Real Property Tax" shall include any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fees, commercial rental tax, including without
limitation, sales, use, gross receipts or value added taxes levied on the rent
payable hereunder, improvement bond or other bonds, including statutory
interest, levy or tax (other than inheritance, personal income or estate taxes)
imposed on the Leased Premises by any authority having the direct or indirect
power to tax, including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or
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other improvement district thereof, as against any legal or equitable interest
of Landlord in the Leased Premises or in the real property of which the Leased
Premises are a part, as against Landlord's right to rent or other income
therefrom, and as against Landlord's business of leasing the Leased Premises.
The term "Real Property Tax" shall also include any tax, fee, levy, assessment
or charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge included within the definition of "Real Property Tax", or
(ii) the nature of which was previously included within the definition of "Real
Property Tax", or (iii) which is imposed as a result of a transfer, either
partial or total, of Landlord's interest in the Leased Premises or which is
added to a tax or charge included within the definition of "Real Property Tax"
by reason of such transfer, or (iv) which is imposed by reason of this
transaction, any modifications or changes hereto, or any transfers hereof.
Tenant shall pay prior to delinquency all taxes assessed against and levied upon
trade fixtures, furnishings, equipment and all other personal property of Tenant
contained in the Leased Premises. When possible, Tenant shall cause said trade
fixtures, furnishings, equipment and all other personal property to be assessed
and billed separately from the real property of Landlord. If any of Tenant's
personal property shall be assessed with Landlord's real property, Tenant shall
pay the taxes attributable to Tenant within ten (10) days after receipt of a
written statement setting forth the taxes applicable to Tenants property.
9. TENANTS IMPROVEMENTS.
Subject to the terms of any Underlying Mortgage (as defined in Section 34
hereof), any structural alterations or improvements or any non-structural
improvements or alterations costing more than Twenty Thousand and No/100 Dollars
($20,000.00) shall require Landlord's written consent, which consent shall not
be unreasonably withheld. Landlord's consent shall be automatically granted if
Landlord does not respond to Tenant's request within ten (10) days after notice
and submission of preliminary plans and specifications from Tenant. Subject to
the preceding sentence and the terms of any Underlying Mortgage, during the full
Term of this Lease, Tenant shall have the right, at any time during the term of
this Lease, and from time to time, at its own cost and sole expense and
liability, to place or install within the Leased Premises, such nonstructural
leasehold improvements not exceeding $20,000.00 as it shall desire. Unless
expressly released by Landlord in writing, all such improvements shall be and
remain, at the time of expiration or other termination of this Lease, the
property of Landlord without payment or offset unless such improvements are not
attached to the Premises, excluding signage and other equipment specific to
Tenant's business whether or not attached to the building, as long as the
equipment can be removed without damage to the Building. No such installation or
construction by Tenant shall violate any lawful rule or regulation, plan or
zoning construction or other law, ordinance or regulation applicable thereto,
and all alterations and improvements shall be done and performed in good and
workmanlike manner and blend architecturally with the existing design and style
of the balance of the subject Building or other improvement being altered and
shall not diminish the value of the subject Building or other improvement as of
the date of the commencement of the subject improvement. All costs of any such
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improvements shall be paid by Tenant and Tenant shall allow no liens for labor
or materials to attach to the Leased Premises by virtue thereof.
Tenant shall give Landlord not less than ten (10) days notice prior to the
commencement of any work in, on or about the Leased Premises and Landlord shall
have the right to post notices of non-responsibility in or on the Leased
Premises as provided by law. Landlord may require that Tenant remove any or all
alterations, improvements or additions made by Tenant to the Leased Premises at
the expiration of the Term and restore the Leased Premises to its prior
condition, only if not previously approved by Landlord in writing.
If Landlord shall consent to the alterations, improvements and additions or
approve of the drawings and specifications, as the case may be, the consent or
approval shall be deemed conditioned upon Tenant acquiring a permit to do so
from appropriate governmental agencies, the furnishing of a copy thereof to
Landlord prior to the commencement of the work and the compliance by Tenant of
all conditions of said permit in a prompt and expeditious manner. Tenant shall
pay, when due, all claims for labor or materials furnished or alleged to have
been furnished to or for Tenant at, or for use in the Leased Premises, which
claims are or may be secured by any mechanic's or materialmen's lien against the
Leased Premises or any interest therein.
10. INSURANCE.
a. Landlord agrees to provide and keep in force during the term of the Lease the
following insurance coverage, the cost and expense of which shall be passed
through in full to Tenant and paid, as an Operating Expense, in equal monthly
installments. If Landlord fails to maintain this insurance, Tenant may pay the
premiums directly.
(1) Fire and All Risk. Fire and all risk insurance in an amount not less than
the Full Insurable Value (defined below) of the Building and improvements on the
Land and/or constructed or maintained in conjunction with the Building, and to
keep such insurance in full force and effect for and during the time any
Building or improvement is located on the Leased Premises during the Term of
this Lease. The coverage shall include all risks commonly insured for properties
similar to the Leased Premises in the metropolitan area in the Minneapolis, St.
Xxxx area, including insurance against damage caused by earthquake, flood,
hurricane, tornado, windstorm, and other disasters (Disaster Insurance) in such
areas where such natural disasters are reasonably expected to occur. For the
purpose hereof, "Full Insurable Value" shall mean the replacement cost of the
Building and such improvements without allowance for depreciation but excluding,
except where covered by Disaster Insurance, footings, foundations, and other
portions of improvements which are customarily not insurable. Such policy or
policies shall contain a standard mortgagee clause providing for payment of
proceeds to any mortgagee or deed of trust holder of the Leased Premises
("Landlord's Lender"), as its interest may appear.
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b. Tenant agrees to provide and keep in force during the term of this Lease and
at its own cost and expense the following insurance coverage:
(1) Public Liability and Property Damage. Public liability and property
damage insurance with limits of not less than One Million and No/100
($1,000,000.00) for injury and death to any one person, and Two Million and
No/100 ($2,000,000.00) for injury or death in any one accident or occurrence per
location including property damage, insuring Landlord and Tenant, and with a
cross-liability endorsement covering claims by an insured against another
insured.
(2) Business Interruption. Business interruption insurance covering all
revenues related to the Leased Premises for a minimum of six (6) months.
(3) Content Insurance. Content insurance insuring Tenants trade fixtures,
equipment, inventory, work in process, and other personal property located in or
at the leased premises against all losses, including but not limited to, fire,
windstorm, vandalism and theft. Landlord in no event shall be responsible for
losses to the same.
c. The insurance referred to in this paragraph 10 shall comply with the
following requirements:
(1) Additional Insureds/Loss Payees. Each policy shall name Landlord and
Landlord's Lender, if any, as Additional Insureds and/or Loss Payees, as their
interests may appear, and shall contain a covenant that should such policies be
canceled, assigned or materially changed during the policy period, the insurer
will mail a notice thereof to Landlord, and Landlord's Lender, if any, at least
thirty (30) days in advance. Certificates of insurance evidencing the existence
and amounts of such insurance, shall be delivered to Landlord by Tenant prior to
Tenants occupancy of any portion of the Leased Premises. No such policy shall be
cancelable except after thirty (30) days written notice to Landlord. Tenant
shall, prior to the expiration of any such policy, furnish Landlord, and
Landlord's Lender with renewals or "binders" thereof together with evidence of
the payment of premiums therefor, or Landlord may order such insurance and
charge the cost thereof to Tenant, which amount shall be paid by Tenant upon
demand. The insurance, as to the interest of Lender therein, shall not be
invalidated by any act or neglect of Landlord or Tenant or any owner of the
Leased Premises, nor by any foreclosure or any other proceedings or notices
thereof relating to the Leased Premises, nor by any change in the title or
ownership of the Leased Premises nor by occupancy of the Leased Premises for
purposes more hazardous than are permitted by such policy.
(2) Deductibles. Subject to the requirements of any Covenant and Mortgage
Insurance, the fire and all risk coverage specified herein shall have a
deductible no greater than Twenty-Five Thousand and No/100 Dollars ($25,000.00).
The public liability and property damage coverage specified herein shall have a
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deductible no greater than Twenty-Five Thousand and No/100 Dollars ($25,000.00).
Tenant shall be liable for any deductible amount. The policies of insurance
required to be carried by Tenant shall be primary and not in excess of any other
insurance available to Landlord. It shall be the responsibility of Tenant not to
violate nor knowingly permit to be violated any condition of the polices
required under this Lease. Neither the issuance of any such insurance policy nor
the minimum limits specified in this Section 10 shall be deemed to limit or
restrict in any way Tenant's liability arising under or out of this Lease.
(3) Waiver of Subrogation. To the extent such waivers are permitted by
insurance carriers, Landlord and Tenant waive their respective right of recovery
against the other and the officers, employees, agents and representatives of
such other party for any direct or consequential damage to the property of the
other including its interest in the Leased Premises by fire or other casualty to
the extent such damage is insured against under a policy or policies of
insurance to be maintained hereunder. Each such insurance policy carried by
either Landlord or Tenant shall include a waiver of the insurer's rights of
subrogration. Such waiver shall in no way be construed or interpreted to limit
or restrict any waiver made by Tenant under the terms of this Lease.
(4) No Impairment of Coverage. Tenant shall not carry any stock of goods or
do anything in or about the Leased Premises which will impair or invalidate the
obligation of any policy of insurance on or in reference to the Leased Premises
or the Building. Landlord shall have the right to require that the amount or
types of insurance coverages required of Tenant hereunder be adjusted from time
to time to reflect insurance customarily required for similar properties in the
St. Xxxx and Minneapolis, Minnesota area in which the Land is located. Insurance
coverages shall be written by an insurance company or companies licensed to do
business in the State of Minnesota.
(5) Review of Coverage. Landlord and Tenant agree to review the insurance
coverages provided herein at least once every five (5) years and to increase the
limits, if necessary, in accordance with reasonable commercial standards.
11. DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD.
If the Leased Premises are totally or partially damaged or destroyed by storm,
fire, lightning, earthquake, or from any other cause whatsoever, during the Term
of this Lease whether or not such damage or destruction is covered by any
insurance required to be maintained under Section 10 hereof, then, subject to
the terms of any Underlying Mortgage, Landlord shall repair, restore and rebuild
the premises in accordance with applicable building and zoning codes at the time
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of rebuilding to substantially the same condition immediately prior to such
damages or destruction and this Lease shall remain in full force and effect,
provided, however, that Landlord shall have the right, with the consent of
Tenant (which shall not be unreasonably withheld) to replace the Leased Premises
with a different structure so long as (a) the value of the Leased Premises with
such new structure is no less than the value of the Leased Premises immediately
prior to the date of casualty and no less than the square footage shown in
Article 1 of this Lease, and (b) the new structure can be built and occupied
under the then applicable laws, codes, ordinances, and zoning restrictions. Such
repair, restoration and rebuilding (all of which are herein called "repair")
shall be commenced within a reasonable time however no more than sixty (60) days
after such damage or destruction has occurred and permits necessary to authorize
such rebuilding have been issued following reasonable pursuit of such permits by
Landlord, and shall be diligently pursued to completion.
If, however, the destruction, whether partial or total, is such that Tenant's
telecommunications equipment and/or system is not operational and such damage
cannot substantially be repaired within thirty (30) days, Tenant may elect to
terminate this Lease as of the date of destruction.
a. Insurance Proceeds. Subject to the terms of any Underlying Mortgage, the
proceeds of any insurance maintained under Section 10 (a) hereof shall be made
available to Landlord for payment of costs and expense of repair.
b. Abatement of Rent. Notwithstanding the partial or total destruction of the
premises and any part thereof, and not withstanding whether the casualty is
insured or not, there shall be no abatement of rent or of any other obligation
of Tenant hereunder including, without limitation, payment of Operating
Expenses, insurance premiums and Real Property Taxes, by reason of such damage
or destruction unless the Lease is terminated by virtue of another provision of
this Lease, or such destruction is the result of Landlord's negligence.
12. ABATEMENT.
Except only as provided in Section 19 (Condemnation), the Tenants obligations to
pay rent and to perform all of the other covenants and agreements which Tenant
is bound to perform under the terms of this Lease shall not terminate, xxxxx, or
be diminished during any period that the Leased Premises or any part thereof are
untenantable regardless of the cause of such untenantability unless such
untenantability was created by Landlord's negligence.
13. USAGE; COMPLIANCE WITH LAWS, ETC.
Tenant shall use the Leased Premises for general office, computer repair, and
computer storage purposes, and for no other purpose. In the use and occupancy of
the Leased Premises, and in the conduct of its business and activities, Tenant
shall at its own cost and expense secure and maintain all necessary licenses and
permits required for the conduct of its business. Tenant shall not use the
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Leased Premises or permit anything to be done in or about the Leased Premises
which will in any way conflict with any zoning requirement, law, statute,
ordinance or governmental rule or regulation now in force or which may hereafter
be enacted or promulgated. Tenant shall at its sole cost and expense comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements of any board of fire underwriters (including all modifications and
improvements required thereby) now in force or which may hereafter be in force
relating to or affecting the condition, use or occupancy of the Leased Premises,
including without limitations the Americans with Disabilities Act. Tenant shall
observe all plat and deed restrictions of record. Without limiting the
generality of the foregoing, Tenant will not generate, store, bury, discharge or
release on or from the Leased Premises any hazardous substances or waste in a
manner which would give rise to penalty or liability under the Resources
Conservation Recovery Act 42 U.S.C. 6901 et seq., or any other federal, state or
local law.
Landlord warrants that the presently existing exterior entrances to the Building
are in compliance with all presently existing code or other building
requirements.
Upon ten (10) days' notice, Tenant shall provide Landlord with copies of all
documents and information evidencing Tenant's compliance with any laws,
ordinances, orders, rules and regulations requested by Landlord.
14. WASTE; NO LIENS; USE; NO HAZARDOUS MATERIALS OR USES.
Except as to liens arising as a result of work performed by or at the direction
of Landlord, which shall be the sole responsibility of Landlord, Tenant agrees
that during the Term hereof it shall not do or suffer any waste to the Land,
Building or Leased Premises, or cause, suffer or permit any liens to attach to
or to exist against the Land, Building or Leased Premises by reason of any act
or omission of Tenant or person claiming through Tenant or by reason of its
failure to perform any act required of it hereunder. Tenant agrees to save and
hold harmless Landlord from and against any such lien(s) or claims of lien(s).
Provided, however, Tenant shall not be required to pay or discharge any lien
against the Leased Premises so long as Tenant has given Landlord notice of its
intent to contest such lien and Tenant is in good faith contesting the validity
or amount thereof and has given to Landlord such security as Landlord has
reasonably requested to assure payment of such lien and to prevent the sale,
foreclosure or forfeiture of the Land, Building or Leased Premises by reason of
non-payment. In the event that any lien does so attach, and is not released
within thirty (30) days after written notice to Tenant thereof or if Tenant has
not indemnified Landlord against such lien within said thirty (30) day period,
Landlord, in its sole discretion, may pay and discharge the same and relieve the
Leased Premises therefrom, and Tenant agrees to repay and reimburse Landlord as
additional rent upon demand for the amount so paid by Landlord. The existence of
any mechanic's, laborer's, materialmen's, supplier's or vendor's lien, or any
right in respect thereof, shall not constitute a violation of this paragraph if
payment is not yet due and payable upon the contract or for the goods or
services in respect of which any such lien has arisen. On final determination of
the lien or claim of lien Tenant will immediately pay any judgment rendered, and
all costs and charges, and shall cause the lien to be released or satisfied.
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Tenant shall not permit the Leased Premises to be used for (a) illegal purposes;
or (b) uses that are dangerous to the Leased Premises or to the public; or (c)
an adult bookstore, or an adult amusement facility. Tenant will not use or
permit the use of the land, Building or Leased Premises in any manner which
would result or would with the passage of time result in the creation of any
easement or prescriptive right. Tenant shall not use or occupy the Leased
Premises, or knowingly permit them to be used or occupied, contrary to any
statute, rule, order, ordinance, requirement or regulation certificate of
occupancy affecting the same, or which would make void or voidable any insurance
then in force with respect thereto or which would make it impossible to obtain
fire or other insurance thereon required to be furnished hereunder, or which
would cause structural injury to the improvements or cause the value or
usefulness of the Leased Premises, or any portion thereof, to diminish
(reasonable wear and tear excepted), or which would constitute a public or
private nuisance or waste, and Tenant agrees that it will promptly, upon
discovery of any such use, take all necessary steps to compel the discontinuance
of such use.
During any period of time in excess of seventy-two (72) hours when the Building
is not open for business, Tenant shall take appropriate security and safety
measures to reasonably guard the Leased Premises from damage, vandalism, and the
deposit of refuse or waste in or about the Leased Premises and to reasonably
protect persons in or about the Leased Premises from death and personal injury.
During such periods of time, Tenant shall submit to Landlord, at least
quarterly, a report of such safety and security measures that have been taken by
Tenant, confirming that Tenant has inspected the Leased Premises and reporting
the condition of the Leased Premises and any damage to the Leased Premises or
any personal injuries known to Tenant that have occurred in or about the Leased
Premises.
a. No Toxics. Tenant hereby represents and warrants that Tenant shall not
install any asbestos containing materials or equipment containing
polychlorinated biphenyl, or any Hazardous Materials (as defined in Section
15(a) hereof) in amounts in excess of those prescribed by law, in the Leased
Premises.
b. No Storage Tanks. Tenant shall not install any storage tanks (either
above-ground or underground) for gasoline or any other substances on the Leased
Premises at any time during Tenant's possession and/or occupancy hereof without
prior written approval from Landlord. Upon the termination of this Lease, or
sooner if required by law, Tenant shall, if installed or introduced by Tenant,
remove and/or remediate any Hazardous Materials and contaminated soil or ground
water, if any, at Tenants sole cost and expense, which may then be present upon
the Land.
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c. Indemnification. Tenant hereby agrees to indemnify, defend, protect, and hold
harmless Landlord and Landlord's Lender, if any, and Landlord's and Landlord's
Lender's employees, agents and representatives from and against any and all
loss, damage or liability including, without limitation, (i) all damages,
directly or indirectly arising out of Tenant's use, generation, storage,
transportation, treatment, release, threatened release or disposal of Hazardous
Materials upon the Land, including diminution in value of the Leased Premises;
and (ii) the cost of any required or necessary repair, remediation, cleanup or
detoxification and the preparation of any closure or other required plans or
reports, to the full extent that such action is attributable, directly or
indirectly, to the presence or use, generation, storage, transportation,
release, or disposal of Hazardous materials by Tenant or any of Tenant's agents,
employees, contractors or invitees during the Term of the Lease. This agreement
to indemnify, defend, protect and hold harmless Landlord and Landlord's Lender
(if any) shall be in addition to any other obligations or liabilities Tenant may
have to Landlord or Landlord's Lender, if any, at common law under all statutes
and ordinances or otherwise and shall survive the termination of the Lease to
the extent of acts or omissions of Tenant occurring prior to the termination of
the Lease.
d. Asbestos. Landlord warrants that no asbestos containing materials currently
exist within the Lease Premises to the best of Landlord's knowledge.
15. TENANT REPRESENTATIONS.
Tenant acknowledges, represents, and warrants to Landlord and Landlord's
successors and assigns that:
a. No Hazardous Materials. Tenant shall not conduct, nor permit, any Hazardous
Materials to be used, generated, manufactured, stored, or disposed of on, under
or about the Leased Premises during the Term without the prior written approval
of Landlord. The term "Hazardous Materials" as used in this Lease shall include,
but not be limited to, any flammable materials, explosives, radioactive
materials, hazardous or toxic substances which are or become regulated by any
local governmental authority, the state in which the Land is located or the
United States Government or which would require removal, treatment or other
remedial action. The term "Hazardous Materials" includes, without limitation,
any material or substance which is (i) listed or defined as a "hazardous waste"
or "hazardous substance", or the like, under any municipal, state or federal
law, code or other regulation; (ii) defined as "hazardous substances",
"hazardous materials", or "toxic substances", in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601
et seq., The Hazardous Materials Transportation Act 49 U.S.C. 1801, et seq., and
the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq.,; (iii)
petroleum products; (iv) asbestos; (v) polychlorinatedbiphenyl; (vi) designated
as a "hazardous substance" pursuant to Section 3.11 of the Federal Water
Pollution Control Act (33 U.S.C. ss. 1317); (vii) any substance which is subject
to the reporting requirements of the Federal Emergency Planning and Community
Right-to-Know Act; (viii) defined as a "hazardous substance" pursuant to the
Toxic Substances Control Act, 15 U.S.C. ss. 2601; or (ix) any substance which
contaminates soil or ground water and causes degradation of the soil and/or
water to the extent that mitigation methods are needed to restore the soil or
water to its natural state;
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16. LANDLORDS PERFORMANCE OF TENANTS DUTIES.
a. Performance at Tenant's Sole Expense. If Tenant should default in the
performance of any covenant or agreement which are outlined herein on its part
to be performed by virtue of any provision of this Lease, Landlord may, after
thirty (30) days' notice in the case of default in the payment of rent,
additional rent or other monetary defaults, or after thirty (30) days' notice in
the case of non-monetary defaults (or, in the case of emergencies, reasonable
attempts at prior notice), perform the same for the account of Tenant, and
Tenant hereby authorizes Landlord to come upon the Leased Premises for such
purposes and while on the Leased Premises to do all things reasonably necessary
to accomplish the correction of such default. If Landlord, at any time, is
compelled to pay or elects to pay any sum of money by reason of the failure of
Tenant, after thirty (30) days notice, to comply with any provision of this
Lease, or if Landlord is compelled to incur any expense, in instituting,
prosecuting or defending any action or proceeding instituted by reason of any
default of Tenant hereunder, the sum or sums so paid by Landlord with all
interest, costs and damages including any loss of rent, shall be deemed to be
additional rent hereunder which shall be due and payable forthwith.
b. Interest on Past Due Amounts. Any amount due from Tenant to Landlord which is
not paid within ten (10) days after receipt by Tenant of Landlord's written
notice that said amount is past due shall bear interest at the Default Rate from
the date that such payment is due until paid, but the payment of such interest
shall not excuse or cure any default by Tenant under this Lease.
c. Late Charge. In the event Tenant is more than ten (10) days late in paying
any installment of rent due under this Lease, Tenant shall pay to Landlord a
late charge equal to ten (10%) percent of the installment in question. The
parties agree that the amount of such late charge represents a reasonable
estimate of the cost and expense that would be incurred by Landlord in
processing each delinquent payment of rent by Tenant and that such late charge
shall be paid to Landlord as liquidated damages for each delinquent payment, but
that the payment of such late charge shall not excuse or cure any default by
Tenant under this Lease.
d. Purpose of Interest and Late Charge. The parties agree that the payment of a
late charge and the payment of interest provided for in this Section 16 are
distinct and separate from one another in that the payment of interest is to
compensate Landlord for the use of Landlord's money by Tenant, while the payment
of a late charge is to compensate Landlord for the additional administrative
expenses incurred by Landlord in handling and processing delinquent payments,
but excluding attorneys' fee and attorneys' costs incurred with respect to such
delinquent payments.
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17. NOTICE TO MORTGAGEE.
So long as there remains of record a mortgage or mortgages of Landlord's
interest in the property, and Tenant has been given written notice of the
identity and address of such mortgagee(s), upon request by Landlord Tenant shall
use reasonable effort to give a duplicate notice of each notice sent to Landlord
to such mortgagee. Failure to give notice to such a mortgagee shall not
invalidate the Tenant's notice to Landlord or expose Tenant to liability to such
a mortgagee. Tenant agrees that if in any notice to Landlord the performance of
some act is required or compliance with some provision hereof is requested and
Landlord does not, within the allotted time, perform such act or comply with
such provision, then such a mortgagee shall have thirty (30) days after
mortgagee's receipt of such notice in which to perform such act or comply with
such provision for and on behalf of Landlord, and Tenant shall have no right to
take action otherwise permitted it, or to terminate this Lease, if the mortgagee
shall perform and comply within said thirty (30) days. In the event the act or
thing to be complied with within said thirty (30) day period cannot by its
nature reasonably be completed within such period, such mortgagee shall be
deemed to have complied therewith in the event it commenced the performance of
compliance within said thirty (30) day period and after it completes the same
with due diligence. The granting to the mortgagee of additional time in which to
comply shall not be deemed in any manner to release or relieve Landlord from the
obligations of Landlord under this Lease. The said mortgagee is hereby
authorized to enter upon the Leased Premises following reasonable notice to
Tenant and while thereon to do anything necessary to correct such default. For
purposes of this Lease any reference to a mortgage or mortgagee shall include
references to deeds of trust and beneficiaries thereof.
18. SUBLETTING AND ASSIGNMENT.
Provided that Tenant shall remain liable under all of the terms and conditions
of this Lease for the full remainder of the Term and any extensions thereof,
Tenant shall have the right to assign or sublet the Premises, in whole or in
part, with the consent of the Landlord, which consent shall not be unreasonably
withheld or delayed, provided that the usage of the Building and Land is
consistent with the provisions herein. Transfers in connection with a public
offering shall not be deemed an assignment of this Lease. Tenant shall have the
right to assign this Lease, or to sublet the Leased Premises, to any of Tenant's
affiliates, subsidiaries or parent corporation(s). A change of ownership of
fifty-one (51%) percent or more of the stock of Tenant shall not be considered
an assignment if it occurs in connection with a bona fide merger or acquisition
or change in the state of incorporation of Tenant. At least thirty (30) days
prior to commencement of any sublease or assignment, and as a condition thereof,
Tenant shall furnish to Landlord (for Landlord's review of the same for
compliance with the terms of this Lease) a copy of the fully executed sublease
or assignment document.
16
Tenant shall retain fifty (50%) percent of any subleasing profits, said fifty
(50%) percent to be determined after all costs to sublease, including but not
limited to the costs of the making of leasehold improvements and the payment of
subleasing commissions, have been netted out of the sub-rents collected. The
balance of said fifty (50%) percent profits shall belong to Landlord.
a. No Release. No assignment or subletting of any form shall serve to release
Tenant of any obligations hereunder or alter the primary liability of Tenant for
the payment of rent and other sums due Landlord hereunder or for the performance
of any other obligations to be performed by Tenant under this Lease, whether or
not the sublessee or assignee has attorned to the Landlord.
b. Acceptance of Rent or Performance. Landlord may accept any rent or
performance of Tenant's obligations from any person other than Tenant and such
acceptance of any rent or performance shall not constitute a waiver or estoppel
of Landlord's rights to exercise its remedies for the default or breach by
Tenant of any of the terms, covenants or conditions of this Lease.
c. No Need to Exhaust Security. In the event of any default or breach of
Tenant's obligations under this Lease, Landlord may proceed directly against
Tenant, or anyone else responsible for the performance of Tenant's obligations
under this Lease, including the sublessee or assignee, without first exhausting
Landlord's remedies against any other person or entity responsible therefor, or
any security held by Landlord or Tenant.
d. Provisions to be Included in Sublease. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Leased
Premises and shall be deemed included in all subleases under this Lease whether
or not expressly incorporated therein.
(1) Assignment of Rents. Tenant hereby assigns and transfers to Landlord all
of Tenant's interest in all rents and income arising from any sublease of all or
a portion of the Leased Premises heretofore or hereafter made by Tenant, and
Landlord may collect such rent and income and apply the same toward Tenant's
obligation under this Lease; provided, however, that except during any period in
which a breach has occurred in the performance of Tenants obligations under this
Lease, and remains uncured Tenant may, except as otherwise provided in this
Lease, receive, collect and enjoy the rents accruing under such sublease.
Landlord shall pay to Tenant any portion of such rents, collected from any
sublessee that exceed the rental and other monetary obligations then due from
Tenant under the Lease, Landlord shall not, by reason of this assignment of
rents or any other assignment of sublease to Landlord, nor by reason of the
collection of the rents from a sublessee, be deemed liable to the sublessee for
any failure of Tenant to perform and comply with any of the Tenant's obligations
to such sublessee under such sublease. Tenant hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Landlord
stating that a default
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performance of its obligations under this Lease, and a resulting termination of
Lease by Landlord, Landlord, at its option and without any obligation to do so,
may require any sublessee to attorn (i.e., agree to become tenant to a new owner
or landlord of the same property) to Landlord, in which event Landlord shall
undertake the obligations of the sublessor under such sublease from the time of
the exercise of said option to the expiration of such sublease; provided,
however, Landlord shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any prior defaults or breaches
of such sublessee under such sublease.
(3) Consent of Landlord Required. Any matter or thing requiring the consent
of the sublessor under a sublease shall also require the consent of Landlord
herein, if Landlords consent is required under this Lease.
(4) Conditions of Sublease. Each sublease shall provide that (i) it is
subject and subordinate to this Lease and any Underlying Mortgage (defined in
Section 34 below); (ii) Landlord may enforce the provisions of the sublease,
including collection of rent; (iii) if this Lease is terminated for any reason,
Landlord may, at its option, either (A) terminate the sublease, or (B) take over
all of the rights and interest of Tenant, as sublessor, under such sublease, in
which case such sublessee shall attorn to Landlord; and (iv) any notices to be
given to Tenant, as sublessor, by the sublessee shall simultaneously be given to
Landlord. If Landlord elects to take over the rights and interest of Tenant,
Landlord shall not (1) be liable for any previous act or omission of Tenant
under the sublease; (2) be subject to any defense or offset in favor of the
sublessee against Tenant; or (3) be bound by any modification to the sublease
made without Landlords written consent or by any prepayment by sublessee of more
than one months rent.
19. CONDEMNATION.
In the event all of the Leased Premises, or such portion thereof as will make
the Leased Premises unusable for the purposes of Tenant, be condemned by any
legally constituted authority for any public use or purpose, then in either of
said events, the Term hereby granted shall cease, at the option of either
Landlord or Tenant on thirty (30) days written notice from the time when
possession thereof is taken by said public authorities, and rent
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shall be accounted for as between landlord and Tenant as of that date. Said
termination, however, shall be without prejudice to the rights of either
Landlord or Tenant, or both, to recover compensation and damage caused by
condemnation from the condemnor, except: (i) Tenant shall have no rights for the
value of its leasehold; and (ii) neither Tenant nor Landlord shall have any
rights in any separate award made to the other party by the condemnor. In the
event less than all of the Leased Premises is taken or condemned for a public or
quasi-public use and the portion of the Leased Premises which is not taken may
be reasonably suitable for the purposes of Tenant by repair or restoration, and
will not materially affect Tenant's business, this Lease will not terminate.
Landlord shall, in such event, subject to the terms of any Underlying Mortgage
(as defined in Section 34 hereof) promptly commence and diligently complete the
repair and restoration of the Leased Premises so that upon completion the
Building will constitute a complete architectural unit with an appearance,
character and commercial value as nearly as possible equal to the value of the
Building immediately prior to the taking, provided however, Landlord shall have
no obligation to expend more on reconstruction than the net amount of a
condemnation award or received by way of settlement in lieu thereof or make a
repair or restoration if the estimated cost thereof would reduce the Landlord's
award. There shall be an abatement of annual Base Rent after such taking which
shall be equal to the percentage of total area of the Building after the taking
and Landlord's restoration thereof as relates to the total area of the Building
immediately prior to said taking thereunder, to the termination of this Lease.
20. MUTUAL INDEMNIFICATION.
Each party ("Indemnifying Party") agrees to indemnify and save harmless the
other ("Indemnified Party") against and from any and all of the following if not
covered by the insurance to be maintained pursuant to Section 10 hereof: claims
by and on behalf of any persons, firms or corporations, arising from the conduct
or management of, from any work or thing whatsoever done by or on behalf of the
Indemnified Party in or about, of its activities upon or (in the case of Tenant)
occupancy, the Leased Premises during the Term of this Lease, and will further
indemnify and save the Indemnified Party harmless against and from any and all
claims arising from any breach or default on the part of the Indemnifying Party
in the performance of any covenant or agreement on the part of such Indemnifying
Party to be performed pursuant to the terms of this Lease, or from any violation
or failure to comply with any law, ordinance or regulation, or from any act or
negligence of such Indemnifying Party, or any of its agents, contractors,
servants, employees, licensees, or invitees or arising from any accident, injury
or damage whatsoever caused to any person, firm or corporation, occurring during
the Term of this Lease, in or about the Leased Premises, or upon or under the
sidewalks and the land adjacent thereto, and from and against all costs,
reasonable and necessary counsel fees, expense and liabilities incurred in or
about any such claim or action or proceeding brought thereon, and in case any
action or proceeding is brought against the Indemnified Party by reason of any
such claim, the Indemnifying Party upon notice from the Indemnified Party
covenants to resist or defend such action or proceeding by counsel reasonably
satisfactory to the Indemnified party. Landlord's liability is limited to
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Landlords interest in the Leased Premises and will be canceled automatically
upon any failure by Tenant to maintain in full force and effect (for such period
as Tenant has failed to maintain such insurance) all insurance required to be
furnished by Tenant under the provisions of this Lease. Each party hereto waives
indemnification rights to the extent such party receives the proceeds of
insurance.
21. INSPECTION OF PREMISES.
Tenant agrees to permit Landlord and any mortgagee of the Leased Premises, and
their agents, to inspect the Leased Premises at all reasonable times, and to
come upon the Leased Premises if necessary to perform any act which Tenant has
failed to perform, as provided elsewhere in this Lease. Tenant shall be given
reasonable prior notice of any such entry (except in the case of emergency) and
any such entry shall be undertaken in a manner that reasonably minimizes
interference with Tenant's use and operations and Tenant shall have the right to
have one or more of its employees present during such inspection.
22. DEFAULT.
Tenant shall be in default under this Lease if one or more of the following
events (herein called "Defaults") shall happen and be continuing, namely:
a. Failure to make the punctual payment of any rent, additional rent or other
monetary payment herein agreed to be paid and such failure shall continue for a
period of ten (10) days after written notice is given by Landlord to Tenant of
such failure;
b. Tenant shall have filed a petition in bankruptcy or prayed for any relief
under the Federal Bankruptcy Law or made an assignment for the benefit of
creditors or consent to the entry of an order for relief in involuntary
bankruptcy;
c. An attachment or execution shall have been levied upon the Tenant's property
in or interest under this Lease, which shall not have been satisfied or released
or the enforcement thereof stayed or superseded by an appropriate proceeding
within thirty (30) days thereafter;
d. An involuntary petition in bankruptcy or for reorganization or arrangement
under the Federal Bankruptcy Law shall have been filed against Tenant and either
an order for relief is entered or such involuntary petition is not withdrawn,
dismissed, stayed or discharged within ninety (90) days from the filing thereof;
e. A Receiver or Trustee shall have been appointed for the property of Tenant or
Tenant's business or assets and the order or decree appointing such Receiver or
Trustee shall have remained in force undischarged or unstayed for sixty (60)
days after the entry of such order or decree;
20
f. Tenant admits in writing its inability to pay its debts as they become due;
g. Tenant shall have failed to perform or observe any other covenant, agreement
or condition to be performed or kept by the Tenant under the terms and
provisions of this Lease, and such failure shall continue for thirty (30) days
after written notice thereof has been given to Tenant by Landlord, unless Tenant
shall have commenced corrective action within such thirty (30) days and
thereafter diligently completes the same; the foregoing provision shall not
require Tenant to occupy the Leased Premises and Tenant shall be entitled to
vacate the Leased Premises so long as it otherwise complies with its obligations
hereunder, however said time period shall be inclusive of any and all statutory
time periods for nonpayment of rent and breach of covenants in this Lease.
23. LANDLORDS REMEDIES UPON DEFAULT.
Upon the occurrence of any Default by Tenant, Landlord, at its option, may have
one or more of the following remedies, in addition to all of the rights and
remedies provided at law or in equity:
a. Entry by Landlord. Landlord may cure the default for the account of Tenant,
and Tenant hereby authorizes Landlord to come upon the Leased Premises for such
purposes and while on the Leased Premises to do all things reasonably necessary
to accomplish the correction of such Default. If Landlord, at any time, is
compelled to pay or elects to pay any sum of money by reason of the occurrence
of a Default by Tenant or if Landlord is compelled to incur any expense,
including reasonable attorneys' fees and attorneys' costs, property management
fees, in instituting, prosecuting or defending any action or proceeding
instituted by reason of any Default of Tenant hereunder, the sum or sums so paid
by Landlord with all interest costs and damages, including any loss of rent,
shall be deemed to be additional rent hereunder and such action by Landlord
shall not be deemed a waiver by Landlord of Tenant's default or any other remedy
available to Landlord.
b. Performance by Landlord. Landlord may, upon notice to Tenant, without
obligation, and without waiving or releasing Tenant from any Default or
obligations of Tenant, make any such payment or perform any such obligation on
Tenant's part to be performed. All sums so paid by Landlord and all costs
incurred by lessor, including reasonable attorneys' fees and costs, shall be
payable to Landlord on demand together with interest thereon at the Default
Rate, and Tenant covenants to pay all such sums, and Landlord shall have (in
addition to any other right or remedy hereunder) the same rights and remedies in
the event of Tenant's non-payment thereof as in the case of default by Tenant in
the payment of rent.
c. Repossession; Damages. Landlord may without further notice repossess the
Leased Premises and at any time thereafter may terminate this Lease by written
notice to Tenant. In such event, Landlord shall be entitled to recover (in lieu
of paying any further deficiency amounts under Section 23(d) below) a sum of
money equal to the total of (i) the cost of recovering the Leased Premises; (ii)
the unpaid rent earned at the time of termination, plus interest thereon; (iii)
late charges on unpaid rent and accrued interest thereon; (iv) reasonable costs
of reletting and refurbishing the Leased Premises including, without limitation,
leasing commissions paid, tenant improvement costs, rent concessions and repairs
to the Leased Premises; and (v) any other sum of money and damages reasonably
necessary to compensate Landlord for the detriment caused by Tenant's Default.
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d. Termination of Right of Possession. Landlord may immediately terminate
Tenant's right of possession of the Leased Premises by written notice to Tenant,
with or without terminating this Lease, and without notice or demand enter upon
the Leased Premises or any part thereof and take absolute possession of the
same, expel or remove Tenant and any other person or entity who may be occupying
the Leased Premises and change the locks. In the event that Landlord terminates
Tenant's right to possession without terminating this Lease, Landlord may engage
a commercial real estate broker to relet the Leased Premises or any part thereof
for such terms and such rents as Landlord may reasonably elect. In the event
Landlord shall elect to so relet, the rent received by Landlord from such
reletting shall be applied first to the payment of any sums owing from Tenant to
Landlord hereunder other than rent due hereunder from Tenant to Landlord, second
to the payment of any reasonable cost of such reletting, including, without
limitation, refurbishing costs and leasing commissions, and third, to the
payment of rent due and unpaid hereunder, and Tenant shall satisfy and pay any
deficiency upon demand therefor from time to time. Any such entry into the
possession of the Leased Premises by Landlord under this Section 23 shall be
without liability or responsibility for damages to Tenant and shall not be in
lieu of or in substitution for any other rights of Landlord hereunder at law or
in equity. Tenant further agrees that Landlord may file suit to recover any sums
due Landlord under the terms of this Section 23 and that no recovery of any
portion due Landlord hereunder shall be any defense to any subsequent action
brought for any amount not theretofore reduced to judgment in favor of Landlord.
Reletting of the Leased Premises shall not be construed as an election on the
part of Landlord to terminate this Lease and notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate this
Lease for such previous breach and recover liquidated damages as of the date of
termination as set forth in Section 23(c) hereof.
e. Suit for Specific Performance or Damages. Landlord may bring suit against
Tenant for the specific performance of this Lease by Tenant or for damages
directly or indirectly arising out of Tenant's breach of any term or covenant of
this Lease.
f. Remedies Are Cumulative. The rights and remedies given to Landlord in this
Lease are distinct, separate and cumulative remedies, and except as provided
herein, no one of them, whether or not exercised by Landlord, shall be deemed to
be an exclusion of any of the others. No right or remedy granted to Landlord
herein is intended to be exclusive of any other right or remedy hereunder or now
or hereafter existing in law or in equity or by statute. In the event of
termination of Tenant's right to possession, by Landlord after the occurrence of
a Default, Tenant waives any and all rights to redeem the Leased Premises either
provided by any statute now in effect or hereafter enacted.
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Notwithstanding anything herein to the contrary, Landlords monetary damages for
lost Base Rent shall not exceed the balance of Base Rent payable through the
expiration of the Lease Term.
24. CONDITION OF PREMISES ON TERMINATION.
Upon termination of this Lease for any reason, Tenant covenants and agrees to
remove all of its personal property, including fixtures and equipment installed
by Tenant upon the Leased Premises which are not permanently attached or which
are permanently attached and are the property of the Tenant, and Tenant shall
repair any damage caused by the removal thereof, and shall leave the Leased
Premises in as good repair and clean condition as at the commencement of this
Lease, normal and reasonable wear and tear and usage excepted. Tenant shall, at
Landlord's election, either (i) remove at Tenant's sole expense, any title
encumbrances relating to the Leased Premises caused by Tenant's interest in the
Lease; or (ii) provide Landlord with a bond for the total amount of said title
encumbrance.
All fixtures (other than trade fixtures and equipment not for the operation of
the Building), improvements, alterations and equipment for the operation of the
Building now or hereafter permanently attached to the Leased Premises, including
without limitation all plumbing, electrical, and HVAC equipment and all doors,
ceiling tiles and lighting fixtures, shall be and remain Landlord's property and
shall not be removed from the Leased Premises without Landlord's prior written
consent. All movable fixtures and equipment are and shall remain Tenant's
property, and Landlord agrees to sign any and all waivers reasonably required by
Tenant in order to complete any fixture financing arrangements relative to said
movable fixtures and equipment. Landlord shall have no interest in any movable
fixtures and equipment owned by Tenant, or installed in or upon the Leased
Premises solely at the cost and expense of Tenant. In the event said property is
thereafter removed from the Leased Premises by Tenant, or any party holding a
lien on, a security interest in, or a reversionary interest in the property, or
by any agent or representative thereof or any purchaser thereof, pursuant to the
exercise or enforcement of any rights incident to the interests created, Tenant
or the party holding such interest shall repair any damage necessitated by the
removal of such property as may be necessary to restore the Leased Premises to
good condition and repair, excepting only reasonable wear and tear, without any
cost or expense to Landlord.
25. SUCCESSORS AND ASSIGNS.
Subject to Section 18, the obligations and responsibilities of the parties to
this Lease shall be binding upon, and the rights and benefits shall inure to the
successors and assigns of the parties hereto; but the liabilities of any
successor to the interest of the Landlord hereunder shall be limited to the
performance of those obligations which arise and accrue during the period of
ownership of the Leased Premises by any such successor. In the event that
Landlord sells, assigns or transfers the Leased Premises, and the
buyer/transferee assumes in writing all obligations of Landlord under this
Lease, then from and after the effective date of such sale, assignment or
transfer, Landlord shall have no further liability under this Lease.
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26. NOTICES.
Unless otherwise specifically provided herein, all notices and demands hereunder
shall be in writing, and shall (1) be given by registered or certified mail,
return receipt requested and shall be deemed given if deposited in the United
States mail, with sufficient postage prepaid thereon to carry it to the
addressed destination or (2) shall be delivered by facsimile transmission (with
hard copy sent no later than 24 hours following transmission by United States
mail, postage prepaid) or (3) shall be delivered by overnight delivery service
to Landlord or Tenant at the following addresses:
If to Landlord: Xxx X. Xxxxxxxx
0000 000xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile:
Telephone No.:
With a copy to: R. Xxxxx Xxxx
Nord, Macklin & Xxxxxxxx, P.A.
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone No.: (000) 000-0000
If to Tenant: DecisionOne
Attention: Corporate Real Estate
00 X. Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to: DecisionOne
Facility Manager
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile:
Telephone No.:
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Landlord and Tenant may designate an additional or other address upon giving
notice to the other party pursuant to this Section. Notice given in any other
manner than as stated herein, shall be deemed effective only upon receipt by the
party to whom such notice is given.
27. NO ORAL AGREEMENTS.
It is expressly agreed between Landlord and Tenant that there is no verbal
understanding or agreement which in any way changes the terms, covenants and
conditions herein set forth, and that no modification of this Lease and no
waiver of any of its terms and conditions shall be effective unless made in
writing and duly executed by the authorized officers of the necessary parties or
party.
Landlord and Tenant hereby agree that all prior or contemporaneous oral
understandings, agreements or negotiations relative to the leasing of the Leased
Premises are merged into this Lease.
28. NO WAIVER.
The failure of Landlord or Tenant to insist, in one or more instances, upon the
strict performance by Tenant or Landlord of any of the provisions of this Lease
shall not be construed as a waiver of any right or remedy available for any
future breach of such provisions. Receipt by Landlord of rent with knowledge of
the breach of any provisions hereof shall not be deemed a waiver of any right or
remedy available for such breach.
29. WARRANTIES OF TENANT; ESTOPPEL CERTIFICATE.
Tenant warrants to and for the benefit of any mortgagee of the Leased Premises
that as of the date of execution of this Lease it neither has nor claims any
defense to this Lease nor any offset against the rentals payable or other
obligations required of Tenant hereunder, and Tenant warrants that it has not
paid any rental in advance for a period of more than one (1) month and covenants
that it will not, without such mortgagee's written consent, at any time during
the term hereof prepay any rental for a period longer than one month.
Tenant shall at any time and from time to time upon not less than ten (10)
business days prior written notice by Landlord, execute, acknowledge and deliver
to Landlord a statement in writing certifying that this Lease is unmodified and
in full force and effect (or if there have been modifications, that the same is
in full force and effect as modified and stating the modifications), that the
Lease has not been collaterally assigned, the dates to which the Base Rent and
any other charges have been paid in advance, if any, confirming the Term and
extension terms of the Lease, stating that the Tenant has accepted the Leased
Premises in their then current condition and is in possession of the Leased
Premises, stating whether or not to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease and, if so, specifying each such default of which Tenant may have
knowledge, stating that the Tenant has no right of set-off against past or
future rents due under the Lease, that no rent has been prepaid for more than
one (1) month in advance, and containing any other information and
certifications which reasonably may be requested by Landlord or the holder of
any Underlying Mortgage. Any such statement delivered pursuant to this Section
29 may be relied upon by a prospective purchaser of the fee of the Leased
Premises or any mortgagee, ground lessor or other like encumbrancer thereof, or
any assignee of any such encumbrancer upon the Leased Premises.
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30. CARDING.
Landlord may place signs at the Leased Premises stating "Building For Rent" or
"Building For Sale", or the equivalency of the same. Landlord may enter the
premises during business hours and upon reasonable notice to show the same to
prospective purchasers, tenants and mortgagees and to inspect or make repairs.
31. LANDLORD AND TENANT.
This Lease shall create the relationship of landlord and tenant between Landlord
and Tenant.
32. TIME OF ESSENCE.
Time is of the essence of this Lease.
33. DEFINITION.
"Landlord" as used in this Lease shall include the original Landlord hereunder,
its successors and assigns. "Tenant" shall include the original Tenant
hereunder, its successors, and if this Lease shall be validly assigned or
sublet, shall include also Tenant's assignee or sublessee, as to premises
covered by such assignment or sublease. "Landlord" and "Tenant" include male and
female, singular and plural, corporation, partnership or individual, as may be
appropriate for the particular parties.
34. MORTGAGE.
Landlord shall have the right to place trust deeds or mortgages against the
Lease Premises as security for a loan obtained or to be obtained by Landlord.
Tenant agrees to execute such documents as may be reasonably required by the
lending agency making any such existing or subsequent loans, including
attornment agreements, subordination agreements and estoppel certificates, if
requested; provided that if a mortgage or trust deed is to be placed on the
Leased Premises, the Landlord and lender shall execute a subordination and
non-disturbance agreement in a form consistent with the terms of this Lease and
reasonably acceptable to Tenant.
If Landlord's interest in the Leased Premises is sold or conveyed upon the
exercise of any remedy provided for in any Underlying Mortgages, or otherwise by
operation of law, then, so long as Tenant is not in default hereunder: (a) this
Lease (and any amendments, modifications and extensions thereof) will not be
affected in any way, and Tenant will attorn and recognize the new owner as
Tenant's landlord under this Lease and Tenant will confirm such attornment in
writing within ten (10) days after request; and (b) the new owner shall not be
(i) liable for any act or omission of Landlord under this Lease occurring prior
to such sale or conveyance, or (ii) subject to any defense or offset, abatement
or reduction of rent because of any default of Landlord under this Lease
occurring prior to such sale or conveyance, (iii) liable to Tenant for any rent
paid more than one (1) month in advance; or (iv) bound by any amendment or
modification of this Lease made without the lender's request.
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This Lease is subject and subordinate to all mortgages, trust deeds, ground
Leases or other encumbrances which may now or hereafter may affect the Leased
Premises (the "Underlying Mortgages") and to all renewals, modifications,
consolidations, replacements and extensions of any such Underlying Mortgages
provided that the holder of such Underlying Mortgage and Tenant shall execute a
subordination and non-disturbance agreement in a form consistent with the terms
of this Lease and reasonably acceptable to Tenant prior to the date such
Underlying Mortgage is recorded as a lien against the Leased Premises.
35. ZONING.
Tenant shall at Landlord's request, furnish Landlord and Landlord's Lender, if
any, a certificate from the appropriate governmental authority addressed to
Landlord and Landlord's Lender, if any, stating that the premises are zoned to
enable Tenant's use as stated herein and that such use does not violate any
applicable ordinance, permit, zoning or building code. Prior to any change in
use of the Leased Premises, Tenant shall furnish Landlord and Landlord's Lender,
if any, a similar certificate stating that the proposed use of the Leased
Premises is permitted under all applicable zoning or building codes or permits.
Landlord cannot guarantee future zoning or changes in permitted uses, and Tenant
assumes the risk thereof.
36. LANDLORD'S CONSENT.
In all matters referred to in this Lease, where Landlord's consent or approval
is required, Landlord agrees that Landlord will not unreasonably withhold
Landlord's consent or approval, except where this Lease indicates that Landlord
may act in its discretion.
37. LEGAL EXPENSE.
If Landlord retains the services of attorneys and successfully recovers
possession of the Leased Premises, or successfully recovers any sum due but not
paid after proper notice has been given by Landlord prior to any suit being
filed, then all such costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord shall be paid by Tenant. If any action,
arbitration or proceeding (including any appeal thereof) is brought by Landlord
or Tenant (whether or not such action is prosecuted to judgment) to enforce its
respective rights under this Lease or to enforce a judgment ("Action"), (i) the
unsuccessful party therein shall pay all costs incurred by the prevailing party
therein, including reasonable attorneys' fees and costs; and (ii) as a separate
right,
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severable from any other rights set forth in this Lease, the prevailing party
therein shall be entitled to recover its reasonable attorneys' fees and costs
incurred in enforcing any judgment against the unsuccessful party therein, which
right to recover such post-judgment attorneys' fees and costs shall be included
in any such judgment. The right to recover post-judgment attorneys' fees and
costs shall (i) not be deemed waived if not included in any judgment; (ii)
survive the final judgment in any Action; and (iii) not be deemed merged into
such judgment. The rights and obligations of the parties under this Section 37
shall survive the termination of this Lease.
38. TITLE OF LANDLORD.
Landlord expressly covenants and agrees that as of the Commencement Date of the
Term of this Lease, it will be the owner of the fee simple title to the Land and
Building and other improvements as set forth on the attached Exhibit "D" and to
the Underlying Mortgages and documents related thereto, if any, and subject to
any liens, encumbrances or restrictions arising from or existing during
Landlord's prior ownership of the Leased Premises. Landlord further covenants
that Tenant, on paying the monthly rental and observing and performing all other
terms and conditions contained in this Lease, shall have quiet and peaceful
possession of the Leased Premises for the full Term, or extensions thereof
subject to the provisions of this Lease.
39. LIMITATIONS ON LANDLORD'S LIABILITY.
It is expressly understood and agreed that if Tenant obtains a money judgment
against Landlord resulting from any default or other claim arising under this
Lease, that judgment shall be satisfied only out of Landlord's right, title and
interest in the Leased Premises, and no other real, personal or mixed property
of Landlord (or any of the officers, directors, stockholders or partners, as
applicable, which comprise Landlord, if any) wherever situated, shall be subject
to levy to satisfy such judgment.
40. OPTION TO EXTEND LEASE.
Tenant shall have the option, to be exercised as hereinafter provided, to extend
the term of this Lease for two (2) periods of five (5) years each on the
following terms and conditions and subject to the limitations hereinafter set
forth, each of such five (5) year renewal periods being sometimes referred to
herein as the "Renewal Term", provided:
a. That at the time hereinafter set forth for the exercise of the renewal
option, and at the time the Renewal Term commences, this Lease shall be in full
force and effect and Tenant shall not be in default in the performance of any of
the terms, covenants and conditions contained in this Lease, but Landlord shall
have the right at its sole discretion to waive the non-default conditions
herein; and
b. That each such Renewal Term shall be on the same terms, covenants and
conditions as provided in this Lease; provided, however, the annual Base Rent
for each such Renewal Term shall be the greater of: (1) the Base Rent provided
for in Section 3 during the original term; or (2) the Market Rent for the Leased
Premises on the date such Renewal Term shall commence as determined in
accordance with the Market Rent provisions below; and
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c. That Tenant shall exercise its right to extend the term of this Lease for the
aforesaid Renewal Term by notifying Landlord, in writing, of its election to
exercise the right to renew and extend the term of this Lease no later than
twelve (12) months prior to the date upon which the original term is to expire.
Prior to commencement of the Renewal Term, Landlord and Tenant agree to execute
an amendment to the Lease incorporating the amended terms referred to in this
Section 40.
d. Market Rent Definition. "Market Rent" means the annual rent amount per square
foot (equivalent to Base Rent under this Lease) which a landlord would receive
by then renting the specific space in question assuming the landlord to be a
prudent person willing to lease but being under no compulsion to do so, assuming
the tenant to be a prudent person willing to lease for a term equal to the term
in question, taking into account the possible uses of the space, the quality,
size, parking benefits, design and location of the space, and rent for
comparable space in comparable buildings located in the southwestern Minneapolis
suburban area, and assuming a lease containing the same terms and provisions as
those contained in this Lease.
e. Determination of Market Rent. Whenever Base Rent under this Lease is based on
the Market Rent, Landlord shall initially determine the Market Rent and shall
thereupon give Tenant notice of such determination and of the amount of Base
Rent for the Renewal Term.
f. Disagreement on Market Rent.
(1) If Tenant does not agree with Landlord's determination of Market Rent,
Tenant shall nevertheless pay Base Rent at the rate set out in the notice given
by Landlord pursuant to this Section and shall give notice to Landlord of such
disagreement within ten (10) days after Landlord gives such notice to Tenant. If
Tenant fails to give such notice of disagreement for any reason, then Tenant
shall be bound by Landlord's determination of Market Rent (and ensuing Base Rent
hereunder).
(2) If Tenant gives Landlord notice of disagreement within the time
permitted, each party shall choose a person with at least five (5) years
experience as a commercial real estate appraiser in the Minneapolis/St. Xxxx
Metropolitan Area who shall be a member in good standing of the American
Institute of Real Estate Appraisers (or successor organization or if no such
organization exists, then persons of similar professional qualifications), with
designation M.A.I., and give notice of the name and address of such person to
the other within thirty (30) days of notice of disagreement from Tenant.
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Those two persons shall within fifteen (15) days select a third person who is
experienced in the determination of commercial rental rates for office space in
the Minneapolis/St. Xxxx Metropolitan Area and the three persons (the "Experts")
shall make a determination of Market Rent as expeditiously as possible
thereafter and in any event within thirty (30) days after the selection of the
third Expert. The determination of the Experts shall be made as follows:
(a) Each Expert will independently determine the Market Rent and then all will
meet and simultaneously disclose to the others their respective determinations.
In determining the Market Rent, all Experts shall be free to consider all
elements affecting the Lease transaction.
(b) If neither the highest nor the lowest determination differs from the
middle determination by more than ten percent (10%) of such middle
determination, then the Market Rent shall be the average of all three
determinations.
(c) If subparagraph (b) does not apply, the Market Rent shall be the average
of the two determinations closest by dollar amount.
(d) The Experts shall promptly notify Landlord and Tenant of each of their
separate determinations and the resulting Market Rent. Except as otherwise
provided in this Lease, the said appraisal shall be conducted in accordance with
the rules then in existence of the American Arbitration Association, and
judgment upon any appraisal decision rendered may be entered by any Court having
jurisdiction thereof. The determination of Market Rent pursuant to this
procedure shall be final, binding and conclusive upon Landlord and Tenant.
(3) From and after the determination of Market Rent based on this Section 40,
Tenant shall pay Base Rent at the rate applicable under this Section 40 and
within thirty (30) days after Landlord and Tenant receive notice of such
determination of Market Rent, Tenant shall pay to Landlord the amount of any
underpayment, or Landlord shall refund to Tenant the amount of any over payment
(or credit the same to the next Base Rent payment due, at Landlord's option), as
the case may be, of Base Rent theretofore made.
(4) Each party will pay any and all fees and expenses incurred in connection
with such party's Expert and the fees and expenses for the third Expert will be
borne equally by the parties.
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41. GOVERNING LAW.
This Lease shall be performed, construed and enforced in accordance with the
laws of the State of Minnesota.
42. HEADINGS.
The headings used in this Lease are for convenience only and shall not have any
bearing or meaning with respect to the content or context of this instrument.
43. HOLDING OVER.
Tenant shall have no right to retain possession of the Leased Premises beyond
the expiration or earlier termination of the Lease.
If Tenant holds over after the expiration of the Term, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further
Term, and such month-to-month tenancy shall be subject to each and every term,
covenant and agreement contained herein; provided, however, that Tenant shall
pay as Base Rent during any holding over period, an amount equal to one hundred
twenty five percent (125%) of the Base Rent payable immediately preceding the
expiration of the Term. Nothing in this Section 43 shall be construed as a
consent by Landlord to any holding over by Tenant and Landlord expressly
reserves the right to require Tenant to surrender possession of the Leased
Premises upon the expiration of the Term or upon the earlier termination hereof
and to assert any remedy in law or equity to evict Tenant and/or collect damages
in connection with such holding over.
44. MEMORANDUM OF LEASE.
Either party may, at its sole cost, prepare and record a Memorandum of Lease at
the location where the deed of title to the Leased Premises is of record. The
other party shall join in executing such Memorandum on request.
45. AUTHORITY TO SIGN LEASE.
If Tenant is a corporation, then the persons executing this Lease on behalf of
Tenant represent and warrant to Landlord that they are duly authorized to
execute and deliver this Lease on Tenant's behalf in accordance with a duly
adopted resolution of the Board of Directors of Tenant. Landlord warrants to
Tenant that the person or persons executing this Lease on behalf of Landlord are
duly authorized to execute and deliver this Lease on Landlord's behalf.
46. INVALIDITY.
If any term or provision of this Lease, the deletion of which would not
adversely affect the receipt of any material benefit by either party hereunder,
shall be held invalid or unenforceable to any extent, the remaining terms,
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conditions and covenants of this Lease shall not be affected thereby and each of
said terms, covenants and conditions shall be valid and enforceable to the
fullest extent permitted by law.
47. SECURITY.
Tenant hereby assumes responsibility for and shall take all reasonable security
measures for the Leased Premises.
48. INTERPRETATION.
This Lease has been fully negotiated and both parties have participated in the
drafting of the same. No presumption shall be made for or against either party
as a consequence of the drafting of the same. No provision shall be construed
for or against either Tenant or Landlord, and this Lease shall be interpreted in
accordance with its general tenor in an effort to reach an equitable result.
49. ASSIGNMENT.
Except as permitted by Section 18 hereof, Tenant shall not assign, collaterally
or otherwise, nor pledge, encumber or mortgage its interest in this Lease or in
the Leased Premises without Landlord's Lenders and Landlord's prior written
consent.
50. TENANT IMPROVEMENTS: PLANS; TENANT IMPROVEMENT ALLOWANCE; POSSIBLE LOAN.
a. Plans. Detailed architectural plans for permanent improvements to the Leased
Premises (hereinafter called the "Plans") shall be submitted by Tenant to
Landlord by January 31, 1998. The improvements to be constructed in accordance
with the same shall not be proceeded with until Landlord approves said Plans in
writing, said approval to not be unreasonably withheld provided that the same
are professionally prepared and certified by a licensed architect or engineer
qualified to prepare the same and are in keeping and in harmony with the overall
design, style, decor, architecture, building materials and structure of the
existing improvements, and, provided further, that the same do not diminish the
presently existing value of the Leased Premises.
b. Tenant Improvement Allowance. The parties acknowledge that the Plans are to
modify the Leased Premises to accommodate Tenant's intended use. Tenant shall be
responsible for constructing the improvements as shown on the Plans (hereinafter
called "Tenants Improvements") for and on behalf of Tenant. Landlord and Tenant
have agreed that the cost of such Tenant's Improvements shall be paid by Tenant,
although Landlord shall provide Tenant an allowance of up to, but in no event
exceeding, Seven Hundred Seventy-Three Thousand Seven Hundred Sixty and No/100
Dollars ($773,760.00) (hereinafter referred to as the "T.I. Allowance") to be
32
applied towards the cost of such Tenant's Improvements. Said amount was based
upon $12.00 per square foot for 64,480 square feet of office space. The T.I.
Allowance shall be used only for the payment of actual out of pocket costs paid
to third parties for the following: (1) the cost of preparing the Plans; (2)
material and labor costs for the buildout of the improvements to be made
(including the parking ramp maintenance repairs referred to in the following
paragraph); (3) the cost of installing voice and data cabling; (4) the cost of
supervising, overseeing or managing the improvement work; and (5) moving costs
of Tenant to the Leased Premises. No portion of the T.I. Allowance shall in any
manner be payable to Tenant.
Tenant agrees to pay from said T.I. Allowance that amount needed to make
reasonable parking ramp maintenance repairs including caulking, concrete work,
and asphalt work as previously pointed out by Landlord.
c. Additional Advance. If requested, Landlord will advance Tenant up to One
Million Three Hundred Thousand and 00/100 ($1,300,000.00) Dollars (the amount
actually advanced to be known as the "Additional Advance") to be used solely for
completion of Tenant Improvements. (Collectively, the T.I. Allowance and the
Additional Advance shall be referred to as the "T.I. Advances".)
(1) Tenant shall be allowed to draw against the T.I. Advances during the
period commencing after the tenant improvements have been approved by
Landlord through July 31, 1998 provided that Tenant is in compliance with the
other provisions of this Lease. The Additional Advance draws (but not the
T.I. Allowance draws) shall bear interest computed at twelve (12%) percent
per annum from and after the date of the respective draw in question. The
total Additional Advance draws and interest as aforesaid shall be computed as
of August 1, 1998 and shall be reimbursed to Landlord as set forth at
subparagraph (2) below.
(2) On or before August 1, 1998, Landlord and Tenant shall execute a Lease
Amendment to this Lease which shall provide for the repaying of the total
Additional Advance (including both principal draws and interest as of August
1, 1998) in the following manner: Base Rent for the Leased Premises under
Section 3 shall be increased by that amount needed to reimburse in equal
monthly installments said total Additional Advance amount together with
interest on the same computed at twelve (12%) percent per annum amortized
over a thirty-six (36) month period, such increased Base Rent to become
payable as of September 1, 1998 and to continue on the first day of each
month thereafter until and through August 1, 2001, said interest to commence
as of August 1, 1998.
(3) Tenant shall have the right to prepay fully or partially the total
Additional Advances at any time without penalty. Any partial prepayment shall
be applied first to the payment of any amount of Additional Advance then due
under paragraph c (2), including unpaid accrued interest, secondly to any
other
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payment or sum then owing by Tenant to Landlord in accordance with the other
provisions of this Lease, and thirdly to the principal payments of paragraph
c(2) in the inverse order of their maturity. Partial prepayments shall not
postpone the due date of the payments to be paid pursuant to paragraph c(2)
or change the amount of such payments.
(4) All payments made under paragraphs c(2) or c(b) shall be considered as
"payments" and shall be first applied towards accrued interest and thereafter
towards the reduction of principal.
Landlord shall not be obligated under any circumstances to advance any portion
of the One Million Three Hundred Thousand and 00/100 ($1,300,000.00) Dollars
referred to in this paragraph c (i.e. the Additional Advance) unless and until
Tenant shall first have provided to Landlord a stand-by Letter of Credit from
Nations Bank, or such other banking facility approved by Landlord, in the amount
of One Million Three Hundred Thousand and 00/100 ($1,300,000.00) Dollars in a
form and embodying terms approved by Landlord.
d. Tenant Draws Against the T.I. Advances. Any costs of the Tenant Improvements
which exceed the T.I. Advances shall be paid by Tenant immediately as they
become owing. Any (1) improvements to the Premises, other than as shown on the
Plans, and (2) the furnishing of the Premises, shall be made by Tenant at the
sole cost and expense of Tenant, subject to all other provisions of this Lease
Agreement, including compliance with all applicable governmental laws,
ordinances and regulations. Tenant shall solely be responsible for having the
Tenant Improvements completed by the Commencement Date of this Lease (i.e., June
1, 1998). Non-completion of such improvements for any reason whatsoever shall
not constitute grounds for extending said Commencement Date.
Landlord shall not be required to advance any portion of the T.I. Advances until
Landlord confirms in writing that Tenant has reasonably satisfied Landlord that
Tenant will make permanent improvements to the Leased Premises that have a fair
market value of at least Eight Hundred Thousand and No/100 Dollars
($800,000.00). The valuation of such permanent improvements shall consist of
labor and material costs attributable to the installation of walls, lighting,
carpeting and other floor coverings, wallpapering, painting, millwork,
electrical lines and systems, heating runs and systems, air conditioning runs
and units, ventilating runs and systems, and ceiling materials. Such permanent
improvements shall specifically not include costs attributable to the
preparation of the Plans, costs for supervising, overseeing or managing any
portion of the work, costs for demolition of presently existing improvements
and/or removal of the same, costs for installing voice and data or other
cabling, or any moving costs of Tenant.
Tenant shall keep full and complete records in organized business format of all
specifications, blueprints, plans, bids, contracts, payments requested, payments
made, mechanic's lien waivers, change orders, correspondence, and other
34
documentation pertaining in any way to the Tenant Improvements to be made
including, but not limited to, all such documentation involving any and all
project architects, managing agents, supervisors, contractors, suppliers,
subcontractors, and all other parties having any involvement with the
improvements to be made and shall make the same available to Landlord at all
reasonable times. Landlord shall be entitled to copy the same.
Any changes in the project Plans shall require the written approval of Landlord,
which such approval shall not be unreasonably withheld.
Tenant shall be entitled to obtain draws from the T.I. Advances under the
following rules and procedures:
(1) Any request for a draw shall be based upon a written request from the
project architect or other project supervisor (hereinafter "Project
Architect") designated by Tenant and reasonably approved by Landlord at the
beginning of the project;
(2) The request shall specify (a) the name of the party to be paid, (b) the
specific work or materials performed or furnished, (c) the dollar amount to
be paid (exclusive of a ten percent [10%] retainage to be withheld until
project finalization as set forth below), (d) a certification from the
Project Architect that the work or materials furnished and the amount to be
paid for the same are in compliance with all project plans, specifications
and contracts, and (e) the amount to be paid by Tenant, if any, as referred
to at paragraph 3 below;
(3) In the event the total cost of all the Tenant Improvements to be made
exceeds the T.I. Advances, then Tenant shall pay such excesses directly and
immediately as the same become due. Further, Tenant shall hold Landlord
harmless and shall indemnify Landlord from the payment of such excesses,
including attorneys' fees or other costs in defending against the same;
(4) A receipt and waiver of mechanic's lien rights to the extent of the
payment made shall be obtained from each party to which payment is made
simultaneous with the making of the subject payment;
(5) Landlord shall advance Landlord's portion of the requested draw amount
within fifteen (15) days of receipt of the certification referred to at
paragraph (2) above;
(6) Landlord's final payment shall consist of the aforementioned ten percent
(10%) retainage amounts and shall be due and payable only upon certification
from the Project Architect that upon payment of the same, together with
Tenant's corresponding payment as referred to at paragraph (3) above, if any,
that payment in full for the entire project will be able to be made and that
all work and materials furnished are in complete accord with all project
plans, specifications and contractual documentation.
35
During the time period that Tenant installs the Tenant Improvements, and
thereafter, Landlord shall have no responsibility or liability for loss or
damage to fixtures, facilities or equipment, installed or left on the Leased
Premises, such risk to be solely on Tenant. By occupying the Leased Premises to
perform the Tenant Improvement work, Tenant shall be conclusively deemed to have
accepted the same and to have acknowledged that the Leased Premises are in the
condition required to be put in by Landlord by this Lease Agreement with the
exception of those items to be corrected by Landlord as set forth at paragraph A
of the attached Exhibit "B" (i.e. the "Landlord's Responsible Punchlist").
51. SIGNAGE.
Subject to Landlord's and the City of Richfield's approval, Tenant shall have
the right to install Tenant's corporate identification on the Building and
directional signage on the premises. The size, location and method of
installation shall be subject to Landlord's approval, which such approval shall
not be unreasonably withheld or delayed. Tenant shall pay the cost to install
and remove such identification and directional signage, as well as repair any
damage to the Building resulting from the installation or removal of the same.
52. ACCESS.
Tenant's employees shall have access to the Leased Premises 24-hours per day,
seven days a week.
53. SATELLITE DISH.
Tenant shall have the right to install a satellite dish on the Leased Premises
provided that the same is in compliance with all building code requirements. The
cost of the installation and removal of said satellite dish shall be the sole
responsibility of Tenant. Upon the removal of said satellite dish on or prior to
the termination of this Lease, Tenant shall be responsible for repairing any
damage to the Leased Premises resulting from such installation or removal
process.
54. JANITORIAL SERVICES.
Tenant shall be responsible for the furnishing and the payment of all janitorial
services to the Leased Premises.
55. BROKERAGE FEES.
Landlord has agreed to pay the following respective fees on the following
respective dates to the following respective parties for the brokering of this
transaction:
36
To Atlantic American Properties: The total sum of $72,032.00 to be paid one-half
(1/2) upon the Commencement Date of this Lease
and one-half (1/2) on December 31, 1998.
To Equis: The total sum of $96,720.00 to be paid one-half
(1/2) upon the Commencement Date of this Lease
and one-half (1/2) on December 31, 1998.
To Landmark Partners: The total sum of $88,152.00 to be paid one-half
(1/2) upon the Commencement Date of this Lease
and one-half (1/2) on December 31, 1998.
To American Commercial: The total sum of $16,120.00 to be paid upon the
execution of this Lease by both Landlord and
Tenant.
There shall be no interest owing or assessed against any of said fees.
Both Tenant and Landlord represent and warrant to the other that there are no
other claims for brokerage fees or finders fees in connection with the entering
into of this Lease Agreement, and each agrees to indemnify the other against,
and to hold harmless the other from, all liabilities arising from any such
claim, including without limitation, the cost of attorney's fees in connection
therewith.
56. SECURITY DEPOSIT.
Tenant shall pay to Landlord upon execution of this Lease two (2) security
deposits, each in the amount of $67,818.00. Both such deposits shall be held by
Landlord and may be intermingled with Landlord's other funds. Landlord shall owe
no interest on either of said deposits, and, Tenant herein waives any right to
claim and/or request the same. Landlord may utilize such deposits to apply
against any default, breach, or non-performance of Tenant of any obligations of
Tenant as set forth in this Lease.
Provided that such deposits have not been used by Landlord and applied towards
any such default, breach or non-performance, then and in such event, one of said
deposits shall be applied towards the Base Rent owing by Tenant to Landlord in
month forty-nine (49) of this Lease, and, similarly, the second of such deposits
shall be applied towards said Base Rent owing in month sixty-one (61) of this
Lease.
57. CONVERSION OF WAREHOUSE.
Tenant shall not make any improvements to the presently existing approximately
18,880 square feet of warehouse space without the prior written consent of
Landlord. This clause shall control above all others in this agreement.
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58. EXECUTION.
This Lease may be signed in counterpart and via facsimile signature.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed as of the day and year first written above.
LANDLORD TENANT
---------------------- DecisionOne
Xxx X. Xxxxxxxx
By:_______________________
Its:______________________
----------------------
Xxxxxx Xxxxxxxx
STATE OF MINNESOTA )
)ss.
COUNTY OF )
The foregoing document was acknowledged before me this ____ day of
_____________, 1997 by Xxx X. Xxxxxxxx and Xxxxxx Xxxxxxxx, husband and wife.
---------------------------
Notary Public
STATE OF PENNSYLVANIA )
)ss.
COUNTY OF )
The foregoing document was acknowledged before me this ____ day of
___________________, 1997 by _____________________ the ____________________ of
DecisionOne, a corporation under the laws of the State of Delaware on behalf of
the corporation.
---------------------------
Notary Public
This Document was drafted by:
Nord, Macklin & Xxxxxxxx, P.A.
R. Xxxxx Xxxx, Esq.
00000 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
38
EXHIBIT "A"
LEGAL DESCRIPTION OF LEASED PREMISES
Lots 1 through 10, inclusive, Block 1, Wexlers Addition, Hennepin County,
Minnesota, together with the following described portions of East 67th Street
and Cedar Avenue South right-of-way, all located in the Northeast Quarter of the
Southeast Quarter, Section 26, Township 28 North, Range 00 Xxxx, Xxxxxx xx
Xxxxxxxx, Xxxxx xx Xxxxxxxxx:
That part of Cedar Avenue South described as follows:
Beginning at the Southeast corner of Xxx 0, Xxxxx 0, Xxxxxx'x
Xxxxxxxx; thence Easterly on the extension of the South line
of said Lot 5 to a point 33 feet West of the East line of
Section 26, Township 28 North, Range 24 West, which point is
referred to herein as "Point A"; thence North on a line
parallel with and 33 feet West of said East line of said
Section 26 to the intersection with the Easterly extension of
the North line of Xxx 0, Xxxxx 0, Xxxxxx'x Addition, which
line is referred to herein as "Line X"; thence West along said
extension of the North line of said Lot 1 to the Northeast
corner of Lot 1; thence South along the East line of Lots 1
through 5 of Block 1, Xxxxxx'x Addition to the point of
beginning, and there terminating; AND
All that part of Cedar Avenue South lying Westerly and Northerly of the
following described lines:
Beginning at "Point A" described above; thence Southerly on
the extension of "Line X" described above to the intersection
with the Easterly extension of the North line of Xxx 0, Xxxxx
0, Xxxxxx'x Xxxxxxxx; thence West along said extension of the
North line of said Lot 1 to the Northeast corner of said Lot
1, and there terminating; AND
That part of Xxxx 00xx Xxxxxx lying between the Southerly prolongation
of the Easterly line of 18th Avenue South and the Southerly
prolongation of the Westerly line of Cedar Avenue South.
Abstract Property.
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EXHIBIT "B"
LANDLORD RESPONSIBLE PUNCHLIST
A. The following items shall be remedied by Landlord at Landlord's expense.
Landlord shall provide Tenant with written confirmation of completion of the
same:
SIDEWALK AREAS:
o Repair west side handicap curb ramp.
o Repair chipping and caulk where sidewalk meets bottom of stairs
(East side entry stairs).
o Repair chipping where railing connects to concrete landing (North
side stairs).
BUILDING EXTERIOR:
o Caulk joint above loading dock. Install new weather stripping at
overhead doors to parking ramp (South side).
o Repair wall area above man door adjacent to lower level parking ramp
overhead door at south side of building.
o Repair loose support bracket of handrail at south side of southwest
corner of parking ramp.
INTERIOR:
o Replace basement level handrail at ramp. It has multiple broken
supports and extensive damage. New handrail should be code compliant.
PLUMBING:
o Install a reduced pressure backflow preventer on the boiler fill line
(due to use of glycol in the heating/cooling system water).
MECHANICAL:
o Replace one boiler module.
o Clean heat pumps and remove ductwork serving the first floor south
side production area. Replace ceiling tiles covered with toner and
cyclone fan in this area.
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B. Landlord shall have no responsibility to remedy the following items. Tenant
shall accept the same in their "as is" condition:
BUILDING EXTERIOR:
o Repair/replace east side handrail (spacing between handrails is
ll feet 0 inches which exceeds the code maximum of 7 feet 4 inches
and height is 32 inches which is lower than the code required height
of 34 inches to 38 inches). If railing is repaired it should then
be painted; if new, handrail should be code compliant.
C. The responsibility for the repair of the following items is in dispute.
Landlord shall have no obligation to repair or replace the same without first
giving its written confirmation of the same:
PARKING LOT:
o Restripe all handicap stalls to show two (2) 8 feet 0 inches wide
space with a 5 feet 0 inches wide access aisle between.
o Patch pavement at south side loading dock near trench drain outside
drive-in overhead door.
o Restripe upper level; fading.
BUILDING EXTERIOR:
o Repair/replace bent railing at east side of building adjacent to
parallel parking area.
ELECTRICAL:
o Test and replace, if necessary, the first floor transformer; extreme
vibrating and humming were identified as serious problems.
INTERIOR:
o Repair or replace all windowsills where plastic laminate is
delaminating. Landlord's liability for such expense shall in no event
exceed $2,500.00. Any expenses in excess of $2,500.00 shall be paid
by Tenant. Landlord and Tenant agree to use their best efforts to
attempt to match the existing color of such windowsills.
MECHANICAL:
o Install balancing valves on the water supply to each heat pump and
balance the system.
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