EXHIBIT 10.10
LEASE
This agreement is made and entered into as of July 30, 1996, by and
between David H. Arnold and Muriel M. Arnold, husband and wife, and Daniel M.
Rukavina and Patricia A. Rukavina, husband and wife, parties of the first part,
Lessors, and EMD Associates, Inc., a Minnesota corporation, party of the second
part, Lessee;
WITNESSETH:
That the said parties of the first part, in consideration of the tents and
covenants hereinafter mentioned, do hereby demise, lease and let unto the said
party of the second part, and the said party of the second part does hereby hire
and take from the said parties of the first part the premises situated at 4155
Theurer Boulevard, Goodview, Minnesota, legally described as Lots Four (4) and
Five (5), Block One (1), Goodview Industrial Park.
TO HAVE AND TO HOLD the above rented premises unto the said Lessee, its
successors and assigns, just as they are, without any liability or obligation on
the part of said Lessors of making any alterations, improvements or repairs of
any kind on or about said premises, except as expressly provided herein, for and
during the full term of ten (10) years from and after September 1, 1996, and
thereafter from year to year until terminated by either party by providing the
other party with written notice of such party's election to terminate the lease
not less than 180 days prior to the expiration of the term (as the term may be
extended year to year as provided herein), for the following purposes, to-wit:
Offices and manufacturing or other similar lawful uses.
And the said Lessee agrees to and with the said Lessors to pay as rent for
the above mentioned premises the sum of Seventeen Thousand One Hundred Fifty and
no/100 ($17,150.00) Dollars per month during the full term of this lease.
Lessee shall be afforded reasonable access to the leased premises before
September 1, 1996, to make improvements and prepare the premises for its use,
provided Lessee shall not interfere with occupancy and use of the leased
premises by Lessors and their current tenant. If Lessors and their current
tenant vacate part of the leased premises before the commencement date of this
lease specified above, and Lessee elects to occupy and use such vacated part,
this lease shall commence with the date such use begins, and the rent specified
herein shall be equitably prorated for the period before the specified
commencement date.
The Lessee, for itself, its successors and assigns, hereby covenants with
the Lessors, their heirs, executors, administrators, and assigns:
(1) That it will promptly pay all gas, oil, electric, light, sewage, water
rates or charges which may become payable during the continuance of this lease
for gas, oil, electric, light and water used on said premises.
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(2) That it will keep all and singular the said building and premises,
including the plumbing and heating plant and all driveways, parking areas and
other appurtenances, in such repair as the same are at the commencement of the
said term or may be put in during the continuance thereof, reasonable wear and
tear and damage by fire or extended coverage perils only excepted, and will
promptly replace all glass thereof broken during the said term by other of the
same quality and size.
(3) That it will not injure, overload or deface or suffer to be injured,
overloaded or defaced the premises or any part thereof.
(4) That it will save harmless and indemnify the Lessors from and against
all loss, liability or expense that may be incurred by reason of any accident
with the machinery, pipes or from any damage or neglect arising from or in any
way growing out of the misuse or abuse of the city water or from the bursting of
any pipes or from any neglect in not removing snow and ice from the premises; or
from any accident or other occurrence on or about said premises.
(5) That it will not make or suffer any unlawful, improper or offensive
use of the premises or any use or occupancy thereof contrary to any law of the
State or any ordinance of the City now or hereafter made, or which shall be
injurious to any person or property or which shall be liable to endanger or
affect any insurance on the said building or to increase the premium thereof.
(6) That it will not make any alterations or additions in or to the
premises without the written consent of the Lessors; nor suffer any holes to be
made or drilled in the outside stone or brick work; nor to suffer any signs to
be placed upon the building except such as the Lessors shall in writing approve.
(7) Lessee shall not assign, underlet or part with the possession of the
whole or any part of the demised premises without first obtaining the written
consent of the Lessors.
(8) Lessors at all reasonable times may enter to view the premises and to
make repairs which Lessors may see fit to make, or to show the premises to
persons who may wish to buy or lease, and that during three (3) months next
preceding the expiration of the term Lessors will be permitted to place and keep
next to the sidewalk in the front of said premises a notice 24" x 24" that the
premises are for rent or sale.
(9) That at the expiration of said term Lessee will peaceably yield up to
Lessors or those having their estates therein the premises and all erections or
additions made upon the same in good repair in all respects, reasonable use and
wear and damage by fire and other unavoidable casualty excepted, as the same now
are or may be put in by Lessors.
(10) That all property of any kind that may be on the premises during the
continuance of this lease shall be at the sole risk of the Lessee, and that the
Lessors shall not be liable to the Lessee
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or any other persons for any injury, loss or damage to property or to any person
on the premises; and neither Lessee nor Lessors will make any claim against the
other for losses arising by reason of fire or extended coverage perils for which
full recovery has been made from any other person, corporation, or association.
(11) Lessee covenants and agrees to pay for the costs of procuring and
maintaining and keeping in full force during the term hereof the following
insurance which shall be procured and renewed from time to time by Lessee at
Lessee's cost and expense:
(a) Insurance upon all of the buildings and improvements located
on the demised premises against loss thereof, or damage
thereto, by fire and the risks included in what is commonly
known as an "all risk policy", for the replacement cost from
time to time of said buildings and improvements; and any loss
insured against shall be payable to Lessors and Lessee as
their respective interests may appear.
(b) Comprehensive general liability insurance insuring Lessors and
Lessee against liability for injury to and destruction of
property and for injury to or loss of life of persons, with a
combined single limit of at least One Million Dollars per
accident or occurrence.
(c) The policies or certificates evidencing the aforesaid
insurance shall be delivered to the Lessors and in turn may be
delivered by the Lessors to their mortgage.
(d) All policies shall provide that the same shall not be canceled
or altered except on ten (10) days' prior written notice to
Lessors and to the mortgagee.
(12) Lessee covenants and agrees that it will not use or permit any person
to use said demised premises or any part thereof for any use or purpose in
violation of the laws of the United States of America, the State of Minnesota or
ordinances or other regulations of any municipality in which said premises are
situated, or of any other lawful authorities, or use or permit, or suffer any
person or use of said premises or any buildings thereon for the manufacture or
sale of intoxicating liquor of any kind, character or description whatsoever;
that during said term it will keep said demised premises and every part thereof
and all buildings at any time situated thereon in a clean and wholesome
condition, and generally that it will in all respects and at all times fully
comply with all lawful health, police and fire regulations, and also that it
will keep the improvements at any time situated on the demised premises and all
sidewalks and areas adjacent thereto, as well as the area thereof, safe, secure
and comfortable to the lawful and valid requirements of any municipality in
which said premises may be situated, and of all other public authorities.
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(13) That no assent, express or implied by the Lessors, to any breach of
any of the Lessee's covenants shall be deemed to be a waiver of any succeeding
breach of the same covenant.
Provided always that these presents are upon this condition that if the
Lessee or its representatives, successors or assigns, shall neglect or fail to
perform and observe any covenant herein contained which on the Lessee's part is
to be performed, or if their leasehold estate shall be taken in execution, or if
the Lessee shall be declared bankrupt or insolvent according to law or shall
make an assignment for the benefit of their creditors, then and in any case the
Lessors or those having the estate of the Lessors in the premises, lawfully may
immediately or at any time thereafter and without notice or demand, enter into
and upon the demised premises or any part thereof and repossess the same as if
of their former estate and expel the Lessee and those claiming under it and
remove Lessee's effect forcibly if necessary without being taken or deemed to be
guilty of any manner of trespass. And thereupon this demise shall absolutely
determine but without prejudice to any remedies which might otherwise be used by
the Lessors for arrears of rent or any breach of the Lessee's covenants herein
contained.
Provided also that in case the demised premises or any part thereof shall
at any time during said term be destroyed or damaged by fire or other
unavoidable casualty so as to be unfit for occupancy and use and so the premises
cannot be rebuilt or restored by the Lessors within one (1) year thereafter,
then and in that case this demise shall terminate, but if the premises can be
rebuilt or restored within one (1) year, and if proceeds of insurance payable
for such casualty are sufficient therefor, the Lessors will at their own expense
and with due diligence so rebuild or restore the premises and Lessee shall
continue to pay the rents hereunder without abatement.
Provided also that in case the whole or any part of the premises hereby
demised shall be taken by the City or State or other public authority for any
use, then this demise shall terminate from the time when such possession of the
whole or any part so taken shall be required for such public use and the rents
properly apportioned shall be paid up to that time; and such taking shall not be
deemed a breach of the Lessors' covenant for quiet enjoyment hereinbefore
contained.
(14) Lessee covenants and agrees to pay all taxes due and payable and all
assessments hereafter levied during the term or extension thereof of this lease.
(15) Each party hereto hereby waives all claims for recovery from the
other party for any loss or damage to any of its property insured under valid
and collectible insurance policies to the extent of any recovery collectible
under such insurance, subject to the limitation that this waiver shall apply
only when the fire and extended coverage policies of both parties contain a
clause to the effect this waiver shall not affect said policies or the right of
both parties to recover thereunder. Both parties agree that such insurance
policies will include such clause as long as the same is includable without
extra cost.
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This lease shall be subject to and subordinate to the lien of any mortgage
or mortgages or deed or deeds of trust which at any time may be placed upon the
fee title to the premises above described; provided, however, that the rights of
the Lessee, its successors and assigns hereunder shall not be cut off or
affected by foreclosure of any such mortgage or mortgages or deed or deeds of
trust so long as the Lessee, its successors and assigns, shall not be in default
hereunder.
Lessor hereby grants to Lessee an option to purchase the Leased Premises
for a stipulated and agreed upon sum of $1,389,000. The term of said purchase
option shall commence on the date hereof and shall expire on July 31, 1999. In
the event Lessee desires to exercise its option to purchase the Leased Premises,
Lessee shall notify Lessor in writing of Lessee's exercise of such purchase
option on or before January 31, 1999; otherwise, the purchase option shall be
null and void and of no further force or effect. In the event Lessee timely
exercises its option to purchase the Leased Premises, Lessor and Lessee agree to
cooperate with each other in good faith to close the purchase of the Leased
Premises within thirty (30) days following the date that Lessee notifies Lessor
in writing that Lessee has exercised its purchase option. The purchase option
shall cover the entire Leased Premises, including all improvements, structures,
buildings and fixtures, located therein or thereon, and all of Lessor's right,
title and interest in and to all easements and other appurtenances thereto, and
the same shall be conveyed by Lessor to Lessee by warranty deed and bills of
sale and assignments, with covenants of general warranty, free and clear of all
liens and encumbrances.
Concurrently with the execution of this agreement, Lessor and Lessee agree
to execute and file of record in the appropriate public records of Winona
County, Minnesota, a Memorandum of Option specifying the leased premises and the
term of the option described in the preceding paragraph, in the form attached
hereto as "Exhibit A".
IN WITNESS WHEREOF, the parties hereto have executed this agreement,
effective the day and year first above written.
/S/ DAVID H. ARNOLD
David H. Arnold
/S/ MURIEL M. ARNOLD
Muriel M. Arnold
/S/ DANIEL M. RUKAVINA
Daniel M. Rukavina
/S/ PATRICIA A. RUKAVINA
Patricia A. Rukavina
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EMD ASSOCIATES, INC.
By: /S/ DAVID FRADIN
David Fradin, President
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AMENDMENT TO LEASE
This Amendment to Lease (this "Amendment") is made and entered into on
this 30th day of July, 1996, by and between David H. Arnold and Muriel M.
Arnold, husband and wife, and Daniel M. Rukavina and Patricia A. Rukavina,
husband and wife (collectively, "Lessor"), and EMD Associates, Inc., a Minnesota
corporation ("Lessee").
WHEREAS, Lessor and Lessee entered into a Lease Agreement dated July 30,
1996 (the "Lease"), whereby Lessor demised and let unto Lessee the premises
located at 4155 Theurer Boulevard, Goodview Minnesota, and legally described in
said Lease as Lots Four (4) and (5), Block One (1), record plat of Goodview
Industrial Park, for a term commencing September 1, 1996, and continuing until
August 31, 2006, and thereafter from year to year until terminated as provided
therein, for a net rent of $17,150 per month, subject to adjustment as provided
therein; and
WHEREAS, the Lease remains in full force and effect; and
WHEREAS, the parties have agreed that the legal description of the
premises was incorrectly described, and the parties desire to modify and amend
the Lease to correct the legal description of the premises covered by the Lease,
and to otherwise modify the Lease in other respects, all as more particularly
described herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of all of which is hereby acknowledged and confessed, the parties
hereto hereby agree as follows:
(16) The legal description of the premises described in the Lease was
incorrect and the parties hereby agree that the premises described in the Lease
shall be modified to be those certain premises located at 4155 Theurer
Boulevard, Goodview, Winona County, Minnesota, and legally described on Exhibit
A attached hereto and incorporated herein for all purposes.
(17) In the event Lessor is unable to deliver the premises to Lessee free
and clear of all other tenancies, and with all of the prior tenant's property
removed therefrom, on or before September 1, 1996, then the term of the Lease
(and Lessee's obligations thereunder, including, without limitation, the
obligation to pay rent) shall not commence until such premises are delivered to
Lessee in the aforementioned condition. Notwithstanding the foregoing, however,
in the event Lessor is able to deliver the entire manufacturing portion of the
premises to Lessee prior to delivering the office portion of the premises to
Lessee, then Lessor and Lessee agree that the Lease shall commence (and Lessee's
obligations under the Lease, including the payment of rent) only with respect to
the manufacturing portion of the premises on the date that the entire
manufacturing portion of the premises is delivered to Lessee in the
aforementioned conditioned; provided, however, until the remainder of the
premises is delivered to Lessee, all rent and other charges payable under the
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Lease shall be prorated such that Lessee shall only be obligated to pay a
percentage thereof based upon the ratio that the square footage of the
manufacturing portion of the premises bears to the total square footage of the
manufacturing portion and the office portion of the premises. Notwithstanding
any of the foregoing or anything in the Lease to the contrary, Lessor covenants
and agrees to deliver the entirety of the premises to Lessee in the
aforementioned condition not later than September 30, 1996.
(18) Except as amended herein, the said Lease shall be and remain in full
force and effect.
IN WITNESS WHEREOF, the paries hereto have executed this Amendment,
effective July 30, 1996.
/S/ DAVID H. ARNOLD
David H. Arnold
/S/ MURIEL M. ARNOLD
Muriel M. Arnold
/S/ DANIEL M. RUKAVINA
Daniel M. Rukavina
/S/ PATRICIA A. RUKAVINA
Patricia A. Rukavina
EMD ASSOCIATES, INC.
By:/S/ DAVID W. FRADIN
Name: DAVID W. FRADIN
Title: PRESIDENT
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