Exhibit 10.3
LEASE
ARTICLE 1. LEASE TERMS
1.1 LANDLORD AND TENANT. This lease ("Lease") is entered into this 28th day of
April, 1995 by and between CSM INVESTORS, INC., a Minnesota corporation,
("Landlord") and DYNAMARK, INC., a Minnesota corporation, ("Tenant").
1.2 PREMISES. Landlord hereby rents, leases, lets and demises to Tenant the
premises and building ("Premises" and "Building") illustrated on the site plan
attached hereto as EXHIBIT A. The Premises and Building are located on the real
property legally described on attached EXHIBIT B. The parties acknowledge that
the Tenant is leasing the entire Building, and that the Building and Premises
consist of approximately 33,000 square feet.
1.3 IMPROVEMENTS. Landlord shall construct the Building, improvements to the
Premises, and site improvements pursuant to plans and specifications agreed to
by Landlord and Tenant pursuant to Section 6.1 of this Lease. Architectural
plans and specifications for the Building and the Premises, and a description of
the improvements to be constructed therein, are attached hereto as EXHIBITS C
and D.
1.4 EXCESS LAND. Landlord and Tenant acknowledge and agree that Landlord is
acquiring more property than is necessary for the development and construction
of the Building, and that development and construction of a second building on
the easterly portion of the property, and site improvements related solely
thereto, will be subject to the terms and conditions set forth in Section 14.13
of this Lease.
1.5 LEASE TERM. The term of this Lease shall commence on September 1, 1995
("Commencement Date") and shall terminate one hundred twenty (120) months
thereafter on August 31, 2005, unless sooner terminated as hereinafter provided.
In the event that Tenant does not vacate the Premises upon the expiration or
termination of this Lease, Tenant shall be a tenant at will for the holdover
period and all of the terms and provisions of this Lease shall be applicable
during that period, except that Tenant shall pay Landlord as base rental for the
period of such holdover an amount equal to one and one-quarter (1.25) times the
base rent which would have been payable by Tenant had the holdover period been a
part of the original term of this Lease, together with all additional rent as
provided in this Lease. During any such holdover period, Tenant agrees to vacate
and deliver the Premises to Landlord upon Tenant's receipt of notice from
Landlord to vacate. The rental payable during the holdover period shall be
payable to Landlord on demand. No holding over by Tenant, whether with or
without the consent of Landlord, shall operate to extend the term of this Lease.
1.6 BASE RENT.
A. Initial Base Rent. Months Monthly Base Rent Per Sq. Ft.
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Initial Term: 1-60 $23,375.00 $8.50
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61-120 $24,750.00 $9.00
Option Terms: 121-180 $27,500.00 $10.00
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181-240 $29,562.50 $10.75
B. Adjustment of Base Rent. The initial base rent set forth above has been
computed at the per square foot rates set forth above, assuming that the
Premises consist of 33,000 square feet. The actual number of square feet in
the Premises shall be determined by Landlord from "As Built" measurements
of the Building and Premises, and shall be accomplished by measuring from
the exterior face of the exterior walls of the Building. Once such
measurements are accomplished, Landlord and Tenant shall execute an
addendum to lease to confirm the actual square footage of the Premises and
to establish the monthly base rent for the Premises by multiplying the
actual square footage of the Premises times the per square foot rent set
forth above.
1.7 PERMITTED USE: General office.
1.8 PRO-RATA SHARE: One hundred and no/100 percent (100%) subject to adjustment
as provided in Section 2.2 hereof.
1.9 ADDRESSES. LANDLORD'S ADDRESS: TENANT'S ADDRESS:
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CSM INVESTORS, INC. DYNAMARK, INC.
2561 TERRITORIAL ROAD 4290 FERNWOOD STREET
ST. PAUL, MN 55114-1500 ST. PAUL, MN 55112
(612) 646-1717 ATTN: JIM SCHOELLER
SENIOR VICE PRESIDENT
ARTICLE 2. RENT, OPERATING EXPENSES AND SECURITY DEPOSIT
2.1 BASE RENT. Tenant agrees to pay monthly as base rent during the term of this
Lease the sum of money set forth in Section 1.6 of this Lease, which amount
shall be payable to Landlord at the address shown above. One monthly installment
shall be due and payable on or before the first day of each calendar month
succeeding the Commencement Date during the term of this Lease; provided, if the
Commencement Date should be a date other than the first day of a calendar month,
the monthly rental set forth above shall be prorated to the end of that calendar
month, and all succeeding installments of rent shall be payable on or before the
first day of each succeeding calendar month during the term of this Lease.
Tenant shall pay, as additional rent, all other sums due under this Lease.
Notwithstanding anything in this Lease to the contrary, if Landlord, for any
reason whatsoever (other than Tenant's default), cannot deliver possession of
the Premises to the Tenant on the Commencement Date, substantially complete and
ready for Tenant's occupancy, this Lease shall not be void or voidable, nor
shall Landlord be liable for any loss or damage resulting therefrom, nor shall
the expiration of the term be extended, but all rent and additional rent shall
be abated until Landlord delivers possession; provided that if the Premises are
not substantially complete and ready for Tenant's occupancy by the later of: (i)
September 1, 1995, or (ii) the date one hundred twenty (120) days after Landlord
secures a building permit from the City of Arden Hills, which Landlord shall
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diligently pursue, (except by reason of force majeure or Tenant caused delays,
including failure to approve plans and specifications for the Premises by April
12, 1995, in which case such date shall be extended by the number of days equal
to the delays caused by Tenant), Landlord shall pay to Tenant, as a credit
against the first installments of rent and additional rent payable hereunder, an
amount equal to $500.00 for each day thereafter until the Premises are
substantially complete and ready for Tenant's occupancy; and provided that if
the Premises are not substantially complete and ready for Tenant's occupancy on
or before October 1, 1995 (except by reason of force majeure or Tenant caused
delays, in which case such date shall be extended by the number of days equal to
the delays caused by Tenant), Tenant shall have the option, in its absolute and
unfettered discretion, to terminate this Lease by written notice to Landlord
given at any time prior to substantial completion of the Premises and Tenant
taking occupancy of the Premises. In the event Landlord, despite due diligence,
is unable to secure a building permit by May 15, 1995, Landlord shall so notify
Tenant, and either Landlord or Tenant may thereafter terminate this Lease by
written notice to the other, given on or before May 25, 1995.
2.2 OPERATING EXPENSES. Tenant shall also pay as additional rent Tenant's pro
rata share of the operating expenses of Landlord for the Building. Landlord may
invoice Tenant monthly for Tenant's pro rata share of the estimated operating
expenses for each calendar year, which amount shall be adjusted from
time-to-time by Landlord based upon reasonably anticipated operating expense.
Within six (6) months following the close of each calendar year, Landlord shall
provide Tenant an accounting showing in reasonable detail the computations of
additional rent due under this Section. In the event the accounting shows that
the total of the monthly payments made by Tenant exceeds the amount of
additional rent due by Tenant under this Section, the accounting shall be
accompanied by evidence of a credit to Tenant's account. In any event the
accounting shows that the total of the monthly payments made by Tenant is less
than the amount of additional rent due by Tenant under this Section, the
accounting shall be accompanied by an invoice for the additional rent. If this
Lease shall terminate on a day other than the last day of a calendar year, the
amount of any additional rent payable by Tenant applicable to the year in which
the termination shall occur shall be prorated on the ratio that the number of
days from the commencement of the calendar year to and including such
termination date bears to 365. Tenant agrees to pay any additional rent due
under this Section within ten (10) days following receipt of the invoice or
accounting showing additional rent due. Following development and construction
of a second building on the property, as described in Subsection 1.4 above,
Tenant's pro rata share set forth in Section 1.9 shall, subject to reasonable
adjustment by Landlord, be equal to a percentage based upon a fraction, the
numerator of which is the total area of the Premises as set forth in Article 1
and the denominator of which shall be the net rentable area of both the Tenant's
Building and the second building, as the same may change from time to time.
2.3 DEFINITlON OF OPERATING EXPENSES. The term "operating expenses" includes all
expenses incurred by Landlord with respect to the maintenance and operation of
the Building, including, but not limited to, the following: maintenance, repair
and replacement costs; electricity, fuel, water, sewer, gas and other common
Building utility charges; equipment used for maintenance and operation of the
Building; operational expenses; exterior window washing and janitorial services;
trash and snow removal; landscaping and pest control; management fees, wages and
benefits payable to employees of Landlord whose duties are
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directly connected with the operation and maintenance of the Building; all
services, supplies, repairs, replacements or other expenses for maintaining and
operating the Building or project including parking and common areas;
improvements made to the Building which are required under any governmental law
or regulation that was not applicable to the Building at the time it was
constructed; installation of any device or other equipment which improves the
operating efficiency of any system within the Premises and there by reduces
operating expense; all other expense which would generally be regarded as
operating, repair, replacement and maintenance expenses; all real property taxes
and installments of special assessments, including dues and assessments by means
of deed restrictions and/or owners' associations which accrue against the
Building during the term of this Lease and legal fees incurred in connection
with actions to reduce the same, and all insurance premiums Landlord is required
to pay or deems necessary to pay, including fire and extended coverage, and rent
loss and public liability insurance, with respect to the Building.
Notwithstanding the foregoing, operating expenses shall not include any
expenditure which must be capitalized for federal income tax purposes, except
that operating expenses shall include the amortization of any such capital
expenditures (except capital expenditures for improvements made to the Building
without the consent of Tenant, or for restoration or repair of damage to the
Building caused by casualty) on a straight-line basis over the reasonably
estimated useful life, at an amortization rate equal to the rate of Treasury
Securities of comparable term, plus two percent (2%).
Further, operating expenses shall not include:
A. Taxes payable by reason of any "minimum assessment": or similar
agreement to the extent exceeding the taxes which otherwise
would be payable with respect to the property of which the
Premises are a part; or
B. Special assessments levied or pending on the date of this Lease
or levied for public improvements constructed in connection with
the initial construction of the Building or any additional
building; or
C. Expenses of contesting taxes or the assessed value of the
property of which the Premises are a part in excess of the
savings achieved in such contest; or
D. Operating expenses including taxes and installments of special
assessments, insurance premiums and maintenance expenses
attributable to the unimproved portion of the property of which
the Premises are a part after the earlier of: (i) the completion
of construction of a second building thereon by Landlord and
reduction of Tenant's proportionate share pursuant to the last
sentence of Section 2.2 above (which shall be determined by
reference to assessors worksheets, insurance carrier rate
calculations and other available data); or (ii) the termination
or expiration of the Holding Period as described in Section
14.13 hereof;
E. Management fees exceeding fifteen percent (15%) of other
operating expenses except taxes and special assessments; or
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F. Expenses incurred by Landlord in satisfying its obligations
under Section 14.15 hereof.
2.4 INCREASE IN INSURANCE PREMIUMS. If an increase in any insurance premiums
paid by Landlord for the Building is caused by Tenant's use of the Premises or
if Tenant vacates the Premises and causes an increase in such premiums, then
Tenant shall pay as additional rent the amount of such increase to Landlord.
ARTICLE 3. OCCUPANCY AND USE
3.1 USE. Tenant warrants and represents to Landlord that the Premises shall be
used and occupied only for the purpose as set forth in Section 1.7. Tenant shall
occupy the Premises, conduct its business and control its agents, employees,
invitees and visitors in such a manner as is lawful, reputable and will not
create a nuisance. Tenant shall not permit any operation which emits any odor or
matter which intrudes into other portions of the Building or otherwise interfere
with, annoy or disturb any other lessee in its normal business operations or
Landlord in its management of the Building. Tenant shall not permit any waste on
the Premises to be used in any way which would, in the opinion of Landlord, be
extra hazardous on account of fire or which would, in any way, increase or
render void the fire insurance on the Building.
3.2 SIGNS. No sign of any type or description shall be erected, placed or
painted in or about the Premises or Building which are visible from the exterior
of the Premises, except those signs submitted to Landlord in writing, and which
signs are in conformance with Landlord's sign criteria, if any, established for
the Building.
3.3 COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Tenant, at Tenant's sole cost
and expense, shall comply with all laws, ordinances, orders, rules and
regulations of state, federal, municipal or other agencies or bodies having
jurisdiction over the use, condition or occupancy of the Premises, provided that
Tenant shall not be obligated to make any material capital improvements required
by such laws, ordinances, orders, rules and regulations, (nor shall Landlord
have such obligation). For purposes of this clause, a "material capital
improvement" shall mean any capital improvement or series of capital
improvements within any calendar year costing in excess of $1,500.00. Tenant
will comply with the reasonable rules and regulations of the Building adopted by
Landlord. Landlord shall have the right at all times to change and amend the
rules and regulations in any reasonable manner as may be deemed advisable for
the safety, care, cleanliness, preservation of good order and operation or use
of the Building or the Premises. All rules and regulations of the Building will
be sent by Landlord to Tenant in writing and shall thereafter be carried out and
observed by Tenant.
3.4 WARRANTY OF POSSESSION. Landlord warrants that it has the right and
authority to execute this Lease, and Tenant, upon payment of the required rents
and subject to the terms, conditions, covenants and agreements contained in this
Lease, shall have possession of the Premises during the full term of this Lease
as well as any extension or renewal thereof. Landlord shall not be responsible
for the acts or omissions of any other lessee or third party that may interfere
with Tenant's use and enjoyment of the Premises.
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3.5 RIGHT OF ACCESS. Landlord or its authorized agents shall, at any and all
reasonable times and upon reasonable notice, have the right to enter the
Premises to inspect the same, to show the Premises to prospective purchasers,
lessees, mortgagees, insurers or other interested parties, and to alter, improve
or repair the Premises or any other portion of the Building. Tenant hereby
waives any claim for damages for injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or use of the Premises, and any other
loss occasioned thereby, except as may result from the negligent or willful
misconduct of Landlord. Tenant shall not change Landlord's lock system or in any
other manner prohibit Landlord from entering the Premises. Landlord shall have
the right to use any and all means which Landlord may deem proper to open any
door in an emergency without liability therefor. Tenant shall permit Landlord to
erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and
wires in, to and through the Premises as often and to the extent that Landlord
may now or hereafter deem to be necessary or appropriate for the proper use,
operation and maintenance of the Building; provided that Landlord does not
thereby materially interfere with the use and enjoyment of the Premises by
Tenant for general office purposes.
ARTICLE 4. UTILITIES AND ACTS OF OTHERS
4.1 BUILDING SERVICES. Tenant shall pay when due, all charges for utilities
furnished to or for the use or benefit of Tenant or the Premises. Tenant shall
have no claim for rebate of rent on account of any interruption in service.
4.2 THEFT OR BURGLARY. Landlord shall not be liable to Tenant for losses to
Tenant's property or personal injury caused by criminal acts or entry by
unauthorized persons into the Premises or the Building.
ARTICLE 5. REPAIRS AND MAINTENANCE
5.1. LANDLORD REPAIRS. Landlord shall not be required to make any improvements,
replacements or repairs of any kind or character to the Premises or the Building
during the term of this Lease except as are set forth in this Section. Landlord
shall maintain only the roof, foundation, parking and common areas, the
structural soundness of the exterior walls, doors, corridors, and other
structures serving the Premises in good order and repair, provided, that
Landlord's cost of maintaining, replacing and repairing the items set forth in
this Section are operating expenses subject to the additional rent provisions in
Section 2.2 and 2.3. Landlord shall correct any deficiencies in maintenance
within thirty (30) days after written notice from Tenant; provided that for work
that cannot be completed within thirty (30) days, Landlord shall not be in
default hereunder if Landlord commences the work within such thirty (30) day
period and diligently proceeds to complete such work; and provided that in the
case of an emergency, Landlord shall take action to correct deficiencies as
promptly as practicable. Landlord shall not be liable to Tenant, except as
expressly provided in this Lease, for any damage or inconvenience, and Tenant
shall not be entitled to any abatement or reduction of rent by reason of any
repairs, alterations or additions made; by Landlord under this Lease; provided
that Landlord does not thereby materially interfere with the use and enjoyment
of the Premises by Tenant for general office purposes.
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5.2 TENANT REPAIRS. Tenant shall, at all times throughout the term of this
Lease, including renewals and extensions, and at its sole expense, keep and
maintain the Premises in a clean, safe, sanitary and first class condition and
in compliance with all applicable laws, codes, ordinances, rules and
regulations, provided that Tenant shall not be obligated to make any material
capital improvements required by such laws, ordinances, orders, rules and
regulations, (nor shall Landlord have such obligation). For purposes of this
clause, a "material capital improvement" shall mean any capital improvement or
series of capital improvements within any calendar year, costing in excess of
$1,500.00. Tenant's obligations hereunder shall include, but not be limited to,
the maintenance, repair and replacement, if necessary, of all heating,
ventilation, air conditioning, lighting and plumbing fixtures and equipment,
fixtures, motors and machinery, all interior walls, partitions, doors and
windows, including the regular painting thereof, all exterior entrances,
windows, doors and docks and the replacement of all broken glass. When used in
this provision, the term "repairs" shall include replacements or renewals when
necessary, and aft such repairs made by the Tenant shall be equal in quality and
class to the original work. Notwithstanding the foregoing, Tenant shall not be
responsible for major non-recurring repairs of or replacements to the HVAC
system, except where caused by Tenant's failure to properly utilize, maintain
and secure said system; Tenant, however, shall pay the amortization (utilizing
the amortization method for capital expenditures described in Section 2.3) of
the costs of such major repairs or replacements performed after the five (5)
year anniversary of the Commencement Date. For purposes of this paragraph,
"major repairs or replacement of the HVAC system" shall mean expenditures for
major repairs to or replacement of compressors or exchangers. The Tenant shall
keep and maintain all portions of the Premises and the sidewalk and areas
adjoining the same in a clean and orderly condition, free of accumulation of
dirt, rubbish, snow and ice. If Tenant fails, refuses or neglects to maintain or
repair the Premises as required in this Lease after notice shall have been given
Tenant, in accordance with this Lease, Landlord may make such repairs without
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property or to Tenant's business by reason
thereof, and upon completion thereof, Tenant shall pay to Landlord all costs
plus fifteen percent (15%) for overhead incurred by Landlord in making such
repairs upon presentation to Tenant of bill therefor.
5.3 TENANT DAMAGES. Tenant shall not allow any damage to be committed on any
portion of the Premises or Building or common areas, and at the termination of
this lease, by lapse of time or otherwise, Tenant shall deliver the Premises to
Landlord in as good condition as existed at the Commencement Date of this Lease,
ordinary wear and tear and damage by casualty excepted. The cost and expense of
repairs necessary to restore the condition of the Premises shall be borne by
Tenant.
ARTICLE 6. ALTERATIONS AND IMPROVEMENTS
6.1 LANDLORD IMPROVEMENTS. Landlord will complete construction of the
improvements to the Premises in accordance with the architectural plans and
specifications attached hereto as EXHIBITS C and D. Any changes or modifications
to the said plans and specifications shall be accomplished by written change
order executed by both Landlord and Tenant. In the event the net cost of all
approved change orders (i.e., change orders which create savings will be applied
against change orders which increase costs) exceeds $10,000.00, the Tenant
shall: i) reimburse Landlord in equal monthly installments on the first day of
each
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month during the initial five (5) year term in an amount necessary to fully
amortize such excess cost together with interest at a rate of nine and one-half
percent (9.5%); or ii) within ten (10) days after receipt of Landlord's invoice,
reimburse Landlord for such excess cost. For the purposes of this provision,
cost shall mean the sum Landlord is actually required to pay its contractor for
any particular change order.
6.2 TENANT IMPROVEMENTS. Tenant shall not make or allow to be made any
alterations or physical additions in or to the Premises without first obtaining
the written consent of Landlord, which consent may not be unreasonably withheld.
Any alterations, physical additions or improvements to the Premises made by
Tenant shall at once become the property of Landlord and shall be surrendered to
Landlord upon the termination of this Lease; provided, however, Landlord, as a
condition to its consent to any proposed alteration or addition, may require
Tenant to remove any physical additions and/or repair any alterations in order
to restore the Premises to the conditions existing at the time Tenant took
possession, all costs of removal and/or alterations to be borne by Tenant. This
clause shall not apply to moveable equipment or furniture owned by Tenant, which
Tenant shall have the right to mortgage, and which may be removed by Tenant at
any time and from time to time. Landlord agrees to cooperate with Tenant in
connection with any financing Tenant elects to place on its equipment and
personal property, including execution of such certificates and documents as
Tenant's lender may reasonably request.
ARTICLE 7. CASUALTY AN INSURANCE
7.1 SUBSTANTIAL DESTRUCTION. If all or a substantial portion of the Premises or
the Building should be totally destroyed by fire or other casualty, or if the
Premises or the Building should be damaged so that rebuilding cannot reasonably
be completed within one hundred fifty (150) working days after the date of
written notification by Tenant to Landlord of the destruction, or if insurance
proceeds are not made available to Landlord, or are inadequate, for restoration,
this Lease shall terminate at the option of Landlord or Tenant by written notice
within sixty (60) days following the occurrence, and the rent shall be abated
for the unexpired portion of the Lease effective as of the date of the
occurrence.
7.2 PARTIAL DESTRUCTION. If the Premises should be partially damaged by fire or
other casualty, and rebuilding or repairs can reasonably be completed within one
hundred fifty (150) working days from the date of written notification by Tenant
to Landlord of the destruction, and insurance proceeds are adequate and
available to Landlord for restoration, this Lease shall not terminate, and
Landlord shall at its sole risk and expense proceed with reasonable diligence to
rebuild or repair the Building or other improvements to substantially the same
condition in which they existed prior to the damage. If the Premises are to be
rebuilt or repaired and are untenantable in whole or in part following the
damage, the rent payable under this Lease during the period for which the
Premises are untenantable shall be adjusted to such an extent as may be fair and
reasonable under the circumstances. Tenant shall not be obligated to pay rent
for any portion of the Premises which it does not actually occupy during
restoration, if such portion is not suitable for Tenant's business operations as
reasonably determined by Tenant. In the event that Landlord fails to complete
the necessary repairs or rebuilding within one hundred fifty (150) working days
from the date of written notification by Tenant to Landlord of the destruction,
Tenant may at its option terminate this Lease by
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delivering written notice of termination to Landlord, whereupon all rights and
obligations under this Lease shall cease to exist.
7.3 PROPERTY INSURANCE. Landlord shall not be obligated in any way or manner to
insure any personal property (including, but not limited to, any furniture,
machinery, goods or supplies) of Tenant upon or within the Premises, any
fixtures installed or paid for by Tenant upon or within the Premises, or any
improvements which Tenant may construct on the Premises. Tenant shall maintain
property insurance on its personal property and shall also maintain plate glass
insurance. Tenant shall have no right in or claim to the proceeds of any policy
of insurance maintained by Landlord even if the cost of such insurance is borne
by Tenant as set forth in Article 2.
7.4 WAIVER OF SUBROGATION. Anything in this Lease to the contrary withstanding,
Landlord and Tenant hereby waive and release each other of and from any and all
right of recovery, claim, action or cause of action, against each other, their
agents, officers and employees, for any loss or damage that may occur to the
Premises, the improvements of the Building or personal property within the
Building, by reason of fire, other casualty insurable under an "all risk
insurance policy", or the elements, regardless of cause or origin, including
negligence of Landlord or Tenant and their agents, officers and employees.
Landlord and Tenant agree immediately to give their respective insurance
companies which have issued policies of insurance covering all risk of direct
physical loss, written notice of the terms of the mutual waivers contained in
this Section.
7.5 HOLD HARMLESS. Landlord shall not be liable to Tenant's employees, agents,
invitees, licensees or visitors, or to any other person, for an injury to person
or damage to property on or about the Premises caused by any act or omission of
Tenant, its agents, servants or employees, or of any other person entering upon
the Premises under express or implied invitation by Tenant, or caused by the
improvements located on the Premises becoming out of repair, the failure or
cessation of any service provided by Landlord (including security service and
devices), or caused by leakage of gas, oil, water or steam or by electricity
emanating from the Premises, provided that Landlord shall be responsible for
loss resulting from its negligence or willful misconduct or from Landlord's
failure to perform repairs within the time required by Section 5.1 hereof.
Tenant agrees to indemnify and hold harmless Landlord of and from any loss,
attorney's fees, expenses or claims arising out of any such damage or injury,
for which Landlord is not liable pursuant to the foregoing provisions.
7.6 PUBLIC LIABILITY INSURANCE. Tenant shall during the term hereof keep in full
force and effect at its expense a policy or policies of public liability
insurance with respect to the Premises and the business of Tenant, on terms and
with companies approved in writing by Landlord, in which both Tenant and
Landlord shall be covered by being named as insured parties under reasonable
limits of liability not less than $1,000,000, or such greater coverage as
Landlord may reasonably require, combined single limit coverage for injury or
death. Such policy or policies shall provide that thirty (30) days' written
notice must be given to Landlord prior to cancellation thereof. Tenant shall
furnish evidence satisfactory to Landlord at the time this Lease is executed
that such coverage is in full force and effect.
ARTICLE 8. CONDEMNATION
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8.1 SUBSTANTIAL TAKING. If all or a substantial part of the Premises are taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
the taking would prevent or materially interfere with the use of the Premises
for the purpose for which it is then being used, this Lease shall terminate and
the rent shall be abated during the unexpired portion of this Lease effective on
the date physical possession is taken by the condemning authority. Tenant shall
have no claim to the condemnation award or proceeds in lieu thereof, except that
Tenant shall be entitled to a separate award for the cost of removing and moving
its personal property.
8.2 PARTIAL TAKING. If all or a substantial part of the Premises are taken for
any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in Section 8.1 above, the rent payable
under this Lease during the unexpired portion of the term shall be adjusted to
such an extent as may be fair and reasonable under the circumstances. Tenant
shall not be obligated to pay rent for any portion of the Premises which it does
not actually occupy after such taking, if such portion is not suitable for
Tenant's business operations as reasonably determined by Tenant, and Tenant
shall have the option to terminate this Lease by written notice to Landlord
given within sixty (60) days after possession is taken if the remaining portion
of the Premises is not suitable for Tenant's business operation as reasonably
determined by Tenant. Tenant shall have no claim to the condemnation award or
proceeds in lieu thereof, except that Tenant shall be entitled to a separate
award for the cost of removing and moving its personal property.
ARTICLE 9. ASSIGNMENT OR SUBLEASE
9.1 LANDLORD ASSIGNMENT. Landlord shall have the right to sell, transfer or
assign, in whole or in part, its rights and obligations under this Lease and in
the Building. Any such sale, transfer or assignment shall operate to release
Landlord from any and all liabilities under this Lease arising after the date of
such sale, assignment or transfer, provided that the transferee or assignee
assumes such liabilities.
9.2 TENANT ASSIGNMENT. Tenant shall not assign, in whole or in part, this Lease,
or allow it to be assigned, in whole or in part, by operation of law or
otherwise, or mortgage or pledge the same, or sublet the Premises, in whole or
in part, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. In no event shall any such assignment or
sublease ever release Tenant or any guarantor from any obligation or liability
hereunder. Notwithstanding anything in this Lease to the contrary, in the event
of any assignment or sublease, any option or right of first refusal granted to
Tenant shall not be assignable by Tenant to any assignee or sublessee. No
assignee or sublessee of the Premises or any portion thereof may assign or
sublet the Premises or any portion thereof.
9.3 CONDITIONS OF ASSIGNMENT. If Tenant desires to assign or sublet all or any
part of the Premises, it shall so notify Landlord at least thirty (30) days in
advance of the date on which Tenant desires to make such assignment or sublease.
Tenant shall provide Landlord with a copy of the proposed assignment or sublease
and such information as Landlord might request concerning the proposed sublessee
or assignee to allow Landlord to make informed judgments
10
as to the financial condition, reputation, operations and general desirability
of the proposed sublessee or assignee. Within seven (7) business days after
Landlord's receipt of Tenant's proposed assignment or sublease and all required
information concerning the proposed sublease or assignee, Landlord shall have
the following options: (1) consent to the proposed assignment or sublease, and,
if the rent due and payable by any assignee or sublessee under any such
permitted assignment or sublease (or a combination of the rent payable under
such assignment or sublease plus any bonus or any other consideration or any
payment incident thereto) exceeds the rent payable under this Lease for such
space, Tenant shall pay to Landlord one-half (1/2) of such excess rent and other
excess consideration within ten (10) days following receipt thereof by Tenant;
or (2) refuse, subject to the limitations set forth in Section 9.2 above, to
consent to the proposed assignment or sublease, which refusal shall be deemed to
have been exercised unless Landlord gives Tenant written notice providing
otherwise. Landlord shall, upon Tenant's request, provide the reasons for any
refusal. Upon the occurrence of an event of default, if all or any part of the
Premises are then assigned or sublet, Landlord, in addition to any other
remedies provided by this Lease or provided by law, may, at its option, collect
directly from the assignee or sublessee all rents becoming due to Tenant by
reason of the assignment or sublease. Any collection directly by Landlord from
the assignee or sublessee shall not be construed to constitute a novation or a
release of Tenant or any guarantor from the further performance of its
obligations under this Lease.
9.4 RIGHTS OF MORTGAGE. Tenant accepts this Lease subject and subordinate to any
recorded mortgage presently existing or hereafter created upon the Building and
to all existing recorded restrictions, covenants, easements and agreements with
respect to the Building. Landlord is hereby irrevocably vested with full power
and authority to subordinate Tenant's interest under this Lease to any first
mortgage lien hereafter placed on the Premises, and Tenant agrees upon demand to
execute additional instruments subordinating this Lease as Landlord may require.
If the interests of Landlord under this Lease shall be transferred by reason of
foreclosure or other proceedings for enforcement of any first mortgage or deed
of trust on the Premises, Tenant shall be bound to the transferee (sometimes
called the "Purchaser") at the option of the Purchaser, under the terms,
covenants and conditions of this Lease for the balance of the term remaining,
including any extensions or renewals, with the same force and effect as if the
Purchaser were Landlord under this Lease, and, if requested by the Purchaser,
Tenant agrees to attorn to the Purchaser, including the first mortgagee under
any such mortgage if it be the Purchaser, as its Landlord. Notwithstanding the
foregoing, Tenant shall not be disturbed in its possession of the Premises so
long as Tenant is not in default hereunder.
9.5 TENANTS STATEMENT. Tenant agrees to furnish, from time to time, within ten
(10) after receipt of a request from Landlord or Landlord's mortgagee, a
statement certifying, if applicable, the following: Tenant is in possession of
the Premises; the Premises are acceptable; the Lease is in full force and
effect; the Lease is unmodified; Tenant claims no present charge, lien, or claim
or offset against rent; the rent is paid for the current month, but is not
prepaid for more than one month and will not be prepaid for more than one month
in advance; there is no existing default by reason of some act or omission by
Landlord; and such other matters as may be reasonably required by Landlord or
Landlord's mortgagee; or specifying any exceptions to such mattes. Tenant's
failure to deliver such statement, in addition to being a default under this
Lease, shall be deemed to establish conclusively that this Lease is in full
force and effect except
11
as declared by Landlord, that Landlord is not in default of any of its
obligations under this Lease, and that Landlord has not received more than one
month's rent in advance. Tenant agrees to furnish, from time to time, within ten
(10) days after receipt of a request from Landlord, the most recent financial
statement of Tenant, certified as true and correct by Tenant.
ARTICLE 10. LANDLORD'S LIEN AND SECURITY AGREEMENT (Intentionally omitted)
ARTICLE 11. DEFAULT AND REMEDIES
11.1 DEFAULT BY TENANT. The following shall be deemed to be events of default
("Default") by Tenant under this Lease: (1) Tenant shall fail to pay when due
any installment of rent or any other payment required pursuant to this Lease and
such failure shall continue for a period of five (5) days after written notice
to Tenant; (2) Tenant shall abandon any substantial portion of the Premises; (3)
Tenant shall fail to comply with any term, provision or covenant of this Lease,
other than the payment of rent, and the failure is not cured within thirty (30)
days after written notice to Tenant; (4) Tenant shall file a petition or if an
involuntary petition is filed against Tenant, or becomes insolvent, under any
applicable federal or state bankruptcy or insolvency law or admit that it cannot
meet its financial obligations as they become due; or a receiver or trustee
shall be appointed for all or substantially all of the assets of Tenant; or
Tenant shall make a transfer in fraud of creditors or shall make an assignment
for the benefit of creditors; or (5) Tenant shall do or permit to be done any
act which results in a lien being filed against the Premises or the Building
and/or project of which the Premises are a part; and Tenant shall not cause such
lien to be released or bonded off within thirty (30) days after written notice
to Tenant.
In the event that an order for relief is entered in any case under Title 11
U.S.C. (the "Bankruptcy Code") in which Tenant is the debtor and: (A) Tenant as
debtor-in-possession, or any trustee who may be a Jointed in the case (the
"Trustee") seeks to assume the lease, then Tenant, or Trustee if applicable, in
addition to providing adequate assurance described in a applicable provisions of
the Bankruptcy Code, shall provide adequate assurance to Landlord of Tenant's
future performance under the Lease by depositing with Landlord a sum equal to
the lesser of twenty-five percent (25%) of the rental and other charges due for
the balance of the Lease term or six (6) months' rent ("Security"), to be held
(without any allowance for interest thereon) to secure Tenant's obligation under
the Lease and (B) Tenant, or Trustee if applicable, seeks to assign the Lease
after assumption of the same, then Tenant, in addition to providing adequate
assurance described in applicable provisions of the Bankruptcy Code, shall
provide adequate assurance to Landlord of the proposed assignee's future
performance under the Lease by depositing with Landlord a sum equal to the
Security to be held (without any allowance or interest thereon) to secure
performance under the Lease. Nothing contained herein expresses or implies, or
shall be construed to express or imply, that Landlord is consenting to
assumption and/or assignment of the Lease by Tenant, and Landlord expressly
reserves all of its rights to object to any assumption and/or assignment of the
Lease. Neither Tenant nor any Trustee shall conduct or permit the conduct of any
"fire", "bankruptcy", "going out of business" or auction sale in or from the
Premises.
11.2 REMEDIES FOR TENANT'S DEFAULT. Upon the occurrence of a Default as defined
above, Landlord may elect either (i) to cancel and terminate this Lease and this
Lease shall not
12
be treated as an asset of Tenant's bankruptcy estate, or (ii) to terminate
Tenant's right to possession only without canceling and terminating Tenant's
continued liability under this Lease. Notwithstanding the fact that initially
Landlord elects under (ii) to terminate Tenant's right to possession only,
Landlord shall have the continuing right to cancel and terminate this Lease by
giving three (3) days' written notice to Tenant of such further election, and
shall have the right to pursue any remedy at law or in equity that may be
available to Landlord.
In the event of election under (ii) to terminate Tenant's right to possession
only, Landlord may, at Landlord's option, enter the Premises and take and hold
possession thereof, without such entry into possession terminating this Lease or
releasing Tenant in whole or in part from Tenant's obligation to pay all amounts
hereunder for the full stated term. Upon such reentry, Landlord may remove all
persons and property from the Premises and such property may be removed and
stored in a public warehouse or elsewhere at the cost and for the account of
Tenant, without becoming liable for any loss or damage which may be occasioned
thereby. Such reentry shall be conducted in the following manner: without resort
to judicial process or notice of any kind if Tenant has abandoned or voluntarily
surrendered possession of the Premises; and, otherwise, by resort to judicial
process. Upon and after entry into possession without termination of the Lease,
Landlord may, but is not obligated to, relet the Premises, or any part thereof,
to any one other than the Tenant, for such time and upon such terms as Landlord,
in Landlord's sole discretion, shall determine. Landlord may make alterations
and repairs to the Premises to the extent deemed by Landlord necessary or
desirable to relet the Premises.
Upon such reentry, Tenant shall be liable to Landlord as follows:
A. For all reasonable attorneys' fees incurred by Landlord in connection
with exercising any remedy hereunder;
B. For the unpaid installments of base rent, additional rent or other unpaid
sums which were due prior to such reentry, including interest and late
payment fees, which sums shall be payable immediately.
C. For the installments of base rent, additional rent, and other sums
falling due pursuant to the provisions of this Lease for the period after
reentry during which the Premises remain vacant, including late payment
charges and interest, which sums shall be payable as they become due
hereunder.
D. For all expenses incurred in releasing the Premises, including leasing
commissions, reasonable attorneys' fees, and costs of alteration or
repairs, which shall be payable by Tenant as they are incurred by
Landlord; and
E. While the Premises are subject to any new lease or leases made pursuant
to this Section, for the amount by which the monthly installments payable
under such new lease or leases is less than the monthly installment for
all charges payable pursuant to this Lease, which deficiencies shall be
payable monthly.
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Notwithstanding Landlord's election to terminate Tenant's right to possession
only, and notwithstanding any reletting without termination, Landlord, at any
time thereafter, may elect to terminate this Lease, and to recover (in lieu of
the amounts which would thereafter be payable pursuant to the foregoing, but not
in diminution of the amounts payable as provided above before termination), as
damages for loss of bargain and not as a penalty, an aggregate sum equal to the
present value of the amount by which the rental value of the portion of the term
unexpired at the time of such election is less than an amount equal to the
unpaid base rent and additional rent, and all other charges which would have
been payable by Tenant for the unexpired portion of the term of this Lease,
which deficiency and all expenses incident thereto, including commissions,
attorneys' fees, expenses of alterations and repairs, shall be due to Landlord
as of the time Landlord exercises said election, notwithstanding that the term
had not expired. If Landlord, after such reentry, leases the Premises, then the
rent payable under such new lease shall be conclusive evidence of the rental
value of the unexpired portion of the term of this Lease.
If this Lease shall be terminated by reason of bankruptcy or insolvency of
Tenant, Landlord shall be entitled to recover from Tenant or Tenant's estate, as
liquidated damages for loss of bargain and not as a penalty, the amount
determined by the immediately preceding paragraph.
11.3 LANDLORD'S RIGHT TO PERFORM FOR ACCOUNT OF TENANT. If Tenant shall be in
Default under this Lease, Landlord may cure the Default at any time for the
account and at the expense of Tenant. If Landlord cures a Default on the part of
Tenant, Tenant shall reimburse Landlord upon demand for any amount expended by
Landlord in connection with the cure, including, without limitation, attorneys'
fees and interest.
11.4 INTEREST, ATTORNEY'S FEES AND LATE CHARGE. In the event of a Default by
Tenant: (1) if a monetary default, interest shall accrue on any sum due and
unpaid at the rate of the lesser of fifteen percent (15%) per annum or the
highest rate permitted by law and, if Landlord places in the hands of an
attorney the enforcement of all or any part of this Lease, the collection of any
rent due or to become due or recovery of the possession of the Premises, Tenant
agrees to pay Landlord's costs of collection, including reasonable attorney's
fees for the services of the attorney, whether suit is actually filed or not.
Other remedies for nonpayment of rent notwithstanding, if the monthly rental
payment or any other payment due from Tenant to Landlord is not received by
Landlord on or before the tenth (10th) day of the month for which the rent is
due, a late payment charge of five percent (5%) of such past due amount shall
become due and payable in addition to such amounts owed under this Lease.
11.5 ADDITIONAL REMEDIES, WAIVERS, ETC.
A. The rights and remedies of Landlord set forth herein shall be in addition
to any other right and remedy now and hereafter provided by law. All
rights and remedies shall be cumulative and not exclusive of each other.
Landlord may exercise its rights and remedies at any times, in any order,
to any extend, and as often as Landlord deems advisable without regard to
whether the exercise of one right or remedy precedes, concurs with or
succeeds the exercise of another.
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B. A single or partial exercise of a right or remedy shall not preclude a
further exercise thereof, or the exercise of another right or remedy from
time to time.
C. No delay or omission by Landlord in exercising a right or remedy shall
exhaust or impair the same or constitute a waiver of, or acquiesce to, a
Default.
D. No waiver of Default shall extend to or affect any other Default or
impair any right or remedy with respect thereto.
E. No action or inaction by Landlord shall constitute a waiver of Default.
F. No waiver of a Default shall be effective unless it is in writing and
signed by Landlord.
ARTICLE 12. RELOCATION (Intentionally omitted)
ARTICLE 13. AMENDMENT AND LIMITATION OF WARRANTIES
13.1 ENTIRE AGREEMENT. IT IS EXPRESSLY AGREED BY TENANT, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; AND THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS,
WARRANTIES, UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO
THIS LEASE, EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE.
13.2 AMENDMENT. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT.
13.3 LIMITATION OF WARRANTIES. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE
ARE AND SHALL BE NO IMPLIED WARRANTIES OR MERCHANTABILITY, HABITABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND
THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS
LEASE.
ARTICLE 14. MISCELLANEOUS
14.1 SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and inure to the
benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and agreed that
should Landlord's interest in the Premises cease to exist for any reason during
this Lease, then notwithstanding the happening of such event this Lease
nevertheless shall remain unimpaired and in full force and effect, and Tenant
hereunder agrees to attorn to the then owner of the Premises.
14.2 USE OR RENT TAX. If applicable in the jurisdiction where the Premises are
issued, Tenant shall pay and be liable for all rental, sales and use taxes or
other similar taxes, if any, levied or imposed by any city, state, county or
other governmental body having authority, such
15
payments to be in addition to all other payments required to be paid to Landlord
under the terms of this Lease. Any such payment shall be paid concurrently with
the payment of the rent, additional rent, operating expenses or other charge
upon which the tax is based as set forth above.
14.3 ACT OF GOD. Landlord shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Tenant, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
or prevented by an act of God, force majeure or by Tenant.
14.4 HEADINGS. The section headings appearing in this Lease are inserted only as
a matter of convenience and in no way define, limit, construe or describe the
scope or intent of any Section.
14.5 NOTICE. All rent and other payments required to be made by Tenant shall be
payable to Landlord at the address set forth in Section 1.10. All payments
required to be made by Landlord to Tenant shall be payable at the address set
forth in Section 1.10, or at any other address within the United States as
Tenant may specify from time to time by written notice. Any notice or document
required or permitted to be delivered by the terms of this Lease shall be deemed
to be delivered (whether or not actually received) upon actual delivery or 48
hours after deposit in the United States Mail, postage prepaid, certified mail,
return receipt requested, addressed to the parties at the respective addresses
set forth in Section 1.10.
14.6 TENANT'S AUTHORITY. If Tenant executes this Lease as a corporation, each of
the persons executing this Lease on behalf of Tenant does hereby personally
represent and warrant that each such person signing on behalf of the corporation
is authorized to do so.
14.7 HAZARDOUS SUBSTANCES. Tenant, its agents or employees, shall not bring or
permit to remain on the Premises or Building any asbestos, petroleum or
petroleum products, explosives, toxic materials, or substances defined as
hazardous wastes, hazardous materials, or hazardous substances under any
federal, state, or local law or regulation ("Hazardous Materials"), except in
compliance with applicable environmental and other laws. Tenant's violation of
the foregoing prohibition shall constitute a material breach and default
hereunder and Tenant shall indemnify, hold harmless and defend Landlord from and
against any claims, damages, penalties, liabilities, and costs (including
reasonable attorney fees and court costs) caused by or arising out of (i) a
violation of the foregoing prohibition by Tenant or (ii) the presence of any
Hazardous Materials on, under, or about the Premises or the Building during the
term of the Lease caused by or arising, in whole or in part, out of the actions
of Tenant its agents or employees. Tenant shall clean up, remove, remediate and
repair any soil or ground water contamination and damage caused by the presence
and any release of any Hazardous Materials in, on, under or about the Premises
or the Building during the term of the Lease caused by or arising, in whole or
in part, out of the actions of Tenant, its agents or employees, in conformance
with the requirements of applicable law. Tenant shall immediately give Landlord
written notice of any suspected breach of this paragraph; upon learning of the
presence of any release of any Hazardous Materials, and upon receiving any
notices from governmental agencies pertaining to Hazardous Materials which may
affect the Premises or the
16
Building. The obligations of Tenant hereunder shall survive the expiration of
earlier termination, for any reason, of this Lease.
14.8 SEVERABILITY. If any provision of this Lease or the application thereof to
any person or circumstances shall be invalid or unenforceable to any extent, the
remainder of this Lease and the application of such provisions to other persons
or circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
14.9 LANDLORD'S LIABILITY. If Landlord shall be in default under this Lease and,
if as a consequence of such default, Tenant shall recover a money judgment
against Landlord, such judgment shall be satisfied only out of the right, title
and interest of Landlord in the Building, as the same may then be encumbered or
by offset against rents, and neither Landlord nor any person or entity
comprising Landlord shall be liable for any deficiency. In no event shall Tenant
have the right to levy execution against any property of Landlord nor any person
or entity comprising Landlord other than the rents and its interest in the
Building as herein expressly provided.
14.10 BROKERAGE. Landlord and Tenant each represents and warrants to the other
that there is no obligation to pay any brokerage fee, commission, finder's fee
or other similar charge in connection with this Lease, other than fees due to
Phil Simonet of The Shelard Group which are the responsibility of Landlord. Each
party covenants that it will defend, indemnify and hold harmless the other party
from and against any loss or liability by reason of brokerage or similar
services alleged to have been rendered to, at the instance of, or agreed upon by
said indemnifying party. Notwithstanding anything herein to the contrary,
Landlord and Tenant agree that there shall be no brokerage fee or commisions due
on expansions, options or renewals by Tenant.
14.11 MANAGEMENT AGENT. Landlord hereby notifies Tenant that the person
authorized to execute this Lease and manage the Premises is CSM Corporation, a
Minnesota corporation, which has been appointed to act as the agent in leasing
management and operation of the Building for owner and is authorized to accept
service of process and receive or give receipts for notices and demand on behalf
of Landlord. Landlord reserved s the right to change the identity and status of
its duly authorized agent upon written notice to Tenant.
14.12 OPTION TO EXTEND TERM OF LEASE. Tenant shall have the option to extend the
term of this Lease for two (2) additional five (5) year terms ("Option Term")
under the same terms and conditions contained herein, provided however, that the
base rent shall be adjusted as set forth in Section 1.6 of this Lease. Tenant
may exercise its Option Term by delivering written notice to Landlord, stating
its irrevocable intent to exercise the Option Term, not less than one hundred
eighty (180) days prior to the expiration of the Lease Term or first Option
Term. In the event that Tenant fails to deliver timely notice of its intent to
exercise the Option Term, Tenant's right to the Option Term shall be deemed as
null and void. It shall be a condition of the exercise of the Option Term that
Tenant not be in Default pursuant to Section 11 of this Lease Agreement.
14.13 EXCESS LAND. Landlord and Tenant acknowledge and agree that Landlord is
acquiring more land than is necessary for the development and construction of
the Building
17
covered by this Lease. The excess land consists of approximately 136,561 square
feet and is outlined in yellow on attached EXHIBIT A (Excess Land). Landlord and
Tenant agree, as follows, with respect to the Excess Land:
A. Landlord will refrain from proceeding with development of the Excess Land
for a period of four (4) years, from and after the Commencement Date of
this Lease (the "Holding Period"). Tenant shall have the right to shorten
the Holding Period by written notice to Landlord given not less than one
(1) year prior to the earlier termination of the Holding Period.
B. In consideration thereof, Tenant will reimburse Landlord for all real
estate taxes, assessments and insurance costs attributable to the Excess
Land from the Commencement Date of this Lease until the earlier of the
expiration of the said Holding Period or the date that development of the
Excess Land is completed. These costs will be reimbursed by Tenant to
Landlord, monthly, as a part of the operating expenses that Tenant pays
Landlord pursuant to Section 2.2 hereof.
C. Tenant will also reimburse Landlord for the costs of carrying the Excess
Land for the remainder of the Holding Period after the first year
thereof. For the purposes of this provision, carrying costs shall mean
interest on the costs incurred by Landlord to acquire the Excess Land
from and after the date incurred. Interest shall be at a rate equal to
the rate on Four Year Treasury Securities, in effect on the Commencement
Date of this Lease, plus two percent (2%). Tenant shall reimburse
Landlord for carrying costs, as aforesaid, in cash, upon expiration of
said Holding Period, unless, prior to that time, Landlord and Tenant have
entered into a binding lease agreement for Tenant s occupancy of a
building to be constructed on the Excess Land, in which case, Tenant's
obligation to reimburse Landlord shall be deemed waived and of no force
and effect.
D. Tenant may, at its option and upon written notice given not less than one
hundred twenty (120) days prior to expiration of the said Holding Period,
extend said Holding Period, for an additional two (2) years. Tenant may
exercise said option only by providing written notice as aforesaid and by
paying to Landlord the full reimbursement due to Landlord pursuant to
Subsections B and C above. In the event Tenant exercises this option to
extend, the same terms and conditions as outlined above shall apply,
except that Tenant shall be obligated to reimburse Landlord for carrying
costs for both years of the extended period.
E. The rights herein conferred are personal to Tenant and may not be sold or
assigned without Landlord's prior written consent.
F. In the event that Tenant defaults in the performance of its obligations
under this Lease and such default is not cured within the applicable cure
period, then Tenant's rights hereunder shall be deemed null and void and
of no force and effect, but Tenant's obligation to reimburse Landlord for
carrying costs shall remain in force and effect until the earlier of the
expiration of the hold period or Landlord's commencement of site
development.
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14.14 SUBMISSION OF LEASE. Submission of this Lease to Tenant for signature does
not constitute a reservation of space or an option to lease. This Lease is not
effective until execution by and delivery to both Landlord and Tenant.
14.15 CONSTRUCTION PROVISIONS. All of the work to be performed by Landlord
pursuant to Section 1.3 hereof shall be performed in accordance with the plans
and specifications approved by Tenant in accordance with Section 6.1 hereof in a
good and workmanlike manner, utilizing new and first-grade materials; shall be
in conformity with all applicable federal, state and local laws, ordinances
regulations, building codes and fire regulations; shall comply with all
insurance requirements of Landlord and Tenant; and shall be free of any liens
for labor and materials. Landlord shall use all reasonable efforts to complete
such construction on or before the Commencement Date.
For the period commencing as of the Commencement Date and ending on the day one
(l) year thereafter, Landlord will correct and/or repair, or cause to be
corrected and/or repaired, any latent or non-obvious defect, malfunction or
failure in or of construction, workmanship, material or operation of the
Premises, provided any such defect, malfunction or failure is not the result of
any work performed by Tenant or on Tenant's behalf, and is not caused by any act
or negligence of Tenant, its employees or contractors. At the expiration of the
one (l) year period, Landlord shall assign to Tenant all guaranties and
warranties made by any contractor, subcontractor or materialmen with respect to
the Premises and thereafter Tenant shall have the right, at its option, to
enforce all such guaranties and warranties in its name directly against the
warrantor. Landlord agrees to exercise good faith efforts to obtain
contractor/subcontractor warranties longer than one (1) year, to the extent the
same are available without additional cost.
As to items which Tenant has notified Landlord are defective and which are
covered by referenced Landlord warranty, Landlord shall proceed expeditiously
and in good faith to complete and repair any such items. As a condition thereof,
Tenant shall allow Landlord, its employees or contractors, to enter upon the
Premises to perform any remedial work required to be performed, and will
cooperate with Landlord, its employees or contractors, so that such remedial
work can be accomplished as quickly as is reasonable under the circumstances,
and with the least amount of interruption to the business of the Tenant.
Occupancy of the Premises by Tenant for conducting its business shall constitute
an acknowledgment by Tenant, and shall be presumptive evidence, that the
Premises are in the condition called for by this Lease and that Landlord has
performed all of the construction work it is obligated to perform pursuant to
Section 1.3 hereof, except for such items which are not completed and as to
which Tenant shall have given notice to Landlord within thirty (30) days after
Tenant takes possession of the Premises (the "Punchlist"), and subject to any
latent or non-obvious defects, malfunctions or failures covered by the foregoing
warranty by Landlord. Landlord shall proceed expeditiously and in good faith to
complete and repair all items set forth on the Punchlist.
In the event of any dispute between Landlord and Tenant as to whether the
Premises are substantially complete and ready for occupancy by Tenant for the
conduct of Tenant's business, or as to any other claim by Tenant based upon
Landlord's warranties and construction obligations contained herein, such
dispute shall be resolved by arbitration in accordance with
19
the rules of the American Arbitration Association, or in accordance with such
other procedures as shall be mutually approved by the parties. In no event shall
the Premises be deemed substantially complete and ready for occupancy by Tenant
until a certificate of occupancy (temporary or permanent) (or, if certificates
of occupancy are not issued by the municipality, an equivalent final inspection
report authorizing Tenant's occupancy and use of the property) has been issued
by the city in which the Premises are located. Landlord agrees to exercise every
reasonable effort to obtain a final certificate of occupancy as soon as possible
following completion of the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease effective the
day and year first above written.
LANDLORD: TENANT:
CSM INVESTORS, INC. DYNAMARK, INC.
BY: BY: J.R. Schoeller
--------------------------- ----------------------------------
ITS: Vice President ITS: Senior Vice President
-------------------------- ---------------------------------
April 27, 1995
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