Exhibit 10:12
OFFICE-WAREHOUSE LEASE
DATE: February 11, 1997
PARTIES: CARLSON REAL ESTATE COMPANY,
A MINNESOTA LIMITED PARTNERSHIP
"Landlord"
MEDI-JECT CORPORATION,
A MINNESOTA CORPORATION
"Tenant"
AGREEMENT:
In consideration of the following terms and conditions, the parties agree as
follows:
1. BASIC LEASE PROVISIONS AND DEFINITIONS.
1.1 STREET ADDRESS OF PREMISES: 161 Cheshire Lane, Suite 100, Plymouth,
Minnesota 55441.
1.2 LANDLORD'S NOTICE ADDRESS: 111 Cheshire Lane, Suite 700, Minnetonka,
MN 55305.
1.3 TENANT'S NOTICE ADDRESS: 161 Cheshire Lane, Suite 100, Plymouth,
Minnesota, 55441
1.4 COMPLEX: The office-warehouse project commonly known as Carlson
Business Center North, shown on Exhibit "B" and legally described on Exhibit
"A", attached. Landlord shall have the right from time to time to add land
and buildings to the Complex.
1.5 PREMISES: Approximately 22,968 rentable square feet of space, as
depicted on Exhibit "B," attached, together with all appurtenances thereto.
The Premises is located within a single story building commonly known as
"Building No. VI", and legally described as Lot 3, Block 1, Carlson Business
Center North according to the recorded plat thereof, and situate in Hennepin
County, Minnesota (the "Building") of the Complex.
1.6 TERM: Five (5) Lease Years.
1.7 PRO RATA SHARE: A fraction, the numerator of which is the number of
rentable square feet in the Premises and the denominator of which is the
number of rentable square feet in the Complex, in each case as reasonably
determined in the first instance by Landlord.
1.8 OPERATING EXPENSES: Defined in Section 8. Landlord estimates that
Operating Expenses for the first calendar year shall be Seventy-Eight Cents
($.78) per rentable square foot of the Premises.
1.9 REAL ESTATE TAXES: Defined in Section 8. Landlord estimates that
Real Estate Taxes for the first calendar year shall be Thirty-Five Cents
($.35) per rentable square foot of the Premises.
1.10 LEASE YEAR: The twelve (12) full calendar month period commencing on
the Commencement Date and each anniversary thereof, unless the Commencement
Date does not fall on the first day of a month in which event the first Lease
Year shall commence on the first day of the month immediately following the
month in which the Commencement Date occurs. Each subsequent Lease Year shall
commence on the anniversary of the first Lease Year. The first Lease Year
shall include any initial partial calendar month.
1.11 Annual Base Rent:
Year P.S.F. Amount
---- ------ ------
1 $7.00 $160,776.00
2 $7.25 $166,518.00
3 $7.50 $172,260.00
4 $7.75 $178,002.00
5 $8.00 $183,744.00
1.12 Monthly Installment:
Year P.S.F. Amount
---- ------ ------
1 $7.00 $13,398.00
2 $7.25 $13,876.50
3 $7.50 $14,355.00
4 $7.75 $14,833.50
5 $8.00 $15,312.00
1.13 Additional Rent: All additional payment obligations of Tenant,
including but not limited to Operating Expenses, Real Estate Taxes and any other
charges or fees and any cost incurred by Landlord on behalf of Tenant.
1.14 Security Deposit: Nine Thousand Five Hundred and 00/100 Dollars
($9,500.00).
1.15 Common Area: Defined in Section 6.
1.16 Delivery Date: The date which is sixty (60) days from the later of
(a) the date the lease is fully executed and delivered, or (b) the date Tenant's
construction plans are approved by Tenant.
1.17 Commencement Date: April 15, 1997.
1.18 Termination Date: The last day of the Fifth (5th) Lease Year
following the Commencement Date.
1.19 Permitted Use: General office, warehouse, technical assembly, and
light manufacturing.
2. PREMISES. Subject to the terms and conditions herein contained,
Landlord hereby leases the Premises to Tenant, and Tenant hereby accepts and
leases the Premises from Landlord for the Term, unless sooner terminated
pursuant to any provision hereinafter set forth.
3. RENT PAYMENT.
3.1 Amount And Manner. Tenant shall pay to Landlord Annual Base Rent in
advance in equal Monthly Installments, without setoff or demand, on the first
day of each calendar month during the Term of this Lease. Monthly Installments
for any fractional month at the commencement or expiration of the Term shall be
prorated based upon a thirty (30) day month. Monthly Installments of Annual Base
Rent, Operating Expenses and Real Estate Taxes shall be payable by Tenant to
Landlord at the address set forth in Section 1.2, above, or at such other place
as Landlord shall hereinafter designate in writing. At the written request of
Landlord, Tenant agrees to take such action and execute such documents as
Landlord shall deem necessary or desirable to cause the timely automatic direct
transfer from Tenant's bank account of funds necessary to make all of the
payments required under the terms of this Lease. Notwithstanding anything to the
contrary contained herein, in the event Landlord withdraws an amount of money in
excess of the amount then due for the Monthly Installment of Annual Base Rent or
Additional Rent under the terms herein (collectively, "Tenant's Monetary
Obligation"), Tenant shall have the right to terminate the automatic direct
transfer, upon thirty (30) days written notice to Landlord. In the event
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Landlord withdraws an amount in excess of Tenant's Monetary Obligation, Landlord
shall immediately pay such overdraft amount to Tenant.
3.2 LATE FEES. If any Monthly Installment is not received by Landlord on
or before the fifth (5th) day of the applicable calendar month, Tenant agrees to
pay Landlord an additional sum equal to two percent (2%) of the total amount
overdue, including Monthly Installments of Annual Base Rent, and Additional
Rent. Said charge is intended to defray Landlord's interest and administrative
expenses, and Tenant acknowledges that such charge represents a fair and
reasonable estimate of such expenses, and shall be due and payable for each full
or partial calendar month that any Monthly Installment and/or Additional Rent
remains unpaid. Further, Landlord shall be entitled to charge a fee of $25.00,
to cover its administrative expense, each time a check from Tenant is returned
by a bank for insufficient funds.
3.3 INTEREST. In addition to the late charges referred to above, which
are intended to defray Landlord's costs resulting from late payments, any late
payment of a Monthly Installment or Additional Rent shall, at Landlord's option,
bear interest from the due date of any such payment to the date same is paid at
sixteen percent (16%) per annum or the maximum lawful rate that Landlord may
charge to Tenant under applicable laws, whichever is less. Acceptance of any
late charge and/or interest shall not constitute a waiver of Tenant's default
with respect to the overdue sum or prevent Landlord from exercising any of its
other rights and remedies under this Lease.
3.4 REMEASURE. In the event it is determined that the Premises are
comprised of more or less than the rentable square footage stated in Section
1.5, as certified by a contractor or architect reasonably satisfactory to
Landlord, the parties agree to enter into a supplemental agreement setting forth
the actual rentable square footage of the Premises, as well as, any changes to
Tenant's Base Annual Rent and/or Additional Rent.
4. LANDLORD'S WORK; TENANT'S ACCEPTANCE OF PREMISES. Landlord shall, at
its sole cost and expense, complete the work described in the attached Exhibit
"C" ("Landlord's Work") and the tenant improvements, if any, described on
Exhibit "D" (the "Tenant Improvements"). All of Landlord's Work and the Tenant
Improvements shall be performed in accordance with Exhibits "C" and "D" attached
hereto, 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 any applicable insurance requirements for the Complex; and shall be
substantially completed before May 1, 1997. Tenant's taking possession of the
Premises shall be conclusive evidence of Tenant's receipt of the Premises.
Tenant shall have thirty (30) days from the Commencement Date to submit to
Landlord, its punch list and Landlord shall, thereafter, use diligent efforts to
perform such work as may be necessary to complete same in an expeditious manner.
5. OPERATION AND USE OF PREMISES.
5.1 USE. Tenant shall use the Premises for the Permitted Use set forth in
Section 1.19 and no other purpose.
5.2 LEGAL COMPLIANCE. Tenant shall, at its expense, comply with all laws,
governmental orders, regulations, rules, local ordinances regarding (a) any of
the Permitted Uses described in Section 1.19, (b) the condition of the Premises
to the extent Tenant is responsible therefor pursuant to this Lease, (c)
improvements and equipment constructed in or installed upon the Premises by
Tenant including, but not limited to, warehouse racking. Upon receipt of any
notice of noncompliance, Tenant shall promptly notify Landlord in writing.
Landlord shall comply with all laws, governmental orders, regulations, rules and
local ordinances relating to: (i) the Common Areas, (ii) the initial
construction of Landlord's Work, and (iii) the exterior surfaces, structural
elements, foundation and roof of the Building, and the costs and expenses
associated with such compliance by Landlord shall be included in Operating
Expenses.
5.3 OBJECTIONABLE MATERIAL. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, nor take any other action which would constitute a
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nuisance or endangers any other tenants of the Complex or interfere with the use
of the respective premises. Without Landlord's prior written consent, Tenant
shall not receive, store, or otherwise handle any product, material or
merchandise which is hazardous, toxic, explosive or highly flammable other than
reasonable quantities thereof incidental to the conduct of Tenant's business
which are stored, used and disposed of in compliance with all applicable legal
requirements. Tenant shall promptly provide to Landlord a detailed list of such
materials used in the conduct of Tenant's business. Outside storage of any type
of equipment, property or materials by Tenant, its agents, employees, customers
or suppliers shall be permitted only with the prior written consent of Landlord.
Tenant shall store all rubbish within the Premises and, at Tenant's expense,
arrange for the regular collection of rubbish and janitorial services.
5.4 RULES AND REGULATIONS. Landlord reserves the right from time to time
to adopt and amend reasonable, non-discriminatory rules and regulations
concerning use of the Common Area and Premises, with which Tenant agrees to
comply ("Rules and Regulations"). A copy of the current Rules and Regulations is
attached as Exhibit "E". Landlord shall provide Tenant with a written copy of
any additional rule or regulation thirty (30) days prior to implementation of
same.
5.5 INSURANCE RISK. Without Landlord's consent, Tenant shall not use
the Premises in any way which could increase insurance rates, or disallow any
sprinkler or other credits, or invalidate any policy of insurance with respect
to the Premises, Building or Complex or Tenant's operations therein.
6. COMMON AREA. The term "Common Area" means the entire area designed
for common use or benefit within the Complex, including the parking lot,
landscaped and vacant areas, and sidewalks. The Common Area shall at all times
be subject to the exclusive control and management of Landlord and may be
expanded, contracted, improved or changed by Landlord from time to time as
deemed desirable. Subject to the Rules and Regulations, the Common Area is
hereby made available to Tenant and its employees, agents, customers, and
invitees for their reasonable nonexclusive use in common with other tenants of
the Complex, their employees, agents, customers, invitees, and to Landlord for
the purposes for which constructed. Tenant shall not in any manner obstruct the
Common Area. Landlord shall have the right to change the area, location, and
arrangement of the Common Area; to enter into, modify, and terminate easements
and other agreements pertaining to the use and maintenance of the Common Area,
to close all or any portion of the Common Area to such extent as may be
necessary; to add or remove improvements; and to do and perform such other acts
in and to these areas and improvements as Landlord shall determine to be
advisable with a view to the improvement and convenient use thereof. In no event
shall Landlord obstruct the ingress or egress to the Building or Complex or
reduce the number of parking stalls below the number required by local code or
ordinance. No exhibit attached to this Lease nor any other materials provided by
Landlord shall constitute a warranty or agreement as to the configuration of the
Building or Complex or the occupants thereof. Landlord shall not materially or
substantially obstruct the visibility of Tenant's exterior signage without the
consent of Tenant, which shall not be unreasonably withheld, delayed or
conditioned.
7. MAINTENANCE OBLIGATIONS.
7.1 LANDLORD'S RESPONSIBILITIES. Landlord shall keep the Common Area,
exterior surfaces, structural elements, foundation and roof of the Building in
good order and repair and the expense of such activities shall be an Operating
Expense. Notwithstanding the foregoing, Landlord shall not be required to make
any repairs which become necessary as a result of any act or omission of Tenant,
its agents, representatives, contractors, employees or customers.
7.2 TENANT'S RESPONSIBILITIES. Throughout the Term of this Lease, Tenant
shall be obligated, at its sole cost and expense, to keep and maintain the
Premises and all heating, air conditioning (including but not limited to motors,
compressors, coils, heat exchanges, etc.), plumbing, doors, windows, locks,
electrical facilities and fixtures therein in good, safe and working order,
condition and repair. Tenant shall maintain a written contract for the regular
maintenance of the HVAC equipment with a contractor satisfactory to Landlord.
Tenant
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shall provide Landlord with a copy of the contract within ten (10) days after it
is fully executed and shall provide Landlord with a copy of all reports and
recommendation for service issued by the contractor. Tenant agrees to replace
and renew, with like kind and quality, any parts of the Premises, except for
those portions of the Premises which are Landlord's responsibility hereunder,
that may become too worn to be repaired, so that, at all times, the Premises
shall be in good, safe and working order, condition and repair. Tenant shall not
permit waste to the Premises. However, there shall be no obligation on the part
of Tenant to comply with any laws which may require structural alterations, or
additions, unless made necessary by any act, work, use or omission by Tenant.
8. OPERATING EXPENSES AND REAL ESTATE TAXES. Landlord and Tenant
hereby agree that it is the intention of the parties that this Lease shall
be absolutely net to Landlord, so that this Lease shall yield, net to Landlord,
the Annual Base Rent specified in Section 1. In addition to the Monthly
Installments of Annual Base Rent, Tenant shall pay on a monthly basis as
Additional Rent during the term hereof all costs and expenses of every kind
relating to the Premises, including but not limited to utilities, janitorial
services and Tenant's Pro Rata Share of "Operating Expenses," which shall mean
the costs and expenses incurred by Landlord in managing, cleaning, operating,
maintaining, repairing and insuring the Complex and the real property described
on Exhibit "A" and the amortized cost over the anticipated useful life of (but
not the entire capitalized cost of): (i) equipment used in maintenance; and (ii)
capital improvements necessary to preserve or maintain the Complex and all
improvements to the real property on which the Complex is situated or required
by any law, rule, regulation or order of any governmental or quasi-governmental
authority. Operating Expenses shall include, but not be limited to, the total
cost incurred for fire and extended coverage and liability insurance premiums
due and payable with respect to the entire Complex; water; sewer; gardening,
lawn and landscape care; paving maintenance, repair and replacement; snow
removal; line painting; sign maintenance; exterior maintenance and repair,
including roofs and building exteriors; security equipment and services and the
costs of personnel and contractors to implement said services; and Landlord's
management fees and administrative costs, all subject to the Operating Expense
exclusions set forth in Exhibit "G".
In addition, Tenant shall pay on a monthly basis as additional rent during
the term hereof its Pro Rata Share of the real estate taxes and installments of
special assessments levied or assessed with respect to the Building ("Real
Estate Taxes") in the applicable year. In the event of any refund of Real Estate
Taxes with respect to a year for which Tenant has paid its Pro Rata Share of
Real Estate Taxes, Landlord shall provide copies of documentation evidencing the
amount of such refund and, in Landlord's discretion, either promptly pay to
Tenant its Pro Rata Share of the amount of the refund after deduction of
Landlord's costs incurred in obtaining such refund, or apply such amount as a
credit against Tenant's future monthly installments of its Pro Rata Share of
Real Estate Taxes.
Tenant's Pro Rata Share of Operating Expenses and Real Estate Taxes shall
be paid by Tenant in monthly installments in such amounts as are estimated and
billed by Landlord at the beginning of each twelve (12) month period commencing
and ending on dates designated by Landlord, each installment being due on the
first day of each calendar month. If at any time during such twelve (12) month
period, it shall appear that Landlord has materially underestimated or
overestimated Operating Expenses or Real Estate Taxes, Landlord may reestimate
Tenant's Pro Rata Share of Operating Expenses and Real Estate Taxes and may bill
Tenant for any deficiency or credit Tenant for any surplus which may have
accrued during such twelve (12) month period and thereafter the monthly
installment payable by Tenant shall also be adjusted. Within one hundred (100)
days after the end of each such twelve (12) month period, Landlord shall deliver
to Tenant a statement of Operating Expenses and Real Estate Taxes for such
twelve (12) month period and the monthly installments paid or payable shall be
adjusted between Landlord and Tenant, and each party hereby agrees that Tenant
shall pay Landlord or Landlord shall credit Tenant' s account (or, if such
adjustment is at the end of the term, pay Tenant), within thirty (30) days of
receipt of such statement, the amount of any excess or deficiency in Tenant's
Pro Rata Share of Operating Expenses and Real Estate Taxes paid by Tenant to
Landlord during such twelve (12) month period. Failure of Landlord to provide
the statement called for hereunder within the time prescribed shall not relieve
Tenant from its obligations hereunder, but no such statement increasing Tenant's
obligations shall be effective if more than one hundred eighty (180) days
delinquent. Tenant shall have the right from time to time (but not exceeding
once in any 12 month period) to examine books and records relating to Operating
Expenses, including the right to conduct audits at Tenant's expense. Such
examinations and audits shall be performed at Landlord's offices during normal
business hours, on reasonable prior written notice to Landlord, and Tenant's
payments shall be adjusted
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accordingly. In the event said audit discloses a total deviation in excess of
five (5%) percent, or more, of the actual Operating Expenses, Landlord shall pay
the cost of said audit. In no event shall Tenant employ any person, firm or
entity to perform the rights of Tenant hereunder who is paid on a contingency
fee basis.
9. REPAIRS-ALTERATIONS. Tenant shall not damage the Premises and shall
not permit waste to the Premises. Tenant shall not make any improvements,
additions or alterations to the Premises, or install any equipment which defaces
the Building interior or exterior or negatively affects the structural or
mechanical components of the Building, without the prior written consent of
Landlord. Subject to Section 22.3, Landlord may condition Landlord's approval on
removal of such machinery, equipment, improvements, additions or alterations at
Tenant's expense upon the termination of this Lease. Tenant shall pay for any
repairs necessary as a result of removal of any such machinery, equipment,
improvements, additions or alterations. Notwithstanding the foregoing, Tenant
may make minor interior, non-structural alterations and improvements without the
consent of Landlord. If plans and specifications are prepared for any such work,
Tenant shall furnish a copy of such plans and specifications to Landlord.
Without regard to any other limitations on Tenant's removal obligations
contained elsewhere in this Lease, Landlord may, in Landlord's sole discretion,
require Tenant to remove any improvements, additions or alterations to the
Premises which were made without Landlord's prior written consent, but Landlord
shall not have the right of reentry or lease termination solely by reason of any
minor, non-structural alterations or improvements made without Landlord's
consent.
10. UTILITIES AND OTHER SERVICES. Tenant shall pay for all utilities
(including, without limitation, gas and electricity) and janitorial services
furnished to the Premises. In the event that Landlord determines, in Landlord's
reasonable discretion, that Tenant's water usage is disproportionally high
compared with other tenants in the Complex, Landlord may charge Tenant directly
for such excess consumption. Landlord shall not be liable for damages for
failure of heat, hot or cold water, air conditioning, sewer service, electric
current, gas, or any other service by reason of breakdown of plant, equipment,
or apparatus, shut-down of any thereof for necessary repairs or alterations or
due to unavailability of fuel, water or any other substance or utility, war,
civil disturbance, strike, lockout, fire, flood, casualty, governmental
regulations, or other conditions beyond Landlord's reasonable control.
11. LANDLORD'S ACCESS. Upon one business day's prior notice, except in an
emergency, Landlord may enter the Premises during the Term hereof at all
reasonable hours for the purpose of inspection, verifying Tenant's compliance
with this Lease or making repairs or improvements to the Premises or any other
portion of the Building, or for the purpose of exhibiting the same to
prospective purchasers, brokers, lenders or others, or during the last six (6)
months of the Term or any Renewal Term, prospective tenants. In an emergency
Landlord may enter the Premises at any time without notice to take such action
as Landlord deems to be prudent or necessary.
12. INDEMNITY AND NON-LIABILITY.
12.1 INDEMNITY. Tenant shall defend, indemnify and hold harmless Landlord,
and Landlord's employees and agents, from and against any and all claims arising
from Tenant's use of the Premises, Building or Complex, or from the conduct of
Tenant's business or from any activity, work, or thing done, permitted, or
suffered by Tenant in or about the Premises or the Building or Complex and shall
further defend, indemnify and hold harmless, Landlord and Landlord's employees
and agents, from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease or arising from any negligence of Tenant, or any
of Tenant's agents, contractors, or employees, and from and against all costs,
reasonable attorneys' fees, expenses and liabilities incurred in the defense of
any such claim or any action or proceeding brought thereon. In the event any
action or proceeding is brought against Landlord by reason of any such claim,
Tenant upon notice from Landlord shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. Notwithstanding any foregoing
provisions hereof to the contrary, Tenant shall have no obligation to indemnify
Landlord from and against any claims directly resulting from Landlord's
negligent actions or omissions.
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Landlord shall defend, indemnify and hold harmless Tenant, and Tenant's
employees and agents, from and against any and all claims arising from the
conduct of Landlord's business in connection with the Building or Complex, or
from any activity, work, or thing done, permitted, or suffered by Landlord in or
about the Building or Complex and shall further defend, indemnify and hold
harmless, Tenant and Tenant's employees and agents, from and against any and all
claims arising from any breach or default in the performance of any obligation
on Landlord's part to be performed under the terms of this Lease or arising from
any negligence of Landlord, or any of Landlord's agents, contractors, or
employees, and from and against all costs, reasonable attorneys' fees, expenses
and liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon. In the event any action or proceeding is brought
against Tenant by reason of any such claim, Landlord, upon notice from Tenant,
shall defend the same at Landlord's expense by counsel reasonably satisfactory
to Tenant. Notwithstanding any foregoing provisions hereof to the contrary,
Landlord shall have no obligation to indemnify Tenant from and against any
claims directly resulting from Tenant's negligent actions or omissions.
12.2 Waiver. Tenant, as a material part of the consideration to Landlord
for this Lease, hereby assumes all risk of damage to property or injury to
persons in, upon or about the Premises arising from any cause except to the
extent caused by the negligence or willful misconduct of Landlord. Tenant hereby
waives all claims in respect thereof against Landlord.
12.3 Liens. Tenant shall have no power to do any act, or to make any
contract, that may create, or be the foundation for, any lien against the
Premises, the Building or the Complex, or any portion thereof, and, should any
such lien be filed due to actions or omissions of Tenant, Tenant, at its own
cost and expense, shall bond for or discharge the same within ten (10) business
days after the filing thereof.
12.4 Non-liability. Unless directly resulting from facilities controlled
by Landlord and from Landlord's negligent act or omission and Tenant has
notified Landlord, Landlord shall not be liable to Tenant for any damage
occasioned by: plumbing, electrical, gas, water, steam or other utility pipes,
systems, and facilities, or by the bursting, stopping, leaking or running of any
tank, washstand, closet or waste or other pipes in or about the Premises or
Building by water being upon or coming through the roof, or any skylight, vent,
trapdoor or otherwise or arising from any act or omission of any third party or
any tenant of the Complex, its agents, contractors or employees.
13. INSURANCE.
13.1 Liability Coverage. Tenant shall, at its expense, obtain and keep
in force during the term of this Lease, including any renewal term, a commercial
general liability insurance policy with a combined single limit of not less than
$2,000,000 covering bodily injury to one or more persons and property damage
with deductibles in an amount reasonably satisfactory to Landlord. All policies
of insurance required to be provided hereunder by Tenant shall be issued by
insurer(s) licensed and qualified to do business in the State of Minnesota, with
a current A.M. Best Company rating of at least AVII. The policy shall name
Landlord as an additional insured and any Mortgagee (as defined in Section 17)
and shall cover the entire Complex. Tenant shall increase its liability coverage
as may be reasonably requested by Landlord, if Landlord presents evidence that
customary insurance coverage limits for similar facilities in the Twin Cities
market area have increased. The establishment of insurance requirements shall
not limit the liability of Tenant under this Lease.
Landlord shall, as a portion of Operating Expenses, obtain and keep in
force with a financially responsible insurance company, during the Term,
including any renewal term, a commercial general liability insurance policy with
a combined single limit of not less than $3,000,000 covering bodily injury to
one or more persons and property damage, and worker's compensation insurance as
required by statute. Landlord shall, upon written request of Tenant, deliver
certificates of insurance evidencing the existence and amounts of the coverages
required hereunder.
13.2 Certificates. Tenant shall deliver to Landlord certificates of
insurance, making specific reference to the Complex and the Premises, evidencing
the existence and amounts of the policy of insurance
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required pursuant to this Section 13, as well as the deductibles. No such policy
shall be nonrenewable, cancelable or subject to material reduction of coverage
or other material modification except after thirty (30) days' prior written
notice to Landlord. Tenant shall, at least thirty (30) days prior to the
expiration of such policy, furnish Landlord with renewals or "binders" thereof.
Any failure of Tenant to obtain, maintain, or provide copies or certificates of
any insurance required hereunder shall constitute a material and continuing
breach of this Lease.
13.3 Property Coverage. Tenant shall maintain in effect, with a
financially responsible insurance company, policies of property insurance
covering for the full insurable value of all improvements (other than those
described in Exhibit "D"), additions or alterations to the Premises made without
Landlord's written consent, and all of Tenant's machinery, equipment, furniture,
fixtures and personal property. Such policies of insurance shall provide
protection for Tenant against all casualties included under standard insurance
industry practices within the classification of "Fire and Extended Coverage" and
shall contain a waiver of subrogation releasing Landlord from all claims and
liabilities arising from or caused by any hazard covered by Tenant's property
insurance. The proceeds from said insurance shall be used to repair or
reconstruct such insured property to the extent required under Section 15 of
this Lease.
Landlord shall, as a portion of Operating Expenses as defined in Section
8 of this Lease, maintain in effect, with a financially responsible insurance
company, policies of property insurance covering the Complex including
Landlord's Work as described in Exhibit "C" and Tenant's Improvements as
described in Exhibit "D," (other than the property required to be insured by
Tenant in the preceding paragraph, and other tenant improvements and tenant
property) on a replacement cost basis.
13.4 Release. Notwithstanding anything apparently to the contrary
elsewhere in this Lease, Landlord and Tenant each hereby mutually release and
relieve the other from all claims and liabilities arising from or caused by any
hazard covered by property insurance on the Premises or covered by property
insurance in connection with property on or activities conducted in or about the
Premises or Complex or covered by the property insurance required hereunder,
regardless of the cause of the damage or loss, provided that this release shall
apply only to the extent that such loss is covered by such property insurance.
Tenant and Landlord shall, at the earlier of the date of obtaining insurance
coverages or the Commencement Date, give notice to the insurance carriers
involved that the foregoing mutual waiver of liability and subrogation is
contained in this Lease.
14. ASSIGNMENT AND SUBLETTING.
14.1 Landlord Consent. Tenant shall not cause or permit, by operation of
law or otherwise, any assignment, sublease, encumbrance, or transfer (a
"Transfer") of this Lease or any estate or interest herein without the prior
written consent of Landlord, which consent shall not be unreasonably withheld or
delayed. It shall be reasonable for Landlord to withhold consent in the event
the proposed assignee's use of the Premises is different from that of Tenant,
or, if the proposed assignee's financial status fails to meet Landlord's
criteria for any tenant leasing space of similar size and quality.
Any conversion of a corporation or partnership to a limited liability
corporation or limited liability partnership, shall be deemed to be an
assignment which shall require Landlord's consent. If Tenant wishes to transfer
any of its rights, Tenant shall submit in writing to Landlord (a) the name and
legal composition of the proposed assignee, subtenant or other transferee (a
"Transferee"); (b) the nature of the business proposed to be carried on in the
Premises; (c) the terms and provisions of the proposed Transfer; (d) such
financial and other information concerning the proposed Transferee as Landlord
may reasonably request; (e) the form of the proposed assignment, sublease or
other agreement governing the proposed Transfer, and (f) a written notice that
failure of Landlord to respond to Tenant's request within ten (10) business days
shall be deemed an approval. Within ten (10) business days after Landlord
receives all such information it shall notify Tenant whether it approves such
Transfer or if it elects to proceed under Section 14.3 - Landlord's Right to
Space. In no event may Tenant publicly advertise or offer all or any portion of
the Premises for assignment or sublease without Landlord's prior written consent
and in no event at a rental less than that then sought by Landlord for a direct
lease (non-sublease) of comparable space in the Complex. Tenant shall pay
Landlord's reasonable attorneys' fees incurred in connection
8
with any proposed Transfer. Attempted assignment or subletting without
Landlord's prior written consent shall constitute a material breach of this
Lease. Failure of Landlord to respond within ten (10) business days after
receipt of all of the information listed above shall be deemed approval by
Landlord of the proposed Transfer. Neither this Lease nor any estate thereby
created shall pass to any trustee or receiver in bankruptcy or any assignee for
the benefit of creditors, or by operation of law. In the event that Landlord
shall consent to a subletting of all or any portion of the Premises under a
sublease which obligates the subtenant to pay a rental at a rate in excess of
Tenant's Annual Base Rent as set forth in Section 1.11, above, then Landlord and
Tenant shall each be entitled to receive fifty (50%) percent of the excess
rental as paid by the subtenant.
Notwithstanding anything to the contrary contained herein, Tenant shall
have the right to assign or sublet the Premises without Landlord's consent to
any affiliate, subsidiary, or parent of Tenant, or to any corporation or
partnership with a comparable net worth who purchases all or substantially all
of the assets of Tenant. In addition, in the event the stock of Tenant or
Tenant's parent company is traded on a nationally recognized stock exchange or
over the counter market, the sale or other transfer of said stock shall neither
be deemed a Transfer hereunder nor require Landlord's consent or approval.
14.2 No Release of Tenant. No consent by Landlord to any Transfer shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether occurring before or after such consent, assignment, subletting or other
Transfer, and the Transferee shall be jointly and severally liable with Tenant
for the payment of rent (or, in the case of sublease, rent in the amount set
forth in the sublease) and for the performance of all other terms and provisions
of this Lease. The consent by Landlord to any Transfer shall not relieve Tenant
or any such Transferee from the obligation to obtain Landlord's express prior
written consent to any subsequent Transfer. The acceptance of rent by Landlord
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any Transfer.
14.3 Landlord's Right to Space. Notwithstanding any of the above
provisions of this Section 14 to the contrary, if Tenant notifies Landlord that
it desires to enter into a Transfer and such Transfer requires Landlord's
consent, Landlord, in lieu of consenting to such Transfer, may elect to
terminate this Lease (in the case of an assignment or a sublease of the entire
Premises), or to terminate this Lease as it relates to the space proposed to be
subleased by Tenant (in the case of a sublease of less than the entire
Premises). In such event, this Lease (or portion thereof) will terminate on the
effective date of the proposed Transfer, and Landlord may lease such space to
any party, including the prospective Transferee identified by Tenant.
15. DAMAGE OR DESTRUCTION.
15.1 Damage to Premises Covered by Insurance. If the Premises are damaged
or destroyed by fire or other casualty insurable under standard fire and
extended coverage insurance (the "Event") so as to become partially or totally
untenantable, the Premises shall be repaired and restored by Landlord and Tenant
with due diligence. The repairs shall commence as soon as reasonably possible
following the Event. Landlord's obligation to repair and restore shall be
limited to the restoration of the building structure and the work designated as
Landlord's Work in Exhibits "C" and Tenant Improvements in Exhibit "D" and
Tenant shall be obligated to restore the remainder of the Premises. If the
Premises are damaged or destroyed to the extent that the cost of the restoration
would exceed 25% of the amount it would have cost to replace the Premises in
their entirety at the time such damage or destruction occurred, and if the
unexpired portion of the Term of this Lease shall be one year or less on the
date of the damage or destruction, then Landlord may elect to terminate this
Lease by giving notice to Tenant of its election to do so within 60 days after
such occurrence. If Landlord exercises such right, then this Lease shall cease
as of the date of such notice and all rent and other charges payable by Tenant
shall pro-rated as of that date.
15.2 Damage to Premises not Covered by Insurance. If the Premises shall at
any time be damaged or destroyed by a casualty not insurable under standard fire
or extended coverage insurance so as to become partially or totally
untenantable, then Landlord shall have the right to either repair and restore
the work designated as Landlord's Work in Exhibits "C" and "D" as it relates to
the Premises or to terminate this Lease. Such election shall be made by Landlord
upon notice to Tenant within 60 days after the occurrence of such casualty. If
Landlord
9
elects to restore its work, such work shall not exceed what is required to
restore the Premises to a condition substantially similar to that at the time of
the original delivery of the Premises to Tenant and, then Tenant shall be
required to repair with diligence the remainder of the Premises. If Landlord
elects to terminate this Lease, this Lease shall terminate 60 days after the
date of the occurrence of such casualty and all rent shall be pro-rated as of
such date of termination.
15.3 Destruction of the Complex. If all or any portion of the Complex
shall be damaged or destroyed by fire or other cause (regardless of whether the
Premises may be affected thereby) to the extent that the cost of restoration
thereof would exceed 25% of the amount it would have cost to replace the Complex
in its entirety at the time such damage or destruction occurred, then Landlord
may elect to repair that portion of the Complex owned by Landlord within a
reasonable time after such damage or destruction, provided that Landlord shall
not be obligated to expend for such rebuilding and repairing an amount in excess
of the insurance proceeds recovered or recoverable as a result of such damage or
destruction, or Landlord may elect to terminate this Lease upon 30 days notice
to Tenant, which notice shall be given, if at all, within 60 days after the date
of such occurrence. In the event of such termination, this Lease shall cease 30
days after such notice is given and all rent shall be pro-rated as of that date.
15.4 Rent Abatement. If the Premises are damaged or destroyed and Tenant
is prevented from occupying and does not occupy the Premises or any part thereof
for ten (10) consecutive business days, Annual Base Rent and other charges
hereunder shall be abated during any period in which such damage or destruction
continues to materially interfere with the operation of Tenant's business in the
Premises. Rent abatement shall be Tenant's sole right against Landlord by reason
of such damage or destruction and such abatement shall apply only during the
period commencing with such damage or destruction and ending 30 days after
Landlord substantially completes its repairs or when Tenant reopens the Premises
for business, whichever is earlier.
15.5 Destruction Cancellation. In the event the Premises shall be damaged
or destroyed by fire or otherwise so as to become partially or totally
untenantable, during the last year of the Term or any extension term hereof,
either party shall have the option to terminate this Lease as of the date of
such damage or destruction by written notice to the other party given within
three (3) months following the date of such damage or destruction and this Lease
shall then be terminated and rent and all other charges shall cease as of the
date of the occurrence of such damage or destruction.
16. EMINENT DOMAIN. Except as may be otherwise agreed to by Landlord and
Tenant as provided in this Section, if all of the Premises, or such portion of
the Premises as renders the remainder impractical for the Permitted Use, are
taken by any public authority under the power or threat of eminent domain or by
private purchase in lieu thereof, then the term of this Lease shall cease as of
the date possession shall be taken by such public authority, and Landlord shall
make a pro rata refund of any Annual Base Rent that may have been paid in
advance. In the event that less than the entire Complex is so taken and the
Premises are not in that portion of the Complex so taken and provided the
Premises are not rendered untenantable thereby, then this Lease shall terminate
only at the option of Landlord. In the event that only a part of the Premises is
so taken and the parties agree that this Lease shall not so terminate, there
shall be a pro rata reduction in Annual Base Rent for the period following such
taking, and all other terms and provisions hereof shall remain in full effect.
All damages awarded for any such taking shall belong to and be the property of
Landlord for diminution in value to this leasehold or to the fee of the
Premises; provided, however, that Landlord shall not be entitled to any portion
of the award made to Tenant for loss of business, depreciation to and cost of
removal of stock and fixtures.
17. MORTGAGEE PROTECTION.
17.1 Subordination of Lease. This Lease shall be subject and subordinate
at all times to the lien of any existing mortgage and other financing documents
and the lien of any mortgages and other financing documents that hereafter may
be made a lien upon the Building and the real property upon which it is
situated; provided, however, that the secured party named in each such mortgage
or other financing document (a "Mortgagee") shall agree to recognize this Lease
in the event of foreclosure if Tenant is not then in default and if Tenant
agrees to attorn to such Mortgagee as Landlord under this Lease. In the event a
Mortgagee elects to have
10
this Lease a prior encumbrance, then and in such event upon Mortgagee notifying
Tenant to that effect, this Lease shall be deemed a prior encumbrance whether
this Lease is dated prior or subsequent to the date of Mortgagee's encumbrance.
Within fifteen (15) business days following Landlord's request, Tenant will
execute and deliver any certificates of subordination and other documents
desirable to effect the purpose of this Section 17.1; provided, however, that
each Mortgagee shall agree to recognize this Lease in the event of foreclosure
if Tenant is not then in default.
17.2 INSURANCE. Whenever under this Lease policies of insurance or bonds
are to be provided for the benefit of Landlord, the same shall, at the option of
Landlord, be made payable to and shall secure Landlord and/or any Mortgagee.
17.3 ESTOPPEL CERTIFICATE. Tenant shall, within ten (10) days following a
request from Landlord, execute and deliver to Landlord an Estoppel Certificate
in such form and content as reasonably requested by Landlord, attesting to the
terms and condition of this Lease and the compliance to date of Landlord with
the terms and conditions of this Lease and such other matters as reasonably
requested by Landlord concerning the tenancy of Tenant under this Lease. In the
event that Tenant asserts any default by Landlord, Tenant shall set forth such
alleged default or defaults upon the said certificate in detail and attest to
the fact that those listed defaults are the only defaults by Landlord hereunder.
17.4 MORTGAGEE'S PERFORMANCE. Tenant agrees to give to any Mortgagee(s),
by certified mail, a copy of any notice of default served upon Landlord,
provided that prior to such notice Tenant has been notified in writing of the
address of such Mortgagee, which notice shall state that it is given pursuant to
this Section of the Lease and that copies of notices shall be sent to such
Mortgagee. If Landlord shall have failed to cure such default within thirty (30)
days from the effective date of such notice of default or such longer time as
Landlord may be provided under this Lease, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
to cure such default and this Lease shall not be terminated so long as such
remedies are being diligently pursued. Upon written request of Tenant, Landlord
shall provide Tenant with the name and address of each Mortgagee.
18. RELOCATION OF PREMISES. INTENTIONALLY DELETED.
19. SIGNAGE. Tenant, at its sole cost and expense, shall be permitted to
place one building standard sign containing Tenant's name, within the sign band
on the Building and within the lease lines of the Premises, the size and design
of said sign to be in conformance with the building signage of the Complex. No
other signage shall be displayed by Tenant without the prior written consent of
Landlord. Tenant shall be responsible, at its sole cost and expense, to
maintain, repair, and clean the signage, as is reasonably necessary.
20. ENVIRONMENTAL COMPLIANCE
I.
(a) Landlord represents, to the best of its knowledge, that on the
Commencement Date, there is no Hazardous Material in the Complex or on the
Premises in violation of any Environmental Law. Landlord hereby agrees that
if at anytime during the term of this Lease, it should be determined that
the Complex or Premises were contaminated with Hazardous Material on the
Commencement Date of this Lease or thereafter because of any acts or
omissions of Landlord or any other tenant in the Complex, Landlord agrees
to indemnify and hold Tenant and Tenant's affiliates, shareholders,
partners, directors, officers, employees and agents harmless from any and
all losses, penalties, claims, liabilities, litigation, demands, defenses,
suits, proceedings damages and obligations or expenses of any nature
arising from or as a result of such contamination.
II. Tenant represents, warrants, and covenants to Landlord that:
(a) Tenant will cause the Premises at all times to be and remain in
compliance with all applicable laws, ordinances, and regulations (including
consent decrees and administrative orders) relating to public health and
safety and protection of the environment, including those statutes, laws,
regulations, and
11
ordinances identified in subparagraph (f), all as amended and modified from
time to time (collectively, "Environmental Laws"). Tenant agrees to obtain
and keep in effect all governmental permits and approvals relating to the
use or operations of the Premises required by applicable Environmental
Laws, and Tenant agrees to comply with the terms of the same.
(b) Tenant will not generate, manufacture, store, treat, transport,
release, or dispose of "Hazardous Material," as that term is defined in
subparagraph (f), on, in, under, about or from the Premises, Building or
Complex, other than in such quantities as are required for the conduct of
Tenant's permitted business, and other than those lawfully incorporated
into the Premises, in keeping with good construction practices, as
appropriate building materials, and then only in compliance with all
Environmental Laws, health, safety, handling, reporting and disclosure
laws, regulations and rules. Tenant shall promptly provide to Landlord
upon written request, but not more often than once in any twelve month
period unless Landlord has reasonable cause to believe that Tenant is not
in compliance with this Section 20, a detailed list of such materials used
in the conduct of Tenant's business or incorporated in the Premises,
together with copies of all applicable permits related to such materials,
if any. If any Hazardous Material (other than as permitted in the
foregoing sentence) is found on the Premises, or if Tenant or any one of
its employees, agents, contractors, suppliers or invitees causes,
contributes to or aggravates any release or disposal of any Hazardous
Material on, in, under or about the Premises, Building, or Complex, Tenant,
at its own cost and expense will immediately take such action as is
necessary to detain the spread of and remove the Hazardous Material to the
complete satisfaction of Landlord and the appropriate governmental
authorities.
(c) Tenant will immediately notify Landlord and provide copies upon
receipt of all written complaints, claims, citations, demands, inquiries,
reports, or notices relating to Tenant's compliance with Environmental
Laws. Tenant will, at its sole cost, promptly cure and have dismissed with
prejudice any such action. Tenant will keep the Premises, Building and
Complex free of any lien imposed pursuant to any Environmental Laws on
account of Tenant's generation, manufacture, storage, treatment,
transportation, release, or disposal of Hazardous Material.
(d) If Tenant breaches or fails to comply with any of the foregoing
warranties, representations, and covenants, Landlord may cause the removal
(or other cleanup acceptable to Landlord) of any Hazardous Material (other
than those expressly authorized herein) from the Premises, Building or
Complex. The costs of such Hazardous Material removal and any other cleanup
(including transportation and storage costs) will be additional rent under
this Lease, whether or not a court or administrative agency has ordered the
cleanup, due and payable on Landlord's demand. Tenant thereby grants
Landlord, its employees, agents and contractors, access to the Premises to
remove or otherwise clean up any Hazardous Material. Landlord, however, has
no affirmative obligation under this Lease to remove or otherwise clean up
any Hazardous Material, from the Premises, Building or Complex and nothing
in this Lease will be construed as creating any such obligations.
(e) Tenant agrees to indemnify, defend, and hold Landlord and Landlord's
affiliates, shareholders, partners, directors, officers, employees and
agents free and harmless from and against all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs,
judgments, suits, proceedings, damages (including consequential damages),
disbursements, or expenses of any kind (including attorneys' and experts'
fees and expenses and fees and expenses incurred in investigating,
defending, or prosecuting any litigation, claim, or proceeding) that may at
any time be imposed upon, incurred by, asserted, or awarded against
Landlord or any of them in connection with or arising from or out of
Tenant's obligations hereunder and under applicable Environmental Laws.
The indemnifications contained in this Section 20 are the personal
obligations of Landlord and Tenant and shall survive termination of this
Lease.
(f) For purposes of this Lease "Hazardous Material" means:
12
i. "Hazardous substances" or "toxic substances" as those terms are
defined by the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. #9601, et seq., or the Hazardous
Materials Transportation Act, 49 U.S.C. # 1 80 1, et seq., both as
amended to and after this date.
ii. "Hazardous wastes," as that term is defined by the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. #6901, et seq., as
amended to and after this date.
iii. Any pollutant or contaminant or hazardous, dangerous, or toxic
chemicals, materials, or substances within the meaning of any other
applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic, or dangerous waste substance or material, all as
amended to and after this date.
iv. Crude oil or any fraction of it that is liquid at standard
conditions of temperature and pressure (60 degrees Fahrenheit and 14.7
pounds per square inch absolute).
v. Any radioactive material, including any source, special nuclear,
or by product material as defined at 42 U.S.C. #201 1, et seq., as
amended to and after this date.
vi. Asbestos in any form or condition.
vii. Polychlorinated biphenyl's (PCB's) or substances or compounds
containing PCB's.
21. DEFAULT.
21.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" by Tenant:
(a) Tenant fails to make any Monthly Installment or Additional Rent payment
when due.
(b) Tenant fails to make any Monthly Installment or Additional Rent
payments when due under this Lease two (2) or more times during any twelve
(12) month period during the Term.
(c) Tenant abandons the Premises; provided, however, that vacation of the
Premises by Tenant, by itself, shall not constitute an Event of Default
hereunder.
(d) Tenant fails to comply with any of the provisions of Section 20 -
Environmental Compliance.
(e) Intentionally deleted.
(f) Tenant fails, within ninety (90) days after the commencement of any
proceedings against Tenant seeking relief under any reorganization,
arrangement, consolidation, readjustment, liquidation, dissolution or
similar arrangement or proceeding under any state or federal bankruptcy or
other statute, law or regulation, to have such proceedings dismissed, or
Tenant fails, within ninety (90) days after any appointment pursuant to any
state or federal bankruptcy or other statute, law or regulation, without
Tenant's consent or acquiescence, of any trustee, receiver or liquidator
for the Premises, for Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.
(g) Tenant fails to perform or comply with any provision of this Lease
other than those described in (a) through (f) above, and such failure is
not cured within thirty (30) days after notice to Tenant or, if such
failure cannot be cured within such thirty (30) day period, Tenant fails
within such thirty (30) day period to commence, and thereafter diligently
proceed with, all actions necessary to cure such failure as soon as
13
reasonably possible but in all events within ninety (90) days of such
notice; provided, however, that if Landlord in its reasonable judgment
determines that such failure cannot or will not be cured by Tenant within
such ninety (90) days, then such failure shall constitute an Event of
Default immediately upon such notice to Tenant.
21.2 REMEDIES. Upon the occurrence of an Event of Default, Landlord shall
have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
(a) If Tenant shall have vacated or abandoned the Premises, Landlord may,
without terminating this Lease, change the locks on the doors to the
Premises and exclude Tenant therefrom.
(b) Landlord may, upon notice to Tenant, terminate this Lease, or without
notice to Tenant re-enter the Premises without terminating this Lease. No
re-entry or taking possession of the Premises by Landlord shall be
construed as an election on its part to terminate this Lease unless a
notice of such intention is given to Tenant (all other demands and notices
of forfeiture or other similar notices being hereby expressly waived by
Tenant). Upon the service of any such notice of termination, the Term of
this Lease shall automatically terminate. Should Landlord at any time
terminate this Lease for any breach, in addition to any other remedies it
may have, it may recover from Tenant all damages it may incur by reason of
such breach, including the cost of recovering the Premises, reasonable
attorneys' fees, and the value at the time of such termination of any rent
reserved in this Lease for the remainder of the term over the then
reasonable rental value of the Premises for the remainder of such term, all
of which amount shall be immediately due and payable from Tenant to
Landlord.
(c) Landlord may require that, upon any termination of the Lease or
Tenant's right to possession without termination of this Lease, Tenant
shall immediately surrender possession of the Premises to Landlord, vacate
the same and remove all effects therefrom except those that may not be
removed under other provisions of this Lease. If Tenant fails to surrender
possession and vacate as aforesaid, Landlord may forthwith re-enter the
Premises and expel and remove Tenant and any other persons and property
therefrom, using such force as may be necessary, without being deemed
guilty of trespass, eviction, conversion or forcible entry and without
thereby waiving Landlord's rights to rent or any other rights given
Landlord under this Lease or at law or in equity. If Tenant does not
remove all effects from the Premises, Landlord may either declare such
effects abandoned and dispose of the same in any reasonable manner without
liability to Tenant or any other party, or remove any or all of such
effects in any manner it shall choose and store the same without liability
to Tenant. Tenant shall pay Landlord on demand, any reasonable expenses
incurred in such removal and storage for any length of time during which
the same shall be in Landlord's possession or in storage.
(d) Landlord can continue this Lease in full force and effect, and the
Lease will continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to collect
Annual Base Rent and Additional Rent when due. After Tenant's right to
possession is terminated Landlord may enter the Premises and may make such
alterations and repairs as it shall determine may be reasonably necessary
to relet the Premises and Landlord may (but shall not be required to) relet
the same or any part thereof upon such terms and conditions as Landlord in
its sole discretion may deem advisable. Upon any reletting, all rentals
received by Landlord from such reletting shall be applied as follows:
first, to the payment of any indebtedness other than rent or other charges
due under this Lease from Tenant to Landlord; second, to the payment of any
costs and expenses of such reletting, including brokerage fees, reasonable
attorneys' fees and costs of such alterations and repairs; and third, to
the payment of Annual Base Rent and Additional Rent and other charges due
and unpaid hereunder. In no event shall Tenant be entitled to receive any
surplus of any sums received by Owner on a reletting in excess of the
rental and other charges payable hereunder. If such rentals and other
charges received from such reletting during any month are less than those
to be paid during that month by Tenant, Tenant shall pay any such
deficiency to Landlord upon demand. No act by Landlord allowed by this
Section shall terminate this
14
Lease unless Landlord notified Tenant that Landlord elects to terminate
this Lease. Landlord can terminate Tenant's right to possession of the
Premises at any time.
21.3 RECEIPT OF MONIES. No receipt of monies by Landlord from or for the
account of Tenant or from anyone in possession or occupancy of the Premises
after the giving of any notice under this Lease, including, without limitation,
a notice of termination of this Lease, shall reinstate, continue or extend the
Term of this Lease or affect any notice given to Tenant prior to the receipt of
such money. No payment by Tenant or receipt by Landlord of a lesser amount than
the charges herein reserved shall be deemed to be other than on account of the
earliest stipulated rent or other charges, nor shall any endorsement or
statement on any check or on any letter accompanying any check be deemed to be
an accord and satisfaction. Landlord shall not be deemed to have accepted
payment made to a "lockbox" or other depository until ten (10) days after
Landlord's actual receipt of the payment if, and only if, during said period
Landlord did not refund or attempt to refund such payment. Landlord's consent to
or approval of any act by Tenant requiring Landlord's consent or approval shall
not be deemed to waive or render unnecessary Landlord's consent to or approval
of any subsequent act by Tenant.
21.4 BANKRUPTCY. If at any time there exists an act of bankruptcy, which
shall include the filing by Tenant, or any guarantor of a petition in bankruptcy
(including, without limitation, a petition for liquidation, reorganization or
for adjustment of debts of an individual with regular income), the filing of any
such petition against Tenant or any guarantor with such party failing to secure
a discharge thereof within 30 days after the filing thereof, or Tenant or any
guarantor becoming insolvent or admitting in writing an inability to pay its
debts as they mature, or making an assignment for the benefit of creditors or
petitioning for or entering into an arrangement with creditors or a custodian
being appointed or taking possession of Tenant's or any guarantor's property
whether or not a judicial proceeding is instituted, then this Lease at
Landlord's option shall (if permitted by law) be terminated, in which event
neither Tenant, any guarantor, nor any person claiming through or under Tenant
or any guarantor or by virtue of any statute or court order shall be entitled to
possession of the Premises. Landlord, in addition to the other rights and
remedies given be this Lease or by virtue of any statute or rule of law, may
retain as liquidated damages any rent or any monies received by Landlord from
Tenant or others on behalf of Tenant.
21.5 LEGAL EXPENSES. In case suit shall be brought because of the breach
of any agreement or obligation contained in this Lease on the part of Tenant or
Landlord to be kept or performed, and a breach shall be established, the
prevailing party shall be entitled to recover all expenses incurred therefor,
including reasonable attorneys' fees and legal expenses.
21.6 LANDLORD'S RIGHT TO CURE DEFAULT. If Tenant fails to perform any
agreement or obligation on its part to be performed under this Lease, Landlord
shall have the right (but shall be under no obligation), if no emergency exists,
to perform the same upon ten (10) days notice to Tenant, and, in any emergency,
to perform the same immediately without notice or delay. For the purpose of
curing Tenant's defaults as aforesaid, Landlord shall have the right to enter
the Premises and Tenant shall within ten (10) days after demand reimburse
Landlord for any reasonable costs incurred by Landlord to cure any of Tenant's
defaults, including reasonable attorneys' fees. Except for gross negligence or
willful misconduct by Landlord, Landlord shall not be liable for any loss,
inconvenience, annoyance or damage resulting to Tenant or anyone holding under
Tenant for any action taken by Landlord pursuant to this Section. Any act done
by Landlord pursuant to this Section shall not constitute a waiver of any such
default by Tenant or a waiver of any covenant, term or condition herein
contained or the performance thereof.
21.7 RIGHTS AND REMEDIES. The rights and remedies given to Landlord and
Tenant in this Lease are distinct, separate, non-exclusive and cumulative rights
and remedies, in addition to every other remedy at law or in equity, and may be
exercised concurrently. No delay or failure by Landlord or Tenant to insist upon
the strict performance of any agreement, term, covenant or condition hereof, or
to exercise any right or remedy consequent upon a breach thereof, and no
acceptance of full or partial rent by Landlord during the continuance of any
such breach, shall constitute a waiver of any such breach, agreement, term,
covenant or condition. No waiver by Landlord of any breach (including recurrent
failure to timely pay rent) by Tenant under this Lease or of any breach
15
by any other tenant under any other lease of any portion of the Complex shall
affect or alter this Lease in any way whatsoever or be construed as a waiver of
any subsequent breach.
21.8 SECURITY DEPOSIT. Tenant shall pay Landlord the Security Deposit,
concurrently with the execution of this Lease, which sum shall be retained by
Landlord as security for Tenant's full, timely and faithful performance of all
of Tenant's obligations hereunder, including but not limited to the payment of
Annual Base Rent, Operating Expenses and Real Estate Taxes. If Tenant fails to
pay such amount or any other charges hereunder or otherwise defaults with
respect to any provisions of this Lease, Landlord may, at its option, apply all
or any portion of the Security Deposit to the payment thereof or for payment of
any other sums for which Landlord may become obligated by reason of Tenant's
default, or to compensate Landlord for any loss or damage that Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of the
Security Deposit, Tenant shall, within ten (10) days after written demand
therefor, deposit with Landlord an amount sufficient to restore the Security
Deposit to the full amount stated in Section 1, above, and Tenant's failure to
do so shall be a material breach of this Lease. Tenant shall not be entitled to
any interest upon the Security Deposit, nor shall Landlord be required to
segregate or hold the Security Deposit separate from Landlord's other funds, but
shall carry such sum as a bookkeeping entry only. In the event that Tenant shall
fully perform the covenants and provisions of this Lease, Landlord shall refund
the Security Deposit, or the unused balance thereof, if any, to Tenant within
thirty (30) days after the expiration or sooner termination of the term of this
Lease.
21.9 DEFAULT BY LANDLORD. Landlord shall not be deemed to be in default
under this Lease until Tenant has given Landlord written notice (the "Cure
Notice") specifying the nature of the default and unless Landlord does not cure
the default within fifteen (15) days after receipt of the Cure Notice or within
such reasonable time thereafter as may be necessary to cure the default where it
is of such a character as to reasonably require more than fifteen (15) days to
cure. If Landlord shall fail to cure a default within the time periods provided
in the preceding sentence, and Landlord's Mortgagee, after having been timely
given a copy of the Cure Notice, shall fail to cure a default within the time
periods provided in Section 17.4 of this Lease, Tenant shall have the right to
perform such cure itself and demand the reasonable, verifiable and direct cost
thereof from Landlord. In the event that Landlord shall not reimburse Tenant
for such costs, and a final judgment shall be entered therefor in favor of
Tenant, Tenant shall have the right to offset the reasonable, verifiable and
direct cost thereof, including reasonable attorney's fees, against the Monthly
Installment of rent next coming due under this Lease; provided that such rights
of self-help and offset shall be subject to the following terms and conditions:
(a) Neither Landlord nor Mortgagee shall be construed to have failed to
proceed with due diligence to the extent that any such failure is due to
reasons of force majeure or delays caused by Tenant.
(b) The Cure Notice shall state with specificity the nature and extent of
each item of repair that Tenant believes should be performed, Tenant's
estimate of the cost thereof, and the potential amount of offset.
(c) Any offset effected hereunder shall be exercised through the delivery
of written notice to Landlord and Landlord's Mortgagee specifying the
amount of the offset and including, as attachments, copies of all invoices
or other source documents reasonably necessary to verify the costs
underlying such offset, which notice shall be delivered to Landlord and
Landlord's Mortgagee on or before the date that Base Rent being offset is
otherwise due.
22. SURRENDER OF POSSESSION.
22.1 CONDITION. At the expiration of the term hereof, Tenant shall
surrender the Premises broom-clean in good condition and repair.
22.2 HOLDING OVER. If Tenant remains in possession of the Premises after
the expiration of the term hereof without the execution of a new lease, it shall
be occupying the Premises as a tenant from month-to-month, subject to all of the
conditions of this Lease insofar as the same are applicable to a month-to-month
16
tenancy, except that the monthly rent payable by Tenant shall be an amount equal
to 125% of the rate specified in Section 1.2. Tenant shall indemnify and hold
Landlord harmless from and against all claims, liabilities, damages, costs or
expenses, including reasonable attorneys' fees and costs of defending the same,
incurred by Landlord and arising from Tenant's failure to timely surrender the
Premises, including (i) any rent payable by or any loss, cost, or damages,
including lost profits, incurred by any prospective tenant of the Premises, and
(ii) Landlord's damages as a result of such prospective tenant rescinding or
refusing to enter into the prospective lease of the Premises by reason of such
failure to timely surrender the Premises.
22.3 FIXTURES. All partitions, wallcovering, ceilings, sinks, plumbing,
floor covering, and other improvements within the Premises shall become the
property of Landlord at the moment of completion of installation; provided,
however, Landlord may direct Tenant to remove, at Tenant's sole cost and
expense, any such improvements upon the termination of this Lease not previously
approved by Landlord and any such other improvements reasonably required to be
removed as indicated by Landlord at the time of Landlord's consent to same.
Tenant shall retain ownership of all removable trade fixtures and machinery
("Tenant's Property") placed in the Premises by Tenant. Prior to the expiration
of the Term, Tenant shall remove all Tenant's Property and repair any damages
occasioned by such removal at Tenant's expense. Upon the failure of Tenant to
remove Tenant's Property prior to expiration of the Term, all remaining Tenant's
Property shall, at Landlord's election, be deemed abandoned by Tenant.
23. NOTICES. Whenever under this Lease provision is made for notice,
such notice shall be in writing, and it shall be deemed sufficient notice and
service if such notice is delivered personally or by a nationally-recognized
overnight courier service providing proof of delivery or by U.S. registered mail
or certified mail, postage prepaid, return receipt requested, to Tenant at the
address set forth in Section 1.3 or the Landlord at its then current address for
the payment of rent under this Lease. Any notice so sent shall be effective for
all purposes at the time of personal delivery or one (1) day following deposit
thereof in the U.S. mail. Either party may hereafter change the address for
notice stated in Section 1, above, by notifying the other party in writing of
the new address.
24. OCCUPANCY. If Landlord permits Tenant to occupy the Premises prior
to the Commencement Date, such occupancy shall be governed by all of the terms
and conditions of this Lease, including the requirement under Section 13 of this
Lease to maintain insurance. However, Tenant shall not owe Landlord any sums for
Annual Base Rent, Real Estate Taxes or Operating Expenses associated with the
Premises during said early occupancy period. Except as specifically provided for
herein, in the event Tenant is unable to enter into and occupy the Premises on
the Commencement Date specified in Section 1.17, because the Premises are not
ready for occupancy, Landlord shall not be liable for damages to Tenant. Annual
Base Rent shall abate during the period Tenant is unable to occupy the Premises;
and the Commencement Date shall automatically be redefined to mean the date
Tenant occupies and conducts business in any portion of the Premises.
Landlord and Tenant anticipate that the Delivery Date shall occur on or
about April 1, 1997. Such Delivery Date is based on the Lease being fully
executed and Tenant approving final construction plans for the Premises on or
before February 14, 1997 (the "Plans"). In the event Tenant approves the Plans
in accordance with the terms herein and the Lease is executed and delivered on
or before February 14, 1997 and Landlord fails to deliver the Premises on or
before the Delivery Date, then Landlord shall pay to Tenant, Five Hundred and
00/100 dollars ($500.00) for each and every day beyond the Delivery Date,
provided such a delay is not caused by, or attributable to, Tenant. Landlord
shall be allowed to add one (1) day to the Delivery Date, for each day that
Tenant fails to approve such plans beyond the specific, individual date herein
described for approval of the Plans and execution of the Lease.
25. JOINT AND SEVERAL LIABILITY. In the event that two or more
individuals, corporations, partnerships or other entities (or any combination of
two or more thereof) shall sign this Lease as Tenant, the liability of each
individual, corporation, partnership or other entity to perform all obligations
hereunder shall be deemed to be joint and several. In like manner, in the event
that Tenant shall be a partnership or other business
17
association, the members of which are, by virtue of statute, or general law,
subject to personal liability, then and in that event, the liability of each
such member shall be deemed to be joint and several.
26. QUIET ENJOYMENT. So long as Tenant is not in default under any of
the covenants and agreements of this Lease, Tenant's quiet and peaceable
enjoyment of the Premises shall not be disturbed by Landlord or by any person
claiming by, through, or under Landlord.
27. BROKERAGE FEES. Tenant warrants that it has not incurred liability
for any real estate brokerage fees or any other fees to any third party in
connection with this Lease and in the event that any third party institutes
legal action in an effort to recover brokerage fees, Tenant shall defend such
action and indemnify and hold Landlord harmless from any related damages,
liability or costs.
28. GENERAL.
28.1 CONSENT. Whenever under this Lease provision is made for Tenant to
secure the consent of Landlord, such consent shall be in writing. The consent by
either party to any act by the other party of a nature requiring consent shall
not be deemed to constitute consent to any similar act.
28.2 LEASE NEGOTIATION. The submission of this Lease for examination
does not constitute an offer, a reservation of or option for the Premises, and
this Lease shall become effective only upon execution and delivery thereof by
both parties.
28.3 NO MODIFICATION. This writing is intended by the parties as a
final expression of their agreement and as a complete and exclusive statement of
the terms thereof. No course of prior dealings between the parties or their
officers, employees, agents or affiliates shall be relevant or admissible to
supplement, explain or vary any of the terms of this Lease. No representations,
understandings or agreements have been made or relied upon in the making of this
Lease other than those specifically set forth herein. This Lease can be modified
only by a writing signed by the party against whom the modification is
enforceable.
28.4 SEVERABILITY. If any term or provision of this Lease, or any
portion thereof, or the application thereof to any person or circumstances
shall, to any extent, be invalid or unenforceable, then the remainder of this
Lease and the application of such term or provision to persons or circumstances,
other than those as to which it is held invalid or unenforceable, shall not be
affected and shall be valid and be enforced to the fullest extent permitted by
law.
28.5 THIRD PARTY BENEFICIARY. Nothing contained in this Lease shall be
construed so as to confer upon any other party the rights of a third party
beneficiary except rights contained herein for the benefit of Landlord's
Mortgagee.
28.6 HEADINGS. The headings of the Sections and Subsections herein
are for convenience only, and do not limit or construe the contents of such
Sections and Subsections.
28.7 FORCE MAJEURE. Whenever a period of time is herein provided for
either party to perform, said party shall not be responsible for, and there
shall be excluded from the computation of such period of time, any delays due to
strikes, riots, acts of God, shortages of labor or materials, national
emergency, acts of a public enemy, governmental restrictions, laws or
regulations, or any other cause or causes, whether similar or dissimilar to
those enumerated, beyond its reasonable control. This Section shall not excuse
Tenant from the prompt payment of rent, additional rent, or any other payments
required by the terms of this Lease.
28.8 PARTIES IN INTEREST. The terms, conditions, covenants and
agreements herein contained shall inure to the benefit of and shall bind the
parties hereto and their respective successors and permitted assigns.
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28.9 WAIVER. No provisions of this Lease shall be deemed waived unless
such waiver is in writing and signed. The waiver of any breach of any provision
of this Lease shall not be deemed a waiver of such provision or of any
subsequent breach of the same or any other provision of this Lease. No delay or
omission in the exercise of any right or remedy shall impair such right or
remedy or be construed as a waiver. Landlord's acceptance of any payment of rent
due under this Lease shall not be deemed a waiver of any default by Tenant under
this Lease, including Tenant's recurrent failure to timely make Monthly
Installment or Additional Rent payments, and no endorsement or statement on any
check or accompanying any check or payment shall be deemed an accord and
satisfaction.
28.10 JURY TRIAL. INTENTIONALLY DELETED.
28.11 LIMITATION OF LIABILITY. Tenant acknowledges and agrees that the
liability of Landlord under this Lease shall be limited to its interest in the
Complex and any judgments rendered against Landlord shall be satisfied solely
out of the proceeds of sale of its interest in the Complex. No personal judgment
shall lie against Landlord upon extinguishment of its rights in the Complex and
any judgment so rendered shall not give rise to any right of execution or levy
against Landlord's assets. The provisions hereof shall inure to Landlord's
successors and assigns including any Mortgagee. The foregoing provisions are not
intended to relieve Landlord from the performance of any of Landlord's
obligations under this Lease, but only to limit the personal liability of
Landlord in case of recovery of a judgment against Landlord.
28.12 AUTHORITY. If Tenant is a corporation, partnership or other form
of business entity, each of the persons executing this Lease on behalf of Tenant
warrants and represents that Tenant is a duly organized and validly existing
entity, that Tenant has full right and authority to enter into this Lease and
the persons signing on behalf of Tenant are authorized to do so and have the
power to bind Tenant to this Lease. Tenant shall provide Landlord upon request
with evidence reasonably satisfactory to Landlord confirming the foregoing
representations.
28.13 ATTORNEYS' FEES. In the event suit is brought for the recovery of
the Premises, or any sum due hereunder, or because of any act which may arise
out of possession of the Premises, the prevailing party shall be entitled to
recovery of all costs incurred therein, including reasonable attorneys' fees.
28.14 NO PARTNERSHIP. Nothing contained in this Lease shall be
interpreted as creating a partnership, joint venture, or relationship of
principal and agent between Landlord and Tenant, it being understood that the
sole relationship created hereby is one of landlord and tenant.
28.15 APPLICABLE LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Minnesota.
28.16 ENTIRE AGREEMENT. This Lease contains the entire understanding
and agreement of the parties hereto. All prior negotiations, understandings
and agreements between the parties have been incorporated herein and are
superseded hereby.
28.17 ADDITIONAL TERMS. Additional terms to this Lease, if any, are
attached as Exhibit "F."
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD:
CARLSON REAL ESTATE COMPANY,
A MINNESOTA LIMITED PARTNERSHIP
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By /s/ Dean A. Riesen
----------------------------------
Dean A. Riesen
Its General Partner
TENANT:
MEDI-JECT CORPORATION,
A MINNESOTA CORPORATION
By Franklin Pass
-----------------------------------
Its Chief Executive Officer
-------------------------------
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TABLE OF CONTENTS
1. Basic Lease Provisions and Definitions............1
2. Premises..........................................2
3. Rent Payment......................................3
4. Landlord's Work; Tenant's Acceptance of Premises..3
5. Operation and Use of Premises.....................3
6. Common Area.......................................4
7. Maintenance Obligations...........................5
8. Operating Expenses and Real Estate Taxes..........5
9. Repairs-Alterations...............................6
10. Utilities and Other Services......................7
11. Landlord's Access.................................7
12. Indemnity and Non-Liability.......................7
13. Insurance.........................................8
14. Assignment and Subletting.........................9
15. Damage or Destruction............................10
16. Eminent Domain...................................12
17. Mortgagee Protection.............................12
18. Relocation of Premises...........................13
19. Signage..........................................13
20. Environmental Compliance.........................13
21. Default..........................................16
22. Surrender of Possession..........................20
23. Notices..........................................21
24. Occupancy........................................21
25. Joint and Several Liability......................21
26. Quiet Enjoyment..................................21
27. Brokerage Fees...................................22
28. General..........................................22
Signatures.......................................24
EXHIBIT CITE
A - Complex Legal Description Section 1.4
B - Premises and Building Site Plan Section 1.5
C - Landlord's Work Base Building Section 4
D - Tenant Improvements Section 4
E - Rules and Regulations Section 5.4
F - Additional Terms and Conditions Section 28.18
G - Operating Expense Exclusions
EXHIBIT "A"
COMPLEX LEGAL DESCRIPTION
Lot 1, 2, 3, 4, and 5, Block 1, Carlson Business Center North, according to the
recorded plat thereof, and situate in Hennepin County, Minnesota.
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EXHIBIT "B"
PREMISES AND BUILDING SITE PLAN
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EXHIBIT "C"
LANDLORD'S WORK
"BASE BUILDING"
The following work is to be done by Landlord or its agent(s) at Landlord's sole
expense.
1. PARKING AREA. Landlord shall provide asphalt parking areas described in
Exhibit "B." In no event shall parking at the Complex be less than three
(3) parking stalls per 1,000 square feet of space.
2. BUILDING SHELL. Landlord shall provide the building shell in accordance
with the following specifications:
(a) Frame. Structural steel, pre-cast concrete and masonry.
(b) Wall. Exterior walls to be unpainted exposed masonry.
(c) Roof.
(d) Exterior Door(s) and Windows. Per architectural plan. Window
blinds shall be included on all windows.
(e) Utilities. Water service lines to individual bays, electric
service line to the utility room, sanitary sewer line extension to each bay.
(f) Slab Floor. (No finishes) Machine trowelled. However, Landlord
shall leave an area of the floor, (approximately ten feet (10') in width)
unfinished to allow for plumbing finish work per tenant's plans ("Floor Space").
Finishing of Floor Space will be considered a tenant improvement.
(g) Sprinkler System. Landlord shall install a sprinkler system. The
number of heads and spacing shall be designed as if the Complex were completely
open and undivided. Any revisions, additions, or relocations which the Tenant
may desire to have done must be done in accordance with the requirements of the
applicable rating bureau. All resulting revision work to be done on the
sprinkler system must be performed at Tenant's expense.
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EXHIBIT "D"
"TENANT IMPROVEMENTS"
Landlord shall cause to be constructed, improvements to the Premises pursuant to
the terms of the Lease and in accordance with final plans, specifications and
working drawings prepared by Wirtanen, Clark, Larson Architects, dated
______________, 1997 and approved, in advance, by Tenant.
Landlord agrees to contribute an amount not to exceed $380,000.00 toward
the cost of Tenant Improvements. Any amount in excess of $380,000.00 shall be
paid in a lump sum by Tenant as Additional Rent. Additionally, Landlord shall
pay the reasonable cost of the preparation of Tenant's initial construction
drawings. The cost of any changes made to the initial construction drawings
shall be included as a Tenant Improvement.
Landlord agrees that Tenant Improvements shall include items such as
countertops, telephone wiring, and installation of a security system.
EXHIBIT "E"
RULES AND REGULATIONS
To the extent these Rules and Regulations are inconsistent with the Lease and/or
any of the other exhibits to the Lease, the terms of the Lease and other
exhibits shall control.
1. Sidewalks, halls, passages and stairways shall not be obstructed by Tenant or
used for any purpose other than for ingress to and egress from the Premises.
2. The Common Areas including, but not limited to, halls, passages, entrances,
stairways, balconies and roof are not for the use of the general public, and
Landlord shall in all cases have the right to control and prevent access thereto
by all persons whose presence in the judgment of Landlord shall threaten the
safety, character, reputation or interests of the Complex and its tenants,
provided, that nothing contained herein shall be construed to prevent such
access to persons with whom Tenant normally deals in the ordinary course of its
business unless such persons are engaged in illegal activities.
3. The sashes, sash doors, windows, glass lights and any lights or skylights
that reflect or admit light into the halls or other places of the Building's
common areas shall not be covered or obstructed. The toilet rooms, water and
wash closets and other water apparatus shall not be used for any purpose other
than that for which they were constructed, and no foreign substance of any kind
whatsoever shall be thrown therein, and the expense of any breakage, stoppage or
damage, resulting from the violation of this rule shall be borne by the tenant
who, or whose employee, agent or visitor, shall have caused it.
4. If Landlord, by a notice in writing to Tenant, shall object to any curtain,
blind, shade or screen attached to, or hung in, or used in connection with, any
window or door of the Tenant's Premises, such use of such curtain, blind, shade
or screen shall be discontinued forthwith by Tenant. No awnings shall be
permitted on any part of the Premises or the Building.
5. Tenant shall not place a load upon any floor of the Building which exceeds
the load per square foot which such floor was designed to carry and which is
allowed by law.
6. Tenant shall not bring into or keep in or about the Building or the Complex
any animals (except assistance dogs), birds or aquariums.
7. Tenant, upon the termination of the tenancy, shall deliver to Landlord all
the keys of offices, rooms and toilet rooms which shall have been furnished
Tenant or which Tenant shall have had made.
8. Tenant assumes full responsibility for protecting its space from theft,
robbery and pilferage which includes keeping doors locked and windows and other
means of entry to the Premises closed.
9. Tenant shall not make any room-to-room canvass to solicit business from other
tenants in the Complex and shall not exhibit, sell or offer to sell, use, rent
or exchange to retail customers in or from the Premises.
10. Tenant shall supervise all contractors, contractor's representatives and
installation technicians, rendering any service to Tenant and Tenant shall be
liable for damage caused or clean-up required in connection therewith. This
provision shall apply to all work performed in the Building including
installations of telephones, telegraph equipment, electrical devises and
attachments and installations of any nature affecting floors, walls, woodwork,
trim, windows, ceilings, equipment or any other physical portion of the
Building.
11. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to assure the most effective operating of the
Building's heating and air conditioning.
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12. Tenant shall not do any cooking in the Premises or engage any coffee cart
service except for incidental cooking (i.e. lunchroom microwaving, on-site
coffee exclusively serving Tenant's employees).
13. No portion of the Premises or any other part of the Building shall at any
time be used or occupied as sleeping or lodging quarters.
14. Tenant shall, and shall use reasonable efforts to cause its employees,
agents, and invitees to, observe and comply with all driving and parking signs
and markers on the property surrounding the Building.
15. Tenant shall give prompt notice to Landlord of any accidents to or defects
in the Building, including, but not limited to, plumbing, electrical,
mechanical, roofing, floors, glass, walls or doors.
16. The directories of the Building shall be used exclusively for the display of
the name and location of the Building tenants. Any additional names requested by
Tenant to be displayed in the directories must be approved by Landlord and, if
approved, will be provided at the sole expense of Tenant.
17. Tenant shall clean its loading areas and front, side and other entrances on
a regular and timely basis. If, after giving Tenant notice, Tenant has failed to
clean its loading areas as provided herein, Landlord reserves the right to clean
such areas at Tenant's expense.
18. Tenant shall use reasonable efforts to notify Landlord and provide copies to
Landlord if Tenant uses the name of the Complex, other than as the address of
Tenant's business, or if Tenant uses pictures of the Premises in advertising or
other publicity. Tenant shall not, without the prior consent of Landlord, use
pictures of the Complex in advertising or other publicity.
19. Tenant shall not be permitted to do any of the following without the prior
consent of the Landlord:
(a) Alter any lock or install a new or additional lock or any bolt on any door
of the Premises, other than interior doors within the Premises. If Landlord
shall give its consent, Tenant shall in each case furnish Landlord with a key
for any such lock.
(b) Store on any part of the property surrounding the Building any vehicles,
product, equipment or any other property.
(c) Install permanent or temporary signs on the Building or any part of the
property surrounding the Building.
(d) Place any lettering on doors or windows located in the Building.
(e) Go upon the roof of the Building.
(f) Attach, hang or use any curtains, blinds, shades or screens, other than
those installed by Landlord, on any window or door of the Building, or remove
any curtains, blinds, shades or screens; provided, however, that Tenant may,
without the consent of Landlord, repair or replace existing curtains, blinds,
shades or screens so long as such replacements are of the same color, size,
quality and specifications as those originally installed by Landlord.
20. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building and the Complex, and for the preservation
of good order therein.
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EXHIBIT "F"
ADDITIONAL TERMS AND CONDITIONS
This Exhibit forms a part of the Lease dated February____, 1997, by and between
Carlson Real Estate Company, a Minnesota Limited Partnership, Landlord, and
Medi-ject Corporation, Tenant. The parties further agree as follows:
1. OPTION TO EXTEND
At the expiration of the initial term of this Lease, if this Lease shall then be
in full force and effect and Tenant shall have fully performed all of its terms
and conditions, Tenant shall have the option to extend this Lease for an
extended term of three (3) years, (the "Extended Term"), upon the same terms and
conditions stated in this Lease, except that the annual fixed rent shall be at
Landlord's then-prevailing fixed rental rate for similar available space in the
Center; provided, however, that the annual fixed rent during the Extended Term
shall not be less than that payable during the final year of the initial term of
this Lease. In order to exercise the said option to extend, Tenant shall give
Landlord written notice thereof not less than six (6) months prior to the
expiration of the initial term. In the event that Tenant so notifies Landlord,
but Landlord and Tenant fail to agree in writing not less than five (5) months
prior to the expiration of the initial terms to the annual fixed rent payable
during the Extended Term, Tenant's right to exercise the said option to extend
shall be deemed to have expired and thereafter Tenant shall have no further
right to extend the term of this Lease.
2. RIGHT OF FIRST OFFER
At any point following the expiration or earlier termination of a lease for the
Contiguous Space (as defined below) and provided Tenant is not in default and
has performed all of its obligations hereunder, Tenant shall have the first
opportunity to lease the contiguous space in the Building (the "Contiguous
Space"), as crosshatched on the attached Exhibit "B", as such Contiguous Space
becomes available for leasing during the term of this Lease (a "First
Opportunity"), at the rental rates and upon such other terms and conditions, as
are then being offered by Landlord to the general public for such space (the
"Offer"). Landlord shall give Tenant as much advance notice of the availability
of the Contiguous Space as is reasonably possible.
Upon receipt of the Offer, Tenant shall have ten (10) business days in
which to elect, in writing, whether to (a) lease the entire Contiguous Space, in
which event the lease shall commence thirty (30) days after the subject space
becomes vacant or thirty (30) days after Tenant's written election, whichever is
later, or (b) provide Landlord with a written counter-offer stating, in
reasonable detail, rental rates and other such terms and conditions under which
Tenant would agree to lease the entire Contiguous Space (the "Counter-offer").
Upon receipt of the Counter-offer, Landlord shall have ten (10) business days in
which to accept or reject, in writing, the Counter-offer. If Landlord accepts
the Counter-offer, then the lease for the Contiguous Space shall commence thirty
(30) days after Landlord's acceptance of the Counter-offer, upon the terms and
conditions substantially identical to those contained in the Counter-offer. If
Landlord rejects the Counter-offer, Landlord shall have the right to lease the
Contiguous Space to a third party under the terms and conditions of either the
Offer or Counter-offer. However, If Landlord rejects the Counter-offer and
offers the Contiguous Space to another party on terms more favorable than those
contained in the Counter-offer (the "Favorable Terms"), then Tenant shall have
the right to lease the Contiguous Space and Landlord shall be required to
deliver the Contiguous Space to Tenant on the Favorable Terms, within thirty
(30) days of Tenant's acceptance of the Favorable Terms.
In the event Tenant declines or fails to elect to lease the subject space,
then the First Opportunity for the Contiguous Space shall automatically
terminate. It is understood that no First Opportunity shall be construed to
prevent any tenant in the Building from extending or renewing its lease. Each
First Opportunity is personal to Tenant, and is not transferable. In the event
of any assignment or subletting under this Lease all rights of Tenant under this
Paragraph 2 shall automatically terminate and thereafter be null and void,
except as may otherwise be agreed upon, in writing, by Landlord and Tenant.
26
3. TERMINATION RIGHT
Tenant shall have the right to terminate this Lease effective as of the last day
of the Forty-eighth (48th) Month of the Initial Term of this Lease, provided
Tenant fully complies with the following:
A. Tenant sends Landlord written notice of its intent to terminate on or
before the end of the thirty-sixth (36th) month of the initial term of the
Lease;
B. Tenant pays Landlord the sum of $113,000.00, delivered with said
notice; and
C. Tenant is not in default under this Lease.
4. SIGNAGE ALLOWANCE. Landlord agrees to provide Tenant with One Thousand and
00/100 Dollars ($1,000.00) allowance for signage described in Section 19.
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EXHIBIT "G"
OPERATING EXPENSE EXCLUSIONS
1. Leasing Costs. All costs primarily related to any leasing or re-leasing of
the Complex. In the event the management company is responsible for leasing and
re-leasing of the Complex, the management company shall not directly bill back
such costs to Operating Expenses.
2. Financing Costs. Financing and refinancing costs, interest on debt or
amortization payments on any mortgage or mortgages.
3. Penalties. All interest penalties incurred as a result of Landlord's failure
to pay any costs as the same shall come due.
4. Improvements. Costs of renovating or improving tenant spaces, other than
Common Areas.
5. Depreciation. Any charge for depreciation of any of the improvements.
6. Reimbursed Costs. Any items not otherwise excluded to the extent Landlord is
reimbursed therefore by insurance or otherwise compensated, including direct
reimbursement by any tenant, less the out-of-pocket cost of collection.
7. Costs Caused by Construction. Any expenses incurred during construction of
the Building in excess of those that would be expended if construction were
completed and the Building fully occupied.
8. Defective Construction. During the initial term of the Lease only, Landlord's
expenses incurred in curing any clearly defective portion of Landlord's Work.
9. Disproportionate Utilities/HVAC. All costs and expenses resulting from the
delivery to other tenants of utilities, electricity, or incremental heating,
ventilation or air conditioning disproportionate to the size of such other
tenant's premises, but only if the cost of such services is recoverable by
Landlord.
10. Operation of Landlord's Business. All costs related to the settlement of
disputes between Landlord and the tenants (other than Tenant) of the Complex.
11. Tenant Specific Cost. All material costs and expenses arising solely out of
the specific needs or character of a particular tenant.
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