EXHIBIT 10.43
LEASE
This Lease is entered into as of May 5, 1998, between MEPC AMERICAN PROPERTIES
INC., a Delaware corporation ("Lessor") and HEALTH RISK MANAGEMENT, INC., a
Minnesota corporation ("Tenant").
1. Definitions. In this Lease:
(a) "Building" means the office/warehouse building commonly known
as the Hampshire Avenue Technology Center ("Building") to be
located in the City of Bloomington, Minnesota, containing
approximately 142,526 Square Feet of space, as shown in the
drawing attached to this Lease as Exhibit A.
(b) "Premises" means the entire Building, the Land on which the
Building is situated and the driveways, parking areas and
other improvements on the Land. There are no common areas on
the Land or in the Building.
(c) "Term" means the period beginning on the Commencement Date and
ending on the last day of the calendar month in which the date
occurs which is six years after the date on which Lessor no
longer has any obligation for Holdover Rent under Section 2 of
this Lease.
(d) "Commencement Date" means October 1, 1998.
(e) "Lease Year" means a period of 12 consecutive months
commencing on the first day of the first full month of the
Term and each 12-month period thereafter during the Term.
(f) "Monthly Base Rent" means the following amounts:
Lease Year Monthly Base Rent
1 through 6 $115,209.00
7 through 11 $127,680.00
(g) "Costs" means the estimated monthly Tax Costs for the Premises
plus the estimated monthly Operating Costs for the Premises.
(h) "Monthly Rent" means the Monthly Base Rent plus the Tenant's
Share of the Costs for the Premises.
(i) "Tenant's Share" means 100% with respect to the Premises.
(j) "Operating Costs" means all costs, charges and expenses
incurred by Lessor in connection with ownership, operation,
security, management, maintenance and repair (but not the
initial construction/installation) of the Land, the Building,
other improvements (exclusive of other buildings on the Land),
appurtenances to the Building, parking, roadways, landscaping,
lighting, sidewalks, interior and exterior maintenance,
insurance, heating, cooling, utilities, (except those which
are separately metered and paid for by Tenant), fees or
expenses for management by Lessor or another party (not to
exceed 4% of the sum of the annual Base Rent, plus Tax Costs,
plus Operating Costs other than management fees), costs of
capital improvements made to reduce Operating Costs, or
required under any governmental law or regulation which was
not applicable to the Premises at the time the Building was
constructed, and costs of repairs made to extend the life of
the Building and other improvements (but in each case
amortized over the useful life of the improvements or repairs
of a capital nature). Operating Costs will not include the
items listed on the attached Exhibit E.
(k) "Tax Costs" means all real estate taxes, levies, charges, and
installments of special assessments including interest on
deferred assessments (provided the same are amortized over the
longest period of time available to Lessor and are not solely
and directly attributable to construction of the Premises)
assessed, levied or imposed on, or allocated to, the Premises
and all attorneys' fees, consultants fees, witness fees, court
costs and other expenses of Lessor in connection with any
proceeding to contest these amounts with Lessor's reasonable
expectation that Tax Costs, including such costs of contest,
will be reduced as a result of such contest.
(l) "Square Feet" means the number of square feet calculated from
dimensional architect's drawings by measuring to the outside
surface of exterior walls.
(m) "Lease" means this Lease, all Exhibits attached to this Lease,
and all properly executed amendments, modifications and
supplements to this Lease.
(n) "Section" means a section of this Lease.
(o) "Exhibit" means an Exhibit attached to and thereby made a part
of this Lease.
(p) "Land" means all of the land described on Exhibit B.
(q) "Taking" means acquisition by a public authority having the
power of eminent domain of all or part of the Land or Building
by condemnation or conveyance in lieu of condemnation.
(r) "Casualty" means a fire, explosion, tornado, or other cause of
damage to or destruction of the Building.
(s) "Tenant Improvements" means improvements to be constructed by
Lessor in the Premises as defined in Section 36.
(t) "Tenant's Work" means all improvements, alterations, fixtures
and equipment other than the Tenant Improvements which are
constructed or installed in addition to Tenant Improvements
for Tenant's use and occupancy of the Premises or desired by
Tenant in addition to the Tenant Improvements to complete the
Premises for occupancy.
2. Premises and Construction.
Lessor leases the Premises to Tenant, and Tenant leases the Premises from
Lessor, for the Term, under the terms and conditions of this Lease.
Lessor shall do everything reasonably within Lessor's control to assure that the
Tenant Improvements are substantially completed not later than September 15,
1998 so that Tenant will be able to commence moving from its existing leased
space on September 15, 1998 and commence doing business from the Premises on or
before October 1, 1998. Lessor agrees that if the Tenant Improvements are not
substantially completed by September 15, 1998, as extended by the length of any
delays caused by Tenant, and if Tenant as a result is not able to commence doing
business from the Premises on or before October 1, 1998, as extended by the
length of any delays caused by Tenant, Lessor shall pay to Tenant with respect
to the period after October 1, 1998, as extended by the length of any delays
caused by Tenant, the actual rent per day (cumulatively, "Holdover Rent") then
being charged to Tenant at its existing facility for each day such substantial
completion is delayed after September 15, 1998, as so extended by Tenant delays.
At such time as Lessor delivers the Premises to Tenant with the Building and the
Tenant Improvements therein substantially completed, Lessor and Tenant shall
jointly inspect the Premises, including the Building to determine if the
Building and Tenant Improvements and the driveways and parking areas on the
Premises are in the condition required by the Lease.
If the Premises are not in the condition required by the Lease, Tenant may
conditionally accept the Premises using the following procedure: Lessor and
Tenant shall negotiate in good faith and mutually agree upon (i) the items which
Lessor must complete or correct in order to bring the Premises into compliance
with the Lease and (ii) the time period within which each said item is to be
completed (each of which dates shall be referred to as the "Agreed Completion
Date" for that item. Such items shall be enumerated on a list (the "Punchlist")
to be attached to a conditional acceptance letter to be prepared by Tenant and
delivered to Lessor. The Punchlist may be updated by Tenant for a period of 30
days thereafter; provided, however, that cosmetic defects may be added to the
Punchlist only if Tenant is able to demonstrate that such defects existed prior
to the date of creation of the initial Punchlist. If the items on the Punchlist
are not completed according to the provisions of the Punchlist on or prior to
the Agreed Completion Date for each said item, Lessor shall continue to be
obligated to complete each said item in accordance with the terms of the
Punchlist and conditional acceptance letter, but Tenant shall be entitled to
give Lessor written notice of non-compliance, and in the event that Lessor does
not complete the incomplete or improperly completed within 15 days after notice
thereof from Tenant, then Tenant shall have the right to complete that item and
charge Lessor with the out-of-pocket cost thereof. Tenant reserves the right to
object to latent defects in the Building or other improvements on the Premises.
Within 60 days after the Commencement Date, Lessor and Tenant will execute an
agreement supplementing this Lease setting forth the actual Commencement Date
and expiration date of the Term.
3. Rent.
Tenant will pay the Monthly Rent to Lessor at ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or such other place as Lessor may designate, in advance on the first
day of each month during the Term, without demand, deduction or setoff. The
Monthly Rent may change as the Costs are adjusted annually under Sections 4 and
5. Monthly Rent will begin on October 1, 1998.
Monthly Rent or other amounts payable by Tenant to Lessor under this Lease which
are not paid within 10 days after the date due will bear interest from the date
due to the date paid at the rate of 12% per annum or the maximum rate of
interest permitted by law, whichever is less, and the interest will be paid to
Lessor on demand. In addition, Tenant will pay Lessor a $100 service charge for
all Monthly Rent not paid by the 10th day of the month for which it is payable,
which service charge is to partially cover expense involved in handling
delinquent payments.
The interest and service charge provisions of the preceding paragraph shall be
deemed waived as to any one such late payment in any period of 12 consecutive
calendar months.
All amounts to be paid by Tenant to Lessor under this Lease will be deemed to be
additional rent for purposes of payment and collection.
If any taxes, special assessments, fees or other charges are imposed against
Lessor by any governmental unit or agency with respect to rentals under this
Lease, Tenant will pay these amounts to Lessor when due, except that Tenant will
have no obligation to pay any income tax on rentals unless the tax is imposed in
lieu of real estate taxes.
4. Cost Adjustments.
The initial Monthly Rent will be based in part on the estimated Operating Costs
for the Premises. Prior to the first day of each calendar year after the date of
this Lease, or as soon as reasonably possible after the first day of the year,
Lessor will furnish Tenant with an estimate of the Operating Costs if greater
than the initial Operating Costs, and the Monthly Rent will be increased or
decreased by 1/12th of Tenant's Share of the difference between the initial
estimate of the Operating Costs for the Premises and the then current estimate.
Within 120 days after the end of each calendar year, including the year in which
the Term expires, Lessor will give Tenant a statement of the actual Operating
Costs for that calendar year with respect to the Premises. If the actual
Operating Costs with respect to the Premises exceed the estimated Operating
Costs for that year, Tenant will pay Tenant's Share of the excess to Lessor
within 20 days after receiving the statement. If the actual Operating Costs are
less than the estimated Operating Costs for that year, Lessor will pay Tenant's
Share of the difference to Tenant with the statement. If Tenant does not give
Lessor written notice within one year after receiving Lessor's statement that
Tenant disagrees with the statement and specifying the amounts in dispute,
Tenant will be deemed to have waived the right to contest the statement.
Within 90 days after receiving Lessor's statement of Operating Costs, Tenant may
request the right to review Lessor's records relating to Operating Costs, which
will then be made available to Tenant for review. If the records are made
available to Tenant, Tenant will give Lessor notice of any objections to the
Statement of Operating Costs within the later of (i) one year after receiving
Lessor's statement, and (ii) 180 days after the records are made available to
Tenant, or Tenant may request an audit of the Operating Costs by an independent
certified public accountant chosen by Lessor from a list of not fewer than three
submitted by Tenant in conjunction with the request. If Lessor does not make the
choice within 15 days, Tenant may do so. The auditor will be given access to
those records of Lessor pertaining to Operating Costs for the year in question
as well as an Operating Cost history for the prior three years. The auditor will
report to the parties within 30 days after being chosen. The report of the
auditor will be final and binding on both parties with respect to the year in
question unless Lessor disputes the audit by notice to Tenant within 15 days
after receiving the report. If the report is disputed by Lessor, the parties
will select a mutually acceptable auditor to review the report, and the
determination of the mutually acceptable reviewing auditor will be final and
binding on both parties. If the actual Operating Costs differ from those charged
to Tenant, payments required to make adjustments in rent to conform to the final
report shall be made within 30 days after receipt of the final report. All
expenses of the audit shall be borne by Tenant unless such audit, or the final
determination by the reviewing auditor if Tenant's audit is disputed by Lessor,
discloses an overstatement of Operating Costs of 5% or more, in which case all
reasonable expenses of Tenant's audit and of the reviewing auditor resolving a
disputed audit will be borne by Lessor.
If Tenant's audit is disputed by Lessor and the reviewing auditor determines
that no adjustment is required, Tenant will pay all costs of its audit and all
costs of the reviewing auditor. If the final resolution of a disputed audit
requires an adjustment in favor of Tenant, but the adjustment is less than 5%,
Tenant will pay the cost of the initial audit, and each party will pay one-half
of the costs of the reviewing auditor. In any case of overpayment or
underpayment, payment of Operating Costs will be adjusted accordingly.
Each year during the Term Tenant shall pay Lessor, as additional rent, the Tax
Costs for the Premises in two equal installments not later than two (2) weeks
prior to the time each installment of real estate taxes is due to the taxing
authority. Presently this would require Tenant to pay the first one-half (1/2)
real estate tax installment on May 1st and the second one-half (1/2) real estate
tax installment on October 1st. The real estate taxes payable for a year during
which the Term was in effect for only a portion of that year shall be pro-rated
on a calendar basis and Tenant shall be responsible only for that portion of the
taxes allocable to the period of the Term. The Land and the improvements
comprise a single tax parcel for real estate tax purposes.
Tenant will file no petition in Tax Court regarding the Tax Costs without
Lessor's prior written consent, which consent shall not be unreasonably
withheld. If Lessor contests Tax Costs payable during the term of this Lease and
receives a refund or incurs additional Tax Costs after adjustments for actual
Tax Costs have been made, the actual Tax Costs will be corrected accordingly and
the appropriate adjustment will be made between Lessor and Tenant regardless of
whether the term of this Lease has expired. The portion of Tax Costs to be paid
by Tenant for the years in which the Term begins and ends will be prorated by
multiplying the actual Tax Costs by a fraction, the numerator of which is the
number of days of that year in the Term and the denominator of which is 365.
5. Cost Computations and Allocations.
The parties acknowledge that Lessor owns and /or manages other commercial
buildings in the Minneapolis metropolitan area and that some of the Operating
Costs attributable to the Premises may be incurred by Lessor as a result of
master contracts with vendors that service the Building and such other buildings
owned or managed by Lessor. Lessor will in its reasonable discretion, determine
from time to time, the method of computing and allocating Operating Costs
between the Premises and other buildings owned or managed by Lessor in the
Minneapolis metropolitan area according to standards and methods customarily
applied in the Minneapolis metropolitan area; provided, however, that if Tenant
objects to the share of such expenses to be allocated to Tenant, Tenant shall
have the right to require Lessor to enter into a separate commercially
reasonable contract for the matter in question.
6. Fiscal Year.
No more frequently than once every five (5) years, the year used to determine
Costs may be changed to a different 12-month period designated by Lessor. If the
calendar year is changed to a fiscal year, or if a fiscal year is changed to a
different fiscal year, prorations will be made for the estimated Costs and the
actual Costs so that the same time period is used to determine each and so that
Costs are not included in more than one time period.
7. Possession.
Lessor shall make all reasonable efforts to provide Tenant with access to the
Premises not later than September 1, 1998 for purposes of installing Tenant's
furniture and equipment and completing Tenant's Work (as defined in Section 36
of this Lease). During such early access period, Tenant shall not interfere
with, delay or otherwise impede Lessor's completion of the Tenant Improvements
in accordance with Section 36 of this Lease, and any such interference shall be
grounds for extension of the period within which Lessor is to complete the
Tenant Improvements. Lessor will use reasonable efforts to coordinate the work
of the Tenant Improvement contractor and the contractors doing the Tenant Work
for Tenant. This Lease will not be void or voidable and Lessor will not be
liable to Tenant for any loss or damage resulting from any delay in delivering
possession of the Premises to Tenant, except for the Holdover Rent described in
Section 2.
Lessor warrants and represents that Tenant, upon paying the rents and keeping
the agreements of this Lease on Tenant's part to be kept and performed, shall
have peaceful and uninterrupted possession of the Premises during the Term of
this Lease except as otherwise specifically set forth herein.
8. Use.
Tenant will use the Premises for office, warehouse and related purposes and for
no other purpose. Tenant will not commit or permit any act or omission which
results in the violation of any law, governmental regulation, or insurance
policy of Lessor, relating to the Premises, or which will increase Lessor's
insurance rates on the Premises.
9. Care of Premises.
Tenant will, at all times during the Term and any renewals and extensions, at
its sole expense, keep and maintain the interior of the Building (and those
portions of the Premises exterior to the Building which are expressly the
obligation of Tenant) in a clean, safe, sanitary, and good condition and in
compliance with all applicable laws, codes, ordinances, rules, and regulations
as provided in Section 11. Tenant's obligations will include but not be limited
to maintaining a heating, ventilating and air conditioning ("HVAC") contract for
maintenance of the HVAC system, and paying for any repairs not covered by the
HVAC contract. Tenant will also be responsible for all equipment and systems
within the interior of the Building, and for maintaining and repairing (and
replacing if necessary) all lighting and plumbing fixtures, all interior walls,
partitions, interior doors and interior windows. Tenant will also be responsible
for all broken glass in the Building. When used in this Section, the term
"repairs" shall include replacements and overhauling equipment when necessary,
and all such repairs made by the Tenant shall be equal in quality and class to
the original work, except that if it becomes necessary to replace HVAC
equipment, such replacement will be done at Lessor's initial expense, and Tenant
will pay to Lessor on a monthly basis as additional rent together with the
Monthly Rent the amortized portion of the cost of replacing the HVAC equipment,
with such amortization being over the useful life of the replacement equipment.
Tenant, at its own cost and expense, will enter into a regularly scheduled
preventive maintenance and service contract with a maintenance contractor
approved by Lessor for servicing all hot water, heating and air conditioning
systems and equipment within the Premises. The service contract must include all
services suggested by the equipment manufacturer in its operations and
maintenance manual and must become effective within 30 days of the date Tenant
takes possession of the Premises.
Where the Lease requires Tenant to maintain a service contract on any system or
device serving the Building, Tenant may submit to Lessor any proposed service or
maintenance contract, in which event Lessor shall promptly review the proposed
contract and notify Tenant whether Lessor accepts the proposed service or
maintenance contract as meeting the requirements of this Lease, which acceptance
or non-acceptance shall be in Lessor's sole discretion. If Lessor does not
respond in writing within five business days of the submission of the proposed
contract to Lessor the contract shall be deemed to have been accepted by Lessor
as meeting the requirements of this Lease. If Lessor disapproves a proposed
service or maintenance contract Lessor shall state with reasonable specificity
why the proposed contract was not accepted and what would be required in order
for Lessor to accept the proposed contract. Any service or maintenance contract
accepted by Lessor or deemed accepted by Lessor shall be considered to meet the
requirements of this section, subject to proper performance of the contract.
Tenant will also be responsible for ordinary day-to-day maintenance of all
equipment and systems within the interior of the Building in accordance with
reasonable written instructions therefor provided to Tenant by Lessor.
Tenant shall keep and maintain all portions of the interior of the Building and
the sidewalk and areas adjoining the same in clean and orderly condition, free
of accumulation of dirt, rubbish, snow, and ice except for those portions of the
exterior which are Lessor's responsibility. Lessor shall assign to Tenant all
warranties and guaranties applicable to the portions of the Premises to be
maintained by Tenant. Notwithstanding any provision to the contrary, Lessor
shall remain responsible for all costs directly related to defects in the design
or original construction of the Premises.
If Tenant fails, refuses or neglects to maintain or repair the Premises as
required in this Lease within 10 days after notice has been given to Tenant,
Lessor may make such repairs without liability to Tenant for any loss or damage
that may accrue to Tenant's merchandise, fixtures or other property or to its
business, and upon completion, upon presentation to Tenant of a ▇▇▇▇ for the
repairs, Tenant will pay to Lessor all out-of-pocket costs plus 10% for overhead
incurred by Lessor in making such repairs.
Lessor shall maintain the exterior portions of the Premises, including the
driveways and parking areas, in a clean, safe and attractive condition and in
accordance with the standards of similar well managed office/warehouse buildings
in the Minneapolis metropolitan area, and the cost thereof shall be included in
Operating Costs. Lessor will repair, at its expense, the structural portions of
the Building, roof and exterior of the Building (subject to inclusion of such
maintenance and repair costs in Operating Costs pursuant to Section 4 of this
Lease but only to the extent permitted in Section 1(j). Lessor shall be solely
responsible for maintenance, repair and replacement of structural components of
the Building, and such costs shall not be considered Operating Costs; provided,
however, where structural repairs are required to be made by reason of the
intentional wrongful acts of Tenant, the costs will be reimbursed by Tenant and
payable by Tenant to Lessor upon demand.
10. Building Rules.
Rules and Regulations for the Premises and the Building in effect on the date of
this Lease are attached as Exhibit ▇. ▇▇▇▇▇▇ will have the right to adopt
different or additional reasonable rules and regulations, and to rescind or
amend the attached rules and regulations, from time to time. Tenant will abide
by the rules and regulations then in force and will cause Tenant's employees to
observe and comply with them. No such rule may have the effect of amending or
changing a provision of this Lease. No new rule or regulation shall be effective
for 30 days from the date Tenant receives notice of such new rule or regulation.
All such Rules and Regulations shall be enforced by Lessor in a uniform,
non-discriminatory manner.
11. Compliance with Laws.
Subject to the limitations set forth in this Section, Tenant will, at its
expense, promptly comply with all laws, ordinances, rules, orders, regulations
and other requirements of governmental authorities now or subsequently
pertaining to the Premises. Tenant will pay any taxes or other charges by any
governmental authority on Tenant's property or trade fixtures in the Premises or
relating to Tenant's use of the Premises.
The Premises shall not be used in any manner which under any requirement of law
or of any public authority would require Lessor to make any addition or
alteration to or in the Building. After the construction of the Building, the
Tenant Improvements and the other initial improvements by Lessor in the
Premises, Tenant will be responsible for compliance with the Americans with
Disabilities Act of 1990 as it applies to the Premises by reason of any
alterations or additions made by Tenant to the Premises or any use of the
Premises by Tenant. The Premises shall not be used in any manner which will
increase the rates required to be paid for public liability or for all risk
insurance covering the Building. Tenant shall occupy the Premises, conduct its
business and control its agents, employees and endeavor to control its invitees
and visitors in such a way as is lawful and reputable and will not permit or
create any nuisance, noise, odor, or otherwise interfere with, annoy, or disturb
any other tenant or subtenant leasing space in the Building in its normal
business operations or Lessor in its management of the Building. Outside storage
on the Land of any type of equipment, property, or materials owned or used by
Tenant or its customers and suppliers is not permitted.
Subject to Lessor's right to contest the same, Lessor will comply with all
present and future laws, ordinances, orders, and regulations of federal, state,
county and city governments, and or other governmental authorities having or
claiming jurisdiction over the Land and Building, including but not limited to
ADA, and any applicable federal, state, county or local statutes, laws,
regulations, rules, ordinances, codes, standards, orders, licenses and permits
of any governmental authorities relating to environmental matters, except those
which are related to Tenant's specific use (as opposed to mere occupancy) of the
Premises, property or equipment within the Building, or alterations made or
requested by Tenant after the initial improvements in the Building. Expenses of
such compliance which are not capital expenses under generally accepted
accounting principals will be included in Operating Costs. If compliance by
Lessor with the preceding sentence requires capital improvements to be made by
Lessor, the cost thereof will be amortized over the useful life of the
improvements and amortization of the cost will be included as a part of
Operating Costs.
Tenant shall be under no obligation to make any repairs, alterations,
modifications or improvements to the Premises or to conduct its activities in
any particular manner in order to comply with any law, ordinance, rule,
regulation or order of any governmental body or insurance underwriter if the
latest date on which Tenant may legally effect such compliance is after the
then-current Term of the Lease, provided that Tenant shall otherwise surrender
the Premises in the condition required under the Lease. Subject to the foregoing
and to the provisions of Section 4, above, and Section 1(j) of the Lease, Tenant
shall not be required to pay any of the costs of alterations which are the
obligation of Lessor unless compliance is required as a result of Tenants acts
or specific use of the Premises.
12. Hazardous Substances.
The term "Hazardous Substances", as used in this Lease, means pollutants,
contaminants, toxic or hazardous wastes or any other substances, the removal of
which is required or the use of which is restricted, prohibited or penalized by
an "Environmental Law", which term means any federal, state or local law or
ordinance relating to pollution or the protection of the environment. Tenant
agrees that (a) no activity will be conducted on the Premises that will produce
any Hazardous Substance, except for activities which are part of the ordinary
course of Tenant's business (the "Permitted Activities"), provided the Permitted
Activities are conducted in accordance with all Environmental Laws and have been
approved in advance in writing by Lessor; (b) the Premises will not be used for
storage of any Hazardous Substances, except for temporary storage of materials
used in the Permitted Activities (the "Permitted Materials"), provided the
Permitted Materials are properly stored in a manner and location meeting all
Environmental Laws and approved in advance in writing by Lessor; (c) no portion
of the Premises or Land will be used by Tenant as a landfill or a dump; (d)
Tenant will not install any underground tanks of any type; (e) Tenant will not
cause any surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute, a public or private
nuisance; (f) Tenant will not permit any Hazardous Substances to be brought onto
the Premises, except for Permitted Materials, and if so brought or found, Tenant
will immediately remove them, with proper disposal, and will undertake all
required cleanup procedures under the Environmental Laws. If, at any time during
or after the term of the Lease, the Premises are found to be contaminated or
subject to conditions prohibited in this Lease, Tenant will indemnify and hold
Lessor harmless from all claims, demands, actions, liabilities, costs, expenses,
damages and obligations of any nature arising from or as a result of the use of
the Premises by Tenant. The foregoing indemnification will survive the
termination or expiration of this Lease. Notwithstanding the foregoing, Tenant
shall not be responsible for the remediation of or required to indemnify Lessor
against losses, costs or liability arising in connection with hazardous
substances unless the need for remediation or losses, costs or liability are
attributable to a default by Tenant under this Lease or the wrongful act or
failure to act of Tenant, its agents, employees or contractors, or anyone within
Tenant's control.
13. Signs.
Tenant will not place or permit any signs on the exterior or windows of the
Building, or within the Premises if visible from the exterior of the Building,
except for building standard signage on the brick exterior above the front entry
to Tenant's Premises in the Building unless Tenant shall first obtain Lessor's
approval, which approval shall not be withheld, delayed or conditioned
unreasonably. Upon approval by Lessor (which approval shall not be withheld,
delayed or conditioned unreasonably) and by the City of Bloomington, Tenant
shall, at its sole expense, have the right to construct and maintain a monument
sign on the Land.
14. Alterations.
After completion of the Building, the improvements on the Premises and the
Tenant Improvements, Lessor will have no obligation to do any redecorating or
remodeling of the Building or the Premises. Tenant shall have the right to make
cosmetic or decorative changes within the Building without Lessor's consent so
long as the cost thereof does not exceed $25,000 in any 12-month period and does
not affect the Building structure, systems or exterior appearance. All other
alterations shall require Lessor's prior consent. Lessor shall not unreasonably
withhold such consent if the work does not adversely affect: (i) the value of
the Building, (ii) any system serving the Building, or (iii) the appearance of
the exterior of the Building. With respect to any consent required pursuant to
this Section, Lessor shall respond in writing within 5 business days after
Tenant has submitted reasonably complete plans and/or specifications for the
work to Lessor, or Lessor will be deemed to have consented. If Lessor
disapproves a proposed alteration Lessor shall state with reasonable specificity
the reasons for disapproval and what would be required in order to obtain Lessor
approval.
Tenant shall have no obligation, at the expiration of the Term, to remove the
initial improvements to the Premises performed by Lessor or Tenant. Tenant shall
not be required to remove any other alterations or improvement at the expiration
of the Lease unless at the time Lessor gave its consent to such alteration
Lessor stated in writing, on the instrument indicating Lessor consent, that
approval was conditioned upon Tenant's agreement to remove the alteration or
improvement at the expiration of the Term. With respect to removal of
alterations required hereunder, Tenant shall not be obligated to replace
affected portions of the Premises but may patch and fill in a manner which will
place the affected area in the same condition as when delivered to Tenant,
reasonable wear and tear excepted (e.g. if carpeting is affected, Tenant's
obligation to restore shall be deemed satisfied if the portion of the carpet
affected by removal of alterations is patched in a reasonable manner.)
Tenant will get Lessor's prior written approval of any contractor or
subcontractor who is to perform work on the Premises at Tenant's request. Such
approval shall not be unreasonably withheld, delayed or conditioned. All
alterations by Tenant will be constructed with new materials, in a good and
workmanlike manner, and in compliance with the plans and specifications approved
by Lessor (except for decorating changes which do not require approved plans and
specifications) and all applicable laws, ordinances, rules, orders, regulations,
or other requirements of governmental authorities. Tenant will pay for any
labor, services, materials, supplies or equipment furnished or alleged to have
been furnished to Tenant in or about the Premises, and will pay and discharge
any mechanic's, materialmen's or other lien against the Premises resulting from
Tenant's failure to make such payment. If any work performed by Tenant results
in the filing of a mechanics lien which Tenant, acting in good faith, wishes to
contest, Tenant shall have the right to contest said lien and the existence of
said lien shall not be deemed to be a default under the Lease so long as (i)
Tenant causes said lien to be satisfied or causes the Premises to be released
from the lien within 30 days after the filing of such lien and (ii) if required
by Lessor Tenant provides Lessor with reasonable security to protect Lessor
interest in the Premises, such as a bond, cash escrow, letter of credit or
guaranty of a person/entity financially capable of satisfying said lien, in an
amount equal to 1.25 times the amount of the lien. If the lien is reduced to
final judgment, Tenant will discharge the judgment and Lessor will return the
cash deposited by Tenant. Lessor may post notices of nonresponsibility on the
Premises as provided by law.
All alterations, additions and improvements to the Premises made at Lessor's or
Tenant's expense, except movable office furniture and Tenant's movable trade and
office fixtures and equipment, including computer equipment and wiring; portable
office partitions; security monitors, wiring and systems, and telecommunications
systems, hardware and wiring, will become the property of Lessor upon
installation and will be surrendered with the Premises upon termination of this
Lease unless Lessor elects otherwise in writing.
15. Utilities and Services.
Lessor will provide and maintain mains and conduits to supply water, gas,
electricity and sanitary sewer services to the Premises, and will separately
meter the Premises for gas and electrical services. Tenant will directly pay all
charges for sewer usage, garbage disposal, refuse removal, water, electricity,
gas, heating, air conditioning and ventilation costs, telephone, and any other
utility services furnished to the Premises during the Term which are not
included in Operating Costs and which are not payable directly by a future
tenant who shares the Building with Tenant. If any of such services are
furnished by Lessor, the cost of all such services furnished by Lessor will be a
part of the Operating Costs. Lessor will not be liable for any loss or damage
resulting from any temporary interruption of these services due to repairs,
alterations or improvements, or any variation, interruption or failure of these
services due to governmental controls, unavailability of energy, or any other
cause beyond Lessor's control. No such interruption or failure of these services
will be deemed as an eviction of Tenant or will relieve Tenant from any of its
obligations under this Lease.
In the event that an interruption in utilities or essential Building services
occurs, and the interruption is reasonably within the control of Lessor, Lessor
shall use conscientious efforts to avoid doing so in a manner or at a time that
would interfere with the reasonable use of the Premises by Tenant and shall
provide Tenant with at least 24 hours' advance notice. If the interruption
continues for more than three consecutive business days, Monthly Rent shall
▇▇▇▇▇ in proportion to the portion of the Premises which is untenantable until
the service or services which were interrupted are reasonably restored.
16. Entry by Lessor.
Upon at least 24 hours prior notice to an officer of Tenant (except in the case
of an emergency in which no notice shall be required) Lessor and its agents and
contractors and mortgagees will have the right to enter the Premises at
reasonable times for inspecting, cleaning, repairing, or exhibiting the
Premises, but Lessor will have no obligation to make repairs, alterations or
improvements except as expressly provided in this Lease. During the last twelve
(12) months of the Term, Lessor may show the Premises to a prospective tenant
provided that Lessor gives Tenant reasonable advance notice. Lessor acknowledges
that Tenant's business records and communications (including inter-office
communications), may contain highly confidential information. Lessor therefore
agrees that if Tenant deems it to be necessary or appropriate, Lessor shall
permit a representative of Tenant to accompany Lessor while Lessor is within the
Building. Furthermore, Tenant may require that Lessor not enter certain portions
of the Building during a given visit if Tenant deems that to be necessary in
order to avoid disclosure of confidential information. In any such event Lessor
will be permitted to revisit the Building and shall be permitted to view any
areas which were not made available to Lessor to visit as soon as may be
reasonably possible. Lessor will not knowingly disclose Tenant's trade secrets,
and Tenant may require third parties to sign a confidentiality agreement in
connection with access of third parties to the Premises.
Wherever in the Lease Lessor has a right to enter the Premises to (i) inspect
the Premises, (ii) do work in the Building or on the Land or (iii) show the
Premises to a third party, Lessor shall be required to use reasonable efforts to
(a) provide Tenant with 24 hours advance notice (which shall not be required in
an emergency), and (b) minimize the interference with Tenant's use and occupancy
of the Premises.
17. Subordination.
At the request of any mortgagee or ground lessor, this Lease will be subject and
subordinate to any mortgage or ground lease which may now or hereafter encumber
the Building, and Tenant will execute, acknowledge and deliver to Lessor any
document reasonably requested by Lessor to evidence the subordination so long as
the same is in form and substance customary in the community and does not have
the effect of altering the provisions of this Lease. Such subordination is on
the condition that this Lease and Tenant's right of possession of the Premises
as provided in this Lease are recognized and will not be disturbed by the
mortgagee or ground lessor so long as Tenant is not in default under this Lease
beyond any applicable cure period. If the interest of Lessor is transferred to
any party by reason of foreclosure of a mortgage or cancellation of a ground
lease, or by delivery of a deed in lieu of foreclosure or cancellation, Tenant
will attorn to such party immediately upon receipt of notice. Tenant agrees that
upon notification by Lessor or any mortgagee or ground lessor of the election of
a mortgagee or ground lessor to subordinate its interest in the Premises to this
Lease, this Lease will become prior to the mortgage or ground lease.
18. Estoppel Certificates.
Each party hereby agrees, from time to time, on not less than fifteen (15) days'
prior notice, to execute and deliver to the other party an estoppel certificate
(an "Estoppel Certificate"). An Estoppel Certificate may be relied on by Lessor
or Tenant, as appropriate, and any third party with whom Lessor or Tenant is
dealing, and shall certify the following, as of the date thereof: (i)the
accuracy of this Lease; (ii) the Commencement Date and the date on which the
Term expires; (iii) that this Lease is unmodified and in full force and effect
or in full force and effect as modified, stating the nature of all
modifications; (iv) whether to the executing party's knowledge the other party
is in default or whether the executing party has any claims or demands against
the other party and , if so, specifying such claim or demand; and (v) to other
correct and reasonably ascertainable facts that are covered by the terms of this
Lease.
19. Waiver of Claims and Assumption of Risks.
Lessor and Tenant release each other from any liability for loss or damage by
fire or other casualty that may be insured under a standard form of "all risk"
insurance policy, whether or not the loss or damage resulted from the negligence
of the other, its agents or employees. Each party will use reasonable efforts to
obtain policies of insurance which provide that this release will not adversely
affect the rights of the insureds under the policies. The releases in this
Section will be effective whether or not the loss was actually covered by
insurance. Tenant assumes all risk of loss or damage of Tenant's property within
the Premises, including any loss or damage caused by sprinkler or other water
leakage, fire, windstorm, explosion, theft, act of any other tenant, or other
cause. Lessor will not be liable to Tenant, or its employees, for loss of or
damage to any property in the Premises.
20. Indemnification.
Tenant will indemnify Lessor and its agents and employees against all claims,
demands and actions, and all related costs and expenses (including reasonable
attorneys' fees) for injury, death, disability or illness of any person, or
damage to property, occurring in the Premises or arising out of Tenant's use of
the Premises, except to the extent caused by the willful misconduct or
negligence of Lessor or someone acting on its behalf.
Lessor will indemnify Tenant and its agents and employees against all claims,
demands and actions, and all costs and expenses relating thereto (including
reasonable attorneys' fees) for injury, death, disability or illness of any
person or persons occurring in, on or about the Land and Building exclusive of
the Premises, except to the extent caused by the willful misconduct or
negligence of Tenant or its officers, employees, agents or contractors or
someone acting on Tenant's behalf.
21. Insurance.
Tenant will keep public liability insurance in force at its expense by an
insurer and policy acceptable to Lessor in its reasonable opinion. The policy
will name Lessor and its mortgagee as additional insureds, for limits of at
least $3,000,000 for bodily injuries or death of one or more persons and at
least $500,000 for property damage. Tenant will carry fire and "all risk"
coverage insurance for Tenant's property and improvements in the Premises,
including coverage for loss or damage by sprinkler leakage or discharge. Prior
to Tenant's occupancy of the Premises, Tenant will deliver to Lessor the
liability and casualty policies or certificates by the insurer showing this
coverage to be in effect with premiums paid. The insurance will provide that
Lessor will be notified in writing 30 days prior to cancellation of, material
change in, or failure to renew, the insurance.
Tenant may, at Tenant's option, self insure its goods, supplies, furniture,
equipment and other items of personal Property that may from time to time be
within any part of the Premises.
With respect to losses, injuries or liability that do not arise from the
negligence or wrongful act of Tenant or Tenant's agents or employees, Lessor's
insurance shall be primary coverage without right of contribution from similar
insurance maintained by Tenant. Lessor shall maintain all-risk full replacement
cost insurance on the Building payable to Lessor, Lessor's mortgagee and Tenant,
as their interests may appear. With respect to alterations or improvements made
to the Premises by Tenant following the Commencement Date of this Lease, Tenant
shall bear the responsibility for insuring said improvements unless Lessor shall
agree to do so in writing.
22. Assignment and Subletting.
Tenant may assign this Lease or sublet the Premises or any portion thereof, or
transfer any of Tenant's interest herein, at any time during this Term or any
renewals or extensions thereof, without Lessor's prior consent, to any
corporation or entity which controls, is controlled by, or is under common
control with Tenant or acquiring all or substantially all the assets of Tenant,
or to any corporation or entity resulting from a merger or consolidation with
Tenant, or to any corporation or entity in which Tenant maintains a majority
control or interest, if notice thereof is given to Lessor within 30 days
thereafter.
Except as set forth above, Tenant may assign this Lease or sublet all or part of
the Premises only with Lessor's prior written consent. If Tenant receives a bona
fide offer for an assignment of Tenant's interest under this Lease or to
sublease all of the Premises or all of the usable space in the Building and
Tenant requests Lessor's consent, a copy of the offer or a letter of intent
stating the terms of the offer will be furnished to Lessor. In the case of a
proposed assignment or sublease of all of the Premises, Lessor may terminate
this Lease, either conditioned on execution of a new lease between Lessor and
the party making the offer on the same terms as the offer to Tenant or without
that condition. If Lessor fails to give Tenant written notice of its decision to
terminate this Lease within 20 days after receiving a copy of the offer or a
letter of intent stating the terms of the offer to Tenant, Lessor will not
unreasonably withhold, delay or condition its consent to the assignment or
sublease described in the offer, and said consent shall be given or refused
within said 20-day period.
In the case of a proposed sublease for less than all of the Premises, Lessor
shall have no right to lease the portion of the Premises to be subleased or to
exclude the portion of the Premises to be subleased from this Lease, and Lessor
will not unreasonably withhold, delay or condition its consent to the sublease
for less than all of the Premises, and if consent is not given or refused by
Lessor, and, if additional information is not requested by Lessor, within 10
days after Tenant's request, such consent shall be deemed given. If consent is
refused, Lessor's reasons will be given to Tenant.
Lessor's refusal to consent shall not be deemed unreasonable if the proposed
transferee's proposed use is not permitted under the Lease, or fails to comply
with existing municipal official controls, or Lessor determines that occupancy
by the proposed transferee will adversely affect the value of the Premises.
If Lessor consents to one or more subleases, Tenant will still remain liable for
all obligations of the Tenant under this Lease but Lessor agrees that Tenant may
agree with its assignee or sublessee that payments pursuant to the assignment or
sublease shall be made directly to Lessor.
In the event of any such transfer, Tenant may install such separate meters or
submeters as Tenant deems appropriate. Any options in favor of Tenant shall be
exercisable by any transferee of Tenant as though the same were being exercised
by Tenant itself.
Lessor's interest in this Lease will be freely assignable and the obligations of
the Lessor arising or accruing under this Lease after an assignment will be
enforceable only against the assignee, provided such assignee shall assume
Lessor's obligations hereunder. Lessor shall give Tenant notice of any
assignment by Lessor within 30 days thereafter.
If Tenant, having first obtained Lessor's consent, if required, shall sublet the
Premises, or any part thereof in excess of 32,500 Square Feet, at a rental or
for other monetary consideration in excess of the rent or pro rata portion
thereof due and payable by Tenant under this Lease, then Tenant shall pay to
Lessor, as additional rent: (a) on the first day of each month during the term
of the sublease, the excess of all rent and other consideration due from the
subtenant for such month over the portion of the rent then payable to Lessor
pursuant to the provisions of this lease for said month which is allocable on a
square footage basis to the space sublet; and (b) immediately upon receipt
thereof, any other rent or consideration received by Tenant from such
subletting. In determining the amount of the rent and other consideration due
from the subtenant for the term of the sublease, Tenant shall have the right to
deduct from the stated amount of the rent and other consideration in the
sublease the sum of all out-of-pocket leasing commissions, leasehold
improvements for the subtenant, and demising costs paid by Tenant in connection
with the sublease, or similar out-of-pocket leasing costs, amortized over the
term of the sublease, together with interest at the rate of 12% per annum.
The provisions of this Section will be binding on Tenant and any assignee or
subtenant of Tenant and will apply to all portions of the Premises remaining
subject to this Lease and to each request by Tenant, or its assignee or
subtenant, for Lessor's consent to a further or subsequent assignment or
subletting.
23. Damage or Destruction.
If the Premises or Building is damaged by Casualty, the damage (excluding damage
to improvements paid for by Tenant and trade fixtures, equipment or personal
property of Tenant) will be repaired by Lessor at its expense to a condition as
near as reasonably possible to the condition prior to the Casualty, but if more
than 25% of the total Square Feet of the Building is rendered untenantable,
Lessor may terminate this Lease as of the date of the Casualty by giving written
notice to Tenant within 30 days after the Casualty. If this Lease is not
terminated, Lessor will begin repairs within 90 days after the Casualty and
complete the repairs within a reasonable time, subject to acts of God, strikes
and other matters not within the control of Lessor.
If Lessor fails to begin the repairs as required, or fails to complete such
repairs within 180 days after they are commenced, Tenant may give Lessor notice
to do so. If Lessor has not begun the repairs within 30 days after Tenant's
notice to commence, or completed the repairs within 30 days after Tenant's
notice to complete, Tenant may terminate this Lease by written notice to Lessor
within 15 days after expiration of the 30-day period.
If this Lease is terminated because of the Casualty, rents and other payments
will be prorated as of the termination and will be proportionately refunded to
Tenant or paid to Lessor, as the case may be. During any period in which the
Premises or any portion of the Premises is made untenantable as a result of the
Casualty, the Monthly Rent will be abated for the period of time untenantable in
proportion to the square foot area untenantable.
24. Eminent Domain.
If there is a permanent Taking of (i) 15% or more of the total Square Feet of
the Building, or (ii) 15% or more of the total number of parking spaces in the
Premises, either party may terminate this Lease as of the date the public
authority takes possession, by written notice to the other party within 30 days
after the Taking provided, however, in the case of a Taking resulting in a loss
of parking spaces, Tenant shall have no right to terminate this Lease if Lessor
provides Tenant with reasonably comparable parking not materially more distant
or less accessible than the parking spaces which were the subject of the Taking.
If this Lease is so terminated, any rents and other payments will be prorated as
of the termination and will be proportionately refunded to Tenant, or paid to
Lessor, as the case may be. All damages, awards and payments for the Taking will
belong to Lessor irrespective of the basis upon which they were made or awarded,
provided that Tenant will be entitled to bring a separate claim and recover any
amounts specifically awarded for Tenant's trade fixtures or equipment or as a
relocation payment or allowance, so long as such award does not reduce Lessor's
award. If this Lease is not terminated as a result of the Taking, Lessor will
restore the remainder of the Premises to a condition as near as reasonably
possible to the condition prior to the Taking, and the rent will be abated for
the period of time the space is untenantable in proportion to the square foot
area untenantable and this Lease will be amended appropriately to reflect the
deletion of the space taken.
25. Defaults.
If: (i) Tenant fails to pay any amount due under this Lease within 10 days after
written notice from Lessor, (ii) Tenant fails to keep or perform any of the
other terms, conditions or covenants of this Lease for more than 30 days after
notice of such failure shall have been given to Tenant (provided that where a
cure is not reasonably possible within that period Tenant shall be entitled to
additional time to effect a cure, so long as Tenant promptly commences acts
reasonably calculated to effect a cure and thereafter diligently prosecutes
those acts to completion), (iii) any proceeding is begun by or against Tenant to
subject the assets of Tenant to any bankruptcy or insolvency law or for an
appointment of a receiver of Tenant or for any of Tenant's assets and is not
discharged or dismissed within 90 days, or (iv) Tenant makes a general
assignment of Tenant's assets for the benefit of creditors, then Lessor may,
with or without terminating this Lease, cure the default and charge Tenant all
reasonable out-of-pocket costs and expenses of doing so, and Lessor also may
reenter the Premises, remove all persons and property, and regain possession of
the Premises through any and all legal means, without waiver or loss of any of
Lessor's rights under this Lease, including Lessor's right to payment of Monthly
Rent. Lessor also may terminate this Lease as to all future rights of Tenant,
without terminating Lessor's right to payment of Monthly Rent and other charges
due under this Lease.
If this Lease or Tenant's right to possession of the Premises has been
terminated under this Section, Tenant shall have the right to seek and propose
to Lessor prospective tenants to lease the Premises from Lessor or to occupy the
Premises under an assignment of this Lease or a sublease, as the case may be. If
Tenant makes such a proposal and this Lease is then in effect, the provisions of
Section 22 will apply. If this Lease has been terminated by reason of Tenant's
default, and Tenant proposes a new lease by Lessor to a tenant obtained by
Tenant, Lessor will give its good faith consideration to leasing all or a
portion of the Premises to that prospective tenant.
Any amount payable by one party to the other pursuant to the terms of this lease
shall bear interest at the rate of 12% per annum from the date payment to the
other party was due, and shall be paid together with such interest, within the
time period specified in this Lease for such payment (or, if no such time period
is specified, within 30 days).
Tenant shall give Lessor written notice of any default by Lessor under this
Lease. Lessor shall have 30 days after Lessor's receipt of Tenant's default
notice to cure such default' provided, however, that if such a nonmonetary
default cannot reasonably be cured within 30 days, Lessor shall have as much
time to cure such default as is necessary provided Lessor promptly commences and
diligently pursues such cure; and provided further, that if the default relates
to a matter which is of an emergency nature, the Lessor shall have only 48 hours
(or such lesser period as is reasonable under the circumstances) to cure such
default. If Lessor fails to cure any such default within such cure period, then
Tenant may cure the default, in which event Lessor shall reimburse Tenant for
all amounts spent on such cure together with interest as provided in the
preceding paragraph.
No waiver by Lessor or Tenant of performance by the other party shall be
considered a continuing waiver or shall preclude Lessor or Tenant from
exercising its rights in the event of a subsequent default. No acceptance by
Lessor of a partial payment tendered by Tenant shall be deemed to be a waiver of
the balance of the amount due even if the tender states that acceptance will
constitute payment in full. No deposit by Tenant of any partial payments due
hereunder into a lockbox or other bank account for the account of Lessor shall
be deemed to be acceptance or payment by Lessor nor shall it be deemed to be a
waiver by Lessor of any claims Lessor may have against Tenant under this Lease.
If Tenant is in default of a monetary provision of this Lease, any payment that
is not sufficient to cure the subject default shall be deemed to be a partial
payment for purposes of this Section.
Each and every right and remedy contained herein shall be cumulative and in
addition to any other right or remedy given hereunder. In the event that either
party brings a legal action to enforce the terms of this Lease or to exercise
any right or remedy provided for herein, the prevailing party shall be paid its
reasonable expenses of suit, including reasonable attorneys' fees, by the other
party.
26. Waiver of Lease Provisions.
No waiver of any provision of this Lease will be deemed a waiver of any other
provision or a waiver of that same provision on a subsequent occasion. The
receipt of rent by Lessor with knowledge of a default under this Lease by Tenant
will not be deemed a waiver of the default. Neither party will be deemed to have
waived any provision of this Lease by any action or inaction and no waiver will
be effective unless it is done by expressed written agreement signed by the
party waiving the provision. Any payment by Tenant and acceptance by Lessor of a
lesser amount than the full amount of all Monthly Rent and other charges then
due will be applied to the earliest amounts due. No endorsement or statement on
any check or letter for payment of rent or other amount will be deemed an accord
and satisfaction, and Lessor may accept such check or payment without prejudice
to its right to recover the balance of any rent or other amount or to pursue any
other remedy provided in this Lease. No acceptance of payment of less than the
full amount due to either party will be deemed a waiver of the right to the full
amount due together with any interest and service charges.
27. Return of Possession to Lessor.
On expiration of the Term or sooner termination of this Lease, Tenant will
return possession of the Premises to Lessor, without notice from Lessor, in good
order and condition, except for ordinary wear and damage, destruction or
conditions Tenant is not required to remedy under this Lease. Tenant will give
Lessor all keys for the Premises and will inform Lessor of combinations on any
locks and safes on the Premises. Any property left in the Premises after
expiration or termination of this Lease or after the Premises have been vacated
by Tenant will become the property of Lessor to dispose of as Lessor chooses.
28. Holding Over.
If Tenant remains in possession of the Premises after expiration of the Term
without a new lease, it may do so only with written consent by Lessor, and any
such holding over will be from month-to-month subject to all the same provisions
of this Lease, except that the Monthly Base Rent will be the Monthly Base Rent
stated in Lessor's consent if a new Monthly Base Rent is stated, or 150% of the
Monthly Base Rent under this Lease if no new Monthly Base Rent is stated in
Lessor's consent. Any holding over without Lessor's consent will be at 150% of
the Monthly Rent under this Lease. The month-to-month occupancy may be
terminated by Lessor or Tenant on the last day of any month by at least 30 days'
prior written notice to the other.
29. Brokers.
Lessor and Tenant represent and warrant one to another that except for Tenant's
representation by Woodbridge Partners Inc., neither of them has employed or
otherwise used any broker or agent in relation to this Lease. Lessor will
indemnify and hold Tenant harmless, and Tenant will indemnify and hold Lessor
harmless, from and against any claims for brokerage or other commissions or fees
arising out of any breach of the foregoing representation and warranty by the
respective indemnitors.
Lessor shall pay Tenant an allowance for payment by Tenant to Woodbridge
Partners, Inc. of a leasing commission in connection with the Lease, payable on
the commencement of the Term in the amount of $427,578.00. In the event Tenant
exercises its option to extend the Term of the Lease, no additional brokerage
commission shall be payable.
30. Notices.
Any notice under this Lease will be in writing, and will be sent by prepaid
certified mail, or by facsimile confirmed by certified mail, or by same day
courier or overnight courier addressed to Tenant prior to the Commencement Date
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax number: ▇▇▇-▇▇▇▇)
Attn: Chief Financial Officer and as of the Commencement Date at the Premises
and to Lessor at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or to such other address as is designated in a notice given under this
Section. A notice will be deemed given on the date mailed. Lessor's statements
of Costs and other routine mailings to tenants need not be sent by certified
mail.
31. Governing Law.
This Lease will be construed under and governed by the laws of Minnesota. If any
provision of this Lease is illegal or unenforceable, it will be severable and
all other provisions will remain in force as though the severable provision had
never been included.
32. Entire Agreement.
This Lease contains the entire agreement between Lessor and Tenant regarding the
Premises. Tenant agrees that it has not relied on any statement, representation
or warranty of any person except as set out in this Lease. This Lease may be
modified only by an agreement in writing signed by Lessor and Tenant. No
surrender of the Premises, or of the remainder of the Term, will be valid unless
accepted by Lessor in writing.
33. Successors and Assigns.
All provisions of this Lease will be binding on and for the benefit of the
successors and assigns of Lessor and Tenant, except that no person or entity
holding under or through Tenant in violation of any provision of this Lease will
have any right or interest in this Lease or the Premises.
34. Intentionally Deleted.
35. Renewal Option.
Lessor grants Tenant the option ("Renewal Option") to extend the term of this
Lease for one additional period of five Lease Years (the "Renewal Period"),
commencing immediately upon the expiration of the Term, subject to the following
conditions:
(a) This Lease is in full force and effect and Lessor has not
declared, in writing, that there exists a default under this
Lease; provided, however, that if Lessor declares such a
default and there is less than 30 days remaining until the
period within which Tenant may exercise its option ends,
Tenant shall have 30 days within which to cure the default and
if so cured, Tenant's exercise of this option shall be
considered effective.
(b) Tenant gives Lessor prior written notice of Tenant's election
to exercise the Renewal Option at least 12 months before the
expiration of the Term. Failure of Tenant to deliver timely
notice of its election to exercise the Renewal Option will
constitute Tenant's waiver of its right to renew the Lease.
(c) The Monthly Base Rent for the Renewal Period will be $127,680.
(d) All of the other terms, covenants and conditions applicable to
the Renewal Period, including Costs, shall be the same as set
forth in this Lease, except that there will be no further
option to extend the Term after the Renewal Period, and no
provisions of this Lease relating to improvements, allowances,
or other incentives or concessions will apply to any Renewal
Period, unless hereafter agreed upon between the parties in
writing.
(e) At the request of either party, Lessor and Tenant will execute
and deliver an appropriate document setting forth all of the
terms, covenants and conditions applicable to the Renewal
Period.
(f) The rights of Tenant under this Section shall not be severed
from this Lease or separately sold, assigned or transferred,
and will expire in accordance with the provisions of this
Section, or upon the expiration or earlier termination of this
Lease.
36. Construction Improvement Allowance; Punchlist.
Lessor shall construct the Building shell improvements which will include glass
in place of dock doors and eight 4-foot by 8-foot skylights (but not the Tenant
Improvements as hereinafter defined) and the driveways, parking areas, exterior
lighting facilities and devices and related improvements to the Premises of a
similar nature in accordance with the plans and specifications prepared by ▇▇▇▇
Associates, Inc., dated January 28, 1998, as modified by supplemental plans and
specifications prepared by ▇▇▇▇ Associates, Inc. dated February 23, 1998, which
Lessor has delivered to Tenant. Lessor shall make no changes to such plans and
specifications, including changes in materials, which will materially adversely
affect Tenant's proposed use of the Premises. The Building shall be constructed
so as to conform to all applicable laws, ordinances and codes. The Building
shall be substantially complete not later than September 1, 1998 subject to
matters reasonably beyond Lessor's control. Tenant shall be entitled to require
changes to the plans and specifications regarding the Building or other
improvements on the Premises, provided that Tenant shall be responsible for all
costs and all delays in completion of construction of the Building caused by
such changes. All such changes in order to be effective must be in the form of a
written change order signed by Tenant which states the amount, if any, by which
the change order increases or decreases the cost of the work as set forth in the
plans and specifications and which states the delay, if any, that the change in
question will cause in substantially completing construction. Lessor has paid
Sewer Access Charges and Water Access Charges in connection with the proposed
improvements on the Premises calculated on the basis that those improvements
would be devoted one-half to office uses and one-half to warehouse uses. All
additional Sewer Access Charges and Water Access Charges shall be Tenant's
responsibility.
Lessor shall cause to be constructed certain leasehold improvements (the "Tenant
Improvements") pursuant to plans and specifications and a contract to be
approved by Lessor and Tenant not later than June 15, 1998. Tenant's approval of
said contract shall not be unreasonably withheld. Tenant shall have the right to
install its own security system. Lessor shall provide construction management
services in connection with the design, construction and commissioning of the
Tenant Improvements, as described and for the fee specified in the attached
Exhibit ▇. ▇▇▇▇▇▇ agrees to be responsible for the cost of the design, sewer and
water charges, permits, signage, construction and construction management of the
Tenant Improvements (the "Tenant Improvement Cost"), in an amount equal to
Twenty Five and 00/100 Dollars ($25.00) per square foot of space in the Building
(the "Tenant Improvement Allowance"). To the extent that the Tenant Improvement
Allowance is insufficient to cover the entire Tenant Improvement Cost, Tenant
shall be responsible for the portion of the Tenant Improvement Cost in excess of
the Tenant Improvement Allowance. The portion of the Tenant Improvement Cost
which is Tenant's responsibility, if any, initially shall be paid by Lessor.
Following completion of the Tenant Improvements (as evidenced by a certificate
of occupancy issued by the responsible governmental authority or a certificate
of final payment and completion certified by Lessor's architect or engineer)
Tenant shall within ten (10) days pay Lessor the portion of the Tenant
Improvement Cost for which Tenant is responsible. To the extent that Tenant
elects to construct Tenant Improvements over time rather than to build-out all
of the space at once, the unused portion of the Tenant Improvement Allowance may
be used by Tenant at any time during the Term prior to the last year (unless
Tenant exercises its option to extend the Term of the Lease, in which case any
unused portion of the Tenant Improvement Allowance shall remain available for
use by Tenant during all but the last year of the Term, as so extended).
Notwithstanding the foregoing, but provided that Tenant has improved the entire
Premises, at any time following construction in the Building of Tenant
Improvements costing not less than Twenty Two and No/100 Dollars per foot,
Tenant may elect to have the unused portion of the Tenant Improvement Allowance
paid to Tenant at Tenant's direction which amount shall be deemed to be an
allowance to reimburse Tenant for Tenant's costs of design, signage, and
equipment installation, including the cost of computer and telecommunication
equipment and/or facilities wiring, all as shown by copies of appropriate
invoices provided by Tenant to Lessor.
In addition to the foregoing Tenant Improvement Allowance, if Tenant elects to
extend the Term pursuant to the renewal option set out in the Lease, as modified
by Section 26, below, Lessor shall provide Tenant with an additional Tenant
Improvement Allowance in the amount of Six and No/100 Dollars ($6.00) per square
foot to be used for purposes of refurbishing the Premises, including all related
design, sewer, water, permit, signage, administrative and construction costs.
This allowance shall in all respects be treated in the same manner as the
original Tenant Improvement Allowance.
Prior to the Commencement Date Tenant shall have reasonable access to the
Building for purposes of installing cabling and wiring as well as roof-top
reception and/or transmission facilities and equipment related thereto pursuant
to Sections 2 and 37, as well as to move equipment, goods and furnishings into
portions of the Building that has been substantially completed, provided that no
such activity shall unreasonably interfere with Lessor's completion of
construction of the Tenant Improvements.
37. Rooftop Telecommunications Equipment.
Tenant will have the right to use the roof of the Building for the installation
and operation of telecommunications satellite dishes, antennae and related
facilities ("Telecommunications Equipment"), subject to the prior written
approval of Lessor as to the location, nature, design, appearance and size of
the Telecommunications Equipment, which approval shall not be unreasonably
withheld, delayed or conditioned. If Telecommunications Equipment is installed
by Tenant, Tenant will not commit or permit any act or omission which results in
the violation of any law, governmental regulation, or insurance policy of
Lessor, relating to the Building. Tenant will not knowingly permit any conduct
or condition which may unduly disturb or endanger occupants of any other
building.
Any rooftop installation of Tenant's Telecommunications Equipment
("Telecommunications Equipment Work") will be completed by Tenant, at Tenant's
expense, in strict accordance with plans approved in writing by Lessor, which
approval shall not be withheld, delayed or conditioned unreasonably and no
modifications, additions or alterations will be made without Lessor's prior
written consent, which consent will not be unreasonably withheld, delayed or
conditioned. Aesthetic concerns will be deemed valid reasons for withholding
consent. All working drawings for Telecommunications Equipment Work will be
prepared by Tenant at Tenant's expense and will be submitted to Lessor for
approval. All Telecommunications Equipment Work will be done in a good and
workmanlike manner and as expeditiously as possible. Tenant's installation and
use of the Telecommunications Equipment will be subject to the following (the
"Conditions"):
(a) No Telecommunications Equipment may be installed without Lessor's
prior written approval. Lessor's approval will not be unreasonably withheld,
delayed or conditioned and, subject to the foregoing, shall be given so long as
the work complies with the plans approved by Lessor and Tenant is not in
material default under this Lease and so long as all other conditions set forth
in this Section are met.
(b) Tenant will submit the working drawings for the Telecommunications
Equipment Work and the Telecommunications Equipment to Lessor at least 20 days
before the date the Telecommunications Equipment Work is to commence.
(c) Tenant will provide Lessor with evidence reasonably acceptable to
Lessor that the Telecommunications Equipment and the proposed installation of
the same complies with all applicable laws, ordinances, rules and regulations,
and that Tenant has obtained any licenses, permits or other governmental
consents or approvals required for the installation or use of the
Telecommunications Equipment and the other Telecommunications Equipment Work.
(d) Upon request, Tenant will provide Lessor with evidence acceptable
to Lessor that the Telecommunications Equipment is owned or leased by Tenant and
that the installation of the Telecommunications Equipment will comply with all
provisions of this Lease relating to alterations.
(e) Tenant will promptly pay all costs of the Telecommunications
Equipment Work and the Telecommunications Equipment and any construction,
installation, repair, maintenance, or governmental approval or licensing costs
associated with the Telecommunications Equipment Work and the Telecommunications
Equipment.
(f) Subject to Tenant's right to self insure for loss or damage to its
own property, Tenant will provide Lessor with evidence that the
Telecommunications Equipment, if owned by Tenant, are insured against fire,
theft and other risks normally covered by an "all risk" policy of casualty
insurance, and evidence that the Tenant's liability insurance required under
this Lease applies to all of the Telecommunications Equipment and their
installation, use, maintenance and repair.
(g) Neither the Telecommunications Equipment nor its installation, use,
maintenance or repair shall:
(i) be disruptive or disturbing by reason of unreasonable
noise, vibration, radio or electromagnetic interference, or similar
cause, or to Lessor's operation or maintenance of the Premises,
(ii) be architecturally or aesthetically inharmonious with the
Land or Building,
(iii) adversely affect the structural or mechanical integrity
of the Building or the operation or maintenance of the systems serving
the Building,
(iv) increase the insurance costs for the Building (except for
costs to be paid solely by Tenant),
(v) endanger the safety or well-being of occupants or visitors
to the Building.
(h) Tenant agrees to comply with and obtain all necessary approvals,
permits, licenses, etc., required by the Federal Communications Commission (the
"FCC") and any other governmental authorities asserting jurisdiction over the
installation or operation of any of Tenant's Telecommunications Equipment.
Tenant warrants, represents and agrees that the installation and operation of
the Telecommunications Equipment shall in no way materially interfere with the
operation of any other Building system or telecommunications equipment system(s)
presently in operation in or on the Building and that in the event such
interference should occur, Tenant, after having received notice of such
interference, will take immediate action to eliminate said interference and
restore the proper operation of such system(s) as required by law or directive
of the FCC. In the event that Tenant fails to eliminate the interference as
required by law or directive of the FCC within a reasonable time, Lessor may, at
its discretion, (i) cure such interference and thereafter add the cost and
expense incurred by Lessor therefor to the next Monthly Rent to become due and
Tenant shall pay said amount as additional Monthly Rent, or (ii) treat such
failure on the part of Tenant to eliminate said interference, as required by the
FCC within the time allotted by the FCC, as a default under this Lease.
Tenant agrees to indemnify and hold Lessor harmless from and against
any claims and expenses Lessor may incur arising from Tenant's failure to comply
with the Conditions or the rules and orders of the FCC with respect to the
installation and operation of any of Tenant's Telecommunications Equipment or
Telecommunications Equipment system(s).
38. Consent Not Unreasonably Withheld.
Wherever in the Lease Lessor's consent is required or a determination is to be
made by Lessor, the decision to consent or not to consent as well as any other
determination shall be made by Lessor in good faith, and no consent shall be
unreasonably withheld, delayed or conditioned, unless different conditions,
standards or provisions are specifically stated in this Lease. Tenant
acknowledges that it shall not be unreasonable for Lessor to refuse to give its
consent to any request if consenting would be a default by Lessor under any
mortgage, ground lease or contract between Lessor and a third party, or if doing
so would be contrary to applicable law. Wherever in the Lease Tenant's consent
is required, the decision to consent or not to consent shall be made by Tenant
in good faith, and no consent shall be unreasonably withheld, delayed or
conditioned.
39. Tenant's Due Diligence.
Lessor has provided Tenant with a copy of an existing survey of the Premises
together with copies of Lessor's Phase I environmental report and Lessor's title
insurance policy. Tenant acknowledges receipt of such items and accepts the
condition of the Premises, Building and Land as represented therein.
Lessor and Tenant have executed this Lease to be effective as of the date stated
in the first paragraph of this Lease.
LESSOR:
MEPC AMERICAN PROPERTIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Senior Vice President
And
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President
TENANT:
HEALTH RISK MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
(Please Print Name)
Its:Chairman and CEO
And
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(Please Print name)
Its:Senior Vice President, Finance and CFO
The following exhibits to the Lease are not being filed herewith but will be
provided to the Commission upon request:
Exhibit A - Premises
Exhibit B - Land
Exhibit C - Rules and Regulations
Exhibit D - Construction Management Fee
Exhibit E - Expenses Not Considered to be Operating Costs
AMENDMENT OF LEASE
This Amendment of Lease is entered into as of September 16, 1998 between MEPC O
& I, INC., a Delaware corporation, ("Lessor") and HEALTH RISK MANAGEMENT, INC.,
a Minnesota corporation ("Tenant").
A. Tenant, as tenant, and MEPC American Properties Inc. ("MEPC")
as lessor, entered into a Lease dated May 5, 1998 (the
"Lease"), under which MEPC leased to Tenant the
office/warehouse building commonly known as the Hampshire
Avenue Technology Center ("Building") to be located in the
City of Bloomington, Minnesota, containing approximately
142,526 Square Feet of space, as more fully described in the
Lease.
▇. ▇▇▇▇▇▇ is now the owner of the Building and has succeeded to
the rights and interests of MEPC as the lessor under the
Lease.
▇. ▇▇▇▇▇▇ and Tenant want to amend the Lease in certain respects.
In consideration of the above facts and in consideration of the mutual
agreements contained in this Amendment, Lessor and Tenant agree that the Lease
is amended as follows:
1. This Amendment is intended to supplement and amend the
provisions of the Lease. To the extent that any of the
provisions of this Amendment are inconsistent with the
provisions of the Lease, the provisions of this Amendment will
control. Except as otherwise provided in this Amendment, the
terms defined in the Lease will have the same meanings when
used in this Amendment.
2. Section 1 (c) of the Lease is amended to read as follows:
"Term" means the period beginning on the Commencement Date and
ending on the last day of the calendar month in which the date
occurs which is eleven (11) years after the date on which
Lessor no longer has any obligation for Holdover Rent under
Section 2 of this Lease.
3. Section 1 (f) of the Lease is amended to read as follows:
"Monthly Base Rent" means the following amounts:
Lease Year Monthly Base Rent Rate/Square Foot
1 through 6 $122,929.00 $10.35
7 through 11 $133,618.00 $11.25
12 through 16 $133,618.00 $11.25
4. Section 13 of the Lease is amended to read as follows:
Signs: Tenant will not place or permit any signs on the
exterior or windows of the Building, or within the Premises if
visible from the exterior of the Building, except for building
standard signage on the brick exterior above the front entry
to Tenant's Premises in the Building unless Tenant shall first
obtain Lessor's approval, which approval shall not be
withheld, delayed or conditioned unreasonably. Upon approval
by Lessor (which approval shall not be withheld, delayed or
conditioned unreasonably) and by the City of Bloomington,
Lessor shall at its sole expense, construct a monument sign on
the Land and Tenant, at its sole expense, shall have the right
to construct and maintain signage to the monument.
5. Section 35 (c) is amended to change the Monthly Base Rent for
the Renewal Period from $127,680.00 to $133,618.00.
6. Section 36 paragraph 2 is amended as follows:
(a) to expand the definition of Tenant Improvements to
include Tenant's out-of-pocket moving and relocation
expenses, which shall include, but not be limited to:
space planning; space design; project management;
consultants; and relocating, rewiring and
reprogramming of telecommunications, computer systems
and networks and other furniture, fixtures and
equipment owned or leased by Tenant;
(b) to allow Tenant the right to provide and install, at
its expense, an uninterruptable power supply (UPS)
and a power generator pursuant to plans and
specifications approved in advance by Lessor;
(c) to increase the Tenant Improvement Allowance from
Twenty Five and no/100 Dollars ($25.00) to Thirty two
and no/100 Dollars ($32.00) per Square Foot.
1. Section 36 Paragraph 3, referencing an additional Tenant
Improvement Allowance upon Tenant's election to extend the
Term, is hereby deleted.
2. Except as expressly amended in this Amendment, all of the
terms of the Lease are ratified and affirmed.
Lessor and Tenant have executed this Amendment as of the date written beside
their respective signatures below.
Lessor:
MEPC AMERICAN PROPERTIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Senior Vice President
And
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Vice President
TENANT: HEALTH RISK MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
Its: Chairman and CEO
And
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: CFO