EXHIBIT 10.21
OFFICE/WAREHOUSE LEASE
THIS INDENTURE of lease, entered into this 23 day of May, 2003, by
and between SMD LINCOLN INVESTMENTS LLC, a Minnesota limited liability
corporation hereinafter referred to as "Landlord", and LECTEC CORPORATION, A
MINNESOTA CORPORATION, hereinafter referred to as "Tenant".
DEFINITIONS:
"Premises" - That certain real property located in the City of EDINA,
County of HENNEPIN, State of MINNESOTA and legally described on Exhibit "A"
attached hereto and made a part hereof, including all buildings and site
improvements located thereon.
"Building" - That certain office/warehouse building containing
approximately 78,000 square feet located upon the Premises and commonly
described as LINCOLN INDUSTRIAL CENTER.
"Demised Premises" - That certain portion of the Building located at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, consisting of approximately 14,316 square feet (4,179 square
feet of office space and 10,137 square feet of warehouse space), as measured
from the outside walls of the Demised Premises to the center of the partition
wall, as shown on the floor plan attached hereto as Exhibit "B" and made a part
hereof. The Demised Premises includes a non-exclusive easement for access to
Common Areas, as hereinafter defined, and all licenses and easements appurtenant
to the Demised Premises.
"Common Areas" - The term "Common Area" means the entire area to be
used for the non-exclusive use by Tenant and other tenants in the Building,
including, but not limited to, corridors, lavatories, driveways, truck docks,
parking lots and landscaped areas. Subject to reasonable rules and regulations
promulgated by Landlord, the Common Areas are hereby made available to Tenant
and its employees, agents, customers, and invitees for reasonable use in common
with other tenants, their employees, agents, customers and invitees.
"Tenant's Proportionate Share" - eighteen and thirty-five one
hundredths percent (18.35%), which is the quotient of 14,316 square feet divided
by 78,000 square feet.
WITNESSETH:
TERM:
1. For and in consideration of the rents, additional rents, terms,
provisions and covenants herein contained, Landlord hereby lets, leases and
demises to Tenant the Demised Premises for the term of sixty-two (62) months
commencing on the FIRST day of JULY, 2003 (the "Commencement Date") and expiring
the LAST day of AUGUST, 2008 (the "Expiration Date"), unless sooner terminated
as hereinafter provided.
NET RENT:
2. Landlord reserves, and Tenant shall pay Landlord, a total rental of TWO
HUNDRED FIFTY-SEVEN THOUSAND SEVEN HUNDRED AND 00/100 DOLLARS ($257,700.00),
payable in advance, in equal monthly
installments as outlined below, commencing on the Commencement Date and
continuing on the first day of each and every month thereafter for the next
succeeding months during the balance of the term ("Base Rent"). Rental for
partial months shall be prorated and adjusted accordingly.
Monthly Total Per
Period Base Rent Period
July 1, 2003 through and
Including August 31, 2003 $ 0.00 $ 0.00
September 1, 2003 through and
Including August 31, 2008 $4,295.00 $ 257,700.00
TOTAL $ 257,700.00
ADDITIONAL RENT:
3. Tenant shall pay to Landlord throughout the term of this Lease
the following:
a. Tenant shall pay its Proportionate Share of Real
Estate Taxes. The term "Real Estate Taxes" shall mean all real estate
taxes, all assessments and any taxes in lieu thereof which may be
levied upon or assessed against the Premises of which the Demised
Premises are a part. Tenant, in addition to all other payments to
Landlord by Tenant required hereunder shall pay to Landlord, in each
year during the term of this Lease and any extension or renewal
thereof, Tenant's Proportionate Share of such real estate taxes and
assessments paid in the first instance by Landlord.
Any tax year commencing during any lease year shall
be deemed to correspond to such lease year. In the event the taxing
authorities include in such real estate taxes and assessments the value
of any improvements made by Tenant, or of machinery, equipment,
fixtures, inventory or other personal property or assets of Tenant,
then Tenant shall pay all the taxes attributable to such items in
addition to its Proportionate Share of said aforementioned Real Estate
Taxes. A photostatic copy of the tax statement submitted by Landlord to
Tenant shall be sufficient evidence of the amount of Real Estate Taxes
assessed or levied against the Premises of which the Demised Premises
are a part.
b. Tenant's Proportionate Share of the annual aggregate
Operating Expenses incurred by Landlord in the operation, maintenance
and repair of the Premises. The term "Operating Expenses" shall
include, but not be limited to, maintenance, repair, replacement and
care of all common area lighting, common area plumbing and roofs,
parking and landscaped areas, signs, snow removal, non-structural
repair and maintenance of the exterior of the Building, insurance
premiums, management fees up to a maximum of five percent (5%) of gross
Building receipts, wages and fringe benefits of personnel (up to the
level of property manager) employed for such work, costs of non-capital
equipment purchased and used for such purposes, and the cost or portion
thereof properly allocable to the Premises (amortized over such
reasonable period as Landlord shall determine together with the
interest at the rate of twelve percent (12%) per annum on the
unamortized balance) of any capital improvements made to the Building
by Landlord after the Base Year which result in a reduction of
Operating Expenses or made to the Building by Landlord after the date
of this Lease that are required under any governmental law or
regulation that was not applicable to the Building at the time it was
constructed.
c. In no event shall the total adjusted monthly rent be
less than the BASE RENT per month during the term of this Lease.
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d. The payment of the sums set forth in this Article 3
shall be in addition to the Base Rent payable pursuant to Article 2 of
this Lease. All sums due hereunder shall be due and payable within
thirty (30) days of delivery of written certification by Landlord
setting forth the computation of the amount due from Tenant. In the
event the lease term shall begin or expire at any time during the
calendar year, the Tenant shall be responsible for its Proportionate
Share of Additional Rent under subdivisions a. and b. during the Lease
and/or occupancy time.
e. Prior to commencement of this Lease and prior to the
commencement of each calendar year thereafter commencing during the
term of this Lease or any renewal or extension thereof, Landlord may
estimate for each calendar year (i) the total amount of Real Estate
Taxes; (ii) the total amount of Operating Expenses; (iii) Tenant's
Proportionate Share of Real Estate Taxes for such calendar year; (iv)
Tenant's Proportionate Share of Operating Expenses for such calendar
year; and (v) the computation of the annual and monthly rental payable
during such calendar year as a result of increases or decreases in
Tenant's Proportionate Share of Real Estate Taxes and Operating
Expenses. Said estimates will be in writing and will be delivered or
mailed to Tenant.
f. The amount of Tenant's Proportionate Share of Real
Estate Taxes and Operating Expenses for each calendar year, so
estimated, shall be payable as Additional Rent, in equal monthly
installments, in advance, on the first day of each month during such
calendar year at the option of Landlord. In the event that such
estimate is delivered to Tenant before the first day of January of such
calendar year, said amount, so estimated, shall be payable as
Additional Rent in equal monthly installments, in advance on the first
day of each month during such calendar year. In the event that such
estimate is delivered to Tenant after the first day of January of such
calendar year, said amount, so estimated, shall be payable as
Additional Rent in equal monthly installments, in advance, on the first
day of each month over the balance of such calendar year, with the
number of installments being equal to the number of full calendar
months remaining in such calendar year.
g. Upon completion of each calendar year during the term
of this Lease or any renewal or extension thereof, Landlord shall cause
its accountants to determine the actual amount of the Real Estate Taxes
and Operating Expenses payable in such calendar year and Tenant's
Proportionate Share thereof and deliver a written certification of the
amounts thereof to Tenant. If Tenant has underpaid its Proportionate
Share of Real Estate Taxes or Operating Expenses for such calendar
year, Tenant shall pay the balance of its share of the same within 30
days after the receipt of such statement. If Tenant has overpaid its
share of Real Estate Taxes or Operating Expenses for such calendar
year, Landlord shall within 30 days after the date of the written
certification either (i) refund such excess, or (ii) credit such excess
against the most current monthly installment or installments due
Landlord for its estimate of Tenant's Proportionate Share of Real
Estate Taxes and Operating Expenses for the next following calendar
year. A prorata adjustment shall be made for a fractional calendar year
occurring during the term of this Lease or any renewal or extension
thereof based upon the number of days of the term of the Lease during
said calendar year as compared to three hundred sixty-five (365) days
and all additional sums payable by Tenant or credits due Tenant as a
result of the provisions of this Article 3 shall be adjusted
accordingly.
h. Tenant, may during normal business hours and on
reasonable prior notice to Landlord, audit Landlord's books and records
that pertain to Real Estate Taxes and Operating Expenses. If Tenant's
audit indicates that Landlord overcharged Tenant Operating Expenses or
Real Estate Taxes, Landlord shall promptly repay all such overpayment
to Tenant and adjust Tenant's estimated payments of Operating Expenses
and Real Estate Taxes if necessary.
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COVENANT TO PAY RENT:
4. The covenants of Tenant to pay the Base Rent and the
Additional Rent are each independent of any other covenant, condition, provision
or agreement contained in this Lease. All rents are payable to Landlord at:
SMD LINCOLN INVESTMENTS LLC
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
UTILITIES:
5. Landlord shall provide mains and conduits to supply water,
gas, electricity and sanitary sewage to the Premises. Tenant shall pay, when
due, all charges for sewer usage or rental, garbage, disposal, refuse removal,
water, electricity, gas, fuel oil, L.P. gas, telephone and/or other utility
services or energy source furnished to the Demised Premises during the term of
this Lease, or any renewal or extension thereof. If Landlord elects to furnish
any of the foregoing utility services or other services furnished or caused to
be furnished to Tenant, then the rate charged by Landlord shall not exceed the
rate Tenant would be required to pay to a utility company or service company
furnishing any of the foregoing utilities or services. The charges thereof shall
be deemed Additional Rent in accordance with Article 3.
CARE AND REPAIR OF DEMISED PREMISES:
6. Tenant shall, at all times throughout the term of this Lease,
including renewals and extensions, and at its sole expense, keep and maintain
the Demised Premises in a clean, safe, sanitary and first class condition and,
subject to the other provisions of this Lease, in compliance with all applicable
laws, codes, ordinances, rules and regulations. Tenant's obligations hereunder
shall include, but not be limited to, the maintenance, and repair and
replacement, if necessary, of heating and air conditioning fixtures, equipment,
and systems, all lighting and plumbing fixtures and equipment, fixtures, motors
and machinery, all interior walls, partitions, doors and windows, all exterior
entrances exclusively serving the Demised Premises, windows, doors and docks and
the replacement of all broken glass. When used in this provision, the term
"repairs" shall include replacements or renewals when necessary. The Tenant
shall keep and maintain all portions of the Demised Premises in a clean and
orderly condition, free of accumulation of dirt and rubbish.
If Tenant fails, refuses or neglects to maintain or repair the
Demised Premises as required in this Lease after notice shall have been given
Tenant in accordance with Article 33 of this Lease and the applicable cure
periods have expired, Landlord may make such repairs and upon completion
thereof, Tenant shall pay to Landlord all costs reasonably incurred by Landlord
in making such repairs within 30 days after presentation to Tenant of ▇▇▇▇
therefor.
Landlord shall maintain, repair and, as necessary, replace the
structural portions of the Building; the Building foundation, the roof and roof
membrane, and all Building systems, including, without limitation, provided,
however, where structural repairs are required to be made by reason of the acts
of Tenant, the costs thereof shall be borne by Tenant and payable by Tenant to
Landlord upon demand. The Landlord shall be responsible for all outside
maintenance of the Demised Premises, including grounds and parking areas. All
such of which is the responsibility of the Landlord shall be provided as
reasonably necessary to the comfortable use and occupancy of Demised Premises
during business hours, except Saturdays, Sundays and holidays, upon the
condition that the Landlord shall not be liable for damages for failure to do so
due to causes beyond its control.
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SIGNS:
7. Any sign, lettering, picture, notice or advertisement
installed on or in any part of the Premises and visible from the exterior of the
Building, or visible from exterior of the Demised Premises, shall be approved
and installed by Landlord (which approval will not be unreasonably withheld) at
Tenant"s expense. In the event of a violation of the foregoing by Tenant,
Landlord may remove the same without any liability and may charge the actual
out-of-pocket expense incurred by such removal to Tenant.
ALTERATIONS, INSTALLATION, FIXTURES:
8. Except as hereinafter provided, Tenant shall not make any
alterations, additions, or improvements in or to the Demised Premises or add,
disturb or in any way change any plumbing or wiring therein without the prior
written consent of the Landlord, which consent will not be unreasonably
withheld. In the event alterations are required by any governmental agency by
reason of the particular use and occupancy of the Demised Premises by Tenant,
Tenant shall make such alterations at its own cost and expense after first
obtaining Landlord's approval of plans and specifications therefor and
furnishing such indemnification as Landlord may reasonably require against
liens, costs, damages and expenses arising out of such alterations. Alterations
or additions by Tenant must be built in compliance with all laws, ordinances and
governmental regulations affecting the Premises and Tenant shall warrant to
Landlord that all such alterations, additions, or improvements shall be in
compliance with all relevant laws, ordinances, governmental regulations, and
insurance requirements. Construction of such alterations or additions shall
commence only upon Tenant obtaining and exhibiting to Landlord the requisite
approvals, licenses and permits and indemnification against liens. All
alterations, installations, physical additions or improvements to the Demised
Premises made by Tenant shall at once become the property of Landlord and shall
be surrendered to Landlord upon the termination of this Lease; provided,
however, this clause shall not apply to movable equipment or furniture owned by
Tenant which may be removed by Tenant at the end of the term of this Lease.
Tenant shall have the right to make non structural changes to the Demised
Premises without Landlord's consent, only if said non structural changes do not
exceed $5,000.00. In such event, Tenant will not be required to remove any such
alterations, installation, physical additions or improvements to the Demised
Premises.
POSSESSION:
9. Except as hereinafter provided, Landlord shall deliver
possession of the Demised Premises to Tenant in the condition required by this
Lease on or before the Commencement Date, but delivery of possession prior to or
later than such Commencement Date shall not affect the expiration date of this
Lease. Any occupancy by Tenant prior to the beginning of the term shall in all
respects be the same as that of a Tenant under this Lease. Landlord shall have
no responsibility or liability for loss or damage to fixtures, facilities or
equipment installed or left on the Demised Premises during such early occupancy.
If the Demised Premises are not ready for occupancy by the Commencement Date and
possession is later than the Commencement Date, Rent shall begin on date of
possession.
In the event the Demised Premises becomes available and ready
for occupancy prior to the Commencement Date, Landlord may elect to permit
Tenant to take occupancy of all or part of the Premises prior to such date. If
Tenant occupies the Demised Premises prior to the Commencement Date, Tenant's
occupancy of the Demised Premises shall be subject to all of the provisions of
the Lease. Early occupancy of the Demised Premises shall not advance the
expiration date of this Lease. Tenant shall have no obligation for Base Rent or
Additional Rent during any early occupancy period.
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SECURITY AND DAMAGE DEPOSIT:
10. Tenant, contemporaneously with the execution of this Lease,
has deposited with Landlord the sum of SEVEN THOUSAND EIGHT HUNDRED
NINETY--SEVEN AND 86/100 DOLLARS ($7,897.86), receipt of which is acknowledged
hereby by Landlord, which deposit is to be held by Landlord, without liability
for interest, as a security and damage deposit for the faithful performance by
Tenant during the term hereof or any extension hereof. Prior to the time when
Tenant shall be entitled to the return of this security deposit, Landlord may
co-mingle such deposit with Landlord's own funds and to use such security
deposit for such purpose as Landlord may determine. In the event of the failure
of Tenant to keep and perform any of the terms, covenants and conditions of this
Lease to be kept and performed by Tenant during the term hereof or any extension
hereof, then Landlord, either with or without terminating this Lease, may (but
shall not be required to) apply such portion of said deposit as may be necessary
to compensate or repay Landlord for all losses or damages sustained or to be
sustained by Landlord due to such breach on the part of Tenant, including, but
not limited to overdue and unpaid Rent, any other sum payable by Tenant to
Landlord pursuant to the provisions of this Lease, damages or deficiencies in
the reletting of the Demised Premises, and reasonable attorneys' fees incurred
by Landlord. Should the entire deposit or any portion thereof be appropriated
and applied by Landlord in accordance with the provisions of this paragraph,
Tenant, upon written demand by Landlord, shall remit forthwith to Landlord a
sufficient amount of cash to restore said security deposit to the original sum
deposited and Tenant's failure to do so within ten (10) business days after
receipt of such demand shall constitute a breach of this Lease. Said security
deposit shall be returned to Tenant, less any depletion thereof as the result of
the provisions of this paragraph, within 30 days after the end of the term of
this Lease or any renewal thereof, or upon the earlier termination of this
Lease. Tenant shall have no right to anticipate return of said deposit by
withholding any amount required to be paid pursuant to the provision of this
Lease or otherwise.
In the event Landlord shall sell the Premises, or shall
otherwise convey or dispose of its interest in this Lease, Landlord may assign
said security deposit or any balance thereof to Landlord's assignee, whereupon
Landlord shall be released from all liability for the return or repayment of
such security deposit and Tenant shall look solely to said assignee for the
return and repayment of said security deposit. Said security deposit shall not
be assigned or encumbered by Tenant without the written consent of Landlord and
any assignment or encumbrance without such consent shall not bind Landlord. In
the event of any rightful and permitted assignment of this Lease by Tenant, said
security deposit shall be deemed to be held by Landlord as a deposit made by the
assignee and Landlord shall have no further liability with respect to the return
of said security deposit to Tenant.
USE:
11. The Demised Premises shall be used and occupied by Tenant
solely for the purposes of GENERAL OFFICE AND WAREHOUSE and legal uses
incidental thereto, so long as such use is in compliance with all applicable
laws, ordinances and governmental regulations affecting the Building and
Premises. The Demised Premises shall not be used in such manner that, in
accordance with any requirement of law or of any public authority, Landlord
shall be obliged on account of the purpose or manner of said use to make any
addition or alteration to or in the Building. The Demised Premises shall not be
used in any manner which will increase the rates required to be paid for public
liability or for fire and extended coverage insurance covering the Premises.
Tenant shall occupy the Demised Premises, conduct its business and control its
agents, employees, invitees and visitors in such a way as is lawful and will not
permit or create any nuisance, noise, odor, or otherwise interfere with, annoy
or disturb any other tenant in the Building in its normal business operations or
Landlord in its management of the Building. Tenant's use of the Demised Premises
shall conform to all of Landlord's reasonable and nondiscriminatory rules and
regulations relating to the use of the Premises. Outside storage on the Premises
of any type of equipment, property or materials owned or used on the Premise by
Tenant or its customers and suppliers shall not be permitted. Tenant shall be
permitted outside storage of a trash compactor.
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ACCESS TO DEMISED PREMISES:
12. Tenant agrees to permit Landlord and the authorized
representatives of the Landlord to enter the Demised Premises at reasonable
times and upon reasonable notice during usual business hours for the purpose of
inspecting the same and making any necessary repairs to the Demised Premises and
performing any work therein that may be necessary to comply with any laws,
ordinances, rules, regulations or requirements of any public authority or of the
Board of Fire Underwriters or any similar body or that Landlord may reasonably
deem necessary to prevent waste or deterioration in connection with the Demised
Premises. Nothing herein shall imply any duty upon the part of Landlord to do
any such work which, under any provision of this Lease, Tenant may be required
to perform and the performance thereof by Landlord shall not constitute a waiver
of Tenant's default in failing to perform the same. Landlord may, during the
progress of any work in the Demised Premises, keep and store upon the Demised
Premises all necessary materials, tools and equipment. The Landlord shall not in
any event be liable for inconvenience, annoyance, disturbance, loss of business,
or other damage of Tenant by reason of making repairs or the performance of any
work in the Demised Premises, or on account of bringing materials, supplies and
equipment into or through the Demised Premises during the course thereof and the
obligations of Tenant under this Lease shall not thereby be affected in any
manner whatsoever.
Landlord reserves the right to enter the Demised Premises at
any time in the event of an emergency and at reasonable hours and upon
reasonable notice to exhibit the Demised Premises to prospective purchasers or
others, and to exhibit the Demised Premises to prospective tenants and to the
display "For Lease" or similar signs on windows or doors in the Demised Premises
during the last ONE HUNDRED EIGHTY (180) days of the term of this Lease, all
without hindrance or molestation by Tenant.
In exercising the above rights, Landlord will use commercially
reasonable efforts to minimize its disruption of Tenant's business in the
Demised Premises.
EMINENT DOMAIN:
13. In the event of any eminent domain or condemnation proceeding
or private sale in lieu thereof in respect to the Premises during the term
thereof, the following provisions shall apply:
a. If the whole of the Premises shall be acquired or
condemned by eminent domain for any public or quasi-public use or
purpose, then the term of this Lease shall cease and terminate as of
the date possession shall be taken in such proceeding and all rentals
shall be paid up to that date.
b. If any substantial part constituting less than the
whole of the Premises shall be acquired or condemned as aforesaid, and
in the event that such partial taking or condemnation shall materially
affect the Demised Premises so as to render the Demised Premises
unsuitable for the business of the Tenant, then the term of this Lease
shall cease and terminate as of the date possession shall be taken by
the condemning authority and Rent shall be paid to the date of such
termination. In the event of a partial taking or condemnation of the
Premises which shall not materially affect the Demised Premises so as
to render the Demised Premises unsuitable for the business of the
Tenant this Lease shall continue in full force and effect but with a
proportionate abatement of the Base Rent and Additional Rent based on
the portion, if any, of the Demised Premises taken. Landlord shall
restore the Building and the Demised Premises to substantially the same
condition as they were prior to such condemnation. Landlord shall
commence restoration and shall restore the Building and the Demised
Premises with reasonable promptness, subject to delays beyond
Landlord's control. The parties shall have no right to terminate this
Lease except as herein provided. Upon completion of such restoration,
the Rent shall be adjusted based upon the portion, if any, of the
Demised Premises restored.
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c. In the event of any condemnation or taking as
aforesaid, whether whole or partial, Tenant shall not be entitled to
any part of the award paid for such condemnation and Landlord is to
receive the full amount of such award; Tenant hereby expressly waiving
any right to claim to any part thereof.
d. Although all damages in the event of any condemnation
shall belong to the Landlord, whether such damages are awarded as
compensation for diminution in value of the leasehold or to the fee of
the Demised Premises, Tenant shall have the right to claim and recover
from the condemning authority, but not from Landlord, such compensation
as may be separately awarded or recoverable by Tenant in Tenant's own
right on account of any and all damage to Tenant "s business by reason
of the condemnation and for or on account of any cost or loss to which
Tenant might be put in removing Tenant's merchandise, furniture,
fixtures, leasehold improvements and equipment. However, Tenant shall
have no claim against Landlord or make any claim with the condemning
authority for the loss of its leasehold estate, any unexpired term or
loss of any possible renewal or extension of said Lease or loss of any
possible value of said Lease, any unexpired term renewal or extension
of said Lease.
DAMAGE OR DESTRUCTION:
14. In the event of any damage or destruction to the Premises by
fire or other cause during the term hereof, the following provisions shall
apply:
a. If the Building is damaged by fire or any other cause
to such extent that the cost of restoration, as reasonably estimated by
Landlord, will either (i) equal or exceed thirty percent (30%) of the
replacement value of the Building (exclusive of foundations) just prior
to the occurrence of the damage; or (ii) require more than 180 days
after the date of the damage to repair, then either party may, no later
than the sixtieth (60th) day following the damage, give written notice
to the other party of its election to terminate this Lease. Landlord
shall, within 60 days after the date of the damage, inform Tenant in
writing of Landlord's reasonable estimate of the amount of time
Landlord requires to repair the damage.
b. If neither party terminates this Lease as permitted
above, Landlord shall restore the Building and the Demised Premises
with reasonable promptness, subject to delays beyond Landlord's control
and delays in the making of insurance adjustments by Landlord. Landlord
shall not be responsible for restoring or repairing leasehold
improvements of the Tenant.
c. In the event of either of the elections to terminate,
this Lease shall be deemed to terminate on the date of the receipt of
the notice of election and all rents shall be paid up to that date.
Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease.
d. In any case where damage to the Building shall
materially affect the Demised Premises so as to render them unsuitable
in whole or in part for the purposes for which they are demised
hereunder, then, unless such destruction was wholly or partially caused
by the negligence or breach of the terms of this Lease by Tenant, its
employees, contractors or licensees, a portion of the rent based upon
the amount of the extent which the Demised Premises are rendered
unsuitable shall be abated until repaired or restored. To the extent
that the destruction or damage was wholly or partially caused by
negligence or breach of the terms of this Lease by Tenant as aforesaid
and if Landlord shall elect to rebuild, the rent equitably ▇▇▇▇▇ and
the Tenant shall remain liable for the same.
CASUALTY INSURANCE:
15. a. Landlord shall at all times during the term of this Lease,
at its expense, maintain a policy or policies of insurance with premiums paid in
advance issued by an insurance company licensed to do business
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in the State of MINNESOTA insuring the Building and all improvements to, or
alterations of, the Demised Premises using the standard Minnesota Special Cause
of Loss Form or equivalent for the full replacement value, provided that
Landlord shall not be obligated to insure any furniture, equipment, machinery,
goods or supplies not covered by this Lease which Tenant may bring upon the
Demised Premises.
b. Tenant shall not carry any stock of goods or do
anything in or about the Demised Premises which will in any way impair
or invalidate the obligation of the insurer under any policy of
insurance required by this Lease.
c. Landlord hereby waives and releases all claims,
liability and causes of action against Tenant and its agents, servants
and employees for loss or damage to, or destruction of, the Premises or
any portion thereof, including the buildings and other improvements
situated thereon, resulting from fire, explosion and other perils
included in broad form coverage insurance, whether caused by the
negligence of any of said persons or otherwise. Likewise, Tenant hereby
waives and releases all claims, liabilities and causes of action
against Landlord and its agents, servants and employees for loss or
damage to, or destruction of, any of the improvements, fixtures,
equipment, supplies, merchandise and other property, whether that of
Tenant or of others in, upon or about the Premises resulting from fire,
explosion or the other perils included in broad form coverage
insurance, whether caused by the negligence of any of said persons or
otherwise. The waiver shall remain in force whether or not Landlord or
Tenant's insurers consent thereto.
d. In the event that the use of the Demised Premises by
Tenant increases the premium rate for insurance carried by Landlord on
the improvements of which the Demised Premises are a part, Tenant shall
pay Landlord, within 30 days after receipt of Landlord's written
demand, the amount of such premium increase. If Tenant installs any
electrical equipment that overloads the power lines to the Building or
its wiring, Tenant shall, at its own expense, make whatever changes are
necessary to comply with the requirements of the insurance underwriter,
insurance rating bureau and governmental authorities having
jurisdiction.
PUBLIC LIABILITY INSURANCE:
16. Tenant shall, during the term hereof, keep in full force and
effect, at its expense, a policy or policies of public liability insurance with
respect to the Demised Premises and the business of Tenant in amounts no less
than $1,000,000 per occurrence, $2,000,000 aggregate using current ISO
Commercial General Liability forms or equivalent naming the Landlord as an
additional insured. Such policy or policies shall provide that ten (10) days
written notice must be given to Landlord prior to cancellation thereof. Tenant
shall furnish a certificate of such insurance to Landlord at the time this Lease
is executed that such coverage is in full force and effect.
DEFAULT:
17. a. In the event of any failure of Tenant to pay any rental due
hereunder within ten (10) days after due, or any failure to perform any other
terms, conditions or covenants of this Lease to be observed or performed by
Tenant for more than thirty (30) days after written notice of such failure shall
have been given to Tenant (provided, however, that if such failure is incapable
of cure within such 30 day period, then such reasonably longer period of time
provided that Tenant commences to cure such failure within such 30 day period
and diligently pursues the same until completion), or if Tenant or an agent of
Tenant shall falsify any report required to be furnished to Landlord pursuant to
the terms of this Lease, or if Tenant shall become bankrupt or insolvent or file
any debtor proceedings or any person shall take or have against Tenant in any
court
9
pursuant to any statute either of the United States or of any state a petition
in bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of Tenant's or any such guarantor's
property, or if Tenant or any such guarantor makes an assignment for the benefit
of creditors, or petitions for or enters into an arrangement, or if Tenant shall
abandon the Demised Premises or suffer this Lease to be taken under any writ of
execution, then in any such event Tenant shall be in default hereunder, and
Landlord, in addition to their rights of remedies it may have, shall have the
immediate right of re-entry and may remove all persons and property from the
Demised Premises and such property may be removed and stored in a public
warehouse or elsewhere at the cost of, and for the account of Tenant, all
without service of notice or resort to legal process and without being guilty of
trespass or becoming liable for any loss or damage which may be occasioned
thereby.
b. Should Landlord elect to re-enter the Demises
Premises as herein provided, or should it take possession of the
Demised Premises pursuant to legal proceedings or pursuant to any
notice provided for by law, it may either terminate this Lease or it
may, from time to time, without terminating this Lease, make such
alterations and repairs as may be necessary in order to relet the
Demised Premises and relet the Demised Premises or any part thereof
upon such term or terms (which may be for a term extending beyond the
term of this Lease) and at such rental or rentals and upon such other
terms and conditions as Landlord in its sole discretion may deem
advisable. Upon each such subletting all rentals received by the
Landlord from such reletting shall be applied first to the payment of
any indebtedness other than Rent due hereunder from Tenant to Landlord;
second, to the payment of any costs and expenses of such reletting,
including customary brokerage fees and reasonable attorneys' fees and
costs of such alterations and repairs; third, to the payment of the
Rent due and unpaid payment of future Rent as the same may become due
and payable hereunder. If such rentals received from such reletting
during any month is less than that to be paid during that month by
Tenant hereunder, Tenant, upon demand, shall pay any such deficiency to
Landlord. No such re-entry or taking possession of the Demised Premises
by Landlord shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention be given to
Tenant, or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any such reletting without
termination, Landlord may at any time after such re-entry and reletting
elect to terminate this Lease for any such breach. In addition to any
other remedies it may have, it may recover from Tenant all damages it
incurs by reason of such breach, including the cost of recovering the
Demised Premises, reasonable attorneys' fees, and including the worth
at the time of such termination of the excess, if any, of the amount of
rent and charges equivalent to Rent reserved in this Lease for the
remainder of the stated term over the then reasonable rental value of
the Demised Premises for the remainder of the stated term, all of which
amounts shall be immediately due and payable from Tenant to Landlord.
c. Landlord may, at its option, instead of exercising
any other rights or remedies available to it in this Lease or otherwise
by law, statute or equity, spend such money as is reasonably necessary
to cure any default of Tenant herein and the amount so spent and costs
incurred, including reasonable attorneys' fees, in curing such default,
shall be paid by Tenant as Additional Rent upon demand.
d. In the event suit shall be brought for recovery of
possession of the Demised Premises, for the recovery of Rent or any
other amount due under the provisions of this Lease, or because of the
breach of any other covenant herein contained on the part of Tenant to
be kept or performed and a breach shall be established, Tenant shall
pay to Landlord all expenses incurred therefor, including a reasonable
attorneys' fees, together with interest on all such expenses at the
rate of twelve percent (12%) per annum from the date of such breach of
the covenants of this Lease.
e. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event
of Tenant being evicted or dispossessed for any cause, or in the event
10
of Landlord obtaining possession of the Demised Premises by reason of
the violation by Tenant of any of the covenants or conditions of this
Lease, or otherwise. Tenant also waives any demand for possession of
the Demised Premises and any demand for payment of Rent and any notice
of intent to re-enter the Demised Premises, or of intent to terminate
this Lease, other than the notices above provided in this Article, and
waives any and every other notice or demand prescribed by any
applicable statutes or laws.
f. No remedy herein or elsewhere in this Lease or
otherwise by law, statute or equity, conferred upon or reserved to
Landlord or Tenant shall be exclusive of any other remedy, but shall be
cumulative and may be exercised from time to time and as often as the
occasion may arise.
g. Landlord Default. For purposes hereof, the term
"Landlord Default" shall mean, if Landlord fails to perform any of its
obligations under this Lease within thirty (30) days after receiving
notice from Tenant specifying the nature and extent of such failure
provided; however, if the obligation shall not be reasonably curable
within such thirty (30) day period, the time for cure shall be extended
so long as Landlord shall continue to use reasonable efforts to effect
a cure. If a Landlord Default has occurred, then, in addition to all
rights, powers or remedies permitted by law or in equity, Tenant may
cure such Landlord Default and charge the cost thereof to Landlord.
Landlord shall be liable for and shall pay to Tenant within thirty (30)
days of receiving Tenant's invoice, all reasonable attorneys' fees and
other costs incurred by Tenant as a result of a Landlord Default. If
Landlord shall fail to pay within such thirty (30) day period the
amount due, Tenant shall have the right to offset such amounts against
the next installments of Rent due hereunder.
COVENANTS TO HOLD HARMLESS:
18. Except to the extent that the liability for damage or loss is
caused by the acts, omissions or negligence of Landlord, its agents or
employees, and subject to Paragraph 15(c) Tenant shall hold harmless Landlord
from any liability for damages to any person or property in or upon the Demised
Premises and the Premises, including the person and the property of Tenant and
its employees and all persons in the Building at its or their invitation or
sufferance, and from damages to the extent resulting from Tenant's failure to
perform the covenants of this Lease. All property kept, maintained or stored on
the Demised Premises shall be so kept, maintained or stored at the sole risk of
Tenant. Tenant agrees to pay all sums of money in respect of any labor, service,
materials, supplies or equipment furnished or alleged to have been furnished to
Tenant in or about the Premises, and not furnished on order of Landlord, which
may be secured by any Mechanic's, Materialmen's or other lien to be discharged
at the time performance of any obligation secured thereby matures, provided that
Tenant may contest such lien, but if such lien is reduced to final judgment and
if such judgment or process thereon is not stayed, or if stayed and said stay
expires, then and in each such event, Tenant shall forthwith pay and discharge
said judgment. Landlord shall have the right to post and maintain on the Demised
Premises notices of non-responsibility under the laws of the State of MINNESOTA.
Except to the extent that the liability for damage or loss is caused by
the acts, omissions or negligence of Tenant, its agents or employees, and
subject to Paragraph 15(c), Landlord shall hold harmless Tenant from any
liability for damages to any person or property in or upon the Premises, and
from damages to the extent resulting from Landlord's failure to perform the
covenants of this Lease.
NON-LIABILITY:
19. Subject to the terms and conditions of Article 14 hereof,
Landlord shall not be liable for damage to any property of Tenant or of others
located on the Premises, nor for the loss of or damage to any property of Tenant
or of others by theft or otherwise. Landlord shall not be liable for any injury
or damage to persons or
11
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow, or leaks from any part of the Premises or from
the pipes, appliances, or plumbing works, or from the roof, street or subsurface
or from any other place or by dampness or by any such damage caused by other
Tenants or persons in the Premises, occupants of adjacent property, of the
buildings, or the public, or caused by operations in construction of any
private, public or quasi-public work.
SUBORDINATION:
20. This Lease shall be subordinated to any mortgages that may now
exist or that may hereafter be placed upon the Demised Premises and to any and
all advances made thereunder, and to the interest upon the indebtedness
evidenced by such mortgages, and to all renewals, replacements and extensions
thereof; provided, however, that Tenant's possession of the Demised Premises
will not be disturbed as long as Tenant is not in default beyond applicable cure
periods under this Lease. In the event of execution by Landlord after the date
of this Lease of any such mortgage, renewal, replacement or extension, Tenant
agrees to execute a subordination agreement with the holder thereof which
agreement shall provide that:
a. Such holder shall not disturb the possession and
other rights of Tenant under this Lease so long as Tenant is not in
default beyond applicable cure periods hereunder,
b. In the event of acquisition of title to the Demised
Premises by such holder, such holder shall accept the Tenant as Tenant
of the Demised Premises under the terms and conditions of this Lease
and shall perform all the obligations of Landlord hereunder, and
c. Tenant shall recognize such holder as Landlord
hereunder.
Tenant shall, upon receipt of a request from Landlord
therefor, execute and deliver to Landlord or to any proposed holder of
a mortgage or trust deed, or to any proposed purchaser of the Premises,
a certificate in recordable form, certifying that this Lease is in full
force and effect, and that there are no offsets against rent nor
defenses to Tenant's performance under this Lease, or setting forth any
such offsets or defenses claimed by Tenant as the case may be.
ASSIGNMENT OR SUBLETTING:
21. Tenant agrees to use and occupy the Demised Premises
throughout the entire term hereof for the purpose or purposes herein specified
and for no other purposes, in the manner and to substantially the extent now
intended. Tenant further agrees, with the exception of any related entities,
affiliates or surviving mergers, not to transfer or assign this Lease or sublet
said Demised Premises, or any part thereof, whether by voluntary act, operation
of law, or otherwise, without obtaining the prior written consent of Landlord in
each instance. Tenant shall seek such consent of Landlord by a written request
therefore, setting forth such information as Landlord may reasonably deem
necessary. Landlord agrees not to withhold consent unreasonably. Consent by
Landlord to any assignment of this Lease or to any subletting of the Demised
Premises shall not be a waiver of Landlord's rights under this Article as to any
subsequent assignment or subletting. Landlord's rights to assign this Lease are
and shall remain unqualified. No such assignment or subleasing shall relieve the
Tenant from any of Tenant's obligations in this Lease contained, nor shall any
assignment or sublease or other transfer of this Lease be effective unless the
assignee, subtenant or transferee, shall at the time of such assignment,
sublease or transfer, assume in writing for the benefit of Landlord, its
successors or assigns, all of the terms, covenants and conditions of this Lease
thereafter to be performed by Tenant and shall agree in writing to be bound
thereby. Should Tenant sublease in accordance with the terms of this Lease,
fifty percent (50%) of any increase in rental (net of costs incurred in
negotiating and consummating the transaction, including, without limitation,
marketing and advertising cost, tenant allowances, brokerage commissions and
attorneys' fees) received by Tenant over the per square foot rental rate which
is being paid by Tenant shall be forwarded to and
12
retained by Landlord, which increase shall be in addition to the Base Rent and
Additional Rent due Landlord under this Lease.
ATTORNMENT:
22. In the event of a sale or assignment of Landlord's interest in
the Premises or the Building in which the Demised Premises are located, or this
Lease, or if the Premises come into custody or possession of a mortgagee or any
other party whether because of a mortgage foreclosure, or otherwise, Tenant
shall attorn to such assignee or other party and recognize such party as
Landlord hereunder; provided, however, Tenant"s peaceable possession will not be
disturbed so long as Tenant faithfully performs its obligations under this
Lease. Tenant shall execute, within 10 business days after receipt of written
demand, any reasonable attornment agreement required by any such party to be
executed, containing such provisions and such other provisions as such party may
reasonably require.
NOVATION IN THE EVENT OF SALE:
23. In the event of the sale of the Demised Premises, Landlord
shall be and hereby is relieved of all of the covenants and obligations created
hereby accruing from and after the date of sale, and such sale shall result
automatically in the purchaser assuming and agreeing to carry out all the
covenants and obligations of Landlord herein thereafter. Notwithstanding the
foregoing provisions of this Article, Landlord, in the event of a sale of the
Demised Premises, shall cause to be included in this agreement of sale and
purchase a covenant whereby the purchase of the Demised Premises assumes and
agrees to carry out all of the covenants and obligations of Landlord herein.
Tenant agrees at any time and from time to time upon not less than ten
(10) business days prior written request by the Landlord to execute, acknowledge
and deliver to the Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect as modified and stating the
modifications, and the dates to which the Base Rent and other charges have been
paid in advance, if any, it being intended that any such statement delivered
pursuant to this paragraph may be relied upon by any prospective purchaser of
the fee or mortgagee or assignee of any mortgage upon the fee of the Demised
Premises.
SUCCESSORS AND ASSIGNS:
24. The terms, covenants and conditions hereof shall be binding
upon and inure to the successors and assigns of the parties hereto.
REMOVAL OF FIXTURES:
25. Intentionally deleted.
QUIET ENJOYMENT:
26. Landlord warrants that it has full right to execute and to
perform this Lease and to grant the estate demised, and that Tenant, upon
payment of the rents and other amounts due and the performance of all the terms,
conditions, covenant and agreements on Tenant"s part to be observed and
performed under this Lease, will peaceably and quietly enjoy the Demised
Premises for the business uses permitted hereunder, subject, nevertheless, to
the terms and conditions of this Lease.
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RECORDING:
27. Tenant shall not record this Lease without the written consent
of Landlord. However, upon the request of either party hereto, the other party
shall join in the execution of the memorandum lease for the purposes of
recordation. Said memorandum lease shall describe the parties, the Demised
Premises and the term of the Lease and shall incorporate this Lease by
reference. This Article 27 shall not be construed to limit Landlord's right to
file this Lease.
OVERDUE PAYMENTS:
28. All monies due under this Lease from Tenant to Landlord shall
be due on demand, unless otherwise specified and if not paid within 10 days
after due, shall result in the imposition of a service charge for such late
payment in the amount of TWELVE percent (12%) of the amount due up to a maximum
of $500 per incident.
SURRENDER:
29. On the Expiration Date or upon the termination hereof upon a
day other than the Expiration Date, Tenant shall peaceably surrender the Demised
Premises broom-clean in good order, condition and repair, reasonable wear and
tear and damage by casualty only excepted. On or before the Expiration Date or
upon termination of this Lease on a day other than the Expiration Date, Tenant
shall, at its expense, remove all trade fixtures, personal property and
equipment and Tenant signs from the Demised Premises and any property not
removed shall be deemed to have been abandoned. Any damage caused in the removal
of such items shall be repaired by Tenant, at its expense. All alterations,
additions, improvements and fixtures (other than trade fixtures) which shall
have been made or installed by Landlord or Tenant upon the Demised Premises and
all floor covering so installed shall remain upon and be surrendered with the
Demised Premises as a part thereof, without disturbance, molestation or injury,
and without charge, at the expiration or termination of this Lease. If the
Demised Premises are not surrendered on the Expiration Date or the date of
termination, Tenant shall indemnify Landlord against loss or liability, claims,
without limitation, made by any succeeding Tenant founded on such delay. Tenant
shall promptly surrender all keys for the Demised Premises to Landlord at the
place then fixed for payment of rent and shall inform Landlord of combinations
of any locks and safes on the Demised Premises.
HOLDING OVER:
30. In the event of a holding over by Tenant after expiration or
termination of this Lease without the consent in writing of Landlord, Tenant
shall be deemed a Tenant at sufferance and shall pay rent for such occupancy at
the rate of one and one-half times the last-current aggregate Base and
Additional Rent, prorated for the entire holdover period, plus all attorney's
fees and expenses incurred by Landlord in enforcing its rights hereunder, plus
any other damages occasioned by such holding over. Except as otherwise agreed,
any holding over with the written consent of Landlord shall constitute Tenant a
month-to-month Tenant.
ABANDONMENT:
31. In the event Tenant shall remove its fixtures, equipment or
machinery or shall abandon the Demised Premises or any part thereof prior to the
Expiration Date of this Lease, or shall discontinue or suspend the operation of
its business conducted on the Demised Premises for a period of more than thirty
(30) consecutive days (except during any time when the Demised Premises may be
rendered untenantable by reason of fire or other casualty), then in any such
event Tenant shall be deemed to have abandoned the Demised Premises and Tenant
shall be in default under the terms of this Lease.
14
CONSENTS BY LANDLORD:
32. Whenever a provision is made under this Lease for Tenant
securing the consent or approval by Landlord, such consent or approval shall
only be in writing.
NOTICES:
33. Any notice required or permitted under this Lease shall be
deemed sufficiently given or secured if sent by registered or certified return
receipt mail to Tenant at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and to Landlord at the address then fixed for the payment of rent as provided in
Article 4 of this Lease, and either party may by like written notice at any time
designate a different address to which notices shall subsequently be sent or
rent to be paid.
RULES AND REGULATIONS:
34. Tenant shall observe and comply with the reasonable and
non-discriminatory rules and regulations as Landlord may prescribe on written
notice to Tenant for the safety, care and cleanliness of the Building.
INTENT OF PARTIES:
35. Except as otherwise provided herein, the Tenant covenants and
agrees that if it shall any time fail to pay any such cost or expense, or fail
to take out, pay for, maintain or deliver any of the insurance policies above
required, or fail to make any other payment or perform any other act on its part
to be made or performed as in this Lease provided, then the Landlord may, but
shall not be obligated so to do, and without notice to or demand upon the Tenant
and without waiving or releasing the Tenant from any obligations of the Tenant
in this Lease contained, pay any such cost or expense, effect any such insurance
coverage and pay premiums therefor, and may make any other payment or perform
any other act on the part of the Tenant to be made and performed as in this
Lease provided, in such manner and to such extent as the Landlord may deem
desirable, and in exercising any such right, to also pay all necessary and
incidental costs and expenses, employ counsel and incur and pay reasonable
attorneys' fees.
All sums so paid by Landlord and all necessary and incidental
costs and expenses in connection with the performance of any such act by the
Landlord, together with interest thereon at the rate of TWELVE percent (12%) per
annum from the date of making of such expenditure, by Landlord, shall be deemed
Additional Rent hereunder and shall be payable to Landlord on demand. Tenant
covenants to pay any such sum or sums with interest as aforesaid and the
Landlord shall have the same rights and remedies in the event of the nonpayment
thereof by Tenant as in the case of default by Tenant in the payment of the Base
Rent payable under this Lease.
GENERAL:
36. The Lease does not create the relationship of principal agent
or of partnership or of joint venture or of any association between Landlord and
Tenant, the sole relationship between the parties hereto being that of landlord
and tenant.
No waiver of any default hereunder shall be implied from any
omission to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect any default other than the
default specified in the express waiver and that only for the time and to the
extent therein stated.
15
One or more waivers shall not then be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent to or approval by
Landlord of any act by Tenant requiring Landlord's consent or approval shall not
waive or render unnecessary Landlord's consent to or approval of any subsequent
similar act by Tenant shall be construed to be both a covenant and a condition.
No action required or permitted to be taken by or on behalf of Landlord under
the terms or provisions of this Lease shall be deemed to constitute an eviction
or disturbance of Tenant"s possession of the Demised Premises. All preliminary
negotiations are merged into and incorporated in this Lease. The laws of the
State of MINNESOTA shall govern the validity, performance and enforcement of
this Lease.
a. This Lease and the exhibits, if any, attached hereto
and forming a part hereof, constitute the entire agreement between
Landlord and Tenant affecting the Demised Premises. Any other
agreements, subsequent alterations, amendments, changes or additions to
this Lease shall be binding upon Landlord and Tenant only when reduced
to writing and executed in the same form and manner in which this Lease
is executed
b. If any agreement, covenant or condition of this Lease
or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or
the application of such agreement, covenant or condition to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each agreement,
covenant or condition of this Lease shall be valid and be enforced to
the fullest extent permitted by law.
HAZARDOUS MATERIAL:
37. a. The Demised Premises hereby leased shall be used by and/or
at the sufferance of Tenant only for the purpose set forth in Article 11 above
and for no other purposes. Tenant shall not use or permit the use of the Demised
Premises in any manner that will tend to create waste or a nuisance, or will
tend to unreasonably disturb other tenants in the Building or the Premises.
Tenant, its employees and all person visiting or doing business with Tenant in
the Demised Premises shall be bound by and shall observe the reasonable and
non-discriminatory rules and regulations made by Landlord relating to the
Demised Premises, the Building or the Premises of which notice in writing shall
be given to the Tenant, and all such rules and regulations shall be deemed to be
incorporated into and form a part of this Lease.
b. Tenant covenants through the Lease Term, at Tenant's
sole cost and expense, promptly to comply with all laws and ordinances
and the orders, rules and regulations and requirements of all federal,
state and municipal governments and appropriate departments,
commission, boards, and officers thereof, and the orders, rules and
regulations of the Board of Fire Underwriters where the Demised
Premises are situated, or any other body now or hereafter as well as
extraordinary, which are applicable to the Demised Premises and to
Tenant's particular use of the Demised Premises; provided, however,
that Tenant is not required to make structural alterations or make
capital expenditures to comply therewith unless such alterations or
expenditures are required solely due to Tenant's particular use of the
Demised Premises. Tenant will likewise observe and comply with the
requirements of all policies of public liability, fire and all other
policies of insurance at any time in force with respect to the building
and improvements on the Demised Premises and the equipment thereof.
c. In the event any Hazardous Material (as hereinafter
defined) is brought or caused to be brought into or onto the Demised
Premises, the Building or the Premises by Tenant, Tenant shall handle
any such material in compliance with all applicable federal, state
and/or local regulations. For purposes of this Article, "Hazardous
Material" means and includes any hazardous, toxic or dangerous waste,
substance or material defined as such in (or for purposes of) the
Comprehensive Environmental Response, Compensation, and Liability Act,
any so-called "Superfund" or "Superlien" law, or any federal, state or
local statute, law, ordinance, code, rule, regulation, order decree
regulating, relating to,
16
or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or materials, as now or
at any time hereafter in effect. Tenant shall submit to Landlord on an
annual basis copies of its approved hazardous materials communication
plan, OSHA monitoring plan, and permits required by the Resource
Recovery and Conservation Act of 1976, if Tenant is required to
prepare, file or obtain any such plans or permits. Tenant will
indemnify and hold harmless Landlord from any losses, liabilities,
damages, costs or expenses (including reasonable attorneys' fees) which
Landlord suffers or incurs as a result of Tenant's introduction into or
onto the Demised Premises, Building or Premises of any Hazardous
Material. This Article shall survive the expiration or sooner
termination of this Lease for a period of one year.
FORCE MAJEURE:
38. Either party's failure to perform the terms and conditions of
this Lease, in whole or in part, shall not be deemed a breach or a default
hereunder or give rise to any liability of such party to the other if such
failure is attributable to any unforeseeable event beyond such party's
reasonable control and not caused by the negligent acts or omissions or the
willful misconduct of such party, including, without limitation, flood, drought,
earthquake, storm, pestilence, lightning, and other natural catastrophes and
acts of God; epidemic, war riot, civic disturbance or disobedience, and act of
the public enemy; fire, accident, wreck, washout, and explosion; strike,
lockout, labor dispute, and failure, threat of failure, or sabotage of such
party's facilities; delay in transportation or car shortages, or inability to
obtain necessary labor, materials, components, equipment, services, energy, or
utilities through such party's usual and regular sources at usual and regular
prices; and any law, regulation, order or injunction of a court or governmental
authority, whether valid or invalid and including, without limitation,
embargoes, priorities, requisitions, and allocations or restrictions of
facilities, equipment or operations. In the event of the occurrence of such a
force majeure event, the party unable to perform promptly shall notify the other
party.
OPTION TO TERMINATE
39. Provided Tenant is not in default beyond applicable cure
periods and has performed all of its covenants and obligations hereunder, Tenant
shall have a one time option to terminate the Term of this Lease (hereinafter,
the "Option to Terminate") at the end of the thirty-sixth (36th) month of the
lease term and upon the following further terms and conditions.
Tenant can exercise said Option to Terminate only by giving Landlord
six (6) months prior written notice and said notice must be accompanied by a
termination fee equal to the unamortized transaction costs (including leasing
commissions & tenant improvements amortized at 8% over the term of the lease).
Such costs will be outlined and memorialized in a letter to tenant within 30
days of the Commencement Date of the lease.
It is understood and agreed that this Option to Terminate is personal
to Lec Tec Corporation, and is not transferable; in the event of any assignment
or subleasing to any entity other than related entities, affiliates or surviving
mergers of any or all of the Demised Premises said Option to Terminate shall be
null and void.
If and from the date Tenant exercises the Option to Terminate, Tenant
agrees that it waives any right it may have to assign or sublet all or part of
the Demised Premises.
LANDLORD'S RIGHT TO RELEASE OFFICE SQUARE FOOTAGE
40. Landlord shall have the right to remove the 1,420 square feet
of office space currently at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ from Lec Tec Corporation's total
square footage and release it to a new tenant. At such time, Lec Tec
Corporation's monthly Additional Rent shall be recalculated based on their new
proportionate share of square footage and the monthly net rent shall remain
unchanged.
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CAPTIONS
41. The captions are inserted only as a matter of convenience and
for reference, and in no way define, limit or describe the scope of this Lease
nor the intent or any provision thereof.
ATTACHMENTS:
42. See also Exhibits A through E, inclusive, which Exhibits are
attached hereto and made a part hereof.
EXHIBIT DESCRIPTION
Exhibit A Legal Description
Exhibit B Demised Premises
Exhibit C Building Rules and Regulations
Exhibit D Improvements
Exhibit E Sign Criteria
SUBMISSION:
43. Submission of this instrument to Tenant or proposed Tenant or
his agents or attorneys for examination, review, consideration or signature does
not constitute or imply an offer to lease reservation of space, or option to
lease, and this instrument shall have no binding legal effect until execution
hereof by Landlord and Tenant or its agents.
REPRESENTATION:
44. Landlord, and Tenant warrant and represent that they have
dealt with no real estate broker in connection with this Lease other than Welsh
Companies, LLC, and that no other broker is entitled to any commission on
account of this Lease. The party who breaches this warranty shall defend, hold
harmless and indemnify the other from any loss, damage or expense, including
reasonable attorneys' fees, arising from the breach. Landlord is solely
responsible for paying the commission of the broker in accordance with the
Listing Agreement.
IN WITNESS WHEREOF, the Landlord and the Tenant have caused these
presents to be executed in form and manner sufficient to bind them at law, as of
the day and year first above written.
Tenant: Landlord:
LECTEC CORPORATION SMD LINCOLN INVESTMENTS LLC
(A MINNESOTA CORPORATION) (A MINNESOTA LIMITED LIABILITY CORPORATION)
By: /s/▇.▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
Its: Chr., CEO and President Its: Chief Manager
Date: 5/22/03 Date: 5/23/03
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EXHIBIT A
LEGAL DESCRIPTION
▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
EXHIBIT B
[INSERT GRAPHIC]
EXHIBIT C
BUILDING RULES AND REGULATIONS
l. Any sign, lettering, picture, notice or advertisement
installed on or in any part of the Premises and visible from the exterior of the
Demised Premises, or visible from the exterior of the Premises, shall be
installed at Tenant's sole cost and expense, and in such manner, character and
style as Landlord may approve in writing. In the event of a violation of the
foregoing by Tenant, Landlord may remove the same without any liability and may
charge the expense incurred by such removal to Tenant.
2. No awning or other projection shall be attached to the outside
walls of the Demised Premises. No curtains, blinds, shades or screens visible
from the exterior of the Premises, shall be attached to or hung in, or used in
connection with any window or door of the Premises without the prior written
consent of Landlord. Such curtains, blinds, shades, screens or other fixtures
must be of a quality, type, design and color, and attached in the manner
approved by Landlord.
3. Tenant, its servants, employees, customers, invitees and
guests shall not obstruct sidewalks, entrances, passages, corridors, vestibules,
halls or stairways in and about the Demised Premises which are used in common
with other tenants and their servants, employees, customers, guests and
invitees, and which are not a part of doors or windows which would be unsightly
from the Demised Premises corridors or from the exterior of the Demised Premises
and will promptly remove any such objects upon notice from Landlord.
4. Tenant shall not make excessive noises, cause disturbances or
vibrations or use or operate any electrical or mechanical devices that emit
excessive sound or other waves or disturbances or create obnoxious odors, any of
which may be offensive to the other tenants and occupants of the Demised
Premises, or that would interfere with the operation of any device, equipment,
radio, television broadcasting or reception from or within the Demised Premises
or elsewhere and shall not place or install any projections, antennas, aerials
or similar devices inside or outside of the Premises or on the Demised Premises
without Landlord's approval.
5. Tenant shall not waste electricity, water or air conditioning
and shall cooperate fully with Landlord to insure the most effective operation
of the Demised Premises's heating and air conditioning systems and shall refrain
from attempting to adjust any controls other than unlocked room thermostats, if
any, installed for Tenant's use. Tenant shall keep corridor doors closed.
6. Tenant assumes full responsibility for protecting its space
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secured after normal business he
7. Landlord shall have the right to prohibit any advertising by
Tenant which in Landlord's reasonable opinion tends to impair the reputation of
the Demised Premises or its desirability as an Demised Premises for office use,
and upon written notice from Landlord, Tenant shall refrain from or discontinue
such advertising.
8. The Premises shall not be used for lodging, sleeping or for
any immoral or illegal purpose.
9. Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully and comply with the foregoing rules and
regulations and such other and further appropriate rules and regulations as
Landlord or Landlord's agent may from time to time adopt. Reasonable notice of
any additional rules and regulations shall be given in such manner as Landlord
may reasonably elect.
C-1
10. Unless expressly permitted by the Landlord, no additional
locks or similar devices shall be attached to any door or window and no keys
other than those provided by the Landlord shall be made for any door. If more
than two keys for one lock are desired by the Tenant, the Landlord may provide
the same upon payment by the Tenant. Upon termination of this Lease or of the
Tenant's possession, the Tenant shall surrender all keys of the Premises and
shall explain to the Landlord all combination locks on safes, cabinets and
vaults.
11. Any carpeting cemented down by Tenant shall be installed with
a releasable adhesive. In the event of a violation of the foregoing by Tenant,
Landlord may charge the expense incurred by such removal to Tenant.
12. The water and wash closets, drinking fountains and other
plumbing fixtures shall not be used for any purpose other than those for which
they were constructed, and no sweepings, rubbish, rags, coffee grounds, or other
substances shall be thrown therein. All damages resulting from any misuse of the
fixtures shall be borne by the Tenant who, or whose servants, employees, agents,
visitors or licensees, shall have caused the same. No person shall waste water
by interfering or tampering with the faucets or otherwise.
13. No electric circuits for any purpose shall be brought into the
leased premises without Landlord's written permission specifying the manner in
which same may be done.
14. No dogs or other animals shall be allowed in office, halls,
corridors, or elsewhere in the building, except for seeing eye animals.
15. Tenant shall not throw anything out of the door or windows, or
down any passageway or elevator shafts.
16. All loading, unloading receiving or delivery of goods,
supplies or disposal of garbage or refuse shall be made only through entryways
and freight elevators provided for such purposes and indicated by Landlord.
Tenant shall be responsible for any damage to the building or the property of
its employees or to others and injuries sustained by any person whomsoever
resulting from the use of or moving of such articles in or out of the leased
premises, and shall make all repairs and improvements required by Landlord or
governmental authorities in connection with the use or moving of such articles.
17. All safes, equipment or other heavy articles shall be carried
in or out of the Premises only at such time and in such manner as shall be
prescribed in writing by Landlord, and Landlord shall in all cases have the
right to specify the proper position of any such safe, equipment or other heavy
article, which shall only be used by Tenant in a manner which will not interfere
with or cause damage to the leased premises or the building in which they are
located, or to the other tenants or occupants of said building. Tenant shall be
responsible for any damage to the building or the property of its employees or
other injuries sustained by any person whomsoever resulting from the use or
moving of such articles in or out of the leased premises, and shall make all
repairs and improvements required by Landlord or governmental authorities in
connection with the use or moving of such articles.
18. Canvassing, soliciting and peddling in the building is
prohibited and each Tenant shall cooperate to prevent the same.
19. Vending machines shall not be installed without permission of
the Landlord.
20. Wherever in these Building Rules and Regulations the word
"Tenant" occurs, it is understood and agreed that it shall mean Tenant's
associates, agents, clerks, servants, and visitors. Wherever the word "Landlord"
occurs, it is understood and agreed that it shall mean Landlord's agents,
clerks, servants and visitors.
C-2
21. Tenant, it's servants, employees, customers, invitees and
guests shall, when using the common parking facilities, if any, in and around
the building, observe and obey all signs regarding fire lanes and no parking
zones, and when parking always park between the designated lines. Landlord
reserves the right to tow away, at the expense of the owner, any vehicle which
is improperly parked in a no parking zone. All vehicles shall be parked at the
sole risk of the owner, and Landlord assumes no responsibility for any damage to
or loss of vehicles. No vehicles shall be parked over night outside the premises
without notice to Landlord or it's agents.
22. All entrance doors to the Premises shall be locked when the
Premises are not in use. All corridor doors shall also be closed during times
when the air condition equipment in the Demised Premises is operating so as not
to dissipate the effectiveness of the systems or place an overload thereon.
23. Landlord reserves the right at any time from time to time to
rescind, alter or waiver, in whole or in part, any of these Rules and
Regulations when it is deemed necessary, desirable, or proper, in Landlord's
judgement, for its best interest or for the best interest of the tenants of the
Demised Premises.
C-3
EXHIBIT D
IMPROVEMENTS
The Landlord agrees to provide, at no expense to the Tenant, the
following improvements to the Demised Premises:
1. Paint the office and warehouse walls white excluding
the 1,420 square feet of office space in the front of ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇.
2. Provide and install two (2) five ton and one (1) two
and a half ton HVAC units in the warehouse/production areas.
3. Repair the warehouse floor and apply a clear floor
sealer.
4. Service and certify that the existing HVAC units
serving the Demised Premises are in good working condition as of the
Commencement Date.
5. Re-key the space.
6. Install an overhead door in the wall between the two
warehouse spaces.
7. Replace any burned out lights.
8. Install double doors in the demising wall separating
the office from warehouse.
9. Remove the raised floor in the front of ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇.
10. Install a utility sink in the warehouse area.
With the exception of those improvements outlined above the Tenant
agrees to accept the Demised Premises in their "As-Is", "Where-Is" condition.
Any additional improvements shall be completed at the Tenant's expense, and must
receive Landlord's prior written approval.
D-1
EXHIBIT E
SIGN CRITERIA
1. In accordance with Article 7 of the attached lease, any and
all signage is to be installed by Landlord at Tenant's sole cost and expense,
and all signage material shall remain the property of the Tenant at the
expiration of the Lease.
2. All units shall have signage on 24" x 48" white plaques
mounted by the entry doors. Signage may contain name and company logo's, letter
style per company choice.
3. All rear overhead loading dock doors shall be identified by
Tenant's address and one line for Tenant's name beneath the address. All numbers
and lettering on these doors shall be in 4" decal type black block lettering.
4. Any exterior signage requires the Landlord's approval.
E-1