EXHIBIT 10.1
LEASE AGREEMENT BETWEEN XXXXX-XXXXXXXXX LLC, LANDLORD
AND INNOVEX, INC., TENANT
SECTION 1
BASIC PROVISIONS
The Landlord, in consideration of the rent herein agreed to be paid by
the Tenant and the other conditions, agreements and stipulations by the Tenant
herein expressed and agreed to be kept and performed by the Tenant, does hereby
demise and lease unto the Tenant the Premises. The following provisions are an
integral part of this Lease.
1.1 Landlord. Xxxxx-Xxxxxxxxx LLC
1.2 Tenant. Innovex, Inc.
a corporation
under the laws of Minnesota
1.3 Tenant's Address. 0000 Xxxxx xxxxxx Xxxxx
Xxxxxxx, XX 00000
1.4 Lease Execution Date 2/13/97
1.5 Building Name, if any: Diamond Building
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
1.6 Building Rentable Area. Approximately 25,687
square feet
1.7 Premises Suite, if any:
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
1.8 Premises Rentable Area. Office Area: Approximately 3,074 sq ft
Warehouse Area: Approximately 8,178 sq ft
Mezzanine Area: Approximately 6,325 sq ft
Total Area: Approximately 17,577 sq ft
1.9 Lease Term. 5 years
0 months
1.10 Lease Commencement Date. March 1, 1997
1.11 Lease Termination Date February 28, 2002
1.12 Base Rent Schedule.
ANNUAL
BASE RATE
PER ANNUAL MONTHLY
DATES SQUARE FOOTAGE SQ. FOOT BASE RENT BASE RENT
3/1/97 -2/28/98 17,577 $6.05 $106,340.76 $8,861.73
3/1/98 - 2/28/99 17,577 $6.30 $110,822.88 $9,235.24
3/1/99 - 2/29/00 17,577 $6.55 $115,129.32 $9,594.11
3/1/00 - 2/28/01 17,577 $6.80 $119,523.60 $9,960.30
3/1/01 - 2/28/02 17,577 $7.05 $123,917.88 $10,326.49
1.13 Initial Estimated Operating Costs. Initial Estimated
Operating Costs
$1.50 per sq ft
1.14 Permitted Use. Tenant's use shall
be limited to
office/warehouse/
production
(the "Permitted Use").
1.15 Security Deposit. $8,000.00
1.16 Address for Notice to Landlord. Xxxx Xxxxx
c/o Xxxxx-Xxxxxxxxx LLC
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
1.17 Address for Notice to Tenant. Xxxxx Xxxx
(if different than address in Section 1.3) Innovex, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
1.18 Real Estate Broker(s) Due Commission. Individual Name:
Xxxx Xxxxxxxxxx
Company Name:
XX Xxxxxxx Company
SECTION 2
REAL PROPERTY, BUILDING AND PREMISES
2.1 Definition of Real Property. The Real Property consists of the land legally
described on Exhibit "A" attached hereto and made a part hereof, and all
improvements thereon including the Building and the Common Area.
2.2 Definition of Building. The Building is a structure located upon the Real
Property containing the approximate square footage provided in Section 1.6.
2.3 Definition of Premises. The Premises are a portion of the Building which is
outlined in red on the floor plan attached hereto as Exhibit "B" and made a part
hereof containing the approximate square footage provided in Section 1.8.
2.4 Determination of Premises. The actual square footage of the Premises and the
Building shall be determined by Landlord measuring the space from the outside
surface of permanent outer walls and from the centerline of interior demising
walls with no deduction by reason of stairs, interior partitions or other
interior construction or equipment.
SECTION 3
TERM
3.1 Lease Term. The term of this Lease shall be as provided in Sections 1.9,
1.10 and 1.11. Notwithstanding the foregoing, in the event Tenant's initial
occupancy of the Premises is delayed because of damage to the Premises caused by
fire, acts of God, acts of war, or any other calamity, for which the Landlord is
not responsible or any other event not under the reasonable control of the
Landlord, the term of this Lease as stated above shall be extended for a period
equal to the amount of time lost by reason of any such cause, but in any event
not beyond six (6) months from the commencement date.
SECTION 4
RENT
4.1 Base Rent. Tenant shall pay to Landlord without demand, diminution,
deduction, or set-off, at the Landlord's address listed in Section 1.16 or at
such other place as Landlord may from time to time designate in writing, an
annual base rent as provided in Section 1.12, payable in advance in successive
equal monthly installments as provided in Section 1.12, each on the first day of
each month during the entire term hereof.
4.2 Additional Rent. The Tenant shall also pay, without demand, diminution,
deduction, or set-off, as additional rent, such other sums of money as shall
become due and payable by Tenant to Landlord under this Lease, including without
limitation, Tenant's Proportionate Share of Operating Costs as provided in
Section 6.
4.3 Rent Proration. If the term of this Lease as heretofore established,
commences on other than the first day of a month or terminates on other than the
last day of a month, then all the rent and additional rent provided for in this
Section for such month or months shall be prorated and the installment or
installments of rent shall be paid by Tenant in advance.
SECTION 5
COMMON AREA
5.1 Definition of Common Area. Common Area shall mean the entire area designated
from time to time by Landlord for common use or benefit of the occupants of the
Building, including, but not by way of limitation, any and all portions of the
Building not available for lease to tenants; the Real Property; the floors; the
heating, ventilating and air conditioning; parking lots; landscaped and vacant
areas; passages for trucks and automobiles; areaways; roads; sidewalks; curbs;
corridors; and facilities such as washrooms, drinking fountains, toilets,
stairs, ramps, elevators and escalators, if any.
5.2 Use and Control of Common Area. Subject to rules and regulations that may be
created by Landlord from time to time, the Common Area is hereby made available
to Tenant and its employees, agents, customers and invitees for their
reasonable, nonexclusive use in common with other Tenants, their employees,
agents, customers, invitees and Landlord. Landlord shall have the exclusive
right to control the Common Area; to change the size location level and
arrangement of the Common Area; to enter into, modify and terminate easements
and other agreements pertaining to the use and maintenance of the Common Area;
to close all or any portion of the Common Area to such extent as, in the opinion
of Landlord's counsel, may be necessary to prevent a dedication thereof or the
accrual of any rights to any person or to the public therein; to close
temporarily any or all portions of the Common Area; and to do and perform such
other acts in and to said areas and improvements as in the exercise of good
business judgement, as Landlord shall determine to be reasonable or necessary.
5.3 Operation and Maintenance of Common Area. Landlord shall operate and
maintain the Common Area or shall cause the same to be operated and maintained
in manner deemed by Landlord reasonable and appropriate.
SECTION 6
OPERATING COSTS
6.1 Definition of Operating Costs. Operating Costs shall consist of all costs
and expenses of the Building and the Common Area and such additional facilities
in subsequent years as may be determined by the Landlord to be necessary to the
Building, which costs and expenses shall be determined in accordance with
generally accepted accounting principles, which shall be consistently applied
(with accruals appropriate to Landlord's business); and shall include without
limitation all ordinary, necessary and reasonable costs and expenses (but not
costs which are separately billed to and paid by tenants) of every kind and
nature which Landlord shall pay or become obligated to pay (excluding principal
and interest payments to the holder of any mortgage on the Building) because of
or in connection with the ownership and operating of the Building and the Common
Area, such as the following:
A. Wages, salaries and related expenses of all employees engaged in
the operation, maintenance and security of the Building, but
excluding executive compensation.
B. All supplies and materials used in the operation and maintenance
of the Building.
C. Management costs, maintenance and service agreements for the
Building and the equipment therein, including without
limitation, window cleaning, mechanical maintenance, snow
removal, janitorial services, and lawn and landscaping
maintenance.
D. Accounting costs, including the costs of audits by certified
public accountants.
E. Cost of all insurance including, but not limited to fire,
casualty, liability and rent abatement for rent loss insurance
applicable to the Building and Landlord's personal property used
in connection with the Building.
F. Cost of all repairs, replacements, reserves for replacements,
and general maintenance, (including, but not limited to,
compliance with environmental laws) (excluding repairs and
general maintenance paid for by proceeds of insurance or by
Tenant and other third parties, and alterations attributable to
tenants of the Building other than Tenant).
G. All charges for sewer and water at the Building and Common Area
and other utility charges for Common Area.
H. All real estate taxes and installments of special assessments,
service payments in lieu of taxes, excises, levies, fees or
charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen of any kind which are assessed,
levied, charged, confirmed, or imposed by any public authority
upon the Building and the Real Property, its operations or the
rent provided for in this Lease. If at any time during the term
of this Lease, under the laws of the State of Minnesota, or of
any political subdivision thereof, in which the Real Property is
situated, a tax or excise on rents, or other tax however
described, is levied or assessed by the State of Minnesota, or
by any such political subdivision, against Landlord on account
of the base rent or additional rent accruing under this Lease,
as a substitute in whole or in part for real estate taxes on the
Real Property or any part thereof, such tax or excise on rents
shall, to the extent of the amount thereof which is lawfully
assessed or imposed as a direct result of Landlord's ownership
of the Real Property or of this Lease, be deemed to be a real
estate tax or assessment levied or assessed against the Real
Property for the purposes of this Section 6.1.H. However,
nothing contained in this Lease shall require Tenant to pay any
income, excess profits, franchise, or similar tax payable by
Landlord on account of the rent accruing under this Lease. All
costs and expenses incurred by Landlord during negotiations for
or contests of the amount of taxes or assessments shall be
included in real estate taxes and special assessments. It is
agreed that Tenant will be responsible for ad valorem taxes on
its personal property and on the value of leasehold improvements
to the extent that same exceeds standard building allowances,
but shall not be responsible for Landlord's State or Federal
Income Tax.
I. Amortization of capital improvements made to the Building and
Common Area before or after the commencement date of the Lease,
which capital improvements shall be amortized over the useful
life of the capital improvements.
6.2 Estimated Operating Costs. Landlord has prepared an estimate of the
Operating Costs for the calendar year of the operation of the Building,
(hereinafter referred to as "Estimated Operating Costs"), all of which Operating
Costs shall be initially paid by Landlord. The Estimated Operating Costs for the
year in which the Lease is executed is as listed in Section 1.13.
6.3 Definition of Tenant's Proportionate Share. Tenant's Proportionate Share
shall be a fraction the numerator of which shall be the area of the Premises and
the denominator of which shall be the rentable area of the Building.
6.4 Payment of Tenant's Proportionate Share. Tenant's Proportionate Share of the
Estimated Costs for each calendar year shall be paid as additional rent without
demand, deduction, diminution, or set-off in monthly installments on the first
day of each calendar month, in advance, in an amount estimated by Landlord from
time to time. If the term of this Lease commences or terminates (other than by
reason of Tenant's default) during the calendar year, Tenant's obligation for
Tenant's Proportionate Share of Estimated Costs shall be prorated based on the
term of the Lease contained within the calendar year. Within ninety (90) days
after the end of each calendar year, Landlord shall furnish Tenant with a
statement of the actual amount of Tenant's Proportionate Share of the Operating
Costs for such period. In the event the total of Tenant's monthly installments
paid for any calendar year does not equal Tenant's Proportionate Share as shown
on such statement, then upon receipt of such annual statement, Tenant shall
promptly pay Landlord as additional rent any deficiency or Landlord shall issue
to Tenant a credit invoice for such excess (except at the end of the term of
this Lease in which case Landlord shall promptly pay Tenant such excess), as the
case may be.
6.5 Adjustment. Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied during any
partial or full calendar year, an adjustment shall be made in computing the
Operating Costs for such year so that the Operating Costs shall be computed for
such year as though the Building has been fully occupied during such year.
Landlord shall bear Operating Costs relating to non-occupied but rentable space.
SECTION 7
USE
7.1 Permitted Use. The Premises shall be used only for the use permitted in
Section 1.14 and for no other use whatsoever. Tenant shall not suffer, use or
permit the use of the Premises or any portion thereof for any purpose other than
the permitted use unless the prior written consent of the Landlord is first
obtained. Tenant shall not use or permit the use of the Premises or any portion
thereof in violation of any law, ordinance or regulation applicable thereto nor
in a manner constituting a nuisance of any kind.
7.2 No Representation or Warranty. Landlord's authorization of Tenant's use as
provided for herein is not, and shall not be deemed, a warranty or
representation by Landlord that Tenant's authorized use is permitted under city,
county, state, or federal laws, or any regulation promulgated by any agency or
quasi-political entity of any city, county, state, or federal government. Tenant
shall have the sole obligation and responsibility to confirm that the use
authorized by the Landlord is permitted under all laws and regulations. In
addition, in the event Tenant is permitted to (i) make any improvement or
alteration within the Premises, or (ii) to expand or contract the Premises, or
(iii) to sublease or assign the Premises to a new tenant or subtenant, as the
case may be, or (iv) the authorized use by any Tenant or any permitted assignee
or subtenant (including Tenant herein) of the Premises changes, or (v) the
internal designation of square footage within the Premises is changed with
respect to the amount of such space utilized for office, warehouse, storage,
manufacturing, or the like, all as provided herein, then, with respect to any of
the aforelisted matters (i through v), Landlord makes no warranty or
representation that they conform or will conform with all laws, codes, and
regulations of any city, county, state, or the federal government, or any
political subdivision thereof that has jurisdiction with respect thereto. It
shall be the sole responsibility and obligation of the Tenant or permitted
assignee or subtenant of Tenant, to have any and all plans and specifications
and change of use or designation of the square footage within the Premises
approved by the appropriate governmental authorities, and to obtain all
necessary licenses, permits, certificates of occupancy, or the like with respect
to such alteration, improvement, expansion of the Premises, contraction of the
Premises, change of use, and/or change of designation of square footage of the
space within the Premises.
7.3 Abandonment. Tenant shall not abandon or leave vacant the Premises or
permit, license, or allow the Premises to be occupied by any other party. As
used herein, "abandonment" or "leaving vacant" shall mean the Premises are left
unattended and/or is not open for business (except for the permitted exceptions
set forth in (i) hereafter) for a period of thirty (30) calendar days. Tenant
warrants and agrees (i) that it shall prevent the Premises from being used in
any way which will injure the reputation of the Real Property, the reputation of
Landlord, or from being used in any way which may be a nuisance, annoyance,
inconvenience, or damage to other tenants or occupants of the properties which
adjoin the Premises, whether or not owned and controlled by Landlord, including,
without limiting the generality of the foregoing, vibration, noise, or odors
from its business operation, playing of any musical instrument, radio, or
television, or use of a microphone, loudspeaker, electrical equipment, or other
equipment which may be heard outside of the Premises, or the allowing the
accumulation of refuse or garbage which would attract vermin, insects, and/or
produce noxious or unpleasant odors; and (ii) that it shall forthwith report to
Landlord in writing any investigation, complaint, or redtag, either from a
neighbor, or governmental body or political subdivision thereof, in which the
Premises is situated. In the event Tenant has abandoned or allowed the Premises
to be vacant, Landlord may, at its sole discretion, take all necessary or
prudent acts to secure the Premises, install an occupant in order to avoid the
insurance contract then in effect from being vitiated by reason of the Premises
being vacant or to minimize the insurance coverage by reason of such abandonment
or allowing the Premises to be vacant including, without limiting the generality
of the foregoing, changing the locks, boarding up windows, obtaining additional
insurance, hiring security guards or services, allowing occupancy of the
Premises during business hours to a nonpaying occupant and not as a tenant, or
any such other act which Landlord deems prudent in the then circumstances. Any
such costs incurred by Landlord by reason of such breach shall be deemed
additional rent and subject Tenant to the remedies of Landlord set forth in
Section 21 of this Lease hereafter. Tenant fully releases and discharges
Landlord from any and all claims and liabilities arising by reason of Landlord
undertaking one or more of the above-referenced actions.
SECTION 8
UTILITIES
8.1 Tenant to Pay. Commencing on the day Tenant takes possession of the
Premises, Tenant shall pay promptly, as and when due, all charges for
electricity, gas, telephone, water, sewer service, trash removal, and all other
services or utilities including any extraordinary amount of sewer and water
which are used, rendered or supplied to or upon the Premises throughout the term
of this Lease, including but not limited to all such costs or charges incurred
to provide heat, ventilation and air conditioning to the Premises; and Tenant
shall indemnify Landlord and save it harmless of and from any cost, liability,
charge or expense with respect thereto. In the event Tenant shall not pay said
utilities when due, Landlord may, but shall not be required to, pay said
utilities on behalf of Tenant, and in that event, Tenant shall promptly
reimburse Landlord therefore upon demand and said advance shall be deemed to be
an additional rent payment required of Tenant.
8.2 Capacity. Tenant hereby acknowledges the limits of the design standard of
the electrical service to be furnished to the Premises and if additional
capacity or wiring is required by Tenant's intended use, Landlord, after first
approving the same, shall permit Tenant to install such additional capacity or
wiring at Tenant's expense in a manner consistent with Section 11.
8.3 Damages. Landlord shall not be liable in damages or otherwise if the
furnishing by any supplier of any utility service or other service to the
Premises shall be interrupted or impaired by fire, accident, riot, strike, act
of God, the making of necessary repairs or improvements or by any causes beyond
Landlord's control.
8.4 Energy Conservation. Should it become necessary because of directives of
public authorities to reduce energy consumption within the Premises, Tenant will
reduce its energy consumption in accordance with reasonable, uniform and
non-discriminatory standards established by public authorities.
SECTION 9
SIGNS
9.1 Consent and Maintenance. Tenant shall not place or cause to be placed or
maintained on any exterior door, wall or window of the Premises or the Building
any advertising matter or other thing of any kind and shall not place or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Premises or any hanging sign without Landlord's prior
written consent. Tenant further agrees to maintain any such sign, awning,
canopy, decoration, lettering, advertising matter or other thing, as may be
approved, in good condition and repair at all times. Any sign proposed to be
used by Tenant shall comply with the requirements of the municipality in which
the Building is located and the requirements of Landlord as contained in
Landlord's Sign Criteria attached hereto as "Exhibit C" and made a part hereof,
as if fully set forth herein.
SECTION 10
ACCEPTANCE OF PREMISES, REPAIR AND MAINTENANCE
10.1 Acceptance. Tenant acknowledges that it has caused the Premises to be
inspected in order to ascertain the quality and the condition thereof, and that
no representations, either expressed or implied, have been made regarding the
quality or condition thereof. Tenant does hereby accept the demise of the
Premises in its "as is" condition, and relies solely on its inspection of the
Premises with respect thereto. Except as may be specified on Exhibit "D"
attached hereto and made a part hereof, as if fully set forth herein, Landlord
shall not be required to make any alterations, additions, improvements, or
repairs to the Premises.
10.2 Maintenance. Tenant, at its sole cost and expense, shall keep and maintain
the Premises and all equipment and improvements thereon, and every part thereof
specifically including, but not limited to, the interior walls and floors in
good repair and in a clean, safe, wholesome, insurable and tenantable condition
and in conformity with the regulations of any governmental authority and in
conformity with the standards established, from time to time, by the National
Fire Protection Association. Tenant shall comply with all health and police and
fire and other regulations, in all respects and at all times. Tenant shall not
allow refuse, garbage or debris to accumulate or be stored outside of or
adjacent to the Premises whether on top of dumpsters, or other containers or
not.
10.3 Indemnification. Except as set forth within this Lease, Tenant agrees to
indemnify, defend and save Landlord, or its partners, agents, officers,
employees, representatives, contractors, licensees and managing agent (if any),
harmless against and from any and all claims, loss, damage and expense by or on
behalf of any person or persons, firm or firms, corporation or corporations,
arising from any act, omission or negligence on the part of Tenant or Tenant's
agents, contractors, servants, employees or licensees, or arising from any
accident, injury or physical damage to the extent caused by Tenant or Tenant's
agents, representatives, contractors, servants, licensees, invitees, and
employees to any person, firm or corporation occurring during the term of this
Lease or any renewal thereof, in or about the Premises or the Common Area, and
from and against all costs, expenses, liabilities, and reasonable counsel fees,
incurred in or about any such claim or action or proceeding brought thereon; and
in case any action or proceeding be brought against Landlord or its partners,
agents, officers, employees, representatives, contractors, licensees or managing
agent (if any) by reason of any such claim, Tenant, upon notice of such
proceeding, shall defend Landlord by counsel reasonably satisfactory to
Landlord. The scope of the indemnification provided for hereunder shall not
include claims, loss, damage or expense to the extent they arise from the gross
negligence or willful misconduct of Landlord or its partners, officers,
employees, representatives or agents, contractors or licensees.
10.4 Waiver of Claims. Except as otherwise provided herein, or to the extent not
expressly prohibited by law, Tenant waives all claims against Landlord, its
partners, agents, officers, employees, representatives, contractors, licensees
and servants for loss or damage to property, loss of business or losses under
worker's compensation laws and benefits which Tenant sustains during the term of
this Lease and which resulted directly or indirectly from any existing or future
condition, defect, matter or thing in, on or about the Premises; from any
equipment or appurtenances becoming out of repair; from any accident; or from
any act or omission of any person or entity including, but not limited to
Landlord or any other permitted Tenant of the Premises. This Section 10.4 shall
apply especially, but not exclusively, to damage caused by the flooding of
basements or other subsurface areas; by refrigerators, sprinkling devices, air
conditioning apparatus, water, snow, frost, steam, excessive heat or cold,
falling plaster, broken glass, sewage, gas, odors or noise; or the bursting or
leaking of pipes or plumbing fixtures. Landlord shall not be liable for damage
to or theft, misappropriation or loss or any property in the Premises belonging
to Tenant, its agents, employees, invitees or any property located in, on or
about the Premises regardless of who owns such property, and Tenant agrees to
release, defend and hold Landlord, its partners, officers, agents, employees,
servants and managing agent (if any) harmless and indemnify them against claims
and liability for injuries to such property.
SECTION 11
ALTERATIONS AND ADDITIONS
11.1 Landlord's Consent Required. Tenant shall not make any alterations,
additions, repairs or improvements to the Premises without, in each such
instance, first obtaining Landlord's written consent. Any such alteration,
addition, repair or improvement by Tenant consented to by Landlord shall be
performed by Tenant in a good workmanlike manner, at Tenant's sole cost and
expense, and in accordance with all laws and regulations of applicable governing
bodies. Any such alterations, additions, repairs and improvements including
fixtures which are permanently affixed to the Building shall remain upon, be
surrendered to Landlord, and become the property of Landlord without disturbance
or injury upon expiration of the term of this Lease, or sooner termination of
this Lease as provided herein, unless Landlord requires specific items thereof
to be removed by Tenant at Tenant's sole expense in which event Tenant shall do
so prior to the expiration or sooner termination of the term of this Lease at
its expense, and shall repair any damage caused thereby. Tenant shall restore
the Premises to its original condition at the commencement of this Lease or such
better condition as the Premises may have been put during the term of this Lease
as provided in Section 19 hereof.
11.2 Indemnification for Liens. Tenant shall indemnify and save Landlord
harmless from and against any lien or claim of lien attached to or upon the
Premises or any part thereof by reason of any act or omission on the part of
Tenant.
11.3 Inspection and Notice of Non-Responsibility. Landlord or Landlord's agents
shall at all reasonable times have the right to enter upon the Premises for the
purpose of inspecting the same, and for the purpose of posting or keeping posted
notices of non-responsibility or any or all forms of notice reasonably necessary
or proper to protect Landlord or the Premises against mechanics or materialmen's
liens, or charges, or other liens or charges which might or could arise out of
the use of the Premises by Tenant, or the construction of the improvements or
the making of alterations or repairs to the Premises.
11.4 Tenant's Additional Obligations. Tenant shall also provide such notice of
non-liability of Landlord to any and all contractors, subcontractors and
materialmen. Tenant shall pay all costs for work done or caused to be done by
Tenant in the Premises, the Building, and the Real Property, which could result
in any lien or encumbrance on Landlord's interest in the Premises, the Building,
and the Real Property, or any part thereof, and shall keep the title to the
Premises, the Building, and the Real Property, and every part thereof, free and
clear of any lien or encumbrance in respect to such work. Tenant shall defend,
indemnify and hold Landlord, its partners, agents, officers, representatives,
contractors, licensees, employees and managing agent (if any) harmless against
any claim, loss, cost, demand and legal or other expense associated with the
assertion of any such lien. Tenant shall immediately notify Landlord of any
claim of lien or other action of which it has, or reasonably should have,
knowledge and which affects the title to the Premises, the Building, and the
Real Estate, or any part thereof, and shall cause the same to be removed within
thirty (30) days (or such additional time as Landlord may consent to in
writing), failing which Landlord may take such action as Landlord deems
necessary to remove the same and the entire cost thereof shall be immediately
due and payable by Tenant to Landlord.
SECTION 12
ASSIGNMENT AND SUBLETTING
12.1 Landlord's Consent. Tenant shall not (i) sell, assign (a sale of
substantially all of the assets of Tenant or a change in control of Tenant shall
constitute an assignment), mortgage, pledge, hypothecate or in any manner
transfer this Lease or any estate or interest thereunder; or (ii) sublet the
Premises or any part or parts thereof; without prior written consent of the
Landlord in each instance, which consent shall not be unreasonably withheld or
delayed. Any permitted assignment, transfer, or subletting shall not relieve or
release Tenant from its obligations under this Lease. In the event Landlord
consents to a sublease of the Premises any profit in connection with said
sublease shall be shared equally between Landlord and Tenant.
12.2 Landlord's Rights. Landlord's right to assign this Lease or sell or convey
the Premises are and shall remain unqualified. Upon any said assignment, sale or
conveyance, Landlord shall thereupon be entirely freed, relieved and released,
of all obligations of the Landlord hereunder and shall not be subject to any
liability resulting from any act or omission or event occurring after said
assignment, sale or conveyance. No assignee, purchaser or mortgagee of Landlord
shall be obligated hereunder for any of Landlord's duties or obligations prior
to the effective date of the assignment, purchase, completion of foreclosure of
mortgage or acceptance of a deed in lieu of foreclosure of mortgage.
SECTION 13
INSURANCE
13.1 Tenant's Insurance. Tenant, at its sole expense, shall provide and keep in
full force and effect during the full term hereof, and during such other times
as Tenant occupies the Premises or any part thereof, for the benefit of Landlord
and Landlord's mortgagee, if any, as their interest may appear (the Landlord and
Landlord's mortgagee to be named as additional insureds thereon) the following
insurance coverages:
A. All Risk Property Insurance, including coverage for fire,
extended coverage, vandalism, malicious mischief and sprinkler
leakage to Tenant's contents and all leasehold improvements to
the Premises whether initially paid for by Landlord or Tenant in
an amount not less than replacement cost.
B. Comprehensive General Liability insurance with a minimum limit
of liability of $2,000,000.00 combined single limit covering the
Premises and adjoining sidewalks, streets and alleys.
C. Worker's Compensation insurance affording statutory coverage and
containing statutory limits of liability as may be required by
Minnesota's Workers Compensation or other similar statutes.
D. Plate glass insurance, if applicable.
E. Boiler insurance, if applicable.
F. Rent insurance, including additional rent for a period of at
least one (1) year which shall name Landlord as loss payee
and/or business interruption insurance.
G. Such other types of insurance (excluding rent insurance in favor
of Landlord), and such additional amounts of insurance as, in
Landlord's reasonable judgment, are or may be necessitated by
good business practice.
13.2 Form of Insurance. All insurance policies required hereunder shall (i) be
in form and content satisfactory to Landlord, (ii) be placed with companies with
a general policyholder's rating of not less than Class A as rated in the most
current Best's Insurance Reports, satisfactory to Landlord and qualified to do
business in the State of Minnesota, (iii) provide for at least thirty (30) days
prior written notice to Landlord before cancellation, modification or amendment
and (iv) provide that the proceeds thereof and Landlord's and Landlord's
Mortgagee's, (if any) interests therein shall not be affected or subject to
cancellation by reason of any act or omission of Tenant. The insurance required
hereby may be maintained by means of a policy or policies of blanket insurance
so long as the provisions of this Section 13 are fully satisfied. Two copies of
all policies of insurance and certificates thereof, stating the premiums have
been paid in full or other evidence satisfactory to Landlord that the premiums
have been paid in full shall be delivered to Landlord.
13.3 Tenant's Actions. Tenant will not do, omit to do, or suffer to be done or
keep or suffer to be kept, anything in, upon or about the Premises or the
Building which will violate the provisions of Landlord's policies insuring
against loss or damage by fire or other hazards (including, but not limited to,
public liability), which will adversely affect Landlord's fire or liability
insurance premium rating or which will prevent Landlord from procuring such
policies with companies acceptable to Landlord, provided Tenant is first given
notice of the requirements of such policies. If anything done, omitted to be
done or suffered to be done by Tenant, or kept or suffered by Tenant to be kept
in, upon or about the Premises shall cause, by itself or in combination with
other circumstances existing at the Building, the premium rate of fire or other
insurance on the Premises or other property of the Building with companies
acceptable to Landlord to be increased beyond the established rate from time to
time fixed by the appropriate underwriters with regard to the use of the
Premises for the purposes permitted under this Lease or to such other property
in the Building for the user or uses made thereof, Tenant will pay the amount of
such increase or, in the event that other circumstances existing at the Building
shall have contributed to such increase, such equitable portion of such increase
as may be reasonably determined by Landlord, as additional rent upon Landlord's
demand, and will thereafter pay the amount of such increase, as the same may
vary from time to time, with respect to every premium relating to coverage of
the Premises during a period falling within the Term until such increase is
eliminated. In addition, if applicable, Landlord may, at its option, rectify the
condition existing on the Premises which caused or was a contributing cause of
the increased premium rate, in the event that the Tenant should fail to do so,
and may charge the cost of such action to Tenant as additional rent, payable on
demand. In determining whether increased premiums are the result of Tenant's use
of the Premises, a schedule, issued by the organization making the insurance
rate on the Premises, showing the various components of such rate, shall be
conclusive evidence of the several items and charges which make up the fire
and/or liability insurance rate on the Premises.
SECTION 14
DAMAGE OR DESTRUCTION
14.1 Determination to Rebuild. In the event the Premises or the Building are
damaged or destroyed by fire, or other casualty (hereinafter referred to as the
"Damage"), Landlord, shall have thirty (30) days from the date of the Damage to
decide to rebuild or terminate this Lease. In the event Landlord decides to
terminate this Lease, Landlord shall provide written notice to Tenant within
said thirty (30) day period. Landlord shall have an additional sixty (60) days
from the expiration of the first thirty (30) day period to obtain all necessary
permits and approvals from the appropriate governmental authorities in order to
commence reconstruction, provided Landlord has not terminated this Lease during
the first thirty (30) day period. If Landlord is unable to obtain all
governmental permits and approvals, then Landlord may terminate this Lease upon
written notice to Tenant.
14.2 Landlord's Restoration. In the event that Landlord has not terminated this
Lease during the first thirty (30) day period after the Damage or the ensuing
sixty (60) day period after the first thirty (30) day period, Landlord shall
commence to repair, reconstruct, and restore the Damage to substantially the
same condition in which it was immediately prior to the happening thereof and
prosecute the same diligently to completion.
14.3 Tenant's Right to Terminate Lease. In the event that construction has not
been completed within two hundred seventy (270) days of the Damage, Tenant shall
be entitled to terminate this Lease upon sixty (60) days notice after the
expiration of two hundred seventy (270) days from the date of Damage. Provided,
however, should the Premises be substantially completed within said sixty (60)
day notice period, then Tenant's notice of termination of the Lease shall be
null and void.
14.4 Rent Abatement. If the Premises are rendered partially or totally
untenantable as a result of the Damage, then to the extent the Premises are
rendered untenantable, the rent shall be proportionally abated until Landlord
has completed the repair, reconstruction, or restoration.
14.5 Tenant's Restoration. In the event Landlord elects to repair, reconstruct,
or restore the Damage, Tenant agrees to repair or replace any Damage to Tenant's
leasehold improvements, its merchandise, trade fixtures, furnishings, operating
equipment, and personal property, including wall coverings, carpeting, and
drapes, as soon as possible after the occurrence of the Damage to at least a
condition equal to that prior to the Damage.
14.6 Liability for Damage. In no event shall Landlord be liable for interruption
to the business of Tenant or for damage to or repair, reconstruction, or
restoration of any items belonging to Tenant or any other items within the
Premises or Common Area.
14.7 Termination of Lease. Upon any termination of this Lease under this Section
14, the rent imposed under this Lease shall be adjusted as of the date of such
termination and the parties shall be released thereby without further obligation
to the other party, except for items which have been previously accrued and are
then unpaid, and except for obligations which are designated as surviving such
termination by Landlord, if any.
SECTION 15
WAIVER OF SUBROGATION
15.1 Waiver of Subrogation. Landlord and Tenant agree that in the event the
Premises, the Building or the fixtures contained thereon are damaged or
destroyed by an insured casualty, the rights, if any, of each party against the
other with respect to such damage or destruction whether caused by negligent act
or omission, or otherwise, to the extent that such damage or destruction is
recovered from the insurer of policies of insurance, are waived.
SECTION 16
CONDEMNATION
16.1 Total or Partial Condemnation. In the event of a condemnation (which shall
in this Section whenever appearing be defined to include a taking for public or
quasi-public use or a voluntary deed executed by the Landlord in lieu thereof)
of all or a substantial part of the Real Property or the Building, this Lease
and Tenant's rights to possession of the Premises shall terminate as of, and
rent shall be paid to, the date title is vested in the condemnor. In the event
of condemnation of less than all or a substantial part of the Real Property or
the Building, this Lease shall continue as to the part not so taken and the
annual rent to Landlord by Tenant shall be reduced prorata for the area of the
Premises so taken. If the condemnation does not include a portion of the
Premises, the annual rent to be paid to Landlord by Tenant shall not be reduced.
16.2 Condemnation Awards. Any and all awards or voluntary compensation paid in
lieu thereof shall be the sole property of Landlord, whether resulting from the
diminution of the value of the leasehold estate or otherwise, and Tenant shall
have no right to or interest in any portion thereof, unless a specific award is
made to Tenant for its relocation costs or moving expenses.
SECTION 17
COMPLIANCE WITH LAW
17.1 Tenant's Compliance. Tenant shall not use or occupy the Premises or permit
the use or occupancy of the Premises nor do or permit anything to be done in or
upon the Premises in any manner which will in any way violate any certificate of
occupancy affecting Premises or make void, voidable or make more expensive any
insurance then in force with respect thereto or which will make it impossible to
obtain fire or other insurance or which will cause or be likely to cause
structural damage to the Building or any part thereof situate upon the Premises
nor which will constitute a public or private nuisance and shall not use or
occupy the Premises or permit the use or occupancy of the Premises in any manner
which will violate any present or future law, ordinance, statute or regulation
of any governmental authority, including but not limited to, the Minnesota Clean
Indoor Air Act.
17.2 Disability Access Laws. Tenant hereby covenants and agrees with Landlord
that Tenant shall at all times during the term of this Lease, comply with any
and all governmental regulation of the Premises regarding access of disabled
persons, including without limitation, Titles III and V of the Americans with
Disabilities Act of 1990, 42 U.S.C. 12101 et seq. or any other similar federal,
state or local laws or ordinances and the regulations promulgated thereunder
(collectively "Disability Access Laws"). Landlord shall not be liable for any
failure by Tenant to comply with the Disability Access Laws with respect to the
Premises during the term hereof and Tenant hereby expressly releases Landlord,
its partners, officers, agents, contractors, licensees, employees, agents,
affiliates and managing agent (if any) and agrees to indemnify and hold
Landlord, its partners, officers, agents, contractors, licensees, employees,
agents, affiliates and managing agent (if any) harmless from and against any and
all claims and demands for loss or damage, including claims for discriminations,
personal injury, monetary damage or injunctive relief arising out of or in
connection with any failure or alleged failure of the Premises to comply with
the Disability Access Laws, and including reasonable attorneys' and other
professional or consultants' fees, paid or incurred by Landlord, its partners,
employees, agents, affiliates and managing agent (if any) in connection with the
defense of any such claims including, but not limited to, all costs for research
regarding settlement or other preventive measures which Landlord, its partners,
employees, agents, affiliates and managing agent (if any) may take prior to the
filing of such action or to attempt to prevent the filing of such an action.
SECTION 18
QUIET ENJOYMENT
18.1 Tenant's Occupancy. Tenant, upon payment of the rent herein reserved and
upon performance of all of the terms, covenants and conditions of this Lease by
it to be kept and performed, shall at all times during the term hereof,
peaceably and quietly enjoy the Premises without any disturbance from Landlord
or from any other person claiming through Landlord.
18.2 No Representations or Warranties. With respect to this Lease, (i) neither
Landlord nor any agent or employee of Landlord has made any representations or
promises with respect to the Premises, except as herein expressly set forth, and
no right, privileges, easements or licenses are acquired by Tenant except as
herein expressly set forth; and (ii) wherever in this Lease any term, covenant
or condition is required to be kept or performed by Landlord, Landlord shall be
deemed to have kept and performed such term, covenant and condition,
notwithstanding any act or omission of Landlord, if such act or omission is
pursuant to any governmental regulation, requirement, directive or request.
SECTION 19
SURRENDER OF THE PREMISES
19.1 Tenant's Obligations. Upon expiration or sooner termination of the term
hereof, Tenant shall surrender the Premises to Landlord, in good condition and
repair, and in at least as good condition and repair as it was at the
commencement of this Lease, or such better condition as the Premises may have
been put during the term of this Lease, and not less than the condition which
Tenant is required to maintain under Section 10 hereof, reasonable wear and
tear, condemnation and insured casualty excepted. Tenant's obligations hereunder
shall include, but not be limited to, leaving the Premises broom clean;
restoring electrical service; elimination of holes in walls; repairing damages
to loading dock areas; and removal of alterations, additions, and improvements
if required by Landlord as provided in Section 11 hereof; compliance with
Section 26 hereof; and bringing the Premises to a tenantable condition; all as
reasonably required by Landlord.
19.2 Landlord's Requirements. Landlord shall inspect the Premises prior to or
upon expiration or sooner termination of this Lease and provide Tenant with
Landlord's reasonable requirements for Tenant's compliance with Sections 10, 11,
and 19 of this Lease. If Tenant does not comply with Landlord's reasonable
requirements by the expiration or sooner termination of this Lease, then
Landlord shall, at Tenant's expense, make the repairs and restorations required
and Tenant shall pay Landlord for such repairs and restorations within five (5)
days of Landlord's invoice or explanation of charges.
SECTION 20
SECURITY DEPOSIT
20.1 Tenant's Deposit. Tenant has deposited with Landlord the sum as provided in
Section 1.15. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all of the terms, covenants and conditions of this
Lease to be kept and performed by Tenant during the term hereof. If Tenant
defaults with respect to any provisions of the Lease, Landlord may (but shall
not be required to) use, apply or retain all or any part of this security
deposit for the payment of any rent or any other sum in default, or for the
payment of any other amount which Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall immediately deposit
cash with Landlord in an amount sufficient to restore the security deposit to
its original amount and Tenant's failure to do so shall be a material breach of
this Lease. Landlord shall not be required to keep this security deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the security deposit or any balance thereof
shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interests hereunder) at the expiration of the Lease term.
SECTION 21
DEFAULT
21.1 Events of Default. The occurrence of any of the following shall constitute
an "Event of Default:"
A. If Tenant should either (i) fail to make due and punctual
payment of rent, additional rent, or any other sum due Landlord
under this Lease; or (ii) vacate or abandon all or any part of
the Premises as defined in Section 7.3.
B. If Tenant shall fail in the punctual performance of or
compliance with any of the obligations, covenants, conditions or
agreements contained in this Lease by Tenant to be kept or
performed other than those referred to in Section 21.1.A. above,
which default continues for a period of ten (10) days after
written notice thereof; provided, however, if any such default
is not susceptible of being cured within said ten (10) day
period, the time permitted to Tenant to cure such default shall
be extended for so long as shall be reasonably necessary to cure
the same so long as Tenant commences promptly and proceeds
diligently to cure the default and provided, further, that such
period of time shall not be so extended if such extension, in
Landlord's sole judgement, shall jeopardize the interest of
Landlord in this Lease or pursuant to a mortgage, now or
hereafter encumbering the Premises or so as to subject Landlord
or Tenant to any civil or criminal liabilities.
C. If, at any time during the term hereof, proceedings in
bankruptcy shall be instituted by Tenant by the filing of a
voluntary petition in bankruptcy or if Tenant shall take any
benefit under the Bankruptcy Act or any other insolvency of
debtor release statute, either state or federal, or if Tenant
shall make a general assignment for the benefit of creditors or
if a receiver shall be appointed for the property of Tenant, and
provided Tenant within sixty (60) days thereafter shall have
failed to cause such receivership to be vacated, or if an
involuntary petition under any provision or section of the
Bankruptcy Act is filed against Tenant and provided Tenant
within sixty (60) days thereafter shall have failed to cause
said involuntary petition to be dismissed and set aside.
21.2 Landlord's Remedies. Upon the occurrence of an Event of Default, Landlord,
at any time thereafter and without limiting Landlord in the exercise of any
other right or remedy it may have on account of such default and without any
further notice or demand, may:
A. notify Tenant, in writing, that this Lease shall terminate as of
the earliest day which the law permits or on any later date
specified in such notice. Tenant's right to possession of the
Premises shall cease as of the date set forth in Landlord's
notice of termination. Neither the passage of time after the
occurrence of an Event of Default nor Landlord's exercise of any
other remedy with regard to such Event of Default shall limit
Landlord's rights under this Section 21.2.A. and no notice from
Landlord under this Section 21.2.A. or under a forcible or
unlawful entry and detainer statute or similar law will
constitute an election by Landlord to terminate this Lease
unless such notice specifically so states. Landlord reserves the
right following any reentry to or reletting of the Premises to
exercise its right to terminate this Lease by giving Tenant such
written notice, in which event this Lease will terminate as
specified in such notice;
B. with or without terminating this Lease and without demand or
notice to Tenant, re-enter and take possession of the Premises
using such procedures as may, from time to time, be provided by
law to expel Tenant and those claiming through or under Tenant,
and to remove the property of either or both. Landlord's
exercise of Landlord's rights under this Section 21.2.B. shall
not subject the Landlord to liability for conversion or trespass
and shall not affect Landlord's right to recover arrearage of
Rent payable under this Lease or any amounts due as a result of
any preceding breach of covenants or conditions. No reentry or
taking possession of the Premises by Landlord will be construed
as an election on Landlord's part to terminate this Lease unless
a written notice of such intention is given to Tenant;
C. should Landlord elect to reenter as provided in Section 21.2.B.
or should Landlord take possession pursuant to legal proceedings
or otherwise Landlord may, but shall not be required to, from
time to time, without terminating this Lease, relet the Premises
in Landlord's or Tenant's name, but for the account of Tenant,
for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the
Term) and on such conditions and upon such other terms (which
may include concessions of free rent and alteration and repair
of the Premises) as Landlord, in its sole discretion, may
determine, and Landlord may collect and receive any rent
resulting from such reletting. Landlord will have no obligation
to relet the Premises and will in no way be responsible or
liable for any failure to relet the Premises or any part of the
Premises, or for any failure to collect any rent due upon such
reletting;
D. with or without terminating this Lease and without demand or
notice to Tenant, to cure any Event of Default and charge Tenant
for the cost of effecting such cure, including, without
limitation (a) an amount equal to 15% of the cost incurred by
Landlord to effect such cure to cover the administrative costs
of effecting the cure; (b) attorneys' fees; and (c) interest on
the amount so advanced at the rate set forth in Section 22.
Notwithstanding the above, Landlord will have no obligation to
cure any such Event of Default of Tenant;
E. with or without terminating this Lease, recover from Tenant an
amount equal to the rent and additional rent owing for the
balance of the term plus the amount of any past due rent and
additional rent, less the net proceeds, if any, of any reletting
of the Premises by Landlord. All of Landlord's expenses in
connection with such reletting, including, but without
limitation, all repossession costs, brokerage, alteration and
repair costs and expenses of preparation for such reletting
shall be deducted from the proceeds of any reletting in
determining the net proceeds of such reletting. If, in
connection with any reletting, the new lease term extends beyond
the existing term, a fair apportionment of the rent received
from such reletting and the expenses incurred in connection with
such reletting as provided in this Section 21.2.E. will be made
in determining the net proceeds from such reletting, and any
rent concessions will be equally apportioned over the term of
the new lease. Landlord may recover the amount due from Tenant
under this Section 21.2.E. monthly, on the day on which the Base
Rent would have been payable under this Lease; or if Landlord so
chooses, on a less frequent basis;
F. elect to terminate the Lease and recover from Tenant as
liquidated damages and not as a penalty, an aggregate rent
which, at the time of such termination of this Lease, represents
the (a) full amount of any past due rent and additional rent,
and (b) the amount by which the rent and additional rent that
would have accrued for the balance of the term of this Lease
exceeds the fair market rental value of the Premises for the
same period with such amount discounted to present value at the
lesser of four percent (4%) or the discount rate of the Federal
Reserve System on the date of the Event of Default.
21.3 Landlord's Rights Cumulative. The foregoing rights of Landlord shall be
cumulative to all other rights and remedies now or hereafter provided by law or
by the terms of this Lease. Landlord shall be entitled to collect from Tenant
its costs, expenses, and fees including, but not limited to, its attorneys' fees
for all actions taken by Landlord because of Tenant's breach of this Lease. In
addition, the maintenance of any action or proceeding to recover the possession
or repossession of the Premises or any installment or installments of rent,
additional rent, or any other obligation which may be due or become due from
Tenant to Landlord shall not preclude Landlord from thereafter instituting and
maintaining subsequent acts or proceedings whether the recovery of possession or
repossession of the Premises or of any subsequent installment of rent,
additional rent, or of any other obligations which may be due or become due from
Tenant to Landlord under any of the provisions hereof. Suit or suits for the
recovery of such deficiency or damage may be brought by Landlord from time to
time at the election of Landlord and nothing herein shall be deemed to require
Landlord to await the date whereon this Lease or the demised term would have
expired by limitation had there been no such default by Tenant.
21.4 No Waiver of Rights or Remedies. The subsequent acceptance by Landlord of
rent or other sums required hereunder shall not be deemed a waiver of any
preceding breach of any obligation hereunder by Tenant other than the failure to
pay the particular rent or other sum so accepted and the waiver of any breach of
any covenant or condition by Landlord herein shall not constitute a waiver of
any other breach regardless of knowledge thereof. The exercise of any right,
option or privilege hereunder by Landlord shall not exclude Landlord from
exercising any and all other rights, privileges and options hereunder, and
Landlord's failure to exercise any right, option or privilege hereunder shall
not be deemed a waiver of such right, option or privilege, nor shall it relieve
Tenant of Tenant's obligations to perform each and every covenant and condition
on Tenant's part to be performed hereunder, nor from damages or other remedy for
failure to perform or meet the obligations of this Lease.
SECTION 22
LATE PAYMENT CHARGES
22.1 Tenant's Liability. If Tenant should fail to pay any installment of rent,
additional rent, or other charge on the day when the same shall become due and
payable hereunder, and continues in default for a period of five (5) days, the
Tenant shall pay to the Landlord a late payment charge of Two Hundred Fifty and
No/100 Dollars ($250.00), or five percent (5%) of the rent payment due,
whichever is greater, together with interest on the unpaid rent installment or
other charge at the maximum rate permitted by law or the rate of eighteen
percent (18%) per annum, calculated from the date the rent installment or other
charge was due, whichever is less. Tenant shall pay such late charges and
interest at the time the rent installment or other charge is paid. However,
acceptance by the Landlord of a late rent installment or other charge without
the late charge due shall not be interpreted as a waiver of the rights to such
late charge by Landlord, either as to that installment or other charge, or as to
any installments or other charges which become due in the future. Further,
failure by Tenant to pay such late charges and interest on unpaid installments
or other charges shall be considered to be a default under this Lease. The
rights, options, powers and remedies of the Landlord under this Section 22 shall
be cumulative and in addition to any other rights given to Landlord by law or
under the terms of this Lease.
SECTION 23
NOTICES
23.1 Manner of Notice. Any notice or demand to be given to or served upon either
Landlord or Tenant in connection with this Lease, shall be deemed to have been
sufficiently given or served for all purpose if it is personally served or if it
is sent certified mail, return receipt requested, postage prepaid, to the
Landlord and Tenant at the addresses provided in Sections 1.16 and 1.17. Either
party may change the place to which notice is to be sent by sending a written
notice thereof to the other in the same manner hereinabove provided.
23.2 Notice to Landlord's Lender. Tenant agrees to give to Landlord's lender by
certified mail, return receipt requested, postage prepaid, a copy of any notice
of default served upon Landlord. Tenant further agrees that if Landlord shall
have failed to cure such default within the time provided for in the Lease, the
lender, if it elects to cure such default, shall have an additional thirty (30)
days within which to cure such default or if such default cannot be cured within
that time, then such additional time as may be necessary if within such thirty
(30) days, Landlord's lender has commenced and is diligently pursuing the
remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, necessary to affect such cure), in
which event the lease shall not be terminated while such remedies are being so
diligently pursued. Landlord's lender, as the term is used herein, shall be
deemed to include any purchaser at a foreclosure sale and any purchaser
acquiring title through mortgage foreclosure proceedings. In the event that
Landlord's lender or any other party shall succeed to the interest of Landlord
under this lease, or otherwise becomes entitled to and takes possession of the
Real Property, Landlord's lender or any such other party, or any subsequent
owner, shall not be liable for any act or omission of any prior landlord
(including Landlord).
SECTION 24
BANKRUPTCY OR INSOLVENCY
24.1 Chapter 7 of the Bankruptcy Code. In the event Tenant shall become a Debtor
under Chapter 7 of the Bankruptcy Code, and such proceeding is neither dismissed
nor stayed within 60 days, and the Trustee or Tenant shall elect to assume this
Lease for the purpose of assigning this Lease or otherwise, such election and
assignment may only be made if all of the terms and conditions of Sections 24.2
and 24.4, hereof, are satisfied. If such Trustee shall fail to elect or assume
this Lease within 60 days after filing of the Petition, this Lease shall be
deemed to have been rejected. Landlord shall be thereupon immediately entitled
to possession of the Premises without further obligation to Tenant or Trustee,
and this Lease shall be cancelled, but Landlord's right to be compensated for
damages in such liquidation proceeding shall survive.
24.2 Chapters 11 and 13 of the Bankruptcy Code. In the event a Petition for
reorganization or adjustment of debts is filed by Tenant under Chapters 11 or 13
of the Bankruptcy Code, or a proceeding is filed under Chapter 7 of the
Bankruptcy Code and is transferred to Chapters 11 or 13, the Trustee Tenant, as
Debtor-In-Possession, must elect to assume this Lease within 60 days from the
date of the filing of the Petition under Chapters 11 or 13, or the Trustee or
Debtor-In-Possession shall be deemed to have rejected this Lease. If Tenant is
in default under Section 21 of this Lease, then no election by the Trustee or
Debtor-In-Possession to assume this Lease, whether under Chapters 7, 11, or 13,
shall be effective unless each of the following conditions, which Landlord and
Tenant acknowledge are commercially reasonable in the context of a bankruptcy
proceeding of Tenant, has been satisfied, and Landlord has so acknowledged in
writing:
A. Landlord has not terminated this Lease pursuant to the
provisions established herein prior to the filing of the
Petition.
B. The Trustee or the Debtor-In-Possession has cured, or has
provided Landlord adequate assurance (as defined below) that
within the times provided in Section 21, the Trustee or the
Debtor-In-Possession will cure all defaults under this Lease;
C. The Trustee or the Debtor-In-Possession has compensated Landlord
(or has provided to Landlord adequate assurance, as defined
below, that within 30 days from the date of assumption Landlord
will be compensated) for any pecuniary loss incurred by Landlord
arising from the default of Tenant, the Trustee, or the
Debtor-In-Possession as recited in Landlord's written statement
of pecuniary loss sent to the Trustee or Debtor-In-Possession.
D. The Trustee or the Debtor-In-Possession has provided Landlord
with "adequate assurance" of the future performance of each of
Tenant's, Trustee's or Debtor-In-Possession's obligations under
this Lease; provided, however, that:
(1) The Trustee or Debtor-In-Possession shall also deposit
with Landlord, as security for the timely payment of
rent and additional rent, an amount equal to three
months of the rent and additional rent and other sums or
charges which are payable under this Lease at the time;
(2) The obligations imposed upon the Trustee or
Debtor-In-Possession shall continue with respect to
Tenant or Transferee of the Lease after the completion
of bankruptcy proceedings.
E. For purposes of this Section 24, Landlord and Tenant acknowledge
that, in the context of a bankruptcy proceeding of Tenant, at a
minimum, "adequate assurance" shall mean:
(1) The Trustee or the Debtor-In-Possession has and will
continue to have sufficient unencumbered assets after
the payment of all secured obligations and
administrative expenses to assure Landlord that Trustee
or Debtor-In-Possession will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and
(2) The Bankruptcy Court shall have entered an Order
segregating sufficient cash payable to Landlord and/or
Trustee, or Debtor-In-Possession shall have granted a
valid and perfected lien and security interest and/or
mortgage in property of Tenant, Trustee or
Debtor-In-Possession to cure the monetary and/or
non-monetary defaults under this Lease within the time
periods set forth above.
24.3 Assumption of Lease. In the event this Lease is assumed by a Trustee
appointed for Tenant or by Tenant as Debtor-In-Possession under the provisions
of Section 24, hereof, and thereafter Tenant is liquidated or files a subsequent
Petition for reorganization or adjustment of debts under Chapters 11 or 13 of
the Bankruptcy Code, then, and in either of such events, if Tenant is in default
under Section 21 of this Lease, Landlord may, at its option, terminate this
Lease and all rights of Tenant hereunder, by giving Tenant written notice of its
election to so terminate, by no later than 30 days after the occurrence of
either of such events.
24.4 Assignment of Lease. If the Trustee or Debtor-In-Possession has assumed
this Lease pursuant to the terms and conditions of Section 24 herein, for the
purpose of assigning (or elects to assign) Tenant's interest under this Lease,
or the estate created thereby, to any other person, if Tenant is in default
under Section 21 of this Lease, such interest or estate may be so assigned only
if Landlord shall acknowledge in writing that the intended assignee has provided
"adequate assurance of future performance," as defined in this Section 24.4, of
all of the terms, covenants, and conditions of this Lease to be performed by
Tenant. For purposes of this Section 24.4, Landlord and Tenant acknowledge that,
in the context of a bankruptcy proceeding of Tenant, at a minimum, "adequate
assurance of future performance" shall mean that each of the following
conditions has been satisfied, and Landlord has so acknowledged in writing:
A. the assignee has submitted a current financial statement audited
by a Certified Public Accountant which shows a net worth and
working capital in amounts determined to be sufficient by
Landlord to assure the future performance by such assignee of
Tenant's obligations under this Lease;
B. the assignee, if requested by Landlord, shall have obtained
guarantees in form and substance satisfactory to Landlord from
one or more persons who satisfy Landlord's reasonable
requirements of credit-worthiness; and
C. the assignee has submitted in writing evidence, satisfactory to
Landlord, of substantial successful business experience in the
use and operation of facilities such as required to be operated
under this Lease.
24.5 Reasonable Use and Occupancy Charges. When, pursuant to the Bankruptcy
Code, the Trustee or Debtor-In-Possession shall be obligated to pay reasonable
use and occupancy charges for the use of the Premises or any portion thereof,
such charges shall not be less than the rent (as defined in this Lease) and
other monetary obligations of Tenant accruing under this Lease as Additional
Rent.
24.6 Landlord's Consent. Neither Tenant's interest in the Lease nor any estate
of Tenant hereby created shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other person or entity, or otherwise by operation
of any law under the bankruptcy, insolvency or other similar laws of any state
having jurisdiction of the person or property of Tenant (hereinafter referred to
as the "state law"), unless Landlord shall consent to such transfer in writing.
No acceptance by Landlord of rent and additional rent, or any other payments
from any such trustee, receiver, assignee, person or other entity shall be
deemed to have waived, nor shall it waive, the need to obtain Landlord's consent
of, Landlord's right to terminate this Lease for any transfer of Tenant's
interest under this Lease, without such consent.
24.7 State Law. In the event the estate of Tenant created hereby shall be taken
in execution or by other process of law, or if Tenant shall be adjudicated
insolvent pursuant to the provisions of any present or future insolvency law
under any state law, or if a Receiver of Trustee of the property of Tenant or
any guarantor shall be appointed under state law by reason of Tenant's
insolvency or inability to pay its debts as they become due and otherwise, and
if Tenant is otherwise in default under the Lease, or if any assignment shall be
made of Tenant's general property for the benefit of creditors under state law,
then and in such event, Landlord may, at its option, terminate this Lease and
all rights of Tenant hereunder by giving Tenant written notice of the election
to so terminate within sixty (60) days after the occurrence of such event.
SECTION 25
ESTOPPEL CERTIFICATE AND SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
25.1 Estoppel Certificate. Tenant agrees, from time to time and within ten (10)
days written notice, to execute, acknowledge and deliver an estoppel certificate
prepared by Landlord certifying that (a) this Lease is in full force and effect
subject only to such modifications (if any) as may be set forth therein, (b)
that Tenant is in possession of the Premises and paying rent and additional rent
as provided in this Lease, (c) the date (if any) to which rent is paid in
advance, (d) that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed,
and (e) any other statements relating to this Lease which may be reasonably
required by Landlord, or required by Landlord's lender, mortgagee or any
prospective transferee or assignee, or which are contained in such forms
prepared by Landlord's lender, mortgagee, or any prospective transferee or
assignee, which do not affect the economic provisions of this Lease or the use
of the Premises by Tenant or the term of this Lease. Any such statement may be
relied upon by any prospective transferee, assignee or mortgagee. If Tenant
fails to deliver such statement, Tenant shall be deemed to have acknowledged
that this Lease is in full force and effect without modification, except as may
be represented by Landlord, and that there are no uncured defaults in Landlord's
performance and that there are no prepaid rents. Tenant hereby irrevocably
appoints Landlord as attorney-in-fact to execute, acknowledge and deliver such
documents as are contemplated in this Section 25. if Tenant shall fail and
refuse to do so within ten (10) days of receipt of Landlord's written request
therefor and upon delivery of a copy of such writing to Tenant the facts set
forth therein shall be conclusively deemed to be true.
25.2 Subordination, Non-Disturbance and Attornment Agreement. Tenant agrees that
this Lease shall be subordinate to any mortgage that may now exist or hereafter
be placed upon the Real Property and to any and all advances to be made
thereunder and to the interests thereon, and all renewals, replacements and
extensions thereof, provided that the mortgagee named in said mortgages shall
agree to recognize the lease of Tenant in the event of foreclosure if Tenant is
not in default. In the event any mortgagee elects to have this Lease prior to
the lien of its mortgage, then, and in such event, upon such mortgagee notifying
Tenant to that effect, this Lease shall be deemed prior in lien to said mortgage
whether this Lease is dated prior to or subsequent to the date of said mortgage.
Tenant agrees, from time to time and within ten (10) days written notice, to
execute, acknowledge and deliver a subordination, non-disturbance and attornment
agreement in the form reasonably required by Landlord, or required by Landlord's
lender or mortgagee.
25.3 Tenant's Default. Tenant's failure to execute and deliver an estoppel
certificate and/or a subordination, non-disturbance and attornment agreement as
provided herein shall constitute an Event of Default and Landlord shall have the
right to exercise any and all remedies as provided in this Lease and/or as
provided by law, including, but not limited to, the right to recover damages
caused by Tenant's failure to provide such estoppel certificate and/or
subordination, non-disturbance and attornment agreement.
SECTION 26
HAZARDOUS MATERIAL
26.1 Tenant's Obligations. Tenant shall not use, or permit the use of the
Premises, Building or Real Property for the use, storage or disposal of any
Hazardous Material as hereinafter defined, except for immaterial quantities used
in Tenant's business operation, if Tenant provides written notification to
Landlord and provides evidence satisfactory to Landlord that Tenant is in full
compliance with all applicable laws relating to the Hazardous Material.
26.2 Definition of Hazardous Material. Hazardous Material as used in this Lease
means any hazardous or toxic substance, material, waste or similar term which is
regulated by local authorities, the State of Minnesota or the federal
government, including, but not limited to, any material, substance, waste or
similar term which is:
A. defined as a Hazardous Material under the laws of the State of
Minnesota, as amended from time to time;
B. defined as a hazardous substance under Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. 1317) as amended
from time to time;
C. defined as a hazardous waste under Section 1004 of the Federal
Resource Conservation and Recovery Act (42 U.S.C. 6901 et. seq.)
as amended from time to time;
D. defined as a hazardous waste substance under Section 101 of the
Comprehensive Environmental Response, Compensation and Liability
Act, (42 U.S.C. 9601 et. seq.) as amended from time to time;
E. defined as a hazardous waste or toxic substance, waste, material
or similar term in any rules and regulations, as amended from
time to time, which are adopted by any administrative agency
including, but not limited to the Environmental Protection
Agency, the Occupational Safety and Health Administration, and
any such similar state or local agency having jurisdiction over
the Premises whether or not such rules and regulations have the
force of law; or
F. defined as a hazardous or toxic waste, substance, material or
similar term in any statute, regulation, rule or law enacted or
adopted at any time before or after the date of this Lease by
local authorities, the State of Minnesota, or the federal
government.
26.3 Indemnification. Tenant shall indemnify and defend Landlord and hold it
harmless from and against any loss, damage or cost or expense, including
reasonable attorney's fees, which may result from any breach or claimed breach
of the foregoing. This Section shall survive the termination of this Lease.
SECTION 27
MISCELLANEOUS
27.1 Headings. The section and subsection headings herein are inserted only for
convenience and reference and shall in no way define, limit or describe the
scope or intent of any provisions of this Lease. As used herein and where
necessary, the singular imports the plural and vice versa, and masculine,
feminine and neuter pronouns and expressions are interchangeable.
27.2 Binding Effect. Subject to Section 12, the covenants and agreements herein
contained shall bind and shall inure to the benefit of the Landlord and Tenant,
their respective heirs, administrators, legal representatives, successors and
assigns.
27.3 Governing Law and Jurisdiction. This Lease shall be governed by, construed
and enforced in accordance with the laws of the State of Minnesota. Any dispute
between Landlord and Tenant concerning this Lease shall be heard and decided by
the District Court for the State of Minnesota, Fourth Division, in and for
Hennepin County, Minnesota. The parties hereto do hereby subject themselves to
the jurisdiction of said court.
27.4 Holding Over. If Tenant shall hold over the Premises or any part thereof
after the expiration or termination of the term hereof such holding over shall
be construed only to be a tenancy at sufferance subject to all of the covenants,
conditions and obligations hereof, except that the rent shall be twice the
amount set forth in Section 4.1 hereof prorated on a daily basis for each day
that Tenant remains in possession. Tenant shall indemnify Landlord against any
and all claims, losses, and liabilities for damages resulting from Tenant's
failure to timely surrender possession, including, without limitation, any
claims made by any succeeding Tenant. Nothing herein shall be construed to give
Tenant any rights to hold over and to continue in possession of the Premises
after the expiration or termination of the term hereof.
27.5 No Joint Venture. The relationship of the parties hereto is that of
Landlord and Tenant and it is expressly understood and agreed that Landlord is
not in any way or for any purpose a partner of Tenant or a joint venturer with
Tenant in the conduct of Tenant's business or otherwise.
27.6 Entire Agreement. This Lease, Addendum, if any, and any Exhibits or
Schedules related thereto embodies the entire agreement between the parties,
supercedes all prior agreements and understandings and may not be changed
verbally but only by an agreement in writing and signed by the party against
whom enforcement or any waiver, change, modification or discharge is sought.
27.7 Time is of the Essence. Time is of the essence of this Lease and of each
and every of the provisions herein contained.
27.8 Adjustment of Rentable Area. Landlord shall have the right to increase or
decrease the rentable area of the Building not to exceed a ten percent (10%)
increase or decrease.
27.9 Landlord's Access. Tenant agrees to permit Landlord, or its agents or
representatives to enter into and upon any part of the Premises at all suitable
hours to inspect the same, to clean it, to make such repairs, alterations or
additions that are required under the terms hereof if not made by Tenant, or to
exhibit the Premises to prospective lessees, purchasers or others, or for such
other reasonable purposes as Landlord may deem necessary or desirable. Tenant
shall not be entitled to any abatement or reduction of rent, Operating Costs, or
any other sums payable by Tenant under this Lease by reason of any such entry.
Landlord shall, whenever possible (except in an emergency), consult with or give
reasonable notice to Tenant prior to such entry, but no such entry shall
constitute an eviction. In such event, Tenant waives any breach or default of
the covenant of quiet enjoyment set forth in Section 18.
27.10 Waiver. One or more waivers of any covenant, term or condition of this
Lease by one party shall not be construed by the other party as a waiver of
subsequent breach of same covenant, term or condition. The failure or delay on
the part of the other party to enforce or exercise at any time any of the
provisions, rights or remedies of this Lease shall in no way be construed to be
a waiver thereof nor in any way effect the validity of this Lease or any part
thereof or the right of the party to thereafter enforce each and every such
provision, right or remedy.
27.11 Severability. The invalidity or unenforceability of any provision hereof
shall not affect or impair the validity or enforceability of any other
provision.
27.12 Payment and Receipt of Money. No payment by Tenant or receipt by Landlord
of a lesser amount than the base rent or additional rent due shall be deemed to
be other than on account of the earliest installment thereof then due nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment be deemed an accord and satisfaction. Landlord may apply any money
received in any manner it determines in it sole discretion. Landlord may accept
such check or payment without prejudice to Landlord's right to any additional
amount due hereunder or pursuant to any other remedy in this Lease provided.
27.13 Landlord Not Liable. Save for its gross negligence, Landlord shall not be
responsible or liable to Tenant for any loss or damage that may be occasioned by
or through the acts or omissions of persons occupying adjoining premises or any
part of the premises adjacent to or connected with the Premises or any part of
the Building or any persons transacting any business in the Building or present
in the Building for any other purpose or for any loss or damage resulting to
Tenant or its property from burst, stopping or leaking water, sewer, sprinkler
or steam pipes or plumbing fixtures or from any failure of or defect in any
electric line, circuit or facility.
27.14 Non-Recourse. Notwithstanding anything to the contrary contained in this
Lease, in the event of any default or breach by Landlord with respect to any of
the terms, covenants and conditions of this Lease to be observed, honored or
performed by Landlord, Tenant shall look solely to the estate and property of
Landlord in the Building owned by Landlord for the collection of any judgment
(or any other judicial procedures requiring the payment of money by Landlord)
and no other property or assets of Landlord shall be subject to levy, execution,
or other procedures for satisfaction of Tenant's remedies.
27.15 Each Covenant Essential. Each covenant and agreement on the part of one
party is understood and agreed to constitute an essential part of the
consideration for each covenant and agreement on the part of the other party.
27.16 Counterparts. This Lease may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
27.17 Joint and Several Liability. If the Lease is executed by more than one
person (or entity) then each party so executing shall be jointly and severally
liable for all amounts, or other performance, under and pursuant to this Lease.
27.18 Survival. Where the context of a term or condition within this Lease
creates an obligation or liability, or both, by its terms or reasonable
interpretation of Tenant to Landlord that would, or could, continue or arise
after the expiration or termination, or both, of this Lease then those terms or
conditions shall survive expiration or termination, or both, of this Lease and
may be enforceable by Landlord against Tenant pursuant to the terms thereof.
Sections of this Lease which are covered by this Section 27.18 include, but are
limited to, sections regarding the payment of money, sections regarding
indemnification, and Sections 4, 6, 8, 10, 11, 13, 19, 21, 22, 26 and 27.24.
27.19 No Reservation or Option. The submission of this Lease for examination
does not constitute a reservation of, or option for, the Premises, and this
Lease becomes effective only upon execution and delivery thereof by Landlord and
Tenant.
27.20 Construction of Lease. This Lease has been negotiated at arms length
between Landlord and Tenant with both Landlord and Tenant having consulted with
legal counsel or had the opportunity to consult with legal counsel; therefore in
the event of any ambiguity of any provision of this Lease or any dispute
concerning the meaning of any provision of this Lease, this Lease shall not be
construed against the party that drafted this Lease.
27.21 Waiver of Jury Trial. Landlord and Tenant hereby waive trial by jury for
all matters which may arise under this Lease.
27.22 Rent Related to Value. Landlord and Tenant agree that the rent and
additional rent provided for in this Lease are related to the value of the
property on the Lease.
27.23 Brokerage Commission. Tenant represents and warrants that it has not
engaged a broker or Tenant representative for whom a commission or fee is
payable by Landlord except as provided in Section 1.18. Any commission or fee
due to a broker or Tenant representative retained by Tenant other than as
provided in Section 1.18 shall be paid by Tenant. Tenant hereby agrees to
indemnify Landlord and hold Landlord harmless from any such brokerage commission
or fee for any broker or Tenant representative not provided for in Section 1.18.
27.24 Attorneys' Fees. Landlord shall be entitled to collect and Tenant shall be
liable to Landlord for Landlord's costs, expenses, and fees, including, but not
limited to attorneys' fees in the event Landlord retains attorneys to represent
Landlord in the enforcement of Landlord's rights and remedies under this Lease,
whether litigation is commenced or not. This provision shall survive the
expiration or termination of this Lease.
27.25 Authorized Signatures. The undersigned persons who sign this Lease on
behalf of and as representatives of Tenant are hereby representing and
warranting that they are duly authorized by Tenant to sign this Lease and that
this Lease is the valid and binding obligation of Tenant.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the day and year first above written.
LANDLORD:
XXXXX-XXXXXXXXX LLC
By \s\ Xxxxxxx Xxxxx
Its Chief Operator
TENANT:
INNOVEX, INC.
By: \s\ Xxxxx X. Xxxx
Its: VP, General Manager
By:
Typed or Printed Name of Person Signing
Its:
