GROUND LEASE

Exhibit 10.23

GROUND LEASE

THIS GROUND LEASE, made and entered into this 7 ^th day of February, by and between NDSU RESEARCH & TECHNOLOGY PARK, INC. a North Dakota non-profit corporation (herein “Landlord”), whose address is 1735 NDSU Research Park Drive, Fargo, North Dakota 58102 and RENAISSANCE DEVELOPMENT, LLC, a North Dakota limited liability company (herein “Tenant”), whose address is 118 Broadway, Suite 204, PO Box 1939, Fargo, North Dakota 58107-1939.

PRELIMINARY STATEMENT

A. Landlord is the ground tenant of unimproved real property located in the NDSU Research & Technology Park II, City of Fargo, County of Cass and State of North Dakota.

B. Tenant desires to lease from Landlord a portion of the unimproved land containing approximately 180,980 square feet of ground area, and Landlord desires to lease said parcel of land to Tenant.

C. Tenant intends to construct, on said parcel, a two-story building containing approximately fifty thousand (50,000) square feet of floor area and other Improvements, upon the terms and conditions hereinafter set forth.

D. Tenant intends to lease the building and other Improvements to Alien Technology Corporation, and Landlord desires that Tenant execute its building lease with Alien Technology Corporation, which building lease shall be expressly subject and subordinate to this Lease.

NOW, THEREFORE, in consideration of the terms, covenants and conditions herein set forth, Landlord and Tenant hereby covenant and agree as follows:

ARTICLE 1. DEFINITIONS

Section 1.1 Common Areas : The parking areas, streets, fire corridors, driveways, walkways, curbs, gutters, drainage areas, landscaped areas, and other areas designated by Landlord for common use or benefit of tenants and other patrons of Technology Park II, which are located within the Technology Park II or adjacent to Technology Park II and made available for common use or benefit of tenants of Technology Park II through reciprocal easements and operating agreements, leases, and the like and which are not enclosed within any building. The term “Common Areas” shall include Common Areas on the Premises, as defined in Section 1 .2.

Section 1.2 Common Areas on the Premises : The exterior landscaped areas, driveways, parking areas and walkways on the Land, exclusive of the service areas,

 

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sidewalks, planters, and landscaped areas immediately adjacent to the Improvements. The approximate location of the Common Areas on the Premises is designated on the Site Plan for the Premises attached as Exhibit 2.

Section 1.3 Delivery Date : The date Tenant is entitled to access to the Premises for the construction of Tenant’s Improvements under Section 6.3.

Section 1.4 Effective Date : The Effective Date shall be the date on which the last party executes and delivers the Lease to the other party. For the purpose of this provision, execution and delivery shall include execution of the Lease and delivering by facsimile or otherwise a signed signature page of the counterpart of this Lease.

Section 1.5 Full Rent Commencement Date : The date Tenant’s obligation to pay a full rate of fixed minimum rent commences under Section 3.1 of this Lease.

Section 1.6 Governmental Requirements : All applicable laws, building codes, zoning ordinances and other rules and regulations of all federal, state, county and municipal governmental and public authorities and agencies having jurisdiction.

Section 1.7 Interim Rent Commencement Date : The date Tenant’s obligation to pay fixed minimum rent at a reduced rate during the scheduled construction period commences under Section 3.1 of this Lease.

Section 1.8 Improvements : The building, research and production facility, parking lots, driveways, walkways, landscaping and other improvements to be constructed on the Land in accordance with the provisions of Article 6 of this Lease.

Section 1.9 Land : The unimproved parcel of land more particularly described as Lot 2, Block 1, NDSU Research & Technology Park Second Addition to the City of Fargo, Cass County, State of North Dakota, the location of which is approximately set forth and labeled on the Technology Park II Site Plan attached as Exhibit 1, and which is separately identified on the Site Plan for the Premises attached as Exhibit 2. Upon approval of the legal description for the Land under Section 4.1, the description so adopted shall constitute the “Land” under this provision.

Section 1.10 Landlord : NDSU Research & Technology Park, Inc., a North Dakota nonprofit corporation and whose phone number for facsimile transmissions is 701-231-7885, as long as it retains control of the Land, and thereafter any future owner or lessee of the Land.

Section 1.11 Lease : This Lease agreement, as amended by the parties in accordance with its terms.

Section 1.12 Permitted Encumbrances : Permitted Encumbrances shall include:

 

1.12.1

any reservation of mineral rights;

 

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1.12.2

pipeline and utility easements that do not interfere with present or proposed use of or improvements on the Subject Premises;

 

1.12.3

zoning and other municipal codes and ordinances;

 

1.12.4

the 75-year ground lease between the State of North Dakota and the North Dakota State Board of Higher Education on behalf of North Dakota State University of Agriculture and Applied Sciences and the Landlord dated December 30,1999 (the “Underlying Lease”);

 

1.12.5

any others interests or restrictions, including without limitation other leases, operating agreements of record, easements, restrictive covenants or other restrictions of record.

Section 1.13 Premises : The Land and the Improvements, as defined herein.

Section 1.14 Substantial Completion Date : The date on which Tenant receives a Certificate of Occupancy for all of Tenant’s Work contemplated by Tenant’s Preliminary Plans.

Section 1.15 Technology Park II : NDSU Research & Technology Park II located on Block 1, NDSU Research & Technology Park Second Addition to the City of Fargo, Cass County, State of North Dakota, together with any adjacent or contiguous land which may be operated as part of Technology Park II; together with all buildings and improvements thereon. The present boundaries of Technology Park II are designated upon the Technology Park II Site Plan attached hereto as Exhibit 1.

Section 1.16 Tenant : Renaissance Development, LLC, a North Dakota limited liability company, whose address is specified above, and whose phone number for facsimile transmissions is (701) 239-8288.

Section 1.17 Tenant’s Work : All Improvements to be constructed by Tenant, whether or not specifically enumerated herein.

ARTICLE 2. PREMISES

In consideration of the mutual covenants, conditions and agreements included in this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises together with any and all easements, appurtenances, rights and privileges belonging to the Premises and the non-exclusive right to use the Common Areas as provided in Section 23.1 hereof, in common with other tenants and occupants of Technology Park II; provided, however, that: (a) Tenant’s rights under this Lease are subject and subordinate to all liens, encumbrances, easements, restrictions, ground leases, and any rights of way and other interests of record, zoning laws and regulations affecting or governing the Premises; and (b) the Common Areas

 

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on the Premises, and ingress to and egress from the Common Areas on the Premises, are for the non-exclusive use by Tenant and its customers in common with other tenants and occupants of the buildings comprising Technology Park II, whether operating under cross-easement and operating agreements or leases with Landlord, together with their respective guests and invitees. The parties are currently working on the details of the planning and design for the Land and the Improvements. As and when such planning is complete, the Lease will be amended and/or the Exhibits attached to reflect the final agreed upon project characteristics.

ARTICLE 3. TERM

Section 3.1 Commencement and Term . This Lease shall begin and be of full force and effect as to both Landlord and Tenant as of the Effective Date. The term of this Lease and Tenant’s obligation to pay rent hereunder shall commence on the earlier to occur of (a) the date of first visible work on the footings and foundation of the facility, as evidenced by driving of pilings, at the Premises in furtherance of Tenant’s Work contemplated by Tenant’s Preliminary Plans, or (b) June 1, 2005 (“Interim Rent Commencement Date”). For purposes of this Lease, the “Full Rent Commencement Date” shall be the earlier to occur of (c) the Substantial Completion Date, or (d) June 1, 2006. Unless sooner terminated as permitted by this Lease or by law, or extended pursuant to Section 3.4 hereof, the term of this Lease shall continue for a period of approximately twenty-one (21) years, terminating on the last day of the 240 ^th full calendar month following the Full Rent Commencement Date.

Section 3.2 Lease Year . The term “Lease Year” means each consecutive period of twelve (12) full calendar months during the term of this Lease commencing on the Interim Rent Commencement Date if that date shall occur on the first day of a calendar month; if not, then the first Lease Year shall commence upon the first day of the first calendar month following the Interim Rent Commencement Date. Each succeeding Lease Year shall commence upon the anniversary date of the first Lease Year. The last Lease Year shall end on the date this Lease terminates and may be less than twelve months.

Section 3.3 Verification of Term - Floor Area - Rent . When the Interim Rent Commencement Date and/or Full Rent Commencement Date have been determined, Landlord and Tenant shall execute and deliver a statement, in duplicate, specifying such dates, Final Project Costs, the actual number of square feet of Land and other matters specified therein, which completed statement shall be attached to and constitute a part of this Lease, as Exhibit 3. In determining the area of the Land, the total area calculated for Lot 2 in the final plat of NDSU Research  & Technology Park II Second Addition shall be deemed conclusive. Failure of Landlord and Tenant to execute Exhibit 3 shall not affect either party’s obligations under this Lease.

Section 3.4 Option to Extend .

 

3.4.1

In the event Alien Technology Corporation acquires or becomes successor in interest to Tenant hereunder, Alien Technology Corporation and its

 

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permitted successor and assigns shall have the option to extend the term of this Lease for a period of ten (10) years by delivery of written notice to Landlord not less than two hundred seventy (270) days prior to the expiration hereof. If exercised, such extended term shall be on the same terms, covenants and conditions as during the initial term hereof.

 

3.4.2

If Alien Technology Corporation does not acquire Tenant’s interest in the Land and Improvements, Tenant and its permitted successors and assigns shall have the option to extend the term of this Lease for a period of fifty (50) years by delivery of written notice to Landlord not less than two hundred seventy (270) days prior to the expiration hereof. If exercised, such extended term shall be on the same terms, covenants and conditions as during the initial term hereof.

ARTICLE 4. PRE-RENTAL COMMENCEMENT DATE CONDITIONS

Section 4.1 Landlord’s Obligations . As soon as practicable following the Effective Date, Landlord will submit to the City of Fargo an application to plat Technology Park II in substantially the same format as depicted in Exhibit 1.

Section 4.2 Approval of Plans and Specifications . Landlord acknowledges that it and the President of North Dakota State University (the “President”) have approved Tenant’s preliminary plans for Tenant’s Work identified on Exhibit 4 (“Tenant’s Preliminary Plans”). Within thirty (30) days following the Effective Date, Tenant shall submit to Landlord for Landlord’s prior approval, which approval shall not be unreasonably withheld, the proposed working plans and specifications for Tenant’s Work, including Tenant’s signage and final site plan. Landlord’s approval or disapproval (and the reasons for any disapproval) shall be communicated to Tenant within ten (10) business days following Landlord’s receipt of Tenant’s plans and specifications for Tenant’s Work. If Landlord disapproves any portion of Tenant’s plans and specifications, Tenant shall, within a reasonable period of time after Landlord’s disapproval, submit substitute plans and specifications, or portions thereof, for Tenant’s Work which satisfy Landlord’s reasons for disapproval, and the same provisions as herein above set forth in this Section shall apply with respect to Landlord’s approval or disapproval of such substitute plans and specifications or portions thereof. If necessary, Tenant shall resubmit such plans and specifications until same have been approved by Landlord; provided, however, if Landlord disapproves of such plans and specifications more than twice, then Tenant may terminate this Lease within fifteen (15) days following any second disapproval of such plans and specifications by Landlord. When such plans and specifications have been approved by Landlord (the “Approved Plans”), sets of the Approved Plans shall be signed by Landlord and Tenant, and at least one (1) signed set shall be delivered to each party.

Notwithstanding anything herein to the contrary, Landlord and Tenant acknowledge that any design, alteration, construction or similar approval of Landlord required hereunder also requires the review and approval of the President pursuant to the Underlying Lease, which

 

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approval shall not be unreasonably withheld, Further, Landlord may delegate any and all such review activities hereunder directly to the President.

Section 4.3 Permits . Promptly following the Effective Date and receipt of Approved Plans, Tenant shall apply to the appropriate governmental authorities for such licenses, permits and any other administrative approvals including, without limitation, building permits, zoning, business permits, and signage permits as may be necessary to construct and operate the facility (herein collectively “Permits”). If, after Tenant’s diligent efforts through such administrative processes as are reasonably and normally required, Tenant is unable to obtain all necessary Permits within thirty (30) days following the Effective Date, then Landlord and Tenant each shall have the right to terminate this Lease by giving the other notice to that effect within forty (40) days following the Effective Date.

Section 4.4 Discovery of Hazardous Materials . Landlord represents and warrants that to the best of its knowledge there are no hazardous materials on the Premises. However, if within thirty (30) days after the Effective Date, Tenant discovers the existence of any Non-Tenant Installed Hazardous Materials, as that term is defined in Section 13.4, on the Premises, Tenant shall have the right to demand, in writing, that Landlord remove, clean up and dispose of all Non-Tenant Installed Hazardous Materials at Landlord’s cost. If, within thirty (30) days after Tenant’s demand, Landlord has not commenced, in good faith, to take the necessary remedial action to remove the Non-Tenant Installed Hazardous Materials, Tenant may, within ten (10) days thereafter, terminate this Lease.

Section 4.5 Title . Tenant shall have the right, at its cost and expense, to obtain a title search or title insurance commitment and an ALTA survey with respect to the Land. If any such title search or commitment or survey reveals any encumbrances, easements, restrictions, reservations, rights or conditions of record other than the Permitted Encumbrances that (a) would prevent or interfere with the construction of the Improvements and/or the operation of the Premises as contemplated by this Lease or (b) would otherwise impair Tenant’s rights or leasehold interests under this Lease, then in either event Tenant shall have the right to notify Landlord of its intent to terminate this Lease no later than thirty (30) days after the Effective Date. If Landlord does not cure any such objections and defects in title within thirty (30) days after written notification to Landlord by Tenant, Tenant shall have the right to terminate this Lease. Landlord agrees to use its best efforts to cure any such objections and defects, but in no event shall Landlord be required to cure any such objections and defects if the cost of curing the same would exceed Ten Thousand ($10,000.00) Dollars.

Section 4.6 Tax Parcel . Landlord shall, with Tenant’s cooperation, if necessary, have the City of Fargo designate the Premises as a separate tax parcel.

Section 4.7 Pre-Delivery Date Termination . If this Lease is terminated pursuant to the provisions of this Article, the Lease shall become null, void and of no further force and effect. Thereafter, Landlord and Tenant shall have no further rights, obligations or liabilities under this Lease. Notwithstanding anything in this Lease to the contrary, Tenant shall not be entitled to terminate this Lease under this Article after July 1, 2005.

 

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ARTICLE 5. FIXED MINIMUM RENT

Section 5.1 Minimum Rent . Tenant covenants and agrees to pay Landlord at its address specified above, or at such other place designated by Landlord, without any prior demand therefore and without any deduction or set-off whatsoever, fixed minimum rent for the Premises at the following per annum rates:

 

5.1.1

for the period from and after the Interim Rent Commencement Date and through the day preceding the Full Rent Commencement Date, $.16576 per square foot of Land per year;

 

5.1.2

from and after the Full Rent Commencement Date $.36 per square foot of Land per year;

 

5.1.3

fixed minimum rent shall increase on the first day of the 13 th full calendar month following the Full Rent Commencement Date and on each of the next eight (8) one-year anniversaries of such day thereafter by 1.00% per annum over the last rate in effect;

 

5.1.4

on the first day of the 121 st full calendar month following the Full Rent Commencement Date (“Adjustment Date”), fixed minimum rent shall be the fixed minimum rent due immediately before the Adjustment Date times a fraction, the numerator of which is the sum of the ‘Consumer Price Index—Seasonally Adjusted Midwest U.S. City Average For All Items For All Urban Consumers (1982-84-100)’ published monthly in the ‘Monthly Labor Review’ of the Bureau of Labor Statistics of the United States Department of Labor (“CIP-U”) last published prior to the Adjustment Date, and the denominator of which is the CPI-U published for the same month ten years earlier.

 

5.1.5

beginning on the first day of the 181 st full calendar month following the Full Rent Commencement Date and on each five (5) year anniversary of such day thereafter (each five (5) year anniversary of the Full Rent Commencement Date, an “Adjustment Date”), fixed minimum rent shall be the fixed minimum rent due immediately before the Adjustment Date times a fraction, the numerator of which is the CPI-U last published prior to the Adjustment Date, and the denominator of which is the CIP-U published for the same month five (5) years earlier.

 

5.1.6

in the event that the Bureau of Labor Statistics shall no longer maintain the Midwest CPI-U, comparable statistics published by a responsible financial periodical or recognized authority selected by Landlord shall be used for making the computation specified above. In the event that the base year “(1982-84-100)” or any future base year is changed, the figures used in

 

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making the adjustment provided above shall be changed so that all increases in the CPI-U are taken into account notwithstanding any such change in the base year.

Fixed minimum rent shall be payable, in advance, on the first day of each month during the Lease term. If the Interim Rent Commencement Date or the Full Rent Commencement Date shall occur on a day other than the first day of any calendar month, Tenant shall pay fixed minimum rent on the Interim Rent Commencement Date or the Full Rent Commencement Date, as the case may be, in a sum equal to the monthly installment of fixed minimum rent then due times a fraction, the numerator of which is total number of remaining days in the month remaining after the Interim Rent Commencement Date or the Full Rent Commencement Date, as the case may be, and the denominator of which is the total number of days in the month.

ARTICLE 6. CONSTRUCTION OF IMPROVEMENTS

Section 6.1 Tenant’s Improvements . Tenant shall, at its sole cost and expense and in accordance with Approved Plans, as defined in Section 4.2, construct the Improvements in compliance with Governmental Requirements, and in compliance with the provisions of this Lease, which Improvements shall include all facilities and appurtenances necessary for the use and operation of the Premises in the manner required hereunder, including, without limitation:

 

6.1.1

Construction of an approximately fifty thousand (50,000) square foot, two-story building in accordance with the Approval Plans otherwise provided for herein. Said construction shall include, but not be limited to, all site and grading work, excavation, necessary foundation, ceilings, walls, doors, plumbing and water, electrical, telephone, heating, ventilating, and air conditioning, telephone, and other building features, details, appurtenances, fixtures, and equipment which are generally necessary and customary in connection therewith.

 

6.1.2

All utility and service lines necessary to connect the building to service and access lines located at the outside boundary of the Land including, but not limited to, all water lines, sewer lines, electric lines, and telephone lines.

 

6.1.3

The necessary grading, compacting, and paving to provide driveways, walkways and parking areas. Parking areas and driveways shall be fully drained by natural landscape slope. All parking areas shall be generally lighted to a minimum brightness of 1-foot candles at parking lot level with a minimum to maximum brightness ratio of 3. Lighting of the parking lot shall be a minimum of 1-foot candles at parking lot level. All drives shall be constructed as shown on the Site Plan for the Premises, and be no less than 261 inches in width. The drives shall be generally lighted to a brightness of a minimum 1-foot candles at parking lot level.

 

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6.1.4

All isles, curbs, curb cuts, planters, landscaped areas, signage, parking areas, driveways, and sidewalks.

 

6.1.5

Subject to the excuses for performance which are expressly provided for herein, the Substantial Completion Date for Tenant’s Work shall occur not later than June 1, 2006.

Section 6.2 Landlord’s Improvements . Landlord agrees, at its expense, to provide storm sewer, sanitary sewer, water lines and electrical power to locations near or adjacent to the outside boundary of the Land. Other than such improvements, Landlord shall have no obligation to make any improvements or modifications to the Premises or for the benefit of the Premises. Tenant further acknowledges that the storm sewer, sanitary sewer, and water lines located in the center of a constructed street shall be considered near or adjacent to the outside boundary of the Land for the purpose of this Section.

Section 6.3 Construction of Tenant’s Improvements . After receipt of Landlord’s approval of Tenant’s Approved Plans as required under Section 4.2, all Permits required under Section 4.3, and Tenant’s waiver of its right to terminate this Lease under Article 4, Tenant shall be entitled to access to the Premises for the sole purpose of constructing the Improvements on the Premises in the manner required hereunder (“Delivery Date”).

Tenant shall enter into a construction contract for the Improvements with licensed bondable general contractor(s), provided that Tenant shall not be required to obtain any performance or payment bonds. Promptly after the Delivery Date, Tenant shall cause said contractor(s) to commence work on the Improvements and prosecute the same diligently to completion in a good and workmanlike manner, all in strict conformance with the Approved Plans. Tenant and its contractors shall perform and complete the Improvements in a good, safe and workmanlike manner in accordance with all Governmental Requirements. The Improvements shall be undertaken in a manner which does not interfere with any other occupants of Technology Park II, and in accordance with Governmental Requirements. During the period between the Delivery Date and the date immediately preceding the Interim Rent Commencement Date, Tenant shall occupy the Premises in accordance with all terms, covenants and conditions of this Lease, provided that Tenant shall be under no obligation to pay rents and other charges owing hereunder, except those owing under Articles 14 and 18. Tenant shall erect or cause to be erected construction barricades enclosing the area of such construction if necessary to comply with Governmental Requirements. In the event Tenant fails to erect governmentally required construction barricades within five (5) days after notice from Landlord, then Landlord shall have the right, but not obligation, to erect the same at Tenant’s cost and expense. During the period of construction of Tenant’s Work, Tenant shall not store any materials on Common Areas outside of the Premises, nor allow any debris, dust or refuse to accumulate outside the Premises, without the prior written approval of Landlord, which approval will not be unreasonably withheld. Unless expressly approved by Landlord in writing, drainage, if any, from the Premises shall be directed away from the

 

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Common Areas outside the Premises, Tenant shall repair, at its own expense, any damage to the land in Technology Park II caused by Tenant’s construction activities.

Section 6.4 Ownership of Improvements and Fixtures . During the term of this Lease and any extension thereof, Tenant shall be deemed the owner of the Improvements including those located on the Common Areas on the Premises, and Tenant shall be entitled to the tax benefits associated with said ownership, provided that Landlord shall be entitled to any applicable deductions or credits with respect to any Improvements paid for by Landlord. Movable furniture, trade fixtures, equipment, and other personal property not permanently affixed to the land or building, which is acquired by Tenant at its expense, shall remain Tenant’s property and may be removed at any time, provided Tenant promptly repairs any damage caused by such removal.

ARTICLE 7. USE OF PREMISES

Section 7.1 Use of Premises . Tenant agrees that the Premises shall be operated and used in compliance with Governmental Requirements solely for the purpose researching, developing, producing and/or distributing “high-technology” products, and all ancillary legal uses.

Section 7.2 Operation of Business . From and after thirty (30) days following receipt by Tenant of its certificate of occupancy for Tenant’s Work, the Premises shall be continuously occupied by an active and operating “high-technology” enterprise.

Section 7.3 Negative Covenants . With respect to Tenant’s use of the Premises and Technology Park II, Tenant agrees that it will not at any time during the Lease term, without first obtaining the Landlord’s prior written consent: (a) use any loudspeakers, phonographs or other devices of similar nature in such a manner as to be unreasonably heard outside of the building; (b) permit the emission of any unreasonable levels or amounts of noise, objectionable odors or fumes, smoke or objectionable light from the Premises; (c) use any flashing or strobe lights visible to public view outside of the Premises; or (d) burn any rubbish or trash in or about the Premises.

ARTICLE 8. PAYMENT OF TAXES, ASSESSMENTS, ETC.

Section 8.1 Tenant’s Obligation . Tenant agrees to pay when due all real estate taxes, assessments, and other governmental charges, general and special, ordinary and extraordinary, of any kind and nature whatsoever, assessed during the Lease term on the Premises, including, but not limited to: taxes in lieu of general real estate taxes, which may be levied or assessed by any lawful authority against the Premises; assessments for public improvements or benefits which shall, during the Lease term, become due and payable and a lien upon the Premises, or any part thereof; any tax, fee or excise on rents, the square footage of the Premises, the act of entering into this Lease, or on the occupancy of the Tenant; or any other tax, fee or excise, however described, on account of the rent reserved hereunder or the business of renting the Premises, now or hereinafter levied on or assessed against the

 

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Landlord, (all of which taxes, assessments, levies, and other governmental charges are herein collectively “Taxes”). For the years in which this Lease commences and terminates, Tenant’s liability for its portion of the taxes for such year shall be subject to a pro rata adjustment based on the number of days in the year this Lease was in effect. A copy of a tax bill or assessment submitted by Landlord to Tenant shall at all times be conclusive evidence of the amount of taxes assessed or levied upon the property to which such bill relates.

Section 8.2 Pilot Program . Notwithstanding the requirements of Section 8.1 above, Landlord and Tenant acknowledge that they anticipate the Premises will be subject to a City of Fargo “pilot” program whereby 100% of the tax increment related to Improvements on the Premises will be eligible for redirection for a period of ten (10) years. Landlord and Tenant anticipate the Improvements will cost approximately $7,500,000, but for the purpose of this Section, the final cost of all Improvements shall be referred to as “Final Project Costs.”

 

8.2.1

On the Full Rent Commencement Date, Tenant shall pay to Landlord, representing approximately the first year’s pilot program benefits an estimated and stipulated portion of pilot benefits in accordance with the following formula: Final Project Costs as reasonably determined by Landlord and Tenant times .025 times .475.

 

8.2.2

Beginning on the first day of the 13 th full calendar month following the Full Rent Commencement Date and on the first day of each of the next 107 months thereafter, Tenant shall pay to Landlord with, and in addition to, its monthly payment of fixed minimum rent a portion of scheduled pilot benefits in accordance with the following formula: assessed value of the Improvements times the effective real estate tax rate for the current year for properties most similar to the Premises times .475 divided by 12. Monthly payments for any particular calendar year shall be based upon an estimated assessed value and effective real estate tax rate as reasonably determined by Landlord. Once the assessed value and effective real estate tax rate for properties most similar to the Premises for a calendar year are determined by applicable governmental authorities, Landlord shall furnish Tenant a statement in reasonable detail showing Tenant’s actual responsibility for the pilot benefits owing under this Section for the calendar year. Tenant shall pay within fifteen (15) days after the provision of such statement the deficiency, if any, between Tenant’s actual pilot benefits owing and the amounts previously paid by Tenant. If Tenant’s payments exceed the actual sum due, the overpayment shall be credited towards the next estimated monthly pilot installment(s) due.

 

8.2.3

Landlord and Tenant acknowledge and agree that pilot payments received by Landlord hereunder shall be utilized by Landlord to finance and/or construct all street, curb, gutter, street lighting, sanitary sewer, storm sewer and potable water infrastructure within Technology Park II, and Tenant shall not be responsible for any special assessments, other taxes, governmental

 

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charges or fees related to same. Tenant shall cooperate with Landlord, including coordinating with its successors and assigns, and shall enter into such agreements with such successors, assigns, and the City of Fargo, and any other necessary governmental entities to effect the covenants in this Section.

Section 8.3 Personal Property Taxes . Tenant shall at all times be responsible for and pay, before delinquency, all taxes levied, assessed or unpaid upon any leasehold interest, any right of occupancy or use, any investment of Tenant in the Premises, or any personal property of any kind owned, installed, or used by the Tenant, including Tenant’s leasehold improvements or taxes on Tenant’s right to occupy or use the premises.

ARTICLE 9. DISCHARGE OF LIENS

Section 9.1 Liens and Encumbrances . Except for the right granted to Tenant to mortgage its interest under this Lease, Tenant shall not create, permit to be created or permit to remain, any lien, encumbrance or charge derived from or through Tenant which might be or become a lien, encumbrance or charge upon the Premises or Technology Park II, or any part thereof. Tenant shall not suffer any other matter or thing derived from or through Tenant whereby the estate, rights and interest of Landlord or Landlord’s designees in Technology Park II, or any part thereof, might be impaired, provided however, that any mechanic’s and/or material men’s liens filed against the Premises, Technology Park II or any part thereof, for which Tenant is responsible may be discharged or bonded in accordance with Section 9.2.

Section 9.2 Mechanic’s Liens . Tenant shall do all things reasonably necessary to prevent the filing of any mechanics’ and/or material men’s liens against the Premises, Technology Park II or any part thereof by reason of work, labor, services or materials furnished or claimed to have been furnished to Tenant or anyone occupying the Premises, or any part thereof, by through or under Tenant, If any such mechanics’ and/or material men’s lien shall at any time be filed against the Premises, Technology Park II, or any part thereof, as the result of work, labor, services or materials furnished or claimed to have been furnished to Tenant or anyone occupying the Premises, or any part thereof, by, through or under Tenant, then Tenant shall cause the same to be discharged of record within thirty (30) days after Tenant has knowledge of the filing of same. However, if Tenant, in its discretion and in good faith, determines that such lien should be contested, Tenant shall furnish such security or bond as may be required by law to prevent any foreclosure proceedings against the Premises or Technology Park II, or any part thereof, during the pendency of such contest. Nothing herein contained shall imply any consent or agreement on the part of Landlord to subject Landlord’s estate to liability under any mechanics’ and/or material men’s lien law.

ARTICLE 10. ALTERATIONS AND IMPROVEMENTS

Section 10.1 Tenant’s Alterations . After completion of the initial construction of Improvements, Tenant shall have the right during the Lease term to make changes and

 

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alterations to the Improvements and to construct and maintain on the Premises such additional improvements, fixtures and facilities as Tenant, in its reasonable business judgment, deems desirable for the operation of the Premises in accordance with this Lease. Tenant shall have the right during the Lease term to remove the same or any part thereof; provided that upon such removal, the same shall be replaced by Tenant with similar improvements, fixtures or facilities of at least equal utility, value and quality, excepting fixtures or facilities removed because of obsolescence. Prior to any such changes, alterations or additions, Tenant shall first obtain all required Permits and, if any such change, alteration, addition or removal is either: (a) structural in nature; (b) involves any modification in the appearance of the exterior of the premises; or (c) the estimated cost of any non-structural or interior change, alteration, addition or removal exceeds Fifty Thousand ($50,000) dollars. Tenant shall obtain Landlord’s written approval. All exterior modifications and additions shall be architecturally harmonious with the buildings in Technology Park II, if any, and, as to any addition to Tenant’s main building, the existing building. All additions and improvements shall be at the approximate height of and construction of materials consistent with the Improvements as initially constructed.

Landlord’s approval of Tenant’s plans and specifications for any such changes, alterations or additions shall not be unreasonably withheld. Landlord shall be deemed to have reasonably withheld consent to any addition, modification or improvement requested by Tenant for any reasonable justification, including, without limitation, any of the following: (a) if the proposed improvements are inconsistent with any of the requirements of Landlord’s design criteria in effect on the date of the improvement; (b) if the proposed addition or modification will result in the breach of the terms and conditions of any lease, reciprocal easement or operating agreement, mortgage, or other agreement to which Landlord is a party; (c) if Landlord is not able to obtain the consent of any party to any lease, reciprocal easement or operating agreement, mortgage, or other agreement required before the proposed addition can be constructed; (d) if the proposed construction will result in the violation of any covenant, term or condition of this Lease including all then existing parking requirements; (e) if Tenant fails to provide adequate evidence of financing for the Improvements; (f) if Tenant fails to provide adequate financial security, including a payment bond, if requested, assuring payment of all contractors and suppliers supplying labor or materials for the improvement; (g) if at the time of the request, Tenant is in violation of any term or condition of this Lease; or with respect to any exterior addition or modification to the Premises if, in Landlord’s judgment, the proposed modification or addition will either: (1) impede access in and around Technology Park II or to properties adjacent to the Premises; (2) conflict with planned additions to Technology Park II; (3) not be architecturally harmonious with and of the same quality as other buildings in Technology Park II.

All such changes, alterations, additions and removals permitted hereunder and/or approved by Landlord shall be performed by Tenant at Tenant’s sole cost and expense and in compliance with all Governmental Requirements. Nothing contained in this Section shall relieve Tenant of its obligations elsewhere set forth in this Lease.

 

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Section 10.2 Tenant’s Signs . Tenant will not place or suffer to be placed or maintained anywhere on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind, and will not place or maintain any decoration, lettering or advertising matter on the glass of any window or door of the Premises without first obtaining Landlord’s written approval and consent, which approval and consent will not be unreasonably withheld. Signs shall be harmonious with the general exterior architectural treatment of the buildings in Technology Park II and must comply with any sign criteria specified by Landlord.

ARTICLE 11. REPAIRS AND MAINTENANCE

Section 11.1 Tenant’s Obligation . Except for Landlord’s obligations pursuant to the provisions hereof and the provisions of Section 23.4 hereof (relating to Landlord’s obligation to maintain the Common Areas, including the Common Areas on the Premises), Tenant agrees, at its sole cost, and expense, that it will throughout the term of this Lease, take good care of the Premises and keep same in good repair, order and condition, and in a clean and orderly condition, free of dirt, rubbish and unlawful obstructions, and that it will make all necessary repairs thereto, interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen. As used herein, the term, “repairs” shall include all necessary replacements, renewals, alterations, additions and betterments. All repairs made by Tenant shall be at least equal in quality and utility value to the original work. Except for landlord’s work and except as otherwise specifically required by Section 23.4 hereof, Landlord shall not be required to furnish any services or facilities or to make any repairs or alterations with respect to the Premises, and Tenant hereby assumes the full and sole responsibility for the condition, operation, repairs, replacement, maintenance and management thereof.

Tenant shall be responsible for maintaining in good order and repair and in a safe condition, and free of snow, ice, debris, or other obstruction, all sidewalks and walkways of the Premises, which are not included in the Common Areas on the Premises. Tenant shall be required to repair and replace walkways and service ways which may become out-of-repair or in a dangerous condition. Tenant shall, at its expense, maintain in good condition the landscaped areas of the Premises, which are not included as part of the Common Areas on the Premises, including as applicable and without limitation, periodic mowing, watering, trimming, removal of rubbish, and replacement of plants, shrubs and tree, as may be necessary to keep the landscaped areas in first class condition.

Section 11.2 Waste or Nuisance . Tenant shall not commit or allow to be committed any waste upon the Premises or any nuisance or other act or thing which may disturb the quiet enjoyment of any other tenant or occupant of Technology Park II, or which may disturb the quiet enjoyment of any person within five hundred feet of the boundaries of Technology Park II.

 

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ARTICLE 12. GOVERNMENTAL REQUIREMENTS; INSURANCE STANDARDS

Section 12.1 Governmental and Insurance Requirements . Throughout the Lease term, Tenant agrees, at its sole cost and expense, that it will promptly comply in every respect with all Governmental Requirements now in force or that may be duly enacted hereafter, foreseen and unforeseen, whether or not compliance therewith shall require changes to the Improvements and whether or not such changes are structural or nonstructural, interior or exterior, ordinary or extraordinary or otherwise. Tenant also agrees, at its sole cost and expense, that it will promptly comply in every respect with all terms and provisions of its insurance policies covering or applicable to the Premises or any part thereof. Tenant agrees, at its sole cost and expense, that it will make all additions, repairs and alterations to the Premises, and other facilities thereon which are or hereafter may be required in order to comply with the foregoing. Tenant agrees, at its sole cost and expense, that it will also 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 Premises. Tenant covenants and agrees to indemnify and save Landlord harmless from any penalties, damages, or charges imposed for any violation of the covenants and obligations of Tenant set forth in this Section, whether occasioned by neglect, omission or willful act of Tenant or any person upon the Premises by license or invitation of Tenant or holding or occupying the Premises or any part thereof under, or by right of, Tenant, unless caused primarily by the neglect, omission or willful act of Landlord or Landlord’s contractors, agents or employees.

Section 12.2 Tenant’s Right to Contest . Tenant shall have the right to contest by appropriate legal proceedings, without cost or expense to Landlord, the validity of any law, ordinance, rule or regulation, if such contest does not and would not: (a) interfere with the use or occupancy of any other premises within Technology Park II; (b) subject Landlord to any fine or any civil or criminal penalty; or (c) result in a forfeiture or seizure of the Premises. In the event of any such contest, compliance with such law, ordinance, rule or regulation legally contested by Tenant may be postponed if permitted by law until the final determination of any such proceeding, provided that all such proceedings shall be prosecuted by Tenant with due diligence and dispatch.

Section 12.3 Fire Extinguishers . Tenant agrees to install, keep in good working order, and maintain chemical extinguishing devices in and on the Premises as required by Governmental Requirements.

ARTICLE 13. HAZARDOUS MATERIALS

Section 13.1 Tenant’s Hazardous Materials . Tenant covenants and agrees that Tenant shall at all times from and after delivery of possession of the Premises to Tenant, be responsible and liable for, and be in complete and strict compliance with, all Governmental laws, ordinances, rules and regulations relating to “Environmental Protection,” “Environmental Matters” and “Industrial Hygiene” (as such terms are hereinafter defined) arising, directly or indirectly, out of the use of “Hazardous Materials” in, on, under or about the Premises or Technology Park II by Tenant, its agents, servants, employees, licensees, contractors, subtenants and concessionaires. The term “Governmental” as used herein shall include, without limitation, federal, state, and local governments, political subdivisions and

 

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regulatory agencies of federal, state, and local governments. The term “Hazardous Materials” as used herein shall include, without limitation, whether now or subsequently listed in any Governmental listing or publication defining hazardous materials, substances defined as: “hazardous substances”, “hazardous materials”, or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq. ; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. ; and any subsequent amendments thereto, or replacement statutes thereof and ordinances, rules and regulations adopted and publications promulgated pursuant to said laws. The terms “Environmental Protection,” “Environmental Matters” and “Industrial Hygiene” as used herein shall include, without limitation, any matter which affects the environment or which may affect the environment, the use of sophisticated electrical and/or mechanical equipment, chemical, electrical, radiological or nuclear processes, radiation, sonar and sound equipment, use of lasers, and laboratory analysis and materials. Tenant shall be deemed to be (a) the person in control, (b) an operator of the Premises and (c) the person in charge with respect to the Premises for purposes of reporting requirements under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended. Tenant agrees that should it or its agents, servants, employees, licensees, contractors, subtenants or concessionaires know of the release or threatened release of any Hazardous Materials, in, on, under or about the Premises, including, without limitation, the release or threatened release of any Hazardous Materials in connection with Tenant’s Work, or in connection with any alterations, replacements, installations, improvements and/or additions made by Tenant to the Premises, or any part thereof, during the Lease term, that they will promptly notify Landlord of such release or threatened release, and that it will provide all warnings of exposure to Hazardous Materials in, on, under or about the Premises, as required by law, including, but not limited to, all laws hereinabove referred to in this Section, as the same may be amended from time to time, all ordinances, rules and regulations adopted and publications promulgated thereunder, and all future laws or case decisions to the same effect.

Section 13.2 Compliance with Laws . Tenant further covenants and agrees, at its sole cost and expense, to procure, maintain in effect, and comply with all conditions of any and all permits, licenses, and approvals issued by Governmental agencies for Tenant’s use of Hazardous Materials in, on, under or about the Premises. Tenant shall, prior to any use of the Premises affecting Environmental Protection, Environmental Matters and Industrial Hygiene or involving the use of Hazardous Materials, in, on, under or about the Premises, notify Landlord in writing of the intended use of such Hazardous Materials and promptly provide Landlord evidence of compliance with all Governmental laws, ordinances, rules and regulations pertaining to such use. Tenant shall in all respects handle, treat, deal with and manage any and all Hazardous Materials in, on, under or about the Premises in strict conformity with all applicable Governmental laws, ordinances, rules and regulations relating to Hazardous Materials, Environmental Protection and Industrial Hygiene.

Section 13.3 Environmental Audit and Removal . Should Landlord, in good faith, have reasonable cause or suspicion to believe environmental conditions exist on the Premises, or

 

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should any environmental review be required by Landlord’s prospective lender, purchaser, or investor in Landlord, Landlord shall have the right, upon written notice to Tenant (“Landlord’s Notice”), at any time and from time to time during the Lease term, including, without limitation, prior to the expiration or earlier termination of the Lease term, or in conjunction with a proposed assignment of this Lease or a proposed sublease of all or a part of the Premises requested by Tenant pursuant to the provisions of this Lease (in which event, Tenant’s satisfaction of its obligations under this Section shall be a condition precedent to Landlord’s consent to any such proposed assignment or sublease), to require Tenant to cause an environmental audit and survey (the “Survey”) to be made of the Premises, as soon as practicable, but in no event no later than sixty (60) days following Landlord’s Notice, by an environmental consulting firm (the “Consulting Firm”) approved and/or designated by Landlord to determine whether the Premises contains any Hazardous Materials. Such environmental audit and Survey shall be undertaken at Tenant’s sole cost and expense unless the environmental audit and Survey was the consequence of the request of Landlord, of Landlord’s prospective Lender, purchaser or investor, and no Tenant Installed Hazardous Materials are found in violation of legal requirements. In such case, Landlord shall be responsible for the cost of the environmental audit and Survey, Tenant shall, upon completion of such Survey, promptly furnish to Landlord a copy of such Survey prepared by the Consulting Firm. In the event said Survey shall disclose the presence of Hazardous Materials in, on, under or about the Premises, and if Landlord determines, based upon the original Approved Plans for Tenant’s Work, or on the basis of any subsequent plans and specifications submitted to Landlord pursuant to the terms of this Lease, or on the basis of other information and data available to Landlord, that the existence of said Hazardous Materials arose out of or is in any way connected with the construction, use, manufacture, storage, sale, release or disposal of Hazardous Materials or products containing Hazardous Materials by Tenant, its agents, servants, employees, licensees, contractors, subtenants or concessionaires during the period of Tenant’s occupancy of the Premises (the “Tenant Installed Hazardous Materials”), (a) Tenant shall, at its sole cost and expense, cause all of said Tenant Installed Hazardous Materials to be removed from in, on, under or about the Premises and transported from Technology Park II for use, storage or disposal in compliance with all applicable laws by a hazardous materials abatement contractor (the “Abatement Contractor”) licensed in the state in which Technology Park II is located and approved by Landlord. In the event such removal and disposal of the Tenant Installed Hazardous Materials is performed by Tenant after the expiration or earlier termination of the term of this Lease, Tenant shall be deemed to be occupying the Premises as a licensee at a monthly charge in an amount equal to average rent for the last twelve months of this Lease term, which sum shall be charged to Tenant by Landlord until the date Landlord receives certification from the Abatement Contractor that all Tenant Installed Hazardous Materials have been removed from in, on, under or about the Premises and transported from Technology Park II for use, storage or disposal, or (b) Landlord may, at its sole option and upon written notice to Tenant, cause all of said Tenant Installed Hazardous Materials to be removed from in, on, under or about the Premises and transported from Technology Park II for use, storage or disposal, in compliance with all applicable laws, by an Abatement Contractor, in which event, the costs and expenses of such removal and disposal, as reasonably estimated by Landlord, shall be paid to Landlord by Tenant, as Additional Rent, within ten (10) days after receipt of an invoice therefore.

 

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In the event Tenant fails to timely perform its obligations under this Section, Landlord shall have the right (but shall not be obligated) to perform Tenant’s obligations under this Section, in which event, Tenant shall pay to Landlord, as Additional Rent, promptly, upon demand, the costs and expenses thereof; provided, however, in the event Landlord performs Tenant’s obligations hereunder after the expiration or earlier termination of the Lease term, Tenant shall pay to Landlord, in addition to the foregoing costs and expenses, a monthly charge in an amount equal to the monthly charge determined pursuant to the provisions of this Section from the date of expiration or earlier termination of the Lease term until the date Landlord has completed Tenant’s obligations under this Section. Landlord and Tenant agree that the foregoing monthly charge represents a reasonable estimate of the financial losses suffered by Landlord by Tenant’s failure to timely perform its obligations under this Section.

Section 13.4 Non-Tenant Installed Hazardous Materials . Tenant shall have no responsibility for Hazardous Materials introduced by Landlord or Landlord’s agents, employees or contractors (in their respective capacities as such herein “Landlord’s Agents”) or for Hazardous Materials existing on, above or under the Land prior to Landlord’s delivery of the Land to Tenant pursuant to the terms of this Lease, or for Hazardous Materials existing in any other portion of Technology Park II, or for Hazardous Materials that migrate to the Premises by air, groundwater or from any other property or that are released, discharged or transported on, under, in, above, to or from the Premises other than by Tenant or Tenant’s agents (collectively “Non-Tenant Installed Hazardous Materials”). Landlord shall be responsible for the removal of Non-Tenant Installed Hazardous Materials existing as of the date hereof and any Hazardous Materials introduced by Landlord or Landlord’s Agents, thereafter, all in compliance with all applicable laws.

Section 13.5 Landlord’s Approval . Tenant shall not take any remedial action in response to the presence of Hazardous Materials in, on, under or about the Premises, nor enter into any settlement agreement, consent decree or other compromise in respect to any Claims in any way connected with the Premises, without first notifying Landlord of Tenant’s intention to do so and affording Landlord ample opportunity to appear, intervene or otherwise appropriately assert Landlord’s interest with respect thereto. This Section shall not apply to action taken as a result of an lawful directive of any Governmental agency resulting from an emergency condition on the Premises, provided Tenant notifies Landlord of such action as soon as practicable.

Section 13.6 Indemnity . Without limiting anything contained in this Article, Tenant shall indemnify and hold Landlord harmless from and against any and all claims, demands, losses, liabilities, penalties, damages, costs and expenses, including without limitation, attorneys’ fees and costs (collectively “Claims”), arising out of or in any way connected with the use, manufacture, storage, sale, release or disposal of Hazardous Materials or products containing Hazardous Materials by Tenant, its agents, servants, employees, licensees, contractors, subtenants or concessionaires in, on, under or about the Premises during the

 

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period of its occupancy of the Premises including, without limitation; (a) any Claim by a federal, state or local Governmental agency or a private citizen arising out of or in any way connected with the environmental condition of the Premises; (b) any Claim by any successor tenant, its agents, servants, employees, licensees, contractors, subtenants or Concessionaires, arising out of or in any way connected with the environmental condition of the Premises; and (c) the cost of any required or necessary repair, cleanup or detoxification and the preparation of any closure or other required plans in connection therewith. The indemnity obligations of Tenant under this Section shall survive the expiration or earlier termination of the term of this Lease.

Landlord agrees to indemnify and hold Tenant harmless from and against any and all Claims arising out of or in any way connected with the use, manufacture, storage, sale, release or disposal of any Hazardous Materials or any products containing Hazardous Materials on or under the Land which exist as of the date hereof or which may be later introduced by Landlord or Landlord’s Agents, including without limitation; (a) any claim by a federal, state or local Governmental agency or a private citizen arising out of or in any way connected with the environmental condition of the Premises and (b) the cost of any required or necessary repair, cleanup or detoxification and the preparation of any closure or other required plans in connection therewith. The indemnity obligation of Landlord under this Section shall survive the expiration or earlier termination of the term of this Lease.

Section 13.7 Landlord’s Representations . Landlord represents that it is not aware of any Hazardous Materials presently on or under the Land. Tenant agrees to undertake such examination of the Premises as it deems necessary and appropriate to verify the lack of Hazardous Materials thereon. Other than expressly provided in this Lease, Landlord makes no warranty regarding the condition of the Land.

ARTICLE 14. INSURANCE AND INDEMNITY

Section 14.1 Construction Insurance . Following the Delivery Date and at all times during the making of any improvements or other construction on the Premises by Tenant, or on Tenant’s behalf, Tenant shall have and maintain in full force builder’s risk insurance (completed value form, if available) and workers compensation insurance to the extent required by law. The limits of such builder’s risk liability (as opposed to casualty) insurance shall not be less than Three Million ($3,000,000.00) dollars combined single limit for property damage. Prior to the commencement of any construction, Tenant shall provide Landlord a certificate of such insurance evidencing compliance with this section.

Section 14.2 Tenant’s Liability Insurance . Tenant shall, during the entire period of its occupancy of the Premises, including the entire Lease term and any occupancy of Tenant prior to the commencement of Tenant’s obligation to pay rent, keep in full force and effect or require its subtenant(s) to keep in full force and effect a public liability insurance policy with respect to the Premises and the business operated by Tenant or any of its subtenants, with a combined single limit of no less than Three Million ($3,000,000.00) Dollars, including independent contractor’s coverage. In addition, Tenant or any of its subtenants shall pay

 

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when due to the North Dakota State worker’s compensation fund all amounts required by law to be paid. In the event North Dakota state law requires the procurement of worker’s compensation insurance or similar insurance, Tenant shall keep in full force and effect a policy affording full statutory coverage at the statutory limits. All insurance shall be in one or more responsible companies qualified to do business in North Dakota and approved by Landlord, and a copy of the policy or a certificate of insurance shall be delivered to Landlord. Not more frequently than once each five years if, in the good faith opinion of Landlord’s lender or Landlord’s insurance agent, the amount of public liability insurance required hereunder is not adequate, Tenant or any of its subtenants shall increase its insurance coverage to the amount reasonably requested or required by Landlord.

Section 14.3 Tenant’s Property Insurance . Tenant agrees to maintain or require its subtenant(s) to maintain in full force during the term of this Lease one or more policies of fire and extended coverage, vandalism, malicious mischief and sprinkler leakage insurance with “All Risks-Extended Coverage” endorsement, covering the Improvements, such insurance to be in an amount equal to the full replacement cost thereof, less the cost of excavations, foundation, footings and underground tanks, conduits, pipes, pilings and other underground items. Except as otherwise provided in Article 15 hereof, the proceeds of such insurance shall be used to repair and/or replace the Improvements.

Section 14.4 Insurance Requirements . All insurance required to be carried by Tenant or Tenant’s subtenant(s) hereunder shall insure Tenant and shall name, as additional insureds or loss payee (as the case may be), Landlord and such other person or persons designated in writing by Landlord to Tenant that have an insurable interest in the Premises, as their respective interests may appear (“Landlord’s Designee(s)”), and each policy shall contain a provision that it cannot be canceled or amended, insofar as it relates to the Premises, without at least fifteen (15) days prior notice to Landlord and Landlord’s Designee(s).

Section 14.5 Proof of Insurance . A certificate of all insurance procured by Tenant or its subtenants in compliance with its obligations under this Lease shall be delivered to Landlord prior to the time such insurance is f