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LEASE

Lease Agreement

LEASE | Document Parties: AULT INCORPORATED | DANE INDUSTRIES, INC You are currently viewing:
This Lease Agreement involves

AULT INCORPORATED | DANE INDUSTRIES, INC

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Title: LEASE
Governing Law: Minnesota     Date: 6/2/2005
Industry: Electronic Instr. and Controls     Sector: Technology

LEASE, Parties: ault incorporated , dane industries  inc
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Exhibit 99.2

 

LEASE

 

THIS LEASE (“Lease”) is made as of May 27, 2005 between DANE INDUSTRIES, INC. , a Minnesota corporation (“Landlord”), and AULT INCORPORATED , a Minnesota corporation (“Tenant”).

 

In consideration of the following mutual covenants and promises, the parties agree as follows:

 

1.              Property :  Landlord does lease to Tenant, and Tenant agrees to lease from Landlord approximately 13,313 square feet of office space (“Leased Property”) on the first and second floors of the building (the “Building”) located in the City of Brooklyn Park, Hennepin County, Minnesota and commonly known as 7105 Northland Terrace, Brooklyn Park, MN 55428,  legally described on attached Exhibit A (“Land”), together with all related improvements including the areas to be used for non-exclusive use by Tenant and Landlord on the Land and in the Building including parking lots, drives, toilets, entry ways, corridors, elevators and similar facilities, subject to reasonable rules adopted by Landlord (“Improvements”).

 

2.              Rent :  Tenant agrees to pay Landlord, beginning on the above date (“Commencement Date”), rent for each and every period of 12 months commencing during the term of this Lease equal to $226,321.00.  Such annual Rent shall be payable in equal monthly installments of 1/12th each due and payable in advance on the first day of each and every calendar month during the term of this Lease.  If the first month is a partial calendar month, rent shall be prorated and the first lease year shall end on the last day of the same month in 2006 that the Commencement Date occurs.  If any installment of Rent is not paid when due on the first business day of a month, the unpaid installment shall bear interest at the Wall Street Journal prime rate plus four percent (4%) per year until paid and Tenant shall pay Landlord an administrative fee of $225.00.

 

3.              Term :  The term (“Term”) of this lease shall be for an initial period of approximately two (2) years and three (3) months, which term shall commence on the Commencement Date and shall end on July 31, 2007.

 

4.              Improvements :  Landlord makes no warranties or representations concerning the condition of the Improvements, the Land, or any equipment or fixtures located on the Land.

 

5.              Maintenance and Repairs by Tenant :  Tenant shall keep the Leased Property in a clean and sanitary condition, replace all light bulbs and ballasts, remove and properly dispose of all trash and waste generated by Tenant and keep the plumbing lines free of obstruction.  Tenant shall provide janitorial or cleaning service to the Leased Property.

 

6.              Maintenance and Repairs by Landlord :  EXCEPT for repairs which are Tenant’s responsibility as specified in Paragraph 5, Landlord agrees at its expense to keep and maintain the Improvements and Land, in good order and repair, including, without limitation, routine maintenance and replacement of all structural or load-bearing elements, roofs, exterior walls and foundations, and repair, maintenance and replacement of all heating, ventilating and air

 



 

conditioning systems, windows, interior walls, doors, electrical systems and equipment, plumbing and all other components of the Improvements, mowing lawns, care of plantings, walkways, removal of snow from walkways, driveways, parking areas and adjacent public sidewalks, maintenance of utility lines and exterior lighting on the Land, and all other repair, maintenance and replacement required to keep the Improvements and Land in good condition.  All such repair, maintenance and replacement shall keep the Improvements and Land in a state of repair and, except for the Leased Property, in a clean and sanitary condition.

 

7.              Utilities :  Landlord shall, at its expense,  provide utilities currently serving the Leased Property including light, heat, water, gas and sewer charges.  Tenant agrees to not waste any such utilities and shall not increase the use of such utilities beyond normal office use.  Landlord shall not be responsible for interruption in utility service so long as Landlord works diligently to get such service restored.  If Landlord is unable to provide any of the utility services required to be maintained by Landlord pursuant to this Lease, and in the event such inability renders the whole or a portion of the Leased Property untenantable, inaccessible or unsuitable for the purposes intended hereunder for a period of three (3) consecutive days after receipt by Landlord of notice of untenantability, inaccessibility or unsuitability from Tenant, rent for the portion of the Leased Property rendered untenantable, inaccessible or unsuitable for the purposes intended hereunder shall abate pro rata from and after such third consecutive day until the services are restored to such a condition that the portion of the Leased Property affected is again rendered tenantable, accessible and suitable.  However, there shall be no such abatement of rent if the Landlord’s inability to provide such services is caused by misuse or neglect of Tenant or by inability to secure energy supplied to be provided by public or private utilities or suppliers which is generally applicable in the vicinity of the Improvements.

 

8.              Taxes and Assessments :  Landlord shall pay all (1) ad valorem or property taxes, and other taxes levied against the Leased Property, which become due and payable during the Term of this Lease, and (2) all installments of special assessments payable during the term of this Lease.

 

9.              Tenant’s Improvements :  Within forty-five (45) days of the Commencement Date or as soon thereafter as is reasonably possible, Landlord, at its expense, shall perform and pay for the tenant improvements described on attached Exhibit B (the “Tenant Improvements”).  Until such Tenant Improvements are completed, Tenant may continue to occupy all portions of the Building and Land currently occupied by Tenant, except that Tenant shall cooperate with Landlord and Landlord’s contractor and subcontractors so as to provide access to all necessary areas of the Building to permit the Tenant Improvements to be constructed and except that Tenant shall limit it occupancy of warehouse space to no more than 13,000 square feet so that Landlord may promptly after the Commencement Date occupy the balance of the warehouse space.  Within forty-five (45) days after substantial completion of the Tenant Improvements, Tenant shall move all personal property and equipment to the Leased Property and otherwise vacate the portions of the Building except the Leased Property and common areas.  Tenant shall not make any improvements to the Leased Property in an amount in excess of $5,000.00 without first obtaining the written consent of Landlord.  Landlord may condition written consent of future improvements upon the type and nature of the proposed improvements, Tenant’s ability to pay for the improvements and the affect of the improvements on the marketability and value of the Leased Property.

 

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Unless otherwise agreed, at the expiration or termination of the Lease, all improvements made by Tenant shall become the property of Landlord.

 

10.            Insurance :  Tenant agrees during the Term of this Lease to:

 

(a)            Provide, keep in force and pay all costs incurred for public liability and property damage insurance with limits of not less than $1,000,000 for injury and death to any one person, and $1,000,000 for injury or death in any one accident or occurrence including property damage, insuring Landlord and Tenant.

 

(b)            Provide, keep in force and pay all costs incurred to maintain fire and all risk insurance on Tenant’s property located on the Land.

 

Landlord agrees during the Term of this Lease to:

 

(a)            provide, keep in force and pay all costs incurred to maintain fire and all risk insurance in an insurance company or companies authorized to do business in the State of Minnesota in an amount equal to the full insurable value of the Improvements and other improvements owned by Landlord on the Land, and in any event for the full replacement cost.

 

(b)            At Landlord’s option, provide, keep in force and pay all costs incurred to maintain rental abatement or loss of income insurance from the Leased Property during a twelve (12) month period.

 

All policies required by this paragraph shall be carried in companies reasonably acceptable to Landlord.

 

All such policies carried by Tenant shall not be subject to cancellation or material modification except after thirty (30) days written notice to Landlord and, if requested, Landlord’s mortgagee and each policy shall so provide.

 

Tenant shall not do anything in or about the Leased Property that will impair or invalidate any obligation of any policy of insurance on the Leased Property or the Improvements.

 

11.            Damage or Destruction of Leased Property :  If the Leased Property is totally or partially destroyed by any cause so as to be totally or partially unusable, Rent shall abate and Landlord shall to the extent insurance proceeds are available restore the Leased Property to substantially the same condition as before damage as speedily as practicable, but in all events within six (6) months.  On completion, Rent shall recommence.  However, if the damage is so extensive that it cannot be reasonably repaired and restored within six (6) months from the date of casualty, then Landlord or Tenant may elect to cancel this Lease by the giving of written notice within thirty (30) days from the date of such casualty.  The provisions of this paragraph with respect to rebuilding and application of insurance proceeds are subject to any requirements or consents by mortgage holders as specified in mortgages of record as of the date of casualty.  Landlord shall have no obligation to restore or rebuild the Leased Property if the cost of rebuilding or reconstruction exceeds the amount of available insurance proceeds.

 

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12.            Compliance with Laws, Use :  Tenant shall use the Leased Property solely for engineering labs, research and development, office and all related activities in the conduct of its business and no other use, and shall at its own cost and expense secure and maintain all necessary licenses and permits required for such use.  Tenant shall at all times comply with all laws and ordinances and all lawful rules and regulations issued by any legally constituted authority, and with the applicable orders, regulations and requirements of any board of fire underwriters (including all modifications and improvements required), and observe all plat and deed restrictions of record.  Without limiting the generality of this section, Tenant will not generate, store, bury, discharge or release on or from the Leased Property reportable quantities of any hazardous substances or waste giving rise to penalty or liability under the Resources Conservation Recovery Act 42 U.S.C. § 6901 et seq. , the Comprehensive Environmental Response, Compensation and Liability Act 42 U.S.C. § 901 et seq. , or any other federal or state law.  Tenant agrees to indemnify Landlord and its successors and assigns from any breach of these conditions and from all loss, damage or expense, including attorney’s fees arising out of or incurred by Landlord as a result of such breach.  The date of indemnification and any clean-up or remedial action resulting from a breach by Tenant of the covenants contained in this section shall survive the expiration or termination of this Lease and remain the obligation of Tenant.

 

13.            Waste; No Liens :  Tenant agrees not to do or suffer any waste to the Leased Property, or cause, suffer or permit any liens to attach to or to exist against the Leased Property by reason of any act or omission of Tenant or persons claiming through Tenant or by reason of its failure to perform any act required of it under this Lease.  Tenant shall not permit the Leased Property to be used for any illegal purpose.  However, Tenant shall not be required to discharge any lien against the Leased Property so long as Tenant has given Landlord notice of its intent to contest such lien and Tenant is in good faith contesting the validity or amount of the lien and has given to Landlord such security as Landlord has reasonably requested to assure payment of such lien and to prevent the sale, foreclosure or forfeiture of any part of the Leased Property by reason of non-payment.  On final determination of the lien or claim of lien Tenant will immediately pay any judgment rendered, and all costs and charges, and shall cause the lien to be released or satisfied.  Tenant shall hold harmless Landlord from any cost or expense, including attorney’s fees, arising out of or incurred by Landlord as a result of such lien or claimed lien.

 

Tenant shall not use or occupy the Leased Property, or knowingly permit it to be used or occupied in a manner:

 

(a)            whi


 
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