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<PAGE>
EXHIBIT 10.22
OFFICE LEASE
BETWEEN
601 SECOND AVENUE LIMITED PARTNERSHIP,
A TEXAS LIMITED PARTNERSHIP
LANDLORD
AND
CAPELLA EDUCATION COMPANY,
A MINNESOTA CORPORATION,
TENANT
225 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C>
1.
DEFINITIONS.........................................................................
1
2.
PREMISES............................................................................
4
3. RENTABLE
AREA.......................................................................
4
4. TENANT'S LEASEHOLD
IMPROVEMENTS.....................................................
5
5.
TERM................................................................................
5
6. BASE
RENT...........................................................................
7
7. CONTRIBUTION TO OPERATING
COSTS..................................................... 9
8. NO PERSONAL
LIABILITY...............................................................
15
9.
USE.................................................................................
16
10. ASSIGNMENT AND
SUBLETTING...........................................................
17
11.
MAINTENANCE.........................................................................
19
12. ALTERATIONS;
EQUIPMENT..............................................................
21
13. KEYS; RIGHT OF ENTRY; RESERVED RIGHTS IN COMMON
AREAS............................... 23
14. SERVICES AND
UTILITIES..............................................................
24
15. WAIVER AND
INDEMNITY................................................................
27
16.
INSURANCE...........................................................................
27
17. WAIVER OF CLAIMS AND
SUBROGATION....................................................
28
18.
DAMAGE..............................................................................
29
19.
CONDEMNATION........................................................................
29
20.
DEFAULT.............................................................................
29
21. LANDLORD'S RIGHT TO CURE DEFAULTS; LATE
PAYMENTS.................................... 32
22.
WAIVER..............................................................................
32
23.
SUBORDINATION.......................................................................
33
24. RULES AND
REGULATIONS...............................................................
34
25. COVENANT OF QUIET
ENJOYMENT.........................................................
34
26. LIMITED
LIABILITY...................................................................
34
27. NO REPRESENTATIONS OR WARRANTIES BY
LANDLORD........................................ 35
28.
NOTICES.............................................................................
35
29. ESTOPPEL
CERTIFICATES...............................................................
36
30. SURRENDER, HOLDING
OVER.............................................................
37
31. TENANT'S
TAXES......................................................................
37
32. NO
MERGER...........................................................................
38
33. GRAPHICS; BUILDING
DIRECTORY........................................................
38
34. LIEN FOR RENT
......................................................................
38
35.
MISCELLANEOUS.......................................................................
38
36. ADDITIONAL RIGHTS OF
TENANT.........................................................
40
</TABLE>
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LIST OF ATTACHED EXHIBITS
EXHIBIT A FLOOR PLAN OF PREMISES
EXHIBIT B LEGAL DESCRIPTION
EXHIBIT C FORM OF DECLARATION OF COMMENCEMENT DATE AND RENTABLE
AREA
EXHIBIT D WORKLETTER
EXHIBIT E RULES AND REGULATIONS OF THE PROJECT
EXHIBIT F AIR CONDITIONING AND HEATING SERVICES
EXHIBIT G EXTENSION OPTION
EXHIBIT H PARKING
EXHIBIT I-1 EXPANSION OPTIONS
EXHIBIT I-2 POTENTIAL EXPANSION FLOORS
EXHIBIT J RIGHT OF OFFER
EXHIBIT K FORM OF CONFIDENTIALITY AGREEMENT
EXHIBIT L STORAGE SPACE
EXHIBIT M ASSIGNMENT LIMITATIONS
EXHIBIT N FORM OF NON DISTURBANCE AGREEMENT
EXHIBIT O CLEANING SPECIFICATIONS
ii
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LEASE
This Lease is made as of February _23 , 2004 ("EFFECTIVE DATE"),
by
and between 601 Second Avenue Limited Partnership, a Texas
limited partnership
("LANDLORD"), and Capella Education Company, a Minnesota
corporation ("TENANT").
1. DEFINITIONS.
"AFFILIATE" of any entity means any other entity directly or
indirectly controlling or controlled by or under direct or
indirect common
control with such entity. For purposes of this definition,
"control" (including,
with correlative meanings, the terms "controlled by" and "under
common control
with") as used with respect to any entity shall mean the
possession, directly or
indirectly, of the power to direct or cause the direction of the
management or
policies of such entity, whether through the ownership of voting
securities or
by agreement or otherwise.
"ANTENNA SITE MANAGER" means SpectraSite Building Group,
Inc.
"ASSIGNEE" means the assignee, mortgagee, subtenant or other
transferee under an Assignment.
"ASSIGNMENT" means (i) any assignment, transfer, mortgage or
other
encumbrance of this Lease or any interest in this Lease, or (ii)
any subletting
or renting or permitting occupancy or use of the Premises, or
any part thereof,
by any third party, whether direct or indirect, voluntary or by
operation of
law.
"BASE BUILDING SYSTEMS" means the systems of the Project
including,
without limitation, the Project's electrical, mechanical,
structural, plumbing,
heating, ventilating, air conditioning and life safety/fire
systems.
"BASE RENT" shall have the meaning set forth in Section 6.
"BUILDING" means the 18 story Park building located in the
Project.
"CAMPBELL MITHUN LEASE" means that certain Lease dated June
28,
2000, between 222 South Ninth Street Limited Partnership, a
Minnesota limited
partnership, as landlord, and Tenant, as tenant, as amended by
that certain
Amendment No. 1 To Lease Agreement dated December 5, 2001,
between ND
Properties, Inc., as landlord, and Tenant, as tenant, and as
further amended by
that certain Amendment No. 2 To Lease Agreement dated October
28, 2002, for the
premises which Capella is currently leasing in the Campbell
Mithun Tower in
Minneapolis, Minnesota.
"COMMENCEMENT DATE" shall have the meaning set forth in Section
5.2.
"COMMON AREAS" means those portions of the Project which are
not
leased or held for lease and which are, from time to time, made
available by
Landlord for the use in common by Landlord, Tenant, other
tenants of the Project
and such other persons as Landlord may designate including,
without limitation,
the main floor lobby and other public areas of the Project
located on levels
B-1, 1 and 2, those portions of the loading dock areas not
reserved for
1
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the specific use of any particular tenant of the Project, the
elevators located
in the Project, the mail room for the Project and the elevator
foyers, corridors
and rest rooms on multi-tenant floors.
"DIRECT COMPETITOR OF TENANT" means any entity in the business
of
providing post secondary educational courses to students.
"EFFECTIVE DATE" means the date on which this Lease has been
fully
executed, which date shall be inserted into this Lease by
Landlord
contemporaneously with Landlord's execution of this Lease.
"ESTIMATED OPERATING COSTS" means Landlord's estimate of
Operating
Costs for a particular calendar year (or fiscal year where
Landlord has
exercised its option under Section 7.8).
"EVENT OF DEFAULT" shall have the meaning set forth in Section
20.
"HAZARDOUS MATERIAL" means any hazardous substance, toxic
chemical,
pollutant or other material which is or becomes regulated by the
Comprehensive
Environmental Response, Compensation and Liability Act of 1985
or the Minnesota
Environmental Response and Liability Act or any similar law,
regulation or code
(local, state or federal), including without limitation
petroleum and petroleum
products and any material, equipment or machinery containing
asbestos,
polychlorinated biphenyls (PCB's), chlorofluorocarbons (CFC's)
or
hydrofluorocarbons (HCFC's).
"INITIAL PREMISES" means the Phase I Space, the Phase II Space
and
the Phase III Space.
"INITIAL EXTENDED TERM" shall have the meaning set forth in
Section
5.
"INITIAL SCHEDULED TERM" shall mean the six year period
beginning on
the Phase I & II Rent Commencement Date.
"INTEREST RATE" means an annual rate equal to the lesser of (i)
two
percentage points above the reference rate of interest published
from time to
time by U.S. Bancorp (or its successors), or if U.S. Bancorp (or
its successors)
discontinues publishing such a rate, two percentage points in
excess of the
published prime rate or other equivalent reference rate of
interest of a major
commercial bank reasonably designated by Landlord, or (ii) the
maximum contract
interest rate per annum permitted by applicable law.
"LAND" means the real estate described on Exhibit B attached
hereto.
"LEGAL REQUIREMENTS" shall have the meaning set forth in
Section
9.1.
"MORTGAGE" means any mortgage or trust deed now existing or
hereafter encumbering or otherwise affecting the Project or any
substantial part
thereof and all renewals, modifications, consolidations,
replacements or
extensions thereof.
"MORTGAGEE" shall have the meaning set forth in Section 23.
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"NORMAL BUSINESS HOURS" means the periods from 7:30 a.m. to
6:00
p.m., Monday through Friday, and 7:30 a.m. to 1:00 p.m. on
Saturday, except
during Holidays as defined in Exhibit F.
"OPERATING COSTS" shall have the meaning set forth in Section 7,
as
adjusted pursuant to Section 7.8.
"PHASE I & II RENT COMMENCEMENT DATE" means November 1,
2004.
"PHASE III RENT COMMENCEMENT DATE" means November 1, 2005.
"PHASE I SPACE" means the 119,711 square feet of Rentable Area
which
is located on the 8th and 9th floors of the Building and the
8th, 9th and 15th
floors of the Tower and depicted on the floor plans which are
attached hereto as
Exhibit A.
"PHASE II SPACE" means the 30,335 square feet of Rentable Area
which
is located on the 7th floor of the Building and depicted on the
floor plans
which are attached hereto as Exhibit A.
"PHASE III SPACE" means the 53,275 square feet of Rentable
Area
which is located on the 6th and 7th floors of the Tower and
depicted on the
floor plans which are attached hereto as Exhibit A.
"PREMISES" shall mean Initial Premises and any other space which
is
added to the Initial Premises pursuant to the Expansion Options
provided in
Exhibit I-1, the Right of Offer provided in Exhibit J or in any
other manner.
"PROJECT" means the Land, the Building and the Tower, the
atrium
connecting the Building and the Tower, the subterranean parking
garage, all
skyways and other improvements of Landlord now or hereafter
constructed on the
Land or on or in any appurtenant easement or encroachment areas,
except
improvements which tenants may remove therefrom pursuant to the
terms of their
respective leases.
"RENT" means Base Rent, Tenant's Additional Rent, and all other
sums
which shall become due and payable by Tenant to Landlord
hereunder.
"RENTABLE AREA" shall be determined in accordance with Section
3.
"RENTABLE AREA OF THE PROJECT" means, during any year, the
Rentable
Area of space leased or held for lease as office space or retail
space contained
in the Project for such year.
"SUCCESSOR" shall have the meaning set forth in Section
10.7.
"TENANT'S ADDITIONAL RENT" means the sum of Tenant's Pro Rata
Share
of Operating Costs (determined in accordance with Section 7
below) plus Tenant's
Property Management Fee.
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"TENANT IMPROVEMENTS" shall have the meaning set forth in
Exhibit D.
"TENANT'S PRO RATA SHARE" is a fraction, the numerator of which
for
any year shall be the weighted average Rentable Area of the
Premises for such
year and the denominator of which shall be the Rentable Area of
the Project for
such year.
"TENANT'S PROPERTY MANAGEMENT FEE" means for any year three
and
09/100 percent (3.09%) of the sum of Tenant's Base Rent and
Tenant's Pro Rata
Share of Operating Costs for such year.
"TERM" shall have the meaning set forth in Section 5.
"TOWER" means the 53 story office building located in the
Project.
2. PREMISES.
2.1 Subject to and upon the terms, provisions and conditions
hereinafter
set forth, and each in consideration of the duties, covenants
and obligations of
the other hereunder, (i) Landlord hereby leases the Initial
Premises to Tenant,
and Tenant hereby leases the Initial Premises from Landlord,
beginning on the
Commencement Date and thereafter throughout the Lease Term, and
(ii) Landlord
hereby grants Tenant a non-exclusive license to use the Common
Areas throughout
the Lease Term for their intended purpose and in accordance with
the rules and
regulations of the Project. Landlord covenants and represents
that (y) the
Initial Premises is currently vacant (other than some personal
property located
thereon which belongs to American Express Financial
Corporation), and (z)
Landlord will cause the Initial Premises to be served by, and to
be delivered in
accordance with, Base Building Systems and conditions which meet
or exceed the
standards described in Section 14 (the "SPACE DELIVERY
STANDARDS").
2.2 The Premises may be contracted pursuant to Section 5.3 or
expanded
pursuant to the Expansion Options provided in Exhibit I-1 or the
Right of Offer
provided in Exhibit J.
3. RENTABLE AREA.
3.1 For purposes of this Lease, the terms "RENTABLE AREA" and
"USABLE
AREA" shall be calculated substantially in accordance with the
Standard Method
for Measuring Floor Area in Office Buildings, ANSI/BOMA
Z65.1-1996.
3.2 Landlord certifies to Tenant that the Rentable Area of the
Phase I
Space, the Phase II Space and the Phase III Space has been
calculated as of the
Effective Date on the basis of the foregoing definitions as
follows: (i) 119,711
square feet for the Phase I Space; (ii) 30,355 square feet for
the Phase II
Space; and (iii) 53,275 square feet for the Phase III Space (and
such amounts
shall not be adjusted as a result of minor variations resulting
from any
construction and completion of the Initial Premises for
occupancy so long as
such work is done in accordance with the terms and provisions of
this Lease).
Landlord further certifies to Tenant that the Rentable Area of
the Project as of
the Effective Date is 1,401,233 square feet.
4
<PAGE>
4. TENANT'S LEASEHOLD IMPROVEMENTS.
Landlord and Tenant shall each comply with the provisions of
Exhibit
D. Landlord is under no obligation to make any alterations,
decorations,
additions or improvements in or to the Premises, nor to bear the
cost of the
same, except as expressly set forth in Exhibit D. By taking
occupancy of the
Premises, Tenant shall be deemed to have acknowledged that
Landlord has
completed all of its obligations for improvements to the
Premises, except as
otherwise provided in Exhibit D. Except as expressly set forth
in Section 2, on
Exhibit D or elsewhere in this Lease, Tenant agrees that it is
taking and
accepting the Premises on the Commencement Date and thereafter
on an "as is",
"where is", and "with all faults" basis, without warranty or
representation of
any kind, including without limitation any warranty as to the
merchantability or
fitness for a particular purpose of any portion of the Premises,
subject,
however, to Landlord's obligations under Section 11.2.
5. TERM.
5.1 Subject to and upon the terms and conditions set forth
herein, or in
any Exhibit or Addendum hereto, the initial term of this Lease
(the "INITIAL
SCHEDULED TERM") shall commence on the Phase I & II Rent
Commencement Date and
shall continue until 11:59 p.m., Minneapolis, Minnesota, time on
the day prior
to the sixth anniversary of the Phase I & II Rent
Commencement Date unless
extended by Tenant's exercise of an Expansion Option pursuant to
Exhibit I-1 or
a Right of Offer pursuant to Exhibit J, as the case may be (as
extended, the
"INITIAL EXTENDED TERM"). For purposes of this Lease, the "TERM"
or "LEASE TERM"
means the Initial Scheduled Term of this Lease as the same may
be hereafter
extended or renewed pursuant to the Expansion Options provided
in Exhibit I-1,
the Right of Offer provided in Exhibit J, the Extension Options
provided in
Exhibit G, or in any other manner.
5.2 Landlord shall provide Tenant with access to the Phase I
Space and
the Phase II Space as soon as reasonably possible (and in any
event within
thirty (30) days) after the Effective Date (the date Landlord
provides Tenant
with access to the Phase I Space and the Phase II Space being
referred to herein
as the "COMMENCEMENT DATE") and access to the Phase III Space on
May 1, 2005, so
that Tenant may prepare the Initial Premises for its use.
Landlord shall not,
however, be liable to Tenant for any delay in giving possession
of the Initial
Premises to Tenant because of any holding over or retention of
possession by any
previous tenants or occupants of the same, nor shall any delay
impair the
validity of this Lease; provided, however, that if Landlord
fails to deliver the
Phase I Space and Phase II Space to Tenant on or before November
1, 2004, Tenant
may, at its option, within thirty (30) days of said date,
terminate this Lease
by delivering written notice of termination to Landlord, and
upon any such
termination Landlord shall reimburse Tenant for all
out-of-pocket costs and
expenses incurred by Tenant in connection with this Lease,
including, without
limitation, design fees, construction costs and expenses,
attorneys' fees, and
consultants' fees. If Landlord fails to deliver the Phase III
Space to Tenant on
or before July 1, 2005, Tenant may, at its option, by written
notice to Landlord
given within thirty (30) days of said date, elect to exclude the
Phase III Space
from the Initial Premises, whereupon the Phase III Space shall
become part of
the Available Space under the Right of Offer. If any delay in
delivering
possession to Tenant of the Phase I and Phase II Space or the
Phase III Space,
as the case may be, actually delays the completion of the Tenant
Improvements,
the Phase I & II Rent Commencement Date or the Phase III
Rent
5
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Commencement Date, as applicable, will be extended by the number
of days that
completion of the Tenant Improvements has been delayed, and if
the Phase I & II
Rent Commencement Date is so extended, then the expiration of
the Initial
Scheduled Term shall be similarly extended and any other date in
this Lease
which is thereby affected will be appropriately adjusted. Tenant
agrees to be
bound by and to comply with all of the terms and conditions of
this Lease (other
than Tenant's obligation to pay Rent) during any occupancy of
the Premises by
Tenant prior to the Phase I & II Rent Commencement Date with
respect to the
Phase I Space and the Phase II Space and prior to the Phase III
Rent
Commencement Date with respect to the Phase III Space.
Notwithstanding anything
to the contrary in this Lease, Tenant shall not be obligated to
pay any Rent for
the Phase I Space or the Phase II Space prior to the Phase I
& II Rent
Commencement Date and Tenant shall not be obligated to pay any
Rent for the
Phase III Space prior to the Phase III Rent Commencement
Date.
5.3 During the Initial Scheduled Term, Tenant shall have the one
time
right (the "CONTRACTION OPTION") to contract the Premises by
surrendering
possession to Landlord of either one or two full floors of the
Premises;
provided that for purposes of such Contraction Option, a "full
floor" shall mean
all of the Rentable Area of a floor in the Tower only or in the
Building only
(so that if, for example, Tenant would like to surrender
possession of all of
the Rentable Area on the 9th floor of the Tower and the 9th
floor of the
Building, all of the space on the 9th floor of the Tower and the
9th floor of
the Building would constitute two "full floors"). Tenant must
exercise the
Contraction Option, if at all, (i) by delivering a written
notice to Landlord
not earlier than fifteen (15) months and not later than twelve
(12) months'
prior to the date on which Tenant intends to surrender such
space (the
"CONTRACTION DATE"), which identifies the floor or floors which
will be
surrendered (the "CONTRACTION SPACE"), and (ii) by Tenant's
payment not later
than the Contraction Date, to Landlord in immediately available
good funds of a
Contraction Fee, computed as set forth in this Section 5.3.
Tenant may not
specify as the Contraction Date any date prior to July 1, 2008,
or any date that
is more than twelve (12) months after the last day of the
Initial Scheduled
Term. For purposes of designating Contraction Space (a) if
Tenant's notice
designates only one floor as Contraction Space, such floor shall
be the
uppermost floor of the Premises in the Tower or in the Building;
(b) if Tenant's
notice designates two floors as Contraction Space, one floor
shall be the
uppermost floor of the Premises in the Tower or in the Building,
and the second
floor shall be contiguous thereto (either vertically or
horizontally), provided,
however, if said uppermost floor in the Tower or Building is not
contiguous
(either vertically or horizontally) to any other floor of the
Premises, then the
second floor shall be the next uppermost floor in the Tower or
Building; (c) in
any case where Tenant is to designate as Contraction Space a
floor that is the
uppermost floor in the Premises and the uppermost floor of the
Premises in the
Tower is on the same level as the uppermost floor of the
Premises in the
Building, Tenant may designate either the floor in the Tower or
the floor in the
Building as the Contraction Space; and (d) in determining which
floor is the
uppermost floor in the Premises under this Section 5.3, that
portion of the
Premises on the 15th Floor of the Tower shall be disregarded.
The "CONTRACTION
FEE" shall be an amount equal to the sum of (A) the unamortized
portion of
Landlord's Transaction Costs as of the Contraction Date, with
respect to the
Contraction Space, plus (B) two months of the Base Rent and
Tenant's Additional
Rent (based upon the amounts which Tenant is obligated to pay
Landlord for the
month in which the Contraction Date occurs) for the Contraction
Space. For
purposes of determining the amount of the Contraction Fee, (x)
"LANDLORD'S
TRANSACTION COSTS" shall mean the total of the brokerage fees
paid to CRESA
Partners for their services in connection with this Lease, plus
the
6
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Improvement Allowance (as defined in Exhibit D attached hereto)
that is actually
advanced or applied as a credit against Base Rent, (y)
Landlord's Transaction
Costs shall be amortized on a fully amortized basis together
with ten percent
(10%) interest on Landlord's Transaction Costs over the Initial
Scheduled Term,
and (z) the unamortized portion of Landlord's Transaction Costs
with respect to
the Contraction Space shall be determined by multiplying the
total amount of the
unamortized portion of Landlord's Transaction Costs as of
Contraction Date, by a
fraction, the numerator of which shall be the number of square
feet of the
Rentable Area of the Contraction Space, and the denominator of
which shall be
203,321. Tenant shall also reimburse Landlord for the reasonable
costs of
removing and filling in any internal stairways installed by
Tenant which serve
the Contraction Space within thirty (30) days after Tenant's
receipt of an
invoice from Landlord for such costs based upon the lowest of
three bids for
such work which are obtained by Landlord.
5.4 Landlord shall promptly after the Commencement Date, the
Phase I &
II Rent Commencement Date, and the Phase III Rent Commencement
Date, prepare a
declaration (substantially in the form of Exhibit C attached
hereto) confirming
such date and the date on which the Initial Scheduled Term shall
expire. Tenant
shall execute and return each such declaration within twenty
(20) days after
submission. If Tenant fails to execute and return either
declaration to Landlord
within said twenty (20) day period, Tenant shall be conclusively
deemed to have
agreed that the information in the declaration is accurate and
Tenant shall have
thereby waived any right to object to the accuracy of such
information unless
Landlord has, during said twenty (20) day period, received a
written notice from
Tenant objecting to such information and describing in detail
Tenant's reasons
for so objecting.
6. BASE RENT.
6.1 Tenant shall pay as monthly "BASE RENT" for the Premises
one-twelfth
of the product of:
(a) Nine and 75/100 Dollars ($9.75) times the number of square
feet
of Rentable Area of the Phase I Space and the Phase II
Space,
collectively, for the period beginning on November 1, 2004 and
ending on
October 31, 2005;
(b) Ten Dollars ($10.00) times the number of square feet of
Rentable
Area of the Premises for the period beginning on November 1,
2005 and
ending on October 31, 2006;
(c) Ten and 25/100 Dollars ($10.25) times the number of square
feet
of Rentable Area of the Premises for the period beginning on
November 1,
2006 and ending on October 31, 2007;
(d) Ten and 50/100 Dollars ($10.50) times the number of square
feet
of Rentable Area of the Premises for the period beginning on
November 1,
2007 and ending on October 31, 2008;
(e) Ten and 75/100 Dollars ($10.75) times the number of square
feet
of Rentable Area of the Premises for the period beginning on
November 1,
2008 and ending on October 31, 2009;
7
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(f) Eleven Dollars ($11.00) times the number of square feet
of
Rentable Area of the Premises for the period beginning on
November 1, 2009
and ending on October 31, 2010.
The Base Rent shall be paid in monthly installments, in advance,
on
the first day of each and every calendar month during the Term.
If the initial
or final month of the Term of this Lease is less than a calendar
month, all Rent
including the Base Rent for such partial month shall be prorated
at the rate of
one-thirtieth of the monthly Base Rent and all other Rent for
each day within
the Term of this Lease. Tenant will pay said Base Rent, together
with Tenant's
Additional Rent and all other amounts due under this Lease, to
Landlord at the
Project, or to such other party or address as Landlord may
designate from time
to time by notice to Tenant, without demand and without
deduction, set-off,
counterclaim or abatement except as expressly provided
herein.
6.2 Notwithstanding anything to the contrary in this Lease,
Tenant
shall, for the period beginning on November 1, 2004, and ending
on November 30,
2005, receive a credit each month against Tenant's obligation to
pay Rent for
the Premises in an amount equal to all of the monthly rent,
estimated operating
expenses (including management fees, but excluding charges for
any services in
addition to the basic services to be provided to Capella under
the Campbell
Mithun Lease) and real estate taxes which Tenant pays for the
premises which
Tenant is currently leasing (the "CAMPBELL MITHUN PREMISES")
pursuant to the
Campbell Mithun Lease as in effect on the Effective Date for the
period from
November 1, 2004, through November 30, 2005 (the "CAMPBELL
MITHUN RENT"). If the
Phase I & II Rent Commencement Date shall be extended
pursuant to Section 5.2
(or Section 4 of Part III of the Work Letter), then the period
during which
Tenant is entitled to receive a credit pursuant to the preceding
sentence shall
be extended from November 30, 2005, to such later date as will
enable Tenant to
receive credit in the full amount of the Campbell Mithun Rent.
Tenant represents
to Landlord that: (a) the total monthly amount of base rent
which Tenant is
obligated to pay for the Campbell Mithun Premises during the
period of November
1, 2004, through November 30, 2005, is $104,820.83 per month;
(b) Tenant is
obligated to pay during calendar year 2004 current estimated
operating expenses
(including management fees) of $57,679.52 per month and real
estate taxes of
$29,778.71 per month for the Campbell Mithun Premises which is
comprised of a
total of 91,480 square feet of rentable area; and (c) Tenant is
not aware of the
monthly charges for operating expenses and real estate taxes
during calendar
year 2005 for the Campbell Mithun Premises. Tenant shall, within
ten (10) days
after being notified of any adjustment (including any refund or
abatement) in
the amount of the Campbell Mithun Rent for calendar years 2004
and 2005, notify
Landlord of such adjustment, but if Tenant shall fail to so
notify Landlord,
such failure shall constitute an Event of Default by Tenant only
if such failure
shall continue for fifteen (15) days after written notice of
default is given by
Landlord in accordance with Section 20.1(c). Tenant hereby
acknowledges that
Landlord shall be entitled to receive a portion of any refund of
estimated
operating expenses which Tenant is entitled to receive pursuant
to the Campbell
Mithun Lease for calendar years 2004 and 2005, and that Tenant
shall not be
entitled to compromise the amount of any such refund. Tenant
shall, within ten
(10) days after receiving a refund of the operating expenses
which Tenant has
paid pursuant to the Campbell Mithun Lease, pay to Landlord (i)
in the case of
any refund for calendar year 2004, one-sixth (1/6) of such
refund, and (ii) in
the case of any refund for calendar year 2005, the full amount
of such refund.
Landlord acknowledges that if Tenant receives a reconciliation
of operating
expenses under the Campbell Mithun Lease
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requiring Tenant to make an additional payment for calendar
years 2004 or 2005
over and above the estimated operating expenses theretofore paid
by Tenant,
Tenant shall be entitled to an additional credit against Rent in
an amount equal
to (a) in the case of any additional payment due for calendar
year 2004,
one-sixth (1/6) of such additional payment, and (b) in the case
of any
additional payment due for calendar year 2005, the full amount
of such
additional payment. Tenant shall not be entitled to receive a
credit against the
Base Rent due to Landlord under this Section 6.2 which is
greater than the total
amount of the monthly rent, operating expenses and management
fees which Tenant
actually pays for the Campbell Mithun Premises for the period
commencing on
November 1, 2004, and ending on November 30, 2005. Tenant agrees
to provide
Landlord with reasonable evidence of Tenant's payment of
Campbell Mithun Rent
from time to time upon Landlord's request.
7. CONTRIBUTION TO OPERATING COSTS.
7.1 Tenant shall pay to Landlord on the first day of each
month
throughout the Lease Term an amount equal to one-twelfth of
Tenant's Additional
Rent (based on Estimated Operating Costs in accordance with
Section 7.5 below).
Tenant's Additional Rent shall be paid to Landlord without
deduction, set-off,
counterclaim or abatement except as expressly provided herein
and shall be
prorated for any partial month during the Lease Term.
7.2 "OPERATING COSTS" are hereby defined with respect to any
calendar
year to include all operating expenses of the Project, computed
on an accrual
basis in accordance with generally accepted accounting
principles which shall be
consistently applied (except that taxes shall be based on a due
and payable, and
not an accrual, basis). Except as otherwise specifically
excluded herein, the
term "operating costs" as used herein shall mean all expenses,
costs and
disbursements of every kind and nature relating to or incurred
or paid in
connection with the ownership, operation, repair and maintenance
of the Project,
including but not limited to, the following:
(a) all taxes and assessments and governmental charges
whether
federal, state, county or municipal, and whether they be by
taxing
districts or authorities presently taxing the Premises or by
others,
subsequently created or otherwise, and any other taxes and
assessments
attributable to the Project or its operation or the rent payable
by
tenants of the Project (provided 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 exceed the base
building
improvements), together with any reasonable costs or fees
incurred in any
challenge or contest of such taxes, assessments or other
charges
(collectively, "TAXES"); provided that operating expenses shall
not
include Landlord's general income, excess profit, franchise,
transfer,
inheritance, estate or gift taxes, except to the extent
assessed, levied
or imposed in lieu of Taxes;
(b) any other fee, charge or assessment imposed by any
governmental
entity for fire protection, police, trash or other service or
amenity;
(c) costs incurred for electricity, gas, fuel, steam, water,
sewer
or other utilities required in connection with the operation
and
maintenance of the Project;
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(d) the cost of all premiums and other charges incurred by
Landlord
with respect to insurance on the Project for all risk property
insurance,
liability insurance, workers' compensation insurance, boiler and
machinery
insurance, sprinkler leakage, water damage, legal liability,
burglary and
hold-up insurance, fidelity and pilferage insurance on equipment
and
materials, rental abatement insurance, and such other insurance
as is
deemed necessary or advisable in Landlord's reasonable judgment
or is
required by any Mortgagee;
(e) costs incurred in connection with the inspection,
servicing,
maintenance and repair (including all outside contracts relating
to the
operation and maintenance) of the Project and appurtenances
thereto
including, without limitation, janitorial and window cleaning,
rubbish
removal, exterminating, landscaping, water treatment,
elevator,
electrical, plumbing, and mechanical equipment and the cost of
materials,
tools, supplies and equipment (not of a capital nature) used in
connection
therewith;
(f) compensation provided in the form of wages, salaries and
such
other compensation and benefits (including payroll taxes,
federal, state
and local unemployment taxes, social security taxes, welfare,
retirement,
vacation, holiday, other paid absences and other fringe
benefits) as well
as any adjustments thereto, to the extent relating to persons
not above
the level of the on-site Project manager who perform duties
connected with
the operation and maintenance of the Project (but only for the
portion of
their time allocable to work related to the Project), and
further
excluding any time reasonably allocable to leasing or other
functions;
(g) expenses reimbursable to the property manager, including
the
rent of the property manager's offices in the Project, and all
other costs
and expenses incurred by Landlord in maintaining a property
management
office in the Project, but excluding the costs of any marketing
center or
any other space in the Project which is used primarily for
leasing space
to new tenants;
(h) fees for professional services (including accounting and
legal
costs), but only to the extent directly related to the operation
and
management of the Project and not involving leasing matters or
matters
associated with the operation of the business of the entity
which
constitutes Landlord such as the preparation of tax returns and
internal
financial statements;
(i) any equipment rental;
(j) operating costs relating to skyways;
(k) amortization of the cost, together with reasonable
finance
charges, of furnishing and installing capital improvements which
are (a)
undertaken by Landlord in the reasonable good faith belief that
the
reduction in Operating Costs likely to result from such
capital
improvements will equal or exceed the amortized cost of such
capital
improvements; (b) required by Landlord's insurance carrier; or
(c)
required as a result of any applicable law, rule, regulation or
order of
any governmental or quasi-governmental authority having
jurisdiction over
the Project which first becomes effective on or after the
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Effective Date (all such costs shall be amortized over the
useful life of
the capital improvement items with the useful life and
amortization
schedule being determined in accordance with generally accepted
accounting
principles, but in no event shall such useful life extend beyond
the
remaining useful life of the Project); and
(l) costs of licenses, permits (not including building permits),
and
inspection fees for the Project.
Notwithstanding anything contained in the foregoing list, out
of
pocket expenses for the following shall be excluded from
Operating Costs (unless
offset by a corresponding credit):
(i) costs of repairs or other work occasioned by fire,
windstorm or other casualty, to the extent that such
costs are reimbursed to Landlord by insurers;
(ii) costs of correcting any violations of any Legal
Requirements, except to the extent of what would have
been the costs of compliance in the first instance if
such compliance would have been properly included in
Operating Expenses under Section 7.2;
(iii) costs directly or indirectly resulting from or
relating
to (including repairs, restoration, security measures,
emergency or temporary services, inspection and, during
the period of such repair or restoration, any increase
in operating expenses resulting from) the exercise of
rights of eminent domain, regardless of whether paid
for by condemnation proceeds;
(iv) costs of correcting defects in, or the inadequacy of,
the initial design or construction of the Project, or
the materials used in the initial construction of the
Project or in the Project equipment or appurtenances
thereto;
(v) leasing commissions, attorneys' fees and other expenses
incurred in connection with negotiations or disputes
with tenants, other occupants, or prospective tenants
or other occupants of the Project;
(vi) costs incurred in renovating or otherwise improving or
decorating or redecorating space leased to tenants of
the Project or other space leased or held for lease in
the Project;
(vii) Landlord's costs for electricity and other services
sold to tenants or which Landlord is actually
reimbursed by tenants, other than through payment of
Operating Costs, as a separate additional charge or
rental;
(viii) depreciation and amortization, except as provided in
Section 7.2(k) above;
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<PAGE>
(ix) costs which under generally accepted accounting
principles, consistently applied, must be capitalized,
except as provided in Section 7.2(k) above;
(x) all amounts paid to subsidiaries or affiliates of
Landlord for services on or to the Project, to the
extent that the costs of such services demonstrably
exceed competitive costs for such services rendered by
persons or entities of similar skill, competence and
experience;
(xi) payments on any Mortgage or any other loan (except as
otherwise permitted with respect to certain capital
improvements as provided in Section 7.2(k) above) and
rental under any ground lease;
(xii) rentals and other related expenses, if any, incurred
in leasing air conditioning systems, elevators or
other equipment ordinarily considered to be of a
capital nature, except equipment which is used in
providing janitorial services and which is not affixed
to the Building and except as provided in Section
7.2(k) above;
(xiii) all items and services for which Landlord actually
receives reimbursement from Tenant (other than through
Tenant paying Tenant's Additional Rent) or for which
Tenant actually pays third parties;
(xiv) costs incurred in advertising for the Project or other
marketing or promotional activity specifically and
primarily designed for marketing space in the Project,
but excluding the costs of amenities provided for the
benefit of existing tenants of the Project;
(xv) any bad debt expense or bad debt reserve, whether for
rent or otherwise, or any fees or penalties charged to
Landlord as a result of not paying any amount
constituting costs or expenses when due;
(xvi) costs (and reserves thereof) of a capital nature
irrespective of the amount thereof, including capital
improvements, capital repairs and replacements and
capital equipment, except as provided in Section
7.2(k) above;
(xvii) costs in connection with services or other benefits
of
a type which are not provided, or which are provided
at higher levels or greater amounts than, or to a
degree which is higher than furnished to Tenant, but
which are provided to other Project tenants;
(xviii) except for Tenant's Property Management Fee and as
specifically provided in Sections 7.2(f), 7.2(g) and
7.2(h) above, fees or costs for management of the
Project, including any property management fee paid to
a property management company for the
12
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Project, or any fees, costs or expenses associated
with any accounting, bill-paying or management
activities;
(xix) costs of entertaining current or prospective Project
tenants, and costs incurred in advertising in respect
of or for the Project or other marketing or
promotional activity;
(xx) all direct costs arising from the operation of the
Parking Garage including costs of operating a ticket
booth, janitorial services, striping, lamp replacement
and repair and replacement of concrete and
reinforcing; provided that Operating Costs shall
include the cost of all Taxes and insurance premiums
allocable to the Parking Garage and any costs and
expenses that relate to the maintenance, repair and
operation of the structural elements of the Project or
Base Building Systems even if such structural elements
or Base Building Systems are located in or about the
Parking Garage;
(xxi) capital costs for sculpture, paintings or other art
objects;
(xxii) contributions to any political or charitable
organizations; and
(xxiii) travel, entertainment and related expenses incurred
by
Landlord or its personnel, except for the reasonable
cost of out of state travel and meals, but only if
directly related to, and to the extent of, services
which are being provided to the Project.
Operating Costs shall be "net" only and for that purpose shall
be
deemed reduced by the amount of any insurance reimbursement,
other
reimbursement, credit or the like received or receivable by
Landlord in
connection with such operating expense.
7.3 Landlord may at its sole discretion pay any Taxes in
installments
when allowed by law, in which case each installment included in
Operating Costs
shall include any interest charged thereon.
7.4 Taxes shall be included in Tenant's Additional Rent in
monthly
installments which are computed such that at each date an
installment of Taxes
is due to the taxing authorities, the proportion of annual taxes
theretofore
included in Tenant's Additional Rental equals the proportion of
annual Taxes due
to the taxing authorities at such installment due date, it being
understood that
this may necessitate some installments to be included in one
year for Taxes
payable in the following year.
7.5 Landlord shall from time to time give Tenant notice of
Landlord's
determination of Estimated Operating Costs for the pertinent
calendar year. If
Landlord makes a redetermination of Estimated Operating Costs at
a time other
than the commencement of a calendar year, then at the time of
the next due
monthly installment of Tenant's Additional Rent, such
installment shall be
increased or reduced, as the case may be, by the monthly
difference in Tenant's
Additional Rent resulting from the redetermination, times the
number of months
elapsed in such year prior to the date on which such next
monthly installment of
Tenant's
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<PAGE>
Additional Rent is due. Landlord agrees to use reasonable
efforts to inform
Tenant if, during any calendar year, Landlord believes that the
actual amount of
Operating Costs for such calendar year will be significantly
greater than the
most recent estimate of such Operating Costs which Landlord has
given to Tenant.
7.6 Within one hundred twenty (120) days after the end of each
calendar
year, Landlord shall submit to Tenant a statement setting forth
(i) the
Operating Costs of the Project actually incurred for such
calendar year, (ii)
Tenant's Additional Rent, based on such Operating Costs for such
year, and (iii)
the aggregate of Tenant's payments of Tenant's Additional Rent
for such year.
Within thirty (30) days after the delivery of such statement
(including any
statement delivered after the expiration or termination of the
Term of this
Lease), the party in whose favor there exists a difference, if
any, between (x)
Tenant's Additional Rent (based on Operating costs actually
incurred), and (y)
Tenant's payments of Tenant's Additional Rent, shall pay the
amount of such
difference to the other; provided that Landlord shall have the
right to offset
any amount owed by Landlord to Tenant pursuant to this Section
7.6 against
amounts which Tenant then owes Landlord.
If Tenant would like more information with respect to one or
more specific
line items set forth on the annual statement, Tenant may, within
sixty (60) days
after receipt thereof, request such additional information, and
Landlord shall,
within thirty (30) days of Tenant's request, provide Tenant with
more detailed
information with respect to such line items. Each statement
furnished by
Landlord hereunder shall constitute a final determination upon
Tenant unless
Tenant shall within ninety (90) days after delivery thereof (or,
if Tenant has
requested additional information from Landlord, then sixty (60)
days after
Landlord provides such additional information), give written
notice to Landlord
that Tenant disputes the accuracy thereof, which notice shall
specify in
reasonable detail the inaccuracies of the statement.
7.7 Tenant shall have the right to audit Operating Costs
provided such
audit is conducted pursuant to the following terms and
conditions: (a) Tenant
shall not have the right to conduct an audit if an Event of
Default by Tenant
exists; (b) such audit must be conducted by Tenant's employees
or an independent
nationally or regionally recognized accounting or consulting
firm that is not
being compensated by Tenant, Tenant's officers, directors,
shareholders,
partners or agents on a contingency fee basis, after execution
of a
Confidentiality Agreement in the form of Exhibit K attached
hereto; (c) such
audit must be commenced within ninety (90) days after Landlord
submits to Tenant
the annual statement described in Section 7.6 (or, if Tenant has
requested
additional information from Landlord, then sixty (60) days after
Landlord
provides such additional information), and once commenced, such
audit shall be
completed in a diligent and expeditious manner (and Tenant shall
inform Landlord
once such audit is completed); (d) Tenant shall supply Landlord
with a copy of
the relevant portion of any audit within fifteen (15) days after
Tenant's
receipt of the same (but if Tenant shall fail to provide such
copy to Landlord,
such failure shall constitute an Event of Default by Tenant only
if such failure
shall continue for fifteen (15) days after written notice of
default is given by
Landlord in accordance with Section 20.1(c)); (e) no audit shall
be conducted if
Tenant has previously conducted an audit for the same period of
time; (f) such
audit shall be conducted during normal business hours, at a
mutually agreed upon
time, at Landlord's business address or at such other location
as Landlord
normally keeps its books and records of Operating Costs; (g) if
Tenant exercises
its audit rights to audit a period of time for which the books
and records are
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<PAGE>
held by another party that is not affiliated with or controlled
by or under
common control with Landlord, such information must be obtained
by Tenant, as
Tenant's sole cost and expense, from the keeper of the books and
records; (h)
such audit shall be at Tenant's sole cost and expense and any
out of pocket
costs or expenses incurred by Landlord in providing Tenant with
the information
required to perform such audit, including, but not limited to,
copying costs and
delivery fees shall be paid by Tenant to Landlord upon demand;
provided,
however, that Landlord shall reimburse Tenant for its actual and
reasonable out
of pocket costs of conducting such audit (other than any fees
owing to an
auditor or inspector retained on a contingency fee basis) if it
is determined
pursuant to such audit that Landlord has overstated the actual
amount of
Tenant's Additional Rent for the applicable year by in excess of
three percent
(3%); (i) any information obtained by Tenant as a result of such
audit shall be
held in strict confidence by Tenant and shall not be
disseminated further except
to Tenant's accountants, attorneys and lenders, or in connection
with the
enforcement by Tenant of its rights under this Lease; (j) no
subtenant shall
have any right to conduct an audit and no assignee shall conduct
an audit for
any period during which assignee was not in possession of the
Premises; and (k)
if it is determined pursuant to such audit that there has been
an overpayment or
underpayment of Tenant's Additional Rent, the parties shall
promptly make such
reconciliation payments and/or refunds as are appropriate.
Further,
notwithstanding the fact that Tenant has elected to conduct such
audit, Tenant
shall not have the right to withhold or offset any part of
Tenant's Additional
Rent, which Tenant shall pay to Landlord as and when due and
payable in
accordance with the terms of this Lease.
7.8 Landlord may, at its option, by giving thirty (30) days'
written
notice to Tenant change its accounting year hereunder from a
calendar year to a
fiscal year, making such adjustments from the end of the last
calendar year to
the commencement of the first full fiscal year as shall be
appropriate pursuant
to generally accepted accounting principles. Upon such change,
references in
this Section 7 to a calendar year shall be deemed to be
references to a fiscal
year.
7.9 Notwithstanding any other provision herein to the contrary,
(i) if
at any time the entire Project is not fully occupied, or if full
services are
not provided to all areas of the Project which are leased or
available for lease
during all or any portion of a calendar year, then those
elements of Operating
Costs and Estimated Operating Costs which vary with occupancy
(or for which full
service is not provided to all areas) shall be adjusted to equal
the cost which
Landlord would have incurred if the Project were fully occupied
and all rentable
areas had received full services; and (ii) if Tenant's use of
the Premises or
any portion thereof is ever such that the services furnished
thereto are more
than are being furnished to other tenants in the Project, then
an adjustment
shall be made to Tenant's Additional Rent to reflect the extra
costs incurred by
Landlord as a result thereof.
8. NO PERSONAL LIABILITY.
Tenant will not be obligated to post a security deposit or
letter of
credit to secure Tenant's obligations under this Lease. No
present or future
partner, shareholder, member or principal of or in Tenant will
have any personal
liability for the payment of Rent or other amounts due under
this Lease or the
performance of Tenant's other obligations under this Lease.
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<PAGE>
9. USE.
9.1 Tenant may use and occupy the Premises solely for general
office
purposes and for no other purpose. Tenant shall not occupy or
use the Premises
or any part thereof for any business or purpose which is
unlawful, and Tenant
shall comply, at Tenant's expense, in all material respects with
all present and
future laws, statutes, ordinances, orders, rules, codes,
regulations, decrees
and requirements of all governmental units (including any
agency, department,
commission, board, bureau or subdivision thereof) (collectively,
the "LEGAL
REQUIREMENTS") which relate directly to the specific nature of
Tenant's use or
occupancy of the Premises. Landlord shall, at Landlord's expense
(subject to the
provisions in Section 7.2(k), comply with all present and future
Legal
Requirements which relate to the use, condition or occupancy of
the Premises and
the Project for general office purposes, including those
required by the
Americans with Disabilities Act. Tenant shall, at Tenant's
expense, comply with
all requirements of the Americans with Disabilities Act which
arise as a result
of any alterations, additions, or improvements to the Premises
which are not
consistent with a build-out for general office occupancy levels.
Tenant
acknowledges that it has had a full opportunity to make its own
determination
that the configuration and nature of the Premises are suitable
for Tenant's
business, and Tenant is not relying upon any implied-by-law
warranty as to the
suitability of the Premises for Tenant's particular
business.
Notwithstanding anything to the contrary in this Lease, Tenant
shall
not use the Premises for any purpose which would (i) adversely
affect the
exterior appearance of the Project in Landlord's reasonable
judgment, (ii)
offend persons of normal sensibilities by reason of items which
are visible from
the elevators in the Project, (iii) adversely affect ventilation
in other areas
of the Project (including without limitation, the creation of
offensive odors),
(iv) create unreasonable elevator loads, (v) cause structural
loads to be
exceeded, (vi) create unreasonable noise levels, or (vii)
otherwise unreasonably
interfere with Project operations or other tenants of the
Project. In all
events, Tenant shall not engage in any activity which is not in
keeping with the
first-class standards of the Project. Tenant also agrees that
Tenant will not
(y) use any part of the Premises which may be located on the
first or second
floor of the Tower for retail banking purposes; provided,
however, such
restriction shall not prohibit Tenant from operating an office
to provide
financial aid counseling and services for students and
prospective students; or
(z) use any portion of the Premises for health care services,
telephone or
telegraph agencies, radio, television stations, employment
agencies, public
restaurants or bars, retail, wholesale or discount shops for
sale of
merchandise, retail service shops, on site classrooms (other
than in a manner
not involving significant portions of the Premises or
significant numbers of
non-employee attendees) or governmental or quasi-governmental
bureaus,
departments or agencies; provided, however, nothing herein shall
prohibit any
broadcasts or other communications to students or prospective
students via the
internet or by any other means which are not disruptive to the
Project or any
other tenants.
9.2 Tenant shall not conduct or permit to be conducted any
activity, or
place any equipment in or about the Premises, which may be
hazardous. If any
increase in the rate of fire insurance or other insurance is due
to activity or
equipment of Tenant in or about the Premises, Tenant shall be
liable for the
full amount of such increase and shall reimburse Landlord
therefor and, further,
if such activity or equipment jeopardizes any insurance
coverage, Tenant shall
immediately cause the discontinuance of such conduct or shall
remove such
equipment.
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<PAGE>
9.3 Tenant shall not install, use, generate, store or dispose of
in or
about the Premises any Hazardous Material without Landlord's
prior written
approval of each Hazardous Material, except that Tenant may use
immaterial
quantities of Hazardous Materials customarily used in the
ordinary course of
office business operations so long as Tenant uses such Hazardous
Materials
strictly in accordance with all Legal Requirements. Tenant shall
reimburse
Landlord upon demand for any costs which Landlord incurs as a
result of Tenant's
installation, use, generation, storage or disposal of any
Hazardous Materials
and Tenant shall indemnify, defend and hold Landlord and any
Mortgagee harmless
from and against any claim, damage, loss, liability or expense
(including,
without limitation, the fees and disbursements of any attorneys
or consultants
incurred by Landlord) arising out of Tenant's installation, use,
generation,
storage, or disposal of any Hazardous Materials, regardless of
whether Landlord
has approved the activity.
9.4 Tenant shall not allow the use of any tobacco products in
any
portion of the Premises or the Project, except at such outdoor
areas which
Landlord agrees to reasonably designate for smokers from time to
time. Tenant
shall not permit its directors, officers, partners, employees,
agents,
contractors or invitees to carry, possess or store a firearm in
or about the
Project except strictly in accordance with Legal
Requirements.
9.5 Landlord shall not lease any part of the first or second
floors of
the Project to a Direct Competitor of Tenant.
10. ASSIGNMENT AND SUBLETTING.
10.1 There shall be no Assignment by Tenant without in each such
case
obtaining the prior written consent of Landlord except as
provided in Section
10.7, which consent shall not be unreasonably withheld or
delayed. No Assignment
by Tenant shall relieve Tenant of any obligation under this
Lease, and Tenant
shall remain fully liable hereunder. Any attempted Assignment by
Tenant in
violation of the terms and covenants of this Section 10 shall be
void. Any
consent by Landlord to a particular Assignment shall not
constitute Landlord's
consent to any other or subsequent Assignment, and any proposed
Assignment by a
subtenant of Tenant shall be subject to the provisions of this
Section 10 as if
it were a proposed Assignment by Tenant. The provisions of this
Section 10.1 are
subject to the provisions of Section 10.10.
10.2 It is expressly agreed by Tenant that it shall be
reasonable for
Landlord and Landlord shall be entitled to withhold its consent
to any proposed
assignment of this Lease or a sublease of all or a portion of
the Premises if
any one of the following applies:
(a) the assignee or subtenant is an entity described on or
engaged
in a business described on Exhibit M attached hereto;
(b) in Landlord's reasonable business judgment, the assignee
or
subtenant is of a character or reputation or engaged in a
business which
is not consistent with the quality and reputation of the
Project; or
(c) in the case of an assignment of this Lease (as opposed to
a
sublease) only, the net worth of the assignee as of the date the
notice of
the proposed Assignment is given pursuant to Section 10.3 or as
of the
consummation of the Assignment and any
17
<PAGE>
transactions related thereto, is or will be less than the
tangible net
worth of Tenant as of the date of this Lease.
Tenant acknowledges and agrees that the right of Landlord to
withhold its
consent reasonably with respect to proposed Assignments under
this Section 10 is
for the mutual benefit of Landlord and Tenant, preserves the
benefit of this
Lease for Tenant in those circumstances, as contemplated hereby,
where such
benefit is appropriate to be preserved, and is appropriate and
reasonable, given
the respective interests of Landlord and Tenant in the Project.
Landlord may
impose reasonable conditions in respect of any consent to an
Assignment.
10.3 If Tenant desires at any time to make an Assignment, Tenant
shall
give Landlord written notice of such desire at least thirty (30)
days in advance
of the date on which Tenant desires to make such Assignment and
shall submit in
writing to Landlord (i) the name of the proposed Assignee, (ii)
the nature of
the proposed Assignee's business to be carried on the Premises,
(iii) a copy of
the proposed Assignment agreement and any other agreements to be
entered into
concurrently with such Assignment, including full disclosure of
the rent to be
paid and all other financial terms, and (iv) such financial
information as
Landlord may reasonably request concerning the proposed
Assignee. Neither the
furnishing of such information nor the payment of attorneys'
fees pursuant to
Section 10.9 shall limit any of Landlord's rights or
alternatives under this
Section 10.
10.4 Each subtenant or assignee shall fully observe all
covenants of this
Lease, including without limitation, the provisions of Section 9
of this Lease,
and no consent by Landlord to an Assignment shall be deemed in
any manner to be
a consent to a use not permitted under Section 9.
10.5 Whether or not Landlord has consented to the applicable
Assignment,
fifty percent (50%) of the amount by which the consideration
(after deducting
from such consideration the amount of any leasehold improvement
costs, marketing
costs and any brokerage fees paid by Tenant in connection with
such Assignment)
received by Tenant pursuant to any Assignment (other than an
Assignment under
Section 10.7) exceeds, in any month, the Base Rent and Tenant's
Additional Rent
then required to be paid with respect to such space, shall be
payable by Tenant
directly to Landlord as additional rent hereunder on or before
the first day of
each such month.
10.6 Landlord shall have the right to transfer and assign, in
whole or in
part, all of its rights and obligations hereunder or in the
Project or in all
other property referred to herein, and upon any such transfer
(any such
transferee to have the benefit of, and be subject to, the
provisions of Sections
26 and 27 hereof), and the express written agreement of the
transferee to
assume, perform and be bound by all of the terms and conditions
of this Lease
applicable to Landlord as if such transferee was an original
party to this
Lease, the transferor shall have no further liability hereunder
with respect to
the rights and obligations so assigned and transferred other
than liability for
payment of the Improvement Allowance and any liability, claim,
offset or defense
which such transferee is not subject to or for which such
transferee is not
liable to Tenant.
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10.7 Notwithstanding anything to the contrary in this Section
10, upon
written notice to Landlord (which notice shall be accompanied by
the information
which Tenant is required to provide under Section 10.3, to the
extent
applicable), but without the need for any consent of Landlord
and without
applicability of Sections 10.2, 10.5 or 10.10, Tenant may make
an Assignment to
any Affiliate, or to any entity (a "SUCCESSOR") resulting from
the merger of or
consolidation with Tenant, or to any person or entity which
acquires all or a
majority of the stock of Tenant or substantially all of the
assets of Tenant as
a going concern (any of such events is referred to as a
"PERMITTED TRANSFER");
provided that any such Successor agrees to assume the
obligations and
liabilities of Tenant hereunder pursuant to an agreement
executed for the
benefit of and in form reasonably acceptable to Landlord.
10.8 Notwithstanding anything to the contrary in this Section 10
and
except as provided in Section 10.7, no Assignment by Tenant
shall become
effective until Tenant and any proposed assignee or subtenant
have executed and
delivered to Landlord an agreement by which such assignee or
subtenant agrees to
assume the obligations and liabilities of Tenant hereunder
pursuant to an
agreement executed for the benefit of and in form reasonably
acceptable to
Landlord.
10.9 Tenant shall be obligated to promptly reimburse Landlord
for any
reasonable attorneys' fees incurred by Landlord in reviewing and
preparing any
documents associated with any such proposed Assignment.
10.10 Notwithstanding anything to the contrary in this Section
10, if
Tenant in good faith desires at any time to make (or to seek an
opportunity to
make) a Third-Party Assignment, Tenant shall give advance
written notice to
Landlord (an "ASSIGNMENT NOTICE") in accordance with this
Section 10.10. For
purposes hereof, a "THIRD-PARTY ASSIGNMENT" means a complete
assignment of this
Lease or a sublease of all or substantially all of the Premises
for all or
substantially all of the then remaining Term, other than any
Assignment (a) to
an Affiliate of Tenant, or (b) made in connection with a
Permitted Transfer. The
Assignment Notice shall specify the earliest date (the "TARGET
DATE") upon which
Tenant may make a Third-Party Assignment; the Target Date may
not be earlier
than six (6) months from the date the Assignment Notice is given
to Landlord.
Following receipt of an Assignment Notice, Landlord shall have
the option, which
may be exercised in Landlord's sole discretion by giving written
notice to
Tenant within thirty (30) days after Landlord's receipt of the
Assignment
Notice, to terminate this Lease effective as of the Termination
Date to be
specified by Tenant as herein provided. If within thirty (30)
days after
Landlord's receipt of the Assignment Notice Landlord shall by
written notice to
Tenant elect to terminate the Lease, Tenant may at any time
thereafter send a
supplemental written notice to Landlord (a "TERMINATION DATE
NOTICE") specifying
the date upon which this Lease shall terminate (the "TERMINATION
DATE");
provided, however, that Tenant may not specify as the
Termination Date any date
that is (i) earlier than the Target Date, (ii) later than six
months after the
Target Date, and (iii) less than sixty (60) days after the date
the Termination
Date Notice is given by Tenant to Landlord. If Tenant shall fail
to give a
Termination Date Notice, the Termination Date shall be the date
that is six
months after the Target Date. If Landlord fails to notify Tenant
in writing of
such election within the thirty (30) day period after Landlord's
receipt of the
Assignment Notice, (x) Landlord shall be deemed to have waived
its right to
terminate this Lease under this Section 10.10, (y) Tenant need
not give a
Termination Date Notice and no Termination Date shall be
established pursuant to
this Section
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10.10, and (z) the provisions of this Section 10.10 shall be of
no further force
or effect; provided, however, that if Tenant shall send an
Assignment Notice to
Landlord and Landlord does not within thirty (30) days of
receipt thereof give
written notice terminating this Lease, and if Tenant does not
make a Third-Party
Assignment within twenty-four (24) months of the date of such
Assignment Notice,
then Landlord's rights under this Section 10.10 shall be
reinstated, and
Landlord and Tenant shall have the same rights and obligations
under this
Section 10.10 just as though such Assignment Notice had never
been given by
Tenant. If Landlord exercises its option to terminate this Lease
by giving
written notice to Tenant within the thirty (30) day period after
Landlord's
receipt of the Assignment Notice, the Term of this Lease shall
end on the
Termination Date and Tenant shall have no obligation to pay any
Rent for the
period after the Termination Date.
11. MAINTENANCE.
11.1 Without limiting Landlord's obligation to provide routine
janitorial
services as set forth in Section 14, and subject to Section
11.3, Tenant agrees
to maintain, at Tenant's sole cost and expense and in accordance
with the
standards of a first class office building in downtown
Minneapolis, all
leasehold improvements, fixtures and equipment installed in the
Premises; to use
the Premises in a prudent and orderly manner; to suffer no waste
or injury to
the Premises or any improvements or fixtures therein; and at the
expiration or
other termination of this Lease, to surrender the same with all
improvements in
the same order and condition in which they were on the
Commencement Date, or in
such better condition as they may thereafter be put, except for
(i) Landlord's
maintenance requirements, (ii) ordinary wear and tear, (iii)
damage by insured
casualty, and (iv) any other alterations or improvements
permitted under this
Lease which under the terms of this Lease Tenant is not required
to remove at
the expiration or earlier termination of the Term. Subject to
Section 17, any
cost of repairs or improvements to the Project, to the Premises
or to any Common
Areas which are occasioned by any act or omission or default of
Tenant, its
officers, employees, agents or invitees, or which arise because
of Legal
Requirements and the particular nature of Tenant's use and
occupancy of the
Premises or because of any leasehold improvements or alterations
to the Premises
which are made by or on behalf of Tenant, shall be paid for by
Tenant, as
additional rent hereunder, immediately upon billing.
11.2 Landlord agrees, throughout the Lease Term, to maintain the
Project
and the Common Areas in a manner consistent with other first
class office
projects in the central business district of downtown
Minneapolis. Unless
otherwise stipulated herein, including but not limited to
Section 9.1, Landlord
shall not be required to make any improvements to or repairs of
any kind or
character to the Premises during the Term of this Lease, except
such repairs to
the structure of the Project and the Base Building Systems as
may be deemed
necessary by Landlord: (i) for normal maintenance operations,
(ii) to keep the
Project compliant with the Space Delivery Standards pursuant to
Section 14, and
(iii) to maintain the Project in a manner consistent with other
first class
office projects in the central business district of downtown
Minneapolis.
11.3 Notwithstanding any provisions of this Lease to the
contrary, all
repairs, alterations or additions to the Base Building Systems
(as opposed to
those involving only Tenant's leasehold improvements), and all
repairs,
alterations or additions to Tenant's leasehold improvements
which affect the
Base Building Systems or the structural elements of the
Project,
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made by, for or on behalf of Tenant shall be made by Landlord or
a contractor
approved in writing by Landlord, which approval shall not be
unreasonably
withheld or delayed. Tenant shall promptly reimburse Landlord
for any reasonable
out of pocket costs incurred by Landlord in having the plans and
specifications
for any such alterations or additions reviewed by Landlord's
architects or
engineers.
11.4 If Tenant experiences any damage, interruption or
disturbance to the
Premises, Tenant's operations, or Tenant's equipment as a result
of any
electro-magnetic fields, Tenant shall promptly notify Landlord
thereof and
Landlord shall, at Tenant's written request and at Tenant's
expense, but subject
to the rights of other tenants of the Project, take such actions
as may be
reasonably necessary or desirable to minimize or eliminate such
condition.
11.5 Landlord represents and warrants that the Premises and the
Project
are substantially in compliance with applicable Legal
Requirements.
11.6 Landlord represents and warrants that the Premises and the
Project
are free of Hazardous Materials, except for those Hazardous
Materials which are
contained in construction materials that are customarily
incorporated at the
time of installation in or from time to time typically used in
the operation of
first class office buildings or such quantities of Hazardous
Materials as are
customarily used in the ordinary course of office business
operations and in
accordance with all Legal Requirements.
11.7 Landlord agrees, at Tenant's request, to make a
representative of
Landlord available to help Tenant identify any cabling or wiring
within the
Premises that serves any other tenants of the Project.
12. ALTERATIONS; EQUIPMENT.
12.1 Tenant will not make or permit anyone to make any
alterations,
decorations, additions or improvements, structural or otherwise,
in or to the
Premises or the Project, or place safes, vaults or other heavy
furniture or
equipment within the Premises, without first obtaining the prior
written consent
of Landlord; provided, however, such consent shall not be
required for (i) the
Tenant Improvements provided in Exhibit D (which are subject to
the consent
requirements contained in Exhibit D), (ii) any recarpeting or
redecorating, or
(iii) any alterations, additions or improvements to the Premises
that do not
result in a cost to Tenant greater than Fifty Thousand and
No/100 Dollars
($50,000) and that do not affect the structural elements of the
Project or the
Base Building Systems. Tenant shall nonetheless provide Landlord
with reasonable
advance notice as to alterations, decorations, additions and
improvements which
Tenant is permitted to make under this Lease without the need
for Landlord
consent (which notice from Tenant may be given orally, or by any
other means
that are practical under the circumstances, and need not be
given in accordance
with the provisions of Section 28, or for any work that is
insignificant). An
alteration, addition or improvement shall be deemed to affect
the structural
elements of the Project if such alteration, addition or
improvement includes any
cuts into the Project structure or the Project walls or floors
including,
without limitation, the installation of any escalators or
stairways. Landlord's
consent may be conditioned upon such requirements as Landlord
may reasonably
impose, including without limitation, the right to approve the
plans and
specifications for the alterations and the contractor who will
perform such
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alterations. In addition, Landlord shall have the right to
require Tenant, prior
to the commencement of any alteration, addition or improvement
requiring
Landlord's consent, to deliver such security against mechanics'
liens as
Landlord may reasonably require, but only if the financial
strength of Tenant is
at such time significantly less than the financial strength of
Tenant as of the
Effective Date.
12.2 If any mechanic's lien is filed against any part of the
Project for
work claimed to have been done for, or materials claimed to have
been furnished
to, Tenant, such mechanic's lien shall be discharged by Tenant
within twenty
(20) days after receipt of written notice from Landlord, at
Tenant's sole cost
and expense, by the payment thereof or by making any deposit
required by law or
by posting a bond with such surety, in such amount and in such
form as Landlord
deems proper. Tenant shall immediately notify Landlord of any
mechanic's lien or
other lien filed against the Project or any part thereof by a
contractor or
subcontractor of Tenant or otherwise by reason of work claimed
to have been done
for or materials claimed to have been furnished to Tenant. If
Tenant fails to
remove such lien or post such bond within the twenty (20) day
period following
the filing thereof, Landlord may, upon not less than twenty (20)
days' written
notice to Tenant, at its sole discretion and without waiving its
rights and
remedies based on such breach by Tenant and without releasing
Tenant from any of
its obligations, cause such lien to be released by any means it
shall deem
proper, including payment in satisfaction of the claim giving
rise to such lien.
Tenant shall, in such event, pay to Landlord at once, upon
notice by Landlord,
any sum paid by Landlord to remove such lien, together with
interest at the
Interest Rate from the date of such payment by Landlord.
Landlord shall have the
right at all times to post and keep posted on the Premises any
notices permitted
or required by Legal Requirements, or that Landlord shall deem
proper for the
protection of Landlord, the Premises, the Project and any other
party having an
interest therein, from liens. All material suppliers,
contractors, artisans,
mechanics, laborers and other parties hereafter contracting with
Tenant for the
furnishing of any labor, services, materials, supplies or
equipment with respect
to any portion of the Premises are hereby charged with notice
that they must
look solely to Tenant for payment of the same and Tenant's
purchase orders,
contracts and subcontracts in connection therewith must clearly
state this
requirement.
12.3 All alterations, decorations, additions or improvements
shall be
made in accordance with all Legal Requirements and insurance
guidelines and
shall be performed in a good and workmanlike manner by
contractors included on
Landlord's list of approved contractors. Tenant shall deliver to
Landlord a copy
of the "as-built" plans and specifications (in both drawn and
CAD disc format)
for all alterations or physical additions so made in or to the
Premises. Upon
completion of any alterations, decorations, additions or
improvements, Tenant
shall cause its architects and contractors to certify that no
asbestos
containing materials or other Hazardous Materials are present in
such
alterations, additions or improvements except for such Hazardous
Materials which
are present in natural substances and typical construction
materials used in
first-class office buildings in Minneapolis, Minnesota. Tenant
shall use
commercially reasonable efforts in the construction or
installation of Tenant's
alterations or fixtures to not cause any disturbance of tenants
adjacent to
Tenant or to Landlord, including any labor disturbance. If a
labor disturbance
occurs, Landlord may prevent any persons giving rise to the
disturbance from
entering the Project. Any core drilling and other activities
that may cause
significant noise or vibrations will be performed after normal
business hours.
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12.4 Upon completion of any such alterations, decorations,
additions or
improvements, Tenant shall deliver to Landlord evidence of
payment, contractors'
affidavits and full and final lien waivers for all labor,
services, or materials
performed or supplied in connection with such alteration,
decoration, addition
or improvement. Tenant shall indemnify, defend (at Landlord's
request and with
counsel approved by Landlord) and hold Landlord harmless from
and against all
losses, costs, damages, claims, liabilities, causes of action
and expenses
(including attorneys' fees and disbursements, whether suit is
commenced or not)
arising out of or relating to any alterations, decorations,
additions or
improvements that Tenant or any of its contractors make to the
Premises,
including any occasioned by the filing of any mechanic's,
material supplier's,
construction or other liens or claims (and all costs or expenses
associated
therewith) asserted, filed or arising out of any such work.
Without limiting the
generality of the foregoing, Tenant shall repair or cause to be
repaired at its
expense all damage caused by any of its contractors,
subcontractors or their
employees or agents. Tenant shall reimburse Landlord for any
costs incurred by
Landlord to repair any damage caused by any of Tenant's
contractors or any costs
incurred by Landlord in requiring any of Tenant's contractors to
comply with the
rules and regulations of the Project as in effect from time to
time. Tenant
shall also reimburse Landlord upon demand for any costs Landlord
may incur to
have an engineer review all mechanical, structural, electrical,
plumbing and
life safety systems installed by any of Tenant's
contractors.
12.5 All alterations, decorations, additions or improvements in
or to the
Premises or the Project made by Tenant (not including any of
Tenant's trade
fixtures) shall become the property of Landlord upon the
expiration or
termination of this Lease and shall remain upon and be
surrendered with the
Premises as a part thereof without disturbance or injury,
unless, prior to the
installation thereof, Landlord requires, in a written notice
delivered to
Tenant, unusual trade fixtures not consistent with a general
office use
build-out to be removed by Tenant at Tenant's sole cost and
expense, in which
event Tenant shall remove the same prior to the expiration or
termination of
this Lease and shall repair any damage caused thereby.
Notwithstanding any
provision to the contrary in this Section 12.5, any internal
staircases and
vaults installed by or at the request of Tenant shall be removed
by Tenant at
its expense prior to the expiration or termination of this Lease
and Tenant
shall repair any damages caused thereby. Tenant shall not,
however, be required
to remove any of the existing leasehold improvements in the
Initial Premises.
12.6 Tenant shall not place or maintain any sign, advertisement
or notice
on any part of the outside of the Premises or any area which is
readily visible
from outside the Premises unless approved in writing by Landlord
(which approval
will not be unreasonably withheld or delayed); except for suite
identification
signage and signage which states that Tenant bans guns on the
Premises.
12.7 Tenant agrees specifically that no food, soft drink or
other vending
machine will be installed within the Premises without the prior
written consent
of Landlord, except that Tenant may install vending machines for
the sole and
exclusive use by Tenant and Tenant's employees in an area
designated by Tenant
and approved by Landlord, provided such machines do not contain
any CFC's.
12.8 Tenant shall not install any fixtures or equipment which
consume
more than the amount of electricity specified in Section 14
without first
obtaining the prior written consent of
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Landlord. If Tenant requires electrical capacity in excess of
that specified in
Section 14, Tenant shall pay to Landlord the cost of the excess
electrical usage
plus all costs of installation, operation (including electrical
metering) and
maintenance of any and all electrical, ventilation or air
conditioning
modifications which Landlord determines to be necessary.
Equipment belonging to
Tenant which causes noise or vibration that may be transmitted
to the structure
of the Project or to any space therein to such a degree as to be
objectionable
to Landlord or to any tenant in the Project shall be installed
and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other
devices
sufficient to eliminate noise and vibration. Landlord shall have
the right at
any time to limit the weight and prescribe the position of safes
and other heavy
equipment or fixtures.
13. KEYS; RIGHT OF ENTRY; RESERVED RIGHTS IN COMMON AREAS.
13.1 Subject to the other terms and conditions of this Lease,
Landlord
will provide Tenant with access to the Premises, twenty-four
(24) hours a day,
seven (7) days per week. Landlord shall manage the Project's
card access system,
but Tenant shall be responsible for managing its own card access
system for the
Premises. Landlord shall provide audit reports on a semi-annual
basis and
additional ad-hoc requests each year without charge. Landlord
shall furnish
Tenant with cards for after-hours access to the Project for all
of Tenant's
employees and students upon an order signed by Tenant and at
Tenant's expense.
All keys and cards furnished by Landlord shall remain the
property of Landlord.
No additional locks shall be allowed on any door of the Premises
without
Landlord's prior written consent, and Tenant shall not make or
permit to be made
any duplicate keys, except those furnished by Landlord. Upon the
expiration or
termination of this Lease, Tenant shall immediately surrender to
Landlord all
keys to any locks on or within the Premises and all access cards
provided by
Landlord, and give to Landlord an explanation of the combination
of all locks
for safes, safe cabinets and vault doors, if any, in the
Premises. Tenant shall
pay for any locks or access reader card systems installed in the
Premises and
the cost of replacing any lost or damaged keys or access cards.
Tenant shall
also provide Landlord with a keying schedule for the
Premises.
13.2 Tenant shall permit Landlord and Landlord's representatives
and
agents, to enter into and upon any part of the Premises, at all
reasonable hours
to examine, inspect and protect the Premises, and to make such
alterations,
renovations, restorations and/or repairs as Landlord shall deem
necessary or
desirable for the Premises, for any other premises in the
Project, or the
Project itself (including access to adjacent roof surfaces and
to distribution
systems above the ceiling of the Premises), to post notices
of
non-responsibility, to provide janitorial services, to perform
maintenance work
requested by Tenant or to provide other services required to be
performed by
Landlord hereunder, or to exhibit the Premises to prospective
tenants during the
last twelve (12) months of the Term, or to prospective
purchasers, mortgagees,
investors or lenders at any time. Landlord shall give reasonable
advance oral
notice prior to entry except for janitorial service and
emergencies and to
perform repairs requested by Tenant. Landlord shall use
reasonable efforts to
not unreasonably interfere with the conduct of Tenant's
business, but Landlord
shall in no event be liable to Tenant for any damages in
connection with such
entry or installation; provided, however, if any of the services
to be provided
by Landlord under this Lease are interrupted for three (3)
consecutive business
days for any reason as a result of such entry or installation,
and Tenant's use
or enjoyment of the Premises is materially affected
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thereby, then all Rent shall abate on a per diem basis with
respect to those
portions of the Premises which Tenant is not using from and
after said third day
until such services are restored.
13.3 Subject to the provisions of Section 35.15, Landlord
reserves the
right to (i) impose such security restrictions in the Common
Areas as it deems
appropriate; (ii) close temporarily or restrict the use of any
of the Common
Areas for maintenance or repair purposes; (iii) use the Common
Areas while
engaged in making additional improvements, repairs or
alterations to the Project
or any portion thereof; and (iv) use on an occasional or
temporary basis or
allow the occasional, temporary use by others of the atrium and
the first and
second floors of the Project, for civic, charitable, cultural,
business and
other events.
14. SERVICES AND UTILITIES.
Landlord shall use reasonable efforts to furnish (as part of
the
Operating Costs of the Project) Tenant, while Tenant occupies
the Premises, the
following services at levels commensurate with the general
standards followed by
landlords of first-class office buildings in Minneapolis,
Minnesota:
(a) Hot and cold domestic water for restrooms and cold
domestic
water at those points of supply provided for general use of
other tenants
in the Project.
(b) During Normal Business Hours, and subject to curtailment
as
required by Legal Requirements, central heat and air
conditioning in
season, at such temperatures and in such amounts as are in
keeping with
the standards described in Exhibit F hereto and otherwise in
accordance
with the standards of a first class office building. Landlord
agrees to
provide the Premises with heating and air conditioning during
other than
Normal Business Hours at Tenant's request. The charge for such
after hours
services initially shall be at the rate of $35.00 per hour (or
partial
hour), for the first floor or partial floor within the Building
or Tower,
and $5.00 per hour (or partial hour) for each additional floor
or partial
floor in the Building or Tower, which amounts may be increased
by Landlord
from time to time, but shall not be greater than the reasonable
cost to
Landlord in providing such after hours services (for purposes of
computing
the charge for after hours services, each floor in Tower and
each floor in
the Building shall be treated as separate floors, so that if
Tenant
requests after hours services on a floor in the Tower and on the
same
floor in the Building, Tenant's request shall be treated as a
request for
two floors). Tenant shall be charged for a minimum of one hour
of service
in connection with each such request. Tenant shall give Landlord
notice by
telephone for the need for such heating and air conditioning
during other
than Normal Business Hours no later than noon of the business
day with
respect to services for the evening of such business day, and no
later
than noon of the immediately preceding business day with respect
to
services for Holidays or weekends.
(c) Routine electric lighting service for all public areas
and
special service areas of the Project.
(d) Janitor service on a five (5) day week basis (except for
Holidays as described in Exhibit F hereto) which shall be
provided after
9:00 p.m. and prior to 7:30 a.m. on
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Mondays through Fridays pursuant to the cleaning specifications
attached
hereto as Exhibit O; provided, however, if Tenant's floor
coverings or
other improvements cost more to clean than typical floor
coverings or
improvements, Tenant shall pay, as additional rent, the
additional costs,
if any, attributable thereto. Landlord represents to Tenant that
(i) its
security service provider currently performs criminal background
checks
through the Minnesota Bureau of Criminal Apprehension and the
Federal
Bureau of Investigation for each of its security personnel
servicing the
Premises, and (ii) its janitorial service provider currently
performs
background checks through the Minnesota Bureau of Criminal
Apprehension
for its personnel servicing the Premises.
(e) Equipment and personnel to limit access to the Project
after
Normal Business Hours; provided, however, Landlord will provide
Tenant
with access to the Premises, twenty-four (24) hours a day, seven
(7) days
per week.
(f) Sufficient electrical capacity for (i) convenience outlets
and
equipment such as personal computers, photocopying machines and
other
machines of similar low voltage (120/208 volts) requirements;
provided,
however, total rated power consumption of 120/208 volt power
shall not
exceed two and one-quarter (2.25) watts per square foot of
Usable Area (as
defined in Section 3.1); and (ii) fluorescent light fixtures and
equipment
of high voltage (277/480 volts) requirements; provided, however,
total
rated power consumption of 277/480 volt power shall not exceed
three and
four tenths (3.40) watts per square foot of Usable Area. If
any
electrical, telephone switching or other equipment requires
air
conditioning or electrical usage in excess of the foregoing
limitations or
requires modifications to a base building electrical panel, the
same shall
be installed or performed at Tenant's expense and Tenant shall
pay all
operating costs relating thereto, including metering.
(g) All building standard fluorescent bulb replacement in all
areas
and all building standard incandescent bulb replacement in
public areas,
toilet and rest room areas and stairwells, together with base
building
starters and ballasts as replacement is needed for such
lighting.
(h) Non-exclusive passenger elevator service to the Premises
twenty-four (24) hours per day and non-exclusive freight
elevator service
during Normal Business Hours.
(i) Base building telephone risers in accordance with
Landlord's
rules and regulations with respect to telephone service as they
may exist
from time to time. Landlord shall have the right to impose
reasonable
charges for the use by third party telecommunications providers
of the
Base building telephone risers.
(j) Uniformed guards and/or equipment on a twenty-four (24)
hour-per-day, seven (7) day-per-week basis to maintain security
for the
Project.
To the extent the services described in (a), (b), (c), (f) and
(h)
require electricity, gas or water supplied by public utilities,
Landlord's
covenants thereunder shall only impose on Landlord the
obligation to use its
reasonable efforts to cause the applicable public utilities to
furnish the same.
Failure by Landlord to furnish the services described in this
Section 14 to any
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extent, or any cessation thereof, shall not render Landlord
liable in any
respect for damages to either person or property, nor be
construed as an
eviction of Tenant, nor, except as explicitly provided below,
work an abatement
of any Rent, nor relieve Tenant from fulfillment of any covenant
or agreement
hereof. Landlord agrees, however, to use diligent efforts to
promptly repair any
Base Building Systems and to restore any services described in
this Section 14
which are interrupted during Normal Business Hours.
If any of the services to be provided by Landlord under this
Section
14 are interrupted for:
(x) three (3) consecutive business days for any reason
within
Landlord's reasonable control (as opposed to generally
prevailing circumstances); or
(y) seven (7) consecutive days for any reason not within
Landlord's control (including generally prevailing
circumstances);
and, in either event, if Tenant's use or enjoyment of the
Premises is materially
affected thereby, then if Tenant has promptly notified Landlord
in writing of
such interruption, all Rent shall abate on a per diem basis with
respect to
those portions of the Premises which Tenant is not using from
and after said
third day (or seventh day, as the case may be) until such
services are restored.
Landlord reserves the right to require telecommunication
connections
and services to be made only pursuant to agreements between
Landlord and
telecommunications providers which are satisfactory to Landlord
in its
reasonable discretion, provided that any such agreement shall
permit Tenant to
obtain the telecommunication services Tenant needs at
competitive rates and on
competitive conditions. Tenant shall conserve heat, air
conditioning, water and
electricity and shall use due care in the use of the Premises
and of the public
areas in the Project. All thermostats within the Premises shall
be under the
sole control of Landlord, and Tenant shall not, nor shall it
permit any of its
employees, agents, representatives or invitees, to open, change
or tamper with
any thermostats.
15. WAIVER AND INDEMNITY.
15.1 Except as expressly provided to the contrary in this Lease,
Landlord
and Landlord's Affiliates and each of their partners, directors,
officers,
shareholders and employees shall not be liable to Tenant, or
those claiming by,
through or under Tenant, for any damage or claims, however
caused, arising from
loss or damage to books, records, computer or other electronic
equipment, data
or media, files, artwork, money, securities, negotiable
instruments or papers,
or any other personal property in the Project, the interruption
in the use of
any cellular or wireless communication devices or the
interruption in the use of
the Premises, any fire, robbery, theft, assault, or any other
casualty, any
leakage or bursting of pipes or water vessels or any roof or
wall leakage or
other water damage, in any part or portion of the Premises or
the Project.
15.2 Subject to the provisions of Section 17 which shall control
if they
conflict with the provisions of this Section 15.2, Tenant shall
indemnify,
defend (at Landlord's request and with counsel reasonably
approved by Landlord)
and hold Landlord and Landlord's Affiliates (and each of their
partners,
directors, officers, shareholders and employees) harmless from
and against every
demand, claim, cause of action, judgment and expense, including,
but not limited
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to, reasonable attorneys' fees and disbursements of counsel,
whether suit is
initiated or not, and all loss and damage arising from or
related to any bodily
or personal injury, death or property damage occurring in the
Premises, except
to the extent caused by the gross negligence or willful
misconduct of Landlord
or Landlord's Affiliates or any of their representatives,
agents, contractors or
employees.
15.3 Subject to the provisions of Section 17 which shall control
if they
conflict with the provisions of this Section 15.3, Landlord
shall indemnify,
defend (at Tenant's request and with counsel reasonably approved
by Tenant) and
hold Tenant and Tenant's Affiliates (and each of their
governors, members,
partners, directors, officers, shareholders and employees)
harmless from and
against every demand, claim, cause of action, judgment and
expense, including,
but not limited to, reasonable attorneys' fees and disbursements
of counsel,
whether suit is initiated or not, and all loss or damage arising
from or related
to any bodily or personal injury, death or property damage
occurring in those
portions of the Project which are not leased to Tenant or other
tenants, except
to the extent caused by the gross negligence or willful
misconduct of Tenant,
Tenant's Affiliates or any of their representatives, agents,
contractors or
employees.
16. INSURANCE.
16.1 Landlord shall maintain all risk property insurance on the
Project
and the leasehold improvements in the Premises with coverage
limits for such
leasehold improvements of $25.00 dollars per square foot of
Rentable Area for
such leasehold improvements. Said insurance shall be maintained
with an
insurance company authorized to do business in Minnesota, in
amounts desired by
Landlord and at the expense of Landlord (but with the same to be
included in the
Operating Costs described in Section 7.2) and payments for
losses thereunder
shall be made solely to Landlord. If the annual premiums to be
paid by Landlord
shall exceed standard rates because of Tenant's operations
within or the
contents of the Premises, Tenant shall promptly pay the excess
amount of the
premium upon request by Landlord. Tenant shall maintain all risk
property
insurance on all of its personal property, including removable
trade fixtures,
located in the Premises and on the value of any of Tenant's
leasehold
improvements in excess of the coverage limits to be maintained
by Landlord as
described above, subject to commercially reasonable deductibles.
Prior to the
Commencement Date and prior to the expiration of then-existing
policies, Tenant
shall deliver to Landlord certificates evidencing maintenance of
the insurance
required herein.
16.2 Landlord shall maintain a policy of commercial liability
insurance
with the premium thereon fully paid on or before the due date,
issued by and
binding upon an insurance company authorized to do business in
Minnesota, such
insurance to afford minimum protection (which may be effected by
primary and/or
excess coverage) of not less than $5,000,000 combined single
limit. Tenant shall
maintain a policy of commercial liability insurance with the
premium thereon
fully paid on or before the due date, issued by and binding upon
an insurance
company acceptable to Landlord that is authorized to do business
in Minnesota,
such insurance to afford minimum protection (which may be
effected by primary
and/or excess coverage) of not less than $5,000,000 combined
single limit.
Landlord and Landlord's property manager shall be named as
additional insureds
on Tenant's liability policy. Prior to the Commencement Date and
prior to the
expiration of then-existing policies, Tenant shall deliver to
Landlord a
certificate of insurance in form satisfactory to Landlord
evidencing maintenance
of the insurance required
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herein together with a copy of the endorsement to Tenant's
commercial liability
policy which adds Landlord and Landlord's property manager as
additional
insureds. Upon Landlord's request, Tenant shall also promptly
deliver to
Landlord a certified copy of the insurance policy which Tenant
is required to
maintain hereunder.
17. WAIVER OF CLAIMS AND SUBROGATION.
Notwithstanding anything to the contrary in this Lease, Landlord
and
Tenant each hereby waives any and all rights of recovery, claim,
action or cause
of action, against the other and their Affiliates and each of
their partners,
shareholders, officers, employees and contractors for any loss
or damage that
may occur to the Premises or the Project, or any improvements
thereto, or any
personal property of such party therein, by reason of fire, the
elements, or any
other cause which could be insured against under the terms of
the all risk
property insurance policies referred to in Section 16 hereof
(whether or not
actually insured) or which is actually insured against by the
party in question,
regardless of cause or origin, including negligence of the other
party hereto or
its Affiliates or any of their partners, shareholders, officers,
employees and
contractors, and covenants that to the extent of such waiver no
insurer shall
hold any right of subrogation against the other party hereto. In
addition,
Tenant hereby waives all rights of recovery with respect to
property damage
against all other tenants of the Project that have, prior to any
loss by Tenant,
executed a reciprocal waiver of recovery rights for the benefit
of Tenant.
18. DAMAGE.
In the event of a fire or other casualty in the Premises,
Tenant
shall immediately give notice thereof to Landlord. If the
Premises shall be
damaged by fire or other casualty so as to render the Premises
untenantable in
whole or in part, the Rent provided for herein shall abate
thereafter as to the
portion of the Premises rendered untenantable until the earlier
of (a) such time
as the Premises are made tenantable, or (b) five (5) business
days after
Landlord substantially completes the restoration of the
Premises. If damage by
fire or other casualty results in the Premises being
untenantable in whole or in
substantial part for a period reasonably estimated by a
responsible contractor
selected by Landlord to be one (1) year or longer after
Landlord's insurance
settlement, and if Landlord shall decide not to rebuild, then
either party may
terminate this Lease upon such date as written notice is
provided to the other
party and all Rent owed up to the time of such destruction or
termination shall
be paid by Tenant. Landlord shall give Tenant written notice of
its decisions,
estimates or elections under this Section 18 within sixty (60)
days after any
such damage or destruction. If this Lease is not terminated,
Landlord shall
commence and prosecute with all due diligence restoration of the
Premises.
Notwithstanding anything contained in this Section 18 to the
contrary, Landlord
shall only be obligated to restore the Premises to the extent of
the insurance
proceeds actually received, but if the insurance proceeds
actually received do
not permit Landlord to restore the Premises, Landlord shall so
notify Tenant and
either Landlord or Tenant may terminate this Lease by written
notice given
within sixty (60) days after Landlord's notice. If Landlord
restores the
Premises or the Project in accordance with the provisions of
this Section 18,
then Tenant shall not have any right to terminate this Lease
because of such
damage pursuant to (i) any common law rights, (ii) Minnesota
Statutes Section
504B.131 as now in effect or as it may be hereafter amended or
supplemented, or
(iii) any comparable right established by a similar statute.
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19. CONDEMNATION.
If (a) any material portion of the Premises shall be
permanently
taken or condemned, this Lease shall, upon written notice from
either party,
terminate as of the date of such condemnation or taking, or (b)
more than
fifteen percent (15%) of the Building or the Tower, or such
lesser portion as is
necessary for the commercially reasonable operation of the
Project, shall be
permanently taken or condemned, this Lease shall, upon written
notice from
Landlord or Tenant, terminate as of the date of such taking. If
not terminated
as provided above, this Lease shall continue in full force and
effect and Rent
shall be partially abated based on the number of square feet of
Rentable Area
taken. All proceeds payable on account of any interest in the
Premises and/or
the Project to either or both parties to this Lease from any
taking or
condemnation of the Premises shall belong to and be paid to
Landlord. Nothing
contained herein shall prevent Tenant from seeking and retaining
a separate
award from the condemning authority in any proceeding involving
a taking or a
sale in lieu of a taking, for Tenant's trade fixtures, equipment
or relocation
expenses.
20. DEFAULT.
20.1 Any one of the following events shall constitute an event
of default
("EVENT OF DEFAULT") by Tenant:
(a) Tenant shall fail to pay any installment of Rent within five
(5)
days after receiving written notice of such failure from
Landlord;
(b) Tenant shall fail to execute and deliver a subordination
instrument or an estoppel certificate within twenty (20) days
after a
request therefor, as required respectively by Sections 23 and
29, if such
failure continues for more than ten (10) days after Tenant has
received
written notice of such failure from Landlord;
(c) Tenant shall violate or fail to perform any of the other
conditions, covenants or agreements herein made by Tenant and
such default
shall continue for fifteen (15) days after written notice from
Landlord;
provided, however, that if the nature of such default is such
that Tenant
can cure the default, but Tenant can not reasonably cure such
default
within fifteen (15) days, then the Event of Default shall be
suspended if
Tenant promptly commences to cure the default and thereafter
diligently
and continuously prosecutes the curing of the default to
completion, but
only if the continuation of such default does not create
material risk to
the Project or substantial interference to other tenants of the
Project;
(d) If (1) the interest of Tenant under this Lease shall be
levied
upon under execution or other legal process, (2) any petition
shall be
filed by or against Tenant to declare Tenant bankrupt or to
delay, reduce
or modify Tenant's debts or obligations, (3) Tenant shall be
declared
insolvent according to law, or (4) any assignment of Tenant's
property
shall be made for the benefit of creditors, or a receiver or
trustee is
appointed for Tenant or its property (provided that no such
levy,
execution, legal process or petition filed against Tenant shall
constitute
a breach of this Lease if Tenant shall vigorously
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<PAGE>
contest the same by appropriate proceedings and shall remove or
vacate the
same within thirty (30) days from the date of its creation,
service or
filing); or
(e) If Tenant is a partnership or other entity and Tenant shall
be
dissolved or otherwise liquidated, except in connection with a
merger,
consolidation or other reorganization resulting in the
continuation of
Tenant's business substantially as previously conducted and such
merger,
consolidation or other reorganization is an Assignment to which
Landlord
has given its consent in accordance with Section 10.
20.2 If an Event of Default shall have occurred and be
continuing:
(a) Landlord may terminate this Lease and forthwith repossess
the
Premises and be entitled to recover forthwith as damages a sum
of money
equal to the total of (i) the cost of recovering the Premises
(including
attorneys' fees, disbursements of counsel and any costs of
suit), (ii) the
unpaid Rent earned at the time of termination, plus interest
thereon at
the Interest Rate, (iii) the present value (discounted at the
then current
reference rate of interest published from time to time by U.S.
Bancorp, or
its successors) of the balance of the Rent for the remainder of
the Term
less the present value (discounted at the same rate) of the
amount Tenant
reasonably demonstrates that Landlord would in all likelihood
receive from
leasing the Premises to another tenant for said period, taking
into
account the cost of reletting, the then-current market
conditions, the
time the Premises was vacant and other similar costs, and (iv)
any other
sum of money and damages owed by Tenant to Landlord.
(b) Landlord may terminate Tenant's right of possession (but
not
this Lease) and may repossess the Premises or any portion
thereof by
eviction action or otherwise by process of law, without thereby
releasing
Tenant from any liability hereunder and without demand or notice
of any
kind to Tenant and without terminating this Lease, in which
event Landlord
may, but shall be under no obligation to do so, relet the same
for the
account of Tenant for such rent and upon such terms as shall
be
satisfactory to Landlord. For the purpose of such reletting
Landlord is
authorized to decorate or to make any repairs, changes,
alterations or
additions to the Premises as may be reasonably necessary or
desirable in
Landlord's judgment, and (i) if Landlord does not relet the
Premises, or
(ii) if the same are relet and the amounts received from such
reletting
(after first deducting therefrom, for retention by Landlord, the
unpaid
Rent due hereunder earned but unpaid at the time of reletting
plus
interest thereon at the Interest Rate, the cost of recovering
possession
(including attorneys' fees, disbursements of counsel and any
costs of
suit), all of the costs and expenses of such decorations,
repairs,
changes, alterations and additions, the expense of such
reletting and the
cost of collection of the rent accruing therefrom), are not
equal to or
greater than the Rent provided for in this Lease to be paid,
then (y)
Tenant shall pay to Landlord as damages if the Premises are not
relet, a
sum equal to the amount of the Rent reserved in this Lease for
such period
or periods, plus the cost of recovering possession of the
Premises
(including attorneys' fees and any costs of suit), the unpaid
Rent earned
at the time of repossession plus interest thereon at the
Interest Rate,
and the costs incurred in any attempt by Landlord to relet the
Premises,
or (z) if the Premises have been relet, the Tenant shall satisfy
and pay
any such deficiency. Any such payments due Landlord shall be
made upon
demand therefor from time to time
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and Tenant agrees that Landlord may file suit to recover any
sums falling
due under the terms of this Section 20 from time to time. No
delivery to
or recovery by Landlord of any portion due Landlord hereunder
shall be any
defense in any action to recover any amount not theretofore
reduced to
judgment in favor of Landlord, nor shall such reletting be
construed as an
election on the part of Landlord to terminate this Lease unless
a written
notice of such intention be given to Tenant by Landlord.
Notwithstanding
any such reletting without termination, Landlord may at any
time
thereafter elect to terminate this Lease for such previous
breach.
20.3 In the event of a breach by either party of any of the
agreements,
conditions, covenants or terms hereof, the non breaching party
shall have the
right of injunction to restrain the same and the right to invoke
any remedy
allowed by law or in equity whether or not other remedies,
indemnities or
reimbursements are provided in this Lease. The rights and
remedies given to
Landlord and Tenant in this Lease are distinct, separate and
cumulative
remedies, and no one of them, whether or not exercised by
Landlord or Tenant,
shall be deemed to be in exclusion of any of the others.
20.4 Intentionally omitted.
20.5 If either party hereto initiates litigation to enforce
the
provisions of this Lease against the other party, the prevailing
party in such
litigation shall be entitled to reimbursement from the
non-prevailing party of
all reasonable and documented costs and expenses, including
reasonable
attorneys' fees, paid or incurred by the prevailing party in
connection with
such litigation. For purposes of this Section 20, the term
"prevailing party"
shall be defined to mean the party whose position in such
litigation is
substantially upheld.
20.6 Any one of the following events shall constitute an Event
of Default
by Landlord:
(a) Landlord's failure to pay any amount which is properly due
and
payable to Tenant within ten (10) business days' after written
notice from
Tenant that the same was not paid when due; or
(b) Landlord's failure to perform any of Landlord's
obligations
under this Lease, within thirty (30) days after Landlord has
received
written notice of such failure from Tenant; provided, however,
that if the
nature of such default is such that Landlord can cure the
default, but not
within thirty (30) days, then such default shall not constitute
an Event
of Default so long as Landlord commences cure within thirty (30)
days and
thereafter diligently and continuously prosecutes the curing of
the
default to completion, but only if continuation of the default
does not
create substantial interference to Tenant's enjoyment of the
Premises.
21. LANDLORD'S RIGHT TO CURE DEFAULTS; LATE PAYMENTS.
If Tenant defaults in the making of any payment, or in the doing
of
any act herein required to be made or done by Tenant, or does or
suffers any act
prohibited herein, then Landlord may, but shall not be required
to, make such
payment or do such act, or correct any damage caused by such
prohibited act and
enter the Premises as appropriate in connection
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therewith. Tenant shall reimburse Landlord on demand for all
costs and expenses
incurred by Landlord in curing any such default plus a charge of
ten percent
(10%) to cover Landlord's overhead in curing any non-monetary
default, together
with interest thereon at the Interest Rat
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