Minnesota-Plymouth-2155 Niagara Lane North Lease Agreement - Northwest Properties Realty Corp. and GT Interactive Software Corp.
LEASE AGREEMENT
The capitalized terms in this Lease shall have the meanings ascribed to
in the Lease and as summarized below, and each reference to such term in the
Lease shall incorporate such meaning therein as if fully set forth therein.
TERMS:
Landlord: Northwest Properties Realty Corp., a Minnesota corporation
Tenant: G. T. Interactive Software Corp., a Delaware corporation
Leased Premises: Suite 150, consisting of approximately 20,400 square feet
Project: Northwest Pointe Business Centre
2155 Niagara Lane North
Plymouth, Minnesota 55447-4699
Term: From 12:01 a.m. on March 1, 1999 (the "Commencement Date")
through 1l:59 p.m. on November 30, 2002 (the "Expiration Date")
Annual Minimum Rent
Payable by Tenant for
First Year of Term: $191,124.60 per annum
Base Year: N/A
Security Deposit: $15,927.05
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INDEX
Paragraph Heading
--------- -------
Summary
Index
1 Leased Premises
2 Term
3 Rent
4 Use
5 Acceptance of Leased Premises, Tenant's Work,
and Repairs by Landlord
6 Repairs by Tenant
7 Plans and Specifications
8 Right of Entry
9 Landlord's Right to Act for Tenant
10 Defaults and Remedies
11 Tenant's Improvements, Liens
12 Tenant's Property, Landlord's Lien
13 Subletting and Assignment
14 Casualty
15 Condemnation
16 Insurance
17 Signage
18 Attorney's Fees
19 Parties
20 Landlord and Tenant Relationship
21 Holding Over
22 Sale by Landlord
23 Surrender of the Premises
24 Notices
25 Covenant of Quiet Enjoyment
26 Subordination
27 Estoppel Certificate
28 Successors and Assigns
29 Limitation of Liability
30 Broker's Commission
31 Rules and Regulations
32 Hazardous Substances
33 Miscellaneous
34 Furnishings Covenant
35 Tenant Access
36 Tenant Security System
37 Heating and Cooling System
Exhibit A: Diagram of the Project
Exhibit B: Tenant's Work
Exhibit B-1: Plans and Specifications
Exhibit C: Rules and Regulations
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LEASE AGREEMENT
This Lease Agreement (hereinafter called "Lease") is made on this 22nd
day of February, 1999, by and between Northwest Properties Realty Corp.
("Landlord"), having an office at c/o Sentinel Real Estate Corporation, 666
Fifth Avenue, 26th Floor, New York, New York 10103-2698 and G.T. Interactive
Software Corp., a Delaware corporation ("Tenant"), having a corporate
headquarters located at 417 Fifth Avenue, New York, New York 10016.
WITNESSETH:
Leased Premises: Landlord hereby demises and leases to Tenant, and
Tenant hereby takes and leases from Landlord, that certain space known and
numbered as Suite 150 and containing approximately 20,400 square feet (the
"Leased Premises"), consisting of 19,812 square feet of office space and 588
square feet of warehouse space, now or hereafter to be constructed in the
Northwest Pointe Business Centre (the "Project"), located at 2155 Niagara Lane
North, Plymouth, Minnesota 55447-4699. The Leased Premises are outlined and
crosshatched in red on the diagram of the Project attached hereto as Exhibit A
and made a part hereof. Exhibit A sets forth the general layout of the Project
and shall not be deemed to be a warranty on the part of Landlord that the
Project will be exactly as indicated on said diagram. Landlord may increase,
reduce or change the number, dimensions and locations of roadways, walks,
buildings, landscaped areas and parking areas as Landlord shall from time to
time deem proper; provided that such changes shall not materially impair
Tenant's access to the Leased Premises. Occupancy by Tenant of the Leased
Premises shall include the use in common with others entitled thereto of parking
areas, service roads and sidewalks shown and depicted on Exhibit A, subject,
however, to the terms and conditions of this Lease and to all rules and
regulations for the use thereof as set forth herein and as may from time to time
be otherwise prescribed by Landlord. No easement is included in the Leased
Premises.
2. Term: (a) The term ("Term") of this Lease shall be for a period of
forty-five (45) months commencing on March 1, 1999 (herein referred to as the
"Commencement Date"), and expiring on November 30, 2002 (herein referred to as
the "Expiration Date"). All references to the "Term" or "term of this Lease"
refer to the term of the Lease as it is renewed, extended or sooner terminated.
(b) If Landlord is unable to give possession of the Leased Premises to
Tenant on the Commencement Date because (i) a tenant or occupant remains in
possession of the Leased Premises, or (ii) for any other reason, then Landlord
shall not be liable for such failure, and no such failure shall affect the
validity of this Lease; provided, however, Tenant shall not be required to pay
rent for any period during which Landlord is prevented from giving possession of
the Leased Premises to Tenant. In no event shall the Expiration Date, as
hereinabove defined, be changed in connection with any such delay.
3. Rent:
(a) Minimum Rent: Landlord reserves and Tenant covenants to pay to
Landlord at the address set forth below, or such other address as Landlord shall
from time to time designate in writing, without prior demand being made therefor
and without offset or deduction of any kind, Minimum Rent for the Leased
Premises as follows:
(i) For the period commencing on March 1, 1999 and expiring on
November 30, 2002, the sum of $191,124.60 per annum, payable in equal monthly
installments, in advance, of $15,927.05 per month.
(b) In addition to the Minimum Rent hereinabove set forth, Landlord
reserves, and Tenant covenants to pay to Landlord, as additional rent for the
Leased Premises, a proportion of the Project's Taxes and Operating Expenses, as
such terms are hereinafter defined, which proportion shall be 22.11% of the
Project.
(c) For the purposes of this Lease the term "Taxes" shall mean the sum
of all real estate, ad valorem, property taxes and any general or special
assessments levied upon all or any part of the Building, both land and
improvements thereon, for each year of the Term. The additional rent provided to
be paid in this Paragraph for Taxes at the commencement of the Term have been
computed based on Taxes anticipated to be incurred during the current calendar
year for an estimated charge of $5,678.00 per month to be paid, in advance,
without prior demand being made therefor and without offset or deduction of any
kind.
(d) For the purposes of this Lease, the term "Operating Expenses" shall
mean the total cost and expense incurred in operating and maintaining the common
areas of the Project actually used or available for use by Tenant and the
employees, agents, servants, customers and other invitees of Tenant, including
without limitation, the sum of all costs of all fire and extended casualty
insurance and all liability insurance on the Project together with the costs of
other insurance protections, including but not limited to, business interruption
insurance, gardening and landscaping, repairs, maintenance, painting, lighting,
sanitary control, security, removal of snow, trash, rubbish, garbage and other
refuse, pest control,
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window washing, janitorial, capital expenditures amortized over their useful
lives, management fees and the cost of personnel. For the purposes of this
Lease, the term "Operating Expenses" shall not include any ground lease rental;
costs incurred by Landlord for the repair of damage to the Project, to the
extent that Landlord is reimbursed by insurance proceeds; costs, including
permit, license and inspection costs, incurred with respect to the installation
of tenant or other occupants' improvements in the Project or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space for tenants or other occupants of the Project; marketing costs including,
without limitation, leasing commissions, attorneys' fees in connection with the
negotiation and preparation of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs associated with tenant
improvements, and other costs and expenses incurred in connection with any
lease, sublease and/or assignment negotiations and transactions with present or
prospective tenants or other occupants of the Project; expenses in connection
with services or other benefits which are provided to another tenant or occupant
of the Project which service or benefit is not also provided to Tenant; costs
incurred by Landlord due to the violation by Landlord or any tenant of the terms
and conditions of any lease of space in the Project; overhead and profit
increment paid to Landlord or to subsidiaries or affiliates of Landlord for
goods and/or services in or to the Project to the extent the same exceeds the
costs of such goods and/or services rendered by unaffiliated third parties on a
competitive basis; interest, principal, points and fees on debts or amortization
on any mortgage or mortgages or any other debt instrument encumbering the
Project; advertising and promotional expenditures; tax penalties incurred as a
result of Landlord's negligence or inability to make payments when due; any
management fees in excess of those management fees which are normally and
customarily charged by landlords of comparable buildings; costs arising from the
negligence or fault of other tenants or Landlord or its agents, or any vendors,
contractors, or providers of materials or services selected, hired or engaged by
Landlord or its agents; costs associated with the operation of the business of
the corporate entity which constitutes Landlord as the same are distinguished
from the costs of operation of the Project, including corporate accounting and
legal matters, costs of defending any lawsuits with any mortgagee (except as the
actions of Tenant may be in issue), costs of selling, syndicating, financing,
mortgaging or hypothecating any of Landlord's interest in the Project, costs of
any disputes between Landlord and its employees (if any) not engaged in Project
operation, or outside fees paid in connection with disputes with other tenants;
and costs of capital improvements, except that Operating Expenses shall include
the cost of any capital improvement completed on or after the Commencement Date
which reduce future Operating Expenses or made by Landlord to keep the Project
in compliance with all governmental rules and regulations applicable thereto
from time to time, in either such case as amortized in accordance with generally
accepted accounting principals. For the purposes of this Lease the term "common
areas" shall mean all areas, space, equipment and services provided by Landlord
for the common or joint use and benefit of the occupants of the Project, their
employees, agents, servants, customers, and other invitees, including without
limitation, parking areas, access roads, driveways, retaining walls, landscaped
areas, truck serviceways or tunnels, loading docks, pedestrian or other malls,
courts, stairs, ramps and sidewalks, comfort and first aid stations, washrooms
and parcel pickup stations. The additional rent provided to be paid in this
Paragraph for Operating Expenses at the commencement of the Term have been
computed based on Operating Expenses anticipated to be incurred during the
current calendar year for an estimated charge of $1,666.00 per month to be paid,
in advance, without prior demand being made therefor and without offset or
deduction of any kind.
(e) The additional rent payable for Taxes and Operating Expenses
hereunder shall be adjusted annually to reflect the actual cost of Taxes and
Operating Expenses incurred during the preceding twelve (12) months, to bill
Tenant for any amounts due or refund Tenant for any amounts overpaid for the
preceding twelve (12) months (payments to be made within 30 days of billing or
when refund is calculated, as applicable) and to compute or recompute the
monthly estimates payable by Tenant to Landlord thereafter, based on Taxes and
Operating Expenses anticipated to be incurred during the succeeding twelve (12)
months. Taxes and Operating Expenses shall be prorated for the years in which
the Term commences and expires or sooner terminates based on the portion of such
years(s) during which the Lease is in effect. If Tenant is entitled to a
refund, or Landlord is entitled to a payment, of Taxes and/or Operating Expenses
during the year in which the Term expires or sooner terminates, such amount
shall be paid to Tenant or paid to Landlord, as the case may be, within thirty
(30) days after adjustment is made as aforesaid. This paragraph shall survive
the expiration or sooner termination of this Lease.
(f) All rental payments shall be made to Landlord in monthly
installments in advance, on or before the first of each month and delivered to
Landlord c/o Sentinel Real Estate Corporation, Commercial Accounting, 666 Fifth
Avenue, 26th Floor, New York, New York, 10103-2698.
(g) Tenant covenants and agrees to pay a $50.00 late fee plus interest
at the rate of one and one-half percent (1.5%) per month, compounded
daily, on all Minimum Rent, additional rent and all other sums due under this
Lease from the time said rents or sums accrue if they are not paid within five
(5) days after said payments are due. Should Tenant pay its rent by a check
which is returned for "non-sufficient funds", Landlord may thereafter require
that all future payment be made by certified or bank check. Landlord expressly
reserves all rights and remedies provided herein and by law in respect thereto.
(h) As used herein, the term "Lease Year" shall mean each term of
twelve (12) consecutive calendar months commencing on the Commencement Date or
on the first (1st) day of the first (1st) calendar month following the
Commencement Date, if the Commencement Date does not fall on the first
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(1st) day of a calendar month; provided, however, that the first (1st) Lease
Year shall include the partial month, if any, caused by the Commencement Date's
falling on other than the first (1st) day of a calendar month.
(i) Tenant has deposited with Landlord sum of $15,927.05 as security
for the full and faithful performance by Tenant of all terms of this Lease
required to be performed by Tenant. Said deposit shall be held by Landlord,
without liability for interest, and may be applied by Landlord, in whole or
part, for the payment of any past due fixed Minimum Rent, additional rent, or
other money, damage or loss which may be sustained by Landlord because of a
default by Tenant. In the event of any such application by Landlord; Tenant
shall, upon the written demand of Landlord, promptly remit to Landlord a
sufficient amount of cash to restore the security to the original sum deposited.
Landlord shall deliver such deposit to any purchaser or other transferee of
Landlord's interest in the Building in which the Leased Premises are located,
and thereupon Landlord shall be discharged from any further liability with
respect to such deposit.
(j) Utilities: Tenant shall promptly pay all charges for utilities and
other services furnished to the Leased Premises by Landlord or the applicable
utility company, including, but not limited to gas, water, electricity, fuel,
light, air and heat, and Tenant shall promptly pay all charges for garbage
collection services and for all other sanitary services rendered to the Leased
Premises or used by Tenant in connection herewith. In the event any utilities
furnished to the Leased Premises are not separately metered, Tenant shall pay to
Landlord, as additional rent, Tenant's pro rata share of the utilities used
(without Landlord mark-up) by Tenant, within fifteen (15) calendar days
following receipt of a statement showing any amount due therefor. Tenant's
prorated amount shall be determined on the basis of the size of the Leased
Premises, unless Landlord reasonably determines that Tenant's use of the Leased
Premises justifies a disproportionate allocation of utility costs to Tenant.
(k) All payments due hereunder are subject to any and all governmental
authority having jurisdiction thereover and should at any time the amounts due
hereunder be subject to sales, use or other tax, Tenant shall pay all applicable
tax together with each payment to Landlord.
4. Use: The Leased Premises shall be used solely for general office,
warehouse, and light manufacturing and for no other purposes. The Leased
Premises shall not be used for any illegal purposes; nor in violation of any
regulation of any governmental body; nor in any manner to create any nuisance or
trespass; nor in any manner to vitiate the insurance or increase the rate of
insurance on the Leased Premises or on the Project. Tenant agrees, at its sole
cost and expense, to promptly comply with all requirements of (i) any legally
constituted public authority; provided, however, in no event shall Tenant be
obligated to make any structural repairs to the Leased Premises or to the
Project except if such structural repairs arise out of or in connection with the
specific use made of the Leased Premises by Tenant, or (ii) any insurance
company or rating agency which sets rates of insurance for the Leased Premises
or the Project made necessary by Tenant's particular use and occupancy of the
Leased Premises. Tenant agrees to use the Leased Premises for the purposes
herein leased.
5. Tenant's Acceptance of the Leased Premises, Tenant's Work and
Repairs by Landlord: (a) Tenant hereby accepts the Leased Premises in their
present "as is" condition and as suited for the uses intended by Tenant and
acknowledges that Landlord shall not be required to perform any work therein in
consideration of Tenant's occupancy, however, Landlord shall reimburse Tenant
for improvements to be made by Tenant to the Leased Premises as more
particularly set forth on Exhibit B attached hereto. Except as otherwise
expressly provided in this Lease, Landlord shall not be required to make any
repairs or improvements to the Leased Premises except repairs to the foundation,
exterior and load bearing walls or roof of the Building as necessary for safety
and tenantability; Landlord's duties shall also include repairs to utility and
sewer pipes outside the exterior walls of the Building, or under or within the
floor of the Leased Premises, unless made necessary by the negligence or misuse
of Tenant, its employees, contractors or agents, in which event such repairs
shall be made by and at the expense of Tenant.
(b) Subject to Tenant's payment of additional rent for Operating
Expenses, as set forth hereinabove, Landlord shall be responsible for the
maintenance of the common areas of the Project, including parking areas, planted
areas and landscaping areas which are from time to time designated by Landlord.
(c) In consideration of Tenant's accepting the Leased Premises in their
present "as is" condition, Tenant shall receive a credit in the amount of
$93,084.20 to be applied, in equal monthly installments of $23,271.05 per month,
towards the Minimum Rent, Operating Expenses and Taxes due hereunder for the
period commencing on March 1,1999 and expiring on June 30,1999.
6. Repairs by Tenant: Tenant shall, at all times during the Term of
this Lease, at its sole cost and expense, repair, maintain, replace as necessary
and keep in good, clean and safe repair and conditions all portions of the
Leased Premises and all equipment, fixtures and systems therein and thereon
which are not specifically set forth as the responsibility of Landlord in
Paragraph 5 of this Lease. Tenant's repairs and replacements shall include,
without limitation, all electrical, plumbing, dockbumpers, heating
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and air conditioning systems, parts, components and fixtures within or relating
to the Leased Premises; in connection therewith, Tenant shall maintain in force
at all times a maintenance contract for the heating, ventilation and air
conditioning equipment reasonably acceptable in form and content to Landlord and
with a service organization reasonably acceptable to Landlord. Tenant shall also
promptly repair or replace all doors, non-structural partitions and all glass
and plate glass immediately when cracked or broken. Landlord gives to Tenant
exclusive control of the Leased Premises and shall be under no obligation to
inspect the Leased Premises. Tenant shall at once report in writing to Landlord
any defective conditions known to Tenant which Landlord is required to repair,
and failure to promptly report such defects shall make Tenant liable to Landlord
for any liability incurred by Landlord by reason of such delay, and, Tenant
indemnifies and holds harmless Landlord from and against all loss, cost and
damage (including reasonable attorney's fees) arising from or related to
Tenant's failure to so report such defective conditions.
7. Plans and Specifications: Tenant agrees that it will perform
improvements to the Leased Premises as provided for in Exhibit B attached hereto
and by this reference made a part hereof pursuant to plans and specifications
mutually acceptable to Landlord and Tenant (the "Plans and Specifications"),
which are to be submitted, reviewed and approved by Landlord and Tenant prior to
the completion of the construction thereof. In the event that one party hereto
shall desire, or shall find it necessary to make, any modifications or changes
to the Plans and Specifications, the party desiring or requiring said changes
shall give the other party written notice thereof. No change to the Plans and
Specifications shall be effective unless and until it has been approved in
writing by both Landlord and Tenant. The Plans and Specifications, as amended,
shall thereafter, for all purposes, be considered the "Plans and Specifications"
hereunder. Notwithstanding the foregoing, Tenant acknowledges that in the course
of construction, certain changes, deviations or omissions may be required by
governmental authorities or job conditions and Tenant agrees to such changes,
deviations or omissions, provided that such changes, deviations, or omissions do
not materially alter the value or appearance of the Leased Premises or
materially reduce the quality of materials used in the construction of the
improvements thereto. Tenant understands and agrees that any plans, renderings
or drawings or similar documents which purport to depict any improvements to the
Leased Premises are merely an approximation of, and may not necessarily reflect,
actual, as-built conditions. Landlord shall, upon Tenant's request, during the
period of Tenants possession of the Leased Premises, permit Tenant to jointly
exercise with Landlord the rights and benefits accruing under any warranties,
guaranties and service agreements, if any, covering those portions of the Leased
Premises for which Tenant is responsible under Paragraph 6 hereof.
8. Right of Entry: Landlord or its representative(s) shall have the
right, but not the obligation, to enter the Leased Premises at reasonable hours
upon reasonable prior verbal notice, to exhibit same to prospective purchasers
or lenders and, during the last six (6) months of this Lease only, prospective
tenants; to inspect the Leased Premises to see that Tenant is complying with all
Tenant's obligations hereunder; and to make repairs required of Landlord under
the terms of this Lease (in which event Landlord agrees to take reasonably
appropriate steps to limit the interference such work causes to Tenant's use of
the Leased Premises). Notwithstanding the foregoing, Landlord, without liability
to Tenant, shall have the right to enter the Leased Premises at anytime without
notice in cases of emergency.
9. Landlord's Right to Act for Tenant: If Tenant fails to pay any
additional rent or make any other payment (except Minimum Rent) or take any
other action when and as required under this Lease, Landlord may, but shall be
under no obligation to, without demand upon Tenant and without waiving or
releasing Tenant from any duty, obligation or liability under this Lease, pay
any such additional rent, make any such other payment or take any such other
action required of Tenant. The actions which Landlord may take shall include,
but are not limited to, the performance of maintenance or repairs and the making
of replacements in or on the Leased Premises, the payment of insurance premiums
which Tenant is required to pay under this Lease and the payment of taxes and
assessments which Tenant is required to pay under this Lease. Landlord may pay
all incidental costs and expenses incurred in exercising its rights hereunder,
including, without limitation, reasonable attorneys' fees and expenses,
penalties, reinstatement fees, late charges and interest. All amounts paid by
Landlord pursuant to this Paragraph, and all costs and expenses incurred by
Landlord in exercising Landlord's rights under this Paragraph, shall be
immediately payable by Tenant to Landlord as additional rent upon demand.
10. Default and Remedies: (a) In the event Tenant shall be in default
in the payment of any installment of rent herein reserved (whether Minimum Rent,
or additional rent of any kind) following five (5) days written notice to Tenant
thereof or in the event Tenant shall be in default in the performance of any of
the terms, covenants, conditions or provisions herein contained binding upon
Tenant after Landlord has given Tenant ten (10) days prior written notice of
such non-performance (except that this ten (10) day period shall be extended for
a reasonable period of time not to exceed forty-five (45) days if the default is
not reasonably capable of cure within said ten (10) day period and Tenant
proceeds to diligently cure the default), or in the event Tenant shall be
adjudicated a bankrupt (not released within thirty (30) days) or shall become
insolvent or shall make a general assignment for the benefit of its creditors,
or in the event a receiver shall be appointed for Tenant or a substantial part
of its property and such receiver is not removed within thirty (30) days after
appointment, Landlord shall have the right (in addition to all other rights and
remedies provided by law) to terminate this Lease, to re-enter and take
possession of the Leased Premises pursuant to legal process, peaceably or by
force, and to remove any property therein, without liability for
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damage to, and without obligation to store, such property. In the event of such
termination, Landlord may (but shall be under no obligation to) relet the Leased
Premises, or any part thereof, from time to time, in the name of Landlord or
Tenant, without further notice, for such term or terms, or such conditions and
for such uses and purposes as Landlord, in its uncontrolled discretion, may
determine, and Landlord shall collect and receive all rents derived therefrom
and apply the same, after deduction of all appropriate expenses, to the payment
of the rent payable hereunder, Tenant remaining liable for any deficiency.
Landlord shall not be responsible or liable for any failure to so relet the
Leased Premises or any part thereof, or for any failure to collect, any rent
connected therewith.
(b) Tenant further agrees to pay all reasonable attorneys fees
and court costs incurred by Landlord on account of Tenant's default hereunder.
(c) If Landlord elects to terminate this Lease or if Landlord
shall reenter the Leased Premises without having terminated the Lease, then
notwithstanding such termination or reentry, Tenant shall be liable for and
shall pay to Landlord, the sum of all fixed Minimum Rents, additional rents and
other indebtedness accrued to the date of such termination or reentry, as the
case may be; and Landlord may declare the Minimum Rent and additional rent for
the balance of the Term immediately due and payable as provided for and
determined by a court of competent jurisdiction. All items of additional rent
relating to periods after termination or reentry shall be conclusively presumed
to be the highest average monthly additional rent paid by Tenant during the
Term, except that additional rent on account of Taxes, and Operating Expenses
(as hereinabove defined) shall be conclusively presumed to increase at the
average of the rates of increase thereof during the period prior to such
termination. Nothing in this Paragraph shall be construed to limit or preclude
recovery by Landlord against Tenant for any sums or damages to which, in
addition to the damages particularly provided above, Landlord may lawfully be
entitled by reason of any default hereunder on the part of Tenant.
(d) All remedies of Landlord shall be cumulative of and in
addition to, but not restrictive of or in lieu of, those conferred by law.
(e) In the event of any default by Landlord, Tenant's
exclusive remedy shall be an action for damages (Tenant hereby waiving the
benefit of any laws granting it a lien upon the property of Landlord and/or upon
rent due Landlord), but prior to any such action Tenant will give Landlord
written notice specifying such default with particularity, and Landlord shall
thereupon have thirty (30) days in which to cure any such default. Unless and
until Landlord fails to commence to cure a default after such notice or if
Landlord commences to cure and then fails to prosecute such cure diligently to
completion, Tenant shall not have any remedy or cause of action by reason
thereof. No obligation of Landlord hereunder will be construed as a condition,
and all Landlord's obligations will be binding upon Landlord only during the
period of its ownership of the Building and not thereafter.
11. Tenant Improvements, Liens: (a) Except for unattached movable
fixtures which may be installed without drilling, cutting or otherwise defacing
the Leased Premises, Tenant shall not make any alterations, additions or
improvements to the Leased Premises, exterior or interior, without the prior
written consent of Landlord, which consent, provided such alterations will not
affect the structure or exterior of the Leased Premises or the Building shall
not be unreasonably withheld or delayed. Should Landlord grant Tenant approval
as aforesaid, all such improvements shall be performed by Tenant at Tenant's
sole cost and expense, in accordance with plans, specifications and descriptions
previously approved by Landlord in writing (such approval, provided such
alterations will not affect the structure or exterior of the Leased Premises or
the Building shall not be unreasonably withheld or conditioned), in a prompt and
diligent manner in full compliance with all applicable laws, ordinances, rules
and regulations of all governmental authorities having jurisdiction thereover,
in a good and workmanlike manner and in such a manner as to insure a minimum of
interference with all aspects of the Project's operations including cooperating
fully with Landlord's requests regarding such items as the locations of
construction equipment and the times and manner in which construction will be
performed; provided, however, Tenant shall not be required to work during
non-business hours unless said work entails loud drilling or would otherwise
cause substantial interference with occupants of the Building. Landlord agrees
to notify Tenant of its approval or disapproval of all plans and specifications
submitted to it within ten (10) business days of receipt (and ten (10) business
days on all subsequent revisions). If any such alterations, additions or
improvements are made by Tenant, then, at the expiration of the Term of this
Lease, Tenant agrees to restore the Leased Premises to the condition prior to
making same, at Tenant's sole cost and expense, reasonable wear and tear
excepted, provided that if Landlord does not require removal, then all such
alterations, additions or improvements shall become the sole property of
Landlord. Tenant may not use or penetrate the roof of the Leased Premises for
any purpose whatsoever without Landlord's prior written consent with respect
thereto. Tenant covenants and agrees that all contractors, subcontractors and
other persons or entities performing work for Tenant at the Leased Premises will
carry liability insurance in amounts reasonably acceptable to Landlord.
(b) Tenant covenants that it shall keep the Leased Premises, the
Building and the Project free from liens of any kind for any work performed,
material furnished or obligations incurred by Tenant. Should any liens or claims
be filed against the Leased Premises, the Building or the Project by reason of
Tenant's acts or omissions or for work claimed to have been done for or
materials claimed to have been
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furnished to Tenant, Tenant shall cause the same to be discharged by bond or
otherwise within ten (10) days after receiving notice thereof and Tenant shall
indemnify, defend and save Landlord harmless from and against any and all
costs, liabilities, suits, penalties claims, damages, judgments and expenses
(including, without limitation, reasonable attorneys fees and disbursements)
resulting therefrom. If Tenant fails to cause any such lien or claim to be
discharged within the required time, Landlord may cause same to be discharged
and may make any payment that Landlord, in its sole judgment, considers
necessary, desirable or proper in order to do so and Tenant hereby agrees to pay
to Landlord, as additional rent, all costs so expended by Landlord immediately
upon demand.
12. Tenant's Property, Landlord's Lien: A first lien is hereby
expressly reserved by Landlord and granted by Tenant under the terms of this
Lease, upon all interest of Tenant in this leasehold and upon all personal
property, fixtures, improvements and all other similar items erected upon,
brought to or stored in the Leased Premises for the payment of Minimum Rent or
additional rent and for the satisfaction of any causes of action which may
accrue to Landlord. Furthermore, upon any termination of this Lease at a time at
which Tenant shall be liable in any amount to Landlord under this Lease,
Landlord shall have a lien upon the personal property and effects of Tenant
within the Leased Premises, and Landlord shall have the right, at Landlord's
election, without notice to Tenant, to sell all or part of said property and
effects for any price against any amounts due under this Lease from Tenant to
Landlord, including the expenses of such sale. Upon Tenant's prior written
request and only provided that Tenant is not then in default of this Lease,
Landlord hereby agrees to waive its lien upon the personal property of Tenant to
Tenant's institutional lender under an agreement reasonably acceptable to
Landlord, Tenant and Tenant's lender. If Tenant shall not remove all Tenant's
effects from the Leased Premises at any expiration or other termination of this
Lease, Landlord shall have the right, at Landlord's election, to remove all or
part of said effects in any manner that Landlord shall choose and store, sell,
or use the same without liability to Tenant for damage thereto or loss thereof,
and Tenant shall be liable to Landlord for all expenses incurred in such removal
and also for the cost of storage of said effects and all costs to sell, without
notice to Tenant, said property or any part thereof at private sale and without
legal process for such price as Landlord may obtain, and apply the proceeds of
such sale to any amounts due under the Lease and to the expense incident to the
removal and sale of said property.
13. Subletting and Assignment: (a) Tenant shall not (i) transfer or
assign this Lease or any interest hereunder, nor permit any assignment hereof
by operation of law, (ii) sublet the Leased Premises or any part thereof nor
(iii) permit the use of the Leased Premises by desk tenants or any parties other
than Tenant or its agents, without in each instance first obtaining the prior
written consent of Landlord. Should Tenant wish to obtain Landlord's consent to
an assignment or subletting, it shall make such request in written form
detailing the proposed sub-rent, term, sub-tenant or assignee, compensation to
be received by Tenant, name and financial data of the proposed sub-tenant or
assignee and such other information as Landlord may reasonably request. Landlord
may, in its sole discretion, either (i) give its approval (ii) not give its
approval, or (iii) cancel and terminate this Lease, or if proposed subletting
or assignment is for less than all the Leased Premises, cancel and terminate
this Lease with respect to such portion (with the rent and all other charges
payable hereunder equitably apportioned). If Landlord should grant Tenant its
approval to any sublease or assignment, Tenant shall remain primarily liable for
the performance of all of the covenants contained herein. Tenant shall not
pledge or mortgage its leasehold interest or any part thereof and any such
pledge or mortgage shall, at Landlord's option, render this Lease void.
(b) For purposes of this Paragraph: (i) the merger, transfer of a
majority of the issued and outstanding capital stock of any corporate Tenant or
subtenant or transfer of a majority partnership interest of Tenant or any
subtenant that is a partnership, however accomplished, whether in a single
transaction or in a series of related or unrelated transactions, shall be deemed
an assignment of this Lease, or of such sublease, as the case may be; (ii) a
takeover, management or succession agreement shall be deemed a transfer of this
Lease; and (iii) a modification, amendment or extension without Landlord's prior
written consent of an assignment or a sublease previously consented to by
Landlord shall be deemed a new assignment or sublease. Notwithstanding anything
to the contrary hereinabove set forth, Landlord hereby agrees that, provided
Tenant, or its successor through merger or acquisition, remains primarily liable
hereunder, Tenant may assign its interest in this Lease: (a) to its Parent, as
such term is hereinafter defined; (b) to any wholly-owned subsidiary of its
Parent; (c) to any entity in which its Parent owns a 51% or more interest in;
(d) to any entity which owns 51% or more interest in said Parent; (e) to an
entity with which Tenant or its Parent may merge or consolidate, provided that
the resulting entity has a net worth at least equal to the net worth of Tenant
prior to the deemed transfer; or (f) in connection with the sale of all or
substantially all of Tenant's assets or stock constituting Tenant (hereinafter a
"Pre-approved Assignment"). Tenant's "Parent" shall be defined as a person or
party, which owns 51% or more interest in Tenant. In the event of any such
Pre-approved Assignment by Tenant, Tenant hereby agrees to deliver to Landlord
notice of such assignment, including documentary evidence of such assignment and
the respective parties' ownership interest and net worth, within the thirty (30)
days following any such Pre-approved Assignment.
(c) Landlord may assign this Lease or any part thereof or right
hereunder at any time. Upon such assignment, Landlord shall have no further
obligations with respect hereto and Tenant shall look solely to such assignee
for the performance of Landlord's obligations provided that the assignee has
assumed all such obligations.
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14. Casualty: If at any time during the Term of this Lease, the Leased
Premises or any portion thereof or any portion of the Building should be damaged
or destroyed by fire or other casualty, then Tenant shall have no right to
terminate this Lease, but Landlord shall have the election to terminate this
Lease or to repair and reconstruct the Leased Premises and Building to
substantially the condition in which they existed immediately prior to such
damage and destruction insofar as the proceeds from Landlord's insurance permit.
In any of the aforesaid circumstances, unless such fire or damage shall have
resulted from the negligence, acts or omissions of Tenant or its agents,
contractors, employees, visitors or licensees, Minimum Rent and additional rent
shall abate proportionately during the period to the extent that the Leased
Premises are unfit for use by Tenant in the ordinary course of its business;
provided, however, that should Tenant reoccupy a portion of the Leased Premises
prior to the date the whole Leased Premises are made tenantable, Minimum Rent
and additional rent allocable to such portion shall be payable by Tenant from
the date of such reoccupancy. If Landlord has elected to repair and restore the
Leased Premises, this Lease shall continue in full force and effect and such
repairs will be made within a reasonable time thereafter, subject to delays
arising from shortage of labor or materials and Acts of God, war or other
conditions beyond Landlord's reasonable control. In the event that this Lease is
terminated as herein permitted, Landlord shall refund to Tenant within sixty
(60) days from the date of termination of this Lease the prepaid rent, if any
(unaccrued as of the date of damage or destruction) and any remaining security
deposit, less any sums then owing Landlord by Tenant. If Landlord has elected to
repair and reconstruct the Leased Premises, then the Lease Term shall be
extended for a period of time equal to the period of such repair or
reconstruction. No damages, compensation or claim shall be payable by Landlord
for inconvenience, loss of business or property or annoyance arising from any
termination. Notwithstanding the foregoing, (i) if such damage shall occur
during the last year of the term of this Lease or (ii) Landlord reasonably
estimates that such damage cannot be repaired within six (6) months of the date
of such damage, then in either of such events, Landlord shall give notice of
such fact to Tenant as soon as such is reasonably determined. Not later than
fifteen (15) days following the giving of such notice to Tenant, Tenant may
elect to terminate this Lease by notice to Landlord. If Tenant makes such
election, the term of this Lease shall expire upon the thirtieth (30th) day
after notice of such election is given, and Tenant shall vacate the Leased
Premises and surrender the same to Landlord.
15. Condemnation: (a) In the event of a taking of all or substantially
all of the Leased Premises (so that the untaken portion is unsuitable for the
continued feasible and economic operation of the Leased Premises by Tenant for
substantially the same purposes as immediately prior to such taking), then this
Lease shall automatically terminate and all rent and other sums payable by
Tenant hereunder shall be apportioned and paid through and including the date of
such taking.
(b) In the event of a taking of less than substantially all of the
Leased Premises, either Landlord or Tenant may elect to terminate this Lease by
giving written notice of such termination to the other party, in which event
this Lease shall terminate, and all rent and other sums payable by Tenant
hereunder shall be apportioned and paid through the date of such taking.
(c) In the event of a taking of a type described in subparagraph (b)
hereof and if Landlord and Tenant do not elect to terminate this Lease, then
this Lease and all of the duties and obligation of Tenant hereunder shall remain
unmodified and in full force and effect, provided, however, that the rent
payable after the taking shall be reduced to an amount which bears the same
ratio to the rent payable immediately prior to the taking as the rental value of
the Leased Premises after taking bears to the rental value of the Leased
Premises immediately prior to the taking.
(d) Landlord shall be entitled to all awards, damages, compensation or
proceeds payable by reason of any taking, and Tenant shall not be entitled to
any portion thereof, and shall have no claim for, and hereby expressly
transfers, assigns, conveys and sets over unto Landlord all of its right, title
and interest, if any, in or to any award, damages, compensation or proceeds
payable by reason of any taking. Notwithstanding the foregoing, in any
condemnation proceeding Tenant may submit a separate claim against the
condemning authority for the value of Tenant's furnishings and trade fixtures
and for the cost of relocation, if such separate claim is allowable as such.
16. Insurance: (a) Throughout the Term or any extension thereof, Tenant
shall hold Landlord harmless from any and all injury or damage to person or
property in or on the Leased Premises including, without limitation, all costs,
expenses, claims or suits arising in connection therewith, except to the extent
such damages or injuries are caused by the gross negligence or willful
misconduct of Landlord or its employees, agents, contractors and invitees.
Furthermore, Tenant covenants that it shall maintain insurance against public
liability for injury to person (including death) or damage to property occurring
within the Leased Premises howsoever occasioned. Such insurance shall be within
the minimum single limit of $1,000,000 for personal injury, death or property
damage and Landlord shall be named as an additional insured under such
policy(s). Upon Tenant's execution of this Lease and on each renewal of such
policy(s), Tenant shall deliver to Landlord a certificate evidencing such
insurance, naming Landlord as an additional insured, and in such certificate
agreement the insurer shall agree that said policy may not be cancelled without
thirty (30) days prior written notice to Landlord. In addition, Tenant hereby
agrees to maintain sufficient "contents" insurance against theft or casualty to
its property for all risks including difference in conditions and including,
without limitation, water damage; and that Landlord shall not be
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liable for any theft or damage to persons or property sustained in or about the
Leased Premises during the Term hereof, howsoever caused.
(b) Throughout the Term or any extension thereof, Landlord
shall hold Tenant harmless from any and all injury or damage to person or
property occurring on the common areas of the Project including, without
limitation, all costs, expenses, claims, or suits arising in connection
therewith. Furthermore, Landlord shall maintain insurance against public
liability for injury to person (including death) or damage to property arising
out of the acts or omissions of Landlord or arising out of the use of the common
areas of the Project by Tenant, its licensees, employees, invitees or customers.
Such insurance shall be with minimum single limit of $1,000,000 for personal
injury, death or property damage.
(c) Each party hereto waives any and all right of recovery
against the other party or parties hereto for each and every insured loss (not
caused by the negligence of the other party) under the terms of such policy or
policies.
17. Signage: Tenant shall not install any signs visible from outside of
the Leased Premises and shall not place or display any decoration, lettering or
advertising matter on the glass of any window or door of the Leased Premises
without the prior written consent of Landlord. Any permitted signs shall be
maintained by Tenant in a good condition of repair in compliance with all
applicable governmental laws, ordinances, rules and regulations governing such
signs, and Tenant shall be responsible to Landlord for any damage caused by the
installation, use and maintenance of said signs. Tenant agrees, upon removal of
said signs, to repair all damage incidental thereto.
18. Attorney's Fees: In the event that at any time during the term of
this Lease either Landlord or Tenant shall institute any action or proceeding
against the other relating to the provisions of this Lease, or any default
hereunder, the unsuccessful party in such action or proceeding agrees to
reimburse the successful party for the reasonable expenses of attorneys' fees
and disbursements incurred therein by the successful party.
19. Parties: "Landlord" as used in this Lease shall include Landlord's
assigns and successors in title to the Leased Premises. "Tenant" shall include
Tenant and, if this Lease shall be validly assigned or the Leased Premises
validly sublet, shall include such assignee or subtenant, its successors and
permitted assigns. "Landlord" and "Tenant" shall include male and female,
singular and plural, corporation, partnership or individual, as may fit the
particular parties.
20. Landlord and Tenant Relationship: This Lease shall create the
relationship of Landlord and Tenant between Landlord and Tenant; no estate shall
pass out of Landlord; Tenant has only a leasehold interest which shall not be
subject to levy and sale.
21. Holding Over: If Tenant remains in possession of the Leased
Premises after expiration of the Term of this Lease, with Landlord's
acquiescence and without any distinct agreement of parties, Tenant shall be a
tenant at will, subject to all of the covenants and obligations of this Lease
and at a rental rate equal to 150% of the Minimum Rent and additional rent in
effect at the end of the Term of this Lease; there shall be no renewal of this
Lease by operation of law.
22. Sale by Landlord: In the event of any sale, conveyance, transfer or
assignment by Landlord of its interest in and to the Leased Premises, all
obligations under this Lease of the party selling, conveying, transferring,
assigning or otherwise disposing shall cease and terminate, provided such party
has agreed to assume the obligations of Landlord under this Lease from and after
the date of transfer, and Tenant releases said party from same and Tenant shall
thereafter look only and solely to the party to whom the Leased Premises were
sold, conveyed, transferred, assigned or otherwise disposed of for performance
of all of Landlord's duties and obligations under this Lease.
23. Surrender of the Premises: At the end of the Term or other sooner
termination of this Lease, Tenant shall surrender the Leased Premises and keys
thereto to Landlord in a broom clean condition and otherwise in at least as good
a condition as at Commencement Date of the Term of this Lease, natural wear and
tear and damage by fire and other casualty only excepted. Tenant shall indemnify
Landlord against any loss or liability resulting from delay by Tenant in so
surrendering the Leased Premises, including, without limitation, any claims
made by and succeeding tenant. The terms of this Paragraph shall survive the
termination or expiration of this Lease.
24. Notices: Tenant hereby appoints as Tenant's agent to receive the
service of all dispossessory or distraint proceedings and notices thereunder,
the person in charge of or occupying the Leased Premises at that time; and if no
person is in charge of or occupying same, then such service or notice may be
made by attaching the same on the main entrance to the Leased Premises. All
other notices required or permitted under this Lease by Landlord to Tenant shall
be sent by certified mail, return receipt requested, postage prepaid, by Federal
Express or other reputable overnight carrier or by hand delivery to Tenant at
the Leased Premises with a copy to Tenant at 417 Fifth Avenue, New York, New
York 10016 Attn: General Counsel or such other address as Tenant may from time
to time designate in writing to Landlord. All notices to Landlord shall be
delivered by certified mail, return receipt requested, postage
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prepaid, by Federal Express or other reputable overnight carrier or by receipted
hand delivery to Landlord's principal office at Northwest Properties Realty
Corp., c/o Sentinel Real Estate Corporation, 666 Fifth Avenue, 26th Floor, New
York, New York 10103-2698, or to such other address as Landlord may from time to
time designate in writing to Tenant.
25. Covenant of Quiet Enjoyment: So long as Tenant observes and
performs the covenants and agreements contained herein to be observed and
performed by Tenant, Landlord covenants and agrees that Tenant shall at all
times during the Term of this Lease peacefully and quietly have and enjoy
possession of the Leased Premises, subject to the terms hereof.
26. Subordination: This Lease is subject and subordinate to all ground
leases and/or mortgages which may now or hereafter affect the Project or any
portion thereof, and to all renewals, refinancings, modifications,
consolidations, replacements and extensions of any such ground leases and/or
mortgages. This clause shall be self-operative and no further instrument of
subordination shall be required. Tenant shall promptly execute any certificate
that Landlord may reasonably request in confirmation of such subordination.
Landlord shall use reasonable efforts to obtain from the existing lender and any
future lenders or ground lessors a subordination, non-disturbance and attornment
agreement in a form reasonably satisfactory to Tenant, Landlord and such lender.
27. Estoppel Certificate: Tenant shall, at any time and from time to
time, within ten (10) days after Landlord's request, execute, acknowledge and
deliver to Landlord a certificate evidencing whether or not (i) this Lease is in
full force and effect; (ii) this Lease has been amended in any way; (iii) there
are any existing defaults on the part of Landlord hereunder, to the knowledge of
Tenant, and specifying the nature of such defaults, if any; (iv) the date to
which rent and other amounts due hereunder, if any, have been paid; and (v) such
other matters reasonably requested by Landlord. Each certificate delivered
pursuant to this Paragraph may be relied on by any prospective purchaser of the
Project or transferee of Landlord's interest hereunder or by any holder or
prospective holder of any mortgage instrument or deed to secure debt now or
hereafter encumbering the Project.
28. Successors and Assigns: The provisions of this Lease shall inure to
the benefit of and be binding upon Landlord and Tenant and their respective
successors, heirs, legal representatives and assigns, subject, however, in the
case of Tenant, to the restrictions on assignment and subletting contained in
this Lease.
29. Limitation of Liability: Tenant agrees that the liability of
Landlord under this Lease and all matters pertaining to or arising out of the
tenancy and the use and occupancy of the Leased Premises including, but not
limited to, all matters or claims of whatsoever nature arising out of or caused
by the negligence of Landlord, its agents, servants or employees, shall be
limited to Landlord's interest in the Project and proceeds, if any, thereof, and
in no event shall Tenant bring any action or make any claim against, recover any
money judgement from, or seek to impose any personal liability upon any
principal, agent, officer, shareholder, director, general or limited partner of
the Landlord or any principal for whom Landlord may be acting.
30. Broker's Commission: Tenant warrants and represents to Landlord
that no party is entitled, as a result of the actions of Tenant, to a commission
or other fee resulting from the execution of this Lease except for Brad Bohlman
of Welsh Companies, 8200 Normandale Boulevard, Suite 200, Minneapolis, Minnesota
55437-1064 (hereinafter "Welsh") and John M. Lavander of Caliber Development
Corporation, 14505 21st Avenue, Suite 205, Plymouth, Minnesota 55447
(hereinafter "Caliber") and Tenant agrees to pay, hold harmless and indemnify
Landlord from and against any and all costs, expenses (including reasonable
attorney's fees and court costs), loss and liability for any compensation,
commissions or charges claimed by any other broker or agent with respect to this
Lease or the negotiations thereof if such claim or claims by any such broker or
agent are based in whole or in part on dealings with Tenant or its
representatives. The fees paid to Welsh and Caliber in connection herewith shall
collectively be the "Brokerage Commission." Landlord agrees to pay the
applicable Brokerage Commission to Welsh and Caliber in accordance with the
terms of a separate agreement.
31. Rules and Regulations: Tenant accepts the Leased Premises subject
to, and hereby agrees with Landlord to abide by, the rules and regulations
attached to this Lease and incorporated herein by reference, together with such
additional Rules and Regulations or amendments thereto as may hereafter from
time to time be established by Landlord, and such additions or amendments shall
be binding on Tenant upon receipt of same by Tenant. Landlord shall enforce all
rules and regulations in a uniform, non-discriminatory manner. In the case of a
conflict between this Lease and any rules and regulations that may later be
adopted, the terms of this Lease shall control.
32. Hazardous Substances: (a) Tenant shall at all times and in all
respects comply with all federal, state, and local laws, ordinances and
regulations ("Hazardous Materials Law") relating to industrial hygiene,
environmental protection or the use, analysis, generation, manufacture, storage,
presence, disposal or transportation of any oil, flammable explosives, asbestos,
urea formaldehyde, radioactive materials or waste or other hazardous toxic,
contaminated, or polluting materials, substances, or wastes, including, without
limitation, any "hazardous substances", "hazardous wastes", "hazardous
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materials", or "toxic substances" under any such laws, ordinances or regulations
(collectively, "Hazardous Materials") in accordance with the provisions
hereinafter set forth.
(b) Tenant shall, at its own cost and expense, procure, maintain in
effect and comply with all conditions of any and all permits, licenses and other
governmental and regulatory approvals required for Tenant's use of the Leased
Premises including, without limitation, discharge of (appropriately treated)
materials or wastes into or through any sanitary sewer serving the Leased
Premises. Except as discharged into the sanitary sewer in strict accordance and
conformity with all applicable Hazardous Materials Laws, Tenant shall cause any
and all Hazardous Materials removed from the Leased Premises to be removed and
transported solely by duly licensed haulers to duly licensed facilities for
final disposal of such materials and wastes. Tenant shall in all respects
handle, treat, deal with and manage any and all Hazardous Materials in, on,
under, or about the Leased Premises in total conformity with all applicable
Hazardous Materials Laws and prudent industry practices regarding management of
such Hazardous Materials. All reporting obligations imposed by Hazardous
Materials Laws are strictly the responsibility of Tenant. Tenant is "in charge"
of Tenant's "facility" as such terms are used in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendment and Reauthorization Act of 1986.
Upon expiration or earlier termination of the Term of this Lease,
Tenant shall cause all Hazardous Materials brought to the Leased Premises by
Tenant or its employees, agents, contractors or invitees to be removed from the
Leased Premises and transported for use, storage, or disposal in accordance and
compliance with all applicable Hazardous Materials Laws. Tenant shall not take
any remedial action in response to the presence of any Hazardous Materials in or
about the Leased Premises or the Project, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any claims relating
to any Hazardous Materials in any way connected with the Leased Premises or the
Project, without first notifying Landlord of Tenant's intention to do so and
affording Landlord ample opportunity to appear, intervene, or otherwise
appropriately assert and protect Landlord's interest with respect thereto. In
addition, at Landlord's request, Tenant shall remove any tanks or fixtures which
contain, contained or are contaminated with Hazardous Materials (other than
those present when Tenant took possession of the Leased Premises).
(c) Tenant shall immediately notify Landlord in writing of: (i) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Laws;
(ii) any claim made or threatened by any person or party against Tenant, the
Leased Premises or the Project relating to damage, contribution, cost recovery
compensation, loss, or injury resulting from or claimed to result from any
Hazardous Materials; and (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in, on, or removed
from the Leased Premises or the Project, including any complaints, notices,
warnings, reports or asserted violations in connection therewith. Tenant shall
also supply to Landlord as promptly as possible, and in any event within five
(5) business days after Tenant first receives or sends the same, copies of all
claims, reports, complaints, notices, warnings, asserted violations relating in
any way to the Leased Premises, the Project or Tenant's use thereof. Tenant
shall promptly deliver to Landlord copies of Hazardous Waste manifests
reflecting the legal and proper disposal of all Hazardous Materials removed from
the Leased Premises.
(d) Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord) and hold Landlord and each of Landlord's partners, employees, agents,
attorneys, successors and assigns, free and harmless from and against any and
all claims, liabilities, penalties, forfeitures, losses, or expenses (including
attorney's fees and disbursements) for death of or injury to any person or
damage to any property whatsoever (including water tables and atmosphere)
arising from or caused in whole or in part, directly or indirectly, by (i) the
presence in, on, under, or about the Leased Premises or the Project or discharge
in or from the Leased Premises or the Project of any Hazardous Materials brought
to, or created at, the Leased Premises by Tenant or its employees, agents,
contractors or invitees, or Tenant's use, analysis, storage, transportation,
disposal, release, threatened release, discharge, or generation of Hazardous
Materials to, in, on, under, about, or from the Leased Premises or the Project,
or (ii) Tenant's failure to comply with any Hazardous Materials Law to the
extent Tenant is required to do so under the terms herein, whether knowingly or
unknowingly, the standard herein being one of strict liability. Tenant's
obligations hereunder shall include, without limitation, and whether foreseeable
or unforeseeable, all costs of any required or necessary repair, cleanup,
detoxification, or decontamination of the Leased Premises or the Project, and
the preparation and implementation of any closure, remedial action, or other
required plans in connection therewith, and shall survive the expiration or
earlier termination of the Term of this Lease. For purposes of the release and
indemnity provision hereof, any acts or omissions of Tenant, or by employees,
agents, assignees, subtenants, contractors, or subcontractors of Tenant or
others acting for or on behalf of Tenant (whether or not they are negligent,
intentional, willful, or unlawful), shall be strictly attributable to Tenant.
(e) If at any time it reasonably appears to Landlord that Tenant is not
maintaining sufficient insurance or other means of financial capacity to enable
Tenant to fulfill its obligation to Landlord hereunder, whether or not then
accrued, liquidated, conditional, or contingent, Tenant shall, upon Landlord's
demand, procure and thereafter maintain in full force and effect such insurance
or other form
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of financial assurance, with or from companies or persons and in forms
reasonably acceptable to Landlord, as Landlord may from time to time reasonably
request. Landlord may, but shall be under no obligation to, procure such
insurance if Tenant fails to meet its obligation hereunder and Tenant agrees to
pay to Landlord the cost thereof as additional rent, immediately upon demand.
(f) If Tenant's use of the Leased Premises shall involve Hazardous
Materials of any kind in any fashion, Landlord shall have the right to require
Tenant to undertake and submit to Landlord a periodic environmental audit from a
qualified environmental engineering firm or auditor which audit will evaluate
Tenant's compliance with the terms of this Lease and all Hazardous Material
Laws.
(g) To the best of Landlord's knowledge, as of the date hereof, there
are no Hazardous Materials in place in the Leased Premises. Should Tenant,
notwithstanding the foregoing, desire to have materials in place in the Leased
Premises tested for the presence of Hazardous Materials, Landlord hereby grants
Tenant the right to perform such testing, only within the thirty (30) days
following the full execution hereof and prior to the construction of any tenant
improvements. If Tenant elects to perform such testing, it shall notify Landlord
in writing of such election, identifying the licensed and qualified engineer it
has hired and the scheduled date and scope of testing to be performed, within
five (5) business days of the full execution hereof and at least five (5) days
prior to such testing. Upon the completion of any such testing by Tenant, Tenant
shall immediately deliver to Landlord its licensed and qualified engineer's
written report and t est results. In the event that such testing by Tenant
reveals the presence of any materials which require removal pursuant to any
Hazardous Material Laws; then, Tenant may either: (i) cancel and terminate this
Lease upon delivery of notice to Landlord; or (ii) demand that Landlord, on a
timely basis, remove such Hazardous Materials and restore that portion of the
Leased Premises affected by such removal to good condition of repair, all in
accordance with the requirements of all applicable Hazardous Material Laws
(collectively such removal and repair shall be called "Restoration"). Landlord
agrees, upon its receipt of such notice of demand by Tenant, to reimburse Tenant
for all reasonable expenses incurred by Tenant for such testing within the
thirty (30) days following Tenant's completion of such testing and delivery to
Landlord evidence of the costs so incurred, and to credit Tenant for all Minimum
Rent and additional rent due hereunder during the period in which such
Restoration is performed, such credit to be applied towards the first month in
which Minimum Rent and additional rents would otherwise be due and payable by
Tenant to Landlord. Should Landlord fail to commence such Restoration within the
thirty (30) days following its receipt of Tenant's demand, then Tenant may
perform such Restoration, on a timely basis, and Landlord agrees to reimburse
Tenant for all reasonable expenses incurred by Tenant for such testing and
Restoration, thirty (30) days following Tenant's completion of such Restoration
and delivery to Landlord evidence of the removal and lawful disposal of all such
Hazardous Materials and the reasonable costs incurred in connection therewith
and to credit Tenant for the Minimum Rent and additional rent due hereunder
during the period in which such Restoration is performed, such credit to be
applied towards the first month in which Minimum Rent and additional rent would
otherwise be due and payable by Tenant to Landlord. However, should Tenant elect
to test materials in place in the Leased Premises for the presence of Hazardous
Materials as hereinabove described and discover that no Hazardous Materials are
present in the Leased Premises, the cost of such testing shall be borne by
Tenant at Tenant's sole cost and expense.
33. Miscellaneous: Time is of the essence with respect to this Lease.
This Lease contains the entire agreement of Landlord and Tenant and no
representations or agreement, oral or otherwise, between the parties not
embodied herein shall be of any force or effect. No failure to exercise any
power given hereunder, or to insist upon strict compliance with any obligations
hereunder, and no custom or practice at variance with the terms hereof shall
constitute a waiver of either party's right to demand exact compliance with the
terms hereof. The acceptance of any payment hereunder by Landlord shall not be
deemed to be a waiver of any preceding default of Tenant of any term, covenant
or condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time of acceptance of such payment. No endorsement or statement on
any check or any letter accompanying any check or payment shall be deemed an
accord and satisfaction and Landlord may accept any such check or payment
without prejudice to Landlord's right to recover the balance of such payment or
pursue any other remedy provided in this Lease or otherwise. If any clause or
provision of this Lease is illegal, invalid or unenforceable under applicable
present or future laws or regulations effective during the Term of this Lease,
the remainder of this Lease shall not be affected. In lieu of each clause or
provision of this Lease which is illegal, invalid or unenforceable, there shall
be added as a part of this Lease a clause or provision as nearly identical as
may be possible and as may be legal, valid and enforceable. This Lease shall be
governed by, construed under and interpreted and enforced in accordance with the
laws of the state in which the Leased Premises is located. Neither this Lease,
nor any memorandum of this Lease or reference hereto, shall be recorded by
Tenant without Landlord's consent endorsed thereon. Landlord shall be excused
from the performance of any of its obligations under this Lease for the period
of any delay resulting from any cause beyond its control, including, without
limitation, all labor disputes, governmental regulations or controls, fires or
other casualties, inability to obtain any material or services or acts of God.
If Tenant executes this Lease as a corporation, Tenant does hereby represent and
warrant that Tenant is a duly authorized and existing corporation, that Tenant
is qualified to do business in the state in which the Leased Premises are
located, that the corporation has full right and authority to enter into this
Lease, and that each person signing on behalf of the corporation is authorized
to do so. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other or in respect to
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any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant hereunder, Tenant's use or occupancy of
the Leased Premises and/or any claim of injury or damages.
34. Furnishings Covenant: Tenant acknowledges and agrees that Landlord
is making and has made no representation regarding the ownership of the
furniture, fixtures or equipment ("Furnishings") in place in the Leased Premises
and Landlord shall not have any responsibility, legal, financially or otherwise,
with respect to the furnishing. Landlord is not guaranteeing or ensuring that
the Furnishings will remain in the Leased Premises and Tenant acknowledges that
a third party may have rights to remove the Furnishings from the Leased
Premises. Tenant agrees that Landlord's rights to the Furnishings may be
subordinate to one or more adverse claims to the Furnishings and Tenant agrees
to hold Landlord harmless should any adverse claim arise regarding the
Furnishings. Notwithstanding the foregoing, however, subject to Landlord's
receipt of an inventory of the Furnishings and evidence of the ownership
thereof, Landlord hereby agrees that upon Tenant's written request and only
provided that Tenant is not then in default of this Lease, Landlord shall waive
its lien, if any, upon the Furnishings in a form reasonably acceptable to
Landlord, Tenant and the owner of such Furnishings.
35. Tenant Access: Tenant shall have access to the Leased Premises on
a 24-hour day, seven day a week basis.
36. Tenant Security System: Tenant shall have the right, at its sole
cost and expense, to install a security system in the Leased Premises; provided
that Tenant shall ensure that Landlord has a means of access to the Leased
Premises at all times during the term of this Lease, including without
limitation, the means for immediate access to the Leased Premises in the case of
an emergency. In connection with the foregoing, Tenant shall provide Landlord at
the commencement of the term of this Lease with at least two functioning card
keys to the Leased Premises.
37. Heating and Cooling System: Upon the commencement of the Term of
this Lease and in addition to the provisions of Paragraph 6 hereof, Tenant
hereby agrees that it shall effect a preventative maintenance program with
respect to the maintenance of the heating and air conditioning system in place
in the Leased Premises (hereinafter the "HVAC"), and agrees to perform such
preventative maintenance program in a manner consistent with common practice and
reasonable prudence to prevent damage and waste with respect to such system.
Notwithstanding the provisions of Paragraph 6 herein, and only provided Tenant
has complied with the provisions with respect to preventative maintenance
hereinabove set forth, including evidencing such compliance by delivering to
Landlord a signed copy of its contract with a qualified heating, ventilation and
air conditioning contractor (the "Preventative Maintenance Contractor") and
copies of all service reports it receives with respect thereto, Landlord agrees
to pay for the cost to repair or replace any major component of the HVAC in
excess of $1,000.00 per calendar year, Tenant being responsible for the first
$1,000.00 of cost therefor. Landlord's obligation hereunder shall not, at any
time, include items which fall into the category of routine or preventative
maintenance. Should Tenant be informed by its Preventative Maintenance
Contractor of the need to repair or replace any major component of its HVAC
costing $1,000.00 or more, Tenant shall immediately notify Landlord in writing,
prior to the performance of any such replacement, and Landlord shall retain the
right to bid such replacement and to utilize the contractor of its choice to
perform any such requirement.
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IN WITNESS WHEREOF, each corporate party hereto has caused this Lease
Agreement to be executed in its name and behalf, by an authorized officer of
the corporation, as of the date set forth above.
WITNESSES: LANDLORD: NORTHWEST PROPERTIES REALTY CORP.
By: /s/ Signature Illegible By: /s/ Christine C. Kurtz
------------------------ ----------------------------------------
(title) Vice President
TENANT: G.T. INTERACTIVE SOFTWARE CORP.
By: /s/ Kari L. Heinle By: /s/ Signature Illegible
------------------------ ----------------------------------------
(title) President
/s/ Signature Illegible V.P. 2/17/99
----------------------------------------
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EXHIBIT A
[MAP]
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EXHIBIT B
Tenants Work
Landlord shall reimburse Tenant for improvements to be made by Tenant to the
Leased Premises up to a maximum amount of $10,000 upon (i) evidence that the
improvements were properly performed in accordance with the approved Plans and
Specifications, (ii) Landlord's receipt of paid invoices totaling at least
$10,000 for those improvements, (iii) evidence of payment and final lien waivers
therefore; and (iv) Tenant's receipt and submission to Landlord of all necessary
certificates of occupancy and any other documentation that Landlord may
reasonably require in connection with said construction.
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EXHIBIT C
Page 1 of 2
Rules and Regulations
1. No sign, placard, picture, advertisement, name, notice or sun screening shall
be inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building or any portion of the Project without the written consent
of Landlord first had and obtained and in the absence thereof, Landlord shall
have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant. All approved signs of
lettering on doors shall be printed, painted, axed or inscribed at the sole risk
and expense of Tenant by a licensed contractor reasonably approved by Landlord
and subject to all laws, ordinances rules, regulations and recommendations of
all governmental and quasi-governmental authorities having jurisdiction
thereover and all insurance companies and fire rating agencies which insure the
Project. Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Leased Premises. Landlord may specify a Building standard window
covering for all exterior windows.
2. All parking shall be within the property boundaries of the Project and within
marked parking spaces. There should be no on-street parking and at no time shall
any Tenant obstruct any driveways or loading areas intended for the use of other
tenants, their employees, agents, customers and invitees. The driveways and
parking areas in the Project are for the joint and non-exclusive use of
Landlord's tenants, their employees, agents, customers and invitees, unless
specifically marked to the contrary. In the event Tenant, its agents, customers
and/or invitees use a disportionate portion of the parking areas, Landlord shall
have the right to restrict Tenant, its agents, customers and/or invitees to
certain parking areas. Tenant shall not permit any fleet trucks to park
overnight in the Project's parking areas without Landlord's prior written
approval.
3. Unless specifically approved by Landlord in writing, no materials, supplies
or equipment shall be stored anywhere in, on or about the Project except inside
the Leased Premises. Trash receptacles may not be placed in the service areas
except by Landlord. If Landlord does not supply trash receptacles, Tenant shall
furnish its own receptacles, and shall place such receptacles in a location
reasonably designated by Landlord.
4. No additional locks, other than Landlord approved entry systems, shall be
placed on the doors of the Leased Premises by Tenant nor shall any existing
locks be changed unless Landlord is immediately furnished with two keys thereto.
Landlord will, without charge, furnish Tenant with two keys for each lock on the
entrance doors to the Leased Premises when Tenant assumes possession, with the
understanding that at the termination or expiration of the Term of this Lease
the keys to the Leased Premises shall be returned to Landlord.
5. Tenant will refer all contractors, contractor's representatives and
installation technicians rendering any service on or to the Leased Premises for
Tenant to Landlord for its reasonable approval and supervision before
performance of any service. Landlord shall notify Tenant of its approval or
disapproval of any contractor to be utilized by Tenant within twenty (20)
business days from the date of such request by Tenant. This provision shall
apply to all work performed in the Project, including, but not limited to,
installation of electrical devices and attachments and installations of any
nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or
any other portion of the Project.
6. No Tenant shall at any time occupy or allow any person to occupy any part of
the Leased Premises or the Project as sleeping or lodging quarters.
7. Tenant shall not place, install or operate on the Leased Premises or in any
part of the Project, any engine, stove or machinery, or conduct mechanical
operations or cook thereon or therein, or place or use in or about the Leased
Premises any explosives, gasoline, kerosene, oil, acids, caustics or any other
flammable, explosive or Hazardous Material without the prior written consent of
Landlord. The foregoing shall not prohibit the use of microwave ovens or coffee
making machines.
8. Windows facing the Building exterior shall at all times be wholly clear and
uncovered (except for such blinds or curtains or other window coverings Landlord
may provide or reasonably approve) so that a full unobstructed view of the
interior of the Leased Premises may be had from outside the Building.
9. The sidewalks, parking lots and exits shall not be obstructed by Tenant, its
employees, agents, contractors, subtenants or assigns or used for any purpose
other than for ingress to and egress from the Leased Premises.
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EXHIBIT C
Page 2 of 2
Rules and Regulations
10. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the Leased Premises, or permit or suffer the Leased Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors and vibrations, or
interfere in any way with other Tenants or those having business in the
Project, nor shall any animals or birds be brought in or kept in or about the
Leased Premises or the Project.
11. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who may in any manner do any act in violation of any law or
any rule or regulations of the Project.
12. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name of the Project and street address of the
Building of which the Leased Premises are a part.
13. Tenant shall not disturb, solicit or canvass any occupant of the Project and
shall cooperate to prevent same.
14. Without the prior written consent of Landlord, Tenant shall not use the name
of the Project in connection with or in promoting or advertising the business of
Tenant except as Tenant's address.
15. Landlord shall have the right to control and operate the common areas of the
Project, the public facilities thereof, as well as the facilities furnished for
the common use of all Tenants, in such manner as it deems appropriate.
16. No satellite dish, radio, television or other aerial or equipment of any
kind may be placed or installed on the roof or on any exterior wall of the
Leased Premises or on the grounds or common areas of the Project without the
prior written consent of Landlord in each instance. Any equipment so installed
without such written consent shall be at the sole risk of Tenant and shall be
subject to removal without notice at any time and Tenant shall pay to Landlord,
on demand, as additional rent, the cost of any damages occasioned thereby
including, but not limited to, the cost to replace any warranty voided or
diminished by such installation and the cost of removal and repairs.
17. Landlord shall have the right from time to time to modify, add to or delete
any of these rules and regulations at Landlord's discretion, provided that any
changes are uniformly applied to all Tenants.
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FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE ("AMENDMENT"), made this 14th day of May,
1999 between Northwest Properties Realty Corp., a Minnesota corporation
("Landlord"), and G. T. Interactive Software Corp., a Delaware corporation
("Tenant");
WITNESSETH:
WHEREAS, Landlord and Tenant entered into a lease dated February 22,
1999 (the "Lease"), covering premises consisting of 20,400 square feet, known
and numbered as Suite 150, located in the Northwest Pointe Business Centre
("Building"), 2155 Niagara Lane North, Plymouth, Minnesota 55447 ("Existing
Premises");
WHEREAS, Landlord and Tenant desire to enter into this Amendment to
provide for Tenant's expansion of the Existing Premises into Suite 151 of the
Building containing approximately 3,000 square feet of office space and to
further amend the Lease; and
WHEREAS, Tenant desires to extend the term of the Lease for an
additional three (3) month period commencing on December 1, 2002 and expiring
on February 28, 2003 and to further amend the Lease.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, Landlord and Tenant hereby agree to amend the Lease,
effective as of April 1, 1999, as follows:
1. The term of the Lease is hereby extended through February 28,
2003.
2. The space, known and numbered as Suite 151 and located in the
Northwest Pointe Business Centre, 2155 Niagara Lane North,
Plymouth, Minnesota 55447, as depicted on Exhibit A attached
hereto ("Expansion Premises"), shall be added to the Existing
Premises, so that as of April 1, 1999, the "Leased Premises"
as such term is defined in the Lease shall be increased from
20,400 square feet to 23,400 square feet and the "Leased
Premises" shall consist of Suites 150 and 151, collectively
consisting of approximately 23,400 square feet, and Exhibit A
attached hereto shall replace Exhibit A attached to the Lease.
The Expansion Premises shall become part of the Leased
Premises for all purposes of the Lease, and any reference in
the Lease to the Leased Premises shall be deemed to refer to
and include the Expansion Premises, except as expressly
provided otherwise in this Amendment.
3. Tenant covenants to pay to Landlord, without prior demand
being made therefor and without offset or deduction of any
kind, as Minimum Rent for the Leased Premises, for the period
commencing on April 1,1999 and expiring on February 28, 2003,
the sum of $219,234.60 per, annum, payable in equal monthly
installments, in advance, of $18,269.55 per month.
4. That the figure "22.11%" shall be deleted from Paragraph 3(b)
of the Lease and the figure "25.37%" shall be inserted in its
stead and place.
5. That the figure "$5,678.00" shall be deleted from Paragraph
3(c) of the Lease and the figure "$6,513.00" shall be inserted
in its stead and place.
6. That the figure "$1,666.00" shall be deleted from Paragraph
3(d) of the Lease and the figure "$1,911.00" shall be inserted
in its stead and place.
7. That the words "Leased Premises" in the first line of
Paragraph 5(c) of the Lease shall be deleted and the words
"Existing Premises" shall be inserted in its stead and place.
8. Tenant hereby accepts the Expansion Premises in "as is"
condition and acknowledges that Landlord shall not be required
to perform any work therein in consideration of Tenant's
occupancy.
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9. In consideration of Tenant's accepting the Expansion Premises
in their present "as is" condition, Tenant shall receive a
credit in the amount of $10,267.50 to be applied in equal
monthly installments of $3,422.50 per month, towards the
Minimum Rent, Operating Expenses and Taxes due under the Lease
for the period commencing on April 1,1999 and expiring on June
30, 1999.
10. Tenant represents and warrants to Landlord that Tenant has had
no dealings or negotiations with any broker or agent in
connection with the consummation of this Amendment except for
Brad Bohlman of Welsh Companies, 8200 Normandale Boulevard,
Suite 200, Minneapolis, Minnesota 55437-1060, (hereinafter
"Welsh") and John M. Lavander of Caliber Development
Corporation, 14505 21st Avenue, Suite 205, Plymouth, Minnesota
55447 (hereinafter "Caliber") and Tenant agrees to pay, hold
harmless and indemnify Landlord from and against any and all
costs, expenses (including attorney's fees and court costs),
loss and liability for any compensation, commissions or
charges claimed by any broker or agent with respect to this
Amendment or the negotiations hereof if such claim or claims
by any such broker or agent are based in whole or in part on
dealings with Tenant or its representatives. Landlord shall
pay the commission due Welsh and Caliber pursuant to the terms
of a separate brokerage agreement entered into between
Landlord and Welsh.
11. Tenant hereby represents and warrants to Landlord that Tenant
(i) is not in default of any of its obligations under the
Lease and that such Lease is valid, binding and enforceable in
accordance with its terms, (ii) has full power and authority
to execute and perform this Amendment, and (iii) has taken all
actions necessary to authorize the execution and performance
of this Amendment.
12. The recitals set forth hereinabove are incorporated herein by
this reference with the same force and effect as if fully set
forth hereinafter.
13. Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Lease.
14. Except as expressly amended hereby, the Lease and all of the
terms, covenants and conditions of the Lease are hereby
confirmed and ratified and shall remain and continue in full
force and effect.
15. This Amendment may not be modified or terminated orally and
constitutes the entire agreement between the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the
day and year first written above.
LANDLORD: Northwest Properties Realty Corp.
By: /s/ (illegible)
-----------------------------------
(Title) Vice President
TENANT: G. T. Interactive Software Corp.
By: /s/ (illegible)
----------------------------------
(Title) President
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EXHIBIT A
[MAP]
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