EX-10 4 lease-5.htm FIFTH AMENDMENT TO LEASE  

FIFTH AMENDMENT TO LEASE
 

DATE: March 2, 2020
  PARTIES: GRE – BRYANT LAKE, LLC,
A MINNESOTA LIMITED LIABILITY COMPANY
“Landlord”
 
NVE CORPORATION,
A MINNESOTA CORPORATION
“Tenant”
  RECITALS:   A.       Landlord, as successor in interest, and Tenant, as
successor in interest, are parties to that certain lease dated October 1, 1998,
First Amendment to Lease dated September 18, 2002, Second Amendment to Lease
dated December 1, 2003, Third Amendment to Lease dated December 17, 2007 and
Fourth Amendment to Lease dated August 2, 2011 (collectively, the “Lease”)
relating to approximately 21,362 square feet of space (the “Premises”) located
in Bryant Lake Business Center, 11409 Valley View Road, Eden Prairie, Minnesota.
  B.       The parties have reached an agreement with extending the Term of the
Lease which they wish to reduce to writing.
 

AGREEMENT:
 
          In consideration of the following terms and conditions, the parties
agree as follows:

          1.        Recitals.      The foregoing recitals are true and are
incorporated herein.

          2.        Effective Date. The “Effective Date” of this Fifth Amendment
to Lease shall be January 1, 2021.

          3.        Extension of Lease Term. The Term of the Lease is hereby
extended, pursuant to all of the terms and conditions of the Lease as amended,
for an additional period of five (5) years and three (3) months, commencing on
January 1, 2021 and ending March 31, 2026 (the “Third Extended Term”).

          4.        Annual Base Rent. As of January 1, 2021, Tenant’s Annual
Base Rent for the Premises shall be as follows:
 

Months Annual Base Rent Monthly Installment 01/01/21-12/31/21 $170,896.00
$14,241.33 01/01/22-12/31/22 $174,313.92 $14,526.16 01/01/23-12/31/23
$177,731.84 $14,810.99

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01/01/24-12/31/24 $181,363.38 $15,113.62 01/01/25-03/31/26 $184,994.92
$15,416.24

 
          5.       Free Rent. Notwithstanding any provision of this Lease to the
contrary, but subject to the condition that Tenant is not in monetary default in
the performance of any of its obligations under this Lease beyond the applicable
cure period, Landlord hereby releases Tenant from the obligation to pay its
Monthly Installment of Annual Base Rent for the period from January 1, 2021
through March 31, 2021 (“Free Rent Period”). During the said Free Rent Period,
Tenant shall remain obligated to pay Landlord for all Additional Rent and other
charges payable pursuant to the Lease, including, but not limited to, Real
Estate Taxes and Operating Expenses.

          6.        Option to Extend. At the expiration of the Third Extended
Term of this Lease, if this Lease shall then be in full force and effect and no
default beyond the applicable cure period then exists, Tenant shall have the
option to extend this Lease for an extended term of five (5) Lease Years (the
“Fourth Extended Term”), upon the same terms and conditions stated in this
Lease, except that the Annual Base Rent during the Fourth Extended Term shall be
at the Market Rent as determined below, provided further, however, that (a) the
Annual Base Rent payable during the Fourth Extended Term shall not be less than
that payable during the final year of the Third Extended Term of this Lease;
(b) Landlord shall have no obligation to do any work in the Premises or give any
work allowance; (c) there shall be no rent abatement period; and (d) there shall
be no further option to extend beyond the expiration of the Fourth Extended
Term. In order to exercise the said option to extend, Tenant shall give Landlord
written notice thereof not later than June 30, 2025. Tenant shall have no right
to exercise its option to extend the Term, and any attempted exercise shall be
void and of no effect, if: (i) the named Tenant has assigned this Lease or has
at any time subleased, in the aggregate, more than 50% of the Premises; or
(ii) Tenant shall be in default hereunder and such default shall not have been
cured at the time of the attempted exercise or, if such default occurs after
Tenant’s attempted exercise of the option, at the time of the proposed
commencement of the Fourth Extended Term.

              Market Rent Determination.

(a)          Definition. “Market Rent” means the market net rental rate for the
premises in question with respect to the time period in question, taking into
account all pertinent factors including, but not limited to, the then existing
condition of the premises in question, the size of the premises in question, the
term in question, the improvements existing in the premises in question, the
location and quality of the Building and Building amenities, and assuming the
Landlord to be a prudent person willing to lease, but being under no compulsion
to do so, and assuming the Tenant to be a prudent person willing to lease, but
being under no compulsion to do so.

(b)          Landlord’s Notice of Market Rent. Whenever Annual Base Rent under
this Lease is based on Market Rent, Landlord shall provide Tenant written notice
(“Landlord’s Notice”) of the Market Rent within thirty (30) days after Tenant
notifies Landlord of Tenant’s exercise of either Tenant’s right to renew this
Lease or Tenant’s exercise of any of its rights of first refusal to which Market
Rent is applicable.

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(c)          Tenant’s Notice of Disagreement on Market Rent. If Tenant does not
agree with Landlord’s determination of Market Rent, Tenant shall give notice to
Landlord of Tenant’s disagreement with the Market Rent (“Tenant’s Notice of
Disagreement”) set by Landlord, together with Tenant’s determination of Market
Rent, within twenty (20) days after receipt of Landlord’s Notice. In the event
Tenant fails to provide Tenant’s Notice of Disagreement, the Market Rent as
specified in Landlord’s Notice shall be deemed to be the Market Rent. Landlord
and Tenant shall negotiate such Market Rent in good faith. If within thirty (30)
days after Landlord’s Notice as described in this Section Landlord and Tenant
are not able to mutually agree on Market Rent, Tenant may either revoke its
exercise of its applicable renewal rights or rights of first refusal, or elect
to determine Market Rent pursuant to the mechanism described in subparagraph (d)
below. If Tenant does not revoke the exercise of its applicable option, pending
determination of Market Rent, Tenant shall nevertheless pay, subject to
subsequent adjustment, Annual Rent at the rate set out in the notice given by
Landlord pursuant to this Section.

(d)          Market Rent Determination Mechanism. If Tenant does not revoke the
exercise of its option, then each party shall choose either (i) a real estate
professional with not less than ten (10) years’ recognized experience in
determination of commercial rental rates in the Minneapolis metropolitan area,
or (ii) a member in good standing of the American Institute of Real Estate
Appraisers (or successor organization or, if no such organization exists, a
person of similar professional qualifications), with the designation M.A.I., and
shall give notice of the name and address of such person to the other within
thirty (30) days of Tenant’s Notice of Disagreement. Those two (2) persons shall
within fifteen (15) days after designation select a third person meeting the
qualifications set forth in the preceding sentence. The three (3) persons
(hereinafter the “Experts”) shall make a determination of Market Rent as
expeditiously as possible thereafter but in no event shall the determination be
made more than ninety (90) days after Tenant’s Notice of Disagreement. The
determination for the Experts shall be made as follows:

(i)          Each Expert will independently determine the Market Rent and
simultaneously disclose to each other his or her separate determination.

(ii)          If the high Market Rent is less than ten percent (10%) higher than
the middle Market Rent and the low Market Rent is less than ten percent (10%)
lower than the middle Market Rent, the average Market Rent of the three Experts
shall be the Market Rent.

(iii)          If either the high Market Rent or the low Market Rent deviates
from the middle Market Rent by more than ten percent (10%) then the average of
the two Market Rents closest by dollar amount shall be the Market Rent.

(iv)          The Experts shall promptly notify Landlord and Tenant of the
determination of the Market Rent.

Upon the Experts’ determination of Market Rent, such determination shall be
final and binding on the parties. Any rent previously paid by Tenant at other
than Market Rent on the applicable space shall be retroactively adjusted. Each
party will pay any and all fees and expenses incurred in connection with such
party’s Expert and the fees and expenses for the third Expert will split equally
between Landlord and Tenant.

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          7.          Landlord Improvement Allowance. Landlord shall pay Tenant
a maximum of One Hundred Thousand and 00/100 ($100,000.00) Dollars for Tenant’s
improvements to the Premises. Said amount shall be payable from Landlord to
Tenant, at any time after full execution of this amendment, provided the
following conditions have been fully satisfied:

A.          Landlord has approved all improvements. Landlord’s consent shall not
be unreasonably withheld.

B.          All necessary permits and approvals have been obtained from
appropriate government authorities.

C.          Tenant is not in default under the terms of the Lease.

D.          Tenant shall have fully completed all of Tenant’s improvements and
fully paid all bills for labor, materials and services prior to December 31,
2021 and shall provide Landlord with copies of all paid bills together with
appropriate lien waivers and any other documentation requested by Landlord.

          8.          Controllable Operating Expenses. As of the Effective Date
of this Fifth Amendment to Lease, Paragraph 4 of the Fourth Amendment to Lease
is hereby deleted and replaced with the following:

Notwithstanding anything to the contrary contained herein, “Controllable
Operating Expenses” (as hereinafter defined) shall not increase by more than
three (3%) percent per year, compounded annually, over the amount of the
Controllable Operating Expenses for the previous calendar year. Such cap is
cumulative, and the unused portion of a year’s cap may be carried forward to
absorb any further Operating Expenses that would otherwise be in excess of the
cap.

“Controllable Operating Expenses” shall be deemed to mean all Operating Expenses
except for utilities, insurance, snow and ice removal, management fees, repair
and maintenance costs and any other expense reasonably determined to be beyond
Landlord’s control.

          9.          Annual HVAC Cap. In no event shall Tenant be liable for
more than $1,000 for repairs or maintenance of each HVAC roof top unit serving
the Premises in any one Lease Year; provided however, such amount shall not
include sums expended for required preventative maintenance and the HVAC
maintenance contract. Additionally, once an HVAC unit is replaced, the $1,000
for said unit shall no longer apply for the remainder of the year and Tenant
shall be responsible for maintaining the unit even it exceeds the $1,000 cap
within that year (the “Annual HVAC Cap”). If an HVAC unit requires replacement,
the HVAC unit is at least 15 years old and Tenant has expended at least $1,000
in repairs on said HVAC unit in the immediately preceding 12 months, then
Landlord will replace said HVAC unit and Tenant shall only be responsible for
paying the amortized costs of the HVAC unit (amortized over a maximum of fifteen
(15) years at an interest rate of 5% per annum) which occurs during the Term or
any extended term.

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          10.          Brokerage. Tenant represents that it has not had or dealt
with any realtor, broker or agent in connection with the negotiation of this
Lease, except for Colliers International (“Broker”), and Tenant shall pay and
hold Landlord harmless from any cost, expense or liability (including costs of
suit and attorneys’ fees) for any compensation, commission or charges claimed by
any realtor, broker or agent with respect to this Lease and the negotiation
thereof, other than a claim of the Broker and a claim based upon any written
agreement between such person and Landlord. Landlord represents that it has not
entered into a written agreement with any broker other than the Broker, with
respect to the leasing of the Premises and which is in effect this date.
Landlord shall compensate the Broker pursuant to a separate agreement.

          11.          Counterparts/Electronic Signatures. This Fifth Amendment
to Lease may be executed in multiple counterparts, each of which shall be
effective upon delivery and, thereafter, shall be deemed to be an original, and
all of which shall be taken as one and the same instrument with the same effect
as if each party had signed on the same signature page. This Fifth Amendment to
Lease may be transmitted by fax or by electronic mail in portable document
format (“pdf”) and signatures appearing on faxed instruments and/or electronic
mail instruments shall be treated as original signatures.

          12.          Interpretation of Fifth Amendment to Lease. In the event
of any conflict between the Lease and this Fifth Amendment to Lease, the terms
of this Fifth Amendment to Lease shall control. Except as expressly amended,
supplemented or modified by this Fifth Amendment to Lease, the Lease shall
continue in full force and effect. All capitalized terms contained in this Fifth
Amendment to Lease, unless specifically defined herein, shall have the meaning
ascribed to them in the Lease.
 
          13.          Binding Effect. This Fifth Amendment to Lease shall bind
and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
 
 
 
 

[Signature page follows]
 
 
 
 
 
 
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         IN WITNESS WHEREOF, Landlord and Tenant have caused this Fifth
Amendment to Lease to be executed as of the day and year first above written.
 

LANDLORD:
  GRE – BRYANT LAKE, LLC,
A MINNESOTA LIMITED LIABILITY COMPANY
  By:  
Carlson Real Estate Services, LLC, its Asset Manager
 
  By: /s/ MARK G. HERREID 
Name: Mark G. Herreid
Title:    Chief Manager and CFO  
 
 
TENANT:
  NVE CORPORATION,
A MINNESOTA CORPORATION
 
  By: /s/ DANIEL A. BAKER 
Name: Daniel A. Baker 
Title: President and CEO 

 
 
 
 
 
 

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