EXHIBIT 10.1


 


FOURTH AMENDMENT
TO OFFICE/WAREHOUSE LEASE


 


This Fourth
Amendment to Office/Warehouse Lease is made December 1, 2005, by and
between FLYING CLOUD BUSINESS CENTRE INVESTORS LLC, a Delaware limited
liability company (“Lessor”) and FARGO ELECTRONICS, INC., a Delaware
corporation (“Lessee”).


 


RECITALS


 


A.            Lessor is the successor to Aetna
Life Insurance Company and Opus Northwest, LLC, as owner of the
Office/Warehouse Complex known as Flying Cloud Business Centre located at 6601
Flying Cloud Drive, Eden Prairie, Minnesota.


 


B.            Lessor’s predecessors and Lessee are
parties to that certain Office/Warehouse Lease dated June 10, 1996, as
amended by Amendment to Lease dated June 10, 1996, as amended by Second
Amendment to Office/Warehouse Lease dated August 29, 1996, and as amended
by Third Amendment to Office/Warehouse Lease dated February 28, 2001,
pursuant to which Lessee leases from Lessor approximately 96,240 square feet of
space.  The Office/Warehouse Lease as
amended is referred to herein as the “Lease”.


 


C.            Lessor and Lessee wish to modify the
terms and conditions of the Lease as hereinafter set forth.


 


NOW,
THEREFORE, in consideration of the foregoing, and the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
parties amend the Lease as follows:


 


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1.             Definitions.  Capitalized terms used in this Fourth
Amendment shall have the meanings set forth in the Lease unless otherwise
specifically defined herein.


 


2.             Term.  The current termination date of the Lease is December 31,
2006.  The term of the Lease is extended
for an additional 120 months for the period commencing January 1, 2007 and
terminating December 31, 2016 (the “Extension Term”), unless terminated
earlier as provided in the Lease.


 


3.             Base Rent.  The Base Rent for the Premises payable by
Lessee during the Extension Term will be as follows:


 


	
  Period

  	
   

  	
  Per Square Foot Rent

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  1/1/07 – 12/31/11

  	
   

  	
  $

  	
  5.00

  	
   

  	
  $

  	
  40,100.00

  	
   

  
	
  1/1/12 – 12/31/16

  	
   

  	
  $

  	
  5.75

  	
   

  	
  $

  	
  46,115.00

  	
   

  



 


4.             Additional Rent.  In addition to the Base Rent set forth in
Paragraph 3, Lessee will continue to be responsible for its proportionate share
of Real Estate Taxes, Operating Expenses, and other Additional Rent as provided
in the Lease.  This Additional Rent is
currently estimated at $2.80 per square foot for calendar year 2005, or
$22,456.00 per month.


 


5.             Option to Renew.  Lessee shall have the option to extend the
term of this Lease beyond the Extension Term for one period of either 2 years
or 5 years, as selected by Lessee, on the following terms and conditions, such
extension period being sometimes referred to herein and in the Lease as the “Renewal
Term”:


 


(a)                                  At
the time of the exercise of the option, the Lease shall be in full force and
effect and Lessee shall not be in default in the performance of any term of the
Lease in respect to a matter as to which notice of default has been given under
the Lease which has not been remedied within the time permitted in the Lease.


 


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(b)                                 Lessee
shall exercise its option to extend the term of the Lease for the Renewal Term
by notifying Lessor in writing of its election to exercise the right to renew
and extend the term of the Lease no later than June 30, 2016.


 


(c)                                  In
exercising its right to extend the term of this Lease for the Renewal Term, the
notice from Lessee shall clearly indicate whether the Renewal Term will be for
a period of 2 years or for a period of 5 years.


 


(d)                                 The
Renewal Term shall be upon the same terms, covenants, and conditions as in the
Lease; provided, however, the Base Rent for the Renewal Term shall be the fair
market Base Rent rate for the Premises on the date the Renewal Term commences
in relation to comparable (in quality and location) space located in the
Minneapolis-St. Paul metropolitan area. 
The fair market Base Rent for the Premises shall be determined as of July 1,
2016.


 


(e)                                  Upon
notification with respect to such renewal, and for a period of 60 days thereafter,
the parties shall make a good faith effort to agree upon the fair market Base
Rent of the Premises for the Renewal Term. 
In the event that Lessor and Lessee fail to agree within the 60 day time
period, the fair market Base Rent of the Premises for the Renewal Term shall be
determined by arbitration in the manner set forth in Article XXXI of the
Lease; provided, however, in no event shall the Base Rent of the Premises for
the Renewal Term be less than $5.75 per square foot or greater than $6.90 per square
foot.  Any determination by arbitration
or any agreement reached by the parties with respect to the fair market Base
Rent and resulting Base Rent of the Premises for the Renewal Term shall be set
forth in a supplement to this Lease signed by the parties.


 


6.             Right of First Opportunity.  Lessor will give written notice to Lessee of
any adjacent space in the Office/Warehouse Complex that becomes available for
lease during the term of this Lease (the “Offer Space”).  Lessor’s notice will include the Base Rent
for the Offer Space calculated at the market rate at which Lessor would, as of
the date upon which Lessor submits written notice to Lessee, expect to charge a
new tenant for the Offer Space for the term in question; provided, however,
that space that is


 


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available as of the date of this Fourth Amendment shall not be included
as Offer Space until it has been leased and has again become available for
leasing.  Following such notice, Lessee
shall have the right to lease the Offer Space in accordance with the following
conditions:


 


(a)                                  Lessee
is not in default under the Lease.


 


(b)                                 The
party currently leasing the Offer Space does not desire to continue to lease
the Offer Space.


 


(c)                                  Other
tenants in the Office/Warehouse Complex with the rights to lease the Offer
Space do not desire to lease the Offer Space.


 


(d)                                 Lessee
provides written notice to Lessor exercising its right to lease the Offer Space
(the “Election Notice”) within 30 days following Lessor’s notice of
availability of the Offer Space.


 


(e)                                  If
Lessee fails to timely exercise its right to lease the Offer Space, Lessee
shall have no further right to lease the Offer Space pursuant to this Paragraph
6 until it has been leased by Lessor to a third party and has again become
available.


 


(f)                                    If
Lessee exercises its right to lease the Offer Space, Lessor and Lessee shall
enter into an amendment to the Lease which adds the Offer Space to the Lease,
subject to the following terms and conditions:


 


(1)                                  The
Base Rent for the Offer Space will be the rate which Lessor submits in its
written notice to Lessee that the Offer Space is available.


 


(2)                                  Lessee’s
pro rata share of Real Estate Taxes, Operating Expenses, and other Additional
Rent pursuant to the Lease will be increased as to include the Offer Space.


 


(3)                                  The
Offer Space shall be delivered to and accepted by Lessee in “as is” condition
when it becomes available.


 


(4)                                  The
obligations of Lessee for Base Rent and Additional Rent with respect to the
Offer Space will commence on the date possession of the Offer Space is tendered
by Lessor to Lessee.


 


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(5)                                  The
Offer Space shall be added to the Premises for a term concurrent with the
current term of the Lease.


 


(6)                                  Except
as herein specifically provided to the contrary, all of the terms and
conditions of the Lease shall apply to the Offer Space upon its addition to the
Premises.


 


(7)                                  Lessee’s
right to lease the Offer Space must be exercised with regard to the entire Offer
Space.


 


(8)                                  Any
improvements to be made to the Offer Space will be constructed by Lessee, at
Lessee’s sole cost and expense, in accordance with plans and specifications
submitted by Lessee and approved by Lessor as provided in Article VIII of
the Lease.


 


(9)                                  Within
15 days after receipt from Lessor, Lessee will execute and deliver to Lessor
those instruments Lessor may reasonably request to evidence the lease of the
Offer Space and the amendments to the Lease required by this Paragraph 6.


 


(10)                            Lessor
shall not be liable for failure to deliver possession of the Offer Space to
Lessee by reason of holding over by third parties, nor shall such failure
impair the validity of Lessee’s leasing of the Offer Space or extend the term
thereof.


 


(11)                            The
right of Lessee under this Paragraph 6 will not be severed from the Lease or
separately sold, assigned, or transferred, and will expire on the expiration or
earlier termination of this Lease.


 


7.             Lessee Improvements.  Lessee agrees to construct and install
improvements to the westerly 24,000 square feet of the Premises to create
additional office space (the “Tenant Improvements”).  Lessee will begin construction of the Tenant
Improvements as soon as reasonably possible following removal of the
contingencies described in Paragraph 11 and will complete the improvements on
or before January 1, 2008. 
Improvements will be constructed at Lessee’s sole cost and expense
(except as


 


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provided in Paragraph 9) and will be in accordance with Lessor’s review
and approval of plans and specifications as provided in Article VIII of
the Lease.


 


8.             Space Planning Allowance.  Lessor will provide Lessee with a $30,000.00
allowance for space planning, design, and construction drawings for the Tenant
Improvements.  This allowance, provided
Lessee is not in default, will be payable to Lessee upon Lessor’s receipt of
paid invoices and lien waivers from architects, planners, designers, or other
contractors providing space planning, design, or construction drawing services
to Lessee related to the Tenant Improvements.


 


9.             Use of Leftover Improvement
Allowance.  Paragraph 5 of the Third
Amendment to Office/Warehouse Lease provides a $50,000.00 allowance from Lessor
to Lessee for certain improvement work to the Premises.  $6,451.80 of this $50,000.00 allowance
remains and will be applied by Lessor to the Tenant Improvements and will be
paid to Lessee by Lessor upon Lessor’s receipt of paid invoices and lien
waivers from contractors, subcontractors, and material suppliers in connection
with the Tenant Improvements.


 


10.           Construction of Additional Parking.  Lessor, at Lessor’s sole cost and expense,
will design and construct approximately 100 additional parking stalls to be
located on the Property (the “Parking Improvements”).  The Parking Improvements will be for the
exclusive use of Lessee during the term of the Lease.  The approximate location of the Parking
Improvements is as set forth on the sketch attached hereto as Exhibit A and described in the letter
from Welsh Construction dated October 3, 2005 attached hereto as Exhibit B.


 


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11.           Contingencies.  Both the Parking Improvements described in
Paragraph 10 and the Tenant Improvements described in Paragraph 7 will require
approvals from the City of Eden Prairie. 
Notwithstanding any other provision of this Fourth Amendment to the
contrary, this Fourth Amendment and all obligations of Lessor and Lessee
provided herein are subject to successfully obtaining all necessary approvals
for the Parking Improvements and the Tenant Improvements on or before June 30,
2006.  Lessor and Lessee will cooperate
with each other and use their best good faith efforts to promptly apply for,
pursue, and obtain the necessary approvals from the City.  Lessor will be responsible for obtaining
approvals for the Parking Improvements and Lessee will be responsible for
obtaining approvals for the Tenant Improvements.  If all approvals necessary for the Parking
Improvements and the Tenant Improvements have not been obtained by June 30,
2006, the parties may by written agreement extend the contingency to a date
mutually agreed upon or, failing such extension, this Fourth Amendment will
terminate and be of no further force or effect. 
Promptly after obtaining all approvals and the satisfaction of the
contingencies described in this paragraph, Lessor will commence construction of
the Parking Improvements and Lessee will commence construction of the Tenant
Improvements.


 


12.           Effect of Amendment.  Except as amended by this Fourth Amendment,
the Lease will remain in full force and effect.


 


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IN WITNESS
WHEREOF, the parties have executed this Fourth Amendment to Office/Warehouse
Lease as of the day and year first above written.


 


	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  FLYING CLOUD
  BUSINESS CENTRE

  
	
   

  	
  INVESTORS
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By Trumball
  One Investors, LLC,

  
	
   

  	
  a General Partner,

  
	
   

  	
   

  	
   

  
	
   

  	
  By UBS Realty Investors, LLC, Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ J.
  Raymond Frazier

  	
   

  
	
   

  	
   

  	
   

  	
  J. Raymond
  Frazier, Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  	
   

  
	
   

  	
  FARGO
  ELECTRONICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey D. Upin

  	
   

  
	
   

  	
   

  	
  Jeffrey D. Upin, Secretary

  	
   

  
						



 


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