**EXHIBIT 10.13**

 

**SIXTH AMENDMENT TO LEASE AGREEMENT**

 

**THISSIXTH AMENDMENT TO LEASE AGREEMENT** (this “**Sixth Amendment**”) is made as of the 27th day of October,2004 by and between **4900****WEST 78TH STREET LLC**(“**Landlord**”)and **AUGUST TECHNOLOGY CORPORATION** (“**Tenant**”).

 

**R E C I T A L S:**

 

A.            West78th Street Bloomington Associates, LLC (Landlord’spredecessor-in-interest) and Tenant entered into that certain Lease Agreementdated October 18, 1999 (the “**Original Lease**”)as amended by (i) that certain First Amendment to Lease Agreement dated March 31,2000 (the “**First Amendment**”), (ii) thatcertain Second Amendment to Lease Agreement dated July 25, 2000 (the “**Second Amendment**”) (iii) that certain Third Amendment toLease Agreement dated June 18, 2001 (the “**Third Amendment**”); (iv) that certain Fourth Amendment to LeaseAgreement dated February 28, 2003 (the “**FourthAmendment**”); and (v) that certain Fifth Amendment to Lease dated May27, 2004 (the “**Fifth Amendment**”);the Original Lease as amended by the First Amendment, the Second Amendment theThird Amendment, the Fourth Amendment and the Fifth Amendment is referred toherein as the “**Lease**”) demising approximately78,437 square feet of space comprised of the “Initial Premises,” the “FirstExpansion Premises,” the “Second Expansion Premises” and the “Third ExpansionPremises” (collectively, the “**Existing Premises**”)in the building located at 4900 W. 78th Street in Bloomington,Minnesota.

 

B.            Landlordand Tenant desire to extend the term of the Lease and make certain other changesto the Lease as provided herein.

 

**NOW,THEREFORE,**in consideration of the mutual covenants containedherein and other good and valuable consideration the receipt and sufficiency ofwhich are hereby acknowledged, Landlord and Tenant hereby amend the Lease asfollows:

 

1.             **Definitions. **Each capitalized term used as a definedterm in this Sixth Amendment but not otherwise defined in this Sixth Amendmentshall have the same meaning ascribed to such term in the Lease.

 

2.             **Term**. The term of the Lease is hereby extended by changing the Leaseexpiration date from April 30, 2006 to April 30, 2012 (hereinafter,the “**New Term Expiration Date**”).  The period commencing on November 1,2004 (the “**New Term Commencement Date**”)and ending on the New Term Expiration Date is hereinafter the “**New Term**”. Except to the extent expressly modified hereby, such extension of theTerm shall be on and subject to all of the terms and provisions of the Leasethat would have been applicable during the last year of the Initial Term hadthe Lease term not been extended by this Sixth Amendment.

 

3.             **Base Rent for Existing Premises**.  Effective as of the New Term CommencementDate, Section 3 of the Original Lease (as amended pursuant to Section 5of the First Amendment, Section 3 of the Second Amendment and Section 2of the Third Amendment) and Section 3.(d) of the Third Amendment arehereby deleted in their entirety and the following is substituted therefor:

 

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“3.           MONTHLYBASE RENT:  Tenant agrees to pay toLandlord during the New Term a monthly Base Rent (“Base Rent”) as set forthbelow:

 
| **Date**               | ** ** | **Annual  Base Rent  Per Square  Foot** | ** ** | **Square Feet** | ** ** | **Annual  Base Rent  For Existing  Premises** | ** ** | **Monthly  Base Rent  for Existing  Premises** | ** ** |
|------------------------|------------|-----------------------------------------|------------|-----------------|------------|-----------------------------------------------|------------|------------------------------------------------|------------|
| 11/1/04 – 4/30/08 |       | $                                       | 7.75       |            | 78,437     |                                          | $          | 607,886.25                                     |       | $ | 50,657.23 |   |
| 5/1/08 – 4/30/10  |       | $                                       | 8.00       |            | 78,437     |                                          | $          | 627,496.00                                     |       | $ | 52,291.33 |   |
| 5/1/10 – 4/30/12  |       | $                                       | 8.25       |            | 78,437     |                                          | $          | 647,105.25                                     |       | $ | 53,925.44 |   |

 

Exceptas otherwise expressly set forth herein, Base Rent shall be payable on thefirst day of each month in advance, without deduction or setoff of any kind, toLandlord and delivered to 4900 West 78th Street LLC, c/o InterstatePartners, N16W23217 Stone Ridge Drive, Suite 280, Waukesha, WI 53188 or at suchother place as may from time to time be designated by Landlord.”

 

4.             **Base Rent for Basement Space**.  Tenant shall continue to have the exclusiveright to use the basement of the Building during the New Term in accordancewith the provisions of Section 1.D. of the Original Lease; provided,however, that notwithstanding anything to the contrary set forth in said section orelsewhere in the Lease, Tenant will not be obligated to pay any Base Renttherefor, nor shall the rentable square footage of the basement be included inthe square footage of the Premises for purposes of calculating Tenant’sProportionate Share of Operating Costs.

 

5.             **Extension Allowance**.  Landlord agrees to contribute $200,000.00(the “**Extension Allowance**”)towards any and all expenses Tenant incurs relating to or arising from thedemolition, design and/or construction of leasehold improvements to theExisting Premises and any additional space Tenant adds to the Existing Premisespursuant to Sections 12 and 13 below (the “**Tenant’sExtension Work**”). On or after November 1, 2006, Landlord shall,at Tenant’s election, (a) pay the Extension Allowance, or applicable portionthereof, directly to Tenant promptly upon presentation of invoices or billsrelating to Tenant’s Extension Work (which invoices or bills may be presentedand paid on a progress payment basis at Tenant’s election), and apply anyremaining portion of the Extension Allowance as a credit (the “**Rent Credit**”), or (b) apply the entireExtension Allowance as the Rent Credit, which Rent Credit, in either case,shall be applied against the next due installment(s) of Base Rent until fullyutilized.

 

6.             **Operating Costs**.  The phrase “not to exceed 5% of gross rents”set forth in the 21st line of Section 5.A. of the OriginalLease is hereby amended to read “not to exceed 3% of gross rents.”  Further, notwithstanding anything to thecontrary set forth in the Lease or this Sixth Amendment, it is expresslyacknowledged by the parties hereto that the definition of Operating Costs setforth in Section 5.A. of the Original Lease includes all expenses andcosts (but not specific costs which are: (i) separately billed to and paid byindividual tenants; or (ii) to be paid by the Landlord as set forth in such Section 5.A.)relating to the basement of the Building. Finally, the parties acknowledge and agree that the Operating Cost Cap,as defined in Section 5.B.(i) of the Lease, shall be extended on the sameterms and provisions during the New Term (and any extension 

 

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thereof) as in effectduring the Initial Term (i.e., it shall increase by 3% per calendar year, suchthat, for instance, the Operating Cost Cap for calendar year 2005 remains at$1.57, the Operating Cost Cap for calendar year 2006 remains at $1.61, theOperating Cost Cap for calendar year 2007 remains at $1.66, the Operating CostCap for calendar year 2008 shall be $1.71, the Operating Cost Cap for calendaryear 2009 shall be $1.76, the Operating Cost Cap for calendar year 2010 shallbe $1.81, the Operating Cost Cap for calendar year 2011 shall be $1.86, and theOperating Cost Cap for calendar year 2012 shall be $1.92.).

 

7.             **Security Deposit**.  The parties hereto acknowledge that Landlordis holding a Security Deposit in the amount of $25,000.00 pursuant to theprovisions of Section 7 of the Original Lease, as amended pursuant to Section 12of the Third Amendment.  The terms andprovisions of Section 3(h) of the Third Amendment are hereby deleted intheir entirety.

 

8.             **Cap Adjustment Period**.  Without limitation of the caps on OperatingCosts set forth in the Lease as amended hereby, the second to the last sentenceof Section 9.(c) of the Third Amendment is hereby amended to provide thatthe HVAC Cap Adjustment Period ends on December 31, 2004.  Further, without limitation of the caps onOperating Costs set forth in the Lease as amended hereby, the second to the lastsentence of Section 9.(d) of the Third Amendment is hereby amended toprovide that the Roof Cap Adjustment Period ends on December 31, 2004.

 

9.             **HVAC Work**.  Notwithstanding anything to the contrary setforth in the Lease, including without limitation the last sentence of Section 3of the Fifth Amendment, Tenant shall have the right to utilize the HVAC CreditAllowance at any time during the New Term.

 

10.           **Deletion of Inapplicable Terms**.  As of the New Term Commencement Date, theterms and provisions of (a) Section 2.(A) of the Original Lease (relatingto Tenant’s renewal rights), as amended pursuant to Section 5 of the ThirdAmendment, and (b) Sections 3.(g) (relating to the Third Expansion PremisesExpiration Payment), 4 (relating to Tenant’s expansion option), 6 (relating toTenant’s additional renewal rights) and 7 (relating to Landlord’s revocation ofTenant’s extension rights), all of the Third Amendment, shall be of no furtherforce or effect:

 

11.           **Renewal Option**.  Tenant shall have the option (the “**New Term Renewal Option**”) to renew theLease for one additional period of three (3) years (the “**New Term Renewal Term**”).  Tenant shall provide written notice of itsexercise of the New Term Renewal Option at least 180 days prior to thetermination of the New Term.  The NewTerm Renewal Term shall be on the same terms, covenants and conditions as inthe Lease, other than Base Rent.  BaseRent for the Existing Premises during the New Term Renewal Term will be $8.50per square foot per annum; provided, however, that, subject to the provisionsof Section 6 of this Sixth Amendment, no Base Rent nor Operating Costsshall be due in connection with Tenant’s leasing of the so-called “basementspace”.  Notwithstanding the foregoing,in the event that Tenant previously exercises its Fourth Expansion PremisesOption (as defined in Section 12 below) or its First Offer Right (asdefined in Section 13 below), Tenant, at Tenant’s sole discretion, canelect whether or not to renew the term of the Lease as to the Fourth ExpansionPremises (as defined in Section 12 below) in its written notice ofexercise for New Term Renewal Option; provided, however, if Tenant fails todesignate in its written notice of exercise whether or not its exercise of theNew Term Renewal Option includes the Fourth Expansion Premises, Tenant shall bedeemed to have elected to renew the term of the Fourth Expansion Premises.

 

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12.           **Fourth Expansion Option**.  Tenant, by written notice to Landlord givennot later than November 1, 2005, shall have the option (the “**Fourth Expansion Premises Option**”) to leaseapproximately 20,176 square feet as depicted on Exhibit A hereto (the “**Fourth Expansion Premises**”) for a periodcommencing on May 1, 2006 and terminating on the New Term Expiration Date (the “**Fourth Expansion Term**”).  The terms for the leasing of the FourthExpansion Premises during the Fourth Expansion Term shall be on the same terms,covenants and conditions as in the Lease, other than Base Rent.  Base Rent for the Fourth Expansion Premisesduring the Fourth Expansion Term will be $5.00 per square foot per annum;provided, however, that such Base Rent shall be abated in full, together withOperating Costs for the Fourth Expansion Premises, for a period of sixty (60)days to provide Tenant time to construct leasehold improvements in the FourthExpansion Premises.  The Fourth ExpansionPremises will be delivered to Tenant in its as-is condition as of the date ofthis Sixth Amendment; provided, however, that Landlord, at Landlord’s sole costand expense will (i) at the request of Tenant, demolish any improvements to theFourth Expansion Premises made by any tenant therein on or after the date ofthis Sixth Amendment and restore the Fourth Expansion Premises to a conditionof Building standard flooring (with all adhesives removed), lighting and wallcoverings and otherwise in broom clean condition and in keeping with similaroffice/warehouse space, (ii) make any improvements necessary to the restroomslocated within the Fourth Expansion Premises so that they are compliant withthe Americans with Disabilities Act, and (iii) provide for heating, ventilationand air conditioning to the Fourth Expansion Premises adequate for generaloffice use therein.  Notwithstandinganything to the contrary set forth above, in the event Tenant does not elect toexercise its Fourth Expansion Premises Option by notice to Landlord on orbefore November 1, 2005, Tenant shall again be provided the FourthExpansion Premises Option, to be exercised on or before November 1, 2008,on the terms and conditions set forth above, except that the term of theleasing thereof shall commence on May 1, 2009. Further, in the event that Tenant does not elect to exercise its FourthExpansion Premises Option by notice to Landlord on or before November 1, 2005(i.e., for a period commencing on May 1, 2006), and to accommodate Tenant’sright to exercise the Fourth Expansion Premises Option effective as of May 1,2009, Landlord covenants and agrees that, in the event the existing tenant (the“**Existing Tenant**”) in the FourthExpansion Premises elects to extend its lease, Landlord shall not grant suchextension for a period greater than through April 30, 2009.

 

13.           **Right of First Offer**.  In the event that Tenant does not elect toexercise its Fourth Expansion Premises Option as provided in Section 12above, Tenant shall be provided a right of first offer (the “**First Offer Right**”) with respect to theFourth Expansion Premises, which First Offer Right shall not be subject norsubordinate to the election of the Existing Tenant to renew its lease or to theexpansion rights (whether such rights are designated as a right of first offer,right of first refusal, expansion option or otherwise) of any tenant in theBuilding, including the Existing Tenant. Tenant’s First Offer Right shall be exercised as follows:  at any time that Landlord has an offer from athird party to lease all or any portion of the Fourth Expansion Premises,Landlord shall provide written notice thereof (“**Landlord’s Notice**”), which Notice shall set forth the date forLandlord’s delivery of the Fourth Expansion Premises.  Tenant may lease the Fourth ExpansionPremises upon the same terms and conditions set forth in Section 12 above(including, without limitation, the rental rate and the sixty (60) day abatementof Base Rent and Operating Costs) by delivering written notice of exercise toLandlord within ten (10) days after the date of Landlord’s Notice; provided,however, that the commencement of the term for the leasing of the FourthExpansion Premises shall be as set forth in Landlord’s Notice.  The First Offer Right shall terminate 

 

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upon Tenant’s failure toexercise its First Offer Right within said ten (10) day period as provided inthis section; provided, however, that (a) if Tenant was entitled to exerciseits First Offer Right, but failed to provide Landlord with a notice of exercisewithin the ten (10) day period provided above, and (b) Landlord does not enterinto a lease for the Fourth Expansion Premises within a period of four (4)months following the date of Landlord’s Notice (a “**Lock-Out Period**”), Tenant shall once again have a First OfferRight with respect to the Fourth Expansion Premises.  In addition, without limitation of any of theprovisions of Sections 12 and 13 of this Sixth Amendment, if at any time otherthan during a Lock-Out Period the Fourth Expansion Premises is not subject to alease or occupancy agreement, Tenant, upon not less than five (5) days priorwritten notice to Landlord, may lease the Fourth Expansion Premises upon thesame terms and conditions set forth in Section 12 above (including,without limitation, the rental rate and the sixty (60) day abatement of BaseRent and Operating Costs).

 

14.           **Broker**. Each of the parties represents and warrants to the other that it has notdealt with any broker or finder in connection with this Sixth Amendment otherthan United Properties, to whom Landlord has agreed to pay a brokerage feepursuant to separate agreement.

 

15.           **No Offer. **Submission of this instrument forexamination or negotiation shall not bind Landlord or Tenant, and no obligationon the part of Landlord or Tenant shall arise until this instrument is signedand delivered by Landlord and Tenant.

 

16.           **Lease in Full Force and Effect. **Except as herein provided, all of theterms and provisions of the Lease shall remain in full force and effect. Allcapitalized terms used in this Sixth Amendment shall have the definition givento them in the Lease unless otherwise defined herein.

 

**INWITNESS WHEREOF**, the parties hereto have caused this SixthAmendment to Lease Agreement to be duly executed and delivered as of the dayand year first written above.

 
| **LANDLORD:**                                     | **TENANT:**                |
|---------------------------------------------------|----------------------------|
|                                              |                       |
| **4900  WEST 78TH STREET LLC**                    | **AUGUST TECHNOLOGY** |
|                                              | **CORPORATION**            |
|                                              |                       |
| **By: Interstate Partners LLC,** its Manager | ** **                 |
| ** **                                        | ** **                 |
| ** **                                        | ** **                 |
| By                                                | /s/ Gregory S.  Miller     |   | By | /s/David Klenk |   |
| Its                                               | President                  |   | Its | President |   |

 

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**EXHIBITA**

 

**FOURTH EXPANSION PREMISES**

 

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