**EXHIBIT 10.39**

 

**LEASE**

**BYAND BETWEEN**

 

**AMBAR, L.L.C.**

 

**LANDLORD**

 

 

**AND**

 

**STEN CORPORATION**

 

**TENANT**

 

 

**13DAY OF SEPTEMBER, 2005**

 

**9/2/05**

 

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**TABLE OF CONTENTS**

 
|        |       | COVER SHEET |                                                 | 1          |
|-------------|------------|-------------|------------------------------------------------------|------------|
|        |       |        |                                                 |       |
|        |       | DATA SHEET  |                                                 | 3          |
|        |       |        |                                                 |       |
| **ARTICLE** | ** ** | **TITLE**   | ** **                                           | **PAGE**   |
|        | 1.         |        | PREMISES:                                            |       | 4 |
|        | 2.         |        | TENANT IMPROVEMENTS:                                 |       | 4 |
|        | 3.         |        | TERM:                                                |       | 4 |
|        | 4.         |        | BASE RENT:                                           |       | 5 |
|        | 5.         |        | CONTRIBUTION TO OPERATING COSTS:                     |       | 5 |
|        | 6.         |        | USE OF PREMISES:                                     |       | 8 |
|        | 7.         |        | ASSIGNMENT AND SUBLETTING:                           |       | 9 |
|        | 8.         |        | MAINTENANCE AND REPAIRS:                             |       | 11 |
|        | 9.         |        | ALTERATIONS; SIGNS; EQUIPMENT; MOVING:               |       | 11 |
|        | 10.        |        | RIGHT OF ENTRY:                                      |       | 12 |
|        | 11.        |        | SERVICES AND UTILITIES:                              |       | 13 |
|        | 12.        |        | WAIVER AND INDEMNITY:                                |       | 14 |
|        | 13.        |        | INSURANCE:                                           |       | 14 |
|        | 14.        |        | FIRE OR OTHER CASUALTY:                              |       | 16 |
|        | 15.        |        | CONDEMNATION:                                        |       | 17 |
|        | 16.        |        | SECURITY DEPOSIT:                                    |       | 17 |
|        | 17.        |        | DEFAULT:                                             |       | 17 |
|        | 18.        |        | LANDLORD’S RIGHT TO CURE DEFAULT; LATE PAYMENT: |       | 19 |
|        | 19.        |        | WAIVER:                                              |       | 19 |
|        | 20.        |        | SUBORDINATION:                                       |       | 20 |
|        | 21.        |        | RULES AND REGULATIONS:                               |       | 20 |
|        | 22.        |        | COVENANT OF QUIET ENJOYMENT:                         |       | 21 |
|        | 23.        |        | NO REPRESENTATIONS BY LANDLORD:                      |       | 21 |
|        | 24.        |        | NOTICES:                                             |       | 21 |
|        | 25.        |        | ESTOPPEL CERTIFICATES:                               |       | 21 |
|        | 26.        |        | SURRENDER; HOLDING OVER:                             |       | 22 |
|        | 27.        |        | ENERGY CONSERVATION:                                 |       | 22 |
|        | 28.        |        | COMMUNICATION AND COMPUTER LINES:                    |       | 22 |
|        | 29.        |        | RELOCATION:                                          |       | 23 |
|        | 30.        |        | TENANT’S TAXES:                                 |       | 23 |
|        | 31.        |        | UNIFORM COMMERCIAL CODE:                        |       | 23 |
|        | 32.        |        | MISCELLANEOUS:                                       |       | 24 |
|        | 33.        |        | OPTION TO RENEW:                                     |       | 25 |
|        |       |        |                                                 |       |   |
| ** **  | ** ** | ** **  | EXHIBITS                                             | ** ** | ** ** |
| A           |       |        | FLOOR PLAN                                           |       |   |
| B           |       |        | BUILDING SITE                                        |       |   |
| C           |       |        | LEASEHOLD IMPROVEMENTS/PLAN                          |       |   |
| D           |       |        | RULES AND REGULATIONS                                |       |   |

 

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**DATA SHEET**

 
| DATE OF  LEASE:          |       | September 13,  2005                                                                         |
|--------------------------|------------|--------------------------------------------------------------------------------------------------|
|                     |       |                                                                                             |
| LANDLORD’S  ADDRESS | ** ** | **AMBAR, L.L.C.**                                                                                |
| FOR RENT and NOTICES:    |       | In Care Of: Great Lakes Management Co.                                                           |
|                     |       | 1907 East Wayzata Boulevard, Suite 110                                                      |
|                     |       | Wayzata, MN 55391                                                                                |
|                     |       | (952) 476-0303 phone – (952) 476-0404 fax                                                   |
|                     |       |                                                                                             |
| TENANT’S  ADDRESS:  | ** ** | **STEN Corporation**                                                                             |
|                     |       | Suite 310                                                                                   |
|                     |       | 10275 Wayzata Boulevard                                                                          |
|                     |       | Minnetonka, MN 55305                                                                             |
|                     |       |                                                                                             |
| LEASE  PREMISES:         |       | Approximately  1,142 rentable square feet, as                                                    |
|                     |       | designated on Exhibit A.                                                                    |
|                     |       |                                                                                             |
| TERM:                    |       | Three (3) years  and two and one-half (2 1⁄2)                                            |
|                     |       | months.                                                                                          |
|                     |       |                                                                                             |
| SCHEDULED                |       |                                                                                             |
| COMMENCEMENT  DATE:      |       | October 15,  2005                                                                           |
|                     |       |                                                                                             |
| EXPIRATION  DATE:        |       | December 31,  2008                                                                          |
|                     |       |                                                                                             |
| OPTION TO RENEW:         |       | One 3-year option to renew after December 31,  2008, to then expire December 31, 2011. |
|                     |       |                                                                                             |
| BASE RENT:               |       | Base Rent  shall be due hereunder as follows,                                                    |
|                     |       | based on 1,142 rsf:                                                                              |

 
| **Period**                      | ** ** | **Base Rent prsf/Yr.**    | ** ** | **Per Month** | ** **  |
|---------------------------------|------------|---------------------------|------------|---------------|-------------|
|                            |       |                      |       |          |        |   |
| From: 10/15/05 through 12/31/05 |       | Free Gross Rent           |       | $             | 00          |   |
| From: 01/01/06 through 12/31/08 |       | $14.00 NNN = $15,988.00 = |       | $             | 1,332.33/mo |   |

 
| **Option Period:**              | ** ** | ** **                | ** ** | ** ** | ** **  |
|---------------------------------|------------|---------------------------|------------|------------|-------------|
|                            |       |                      |       |       |        |   |
| From: 01/01/09 through 12/31/11 |       | $16.00 NNN = $18,272.00 = |       | $          | 1,522.67/mo |   |

 
| SECURITY  DEPOSIT: |   | Equal to 1  month of gross rent = **$2,460**                                                |
|--------------------|--------|---------------------------------------------------------------------------------------------|
|               |   | (1  mo base rent = $1,332 ÷ 1 mo real estate taxes & CAM of $1,128 =  $2,460) |

 

**The information inthis Data Share and Exhibits A through D are incorporated in and made a part ofthis lease agreement.**

 

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THIS OFFICELEASE (“Lease”), dated September 13,2005 is made and entered into by andbetween **AMBAR, LLC**. (“Landlord”)and **STEN Corporation**, (“Tenant”)upon the following terms and conditions:

 

# 1.             PREMISES:Subject to the terms and conditions of this Lease, Landlord leases to Tenant,and Tenant rents from Landlord, the leased premises commonly known asMinnetonka Executive Plaza located at 10275 Wayzata Boulevard, Minnetonka,Minnesota 55305 consisting of approximately 1,142 square feet of Net RentableArea as depicted on Exhibit ”A” which is attached hereto and incorporatedby this reference, hereinafter referred to as the “Premises”, Suite 310,in the building (hereinafter referred to as the “Building”). The square feet ofRentable Area shall be determined in accordance with Industry and BOMAstandards and shall be verified by the Landlord’s architect after completion ofconstruction of the Tenant Improvements (defined below). Any adjustment to thesquare feet of Rentable Area shall then be made based on the architect’sdetermination. Landlord also hereby leases to Tenant the non-exclusive right,in common with the other tenants of the Building, and Landlord, its customers,agents, invitees, licensees, suppliers, employees, guests, and visitors, to useall “Common Areas” as hereinafter defined. The land upon which the Building andthe Leased Premises are a part is hereinafter referred to as the “Property”including all buildings and improvements and personal property of Landlord usedin connection with the operation or maintenance thereof located therein andthereon and the appurtenant parking facilities are hereinafter called the “Property”.The Property is depicted on Exhibit ”B” which is attached hereto andincorporated by this reference, and legally described on Exhibit ”B-1”attached hereto and made a part hereof by reference.

 

# 2.             TENANTIMPROVEMENTS: Subject to the terms hereof, at Tenant’s cost and expense andwith no right of reimbursement from Landlord, other than as provided for inthis Lease, Tenant shall construct or cause to be constructed all those certainimprovements on Exhibit C attached hereto and incorporated herein byreference (the “Tenant Improvements”). Exhibit C shall also consist of aspace plan provided by the Tenant.

 

Theconstruction of the Tenant Improvements shall be completed in a good andworkmanlike manner, utilizing new and first grade materials, in conformity withall applicable federal state, and local laws, ordinances, regulations buildingcodes, fire regulations, and applicable insurance requirements.

 

# 3.             TERM:The duration of the Lease shall be for a period of three (3) years and twoand one-half (21⁄2%) months.

 

## 3.1.          Theterm of this Lease shall commence October 15, 2005. Any entry by Tenantprior to the Commencement Date shall be subject to all of the terms andconditions of this Lease other than the obligation to pay Base Rent andadditional rent.

##  

## 3.2.          Landlordmay at any time prepare a Supplement to this Lease confirming the CommencementDate and the Rentable Area of the Premises. Tenant shall execute and returnsuch Supplement within ten (10) days after submission unless Tenant giveswritten notice specifying in reasonable detail Tenant’s objections thereto.

 

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## 3.3.          Fourteen(14) days prior to the Scheduled Commencement Date, Landlord shall allow Tenantto have reasonable access to the Premises, free of rent, for the purpose ofinstalling trade fixtures and furniture. Tenant agrees to indemnify, defend andhold Landlord and its partners, officers and employees and property managerharmless from and against any claim, loss or expense arising out of injury,death or property loss or damage occurring in the Premises, except only to theextent caused by the negligent act or intentional misconduct of Landlord or itspartners, officers or employees or property manager.

##  

# 4.             BASERENT: Tenant shall pay as monthly “Base Rent” for the Premises one-twelfth ofthe product of: (i) the Rental Rate set forth in the Data Sheet, times (ii) thenumber of square feet of Rentable Area of the Premises. The Base Rent shall bepaid to Landlord without notice or demand in lawful money of the United Statesin monthly installments, in advance, on the first day of each and everycalendar month during the Term. If the initial or final month of the Term ofthis Lease is less than a calendar month, Base Rent for such partial monthshall be prorated at the rate of one-thirtieth of the monthly Base Rent foreach day, payable in advance. Tenant will pay said Base Rent, together withOperating Costs and all other amounts due under this Lease, to Landlord atLandlord’s Address set forth in the Data Sheet, or to such other party or tosuch other address as Landlord may designate from time to time by writtennotice to Tenant. Tenant’s obligation to pay the Base Rent, Operating Costs andother amounts due under this Lease is an independent covenant, and, except asprovided otherwise herein, shall not be subject to any abatement, deduction,counterclaim, reduction, setoff or defense of any kind whatsoever.

 

# 5.             CONTRIBUTIONTO OPERATING COSTS:

#  

## 5.1.          Tenantshall, for the entire Term of this Lease, and, except as provided otherwiseherein, without any abatement, set-off or deduction therefrom, pay to Landlordas additional rent its Pro Rata Share, as hereinafter defined, of all costswhich Landlord may incur in maintaining and operating the entire Property. Saidcosts shall be referred to herein as “Operating Costs” and are hereby definedwith respect to any calendar year to include but not be limited to thefollowing costs incurred by Landlord in such calendar year with respect to theProperty: all real estate taxes and installments of special assessments whichshall accrue or become a lien against, or are payable in respect of, any partof the Property during the Term of this Lease; all other governmentalimpositions, including but not limited to amounts payable under assessmentagreements, gross receipts taxes and taxes on rentals (other than income taxes)relating to the Property; the costs of heat, cooling, utilities, insurance(including but not limited to liability insurance and fire and casualtyinsurance with rental abatement endorsement, boiler and pressure vesselinsurance, builders risk insurance, and owners protective liability insurance),security, landscaping, janitorial and cleaning services; all employment costsincluding salaries, wages and fringe benefits; all management fees, includingexpenses reimbursable to any manager and rental of property management office;fees for professional services; charges under maintenance and servicecontracts; all supplies purchased for use in the Property; all maintenance andrepair costs; any equipment rental; depreciation of the cost of capitalimprovements made to (i) reduce Operating Costs or limit increasestherein, or (ii) required by Landlord’s insurance carrier or (iii) requiredby any law, rule, regulation or order of any governmental or quasi-governmentalauthority having jurisdiction; all costs, charges, and expenses incurred byLandlord in connection with any change of any company providing electricityservice, including, without limitation, maintenance, repair, installation, andservice

 

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## costs associated therewith; andany and all other costs of operation, whether ordinary or extraordinary.

##  

OperatingCosts shall not include direct out-of-pocket costs of the following: leasingcommissions and costs of marketing; the cost of constructing leaseholdimprovements; payments of principal and interest on any mortgages, deeds oftrust or other encumbrances upon the Property; depreciation of the capital costof the Property except as provided above; the cost of any items for whichLandlord is directly reimbursed by insurance proceeds, condemnation awards, atenant of the Property or the like; wages, salaries or other compensation paidto executive employees of Landlord or the property manager ranking above thehighest-ranking, on-site employee; costs associated with the operation of thebusiness of the entity which constitutes Landlord, which costs are not directlyrelated to maintaining or operating the Property (by way of example, theformation of the entity, internal accounting and legal matters, including butnot limited to preparation of tax returns and financial statements andgathering of data therefor, costs of defending any lawsuits related tomaintaining or operating the Property, costs of selling, syndicating,financing, mortgaging or hypothecating any of Landlord’s interest in theProperty, and costs of any disputes between Landlord and its employees); anyexpense representing an amount paid for products or services (other thanoverall property management) to a person or entity related to or affiliatedwith Landlord which is in excess of the fair market value of such services andproducts; fees incurred in disputes with tenants; costs of remediation ofHazardous Materials which are (i) in or on the Property as of the date ofthis Lease and which are classified as Hazardous Materials as of the date ofthis Lease under laws in effect as of the date of this Lease, or (ii) whichare subsequently brought onto the Property by Landlord or with the expressconsent of Landlord and which are on the date of their introduction onto theProperty classified as Hazardous materials under laws in effect as of the dateof such introduction, excluding in the case of both (i) and (ii) above,lawful use and disposition of reasonable quantities of supplies used in theordinary course of operation and maintenance of like projects.

 

## 5.2.          Asfrequently hereafter as Landlord shall deem appropriate, Landlord may giveTenant notice of Landlord’s estimate of Operating Costs for the then-currentcalendar year (“Estimated Operating Costs”). Tenant shall pay on the first dayof each calendar month during the Term, as additional rent hereunder,one-twelfth (or portion thereof for partial months) of Tenant’s Pro Rata Shareof Estimated Operating Costs.

##  

## 5.3.          Tenant’s“Pro Rata Share” is a fraction, the numerator of which is the Rentable Area ofthe Premises, and the denominator of which is the Rentable Area of all areas inthe Property designated by Landlord for lease, excluding separately leasedstorage and parking areas. Landlord may reasonably redetermine Tenant’s ProRata Share from time to time to reflect reconfiguration, additions ormodifications to the Building.

##  

## 5.4.          Withina reasonable time after the expiration of each calendar year, Landlord shallsubmit to Tenant a statement (“Landlord’s Statement”) setting forth the actualOperating Costs of the Property for such calendar year (“Actual Operating Costs”),(a) Tenant’s Pro Rata Share of Actual Operating Costs, and (b) theaggregate of Tenant’s payments of Estimated Operating Costs for such year.Within thirty (30) days after the delivery of such statement (including anystatement delivered after the expiration or termination of the Term of thisLease), the party in

 

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## whose favor the difference, ifany, between (a) and (b) exists shall pay the amount of suchdifference to the other; provided, however, that overpayments by Tenant may atLandlord’s option be credited against future payments of Estimated OperatingCosts except with respect to the last year of the Term.

##  

Provided thatTenant is not then in default beyond any applicable cure period of itsobligations to pay Base Rent, or any other payments required to be made by itunder this Lease and provided further that Tenant strictly complies with theprovisions of this Section 5.4, Tenant shall have the right, once eachcalendar year, to reasonably review supporting data for any portion of aLandlord’s Statement (provided, however Tenant may not have an audit right toall documentation relating to Building operations as this would far exceed therelevant information necessary to properly document a pass through billingstatement, but real estate tax statements and information on utilities,repairs, maintenance and insurance will be available), in accordance with thefollowing procedure:

 

### (A)          Tenant shall, within ten(10) business days after any such Landlord’s Statement is delivered,deliver a written notice to Landlord specifying the portions of the Landlord’sStatement that are claimed to be incorrect, and Tenant shall simultaneously payto Landlord all amounts due from Tenant to Landlord as specified in theLandlord’s Statement. Except as expressly set forth in subsection (C) below,in no event shall Tenant be entitled to withhold, deduct, or offset anymonetary obligation of Tenant to Landlord under the Lease (including, withoutlimitation, Tenant’s obligation to make all payments of Base Rent and allpayments of Tenant’s Pro Rata Share of Tax and Operating Costs) pending thecompletion of and regardless of the results of any review of record under this Section 5.4.The right of Tenant under this Section 5.4 may only be exercised once percalendar year for any Landlord’s Statement, and if Tenant fails to meet any ofthe above conditions as a prerequisite to the exercise of such right, the rightof Tenant under this Section 5.4 for a particular Landlord’s Statementshall be deemed waived.

###  

### (B)           Tenant acknowledgesthat Landlord maintains its records for the Building at Landlord’s manager’scorporation offices presently located at the address set forth in the DataSheet and Tenant agrees that any review of the records under this Section 5.4shall be at the sole expense of Tenant and shall be conducted by an independentfirm of certified public accounts which will be engaged by Tenant on a fee, notcontingency basis. Tenant may exercise the right to audit only during normalbusiness hours, at Landlord’s offices. Tenant acknowledges and agrees that anyrecords reviewed under this Section 5.4 constitute confidentialinformation of Landlord, which shall not be disclosed to anyone other than theaccountants performing the review and principals of Tenant who receive theresult of the review. The disclosure of such information to any person, whetheror not caused by the conduct of Tenant shall constitute a material breach ofthis Lease,

###  

### (C)           Any errors disclosed bythe review shall be promptly corrected by Landlord, provided, however, that ifLandlord disagrees with any such claimed

 

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### errors, Landlord shall have the right to cause another review to bemade by an independent firm of certified public accountants of nationalstanding. In the event of a disagreement between the two accounting firms, thereview that discloses the least amount of deviation from the Landlord’sStatement shall be deemed to be correct. In the event that the result of thereview of records (taking into account, if applicable, the result of anyadditional review caused by Landlord) reveal that Tenant has overpaidobligations for a preceding period the amount of such overpayment shall becredited against Tenant’s subsequent installment obligations to pay theestimated Tax and Operating Expense Adjustment. In the event that such resultsshows that Tenant has underpaid its obligation for a preceding period, Tenantshall be liable for Landlord’s actual accounting fees, and the amount of suchunderpayment shall be paid by Tenant to Landlord with the next succeedinginstallment obligation of estimated Tax and Operating Costs.

###  

## 5.5.          Landlordmay at its option by thirty (30) days written notice to Tenant Change itsaccounting year hereunder from the calendar year to a fiscal year, making suchadjustments from the end of the last calendar year to the commencement of thefirst full fiscal year as shall be appropriate pursuant to generally acceptedaccounting principles. Upon such change, references in this Section 5.5 toa calendar year shall be deemed to be references to a fiscal year.

##  

## 5.6.          Whenin the reasonable determination of Landlord any service, including but notlimited to HVAC, electrical, janitorial and property management service, isprovided disproportionately either to the Premises or to any other premiseswithin the Property, then the Operating Cost per square foot payable hereundermay be increased or reduced, as the case may be, by Landlord’s determination ofthe increased or reduced cost per square foot of such disproportionate service.Other than the actual increase in utility costs for the disproportionateservice, as determined by Landlord, Landlord shall not charge any fee for thedisproportionate service. Tenant agrees to pay for any additional HVAC andutility usage beyond the Buildings normal hours of operation. A cost per hourfee for the additional HVAC and utilities usage shall be determined by andbetween the parties. The cost per hour fee shall be equal to an amount to bedetermined based upon mechanical engineering estimates and current marketestimates for similar Class Buildings. In the case of unoccupied space,those elements of Operating Costs that increase with occupancy shall beadjusted upward to the amount that would be incurred if the Project were fullyoccupied; provided, however, in no event shall such adjustment permit Landlordto collect from tenants in the Project as Operating Costs, more than 100% ofactual Operating Costs attributable to such adjusted elements.

##  

# 6.             USEOF PREMISES: Tenant will use and occupy the Premises for purposes of conductingthe business of: General Office Use.

 

## 6.1.          Tenantwill not use or occupy the Premises for any unlawful purpose, and will complywith all present and future laws, ordinances, regulations and orders of allgovernmental units having jurisdiction over the Premises. Tenant shall notcause or permit any unusual noise, vibrations, odors or nuisance in or aboutthe Premises. Landlord disclaims any warranty that the Premises are suitablefor Tenant’s use and Tenant acknowledges that it has had a full opportunity tomake its own determination in this regard.

 

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## 6.2.          Tenantwill not conduct or permit to be conducted any activity, or place any equipmentin or about the Premises, which will in any way increase the rate of fireinsurance or other insurance on the Property; and if any increase in the rateof fire insurance or other insurance is stated by any insurance company or bythe applicable Insurance Rating Bureau to be due to activity or equipment ofTenant in or about the Premises, such statement shall be conclusive evidencethat such increase in such rate is due to such activity or equipment and, as aresult thereof, Tenant shall be liable for such increase and shall reimburseLandlord therefor and, further, shall discontinue or cause the discontinuanceof such conduct or shall remove such equipment upon Landlord’s demand made atany time thereafter.

##  

## 6.3.          Tenantshall not install, use, generate, store or dispose of in or about the Premisesany hazardous substance, toxic chemical, pollutant or other material regulatedby the Comprehensive Environmental Response, Compensation and Liability Act of1985 or the Minnesota Environmental Response and Liability Act or any similarlaw or regulation, including without limitation any material containingasbestos, PCB, CFC or HCFC (collectively “Hazardous Materials”) withoutLandlord’s written approval of each Hazardous Material. Landlord shall notunreasonably withhold its approval of use by Tenant of immaterial quantities ofHazardous Materials customarily used in office business operations so long asTenant uses such Hazardous Materials in accordance with all applicable laws.Tenant shall indemnify, defend and hold Landlord harmless from and against anyclaim, damage or expense arising out of Tenant’s installation, use, generation,storage, or disposal of any Hazardous Materials, regardless of whether Landlordhas approved the activity.

##  

## 6.4.          Tothe best of Landlord knowledge, the Building is new construction and noHazardous Materials were utilized in the construction of the Building.

##  

## 6.5.          Tothe best of Landlord knowledge, the Building was constructed in accordance withthe requirements imposed under the Americans with Disabilities Act (ADA).

##  

# 7.             ASSIGNMENTAND SUBLETTING:

#  

## 7.1.          Tenantwill not assign, transfer, mortgage or encumber this Lease or sublet or rent orpermit occupancy or use of the Premises, or any part thereof by any thirdparty; nor shall any assignment or transfer of this Lease be effectuated byoperation of law or otherwise, (any of the foregoing being hereinafter referredto as an “Assignment”) without in each such, case obtaining the prior writtenconsent of Landlord, which consent shall be subject to Landlord s solediscretion. The consent by Landlord to any Assignment shall not be construed asa waiver or release of Tenant from the terms of any covenant or obligationunder this Lease, nor shall the collection or acceptance of rent from anytransferee under an Assignment constitute an acceptance of the Assignment or awaiver or release of Tenant or any transferee of any covenant or obligationcontained in this Lease, nor shall any Assignment be construed to relieveTenant from the requirement of obtaining the consent in writing of Landlord toany further Assignment.

##  

Landlord’sconsent to a proposed assignment or subletting shall not be unreasonablywithheld; but, in addition to any other ground for denial, Landlord’s consentshall be deemed reasonably withheld if, in Landlord’s good faith judgement: (i) theproposed assignee or subtenant does not have the financial strength to performits obligations under this Lease or any proposed sublease;

 

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(ii) thebusiness and operations of the proposed assignee or subtenant are not ofcomparable quality to the business and operations being conducted by othertenants in the Building; (iii) the proposed assignee or subtenant intendsto use any part of the Premises for a purpose not permitted under this Lease; (iv) eitherthe proposed assignee or subtenant, or any person which directly or indirectlycontrols, is controlled by, or is under common control with the proposedassignee or subtenant occupies space in the Building, or is negotiating withLandlord to lease space in the Building; (v) the proposed assignee orsubtenant is disreputable; or (vi) the use of the Premises or the Buildingby the proposed assignee or subtenant would, in Landlord’s reasonablejudgement, impact the Building in a negative manner including but not limitedto significantly increasing the pedestrian traffic in and out of the Buildingor requiring any alterations to the Building to comply with applicable laws; (vii) thesubject space is not regular in shape with appropriate means of ingress andegress suitable for normal renting purposes; (viii) the transferee is agovernment (or agency or instrumentality thereof) or (ix) Tenant hasfailed to cure a default at the time Tenant requests consent to the proposedTransfer.

 

## 7.2.          Notwithstandingthe foregoing, Tenant shall have the right to assign or sublet, with Landlord’sconsent, to a) any entity resulting from a merger or consolidation with Tenant,b) any partnership succeeding to the business and assets of Tenant, and c) anysubsidiary or Affiliate of Tenant. Affiliate means any person or entity thatcontrols is controlled by, or is under common control with Tenant with “control”meaning ownership of fifty percent (50%) or more of the voting interests inTenant.

##  

## 7.3.          IfTenant desires at any time to make an Assignment, it shall first notifyLandlord of its desire to do so and shall submit in writing to Landlord (i) thename of the proposed assignee, mortgagee, subtenant or other transferee (any ofthe foregoing being hereinafter referred to as an “Assignee”), (ii) thenature of the proposed Assignee’s business to be carried on the Premises, (iii) acopy of the proposed Assignment agreement and any other agreements to beentered into concurrently with such Assignment, including full disclosure ofall financial terms, and (iv) such financial information as Landlord mayreasonably request concerning the proposed Assignee. Tenant shall pay toLandlord a reasonable fee for Landlord’s expenses, including attorneys’ fees,in reviewing such proposed Assignment. Neither the furnishing of suchinformation nor the payment of such fee shall limit any of Landlord’s rights oralternatives under this Section.

##  

## 7.4.          Uponany request for Landlord’s consent under this Section, Landlord shall have theoption, to be exercised by giving written notice to Tenant within fourteen (14)days after receipt by Landlord of the information concerning such Assignmentrequired by this Section, to terminate this Lease as to the portion of thePremises for which Tenant proposes an Assignment, effective as of the dateTenant proposes the Assignment to take place. Upon termination of this Lease asto such portion of the Premises, (i) the Base Rent shall be reduced by thelesser of (x) the then-current Base Rent per square foot of Rentable Area,multiplied by the number of square feet of Rentable Area for which Tenantproposes an Assignment and (y) the Base Rent stated in Tenant’s notice under Section 7.3;(ii) Tenant’s Pro Rata Share shall be reduced in proportion to thereduction of the Rentable Area of the Premises; (iii) such portion of thePremises shall, at Tenant’s expense, be a separately demised area complyingwith all codes and with a reasonable and appropriate entrance separate from theentrance for the remainder of the Premises; (iv)

 

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## Tenant shall at all timesprovide non-exclusive use of any common facilities; and (v) Landlord shallhave the right to use such portion of the Premises for any legal purposecompatible with a first class office building, in its sole discretion, and theright to further assign or sublease the portion of the Premises shall besubject to Landlord’s election without the consent of Tenant. Upon terminationof this Lease as to all or any portion of the Premises, any option to extendthe term of this Lease with respect to such portion of the Premises shall alsoterminate, whether or not such options have been exercised. Non-exercise byLandlord of its rights under this Section shall not limit any of Landlord’sother rights and alternatives under this Section.

##  

## 7.5.          Whetheror not Landlord has consented to the applicable Assignment, the amount by whichthe income received by Tenant with respect to any Assignment exceeds, in anymonth, the Base Rent and Operating Costs payable by Tenant to Landlord, shallbe payable by Tenant directly to Landlord, as additional rent hereunder on orbefore the last day of each such month. Tenant shall make full disclosure toLandlord of a consideration paid or payable, agreements and other relevantunderstandings with respect to any such Assignment.

##  

# 8.             MAINTENANCEAND REPAIRS: Without limitation of Landlord’s obligation to provide routinejanitorial services as set forth in Section 11 Tenant agrees to keep andmaintain the Premises and the fixtures and equipment therein in first class,properly, functioning, safe, orderly and sanitary condition, will make allnecessary replacements thereto, will suffer no waste or injury thereto, andwill at the expiration or other termination of the Term of this Lease,surrender the same with all improvements in the same order and condition inwhich they were on the Commencement Date, or in such better condition as theymay hereafter be put, ordinary wear and tear and casualty damage to the extentcovered by insurance, excepted. Landlord shall make all necessary repairs tothe outer walls, roof, downspouts, gutters and basic structural elements andcommon areas of the Property. Landlord shall also make all necessary repairs tothe portions of the building systems (plumbing, sewage, heating, airconditioning and electrical) providing service jointly to the Premises andother portions of the Property. Notwithstanding anything apparently to thecontrary in this Section, any cost of repairs or improvements to the Property,to the Premises or to any common areas which are occasioned by the negligenceor the fault of Tenant, its officers, employees, agents or invitees, and whicharise out of the nature of Tenant’s use and occupancy of the Premises or theinstallations of Tenant in the Premises shall be paid for by Tenant, asadditional rent hereunder, immediately upon billing.

 

# 9.             ALTERATIONS;SIGNS; EQUIPMENT; MOVING:

#  

## 9.1.          Tenantwill not make or permit anyone to make any alterations, decorations, additionsor improvements, structural or otherwise, in or to the Premises or the Propertywithout the prior written consent of Landlord. Landlord shall not unreasonablywithhold consent to Tenant’s interior decorations provided they comply with Section 2of this Lease. As a condition precedent to consent of Landlord hereunder,Tenant agrees to obtain and deliver to Landlord such security against mechanic’sliens, as Landlord shall reasonably request. If any mechanic’s lien is filedagainst any part of the Property for work claimed to have been done for, ormaterials claimed to have been furnished to, Tenant, such mechanic’s lien shallbe discharged by Tenant within ten (10) days thereafter, at Tenant’s solecost and expense, by the payment thereof or by making any deposit required bylaw. Regardless of whether Landlord’s consent is required or obtainedhereunder: (i) all alterations shall be made in accordance with applicablelaws, codes and insurance guidelines, and shall be

 

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## performed in a good andworkmanlike manner, and (ii) if the construction or Installation of Tenant’salterations or fixtures causes any labor disturbance; Tenant shall immediatelytake any action necessary to end such labor disturbance. All alterations,decorations, additions or improvements in or to the Premises or the Propertymade by Tenant shall become the property of Landlord upon expiration of theTerm and shall remain upon and be surrendered with the Premises as a partthereof without disturbance or injury, unless Landlord requires specific itemsthereof to be removed by Tenant at Tenant’s sole expense, in which event Tenantshall do so prior to the expiration of the Term at its expense, and shallrepair any damage caused thereby. Notwithstanding the foregoing, if (i) Tenantis not in default in the performance of any of its obligations under thisLease, (ii) if any and all damage resulting therefrom be repaired, and (iii) Tenantshall post such security with respect to damage as Landlord may reasonablyrequest, Tenant shall have the right to remove, during the last ninety (90)days of the term of this Lease, all movable furniture, furnishings or tradefixtures installed in the Premises at the direct expense of Tenant, providedthe same is completed with no damage to the Premises.

##  

## 9.2.          Tenantshall not place any signs on the Building without first obtaining the writtenconsent of Landlord. Any allowed signs shall comply with the Building structureand the City Code. Such signs shall also comply with the following: (i) suchplace, number, size, color and style as has been approved in writing byLandlord and (ii) in accordance with the sign criteria to be developed byLandlord. Any such signs shall be at the sole expense of Tenant. Tenant shallremove all signs at the expiration or termination of this lease and restore theaffected area to its original condition.

##  

## 9.3.          Tenantshall not install any equipment which will or may necessitate any changes,replacements or additions to, or in the use of, the heating, ventilating or airconditioning system, or electrical system of the Premises or the Property norany equipment containing Hazardous Materials without first obtaining the priorwritten consent of Landlord. Equipment belonging to Tenant which causes noiseor vibration that may be transmitted to the structure of the Property or to anyspace therein to such a degree as to be objectionable to Landlord or to anytenant in the Property shall be installed and maintained by Tenant, at Tenant’sexpense, on vibration eliminators or other devices sufficient to eliminatenoise and vibration. Landlord shall have the right at any time to limit theweight and prescribe the position of safes, concentrated filing systems andother heavy equipment or fixtures.

##  

## 9.4.          Nofurniture, equipment or other bulky matter of any description will be receivedinto the Property or carried in the elevator except as approved by Landlord.All moving of furniture, equipment and other material shall be done at otherthan normal business hours, after notification to Landlord who shall, however,not be responsible for any damage to or charges for moving the same unlessdamage is the direct result of Landlord’s sole and gross negligence. Any andall damage or injury to the premises or the Property caused by moving theproperty of Tenant in or out of the Premises, or due to the same being on thePremises, shall be repaired by, and at the sole cost of, Tenant. No deliveriesor pickups shall be left unattended at the loading dock.

##  

# 10.           RIGHTOF ENTRY: Tenant will permit Landlord, or its representative, to enter thePremises, to examine, inspect and protect the Premises, and to make suchalterations,

 

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# renovations, restorationsand/or repairs as in the judgment of Landlord may be deemed necessary ordesirable for the Premises, for any other premises in the Property, or theProperty itself (including access to distribution systems above the ceiling ofthe Premises), or to exhibit the same to prospective tenants during the lastyear of the Term of this Lease or during any period Tenant is in defaulthereunder, or to prospective purchasers or lenders at any time. Landlord shalluse reasonable efforts to not unreasonably interfere with the conduct of Tenant’sbusiness, but Landlord shall in no event be liable to Tenant for any damages inconnection with such entry or installation.

 

# 11.           SERVICESAND UTILITIES:

#  

## 11.1.        Duringthe Property business days and hours as established by Landlord from time totime, Landlord shall furnish reasonably adequate water service and heat and airconditioning during such seasons of the year when such services are normallyfurnished in office buildings in the metropolitan area. Landlord shall providereasonable evening cleaning and janitorial service to the Premises, Saturdays,Sundays and holidays excluded, provided that the Premises are used exclusivelyfor office purposes and are kept reasonably in order by Tenant. Tenant shallpay to Landlord the non-typical costs for special cleaning and trash removal.Landlord shall provide reasonable access to electric and telephone service.Landlord shall not be liable for, and there shall be no abatement of rent byreason of, failure to furnish, or for delay or suspension in furnishing, anyservices to be provided by Landlord, caused by breakdown, maintenance, and/orrepairs or causes beyond Landlord’s control. Tenant shall conserve heat, airconditioning, water and electricity and shall use due care in the use of thePremises and of the public areas in the Property. All thermostats within thePremises shall be under the sole control of Landlord, and Tenant shall not, norshall it permit any of its employees, agents, representatives, guests orinvitees, to open, change or tamper with any thermostats. If permitted by Law,Landlord shall have the right at any time and from time to time during theLease Term, to either contract for service from a different company orcompanies providing electricity service, “Alternative Service Provider”.

##  

## 11.2.        Aslong as space remains available, Landlord agrees to make available for rentalto Tenant, lower level storage space, consisting of 226 square feet. Tenantshall pay $9.00 per square foot gross per year for the storage space at suchtimes and in the manner Base Rent is payable pursuant to the terms of thisLease. The lease of storage space shall be subject to a separate agreement tobe executed by Landlord and Tenant, and is subject to rate increases if theLandlord so determines. *Landlord and Tenantagree that upon sixty (60) days written notice to Tenant, Landlord may cancelthe storage space agreement*.

##  

## 11.3.        Tenantshall have access to the Building and Premises 24 hours per day, seven (7) daysper week, 52 weeks per year. Employee access outside of the normal hours ofoperation for the Building shall be through the issuance of card keys for adesignated exterior door.

##  

## 11.4.        Landlordshall provide to Tenant, Tenant employees and customers, free shared in commonsurface level parking. So long as stalls remain available, Landlord shall makeavailable to Tenant two (2) parking stalls in the underground parking rampserving the Building for rental by Tenant. The rental rate shall be $80.00 perstall per month and shall be payable at such times and in the manner Base Rentis payable pursuant to this Lease. The lease of the underground

 

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## parking stalls shall be subjectto a separate agreement to be executed by Landlord and Tenant, and are subjectto rate increases if the Landlord so determines.

##  

## 11.5.        Landlordreserves the right to impose such security restrictions in the Common Areas asit deems appropriate. The parties acknowledge that safety and security devices,services and programs provided by Landlord, if any, while intended to detercrime and ensure safety, may not in given Instances prevent theft or othercriminal’s acts, or ensure safety of persons or property. The risk that anysafety or security device, service or program may not be effective, or maymalfunction, or be circumvented by a criminal, is assumed by Tenant withrespect to Tenant property and interest, and Tenant shall obtain insurancecoverage to the extent Tenant desires protection against such criminal acts andother losses, as further described in this Lease. Tenant agrees to cooperate inany reasonable safety or security program developed by Landlord or required byLaw.

##  

# 12.           WAIVERAND INDEMNITY:

#  

## 12.1.        Notwithstandinganything apparently to the contrary in this Lease, Landlord and Tenant herebyrelease one another and their respective partners, officers and employees andproperty manager from any and all liability (to the other or anyone claimingthrough or under them by way of subrogation or otherwise) for any loss ordamage covered by property insurance or coverable by a customary policy ofinsurance required by Section 13, even if such loss or damage shall havebeen caused by the fault or negligence of the other party, or anyone for whomsuch party may be responsible.

##  

## 12.2.        Notwithstandinganything apparently to the contrary in this Lease, Landlord and its partners,officers and employees and property manager shall not be liable to Tenant, andTenant hereby releases such parties from all damage, compensation or claimsfrom any cause other than the intentional misconduct of Landlord or itspartners, officers or employees or property manager arising from: loss ordamage to personal property or trade fixtures in the Premises including books,records files, computer equipment, computer data, money, securities, negotiableinstruments or other papers; lost business or other consequential damagearising out of interruption in the use of the Premises; and any criminal act byany person other than Landlord or its partners, officers or employees.

##  

## 12.3.        Tenantagrees to indemnify, defend and hold Landlord and its partners, officers andemployees and property manager harmless from and against any claim, loss orexpense arising out of injury, death or property loss or damage occurring inthe Premises, except only to the extent caused by the negligent act orintentional misconduct of Landlord or its partners, officers or employees orproperty manager.

##  

## 12.4.        Landlordagrees to indemnify, defend and hold Tenant and its partners, officers andemployees harmless from and against any claim, loss or expense arising out ofinjury, death or property loss or damage occurring in the Common Areas of theProperty, except to the extent caused by the negligent act or intentionalmisconduct of Tenant or its partners, officers or employees.

##  

# 13.           INSURANCE:

#  

## 13.1.        Tenantagrees to purchase, in advance, and to carry in full force and effect thefollowing insurance.

 

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### (A)          “All risk” propertyinsurance covering the full replacement value of all of Tenant’s leaseholdimprovements, trade fixtures and personal property within the Premises.Landlord shall be named as loss payee under all such policies.

###  

### (B)           At all times during thelease Term, Tenant shall procure and maintain business interruption insurancein such amount as will reimburse Tenant for direct or indirect loss of earningattributable to all perils insured against in Section 13.

###  

### (C)           Commercial generalliability insurance, providing coverage on an “occurrence” rather than a “claimsmade” basis, which policy shall include coverage for Bodily Injury, PropertyDamage, Personal Injury, Contractual Liability (applying to this Lease), andIndependent Contractors, in current Insurance Services Office form or otherform which provides coverage at least as broad. Tenant shall maintain acombined policy limit of at least One Million and 00/l00ths Dollars($1,000,000.00) applying to Bodily Injury, Property Damage and Personal Injury,which limit may be satisfied by Tenant’s basic policy, or by the basic policyin combination with umbrella or excess policies so long as the coverage is atleast as broad as that required herein. Such liability umbrella and/or excesspolicies may be subject to aggregate limits so long as the aggregate limitshave not at any pertinent time been reduced to less than the policy limitstated above, and provided further that any umbrella or excess policy providescoverage from the point that such aggregate limits in the basic policy becomereduced or exhausted. Landlord and its managing agent shall be named as anadditional insured under all such policies.

###  

### (D)          Prior to the sale,storage, use or giving away of alcoholic beverages on or from the Premises byTenant or another person, Tenant, at its own expense, shall obtain a policy orpolicies of insurance issued by reasonable insurance company and in a formacceptable to Landlord saving harmless and protecting Landlord, its managingagent, and the Premises against any and all damages, claims liens, judgements,expenses and costs, including actual attorneys fees, arising under any presentor future law, statute, or ordinance of State of Minnesota or othergovernmental authority having jurisdiction of the Premises, by reasons of anystorage, sale, use or giving away of alcoholic beverages on or from thePremises. Such policy or policies of insurance shall have a minimum combinedsingle limit of One Million Dollars ($1,000,000) per occurrence and shall applyto bodily injury, fatal or non fatal; injury to means of support; and injury toproperty of any person. Such policy or policies of insurance shall nameLandlord and its agents, beneficiaries, partners, employees and any mortgageeof Landlord or any ground lessor of Landlord as additional insured.

###  

### (E)           Failure to insure. IfTenant fails to maintain any insurance which Tenant is required to maintainpursuant to this Section 13, Tenant shall be liable to Landlord for anyloss or cost resulting from such failure to maintain. Tenant may notself-insure against any risks required to be covered by insurance withoutLandlord’s prior written consent.

 

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## 13.2.        Atleast ten (10) days prior to entry by Tenant on the Premises, Tenant shalldeliver to Landlord evidence that the insurance required by this Lease is infull force and effect. At least ten (10) days prior to expiration of anysuch coverage, Tenant shall deliver evidence that the coverage in question willbe renewed or replaced upon expiration. Such evidence of insurance shallcontain sufficient information to enable Landlord to determine whether Tenant’sinsurance complies with the requirements of this Lease. Upon request, Tenantshall also furnish insurer-certified copies of all pertinent policies. Allpolices used to provide the coverage required by this Lease shall (i) beendorsed to require the insurer to provide at least ten (10) days noticeto Landlord prior to cancellation or non-renewal, and (ii) be issued byfinancially sound companies having an A.M. Best Company rating of at leastA: VII.

##  

## 13.3.        Landlordagrees to purchase in advance, and to carry in full force and effect thefollowing insurance:

##  

### (A)          “All risk” propertyinsurance coverage on the Property exclusive of Tenant’s LeaseholdImprovements, in such amount as Landlord deems prudent.

###  

### (B)           Commercial generalpublic liability insurance covering the Property in a combined single limitamount of at east One Million and 00/l00ths Dollars ($1,000,000.00) and writtenon an “occurrence” basis.

###  

## 13.4.        Ifany insurance required hereunder ceases to be available, or is available onterms so unacceptable that prudent landlords or tenants, as the case may be,generally do not carry such insurance, then in lieu of such insurance thepertinent party may carry the most comparable insurance which is available andgenerally carried by prudent parties.

##  

# 14.           FIREOR OTHER CASUALTY: If the Premises or the Property shall be damaged by fire orother cause Landlord shall at its option either (a) undertake to restoresuch damage with all due diligence, or (b) in the event the Premises orthe Property are damaged by fire or other cause to such extent that damagecannot, in Landlord’s sole judgment, be economically repaired within ninety(90) days after the date of such damage (taking into account the time necessaryto effectuate a satisfactory settlement with any insurance company and usingnormal construction methods without overtime or other premium), terminate thisLease, by notice given to Tenant within sixty (60) days after the date of thedamage. Any termination hereunder by reason of damage to the Premises shall beeffective as of the date of the damage. Any termination by reason of damage tothe Property but not the Premises shall be effective as of the date notice is given.If Landlord elects to restore, Landlord shall not be obligated to restore anyimprovements in the Premises which were not owned and constructed by Landlord.Upon substantial completion by Landlord of its work, Tenant shall undertake torestore its leasehold improvements and trade fixtures with all due diligence.This Lease shall, unless terminated by Landlord pursuant to this Section,remain in full force and effect following such damage, and, in the case ofdamage to the Premises, the Base Rent and additional rent, prorated to theextent that the Premises are rendered untenantable, shall be equitably abateduntil such repairs are completed; provided, however, that if Tenant does notrestore its leasehold improvements and trade fixtures with due diligence,abatement shall cease as of the date restoration could have been completedusing due diligence.

 

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# 15.           CONDEMNATION:If the whole or any substantial part of the Premises shall be taken orcondemned or purchased under threat of condemnation by any governmentalauthority, then the Term of this Lease shall cease and terminate as of the datewhen the condemning authority takes possession of the Premises and Tenant shallhave no claim against the condemning authority, Landlord or otherwise for anyportion of the amount that may be awarded as damages as a result of such takingor condemnation or for the value of any unexpired term of this Lease provided,however, that Landlord shall not be entitled to any separate award made toTenant for loss of business or costs of relocation. In the event part of theProperty, but not the Premises, is condemned to the extent that the Propertycannot, in Landlord’s sole judgment, be economically restored within areasonable time, Landlord shall have the option by notice given to Tenantwithin ninety (90) days after the date the condemning authority takespossession to terminate this Lease as of the date of such possession.

 

# 16.           SECURITYDEPOSIT: Upon the execution of this Lease, Tenant shall deposit with Landlord asecurity deposit equal to one month of Gross Rent, as defined herein. Thedeposit is for securing Tenant’s full and faithful performance of all of theterms of this Lease. Landlord shall return such sum, without Interest, afterthe expiration of this Lease. Landlord may apply any part of such deposit tocure any Tenant default. If there is a sale of the Property, Landlord maytransfer the deposit to the Purchaser. Tenant has submitted a security depositof $2,460 with Landlord. If Landlord so uses or applies any portion of theSecurity Deposit, for the purpose of covering delinquent rent, Tenant shallimmediately upon written demand deposit cash with Landlord in an amountsufficient to restore the Security Deposit to the full amount herein stated. IfTenant is in default under the Lease more than two (2) times within anytwelve- month period, irrespective of whether or not such default is cured,then, without limiting Landlord’s other rights and remedies provided for in thisLease, or at law or equity, the Security Deposit shall automatically beincreased by an amount equal to two (2) times the original SecurityDeposit.

 

# 17.           DEFAULT:

#  

## 17.1.        Anyone of the following events shall constitute an Event of Default:

##  

#### (i)            Tenant shall fail topay any monthly installment of Base Rent or Additional Rent as herein provided,and such default shall continue for a period of five (5) days after thedue date therefor;

####  

#### (ii)           The abandonment orvacation of the Premises by Tenant for fourteen (14) consecutive days (with orwithout payment of rent).

####  

#### (iii)          Tenant shall violate orfail to perform any of the other conditions, covenants or agreements hereinmade by Tenant and such default shall continue for fifteen (15) days afternotice from Landlord; provided however, that if the nature of such default issuch that Tenant can cure the default, but not within fifteen (15) days, thenthe Event of Default shall be suspended for a period not in excess of thirty(30) additional days so long as Tenant commences cure within fifteen (15) daysand thereafter diligently and continuously prosecutes the curing of thedefault, and so long as continuation of the default does not create materialrisk to the Property or to persons using the Property.

 

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#### (iv)          Tenant shall file orhave filed against it or any guarantor of this Lease any bankruptcy or othercreditor’s action, or make an assignment for the benefit of its creditors.

####  

## 17.2.        Ifan Event of Default shall have occurred and be continuing, Landlord may at Itssole option by written notice to Tenant, terminate this Lease. Neither thepassage of time after the occurrence of the Event of Default nor exercise byLandlord of any other remedy with regard to such Event of Default shall limitLandlord’s rights under this Section 17.

##  

## 17.3.        Ifan Event of Default shall have occurred and be continuing, whether or notLandlord elects to terminate this Lease, Landlord may enter upon and repossessthe Premises (said repossession being hereinafter referred to as “Repossession”)and may remove Tenant and all other persons and property therefrom.

##  

## 17.4.        Fromtime to time after Repossession of the Premises, whether or not this Lease hasbeen terminated, Landlord may, but shall not be obligated to, attempt to reletthe Premises for the account of Tenant in the name of Landlord or otherwise,for such term or terms (which may be greater or less than the period whichwould otherwise have constituted the balance of the Term) and for such terms(which may include concessions or free rent) and for such uses as Landlord, inits uncontrolled discretion, may determine, and may collect and receive therent therefor. Any rent received shall be applied against Tenant’s obligationshereunder, but Landlord shall not be responsible or liable for any failure tocollect any rent due upon any such reletting.

##  

## 17.5.        Notermination of this Lease and no Repossession of the Premises shall relieveTenant of its liabilities and obligations under this Lease, all of which shallsurvive any such termination or Repossession. In the event of any suchtermination or Repossession, whether or not the Premises shall have been relet,Tenant shall pay to Landlord the Base Rent and other sums and charges to bepaid by Tenant up to the time of such termination or Repossession, andthereafter Tenant, until the end of what would have been the Term in theabsence of such termination or Repossession, shall pay to Landlord, as and forliquidated and agreed current damages for Tenant’s default, the equivalent ofthe amount of the Base Rent and such other sums and charges which would bepayable under this Lease by Tenant if this Lease were still in effect, less thenet proceeds if any, of any reletting effected pursuant to the provisions of Section 17.4after deducting all of Landlord’s expenses in connection with such reletting,including, without limitation, all repossession costs, brokerage and managementcommissions, operating expenses, legal expenses, attorneys’ fees, alterationcosts, and expenses of preparation for such reletting. Tenant shall pay suchcurrent damages to Landlord monthly on the days on which the Base Rent wouldhave been payable under this Lease if this Lease were still in effect, andLandlord shall be entitled to recover the same from Tenant on each such day. Atany time after such termination or Repossession, whether or not Landlord shallhave collected any current damages as aforesaid, Landlord shall be entitled torecover from Tenant, and Tenant shall pay to Landlord on demand, as and forliquidated and agreed final damages for Tenant’s default, an amount equal tothe then present value of the excess of the Base Rent and other sums or chargesreserved under this Lease from the day of such termination or Repossession forwhat would be the then unexpired term if the same had remained in effect, overthe amount of rent Tenant demonstrates that Landlord

 

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## could in all likelihoodactually collect for the Premises for the same period, said present value to bearrived at on the basis of a discount of nine percent (9%) per annum.

##  

## 17.6.        Inaddition to all other remedies of Landlord, Landlord shall be entitled toreimbursement upon demand of all reasonable attorneys fees incurred by Landlordin connection with any Event of Default.

##  

## 17.7.        Landlordshall in no event be considered to be in default of Landlord’s obligationshereunder until the expiration of a reasonable time after notice of defaultfrom Tenant.

##  

## 17.8.        Inaddition to all other remedies of Landlord, Tenant acknowledges that its latepayment of any monthly installment of rent will cause Landlord to incur certaincosts and expenses not contemplated under this Lease, the exact amount of whichis extremely difficult or impractical to fix. Such costs and expenses willinclude, without limitations, loss of use of money, administrative andcollection costs, and processing and accounting expenses. Therefore, if anyinstallment of rent is not received by Landlord from Tenant by the fifth (5th)day of the month for which such installment is due, Tenant shall immediatelypay to Landlord (i) a late charge equal to 5 percent of such installmentand (ii) the unpaid balance due Landlord shall bear interest at theInterest Rate, defined in Section 18 herein, from the date suchinstallment became due and payable to the date of payment thereof by Tenant,and such interest shall constitute additional to any interest due pursuant tothis Lease. The “Interest Rate” as used herein means the maximum rate permittedby law. Landlord and Tenant agree that this rate charge represents a reasonableestimate of costs and expenses incurred by Landlord, and is in faircompensation to Landlord for its loss suffered by such non-payment by Tenant.Acceptance of this late charge shall not constitute a waiver of Tenant’sdefault with respect to such non-payment by Tenant, nor prevent Landlord fromexercising any other rights and remedies available to Landlord under thisLease.

##  

# 18.           LANDLORD’SRIGHT TO CURE DEFAULT; LATE PAYMENT: If Tenant commits an Event of Default (orif any default exists and Landlord has good cause for action prior toexpiration of Tenant’s grace period), then Landlord may, but shall not berequired to, make such payment or do such act, or correct any damage caused bysuch prohibited act and to enter the Premises as appropriate in connectiontherewith, and the amount of the expense thereof, if made or done so byLandlord, with interest thereon at the Interest Rate (as hereinafter defined)from the date paid by Landlord, shall be paid by Tenant to Landlord and shallconstitute additional rent hereunder due and payable with the next monthlyinstallment of rent; but the making of such payment or the doing of such act byLandlord shall not operate to cure such default or to stop Landlord from thepursuit of any remedy of which Landlord would otherwise be entitled. The “InterestRate” as used herein means the maximum rate permitted by law.

 

# 19.           WAIVER:No waiver by either party of any breach of any agreement herein contained shalloperate as a waiver of such agreement itself, or of any subsequent breachthereof. No payment by Tenant or receipt by Landlord of a lesser amount thanthe monthly installments of rent herein stipulated shall be deemed to be otherthan on account of the earliest stipulated rent nor shall any endorsement orstatement on any check or letter accompanying a check for payment of rent bedeemed an accord and satisfaction, nor shall acceptance of rent with

 

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# knowledge of breach constitutea waiver of the breach, and Landlord may accept such check or payment withoutprejudice to Landlord’s right to recover the balance of such rent, to terminatethis Lease, to Repossess the Premises or to pursue any other remedy provided inthis Lease. No re-entry by Landlord, and no acceptance by Landlord of keys fromTenant, shall be considered an acceptance of a surrender of the Lease.

 

# 20.           SUBORDINATION:

#  

## 20.1.        Forthe purposes of this Section, the term “Mortgage” shall mean at any time, anymortgage of record now or hereafter placed against the Property, any increase,amendment, extension, refinancing or recasting of a Mortgage and, in the caseof a sale or lease and leaseback by Landlord of all or any part of theProperty, the lease creating the leaseback. For the purposes hereof a mortgageshall be deemed to continue in effect after foreclosure thereof and during theperiod of redemption therefrom.

##  

## 20.2.        ThisLease is subject and subordinate to the lien of any Mortgage, which may now orhereafter encumber the Property or any development of which the Property is apart. In confirmation of such subordination, Tenant shall, at Landlord’srequest from time to time, promptly execute any certificate or other documentrequested by the holder of the Mortgage, including but not limited to, Tenant’smost recently completed fiscal year-end income statement and balance sheet.Tenant shall submit these documents to landlord within ten (10) days writtennotice to Tenant. Tenant agrees that in the event that any proceedings arebrought for the foreclosure of any Mortgage, Tenant shall immediately andautomatically attorn to the purchaser at such foreclosure sale, as the landlordunder this Lease, and Tenant waives the provisions of any statute or rule oflaw, now or hereafter in effect, which may give or purport to give Tenant anyright to terminate or otherwise adversely affect this Lease or the obligationsof Tenant hereunder in the event that any such foreclosure proceeding isprosecuted or completed. Neither the holder of the Mortgage (whether itacquires title by foreclosure or by deed in lieu thereof) nor any purchaser atforeclosure sale shall be liable for any act or omission of Landlord, subjectto any offsets or defenses which Tenant might have against Landlord or bound byany prepayment by Tenant of more than one month’s installment of Base Rent andadditional rent or by any modification of this Lease made subsequent to thegranting of the Mortgage. Notwithstanding anything to the contrary in thisSection, Tenant’s rights to quiet possession of the Premises shall not bedisturbed so long as Tenant shall pay the rent and observe and perform all ofthe provisions of this Lease to be observed and performed by Tenant, unlessthis Lease is terminated pursuant to specific provisions relating totermination contained in this Lease. With respect to future mortgages, Tenantwill agree to subordinate the Lease so long as the Lender agrees (i) inthe event of foreclosure, the Lease will not be terminated so long as Tenant isnot in default (ii) the Lease will continue in effect and the Lender (orany purchaser at the foreclosure sale) will perform the obligations of Landlordunder the Lease following the date of foreclosure; and (iii) with respectto any “continuing defaults” of Landlord existing as of the date of foreclosure(e.g., failure to maintain, failure to repair), the Lender acquiring titleshall correct such conditions.

##  

# 21.           RULESAND REGULATIONS: Tenant shall use the Premises and the Common Areas of theProperty in accordance with the terms of this Lease and such additional rules andregulations as may from time to time be reasonably made by Landlord for thegeneral safety, comfort and convenience of the owners, occupants and tenants ofthe Property, and Tenant shall use its best efforts to cause Tenant’scustomers, employees and invitees to abide by such rules

 

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# and regulations. Landlord shallin no event be responsible to Tenant for enforcement of such rules andregulations against other tenants. ‘These rules and regulations arefurther outlined in Exhibit D attached to this lease.

 

# 22.           COVENANTOF QUIET ENJOYMENT: Landlord covenants that it has the right to make this Leasefor the term aforesaid and covenants that if Tenant shall pay the rent andperform all of the covenants, terms and conditions of this Lease to beperformed by Tenant, Tenant shall, during the Term hereby created, freely,peaceably and quietly occupy and enjoy the full possession of the Premises. Theliability of the original Landlord and any successor Landlord under this Leaseis limited to its interest in the Building and Property.

 

# 23.           NOREPRESENTATIONS BY LANDLORD: Neither Landlord nor any agent or employee ofLandlord has made any representations or promises with respect to the Premisesor the Property except as herein expressly set forth, and no right, privileges,easements or licenses are acquired by Tenant except as herein expressly setforth. No exhibit, not attached to this Lease nor any other materials providedby Landlord, shall constitute a warranty or agreement as to the configurationof the Property or the occupants thereof. Landlord reserves the right from timeto time to modify the Property, including common areas, appurtenances andrentable areas, without in any case reducing the obligations of Tenanthereunder. Tenant has no right to light or air over any premises adjoining theProperty. Tenant, by taking possession of the Premises, shall accept the same “asis” except as expressly provided in this Lease and such taking of possessionshall be conclusive evidence that the Premises and the Property are in good andsatisfactory condition at the time of such taking of possession. In addition toand without limitation of the immediately preceding sentence, Tenant agreesthat it is leasing the Premises on an “as is”, “where is” and “with all faults”basis, based upon its own judgment, and hereby disclaims any reliance upon anystatement or representation whatsoever made by Landlord. Landlord makes nowarranty with respect to the premises, the property or any part thereof,express or implied, and landlord specifically disclaims any warranty ofmerchantability and of fitness for a particular purpose and any liability forconsequential damages arising out of the use of or the inability to use thepremises, the project or any part thereof.

 

# 24.           NOTICES:All notices or other communications hereunder shall be in writing and shall behand delivered or sent by registered or certified first-class mail, postageprepaid, or by overnight air express service, (i) if to Landlord atLandlord Address set forth on the Data Sheet, and (ii) if to Tenant, atthe Premises, unless notice of a change of address is given pursuant to theprovisions of this Section. The day notice is given by mail shall be deemed tobe the day following the day of mailing.

 

# 25.           ESTOPPELCERTIFICATES: Tenant agrees at any time and from time to time, upon not lessthan five (5) days prior written notice by Landlord, to execute,acknowledge and deliver to Landlord or a party designated by Landlord astatement in writing (i) certifying that this Lease is unmodified and infull force and effect, or if there have been modifications, that the Lease isin full force and effect as modified and stating the modifications, (ii) statingthe dates to which the rent and other charges hereunder have been paid byTenant, (iii) stating whether or not Landlord is in default in the performanceof any covenant, agreement or condition contained in this Lease, and, if so,specifying each such default (iv) agreeing that Tenant and Landlord will

 

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# not thereafter modify the Leasewithout the approval of any mortgagee identified by Landlord, and (v) agreeingthat, except for any security deposit required herein, Tenant shall not prepayany rent more than thirty (30) days in advance, and (vi) such othermatters relating to this Lease as may reasonably be requested. Any suchstatement delivered pursuant hereto may be relied upon by any owner of theProperty, any prospective purchaser of the Property, any mortgagee orprospective mortgagee of the Property or of Landlord’s interest, or anyprospective assignee of any such mortgagee. Tenant acknowledges that failure tocomply with this Section on a timely basis could result in loss of afavorable sale or financing and Tenant agrees to be liable for anyconsequential damages resulting from Tenant’s breach hereunder.

 

# 26.           SURRENDER;HOLDING OVER: Upon the expiration of this Lease or the earlier termination ofTenant’s right to possession, Tenant shall immediately vacate the Premises,remove all of its property therefrom, remove any Hazardous Materials installed,used, generated, stored or disposed of by Tenant, and leave the Premises in thecondition required by this Lease. Any property not removed shall be deemedabandoned, and Tenant shall be liable for all costs of removal. Should Tenantcontinue to occupy the Premises, or any part thereof, after the expiration ortermination of the Term, whether with or without the consent of Landlord, suchtenancy shall be from month to month and the monthly Base Rent shall be twicethat which would otherwise be payable under Section 4. If Tenant’sholdover is without the consent of Landlord, neither this Section nor theacceptance of any rent hereunder shall prevent Landlord from exercising anyremedy to regain immediate possession of the Premises.

 

# 27.           ENERGYCONSERVATION: Wherever in this Lease any terms, covenants or conditions arerequired to be kept or performed by Landlord, Landlord shall be deemed to havekept and performed such terms, covenants and conditions notwithstanding any actor omission of Landlord, if such act or omission is pursuant to anygovernmental regulations, requirements, directives or requests. Withoutlimiting the generality of the foregoing, Landlord may reduce the quantity andquality of all utility and other services and impose such regulations asLandlord deems necessary in order to conserve energy.

 

# 28.           COMMUNICATIONAND COMPUTER LINES: Tenant may, in a manner consistent with the provisions andrequirements of this Lease, install, maintain, replace, remove or use anycommunications or computer wires, cables and related devices (collectively theLines) at the Building in or serving the Premises, provided: (a) Tenantshall obtain Landlord’s prior written consent, which consent may be conditionedas required by Landlord, (b) if Tenant any time uses any equipment thatmay create an electromagnetic field exceeding the normal insulation ratings ofordinary twisted pair riser cable or cause radiation higher than normalbackground radiation, the Lines therefore (including riser cables) shall beplenum rated and appropriately insulated to prevent such excessiveelectromagnetic field or radiation, and (c) Tenant shall pay all costs inconnection therewith. Landlord reserves the right to require that Tenant removeany Lines which are installed in violation of these provisions.

 

Landlord may(but shall not have the obligation to): (i) install new Lines at theProperty, and (ii) create additional space for Lines at the Property, andadopt reasonable uniform rules and regulations with respect to the Lines.

 

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Notwithstandinganything to the contrary contained in Section 28, Landlord reserves theright to require that Tenant remove any or all Lines installed by or for Tenantwithin or serving the Premises upon termination of this Lease. Tenant shallnot, without the prior written consent of Landlord in each instance, grant toany third party a security interest or lien in or on the Lines, and suchsecurity interest or lien granted without Landlord written consent shall benull and void. Except to the extent arising from the intentional or negligentacts of Landlord or Landlord agents or employees, Landlord shall have noliability for damages arising from, and Landlord does not warrant that Tenant’suse of any Lines will be free from the following (collectively called “LineProblems”: (a) any eavesdropping or wire-tapping by authorized parties, (b) anyfailure of any Lines to satisfy Tenant’s requirements, or (c) anyshortages, failures, variations, interruptions, disconnections, loss or damagecaused by the installation, maintenance, replacement, use or removal of Linesby or for other tenants or occupants at the Property. Under no circumstancesshall any Line Problems be deemed an actual or constructive eviction of Tenant,render Landlord liable to Tenant for abatement of Rent, or relieve Tenant fromperformance of Tenant obligation under this Lease. Landlord in no event shallbe liable for damages by reason of loss of profits, business interruption orother consequential damage arising from any Line Problems.

 

# 29.           RELOCATION:Landlord may from time to time upon not less than thirty (30) days writtennotice require Tenant to relocate to substitute premises within the building,provided: (i) Rentable Area of the substitute premises is not less than 90percent (90%) of the Rentable Area of the Premises; (ii) at Landlord’soption the Rentable Area of the substitute premises may be greater than that ofthe Premises, but if the increase in the Rentable Area is more than 10 percent(10%) of Rentable Area of the Premises, then for purposes of computing BaseRent and Tenant’s Pro Rata Share the Rentable Area shall be deemed to increaseonly 10 percent (10%); and (iii) Landlord shall at its sole expenseprovide leasehold improvements in the substitute premises which are reasonablycomparable to those in the Premises. Except as expressly provided hereinLandlord shall have no further obligations with respect to such relocation.Upon the date of relocation as specified in Landlord’s notice: (i) Tenantshall promptly vacate and surrender its previous premises in the conditionrequired by this Lease, time being of the essence; and (ii) the newsubstitute premises shall become the Premises for purposes of this Lease.

 

# 30.           TENANT’STAXES: At least ten (10) days prior to delinquency, Tenant shall pay alltaxes levied or assessed upon (i) Tenant’s equipment, furniture and otherpersonal property located in or about the Premises, and (ii) this Lease orthe rent paid hereunder or any portion thereof, excluding any tax measured byLandlord’s net income. If any such taxes are imposed upon Landlord, Tenantshall pay to Landlord, at least twenty (20) days before the date eachinstallment is due to the taxing authority, the portion allocable to Tenantpursuant to this Section.

 

# 31.           UNIFORM COMMERCIALCODE: The Tenant grants to the Landlord a lien upon all personal property ofthe Tenant in the Leased Premises during said term to secure payment of therent payable hereunder, and agrees that no such property shall be removed fromthe Leased Premises without the consent of the Landlord while any installmentsof rent are past due, and during any other default in the conditions hereof.

 

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To the extentthis Lease grants Landlord, or recognizes in Landlord, any lien or rightsgreater than provided by the laws of the State of Minnesota pertaining to “Landlord’sLiens,” this Lease is intended and does constitute a security agreement withinthe meaning of the Uniform Commercial Code of the State of Minnesota, andLandlord, in addition to the rights prescribed herein, shall have the rights,titles, liens and interests in and to Tenant’s property now or hereafterlocated in or upon the Leased Premises which are granted a “secured party”, asthe term is defined under such Uniform Commercial Code, to secure the paymentto Landlord of amounts and monies due under this Lease. Tenant will execute, onrequest of Landlord, and will deliver to Landlord, a financing statement forthe purpose of perfecting Landlord’s security interest under this Lease, sothat the Landlord may file this Lease as a security agreement.

 

# 32.           MISCELLANEOUS:

#  

### (A)          This is a Minnesotacontract and shall be construed according to the laws of Minnesota.

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### (B)           The submission of thisLease to Tenant or its broker or other agent does not constitute an offer toTenant to lease the Premises. This Lease shall have no force and effect until, (i) itis executed and delivered by Tenant to Landlord and (ii) it is fullyreviewed and executed by Landlord; provided, however, that upon execution ofthis Lease by Tenant and delivery to Landlord, such execution and delivery byTenant shall, in consideration of the time and expense incurred by Landlord inreviewing the Lease and Tenant credit, constitute an offer by Tenant to Leasethe Premises upon the terms and conditions set forth herein (which offer toLease shall be irrevocable for ten (10) business days following the dateof delivery).

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### (C)           The captions in thisLease are for convenience only and are not a part of this Lease.

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### (D)          If more than one personor entity shall sign this Lease as Tenant, the obligations set forth hereinshall be deemed joint and several obligations of each such party.

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### (E)           Time is of the essence.

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### (F)           The provisions of thisLease which relate to periods subsequent to the expiration of the Term shallsurvive expiration.

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### (G)           If any provision ofthis Lease is invalid or unenforceable to any extent, then such provision andthe remainder of this Lease shall continue in effect and be enforceable to thefullest extent permitted by law.

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### (H)          This Lease contains theentire agreement of the parties hereto with respect to the Premises andProperty. This Lease may be modified only in writing, executed and delivered byboth parties.

 

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### (I)            Nothing contained inthis Lease shall be deemed or construed to create a partnership or jointventure of or between Landlord and Tenant, or to create any other relationshipbetween the parties other than that of landlord and tenant.

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### (J)            This Lease shall bebinding upon and inure to the benefit of the parties hereto and, subject to therestrictions and limitations herein contained their respective heirs,successors and assigns.

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# 33.           OPTIONTO RENEW: Providing Tenant is not in default of Lease, and providing Tenantgives Landlord six (6) months prior written notice, Tenant has the rightto renew the Lease for one term of three (3) years. The Base Rent duringthis Option Period shall be at $16.00 per rentable square foot.

 
| Landlord          |          | Tenant               |
|-------------------|---------------|----------------------|
|              |          |                 |
| **AMBAR, L.L.C.** | ** **    | **STEN Corporation** |
|              |          |                 |
| By                |          |                 | By |   |
|              | Frank Dunbar  |                 |   | Kenneth Brimmer |
|              |          |                 |   |   |
| Its:              | Chief Manager |                 | Its: | Chief Executive Officer |

 

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