**Exhibit 10.4**

 

**COMMERCIALLEASE**

**(Highway7 Corporate Center)**

 

In consideration of themutual promises and covenants contained in this Lease, HIGHWAY 7 BUSINESSCENTER LLC, a Minnesota limited liability company (“Landlord”), and CIPRICOINC., a Delaware corporation (“Tenant”) agree as follows:

 

1.                                       PREMISES. Landlord agrees to lease to Tenant and Tenant agrees to lease fromLandlord, approximately 20,605****square feet ofwhich approximately 12,367 square feet is office space, 3,198 square feet islab space, 4,971 square feet is operations space, and 69 square feet is Tenant’spro rata share of mechanical room space (collectively the “Premises”), togetherwith rights in common with other tenants to the Common Areas (as hereinafterdefined), within the building (“Building”) which is situated on that certainland (“Land”) in the City of St. Louis Park, Minnesota, commonly known asHighway 7 Corporate Center, with an address of 7003 Lake Street West, St. LouisPark, Minnesota, and more particularly described on Exhibit A attachedhereto (the Building and the Land are collectively the “Property”).  The Premises are depicted on Exhibit B,attached hereto.

 

The “Common Areas” aredefined as all areas and facilities outside the Premises and within theexterior boundary line of the Land which are provided and designated byLandlord from time to time for the general non-exclusive use of Landlord,Tenant, and other tenants of the Building and their respective employees,suppliers, shippers, customers and invitees. The Common Areas may include, but are not limited to, the parking areas,loading and unloading areas, trash areas, roadways, sidewalks, walkways,parkways and landscaped areas. Notwithstanding the foregoing, Landlord agrees (i) to keep thelandscaped areas in front of the Premises (including the east side hill area)substantially the same as it exists as of the date hereof with the effect thatthe substation is screened from view; (ii) not to increase the size of theCommon Areas in a manner that will increase Tenant’s Share of OperatingExpenses, as hereinafter defined; and (iii) not to make changes to theCommon Area that deny Tenant reasonable access to the Premises.

 

2.                                       CONDITION OF PREMISES.  Except as otherwise expressly set forth in Section 21hereof, or in Exhibits B and D attached hereto, Tenant agrees to accept thePremises “as-is.”

 

3.                                       TERM. The term of this Lease (the “Term”) shall commence on the later of October 13,2007, or the date that Landlord’s Work (as hereinafter defined) isSubstantially Complete (the “Commencement Date”), and continue for a period ofeighty-five and one-half (851⁄2) months thereafter, at which time the Term of theLease shall expire without further action on the part of either partyhereto.  “Substantially Complete” shallmean the point at which (i) a temporary certificate of occupancy has beenissued, and (ii) Landlord’s Work is complete in accordance with Exhibits Band D and in compliance with all applicable laws to the degree that any itemsremaining to be completed or corrected do not materially interfere with Tenant’sability to take occupancy and prepare to conduct its business within thePremises.  Tenant shall have noobligation to accept possession of the Premises before the Premises areSubstantially Complete.  Upon notice fromLandlord that the Premises are Substantially Complete, the parties shallinspect the Premises and prepare a punchlist of items necessary to finallycomplete the portions of the Premises for which Landlord is responsible.  Landlord agrees to cause to be completed orcorrected all such punchlist items promptly after the same have beenidentified.  Landlord covenants to obtaina final certificate of occupancy for the Premises; provided that Landlord shallnot be deemed to be in default of this covenant to the extent Landlord’sinability to obtain a final certificate of occupancy is the result ofimprovements, furnishings, or other activities of Tenant within thePremises.  Upon determination of theactual Commencement Date, Landlord and Tenant will confirm such date inwriting.  In the event that the Premisesare not delivered to Tenant by October 13, 2007, Tenant shall receive oneday of additional free Base Rent (as hereinafter defined) for each day thatelapses between October 13 and the actual Commencement Date.  In addition, if the Premises have not beendelivered to Tenant by October 31, 2007, Landlord shall be responsible topay the difference between the rent which would have been payable under thisLease had the Premises been delivered by October 31, 2007 (ignoring forpurposes of this provision any free rent to be granted to Tenant hereunder andassuming the rental amounts payable starting in month 2, as set out inparagraph 5 hereof) and the holdover rent payable by Tenant in its currentlocation.  Tenant 

 

 

----

 

represents that itsholdover rate will be 150% under its current lease if Tenant does not vacateits current space by October 31, 2007. In no event will the Commencement Date be prior to Landlord’s completionof Landlord’s Work, as hereinafter defined.

 

4.                                       HOLDING OVER.  If Tenant shall retain possession of thePremises after termination or expiration of this Lease, then (i) for eachday, or part thereof the Tenant so retains possession of the Premises, Tenantshall pay Landlord 150% of the amount of the daily rate of Base Rent payable byTenant under Section 5 during the calendar month immediately precedingsuch termination or expiration together with any damages sustained by Landlordas a result thereof, (ii) if such retention of the Premises is with theexpress written consent of Landlord, such tenancy shall be from month to monthand in no event from year to year or any period longer than month to month, and(iii) except as provided in this Section 4, any such tenancy shall beupon the same terms and conditions as contained in this Lease.

 

5.                                       RENT.

 

(a)                                  Base Rent.  The annualBase Rent set forth below consists of rent for the Premises and assumes$624,945 in a Tenant Improvement Allowance (as hereinafter defined).  Subject to adjustment pursuant to the termsof Section 21, Tenant covenants and agrees to pay to Landlord or itsauthorized agent, at Landlord’s address, without prior demand and withoutdeduction or set-off, rent (“Rent”) for the Premises as follows:

 

| **Months**          | ** ** | **Annual Base Rent**   | ** ** | **Monthly Base Rent** | ** ** |
|---------------------|------------|------------------------|------------|-----------------------|------------|
| ** **          | ** ** | **(per  square foot)** | ** ** | ** **            | ** ** |
| Oct. 13-31     |       | $                      | 0.00       |                  | $          | 0.00 |   |
| 1st full month |       | $                      | 0.00       |                  | $          | 0.00 |   |
| 2-13                |       | $                      | 11.25      |                  | $          | 19,317.19 |   |
| 14-25               |       | $                      | 11.48      |                  | $          | 19,712.12 |   |
| 26-37               |       | $                      | 11.71      |                  | $          | 20,107.05 |   |
| 38-49               |       | $                      | 11.94      |                  | $          | 20,501.98 |   |
| 50-61               |       | $                      | 12.18      |                  | $          | 20,914.08 |   |
| 62-73               |       | $                      | 12.42      |                  | $          | 21,326.18 |   |
| 74-85               |       | $                      | 12.67      |                  | $          | 21,755.45 |   |

 

Tenant shall alsopay Additional Rent as provided in section 5(b), and any other additionalpayments due under this Lease, such Additional Rent to commence on theCommencement Date.  All such paymentsshall be made in equal monthly installments, payable in advance on or beforethe first day of each calendar month with the first payment due on or beforethe Commencement Date.  Rent for anypartial month at the beginning or end of the Term of this Lease shall beprorated based upon the actual number of days of such month included within theTerm of this Lease.

 

(b)                                 Additional Rent. Tenant shall pay, as “Additional Rent,” the amount of Tenant’s Share ofOperating Expenses for each Lease Year, as reasonably estimated by Landlordprior to the beginning of such Lease Year, in equal monthly installments, inadvance, on the first day of each month during each applicable Lease Year.

 

The parties hereto agreeupon the following Definitions:

 

i.                                          The term “Lease Year” shall mean eachtwelve (12) month period which ends on December 31 of any year duringwhich all or any part of the Term occurs.

 

ii.                                       The term “Real Estate Taxes” shall meanand include all real estate taxes, and installments of special assessments (withpayments extended over the longest period allowable by the authority levyingsame), including interest thereon, relating to the Property, and all other 

 

2

----

 

governmental charges,general and special, ordinary and extraordinary, foreseen as well asunforeseen, of any kind and nature whatsoever, or other tax, however described,which is levied or assessed by any governmental entity, against Landlord or allor any part of the Property as a result of Landlord’s ownership of or interestin the Property, and payable during the respective Lease Year.

 

Tenant also shallpay, as Additional Rent, any tax or excise on rents, gross receipts tax, orother tax, however described, which is levied or assessed by any governmentalentity, against Landlord in respect to the Rent, Additional Rent, or othercharges reserved under this Lease or as a result of Landlord’s receipt of suchrents or other charges accruing under this Lease, except income, franchise,gift, succession, foreign ownership, foreign control, transfer, sales,inheritance, estate, payroll or personal property taxes.

 

iii.                                    The term “Operating Expenses” shall meanand include all expenses incurred with respect to the maintenance and operationof the Property, including, but not limited to, Real Estate Taxes, publicliability, casualty and other insurance premiums reasonably required byLandlord’s lender, Common Area maintenance and repair costs, steam,electricity, water, sewer, gas, and other Common Area utility charges, fuel,lighting, window washing, janitorial services, trash and rubbish removal, snowremoval, lawn mowing and maintenance, repair and replacement of exteriorwindows, repair and replacement of the non-structural portions of the roof androof membrane, wages and benefits payable to employees of Landlord whose dutiesare directly connected with the operation, maintenance and management of theProperty (but only to the level of building manager), and to the extent suchemployee’s time is directly charged to working at the Property, amounts paid tocontractors or subcontractors for work or services performed in connection withthe operation and maintenance of the Property, all services, supplies, repairs,replacements or other expenses for maintaining and operating the Property,reasonable attorneys’ fees and costs in connection with the appeal or contestof Real Estate Taxes or levies (to the extent of any reduction realized), andsuch other expenses as may be ordinarily incurred in the operation, maintenanceand management of the Property and not specifically set forth herein.  Landlord agrees that any management feecharged as part of Operating Expenses shall not exceed amounts customarilycharged for such services.  With respectto repairs or replacements to the Property which would be recognized as capitalimprovements under generally accepted accounting principles (“GAAP”), the term “OperatingExpenses” shall only include a prorata portion of the cost of such repairs orreplacements determined by amortizing at prevailing interest rates over theuseful life of the repair or replacement as determined in accordance withGAAP.  Landlord agrees that it will incurreplacement costs only when it is consistent with sound business and buildingownership practices, or as otherwise required by law or the requirements ofLandlord’s lender.

 

The term “OperatingExpenses” shall not include repairs, restoration or other work occasioned byfire, windstorm or other insured casualty, expenses incurred in leasing orprocuring tenants, leasing commissions, advertising expenses, expenses forrenovating space for Landlord or new tenants, payments made to affiliates ofLandlord including inside or related contractors and executives (but only tothe extent the amount paid exceeds market rate for the services provided),legal expenses incident to enforcement by Landlord of the terms of any lease,interest or principal payments on any mortgage, depreciation allowances orexpenses, costs to cure construction defects, costs to remedy building codeviolations or other violations of applicable laws, codes, ordinances orregulations existing as of the Commencement Date, costs to remediate HazardousSubstances (as hereinafter defined) which are not due to the acts or omissionsof Tenant, costs for the maintenance, repair and replacement of those itemsidentified as “Excluded Items” in paragraph 7(a) hereof, rent under anyground lease or underlying lease, or any costs incurred by Landlord inconnection with the transfer or disposition of Landlord’s interest in theProperty.  Notwithstanding the foregoing,in the event Landlord installs equipment in or makes improvements oralterations to the Property which are required under any governmental laws,regulations, or ordinances which were not required as of the date of thisLease, Landlord shall include in Operating Expenses reasonable charges for thesame so as to amortize such investment at 

 

3

----

 

prevailing interest ratesover the useful life of such equipment, improvement or alteration, asdetermined in accordance with GAAP.

 

iv.                                   The term “Tenant’s Share of OperatingExpenses” shall mean twenty-six percent (26%) of the Operating Expenses for theapplicable Lease Year.  The abovepercentage has been agreed upon by the parties hereto after due considerationof the number of leasable square feet in the Premises compared to the number ofleasable square feet in the Building.

 

As to each LeaseYear after the initial Lease Year, Landlord shall reasonably estimate for eachsuch Lease Year the total amount of (i) Operating Expenses; (ii) Tenant’sShare of Operating Expenses; and (iii) the computation of the annual andmonthly Additional Rent payable during such Lease Year as a result of changesin Tenant’s Share of Operating Expenses. Landlord shall make the estimate in writing and deliver or mail it toTenant at its address for notice purposes hereunder.

 

From time to timeduring any applicable Lease Year, Landlord may re-estimate the amount of OperatingExpenses and Tenant’s Share thereof, and in such event Landlord shall notifyTenant, in writing, of such re-estimate in the manner above set forth and fixmonthly installments for the then remaining balance of such Lease Year in anamount sufficient to pay the re-estimated amount over the balance of such LeaseYear after giving credit for payments made by Tenant on the previous estimate.

 

Upon completion ofeach Lease Year, Landlord shall determine the actual amount of OperatingExpenses for such Lease Year and Tenant’s Share thereof and deliver a writtenreport of the amounts thereof to Tenant within 120 days after the end of eachLease Year.  The report shall becertified by a financial officer of Landlord. If Tenant has paid less than its Share of Operating Expenses for anyLease Year, Tenant shall pay the balance of Tenant’s Share within thirty (30)days after the receipt of such statement. If Tenant has paid more than Tenant’s Share of Operating Expenses forany Lease Year, Landlord shall credit such excess against the most currentinstallment or installments due Landlord for its estimate of Tenant’s Share ofOperating Expenses for the next following Lease Year.  A pro rata adjustment shall be made for anyfractional Lease Year occurring during the Term of this Lease or any renewal orextension thereof based upon the number of days of the term of this Leaseduring such Lease Year as compared to three hundred sixty-five (365) days.  If an overpayment occurs during the lastLease Year, Landlord shall refund the amount overpaid to Tenant.

 

Tenant shall havethe right during any Lease Year, after reasonable notice and at reasonabletimes, to inspect Landlord’s accounting records relating to Operating Expensecharges (for the immediately preceding Lease Year only) at Landlord’saccounting office.  Tenant shall furnishLandlord with the results of such inspection, and if such inspection shows thatTenant has paid less than its Share of Operating Expenses for any Lease Year,Tenant shall pay the balance of Tenant’s Share within thirty (30) days afterthe receipt of such inspection results. If Tenant has paid more than Tenant’s Share of Operating Expenses forany Lease Year, Landlord shall credit such excess against the most currentinstallment or installments due Landlord for its estimate of Tenant’s Share ofOperating Expenses for the next following Lease Year.  If an overpayment occurs during the lastLease Year, Landlord shall refund the amount overpaid to Tenant.  Upon Tenant’s written request, Landlord willprovide Tenant with copies of documentation substantiating any OperatingExpense.

 

6.                                       USE. Subject to any limitations imposed by applicable laws, rules andregulations, the Premises may be used and occupied solely for general office,showroom, light assembly and warehouse purposes.  Tenant will not use the Premises in a mannercontrary to law, or in any manner that may increase the insurance risk, preventthe obtaining of insurance, or be in violation of any applicable federal, stateor local law, rule or regulation.

 

4

----

 

7.                                       MAINTENANCE AND REPAIR.

 

(a)                                  Landlord’s Obligations for Maintenance. Landlord shall keep and maintain the Common Areas, foundation, exteriorwalls, and roof (structural and roof membrane) of the Building in which thePremises are located, the structural portions of the Premises (exclusive ofdoors, door frames, door checks, windows, and exclusive of window frameslocated in the exterior building walls), and building systems that do notexclusively serve Tenant or any other single tenant, in good condition andrepair (including replacements, as necessary) except that Landlord shall not becalled upon to make such repairs occasioned by the act or negligence of Tenant,its agents, employees, invitees, licensees or contractors.  Except to the extent the same are Tenant’sobligation under paragraph 7(b)(ii) or (iii) below, or as otherwiseprovided elsewhere in this Lease, Landlord shall maintain the Property incompliance with applicable law and the requirements of applicable insuranceunderwriters.  Except as otherwiseprovided in the last sentence of this paragraph 7(a), the costs incurred byLandlord in the performance of the obligations set forth in this paragraph 7(a) shallbe included as Operating Expenses, subject to the provisions of paragraph5(b).  Costs to maintain, repair andreplace the foundation, exterior walls (other than painting or other cosmetictreatments), structural portions of the roof, and structural portions of thePremises (collectively, the “Excluded Items”) shall not be included inOperating Expenses, but shall be the sole cost of Landlord, except to theextent that such maintenance, repairs or replacements are occasioned by the actor negligence of Tenant, its agents, employees, invitees, licensees orcontractors.

 

(b)                                 Tenant’s Obligations for Maintenance.

 

(i)                                     Except as provided in section 7(a),Tenant shall repair (including replacement of parts and equipment if necessary)the Premises and every part thereof, including, without limitation, allplumbing and sewage facilities, fixtures, heating and air conditioning (repairand maintenance only, including seasonal inspections, filter replacements andadjustments — replacement addressed below) and electrical systems, sprinklersystem, walls, floors, ceilings, together with any other Improvements (ashereinafter defined) included within and exclusively serving the Premises,provided that such maintenance and/or repairs are not due to manufacturerdefects or improper installation of any of the aforementioned items which occurduring any relevant warranty period.  AtLandlord’s option, Landlord may perform the repair and maintenance on theheating and air conditioning units serving the Premises, and charge the costthereof to Tenant so long as such costs are at competitive market rates.  Tenant shall also be responsible to repairother parts of the Property to the extent such repairs are made necessary bythe act or negligence of Tenant, its agents, employees, invitees, licensees orcontractors.  Landlord shall beresponsible for improvements to the Premises of a capital nature (including thereplacement of the heating and air conditioning system, and thoserequired by changes in law coming into effect after the Commencement Date whichare not specific to Tenant’s use), provided that the cost of any such capitalimprovements shall be amortized at prevailing interest rates over the usefullife of such improvements (as determined in accordance with GAAP) and Tenantshall pay to Landlord Tenant’s Share of the amortized portion of such costsattributable to the term of the Lease as part of Operating Expenses.

 

(ii)                                  Tenant shall keep and maintain thePremises in a clean, sanitary and safe condition in accordance with the laws ofthe State of Minnesota and in accordance with all directions, rules andregulations of the health officer, fire marshal, building inspector, or otherproper officials of the governmental agencies having jurisdiction, at the solecost and expense of Tenant, and Tenant shall comply with all requirements oflaw, ordinance and otherwise, affecting the 

 

5

----

 

Premises including, butnot limited to, the Americans With Disabilities Act (“ADA”); provided, however,that Tenant shall not be obligated to cure a violation of any law or ordinancewhich existed as of the Commencement Date unless (a) such violation wasthe result of Tenant’s activities on the Premises, or (b) such cure isrequired as the result of Tenant’s particular use of the Premises and not ageneral requirement of like buildings regardless of use.  If Tenant refuses or neglects to commence andto promptly and adequately complete any repairs which are the obligation ofTenant pursuant to this section 7(b), Landlord may, but shall not be requiredto, make or complete such repairs and Tenant shall pay the cost thereof toLandlord immediately upon demand.

 

(iii)                               Tenant, at its own expense, shall installand maintain fire extinguishers and other fire protection devices (in additionto the ESFR sprinkler system provided by Landlord) as may be required from timeto time by any agency having jurisdiction thereof and the insuranceunderwriters insuring the Premises, but only to the extent such requirementsare the result of Tenant’s particular use of the Premises and not a generalrequirement of like buildings regardless of use.

 

8.                                       UTILITIES, TAXES, AND ASSESSMENTS.  The Premises shall be separately metered forelectrical and natural gas.  Tenant shallbe billed directly by the utility companies for electrical, natural gas andtelephone services.  Tenant shall payeither directly or, at Landlord’s option, as a part of Tenant’s Share ofOperating Expenses, all charges for any other utility or service used, renderedor supplied upon or in connection with the Premises including, but not limitedto, sewer and water.  Tenant shallprovide its own trash and janitorial service.

 

9.                                       ADDITIONAL COVENANTS OF TENANT.

 

(a)                                  Signs.  Subject toapplicable municipal ordinances, Tenant shall have the right to install signageat their own cost above, or adjacent to, the main entrance to the Premises inaccordance with the Sign Criteria which is attached hereto as Exhibit C.  Landlord will provide front and back doorvinyl graphics for the Premises’ suite number, and will also provide tenantsignage on the monument sign at the Lake Street entrance to the Property, inthe manner depicted on Exhibit E attached hereto.  During the last nine (9) months of theTerm, Landlord may place “For Lease/Sale” signs upon the Premises in a mannerthat does not obstruct Tenant’s signage.

 

(b)                                 Compliance with Laws. Except as otherwise provided in this Lease, Tenant agrees, at Tenant’sexpense, to comply with all laws, orders, ordinances and regulations and with anydirection made pursuant to law of any public officer, relating to Tenant’s useof the Premises.

 

(c)                                  Surrender.  Tenant agreesupon the termination of this Lease for any reason, to remove Tenant’s personalproperty and trade fixtures (including Tenant’s modular furniture) and those ofany other persons claiming under Tenant, and to quit and deliver up thePremises to Landlord peaceably and quietly in as good order and condition asthe same are at the commencement of this Lease or thereafter may be improved byLandlord and Tenant, reasonable use and wear and damage due to fire or othercasualty excepted.  Tenant, at Tenant’scost, shall repair any damage resulting from Tenant’s removal of its personalproperty and trade fixtures from the Premises.

 

(d)                                 Personal Property Taxes. Tenant agrees to pay, before delinquency, any and all taxes levied orassessed and which become payable during the Term hereof upon Tenant’sequipment, fixtures, furniture, and other personal property located on thePremises.

 

6

----

 

10.                                 ENVIRONMENTAL RESTRICTIONS.  Tenant covenants and agrees that during theTerm of this Lease (i) no Hazardous Substances (as hereinafter defined)shall be located, stored, used, disposed of, released or discharged from(including groundwater contamination) the Premises, provided that the Tenantmay store, use and dispose of (in compliance with this paragraph 10) normaloffice materials and limited amounts of manufacturing materials and otheramounts of materials customarily used in accordance with the use permitted bythis Lease; (ii) the Premises and its use and operation shall at all timesand in all respects comply with all federal, state and local laws, ordinancesand regulations relating to the protection of health and with all EnvironmentalLaws (as hereinafter defined); and (iii) Tenant will obtain all permits,if any, required under Environmental Laws relating to Tenant’s use andoccupancy of the Premises.

 

(a)                                  For purposes of this section, the term “HazardousSubstances” shall mean the following: (i) any “hazardous substance” as nowdefined pursuant to the Comprehensive Environmental Response, Compensation andLiability Act (“CERCLA”), 42 U.S.C.A. § 960 1(14) as amended by theSuperfund Amendments and Reauthorization Act (“SARA”), and including thejudicial interpretation thereof (ii) any “pollutant or contaminant” as nowdefined in 42 U.S.C.A. § 960 1(33); (iii) any petroleum, includingcrude oil or any fraction thereof; (iv) natural gas, natural gas liquids,liquefied natural gas, or synthetic gas usable for fuel; (v) any “hazardouschemical” as now defined pursuant to 29 C.F.R. part 1910; and (vi) anyother substance subject to regulation as a hazardous or-toxic substance underexisting Environmental Laws.

 

(b)                                 For purposes of this section, the term “EnvironmentalLaws” shall mean and include all federal, state and local statutes, ordinances,regulations and rules presently in force or hereafter enacted relating toenvironmental quality, contamination and clean-up, including, withoutlimitation, CERCLA, 42 U.S.C.A. § 9601 et seq., as amended by the SARA,the Resource Conservation and Recovery Act of 1976, 42 U.S.C.A. § 6901 etseq., as amended by the Hazardous and Solid Waste Amendments of 1984, and any applicablestate superlien and environmental clean-up statutes and all rules andregulations presently or hereafter promulgated under said statutes, as amended.

 

Tenant shall indemnify,defend (with counsel reasonably acceptable to Landlord), protect and holdLandlord and each of Landlord’s officers, directors, partners, employees,agents, attorneys, successors and assigns free and harmless from and againstany and all claims, liabilities, damages, costs, penalties, forfeitures, lossesor expenses (including attorneys’ fees) for death or injury to any person ordamage to any property whatsoever (including water tables and atmosphere)arising or resulting in whole or in part, directly or indirectly, from therelease or discharge of Hazardous Materials, in, on, under, upon or from thePremises or the Improvements located thereon or from the transportation ordisposal of Hazardous Materials to or from the Premises, to the extent causedby Tenant whether knowingly or unknowingly. Tenant’s obligations hereunder shall include, without limitation, andwhether foreseeable or unforeseeable, all costs of any required or necessaryrepairs, clean-up or detoxification or decontamination of the Premises or theImprovements, and the presence and implementation of any closure, remedialaction or other required plans in connection therewith, to the extent requiredby Environmental Laws.  For purposes ofthe indemnity provided herein, any acts or omissions of Tenant, or itsemployees, agents, customers, sublessees, assignees, contractors orsub-contractors of Tenant (whether or not they are negligent, intentional,willful or unlawful) shall be strictly attributable to Tenant; any acts oromissions of Landlord, its employees, agents, customers, assignees, contractorsor sub-contractors shall be strictly attributable to Landlord.  Landlord agrees to remediate, or cause to beremediated, to the extent required by Environmental Laws, any HazardousMaterials which are not the responsibility of Tenant.

 

The foregoing covenantsshall survive the termination or expiration of this Lease or Tenant’s right topossession of the Premises hereunder.

 

11.                                 INSURANCE.

 

(a)                                  Tenant’s Liability Insurance. Tenant agrees to carry, at its expense, during the entire term hereof, apolicy of comprehensive general liability and property damage insurance in an 

 

7

----

 

amount of not less than$2,000,000.00 per occurrence, with respect to the Premises, and the businessoperated by Tenant in the Premises.

 

(b)                                 Tenant’s Property Insurance. Tenant agrees to carry, at its expense, during the entire term hereof,insurance against fire, vandalism, malicious mischief, and such other perils asare from time to time included in a standard extended coverage endorsementinsuring Tenant’s merchandise, trade fixtures, furnishings, equipment and allother items of personal property of Tenant located on the Premises on areplacement value basis.

 

(c)                                  Requirements of Tenant’s Insurance. All policies of insurance to be carried by Tenant under this Lease shall(i) be in the amounts stated above, subject to adjustment from time totime as reasonably required by Landlord or Landlord’s lender; (ii) as toliability insurance only, name Landlord, and any other parties in interestdesignated by Landlord as additional insureds; (iii) contain suchendorsements as Landlord may from time to time reasonably require; and (iv) bein form and substance reasonably satisfactory to Landlord.  Such insurance may be furnished by Tenantunder any blanket policy carried by it or under a separate policytherefor.  The insurance shall be with aninsurance company authorized to do business in the State of Minnesota and acopy of the paid-up policies evidencing such insurance or certificates ofinsurers certifying to the issuance of such policies shall be delivered toLandlord prior to the Commencement Date and upon renewals not less than 30 daysprior to expiration of such coverage. Such policies shall also provide that no act or default of any personother than the Landlord or its agents shall render the policy void as toLandlord or effect Landlord’s right to recover thereon.

 

(d)                                 Landlord’s Liability Insurance. Landlord agrees to carry during the entire term hereof, a policy ofcomprehensive general liability and property damage insurance in an amount ofnot less than $3,000,000.00 per occurrence ($3,000,000.00 aggregate), withrespect to the Property.

 

(e)                                  Landlord’s Property Insurance. Landlord agrees to carry during the entire term hereof, insurance againstfire, vandalism, malicious mischief, and such other perils as are from time totime included in a standard extended coverage endorsement insuring the Buildingand Landlord’s Work on a replacement value basis.

 

12.                                 WAIVER OF SUBROGATION.  Notwithstanding anything in this Lease to thecontrary, neither Landlord nor Tenant shall be liable to the other for lossarising out of damage or destruction of the Premises, the Building, theProperty, or other Improvement, or personal property or contents therein ifsuch damage or destruction is caused by a peril included within a standard formof fire insurance policy, with full extended coverage endorsement added, asfrom time to time issued in Minnesota. Such absence of liability shall exist whether or not the damage ordestruction is caused by the negligence of Landlord or Tenant, or theirrespective officers, employees, agents or customers.  It is the intention and agreement of Landlordand Tenant that each party shall look to its insurer for reimbursement of anysuch loss, and the insurer involved shall have no subrogation rights againstthe other party.  Each party shall adviseits insurance company of this release and such policy shall, if necessary,contain a waiver of any right of subrogation by the insurer against the otherparty.

 

13.                                 INDEMNIFICATION.  Tenant shall defend and indemnify Landlordand hold it harmless from and against any and all liability, damages, costs, orexpenses, including attorneys’ fees, arising from any act, omission ornegligence of Tenant or its officers, contractors, licensees, agents, servants,employees, guests, invitees, or visitors in or about the Premises or Building,or arising from any default under this Lease by Tenant.  Landlord shall defend and indemnify Tenantand save it harmless from and against any and all liability, damages, costs, orexpenses, including attorneys’ fees, arising from any act, omission ornegligence of Landlord or its officers, contractors, licensees, agents,servants, employees, guests, invitees, or visitors in or about the Premises orBuilding, or arising from any default under this Lease by Landlord.  Landlord shall not be liable for any loss ordamage to person or property sustained by Tenant, which may be caused by thePremises, or appurtenances thereto, being out of repair or by theft, or byvandalism, or by any other cause of whatsoever nature except to the extentcaused by the 

 

8

----

 

intentional act ofLandlord, or the failure of Landlord to perform its obligations under the termsof this Lease.  Tenant shall not beliable for any loss or damage to person or property sustained by Landlord,which may be caused by the Property (other than the Premises), or appurtenancesthereto, being out of repair or by theft, or by vandalism, or by any othercause of whatsoever nature except to the extent caused by the intentional actof Tenant, or the failure of Tenant to perform its obligations under the termsof this Lease.

 

14.                                 IMPROVEMENTS AND ALTERATIONS.  Tenant may not make alterations orimprovements (“Improvements”) to the Premises at a cost in excess of $7,500.00per instance without the prior written consent of Landlord, which consent shallnot be unreasonably withheld. Improvements shall be made at Tenant’s sole cost and any contractor mustfirst be approved by Landlord.  Tenantshall obtain all necessary permits and provide Landlord with copies.  Tenant shall promptly repair any damage andperform any necessary cleanup resulting from any Improvements.  All Improvements (except trade fixtures,furniture and equipment belonging to Tenant which are removable without causingdamage to the Premises) shall be Landlord’s property and shall remain upon thePremises upon the expiration or other termination of this Lease, all withoutcompensation to Tenant.  Tenant agreesnot to create, incur, impose or permit any lien against the Premises orLandlord by reason of any Improvement and Tenant agrees to hold Landlordharmless from and against any such lien claim. At its expense, Tenant shall cause to be discharged, within thirty (30)days of notice of the filing thereof, any construction lien claim filed againstthe Premises for work claimed to have been done for, or materials claimed tohave been furnished to, or on behalf of Tenant. Tenant may contest any such lien in a manner prescribed by law afterposting security for the benefit of Landlord in an amount reasonably determinedby Landlord, but in no event not less than 150% of the amount claimed by suchlien.

 

15.                                 CONDEMNATION.

 

(a)                                  If the Property shall be taken orcondemned for any public purpose, or purchased under threat of such taking, tosuch an extent as to render the Premises untenantable, this Lease shallforthwith cease and terminate as of the date title vests in the condemningauthority or the date the condemning authority takes possession, whichevershall occur first.

 

(b)                                 In the event this Lease is not terminatedas contemplated by subparagraph (a) above, Landlord shall promptly restorethe Property to substantially the same condition as the Property was in as ofthe Commencement Date (with the exception of those portions of the Propertytaken).  Rent and Additional Rent shallbe abated during any period of restoration to the extent that Tenant is unableto occupy all or a portion of the Premises during said restoration.  After restoration, Rent and Additional Rentshall be proportionately adjusted to reflect any diminution in Premises squarefootage.

 

(c)                                  In any taking of the Property, or anyportion thereof, whether or not this Lease is terminated as provided in thisarticle, Tenant shall not be entitled to any portion of the award for thetaking of the Property or damage to the Tenant Improvements, with the exceptionthat Tenant may apply for a separate award for Tenant’s relocation expenses,and the taking of Tenant’s furniture, fixtures or equipment, or personalproperty.

 

16.                                 ASSIGNMENT AND SUBLETTING.  Tenant shall not voluntarily, involuntarilyor by operation of law assign, transfer, mortgage or encumber this Lease, norsublet the whole or any part of the Premises without first obtaining Landlord’swritten consent, which consent shall not be unreasonably withheld.

 

17.                                 DEFAULT BY TENANT AND RIGHTS OF LANDLORD.

 

(a)                                  Defaults.  If Tenant (i) failsto pay when due any installment of Rent, Additional Rent, or other charges duehereunder for 5 days after the same is due, or (ii) fails to perform anyother covenant, term, agreement or condition of this Lease, and such failurecontinues for 20 days after written notice from Landlord (provided, however,that if the nature of such default other than for nonpayment is such that thesame cannot reasonably be cured within such 20-day period, Tenant shall not bedeemed in default if Tenant shall commence such cure within said 20-day periodand thereafter diligently prosecute the same to completion), then, Landlord, inaddition to all other rights and remedies available to Landlord at law orequity or by other provisions hereof, 

 

9

----

 

may, without process,immediately re-enter the Premises and remove all persons and property and, atLandlord’s option, terminate this Lease or terminate Tenant’s right topossession of the Premises without terminating the Lease.  Tenant further agrees that in case of anysuch termination Tenant will indemnify Landlord against all loss of rents andother damage which Landlord may incur by reason of such termination, including,without limitation, reasonable attorneys’ fees. Notwithstanding the five (5) day grace period set forth in thisparagraph 17(a)(i) above, if Tenant’s payments of Rent, Additional Rent orother charges are received after the date due by 7 or more days in theaggregate in any given Lease Year (meaning, for example, 3 days late in onemonth, 2 days late in another month and 2 days late in yet another month, for acumulative total of 7 days), Tenant will thereafter for the balance of saidLease Year be deemed to be in default under this paragraph 17(a)(i) ifsuch payments are not received on the due date (provided, however, thatLandlord must provide notice to Tenant when Tenant’s late payments first totalseven (7) or more days in any Lease Year, after which notice Tenant shallbe allowed one (1) additional late payment within such five (5) daygrace period before Tenant is thereafter deemed to be in default if paymentsare not received on the due date for the balance of said Lease Year).  The terms of the grace periods set forthherein shall be reinstated as of the commencement of each subsequent LeaseYear.

 

(b)                                 Right of Landlord to Cure Defaults. If Tenant shall default in the observance or performance of any term orcovenant of this Lease, or if Tenant shall fail to pay any sum of money, otherthan Rent required to be paid by Tenant hereunder, Landlord may, but shall notbe obligated to, and without waiving or releasing Tenant from any obligation tomake any such payment or perform any such other act on Tenant’s part to be madeor performed as provided in this Lease, remedy such default for the account andat the expense of Tenant, immediately and without notice in case of emergency,or in any other case after notice and expiration of any applicable cureperiod.  If Landlord makes any expendituresor incurs any obligations for the payment of money in connection with Tenant’sdefault including, but not limited to, attorneys’ fees, Tenant shall pay toLandlord as Additional Rent such sums paid or obligations incurred, with costsand interest at the rate of 15% per year or the maximum rate permitted by law,whichever is lower.  In any event,Landlord shall have (in addition to any other right or remedy of Landlord) thesame rights and remedies in the event of the nonpayment of sums due under thissection as in the case of default by Tenant in the payment of Rent orAdditional Rent.

 

(c)                                  Unpaid Sums. Any amounts owing from Tenant to Landlord under this Lease shall bearinterest at the highest rate permitted by law in the State of Minnesota, not toexceed the annual rate of 15% calculated from the date due until the date ofpayment.  In addition to the foregoingremedies, if any payment of Rent or Additional Rent is not paid within five (5) daysof the date due, Tenant shall (without the necessity of notice from Landlord)pay a late charge equal to 5% of the amount of such overdue payment per monthor proportion thereof as liquidated damages for Landlord’s extra expense inhandling such past due account.

 

18.                                 SALE OR MORTGAGE OF LANDLORD’S INTEREST.

 

(a)                                  Conveyance of Landlord’s Interest. Landlord may sell, assign or otherwise transfer, in whole or in part,its interest in this Lease and the Property. Landlord shall require the transferee to accept the interest transferredsubject to this Lease, and assume the obligations of Landlord under the Leasearising from and after the date of transfer. The transfer shall release Landlord from any further liability to Tenanthereunder for acts occurring after the transfer and, after any such transfer,Tenant shall look solely to the transferee for the performance of anyobligations of the party who from time to time is the landlord under thisLease.

 

(b)                                 Estoppel Certificate. Within ten (10) business days after written request by eitherparty, the other party shall execute, acknowledge and deliver to the requestingparty a statement in writing (i) certifying that this Lease is unmodifiedand in full force and effect (or if modified, stating the nature of suchmodification and certifying that this Lease, as so modified, is 

 

10

----

 

in full force andeffect), the dates to which Rent and any other charges payable by Tenanthereunder are paid in advance, if any, (ii) acknowledging that there arenot, to the certifying party’s knowledge, any uncured defaults on the part ofthe requesting party hereunder or specifying such defaults if any are claimed,and (iii) in case of a transfer of Landlord’s interest, attorning to thetransferee, provided the transferee acknowledges Tenant’s rights under thisLease.  Landlord and Tenant herebyacknowledge that prospective purchasers and encumbrancers of the Premises,Tenant’s business, or of the Property, may incur obligations or extend creditin reliance upon the representations contained in such statement.  If the certifying party fails to deliver suchstatement to the requesting party within said ten (10) business dayperiod, the requesting party shall give the certifying party an additionalwritten notice of such request.  If suchstatement in not received by the requesting party within two (2) businessdays after such additional request, such failure shall conclusively evidencethe representation and agreement that: this Lease is in full force and effect,without modification, except as the requesting party may represent; there areno uncured defaults in the requesting party’s performance hereunder; and Tenanthas not paid more than one month’s rent in advance.

 

19.                                 SUBORDINATION.  This Lease, and the term and estate herebygranted, and all of the rights of Tenant hereunder, are subject and subordinateto any underlying leases and the liens of any mortgage or mortgages now orhereafter in force against the Premises or the building in which the Premisesare located or the land on which it sits, as well as to any and all zoninglaws, ordinances and regulations, conditions and agreements affecting said realestate at any time, and Tenant shall execute such further instrumentssubordinating this Lease to the lien or liens of any such lease or mortgage asshall be requested by Landlord and reasonably acceptable to Tenant; provided,however, that this subordination and any such further instruments shall not, solong as Tenant is not in default in the performance of any of the terms,covenants and conditions of this Lease beyond any applicable notice and cureperiods provided in this Lease, terminate or modify this Lease or any of therights of Tenant hereunder.  Landlord,Landlord’s lender and Tenant shall enter into a Subordination, Attornment andNondisturbance Agreement substantially in the form attached hereto as Exhibit F,promptly after execution of this Lease.

 

20.                                 QUIET ENJOYMENT.  Landlord covenants that if Tenant shall paythe rent and observe and perform all the terms, covenants and conditions ofthis Lease on its part to be observed and performed, Tenant may peaceably andquietly enjoy the Premises subject to the terms and conditions of this Lease.

 

21.                                 BUILDING IMPROVEMENTS/TENANTEQUIPMENT/WARRANTY.  Landlord shall causeto be performed those certain improvements to the Premises as depicted on Exhibit Battached hereto and described on Exhibit D attached hereto (“Landlord’sWork”).  Tenant hereby confirms theacceptability of Exhibits B and D, including the budget for the cost ofLandlord’s Work shown on page 2 of Exhibit D (the “Budget”).  Tenant shall have the right to request andauthorize changes to Landlord’s Work during construction, which changes shallbe subject to Landlord’s prior approval, not to be unreasonably withheld.  Landlord shall respond to Tenant’s requestfor changes to Landlord’s Work within three (3) business days afterreceipt thereof.  Prior to commencing anychange, Landlord shall prepare and deliver to Tenant, for Tenant’s approval, achange order (“Change Order”) setting forth the total cost of such change andany delay in Substantial Completion of Landlord’s Work caused by the ChangeOrder.  If Tenant fails to approve suchChange Order within three (3) business days after delivery by Landlord,the Change Order shall not be implemented. Upon Landlord’s receipt of Tenant’s approval, Landlord shall proceedwith the Change Order.  Landlord’s Workshall be completed by the Commencement Date. Landlord’s Work shall be performed by contractors selected byLandlord.  Tenant shall cooperate withLandlord and those engaged by Landlord to perform Landlord’s Work in thescheduling of such work and the supplying of access and utility servicesnecessary for the performance of such work. Tenant shall also cooperate with Landlord’s contractor in coordinatingany work to be done by Tenant’s contractors or subcontractors during the periodthat Landlord’s Work is being completed. Such coordination shall require that Tenant’s work not adversely affectthe schedule for Landlord’s Work or result in any labor dispute.

 

The Base Rent includes$624,945.00 for tenant improvements (“Tenant Improvement Allowance”).  In the event the cost of the tenantimprovements exceeds the Tenant Improvement Allowance and any excess cost isconsistent with the Budget and any Change Order costs approved by Tenant,Tenant shall pay the cost of such excess to Landlord in full on or before theCommencement Date.  In the event the costof the tenant improvements is less 

 

11

----

 

than the Tenant ImprovementAllowance, the unused portion shall be used to offset future Rentpayments.  Landlord shall provide Tenanta certified statement of actual costs for Landlord’s Work, together with anysupporting documentation requested by Tenant, upon completion of Landlord’sWork.

 

Tenant shall have thebenefit of any labor and material warranties given by Landlord’s contractor oravailable from a manufacturer and, in addition, Landlord hereby warrants toTenant that the Premises (including Landlord Work) shall be free from defectivematerials and workmanship for a period of one (1) year from the date ofTenant’s occupancy of the Premises.

 

Fourteen (14) days priorto the Commencement Date, Tenant shall be allowed access to the Premises forthe purposes of installing telecommunications systems, racking systems,fixtures, furniture and equipment; provided, however, that such early accessshall only be permitted to the extent Tenant’s access does not (i) delaythe completion of Landlord’s Work, (ii) result in a labor dispute, (iii) delaythe issuance of a certificate of occupancy (temporary or permanent), or (iv) damageLandlord’s property.  Said earlyoccupancy shall be subject to all of the terms and conditions of this Leaseexcept that Tenant shall not be required to pay Rent or real estate taxes orassessments until the Commencement Date.

 

22.                                 SECURITY DEPOSIT.  Prior to taking possession of the Premises,Tenant shall deposit with Landlord the sum of one month’s gross rent, whichdeposit is to be held by Landlord, without liability for interest, as asecurity and damage deposit for the faithful performance by Tenant during theTerm hereof.  In the event of a failureof Tenant to keep and perform any of the terms, covenants and conditions ofthis Lease to be kept and performed by Tenant, then Landlord, either with orwithout terminating this Lease, may (but shall not be required to) apply suchportion of said deposit as may be necessary to compensate or repay Landlord forall losses or damages sustained or to be sustained by Landlord due to suchbreach on the part of Tenant, including, but not limited to overdue and unpaidrent, any other sum payable by Tenant to Landlord, damages or deficiencies  in the reletting of the Premises, andreasonable attorneys’ fees incurred by Landlord.  Should any portion of the deposit beappropriated and applied by Landlord in accordance with this paragraph, Tenantshall, upon demand by Landlord, immediately replenish said deposit to itsoriginal amount, and Tenant’s failure to do so within fifteen (15) days afterLandlord’s demand shall constitute a default under this Lease.  The security deposit shall be returned toTenant (less any depletion thereof pursuant to this paragraph) at the end ofthe Term or upon earlier termination of this Lease.  Tenant shall have no right to anticipatereturn of the deposit by withholding any amount required to be paid pursuant tothe provisions of this Lease or otherwise.

 

23.                                 BROKER/COMMISSIONS.  Tenant and Landlord hereby acknowledge thatthey have dealt with no brokers other than Welsh Companies and UnitedProperties.  Landlord shall beresponsible for any commission or fee due to Welsh Companies and UnitedProperties, such commission being payable 50% upon lease execution and 50% uponTenant occupancy and acceptance of the Premises.  Landlord and Tenant agree to indemnify,defend and hold each other harmless from any other claims by any other brokeror agent arising out of the respective actions of Landlord or Tenant.

 

24.                                 DAMAGE OR DESTRUCTION.  If the Property is damaged or destroyed byfire or other casualty (“Casualty”) to the extent of fifty percent (50%) ormore of the Property’s value at the time, then Landlord, by giving writtennotice to Tenant within thirty (30) days after the Casualty, may terminate thisLease.  If less than fifty percent (50%)of the Property’s value is so damaged or destroyed by Casualty (or if Landlorddoes not elect to terminate in the event of damage of 50% or more), Landlordshall promptly commence restoration of the damaged areas to substantially thesame condition that existed immediately prior to the Casualty.  If the same cannot likely be restored withintwo hundred forty (240) days after the Casualty, as reasonably determined by Landlord,then either Landlord or Tenant, by giving written notice to the other withinthirty (30) days after the Casualty, may terminate this Lease.  If this Lease is not terminated as providedherein, but Landlord has not completed the restoration of the Property withintwo hundred forty (240) days after the Casualty, Tenant may thereafterterminate this Lease by giving written notice of termination to Landlord withinten (10) days after the expiration of the 240-day period.  Any Lease termination under this paragraphshall be effective ten (10) days after such notice is given, except thatif the Casualty has materially disrupted or prevented Tenant’s use of thePremises as of or about the date of said Casualty, the termination shall beeffective as of the date of said Casualty. In no event shall Tenant be entitled to any part of any of Landlord’sinsurance proceeds resulting from the Casualty. Rent and Additional Rent shall be abated during any 

 

12

----

 

period of restoration tothe extent that Tenant is unable to occupy all or a portion of the Premisesduring said restoration.  If there occursa Casualty during the last twelve (12) months of the Lease Term, such thatLandlord otherwise would be required under the terms of this Lease to restorethe Premises, either Landlord or Tenant shall have the option to terminate thisLease by written notice to the other within thirty (30) days of the date ofsuch Casualty if it is not reasonable to expect that Landlord will complete therestoration of the Premises on or before 60 days prior to the end of the LeaseTerm.

 

25.                                 RIGHT OF FIRST OFFER.   In the event that any rentable spacecontiguous to the Premises becomes available for lease, Landlord shall firstoffer such space to Tenant.  Landlord willgive Tenant notice of the terms at which Landlord intends to market such space(“Landlord’s Notice”) and Tenant shall notify Landlord within ten (10) daysafter receipt of Landlord’s Notice if Tenant desires to lease such space on theterms identified in Landlord’s Notice. If Tenant elects to lease such additional space, this Lease shall beamended to include such space on the terms set forth in Landlord’s Noticeexcept that the lease term for such additional space shall be co-terminus withthe Term hereof.  If Tenant declines theoffer to lease such space, Landlord may proceed to offer the space to othersprovided that any lease entered into for such space shall be at a rental ratenot less than 90% of the rate specified in Landlord’s Notice, or such spacewill be re-offered to Tenant at such lower rate.

 

26.                                 MISCELLANEOUS PROVISIONS.

 

(a)                                  Headings.  The titles tosections of this Lease are not a part of this Lease and shall have no effectupon the construction or interpretation of any part hereof

 

(b)                                 Heirs and Assigns. All of the covenants, agreements, terms and conditions contained in thisLease shall inure to and be binding upon Landlord and Tenant and theirrespective heirs, executors, administrators, successors and assigns.

 

(c)                                  Non-waiver.  Waiver byLandlord or Tenant of any breach of any term, covenant or condition hereincontained in any instance shall not be deemed to be a waiver of any otherbreach of such term, covenant, or condition of this Lease.

 

(d)                                 Entire Agreement. This Lease contains all covenants and agreements between Landlord andTenant relating in any manner to the Premises. No prior agreements or understandings pertaining thereto shall be validor of any force or effect.  This Leaseshall not be altered, modified or amended except in writing signed by Landlordand Tenant.

 

(e)                                  Severability. Any provision of this Lease which shall prove to be invalid, void orillegal shall in no way affect, impair or invalidate any other provision hereofand the remaining provisions hereof shall nevertheless remain in full force andeffect.  If the intent of any sections ofthis Lease so indicate, the obligations of Landlord and Tenant pursuant to suchsections of this Lease shall survive the termination of this Lease.

 

(f)                                    No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than theRent, Additional Rent and other charges stipulated herein shall be deemed to beother than on account of the earliest stipulated Rent, Additional Rent or othercharges, nor shall any endorsement or statement on any check or any letteraccompanying any check or payment as Rent be deemed an accord and satisfaction,and Landlord shall accept such check or payment without prejudice to Landlord’sright to recover the balance of such Rent, Additional Rent and any othercharges or pursue any other remedy in this Lease.

 

(g)                                 Notices.  Whenever inthis Lease it shall be required or permitted that notice or demand be given orserved by either party to this Lease, such notice or demand shall be given orserved in writing and sent to Landlord and Tenant at the addresses set forthbelow:

 

13

----

 

| Tenant:   | Ciprico Inc.                       |
|-----------|------------------------------------|
|      | Attn: Monte S. Johnson             |
|      | 17400 Medina Road,  Suite 800 |
|      | Plymouth, MN 55447                 |
|      | Tel: (763) 551-4016                |
|      | Fax: (763) 551-4002                |
|      |                               |
| Landlord: | Highway 7 Business  Center LLC     |
|      | Attn.: Paul M. Hyde                |
|      | Suite 4500                    |
|      | 90 South 7th Street           |
|      | Minneapolis, MN 55402              |
|      | Tel: 612-904-1513                  |
|      | Fax: 612-904-1590                  |

 

 

All such noticesshall be sent by (i) certified or registered mail, return receiptrequested, and shall be effective three (3) days after the date ofmailing; (ii) Federal Express or similar overnight courier and shall beeffective one (1) day after delivery to Federal Express or similarovernight courier; and (iii) personal service or facsimile, and shall beeffective on the same day as service or facsimile.  Any such address may be changed from time totime by either party serving notices as provided above.

 

(h)                                 Parking.  Tenant willhave the exclusive use of not fewer than seventy (70) parking spaces at theBuilding.

 

14

----

 

(i)                                     Attorneys’ Fees.  If either party institutes a suit****against the other for violation of or to enforce anycovenant, term or condition of this Lease, the prevailing party shall beentitled to all of its costs and expenses, including, without limitation,reasonable attorneys’ fees.

 

(j)                                     Time is of the Essence. Time is of the essence as to the payment of Rent and the performance ofall other obligations of Landlord and Tenant under this Lease.

 

Dated this 3rdday of August, 2007.

 

 
|   | LANDLORD:                         |
|--------|-----------------------------------|
|   |                              |
|   | **HIGHWAY 7 BUSINESS CENTER LLC** |
|   |                              |
|   |                              |
|   |                              |
|   | BY                                |   |
|   |                              | Its |   |
|   |                              |
|   |                              |
|   | TENANT:                           |
|   |                              |
|   | **CIPRICO INC.**                  |
|   |                              |
|   |                              |
|   |                              |
|   | BY                                |   |
|   |                              | Its |   |

 

15

----

 

**EXHIBIT A**

 

**Descriptionof Land**

 

                Lot 1, Block 1, RER Addition,Hennepin County, Minnesota

 

 

 

 

16

----

 

** **

**EXHIBIT B**

 

**Depictionof the Premises**

 

 

 

17

----

 

** **

**EXHIBIT C**

 

**SignCriteria**

 

**1.             GENERAL**

 

A.                                   An area identification sign (Ground Sign)will be provided for the site containing only the project name.

 

B.                                     No pylon sign will be permitted.

 

C.                                     Signage on the building façade will bepermitted for those tenancies located in those areas of the buildings designedfor combined office/warehouse use.

 

D.                                    All signage permitted on the buildingsshall be of the unlighted type.

 

E.                                      The furnishing and installation of signsas provided for herein and costs incurred will be the responsibility of thetenant.

 

F.                                      It is intended that the signage for eachcombination office/warehouse use be uniform in design and style of letteringand although previous and current signage practice of the tenant will beconsidered, it will not be the governing factor in the approval of signs to beinstalled.

 

G.                                     Service doors at the rear of the serviceareas of the building may be identified with professionally applied signs,identifying the business name and address of the tenant only.  Lettering shall not be larger than 3” inheight and shall be uniformly placed at each tenant location as approved by theOwner/Landlord.

 

H.                                    Tenants shall not post any signs otherthan those provided for herein.

 

**2.             SIGN CRITERIA**

 

A.                                   The wording of the signage provided forherein shall be limited to the tenant’s business identification (name) only andshall not include items sold or services provided.  (The intent here being that of businessidentification and not product or service advertising.)

 

B.                                     The use of corporate shields, logos orinsignias will be permitted (subject to Landlord’s approval), provided suchcorporate shields, logos, or insignias shall not exceed the allowable heightfor sign letter.

 

C.                                     Multiple or repetitive signage will beallowed only with the approval of the Landlord provided the area of suchsignage conforms to the limitations set forth herein.

 

D.                                    All signs and identifying marks shall bewithin the limitations of the sign fascia as set forth on the buildingelevation drawings.

 

E.                                      Internally lighted and/or flood lightedsignage will not be approved.

 

F.                                      Tenant’s signage shall be of the samematerial and color as may be designated by Landlord to be used uniformly forall tenant’s of the building.

 

18

----

 

 

**3.             PROHIBITED TYPES OF SIGNS OR SIGN COMPONENTS**

 

                A.            Movingor rating signs

 

                B.            Illuminatedsigns.

 

                C.            Signsemploying moving or flashing lights.

 

                D.            Signsemploying exposed raceways.

 

 

 

19

----

 

**EXHIBITD**

** **

**Landlord’sWork**

 

----

**EXHIBIT E**

 

**Depictionof Monument Signage**

----

**EXHIBIT F**

 

**SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ANDESTOPPEL CERTIFICATE**

** **

THISAGREEMENT (“Agreement”), made and entered into as of August     ,2007, by and between CIPRICO INC., a Delaware corporation (“Tenant”), whoseaddress is 17400 Medina Rd., Plymouth, MN 55447, HIGHWAY 7 BUSINESS CENTER LLC, a Minnesota limited liability company (“Landlord”), whose address is 90 So. 7th St., Suite 4500,Minneapolis, MN, and FIRST NATIONAL BANK OFOMAHA, a national banking association (together with its successors andassigns, “Lender”), whose address is 11404 West Dodge Road, 3rd Floor,Omaha, NE 68154.

 

**RECITALS**

 

A.                              Lender has made one ormore loans to Landlord (collectively, the “Loan”), repayment of which issecured by one or more combination Mortgage, Security Agreement, FixtureFinancing Statement and Assignment of Leases and Rents (as modified, amended,restated or replaced from time to time, collectively, the “Mortgage”) on thepremises (the “Premises”) more fully described in Exhibit “A” attachedhereto.

 

B.                                   Tenant is the intended tenant under a commercial lease dated August       , 2007 between Tenantand Landlord (as it may be modified, amended, restated or replaced from time totime, the “Lease”) demising a portion of the Premises described in the Lease(the “Leased Premises”).

 

C                                 Landlord is the currentholder of the landlord’s interest in the Lease.

 

D.                              Lender has requiredthat Tenant subordinate the Lease and its interest in the Leased Premises inall respects to the lien of the Mortgage.

 

E.                               In return, Lender isagreeable to not disturbing Tenant’s possession of the Leased Premises.

 

 

2

----

 

F.                                Lender is disbursingthe Loan proceeds in reliance upon the agreements contained in this instrumentand has conditioned further disbursements under the Loan upon execution of thisAgreement.

 

**AGREEMENT**

 

                NOW,THEREFORE, for and inconsideration of the mutual covenants and agreements herein contained, thecontinuing disbursements under the Loan by Lender to Landlord and other goodand valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto do hereby covenant and agree as follows:

 

                1.             **Subordination**.  TheLease, including anyoption in favor of Tenant to renew the Lease or to purchase the Leased Premisesor the Premises, is hereby subjected andsubordinated and shall remain in all respects and for all purposes subject,subordinate and junior of the lien of the Mortgage.

 

                2.             **Tenant Not to Be Disturbed**.  So long as Tenant is not in default (beyondany period given Tenant to cure such default) in the payment of rent to be paidunder the Lease or in the performance of any of the terms, covenants orconditions of the Lease on Tenant’s part to be performed, Tenant’s possessionof the Leased Premises under all of the terms, covenants and conditions of theLease and any extensions or renewals thereof which may be effected inaccordance with any renewal rights therefor in the Lease, shall not bediminished or interfered with by Lender, and Tenant’s occupancy of the LeasedPremises under all of the terms, covenants and conditions of the Lease shallnot be disturbed by Lender during the term of the Lease or any such extensionsor renewals thereof, subject, however, to the rights and remedies of theLandlord under the Lease and the exercise thereof, including but not limited torights of re-entry and termination.

 

                3              **Tenant Not to be Joined in Foreclosure Unless Required by Law**.  So long as Tenant is not in default (beyondany period given Tenant to cure such default) in the payment of rent to be paidunder the Lease or in the performance of any of the terms, covenants orconditions of the Lease on Tenant’s part to be performed, Lender will not nameor join Tenant in any action or proceeding foreclosing the Mortgage unless suchnaming or joinder is necessary to foreclose the Mortgage and then only for suchpurpose and not for the purpose of terminating the Lease.

 

                4              **Tenant to Attorn to Lender; Lender not Bound by Certain Acts**.  After the receipt by Tenant of written noticefrom Lender of completion of a foreclosure sale under the Mortgage or thatLender has received a conveyance of the Premises lieu of foreclosure, Tenantwill be considered to have attorned to and recognized Lender or any purchaserat the foreclosure sale, as its substitute lessor under the Lease, and, havingthus attorned, Tenant’s possession shall not thereafter be disturbed by Lenderduring the term of the Lease, as long as Tenant shall 

 

3

----

 

continueto pay the rents and otherwise observe and perform the covenants, terms andconditions of the Lease to be observed and performed by Tenant thereunder.  Lender and Tenant shall execute and deliver,upon request, appropriate agreements of attornment and recognition, but thisAgreement shall be deemed to be self-operative, and no such separate agreementsshall be required to effectuate the foregoing attornment and recognition.

 

                                                                                                The respective rightsand obligations of Tenant and Lender upon such attornment, to the extent of thethen remaining balance of the term of the Lease and any such extensions andrenewals, shall be and are the same as now set forth therein, it being theintention of the parties hereto for this purpose to incorporate the Lease inthis Agreement by reference with the same force and effect as if set forthherein.  If Lender or any other person,party or entity becomes the owner of the Project (“New Owner”) or shouldsucceed to the interest of Landlord under the Lease, as a result of aforeclosure sale under the Mortgage or a conveyance in lieu of foreclosure,Tenant shall have no claim against New Owner resulting from, and New Ownershall not be:

 

 (a)                              liable for any act oromission of any prior landlord (including, without limitation, Landlord),except for those of a continuing nature that relate to Landlord’s maintenanceand repair obligations under the Lease;

 

(b)                                 subject to any offsetsor defenses which Tenant might have against any prior landlord (including,without limitation, Landlord), except for those offsets and defenses for whichLender has been given notice under Section 5 hereof and which offsets anddefenses are specifically provided for in the Lease;

 

(c)                                  bound by any fixedmonthly rent which Tenant might have paid for more than 30 days in advance; or

 

(e)                                  liable for the returnof any security deposit except to the extent actually received by Lender.

 

Upon any assignment orother transfer by a New Owner of its interest in the Leased Premises,including all rights of Landlord under the Lease, and an assumption inwriting of all obligations of Landlord under the Lease by the assignee orother transferee, New Owner shall thereupon automatically be released anddischarged from all liability thereafter accruing under the Lease.

 

                5.             **Notice of Default**. In the event of a default by the Landlord under the Lease or anoccurrence that would give rise to Tenant’s right to terminate the Lease,Tenant will give Lender notice of such default or occurrence at the address ofLender as set forth above and Lender shall have the right to cure such defaulton the part of the Landlord:

 

(a)                                 by curing the samewithin thirty (30) days after notice; or

 

(b)                                 by curing the samewithin such period as may be reasonably required to cure the same (includingtime for Lender to have a receiver appointed to 

 

4

----

 

cure the default or take possession,as the case may be) if the cure requires more than 30 days and Tenant’s peacefulpossession and use of the Leased Premises is not substantially impaired by suchdefault.

 

                6.             **Assignment of Lease**. Landlord has by the Mortgage assigned its interest in the rents andpayments due under the Lease to Lender as security for repayment of theLoan.  If in the future there is adefault by Landlord in the performance and observance of the terms of theMortgage, Lender may, at its option under the Mortgage, require that all rentsand other payments due under the Lease be paid directly to it.  Upon written notification to that effect byLender to Tenant, Landlord hereby authorizes and directs Tenant and Tenantagrees to pay the rent and any payments due under the terms of the Lease toLender, and Landlord consents to such payments by Tenant.  The Mortgage does not diminish anyobligations of Landlord under the Lease nor impose any such obligations onLender.

 

                7.             **Successors and Assigns; Counterparts**.  This Agreement is binding upon the partieshereto and their successors and assigns, and shall inure to the benefit ofLender and its successors and assigns. As used here, the words “successors and assigns” shall include withoutlimitation any successor entity to any entity which is a party to thisAgreement, and the heirs, administrators and representatives of any naturalperson who is a party to this Agreement. This Agreementmay be executed in any number of counterparts, all of which shall constitute asingle Agreement.

 

                8.             **Choice of Law**.  ThisAgreement is made and executed under and in all respects is to be governed andconstrued by the laws of the State where the Premises is situated.

 

                9.             **Captions and Readings**. The captions and headings of the various sections of this Agreement arefor convenience only and are not to be construed as continuing or limiting inany way the scope or intent of the provisions hereof.  Whenever the context requires or permits, thesingular shall include the plural, the plural shall include the singular andthe masculine, feminine and neuter shall be freely interchangeable.

 

                10.          **Notices**.  Any notice or other communication to anyparty in connection with this Agreement shall be in writing and shall be sentby manual delivery, facsimile transmission (confirmed by electronic receipt ofsuch facsimile), overnight courier or United States registered or certifiedmail, postage prepaid, return receipt requested, addressed to such party at theaddress specified on the first page hereof, or at such other address assuch party shall have specified to the other parties hereto in writing.  Unless otherwise specified herein, allperiods of notice shall be measured from the date of delivery thereof ifmanually delivered, from the date of sending thereof if sent by facsimiletransmission, from the first “business day” (defined as any day except aSaturday, a Sunday or a legal holiday on which Lender is closed for business)after the date of sending if sent by overnight courier, or from four days afterthe date of mailing if mailed.

 

                11.          **Estoppel. **Tenant hereby certifies, represents, warrantsand confirms to Lender that, as of the date hereof:

 

 

5

----

 

(a)           The Lease sets forth all of theagreements and understandings of Landlord and Tenant with respect to the LeasedPremises, and has not been modified or amended.

 

                                (b)           There are no other written or oralagreements or understandings between Landlord and Tenant with respect to theLeased Premises.

 

                                (c)           Tenant has not subleased any portionof the Leased Premises, and Tenant has not assigned, whether outright or bycollateral assignment, all or any portion of its rights under the Lease.

 

                                (d)           The Lease is in full force and effectin accordance with its terms; and a complete copy of the Lease is attachedhereto as Exhibit B.

 

                                (e)           The term of the Lease is set forth inSection 3 of the Lease.

 

(f)            Ascontemplated under the Lease, as of the date hereof, the improvements andspace required to be furnished according to the Lease are in process, but havenot yet been delivered by Landlord or accepted by Tenant, nor has occupancycommenced.  To the best of Tenant’sknowledge, no default by Landlord or Tenant in the performance of the Lease tobe performed exists on the date hereof. To the best of Tenant’s knowledge, no occurrences or events exist whichwould, with the passage of time or expiration of any notice, grace or right tocure period, constitute a default by either Landlord or Tenant under the Lease

 

(g)           Basemonthly rent and additional rent to be paid by Tenant are set forth in Section 5of the Lease.  No rents have been paidunder the Lease to date.

 

                                (h)           To the best of Tenant’s knowledge,Tenant does not now have any current claim against Landlord that might beset-off against past or future rents due under the Lease or which might be usedas a defense to enforcement of the Lease.

 

                                (i)            The amount of security or otheradvance deposit, if any, paid or to be paid on account of the Lease is$23,110.00.

 

[Remainder of page intentionally left blank.  Signature pages immediately follow.]

 

6

----

 

INWITNESS WHEREOF, the parties hereto have each caused this Agreement to beexecuted as of the date first above written.

 
| ** ** | **TENANT:**   |
|------------|---------------|
|       |          |
|       | CIPRICO  INC. |
|       |          |
|       | By:           |   |
|       | Its:          |   |

 
| STATE  OF MINNESOTA) |   |
|----------------------|--------|
|                 | ) ss.  |
| COUNTY  OF           |   | ) |
|                      |        |  |

 

The foregoing instrument wasacknowledged before me this         day of August, 2007, by                                                    ,the                                     of CIPRICO INC., a Delaware corporation, on behalf of the corporation.

 
| Insert  Notarial Seal Below: |                   |
|------------------------------|------------------------|
|                         | Notary  Public         |
|                         | My  commission expires |   |

 

----

 
| ** ** | **LANDLORD:**                  |
|------------|--------------------------------|
|       | HIGHWAY  7 BUSINESS CENTER LLC |
|       |                           |
|       | By                             |   |
|       | Paul Hyde, CEO                 |

 

 
| STATE  OF MINNESOTA) |     |
|----------------------|----------|
|                 | ) ss.    |
| COUNTY  OF           | HENNEPIN | ) |
|                      |          |  |

 

The foregoing instrument wasacknowledged before me this         day of August, 2007, by Paul Hyde, the CEO of HIGHWAY 7 BUSINESS CENTER LLC, aMinnesota limited liability company, on behalf of the limited liabilitycompany.

 
| Insert  Notarial Seal Below: |                   |
|------------------------------|------------------------|
|                         | Notary  Public         |
|                         | My  commission expires |   |

----

 
|   | **LENDER:**                      |
|--------|----------------------------------|
|   | ** **                       |
|   | FIRST  NATIONAL BANK OF OMAHA    |
|   |                             |
|   | By:                              |   |
|   | Lorrie L. Becker, Vice President |

 

 
| STATE  OF NEBRASKA) |    |
|---------------------|---------|
|                | ) ss.   |
| COUNTY  OF          | DOUGLAS | ) |
|                     |         |  |

 

                Theforegoing instrument was acknowledged before me this         day of August, 2007, by LorrieL. Becker, Vice President of FIRST NATIONAL BANK OF OMAHA, a national bankingassociation, on behalf of the national banking association.

 

 
| Insert  Notarial Seal Below: |                   |
|------------------------------|------------------------|
|                         | Notary  Public         |
|                         | My  commission expires |   |

 

 

THIS INSTRUMENT WASDRAFTED BY:

 

TK Law, PLC (TFK)

13033 Ridgedale Drive, Ste.137

Minnetonka,MN 55305

----

**EXHIBIT A TO SNDA**

 

**Premises**

 

                Lot 2, Block 1, RER Addition, HennepinCounty, Minnesota.

 

----

**EXHIBIT B TO SNDA**

 

**Lease**

 

See attached.

 

----