Document:

EXHIBIT 10.12

 

COMMERCIAL LEASE

 

This Indenture of Lease, dated

this day 12th day of June, 2002 by and between Moen Leuer

Properties, Inc., a Minnesota corporation (“Landlord”), and Ciprico Inc. a

Minnesota corporation (hereinafter referred to as “Tenant”).

 

DEFINITIONS:

 

“Property”—That

certain real property located in the City of Plymouth, County of Hennepin and

State of Minnesota and legally described on Exhibit “A” attached hereto and

made a part hereof, including all buildings and site improvements located

thereon.

 

“Building”—That

certain office/warehouse building containing approximately 83,513 square feet

located upon the Property and commonly described as Plymouth Ponds Building #

8, located at 17400 Medina Road, Plymouth, Minnesota 55447.

 

“Premises”—That

certain portion of the Building described on attached Exhibit “B” and located

at 17400 Medina Road, Plymouth, Minnesota, and designated as Suite 800,

totaling approximately 39,147 square feet consisting of 29,490 square feet of

office/engineering space, approximately 9,040 square feet of

technology/engineering area and approximately 617 square feet of warehouse and

shared mechanical space as measured in accordance with BOMA standards.  Landlord shall deliver to Tenant a space

plan that contains Landlord’s final determination of such figures.  Tenant shall have the right to confirm such

figures with Tenant’s architect or engineer. 

The Premises include a non-exclusive easement for access to common

areas, as hereinafter defined, and all licenses and easements appurtenant to

the Premises.

 

“Common Areas”—The

term “common area” means the entire areas to be used for the non-exclusive use

by Tenant and other tenants in the Building, including, but not limited to,

corridors, lavatories, driveways, truck docks, parking lots and landscaped

areas.  Subject to reasonable rules and

regulations promulgated by Landlord, the common areas are hereby made available

to Tenant and its employees, agents, customers, and invitees for reasonable use

in common with other Tenants, their employees, agents, customers and

invitees.  Landlord further warrants

that any action taken by Landlord regarding the Common Areas shall not:  (i) affect ingress or egress to the

Premises, nor the visibility of Tenant’s signage; (ii) increase the cost to

Tenant of Operating Expenses; (iv) result in a material reduction of parking

spaces available to Tenant, its employees and customers; or (v) materially and

adversely affect Tenant’s use and enjoyment of the Premises.

 

Landlord shall

exercise its control of the Common Areas in such a manner so as to preclude any

impairment of visibility or access to the Common Areas or Premises, or closure

of parking spaces or other interference with the operation of Tenant’s

business.  Landlord shall keep the Common

Areas in a neat, clean and orderly condition, properly surfaced, painted,

landscaped and lighted in a manner consistent with a first class office

building in Minneapolis, Minnesota

 

“Proportionate

Share”—Tenant’s “Proportionate Share” of Real

Estate Taxes and Operating Expenses shall be the ratio that the rentable area

of the Premises bears to the rentable area existing within the Building.

 

 

WITNESSETH:

 

1.             TERM:

 

For and in consideration of the

rents, additional rents, terms, provisions and covenants herein contained,

Landlord hereby lets, leases and demises to Tenant the Premises for the term of

Eighty-Four (84) months commencing on the 1st day of November, 2002

(sometimes called “the Commencement Date”), subject to the terms of Article 9,

and expiring the 31st day of October, 2009 (sometimes called

“Expiration Date”), unless sooner terminated as hereinafter provided.

 

2.             BASE

RENT:

 

Landlord reserves and Tenant

shall pay Landlord, a total rental of (See Addendum) payable in advance without

offset, deduction or demand, except as set forth herein, in equal monthly

installments of (See Addendum) commencing on the Commencement Date and

continuing on the first day of each and every month thereafter for the next

succeeding months during the balance of the term (sometimes called “Base

Rent”).  In the event the Commencement

Date falls on a date other than the first of a month the rental for that month

shall be prorated and adjusted accordingly.

 

3.             ADDITIONAL

RENT:

 

Tenant shall pay to Landlord

throughout the term of this Lease the following:

 

a.             Tenant shall pay a sum equal to

Tenant’s Proportionate Share of the Real Estate Taxes, which share is currently

46.88%.  The term “Real Estate Taxes”

shall mean all real estate taxes, all assessments and any taxes in lieu thereof

which may become due and payable against the Property during the Term,

excluding, however, federal and state or other taxes on net income, death

taxes, excess profit taxes or franchise taxes or any special assessments

related to initial construction of the Building, capital stock, or penalties or

interest on late payment of Real Estate Taxes unless caused by Tenant.  Any tax year commencing during any lease

year shall be deemed to correspond to such lease year.  In the event the taxing authorities include

in such real estate taxes and assessments the value of any improvements made by

Tenant, or of machinery, equipment, fixtures, inventory or other personal

property or assets of Tenant, then Tenant shall pay all the taxes attributable

to such items in addition to its proportionate share of said aforementioned

real estate taxes and assessments.  A

photostatic copy of the tax statement submitted by Landlord to Tenant shall be

sufficient evidence of the amount of taxes and assessments assessed or levied

against the Property of which the Premises are a part.

 

b.             A sum equal to Tenant’s

Proportionate Share of the annual aggregate Operating Expenses, which share is

currently 46.88%, incurred by Landlord in the operation, maintenance and repair

of the Building and Property.  The term

“Operating Expenses” shall include but not be limited to maintenance, repair,

operation, replacement and care of all common areas (including common area

utilities and lighting), mechanical rooms, common area plumbing and roofs,

parking and landscaped areas, signs, snow removal, non-structural repair and

maintenance of the exterior of the Building, Insurance premiums, management fee

(not to exceed 4% of gross building revenue), wages and fringe benefits of

personnel directly employed for such work, costs of equipment purchased and

used for such purposes and the cost or portion thereof properly allocable to

the Property (amortized in accordance with generally accepted accounting

principles together with the interest at the rate of ten percent (10%) per

annum on the unamortized balance) of any capital improvements made to the

Building by Landlord after the Base Year, but only to the extent of the

reduction achieved in Operating Expenses resulting from

 

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such capital improvement, or

made to the Building by Landlord after the date of this Lease that are required

under any governmental law or regulation that was not applicable to the

Building at the time it was constructed.

 

c.             In no event shall the total

adjusted monthly rent be less than-the first month’s base rent plus Tenant’s

proportionate share of building taxes and common area maintenance charges,

except as otherwise set forth herein.

 

The payment of the sums set

forth in this Article 3 shall be in addition to the Base Rent payable

pursuant to Article

2 of this Lease.  All sums

due hereunder shall be due and payable within thirty (30) days of delivery of

written certification by Landlord setting forth the computation of the amount

due from Tenant.  In the event the lease

term shall begin or expire at any time during the calendar year, Tenant shall

be responsible for his pro-rata share of Additional Rent under subdivisions a.

and b. during the Lease and/or occupancy time.

 

Prior to commencement of this

Lease, and prior to the commencement of each calendar year thereafter

commencing during the term of this Lease or any renewal or extension thereof,

Landlord may reasonably estimate for each calendar year (i) the total amount of

Real Estate Taxes; (ii) the total amount of Operating Expenses; (iii) Tenant’s

share of Real Estate Taxes for such calendar year; (iv) Tenant’s share of

Operating Expenses for such calendar year; and (v) the computation of the

annual and monthly rental payable during such calendar year as a result of

increases or decreases in Tenant’s share of Real Estate Taxes, and Operating

Expenses.  Said estimates will be in

writing and will be delivered or mailed to Tenant.

 

The amount of Tenant’s share of

Real Estate Taxes, and Operating Expenses for each calendar year, so estimated,

shall be payable as Additional Rent by Tenant, without offset, deduction or

demand, except as set forth herein, in equal monthly installments, in advance,

on the first day of each month during such calendar year at the option of

Landlord.  In the event that such

estimate is delivered to Tenant before the first day of January of such

calendar year, said amount, so estimated, shall be payable as additional rent

in equal monthly installments, in advance, on the first day of each month

during such calendar year.  In the event

that such estimate is delivered to Tenant after the first day of January of

such calendar year, said amount, so estimated, shall be payable as additional

rent in equal monthly installments, in advance, on the first day of each month

over the balance of such calendar year, with the number of installments being

equal to the number of full calendar months remaining in such calendar year.

 

No later than ninety (90) days

after completion of each calendar year during the term of this Lease or any

renewal or extensions thereof, Landlord shall cause its accountants to

determine the actual amount of the Real Estate Taxes, and Operating Expenses

payable in such calendar year and Tenant’s Proportionate Share thereof and

deliver a written certification of the amounts thereof to Tenant.  If Tenant has underpaid its share of Real

Estate Taxes, or Operating Expenses for such calendar year, Tenant shall pay

the balance of its share of same within ten (10) days after the receipt of such

statement.  If Tenant has overpaid its

share of Real Estate Taxes, or Operating Expenses for such calendar year,

Landlord shall either (i) refund such excess, or (ii) credit such excess

against the most current monthly installment or installments due Landlord for

its estimate of Tenant’s share of Real Estate Taxes, and Operating Expenses for

the next following calendar year.  A pro

rata adjustment shall be made for a fractional calendar year occurring during

the term of the Lease or any renewal or extension thereof based upon the number

of days of the term of the Lease during said calendar year as compared to three

 

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hundred sixty-five (365) days

and all additional sums payable by Tenant or credits due Tenant as a result of

the provision of this Article 3 shall be adjusted accordingly.

 

Tenant

shall be entitled to review Landlord’s books and records relating to Operating

Expenses at Landlord’s Plymouth, Minnesota office, on not less than three (3)

business days notice to Landlord.  If

Landlord and Tenant disagree on the accuracy of Operating Expenses as set forth

in the statement, Tenant shall nevertheless make payment in accordance with any

notice given by Landlord, but Tenant may cause the Operating Expenses to be

audited by a certified accountant approved by Landlord (which approval will not

be unreasonably withheld and will be deemed given if not given or withheld by

Landlord within ten (10) days after Tenant’s written request for approval is

received by Landlord), in which case Landlord will submit Landlord’s relevant

books and records to such auditor at a location in Plymouth, Minnesota that is

reasonably acceptable to Tenant.  The

results of any such audit will be conclusive, and any adjustment required to

any previous payment made by Tenant or Landlord by reason of any such audit

shall be made within fourteen (14) days of delivery of such audit by such

auditor to Landlord and Tenant, and the party required to make payment under

such adjustment shall bear all costs of the audit.

 

4.             COVENANT

TO PAY RENT:

 

The covenants of Tenant to pay

the Base Rent and the Additional Rent are each independent of any other

covenant, condition, provision or agreement contained in this Lease, except as

otherwise set forth herein.  All rents

are payable to Landlord at 3600 Holly Lane North, Suite 100, Plymouth, MN  55447.

 

5.             UTILITIES:

 

Landlord shall provide mains

and conduits to supply water, gas, electricity and sanitary sewage to the

Property.  Tenant shall pay, when due,

all charges for sewer usage or rental, garbage disposal, refuse removal, water,

electricity, gas, fuel oil, L.P. gas, telephone and/or other utility services

or energy source furnished to the Premises during the term of this Lease, or

any renewal or extension thereof.  If

Landlord elects to furnish any of the foregoing utility services of other

services furnished or caused to be furnished to Tenant, then the rate charged

by Landlord shall not exceed the rate Tenant would be required to pay to a

utility company or service company furnishing any of the foregoing utilities or

services.  The charges thereof shall be

deemed additional rent in accordance with Article 3. Landlord shall not be liable

for, and Tenant shall not be entitled to any abatement or reduction of Base

Rent or Minimum Rent by reason of Landlord’s failure to furnish any of the

foregoing utilities, when such failure is caused by accident, breakage, repairs

(including replacements), strikes, lockouts or other labor disturbances or

labor disputes of any character, of for any other causes not within the control

of Landlord.

 

6.             CARE

AND REPAIR OF PREMISES:

 

Tenant shall, at all times

throughout the term of this Lease, including renewals and extension, and at its

sole expense, keep and maintain the Premises in a clean, safe, sanitary and

first class condition, subject to reasonable wear and tear, and in compliance

with all applicable laws, codes, ordinances, rules and regulations but only if the requirements apply to Tenant’s

specific use of the Premises and not to office or retail use generally, and

otherwise Landlord shall be responsible for such compliance.  Tenant’s obligations hereunder shall include

but not be limited to the maintenance, repair and replacement, if necessary, of

heating, air conditioning fixtures, equipment, and systems, all lighting and

plumbing fixtures and equipment, fixtures, motors and machinery, all interior

walls and doors of the trash

 

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enclosure, partitions, doors

and windows, including the regular painting thereof, all exterior entrances,

windows, doors and docks and the replacement of all broken glass, and all

interior walls, to the extent any of the foregoing items are located within,

and exclusively serve, the Premises. 

When used in this provision, the term “repairs” shall include

replacements or renewals when necessary, and all such repairs made by Tenant

shall be equal in quality and class to the original work.  The Tenant shall keep and maintain all

portions of the Premises in a clean and orderly condition, free of accumulation

of dirt, rubbish, snow and ice.

 

If Tenant fails, refuses or

neglects to maintain or repair the Demised Premises as required in this Lease

within a reasonable time after notice shall have been given Tenant, in

accordance with Article 33 of this Lease, Landlord may make such repairs

without liability to Tenant for any loss or damage that may accrue to Tenant’s

merchandise, fixtures or other property or to Tenant’s business by reason

thereof, and upon completion thereof, Tenant shall pay to Landlord all costs

plus ten percent (10%) of overhead reasonably incurred by Landlord in making

such repairs upon presentation to Tenant of bill therefor.

 

Landlord shall repair, at its

expense, the structural portions of the Building, provided however where

structural repairs are required to be made by reason of the acts of Tenant, the

costs thereof shall be borne by Tenant and payable by Tenant to Landlord upon

demand, subject to Section 15C.

 

Landlord shall be responsible

for all outside maintenance of the Premises, including grounds, parking areas,

trash enclosures, the electrical systems, heating and air conditioning systems

(located outside the Premises), sprinkler and plumbing systems (located outside

the Premises), roof, exterior walls, foundation, the parking, landscaped and

common areas, and shall keep such areas free of accumulation of dirt, rubbish,

snow and ice.  Landlord also shall

maintain all other portions of the Premises and Building not specifically

delegated to Tenant herein.  All such maintenance which is the

responsibility of Landlord shall be provided as reasonably necessary to the

comfortable use and occupancy of Premises during business hours, except Saturdays,

Sundays and holidays, in accordance with the standards of first class

office/warehouse buildings.

 

7.             SIGNS:

 

Any sign, lettering, picture,

notice or advertisement installed on or in any part of the Property and visible

from the exterior of the Building, or visible from the exterior of the

Premises, must be approved in advance by Landlord and installed at Tenant’s

expense, which approval shall not be unreasonably withheld.  In the event of a violation of the foregoing

by Tenant, Landlord may remove the same without any liability and may charge

the expense incurred by such removal to Tenant.

 

8.             ALTERATIONS,

INSTALLATION, FIXTURES:

 

Except as hereinafter provided,

Tenant shall not make any alteration, additions, or improvements in or to the

Premises or add, disturb or in any way change any plumbing or wiring therein

without the prior written consent of Landlord, which consent shall not be

unreasonably withheld; provided, however, that Tenant shall have the right to

make cosmetic alterations and non-structural alterations costing less than Five

Thousand and no/100 Dollars ($5,000.00) with written notice to Landlord but

without obtaining Landlord’s consent. 

In the event alterations are required by any governmental agency by

reason of the specific use and occupancy of the Premises by Tenant, as opposed

to office or retail use generally, Tenant

shall make such alterations at its own cost and expense after first obtaining

Landlord’s approval of plans and specifications therefor and furnishing such

indemnification as Landlord may reasonably

 

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require against liens, costs,

damages and expenses arising out of such alterations.  Alterations or additions by Tenant must be built in compliance

with all laws, ordinances and governmental regulations affecting the Property

and Tenant shall warrant to Landlord that all such alterations, additions, or

improvements shall be in strict compliance with all relevant laws, ordinances,

governmental regulations, and insurance requirements.  Construction of such alterations or additions shall commence only

upon Tenant obtaining and exhibiting to Landlord the requisite approvals,

licenses and permits and indemnification against liens.  All alterations, installations, physical

additions or improvements to the Premises made by Tenant shall at the option of

Landlord become the property of Landlord and shall be either removed by Tenant

at Tenant’s sole cost or surrendered to Landlord upon the termination of this

Lease; provided, however, that (i) Landlord must notify Tenant of any removal

obligations in writing at the time Tenant commences any alterations,

installations physical additions or improvements and (ii) this clause shall not

apply to movable equipment or furniture owned by Tenant which shall be removed

by Tenant at the end of the term if this Lease.  Notwithstanding anything to the contrary set forth in this Lease,

in no event shall Tenant have any obligation to remove any cabling from the

Premises, including, without limitation, voice or data cabling.

 

9.             POSSESSION:

 

Landlord shall deliver

possession of the Premises to Tenant in the condition required by this Lease on

or before October 1, 2002, but delivery of possession prior to or later than

such date shall not affect the expiration date of this Lease.  Base Rent and Additional Rent shall commence

thirty (30) days after the date Landlord has delivered possession of the

Premises to Tenant in the condition required herein.  Landlord shall have no responsibility or liability for loss or

damage to fixtures, facilities or equipment installed or left on the Premises,

except to the extent caused by the negligence of Landlord or its employees or

agents.  In the event Landlord fails to

deliver the Premises to Tenant in the condition required herein by October 1,

2002, excluding a delay directly attributable to Tenant, then (i) Tenant’s

obligation to pay Base Rent and Additional Rent shall be abated one (1) day for

each day beyond October 1, 2002 that that the Premises in the condition required

herein is not delivered to Tenant, which abatement shall be in addition to the

abatement of Base Rent and Additional Rent for the first month of the Term and

(ii) Landlord shall indemnify and hold Tenant harmless from all costs damages,

expenses and liabilities, including, without limitation, hold-over rent, rent

for any temporary facility and moving costs resulting from or related to

Landlord’s failure to deliver the Premises to Tenant in the condition required

herein by October 1, 2002.  In addition,

in the event Landlord fails to deliver the Premises to Tenant in the condition

required herein by November 1, 2002, excluding a delay directly attributable to

Tenant, then Tenant also shall have the right to terminate this Lease upon ten

(10) days’ written notice to Landlord.

 

10.          SECURITY

AND DAMAGE DEPOSIT:

 

Tenant contemporaneously with

the execution of this Lease, has deposited with Landlord the sum of Thirty

Thousand and No/100 Dollars ($30,000.00), receipt of which is acknowledged

hereby by Landlord, which deposit is to be held by Landlord, without liability

for interest, as a security and damage deposit for the faithful performance by

Tenant during the term hereof or any extension hereof.  Prior to the time when Tenant shall be

entitled to the return of this security deposit, Landlord may commingle such

deposit with Landlord’s own funds and to use such security deposit for such

purpose as Landlord may determine.  In

the event of a default by Tenant hereunder, and Tenant’s failure to cure within

the applicable time frame, during the term hereof or any extension hereof, then

Landlord, either

 

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with or without terminating

this Lease may (but shall not be required to) apply such portion of said

deposit as may be necessary to compensate or repay Landlord for all losses or

damages reasonably sustained or to be sustained by Landlord due to such breach

on the part of Tenant, including, but not limited to overdue and unpaid rent,

any other sum payable by Tenant to Landlord pursuant to the provisions of this

Lease, damages or deficiencies in the reletting of Premises, and reasonable

attorney’s fees incurred by Landlord. 

Should the entire deposit or any portion thereof, be appropriated and

applied by Landlord, in accordance with the provisions of this paragraph,

Tenant upon written demand by Landlord, shall remit forthwith to Landlord a

sufficient amount of cash to restore said security deposit to the original sum

deposited, and Tenant’s failure to do so within five (5) days after receipt of

such demand shall constitute a breach of this Lease.  Said security deposit shall be returned to Tenant, less any

depletion thereof as the result of the provisions of this paragraph, at the end

of the term of this Lease or any renewal thereof, or upon the earlier

termination of this Lease.  Tenant shall

have no right to anticipate return of said deposit by withholding any amount

required to be paid pursuant to the provision of this Lease or otherwise.

 

In the event Landlord shall

sell the Property, or shall otherwise convey or dispose of its interest in this

Lease, Landlord may assign the security deposit or any balance thereof to

Landlord’s assignee, whereupon Landlord shall be released from all liability

for the  return or repayment of such

security deposit and Tenant shall look solely to the said assignee for the

return and repayment of said security deposit. 

Said security deposit shall not be assigned or encumbered by Tenant

without such consent of Landlord, and any assignment or encumbrance without

such consent shall not bind Landlord. 

In the event of any rightful and permitted assignment of this Lease by

Tenant, said security deposit shall be deemed to be held by Landlord as a deposit

made by the assignee, and Landlord shall have no further liability with respect

to the return of said security deposit to Tenant.

 

11.          USE:

 

The Premises shall be used and

occupied by Tenant solely for the purposes of office, technology and warehouse

and such use by Tenant shall at all times be in full compliance with all

applicable laws, ordinances and governmental regulations affecting the Building

and Property but only if the requirements

apply to Tenant’s specific use of the Premises and not to office or retail use

generally, and otherwise Landlord shall be responsible for such compliance.  The Premises shall not be used in such

manner that, in accordance with any requirement of law or of any public

authority, Landlord shall be obligated on account of the purpose or manner of

said use to make any addition or alteration to or in the Building.  The Premises shall not be used in any manner

which will increase the rates required to be paid for pubic liability or for

fire and extended coverage insurance covering the Property.  Tenant shall occupy the Premises conduct its

business and control its agents, employees, invitees and visitors in such a way

as is lawful, and reputable and will not permit or create any nuisance, noise,

odor, or otherwise interfere with, annoy or disturb any other Tenant in the

Building in its normal business operations or Landlord in its management of the

Building.  Tenant’s use of the Premises

shall conform to all Landlord’s reasonable rules and regulations relating to

the use of the Property.  Outside

storage on the Property of any type of equipment, property or materials owned

or used on the Premise by Tenant or its customers and suppliers shall not be

permitted.

 

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12.          ACCESS

TO PREMISES:

 

The Tenant agrees to permit

Landlord and the authorized representatives of Landlord to enter the Premises

at all times during usual business hours upon reasonable prior notice for the

purpose of inspecting the same and making any necessary repairs to the Premises

and performing any work therein that may be necessary to comply with any laws,

ordinances, rules, regulations or requirements of any public authority or of

the Board of Fire Underwriters or any similar body or that Landlord may deem

necessary to prevent waste or deterioration in connection with the

Premises.  Nothing herein shall imply

any duty upon the part of Landlord to do any such work which, under any

provision of this Lease, Tenant may be required to perform and the performance

thereof by Landlord shall not constitute a waiver of Tenant’s default in

failing to perform the same.  The

Landlord may, during the progress of any work in the Premises, keep and store

upon the Premises all necessary materials, tools and equipment.  The Landlord shall not in any event be

liable for inconvenience, annoyance, disturbance, loss of business, or other

damage of Tenant by reason of making repairs or the performance or any work in

the Premises, or on account of bringing materials, supplies and equipment into

or through the Premises during the course thereof and the obligations of Tenant

under this Lease shall not thereby be affected in any manner whatsoever.

 

Landlord reserves the right to

enter upon the Premises at any time in the event of an emergency and at

reasonable hours to exhibit the Premises to prospective purchasers or others;

and to exhibit the Premises to prospective Tenants and to display “For Lease”

or similar signs on windows or doors in the Premises during the last one

hundred eighty (180) days of the term of this Lease, all without hindrance or

molestation by Tenant.

 

Notwithstanding anything to the

contrary set forth in this Article 12, Landlord agrees to exercise the rights

set forth herein in a manner that does not interrupt or impair Tenant’s use of

the Premises.

 

13.          EMINENT

DOMAIN:

 

In the event of any eminent

domain or condemnation proceeding or private sale in lieu thereof in respect to

the Property during the term thereof, the following provisions shall apply:

 

a.             If the whole of the Property shall

be acquired or condemned by eminent domain or any public or quasi-public use or

purpose, then the term of this Lease shall cease and terminate as of the date

possession shall be taken in such proceeding and all rentals shall be paid up

to that date.

 

b.             If any part constituting less than

the whole of the Property shall be acquired or condemned as aforesaid, and in

the event that such partial taking or condemnation shall materially affect the

Premises so as to render the Premises unsuitable for the business of Tenant,

then the term of this Lease shall cease and terminate as of the date possession

shall be taken by the condemning authority and rent shall be paid to the date

of such termination.

 

In the event of a partial

taking or condemnation of the Property which shall not materially affect the

Premises so as to render the Demised Premises unsuitable for the business of

Tenant, this Lease shall continue in full force and effect but with a

proportionate abatement of the Base Rent and Additional Rent based on the

portion, if any, of the Demised Premises taken. If not so terminated, then

Landlord shall restore the Building and the Premises to substantially the same

condition as they were prior to such condemnation.  Landlord shall commence restoration and shall restore the

Building and the Premises

 

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with reasonable promptness,

subject to delays beyond Landlord’s control and delays in the making of

condemnation or sale proceeds adjustment by Landlord; and Tenant shall have no

right to terminate this Lease except as herein provided.  Upon completion of such restoration, the

rent shall be adjusted based upon the portion, if any, of the Premises

restored.

 

c.             In the event of any condemnation or

taking as aforesaid, whether whole or partial, Tenant shall not be entitled to

any part of the award paid for such condemnation and Landlord is to receive the

full amount of such award, Tenant hereby expressly waiving any right to claim

to any part thereof.

 

d.             Although all damages in the event

of any condemnation shall belong to Landlord whether such damages are awarded

as compensation for diminution in value of the leasehold or to the fee of the

Premises, Tenant shall have the right to claim and recover from the condemning

authority, but not from Landlord, such compensation as may be separately

awarded or recoverable by Tenant in Tenant’s own right on account of any and

all damage to Tenant’s business by reason of the condemnation and for or on

account of any cost or loss to which Tenant might be put in removing Tenant’s

merchandise, furniture, fixtures, leasehold improvements and equipment.  However, Tenant shall have no claim against

Landlord or make any claim with the condemning authority of the loss of its leasehold

estate, any unexpired term of loss of any possible renewal or extension of said

lease or loss of any possible value of said lease, any unexpired term, renewal

or extension of said Lease.

 

14.          DAMAGE

OR DESTRUCTION:

 

In the event of any damage or

destruction to the Property by fire or other cause during the term hereof, the

following provisions shall apply:

 

a.             If the Building is damaged by fire

or any other cause to such extent that the cost of restoration, as reasonably

estimated by Landlord, will equal or exceed thirty percent (30%) of the

replacement value of the Building (exclusive of foundations) just prior to the

occurrence of the damage, then Landlord may, no later than the sixtieth (60th)

day following the damage, give Tenant written notice of Landlord’s election to

terminate this Lease.

 

b.             If the cost of restoration as

estimated by Landlord will equal or exceed fifty percent (50%) of said

replacement value of the Building and if the Premises are not suitable as a

result of said damage for the purposes for which they are demised hereunder, in

the reasonable opinion of Tenant, then Tenant may, no later than the sixtieth

(60th) day following the damage, give Landlord a written notice of election to

terminate this Lease.

 

c.             If the cost of restoration as

estimated by Landlord shall amount to less than thirty percent (30%) of said

replacement value of the Building, or if, despite the cost, Landlord does not

elect to terminate this Lease, and Tenant does not exercise its termination

option, Landlord shall restore the Building and the Premises with reasonable

promptness, subject to delays beyond Landlord’s control and delays in the

making of insurance adjustments by Landlord; and Tenant shall have no right to

terminate this Lease except as herein provided.  Landlord shall not be responsible for restoring or repairing

leasehold improvements of Tenant.

 

d.             In the event of either of the

elections to terminate, this Lease shall be deemed to terminate on the date of

the casualty and all rentals shall be paid up to that date.  Tenant shall have no claim against Landlord

for the value of any unexpired term of this Lease.

 

9

 

e.             In any case where damage to the

Building shall materially affect the Premises so as to render them unsuitable

in whole or in part for the purposes for which they are demised hereunder, then

a portion of the rent based upon the amount of the extent to which the Premises

are rendered unsuitable shall be abated until repaired or restored.

 

Notwithstanding anything

contained in this Article 14 to the contrary, Landlord shall only be obligated

to restore the Premises to the extent of the insurance proceeds actually

received, but if the insurance proceeds actually received do not permit

Landlord to restore the Premises, Landlord shall so notify Tenant and either

Landlord or Tenant may terminate this Lease by written notice given within

sixty (60) days after Landlord’s notice. 

If Landlord restores the Premises or the Project in accordance with the

provisions of this Section, then Tenant shall not have any right to terminate

this Lease because of such damage pursuant to: 

(i) any common law rights, (ii) Minnesota Statutes § 504.05 as now in

effect or as it may be hereafter amended or supplemented, or (iii) any

comparable right established by a similar statute.

 

15.          CASUALTY

INSURANCE:

 

a.             Landlord shall at all times during

the term of this Lease, at its expense, maintain a policy or policies of

insurance with premiums paid in advance issued by an insurance company licensed

to do business in the State of Minnesota insuring the Building against loss or

damage by fire, explosion or other insurable hazards and contingencies for the

full insurable value, provided that Landlord shall not be obligated to insure

any furniture, equipment, machinery, goods or supplies not covered by this

Lease which Tenant may bring upon the Premises or any additional improvements

which Tenant may construct or install on the Demised Premise.  Tenant shall at all times during the term of

this Lease, at its expense maintain a policy or policies of insurance with

premiums paid in advance issued by an insurance company licensed to do business

in the State of Minnesota insuring Tenant’s improvements to the Premises and

Tenant’s personal property.

 

b.             Tenant shall not carry any stock of

goods or do anything in or about the Premises which will in any way impair or

invalidate the obligation of the insurer under any policy of insurance required

by this Lease.

 

c.             Landlord hereby waives and releases

all claims, liabilities and causes of action against Tenant and its agents,

servants and employees for loss or damage to, or destruction of, the Property

or any portion thereof, including the buildings and other improvements situated

thereon, resulting from fire, explosion and other perils included in standard

extended coverage insurance, whether caused by the negligence of any of said

persons or otherwise.  Likewise, Tenant

hereby waives and releases all claims, liabilities and causes of action against

Landlord and its agents, servants and employees for loss or damage to, or

destruction of, any of the improvements, fixtures, equipment, supplies,

merchandise and other property, whether that of Tenant or of others, upon or

about the Property resulting from fire, explosion or the other perils included

in standard extended coverage insurance, whether caused by the negligence of

any of said persons or otherwise.  The

waiver shall remain in force whether or not Tenant’s or Landlord’s insurer

shall consent thereto.

 

d.             In the event that the use of the

Premises by Tenant increases the premium rate for insurance carried by Landlord

on the improvements of which the Premises are a part, Tenant shall pay

Landlord, upon demand, the amount of such premium increase.  If Tenant installs any electrical

 

10

 

equipment that overloads the

power lines to the building or its wiring, Tenant shall, at its own expense,

make whatever changes are necessary to comply with the requirements of the

insurance underwriter, insurance rating bureau and governmental authorities

having jurisdiction.

 

16.          PUBLIC

LIABILITY INSURANCE:

 

Tenant shall during the term

hereof keep in full force and effect at its expense a policy or policies of

public liability insurance with respect to the Premises and the business of

Tenant, on terms with companies approved in writing by Landlord, in Landlord

and Landlord’s designees are named as additional insureds under prudent limits

of liability not less than: $1,000,000 for injury/death to any one person;

$2,000,000 for injury/death to more than one person, and $1,000,000 with

respect to damage to property.  Such

policy(ies) shall: (i)  provide that

such policies are primary and Landlord’s policy(ies) are noncontributing; (ii)

include a cross-liability endorsement, and (iii) require at lease thirty (30)

days prior written notice must be given to Landlord prior to cancellation,

expiration or material adverse changes to such policy(ies).  Tenant shall furnish evidence satisfactory

to Landlord at the time this Lease is executed that such coverage is in full

force and effect.  Landlord shall

maintain a policy or policies of commercial general liability insurance with

the premiums thereon fully paid on or before the due dates, issued by and

binding upon a solvent insurance company authorized to do business in

Minnesota, such insurance to afford minimum protection of not less than

$2,000,000 combined single limit.

 

17.          DEFAULT

OF TENANT:

 

a.             In the event of any failure of

Tenant to pay any rental due hereunder within five (5) days after receipt of

written notice that the same is due (provided, however, that Landlord shall

have the obligation to provide written notice of a rental default only one (1)

time during any twelve (12) month period), or any failure to perform any other

of the terms, conditions or covenants of this Lease to be observed or performed

by Tenant for more than twenty (20) days after written notice of such failure

shall have been given to Tenant, or such additional time as may be necessary if

such failure cannot be cured within such twenty (20) day period, or if Tenant

or an agent of Tenant shall falsify any report required to be furnished to

Landlord pursuant to the terms of this Lease, or if Tenant shall become

bankrupt, or file any debtor proceedings or any person shall take or have

against Tenant in any court pursuant to any statue either of the United States

or of any state a petition of bankruptcy or insolvency or for reorganization or

for the appointment of a receiver or trustee of all or a portion of Tenant’s

property, and such proceeding is not removed within sixty (60) days after

filing, or if Tenant or any such guarantor makes an assignment for the benefit

or creditors, or petitions for or enters into such  an arrangement, or if Tenant shall suffer this Lease to be taken

under any writ of execution, then in any such event Tenant shall be in default

hereunder, and Landlord, in addition to other rights of remedies it may have,

shall have the immediate right or re-entry and may remove all persons and

property from the Premises and such property may be removed and stored in a

public warehouse or elsewhere at the cost of, and for the account of Tenant,

all without service of notice or resort to legal process and without being

guilty of trespass, or becoming liable for any loss or damage which may be

occasioned thereby.

 

b.             Should Landlord elect to re-enter

the Premises, as herein provided, or should it take possession of the Premises

pursuant to legal proceedings or pursuant to any notice provided for by law, it

may either terminate this Lease or it may from time to time, without

terminating this Lease, make such alterations and repairs as may be necessary

in order to relet the Premises, and relet the Premises or any part thereof upon

such term or terms (which may be for a term extending beyond the term of this

Lease)

 

11

 

and at such rental or rentals

and upon such other terms and conditions as Landlord in its reasonable

discretion may deem advisable.  Upon

each such subletting all rentals received by Landlord from such reletting shall

be applied first to the payment of any indebtedness other than rent due

hereunder from Tenant to Landlord; second, to the payment of any costs and

expenses of such reletting, including brokerage fees and attorney’s fees and

costs of such reasonable alterations (consistent with office use) and repairs;

third, to the payment of the rent due and unpaid payment of future rent as the

same may become due and payable hereunder. 

If such rentals received from such reletting during any month be less

than that to be paid during that month by Tenant hereunder, Tenant, upon

demand, shall pay any such deficiency to Landlord.  No such re-entry or taking possession of the Premises by Landlord

shall be construed as an election on its part to terminate this Lease unless a

written notice of such intention be given to Tenant or unless the termination

thereof be decreed by a court of competent jurisdiction.  Notwithstanding any such reletting without

termination, Landlord may at any time after such re-entry and reletting elect

to terminate this Lease for any such breach, in addition to any other remedies

it may have, it may recover from Tenant all damages it may incur by reason of

such breach, including the cost of recovering the Premises, reasonable

attorney’s fees, and including the worth at the time of such termination of the

excess, if any, of the amount of rent and charges equivalent to rent reserved

in this Lease for the remainder of the stated term, minus the amount of rental

loss which Tenant proves could have been reasonably avoided,  all of which amounts shall be immediately

due and payable from Tenant to Landlord. 

Landlord shall also be entitled to any other amounts necessary to compensate

Landlord for all detriment proximately caused by Tenant’s failure to comply

with the requirements of this Lease, excluding, however, consequential damages.

 

c.             Landlord may, at its option,

instead of exercising any other rights or remedies available to it in this

Lease or otherwise by law, statue or equity, if Tenant has failed to cure the

default within thirty (30) days after receipt of written notice from Landlord,

spend such money as is reasonably necessary to cure any default of Tenant herein

and the amount so spent, and costs incurred, including attorney’s fees in

curing such default, shall be paid by Tenant, and additional rent, upon demand.

 

d.             In the event suit shall be brought

for recovery of possession of the Premises, for the recovery of rent of any

other amount due under the provisions of this Lease, or because of the breach

of any other covenant herein contained on the part of Tenant to be kept or

performed, and a breach shall be established, Tenant shall pay to Landlord all

expenses reasonably incurred therefor, including a reasonable attorney’s fee,

together with interest on all such expenses at the rate of ten percent (10%)

per annum from the date of such breach of the covenants of this Lease.

 

e.             Tenant  waives any demand for possession of the Premises, and any demand

for payment of rent and any notice of intent to re-enter the Premises, or of

intent to terminate this Lease, other than the notices above provided in this

Article, and waives any and every other notice or demand prescribed by any

applicable statues or laws.

 

f.              No remedy herein or elsewhere in

this Lease or otherwise by law, statue or equity, conferred upon or reserved to

Landlord or Tenant shall be exclusive of any other remedy, but shall be

cumulative, and may be exercised from time to time and as often as the occasion

may arise.

 

18.          INDEMNITY

& HOLD HARMLESS:

 

Except to the extent that

liability for damage or loss is caused by the negligence of Landlord, its

agents or employees,  Tenant shall

indemnify, protect, defend (at Landlord’s request and with counsel

 

12

 

reasonably approved by

Landlord) and hold Landlord and Landlord’s affiliates and each of their

respective partners, directors, officers, shareholders and employees harmless

from and against every demand, claim, cause of action, judgment and expense,

including, but not limited to, reasonable attorneys’ fees and disbursements of

counsel, whether suit is initiated or not, and all loss and damage arising

from: (a) any injury, loss or damage to the person or property of Tenant, any

other tenant in the Property or to any other person rightfully in the Property,

(i) occurring in or about the Premises, or (ii) caused by the negligence or

misconduct of Tenant, or Tenant’s affiliates or any of their respective

employees, representatives, agents or contractors, or (iii) resulting from the

violation of any legal requirements or the provisions of this Lease by Tenant,

or Tenant’s affiliates or any of their respective employees, representatives,

agents or contractors; (b) any loss or damage to books, records, computer or

other electronic equipment, data or media, files, artwork, money, securities,

negotiable instruments or papers in the Premises; or (c) any loss or damage

resulting from interference with or obstruction of deliveries to or from the

Premises caused by Tenant or Tenant’s affiliates or any of their  respective employees, representatives,

agents or contractors.  All property

kept, maintained or stored on the Premises shall be so kept, maintained or

stored at the sole risk of Tenant, except for the negligence of Landlord.

 

If any mechanic’s lien is filed

against any part of the Property for work claimed to have been done for, or

materials claimed to have been furnished to, Tenant, such mechanic’s lien shall

be discharged by Tenant within thirty (30) days thereafter, at Tenant’s sole

cost and expense, by the payment thereof or by making any deposit required by

law or by posting a bond with such surety, in such amount and in such form as

Landlord deems proper.  Tenant shall

immediately notify Landlord of any mechanic’s lien or other lien filed against

the Property or any part thereof by a contractor or subcontractor of Tenant or

otherwise by reason of work claimed to have been done for or materials claimed

to have been furnished to Tenant.  If

Tenant fails to remove such lien or post such bond within the thirty (30) day

period following the filing thereof, Landlord may, at its sole discretion and

without waiving its rights and remedies based on such breach by Tenant and

without releasing Tenant from any of its obligations, cause such lien to be

released by any means it shall deem proper, including payment in satisfaction

of the claim giving rise to such lien. 

Tenant shall, in such event, pay to Landlord at once, upon notice by

Landlord, any sum paid by Landlord to remove such lien, together with interest

at the rate of 12% from the date of such payment by Landlord.  Landlord shall have the right at all times

to post and keep posted on the Premises any notices permitted or required by

applicable law, or that Landlord shall deem proper for the protection of

Landlord, the Premises, the Property and any other party having an interest

therein, from liens.  All material

suppliers, contractors, artisans, mechanics, laborers and other parties

contracting with Tenant for the furnishing of any labor, services, materials,

supplies or equipment with respect to any portion of the Premises are hereby

charged with notice that they must look solely to Tenant for payment of the

same and Tenant’s purchase orders, contracts and subcontracts in connection

therewith must clearly state this requirement.

 

19.          NON-LIABILITY:

 

Subject the terms and

conditions of Article 14 hereof, Landlord shall not be liable for damage

to any property of Tenant or of others located on the Property, not for the

loss of or damage to any property of Tenant or of others by theft or otherwise.

Landlord shall not be liable for any injury or damage to persons or property

resulting from fire, explosion, falling plaster, steam, gas, electricity,

water, rain or snow or leaks from any part of the Property or from the pipes,

appliances, or plumbing works or from the roof, street or subsurface or from

any other place or by dampness or by any other cause of whatsoever nature.  Landlord shall not be liable for any such

damage caused by other Tenants or persons

 

13

 

in the Property, occupants of

adjacent property, of the buildings, or the public or caused by operations in

construction of any private, public or quasi-public work.  Landlord shall not be liable for any latent

defect in the Premises.  All property of

Tenant kept or stored on the Premises shall be so kept or stored at the risk of

Tenant only and Tenant shall hold Landlord harmless from any claims arising out

of damage to the same, including subrogation claims by Tenant’s insurance

carrier.

 

Notwithstanding the foregoing,

unless caused by Tenant’s negligence or misconduct, Landlord shall indemnify

and hold Tenant harmless from and against every demand, claim, cause of action,

judgment and expense and all loss or damage which may be asserted against

Tenant arising from any injury or damage to person or property of any other

Building tenant, or any other person in the Building, or results from the

violation of any governmental laws or ordinances by Landlord, its employees,

agents or contractors.

 

20.          SUBORDINATION:

 

This Lease shall be

subordinated to any mortgages, deeds of trust, security agreements, ground

leases, master leases or other encumbrances (collectively, “Encumbrances”) that

may now exist or that may hereafter be placed upon the Property, or any part

thereof, and to any and all advances made thereunder, and to the interest upon

the indebtedness evidenced by such Encumbrances, and to all renewals,

replacements and extensions of any of the Encumbrances.  In the event of execution by Landlord after

the date of this Lease of any such Encumbrance, renewal, replacement or

extension, Tenant agrees,  within ten

(10) days of its receipt, to execute and return any commercially reasonable

subordination agreement required by the holder of such Encumbrance, which

agreement shall provide that:

 

a.             Such holder shall not disturb the

possession and other rights of Tenant under this Lease so long as Tenant is not

in default hereunder;

 

b.             In the event of acquisition of

title to the Premises by such holder, such holder shall accept Tenant as Tenant

of the Premises under the terms and conditions of this Lease and shall perform

all the obligations of Landlord hereunder; and

 

c.             In the event of such Tenant shall

recognize such holder as Landlord hereunder.

 

Tenant shall, upon receipt of a

request from Landlord therefore, within ten (10) days after receipt of such

request, execute and deliver to Landlord or to any proposed holder of an

Encumbrance, an estoppel certificate in recordable form, certifying that this

Lease is in full force and effect, and that there are no offsets against rent

nor defenses to Tenant’s performance under this Lease, or setting further any

such offsets or defenses claimed by Tenant, as the case may be.  In the event that Tenant fails to execute

and return the estoppel certificate within such ten (10) day period, the holder

of such Encumbrance shall be entitled to rely, as against the Tenant, that: (i)

this Lease is in full force and effect, without amendment except as specified

by the Landlord, (ii) Tenant has no offsets against rent nor any defenses to

Tenant’s performance under this Lease, (iii) Tenant has no right to any offset

or defenses to the payment of rent, and (iv) Tenant has not paid any rental

under this Lease more than one month in advance.

 

Tenant agrees to give prompt

written notice to the holder of each Encumbrance who has given Tenant written

notice of its address of any default by Landlord under this Lease which would

entitle Tenant to terminate or cancel this Lease or abate the rental payable

hereunder.

 

14

 

If a mortgage encumbers the

Property, then prior to the Commencement Date, Landlord shall deliver to Tenant

a non-disturbance agreement from all existing mortgagees of the Property

pursuant to a form reasonably acceptable to Tenant.

 

21.          ASSIGNMENT

OR SUBLETTING:

 

Tenant agrees to use and occupy

the Premises throughout the entire term hereof for the purpose or purposes

herein specified and for no other purposes, in the manner and to substantially

the extent now intended, and not to assign, sublet, license, concession or

otherwise transfer this Lease or Tenant’s rights in the Premises, or any part

thereof, whether by voluntary act, operation of law, or otherwise, without

obtaining the prior written consent of Landlord in each instance.  Tenant shall seek such consent of Landlord

by a written request therefor, setting forth such information as Landlord may

reasonably deem necessary. Landlord agrees not to withhold consent

unreasonably.  Consent by Landlord to

any assignment of this Lease or to any subletting of the Premises shall not be

a waiver of Landlord’s rights under this Article as to any subsequent

assignment or subletting.  Tenant will

be responsible for Landlord’s reasonable attorney fees for review and approval

of the sublease document.  Landlord’s

rights to assign this Lease are and shall remain unqualified.  No such assignment or subleasing shall

relieve Tenant from any of Tenant’s obligations in this Lease contained, nor

shall any assignment or sublease or other transfer of this Lease be effective

unless the assignees, subtenant or transferee shall at the time of such

assignment, sublease or transfer, assume in writing for the benefit of

Landlord, its successors or assigns, all of the terms, covenants and conditions

of this Lease thereafter to be performed by Tenant and shall agree in writing

to be bound thereby.  Should Tenant

sublease in accordance with the terms of this Lease, fifty percent (50%) of any

profit received by Tenant shall be forwarded to and retained by Landlord, which

increase shall be in addition to the Base Rent and Additional Rent due Landlord

under this Lease.  Notwithstanding the

foregoing, Tenant shall have the right to assign or sublet the Premises without

Landlord’s consent to any of the following (a “Permitted Transferee”): (i) any

successor corporation or other entity resulting from the merger or

consolidation of Tenant; or (ii) any entity that which controls, is controlled

by, or is under common control with Tenant.

 

22.          ATTORNMENT:

 

In the event of any sale,

transfer or assignment of Landlord’s interest in the Property, or the Building

in which the Premises are located, or this Lease, or if the Property come into

custody or possession of a mortgagee or any other party whether because of a

mortgage foreclosure, or otherwise, Tenant shall attorn to such assignee or

other party and recognize such party as Landlord hereunder; provided, however

Tenant’s peaceable possession pursuant to the terms of this Lease will not be

disturbed so long as Tenant faithfully performs its obligations under this

Lease.  Tenant shall execute, on demand,

any commercially reasonable  attornment

agreement required by any such party to be executed, containing such provisions

and such other provisions as such party may require.

 

23.          NOVATION

IN THE EVENT OF SALE:

 

In the event of the sale of the

Premises, Landlord shall be and hereby is relieved of all of the covenants and

obligations created hereby accruing from and after the date of sale, and such

sale shall result automatically in the purchaser assuming and agreeing to carry

out all the covenants and obligations of Landlord herein.  Notwithstanding the foregoing provisions of

this Article, Landlord, in the event of a sale of the Premises, shall cause to

be included in this agreement of sale and purchase a covenant

 

15

 

whereby the purchaser of the

Premises assumes and agree to carry out all of the covenants and obligations of

Landlord herein.

 

The Tenant agrees at any time

and from time to time upon not less than ten (10) days prior written request by

Landlord to execute, acknowledge and deliver to Landlord a statement in writing

certifying that this Lease is unmodified and in full force and effect as

modified and stating the modifications, and the dates to which the basic rent

and other charges have been paid in advance, if any, it being intended that any

such statement delivered pursuant to this paragraph may be relied upon by any

prospective purchaser of the fee or mortgagee or assignee of any mortgage upon

the fee of the Premises.  In the event

that Tenant fails to execute and return the estoppel certificate within such

ten (10) day period, the holder of such Encumbrance shall be entitled to rely,

as against the Tenant, that: (i) this Lease is in full force and effect,

without amendment except as specified by the Landlord, (ii) Tenant has no

offsets against rent nor any defenses to Tenant’s performance under this Lease,

(iii) Tenant has no right to any offset or defenses to the payment of rent, and

(iv) Tenant has not paid any rental under this Lease more than one month in

advance.

 

24.          SUCCESSORS

AND ASSIGNS:

 

The terms, covenants and

conditions hereof shall be binding upon and inure to the successors and assigns

of the parties hereto.

 

25.          REMOVAL

OF FIXTURES:

 

Notwithstanding anything

contained in Article 8, Article 29 or elsewhere in this Lease, if Landlord

requests in writing at the time Tenant commences installation of any fixture,

equipment or alterations, excluding the initial improvements, the Tenant will remove

at the sole cost and expense of Tenant such fixtures, equipment and alterations

made by Tenant simultaneous with vacating the Premises and Tenant will promptly

restore said Premises to the condition that existed immediately prior to said

fixtures, equipment and alternations having been made all at the sole cost and

expense of Tenant, subject to reasonable wear and tear.  Notwithstanding anything to the contrary set

forth in this Lease, in no event shall Tenant have any obligation to remove any

cabling from the Premises, including, without limitation, voice or data

cabling.

 

26.          QUIET

ENJOYMENT:

 

Landlord warrants that it has

full right to execute and to perform this Lease and to grant the estate

demised, and that Tenant, upon payment of the rents and other amounts due and

the performance of all the terms, conditions, covenants and agreements on

Tenant’s part to be observed and performed under this Lease, may peaceably and

quietly enjoy the Premises for the business uses permitted hereunder, subject, nevertheless,

to the terms and conditions of this Lease.

 

27.          RECORDING:

 

Tenant shall not record this

Lease without the written consent of Landlord. 

However, upon the request of either party hereto, the other party shall

join in the execution of the Memorandum lease for the purposes of

recordation.  Said Memorandum lease

shall describe the parties, the Premises and the term of the Lease and shall

incorporate this Lease by reference. 

This Article

27 shall not be construed to limit Landlord’s right to file this

Lease under

Article 22 of this Lease.

 

16

 

28.          OVERDUE

PAYMENTS:

 

All monies due under this Lease

from Tenant to Landlord shall be due on demand, unless otherwise specified and

if not paid within five (5) days of when due, shall result in the imposition of

a service charge for such late payment in the amount of five percent (5%) of

the amount due.  All unpaid or

delinquent rents and Tenant obligations of any kind shall accrue interest at

the rate of one and one-half (1-1/2%) percentage per month from and after the

due date.

 

29.          SURRENDER:

 

On the Expiration Date or upon

the termination hereof upon a day other than the Expiration Date, Tenant shall

peaceably surrender the Premises broom-clean in good order, condition and

repair, reasonable wear and tear, casualty damage and condemnation damage only

excepted.  On or before the Expiration

Date or upon termination of this Lease on a day other than the Expiration Date,

Tenant shall, at its expense, remove all trade fixtures, personal property and

equipment and signs from the Premises and any property not removed shall be

deemed to have been abandoned.  Any

damage caused in the removal of such items shall be repaired by Tenant and at

its expense.  If the Premises are not

surrendered on the Expiration Date or the date of termination, Tenant shall

indemnify Landlord against loss or liability, claims, without limitation, made

by any succeeding Tenant founded on such delay.  Tenant shall promptly surrender all keys for the Premises to

Landlord at the place then fixed for payment of rent and shall inform Landlord

of combinations of any locks and safes on the Premises.

 

30.          HOLDING

OVER:

 

In the event of a holding over

by Tenant after expiration or termination of this Lease without the consent in

writing of Landlord, Tenant shall be deemed a Tenant at sufferance and shall

pay rent for such occupancy at the rate of one hundred fifty percent (150%) the

lease-current aggregate Base Rent, prorated for the entire holdover period,

plus all reasonable attorney’s fees and expenses incurred by Landlord in

enforcing its rights hereunder, plus any other damages occasioned by such

holding over.  Except as otherwise

agreed, any holding over with the written consent of Landlord shall constitute

Tenant a month-to-month Tenant.

 

31.          ABANDONMENT:

 

In the event Tenant shall

remove its fixtures, equipment or machinery or shall vacate the Premises or any

part thereof prior to the Expiration Date of this Lease, or shall discontinue

or suspend the operation of its business conducted on the Premises, Tenant

shall not be deemed to have abandoned the Premises and Tenant shall not be in

default under the terms of this Lease unless Tenant fails to pay the Landlord

the Base Rent and Additional Rent within the time frames described herein.

 

32.          CONSENTS

BY LANDLORD:

 

Whenever provision is made

under this Lease for Tenant securing the consent or approval by Landlord, such

consent or approval shall only be in writing and shall not be unreasonably

withheld.

 

17

 

33.          NOTICES:

 

Any notice required or

permitted under this Lease shall be deemed sufficiently given or secured if

sent by registered or certified return receipt mail to Tenant at address as

provided in Definitions

on Page 1 of Lease and to Landlord at the address as provided in Article 4

of this Lease, and either party may by like written notice at any time

designate a different address to which notices shall subsequently be sent or

rent to be paid.

 

34.          RULES

AND REGULATIONS:

 

Tenant shall observe and comply

with the reasonable rules and regulations as Landlord may prescribe, on written

notice to Tenant for the safety, care and cleanliness of the Building.

 

35.          INTENT

OF PARTIES:

 

Except as otherwise provided

herein, Tenant covenants and agrees that if it shall any time fail to pay any

such cost or expenses, or fail to take out, pay for, maintain or deliver any of

the insurance policies above required, or fail to make any other payment or

perform any other act on its part to be made or performed as in this Lease

provided within a reasonable time after receipt of written notice from Tenant,

then Landlord may, but shall not be obligated so to do, and without notice to

or demand upon Tenant and without waiving or releasing Tenant from any

obligations of Tenant in this Lease contained, pay any such cost or expense,

effect any such insurance coverage and pay premiums therefor, and may make any

other payment or perform any other act on the part of Tenant to be made and

performed as in this Lease provided, in such manner and to such extent as

Landlord may deem desirable, and in exercising any such right, to also pay all

necessary and incidental costs and expenses, employ counsel and incur and pay

reasonable attorneys’ fees.  All sums so

paid by Landlord and all necessary and incidental costs and expenses in

connection with the performance of any such act by Landlord, together with

interest thereon at the rate of twelve percent (12%) per annum from the date of

making of such expenditure, by Landlord, shall be deemed additional rent

hereunder, and shall be payable to Landlord on demand.  Tenant covenants to pay any such sum or sums

with interest as aforesaid and Landlord shall have the same rights and remedies

in the event of the non-payment thereof by Tenant as in the case of default by

Tenant in the payment of the Base Rent payable under this Lease.

 

36.          GENERAL:

 

a.             The Lease

does not create the relationship of principal and agent or of partnership or of

joint venture or of any association between Landlord and Tenant, the sole

relationship between the parties hereto being that of Landlord and Tenant.

 

b.             No waiver

of any default of Tenant hereunder shall be implied from any omission by

Landlord to take any action on account of such default if such default persists

or is repeated, and no express waiver shall affect any default other than the

default specified in the express waiver and that only for the time and to the

extent therein stated.  One or more

waivers by Landlord shall not then be construed as a waiver of a subsequent

breach of the same covenant, term or condition.  The consent to or approval by Landlord of any act by Tenant

requiring Landlord’s consent or approval shall not waive or render necessary

Landlord’s consent to or approval of any subsequent similar act by Tenant.  No action specifically required or permitted

to be taken by or on behalf of Landlord under the terms or provisions of this

Lease shall be deemed to constitute an eviction or disturbance of Tenant’s

possession of the

 

18

 

Premises, except as otherwise

set forth herein.  All preliminary

negotiations are merged into and incorporated in this Lease.  The laws of the State of Minnesota shall

govern the validity, performance and enforcement of this Lease.

 

c.             This Lease and the exhibits, if

any, attached hereto and forming a part hereof, constitute the entire agreement

between Landlord and Tenant affecting the Premises and there are no other

agreements, either oral or written, between them other than are herein set

forth.  No subsequent alteration,

amendment, change or addition to this Lease shall be binding upon Landlord or

Tenant unless reduced to writing and executed in the same form and manner in which

this Lease is executed.

 

d.             If any agreement, covenant or

condition of this Lease or the application thereof to any person or

circumstances shall, to any extent, be invalid or unenforceable, the remainder

of this Lease, or the application of such agreement, covenant or condition to

persons or circumstances other than those as to which it is held invalid or

unenforceable, shall not be affected thereby and each agreement, covenant or

condition of this Lease shall be valid and be enforced to the fullest extent

permitted by law.

 

e.             The obligations of Landlord under

this Lease do not constitute the personal obligations of the individual

partners, members, trustees, shareholders, directors or officers of Landlord or

its constituent members or partners.  If

Landlord shall fail to perform any covenant, term or condition of this Lease

required of Landlord, Tenant shall be required to deliver to Landlord written

notice of the same.  If Landlord fails

to cure such breach within thirty (30) days after receipt of written notice

from Tenant or immediately in the event of an emergency, then Tenant shall have

the right to cure such breach and deduct the costs from the Base Rent payable

under the terms of this Lease.  If, as a

consequence of such default, Tenant shall recover a money judgment against

Landlord, such judgment shall be satisfied only out of the proceeds of sale

received upon execution of such judgment and levied thereon against the right,

title and interest of Landlord in the Property and out of rent or other income

form the Property receivable by Landlord, or out of consideration received by

Landlord from the sale or other disposition of all or any part of Landlord’s

right, title or interest in the Property, and no action for any deficiency may

be sought or obtained by Tenant.

 

37.          HAZARDOUS

MATERIAL:

 

a.             The Premises hereby leased shall be

used by and/or at the sufferance of Tenant only for the purpose set forth in Article 11 above

and for no other purposes.  Tenant shall

not use or permit the use of the Premises in any manner that will tend to

create waste or a nuisance, or will tend to unreasonably disturb other Tenants

in the Building or the Property. 

Tenant, its employees and all persons visiting or doing business with

Tenant in the Premises shall be bound by and shall observe the reasonable rules

and regulations made by Landlord relating to the Premises, the Building or the

Property of which notice in writing shall be given to Tenant, and all such

rules and regulations shall be deemed to be incorporated into and form a part

of this Lease.

 

b.             Tenant covenants throughout the

Lease Term, at Tenant’s sole cost and expense, promptly to comply with all laws

and ordinances and the orders, rules and regulations and requirements of all

federal, state and municipal governments and appropriate departments,

commissions, boards, and officers thereof, and the orders, rules and

regulations of the Board of Fire Underwriters where the Premises are situated,

or any other body now or hereafter created with jurisdiction over the Premises,

and whether or not the same require structural repairs or alterations, which

may be applicable to the Premises, or the use or manner of use of the Premises but only if the requirements apply to Tenant’s

 

19

 

specific

use of the Premises and not to office or retail use generally, and otherwise

Landlord shall be responsible for such compliance.  Tenant will likewise observe and comply with

the requirements of all policies of public liability, fire and all other

policies of insurance at any time in force with respect to the buildings and

improvements on the Premises and the equipment thereof but only if the requirements apply to Tenant’s specific use of the

Premises and not to office or retail use generally, and otherwise Landlord

shall be responsible for such compliance.

 

c.             In the event any Hazardous Material

(hereinafter defined) is brought or caused to be brought into or onto the

Premises, the Building or the Property by Tenant, Tenant shall handle any such

material in compliance with all applicable federal, state and/or local

regulations.  For purposes of this

Article, “Hazardous Material” means and includes any hazardous, toxic or

dangerous waste, substance or material defined as such in (or for purposes of)

the Comprehensive Environmental Response, Compensation, and Liability Act, and

so-called “Superfund” or “Superlien” law, or any federal, state or local

statue, law, ordinance, code, rule, regulation, order decree regulation,

relating to, or imposing liability or standards of conduct concerning, any

hazardous, toxic or dangerous waste, substance or material, as now or at any

time hereafter in effect.  Tenant shall

submit to Landlord on an annual basis copies of its approved hazardous

materials communication plan, OSHA monitoring plan, and permits required by the

Resource Recovery and Conservation Act of 1976, if Tenant is required to

prepare, file or obtain any such plans or permits.  Tenant will indemnify and hold harmless Landlord from any losses,

liabilities, damages, costs or expenses (including reasonable attorneys’ fees)

which Landlord may suffer or incur as a result of Tenant’s introduction into or

onto the Premises, Building or Property of any Hazardous Material.  This Article shall survive the expiration or

sooner termination of this Lease.

 

Notwithstanding

the foregoing, Landlord shall indemnify, defend and hold harmless Tenant, its

officers, directors, agents, employees, and invitees from and against any and

all claims, damages, fines, judgments, penalties, costs, expenses or

liabilities (including, without limitation, any and all sums paid for

settlement of claims, attorney’s fees, consultant and expert fees) arising any

time from or in connection with the use, storage, generation or disposal of

Hazardous Materials in, on, or about the Building, Premises or Property, except

to the extent caused by Tenant, Tenant’s agents, employees, contractors, or

invitees.

 

38.          CAPTIONS:

 

The captions are inserted only

as a matter of convenience and for reference, and in no way define, limit or

describe the scope of this Lease nor the intent or any provision thereof.

 

39.          ATTACHMENTS:

 

See also rider attached hereto

and made a part hereof containing Article 1 through Article 49 inclusive as

well as Exhibits

A through Exhibit E inclusive, which Exhibits are

attached hereto and made a part hereof.

 

	

  Exhibit

  	

   

  	

  Description

  
	

  Exhibit A

  	

   

  	

  Legal

  Description

  
	

  Exhibit B

  	

   

  	

  Demised

  Premises

  
	

  Exhibit C

  	

   

  	

  Exclusions

  to Operating Expenses

  
	

  Exhibit D

  	

   

  	

  Building

  Rules and Regulations

  
	

  Exhibit E

  	

   

  	

  Improvements

  

 

20

 

40.          SUBMISSION:

 

Submission of this instrument

to Tenant or proposed Tenant or his agents or attorneys for examination,

review, consideration or signature does not constitute or imply an offer to

lease, reservation of space, or option to lease, and this instrument shall have

no binding legal effect until execution hereof by both Landlord/Owner and

Tenant or its agents.

 

41.          REPRESENTATION:

 

It is agreed and understood that

Jonathan R. Yanta and Jason J. Meyer, agents or brokers with United Properties

Brokerage LLC, are representing Moen Leuer Properties, Inc., Landlord, and

Michael Smith, agent(s) or broker(s) with Grubb & Ellis, is representing

Ciprico, Inc., the Tenant in this transaction.

 

IN WITNESS

WHEREOF, Landlord and Tenant have caused these presents to be executed in form

and manner sufficient to bind them at law, as of the day and year first above

written.

 

	

  Landlord:

  	

   

  	

  Moen Leuer Properties, Inc.,

  A Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Bradley

  Moen

  	

   

  
	

   

  	

   

  	

  Name:

  Bradley Moen

  	

   

  
	

   

  	

   

  	

  Its:

  Governor

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Tenant:

  	

   

  	

  Ciprico Inc.
A Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Thomas

  S. Wargolet

  	

   

  
	

   

  	

   

  	

  Name: Thomas

  S. Wargolet

  	

   

  
	

   

  	

   

  	

  Its:

  VP-Finance/CFO

  	

   

  

 

 

STATE OF 

ss.

COUNTY OF 

 

On this             day

of               ,

20      , personally came before me, a Notary Public

within and for said County,

                                    and

                                   ,

to me well known to be the same persons described in and who executed the

foregoing instrument, and acknowledged that they executed the same as their

free act and deed.

 

 

Notary Public

My commission expires: January

31, 2005

 

21

 

LEASE ADDENDUM

 

This Indenture

of Lease, dated this 12th day of June, 2002 by and between Moen

Leuer Properties, Inc., a Minnesota corporation (“Landlord”), and Ciprico Inc.

a Minnesota corporation (“Tenant”), is attached to and made a part of that

certain Commercial Lease of even date hereof (the “Lease Form”).  The Lease Form as modified by this Addendum

is hereinafter referred to as the Lease. 

Except to the extent otherwise defined below, all capitalized terms used

in this Addendum shall be as defined in the Lease Form.

 

Landlord and

Tenant mutually agree as follows:

 

Any provision

of the Lease Form to the contrary notwithstanding, the following provisions

shall apply:

 

42.          Base Rental:

 

	

  Years

  	

   

  	

  Price Per

  Square

  Foot

  	

   

  	

  Monthly

  	

   

  	

  Annually

  	

   

  
	

  1-3:

  	

   

  	

  $

  	

  8.56

  	

   

  	

  $

  	

  27,924.86

  	

   

  	

  $

  	

  335,098.00

  	

   

  
	

  4:

  	

   

  	

  $

  	

  8.84

  	

   

  	

  $

  	

  28,838.29

  	

   

  	

  $

  	

  346,059.48

  	

   

  
	

  5:

  	

   

  	

  $

  	

  9.08

  	

   

  	

  $

  	

  29,621.23

  	

   

  	

  $

  	

  355,454.76

  	

   

  
	

  6-7:

  	

   

  	

  $

  	

  9.22

  	

   

  	

  $

  	

  30,077.95

  	

   

  	

  $

  	

  360,935.34

  	

   

  

 

43.          Amounts

Due Upon Lease Execution: The Security and Damage

Deposit described in Article 10 of the Lease herein

($30,000.00) shall be due upon execution of the Lease.  Tenant shall submit to Landlord a check in

amount representing the first month’s Base Rent ($27,924.86) and Additional

Rent on or before the first day of the first month of the Term.

 

44.          Free Rent:  Landlord will provide Tenant one (1) month

of free Base Rent and Additional Rent after completion of the Leasehold

Improvements but prior to the Commencement Date to set-up equipment.

 

45.                               Leasehold Improvements: Landlord

shall construct the leasehold improvements pursuant to the plans and

specifications for the leasehold improvements attached hereto as Exhibit E (the

“Leasehold Improvements”).  Landlord

agrees to be responsible for the cost of the Leasehold Improvements per the

agreed to space plan. To the extent that the Tenant adds any additional Tenant

Improvement costs to the agreed to space plan, Tenant shall be responsible for

the excess costs; provided, however that Landlord must obtain Tenant’s prior

written consent before expending any sums in excess of the agreed to space

plan.  The portion of the Leasehold

Improvement Cost, which is Tenant’s responsibility shall be paid by Tenant

within thirty (30) days of the completion of the Leasehold Improvements as

evidenced by a certificate of occupancy or a certificate of Tenant’s architect

or engineer.

 

22

 

On or prior to October 1, 2002,

Landlord and Tenant shall jointly inspect the Premises to determine if the

Premises are in the condition required under Exhibit E.  If the Premises are in the condition

required by Exhibit E, the Term shall be deemed to commence in accordance with

the provisions of the Lease.

 

If the Premises are not in the

condition required by the Lease, Tenant may conditionally accept the Premises

using the following procedure: Tenant shall deliver to Landlord a list of the

items which Landlord must complete or remediate in order to bring the Premises

into compliance with the Lease and the time period within which each said item

is to be completed (each of which dates shall be referred to as the “agreed

completion date” for that item.  Such

items on the list (“Punchlist”) shall be attached to a conditional acceptance

letter to be prepared by Tenant.  If the

items on the Punchlist are not completed according to the provisions of the

Punchlist on or prior to the agreed completion date for each said item,

Landlord shall continue to be obligated to complete each said item in

accordance with the terms of the Punchlist and conditional acceptance letter,

but Tenant shall be entitled to complete the uncompleted items on its own, in

which event Tenant shall be entitled to set off against the Base Rent the

reasonable costs of completing the items in question unless Landlord shall

reimburse Tenant for the reasonable costs incurred by Tenant in completing said

items, within ten (10) days following written demand by Tenant for such

reimbursement. Tenant reserves the right to object to latent defects in the

Premises.

 

46.                               Option

to Renew: Landlord hereby grants to

Tenant two (2) options (the “Renewal Options”) to renew this Lease

Agreement for a term of three (3) years each (“Renewal Terms”), for all

portions of the Premises then being leased by Tenant as of the date the

applicable Renewal Term is to commence. 

Each Renewal Term shall be on the same terms and conditions as set forth

in this Lease Agreement, except as modified by the terms, covenants and

conditions as set forth below:

 

a.             If Tenant elects to exercise said

option, then Tenant shall provide Landlord with written notice nine (9) months

prior to the expiration of the then current Term of the Lease Agreement

(“Renewal Notice”).  If Tenant fails to

provide such notice, Tenant shall have no right to extend or renew the Term of

the Lease Agreement; provided, however, that Landlord agrees to provide Tenant

with written notice of the deadline for exercising the Renewal Notice twelve

(12) months prior to the expiration of the Term.  Time is of the essence with respect to the giving of such Renewal

Notice.  The Renewal Notice shall be

given in the manner provided in the Lease Agreement for the giving of notices

to Landlord.

 

b.             Within ten (10) days of Landlord’s

receiving Tenant’s Renewal Notice, Landlord

shall notify Tenant of Landlord’s determination of the “Fair Rental Rate” to be

applicable during the Renewal Term (“Landlord’s

Rate Notice”).  If the Fair

Rental Rate as set forth in Landlord’s Rate Notice is acceptable to Tenant,

then Tenant’s exercise of said Renewal Option shall be complete.  If the Fair Rental Rate as set forth in

Landlord’s Rate Notice is not acceptable to Tenant, Tenant must provide

Landlord with written notice on or before thirty (30) days subsequent to the

receipt of Landlord’s Rate Notice.  If

Tenant has so timely objected in writing to Landlord’s Rate Notice, then

Landlord and Tenant shall negotiate, in good faith, for up to an

 

23

 

additional thirty (30) days to

arrive at a mutually acceptable Fair Rental Rate, which is within the

definition thereof as set forth below. 

If, however, at the end of said additional thirty (30) day period

Landlord and Tenant have failed to arrive at a mutually acceptable Fair Rental

Rate, then Tenant, within ten (10) days after expiration of said thirty (30)

day period, shall either terminate the exercise of its Renewal Option or elect

to have Fair Rental Value be determined by an arbitrator in accordance with

this Article.  All notices under this

Paragraph shall be given in the manner provided in the Lease Agreement for the giving

of notices.

 

c.             Upon the exercise of the Renewal

Option, whether by Tenant’s acceptance of Landlord’s determination of the Fair

Rental Rate as set forth in Landlord’s Rate Notice, or by a mutually acceptable negotiated Fair Rental Rate pursuant to paragraph

b of this Article; then the parties shall memorialize the exercise of the Renewal Option by

executing an amendment to the Lease Agreement to extend the Term of the Lease

Agreement for the Renewal Term, upon the same terms and conditions herein contained;

provided, however, that the monthly installments of Base Rent payable by Tenant

to Landlord for the Renewal Term shall be at the Fair Rental Rate as determined

by the foregoing paragraph b of this Article.

 

d.             For purposes of this Article, “Fair

Rental Rate” means the Base Rent that a tenant would pay to a landlord under a

lease containing other terms and conditions substantially as set forth herein

with respect to comparable premises in a comparable building in the western

suburban metropolitan area of Minneapolis, Minnesota.

 

e.             In the event

Landlord and Tenant have not agreed on the Fair Rental Rate for the Renewal

Term within thirty (30) days as set forth above, then the Fair Rental Rate

shall be determined by appraisal in accordance with the rules from the American

Arbitration Association.

 

47.          Expansion:  EXPANSION

RIGHTS-FIRST REFUSAL

 

Subject to the

terms and conditions of this Article 47, Landlord grants to Tenant a right of

first refusal to lease the space within the Building located adjacent to the

Premises (the “First Refusal Space’). 

If Landlord enters into good faith negotiations with any third party to

lease all or any part of the First Refusal Space and receives from such third

party a letter of intent or similar document acceptable to Landlord in

Landlord’s sole discretion to lease all or any part of the First Refusal Space,

Landlord will notify Tenant of the terms and conditions of the proposed lease

between Landlord and the third party and provide Tenant with a copy of the

letter of intent or similar document.

 

If Tenant

desires to lease the portion of the First Refusal Space that is the subject of

the negotiations between Landlord and the third party on the same terms and

conditions described in Landlord’s notice to Tenant and the letter of intent or

similar document, Tenant will so notify Landlord within ten (10) business days

after the date of Landlord’s notice to Tenant. 

If Tenant does not so notify Landlord within the ten (10) business day

period, Landlord may lease the subject portion of the First Refusal Space to

the third party on only the same terms and conditions described in Landlord’s

notice to Tenant and the letter of intent or similar document (or on terms and

conditions more favorable to Landlord). 

If Tenant notifies Landlord within the ten (10) business day period that

Tenant desires to lease the subject portion of the First Refusal Space,

Landlord and Tenant will proceed in good faith to negotiate an amendment to

this Lease to reflect the addition of the subject portion of the First Refusal

Space to the Premises; provided however that the term of the First Refusal

Space shall be coterminous

 

24

 

with the Term for the Premises.

 

If Tenant

fails to exercise its expansion rights after receipt of Landlord’s Notice under

this Article and, prior to Landlord’s execution of a lease with the third

party, the terms and conditions of the transaction between Landlord and the

third party change to be less favorable to Landlord than the terms and

conditions described in Landlord’s notice to Tenant or the letter of intent or

similar document, Landlord will notify Tenant of the revised terms and

conditions.  If Tenant desires to lease

the subject portion of the First Refusal Space on the revised terms and

conditions, Tenant must so notify Landlord within five (5) business days after

the date of Landlord’s notice.  If

Tenant so notifies Landlord within the five (5) business day period, Landlord

and Tenant will negotiate an amendment to this Lease.

 

Landlord shall

be obligated to offer the First Refusal Space to Tenant pursuant to the

conditions set for in this Article 47 each time Landlord attempts to lease all

or any portion of the First Refusal Space.

 

The rights set

forth herein are subordinate to the current expansion and renewal rights of the

current contiguous Tenant, Pulmonetics, pursuant to the terms of the existing

lease between Pulmonetics and Landlord dated March 29, 2002.

 

48.          Options to Terminate:  Provided (a) on or before the last day of

the twenty-seventh (27th) month of the Term, Tenant delivers written notice to

Landlord advising Landlord that Tenant desires to terminate this Lease as of

the end of the thirty-sixth (36th) month of the Term, and (b) Tenant

delivers to Landlord a payment in the amount of Six Hundred Eighty Thousand and

00/100 Dollars ($680,000.00) no later than the effective date of termination,

then this Lease shall be deemed to terminate on the last day of the

thirty-sixth (36th) month of the term.  Upon such termination, Tenant shall have no obligations

hereunder.  If Tenant does not exercise

the First Termination Option, then provided (a) on or before the last day of

the fifty-first (51st) month of the initial term, Tenant delivers written

notice to Landlord advising Landlord that Tenant desires to terminate this

Lease as of the end of the sixtieth (60th) month of the Term, and

(b) Tenant delivers to Landlord a payment in the amount of Forty-two Thousand

and 00/100 Dollars ($42,000.00) no later than the effective date of

termination, then this Lease shall be deemed to terminate on the last day of

the-sixtieth (60th) month of the initial term.  (the “Second Termination Option”.)  Upon such termination, Tenant shall have no

obligations hereunder.

 

25

 

49.          Directional Signage:

Prior to October 1, 2002, Landlord shall provide, at its sole cost and expense,

prominent directional signage to the Premises in accordance with Tenant’s

instructions as to location and design.

 

	

  Tenant:

  	

   

  	

  Ciprico Inc.

  	

   

  
	

   

  	

   

  	

  A Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Date: June

  12, 2002

  	

   

  	

  By:

  	

   /s/ Thomas S. Wargolet

  	

   

  
	

   

  	

   

  	

  Its: VP

  Finance/CFO

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Landlord:

  	

   

  	

  Moen Leuer Properties, Inc.

  	

   

  
	

   

  	

   

  	

  a Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Date: June

  12, 2002

  	

   

  	

  By:

  	

  /s/ Bradley

  Moen

  	

   

  
	

   

  	

   

  	

  Its:

  Governor

  	

   

  

 

26

 

EXHIBIT A

LEGAL DESCRIPTION

OF

PROPERTY

 

 

Lot 4, Block 1

Plymouth Ponds Business Park

Third Addition

 

27

 

EXHIBIT B

PREMISES

 

28

 

EXHIBIT C

EXCLUSIONS TO OPERATING EXPENSES

 

Notwithstanding the forgoing, Operating

Expenses shall not include the following:

 

(i)            repairs or other work occasioned by

fire, windstorm or other casualty, to the extent that the costs thereof are

reimbursed to Landlord by insurers, or would have been reimbursed had the

insurance required hereunder been maintained, or by governmental authorities in

eminent domain

 

(ii)           leasing commissions, attorneys’ fees

and other expenses incurred in connection with negotiations or disputes with

tenants, or prospective tenants of the Building;

 

(iii)          costs incurred in renovating or

otherwise improving or decorating or redecorating space for tenants in the

Building or other space leased or held for lease in the Building;

 

(iv)          Landlord’s costs of utilities,

janitorial and other services sold to tenants for which Landlord is entitled to

be reimbursed by tenants,

 

(v)           depreciation and amortization, except

as specifically provided in the Lease;

 

(vi)          costs which under generally accepted

accounting principles, consistently applied, must be capitalized;

 

(vii)          interest on debt or amortization

payments on any mortgage or mortgages, and rental under any ground or

underlying lease or leases;

 

(viii)        costs incurred in advertising for the

Building or other marketing or promotional activity specifically and primarily

designed for marketing space in the Building but excluding amenities for the

benefit of existing tenants of the Building;

 

(ix)           employment costs of Landlord’s

personnel ranking higher than the on-premises manager, provided that the

allocable compensation, on the basis of time spent on the Building, of one

senior property management executive may be included;

 

(x)            any bad debt expense or bad debt

reserve.

 

(xi)           all costs incurred in connection with

or directly related to the original construction (as distinguished from

operation, repair and maintenance) of the Building;

 

(xii)          legal and other fees, leasing

commissions, advertising expenses and other costs incurred in connection with

acquisition or original development or original leasing of the Building;

 

(xiii)         the costs of renting or leasing

anything other than items, the purchase price of which could be included in

Operating Expenses hereunder;

 

29

 

(xiv)        all costs related to the removal of

substances or materials from the Building which are presently, or at any time

in the future may be, deemed hazardous;

 

(xv)         the cost of changes to the Building,

the parking structure, or the appurtenances in compliance with any laws,

statutes, ordinances, rules or directives enacted prior to the Commencement

Date;

 

(xvi)        any charges for ground leases or other

underlying leases, easements or any other similar or dissimilar use fees or

other costs;

 

(xvii)       costs of correcting defects in the design

or construction of the Building, the major Building systems or the material

used in the construction of the Building (including latent defects or the

inadequacy of design) or in the building equipment or appurtenances thereto;

 

(xviii)      the cost of any repair to remedy damage

caused by or resulting from the negligence of any other tenants in the

Building, including their agents, servants, employees or invitees, together

with the costs and expenses incurred by Landlord in attempting to recover such

costs;

 

(xix)         any item of cost which represents an

amount paid to an affiliate of Landlord or an affiliate of any partner or

shareholder of Landlord, to the extent the same is in excess of the lowest

reasonable cost of said item or service in an arms length transaction;

 

(xx)          any and all costs (including legal

fees and costs of lawsuits) associated with the operation of the business of

the entity which constitutes Landlord or preservation of the Landlord’s

interest in the Building;

 

(xxi)         any expense incurred as a result of the

negligence of Landlord, its agents, servants, or employees or arising out of

Landlord’s negligent failure to manage the Building consistently with the

standards required by this Lease; and

 

(xxii)        Any holding costs

relating to land held for development or future construction.

 

30

 

EXHIBIT D

BUILDING RULES AND

REGULATIONS

 

1.             Any sign,

lettering, picture, notice or advertisement installed on or in any part of the

Property and visible from any exterior or interior common area of the Complex

or from the exterior of the Property, shall be installed at Tenant’s sole cost

and expense, and in such manner, character and style as Landlord may approve in

writing.  Anything herein to the

contrary notwithstanding, approval as to signs shall be subject to Landlord’s

approval which may be withheld in Landlord’s reasonable discretion.  In the event of a violation of the foregoing

by Tenant, Landlord may remove the same without any liability and may charge

the expense incurred by such removal to Tenant.

 

2.             Intentionally Deleted.

 

3.             Tenant,

its employees, customers, invitees and guests shall not obstruct sidewalks,

entrances, passages, corridors, vestibules, halls, or stairways in and about

the Complex which are used in common with other tenants and their employees,

customers, guests and invitees, and which are not a part of the Property of

Tenant.  Tenant shall not place objects

against glass partitions or doors or windows which would be unsightly from the

Complex corridors or from the exterior of the Complex and will promptly remove

any such objects upon notice from Landlord.

 

4.             Tenant

shall not make excessive noises, cause disturbances or vibrations, use or

operate any electrical or mechanical devices that emit excessive sound or other

waves, disturbances or create obnoxious odors, nor operate any device/equipment

for radio/television broadcasting or reception from or within the Complex or

elsewhere and shall not place or install any projections, antennas, aerials or

similar devices inside or outside the Property or on the Complex.

 

5.             Tenant

shall not waste electricity, water or air conditioning furnished by Landlord,

if any, and shall cooperate fully with Landlord to ensure the most effective

operation of the Complex’s heating and air conditioning systems.

 

6.             Tenant

assumes full responsibility for protecting its space from theft, robbery and

pilferage, which includes keeping doors locked and other means of entry to the

Property closed and secured after normal business hours.

 

7.             In no

event shall Tenant bring into the Complex flammables, such as gasoline,

kerosene, naphtha, benzene, explosives or any other article of intrinsically

dangerous nature.  If, by reason of the

failure of Tenant to comply with the provisions of this subparagraph, any

insurance premium for all or any part of the Complex shall at any time be

increased, Tenant shall make immediate payment of the whole of the increased

insurance premium, without waiver of any of Landlord’s other rights at law or

in equity for Tenant’s breach of this lease.

 

8.             Tenant shall comply with all applicable

federal, state and municipal laws, ordinances and regulations, and building

rules and shall not directly or indirectly make any use of the Property which

may be prohibited by any of the foregoing or which may be dangerous to persons

or property or may increase the cost of insurance or require additional

insurance coverage, except as set forth in the Lease.

 

31

 

9.             Landlord

shall have the right to prohibit any advertising by Tenant which in Landlord’s

reasonable opinion tends to impair the reputation of the Complex or its desirability

as a building complex for office/warehouse use, and upon written notice from

Landlord, Tenant shall refrain from or discontinue such advertising.

 

10.          The Property

shall not be used for cooking (as opposed to heating of food), lodging,

sleeping or for any immoral or illegal purpose.

 

11.          Unless

expressly permitted by Landlord, no additional locks or similar devices shall

be attached to any door or window and no keys other than those provided by

Landlord shall be made for any door.  If

more than two keys for one lock are desired by Tenant, Landlord may provide the

same upon payment by Tenant.  Upon

termination of this Lease or of Tenant’s possession, Tenant shall surrender all

keys of the Property and shall explain to Landlord all combination locks on safes,

cabinets and vaults.

 

12.          Any carpeting

cemented down shall be installed with a releasable adhesive. In the event of a

violation of the foregoing by Tenant, Landlord may charge the expense incurred

by removal to Tenant.

 

13.          The

restrooms, drinking fountains and other plumbing fixtures shall not be used for

any purpose other than those for which they are constructed, and no sweepings,

rubbish, rags, coffee grounds or other substances shall be thrown therein.  All damages resulting from any misuse of the

fixtures shall be borne by Tenant who, or whose employees, agents, visitors or

licensees have caused same.  No person

shall waste water by interfering or tampering with the faucets or otherwise.

 

14.          Tenant shall

not overload any utilities serving the Property.

 

15.          No dog or

other animal shall be allowed in the Complex.

 

16.          All

loading/unloading, receiving/delivery of goods/supplies or disposal of

garbage/refuse shall be made only through entryways provided for such

purposes.  Tenant shall be responsible

for any damage to the Complex or the property of its employees or others and

injuries sustained by any person whomsoever resulting from the use or moving of

such articles in or out of the Property, and shall make all repairs and

improvements required by Landlord or governmental authorities in connection

with the use or moving of such articles.

 

17.          All safes,

equipment or other heavy articles shall only be used by Tenant in a manner

which will not interfere with or cause damage to the Property or the Complex in

which they are located, or to the other tenants or occupants of said

Complex.  Tenant shall be responsible

for any damage to the building or the property of its employees or others and

injuries sustained by any person whomsoever resulting from the use or moving of

such articles in or out of the Property, and shall make all repairs and

improvements required by Landlord or governmental authorities in connection

with the use or moving of such articles.

 

18.          Canvassing,

soliciting, and peddling in or about the Complex is prohibited and each Tenant

shall cooperate to prevent the same.

 

32

 

19.          Wherever in

these Building Rules and Regulations the word “Tenant” occurs, it is understood

and agreed that it shall mean Tenant’s associates, employees, agents, clerks,

invitees, and visitors.  Wherever the

word “Landlord” occurs, it is understood and agreed that it shall mean

Landlord’s assigns, agents, clerks, and visitors.

 

20.          Landlord shall have the right to enter upon

the Property at all reasonable hours for the purpose of inspecting the same.

 

21.          Landlord shall have the right to enter the

Property at hours convenient to Tenant for the purpose of exhibiting the same

to prospective Tenants.

 

22.          Tenant, its

employees, customers, invitees and guests shall, when using the parking

facilities in and around the Complex, observe and obey all signs regarding fire

lanes and no parking zones, and when parking always park between the designated

lines.  Landlord reserves the right to

tow away, at the expense of the owner, any vehicle which is improperly parked

or parked in a no parking zone.  All

vehicles shall be parked at the sole risk of the owner, and Landlord assumes no

responsibility for any damage to or loss of vehicles.  No vehicles shall be parked overnight.

 

23.          In case of

invasion, mob, riot, public excitement, or other commotion, Landlord reserves

the right to prevent access to the Complex during the continuance of the same

by closing the doors or otherwise, for the safety of the tenants or the

protection of the Complex and the property therein.  Landlord shall in no case be liable for damages resulting from

any error or action taken with regard to the admission to or exclusion from the

Complex of any person.

 

24.          All entrance

doors to the Property shall be locked when the Property are not in use.  All common corridor doors, if any, shall

also be closed during times when the air conditioning equipment in the Complex

is operating so as not to dissipate the effectiveness of the system or place an

overload thereon.

 

25.          Intentionally Deleted.

 

26.          Intentionally Deleted.

 

27.          No awning or

other projection shall be attached to the outside walls of the Complex.  No curtains, blinds, shades or screens

visible from the exterior or interior common area of the Complex or visible

from the exterior of the Property, shall be attached to, hung in, or used in

connection with any window or door of the Property without the prior written

consent of Landlord.  Such curtains,

blinds, shades, screens or other fixtures must be of a quality, type, design

and color, and attached in manner approved by Landlord.

 

28.          Tenant and

Tenant’s employees, agents, visitors and licensees shall observe faithfully and

comply strictly with the foregoing rules and regulations and such other and

further appropriate rules and regulations as Landlord or Landlord’s agent may

from time to time adopt.  Reasonable

notice of any additional rules and regulations shall be given in such manner as

Landlord may reasonably elect.

 

33

 

29.          Landlord reserves the right at any

time to rescind, alter or waive, in whole or in part, any of these Rules and

Regulations when deemed necessary, desirable, or proper, in Landlord’s reasonable

judgment, for its best interest or for the best interest of the tenants of the

Complex.  Tenant reserves the right to

refuse compliance with any subsequent additional rules and regulations added to

those agreed to at the time of signing the lease.

 

30.          Intentionally

Deleted.

 

31.                               Any

trash dumpsters must be kept inside the premises.

 

32.          No outside

storage of materials is allowed. (This includes trailer storage parked longer

than 96 hours.

 

33.          To the extent

these rules are in conflict with the terms of the Lease, the terms of the Lease

shall rule and govern.

 

34

 

EXHIBIT E

 

See Plans & Specifications

 

35Exhibit 10.01

 

LOAN AGREEMENT

 

This LOAN

AGREEMENT (“Agreement”) is made and entered into as of November 4, 2002, by and

between ZAMBA

CORPORATION and ENTRX CORPORATION.

 

RECITALS:

 

FIRST:                   Borrower and Lender have

agreed to an arrangement whereby Lender will extend to Borrower a loan of up to

$2,500,000 (the “Loan”), the proceeds of which are to be advanced in three

stages; and

 

SECOND:             Lender and

Borrower have agreed to such Loan, subject to the terms and upon the conditions

contained herein.

 

AGREEMENT

 

NOW, THEREFORE,

for good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, Borrower and Lender hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND

ACCOUNTING TERMS

 

1.1           Definitions.  As used herein, in each exhibit or schedule

hereto and in each other Loan Document (unless otherwise expressly defined

therein), the following terms shall have the following respective meanings

(such terms to be equally applicable to both the singular and plural forms of

the terms defined):

 

“Advances”

shall mean, collectively, the First, Second and Third Advances, with such

advances being respectively defined as set forth in Section 3.1.1 hereof.

 

“Agreement”

means this Loan Agreement by and between Borrower and Lender, as the same may

be amended, modified or restated from time to time hereafter.

 

“Borrower”

means Zamba Corporation, a Delaware corporation.

 

“Business

Day” means a day on which Lender is open for the

normal transaction of business in Minnesota.

 

“Collateral”

shall mean up to 833,333 shares of NextNet Series A Preferred Stock which are

owned by Borrower and which are more fully described in the Pledge Agreement.

 

“Conversion

Securities” means, as applicable, the shares of

Borrower’s common stock issuable upon conversion of the Note, or (ii) shares of

NextNet Series A Preferred Stock which are owned by Borrower and which are

issuable upon conversion of the Note.

 

1

 

“Default”

means the occurrence of any event which with the giving of notice and/or the

lapse of any applicable grace period would constitute an Event of Default

hereunder.

 

“Disclosure

Materials” shall have the meaning set forth in

Section 4.2 hereof.

 

“Event

of Default” means the occurrence of an event as

described in Article IX of this Agreement.

 

“Exchange

Act” means the Securities Exchange Act of 1934, as

amended.

 

“GAAP”

means accounting principles generally accepted in the United States

consistently applied and maintained throughout the period indicated, except for

changes mandated by the Financial Accounting Standard Board or similar

accounting authority of comparable standing.

 

“Lender”

means Entrx Corporation, a Delaware corporation.

 

“Loan

Documents” means this Agreement, the Note and the

Pledge Agreement as the same may be amended, modified or restated from time to

time.

 

“Material

Adverse Occurrence” means any occurrence, state of

facts, change, development, effect, condition, circumstance or failure of

performance, whether or not insured against, of whatsoever nature (including,

without limitation, any adverse determination in any litigation, arbitration or

governmental investigation or proceeding) which Lender determines in its sole

reasonable discretion, has, will or could reasonably be expected to materially adversely

affect the business, assets, financial condition or results of operations of

Borrower or NextNet as applicable, or materially impair the ability of Borrower

to perform its obligations under this Agreement or any instrument executed

pursuant hereto.

 

“Maturity

Date” means March 31, 2003.

 

“NextNet”

means NextNet Wireless, Inc., a Delaware corporation.

 

“Note”

means that certain Secured Convertible Promissory Note, dated of even date

herewith, made payable to Lender’s order by Borrower, in the original principal

amount of $2,500,000, as the same may be amended, restated or extended from

time to time hereafter.

 

“Option”

shall mean Borrower’s option to purchase up to 250,000 shares of NextNet Series

A Preferred Stock owned by Lender in accordance with the provisions of Section

3.3 hereof.

 

“Pledge

Agreement” means that certain Escrow Pledge

Security Agreement, dated of even date herewith, by and among Borrower, Lender

and Wells Fargo Bank Minnesota, N.A., as collateral agent (“Collateral Agent”).

 

2

 

“Security

Interest” means any security interest, pledge,

lien, hypothecation or other encumbrance now or hereafter granted to Lender by

Borrower.

 

1.2           Accounting Terms and

Calculations.  All accounting terms

used herein shall be interpreted and all accounting determinations hereunder

shall be made in accordance with GAAP. 

To the extent any change in GAAP after the date hereof affects any

computation or determination required to be made pursuant to this Agreement,

such computation or determination shall be made as if such change in GAAP had

not occurred unless Borrower and Lender agree in writing on an adjustment to

such computation or determination to account for such change in GAAP.

 

1.3           Computation of Time

Periods.  In this Agreement, in the

computation of a period of time from a specified date to a later specified

date, unless otherwise stated the word “from” means “from and including” and

the word “to” or “until” each means “to but excluding.”

 

1.4           Other Definitional

Terms.  The words “hereof,” “herein”

and “hereunder” and words of similar import when used in this Agreement shall

refer to this Agreement as a whole and not to any particular provision of this

Agreement, section, schedule, exhibit and like references are to this Agreement

unless otherwise clearly requires, and “or” has the inclusive meaning

represented by the phrase “and/or.”  The

singular includes the plural and the singular.

 

ARTICLE II

DOCUMENTS DELIVERED HEREWITH

 

This Agreement

shall include the following documents, all of which shall be attached hereto

and incorporated herein by this reference:

 

(a)           The Note, appropriately

completed and duly executed by Borrower.

 

(b)           The Pledge Agreement,

duly executed by Borrower and with the Collateral, with duly executed

assignments separate from certificates, delivered to the Collateral Agent

designated therein.

 

Delivery of

the forgoing executed documents to Lender and the Collateral to the Collateral

Agent with duly executed Assignments Separate From Certificates for all of the

Collateral is an express condition to Lender’s obligations herein.

 

ARTICLE III

COMMITMENT OF LENDER

 

3.1           Loan.

 

3.1.1        Loan.  Subject to the terms and conditions of this

Agreement, Lender agrees to make a loan to Borrower of up to $2,500,000, to be

advanced in stages with the initial advance (“First Advance”) of $1,000,000.00

to be made on the later of (i) the date hereof or (ii) the date on which the

conditions in Article II are satisfied and all restrictions or conditions, including

but not limited to any right of first refusal, for transfer or conveyance to

Lender of the Collateral or shares reserved for the Option are waived,

 

3

 

removed or

satisfied; the second advance (“Second Advance”) of $750,000.00 to be made no

later than December 15, 2002, subject to the satisfaction of the requirements

set forth in Section 3.1.2 hereof; and the third advance (“Third Advance”) of

$750,000.00 to be made no later than February 15, 2003, subject to the

satisfaction of the requirements set forth in Section 3.1.3 hereof.

 

3.1.2        Second Advance

Borrowing Procedure.  Lender shall

be obligated to advance to Borrower, and Borrower shall be obligated to borrow

from Lender, the Second Advance on December 15, 2002, provided all of the

following conditions are satisfied: (i) Borrower has provided to Lender written

evidence satisfactory to Lender that Borrower’s loss from operations (which

shall be determined in a manner consistent with Borrower’s presentation of such

number in its Quarterly Report on Form 10-Q for Borrower’s fiscal quarter ended

June 30, 2002) for the period from October 1, 2002 through November 30, 2002 is

no greater than $515,000;  (ii) no Material

Adverse Occurrence exists or has occurred; (iii) each and every representation,

warranty and covenant made by Borrower herein was true on the date made and

remains true as of the date of the Second Advance; and (iv) no event has

occurred which constitutes, or with the passage of time or giving of notice

would constitute, an Event of Default by Borrower  herein. Lender may in its discretion waive the failure of any

condition stated above and provide the Second Advance.

 

3.1.3        Third Advance

Borrowing Procedure.  Lender shall

be obligated to advance to Borrower, and Borrower shall be obligated to borrow

from Lender, the Third Advance on February 15, 2003, provided all of the

following conditions are satisfied: (i) Borrower has provided to Lender written

evidence satisfactory to Lender that 

Borrower’s loss from operations (which shall be determined in a manner

consistent with Borrower’s presentation of such number in its Quarterly Report

on Form 10-Q for Borrower’s fiscal quarter ended June 30, 2002) for the period

from October 1, 2002 through January 31, 2003 is no greater than $807,000; (ii)

no Material Adverse Occurrence exists or has occurred; and (iii) each and every

representation, warranty and covenant made by Borrower herein was true on the

date made and remains true as of the date of the Third Advance; and (iv) no

event has occurred which constitutes, or with the passage of time or giving of

notice would constitute, an Event of Default by Borrower  herein. To the extent that Borrower does not

satisfy the conditions set forth in Section 3.1.2 above to Lender making the

Second Advance, but satisfies the conditions set forth in this Section 3.1.3 to

Lender making the Third Advance, the amount advanced by Lender in connection

with the Third Advance shall include the amount not previously advanced by

Lender in connection with the Second Advance. 

Lender may in its discretion waive the failure of any condition stated

above and provide the Third Advance.  

 

3.1.4        Borrower Remedies.  In the event of Lender’s breach of its

obligation to make the First Advance on the date required pursuant to section

3.1.1, or the Second Advance or the Third Advance within ten (10) days of when

required (if required) herein,(i) the Option shall be terminated, after which

date the Option shall be of no further force or effect, (ii) interest shall

cease to accrue or be payable on any amount outstanding under the Note, (iii)

Lender shall forfeit all its rights to convert any amounts then outstanding

under the Note into Borrower’s common stock, and (iv) any amounts then outstanding

under the Note shall automatically convert into a pro rata amount of shares of

the NextNet Series A Preferred Stock at a price of $6.00 per share (or $2.00

per

 

4

 

common share

equivalent) pursuant to Article VI herein. 

Further, Lender acknowledges that upon any such occurrence, Borrower

shall be automatically free of its obligations to (x) keep the Collateral,

other than Collateral then subject to conversion under Sections 3.1.2, 3.1.3,

6.1.1 or otherwise for Advances made and outstanding, free from any

encumbrances, (y) keep reserved a sufficient number of shares of its NextNet

Series A Preferred Stock for issuance pursuant to Lender’s exercise of the

Option, or (z) keep reserved a sufficient number of shares of its common stock

for issuance upon any conversion of the Note. 

Lender further agrees to execute any and all documents requested by

Borrower evidencing the loss of its rights set forth in (i), (ii), (iii) and

(iv) above. The remedies set forth in this Section 3.1.4 are the sole and

exclusive remedies available for an Event of Default by Lender or any other

breach by Lender of this Loan Agreement, including Lender’s breach of any

obligation to make an Advance to Borrower. 

Lender shall have no liability to Borrower or any third party for direct

or consequential damages that may arise or occur as a result of any breach of

this Agreement by Lender, including any failure to make the First Advance,

Second Advance or Third Advance hereunder, it being the express agreement of

the parties hereto that the remedies set forth in this paragraph are the

exclusive remedies for any breach by Lender.

 

3.1.5        Interest.  The outstanding principal balance of the

Note shall bear interest as provided therein through the Maturity Date.  Interest accrued on Advances made under the

Note through the last day of each calendar month shall be payable on the

fifteenth day of the next succeeding calendar month, as more fully set forth in

the Note.  Interest shall cease to accrue

following the Maturity Date.

 

3.1.6        Repayment of

Principal.  Subject to the

provisions elsewhere set forth herein, the outstanding unpaid principal balance

of the Note shall be convertible in full on March 31, 2003.

 

3.2           General Terms

 

3.2.1        Computations.  Interest on the Note shall be computed

utilizing the actual number of days elapsed in a year of 360 days.

 

3.2.2        Time and Method of

Payments.  All payments and

prepayments by Borrower on the Note shall be made in immediately available

funds to Lender at its office in Minneapolis, Minnesota, not later than 2:00

p.m. (Minnesota time) on the day such payment is due.  Funds received after such hour shall be deemed to have been

received by Lender on the next Business Day.

 

3.2.3        Persons Authorized

to Request Advances.  Until

otherwise directed in writing by an Authorized Person, Borrower hereby

authorizes Lender, upon receipt of written instructions from any one of the

Authorized Persons, to make the Second and Third Advances against the Note in

the amounts and on the dates designated by such Authorized Persons.  The list of Authorized Persons may be

changed at any time upon written notice to Lender.  Lender may assume, and act upon the assumption, that any person

giving Lender instructions hereunder is the person he or she purports to be.

 

3.3           Option.  Subject to the provisions of Section 3.1.4,

Lender shall have the option (the “Option”), but not the obligation, to

purchase from Borrower up to an additional 250,000 shares

 

5

 

of Borrower’s shares of NextNet

Series A Preferred Stock at a price of $6.00 per share.  Subject to the provisions of Section 3.1.4,

the parties agree and acknowledge that this Option will automatically expire on

April 15, 2003 (the “Expiration Date”). Lender may exercise the Option in the

partial amount of $300,000 for 50,000 shares of Borrower’s shares of NextNet

Series A Preferred Stock at a price of $6.00 per share ($2.00 per common share

equivalent) at any time on or before the Expiration Date (the “Partial

Exercise”).  If Lender timely exercises

the Partial Exercise, the Option for the remaining shares shall be extended to

5:00 p.m. (Minneapolis time) on July 15, 2003. 

To the extent that Lender exercises this Option or exercises the Partial

Exercise, the parties agree to take reasonable steps to cause a closing on the

sale of any such shares to occur at a mutually convenient time and place and to

deliver such additional documents in connection therewith as shall be, in good

faith, reasonably requested by each party.

 

3.4           Representation on

Borrower’s Board of Directors.  Upon

provision of the First Advance, Lender shall have the right to appoint one (1)

representative to be a member of the Board of Directors of Borrower.

 

ARTICLE IV

BORROWER

REPRESENTATIONS AND WARRANTIES

 

To induce

Lender to enter into this Loan Agreement and to make the Advances, Borrower

hereby represents and warrants to Lender that:

 

4.1           Corporate Existence.  Borrower is a corporation duly organized,

validly existing and in good standing under the laws of the State of Delaware,

has the requisite power and authority to own its property and to transact the

business in which it is now engaged, and is duly qualified as a foreign

corporation and is in the good standing to do business in the State of

Minnesota and every other jurisdiction in which the nature of its business or

properties makes such qualification necessary, except where the failure to be

so qualified would not have a Material Adverse Occurrence on Borrower.

 

4.2           Disclosure.  In connection with the purchase of the Note

by Lender, Borrower has provided Lender with copies the following

documents:  (i) this Agreement,

including the form of Note; (ii) Borrower’s unaudited financial statements as

of September 30, 2002, are as to be included in Borrower’s next Form 10-Q in

accordance with GAAP on a method consistent with its previous Form 10-K; (ii)

Borrower’s Annual Report on Form 10-K for Borrower’s fiscal year ended December

31, 2001 (the “10-K”); and (iv) copies of all reports and other documents filed

by Borrower with the U.S. Securities and Exchange Commission since April 1,

2002, the date on which Borrower filed the 10-K (all such materials being

collectively referred to herein as the “Disclosure Materials”).  For the purposes hereof, if any such

Disclosure Materials are available on the Securities and Exchange Commission’s

EDGAR database or on Borrower’s website located at www.zambasolutions.com, all

such materials shall be deemed to be provided to Lender for the purposes

hereof.

 

4.3           Corporate Power and

Authority.  Borrower has full

corporate power, right and authority to execute and deliver the Loan Documents,

to borrow the funds herein provided for, and to perform and observe each and

all of the matters and things provided for in said Loan Documents.  The execution and delivery of the Loan

Documents and the performance or observance of the terms thereof have been duly

authorized by all necessary Borrower Board of Directors action and do not

contravene or violate any provision of law or any charter or bylaw

 

6

 

provision or any covenant,

indenture or agreement of or binding upon Borrower, nor require the consent or

approval of, or registration, filing or declaration with, any governmental

entity or agency thereof. This Agreement and each of the other Loan Documents,

are the legal, valid and binding obligation of Borrower enforceable against

Borrower in accordance with their respective terms, subject only to bankruptcy,

insolvency, reorganization, moratorium or similar laws at the time in effect

affecting the enforceability of rights of creditors generally.

 

4.4           Liens.  Subject to the conditions and restrictions

described in Section 5.7, Borrower has good and marketable title to the

Collateral, which is not subject to any mortgage, pledge, title retention lien,

restriction, condition or other lien, encumbrance or security interest of any

kind.

 

4.5           Accuracy of

Information.  All Disclosure

Information heretofore or contemporaneously furnished by or on behalf of

Borrower to Lender for purposes of or in connection with this Agreement or any

transaction contemplated hereby is, and all other such factual information

hereafter furnished by or on behalf of Borrower to Lender will be, true and

accurate in every material respect on the date as of which such information is

dated or certified and not be incomplete by omitting to state any material fact

necessary to make such information not misleading on such date. If any

Disclosure Information provided to Lender becomes untrue or inaccurate at any

time prior to the time of any Advance to be made hereunder, Borrower shall

promptly (and in any event prior to any future Advance) inform Lender in

writing of all information that has become untrue or inaccurate.

 

4.6           Consents, etc.  No consent, approval, authorization of, or

registration, declaration or filing with any governmental authority is required

on the part of Borrower or Nextnet, or if consent, approval, authorization of,

or registration, declaration or filing with any governmental authority is

required, such consent, approval, authorization of, or registration,

declaration or filing has been obtained and provided,  in connection with the execution and delivery of this Agreement

or the other Loan Documents or the performance of or compliance with the terms,

provisions and conditions hereof, other than those which may be required under

the Securities Act of 1933, as amended, or the Exchange Act.

 

4.7           Licenses, Permits,

Etc.  Borrower owns or possesses all

licenses and permits as are necessary to enable Borrower to conduct it’s

business as presently being conducted and as proposed to be conducted, except

for such conflicts which could not materially and adversely affect the

business, properties, operation or condition, financial or otherwise of

Borrower.

 

4.8           Litigation.  Except as set forth in Disclosure Schedule

4.8, there are no suits, actions or proceedings pending, or, to the knowledge

of Borrower, threatened against or affecting the Borrower, which, assert or may

assert claims exceeding in the aggregate $150,000.

 

4.9           Absence of Default.  Except as set forth in Disclosure Schedule

4.9,  Borrower to the best of Borrower’s

knowledge is not in default of a material provision under any material

agreement, instrument, decree or order to which it is a party or to which it or

its property is bound or affected.

 

4.10         NextNet Series A

Preferred Stock Conversion Rights. 

Each share of Series A Preferred Stock is convertible without cost at

any time at the option of the holder thereof into three shares of the NextNet’s

Common Stock Borrower is currently the registered owner of

 

7

 

approximately 1,300,834 shares

of NextNet Series A Preferred Stock. The registration rights described in

Section 1 and the right of first offer described in Section 2.6 of that Amended

and Restated Investors’ Rights Agreement dated July 10, 2000, are appurtenant

to the NextNet Series A Preferred Shares and are automatically assigned and

transferred with such Shares subject to the conditions stated in the Amended

and Restated Investor’s Rights Agreement.

 

That Second

Amended and Restated Certificate of Incorporation of NextNet Wireless, Inc,

dated July 7, 2000, a copy of which has been provided by Borrower to Lender, is

the current Certificate of Incorporation of NextNet Wireless, Inc. and there

have been no amendments or modifications to said Certificate.

 

4.11         No Restrictions on

Transferability of Collateral. 

There is no condition, restriction, rights of first refusal, prior

option or condition which would in any way limit, delay or condition the

transfer, assignment or conveyance of all or part of the Collateral to Lender

upon any event of conversion of Advances to Series A Preferred Stock under this

Agreement, or if any such condition, restriction, right of first refusal,

option or condition does exist, Borrower has obtained any waiver or termination

necessary to permit conversion of Advances to Series A Preferred Stock under

this Agreement free of any condition, restriction, right of first refusal,

prior option or condition.

 

4.12         Reservation of

Conversion Securities.  Subject to

the provisions of Section 3.1.4 above and Section 5.4 below, the shares of the

Company’s common stock issuable upon conversion of the Note will, at all times

while the Note remains outstanding and unpaid, be reserved for issuance and,

when issued and delivered in accordance with the terms thereof, will be duly

authorized, validly issued, fully paid and non-assessable and shall be free of

any pledges, liens, encumbrances and restrictions. Borrower shall reserve for

Lender an aggregate of 1,083,333 shares of its NextNet Series A Preferred Stock

to fulfill its obligations hereunder, including, but not limited to, the

issuance of the Conversion Securities and the issuance of shares upon exercise

of the Option.

 

4.13         No Event of Default by

Borrower.  No condition, event or

occurrence exists which with the passage of time or giving of notice would

constitute an  Event of Default by

Borrower pursuant to Section 9.1 of this Agreement.

 

ARTICLE V

LENDER REPRESENTATIONS AND WARRANTIES AND

COVENANTS

 

To induce

Borrower to enter into this Loan Agreement and to accept the Advances, Lender

hereby represents and warrants to Borrower that:

 

5.1           Corporate Existence.  Lender is a corporation duly organized,

validly existing and in good standing under the laws of the State of Delaware,

has the requisite power and authority to own its property and to transact the

business in which it is now engaged.

 

5.2           Corporate Power and

Authority.  Lender has full

corporate power, right and authority to execute and deliver the Loan Documents,

to loan the funds herein provided for, and to perform and observe each and all

of the matters and things provided for in said Loan Documents.  Lender was not organized for the purpose of

purchasing the Note or making an investment in the Conversion Securities.  The execution and delivery of the Loan

Documents and

 

8

 

the performance or observance

of the terms thereof have been duly authorized by all necessary Lender Board of

Directors action and do not contravene or violate any provision of law or any

charter or bylaw provision or any covenant, indenture or agreement of or

binding upon Lender.

 

5.3           Validity of

Obligations.  This Agreement and

each of the other Loan Documents, are the legal, valid and binding obligation

of Lender enforceable against Lender in accordance with their respective terms,

subject only to bankruptcy, insolvency, reorganization, moratorium or similar

laws at the time in effect affecting the enforceability of rights of creditors

generally.

 

5.4           Investment Intent.  The Note being entered into by Lender is

being purchased for investment for its own account and not with the view to, or

for resale in connection with, any distribution or public offering

thereof.  Lender understands that

neither the Note nor any Conversion Securities issuable upon conversion thereof

have been registered under the Act or any state securities laws by reason of

their contemplated issuance in transactions exempt from the registration

requirements of the Act and applicable state securities laws, and that the

reliance of Borrower upon these exemptions is predicated in part upon this

representation by Lender.  Lender

further acknowledges that the Note, and the Conversion Securities issuable upon

conversion thereof, may not be transferred or resold without (i) registration

under the Act and any applicable state securities laws, or (ii) an exemption

from the requirements of the Act and applicable state securities laws. Lender

acknowledges that any conversion by it of the Note into Conversion Securities

involves a highly speculative investment and a high degree of risk.  Lender acknowledges that it may not ever be

able to resell any of the Conversion Securities into which the Note may be

converted, whether at the applicable conversion price or otherwise.  Neither Borrower nor NextNet has any

obligation to register any of the Conversion Securities for resale under the

Act or any applicable state securities laws, or to take any other action which

would facilitate the availability of federal or state registration exemptions

in connection with any resale of such shares.

 

5.5           Residence,

Qualification as an Accredited Investor, etc.  Lender’s principal place of business is at the address set forth

in Section 10.3 hereof.  Lender is an

“accredited investor,” as that term is defined in Section 501(a) of the rules

and regulations promulgated under the Act. 

In connection with its purchase of the Note, Lender acknowledges that it

has made an independent due diligence investigation of Borrower and that

Borrower has made available to Lender at a reasonable time prior to the execution

of this Agreement the opportunity to ask questions and receive answers

concerning the business and affairs of Lender and the terms and conditions of

the sale of the Note contemplated by this Agreement and to obtain any

additional information (other than the Disclosure Materials which Lender

possesses or can acquire without unreasonable effort or expense) as may be

necessary to verify the accuracy of information furnished to Lender.  Lender (a) is able to bear the loss of its

entire investment in the Note without any material adverse effect on its

business, operations or prospects, (b) has such knowledge and experience in

financial and business matters that it is capable of evaluating the merits and

risks of the investment to be made by it pursuant to this Agreement, (c)

realizes that Borrower has a significant need for additional financing and

without such additional financing may be unable to continue operations or repay

the Note when due, (d) realizes that an investment in Borrower is highly

speculative and subject to significant risks including, without limitation,

those risks identified in the Disclosure Materials, and (e) acknowledges that

it has made its own independent investigation of Borrower’s business and

properties and that its decision to purchase the Note was not based upon its

reliance on any information which may been provided by

 

9

 

Borrower, other than the

Disclosure Materials, including, but not limited to, Borrower’s officers,

directors, employees, agents and other representatives.

 

5.6           NextNet’s Business.  Lender has been provided with or given

access to such information concerning NextNet, including, but not limited to,

its business, financial condition and prospects (collectively, “NextNet’s

Business”), as Lender has requested and/or deems necessary and has utilized

such information to Lender’s satisfaction for the purpose of agreeing to enter

into the Note.  Lender hereby

acknowledges that it has made its own independent investigation of NextNet’s

Business and that it is not relying on any information which may been provided

by Borrower, including, but not limited to, Borrower’s officers, directors,

employees, agents and other representatives, in connection with its agreement

to enter into the Note.

 

5.7           Nondistribution;

NextNet Agreements.  Lender agrees

and covenants that it will not sell or otherwise distribute or pledge in any

manner any Conversion Securities other than in accordance with applicable state

and federal securities laws, which may, if requested by Borrower and/or

NextNet, require the delivery by Lender to Borrower of an opinion of

Lender’s  legal counsel that any such

sale, distribution or pledge is exempt from the applicable provisions of such

laws.

 

In any event,

Lender hereby hold any Conversion Securities which consist of shares of NextNet

Series A Preferred Stock in accordance with and subject to the terms of the

Right of First Refusal Agreement dated as of September 21, 1998, among

Borrower, NextNet and the Series B purchasers identified therein. Lender agrees

to be bound by the transfer restrictions related to the NextNet Series A

Preferred Stock that are described in Section 3.6 of the Series A Preferred

Stock Purchase Agreement dated as of September 21, 1998, between Borrower and

NextNet (the “Series A Agreement”). 

Borrower represents that if Lender acquires at least 375,000 shares

of  NextNet Series A Preferred Stock

pursuant to this Agreement, the shares of NextNet Series A Preferred Stock will

be afforded the registration rights described in Section 1 and the right of

first offer described in Section 2.6 of that Investor’s Rights Agreement dated

July 10, 2000 among Borrower, NextNet and the investors and founders identified

therein. Lender and Borrower acknowledge and agree that any of Borrower’s

shares of NextNet Series A Preferred Stock acquired hereunder shall continue to

be subject to the obligations of, and shall have the benefits and rights in,

the terms and conditions of the Series A Agreement, the Investors” Rights

Agreement, and the Voting Agreement dated July 10, 2000 by and among NextNet,

Borrower and others, except for the provisions of those Agreements that by

their nature are not transferable or assignable to Lender.

 

5.8           Nonassignment.  Lender covenants and agrees that it shall

not assign any of its rights or delegate any of its duties set forth hereunder

to any third party, whether voluntarily, through operation of law or otherwise,

except Lender may subject to Section 5.7 and 5.4 sell any Conversion Securities

and shares acquired pursuant to exercise of Option.

 

5.9           Voting of NextNet

Series A Preferred Stock.  Until

such time as Borrower beneficially holds fewer than100,000 shares of NextNet

Series A Preferred Stock, Lender agrees to vote or act with respect to any of

its shares of NextNet Series A Preferred Stock so as to elect the nominee of

Borrower to be the representative of the Series A shareholders on the NextNet

Board of Directors.

 

10

 

ARTICLE VI

CONVERSION OF NOTE

 

6.1           NextNet Conversion.

 

6.1.1        At Lender’s option,

any time on or before March 31, 2003, Lender may convert all or part of the

outstanding Advances under the Note into shares of NextNet Series A Preferred

Stock owned by Borrower, or if such Series A Preferred Stock has been converted

into common stock of NextNet, such NextNet common stock.  Initially, the conversion rate (the “NextNet

Conversion Rate”) of such shares shall be the equivalent of one share of

NextNet Series A Preferred Stock or three shares of Common Stock for each $6.00

of principal amount of the Note ($2.00 per common share equivalent), subject to

adjustment as set forth herein.  The

NextNet Conversion Rate shall be adjusted prior to each conversion to equal the

lowest per share common equivalent price for any sale by Borrower or NextNet

subsequent to the date of this Agreement to a purchaser other than Lender or

persons or entities associated or affiliated with Lender of NextNet securities

at a common per share equivalent price of less than $2.00 prior to the time the

notice of conversion is given, to the extent the aggregate amount of the

transaction or transactions prior to the affected conversion exceed

$100,000.00.  Issuances of securities

pursuant to employee stock options and benefit plans and the issuance of any

security pursuant to an existing warrant or option shall not cause an

adjustment.  The NextNet Conversion Rate

for a conversion of Advances pursuant to this Section 6.1.1 shall not be

adjusted for sales made subsequent to the affected conversion.

 

6.1.2        In case NextNet shall

at any time exchange as a whole, by subdivision or combination in any manner or

by the making of a stock split or stock dividend, the number of common shares

or Series A Preferred Shares then outstanding into a different number of

shares, with or without par value, thereafter the number of common equivalent

shares or Series A Preferred Shares into which the principal balance of the

Note is convertible (calculated immediately prior to such change), shall be

increased or decreased, as the case may be, in direct proportion to the

increase or decrease in the number of common shares or Series A Preferred

Shares of NextNet by reason of such change.

 

6.1.3        In case of any

reclassification or change of outstanding common shares of NextNet (other than

a change in par value, or from par value to no par value, or from no par value

to par value, or as a result of a subdivision, combination or stock dividend as

provided for in Section 6.1.2), or in case of any consolidation of NextNet

with, or merger of the NextNet into, another corporation, or in case of any

sale of all, or substantially all, of the property, assets, business and

goodwill of NextNet as an entirety, the principal balance of the Note shall be

convertible into the  kind and amount of

shares of stock and other securities and property receivable upon such

reclassification, change, consolidation, merger or sale by a holder of a common

share of NextNet, adjusted for the NextNet Conversion Rate in effect

immediately prior to such reclassification, change, consolidation, merger or

sale or any further adjustment pursuant to Section 6.1.2 above.

 

6.2           Zamba Conversion.

 

6.2.1        Provided that Lender

had theretofore made all required Advances, and at Lender’s option any time on

or before March 31, 2003, Lender may convert all

 

11

 

outstanding

Advances under the Note into that number of Borrower’s shares of common capital

stock sufficient to cause Lender to own 20% of all of Borrower’s issued and

outstanding common stock immediately after such conversion.  Such conversion may occur only if the

following conditions are met:  (i)

Lender has disposed of its Metalclad Insulation Corporation operations and

obligations in a manner that is satisfactory to the Board of Directors of

Borrower in its reasonable discretion (which discretion may include an analysis

of continuing contingent liabilities resulting from the ownership of such

operations) and (ii) Lender has cash and reasonably liquid assets of

$7,500,000, less all Advances made through the date of conversion, as

determined by the Chief Financial Officer of Zamba, in his reasonable

discretion.

 

In case of any reclassification or change of outstanding common shares

of Borrower (other than a change in par value, or from par value to no par

value, or from no par value to par value, or as a result of a subdivision,

combination or stock dividend), or in case of any consolidation of Borrower

with, or merger of Borrower into, another corporation, or in case of any sale

of all, or substantially all, of the property, assets, business and goodwill of

Borrower as an entirety, subject to the provisions set forth above in Section

6.2.1, the principal balance of the Note shall be convertible into the kind and

amount of shares of stock and other securities and property receivable upon

such reclassification, change, consolidation, merger or sale by a holder of a

common share of Borrower.

 

6.3           Conversion

Procedures.

 

6.3.1        Borrower shall on the

date hereof deliver to Collateral Agent pursuant to the Pledge Agreement a

stock certificate or certificates representing 833,333 shares of Series A

Preferred Stock of NextNet, said certificate(s) to be duly endorsed in blank or

accompanied by Assignment(s) Separate from Certificate(s) duly endorsed in

blank.  If Lender desires to convert the

Note in accordance with the terms hereof, Lender shall surrender the Note to

Collateral Agent, or, if the Note has been lost, stolen, destroyed or

mutilated, then, in the case of loss, theft or destruction, Lender shall

deliver to Collateral Agent an indemnity agreement reasonably satisfactory in

form and substance to Borrower, or, in the case of mutilation, Lender shall

surrender to Collateral Agent and cancel the Note.

 

If Lender elects to convert to Borrower shares, Borrower shall, subject

to the provisions elsewhere set forth herein, issue and deliver or cause to be

issued and delivered to Lender at its address set forth below a certificate or

certificates for the number of Borrower’s common stock to which Lender shall be

entitled upon such conversion (bearing such legends as are reasonably required

by Borrower’s counsel). If Lender elects to convert to NextNet shares, the

Collateral Agent shall deliver to NextNet’s transfer agent the NextNet

certificate(s) duly endorsed or with appropriate Assignment(s) Separate From

Certicates(s) with instructions to issue and deliver certificates for the

appropriate number of NextNet shares to Lender and the balance of the shares to

be issued in a certificate to Borrower, provided however,  said certificate of Borrower is to be

returned and held by Collateral Agent pursuant to the terms of the Pledge

Agreement.

 

12

 

On April 1, 2003, the Collateral Agent shall return to Borrower all

shares of Collateral except, and Collateral Agent shall retain, a certificate

or certificates for 250,000 shares of Series A Preferred Stock  On August 31, 2003, Collateral still in the

possession of Collateral Agent shall be returned to Borrower.

 

6.3.2        No fractional shares

shall be issued upon conversion of the Note. 

In lieu of Borrower issuing any fractional shares to Lender upon the

conversion of the Note, Borrower shall pay or cause to be paid to Lender an

amount equal to the product obtained by multiplying the applicable conversion

rate by the fraction of a share not issued pursuant to the previous

sentence.  Upon conversion of the Note

in full, Borrower shall be forever released from all its obligations and

liabilities under the Note.

 

ARTICLE VII

AFFIRMATIVE COVENANTS

 

Borrower hereby covenants and

agrees with Lender that for so long as any amount remains unpaid on the Note

and for so long as Lender has any obligation to make advances thereunder,

Borrower will, unless Lender shall otherwise consent in writing:

 

7.1           Maintain Collateral.  Keep the Collateral free of any mortgage,

pledge, title retention lien, or other lien, encumbrance or security interest

of any kind.

 

7.2           Exchange Act Reports.

 Continue to timely file all reports

required to be filed by it under and pursuant to the Exchange Act.

 

7.3           Access to Records.  Subject to the execution by Lender or any of

its agents or representatives of a customary confidentiality agreement, at any

reasonable time and from time to time, upon reasonable notice and during normal

business hours, permit Lender or any agent or representative thereof, to

examine and make copies of and abstracts from the records and books of account

of, and visit the properties of, Borrower, and to discuss the affairs,

finances, and accounts of Borrower with any of its officers and directors.

 

7.4           Taxes, Assessments

and Charges.  Promptly pay over to

the appropriate authorities all sums for taxes deducted and withheld from wages

as well as the employer’s contributions relating thereto and promptly pay all

taxes, assessments and other governmental charges imposed upon or asserted

against Borrower’s income, profits, properties and activities and all claims

for labor, materials, supplies, rental charges or otherwise which are or might

become a lien charged upon Borrower’s properties, unless the same are being

contested in good faith by appropriate proceedings and adequate reserves shall

have been established on Borrower’s books with respect hereto.

 

7.5           Existence.  Preserve and maintain its corporate

existence and good standing in the jurisdiction of its incorporation and

continue in compliance in all material respects with all applicable statutes,

laws, rules and regulations.

 

7.6           Conduct of Business.  Continue to engage in a business of the same

general type as that now being conducted by Borrower on the date of this

Agreement, provided, however, that nothing contained in this Section shall

prevent Borrower from discontinuing any part of the

 

13

 

business of Borrower, if the

discontinuance is, in the opinion of the Board of Directors of Borrower, in the

best interests of Borrower.

 

ARTICLE VIII

NEGATIVE COVENANTS

 

Borrower

hereby covenants and agrees with Lender that so long as any amount shall remain

unpaid on any indebtedness of Borrower to Lender or Lender has any obligation

to make advances hereunder, Borrower will not, without the written consent of

Lender, create, assume, incur or suffer to exist any pledge, mortgage,

assignment or other lien or encumbrance of any kind, or upon any of the

Collateral.

 

ARTICLE IX

EVENTS OF DEFAULT

 

9.1           Events of Default by

Borrower.  The occurrence of any one

or more of the following events shall constitute an “Event of Default by

Borrower:”

 

9.1.1        Failure of Borrower

to make any payment when due of interest on the Note, provided that Borrower

shall have fifteen (15) days  from the

date on which it receives written notice from Lender of any such nonpayment of

interest to make such interest payment; or

 

9.1.2        Any material

representation by Borrower herein is untrue as of the date made or Borrower

defaults in the due performance and observance of any covenants in this

Agreement and such default continues for a period of thirty (30) days after

written notice from Lender.

 

9.1.3        On or prior to the

Maturity Date, Borrower applies for, consents to, or acquiesces in the

appointment of trustee or receiver of Borrower, or its property; or, in the

absence of such application, consent or acquiescence, a trustee or receiver is

appointed for Borrower, or for a substantial part of its property; or any

bankruptcy, reorganization, debt arrangement or other proceedings under any

bankruptcy or insolvency law is instituted by or against Borrower; or

 

9.1.4        On or prior to the

Maturity Date, any dissolution or liquidation proceeding is instituted by or

against Borrower; or

 

9.1.5        Judgments against

Borrower for the payment of money totaling in excess of $10,000,000.00 shall be

outstanding for a period of ninety (90) days without a stay of execution.

 

9.2           Lender’s Remedies.  If any Event of Default by Borrower shall

occur as a result of any of the events described in Section 9.1 above (taking

into account the applicable cure period set forth above), any amounts then

outstanding under the Note, including accrued interest, shall be converted into

Borrower’s shares of NextNet Series A Preferred Stock at the conversion price

of $3.00 per share ($1.00 per common share equivalent), unless at such time,

there is also an Event of Default by Lender (as defined below), in which case

all amounts then outstanding under the Note, including accrued interest, shall

be converted into Borrower’s shares of NextNet Series 

 

14

 

A Preferred Stock at the

conversion price of $6.00 per share ($2.00 per common share equivalent), after

either of which the obligations required in this Agreement or any other Loan

Document to be performed by  Borrower,

other than to have registered in Lender’s name and to deliver to Lender those

shares of NextNet Series A Preferred Stock which are transferable to Lender as

a result of such Event of Default by Borrower or Lender’s exercise of the

Option, shall automatically terminate and be of no further force or effect,

provided that if an Event of Default by Borrower occurs prior to Lender’s

making the Second or Third Advance, Lender shall not be required to make any

such advance.  Provided Lender receives

NextNet Series A Preferred Stock in accordance with the foregoing remedy, such

remedy shall be Lender’s sole remedy for an Event of Default by Borrower

described in Sections 9.1.1, 9.1.3, 9.1.4 and 9.1.5.

 

9.3           Event of Default by

Lender.  For the purposes hereof,

any failure by Lender to make any Advance if and when due shall constitute an

Event of Default by Lender.

 

ARTICLE X

MISCELLANEOUS

 

10.1         Binding Effect.  The parties hereto agree that this Agreement

shall be binding upon and inure to the benefit of their respective successors

in interest and assigns including any holder of the Note; provided however,

that Borrower may not assign or transfer its interest hereunder without the

prior written consent of Lender.

 

10.2         Governing Law.  This Agreement and the rights and obligations

of the parties hereunder and under the Note and any other documents delivered

herewith shall be interpreted and construed in accordance with and governed by

the laws of the State of Minnesota.

 

10.3         Notices.  Unless and until notified otherwise in writing,

any and all notices and other communications required or permitted under this

Agreement shall be effectively delivered for all purposes, if delivered

personally or by telecopier, upon the date delivered or the telecopied message

is received, or if mailed, three (3) Business Days after deposit in the United

States mail, first class postage prepaid properly addresses to the parties at

the addresses set forth below:

 

	

  If to

  Borrower:

  	

  Zamba

  Corporation

  
	

   

  	

  3033

  Excelsior Boulevard

  
	

   

  	

  Suite 200

  
	

   

  	

  Minneapolis,

  Minnesota 55416

  
	

   

  	

  Attention:

  Norm Smith, Chief Executive Officer

  
	

   

  	

  Facsimile:

  (952) 893-3948

  
	

   

  	

   

  
	

  with a copy

  to:

  	

  Ian Nemerov,

  Esq.

  
	

   

  	

  General

  Counsel

  
	

   

  	

  Zamba

  Corporation

  
	

   

  	

  3033

  Excelsior Boulevard

  
	

   

  	

  Suite 200

  
	

   

  	

  Minneapolis,

  Minnesota 55416

  
	

   

  	

  Facsimile:

  (952) 893-3935

  

 

15

 

	

  If to

  Lender:

  	

  Entrx

  Corporation

  
	

   

  	

  800 Nicollet

  Mall

  
	

   

  	

  Suite 2690

  
	

   

  	

  Minneapolis,

  Minnesota 55402

  
	

   

  	

  Attention:

  Wayne W. Mills, Chief Executive Officer

  
	

   

  	

  Facsimile:

  (612) 338-7332

  
	

   

  	

   

  
	

  with a copy

  to:

  	

  Roger

  Frommelt, Esq.

  
	

   

  	

  Felhaber,

  Larson, Fenlon & Vogt

  
	

   

  	

  225 S. Sixth

  Street

  
	

   

  	

  Suite 4200

  
	

   

  	

  Minneapolis,

  Minnesota 55402

  
	

   

  	

  Facsimile:

  (612) 338-4608

  

 

10.4         No Waivers.  No failure or delay on the part of Lender in

exercising any right, power or privilege hereunder and no course of dealing

between Borrower and Lender shall operate as a waiver thereof; nor shall any

single or partial exercise of any right, power or privilege hereunder preclude

any other or further exercise thereof or the exercise of any other right, power

or privilege.

 

10.5         Headings.  The headings of various sections of this

Agreement have been inserted for reference only and shall not be deemed to be a

part of this Agreement.

 

10.6         Amendment and Waiver.  Neither this Agreement nor any provision

hereof may be modified, waived, discharged or terminated orally, but only by an

instrument in writing signed by the party against whom enforcement of the

change, waiver, discharge or termination is sought.

 

10.7         Time of the Essence.  The parties hereto agree that time shall be

of the essence when determining their respective obligations hereunder.

 

10.8         Confidentiality.  Lender and Borrower hereby acknowledge each

other’s status as a public company. 

Further Lender and Borrower, together with their respective  Representatives (as defined below)

acknowledge that each may, from time to time, be provided with confidential

information that Borrower or Lender has not otherwise disclosed publicly.  Regardless, Lender, on behalf of itself and

it’s Representatives, and Borrower on behalf of itself and it’s

Representatives, agrees to hold all information, whether financial or

otherwise, disclosed to it or them by other pursuant to the terms hereof

strictly confidential and to not disclose such information to anyone, other

than their respective representatives and advisors (collectively,

“Representatives”) who have a need to know such information, provided that

prior to any such disclosure, the disclosing party makes all such persons aware

of its confidentiality obligations set forth herein.  Further, Lender, on behalf of itself and it’s Representatives,

and Borrower, on behalf of itself and it’s Representatives,  acknowledges that by virtue of its and their

receipt and possession of such information, it and they may be prohibited from,

among other things, engaging in purchases or sales of Borrower’s and

Lender’s  securities.

 

10.9         Limited Recourse.  Borrower’s and Lender’s liabilities are

limited as provided in Sections 3.1.4 and 9.2 herein.

 

16

 

IN WITNESS WHEREOF,

the parties hereto have caused this Loan Agreement to be executed and delivered

the date and year first above written.

 

	

   

  	

  ZAMBA CORPORATION,

  a Delaware corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By 

  	

  /s/ Michael

  H. Carrel

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name: [Michael H. Carrel

  	

  ]

  	

   

  
	

   

  	

   

  	

  Title: [CFO

  	

  ]

  	

   

  
	

   

  	

   

  
	

   

  	

  ENTRX CORPORATION,

  
	

   

  	

  a Delaware

  corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By 

  	

  /s/ Kenneth

  W. Brimmer

  	

   

  	

   

  	 

	

   

  	

   

  	

  Name: [Kenneth W. Brimmer

  	

  ]

  	

   

  
	

   

  	

   

  	

  Title: [Chairman

  	

  ]

  	

   

  
								

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]