Document:

Exhibit 10.11

 

BAKER
CENTER

LEASE OF OFFICE SPACE

 

	
  DATE:

  	
   

  	
  November 18, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BETWEEN:

  	
   

  	
  ST. PAUL
  PROPERTIES, INC.

  	
   

  	
   

  
	
  (address)

  	
   

  	
  400 U.S.
  Trust Building

  	
   

  	
   

  
	
   

  	
   

  	
  730 Second
  Avenue South

  	
   

  	
   

  
	
   

  	
   

  	
  Minneapolis,
  MN 55402

  	
   

  	
  (“Landlord”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
  ESCHELON TELECOM, INC.

  	
   

  	
   

  
	
   

  	
   

  	
  900 U.S. Trust Building

  	
   

  	
   

  
	
   

  	
   

  	
  730 Second Avenue South

  	
   

  	
   

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  	
   

  	
  (“Tenant”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FOR PREMISES
  IN:

  	
   

  	
  Roanoke, Investors and U.S.  Trust
  Buildings

  

 

LANDLORD AND TENANT, in
consideration of the covenants herein contained, hereby agree as follows:

 

ARTICLE
1.00  DEFINITIONS

1.01                           Definitions  In this Lease:

 

(a)               “Annual
Rent” means the amount payable by Tenant to Landlord in respect of each year of
the Term under Article 4.01.

 

(b)              “Article”
means an article of this Lease.

 

(c)               “Commencement
Date” means the date set forth in Article 3.01 as the first day of the Term.

 

(d)              “Exhibit
A” means the plan(s) attached hereto as Exhibits A1 - A4.

 

(e)               “Exhibit
B” means the provisions relating to Occupancy Costs for the Buildings in which the Premises are located  and
other matters attached hereto as Exhibits B-1 for Roanoke Premises, B-2 for Investors Premises and B-3 for the
U.S.  Trust Premises.

 

(f)                 “Exhibit
C” means the Rules and Regulations attached hereto as Exhibit C.

 

(g)              “Exhibit D”
means Supplemental Terms and Conditions attached hereto as Exhibit D.

 

 

(h)              “Exhibit E” means
Construction Procedures attached hereto as Exhibit E.

 

(i)                  “Expiration
Date” means the date set forth in Article 3.01 as the last day of the Term.

 

(j)                  “Fiscal
Year” means the calendar year unless Landlord elects by thirty (30) days’
notice to Tenant that Fiscal Year shall mean a twelve-month period from time to
time determined by Landlord, with concurrence of the appropriate taxation
authorities, at the end of which Landlord’s books are balanced for auditing or
taxation purposes.

 

(k)               “Lease”
means this lease, Exhibits A, B, C, D and E to this lease, and every properly executed
instrument which by its terms amends, modifies or supplements this lease.

 

(I)                 “Occupancy
Costs” means amounts payable by Tenant to Landlord under Article 4.02.

 

(m)            “Other
Charges” means amounts payable by Tenant to Landlord under Article 4.03.

 

(n)              “Roanoke Premises” means the area on
the ninth floor of the Roanoke Building, defined as Building in Exhibit B1, and
indicated on Exhibit A-1, hereby deemed to contain 15,127 square feet.

 

(o)              “Investors Premises” means the area
on the ninth floor of the Investors Building, defined as Building in Exhibit
B-2, and indicated on Exhibit A-2, hereby deemed to contain 32,081 square feet.

 

(p)              “U.S.  Trust Premises” means the area on the ninth floor as indicated on
Exhibit A-3, hereby deemed to contain 24,053 square feet and the area on the
eighth floor as indicated on Exhibit A-4, hereby deemed to contain 21,229
square feet, plus for the calculation of rent only, an additional 2,547 square
feet in the U.S.  Trust Building,
defined as Building in Exhibit B-3.

 

(q)              “Premises” means the Roanoke,
Investors and U.S.  Trust Premises.

 

(r)                 “Rent”
means the aggregate of all amounts payable by Tenant to Landlord under Articles
4.01, 4.02 and 4.03.

 

(s)               “Term”
means the period of time set out in Article 3.01.

 

(t)                 “Buildings” means the Roanoke
Building, as defined as Building under Section 1.01 (d) of Exhibit B-1,
Investors Building, as defined as Building under Section 1.01 (d) of Exhibit
B-2 and U.S.  Trust Building as defined
under Section 1.01 (d) of Exhibit B-3..

 

Other words
and phrases are defined in Exhibit B.

 

2

 

ARTICLE
2.00  GRANT OF LEASE

 

2.01                           Grant  Landlord hereby demises and leases the Premises to
Tenant, and Tenant hereby leases and accepts the Premises from Landlord, to
have and to hold during the Term, subject to the terms, covenants and conditions
of this Lease.

 

2.02                           Quiet Enjoyment  So long as Tenant observes and performs all
of the terms, covenants and conditions to be observed and performed by Tenant
under this Lease, Tenant shall quietly have, hold and enjoy possession of the
Premises during the Term subject to the terms and conditions of this Lease.

 

2.03                           Covenants of Landlord and Tenant  Landlord covenants to observe and perform
all of the terms and conditions to be observed and performed by Landlord under
this Lease.  Tenant covenants to pay the
Rent when due under this Lease, and to observe and perform all of the terms and
conditions to be observed and performed by Tenant under this Lease.

 

ARTICLE
3.00  TERM AND POSSESSION

 

3.01                           Term  Notwithstanding Articles 3.02 and 3.03, the
term of this Lease shall be nine (9) years, beginning on the first day of the month
of December, 2003 and
ending on the last day of the month of November, 2012, unless terminated earlier as provided in
this Lease.

 

3.02                           Delivery Date  The date which Landlord will make the
Premises available for commencement of Tenant’s Work in accordance with Exhibit
E, which date is now scheduled to occur on or about December 1, 2003, provided
that Landlord may in its absolute discretion adjust such date from time to time
upon notice to Tenant.

 

3.03                           Delayed Possession  If Landlord is delayed in delivering
possession of all or any portion of the Premises to Tenant on or before the
Commencement Date, then Tenant shall take possession of the Premises on the
date (not later than one year after the Commencement Date) when Landlord
delivers possession of all of the Premises. 
This Lease shall not be void or voidable nor shall Landlord be liable to
Tenant for any loss or damage resulting from any delay in delivering possession
of the Premises to Tenant nor shall any delay be construed in any way to affect
the Expiration Date, but, unless such delay is principally caused by or
attributable to Tenant, its servants, agents or independent contractors, no
Rent shall be payable by Tenant for the period prior to the date on which
Landlord can so deliver possession of all of the Premises, unless Tenant elects
to take possession of a portion of the Premises whereupon Rent shall be payable
in respect of that portion from the date such possession is so taken.

 

3.04                           Acceptance of Premises  Taking possession of all or any portion of
the Premises by Tenant shall be conclusive evidence as against Tenant that the
Premises or such portion thereof are in satisfactory condition on the date of
taking possession.

 

ARTICLE
4.00  RENT AND OCCUPANCY COSTS

 

4.01                           Annual Rent  Tenant shall pay to Landlord as Annual Rent
for the Premises the annual sum of:

 

Five hundred
twenty-two thousand seven hundred three and 50/100 dollars

 

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($522,703.50) with
respect to the period commencing on December 1, 2003 through November 30, 2004;

 

Seven hundred twelve
thousand seven hundred seventy-seven and 50/100 dollars ($712,777.50) with
respect to the period commencing on December 1, 2004 through November 30, 2005;

 

Seven hundred
thirty-six thousand five hundred thirty-six and 75/100 dollars ($736,536.75)
with respect to the period commencing on December 1, 2005 through November 30,
2006;

 

Seven hundred sixty
thousand two hundred ninety-six and 00/100 dollars ($760,296.00) with respect
to the period commencing on December 1, 2006 through November 30, 2007;

 

Seven hundred
eighty-four thousand fifty-five and 25/100 dollars ($784,055.25) 

with respect to the
period commencing on December 1, 2007 through November 30, 2008;

 

Eight hundred seven
thousand eight hundred fourteen and 50/100 dollars ($807,814.50) with respect
to the period commencing on December 1, 2008 through November 30, 2009;

 

Eight hundred
thirty-one thousand five hundred seventy-three and 75/100 dollars ($831,573.75)
with respect to the period commencing on December 1, 2009 through November 30,
2010;

 

Eight hundred
fifty-five thousand three hundred thirty-three and 00/100 dollars ($855,333.00)
with respect to the period commencing on December 1, 2010 through November 30,
2011;

 

Eight hundred
seventy-nine thousand ninety-two and 25/100 dollars ($879,092.25) 

with respect to the
period commencing on December 1, 2011 through and including November 30, 2012.

 

payable in
advance and without notice in monthly installments (each equal to one-twelfth
of the Annual Rent) on the Commencement Date and on the first day of each
calendar month thereafter during the term.

 

4.02                           Occupancy Costs  Tenant shall pay to Landlord, at the times
and in the manner provided in Article 4.06, the Occupancy Costs determined for the Buildings in which the
Premises are located under Exhibit B-1 for Roanoke Premises, B-2 for Investors
Premises and B-3 for U.S.  Trust
Premises.

 

4.03                           Other Charges  Tenant shall pay to Landlord, at the times
and in the manner provided in this Lease or, if not so provided, as reasonably
required by Landlord, all amounts (other than that payable under Articles 4.01
and 4.02) which are payable by Tenant to Landlord under this Lease.

 

4

 

4.04                           Payment of Rent-General  All amounts payable by Tenant to Landlord
under this Lease shall be deemed to be Rent and shall be payable and
recoverable as Rent in the manner herein provided, and Landlord shall have all
rights against Tenant for default in any such payment as in the case of arrears
of rent.  Rent shall be paid to
Landlord, without deduction or set-off, in legal tender of the jurisdiction in
which the Building is located, at the address of Landlord as set forth in the
beginning of this Lease, or to such other person or at such other address as
Landlord may from time to time designate in writing.  Tenant’s obligation to pay Rent shall survive the expiration or
earlier termination of this Lease.

 

4.05                           Annual Rent - Partial Months  If the Term begins on a day other than the
first day of a calendar month or ends on a day other than the last day of a
calendar month, the installment of Annual Rent payable in respect of that
calendar month shall be that proportion of the Annual Rent which the number of
days in that calendar month which fall within the Term bears to 365.

 

4.06                           Payment - Occupancy Costs

 

(a)                                  Unless
delayed by causes beyond Landlord’s reasonable control, prior to the
Commencement Date and the beginning of each Fiscal Year thereafter, Landlord
shall compute and deliver to Tenant a bona fide estimate of Occupancy Costs for
the appropriate Fiscal Year.  Without
further notice Tenant shall pay to Landlord in monthly installments one-twelfth
of such estimate simultaneously with Tenant’s payments of Annual Rent during
such Fiscal Year.

 

(b)                                 Landlord
may at any time during a Fiscal Year compute and deliver to Tenant a revised
bona fide estimate of Occupancy Costs for that Fiscal Year, together with
Landlord’s determination of the adjustment to Tenant’s monthly installments of
Occupancy Costs for that Fiscal Year to fully recover the revised estimate of
Occupancy Costs in that Fiscal Year. 
Without further notice, Tenant shall pay to Landlord monthly
installments of Occupancy Costs in accordance with that adjustment.

 

(c)                                  Unless
delayed by causes beyond Landlord’s reasonable control, Landlord shall deliver
to Tenant within one hundred twenty (120) days after the end of each Fiscal
Year a written statement (the “Statement”) setting out in reasonable detail the
amount of Occupancy Costs for such Fiscal Year.  If the aggregate of monthly installments of Occupancy Costs
actually paid by Tenant to Landlord during such Fiscal Year differs from the
amount of Occupancy Costs payable for such Fiscal Year under Article 4.02,
Tenant shall pay, or if Tenant is not then in default under this Lease beyond
the applicable grace period, Landlord shall refund the difference (as the case
may be) without interest within thirty (30) days after the date of delivery of
the Statement.

 

(d)                                 If
Landlord and Tenant disagree on the accuracy of Occupancy Costs as set forth in
the Statement, Tenant shall nevertheless make payment in accordance with any
notice given by Landlord, and Landlord shall immediately refer the disagreement

 

5

 

to a public
accountant, architect, insurance broker or other professional consultant
selected by Landlord and approved by Tenant, which approval will not be
unreasonably withheld, who shall be deemed to be acting as an expert and not an
arbitrator, and a determination signed by the selected expert shall be final
and binding on both Landlord and Tenant. 
Any adjustment required to any previous payment made by Tenant or
Landlord by reason of any such decision shall be made within fourteen (14) days
thereof, and the party required to make payment under such adjustment shall
bear all costs of the expert making such decision, except where that payment
represents 3% or less of the Occupancy Costs that were the subject of the
disagreement in which case Tenant shall bear all such costs.

 

(e)                                  Neither
party may claim re-adjustment in respect of Occupancy Costs for a Fiscal Year
if based upon any error of computation or allocation except by notice delivered
to the other party within six months after the date of delivery of the
Statement.

 

ARTICLE
5.00  USE OF PREMISES

 

5.01                           Use  The Premises shall be used and occupied only
as executive, administrative, and general business offices of Tenant or for
such other purpose as Landlord may specifically authorize in writing.

 

5.02                           Compliance  The Premises shall be used and occupied in a
prudent, safe, careful and proper manner and in such manner as not to
contravene any present or future governmental or quasi-governmental laws in
force or regulations or orders, or to make void or voidable any insurance on
the Buildings.  If, due to Tenant’s
non-compliance with the foregoing sentence, Landlord’s insurance carrier(s)
reasonably imposes an increased or extra premium for Landlord’s insurance on
the Buildings, Tenant shall pay such increased or extra premium.  If, due solely to Tenant’s use of the
Premises, improvements are necessary to comply with any of the foregoing or
with the requirements of insurance carriers, Landlord, or Tenant at Landlord’s
election, shall make such improvements and, in either event, Tenant shall pay
the entire cost thereof.  Any such
improvements by Tenant shall comply with the provisions of Article 7.04.

 

5.03                           Abandonment  Tenant shall not vacate or abandon the
Premises at any time during the Term without Landlord’s prior written consent.

 

5.04                           Nuisance  Tenant shall not cause or maintain any nuisance in
or about the Premises, and shall keep the Premises free of debris, rodents,
vermin and anything of a dangerous, noxious or offensive nature or which could
create a fire hazard (through undue load on electrical circuits or otherwise)
or undue vibration, heat, odor or noise.

 

ARTICLE
6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD

 

6.01                           Operation of Buildings  During the Term Landlord shall operate and
maintain the Buildings in accordance with all applicable laws and regulations
and with standards from

 

6

 

time to time
prevailing for first-class office buildings in the area in which the Buildings
are located and, subject to participation by Tenant by payment of Occupancy
Costs under Article 4.02, shall provide the services set out in Articles 6.02
and 6.03.

 

6.02                           Services to Premises  Landlord shall provide in the Premises:

 

(a)                                  heat,
ventilation and cooling as required for the comfortable use and occupancy of
the Premises during normal business hours,

 

(b)                                 janitor
services, including bi-annual window washing, Monday through Friday, excluding
holidays, as reasonably required to keep the Premises in a clean and wholesome
condition, provided that Tenant shall leave the Premises in a reasonably
orderly condition at the end of each business day, and

 

(c)                                  maintenance,
repair and replacement as set out in Article 6.04.

 

6.03                           Building Services  Landlord shall provide in the Buildings:

 

(a)                                  domestic
running water and necessary supplies in washrooms sufficient for the normal use
thereof by occupants in the Buildings,

 

(b)                                 access
to and egress from the Premises, including elevator or escalator service if
included in the Buildings,

 

(c)                                  heat,
ventilation, cooling, lighting, electric power, domestic running water, and
janitor service in those areas of the Buildings from time to time designated by
Landlord for use during normal business hours by Tenant in common with all
tenants and other persons in the Buildings but under the exclusive control of
Landlord,

 

(d)                                 a
general directory board on which Tenant shall be entitled to have, at Tenant’s
cost, its name shown, provided that Landlord shall have exclusive control
thereof and of the space thereon to be allocated to each tenant, and

 

(e)                                  maintenance,
repair, and replacement as set out in Article 6.04.

 

6.04                           Maintenance, Repair and Replacement  Landlord shall operate, maintain, repair and
replace the systems, facilities and equipment necessary for the proper
operation of the Buildings and for provision of Landlord’s services under
Articles 6.02 and 6.03 (except such systems, facilities and equipment as may be
installed by or be the property of Tenant) and shall be responsible for and
shall maintain and repair the foundations, structure and roof of the Buildings
and repair damage to the Buildings which Landlord is obligated to insure
against under Article 9.00, provided that

 

(a)                                  if
all or part of such systems, facilities or equipment is destroyed, damaged,
impaired or taken by condemnation, Landlord shall have a reasonable time in
which to complete the necessary repair or replacement, and during that time
shall be required only to maintain such services as are reasonably possible in
the

 

7

 

circumstances,
and

 

(b)                                 Landlord
may temporarily reduce or discontinue such services or any of them at such
times as may be reasonably necessary due to causes (except lack of funds)
beyond the reasonable control of Landlord.

 

6.05                           Additional Services

 

(a)                                  If
from time to time requested in writing by Tenant and to the extent that it is
reasonably able, Landlord shall endeavor to provide in the Premises services in
addition to those set out in Article 6.02, provided that Tenant shall within
ten (10) days of receipt of any statement for any such additional service pay
Landlord therefore at such rates as Landlord may from time to time reasonably
establish.  So long as Landlord is
entitled to terminate this Lease, Landlord may terminate any such additional
services.

 

(b)                                 If
electricity is provided by Landlord under Article 7.02(b), Landlord will pay
the cost thereof and will apportion such costs among the users based on meter
readings for the Premises or, if the Premises are not separately metered,
according to the proportion of each user’s floor space to the total floor space
of all users on a common meter with the Premises.  Upon receipt of Landlord’s statement of apportionment, Tenant
shall reimburse Landlord for the amounts which Tenant is shown thereon to be
liable to Landlord.

 

(c)                                  Tenant
shall not without Landlord’s prior written consent, which consent will not be
unreasonably withheld, install in the Premises equipment (including telephone
equipment) which generates sufficient heat to affect the temperature otherwise
maintained in the Premises by the air conditioning system as normally operated.  If Tenant installs such equipment, Landlord
may install supplementary air conditioning units, facilities or services in the
Premises, or modify its air conditioning system, as may in Landlord’s
reasonable opinion be required to maintain proper temperature levels, and
Tenant shall pay Landlord the cost thereof (including, without limitation,
installation, operation and maintenance expenses) within ten (10) days of
receipt of notice from Landlord.

 

(d)                                 If
Landlord shall from time to time reasonably determine that the use of
electricity or any other utility or service in the Premises is disproportionate
to the use of other tenants, Landlord may separately charge Tenant for the
excess costs attributable to such disproportionate use.  In the event of such determination, Landlord
may also install and maintain, at Tenant’s expense, metering devices for
determining the use of any such utility or service in the Premises.

 

6.06                           Alterations by Landlord  Landlord may from time to time

 

(a)                                  make
repairs, replacements, changes or additions to the structure, systems,
facilities and equipment in the Premises where necessary to serve the Premises
or other parts of the Buildings or Project,

 

8

 

(b)                                 make
changes in or additions to any part of the Buildings or Project not in or
forming part of the Premises, and

 

(c)                                  change
or alter the location of those areas of the Buildings or Project from time to
time designated by Landlord for use during normal business hours for the
Building by Tenant in common with all tenants and other persons in the Building
but under the exclusive control of Landlord,

 

provided that,
subject to Article 6.04, Landlord shall not disturb or interfere with Tenant’s
use of the Premises and operation of its business any more than is reasonably
necessary under the circumstances and shall repair any damage to the Premises
caused thereby.

 

6.07                           Access by Landlord  Tenant shall permit Landlord to enter the
Premises outside normal business hours, and during normal business hours where
such will not unreasonably disturb or interfere with Tenant’s use of the
Premises and operation of his business, to examine and inspect the Premises and
show the Premises to any prospective purchaser or mortgagee of the Buildings or
person wishing to lease them, to provide services or make repairs,
replacements, changes or alterations as set out in this Lease, and to take such
steps as Landlord may deem necessary for the safety, improvement or
preservation of the Premises, the Buildings, or the Project.  Landlord shall, to the extent reasonably
possible, consult with or give notice to Tenant prior to such entry, and no
such entry shall constitute an eviction or entitle Tenant to any abatement of
Rent.

 

6.08                           Energy, Conservation and Security
Policies  Landlord shall
be deemed to have observed and performed the terms and conditions to be
performed by Landlord under this Lease, including those relating to the
provision of utilities and services, if in doing so it acts in accordance with
a directive, policy or request of a governmental or quasi-governmental
authority serving the public interest in the fields of energy, conservation or
security.

 

6.09                           Limitation

 

(a)                                  Landlord
shall use reasonable diligence in carrying out its obligations under Article
6.00, but shall not be liable under any circumstances for any consequential
damage to any person or property for any failure to carry out such obligations.

 

(b)                                 No
reduction or discontinuance of any services under this Article 6.00 shall be
construed as an eviction of Tenant or (except as specifically provided in this
Lease) release Tenant from any obligation of Tenant under this Lease.

 

(c)                                  Nothing
contained in this Article 6.00 shall derogate from the provisions of Article
15.00 or Article 16.00.

 

6.10                           Demolition or Substantial Renovation
 Notwithstanding anything
contained in this Lease, Landlord may terminate this Lease at any time after
twelve months prior written notice if at the date of the notice it is
Landlord’s intention to demolish or substantially renovate the Building or
other buildings in the Project.

 

9

 

ARTICLE
7.00  UTILITIES, MAINTENANCE, REPAIR AND
ALTERATIONS BY TENANT

 

7.01                           Condition of Premises  Except to the extent Landlord is
specifically responsible therefore under this Lease, Tenant shall maintain the
Premises and all improvements therein in good order and condition, including

 

(a)                                  repainting
and redecorating the Premises and cleaning blinds, drapes and carpets at
reasonable intervals as needed, and

 

(b)                                 making
repairs, replacements and alterations as needed, including those necessary to
comply with the requirements of any governmental or quasi-governmental
authority having jurisdiction over the Premises.

 

7.02                           Electricity

 

(a)                                  During
the Term, Tenant shall provide in the Premises at its own expense all
electricity required in the Premises, except electricity required for such
heat, ventilation and cooling of the Premises as shall be the Landlord’s
responsibility under Article 6.02(a).

 

(b)                                 If
during the Term the electrical utility serving the Buildings ceases to make
electricity directly available to Tenant, Landlord shall connect Tenant’s
electrical service to the Buildings system at Tenant’s cost and expense and, to
the extent such utility makes electricity available to Landlord, shall provide
electrical power in the Premises as an additional service in accordance with
the conditions of Article 6.05.

 

7.03                           Failure to Maintain Premises  If Tenant fails to perform any
obligation under Article 7.01, then on not less than ten (10) days’ notice to
Tenant (or without notice in an emergency), Landlord may enter the Premises and
perform such obligation without liability to Tenant for any loss or damage to
Tenant thereby incurred, and Tenant shall pay Landlord for the cost thereof,
plus 20% of such cost for overhead and supervision, within ten (10) days of
notice from Landlord of such cost.

 

7.04                           Alterations by Tenant  Tenant may from time to time at its own
expense make non-structural changes, additions and improvements in the Premises
to better adapt the same to its business, provided that any such change,
addition or improvement shall

 

(a)                                  comply
with the requirements of any governmental or quasi-governmental authority
having jurisdiction,

 

(b)                                 be
made only with the prior written consent of Landlord, which consent will not be
unreasonably withheld,

 

(c)                                  equal
or exceed the then current standard for the Buildings,

 

(d)                                 be
carried out only by persons selected by Tenant and approved in writing by

 

10

 

Landlord,
which approval will not be unreasonably withheld, who shall if required by
Landlord deliver to Landlord before commencement of the work performance and
payment bonds as well as proof of worker’s compensation and public liability
and property damage insurance coverage, with Landlord named as an additional
insured, in amounts, with companies, and in forms reasonably satisfactory to
Landlord, which shall remain in effect during the entire period in which the
work will be carried out, and

 

(e)                                  If
requested by Landlord prior to termination, any wiring or cabling installed by
Tenant in the Premises or in shafts, ducts or portions of the Common Areas
(excluding standard wiring for electrical use) shall be removed by Tenant at
Tenant’s expense on or before the Expiration Date or earlier termination of
this Lease.  If Tenant fails to remove
any such wiring or cabling, Landlord may have the same removed at Tenant’s
expense.

 

Any increase
in property taxes on or fire or casualty insurance premiums for the Buildings
attributable to such change, addition or improvements shall be borne by Tenant.

 

7.05                           Trade Fixtures and Personal Property  Tenant may install in the Premises its usual
trade fixtures and personal property in a proper manner, provided that no such
installation shall interfere with or damage the mechanical or electrical
systems or the structure of the Buildings. 
Trade fixtures and personal property installed in the Premises by Tenant
may be removed from the Premises

 

(a)                                  from
time to time in the ordinary course of Tenant’s business or in the course of
reconstruction, renovation or alteration of the Premises by Tenant, and

 

(b)                                 during
a reasonable period prior to the expiration of the Term,

 

provided that
Tenant conducts such installation and removal in a manner which does not
unreasonably interfere with the rights of other tenants in the Building and
otherwise in compliance with any Rules and Regulations promulgated under
Article 14.00, and Tenant promptly repairs at its own expense any damage to the
Premises, Buildings or Project resulting from such installation and removal.

 

7.06                           Mechanic Liens  Tenant shall pay before delinquency all
costs for work done or caused to be done by Tenant in the Premises which could
result in any lien or encumbrance on Landlord’s interest in the Land and
Buildings or any part thereof or on Tenant’s interest in the Premises, shall
keep the title to the Land and Building and every part thereof free and clear
of any lien or encumbrance in respect of such work and shall indemnify and hold
harmless Landlord against any claim, loss, cost, demand and legal or other
expense, whether in respect of any lien or otherwise, arising out of the supply
of materials, services or labor for such work. 
Tenant shall immediately notify Landlord of any such lien, claim of lien
or other action of which it has or reasonably should have knowledge and which
affects the title to the Land or Building or any part thereof or to Tenant’s
interest in the Premises, and shall cause the same to be removed within five
(5) days (or

 

11

 

such
additional time as Landlord may reasonably consent to in writing) failing which
Landlord may take such action as Landlord deems necessary to remove the same
and the entire cost thereof shall be immediately due and payable by Tenant to
Landlord.

 

7.07                           Signs  Any sign, lettering or design of Tenant
which is visible from the exterior of the Premises shall be at Tenant’s expense
and subject to approval by Landlord, and shall conform to the uniform pattern
of identification signs for tenants in the Buildings as prescribed by
Landlord.  Tenant shall not inscribe or
affix any sign, lettering or design in the Premises or Buildings which is
visible from the exterior of the Buildings.

 

ARTICLE
8.00  TAXES

 

8.01                           Landlord’s Taxes  Landlord shall pay before delinquency
(subject to participation by Tenant by payment of Occupancy Costs under Article
4.02) every real estate tax, assessment, license fee and other charge,
excepting Tenant’s Taxes under Article 8.02, which is imposed, levied, assessed
or charged by any governmental or quasi-governmental authority having
jurisdiction and which is payable in respect of the Term upon or on account of
the Land or Buildings.

 

8.02                           Tenant’s Taxes  Tenant shall pay before delinquency every
tax, assessment, license fee, excise and other charge, however described, which
is imposed, levied, assessed or charged by any governmental or
quasi-governmental authority having jurisdiction and which is payable in
respect of the Term upon or on account of

 

(a)                                  operations
at, occupancy of, or conduct of business in or from the Premises by or with the
permission of Tenant,

 

(b)                                 fixtures
or personal property in the Premises which do not belong to the Landlord, and

 

(c)                                  the
Rent paid or payable by Tenant to Landlord for the Premises or for the use and
occupancy of all or any part thereof;

 

provided that
if Landlord so elects by notice to Tenant, Tenant shall add any amounts payable
under this Article 8.02 to the monthly installments of Annual Rent payable
under Article 4.01 and Landlord shall remit such amounts to the appropriate
authorities.

 

8.03                           Right to Contest  Landlord and Tenant shall each have the right
to contest in good faith the validity or amount of any tax, assessment, license
fee, excise fee and any other charge which it is responsible to pay under this
Article 8.00, provided that no contest by Tenant may involve the possibility of
forfeiture, sale or disturbance of Landlord’s interest in the Premises,
Buildings or Project and that upon the final determination of any contest by
Tenant, Tenant shall immediately pay and satisfy the amount found to be due,
together with any costs, penalties and interest.

 

ARTICLE
9.00  INSURANCE

 

9.01                           Landlord’s Insurance  During the Term, Landlord shall maintain at
its own expense

 

12

 

(with
participation by Tenant by payment of Occupancy Costs under Article 4.02)
liability insurance, fire insurance with extended coverage, boiler and pressure
vessel insurance, and other insurance on the Buildings and all property and
interest of Landlord in the Buildings with coverage and in amounts not less
than those which are from time to time reasonably acceptable to a prudent owner
in the area in which the Buildings are located.  Policies for such insurance shall waive, to the extent available
from Landlord’s insurance carrier(s), any right of subrogation against
Tenant.  If there shall be an additional
charge for such waiver, Tenant shall promptly pay the same upon demand by
Landlord.

 

9.02                           Tenant’s Insurance  During the Term, Tenant shall maintain at its
own expense

 

(a)                                  fire
insurance with extended coverage and water damage insurance in amounts
sufficient to fully cover Tenant’s improvements and all property in the
Premises which is not owned by Landlord, and

 

(b)                                 liability
insurance, with Landlord named as an additional insured, against claims for
death, personal injury and property damage in or about the Premises, in amounts
which are not less than those from time to time acceptable to a prudent tenant
in the community in which the Buildings are located, but in no event less than
One Million Dollars ($1,000,000) for death, illness or injury to any one or
more persons, and Five Hundred Thousand Dollars ($500,000) for property damage,
in respect of each occurrence.

 

Policies for
such insurance shall be in a form and with an insurer reasonably acceptable to
Landlord, shall require at least fifteen (15) days’ written notice to Landlord
of termination or material alteration during the Term, and shall waive, to the
extent available from Tenant’s insurance carriers, any right of subrogation
against Landlord.  If there shall be an
additional charge for such waiver, Landlord shall promptly pay the same upon
demand by Tenant.  If requested by
Landlord, Tenant shall from time to time promptly deliver to Landlord certified
copies or other evidence of such policies acceptable to Landlord, and evidence
satisfactory to Landlord that all premiums thereon have been paid and the
policies are in full force and effect.

 

ARTICLE
10.00  INJURY TO PERSON OR PROPERTY

 

10.01                     Indemnity by Tenant  Tenant shall indemnify and hold harmless
Landlord from and against every demand, claim, cause of action, judgement and
expense (including attorney’s fees), and all loss and damage arising from

 

(a)                                  any
injury or damage to the person or property of Tenant, any other tenant in the
Project or to any other person in the Project, where the injury or damage is
caused by negligence or misconduct of Tenant, its agents, servants or
employees, or of any other person entering upon the Premises under express or
implied invitation of Tenant, or results from the violation of laws or
ordinances, governmental orders of any kind or of the provisions of this Lease
by any of the foregoing parties,

 

13

 

(b)                                 any
loss or damage, however caused, to books, records, files, money, securities,
negotiable instruments or papers in or about the Premises,

 

(c)                                  any
loss or damage resulting from interference with or obstruction of deliveries to
or from the Premises, and

 

(d)                                 any
injury or damage not specified above to the person or property of Tenant, its
agents, servants or employees, or any other person entering upon the Premises
under express or implied invitation of Tenant, where the injury or damage is
caused by any reason other than the negligence or misconduct of Landlord, its
agents, servants, or employees.

 

10.02.                  Subrogation  The provisions of this Article 10.00 are
subject to the waiver of any right of subrogation against Tenant in Landlord’s
Insurance Under Article 9.01 and to the waiver of any right of subrogation
against Landlord in Tenant’s Insurance under Article 9.02.

 

ARTICLE
11.00  ASSIGNMENT AND SUBLETTING

 

11.01                     Assignment  Tenant may assign this Lease with Landlord’s
prior written consent, which consent will not be unreasonably withheld.

 

(a)                                  to
an assignee who is a purchaser of all or substantially all of the assets of
Tenant, a parent or wholly owned subsidiary of Tenant, a company which results
from the reconstruction, consolidation or merger of Tenant, or a partnership in
which Tenant (or not less than one-half of the principals thereof) has a greater
than 50% interest, provided that consent will not be required if the assignment
is for a good business purpose and not principally for the purpose of
transferring this Lease and (except for an assignment to a subsidiary of
Tenant) the net worth of the assignee immediately following the assignment is
not less than the net worth of the Tenant on the Commencement Date or
immediately prior to the assignment, whichever is greater, or

 

(b)                                 subject
to the Article 11.03, to any other assignee who, in Landlord’s reasonable
opinion, will not be  inconsistent with
the dignity, character and standards of the Building and its other tenants.

 

11.02                     Subleasing  Tenant may sublet all or any part of the
Premises with Landlord’s prior written consent, which consent will not be
unreasonably withheld.

 

(a)                                  to
a sublessee who is a parent or wholly owned subsidiary of Tenant and is
consistent with the dignity, character and standards of the Building and its
other tenants, and only for such period as it remains a parent or wholly owned
subsidiary of Tenant, or

 

(b)                                 subject
to Article 11.03, to any other sublessee who, in Landlord’s reasonable opinion,
will not be inconsistent with the dignity, character and standards of the
Building and its other tenants.

 

14

 

11.03                     First Offer

 

(a)                                  If
Tenant wishes to assign this Lease or sublet all or any part of the Premises
(except as set out in Article 11.01(a) or 11.02(a)) to a named third party,
Tenant shall first offer in writing to assign or sublet (as the case may be) to
Landlord.  Such first offer shall
contain the terms of Tenant’s proposed assignment or subletting.Any such first
offer shall be deemed to be rejected unless within thirty (30) days of receipt
thereof Landlord delivers written notice of acceptance to Tenant.

 

(b)                                 If
Landlord accepts Tenant’s offer, Tenant shall assign this Lease to Landlord or
sublet the proposed space to Landlord without cost, such assignment or
subletting to be effective on the date and for the periods of time set forth in
Tenant’s notice, provided the effective date shall not be sooner than
forty–five (45) days after the giving of Tenant’s offer.

 

(c)                                  Any
sublease to Landlord will be on the same terms and conditions as provided in
this Lease except that

 

(i)                                     Rent
shall be the Rent (on a square-foot basis) provided in this Lease, or the rent
Tenant’s proposed sublessee would have paid, whichever is less,

 

(ii)                                  Landlord
may assign the sublease or further sublet all or any part of the space without
Tenant’s consent, and

 

(iii)                               Landlord
may make changes, additions, alterations or improvements (structural or
otherwise) to the space provided that Landlord shall be required to restore the
space to its condition immediately prior to the commencement of the sublease to
the same extent as Tenant’s proposed sublessee would have been required to do
so.

 

11.04                     Limitation  No assignment or sublease which is permitted
under this Article 11.00 shall be effective until Tenant delivers a copy of the
executed instrument to Landlord.  Except
as specifically provided in this Article 11.00, Tenant shall not assign or
transfer this Lease or any interest therein or in any way part with possession
of all or any part of the Premises, or permit all or any part of the Premises
to be used or occupied by any other person. 
Any assignment, transfer or subletting or purported assignment, transfer
or subletting except as specifically provided herein shall be null and void and
of no force and effect.  Landlord shall
not be required to consent to an assignment of this Lease or a sublease of all
or part of the Premises by Tenant to any tenant in the Project or with whom
Landlord is negotiating in good faith for space in the Project.  Except as expressly provided herein, the
rights and interests of Tenant under this Lease shall not be assignable by
operation of law without Landlord’s written consent, which consent may be
withheld in Landlord’s absolute discretion.

 

11.05                     Tenant’s Obligations Continue  No assignment, transfer, or
subletting (or use or occupation of the Premises by any other person) shall in
any way release or relieve Tenant of its obligations under this Lease unless
such release or relief is specifically

 

15

 

granted by
Landlord to Tenant in writing.

 

11.06                     Subsequent Consent  Landlord’s consent to an assignment,
transfer or subletting (or use or occupation of the Premises by any other
person) shall not be deemed to be a consent to any subsequent assignment,
transfer, subletting, use or occupation.

 

11.07                     Change in Control  As used in this Article 11.00, the
term “assignment” shall be deemed to include

 

(a)                                  a
take-over agreement,

 

(b)                                 the
issuance of equity interest in an entity (whether stock, partnership interest
or otherwise) to any person or group of related persons in a single transaction
or series of related or unrelated transactions so that after such issuance such
person or group owns at least 50% of the voting or equitable interest in that
entity, and

 

(c)                                  a
transfer of more than 50% in interest of an entity (whether stock, partnership
interest or otherwise) by any party or parties in interest whether in a single
transaction or in a series of related or unrelated transactions (other than a
transfer of the stock of an entity through the “over-the-counter” or any
nationally recognized securities exchange unless the transfer is by a party or
related parties owning more than 50% of the voting stock of the entity).

 

ARTICLE
12.00  SURRENDER

 

12.01                     Possession  Upon the expiration or other
termination of the Term, Tenant shall immediately quit and surrender possession
of the Premises (including all improvements made to the Premises) in
substantially the condition in which Tenant is required to maintain the
Premises, excepting only reasonable wear and tear and damage covered by
Landlord’s insurance under Article 9.01. 
Upon such surrender, all right, title and interest of Tenant in the
Premises including the improvements made to the Premises shall cease.

 

12.02                     Trade Fixtures, Personal Property
and Improvements  Subject
to Tenant’s rights under Article 7.05, after the expiration or other
termination of the Term all of Tenant’s trade fixtures and personal property
remaining in the Premises shall be deemed conclusively to have been abandoned
by Tenant.  All of Tenant’s trade
fixtures, personal property and improvements remaining in the Premises may be
appropriated, sold, destroyed or otherwise disposed of by Landlord without
notice or obligation to compensate Tenant or to account therefore, and Tenant
shall pay to Landlord on written demand all costs incurred by Landlord in
connection therewith.  The obligations
of Tenant under this Article 12.02 shall survive the expiration or other
termination of the Term.

 

12.03                     Merger  The
voluntary or other surrender of this Lease by Tenant or the cancellation or
termination of this Lease by mutual agreement of Tenant and Landlord or
otherwise shall not work a merger, and shall at Landlord’s option terminate all
or any subleases and subtenancies or operate as an assignment to Landlord of
all or any subleases or subtenancies.

 

16

 

12.04                     Payments After Termination  No payments of money by Tenant to
Landlord after the expiration or other termination of the Term or after the
giving of any notice (other than a demand for payment of money) by Landlord to
Tenant, shall reinstate, continue or extend the Term or make ineffective any
notice given to Tenant prior to the payment of such money.  After the service of notice or the
commencement of a suit, or after final judgment granting Landlord possession of
the Premises, Landlord may receive and collect any sums of Rent due under the
Lease, and the payment thereof shall not make ineffective any notice, or in any
manner affect any pending suit or any judgment theretofore obtained.

 

ARTICLE
13.00  HOLDING OVER

 

13.01                     Month-to-Month Tenancy  If with Landlord’s written consent (which
consent will not be unreasonably withheld if all or part of the Premises is not
leased to others or required for Landlord’s use) Tenant remains in possession
of the Premises after the expiration or other termination of the Term, Tenant
shall be deemed to be occupying the Premises on a month-to-month tenancy only
at a monthly rental equal to the installment of Annual Rent in effect for the
last month of the Term, plus all other Rent which would have been payable under
this Lease for such additional month or months if the Term had remained in
effect, as determined in accordance with Article 4.00, or such other rental as
is stated in such written consent, and such month-to-month tenancy may be
terminated by Landlord or Tenant on the last day of any calendar month by
giving at least one month’s advance notice of termination to the other.

 

13.02                     Tenancy at Sufferance  If without Landlord’s written consent Tenant
remains in possession of the Premises after the expiration or other termination
of the Term, Tenant shall promptly surrender the Premises to Landlord in
accordance with Article 12.00, and shall pay to Landlord for each day that
Tenant retains possession of the Premises or any portion thereof beyond the
expiration or other termination of the Term an amount equal to two times the
Annual Rent in effect on the last day of the Term, plus all other Rent which would
have been payable under this Lease if the Term had remained in effect, as
determined in accordance with Article 4.00 and adjusted and calculated on a per
diem basis.

 

13.03                     General  Any month-to-month tenancy or tenancy at
sufferance hereunder shall be subject to all other terms and conditions of this
Lease except any right of renewal and nothing contained in this Article 13.00
shall be construed to limit or impair any of Landlord’s rights of re-entry or
eviction or constitute a waiver thereof.

 

ARTICLE
14.00  RULES AND REGULATIONS

 

14.01                     Purpose  The Rules and Regulations in
Exhibit C have been adopted by Landlord for the safety, benefit and convenience
of all tenants and other persons in the Buildings.

 

14.02                     Observance  Tenant shall at all times comply
with, and shall cause its employees, agents, licensees and invitees to comply
with the Rules and Regulations from time to time in effect.

 

17

 

14.03                     Modification  Landlord may from time to time, for the purposes
set out in Article 14.01, amend, delete from, or add to the Rules and
Regulations, provided that any such modification

 

(a)                                  shall
not be repugnant to any other provision of this Lease,

 

(b)                                 shall
be reasonable and have general application to all tenants in the Buildings, and

 

(c)                                  shall
be effective only upon delivery of a copy thereof to Tenant at the Premises.

 

14.04                     Non-Compliance  Landlord shall endeavor to secure
compliance by all tenants in the Buildings with the Rules and Regulations from
time to time in effect, but shall not be responsible to Tenant for failure of
any person to comply with such Rules and Regulations.

 

ARTICLE
15.00  EMINENT DOMAIN

 

15.01                     Taking of Premises  If during the Term all of the Premises shall
be taken for any public or quasi-public use under any statute or by right of
eminent domain, or purchased under threat of such taking, this Lease shall
automatically terminate on the date on which the condemning authority takes
possession of the Premises (hereinafter called the “date of such taking”).

 

15.02                     Partial Taking of Building
If during the Term only part of a Building is taken or purchased as set out in
Article 15.01, then

 

(a)                                  if
in the reasonable opinion of Landlord substantial alteration or reconstruction
of such Building is necessary or desirable as a result thereof, whether or not
the Premises are or may be affected, Landlord shall have the right to terminate
this Lease by giving Tenant at least thirty (30) days’ written notice of such
termination, and

 

(b)                                 if
more than one-third of the number of square feet in the Premises is included in
such taking or purchase, Landlord and Tenant shall each have the right to
terminate this Lease by giving the other at least thirty (30) days’ written
notice thereof.

 

If either
party exercises its right of termination hereunder, this Lease shall terminate
on the date stated in the notice, provided, however, that no termination
pursuant to notice hereunder may occur later than sixty (60) days after the
date of such taking.

 

15.03                     Surrender  On any such date of termination under Article
15.01 or 15.02, Tenant shall immediately surrender to Landlord the Premises and
all interests therein under this Lease. 
Landlord may re-enter and take possession of the Premises and remove
Tenant therefrom, and the Rent shall abate on the date of termination, except
that if the date of such taking differs from the date of termination, Rent
shall abate on the former date in respect of the portion taken.  After such termination, and on notice from
Landlord stating the Rent then

 

18

 

owing, Tenant
shall forthwith pay Landlord such Rent.

 

15.04                     Partial Taking of Premises  If any portion of the Premises
(but less than the whole thereof) is so taken, and no rights of termination
herein conferred are timely exercised, the Term of this Lease shall expire with
respect to the portion so taken on the date of such taking.  In such event the Rent payable hereunder
with respect to such portion so taken shall abate on such date, and the Rent
thereafter payable with respect to the remainder not so taken shall be adjusted
pro rata by Landlord in order to account for the resulting reduction in the
number of square feet in the Premises.

 

15.05                     Awards  Upon any such taking or purchase, Landlord
shall be entitled to receive and retain the entire award or consideration for
the affected lands and improvements, and Tenant shall not have nor advance any
claim against Landlord or the condemning authority for the value of its
property or its leasehold estate or the unexpired Term of this Lease, or for
costs of removal or relocation, or business interruption expenses or any other
damages arising out of such taking or purchase, and Tenant hereby assigns to
Landlord all of its interest to such award and agrees to execute any documents
that may be required to facilitate collection thereof by Landlord.  Nothing herein shall give Landlord any
interest in or preclude Tenant from seeking and recovering on its own account
from the condemning authority any separate award or compensation attributable
to the taking or purchase of Tenant’s trade fixtures or personal property, or
the removal or relocation of its business and effects, or the interruption of
its business, provided such award shall be made in addition to, and not result
in a reduction of, the award otherwise made to Landlord.  If any such award made or compensation paid
to either party specifically includes an award or amount for the other, the
party first receiving the same shall promptly account therefore to the other.

 

ARTICLE
16.00 DAMAGE BY FIRE OR OTHER CASUALTY

 

16.01                     Limited Damage to Premises  If all or part of the Premises are rendered
untenantable by damage from fire or other casualty, which in the reasonable
opinion of an architect selected by Landlord and approved by Tenant, which
approval will not be unreasonably withheld, can be substantially repaired under
applicable laws and governmental regulations within one hundred eighty (180)
days from the date of such casualty (employing normal construction methods
without overtime or other premium), Landlord shall forthwith at its own expense
repair such damage other than damage to improvements, trade fixtures or
personal property which do not belong to Landlord.

 

16.02                     Major Damage to Premises  If all or part of the Premises
are rendered untenantable by damage from fire or other casualty, in the
reasonable opinion of an architect selected by Landlord and approved by Tenant,
which approval will not be unreasonably withheld, cannot be substantially
repaired under applicable laws and governmental regulations within one hundred
eighty (180) days from the date of such casualty (employing normal construction
methods without overtime or other premium), then either Landlord or Tenant may
elect to terminate this Lease as of the date of such casualty by written notice
delivered to the other not more than twenty (20) days after receipt of such
architect’s opinion, failing which Landlord shall forthwith at its own expense
repair such damage

 

19

 

other than
damage to improvements, trade fixtures or personal property which do not belong
to Landlord.

 

16.03                     Abatement  If Landlord is required to repair damage to
all or part of the Premises under Article 16.01 or 16.02, the Rent payable by
Tenant hereunder shall be proportionately reduced to the extent that the
Premises are thereby rendered unusable by Tenant in its business, from the date
of such casualty until five (5) days after completion by Landlord of the
repairs to the Premises (or the part thereof rendered untenantable) or until
Tenant again uses the Premises (or the part thereof rendered untenantable) in
its business, whichever first occurs.

 

16.04                     Major Damage to Building  If all or a substantial part (whether or not
including the Premises) of a Building is rendered untenantable by damage from
fire or other casualty to such a material extent that in the reasonable opinion
of Landlord the Building must be totally or partially demolished, whether or
not to be reconstructed in whole or in part, Landlord may elect to terminate
this Lease as of the date of such casualty (or on the date of notice if the
Premises are unaffected by such casualty) by written notice delivered to Tenant
not more than sixty (60) days after the date of such casualty.

 

16.05                     Limitation on Landlord’s Liability
Except as specifically provided in this Article 16.00, there shall be no
reduction of Rent and Landlord shall have no liability to Tenant by reason of
any injury to or interference with Tenant’s business or property arising from
fire or other casualty, howsoever caused, or from the making of any repairs
resulting therefrom in or to any portion of the Building or the Premises.  Notwithstanding anything contained herein,
Rent payable by Tenant hereunder shall not be abated if the damage is caused by
any act or omission of Tenant, its agents, servants, employees or any other
person entering upon the Premises under express or implied invitation of
Tenant.

 

ARTICLE
17.00 TRANSFERS BY LANDLORD

 

17.01                     Sales, Conveyance and Assignment  Nothing in this Lease shall restrict the
right of Landlord to sell, convey, assign or otherwise deal with a Building,
subject only to the rights of Tenant under this Lease.

 

17.02                     Effect of Sale, Conveyance or
Assignment  A sale,
conveyance or assignment of a Building shall operate to release Landlord from
liability from and after the effective date thereof upon all of the covenants,
terms and conditions of this Lease, express or implied, except as such may relate
to the period prior to such effective date, and Tenant shall thereafter look
solely to Landlord’s successor in interest in and to this Lease.  This Lease shall not be affected by any such
sale, conveyance or assignment, and Tenant shall attorn to Landlord’s successor
in interest thereunder.

 

17.03                     Subordination  This Lease is and shall be subject and
subordinate in all respects to any and all ground or underlying leases, and to
all mortgages and deeds of trust which may now or hereafter affect any of such
leases or a Building or Land, and to all renewals, modifications,
consolidations, replacements and extensions thereof.

 

17.04                     Attornment  Subject to Article 17.05, if the interest of
Landlord is transferred to any

 

20

 

person (herein
called “Purchaser”) by reason of foreclosure or other proceedings for
enforcement of any such mortgage or deed of trust, or by delivery of a deed in
lieu of such foreclosure or other proceedings, Tenant shall immediately and automatically
attorn to Purchaser.

 

17.05                     Nondisturbance  No attornment by Tenant under Article 17.04
shall be effective unless, before the date of transfer to Purchaser, Purchaser
delivers to Tenant a written undertaking, binding upon Purchaser and enforceable
by and for the benefit of Tenant under applicable law, that this Lease and
Tenant’s rights hereunder shall continue undisturbed while Tenant is not in
default despite such enforcement proceedings and transfer.

 

17.06                     Effect of Attornment  Upon attornment under Article 17.04, this
Lease shall continue in full force and effect as a direct lease between
Purchaser and Tenant, upon all of the same terms, conditions and covenants as
are set forth in this Lease except that, after such attornment, Purchaser shall
not be

 

(a)                                  liable
for any act or omission of Landlord, or

 

(b)                                 subject
to any offsets or defenses which Tenant might have against Landlord, or

 

(c)                                  bound
by any prepayment by Tenant of more than one month’s installment of Rent, or by
any previous modification of this Lease, unless such prepayment or modification
shall have been approved in writing by Purchaser or any predecessor in interest
except Landlord.

 

17.07                     Execution of Instruments  The subordination and attornment provisions
of this Article 17.00 shall be self-operating and, except as set out in Article
17.05, no further instrument shall be required.  Nevertheless, Tenant, on request by and without cost to Landlord
or any successor in interest, shall promptly execute and deliver to Landlord
any and all instruments further evidencing such subordination and (where
applicable hereunder) attornment.

 

ARTICLE
18.00  NOTICES, ACKNOWLEDGMENTS,
AUTHORITIES FOR ACTION

 

18.01                     Notices  Any notice from Landlord to Tenant
shall be in writing and shall be deemed duly served if delivered personally to
a responsible employee of Tenant, or if mailed by registered or certified mail
addressed to Tenant at the Premises (whether or not Tenant has departed from,
vacated or abandoned the same).  Any
notice from Tenant to Landlord shall be in writing and shall be deemed duly
served if mailed by registered or certified mail addressed to Landlord at the
place from time to time established for the payment of Rent.  Any notice shall be deemed to have been
given at the time of personal delivery or, if mailed, three (3) days after the
date of mailing thereof.  Either party
shall have the right to designate by notice, in the manner above set forth, a
different address to which notices are to be mailed.

 

18.02                     Acknowledgments  Each of the parties hereto shall
at any time and from time to time upon not less than fifteen (15) days’ prior
notice from the other execute, acknowledge

 

21

 

and deliver a
written statement certifying

 

(a)                                  that
this Lease is in full force and effect, subject only to such modifications (if
any) as may be set out therein,

 

(b)                                 that
Tenant is in possession of the Premises and paying Rent as provided in this
Lease,

 

(c)                                  the
dates (if any) to which Rent is paid,

 

(d)                                 that
there are not, to such party’s knowledge, any uncured defaults on the part of
the other party hereunder, or specifying such defaults if any are claimed,

 

(e)                                  as
to such other matters pertaining to this Lease as the other party may
reasonably request.

 

Any such
statement may be relied upon by any prospective transferee or encumbrancer of
all or any portion of the Building, or any assignee of any such persons.  If Tenant fails to timely deliver such
statement, Tenant shall be deemed to have acknowledged that this Lease is in
full force and effect, without modification except as may be represented by
Landlord, and that there are no uncured defaults in Landlord’s performance.

 

18.03                     Authorities for Action  Landlord may act in any matter provided for
herein through its property manager and any other person who shall from time to
time be designated by Landlord by notice to Tenant.  Tenant shall designate in writing one or more persons to act on
its behalf in any matter provided for herein and may from time to time change,
by notice to Landlord, such designation. 
In the absence of any such designation, the person or persons executing
this Lease for Tenant shall be deemed to be authorized to act on behalf of
Tenant in any matter provided for herein.

 

ARTICLE
19.00  DEFAULT

 

19.01                     Interest and Costs  Tenant shall pay to Landlord interest at a
rate equal to the lesser of 11⁄2% per month, or the maximum rate permitted by
applicable law, upon all Rent required to be paid hereunder from the due date
for payment thereof until the same is fully paid and satisfied.  Tenant shall indemnify Landlord against all
costs and charges (including legal fees) reasonably incurred in enforcing
Tenant’s payment of Rent, and in obtaining possession of the Premises after
default of Tenant or upon expiration or earlier termination of the Term of this
Lease, and in enforcing any covenant, proviso or agreement of Tenant herein
contained.

 

19.02                     Right of Landlord to Perform
Covenants  All
covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant, at Tenant’s sole cost and expense, and
without any abatement of Rent.  If
Tenant shall fail to perform any act on its part to be performed hereunder, and
such failure shall continue for ten (10) days after notice thereof from
Landlord (or without notice in an emergency), Landlord may (but shall not be
obligated to) perform such act without waiving or releasing Tenant from any of
its obligations or liabilities relative thereto.  All sums paid or costs incurred

 

22

 

by Landlord in
so performing such acts under this Article 19.02, together with interest
thereon at the rate set out in Article 19.01 from the date each such payment
was made or each such cost incurred by Landlord, shall be payable by Tenant to
Landlord on demand.

 

19.03                     Events of Default The
rights of Tenant under this Lease are subject to the limitations that if

 

(a)                                  Tenant
files a voluntary petition in bankruptcy or insolvency, or is adjudicated a
bankrupt or insolvent, or files a petition or answer-seeking any relief under
any bankruptcy act or other similar applicable law, or makes an assignment for
the benefit of creditors or seeks or consents in the appointment of any
trustee, receiver, or liquidator of Tenant’s business or property, or

 

(b)                                 within
sixty (60) days after the commencement of any proceeding against Tenant seeking
any relief under any bankruptcy act or similar applicable law, such proceeding
has not been dismissed, or if, within sixty (60) days after the appointment of
any trustee, receiver or liquidator of Tenant’s business or property without
the consent of Tenant, such appointment has not been vacated or otherwise
discharged, or if any execution or attachment shall be issued against Tenant’s
business or property pursuant to which the Premises may be taken or occupied,
or

 

(c)                                  part
or all of the Rent is not paid when due and such default continues for five (5)
days after the due date thereof, or

 

(d)                                 Tenant’s
interest in this Lease devolves or passes to any party other than Tenant, by
operation of law or otherwise, except with the prior written consent of
Landlord, or

 

(e)                                  the
Premises are vacated or abandoned or if Tenant fails to take occupancy of the
Premises within thirty (30) days after the Commencement Date, except with the
prior written consent of Landlord, or

 

(f)                                    Tenant
fails to observe or perform any other term, covenant or condition of this Lease
on Tenant’s part to be observed or performed, other than the payment of Rent,
and fails to remedy such default within ten (10) days after notice by Landlord
to Tenant of such default or, if such default is of such a nature that it
cannot be completely remedied within said period, Tenant fails to promptly,
upon the giving of such notice, advise Landlord of Tenant’s intent to institute
all steps necessary to remedy the default and promptly institute and thereafter
diligently prosecute to completion all steps necessary to remedy the default,
and complete such remedy within a reasonable time after the giving of such
notice by Landlord and in any event prior to such time as would cause a default
under any mortgage or underlying lease on a Building or Land,

 

then in any of
said events Landlord may terminate this Lease by giving at least three (3)
days’ prior written notice to Tenant and this Lease shall terminate upon the
‘expiration of that notice period as though that date were the Expiration Date,
but Tenant shall remain

 

23

 

liable for
damages as provided in this Article 19.00.

 

19.04                     Re-Entry and Remedies  If part or all of the Rent is not paid when
due and such default continues for five (5) days after notice from Landlord to
Tenant or if this Lease is terminated as provided in Article 19.03,

 

(a)                                  Landlord
may immediately or at any time thereafter re-enter the Premises or any part
thereof in accordance with applicable law by summary proceedings or otherwise,
and may repossess the Premises and dispossess Tenant and any other persons from
the Premises and remove Tenant’s trade fixtures and personal property from the
Premises, without liability for damage thereto, and in no event shall re-entry
be deemed an acceptance of surrender of this Lease, and

 

(b)                                 Landlord
may from time to time (but shall not be obligated to) relet the whole or any
part of the Premises on such terms and at such rentals as Landlord deems
advisable.  Landlord may make such
changes, additions, improvements and repairs to the Premises as Landlord deems
advisable without affecting Tenant’s liability under this Lease.

 

19.05                     Waiver  Tenant hereby expressly waives any
and all rights of redemption or reinstatement granted by or under any present
or future laws in the event of Tenant being evicted or dispossessed for any
cause, or in the event of Landlord obtaining possession of the Premises, by
reason of the violation by Tenant of any of the terms, covenants or conditions
of this Lease or otherwise.

 

19.06                     Payments  If this Lease is terminated or if Landlord
re-enters the Premises under this Article 19.00:

 

(a)                                  Tenant
shall pay to Landlord all Rent up to the time of re-entry or termination,
whichever is later,

 

(b)                                 Landlord
may retain all monies, if any, paid by Tenant to Landlord, whether as advance
rent, security or otherwise, but such monies shall be credited by Landlord
against any Rent due at the time of such termination or re-entry or, at
Landlord’s option, against any damages payable by Tenant,

 

(c)                                  Tenant
shall pay to Landlord all expenses incurred by Landlord in terminating,
re-entering and re-letting, including all repossession costs, brokerage and
legal fees and costs of preparing the Premises for reletting, and

 

(d)                                 (i)                                     Tenant shall pay
to Landlord, as damages, any deficiency between the Rent for the period which
otherwise would have constituted the unexpired portion of the Term and the
payments, if any, received by Landlord from other tenants in the Premises, such
deficiency to be paid at the times and in the manner as Rent is payable under
Article 4.00, and Landlord shall be entitled to bring a suit to recover each
deficiency as the same shall arise, or at Landlord’s election, bring suits from
time to time.

 

24

 

(ii)                                  If
elected by Landlord, at or after re-entry or termination, Tenant shall pay
Landlord on demand as liquidated and final damages for lost Rent and not as a
penalty, a sum equal to the amount by which the Rent payable hereunder for the
period to the Expiration Date from the latest of the date of termination of
this Lease, the date of re-entry or the date through which monthly deficiencies
shall have been paid (conclusively presuming the Occupancy Costs to be the same
as payable for the Fiscal Year immediately preceding such termination or
re-entry) exceeds the then fair rental value of the Premises for the same
period, discounted at the rate of 7% per annum to present worth.  If, before presentation of proof of such
liquidated damages to any court, commission or tribunal, all or part of the
Premises are relet by Landlord for all or part of the period which otherwise
would have constituted the unexpired portion of the Term, the amount of rent
upon such reletting shall be deemed to be the fair rental value for the part or
whole of the Premises during the term of the reletting.

 

(iii)                               In
no event shall Tenant be entitled to receive any excess of any payments
received by Landlord from a reletting of the Premises over the sums payable by
Tenant to Landlord hereunder; and

 

(iv)                              If
the Premises or any part thereof should be relet in combination with other
space, then proper apportionment on a square foot area basis shall be made of
the rent received from such reletting and the expenses of reletting.

 

Nothing herein
shall be construed as limiting or precluding the recovery by Landlord against
Tenant of any sums or damages to which, in addition to the damages set out in
this Article 19.06, Landlord may lawfully be entitled by reason of any default
hereunder by Tenant.

 

19.07                     Remedies Cumulative  Each right of Landlord provided for in this
Lease shall be cumulative and shall be in addition to every other right
provided for in this Lease or existing at law or in equity, and the exercise by
Landlord of any one or more of such rights shall not preclude the simultaneous
or later exercise by Landlord of any other rights provided for in this Lease or
existing at law or in equity.

 

ARTICLE
20.00  MISCELLANEOUS

 

20.01                     Relationship of Parties  Nothing contained in this Lease shall create
any relationships between the parties hereto other than that of landlord and
tenant, and it is acknowledged and agreed that Landlord does not in any way or
for any purpose become a partner of Tenant in the conduct of its business, or a
joint venturer or a member of a joint or common enterprise with Tenant.

 

20.02                     Name of Building  Landlord shall have the right, after thirty
(30) days’ notice to Tenant, to change the name, number and designation of a
Building, during the Term without liability to Tenant.

 

20.03                     Applicable Law and Construction  This Lease shall be governed by and construed
under

 

25

 

the laws of
Minnesota and its provisions shall be construed as a whole according to their
common meaning and not strictly for or against Landlord or Tenant.  The words Landlord and Tenant shall include
the plural as well as the singular.  If
this Lease is executed by more than one tenant, Tenant’s obligations hereunder
shall be joint and several obligations of such executing tenants.  Time is of the essence of this Lease and
each of its provisions.  The captions of
the Articles are included for convenience only, and shall have not effect upon
the construction or interpretation of this Lease.

 

20.04                     Entire Agreement  If there are any terms and conditions which
at the date of execution of this Lease are additional or supplemental to those
set out on the first 19 pages and in Exhibits A, B and C, such terms and
conditions are contained in Exhibit D attached hereto as part of this Lease.  This Lease contains the entire agreement
between the parties hereto with respect to the subject matter of this
Lease.  Each party acknowledges and
agrees that it has not relied upon any statement, representation, agreement or
warranty except such as are set out in this Lease.

 

20.05                     Amendment or Modification  Unless otherwise specifically provided in
this Lease, no amendment, modification, or supplement to this Lease shall be
valid or binding unless set out in writing and executed by the parties hereto
in the same manner as the execution of this Lease.

 

20.06                     Construed Covenants and Severability
 All of the provisions of
this Lease are to be construed as covenants and agreements as though the words
importing such covenants and agreements were used in each separate Article
hereof.  Should any provision of this
Lease be or become invalid, void, illegal or not enforceable, it shall be
considered separate and severable from the Lease and the remaining provisions
shall remain in force and be binding upon the parties hereto as though such
provision had not been included.

 

20.07                     No Implied Surrender or Waiver  No provisions of this Lease shall be deemed
to have been waived by Landlord unless such waiver is in writing signed by
Landlord.  Landlord’s waiver of a breach
of any term, covenant or condition of this Lease shall not prevent a subsequent
act, which would have originally constituted a breach, from having all the
force and effect of any original breach. 
Landlord’s receipt of Rent with knowledge of a breach by Tenant of any
term, covenant or condition of this Lease shall not be deemed a waiver of such
breach.  Landlord’s failure to enforce
against Tenant or any other tenant in the Building any of the Rules and
Regulations made under Article 14.00 shall not be deemed a waiver of such Rules
and Regulations.  No act or thing done
by Landlord, its agents or employees during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid, unless in writing signed by
Landlord.  The delivery of keys to any
of Landlord’s agents or employees shall not operate as a termination of this
Lease or a surrender of the Premises. 
No payment by Tenant, or receipt by Landlord, of a lesser amount than
the Rent due hereunder shall be deemed to be other than on account of the full
Rent due, nor shall any endorsement or statement on any check or any letter
accompanying any check, or payment of Rent, be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice
to Landlord’s right to recover the balance of such Rent or pursue any other
remedy available to Landlord.

 

26

 

20.08                     Successors Bound  Except as otherwise specifically provided,
the covenants, terms, and conditions contained in this Lease shall apply to and
bind the heirs, successors, executors, administrators and assigns of the
parties hereto.

 

ARTICLE
21.00  RELOCATION BY TENANT - INTENTIONALLY
OMITTED

 

IN WITNESS OF
THIS LEASE Landlord and Tenant have properly executed it as of the date set out
on page one.

 

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  ST.  PAUL PROPERTIES, INC.

  	
  ESCHELON
  TELECOM, INC.

  
	
   

  	
   

  
	
  By:

  	
      /s/
  R. William Inserra

  	
   

  	
  By:

  	
      /s/
  Michael Donahue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Print name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Michael A.
  Donahue

  
	
   

  	
  VP Finance
  & Treasurer

  
	
   

  	
   

  
	
  Date
  Executed:

  	
    12-5-03

  	
   

  	
  Date
  Executed:

  	
    11/26/03

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Witness to
  the signature of

  tenant if not incorporated.

  
											

 

27

 

 

 

 

 

 

 

 

 

	
  BAKER CENTER

  	
   

  	
  EXHIBIT B-1

  
	
  Office Space

  	
   

  	
   

  

 

ROANOKE BUILDING

109 SOUTH SEVENTH STREET

MINNEAPOLIS, MINNESOTA 55402

 

SECTION 1.00              WORDS
AND PHRASES

 

1.01                           Definitions                                   In
the Lease, including this Exhibit:

(a)                                  “Architect”
means that firm of professional architects or engineers as Landlord may from
time to time engage for preparation of construction drawings for the Building
or for general supervision of architectural and engineering aspects and
operations of the Building and includes any consultant(s) from time to time
appointed by Landlord or the Architect whenever such consultants(s) is acting
within the scope of his or her appointment and specialty.

(b)                                 “Land”
means those lands located in Hennepin County, Minnesota, described as:

Lots 3, 4 and
5, Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(c)                                  “Project”
means those portions of those lands, in Hennepin County, Minnesota, described
as:

Lots 1, 2, 3,
4, 5, 6, 7, 8, 9, 10 and 11, Auditor’s Subdivision No. 178 Hennepin County,
Minnesota, from time to time owned or leased by Landlord, and the developments
and improvements from time to time constructed on those portions.

(d)                                 “Building”
means the building in which the Premises are located, being those portions of
the Project on the Land.

(e)                                  “Baker
Building” means those portions of the Project on those lands in Hennepin
County, Minnesota, described as: Lots 1 and 2, Auditor’s Subdivision No. 178
Hennepin County, Minnesota,

(f)                                    “Investors
Building” means those portions of the Project on those lands located in
Hennepin County, Minnesota, described as:

Lots 6, 7 and
8, Auditor’s Subdivision 178 Hennepin County, Minnesota, except the
Southeasterly 10 feet of the Southwesterly 90 feet of said Lot 8.

(g)                                 “Peavey
Building” means those portions of the Project on those lands located in Hennepin
County, Minnesota, described as:

Lots 9, 10 and
11, and the Southeasterly 10 feet of the Southwesterly 90 feet of Lot 8,
Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(h)                                 “Rentable
Components” means the Building, Baker Building, Investors Building and Peavey
Building, in each case excluding Common Areas and Parking Facilities.

(i)                                     “Parking
Facilities” means those portions of the Project from time to time designated by
Landlord for vehicular parking.

(j)                                     “Common
Areas” means those portions of the Project (excluding Parking

 

1

 

Facilities)
not leased or designated for lease to tenants that Landlord provides for use in
common by Landlord, Tenant, and other tenants of the Project (or by their respective
sublessees, agents, employees, customers or licensees), whether or not those
areas are open to the general public, and includes any fixtures, chattels,
systems, decor, signs, facilities, or landscaping contained, maintained, or
used in connection with those areas, and is deemed to include the city
sidewalks adjacent to the Land and adjoining lands and any pedestrian walkway
system (either above or below ground) or other facility open to the general
public in respect of which Landlord is from time to time subject to obligations
arising from the Project, but does not include any space on office floors
designated by Landlord for use in common by tenants and other persons.

(k)                                  “Delivery
Facilities” means those portions of the Common Areas from time to time
designated by Landlord as facilities to be used in common by Landlord, tenants
in the Project, and others for purposes of loading, unloading, delivery,
dispatch, and holding of merchandise, goods and materials entering or leaving
the Project and giving vehicular access to those portions of the Project.

(l)                                     “Section”
means a section of this Exhibit B.

 

1.02                           Normal
Business Hours:

 

Except as
otherwise specifically provided in this Lease, normal business hours for the
Building shall be from 8:00 a.m. to 6:00 p.m. Monday through Friday, and 8:00
a.m. to 1:00 p.m. Saturday, excluding days which are legal or statutory
holidays in the jurisdiction in which the Building is located.

 

SECTION 2.00              DETERMINATION
OF OCCUPANCY COSTS

 

2.01                           Definitions                                   In
this Section 2.00:

 

(a)                                  “Tax
Cost” means the Taxes accruing in respect of the calendar year in which the
Fiscal Year begins, less that part of those Taxes attributable to the Parking
Facilities.

(b)                                 “Taxes”
means the aggregate of all taxes, rates, charges, levies and assessments
payable by Landlord and imposed by any competent authority upon or in respect
of the Land and all improvements on the Land, including any tax imposed on the
capital invested in the Land or improvements on the Land.  In determining Taxes, any corporate income,
profits, excess profits and business tax imposed upon the income of Landlord
and any other impost of a personal nature charged or levied against the
Landlord shall be excluded, except to the extent that it is levied in lieu of
or as a substitute for increases in taxes, rates, charges or assessments in
respect of the Land or any improvements on the Land.

(c)                                  “HVAC
Cost” means a percentage of the costs in the Fiscal Year for the operation,
repair and maintenance of the system for heating, ventilating and cooling the
Project as established by Landlord from time to time on a fair and equitable
basis which reflects load and hours of operation.

(d)                                 “Common
Areas Costs” means all net costs, charges and expenses in respect of a Fiscal
Year which are directly attributable to the operation, repair and maintenance
of the Common Areas, including without limitation HVAC Cost.

 

2

 

(e)                                  “Project
Costs” means all net costs, charges and expenses in respect of a Fiscal Year
which are directly attributable to the operation, repair and maintenance of the
Project, but which are not attributable solely to the operation, repair or
maintenance of the Common Areas, Parking Facilities, or any Rentable Component.

(f)                                    “Square
Feet in the Premises” means the number of square feet set out in Article
1.01(l) or 1.01(n) of the Lease, which for office tenants includes the number
of square feet of unallocated space in the Building set out in Article 1.01(l)
of the Lease.

(g)                                 “Square
Feet in the Building” means 182,355 square feet, being the aggregate of the
rentable areas of office space (on a single-tenancy floor basis) and retail and
service store space in the Building.  If
from time to time there is a material change in the rentable areas of the
Building, Square Feet in the Building shall (until any further change) mean the
number of square feet in the Building determined on completion of such change
on the basis set out in Sections 3.01 and 3.03.

 

2.02                           Occupancy
Costs:

Occupancy Costs
for any Fiscal Year shall be an amount equal to the Operating Cost in respect
of that Fiscal Year multiplied by the Square Feet in the Premises.

 

2.03                           Determination
Of Operating Cost:

“Operating
Cost” means an amount per square foot (calculated to the nearest tenth of a
cent) established in accordance with generally accepted accounting principles
and confirmed in a certificate of Landlord, and equal to the sum of the
following costs in respect of a Fiscal Year, divided by the Square Feet in the
Building:

(a)                                  all
net costs, charges and expenses directly attributable to the operation, repair
and maintenance of the Building (excluding Common Areas and Parking
Facilities), including, without limitation, Tax Cost and HVAC Cost, and

(b)                                 a
portion of the Common Areas Costs as established by Landlord from time to time
on a fair and equitable basis, and

(c)                                  that
proportion of Project Costs which the gross area of the Building (excluding
Common Areas and Parking Facilities) is of the aggregate gross area of the Rentable
Components.

Operating Cost
under this Section 2.03 includes all net expenses properly allocable to the
Fiscal Year for any capital improvement or structural repair incurred to reduce
or limit increases in Operating Cost, or required by Landlord’s insurance
carrier or by any change in the laws, rules, regulations or orders of any
governmental or quasi-governmental authority having jurisdiction, which
expenses shall be amortized at applicable interest rates over the useful
capital life of the capital improvement or structural repair. If Landlord
manages the Building or other applicable portion of the Project, Operating Cost
under this Section 2.03 also includes an imputed management fee commensurate
with the then-current Minneapolis-Saint Paul metropolitan market for management
services.

 

2.04                           Limitation
on Operating Cost:

In determining
Operating Cost, the cost (if any) of the following shall be excluded except as
specifically provided in Section 2.03:

(a)                                  major
structural repairs to the Project,

(b)                                 improvements,
additions or alterations to the Project,

 

3

 

(c)                                  repair
and replacement resulting from inferior or deficient workmanship, materials or
equipment in the initial construction of the Project or for which Landlord is
reimbursed by insurers,

(d)                                 ground
rent (if any), depreciation, amortization and interest on and capital
retirement of debt,

(e)                                  operation,
repair and maintenance which is attributable solely to the Parking Facilities
or to any Rentable Component other than the Building, and

(f)                                    leasing
commissions.

 

2.05                           When
Services Are Not Provided:

Notwithstanding
Section 2.03, when and if any service which is normally provided by Landlord to
some tenants of the Building in their premises

(a)                                  is
not provided by Landlord in the Premises under the specific terms of the Lease,
in determining Occupancy Costs for Tenant, the cost of that service (except as
it relates to Common Areas, those spaces on office floors designated by
Landlord for use in common by tenants and other persons in the Building, and
janitorial services) shall be excluded, and

(b)                                 is
not provided by Landlord in a significant portion of the Building, in
determining Occupancy Costs for Tenant, the cost of that service shall be
divided by the number of square feet in the Building in which Landlord provides
that service, determined on the basis set out in Sections 3.01 and 3.03.

 

2.06                           Shared
Facilities, Services and Utilities:

If any
facilities, services or utilities:

(a)                                  for
the operation, repair and maintenance of the Project are provided from another
building or other buildings, owned or operated by Landlord or an affiliate of
Landlord, or

(b)                                 for
the operation, repair and maintenance of another building or other buildings
owned or operated by Landlord or an affiliate of Landlord are provided from the
Project,

the net costs,
charges and expenses for those facilities, services and utilities shall, for
the purpose of Section 2.03, be allocated by Landlord between the Project and
the other building or among the Project and the other buildings on a fair and
equitable basis.

 

2.07                           Credit to
Common Areas:

Landlord shall
use reasonable efforts to recover where circumstances so permit an equitable
share of the cost of operating and maintaining Common Areas from owners or
occupants of neighboring properties and others who benefit from the use of the
Common Areas, and shall credit any recovery to the gross cost before
determination of Common Areas Costs.

 

2.08                           Occupancy
Adjustment:

If the Project
is not fully leased and occupied in any Fiscal Year, appropriate adjustments
shall be made in determining Occupancy Costs under this Section 2.00 so that
Occupancy Costs shall be as though the Project had been fully leased and
occupied during that Fiscal Year.

 

4

 

2.09                           Partial
Fiscal Year:

If the Term
commences after the beginning of or terminates before the end of a Fiscal Year,
any amount payable by Tenant under Section 2.02 shall be adjusted accordingly.

 

SECTION 3.00                                 DETERMINATION
OF SQUARE FEET IN THE PREMISES

 

3.01                           Office Space
— Single Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a single-tenancy floor in the Building (if any) shall be calculated
from dimensioned Architect’s drawings to the inside face of the glass in the
permanent exterior building walls (whether or not the glass extends to the
floor) or to the inside finish of those walls if they contain no glass.  It shall include all space within exterior
building walls except for stairs (other than stairs exclusively serving a
tenant occupying offices on more than one floor), elevator shafts, flues, pipe
shafts, vertical ducts, and other vertical risers which penetrate the floor and
their enclosing walls.  No deduction
shall be made for washrooms, janitor closets, air conditioning rooms, fan
closets, or for electrical or telephone cupboards within and servicing only
that floor or servicing a single tenant on more than one floor, or for any
other rooms, corridors, or areas available to the tenant on that floor for its
use, furnishings, or personnel, or for any columns located wholly or partially
within the space, or for any enclosures around the periphery of the Building
used for the purpose of heating, ventilating or cooling.

 

3.02                           Office Space
— Multiple-Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a multiple-tenancy floor in the Building (if any) shall be
calculated from dimensioned architect’s drawings to the inside finish of
permanent exterior building walls or the inside face of the glass as described
in Section 3.01, to the face of permanent interior walls and to the center line
of demising partitions.  No deductions
shall be made for any columns located wholly or partially within the space, or
for any enclosures around the periphery of the Building used for the purpose of
heating, ventilating or cooling.

 

3.03                           Retail
Space:

For the
purposes of this Lease, the number of square feet of retail and service store
space in the Building, whether above or below grade, is calculated from
dimensioned Architect’s drawings to the inside face of permanent exterior
building walls, to the face of permanent interior walls, to the center line of
demising partitions, and to the center line of a predetermined lease line
(usually referred to as the storefront line) in the case of retail and service
store space facing onto either an interior public mall or corridor or onto a
public street or lane. No deduction is made for vestibules inside the permanent
exterior building walls or inside the predetermined lease line, or for any
columns located wholly or partially within the space.

 

SECTION 4.00              LOADING
AND DELIVERY

 

4.01                           The
delivery and shipping of merchandise, supplies, fixtures, and other materials
or goods of any kind to or from the Premises and all loading, unloading, and
handling of them shall be done only at such times, in such areas, by such
means, and through such

 

5

 

elevators, entrances, malls, and corridors as are designated from time
to time by Landlord.

 

4.02                           Landlord
accepts no liability and is hereby relieved and released by Tenant in respect
of the operation and adequacy of the Delivery Facilities, the acts or omissions
of any person or persons engaged in the operation of the Delivery Facilities,
or in the acceptance, holding, handling, delivery or dispatch of any goods for
or on behalf of Tenant, and any claim of Tenant by reason of damage, loss,
theft or any acceptance, holding, handling, delivery or dispatch, or failure of
any acceptance, holding, handling or dispatch, or any error, negligence or
delay in acceptance, holding, handling, or dispatch.

 

4.03                           Landlord
may from time to time make and amend regulations for the orderly and efficient
operation of the Delivery Facilities, and may require the payment of reasonable
and equitable charges for delivery services and demurrage provided by Landlord.

 

SECTION 5.00 NON-DISCRIMINATION

 

5.01                           Non-Discrimination:

If Tenant
operates or has the right to operate under this Lease any store, shop,
restaurant, cafeteria, restroom, or any other facility of a public nature in
the Building, Tenant shall not discriminate by segregation or otherwise against
any person or persons because of race, creed, color, or national origin in
furnishing, or by refusing to furnish, to such person or persons the use of any
such facility including any and all services, privileges, accommodations, and
activities provided thereby.

 

5.02                           Enforcement:

Tenant’s
noncompliance with the provisions of this Section 5.00 shall constitute a
material breach of this Lease.  In the
event of such noncompliance, Landlord may take appropriate action to enforce
compliance, may terminate this Lease, or may pursue such other remedies as may
be provided by law.

 

6

 

	
  BAKER CENTER

  	
   

  	
  EXHIBIT B-2

  
	
  Office Space

  	
   

  	
   

  

 

INVESTORS BUILDING

733 MARQUETTE AVENUE

MINNEAPOLIS, MINNESOTA 55402

 

SECTION 1.00                                 WORDS
AND PHRASES

 

1.01                           Definitions                                   In
the Lease, including this Exhibit:

(a)                                  “Architect”
means that firm of professional architects or engineers as Landlord may from
time to time engage for preparation of construction drawings for the Building
or for general supervision of architectural and engineering aspects and
operations of the Building and includes any consultant(s) from time to time
appointed by Landlord or the Architect whenever such consultants(s) is acting
within the scope of his or her appointment and specialty.

(b)                                 “Land”
means those lands located in Hennepin County, Minnesota, described as:

Lots 6, 7 and
8, Auditor’s Subdivision 178 Hennepin County, Minnesota, except the
Southeasterly 10 feet of the Southwesterly 90 feet of said Lot 8.

(c)                                  “Project”
means those portions of those lands, in Hennepin County, Minnesota, described
as:

Lots 1, 2, 3,
4, 5, 6, 7, 8, 9, 10 and 11, Auditor’s Subdivision No. 178 Hennepin County,
Minnesota, from time to time owned or leased by Landlord, and the developments
and improvements from time to time constructed on those portions.

(d)                                 “Building”
means the building in which the Premises are located, being those portions of
the Project on the Land.

(e)                                  “Baker
Building” means those portions of the Project on those lands in Hennepin
County, Minnesota, described as: Lots 1 and 2, Auditor’s Subdivision No. 178
Hennepin County, Minnesota,

(f)                                    “Roanoke
Building” means those portions of the Project on those lands located in
Hennepin County, Minnesota, described as:

Lots 3, 4 and
5, Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(g)                                 “Peavey
Building” means those portions of the Project on those lands located in
Hennepin County, Minnesota, described as:

Lots 9, 10 and
11, and the Southeasterly 10 feet of the Southwesterly 90 feet of Lot 8,
Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(h)                                 “Rentable
Components” means the Building, Baker Building, Roanoke Building and Peavey
Building, in each case excluding Common Areas and Parking Facilities.

(i)                                     “Parking
Facilities” means those portions of the Project from time to time designated by
Landlord for vehicular parking.

(j)                                     “Common
Areas” means those portions of the Project (excluding Parking Facilities) not
leased or designated for lease to tenants that Landlord provides for

 

1

 

use in common
by Landlord, Tenant, and other tenants of the Project (or by their respective
sublessees, agents, employees, customers or licensees), whether or not those
areas are open to the general public, and includes any fixtures, chattels,
systems, decor, signs, facilities, or landscaping contained, maintained, or
used in connection with those areas, and is deemed to include the city
sidewalks adjacent to the Land and adjoining lands and any pedestrian walkway
system (either above or below ground) or other facility open to the general
public in respect of which Landlord is from time to time subject to obligations
arising from the Project, but does not include any space on office floors
designated by Landlord for use in common by tenants and other persons.

(k)                                  “Delivery
Facilities” means those portions of the Common Areas from time to time
designated by Landlord as facilities to be used in common by Landlord, tenants
in the Project, and others for purposes of loading, unloading, delivery,
dispatch, and holding of merchandise, goods and materials entering or leaving
the Project and giving vehicular access to those portions of the Project.

(l)                                     “Section”
means a section of this Exhibit B.

 

1.02                           Normal Business
Hours:

 

Except as
otherwise specifically provided in this Lease, normal business hours for the
Building shall be from 8:00 a.m. to 6:00 p.m. Monday through Friday, and 8:00
a.m. to 1:00 p.m. Saturday, excluding days which are legal or statutory holidays
in the jurisdiction in which the Building is located.

 

SECTION 2.00                                 DETERMINATION
OF OCCUPANCY COSTS

 

2.01                           Definitions                                   In
this Section 2.00:

(a)                                  “Tax
Cost” means the Taxes accruing in respect of the calendar year in which the
Fiscal Year begins, less that part of those Taxes attributable to the Parking
Facilities.

(b)                                 “Taxes”
means the aggregate of all taxes, rates, charges, levies and assessments
payable by Landlord and imposed by any competent authority upon or in respect
of the Land and all improvements on the Land, including any tax imposed on the
capital invested in the Land or improvements on the Land.  In determining Taxes, any corporate income,
profits, excess profits and business tax imposed upon the income of Landlord
and any other impost of a personal nature charged or levied against the
Landlord shall be excluded, except to the extent that it is levied in lieu of
or as a substitute for increases in taxes, rates, charges or assessments in
respect of the Land or any improvements on the Land.

(c)                                  “HVAC
Cost” means a percentage of the costs in the Fiscal Year for the operation,
repair and maintenance of the system for heating, ventilating and cooling the
Project as established by Landlord from time to time on a fair and equitable
basis which reflects load and hours of operation.

(d)                                 “Common
Areas Costs” means all net costs, charges and expenses in respect of a Fiscal
Year which are directly attributable to the operation, repair and maintenance
of the Common Areas, including without limitation HVAC Cost.

(e)                                  “Project
Costs” means all net costs, charges and expenses in respect of a Fiscal

 

2

 

Year which are
directly attributable to the operation, repair and maintenance of the Project,
but which are not attributable solely to the operation, repair or maintenance
of the Common Areas, Parking Facilities, or any Rentable Component.

(f)                                    “Square
Feet in the Premises” means the number of square feet set out in Article
1.01(l) or 1.01(n) of the Lease, which for office tenants includes the number
of square feet of unallocated space in the Building set out in Article 1.01(l)
of the Lease.

(g)                                 “Square
Feet in the Building” means 404,986 square feet, being the aggregate of the
rentable areas of office space (on a single-tenancy floor basis) and retail and
service store space in the Building.  If
from time to time there is a material change in the rentable areas of the
Building, Square Feet in the Building shall (until any further change) mean the
number of square feet in the Building determined on completion of such change
on the basis set out in Sections 3.01 and 3.03.

 

2.02                           Occupancy
Costs:

Occupancy
Costs for any Fiscal Year shall be an amount equal to the Operating Cost in
respect of that Fiscal Year multiplied by the Square Feet in the Premises.

 

2.03                           Determination
Of Operating Cost:

“Operating
Cost” means an amount per square foot (calculated to the nearest tenth of a
cent) established in accordance with generally accepted accounting principles
and confirmed in a certificate of Landlord, and equal to the sum of the
following costs in respect of a Fiscal Year, divided by the Square Feet in the
Building:

(a)                                  all
net costs, charges and expenses directly attributable to the operation, repair
and maintenance of the Building (excluding Common Areas and Parking
Facilities), including, without limitation, Tax Cost and HVAC Cost, and

(b)                                       a
portion of the Common Areas Costs as established by Landlord from time to time
on a fair and equitable basis, and

(c)                                  that
proportion of Project Costs which the gross area of the Building (excluding
Common Areas and Parking Facilities) is of the aggregate gross area of the
Rentable Components.

Operating Cost
under this Section 2.03 includes all net expenses properly allocable to the
Fiscal Year for any capital improvement or structural repair incurred to reduce
or limit increases in Operating Cost, or required by Landlord’s insurance
carrier or by any change in the laws, rules, regulations or orders of any
governmental or quasi-governmental authority having jurisdiction, which
expenses shall be amortized at applicable interest rates over the useful
capital life of the capital improvement or structural repair. If Landlord
manages the Building or other applicable portion of the Project, Operating Cost
under this Section 2.03 also includes an imputed management fee commensurate
with the then-current Minneapolis-Saint Paul metropolitan market for management
services.

 

2.04                           Limitation
on Operating Cost:

In determining
Operating Cost, the cost (if any) of the following shall be excluded except as
specifically provided in Section 2.03:

(a)                                  major
structural repairs to the Project,

(b)                                 improvements,
additions or alterations to the Project,

 

3

 

(c)                                  repair
and replacement resulting from inferior or deficient workmanship, materials or
equipment in the initial construction of the Project or for which Landlord is
reimbursed by insurers,

(d)                                 ground
rent (if any), depreciation, amortization and interest on and capital
retirement of debt,

(e)                                  operation,
repair and maintenance which is attributable solely to the Parking Facilities
or to any Rentable Component other than the Building, and

(f)                                    leasing
commissions.

 

2.05                           When
Services Are Not Provided:

Notwithstanding
Section 2.03, when and if any service which is normally provided by Landlord to
some tenants of the Building in their premises

(a)                                  is
not provided by Landlord in the Premises under the specific terms of the Lease,
in determining Occupancy Costs for Tenant, the cost of that service (except as
it relates to Common Areas, those spaces on office floors designated by
Landlord for use in common by tenants and other persons in the Building, and
janitorial services) shall be excluded, and

(b)                                 is
not provided by Landlord in a significant portion of the Building, in
determining Occupancy Costs for Tenant, the cost of that service shall be
divided by the number of square feet in the Building in which Landlord provides
that service, determined on the basis set out in Sections 3.01 and 3.03.

 

2.06                           Shared
Facilities, Services and Utilities:

If any
facilities, services or utilities:

(a)                                  for
the operation, repair and maintenance of the Project are provided from another
building or other buildings, owned or operated by Landlord or an affiliate of
Landlord, or

(b)                                 for
the operation, repair and maintenance of another building or other buildings
owned or operated by Landlord or an affiliate of Landlord are provided from the
Project,

the net costs,
charges and expenses for those facilities, services and utilities shall, for
the purpose of Section 2.03, be allocated by Landlord between the Project and
the other building or among the Project and the other buildings on a fair and
equitable basis.

 

2.07                           Credit to
Common Areas:

Landlord shall
use reasonable efforts to recover where circumstances so permit an equitable
share of the cost of operating and maintaining Common Areas from owners or
occupants of neighboring properties and others who benefit from the use of the
Common Areas, and shall credit any recovery to the gross cost before
determination of Common Areas Costs.

 

2.08                           Occupancy
Adjustment::

If the Project
is not fully leased and occupied in any Fiscal Year, appropriate adjustments
shall be made in determining Occupancy Costs under this Section 2.00 so that
Occupancy Costs shall be as though the Project had been fully leased and
occupied during that Fiscal Year.

 

4

 

2.09                           Partial
Fiscal Year:

If the Term
commences after the beginning of or terminates before the end of a Fiscal Year,
any amount payable by Tenant under Section 2.02 shall be adjusted accordingly.

 

SECTION 3.00                                 DETERMINATION
OF SQUARE FEET IN THE PREMISES

 

3.01                           Office Space
— Single Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a single-tenancy floor in the Building (if any) shall be calculated
from dimensioned Architect’s drawings to the inside face of the glass in the
permanent exterior building walls (whether or not the glass extends to the
floor) or to the inside finish of those walls if they contain no glass.  It shall include all space within exterior
building walls except for stairs (other than stairs exclusively serving a
tenant occupying offices on more than one floor), elevator shafts, flues, pipe
shafts, vertical ducts, and other vertical risers which penetrate the floor and
their enclosing walls.  No deduction
shall be made for washrooms, janitor closets, air conditioning rooms, fan
closets, or for electrical or telephone cupboards within and servicing only
that floor or servicing a single tenant on more than one floor, or for any
other rooms, corridors, or areas available to the tenant on that floor for its
use, furnishings, or personnel, or for any columns located wholly or partially
within the space, or for any enclosures around the periphery of the Building
used for the purpose of heating, ventilating or cooling.

 

3.02                           Office Space
— Multiple-Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a multiple-tenancy floor in the Building (if any) shall be
calculated from dimensioned architect’s drawings to the inside finish of
permanent exterior building walls or the inside face of the glass as described
in Section 3.01, to the face of permanent interior walls and to the center line
of demising partitions.  No deductions
shall be made for any columns located wholly or partially within the space, or
for any enclosures around the periphery of the Building used for the purpose of
heating, ventilating or cooling.

 

3.03                           Retail
Space:

For the
purposes of this Lease, the number of square feet of retail and service store
space in the Building, whether above or below grade, is calculated from
dimensioned Architects drawings to the inside face of permanent exterior
building walls, to the face of permanent interior walls, to the center line of
demising partitions, and to the center line of a predetermined lease line
(usually referred to as the storefront line) in the case of retail and service
store space facing onto either an interior public mall or corridor or onto a
public street or lane. No deduction is made for vestibules inside the permanent
exterior building walls or inside the predetermined lease line, or for any
columns located wholly or partially within the space.

 

SECTION 4.00                                 LOADING
AND DELIVERY

 

4.01                           The
delivery and shipping of merchandise, supplies, fixtures, and other materials
or goods of any kind to or from the Premises and all loading, unloading, and
handling of

 

5

 

them shall be
done only at such times, in such areas, by such means, and through such
elevators, entrances, malls, and corridors as are designated from time to time
by Landlord.

 

4.02                           Landlord
accepts no liability and is hereby relieved and released by Tenant in respect
of the operation and adequacy of the Delivery Facilities, the acts or omissions
of any person or persons engaged in the operation of the Delivery Facilities,
or in the acceptance, holding, handling, delivery or dispatch of any goods for
or on behalf of Tenant, and any claim of Tenant by reason of damage, loss,
theft or any acceptance, holding, handling, delivery or dispatch, or failure of
any acceptance, holding, handling or dispatch, or any error, negligence or
delay in acceptance, holding, handling, or dispatch.

 

4.03                           Landlord
may from time to time make and amend regulations for the orderly and efficient
operation of the Delivery Facilities, and may require the payment of reasonable
and equitable charges for delivery services and demurrage provided by Landlord.

 

SECTION 5.00 NON-DISCRIMINATION

 

5.01                           Non-Discrimination:

If Tenant
operates or has the right to operate under this Lease any store, shop,
restaurant, cafeteria, restroom, or any other facility of a public nature in
the Building, Tenant shall not discriminate by segregation or otherwise against
any person or persons because of race, creed, color, or national origin in
furnishing, or by refusing to furnish, to such person or persons the use of any
such facility including any and all services, privileges, accommodations, and
activities provided thereby.

 

5.02                           Enforcement
:

Tenant’s
noncompliance with the provisions of this Section 5.00 shall constitute a
material breach of this Lease.  In the
event of such noncompliance, Landlord may take appropriate action to enforce
compliance, may terminate this Lease, or may pursue such other remedies as may
be provided by law.

 

6

 

	
  BAKER CENTER

  	
   

  	
  EXHIBIT B-3

  
	
  Office Space

  	
   

  	
   

  

 

U.S. TRUST BUILDING

730 SECOND AVENUE SOUTH

MINNEAPOLIS, MINNESOTA 55402

 

SECTION 1.00 WORDS AND PHRASES

 

1.01                           Definitions                                   In
the Lease, including this Exhibit:

(a)                                  “Architect”
means that firm of professional architects or engineers as Landlord may from
time to time engage for preparation of construction drawings for the Building
or for general supervision of architectural and engineering aspects and
operations of the Building and includes any consultant(s) from time to time
appointed by Landlord or the Architect whenever such consultants(s) is acting
within the scope of his or her appointment and specialty.

(b)                                 “Land”
means those lands located in Hennepin County, Minnesota, described as:

Lots 9, 10 and
11, and the Southeasterly 10 feet of the Southwesterly 90 feet of Lot 8,
Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(c)                                  “Project”
means those portions of those lands, in Hennepin County, Minnesota, described
as:

Lots 1, 2, 3,
4, 5, 6, 7, 8, 9, 10 and 11, Auditor’s Subdivision No. 178 Hennepin County,
Minnesota, from time to time owned or leased by Landlord, and the developments
and improvements from time to time constructed on those portions.

(d)                                 “Building”
means the building in which the Premises are located, being those portions of
the Project on the Land.

(e)                                  “Investors
Building” means those portions of the Project on those lands in Hennepin
County, Minnesota, described as: Lots 6, 7 and 8, Auditor’s Subdivision 178
Hennepin County, Minnesota, except the Southeasterly 10 feet of the
Southwesterly 90 feet of said Lot 8.

(f)                                    “Roanoke
Building” means those portions of the Project on those lands located in
Hennepin County, Minnesota, described as:

Lots 3, 4 and
5, Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(g)                                 “Baker
Building” means those portions of the Project on those lands located in
Hennepin County, Minnesota, described as:

Lots 1 and 2, Auditor’s Subdivision No. 178 Hennepin County, Minnesota.

(h)                                 “Rentable
Components” means the Building, Investors Building, Roanoke Building and Baker
Building, in each case excluding Common Areas and Parking Facilities.

(i)                                     “Parking
Facilities” means those portions of the Project from time to time

 

1

 

designated by
Landlord for vehicular parking.

(j)                                     “Common
Areas” means those portions of the Project (excluding Parking Facilities) not
leased or designated for lease to tenants that Landlord provides for use in
common by Landlord, Tenant, and other tenants of the Project (or by their
respective sublessees, agents, employees, customers or licensees), whether or
not those areas are open to the general public, and includes any fixtures,
chattels, systems, decor, signs, facilities, or landscaping contained, maintained,
or used in connection with those areas, and is deemed to include the city
sidewalks adjacent to the Land and adjoining lands and any pedestrian walkway
system (either above or below ground) or other facility open to the general
public in respect of which Landlord is from time to time subject to obligations
arising from the Project, but does not include any space on office floors
designated by Landlord for use in common by tenants and other persons.

(k)                                  “Delivery
Facilities” means those portions of the Common Areas from time to time
designated by Landlord as facilities to be used in common by Landlord, tenants
in the Project, and others for purposes of loading, unloading, delivery,
dispatch, and holding of merchandise, goods and materials entering or leaving
the Project and giving vehicular access to those portions of the Project.

(l)                                     “Section”
means a section of this Exhibit B.

 

1.02                           Normal
Business Hours:

 

Except as
otherwise specifically provided in this Lease, normal business hours for the
Building shall be from 8:00 am. to 6:00 p.m. Monday through Friday, and 8:00
a.m. to 1:00 p.m. Saturday, excluding days which are legal or statutory
holidays in the jurisdiction in which the Building is located.

 

SECTION 2.00 DETERMINATION OF OCCUPANCY COSTS

 

2.01                           Definitions                                   In
this Section 2.00:

(a)                                  “Tax
Cost” means the Taxes accruing in respect of the calendar year in which the
Fiscal Year begins, less that part of those Taxes attributable to the Parking
Facilities.

(b)                                 “Taxes”
means the aggregate of all taxes, rates, charges, levies and assessments
payable by Landlord and imposed by any competent authority upon or in respect
of the Land and all improvements on the Land, including any tax imposed on the
capital invested in the Land or improvements on the Land.  In determining Taxes, any corporate income,
profits, excess profits and business tax imposed upon the income of Landlord
and any other impost of a personal nature charged or levied against the
Landlord shall be excluded, except to the extent that it is levied in lieu of
or as a substitute for increases in taxes, rates, charges or assessments in
respect of the Land or any improvements on the Land.

(c)                                  “HVAC
Cost” means a percentage of the costs in the Fiscal Year for the operation,
repair and maintenance of the system for heating, ventilating and cooling the
Project as established by Landlord from time to time on a fair and equitable
basis which reflects load and hours of operation.

(d)                                 “Common
Areas Costs” means all net costs, charges and expenses in respect of a

 

2

 

Fiscal Year
which are directly attributable to the operation, repair and maintenance of the
Common Areas, including without limitation HVAC Cost.

(e)                                  “Project
Costs” means all net costs, charges and expenses in respect of a Fiscal Year
which are directly attributable to the operation, repair and maintenance of the
Project, but which are not attributable solely to the operation, repair or
maintenance of the Common Areas, Parking Facilities, or any Rentable Component.

(f)                                    “Square
Feet in the Premises” means the number of square feet set out in Article
1.01(l) or 1.01(n) of the Lease, which for office tenants includes the number
of square feet of unallocated space in the Building set out in Article 1.01(l)
of the Lease.

(g)                                 “Square
Feet in the Building” means 307,245 square feet, being the aggregate of the
rentable areas of office space (on a single-tenancy floor basis) and retail and
service store space in the Building.  If
from time to time there is a material change in the rentable areas of the
Building, Square Feet in the Building shall (until any further change) mean the
number of square feet in the Building determined on completion of such change
on the basis set out in Sections 3.01 and 3.03.

 

2.02                           Occupancy
Costs:

Occupancy
Costs for any Fiscal Year shall be an amount equal to the Operating Cost in
respect of that Fiscal Year multiplied by the Square Feet in the Premises.

 

2.03                           Determination
Of Operating Cost:

“Operating
Cost” means an amount per square foot (calculated to the nearest tenth of a
cent) established in accordance with generally accepted accounting principles
and confirmed in a certificate of Landlord, and equal to the sum of the
following costs in respect of a Fiscal Year, divided by the Square Feet in the
Building:

(a)                                  all
net costs, charges and expenses directly attributable to the operation, repair
and maintenance of the Building (excluding Common Areas and Parking
Facilities), including, without limitation, Tax Cost and HVAC Cost, and

(b)                                 a
portion of the Common Areas Costs as established by Landlord from time to time
on a fair and equitable basis, and

(c)                                  that
proportion of Project Costs which the gross area of the Building (excluding
Common Areas and Parking Facilities) is of the aggregate gross area of the
Rentable Components.

Operating Cost
under this Section 2.03 includes all net expenses properly allocable to the
Fiscal Year for any capital improvement or structural repair incurred to reduce
or limit increases in Operating Cost, or required by Landlord’s insurance
carrier or by any change in the laws, rules, regulations or orders of any
governmental or quasi-governmental authority having jurisdiction, which
expenses shall be amortized at applicable interest rates over the useful
capital life of the capital improvement or structural repair.  If Landlord manages the Building or other
applicable portion of the Project, Operating Cost under this Section 2.03 also
includes an imputed management fee commensurate with the then-current Minneapolis-Saint
Paul metropolitan market for management services.

 

2.04                           Limitation
on Operating Cost:

In determining
Operating Cost, the cost (if any) of the following shall be excluded except

 

3

 

as specifically provided in Section 2.03:

(a)                                  major
structural repairs to the Project,

(b)                                 improvements,
additions or alterations to the Project,

(c)                                  repair
and replacement resulting from inferior or deficient workmanship, materials or
equipment in the initial construction of the Project or for which Landlord is
reimbursed by insurers,

(d)                                 ground
rent (if any), depreciation, amortization and interest on and capital
retirement of debt,

(e)                                  operation,
repair and maintenance which is attributable solely to the Parking Facilities
or to any Rentable Component other than the Building, and

(f)                                    leasing
commissions.

 

2.05                           When
Services Are Not Provided:

Notwithstanding
Section 2.03, when and if any service which is normally provided by Landlord to
some tenants of the Building in their premises

(a)                                  is
not provided by Landlord in the Premises under the specific terms of the Lease,
in determining Occupancy Costs for Tenant, the cost of that service (except as
it relates to Common Areas, those spaces on office floors designated by
Landlord for use in common by tenants and other persons in the Building, and
janitorial services) shall be excluded, and

(b)                                 is
not provided by Landlord in a significant portion of the Building, in
determining Occupancy Costs for Tenant, the cost of that service shall be
divided by the number of square feet in the Building in which Landlord provides
that service, determined on the basis set out in Sections 3.01 and 3.03.

 

2.06                           Shared
Facilities, Services and Utilities:

If any
facilities, services or utilities:

(a)                                  for
the operation, repair and maintenance of the Project are provided from another
building or other buildings, owned or operated by Landlord or an affiliate of
Landlord, or

(b)                                 for
the operation, repair and maintenance of another building or other buildings
owned or operated by Landlord or an affiliate of Landlord are provided from the
Project, the net costs, charges and expenses for those facilities, services and
utilities shall, for the purpose of Section 2.03, be allocated by Landlord
between the Project and the other building or among the Project and the other
buildings on a fair and equitable basis.

 

2.07                           Credit to
Common Areas:

Landlord shall
use reasonable efforts to recover where circumstances so permit an equitable
share of the cost of operating and maintaining Common Areas from owners or
occupants of neighboring properties and others who benefit from the use of the
Common Areas, and shall credit any recovery to the gross cost before
determination of Common Areas Costs.

 

2.08                           Occupancy
Adjustment :

If the Project
is not fully leased and occupied in any Fiscal Year, appropriate adjustments

 

4

 

shall be made
in determining Occupancy Costs under this Section 2.00 so that Occupancy Costs
shall be as though the Project had been fully leased and occupied during that
Fiscal Year.

 

2.09                           Partial
Fiscal Year:

If the Term
commences after the beginning of or terminates before the end of a Fiscal Year,
any amount payable by Tenant under Section 2.02 shall be adjusted accordingly.

 

SECTION 3.00 DETERMINATION OF SQUARE FEET IN
THE PREMISES

 

3.01                           Office Space
— Single Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a single-tenancy floor in the Building (if any) shall be calculated
from dimensioned Architect’s drawings to the inside face of the glass in the
permanent exterior building walls (whether or not the glass extends to the
floor) or to the inside finish of those walls if they contain no glass.  It shall include all space within exterior
building walls except for stairs (other than stairs exclusively serving a
tenant occupying offices on more than one floor), elevator shafts, flues, pipe
shafts, vertical ducts, and other vertical risers which penetrate the floor and
their enclosing walls.  No deduction
shall be made for washrooms, janitor closets, air conditioning rooms, fan
closets, or for electrical or telephone cupboards within and servicing only
that floor or servicing a single tenant on more than one floor, or for any
other rooms, corridors, or areas available to the tenant on that floor for its
use, furnishings, or personnel, or for any columns located wholly or partially
within the space, or for any enclosures around the periphery of the Building
used for the purpose of heating, ventilating or cooling.

 

3.02                           Office Space
— Multiple-Tenancy Floors:

For the
purposes of this Lease, the number of square feet of office space in the
Premises on a multiple-tenancy floor in the Building (if any) shall be
calculated from dimensioned architect’s drawings to the inside finish of
permanent exterior building walls or the inside face of the glass as described
in Section 3.01, to the face of permanent interior walls and to the center line
of demising partitions.  No deductions
shall be made for any columns located wholly or partially within the space, or
for any enclosures around the periphery of the Building used for the purpose of
heating, ventilating or cooling.

 

3.03                           Retail
Space:

For the
purposes of this Lease, the number of square feet of retail and service store
space in the Building, whether above or below grade, is calculated from
dimensioned Architect’s drawings to the inside face of permanent exterior
building walls, to the face of permanent interior walls, to the center line of
demising partitions, and to the center line of a predetermined lease line
(usually referred to as the storefront line) in the case of retail and service
store space facing onto either an interior public mall or corridor or onto a
public street or lane. No deduction is made for vestibules inside the permanent
exterior building walls or inside the predetermined lease line, or for any
columns located wholly or partially within the space.

 

5

 

SECTION 4.00 LOADING AND DELIVERY

 

4.01                           The
delivery and shipping of merchandise, supplies, fixtures, and other materials
or goods of any kind to or from the Premises and all loading, unloading, and
handling of them shall be done only at such times, in such areas, by such
means, and through such elevators, entrances, malls, and corridors as are
designated from time to time by Landlord.

 

4.02                           Landlord
accepts no liability and is hereby relieved and released by Tenant in respect
of the operation and adequacy of the Delivery Facilities, the acts or omissions
of any person or persons engaged in the operation of the Delivery Facilities,
or in the acceptance, holding, handling, delivery or dispatch of any goods for
or on behalf of Tenant, and any claim of Tenant by reason of damage, loss,
theft or any acceptance, holding, handling, delivery or dispatch, or failure of
any acceptance, holding, handling or dispatch, or any error, negligence or
delay in acceptance, holding, handling, or dispatch.

 

4.03                           Landlord
may from time to time make and amend regulations for the orderly and efficient
operation of the Delivery Facilities, and may require the payment of reasonable
and equitable charges for delivery services and demurrage provided by Landlord.

 

SECTION 5.00 NON-DISCRIMINATION

 

5.01                           Non-Discrimination:

If Tenant
operates or has the right to operate under this Lease any store, shop,
restaurant, cafeteria, restroom, or any other facility of a public nature in
the Building, Tenant shall not discriminate by segregation or otherwise against
any person or persons because of race, creed, color, or national origin in
furnishing, or by refusing to furnish, to such person or persons the use of any
such facility including any and all services, privileges, accommodations, and
activities provided thereby.

 

5.02                           Enforcement:

Tenant’s
noncompliance with the provisions of this Section 5.00 shall constitute a
material breach of this Lease.  In the
event of such noncompliance, Landlord may take appropriate action to enforce
compliance, may terminate this Lease, or may pursue such other remedies as may
be provided by law.

 

6

 

	
  BAKER CENTER

  	
   

  	
  EXHIBIT C

  

 

BAKER CENTER

RULES AND REGULATIONS

 

1.                                       Security
Landlord may from time to time adopt appropriate systems and procedures for the
security or safety of the Building, any persons occupying, using or entering
the same, or any equipment, finishings or contents thereof, and Tenant shall
comply with Landlord’s reasonable requirements relative thereto.

 

2.                                       Locks   Landlord may from time to time install and
change locking mechanisms on entrances to the Building, common areas thereof,
and the Premises, and (unless 24 hour security is provided by the Building)
shall provide to Tenant a reasonable number of keys and replacements therefor
to meet the bona fide requirements of Tenant. 
In these rules “keys” include any device serving the same purpose.  Tenant shall not add to or change existing
locking mechanisms on any door in or to the Premises without Landlord’s prior
written consent.  If with Landlord’s
consent, Tenant installs lock(s) incompatible with the Building master locking
system:

 

(a)                                  Landlord,
without abatement of Rent, shall be relieved of any obligation under the Lease
to provide any service to the affected areas which require access thereto.

(b)                                 Tenant
shall indemnify Landlord against any expense as a result of forced entry
thereto which may be required in an emergency, and

(c)                                  Tenant
shall at the end of the Term and at Landlord’s request remove such lock(s) at
Tenant’s expense.

 

3.                                       Return
of Keys  At the end of the Term,
Tenant shall promptly return to Landlord all keys for the Building and Premises
which are in possession of Tenant.

 

4.                                       Windows
Tenant shall observe Landlord’s rules with respect to maintaining window
coverings at all windows in the Premises so that the Building presents a
uniform exterior appearance, and shall not install any window shades, screens,
drapes, covers, or other materials on or at any window in the Premises without
Landlord’s prior written consent. 
Tenant shall ensure that window coverings are closed on all windows in
the Premises while they are exposed to the direct rays of the sun.

 

5.                                       Repair,
Maintenance, Alterations and Improvements Tenant shall carry out Tenant’s
repair, maintenance, alterations and improvements in the Premises only during
times agreed to in advance by Landlord and in a manner which will not interfere
with the rights of other tenants in the Building.

 

6.                                       Water
Fixtures Tenant shall not use water fixtures for any purpose for which they
are not intended, nor shall water be wasted by tampering with such
fixtures.  Any cost or damage resulting
from such misuse by Tenant shall be paid for by Tenant.

 

1

 

7.                                       Personal Use
of Premises                                       The
Premises shall not be used or permitted to be used for residential, lodging or
sleeping purposes or for the storage of personal effects or property not
required for business purposes.

 

8.                                       Heavy
Articles  Tenant shall not place in
or move about the Premises without Landlord’s prior written consent any safe or
other heavy article which in Landlord’s reasonable opinion may damage the
Building, and Landlord may designate the location of any heavy articles in the
Premises.

 

9.                                       Smoking
Policy Smoking is not permitted throughout the Project common areas to
include, but not limited to, elevator lobbies, corridors and restrooms.

 

10.                                 Bicycles,
Animals  Tenant shall not bring any
animals or birds into the Building, and shall not permit bicycles or other
vehicles inside or on the sidewalks outside the Building except in areas
designated from time to time by Landlord for such purposes.

 

11.                                 Deliveries  Tenant shall ensure that deliveries of
materials and supplies to the Premises are made through such entrances,
elevators and corridors and at such times as may from time to time be
designated by Landlord, and shall promptly pay or cause to be paid to Landlord
the cost of repairing any damage in the Building caused by any person making
such deliveries.

 

12.                                 Furniture/
Equipment and Moving                    Tenant
shall ensure that loading dock reservations and furniture equipment being moved
in or out of tenant spaces is scheduled in advance with Baker Center
Operations.  Moving furniture and
equipment shall only be done between 6:00 pm and 7:00 am Monday thru
Friday.  Additional hours for weekends
may be scheduled and approved in writing by Baker Center Operations.

 

Furniture and
equipment must be moved using pneumatic tire devices, through entrances, elevators,
and corridors as specified by Landlord. 
Landlord in it sole discretion may require the use of additional floor
protection.  Movers or a moving company
are subject to Landlord approval and shall pay or cause to be paid to Landlord
the cost of repairing any damage in the Building caused by their employees or
equipment.

 

13.                                 Solicitations  Landlord reserves the right to restrict or
prohibit canvassing, soliciting or peddling in the Building.

 

14.                                 Food
and Beverages Only persons approved from time to time by Landlord may
prepare, solicit orders for, sell, serve or distribute foods or beverages in
the Building, or use the elevators, corridors or common areas for any such
purpose.  Except with Landlord’s prior written
consent and in accordance with arrangements approved by Landlord, Tenant shall
not permit on the Premises the use of equipment for dispensing food or
beverages or for the preparation, solicitation of orders for, sale, serving or
distribution of food or beverages.

 

15.                                 Refuse   Tenant shall place all refuse in proper
receptacles provided by Tenant at its expense in the Premises or in receptacles
(if any) provided by Landlord for the Building,

 

2

 

and shall keep
sidewalks and driveways outside the Building, and lobbies, corridors,
stairwells, ducts and shafts of the Building, free of all refuse.

 

16.                                 Obstructions
Tenant shall not obstruct or place anything in or on the sidewalks or driveways
outside the Building or in the lobbies, corridors, stairwells or other common
areas of the Building, or use such locations for any purpose except access to
and exit from the Premises without Landlord’s prior written consent.  Landlord may remove at Tenant’s expense any
such obstruction or thing (unauthorized by Landlord) without notice or
obligation to Tenant.

 

17.                                 Dangerous
or Immoral Activities Tenant shall not make any use of the Premises which
involves the danger of injury to any person, nor shall the same be used for any
immoral purpose.

 

18.                                 Proper
Conduct Tenant shall not conduct itself in any manner which is inconsistent
with the character of the Building as a first class building or which will
impair the comfort and convenience of other tenants in the Building.

 

19.                                 Employees,
Agents and Invitees  In these Rules
and Regulations, Tenant includes the employees, agents, invitees and licensees
of Tenant and others permitted by Tenant and others permitted by Tenant to use
or occupy the Premises.

 

3

 

Exhibit D

 

SUPPLEMENTAL TERMS
AND CONDITIONS

 

1.                                       The
following is added as Article 22.00 of the Lease

 

Article 22.00             Surrender
of Leases

 

22.01                     Surrender
of Leases:

 

Tenant, effective on October 1,
2003 is the “Tenant” under the following defined leases (“Surrendered Leases”)
covering the specified leased spaces (“Surrendered Premises”) in the Baker
Building and U.S. Trust Building (formerly the Peavey Building):

 

•                  Lease of Office
Space, dated July         1996 between
One Call TeleCom, Inc. and St. Paul Properties, Inc, as amended by Amendment of
Lease, dated May 15, 1997 and Second Amendment of Lease, dated October 15, 1998
and assigned to Eschelon Telecom, Inc. (successor in interest to Advanced
Telecommunications, Inc.) by Assignment of Lease, dated August 18, 1998,
covering 7,277 square feet on the twelfth floor of the Baker Building.

 

•                  Lease of Office
Space, dated September 15, 1997 between Eschelon Telecom, Inc (successor in
interest to Advanced Telecommunications, Inc.) and St. Paul Properties, Inc. as
amended by Amendment of Lease, dated October 5, 1998 and Partial Surrender of
Lease, dated April 21, 2000, covering 6,262 square feet on the twelfth floor of
the U.S. Trust Building.

 

•                  Lease of
Additional Office Space, dated November 24, 1999 between Eschelon Telecom, Inc.
(successor in interest to Advanced Telecommunications, Inc.) and St. Paul
Properties, Inc., covering 6,977 square feet on the ninth floor of the Baker
Building.

 

•                  Lease of
Additional Office Space, dated December 28,1999 between Eschelon Telecom, Inc.
(successor in interest to Advanced Telecommunications, Inc.) and St. Paul
Properties, Inc., covering 7,139 square feet on the third floor of the Baker
Building.

 

•                  Lease of
Additional Office Space, dated April 20, 2000 between Eschelon Telecom, Inc.
(successor in interest to Advanced Telecommunications, Inc.) and St. Paul
Properties, Inc., covering 6,449 square feet on the sixth and seventh floors of
the Baker Buildings.

 

•                  Lease of
Additional Office Space, dated April 21, 2000 between Eschelon Telecom, Inc
(successor in interest to Advanced Telecommunications, Inc,) and St. Paul
Properties, Inc., as amended by Partial Surrender of Office Space Lease, dated
November 19, 2002, covering 4,818 square feet on the fifth floor of the Baker
Building.

 

1

 

•                  Lease of
Additional Office Space, dated September 8, 2000 between Eschelon Telecom, Inc.
and St. Paul Properties, Inc., covering 1,002 square feet on the sixth floor of
the Baker Building.

 

•                  Lease of Additional
Office Space, dated October 15, 2000 between Eschelon Telecom, Inc. and St.
Paul Properties, Inc., covering 348 square feet on the seventh floor of the
Baker Building.

 

•                  Lease of
Additional Office Space, dated January 1, 2001 between Eschelon Telecom, Inc.
and St. Paul Properties, Inc., as amended by Amendment of Lease, dated August
1, 2001, covering 7,381 square feet on the tenth floor of the Baker Building.

 

•                  Lease of
Additional Office Space, dated January 1, 2001 between Eschelon Telecom, Inc.
and St. Paul Properties, Inc., covering 19,122 square feet on the eighth floor
of the U.S. Trust Building.

 

•                  Lease of
Additional Office Space, dated May 7, 2001 between Eschelon Telecom, Inc. and
St. Paul Properties, Inc. covering 4,654 square feet on the eight floor of the
U.S. Trust Building.

 

Provided Tenant is not in
default under the Lease, Tenant shall not be responsible for the payment of
Annual Rent and Occupancy Costs on the Surrendered Premises for the period
beginning on December 1, 2003 through the “Vacation Date” shown below.

 

SURRENDERED PREMISES

 

	
  BUILDING

  	
   

  	
  FLOOR

  	
   

  	
  SUITE

  	
   

  	
  SQ. FEET

  	
   

  	
  VACATION

  DATE

  	
   

  
	
  Baker

  	
   

  	
  Third

  	
   

  	
  300

  	
   

  	
  7,139

  	
   

  	
  March 5,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Sixth

  	
   

  	
  600

  	
   

  	
  3,198

  	
   

  	
  March 12,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Fifth

  	
   

  	
  500

  	
   

  	
  4,818

  	
   

  	
  April 9,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Seventh

  	
   

  	
  700, 710

  	
   

  	
  3,599

  	
   

  	
  April 9,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Sixth

  	
   

  	
  650

  	
   

  	
  1,002

  	
   

  	
  April 9,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Ninth

  	
   

  	
  900

  	
   

  	
  6,977

  	
   

  	
  April 16,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Tenth

  	
   

  	
  1000, 1050

  	
   

  	
  7,381

  	
   

  	
  April 23,
  2004

  	
   

  
	
  Baker

  	
   

  	
  Twelfth

  	
   

  	
  1200, 1244

  	
   

  	
  7,277

  	
   

  	
  April 16,
  2004

  	
   

  
	
  U.S. Trust

  	
   

  	
  Twelfth

  	
   

  	
  1200

  	
   

  	
  6,262

  	
   

  	
  April 16,
  2004

  	
   

  
	
  U.S. Trust

  	
   

  	
  Eighth

  	
   

  	
  800, 825,
  850

  	
   

  	
  23,776

  	
   

  	
  November 30,
  2003

  	
   

  

 

Except for the Surrendered
Premises on the eighth floor of the U.S. Trust Building which Tenant shall
continue to occupy; if Tenant fails to vacate the Surrendered Premises as shown
above, on or before the Vacation Date, then Tenant’s obligations to pay Annual
Rent and Occupancy Costs on that portion of the Surrendered Premises, shall
commence on the day following the Vacation Date, at one and one-half times the
amount required under the lease for such portion of the Surrendered Premises
and continue until the day following the date when Tenant has vacated such
portion of the Surrendered Premises. The Surrendered Leases shall terminate
individually on the date following the day Tenant has vacated all the space
under each lease included in the Surrendered Leases (“Surrender Date”) except
for the Surrendered Lease covering the

 

2

 

Surrendered Premises on the
eighth floor of the U.S. Trust Building which shall terminate on November 30,
2003. Each lease included in the Surrendered Leases shall have its own
Surrender Date, which shall be documented in writing between Tenant and
Landlord. Tenant will surrender to Landlord those leases (“Surrendered Leases”)
as setforth in this Article 22.00 on the Surrender Date for the unexpired term
of the Surrendered Leases. Tenant will promptly quit and surrender possession
of the Surrendered Premises on the Surrender Date in good order and condition,
reasonable wear and tear and damage by fire and other casualty excepted. Any
property of Tenant not removed from the Surrendered Premises on or before the
Surrender Date shall be and become the property of Landlord absolutely. The
respective rights and obligations of Landlord and Tenant under the Surrendered
Leases shall be preserved and shall survive the Surrender Date as to all
matters arising or accruing prior to the Surrender Date, but no such rights or
obligations will arise or accrue to either of them under the Surrendered Leases
on or after the Surrender Date.

 

2.                                       The
following is added as Article 23.00 of the Lease

 

Article 23.00 Tenant Improvements

 

23.01                     Tenant
agrees to perform improvements to the Premises to accommodate Tenant’s office
space needs (“Tenant Improvements”). All work to be done by Tenant and Tenant’s
general contractor, who must be approved by the Landlord prior to the
commencement of any Tenant Improvements, shall be done in accordance with
Article 7.04 of the Lease and Exhibit E attached hereto. Tenant further agrees
that the Tenant Improvements shall include all work necessary for Tenant’s
occupation of the Premises including demolition, construction, architectural
and engineering fees, data and phone cabling and moving expenses.

 

23.02                     Tenant
shall have design control over the elevator lobby on the ninth floor of the
U.S. Trust, Roanoke & Investors Buildings provided such work is included in
Tenant’s initial Tenant Improvements and is approved by Landlord in accordance
with the provisions set forth on attached Exhibit E.

 

3.                                       The
following is added as Article 24.00 of the Lease

 

Article 24.00 Landlord Contribution

 

24.01                     Landlord
shall in accordance with this Article 24.00 reimburse Tenant, up to the Landlord
Contribution, as defined below, for those costs actually incurred by Tenant in
performing work. The “Landlord Contribution” is  One Million One Hundred Forty-Three Thousand Nine Hundred Seventy-One
and 41/100 ($1,143,971.41) dollars and may also be used to pay
costs incurred by Tenant in design, consulting fees, moving costs, cabling and
wiring expense and furniture.

 

24.02                     Tenant
may, from time to time but no more frequently than once every fifteen (15)
days, request in writing reimbursement from the Landlord Contribution for those
costs that Tenant has actually paid for the performance of the Tenant Work.
Landlord shall reimburse Tenant for the amount requested within fifteen (15)
days after Landlord’s

 

3

 

receipt of the
following items, and Landlord’s receipt of such items is a condition precedent
to Landlord’s reimbursement obligations: (i) Tenant’s written reimbursement
request specifying the amount for which Tenant is seeking reimbursement; (ii) copies
of applications for payment executed by Tenant’s general contractor and
certifications for payment executed by Tenant’s architect substantiating the
requested reimbursement; (iii) commencing with the first reimbursement request
and continuing with each request thereafter, a lien waiver, in form and
substance reasonably acceptable to Landlord, from Tenant’s general contractor
in an amount equal to the sum of the current reimbursement request plus all
prior reimbursement requests; (iv) commencing with the second reimbursement
request and continuing with each request thereafter, lien waivers, in form and
substance reasonably acceptable to Landlord, from each of the general
contractor’s subcontractors, of every level, material suppliers and any other
party providing material or performing work in connection with the Tenant
Improvements in amounts equal to all prior payments made by Tenant to its
general contractor for each subcontractors, suppliers or other parties; and (v)
such other evidence as Landlord may reasonably request to substantiate Tenant’s
right to be reimbursed by Landlord from the Landlord Allowance. Landlord is not
required to reimburse Tenant for any amounts (i) if Tenant is in default beyond
any of the evidence identified above; (ii) if Tenant has failed to provide any
of the evidence identified above; (iii) if making such reimbursement would
cause the total amount of Landlord Allowance paid by Landlord to exceed the
reasonable value of the Tenant Improvements completed as of the date of Tenant’s
reimburse request; and (iv) Landlord
reserves the right to withhold fifteen percent (15%) of Landlord’s Contribution
until the Tenant Improvements, including clean up, have been one hundred
percent (100%) completed and signed off by Landlord

 

4.                                       The
following is added as Article 25.00 of the Lease

 

Article 25.00 Americans with Disabilities Act
(“ADA”)

 

25.01                     Landlord
shall be responsible for base building improvements outside the Premises and in
common areas of the Building which Landlord deems necessary to cause the same
to comply with ADA. Tenant shall be responsible for ADA compliance within the
Premises except for the restrooms that are located on full floors within the
Premises, in which case Landlord shall be responsible for any upgrades necessary,
provided that such cost shall be included as a Building Operating Expense.

 

5.                                       The
following is added as Article 26.00 of the Lease

 

Article 26.00 Right of First Offer

 

26.01                     Landlord
hereby grants to Tenant a right of first offer (the “Right of First Offer”)
with respect to the Offer Space hereinafter defined, subject to and in
accordance with the provisions of this Article 26.00. For the purpose of this
Article 26.00 “Offer Space” shall mean any leasable space not leased to Tenant
located on the eighth floor of the U.S. Trust Building, the eighth and tenth
floors of the Investors Building and the eighth and tenth floor of the Roanoke
Building, subject to such exceptions and restrictions as Landlord may
reasonably establish to reserve a portion of the Offer Space for additional
elevator

 

4

 

use.

 

26.02                     Landlord
warrants and represents that Landlord has not presently granted any lease
rights to lease the Offer Space other than that portion which is currently
leased to other tenants on the eighth floor of the U.S. Trust Building and the
eighth floor of the Roanoke Building.

 

26.03                     Landlord
shall give Tenant written notice if Landlord is actively working with another
party to lease all or part of the Offer Space (“Offer Notice”). The Offer
Notice shall state the portion of the Offer Space in question, the availability
date with regard to the U.S. Trust and Roanoke Buildings’ eighth floor space,
any portion of the Offer Space to be included (whether by lease or pursuant to
exercise of an option) and Landlord’s estimate of Market Rent.

 

Landlord shall
have no obligation to deliver an Offer Notice to Tenant or to lease the Offer
Space to Tenant, if Tenant is in default under the Lease. Tenant’s First Right
Offer shall terminate as of November 30, 2010.

 

26.04                     Tenant
shall have the right, at its option, to lease the Offer Space identified in the
Offer Notice upon the terms, and at the rent provided in the application
provisions of this Article 26.00, by giving Landlord notice of Tenant’s
election to lease such Offer Space within fifteen (15) days after the Offer
Notice for such Offer Space is given. If Tenant disagrees with Landlord’s
estimate of Market Rent for such Offer Space as stated in Landlord’s Offer
Notice, Tenant may elect to have the Market Rent for such Offer Space
determined in accordance with the provisions of Article 27.00 of this Exhibit D
by notice given as therein provided. If Tenant fails to give Landlord notice of
its election to lease such Offer Space within said fifteen (15) day period,
Landlord shall be free to lease the Offer Space identified in such Offer
Notice, or to otherwise grant rights with respect to such Offer Space without
restriction unless and until Landlord thereafter again given Tenant an Offer
Notice affecting such Offer Space.

 

26.05                     Annual
Rent for any Offer Space added to the Premises in accordance with this Article
26.00 shall equal the number of square feet in the Offer Space, determined in
accordance with the provisions of Section 3.00 of Exhibit B, times the Market
Rental Rate for such Offer Space. Said Market Rental Rate shall be the amount
stated in the Offer Notice, unless Tenant elects to have the Market Rental Rate
determined in accordance with the provisions of Article 27.00 of this Exhibit
D, in which event the latter determination shall be controlling. Annual Rent as
determined in accordance with the provisions of Article 27.00 shall be the
Annual Rent for such Offer Space during the balance of the Term. Except for Annual
Rent and except as expressly stated to the contrary in this Article 26.00 and
in any Offer Notice, the Offer Space will be included in the Premises as of the
delivery date therefore and shall otherwise be leased in accordance with and
pursuant to the terms, conditions and provisions of this Lease.

 

26.06                     In
the event that Tenant elects to lease Offer Space, Landlord shall deliver the
Offer Space to Tenant in its then “as-is” condition, free of all tenant’s and
occupants and their respective trade fixtures, on (i) the availability date as
stated in Landlord’s Offer Notice

 

5

 

with respect
to the Offer Space on the eighth floor of the U.S. Trust and Roanoke Buildings,
or (ii) the date of Tenant’s notice of its election to lease Offer Space
identified in an Offer Notice, (the “Offer Space Delivery Date”). From and
after the ninety (90) day period following the Offer Space Delivery Date,
Tenant shall have the right, without any corresponding obligation to make payments
of Rent or other payments for the Offer Space (other than Landlord’s reasonable
charges for electricity and other utilities used by Tenant in such Offer Space
during such 90 day period), to make such improvements to the Offer Space as
Tenant may wish to make, subject to and in accordance with Article 7.04, to
prepare the Offer Space for Tenant’s use and occupancy. If Tenant moves into
and occupies any portion of such Offer Space prior to the expiration of the
ninety (90) day period following the Offer Space Delivery Date, Tenant’s
obligation to pay rent with respect to the entire Offer Space shall commence on
any earlier date upon which Tenant takes occupancy of such portion. Landlord
shall have no liability to Tenant hereunder for the failure of any prior tenant
in violation of its lease to vacate or remove its trade fixtures prior to the
Offer Space Delivery Date, provided that Landlord exercises its reasonable best
efforts to force timely surrender of the subject Offer Space by any such tenant
and removal of such trade fixtures by any such tenant.

 

6.                                       The
following is added as Article 27.00 of the Lease

 

Article 27.00 Market Rent

 

27.01                     Definition
- “Fair Rental Value” the Annual Rent which Landlord would receive by renting
the space in question including all building, structure and fixtures erected
thereon, together with all additions, alterations and replacements thereof in
their condition and configuration as of the time of determination of Fair
Rental Value assuming the Landlord to be a prudent person willing to lease but
being under no compulsion to do so, and assuming the Tenant to be a renewal or
expanding tenant within downtown Minneapolis and prudent person willing to
lease but being under no compulsion to do so, assuming a lease term equal to
the term in question, assuming a lease containing the same terms and provisions
as those contained in this Lease, and giving due regard to all economic
factors; including, without limitation, the size and use of the space in
question, a location on the downtown Minneapolis skyway system, the quality and
age of the Building, the extent of services provided by the Landlord,
applicable distinctions between “gross” leases and “net” leases, the
creditworthiness and quality of Tenant, leasing commissions payable in the
market, any inducements, or rental concessions, if any, and any other relevant
term or condition in making such evaluation, including the benefit to Landlord
of having the space in question immediately rent producing at the date in
question.

 

27.02                     Appraisal

 

(a)                                  Such
Fair Rental Value shall be determined under this Article 26.00 by a Fair Rental
Board consisting of three reputable real estate appraisers, each of whom shall
be a Member of the American Institute of Real Estate Appraisers (“Association”)
with the designation of “MAI” and shall have no direct or indirect financial or
other business interest in or in common with any of the parties hereto.

 

6

 

One appraiser
shall be appointed by Tenant or its representative and the second appraiser
shall be appointed by Landlord or its representative. The third appraiser shall
be appointed by the first two appraisers. If the first two appraisers are
unable to agree on a third appraiser within fifteen (15) days after the
appointment of the second appraiser, or if either party refuses or neglects to
appoint an appraiser as herein provided within twenty (20) days after the
appointment of the first appraiser, then such third appraiser or such second
appraiser whose appointment was not made as aforesaid shall be appointed by the
Association.

 

(b)                                 Within
thirty (30) days after the appointment, arbitrators so chosen shall hold a
hearing at which each party may submit evidence, be heard and cross-examine
witnesses, with each party having at least ten (10) days advance notice of the
hearing. In the event of the failure, refusal or inability of any arbitrator to
act, a new arbitrator shall be appointed in his or her stead, which appointment
shall be made in the same manner as hereinbefore provided for the particular
arbitrator being replaced. The hearing shall be conducted such that each of
Landlord and Tenant shall have two (2) hours only to present oral evidence
being sent concurrently to the other party. Within 30 days after the conclusion
of the hearing, arbitrators shall then each independently and separately
determine the Fair Rental Value. If the determinations of at least two of the
appraisers shall be identical in amount, said amount shall be deemed to be the
Fair Rental Value. If the determinations of at least two of the appraisers
shall not be identical in amount, the Fair Rental Value shall be determined as
follows: (a) if neither the highest nor the lowest determination of Fair Rental
Value differs by more than ten percent (10%) of such middle determination of
Fair Rental Value, then the Fair Rental Value shall be deemed to be the average
of the three determinations and (b) if clause (a) does not apply, then the Fair
Rental Value shall be the average of the middle determination of Fair Rental
Value and the closest in amount to said middle determination of Fair Rental
Value.

 

(c)                                  The
foregoing determination of Fair Rental Value shall in all cases be final,
binding and conclusive upon the parties. Each party shall pay the fees and
expenses of the one of the two original appraisers appointed by such party, or
in whose stead as above provided such appraiser was appointed, and the fees and
expenses of the third appraiser shall be borne equally by both parties. The determination
made pursuant to the foregoing procedures shall be final and binding on the
parties and judgment upon any such determination may be entered by any Court
having jurisdiction thereof.

 

27.03                     Payment
and Adjustment - Until Fair Rental Value is determined, amounts payable in
reference to the Fair Rental Value shall be paid in accordance with the
Landlord’s opinion of value, and if the appraisal determination indicates that
a greater or lesser amount should have been paid than that which actually was paid,
a proper adjustment, including interest on such adjustment at the interest rate
specified in Article 19.01 from time to time during the period from and after
the date of Tenant’s payment to the date of adjustment based upon such
determination shall be made between the parties hereto within fifteen (15) days
after such determination is made.

 

7

 

27.04                     Upon
determination of the Annual Rent for a renewal or expansion, the parties will
execute an Amendment to this Lease confirming the renewal or expansion and the
Annual Rent, as determined pursuant to Article 26.00.

 

7.                                       The
following is added as Article 28.00 of the Lease

 

Article 28.00 Security Deposit

 

28.01                     Tenant
shall deposit with Landlord the Security Deposit in the amount of one hundred
seventy-five thousand and 00/100 dollars ($175,000.00) on or before the date of
full execution of this Lease. The Security Deposit shall be held by Landlord,
without interest thereon, as security for the full and faithful performance by
Tenant of each and every term, covenant and condition of this Lease to be
observed and performed by Tenant. The Security Deposit shall not be mortgaged,
assigned, transferred or encumbered by Tenant and any such act on the part of
Tenant shall be null and void and of no force and effect. If any Rent or any
other sum payable by Tenant to Landlord shall be unpaid or should Tenant fail
to perform any of the terms of this Lease, then Landlord may, and without
prejudice to any other remedy, appropriate any apply the Security Deposit to
compensate Landlord toward the payment of the Rent or other sums due from
Tenant, or towards any loss, damage or expense sustained by Landlord resulting
from such default; and, in such event, Tenant shall forthwith restore the
Security Deposit to the original sum required to be deposited. In the event
Tenant shall fully and faithfully comply with all of the terms, covenants and
conditions of this Lease, the Security Deposit shall be returned in full to
Tenant following the date of the expiration of the Lease Term and the surrender
of the Premises by Tenant in compliance with provisions of this Lease. In the
event any bankruptcy, insolvency, reorganization or other creditor-debtor
proceedings shall be instituted by or against Tenant, or its successors or
assigns, such Security Deposit shall be deemed to be applied first to the
payment of any rents and/or other charges due Landlord for all periods period
to the institution of such proceedings and the balance, if any, of such
Security Deposit may be retained by Landlord in partial liquidation of
Landlord’s damages. Landlord may deliver the Security Deposit to the purchaser
or other transferee of Landlord’s interest in the Premises and thereupon
Landlord shall be discharged and released from all further liability with
respect to such Security Deposit, and Tenant agrees to look solely to the new
landlord or other transferee for the return of said Security Deposit. No holder
of a mortgage or deed of trust or lessor under a ground or underlying lease to
which this lease is or may be superior or subordinate shall be responsible in
connection with the Security Deposit, unless such mortgagee or holder of such
deed of trust or lessor shall have actually received the Security Deposit as
such.

 

8.                                       The
following is added as Article 29.00 of the Lease

 

Article 29.00 Signage

 

29.01                     Tenant,
with prior written approval from Landlord, shall have the right to install
signage of its choice on all full floors leased provided said signage is not
visible from the outside of the Building. Tenant signage for floors on which
Tenant is not leasing the entire floor shall be done in accordance with
Building standard signage.

 

8

 

29.02                     Tenant
shall be allowed standard signage on Building Directories in which the Premises
are located on a prorate basis, based on the portion of the Building leased by
Tenant.

 

9.                                       The
following is added as Article 30.00 of the lease

 

Article 30.00 Skybridge

 

30.01                     Tenant
shall have the exclusive right to use the existing skybridge between the 9th
floor of the U.S. Trust Building and the 9th floor of the Investors
Building. Landlord shall be responsible for the structural integrity of the
skybridge and Tenant shall be responsible for all other costs related to the
use and maintenance of the skybridge.

 

10.                                 The
following is added as Article 31.00 of the Lease.

 

Article 31.00 Partial Surrender of Premises

 

31.01                     Provided
Tenant is not default under the Lease, Tenant shall have the right to surrender
back to Landlord 3,006 square feet on the eighth floor of the U.S. Trust
Building shown as (“Surrender Premises”) on Exhibit A-3 attached hereto, plus
for the calculation of Rent only an additional 361 square feet of unallocated
space in the U.S. Trust Building, provided:

 

(a)          Tenant
gives Landlord written notice no later than March 30, 2004 that it is
exercising its right to surrender the Surrender Premises,

 

(b)         Tenant
vacates Surrender Premises in accordance with the Lease no later than the last
day of the third full month of the Term after Tenant’s notice (“Surrender
Date”).

 

(c)          Prior
to the Surrender Date, Tenant shall erect a demising wall deck to deck and
separate electrical service necessary to allow the Surrender Premises to be separately
metered for electrical service.

 

Should Tenant
exercise their right to surrender the Surrender Premises and fails to vacate
the Surrender Premises in accordance with (a), (b) and (c) above by the
Surrender Date then Tenant shall be occupying the Surrender Premises under
Article 13.02 of the Lease and the Surrender Date shall be the date following
the day Tenant has vacated the Surrender Premises in accordance with (a), (b)
and (c) above.

 

31.02                     Survival   The respective rights and obligations of Landlord
and Tenant with respect to the Surrender Premises shall be preserved and shall
survive the Surrender Date as to all matters arising or accruing prior to the
Surrender Date, and shall be preserved and shall survive any partial
cancellation in accordance with Article 30.01 as to all matters arising or
accruing prior to the Surrender Date.

 

31.03                     Execution
of Instruments   Within fifteen (15)
days after Tenant’s receipt from Landlord of any instruments Landlord may
reasonably request to evidence the termination of the Surrender Premises,
Tenant shall execute and deliver such instruments to Landlord.

 

9

 

EXHIBIT E

 

CONSTRUCTION
AGREEMENT

 

	
  DATE:

  	
   

  	
  November 18, 2003

  
	
   

  	
   

  	
   

  
	
  BETWEEN:

  	
   

  	
  ST. PAUL
  PROPERTIES, INC.

  
	
   

  	
   

  	
  Suite 400

  
	
   

  	
   

  	
  730 Second
  Avenue South

  
	
   

  	
   

  	
  Minneapolis,
  Minnesota 55402

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  ESCHELON TELECOM, INC.

  
	
   

  	
   

  	
  900 U.S. Trust Building

  
	
   

  	
   

  	
  730 Second Avenue South

  
	
   

  	
   

  	
  Minneapolis, MN 55402

  

 

 

IN RESPECT OF SPACE IN:                                            Roanoke Building, Investors Building
and U.S. Trust Building

 

LANDLORD AND TENANT hereby
agree as follows:

 

1.                                       In
this Agreement:

 

(a)                                  “Building”
means Roanoke, Investors and
U.S. Trust Building located in the city of Minneapolis,
Minnesota

 

(b)                                 “Premises”
means Roanoke Premises,
Investors Premises and U.S. Trust Premises.

 

(c)                                  “Lease”
means the lease between Landlord and Tenant dated November 18, 2003.

 

(d)                                 All
other words and phrases, unless otherwise defined in these Agreement, have the
meanings attributed to them in the Lease.

 

2.                                       Landlord
shall be responsible for the work set out as its responsibility in the
Construction Procedures attached as Schedule 1, by this reference made a part
of this Agreement.

 

3.                                       Tenant
shall be responsible for all work desired by Tenant or necessary to complete
the Premises for occupancy. Any work for which Tenant is responsible shall be
designed, performed, and completed in strict compliance with the provisions of
Schedule 1.

 

4.                                       Until
the day Tenant occupied the Premises, Tenant selects as its address for receipt
of notices, correspondence, or other communications form Landlord the address
set out as its address at the beginning of this Agreement. Tenant appoints
                             
as its representative in all matters relating to the design and construction of
the Premises.

 

5.                                       Notwithstanding
anything in the Lease to the contrary, the term “Lease” in Article 20.05 of the
Lease is deemed to include this Agreement.

 

1

 

6.                                       Any
default by Tenant under this Agreement shall ipso facto be deemed a default
under the Lease dated.

 

THIS AGREEMENT is executed as
of the date set out at the beginning of it.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  ST. PAUL
  PROPERTIES, INC.

  	
  ESCHELON TELECOM, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ R. William Inserra

  	
   

  	
  By:

  	
  /s/ Michael Donahue

  	
   

  
	
   

  	
  R. William
  Inserra

  	
   

  	
  Michael A.
  Donahue

  
	
   

  	
  Vice
  President Asset Management

  	
   

  	
  VP Finance
  & Treasurer

  
						

 

2

 

Schedule 1

 

CONSTRUCTION
PROCEDURES

 

ARTICLE 1.00                                       GENERAL
DESIGN AND CONSTRUCTION CRITERIA

 

1.01                                                                           Subject
to the provisions hereof, Tenant is free to utilize designers, contractors approved by Landlord,
and workmen of its choice. Restrictions on mechanical and electrical
connections by Tenant must be imposed, however, to ensure that no warranty or
guarantee pertaining to the Project is lost or jeopardized.

 

1.02                                                                           Tenant
is responsible for preparation of all design drawings and plans and
specifications relating to completion of the Premises for occupation by Tenant,
calling of vendors and letting of contracts relating to Tenant’s Work,
supervision and completion of Tenant’s Work, compliance with the requirements
of all authorities having jurisdiction and with conditions contained herein,
and payment of all fees and charges thereby incurred.

 

1.03                                                                           Landlord
reserves the right to withhold approval of any plans or specifications and to
withhold authorization for Tenant’s Work to proceed until furnished with
reasonable evidence that Tenant has made provision to pay the full cost of the
work and to discharge any liens that may arise therefrom.

 

1.04                                                                           Tenant
shall impose and enforce all terms hereof on any designer, contractor, and
workmen engaged by Tenant.

 

ARTICLE 2.00                                       PLANS

 

2.01                                                                           Tenant’s
designer(s) is responsible to verify the location of mechanical and electrical
facilities and become familiar with the Building to permit completion of proper
and adequate architectural, structural, mechanical, and electrical working
drawings for Tenant’s Work.

 

2.02                                                                           Not
more than thirty (30) working days after execution of the Lease, Tenant shall
deliver to Landlord two (2)
copies of each of the complete plans and specifications for Tenant’s Work, and
such other information as may be reasonably requested by Landlord. Such plans
and specifications shall include floor plans, interior elevations, details of
any special installations which will affect the building or perimeter walls of
the Premises, complete plans for all mechanical, plumbing and electrical
materials and finishes to be used, and performance characteristics for fixtures
and equipment. Where applicable, such plans and specifications shall include
sections and elevations for Tenant entries, details of entry signage (which
shall conform to Landlord’s sign criteria), reflected ceiling plans, and
sprinkler head location.

 

2.03                                                                           Not
more than five (5) working days after receipt by Landlord of plans and
specifications referred to in Articles 2.01 and 2.02, Landlord shall notify
Tenant either of its approval thereof or of the changes required. If Landlord
notifies

 

3

 

Tenant that
changes are required, Tenant shall within five (5) working days of such
notification submit to Landlord, for its approval, plans and specifications
amended in accordance with the changes so required.

 

2.04                                                                           Unless
otherwise agreed by Landlord, all drawing provided by Tenant hereunder shall be
of uniform size not exceeding 24” by 26” and to a minimum scale on one-eighth
inch equals one foot.

 

2.05                                                                           On-Site
Meeting. A minimum of five (5) days prior to the commencement of Tenant
construction, Tenant and Tenant’s contractor shall meet with the Landlord’s
Tenant Coordinator in the Tenant’s designated Premises. At that time, Tenant
shall provide Landlord the following items:

 

1.                                       Copy
of Tenant’s Building Permit.

 

2.                                       Certificate
setting forth name and address of Tenant’s general, mechanical, electrical and
sprinkler contractor(s) involved in completion of Tenant’s Work portion of
Additional Space.

 

3.                                       Certificate
of Insurance, naming the Landlord as an additional insured as called for
herein. Tenant’s contractors shall not be permitted to commence any work until
all required insurance has been obtained and all certificates have been
received by Landlord.

 

The Tenant’s
contractor shall purchase from and maintain in a company or companies lawfully
authorized to do business in workmen’s compensation acts and other employee
benefit acts which are applicable, claims for damages because of bodily injury,
including death, and from claims for damages, other than to the Work itself, to
property which may rise out of or result from the Contractor’s operations under
the Contract, whether such operations be by the Contractor or by a
Subcontractor or anyone directly or indirectly employed by any of them. This
insurance shall be written for not less than limits of liability specified
below or required by law, whichever coverage is greater, and shall include
contractual liability insurance applicable to the Contractor’s obligations.

 

The Contractor
shall procure the following minimum insurance coverages and limits the
liability:

 

	
  Workman’s Compensation

  	
   

  	
  Statutory

  
	
   

  	
   

  	
   

  
	
  Employer’s
  Liability

  	
   

  	
  $1,000,000
  each accident

  $1,000,000 bodily injury by disease each person

  $1,000,000 aggregate including bodily injury by disease

  
	
   

  	
   

  	
   

  
	
  Commercial
  General Liability

  	
   

  	
  $1,000,000
  each occurrence

  $1,000,000 aggregate

  
	
   

  	
   

  	
   

  
	
  Comprehensive
  Automobile

  	
   

  	
  $1,000,000
  each occurrence

  
	
   

  	
   

  	
   

  
	
  Liability

  	
   

  	
  $1,000,000
  aggregate

  
	
   

  	
   

  	
   

  
	
  Employee
  Dishonesty

  	
   

  	
  $100,000

  
	
   

  	
   

  	
   

  
	
  Umbrella
  Excess Liability

  	
   

  	
  $1,000,000

  

 

4

 

Commercial
General Liability insurance required under this paragraph shall include
coverage for Products/Completed Operations (extending one (1) year after
completion of the Work), Operations, Personal Injury with Employment Exclusion
deleted, Blanket XCU, Incidental Malpractice, Host Liquor Liability, and
Blanket Contractual Liability insurance applicable to the Contractor’s
Indemnity obligations and other contractual indemnities assumed by the
Contractor under the contract documents.

 

Comprehensive
Automobile Liability insurance required under this paragraph shall include
coverage for all owned, hired and non-owned autos.

 

Employer’s
Liability, Comprehensive General Liability and Automobile Liability insurance
may be arranged under single policies for the full minimum limits required, or
by a combination of underlying policies with the balance provided by an Excess
or Umbrella Liability policy.

 

Qualification
of Insurers. All companies providing the coverages required shall have a
financial rating no lower than XII and a policy holder’s service rating no
lower than A+ as listed in A.M. Best’s Key Rating Guide, current edition.
Companies with ratings lower than A+:XII will be acceptable only upon written
consent of the Owner.

 

Subrogation
Clause. The Contractor waives all rights against the Owner for losses, costs,
expenses or damages covered by Contractor’s insurance. The following
subrogation clause shall appear in all policies of insurance, “Subrogation
Clause” - It is hereby stipulated that this insurance shall not be invalidated
should the insured waive in writing prior to a loss any or all right or
recovery against any party for loss occurring to the property described herein.

 

ARTICLE 3.00                                       LANDLORD’S
WORK

 

3.01                                                                           All
work, except as specifically stated in this Exhibit E, is to be done by Tenant.

 

ARTICLE 4.00                                       TENANT’S
WORK

 

4.01                                                                           All
work required to complete the Premises for occupancy (the “Tenant’s Work”)
shall be performed by Tenant at no cost to Landlord.

 

4.02                                                                           At
its own expense, Tenant shall provide all design permits, fees, work and
materials required to complete the Premises for occupancy including but not

 

5

 

limited to the
following:

 

	
  (a)

  	
   

  	
  Signs

  	
   

  	
  Supply and
  installation of all signs and related electrical connections (if any) which
  shall be from Tenant’s junction box.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Interior

  	
   

  	
  Supply and
  installation of all interior fixtures and finishes on the Premises including
  ceilings, lights, partitions, doors, floor coverings, vertical and horizontal
  transportation equipment, trade fixtures, security vaults, and all finishing
  thereof, and such other requirements as may be imposed by any regulatory
  authority having jurisdiction.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Telephones

  	
   

  	
  Supply and
  installation of telephones, communication and alarm systems to and in the
  Premises.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Water and
  Drainage

  	
   

  	
  Supply and
  installation of any plumbing service (including water heating required by
  Tenant) to and in the Premises from the point of access provided by Landlord,
  provided that Landlord may require to provide metering, but such metering
  shall be at Tenant’s expense.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Heating,
  Cooling

  	
   

  	
  Supply and
  installation of secondary and Ventilation distribution ductwork and VAV
  boxes, if needed, including any approved modification to the primary systems,
  additional controls, and special ventilations, cooling and exhaust
  requirements.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Power

  	
   

  	
  Supply and
  installation of electrical distribution systems for power and supplementary
  lighting to and in the Premises from the point of access provided by Landlord
  at the perimeter of the Premises, including any special electrical systems
  and any approved modifications to base Building systems to accommodate the
  same.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Fire
  Protections

  	
   

  	
  Supply and
  installation of any and Sprinklers approved modifications to the Building’s
  fire detection and fire warning systems. Supply and installation of safety
  and emergency equipment and lighting as required by Tenant or any regulatory
  authority having jurisdiction which is additional to the base systems
  provided by Landlord. Installation of approved modifications to the base
  building

  

 

6

 

	
   

  	
   

  	
   

  	
   

  	
  sprinkler
  system [see 4.02(l)].

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Stairways

  	
   

  	
  If Tenant
  occupies two or more floors, where structurally feasible, stairways and other
  means of access between such floors required by Tenant and approved by
  Landlord, including approved modifications to the base building structure,
  framing and floor slab.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Garbage
  Removal

  	
   

  	
  Provisions
  reasonably satisfactory to Landlord for storage and removal of perishable
  garbage during and after construction.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  At
  Landlord’s sole discretion, Landlord may contract for all construction
  garbage removal to be share in common by all contractors working in the
  complex, and Landlord shall charge Tenant for its fair share use of the
  garbage facilities.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
   

  	
  Special
  Items

  	
   

  	
  The
  following, which require separate specific prior approval by Landlord, which
  shall not be unreasonably withheld or delayed:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (1)                                  any
  opening, sign, storefront or other alteration or improvement on the exterior
  or demising walls of the Premises,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (2)                                  any
  alarm or signal systems on the exterior walls of the Premises or Building.
  Individual antenna of any natures on the roof of the Building and all access
  to the roof, is prohibited,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (3)                                  any
  proposed mezzanine on the Premises,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (4)                                  any
  load suspended from the underside of the floor above or the roof structure of
  the Premises other than normal ceiling, ductwork, piping, and lighting and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (5)                                  any
  working load on the floor of the Premises which is greater than the designed loads
  specified in the Building Standard.

  

 

7

 

	
  (k)

  	
   

  	
  Special
  Services

  	
   

  	
  Supply and
  installation of any special services required by Tenant and approved by
  Landlord (e.g., natural gas, compressed air, kitchen exhaust system,
  auxiliary exhaust system, etc.).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l)

  	
   

  	
  Work to be
  Performed

  	
   

  	
  The
  following shall be carried out at Tenant’s expense and by Landlord’s
  Contractor provided same is at competitive rates:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (1)                                  all
  approved modifications of the base Building structural, heating, cooling,
  ventilation, exhaust, control, electrical distribution and life safety
  systems as installed by Landlord.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (2)                                  patching
  of Building Standard fireproofing,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (3)                                  any
  drilling, cutting, coring and patching for conduit, pipe sleeves, chases,
  duct equipment, or openings in the floors, walls, columns or roofs of the
  Building which is approved by Landlord,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (4)                                  installation
  of approved modifications to the Building Standard sprinkler system, and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (5)                                  connections
  to base Building systems, except low pressure ductwork connection.

  

 

4.03                                                                           Modifications
to the base Building systems and special requirements of Tenant can be
considered by Landlord only if applied for at the time Tenant’s plans and
specifications are submitted for approval and if they are compatible with the
capacity and character of the Building. Any such approved modifications shall
be made at Tenant’s expense and by Landlord’s contractor provided same is at
competitive rates.

 

4.04                                                                           No
construction work shall be undertaken or commenced by Tenant on the Building
until:

 

(a)                                  plans
and specifications fully describing the work, or changes to work previously
approved, have been submitted to and approved by Landlord under Article 2.00.

 

(b)                                 all
necessary building permits and all conventional insurance coverages

 

8

 

have been
obtained by Tenant,

 

(c)                                  proper
provision has been made by Tenant for payment in full of the cost of the work,
and

 

(d)                                 Landlord
has given written notice that the work can proceed, subject to such reasonable
conditions as Landlord may impose, as are reflected in this Lease or
Construction Schedule.

 

4.05                                                                           Subject
only to circumstances over which Tenant has no control and which could not have
been avoided by Tenant by the exercise of due diligence, including events set
forth in Article 20.09 of the Lease, Tenant shall proceed with its work
expeditiously, continuously, and efficiently, and shall complete the same
within the period provided in the Lease or other applicable agreement between the
parties.

 

4.06                                                                           Tenant
shall ensure that all materials and workmanship in Tenant’s Work shall be of
uniformly high quality, not less than Building Standard, and in accordance with
the very best standards of practice and any governing codes or regulations.

 

ARTICLE 5.00                                       TENANT’S
ACCESS FOR COMPLETION OF WORK

 

5.01                                                                           Subject
to compliance with applicable rules referred to in Article 4.00, and subject to
the rights of existing tenants of the Additional Space, Tenant and designers,
contractors, and workmen employed by Tenant shall have access to and
non-exclusive use of the Premises to perform Tenant’s Work and such other work
approved by Landlord as Tenant may desire. Any such work shall be done by
contractors selected by Tenant and approved by Landlord, such approval not to
be unreasonably withheld or delayed, provided that there shall be no conflict
caused thereby with any union or other contract to which Landlord may be a
party. If Tenant’s contractor or subcontractors or trades or workmen cause such
conflict, Tenant shall forthwith remove them from the Building. Landlord shall
have no responsibility or liability whatsoever with respect to any such work or
attendant materials left or installed in the Building, and shall be reimbursed
for any additional costs and expenses of Landlord caused thereby, or resulting
directly or indirectly from any delays caused to Landlord, which are the fault
of Tenant.

 

5.02                                                                           In
order to ensure that work proceeds efficiently in the Building, Landlord may
from time to time make rules for coordination of all construction work. Tenant
shall ensure that any designer, contractor and workmen employed by Tenant is
informed of and observes such rules, and prior to commencement of any
construction work make appropriate arrangements with Landlord, particularly
with respect to:

 

(a)                                  material
and equipment storage

(b)                                 time
and place of deliveries

(c)                                  hours
of work and coordination of work

(d)                                 scheduling

 

9

 

(e)                                  security

(f)                                    clean-up

 

5.03                                                                           Landlord
may require that neat screens or hoardings as designed or prescribed by
Landlord be erected at Tenant’s expense around the work and the Premises, that
all work be conducted and all tools and materials be kept behind such
hoardings, and that all cutting, drilling or other work of a noisy or vibrant
nature be conducted outside the normal business hours of tenants in occupation.

 

5.04                                                                           Tenant
shall at all times keep the Premises and adjacent areas free from accumulation
of waste material or rubbish caused by his suppliers, contractors, or workmen.
Landlord may require clean-up on a daily basis and reserves the right to do
clean-up at the expense of Tenant if Landlord’s reasonable requirements in this
regard are not complied with. At the completion of the work, Tenant’s
contractor shall forthwith remove all rubbish and all tools, equipment and
surplus materials from and about the Additional Space and shall leave the
Premises clean to the satisfaction of Landlord. This final clean-up shall
include the cleaning of light fixtures, windows, perimeter radiation units,
entries and public space affected by the work.

 

5.05                                                                           Any
damage caused by Tenant’s contractor or sub-trades to any property of Landlord
or other tenants shall be repaired forthwith to the satisfaction of Landlord by
Tenant at Tenant’s expense.

 

5.06                                                                           If
Tenant’s contractor does not prosecute Tenant’s Work properly in accordance
with the approved plans and specifications, Landlord, after five (5) day’s
written notice to Tenant and Tenant’s contractor, and without prejudice to any
other right or remedy Landlord may have, may remedy the default or make good
any deficiencies, and recover the costs incurred therein from Tenant.

 

5.07                                                                           Not
more than ten (10) working days after receipt of invoice therefor, Tenant shall
reimburse Landlord for the fees (if any) payable by Landlord to Landlord’s
architect, engineers, and electrical, mechanical and other consultants for
examination of Tenant’s plans and specifications (including in particular
electrical and mechanical details) and for inspection of work performed by
Tenant’s contractors and workmen in accordance therewith.

 

ARTICLE 6.00                                       PERFORMANCE
OF TENANT’S WORK BY LANDLORD

 

6.01                                                                           If
Landlord performs any Tenant’s Work hereunder, whether at the request of Tenant
or as provided herein to be performed by Landlord at Tenant’s cost, or if
Landlord performs other work or supplies, materials, or equipment on the
Premises or in the Building by agreement in writing with Tenant, Tenant shall
pay to Landlord the direct cost thereof to Landlord plus fifteen percent (15%)
of such cost in respect of coordination by Landlord.

 

6.02                                                                           Tenant
shall pay to Landlord any amount payable under Article 6.01 not more than ten
(10) working days after receipt of invoice therefor, provided that if

 

10

 

request by
Landlord, Tenant shall pay to Landlord thirty-five percent (35%) of the
estimated amount thereof at the time Landlord commences such work or orders
materials or equipment for such work and shall make progress payments to
Landlord as the work proceeds in such amounts as Landlord may require.

 

11Exhibit
10.12

 

STANDARD
OFFICE LEASE AGREEMENT (GROSS)

 

THIS LEASE AGREEMENT (hereinafter called the “Lease Agreement”) made as of
the 3rd
day of March,
1999, by and between TIMESHARE SYSTEMS, INC., a Minnesota
corporation, having offices at 511 Eleventh Avenue South, Minneapolis,
Minnesota, 55415 (hereafter called the “Landlord”), and Advanced Telecommunications, Inc.,
a Minnesota corporation (hereafter called the “Tenant”).

 

WITNESSETH

 

FOR AND IN CONSIDERATION of the sum of One Dollar ($1.00) in hand paid
by each of the parties to the other, and other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, Landlord does hereby
lease and let unto Tenant, and Tenant does hereby hire, lease and take from
Landlord, that area outlined in red on Exhibit A-1 attached hereto, and by this
reference incorporated herein, and described as Suites 333, 340, 343, 348 and 367,
collectively containing approximately 5,071.5 rentable square feet of area
(collectively referred to as the “Five Suites”); Suite  334, containing approximately 1,046.5
rentable square feet of area (“Suite 334”); the approximate East Half of
Suite 325 (as shown on Exhibit A-1) containing approximately 5,487.8
rentable square feet of area (“Suite 325E”); and the approximate West Half of
Suite 325
containing approximately 5,736.2 rentable square feet of area (“Suite 325W”);
collectively the Five Suites, Suite 334, Suite 325E and Suite 325W shall
constitute the “Premises” provided such suites shall not be deemed part of the
Premises until the time periods as set forth in Article 5 below. The
Premises are all located within the building at 511 11th Avenue South
(hereafter called the “Building”) in the City of Minneapolis,
County of Hennepin, State of Minnesota. The term Building as it is used herein
shall consist of the land and building(s) set forth in Exhibit A-2 hereto. The
Premises area shall be measured from the outside of exterior or corridor walls
and from the center of demising walls to obtain the useable area of the
Premises, which shall be multiplied by a factor of 1.15 to arrive at the
rentable area of the Premises. The parties may measure the Premises at any
time, but unless the rentable area differs by more or less than 10% the rental
amounts set forth below shall not be adjusted.

 

ARTICLE 1 -TERM
AND PRIOR LEASE

 

A.                                   To
have and to hold said Premises for a term of ten (10) years, commencing upon the
earlier of: i) June 1, 1999; or ii) the date on which Tenant occupies any
portion of the Premises for the conduct of its business; and
terminating on May 31, 2009 (hereafter called the “Term”) upon the rentals and
subject to the conditions set forth in this Lease Agreement, and the Exhibits
attached hereto. The commencement and termination dates are specifically
subject to the provisions of Article 5 hereof.

 

B.                                     Tenant
shall have the right to renew the Term of the Lease Agreement for two (2)
periods of five (5) years each (“Renewal Term(s)”), subject to the
following terms, covenants and conditions: i) Tenant shall not be in default
beyond any applicable grace period in the performance of any of the terms,
covenants or conditions of this Lease Agreement, either at the time of the
exercise of the right to renew or at the commencement of the applicable Renewal
Term; ii) the Renewal Term(s) shall be on the same terms, covenants and
conditions as provided in this Lease Agreement, except the Minimum Rental
during the Renewal Term shall be at the rates as set forth in the table in
Paragraph 3B and there shall be no further renewal right after the

 

 

commencement of the second Renewal Term; and iii) Tenant shall exercise
its right to renew by giving written notice thereof to Landlord at least nine
(9) calendar months prior to the expiration of the initial Term or first
Renewal Term, as the case may be, time being of the essence. If Tenant fails to
notify Landlord in the manner and within the time as provided in this
paragraph, Tenant’s right to renew this Lease Agreement shall expire and become
null and void. If Tenant fails to exercise the first Renewal Term, then the
following Renewal Term shall also terminate.

 

C.                                     The
parties acknowledge that Tenant currently has possession of approximately 7061
rentable square feet of space on the 4th floor of the Building
denominated Suite 409 (“Suite 409”), pursuant to a lease dated
March 3, 1999 (the “Prior Lease”). The parties agree that upon
the commencement of the Term of this Lease Agreement, the Prior Lease shall
terminate and be of no further force or effect without further act or deed of
the parties; however, notwithstanding the forgoing, all rentals due under the
Prior Lease shall be paid trough June, 1999 and no rentals under this Lease
Agreement shall commence until July, 1999; and provided further any other
obligations under the Prior Lease winch accrue prior to the commencement of the
Term of this Lease shall continue until satisfied. As of the commencement of
the Term of this Lease Agreement, Tenant shall surrender possession of Suite
409 in the condition required by Article 19, “Surrender” of the Prior
Lease. As of the commencement of the Term of this Lease Agreement, Tenant shall
and hereby does transfer, convey, quitclaim and assign to Landlord all of its
rights and interests in and to Suite 409 and all improvements located therein;
provided the foregoing does not in any way relieve Tenant front its obligations
under said Article 19, with respect to Suite 409.

 

ARTICLE 2 - USE

 

A.                                   The
Premises shall be used by the Tenant solely for the following purposes: General
office purposes, including executive corporate and general offices; in addition
Tenant shall be entitled, subject to obtaining such approvals as may be
required from any governmental authorities which may have jurisdiction thereof,
to install, operate and maintain telecommunications equipment, including
telecommunication switching operations and related facilities utilized in
connection with Tenant’s telecommunication business. No other use of
the Premises stall be permitted or allowed.

 

B.                                     Landlord
acknowledges that in connection with Tenant’s use of the Premises, it shall be
installing specialized telecommunication equipment, and various electrical
equipment and facilities associated therewith (“Telecommunications Equipment”).
Tenant shall be solely responsible for ensuring that the Telecommunications
Equipment can be operated consistent with Landlord’s current facilities and
utilities and Tenant shall be solely responsible for any special utility
requirements created by the Telecommunications Equipment (such as, but not limited
to: all electrical power utilized thereby, additional cooling requirements,
uninterrupted power sources, etc.) the installation of which shall be governed
by Article 4 below. Tenant shall also be solely responsible to ensure that
any electrical/magnetic field (“EMF”) is not emitted beyond the Premises at
levels exceeding those acceptable by the Food and Drug Administration for
persons with pacemakers or other electronic prosthetics (5 goss or 5,000
milligoss). In all events, Tenant shall indemnify, defend with counsel of
Landlord’s selection, and save Landlord harmless from any claim for injury to a
person or damage to property asserted by any person against Landlord, its
agents or employees by reason of any EMF emitted from or created by the Telecommunications
Equipment. In addition, Tenant hereby assumes all risk in

 

2

 

connection with the presence of all EMF within the Premises aid hereby
releases Landlord from any and all liability or responsibility to Tenant, its
agents, employees, contractors or anyone claiming through or under Tenant by
way of subrogation or otherwise for the loss or damage to property or injury to
persons arising out of or relating to EMF.

 

C.                                     Tenant
and its “Affiliates” (as defined in Article 15 below) shall have the right
to provide telecommunication services to other tenants in the Building on a
non-exclusive basis with other providers of such services; provided all such
tenants shall be able to freely choose their telecommunications provider, and
Tenant shall not solicit such tenants (in person) except with Landlord’s prior
approval.

 

ARTICLE 3-RENTALS

 

A.                                   Tenant
agrees to pay to Landlord as minimum rental (hereinafter called “Minimum
Rental”) for the Premises, without notice set-off or demand, during
the Term, and if properly exercised, each of the two Renewal Terms, at the rate
as set forth in the table in Paragraph 3B below. During any given period during
the Term the appropriate Rental Rate, as set forth below, shall be multiplied
by the number of actual rentable square feet of area as existing within the
Premises, and the resultant product shall be divided by 12 to arrive at the
monthly Minimum Rent installment to be payable during the corresponding time
period in which the Premises contains said same number of rentable square feet
of area. Said monthly installments to be due and payable by Tenant in advance
on the first day of each calendar month during the Term of this Lease
Agreement, or any extension or renewal thereof, at the office of Landlord set
forth in the preamble to this Lease Agreement or at such other place as
landlord may designate. In the event of any fractional calendar month, Tenant
shall pay for each day in such partial month a rental equal to 1/30 of the Minimum
Rental. Tenant agrees to pay, as Additional Rent, which shall be collectible to
the same extent as Minimum Rental, all amounts which may become due to Landlord
hereunder and any tax, charge or fee that may be levied, assessed or imposed
upon or measured by the rents reserved hereunder by any governmental authority
acting under any present or future law before why fine, penalty, interest or
costs may be added thereto for non-payment.

 

B.                                     The
scheduled Minimum Rentals to be paid by Tenant are as follows:

 

3

 

	
  Time Period

  	
   

  	
  Per Annum
  Minimum Rental Rate per

  Rentable Square Font of Area Contained

  within the Premises

  	
   

  
	
  6/1/99 - 5/31/00

  	
   

  	
  $

  	
  16.95

  	
   

  
	
  6/1/00-5/31/01

  	
   

  	
  $

  	
  17.45

  	
   

  
	
  6/1/01 -5/31/02

  	
   

  	
  $

  	
  17.95

  	
   

  
	
  6/1/02 - 5/31/03

  	
   

  	
  $

  	
  18.45

  	
   

  
	
  6/1/03 - 5/3 1 /04

  	
   

  	
  $

  	
  18.95

  	
   

  
	
  6/ 1 /04 - 5/31/05

  	
   

  	
  $

  	
  19.45

  	
   

  
	
  6/ 1 /05 - 5/31/06

  	
   

  	
  $

  	
  19.95

  	
   

  
	
  6/ 1 /06 - 5/31/07

  	
   

  	
  $

  	
  20.45

  	
   

  
	
  6/ 1 /07 - 5/31/08

  	
   

  	
  $

  	
  20.95

  	
   

  
	
  6/1/08 - 5/31/09

  	
   

  	
  $

  	
  21.45

  	
   

  
	
  6/1/09 - if First Renewal Term is
  applicable, until 5/31/10

  	
   

  	
  $

  	
  21.95

  	
   

  
	
  6/1/10 - 5/31/11

  	
   

  	
  $

  	
  22.45

  	
   

  
	
  6/1/11 -5/31/12

  	
   

  	
  $

  	
  22.95

  	
   

  
	
  6/1/12 - 5/31/13

  	
   

  	
  $

  	
  23.45

  	
   

  
	
  6/1/13 - 5/31/14

  	
   

  	
  $

  	
  23.95

  	
   

  
	
  6/1/14 - if Second Renewal Term is
  applicable, until 5/31/15

  	
   

  	
  $

  	
  24. 45

  	
   

  
	
  6/1/15 - 5/31/16

  	
   

  	
  $

  	
  24.95

  	
   

  
	
  6/1/16 -5/31/17

  	
   

  	
  $

  	
  25.45

  	
   

  
	
  6/1/17 - 5/31/18

  	
   

  	
  $

  	
  25.95

  	
   

  
	
  6/1/18 - 5/31/19

  	
   

  	
  $

  	
  26.45

  	
   

  

 

ARTICLE 4 -
CONSTRUCTION

 

A.                                   Tenant
has provided or shall provide Landlord with plans and/or a description for
permanent improvements to modify the Premises to accommodate Tenant’s intended
use (hereafter called the “Preliminary Plans”), which Preliminary
Plans are subject to Landlord’s approval, which approval shall not be
unreasonably withheld or delayed. Subject to the further written approval of
Landlord, which approval also shall not be unreasonably withheld or delayed,
Tenant shall make such modifications to the Preliminary Plans as it shall
require (hereafter called the “Final Plans”). The Final Plans shall be
deemed approved by Landlord if Landlord fails to make objections thereto within
the later of five (5) days of receipt of such Final Plans from Tenant or the
date of execution of this Lease Agreement. Tenant agrees to make its architect
and engineers available to Landlord for purposes of responding to questions of
Landlord regarding the Preliminary and Final Plans and their impact upon the
Building. Upon receipt of the Final Plans, Tenant shall obtain bids from the
various contractors and subcontractors needed to perform the work contemplated
by the Final Plans (“Work”). The general contractor,
construction manager and major subcontractors contemplated by Tenant shall be
first approved by Landlord, which approval shall not be unreasonably withheld
or delayed. Tenant shall furnish to the Landlord a written statement certified
by Tenant and the general contractor who shall perform the Work listing all
subcontractors and suppliers regarding the Work. Upon submission of such
certification, Tenant shall have the right and license to enter the Premises to
do the Work, subject to all the provisions of this Lease Agreement, except that
the

 

4

 

Term and the commencement of rentals shall not commence except pursuant
to Paragraph 1A above. Tenant shall be responsible for constructing the improvements
as shown on the Final Plans (handler called “Tenant Improvements”) at
Tenant’s sole cost and expense. Article 27 below, and Tenant’s obligations
thereunder shall specifically be applicable to the Tenant Improvements and all
Work performed or to be performed by Tenant. Tenant acknowledges that the Work
shall begin with the Premises in its current “as is” condition with the
exception of the following (“Landlord’s Work”): the Premises shall be in
broom-clean condition. After completion of the Tenant Improvements, Tenant
shall supply to Landlord lien waivers from all suppliers, subcontractors and
other entities listed on the sworn construction statement, together with a
blanket lien waiver from Tenant’s contractor for the fill amount of the Work.
Within ninety (90) days subsequent to the commencement of the Term, Tenant,
shall submit in writing to Landlord a list (“Tenant’s Equipment”) of any
equipment and/or fixtures it deems to be “trade fixtures” and which Tenant
shall be removing at the end of the Term (or last Renewal Term, if applicable).
In no event shall any Tenant Improvement which alters any existing Building
system or any Building equipment servicing more than just the Premises be
included as Tenant’s Equipment. If no list is so submitted to Landlord then
none of the equipment and improvements installed by Tenant shall be deemed
trade equipment nor removable by Tenant at the end of the Term, unless it is
covered by a separate license agreement between Landlord and Tenant. If Tenant
desires to add equipment not shown on the Final Plans (whether during the
performance of Tenant’s Work or subsequently during the Term or any Renewal
Term) then it shall supplement Tenant’s Equipment List prior to the
installation of such equipment. Landlord, in connection with its approval of
the Final Plans, shall provide Tenant with a list of those improvements which
Landlord will require Tenant to remove at the end of the Term (or last Renewal
Term, if applicable) pursuant to Article 19 below. Any Tenant Improvements
not on such list, or if Landlord fails to supply such list to Tenant prior to
the completion of the Tenant Improvements, then Landlord shall be deemed to
have waived its rights under Article 19 to required Tenant to so remove
such Tenant Improvements.

 

B.                                     The
parties acknowledge that the Tenant’s Work shall include the following matters
(whether or not included within the Final Plans):

 

1.                                       the following
electrical systems requirements:

 

(i)                                     reconfiguring the
power distribution system in connection with the power to be distributed to the
“Electrical Room” (as defined below) including installation of electrical
grounding facilities connected to the Building’s water main, provided the same
does not violate any city ordinance and any necessary consents from the City of
Minneapolis are obtained by Tenant at its sole cost and expense;

 

(ii)                                  providing of A/C
electric capacity delivered to a pull box within the Premises at a capacity for
Tenant’s needs (such electrical capacity may exist, but Tenant is responsible
for verifying same, as well as confirming that such is sufficient for its
needs, including the “Tenant Generator”, as defined below). If’ Tenant
determines that its electrical requirements exceed the existing service to the
Premises, Tenant shall be entitled to, at its sole cost and expense, increase
such capacity, provided it obtains the necessary governmental approvals and no
additional costs for service fees are incurred by Landlord. Landlord agrees to
cooperate with any applications Tenant may be required to

 

5

 

make to any appropriate governmental agencies and/or public utility
providers as in connection therewith, provided the same shall be without cost
to Landlord. Landlord has verified that Tenant will have 800 amp electrical
capacity available for its use. R/D 8/14/99 BM 8/1/99

 

(iii)                               Tenant shall be entitled
to install an UPS electrical system and/or batteries all in a segregated area
on the Premises along with the Telecommunications Equipment (“Electrical
Room”).

 

(iv)                              Tenant shall install for
the Premises (including the Electrical Room) an electric submeter for all
electrical usage therein;

 

2.                                       installation of
the following:

 

(i)                                     Tenant shall cause
to be removed modular interior walls from within the Premises, if there are
any, and store the same inside the Premises (or at such other storage location
as designated by Landlord) until the completion of Tenant’s Work, at which time
said removed modular interior walls (together with any additional modular interior
walls Landlord may have in storage) shall be made available by Landlord to
Tenant for installation of offices and rooms (including the Electrical Room)
utilizing Landlord’s modular walls, to the extent Tenant so desires;

 

(ii)                                  installation of floor
covering and wall coverings pursuant to Final Plans;

 

(iii)                               extension of the
demising walls above the ceiling to the deck of the roof; pursuant to Final
Plans.

 

(iv)                              installation of cabling
and conduit from the Premises to Tenant’s telecommunication antennae and
related equipment on the roof of the Building (which placement, location and
maintenance of such equipment shall be governed by a separate license agreement
in the form of Exhibit B attached hereto and incorporated herein by reference).
Tenant agrees that at no time during the Term shall it use, license or
otherwise agree to utilize any space upon the Building or land upon which it is
located for antennae space, except pursuant to Exhibit B, and in no event shall
it use, license, utilize or rent space from other tenants or licensees of the
Building without the consent of Landlord, which consent may be conditioned upon
payment of reasonable fees to Landlord;

 

(v)                                 use of the Building’s
existing conduit and riser space and in the event existing conduit is not
available, the installation of conduit and cabling from the Electric Room to
Tenant’s network outside of the Building. In connection therewith Landlord
shall cooperate with Tenant to locate and utilize an appropriate riser space
from the Premises to other necessary levels of the Building, such cooperation
may include core drilling (subject to Paragraph 4C below). Tenant shall also
have the right to construct dual telecommunication conduit entrances to the
Building (as reasonably approved by Landlord), which may include the removal
and replacement of curbing and/or sidewalks, and trenching and repairing
portions of the parking lot and/or other common areas, all

 

6

 

subject to Paragraph 4C below. Tenant agrees to cooperate and
coordinate with other tenants of the Building desiring or constructing such
dual telecommunication conduit entrances. Notwithstanding anything contained in
this Lease Agreement to the contrary, all cabling and conduit, located on the
exterior of the Premises shall become the property of Landlord upon the
expiration of the Term and shall be surrendered with the Premises.

 

(vi)                              Tenant may remove any
demising walls between or among the Five Suites and/or Suite 334 and/or Suite
325E. At such time as possession to Suite 325E is delivered to Tenant, Tenant
shall construct a temporary demising wall to separate Suite 325E from Suite
325W at the approximately location as shown by the dotted line on Exhibit A-1.
Said temporary demising wall shall be pursuant to plans to be approved by
Landlord, which approval shall not be unreasonably withheld or denied.

 

3.                                       installation of
the following heating, ventilation, air conditioning systems, equipment or
facilities (“HVAC”):

 

(i)                                     installation of
such plumbing, cables, controls and accessory equipment to connect the
Electrical Room to the Building’s chiller equipment pursuant to the provisions
of the license agreement set forth in Exhibit E attached hereto and to which
the parties hereby agree to be bound.

 

(ii)                                  such equipment to
provide Tenant’ necessary HVAC capacity to the Premises, including but not
limited to, condensers on the exterior of the Building, or on the roof of the
Building, at such location as approved by Landlord (“Cooling Equipment”). If such
Cooling Equipment is necessary, it shall be subject to availability of space
and Tenant shall pay for such space at the same per square foot rate as is set
forth in the table of Article 3.

 

(iii)                               in connection with the
Cooling Equipment or other forms of cooling, such drains as Tenant deems
necessary, subject to Paragraph 4C below.

 

(iv)                              Tenant shall have the
right to modify the Building’s heating system servicing the Premises, subject
to Paragraph 4C below.

 

(v)                                 Tenant may modify the
duct work and other modifications necessary to the Building’s HVAC so as to
service the office portions of the Premises.

 

4.                                       subject to the
prior approval of Landlord, which approval shall not be unreasonably withheld
or delayed, Tenant shall be entitled to reinforce the floor load capacity of
the Premises. Tenant shall be responsible for assuring that its equipment and
any of the Work performed within the Premises does not exceed the floor
capacities of the Building and/or Premises and Tenant shall indemnify and hold
Landlord harmless from all damage, liability and costs (including reasonable
attorneys’ fees) in the event it over-loads the floor capacity of the Premises,
but only to the extent it exceeds 80 ppf live weight and 20 ppf dead weight.

 

5.                                       Tenant shall
have the right to modify the Building’s sprinkler system serving the Premises
(including installation of a fire suppression system which

 

7

 

may be independent of the Building’s system or have the system
servicing the Premises modified to a dry pipe system), pursuant to Final Plans
to be approved by Landlord.

 

6.                                       If Tenant
desires to have the right to install an emergency generator (the “Tenant
Generator”) either (at Landlord’s election) in an enclosed pad on
the roof of the Building or at the exterior of the Building in a location
approved by Landlord, the same shall be subject to the following:

 

a.                                       Tenant shall
first obtain such governmental approvals, authorizations and permits as are
required to install and operate the Tenant Generator.

 

b.                                      All plans and
specifications for the installation of the Tenant Generator and its connection
to the Premises must be approved, in advance, by Landlord. The installation of
the Tenant Generator shall be performed in a manner approved by Landlord. The
Tenant Generator may consist of up to 350 KW diesel generator and up to a
related 500 gallon fuel tank.

 

c.                                       Tenant shall pay
the entire cost of installing the Tenant Generator, including any modifications
to the generator area required to accommodate and screen the Tenant Generator.

 

d.                                      Tenant shall
maintain the Tenant Generator and any related equipment, at its sole cost and
expense, in good order and condition and will repair any damage to the Building
and/or any other equipment caused by the Tenant Generator and/or its
installation and/or removal. Landlord shall not be liable to Tenant or to any
other person for any loss or damage to the Tenant Generator regardless of
cause, other than the negligence or acts of Landlord, its agents or employees.

 

e.                                       Tenant shall
have the right to install gas generator(s) in lieu of diesel. In either event
(i) any fuel tank shall be located above ground and within the frame of the
generator, (ii) Tenant shall install such spill protection and other tank monitoring
devices as shall be required by governmental codes and regulations, (iii)
Tenant shall provide Landlord with copies of all warranties and evidence of any
testing required by law, and (iv) Tenant shall indemnify Landlord from and
against any and all costs and liability arising from a leak from such fuel
tank, including, without limitation, any clean-up costs.

 

f.                                         Upon the
termination of the Lease Agreement, Tenant will have the right to remove the
Tenant Generator, provided, (i) the Tenant Generator is removed within five (5)
days following the termination of the Lease Agreement, and (ii) Tenant shall
repair all

 

8

 

damage to the Building, landscaping and/or any other equipment caused
by the removal of the Tenant Generator and shall restore the area to the
condition as existing prior to such installation.

 

g                                         The
availability of appropriate exterior space, and Tenant shall pay for such space
at the same per square foot rate as is set forth in the table of
Article 3.

 

C.                                     All
of Tenant’s Work shall be performed in a good and workmanlike manner using
first grade and new materials and to the extent any of such Work involves
alteration or replacement of any existing equipment or facilities of the
Building, Tenant shall use a standard and grade equal to or better than such
existing equipment and facilities. To the extent any of Tenant’s Work involves
areas outside the Premises (“Exterior Work”), Tenant and its contractors
shall coordinate all such Work with Landlord and Landlord’s Building Manager,
on a daily basis. All such Work, including the Exterior Work, shall be
performed in a manner so as to not unreasonably disturb or interfere with the
operations of the Building or other tenants of the Building; specifically, but
not exclusively including, the performance of all such Work which may involve
loud and/or imitating noises, vibrations, dust and/or odors after normal
business hours (as defined in Paragraph 7D below). In all events, whenever the
Tenant’s Work involves the alteration and/or interference with any of the
Building’s systems, including, but not limited to, electrical, water, HVAC,
sprinkler, plumbing and life/health/safety systems, Tenant shall indemnify and
hold Landlord harmless with respect to any interruption of such systems to
other portions of the Building and/or other tenants and the continued
operational integrity of such systems as a result of the Work. In all events,
Tenant, at is sole cost and expense, shall obtain all applicable governmental
approvals with respect to the installation or doing of all Work including the
Exterior Work. Tenant shall cause its contractors and subcontractors to utilize
only those parking areas designated by Landlord, and to the extent such use
utilizes parking spaces, Tenant shall utilize its parking licenses (as set
forth in Paragraph 14D and Exhibit C below) for such purposes and Tenant shall
be responsible for the license fees due thereunder during such parking use by
Tenant’s contractors and subcontractors. Landlord agrees to cooperate, at no
cost to it, with respect to the obtaining of any such governmental approvals,
such cooperation, however, shall not extend to providing any concessions to the
governmental authority with respect to zoning, parking or other restrictions
relating to the Building.

 

D.                                    Landlord
agrees to make such alterations to the common area restroom facilities on the
first floor as necessary so as to put them in compliance with Title III of the
Americans with Disabilities Act of 1990 (“ADA”). Tenant shall perform its Work so as
to be in compliance with the ADA.

 

ARTICLE 5
-POSSESSION

 

Except as otherwise provided, Landlord shall deliver possession to
Tenant of the Five Suites on June 1, 1999. Landlord shall deliver to
Tenant possession of Suites 334 and 325E on or about July 1, 1999 and
Landlord shall deliver to Tenant possession of Suite 325W on or about
September 1, 1999. Delivery of possession prior to the foregoing dates
shall not affect the expiration date of this Lease Agreement. Failure of
Landlord to deliver possession to any given suite by the dates above provided,
due to any cause beyond Landlord’s control, shall not affect the parties’
obligations or liabilities hereunder, but such delay shall simply delay the
adding of

 

9

 

such suite to and to become part of the Premises until Landlord is able
to so deliver possession of said suite to Tenant.

 

Construction delays affecting Tenant’s Work due to material shortages,
strikes, or acts of God, or otherwise shall in no event postpone the date of
commencement of the Term of this Lease Agreement nor of the payment of rentals.
By occupying any given Suite constituting the Premises as a Tenant, or to
install fixtures, facilities or equipment, or to perform the Work, Tenant shall
be conclusively deemed to have accepted the same, except for any latent defects
affecting the Building. Immediately after Tenant’s completion of its Work for
the entire Premises, Landlord and Tenant shall execute a ratification agreement
which shall set forth the final Minimum Rental, the square footage of the
Premises, and delivery of the Premises in the condition required by this Lease
Agreement.

 

ARTICLE 6 -
TENANT’S PRO RATA SHARE OF REAL ESTATE TAXES AND OPERATING EXPENSES ABOVE BASE

 

A.                                   Commencing
with the first full calendar year subsequent to the commencement of the Term,
during each full or partial calendar year during the Term of this Lease
Agreement, Tenant shall pay to Landlord, as Additional Rental, the amounts by
which actual Real Estate Taxes and Operating Expenses (both as hereafter
defined) per square foot of rentable area in the Building multiplied by the
number of square feet of rentable area in the Premises exceed the Real Estate
Tax Base and the Operating Expense Base, respectively (both as hereafter
defined) prorated for the period that Tenant occupied the Premises. In the
event that during all or any portion of any calendar year, the Building is not
fully rented and occupied Landlord may make any appropriate adjustment in
occupancy-related Operating Expenses for such year for the purpose of avoiding
distortion of the amount of such Operating Expenses to be attributed to Tenant
by reason of variation in total occupancy of the Building, by employing sound accounting
and management principles to determine Operating Expenses that would have been
paid or incurred by Landlord had the Building been 100% rented and occupied,
and the amount so determined shall be deemed to have been Operating Expenses
for such year. As used herein, the “Real Estate Tax Base” shall be $1.11
per rentable square foot times the rentable square feet contained within the
Premises, and the “Operating Expense Base” shall be $3.84
per rentable square foot times the rentable square feet contained within the
Premises. If the actual Real Estate Taxes or Operating Expenses per square foot
times the rentable square feet contained within the Premises are less than the
Real Estate Tax Base or Operating Expense Base, respectively, Tenant shall not be
entitled to any refund or credit.

 

B.                                     Commencing
with the first full calendar year subsequent to the commencement of the Term,
Landlord shall, each year during the Term of this Lease Agreement, give Tenant
an estimate of Operating Expenses and an estimate of Real Estate Taxes payable
per square foot of rentable area for the coming calendar year. If either such
estimate exceeds the respective Real Estate Tax Base or Operating Expense Base
(as defined above), Tenant shall pay, as Additional Rental, along with its
monthly Minimum Rental payments required hereunder, one-twelfth (1/12) of such
excess estimated Operating Expenses and/or Real Estate Taxes and such
Additional Rental shall be payable until subsequently adjusted for the
following year pursuant to this Article.

 

10

 

C.                                     As
soon as possible after the expiration of each calendar year beginning with the
first full calendar year subsequent to the commencement of the Term, but in any
event no later than ninety (90) days following the close of the calendar year,
Landlord shall determine and certify to Tenant the actual Operating Expenses
and Real Estate Taxes for the previous year per square foot of rentable area in
the Building and the amounts applicable to the Premises. If such statement
shows that Tenant’s share of increases in Operating Expenses and Real Estate
Taxes over the Operating Expense Base and the Real Estate Tax Base,
respectively exceeds Tenant’s estimated monthly payments for the previous
calendar year, then Tenant shall, within twenty (20) days after receiving
Landlord’s certification, pay such deficiency to Landlord. In the event of an
overpayment by Tenant, such overpayment (not to exceed the amount of the
estimated payments) shall be refunded to Tenant, at the time of certification,
in the form of an adjustment in the Additional Rental next coming due, or if at
the end of the Term by a refund. By written notice given to Landlord no later
than six (6) months following delivery of the written certification of
Landlord, Tenant shall have the right to audit, or have audited the written
certification and the books and records from which such certification is
derived. Tenant shall pay the costs of any such audit, unless it is determined
that Tenant’s overpayment was more than five percent (5%) of the actual amount
in which case Landlord shall reimburse Tenant for the reasonable cost of the
audit.

 

D.                                    For
purposes of this Article, the term “Real Estate Taxes” means the total of all
taxes, fees, charges and assessments, general and special, ordinary and
extraordinary, foreseen or unforeseen, which become due and payable upon the
Building. All reasonable costs and expenses incurred by Landlord during
negotiations for or contests of the amount of Real Estate Taxes shall be
included within the term “Real Estate Taxes.” For purposes of this Article, the
term “Operating Expenses” shall be deemed to mean all costs and expenses
directly related to the Building incurred by Landlord in the repair, operation,
management and maintenance of the Building including interior and exterior and
common area maintenance, management fees, cleaning expenses, energy expenses,
insurance premiums, and the amortization of capital investments made to reduce
operating costs (including reroofing costs) or that are necessary due to
governmental requirements, all in accordance with generally accepted accounting
principles. Notwithstanding the foregoing, the parties acknowledge and agree
that the janitorial services and electricity to the Premises shall be supplied
by Tenant at its costs and/or submetered and paid for by Tenant (“Tenant
Supplied Utilities”) and Tenant acknowledges that it shall be given
no credit against Operating Expenses for those portions of the Premises being
serviced by Tenant Supplied Utilities. The following shall not be included in
Operating Expenses:

 

(1)                                  real
estate brokerage and leasing commissions;

 

(2)                                  cost
of alterations of any tenant’s premises;

 

(3)                                  allowances
or concessions provided to any tenant or occupant of the Building;

 

(4)                                  costs
incurred to make major repairs or replacements of any defective initial
construction of the Building and related appurtenances regardless of how such
costs are characterized under generally accepted accounting principles;

 

11

 

(5)                                  legal
expenses incurred in connection with the preparation or negotiation of leases,
subleases, assignments or other lease-related documents with current, prior or
prospective tenants or occupants of the Building;

 

(6)                                  marketing
or advertising costs to solicit new tenants;

 

(7)                                  wages,
salaries, fees, and fringe benefits paid to executive personnel or officers or
partners of Landlord not having direct day to day responsibility for operating
or providing services to the Building;

 

(8)                                  the
cost, above any applicable deductible, of repairs or other work occasioned by
fire, windstorm or other casualty of an insurable nature or by the exercise of
eminent domain;

 

(9)                                  costs
incurred for alterations, replacements or improvements that would be considered
capital improvements under sound accounting and management principles
consistently applied, except current amortization (together with interest of
ten percent (10%) per annum on the unamortized amount) of the capital
improvement cost over the reasonable useful life of the improvement where such
capital improvement is reasonably necessary to improve the operation or
maintenance efficiency of the Building or as otherwise expressly permitted
above, provided that the amortization costs charged to direct costs for capital
improvements to improve the operation or maintenance efficiency of the Building
shall be limited to the estimated reduction in direct costs for the relevant
years resulting from such capital improvements;

 

(10)                            expenses
in connection with services or other benefits of a type which are not provided
or available to Tenant but which are provided to another tenant of the Building
or to some other third party;

 

(11)                            costs
incurred due to violation by Landlord or any tenant of the Building of the
terms or conditions of any lease;

 

(12)                            Landlord’s
general overhead except as it directly relates to the management and operation
of the Building;

 

(13)                            all
items and services for which any tenant reimburses Landlord or pays third
persons;

 

(14)                            ground
lease rentals, principal or interest payments, refinancing charges or points,
or penalties resulting from late payments by the Landlord, or depreciation;

 

(15)                            costs
incurred in connection with the cure or correction of latent defects at the
Building and cost incurred in connection with the clean-up of Hazardous
Substances from the Project or Building;

 

(16)                            Landlord’s
cost of services sold separately to tenants for which Landlord is entitled to
be reimbursed by such tenants as an additional charge;

 

12

 

(17)                            costs
incurred in connection with negotiations or disputes with tenants of the
Building;

 

(18)                            costs
incurred in connection with renovating or otherwise improving or decorating
leased space for other tenants or other occupants or vacant tenant space, other
than common areas;

 

(19)                            any
particular item or service for which Tenant otherwise reimburses Landlord by
direct payment;

 

(20)                            any
expense for which Landlord is compensated through proceeds of insurance or
agreements of indemnity or surety bonds or guaranties;

 

(21)                            any
fines or penalties incurred due to actual or alleged violations by Landlord of
any governmental rule or authority;

 

(22)                            cost
of legal, accounting and other professional services incurred by Landlord in
connection with leasing activities or other activities which are not Operating
Expenses, and costs of audits of any kind performed by tenants;

 

(23)                            any
bad debt loss, rent loss, or reserves for bad debt or rent loss;

 

(24)                            Landlord’s
general corporate overhead and general administrative expenses; and

 

(25)                            Costs
arising from Landlord’s charitable or political contributions.

 

E.                                      Landlord
may at any time designate a fiscal year in lieu of a calendar year and in such
event, at the time of such a change, there may be a billing for the fiscal year
which is less than 12 calendar months.

 

F.                                      Landlord
reserves, and Tenant hereby assigns to Landlord, the sole and exclusive right
to contest, protest, petition for review, or otherwise seek a reduction in the
Real Estate Taxes. In the event of any reductions in the Real Estate Taxes due
to Landlord’s contesting the same which relate to taxes due and payable for a
year during the Term, such tax reduction, after payment of Landlord’s costs and
expenses incurred in connection with effectuating such reduction, shall be
retroactively given effect, and Tenant shall be refunded its Proportionate
Share of said reduction (but not below the Real Estate Tax Base).

 

G.                                     Landlord
shall keep and maintain records of all Operating Expenses, Real Estate Taxes
for a period of not less than two (2) years, which records shall be made
available to Tenant at reasonable times at Landlord’s offices for inspection
and copying by Tenant or its representatives, at Tenant’s cost. If Tenant in
good faith disputes the accuracy of the total amount of Operating Expenses or
Real Estate Taxes, Tenant may audit Landlord’s books and records by Tenant’s
representative. If such audit establishes that any of the actual Operating
Expenses or Real Estate Taxes are less than Landlord’s final determination
thereof by four percent (4%) or more, then Landlord shall pay the cost of such
audit. Any over-charged or under-paid amounts shall be reimbursed by the
responsible party with thirty (30) days following delivery of such

 

13

 

audit to Landlord, provided Landlord does not contest the same. Any
amounts payable pursuant to this Lease Agreement shall continue to be paid
during the pendency of any audit or dispute, but upon final determination or
resolution of such dispute, any amounts payable by one party to the other
hereunder shall bear interest at the rate of eight percent (8%) per annum.

 

ARTICLE 7 -
UTILITIES AND SERVICE

 

A.                                   Landlord
agrees to provided water and sanitary sewer services to the common area
restrooms of the Building, together with janitorial supplies and cleaning
services to such restroom facilities.

 

B.                                     Landlord
agrees to furnish heat during the usual heating season and air conditioning
during the usual air conditioning season (provided Tenant does not remove
and/or relocate the HVAC duct work serving the office areas of the Premises),
as well as electricity and janitorial services to the office areas of the Premises
(all specifically excluded from the Electrical Room), on a 24-hour basis.
Electricity to the Premises shall be by separate submeter.

 

C.                                     No
temporary interruption or failure of such services incidental to the making of
repairs, alterations or improvements, or due to accidents or strike or
conditions or events not under Landlord’s control, shall be deemed as an
eviction of the Tenant or relieve the Tenant from any of the Tenant’s
obligations hereunder. Notwithstanding the foregoing, if for any reason
whatsoever, except due to force majeure or by any negligent act or omission or
intentional misconduct of Tenant and as a result: (i) all or any portion of the
Premises shall become untenantable (the “Untenantable Premises”) for the normal
conduct of Tenant’s business for a period of three (3) consecutive days, (ii)
Tenant shall vacate the Untenantable Premises and cease doing business therein
(provided, however, that the continued presence of Tenant’s security personnel
therein for the purposes of preservation of Tenant’s property shall not
constitute a failure by Tenant to vacate the Untenantable Premises) and (iii)
Tenant shall give notice to Landlord of the facts set forth in clauses (i) and
(ii) above, then in such event, the portion of the Rents allocable to the
Untenantable Premises shall be fully abated for the period commencing on the
day that all the conditions set forth in (i), (ii) and (iii) above shall first
be satisfied and ending on the date that the Untenantable Premises shall be
rendered usable for the normal conduct of Tenant’s business and Landlord shall
have given notice thereof (or the date Tenant shall re-occupy the Untenantable
Premises for the normal conduct of its business, if earlier).

 

D.                                    For
the purposes of this Article 7, normal business hours shall be deemed to
mean the period of time between 8:00 a.m. and 6:00 p.m., Monday through Friday,
and 8:00 a.m. to 1:00 p.m. Saturdays, and specifically excluding Sundays and
legal holidays. Landlord agrees that Tenant shall have access to the Premises
24 hours per day, 7 days per week, however, after normal business hours such
access may be subject to the use of security cards and other rules and
regulations which Landlord may adopt from time to time with respect to the
Building, provided the same are reasonable and are equally applicable to all
tenants of the Building.

 

E.                                      Tenant
shall have the right to place telecommunications equipment of its customers
within the Premises (“Co-Location”) and such Co-Location shall
not be deemed an assignment or sublease under the terms of this Lease Agreement
regardless whether a written agreement exists between Tenant and its customers.

 

14

 

F.                                      Tenant
agrees prior to such time as it installs its own Tenant Generator (and during
such time after Tenant has so installed its own Tenant Generator) that it
elects to continue to have available to it access to the Landlord’s existing
back-up emergency generator at no cost. Tenant shall pay to Landlord its
proportionate costs of all maintenance repairs and replacement of the
Building’s back-up emergency generator. Such proportionate use shall be based
on electrical connected load hooked up to said generator as compared to
electrical connected load of other tenants within the Building hooked up to
said generator.

 

G.                                     If
the Tenant installs its own Tenant Generator, Tenant shall cooperate with the
Landlord in load shedding and/or peak moving program when requested by the
electric utility supplier (Northern States Power Company). Tenant acknowledges
that compliance with Northern States Power Company’s load shedding program has
resulted in lower electrical charges to Landlord and is expected to result in
lower electrical charges to Tenant.

 

ARTICLE 8 -
NON-LIABILITY OF LANDLORD

 

Except in the event of negligence of Landlord, its agents, employees or
contractors, or as specifically provided herein, Landlord shall not be liable
for any loss or damage for failure to furnish heat, air conditioning,
electricity, elevator service, water, sprinkler system or janitorial service.
Landlord shall not be liable for personal injury, death or any damage from any
cause about the Premises or the Building except if caused by Landlord’s
negligence or willful misconduct

 

ARTICLE 9 - CARE
OF PREMISES

 

A.                                   Tenant agrees:

 

1. To keep the Premises in as good condition and repair as they were in
at the time Tenant took possession of same, reasonable wear and tear and damage
from fire and other casualty for which insurance is normally procured excepted;

2. To keep the Premises in a clean and sanitary condition and to be
responsible for janitorial services for the switch room;

3. Not to commit any nuisance or waste on the Premises, overload the
Premises or the electrical, water and/or plumbing facilities in the Premises or
Building, throw foreign substances in plumbing facilities, or wastefully use
any of the utilities furnished by Landlord;

4. To abide by such rules and regulations as may from time to time be
reasonably promulgated by Landlord;

5. To obtain Landlord’s prior approval (not to be unreasonably
withheld) of the interior design of any portion of the Premises visible from
the common areas or from the outside of the Building. “Interior design” as used
in the preceding sentence shall include but not be limited to floor and wall
coverings, furniture, office design, artwork and color scheme; and

6. Tenant shall maintain, repair and replace, if necessary any and all
equipment and/or facilities and/or trade fixtures which services, or is
dedicated, solely or exclusively to the Premises and/or Tenant, whether
initially installed by Landlord or Tenant, all at Tenant’s sole cost and
expense.

 

B.                                     If
Tenant shall fail to keep and preserve the Premises in the state of condition
required by the provisions of this Article 9, the Landlord may at its
option put or cause

 

15

 

the same to be put into the condition and state of repair agreed upon,
and in such case the Tenant, on demand, shall pay the cost thereof.

 

C.                                     Landlord
agrees to keep and maintain the common areas of the Building consistent with
other Class B buildings in the Minneapolis central business district and to
supply janitorial services for only the office and common areas.

 

ARTICLE 10-NON-PERMITTED
USE

 

A.                                   Tenant
agrees to use the Premises only for the purposes set forth in Article 2
hereof. Tenant further agrees not to commit or permit any act to be performed
on the Premises or any omission to occur which shall be in violation of any
statute, regulation or ordinance of any governmental body or which will
increase the insurance rates on the Building or which will be in violation of
any insurance policy carried on the Building by the Landlord. Tenant, at its
expense, shall comply with all governmental laws, ordinances, rules and
regulations applicable to Tenant’s particular use of the Premises and shall
promptly comply with all governmental orders, rulings and directives for the
correction, prevention and abatement of any violation upon, or in connection with
Tenant’s particular use of the Premises, including the making of any
alterations or improvements to the Premises, all at Tenant’s sole cost and
expense. The Tenant shall not disturb other occupants of the Building by making
any undue or unseemly noise and shall not do or permit to be done in or about
the Premises anything which will be dangerous to life or limb. In connection
with the foregoing provision, Tenant covenants and agrees that it shall not
store, process, produce or dispose of any flammables, explosives, radioactive
materials, ACM’s, polychlorinated biphenyls (PCB’s), chemicals known to cause
cancer or reproductive toxicity, pollutants, contaminants, hazardous waste,
toxic substances, petroleum and petroleum products, chloraflora carbons (CFC’s)
and substances declared to be hazardous or toxic (collectively “Hazardous
Substances”) in violation of any present or future federal, state or
local environmental law, ordinance or regulation (“Environmental Laws”) upon
the Premises or any part thereof without first obtaining Landlord’s written
consent, which consent may be withheld or denied in Landlord’s sole discretion,
provided that Landlord hereby consents to Hazardous Substances in small
quantities as are typically used in an office building (such as, toner,
cleaning fluids, etc.). Tenant agrees to indemnify and defend and hold Landlord
harmless from and against all fines, suits, claims, actions, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees) asserted
against Landlord arising out of and in any way connected with Tenant’s failure
to comply with its obligations of this Paragraph or arising from the consented
to presence of Hazardous Substances (specifically including any diesel fuel),
which indemnification shall survive the expiration of the termination of this
Lease Agreement.

 

B.                                     Landlord
represents that it was not the owner of the Building during construction, and
makes no representations as to any Hazardous Substances but Landlord shall make
available that certain Phase I Environmental Report prepared on behalf of the
FDIC/RTC (“Environmental
Report”) to Tenant. Landlord hereby covenants that if, at any time
during the Term of the Lease. Agreement, as the same may be extended,
“Hazardous Substances” are required to be removed, encapsulated or otherwise
remediated by any legal governmental authority having jurisdiction over the
Building, the presence for which Landlord is the “responsible party” and Tenant
is not a “responsible party” (as defined by Environmental Laws) then Landlord
shall so remediate the same as so required, at Landlord’s sole cost and expense
and not as a part of Operating Expenses. Landlord agrees to indemnify and
defend and hold Tenant

 

16

 

harmless from and against all fines, suits, claims, actions, damages,
liabilities, costs and expenses (including attorneys’ fees) asserted by such
governmental authorities against Tenant arising out of or in any way connected
with Landlord’s failure to comply with its obligations in the preceding
sentence, which indemnification shall survive the expiration or the termination
of this Lease Agreement.

 

ARTICLE 11-
INSPECTION

 

The Landlord or its employees or agents shall have the right without
any diminution of rent or other charges payable hereunder by Tenant to enter
the Premises at all reasonable times for the purpose of exhibiting the Premises
to prospective tenants or purchasers, inspection, cleaning, repairing, testing,
altering or improving the same or said Building, but nothing contained in this
Article shall be construed so as to impose any obligation on the Landlord
to make any repairs, alterations or improvements. Landlord’s rights under this
section shall be exercised in such a manner as to create the least practicable
interference with Tenant’s use and occupancy of the Premises. Except in the
case of an emergency which makes notice to Tenant impractical, any entry on the
Premises by Landlord shall be made at reasonable times after reasonable notice
to Tenant. In exercising Landlord’s rights of entry, Landlord shall comply with
Tenant’s reasonable security regulations of which Landlord has been advised of
in writing. Landlord hereby recognizes that Tenant is engaged in a business
that involves access to privileged and confidential matters and information and
agrees to take reasonable precautions as to not compromise such
confidentiality. Therefore Landlord agrees that Landlord may enter and pass
through the Premises only when accompanied by a representative of Tenant,
provided that Tenant agrees to make such representative available. Landlord
agrees that it shall not enter the Premises for the purpose of exhibiting the
Premises to prospective tenants, except during the last nine (9) months of any
Term, or at any time when Tenant is in default.

 

ARTICLE 12 -
ALTERATIONS

 

Tenant will not make any alterations, additions or improvements in or
to the Premises or add, disturb or in any way change any plumbing, wiring,
life/safety or mechanical systems, locks, or structural portions of the
Building without the prior written consent of the Landlord as to the character
of the alterations, additions or improvements to be made, the manner of doing
the work, and the contractor doing the work. Such consent shall not be
unreasonably withheld or delayed, if such alterations, repairs additions or
improvements are required of Tenant or are the obligation of Tenant pursuant to
this Lease Agreement. All such work shall comply with all applicable
governmental laws, ordinances, rules and regulations. Tenant agrees to
indemnify and hold Landlord free and harmless from any liability, loss, cost,
damage or expense (including attorney’s fees) by reasons of any said
alteration, repairs, additions or improvements.

 

ARTICLE 13 -
SIGNS

 

Tenant agrees that no signs or other advertising materials shall be
erected, attached or affixed to any portion of the interior or exterior of the
Premises or the Building without the express prior written consent of Landlord.
Landlord, at its sole cost and expense, shall install Building standard tenant
graphics at the main entry to the Premises and an identification strip for
Tenant on the Building’s lobby directory.

 

17

 

ARTICLE 14 -
COMMON AREAS

 

A.                                   Tenant
agrees that the use of all corridors, passageways, elevators, toilet rooms,
parking areas and landscaped area in and around said Building, by the Tenant or
Tenant’s employees, visitors or invitees, shall be subject to such reasonable
rules and regulations as may from time to time be made by Landlord for the
safety, comfort and convenience of the owners, occupants, tenants and invitees
of said Building. Tenant agrees that no awnings, curtains, drapes or shades
shall be used upon the Premises except as may be approved by Landlord, such
approval not to be unreasonably withheld, delayed or conditioned.

 

B.                                     In
addition to the Premises, Tenant shall have the right of non-exclusive use, in
common with others, of (a) all unrestricted automobile parking areas, driveways
and walkways, and (b) loading facilities, freight elevators and other
facilities as may be constructed in the Building, all to be subject to the
terms and conditions of this Lease Agreement and to reasonable rules and
regulations for the use thereof as prescribed from time to time by Landlord.

 

C.                                     Landlord
shall have the right to make changes or revisions in the site plan and in the
Building so as to provide additional leasing area. Landlord shall also have the
right to construct additional buildings on the land described on Exhibit A-2
for such purposes as Landlord may deem appropriate. Subject to Tenant’s rights
in respect of the Tenant Improvements, Landlord also reserves all airspace
rights above, below and to all sides of the Premises, including the right to
make changes, alterations or provide additional leasing areas, provided the
same do not interfere with Tenant’s operations on or from the Premises.

 

D.                                    Landlord
and Tenant agree that Landlord will not be responsible for any loss, theft or
damage to vehicles, or the contents thereof, parked or left in the parking
areas of the Building and Tenant agrees to so advise its employees, visitors or
invitees who may use such parking areas. The parking areas shall include those
areas designated by Landlord, in its sole discretion, as either restricted or
unrestricted parking areas. Any restricted parking areas shall be leased only
by separate license agreement with Landlord. Landlord agrees to provide Tenant,
subject to availability, unassigned parking spaces pursuant to license
agreements in the form of Exhibit C. The parking spaces being made available to
Tenant pursuant to this Paragraph shall be made available at the commencement
of the Term and continuing thereafter during the balance of the Term and
Renewal Terms, but only to the extent Tenant continues the initial number of
parking spaces continuously. If Tenant should cease one or more such parking
spaces, then Landlord shall not and does not guaranty that Tenant shall be
entitled to subsequently have such parking spaces available to it.

 

ARTICLE 15 -
ASSIGNMENT AND SUBLETTING

 

A.                                   Tenant
agrees not to assign, sublet, license, or encumber this Lease Agreement, the
Premises, or any part thereof, whether by voluntary act, operation of law, or
otherwise without the specific prior written consent of Landlord; provided
however, Landlord agrees not to unreasonably withhold, delay or deny such
consent if: i) such assignment or sublease is in writing and the assignee or
sublessee assumes all the obligations of Tenant under this Lease Agreement; ii)
the proposed subtenant or assignee has a net worth of One Million Dollars
($1,000,000) or more at the time of such assignment or subletting; iii) the
remaining provisions of this Lease Agreement continue to be applicable; and iv)
Tenant shall remain liable hereunder. Landlord further hereby gives its consent
(subject however to Tenant’s providing ten (10) days prior written notice and
clauses i), iii) and iv) above being applicable) to an assignment

 

18

 

of this Lease Agreement or sublease of the Premises to an “Affiliate”
of Tenant or to any entity into or with which Tenant is merged or to the
purchaser of all or substantially all the ownership interests or assets of
Tenant; provided the survivor or transferee continues to operate the business
of Tenant as a going concern. For purposes hereof an Affiliate shall mean any
party that is “related to” Tenant as that term is defined by Sec. 267(b) of the
Internal Revenue Code of 1986. Consent by Landlord in one such instance shall
not be a waiver of Landlord’s rights under this Article as to requiring
consent for any subsequent instance. In the event Tenant desires to sublet a
part or all of the Premises, or assign this Lease Agreement, Tenant shall give
written notice to Landlord at least thirty (30) days prior to the proposed
subletting or assignment, which notice shall state the name of the proposed
subtenant or assignee, the terms of any sublease or assignment documents and
copies of financial reports or other relevant financial information of the
proposed subtenant or assignee. At Landlord’s option, any and all payments by
the proposed assignee or sublessee with respect to the assignment of sublease
shall be paid directly to Landlord. In any event no subletting or assignment
shall release Tenant of its obligation to pay the rent and to perform all other
obligations to be performed by Tenant hereunder for the Term of this Lease
Agreement. The acceptance of rent by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision hereof.

 

B.                                     Notwithstanding
anything to the contrary contained in this Article, Tenant may collaterally
assign, mortgage, pledge, or hypothecate, without Landlord’s consent, its
interest in this Lease Agreement to any financing entity, or agent on behalf of
any financing entity to whom Tenant: i) has obligations for borrowed money or
in respect of guarantees thereof, ii) has obligations evidenced by bonds,
debentures, notes, or similar instruments, or iii) has obligations under or
with respect to letters of credit, bankers’ acceptances and similar facilities
or in respect of guarantees thereof.

 

C.                                     Landlord’s
right to assign this Lease Agreement is and shall remain unqualified upon any
sale or transfer of the Building and, providing the purchaser succeeds to the
interests of Landlord under this Lease Agreement and assumes the Landlord’s
obligations hereunder, Landlord shall thereupon be entirely freed of all
obligations of the Landlord accruing hereunder after such conveyance and shall
not be subject to any liability resulting from any act or omission or event
occurring after such conveyance.

 

ARTICLE 16 -
LOSS BY CASUALTY

 

A.                                   If
the Building is damaged or destroyed by fire or other casualty, the Landlord
shall have the right to terminate this Lease Agreement, provided it gives
written notice thereof to the Tenant within ninety (90) days after such damage
or destruction. If a portion of the Premises or Building is damaged by fire or
other casualty, and in the reasonable opinion of Landlord: i) the Premises
cannot be restored to tenantable condition within a period of ninety (90) days
following the commencement of such restoration work, and/or ii) the cost of
performing such restoration work exceeds the proceeds of Landlord’s casualty
insurance by more than $100,000, then Landlord shall not be required to make
any repairs and Landlord shall have the right to terminate this Lease,
Agreement upon written notice to Tenant within thirty (30) days of the date of
such fire or other casualty, in which event, this Lease Agreement shall
terminate as of the date of such notice and Landlord and Tenant shall be
released from any and all liability thereafter accruing hereunder. Landlord
shall notify Tenant of its decision to rebuild or not within said thirty (30)
day period. Anything herein to the contrary notwithstanding, if the

 

19

 

Premises are destroyed or so damaged that they cannot be repaired and
made tenantable within ninety (90) days following commencement of such
restoration work, or so damaged that Landlord shall decide not to repair or
rebuild, or Landlord decides to repair or rebuild, or Landlord decides to
repair or rebuild, but does not restore the Premises to a tenantable condition
within ninety (90) days after commencement of such restoration work (subject to
an extension of up to an additional sixty (60) days due to causes beyond
Landlord’s control), then, in any of such instances, Tenant may terminate this
Lease Agreement by giving notice to Landlord within thirty (30) days after
Tenant’s receipt of Landlord’s notice or the expiration of said ninety (90) day
period (as extended due to causes beyond Landlord’s control, as set forth
above) as applicable, in which event this Lease Agreement shall terminate as of
the date of such notice and Landlord and Tenant shall be released from any and
all liability thereafter accruing hereunder. If this Lease Agreement has not
been terminated by either Landlord or Tenant, then the rents due hereunder
shall abate during such period of time as the Premises are untenantable, in the
proportion that the untenantable portion of the Premises bears to entire
Premises.

 

B.                                     If
the Premises are to be repaired under this Article 16, Landlord shall
repair any injury or damage to the Building itself and the Premises in
substantially the condition the Premises were in at the execution of this Lease
Agreement, specifically excluding any leasehold improvements constructed by
Tenant, Tenant’s Equipment or any Collateral, all of which shall be restored to
the extent Tenant deems necessary, at Tenant’s sole cost and expense. Tenant
shall, at its own cost and expense, remove all of its furniture and other
personal property from the Premises as Landlord shall reasonably require in
connection with its repair and restoration of the Premises under this
Article 16.

 

ARTICLE 17 -
WAVER OF SUBROGATION

 

Landlord and Tenant hereby release the other from any and all liability
or responsibility to the other or anyone claiming through or under them by way
of subrogation or otherwise for any loss or damage to property caused by fire
or any of the extended coverage or supplementary contract casualties, even if
such fire or other casualty shall have been caused by the fault or negligence
of the other party, or anyone for whom such party may be responsible, provided
however, that this release shall be applicable and in force and effect only
with respect to loss or damage occurring during such times as the releasing
party’s policies shall contain a clause or endorsement to the effect that any
such release would not adversely affect or impair said policies or prejudice
the right of the releasing party to recover thereunder. Landlord and Tenant
agree that they will request their insurance carriers to include in their
policies such a clause or endorsement. If extra cost shall be charged
therefore, each party shall advise the other of the amount of the extra cost,
and the other party, at its election, may pay the same, but shall not be
obligated to do so.

 

ARTICLE 18 -
EMINENT DOMAIN

 

If the entire Building is taken by eminent domain, this Lease Agreement
shall automatically terminate as of the date of taking. If a portion of the
Building is taken by eminent domain, the Landlord shall have the right to
terminate this Lease Agreement, provided it gives written notice thereof to the
Tenant within ninety (90) days after the date of taking. If a portion of the
Premises is taken by eminent domain and this Lease Agreement is not terminated
by Landlord, Tenant shall have the right to terminate this Lease Agreement,
provided it gives written notice thereof to Landlord within ninety (90) days of
the date of taking. If neither

 

20

 

Landlord nor Tenant terminates, then the Landlord shall, at its
expense, restore the Premises to as near the condition which existed
immediately prior to the date of taking as reasonably possible, and the rentals
shall abate during such period of time as the Premises are untenantable, in the
proportion that the untenantable portion of the Premises bears to the entire
Premises. All damages awarded for such taking under the power of eminent domain
shall belong to and be the sole property of Landlord, irrespective of the basis
upon which they are awarded, provided, however, that nothing contained herein
shall prevent Tenant from making a separate claim to the condemning authority
for its moving expenses and trade fixtures. For purposes of this Article, a
taking by eminent domain shall include Landlord’s giving of a deed under threat
of condemnation, and shall be deemed to occur on the earlier of the date fee
simple title has vested or possession has been obtained by the taking
authority.

 

ARTICLE 19- SURRENDER

 

On the last day of the Term of this Lease Agreement or on the sooner
termination thereof in accordance with the terms hereof, Tenant shall peaceably
surrender the Premises in good condition and repair consistent with Tenant’s
duty to make repairs as provided in Article 9 hereof. On or before said
last day, Tenant shall at its expense remove all of its equipment from the
Premises, repairing any damage caused thereby, and any property not removed
shall be deemed abandoned, with the exception of any “Collateral” (as defined
in Article 28 below) to the extent of any security interests by third
parties. All alterations, additions and fixtures other than Tenant’s trade
fixtures, which have been made or installed by either Landlord or Tenant upon
the Premises shall remain as Landlord’s property and shall be surrendered with
the Premises as a part thereof, or shall be removed by Tenant (unless such
right to remove has been waived by Landlord pursuant to Article 4 above),
in which event Tenant shall at its expense repair any damage caused thereby. It
is specifically agreed that any and all telephonic, coaxial, ethernet, or other
computer, word-processing, facsimile, or electronic wiring installed by Tenant
within the Premises (hereafter “Wiring”) shall be removed at Tenant’s cost at
the expiration of the Term, unless Landlord has specifically requested in
writing that said Wiring shall remain, whereupon said Wiring shall be
surrendered with the Premises as Landlord’s property. If the Premises are not
surrendered at the end of the Term or the sooner termination thereof; Tenant
shall indemnify Landlord against loss or liability resulting from delay by
Tenant in so surrendering the Premises, including, without limitation, claims
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 rental and shall inform Landlord of combinations on any locks and
safes on the Premises.

 

ARTICLE 20 -
NON-PAYMENT OF RENT, DEFAULTS

 

If any one or more of the following occurs: (1) a rent payment or any
other payment due from Tenant to Landlord shall be and remain unpaid in whole
or in part for more than ten (10) days after same is due and payable; (2)
Tenant shall violate or default on any of the other covenants, agreements,
stipulations or conditions herein, or in any parking agreement(s) or other
agreements between Landlord and Tenant relating to the Premises, and such
violation or default shall continue for a period of thirty (30) days after
written notice from Landlord of such violation or default or if such violation
or default shall reasonably require longer than thirty (30) days to cure, if
Tenant shall fail to commence the cure of such default or violation within
thirty (30) days after receipt of notice thereof and/or fail to prosecute a
cure to completion with due diligence; (3) if Tenant shall commence or have
commenced against Tenant proceedings under a

 

21

 

bankruptcy, receivership, insolvency or similar type of action; or (4)
if Tenant shall abandon the Premises; then it shall be optional for Landlord,
without further notice or demand, to cure such default or to declare this Lease
Agreement forfeited and the said Term ended, or to terminate only Tenant’s
right to possession of the Premises, and to re-enter the Premises, with or
without process of law, using such force as may be necessary to remove all
persons or chattels therefrom, and Landlord shall not be liable for damages by
reason of such re-entry or forfeiture; but notwithstanding re-entry by Landlord
or termination only of Tenant’s right to possession of the Premises, the
liability of Tenant for the rent and all other sums provided herein shall not
be relinquished or extinguished for the balance of the Term of this Lease
Agreement and Landlord shall be entitled to periodically sue Tenant for all
sums due under this Lease Agreement or which become due prior to judgment, but
such suit shall not bar subsequent suits for any further sums coming due
thereafter. Tenant shall be responsible for, in addition to the rentals and
other sums agreed to be paid hereunder, the cost of any necessary maintenance,
repair, restoration, reletting (including related cost of removal or modification
of tenant improvements) or cure as well as reasonable attorney’s fees incurred
or awarded in any suit or action instituted by Landlord to enforce the
provisions of this Lease Agreement, regain possession of the Premises, or the
collection of the rentals due Landlord hereunder. Tenant shall also be liable
to Landlord for the payment of a late charge in the amount of 5% of the rental
installment or other sum due Landlord hereunder if said payment has not been
received within ten (10) days from the date said payment becomes due and
payable, or cleared by Landlord’s bank within three (3) business days after
deposit. Tenant agrees to pay interest at the highest permissible rate of
interest allowed under the usury statutes of the State of Minnesota, or in case
no such maximum rate of interest is provided, at the rate of 12% per annum, on
all rentals and other sums due Landlord hereunder not paid within ten (10) days
from the date same become due and payable. Each right or remedy of Landlord
provided for in this Lease Agreement shall be cumulative and shall be in
addition to every other right or remedy provided for in this Lease Agreement
now or hereafter existing at law or in equity or by statute or otherwise.

 

ARTICLE 21-
LANDLORD’S DEFAULT

 

Landlord shall not be deemed to be in default under this Lease
Agreement until Tenant has given Landlord written notice specifying the nature
of the default and Landlord does not cure such default within thirty (30) days
after receipt of such notice or within such reasonable time thereafter as may
be necessary to cure such default where such default is of such a character as
to reasonably require more than thirty (30) days to cure.

 

ARTICLE 22 -
HOLDING OVER

 

Tenant will, at the expiration of this Lease Agreement, whether by
lapse of time or termination, give up immediate possession to Landlord. If
Tenant fails to give up possession Landlord may, at its option, serve written
notice upon Tenant that such holdover constitutes any one of (i) creation of a
month to month tenancy, or (ii) creation of a tenancy at sufferance. If
Landlord does not give said notice, Tenant’s holdover shall create a tenancy at
sufferance. In any such event the tenancy shall be upon the terms and
conditions of this Lease Agreement, except that the Minimum Rental shall be
150% the Minimum Rental Tenant was obligated to pay Landlord under this Lease
Agreement immediately prior to termination (in the case of tenancy at
sufferance such Minimum Rental shall be prorated on the basis of a 365 day year
for each day Tenant remains in possession); excepting further that in the case
of a tenancy at sufferance, no notices shall be required prior to commencement
of any legal action to gain repossession of the

 

22

 

Premises. In the case of a tenancy at sufferance, Tenant shall also pay
to Landlord all damages sustained by Landlord resulting from retention of
possession by Tenant, provided such damages shall not include consequential
damages if such holdover is for five (5) business days or less. The provisions
of this paragraph shall not constitute a waiver by Landlord of any right of
re-entry as otherwise available to Landlord; nor shall receipt of any rent or
any other act in apparent affirmance of the tenancy operate as a waiver of the
right to terminate this Lease Agreement for a breach by Tenant hereof.

 

ARTICLE 23 -
SUBORDINATION

 

Tenant agrees that this Lease Agreement shall be subordinate to any
mortgage(s) that may now or hereafter be placed upon the Building or any part
thereof, and to any and all advances to be made thereunder, and to the interest
thereon, and all renewals, replacements, and extensions thereof and to execute
a specific subordination agreement (in a form reasonably requested by
mortgagee) if so requested by Landlord, provided the mortgagee named in such
subordination shall agree to recognize this Lease Agreement or Tenant in the
event of foreclosure provided the Tenant is not in default by including
non-disturbance language, in recordable form. In the event of any mortgagee
electing to have the Lease Agreement a prior encumbrance to its mortgage, then
and in such event upon such mortgagee notifying Tenant to that effect, this
Lease Agreement shall be deemed prior in encumbrance to the said mortgage, whether
this Lease Agreement is dated prior to or subsequent to the date of said
mortgage. Landlord shall use its best efforts to obtain a non-disturbance
agreement from the existing mortgagee (the Federal Deposit Insurance
Corporation) and any future mortgagees, in a form reasonably satisfactory to
such mortgagee and Tenant.

 

ARTICLE 24 -
INDEMNITY, INSURANCE AND SECURITY

 

A.                                   Tenant
will keep in force at its own expense for so long as this Lease Agreement
remains in effect public liability insurance with respect to the Premises in
which Landlord shall be named as an additional insured, in companies and in
form acceptable to Landlord with a minimum combined limit of liability of Two
Million Dollars ($2,000,000.00). This limit shall apply per location. Said insurance
shall also provide for contractual liability coverage by endorsement. Tenant
shall further provide for business interruption insurance to cover a period of
not less than six (6) months. Tenant will further deposit with Landlord the
policy or policies of such insurance or certificates thereof, or other
acceptable evidence that such insurance is in effect, which evidence shall
provide that Landlord shall be notified in writing thirty (30) days prior to
cancellation, material change, or failure to renew the insurance. Tenant
further covenants and agrees to indemnify and hold Landlord and Landlords
manager of the Building harmless for any claim, loss or damage, including
reasonable attorney’s fees, suffered by Landlord, Landlord’s manager or
Landlord’s other tenants caused by: i) any act or omission by Tenant, Tenant’s
employees or anyone claiming through or by Tenant in, at, or around the
Premises or the Building; ii) the conduct or management of any work or thing
whatsoever done by Tenant in or about the Premises; or iii) Tenant’s failure to
comply with any and all governmental laws, rules, ordinances or regulations
applicable to Tenant’s particular use of the Premises. If Tenant shall not
comply with its covenants made in this Article 24, Landlord may, at its
option, cause insurance as aforesaid to be issued and in such event Tenant
agrees to pay the premium for such insurance promptly upon Landlord’s demand.

 

23

 

B.                                     Tenant
shall be responsible for the security and safeguarding of the Premises and all
property kept, stored or maintained in the Premises. Landlord will make
available to Tenant, at Tenant’s request, the plans and specifications for
construction of the Building and the Premises. Tenant represents that it is
satisfied that the configuration of the Building and the Premises, including
the location and dimensions of the floors, walls, windows, doors and means of
access thereto are suitable for the particular needs of Tenant’s business. The
placement and sufficiency of all safes, vaults, cash or security drawers,
cabinets or the like placed upon the Premises by Tenant shall be at the sole
responsibility and risk of Tenant. Tenant shall maintain in force throughout
the Term, insurance upon all contents of the Premises, including that owned by
others and Tenant’s equipment and any alterations, additions, fixtures, or
improvements in the Premises acknowledged by Landlord to be the Tenant’s.

 

C.                                     Landlord
shall carry and cause to be in full force and effect a fire and extended
coverage insurance policy on the Building, but not contents owned, leased or
otherwise in possession of Tenant. Landlord will also keep in force during this
Term public liability insurance with respect to the Building with a minimum combined
limit of liability of $2,000,000. The cost of such insurance shall be an
Operating Expense.

 

ARTICLE 25 -
NOTICES

 

All notices from Tenant to Landlord required or permitted by any
provisions of this Lease Agreement shall be directed to Landlord postage
prepaid, certified or registered mail or sent by U.S. express mail or any
nationally recognized overnight carrier with a signed receipt obtained upon
delivery, at the address provided for Landlord in the preamble to this ease
Agreement or at such other address as tenant shall be advised to use by
Landlord. All notices from Landlord to Tenant required or permitted by any
provision of this Lease Agreement shall be directed to Tenant, postage prepaid,
certified or registered mail or sent by U.S. express mail or any nationally
recognized overnight carrier with a signed receipt obtained upon delivery, at:
.. Landlord and Tenant shall each have the right at any time and from time to
time to designate one (1) additional party to whom copies of any notice shall
be sent.

 

ARTICLE 26 -
APPLICABLE LAW

 

This Lease Agreement shall be construed under the laws of the State of
Minnesota.

 

ARTICLE 27 -
MECHANICS’ LIEN

 

In the event any mechanic’s lien shall at any time be filed against the
Premises or any part of the Building by reason of work, labor, services or
materials performed or furnished to Tenant or to anyone holding the Premises
through or under Tenant, Tenant shall forthwith cause the same to be discharged
of record. Tenant shall and hereby does indemnify Landlord from and against all
costs, damages and expenses (including reasonable attorney’s fees) incurred by
Landlord as a result of any such mechanic’s lien. If Tenant shall fail to cause
such lien forthwith to be discharged within twenty (20) days after being
notified of the filing thereof, then, in addition to any other right or remedy
of Landlord, Landlord may, but shall not be obligated to, discharge the same by
paying the amount claimed to be due, or by bonding, and the amount so paid by
Landlord and all costs and expenses, including reasonable attorney’s fees
incurred by Landlord in procuring the discharge of such lien, shall be due and
payable in full by Tenant to Landlord on demand. Landlord shall have the right
to post on the Premises notices of

 

24

 

nonresponsibility for payment of labor and materials supplied to the
Premises pursuant to applicable law.

 

ARTICLE 28 -
SECURITY DEPOSIT

 

INTENTIONALLY DELETED.

 

ARTICLE 29-
BROKERAGE

 

Each of the parties represents and warrants that there are no claims
for brokerage commissions or finder’s fees in connection with this Lease
Agreement and agrees to indemnify the other against, and hold it harmless from
all liabilities arising from any other such claim, including without
limitation, the cost of attorney’s fees in connection therewith.

 

ARTICLE 30-
EXCULPATION

 

Tenant agrees to look solely to Landlord’s interest in the Building for
the recovery of any judgment from Landlord, it being agreed that Landlord and
Landlord’s partners, whether general or limited (if Landlord is a partnership)
or its directors, officers or shareholders (if Landlord is a corporation),
shall never be personally liable for any such judgment.

 

ARTICLE 31-
ESTOPPEL CERTIFICATES

 

Each party hereto agrees that at any time, and from time to time during
the Term of this Lease Agreement (but not more often than twice in each
calendar year), within ten (10) days after request by the other party hereto,
it will execute, acknowledge and deliver to such other party or to any
prospective purchaser, assignee or mortgagee designated by such other party, an
estoppel certificate in a form acceptable to Landlord. Tenant agrees to provide
Landlord (but not more often than twice in any calendar year), within ten (10)
days of request, the then most current financial statements of Tenant and any
guarantors of this Lease Agreement, which shall be certified by Tenant, and if
available, shall be audited and certified by a certified public accountant
Landlord shall keep such financial statements confidential, except Landlord
shall, in confidence, be entitled to disclose such financial statements to
existing or prospective mortgagees or purchasers of the Building.

 

ARTICLE 32 -
GENERAL

 

This Lease Agreement 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 Landlord and Tenant being
that of landlord and tenant. 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. The covenants of
Tenant to pay the Minimum Rental and the Additional Rental are each independent
of any other covenant, condition, or provision contained in this Lease
Agreement. The marginal or topical headings of the several Articles, paragraphs
and clauses are for convenience only and do not define, limit or construe the
contents of such Articles, paragraphs or clauses. All preliminary negotiations
are merged into and incorporated in this Lease Agreement. This Lease Agreement
can only be modified or amended by an agreement in writing signed by the
parties hereto. All provisions hereof shall be binding upon the heirs,
successors and assigns of each party hereto. If any term or provision of this
Lease Agreement shall to any extent be held invalid or unenforceable, the
remainder shall not be affected thereby,

 

25

 

and each other term and provision of this Lease Agreement shall be
valid and be enforced to the fullest extent permitted by law. If Tenant is a
corporation, each individual executing this Lease Agreement on behalf of said
corporation represents and warrants that he is duly authorized to execute and
deliver this Lease Agreement on behalf of said corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation or in
accordance with the Bylaws of said corporation, and that this Lease Agreement
is binding upon said corporation in accordance with its terms. No receipt or acceptance
by Landlord from Tenant of less than the monthly rent herein stipulated shall
be deemed to be other than a partial payment on account for any due and unpaid
stipulated rent; no endorsement or statement of any check or any letter or
other writing accompanying any check or payment of rent to Landlord shall be
deemed an accord and satisfaction, and Landlord may accept and negotiate such
check or payment without prejudice to Landlord’s rights to (i) recover the
remaining balance of such unpaid rent or (ii) pursue any other remedy provided
in this Lease- Agreement. Either party may record a memorandum of this Lease
Agreement and the parties agree to execute a reasonable form memorandum as
presented by the other party. Time is of the essence with respect to the due
performance of the terms, covenants and conditions herein contained. Submission
of this instrument for examination does not constitute a reservation of or
option for the Premises, and this Lease Agreement shall become effective only
upon execution and delivery thereof by Landlord and Tenant.

 

ARTICLE 33 -
QUIET ENJOYMENT

 

Landlord covenants that Tenant, upon paying the rental and other
charges due hereunder and performing all of Tenant’s obligations under this
Lease Agreement, shall peacefully and quietly hold, occupy and enjoy Premises
throughout the Term hereof, without molestation or hindrance by any person
holding, under or through Landlord, subject, however, to the provisions of this
Lease Agreement and to any mortgages or ground or underlying leases referred to
in Article 23 hereof. Any diminution or shutting off of light, air or view
by any structure which may be erected on lands adjacent to the Building shall
in no way affect this Lease Agreement or impose any liability on Landlord.

 

ARTICLE 34 - LIMITED
EXPANSION RIGHT

 

A.                                   Provided
Tenant is not then in default under this Lease Agreement beyond the applicable
grace period, Tenant shall have a right of leasing space contiguous to the
Premises on the third floor of the Building (hereafter referred to as the “Option
Space”), in the event such Option Space becomes “Available for
Leasing” (as defined below) during the original Term, subject to and
conditioned upon the provisions of this Article (the “Expansion Right”).

 

B.                                     Landlord
shall notify Tenant (“Landlord’s Notice”) in the event the
Option Space becomes “Available for Leasing”; or in the event Landlord has a
third party interested in leasing the Option Space which is then “Available for
Leasing”. Tenant shall notify Landlord (“Tenant’s Leasing Notice”) within five (5)
business days after its receipt of Landlord’s Notice as to whether Tenant
intends to exercise its Expansion Right with respect to said Option Space as so
identified in Landlord’s Notice, time being of the essence. If Tenant exercises
its Expansion Right, it must do so with respect to all the Option Space as so
identified in Landlord’s Notice. In such event, Landlord and Tenant shall
execute an amendment to the Lease Agreement incorporating the Option Space as
so identified into the Premises at the Minimum Rent at the then applicable
rates as set forth in the table of Paragraph 3B above. In the

 

26

 

event Tenant fails to notify Landlord within the time period set forth
above, Tenant’s rights under this Article shall be null and void with
respect to any lease entered into with respect to the original prospective
Tenant for the Option Space as so identified in Landlord’s Notice; provided
such Expansion Right shall again be applicable in the event Landlord does not
lease such Option Space to the original prospective Tenant within nine (9)
months of the Landlord’s Notice.

 

C.                                     Tenant’s
Expansion Right shall also include Tenant’s providing Landlord a Tenant’s
Leasing Notice (in the first instance and not in response to a Landlord’s
Notice) with respect to the Option Space which is then “Available for Leasing”
provided no Landlord’s Notice has been given to Tenant with respect to any
portion of such Option Space within the previous nine (9) months.

 

D.                                    The
leasing of said Option Space shall commence as of the “Effective Date” (as set
forth below) and shall be in said Option Space’s, then “AS-IS” condition
without any improvements, improvement allowances or other modifications to be
made by Landlord. For purposes of this Article, the “Effective Date” shall mean
the date on which Tenant shall begin paying rentals upon the Option Space after
it has exercised its rights to said space; which shall be thirty (30) days
after Tenant’s Leasing Notice under this Article to Landlord exercising
its rights hereunder (or such sooner date as Tenant takes possession and
commences its business operations from within the Option Space). The provisions
of this Lease Agreement governing alterations of the Premises shall apply with
respect to the construction of any leasehold improvements Tenant desires to
make to such Option Space.

 

E.                                      Notwithstanding
anything to the contrary in the foregoing, if Tenant exercises its rights under
this Article and there remains less than thirty-six (36) months from the
Effective Date to the expiration of the Term, then the Tenant shall not be
entitled to exercise its rights under this Article unless it exercises its
Option to Renew the Term, or if no such Option to Renew can then be exercised,
then Tenant shall no longer have any rights under this Article with
respect to the Option Space.

 

F.                                      For
purposes of this Article, “Available for Leasing” shall mean the
Option Space is not subject to any existing (as of the date of this Lease Agreement)
lease or first rights of refusal, first rights of negotiation, first rights of
leasing, expansion rights, renewal rights and/or similar rights of any other
third party tenant or such rights have been waived in writing (provided if all
such rights are to expire within six (6) months, Landlord may make such Option
Space Available for Leasing contingent upon the expiration of such rights). In
any event Landlord shall be entitled to renew or extend any lease of an
“Occupying Third Party” (as defined below), without providing Tenant a
Landlord’s Notice and without it being subject to any rights of a third party
under this Article. Tenants which are either presently occupying Option Space
or may be so occupying in the future pursuant to a third party lease which was
entered into after Tenant’s rights were waived or deemed waived pursuant to
Paragraph B of this Article shall be deemed to be an “Occupying Third Party”.

 

G.                                     If
the Lease Agreement or Tenant’s right to possession of the Premises shall
terminate in any manner whatsoever before Tenant shall exercise its rights
under this Article, or if Tenant shall have subleased or assigned all or any
portion of the Premises, then immediately upon such termination, sublease, or
assignment, then this Article and Tenant’s rights

 

27

 

hereunder shall simultaneously terminate and become null and void. Such
right is personal to Tenant Under no circumstances whatsoever shall the
assignee under a complete or partial assignment of the Lease, or a subtenant
under a sublease of the Premises, have any right to exercise any rights under
this Article or have any right to receive any Landlord’s Notice.

 

ARTICLE 35 -
CANCELLATION RIGHT

 

A.                                   Tenant
shall have two separate rights to notify Landlord, that it elects to terminate
this Lease as of the end of the sixtieth (60th) or the eighty-fourth (84) month
of the Term, subject to and conditioned upon the following conditions:

 

i.  Tenant shall give Landlord
written notice of Tenant’s intention to terminate this Lease not less than six
(6) months prior to either the fifth (5th) or the seventh (7) anniversaries of
the Term, in accordance with the notice provisions set forth above (“Termination
Notice”);

 

ii.  The Termination Notice
shall set forth the effective date for said termination (“Termination Date”) which
date shall be midnight of the day prior to: i) the fifth (5th) anniversary of
the Term (if the Termination Notice is given prior to the fifty-fourth (54th)
month of the Term), or ii) the seventh (7th) anniversary of the Term (if the
Termination Notice is given after the fifty-fourth (54th) month but prior to
the seventy-eighth (78th) month of the Term);

 

iii.  Tenant must not be in
default either at the time of the Termination Notice nor at the Termination
Date and Tenant must comply with all of the terms and conditions of this Lease
Agreement (including surrender of the Premises as required by this Lease
Agreement) through the Termination Date;

 

iv.  Tenant must accompany said
Termination Notice with a “Termination Fee”, which shall be equal to
six (6) months rental which would otherwise have been due under this Lease
Agreement immediately following the Termination Date.

 

v.  In no event shall Tenant be
entitled to terminate this Lease if it has exercised its rights to renew under
Article 1 above.

 

B. The rights provided to Tenant under this Article are personal
to Tenant, which may assign them only in connection with an assignment of this
Lease Agreement to a company controlled by or which controls (directly or
indirectly) Advanced Telecommunications, Inc. (“Affiliate”), and such rights
shall expire automatically if Tenant assigns this Lease Agreement to any other
party or subleases all or any portion of the Premises to any other party.

 

C. Tenant’s rights under this Article may be exercise only once,
but at either of the two (2) time periods set forth above.

 

D. Notwithstanding anything contained in this Article to the
contrary, if Tenant exercises its Expansion Right pursuant or in response to a
“Landlord’s Notice” (as defined in Paragraph 34B above), then Tenant’s right to
give a Termination Notice under this Article shall be suspended for a
period commencing with Tenant’s giving of its “Tenant’s Leasing Notice” (as
defined in Paragraph 34B above) and continuing through the 18th month
subsequent to the “Effective Date” (as defined in Paragraph 34D above). Any
Termination Notice given during such period shall be of no effect and shall not
result in the termination of this Lease Agreement.

 

28

 

The restrictions of this Paragraph, and specifically the suspension of
Tenant’s right to give a Termination Notice under this Article shall not
become applicable if Tenant exercises its Expansion Right pursuant to Paragraph
35C above (i.e.
Tenant shall continue to have the rights to terminate under this
Article if Tenant’s expansion was not in response to a “Landlord’s
Notice”).

 

IN WITNESS WHEREOF, this Lease Agreement has been duly executed by the
parties hereto as of the day and year indicated above.

 

	
  By: 

  	
  /s/Richard A. Smith

  	
   

  	
  By:

  	
    /s/ Basant Kharbanda

  
	
  Its:

  	
  CFO

  	
   

  	
  Its:

  	
  President & CEO

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  
	
  Date:

  	
  6/2/1999

  	
   

  	
  Date:

  	
  8/1/99

  
								

 

SCHEDULE OF EXHIBITS

 

	
  Exhibit A-1

  	
   

  	
  Graphical depiction of Premises

  
	
  Exhibit
  A-2

  	
   

  	
  Legal
  Description of Land and Building

  
	
  Exhibit
  B

  	
   

  	
  License
  Agreement (Antenna)

  
	
  Exhibit
  C

  	
   

  	
  License
  Agreement (Parking Lot Unassigned)

  
	
  Exhibit
  D

  	
   

  	
  Rules
  and Regulations

  
	
  Exhibit
  E

  	
   

  	
  Chiller
  License Agreement

  

 

 

SCHEDULE OF EXHIBITS

 

	
  Exhibit A-1

  	
   

  	
  Graphical depiction of Premises

  
	
  Exhibit
  A-2

  	
   

  	
  Legal
  Description of Land and Building

  
	
  Exhibit
  B

  	
   

  	
  License
  Agreement (Antenna)

  
	
  Exhibit
  C

  	
   

  	
  License
  Agreement (Parking Lot Unassigned)

  
	
  Exhibit
  D

  	
   

  	
  Rules
  and Regulations

  
	
  Exhibit
  E

  	
   

  	
  Chiller
  License Agreement

  

 

29

 

EXHIBIT A-2

LEGAL DESCRIPTION

 

All of Block 7, Atwaters Addition to the Town of Minneapolis; all of
Block 8, Morrison, Smith and Hancocks Addition to Minneapolis; and that part of
12th Avenue South, Morrison, Smith and Hancocks Addition to Minneapolis; and
Atwaters Addition to the Town of Minneapolis, lying Southwesterly of a line
connecting the most Easterly corner of Block 7, Morrison, Smith and Hancocks
Addition to Minneapolis; and the most Northerly corner of Block 8, Morrison,
Smith and Hancocks Addition to Minneapolis and Northeasterly of a line
connecting the most Southerly corner of Block 7, Atwaters Addition to the Town
of Minneapolis and the most Westerly corner of Block 8, Atwaters Addition to
the Town of Minneapolis and that part of Block 8, Atwaters Addition to the Town
of Minneapolis; except that part of said Block 8 which lies Northeasterly of
the following described line:

 

Beginning at a point on the Southeasterly line of Lot 7, Block 8,
distant 116.50 feet Southwesterly of the most Easterly corner thereof; thence
run Northwesterly to a point on the Northwesterly line of the Southeasterly
half of Lot 9, said Block 8, distant 10 feet Southwesterly of the Northeasterly
line of said Lot 9, and there terminating.

 

Also except that part of the Northwesterly 1/2 of Lot 9, Block 8,
Atwater’s Addition to the Town of Minneapolis which lies Northeasterly of the
following described line: Beginning at a point on the Southeasterly line of the
Northwesterly 1/2 of Lot 9, Block 8, said Addition, distant 5 feet
Southwesterly of the most Easterly corner thereof, thence run Northwesterly to
the most Northerly corner of Lot 9 and there terminating.

 

All of Block 7, Morrison, Smith and Hancocks Addition to Minneapolis,
except that part of Lots 9, 10, 11 and 12 of said Block 7, described as follows:

 

Beginning at the most Northerly corner of said Lot 12; thence south 30
degrees 04 minutes 33 seconds West, on an assumed bearing, along the
Northwesterly line of said Lot 12, a distance of 127.58 feet; thence Easterly,
a distance of 259.94 feet along a non-tangential curve concave to the South
having a radius of 240.00 feet, a central angle of 62 degrees 03 minutes 21
seconds and the chord of said curve bears North 89 degrees 04 minutes 43
seconds East; thence North 30 degrees 06 minutes 24 seconds East along the
prolongation of a radial line of said curve, a distance of 0.08 feet to the
Northeasterly line of said Lot 9; thence North 59 degrees 54 minutes 07 seconds
West along the Northeasterly line of said Block 7, a distance of 212.08 feet to
the point of beginning.

 

All according to the plats thereof on file and of record in the
Hennepin County Recorders Office and in the Office of the Registrar of Titles,
and situate in Hennepin County, Minnesota.

 

Part of the above shown below as Parcels 1 through 4, is Registered
Property as evidenced by Certificate No. 830754. Said Registered Property is
described as follows:

 

Parcel 1:
Lots 3, 6, 8 and 9, Block 7;

 

A-2-1

 

That part of Lot 7, Block 7 lying Northeasterly of a line drawn
parallel with and distant 96 feet Southwesterly of the Southwesterly boundary
line of 5th Street; The Northeasterly 60 feet of the Southwesterly 105 feet of
Lot 1, Block 8;

Lots 2, 3, 4, 5, 6 and 10, Block 8;

That part of the Northwesterly 1/2 of vacated 12th Avenue South lying
between the extensions across it of the Northeasterly and Southwesterly lines
of said Lot 6, Block 7 and

That part of the Southeasterly 1/2 of vacated 12th Avenue South lying
between the extensions across it of the Northeasterly and Southwesterly lines
of said Northeasterly 60 feet of the Southwesterly 105 feet of Lot 1, Block 8, 

all in Atwaters Addition to the Town of Minneapolis.

 

Parcel 2:
That part of the following described Tract:

The Northwesterly 27 feet of the Northeasterly 100 feet of Lot 7; The
Southwesterly 39 feet of the Northeasterly 139 feet of Lot 7; The Northwesterly
1/2 of Lot 8 and

The Southeasterly 1/2 of Lot 9,

all in Block 8, Atwaters Addition to the Town of Minneapolis, which lies
Southwesterly of a line drawn from a point on the Southeasterly line of said
Lot 7, distant 116.50 feet Southwesterly of the most Easterly corner thereof to
a point on the Northwesterly line of said Southeasterly 1/2 of Lot 9, distant
10 feet Southwesterly of the Northeasterly line thereof.

 

Parcel 3:
Lots 3 and 8, Block 7,

 

That part of Lot 7, Block 7 lying Northeasterly of a line drawn
parallel with and distant 96 feet Southwesterly of the Southwesterly boundary
line of 5th Street and

Lot 9, Block 7 except that part thereof lying Northerly of the
following described line: Beginning at the most Northerly corner of Lot 12,
said Block 7; thence South 30 degrees 04 minutes 33 seconds West, on an assumed
bearing, along the Northwesterly line of said Lot 12, a distance of 127.58
feet; thence Easterly, a distance of 259.94 feet along a non-tangential curve
concave to the South having a radius of 240.00 feet, a central angle of 62
degrees, 03 minutes, 21 seconds and the chord of said curve bears North 89
degrees, 04 minutes, 43 seconds East, thence North 30 degrees, 06 minutes, 24
seconds East along the prolongation of a radial line of said curve, a distance
of 0.08 feet to the Northeasterly line of said Lot 9 and said line there
terminating,

all in Morrison, Smith and Hancocks Addition to Minneapolis.

 

Parcel 4:
That part of the Northwesterly 1/2 of vacated 12th Avenue south lying between
the extensions across it of the Northeasterly line of Lot 7, Block 7, Morrison,
Smith and Hancocks Addition to Minneapolis and a line drawn parallel to and
distant 96 feet Southwesterly of the Northeasterly line of said Lot 7

 

Subject to minerals and mineral rights reserved by the State of
Minnesota; (As to all of above land except Lot 3, Block 7 in Parcel 1; Lot 3,
Block 7 in Parcel 3 and the above portion of Lot 9, Block 8 in Parcel 2; and
except that part of Lot 6, Block 7 and of that part of the Northwesterly 1/2 of
vacated 12th Avenue South in Parcel 1 lying Northeasterly of extensions across
it of the Southwesterly lien of said Lot 6 and its extension);

 

Subject to covenants, restrictions, reservations and conditions
subsequent, including a right of re-entry and forfeiture of title upon default
as contained in Deed Doc. No. 1488605; (See Inst)

 

A-2-2

 

EXHIBIT B

 

ANTENNAE
LICENSE AGREEMENT

 

This License Agreement (the “Agreement”), dated as of this 3rd day of
March, 1999, is between TIMESHARE SYSTEMS, INC. (the “Licensor”), having an
address at 511 Eleventh Avenue South, Minneapolis, MN. 55415 and ADVANCED
TELECOMMUNICATIONS, INC. (the “Licensee”), having an address at 511
Eleventh Avenue South, Minneapolis, MN. 55415 (the “Premises”).

 

A.                                   Licensor
agrees to permit Licensee to utilize for purposes provided herein, the roof
space (the exact location to be determined by Licensor with the reasonable
consent of Licensee, but in no event shall such space exceed 100 contiguous
square feet) on the building (“Building”) in which the Premises are
located (the “Roof Space”), from the date hereof and expiring April 30,
2099. Upon termination of Licensee’s lease for the Premises for any reason
(including the failure to renew the Term), this License Agreement and the
license created hereby shall automatically expire with said termination. The
termination, cancellation or expiration of this License Agreement or the
license created hereunder shall not be cause or grounds for the cancellation or
termination of Licensee’s lease for the Premises.

 

H. Licensee may install, use and maintain on such Roof Space equipment
(“Equipment”)
as described in Exhibit A attached hereto. If so requested by Licensor,
Licensee shall, at its sole expense, install a screening and protective fence (“Fence”)
around the perimeter of the Roof Space. The Fence style and installation shall
be subject to Licensor’s prior approval.

 

I.                                         Licensor
agrees that Licensee may run cables (the “Cables”) between the Roof Space and
the Licensee’s Premises. Any damages to the Building or fixtures or equipment
located upon or within the Building resulting therefrom shall be promptly
repaired by Licensee.

 

J.                                        The
Equipment and Fence shall remain the property of the Licensee or its
contractor. Licensee shall at its cost remove such Equipment and Fence (and if
so requested by Licensor, the Cables) at the expiration or sooner termination
of the license granted hereunder or this License Agreement, and restore the
Roof Space and Building to the condition they were in prior to Licensee’s
installation of the Equipment, Fence and Cables. The obligations to remove the
Equipment, Fence and Cables and to restore and repair the Roof Space and
Building shall survive the expiration or sooner termination of the license and
this License Agreement.

 

K.                                    Licensee
and/or its contractor shall bear all expenses in connection with the
installation; use and maintenance of such Equipment, Fence and Cables and
removal of the same. Licensee shall indemnify and hold Licensor harmless from
and against liability, damages, costs and expenses, including reasonable
attorneys’ fees incurred by Licensor, arising out of Licensee’s installation,
use, maintenance and removal of the Equipment, Fence and Cables. This
obligation shall survive the expiration, cancellation or termination of this
License Agreement and the license created hereunder.

 

L.                                      Licensee
and/or its contractor shall maintain in force during the term of this License
Agreement comprehensive liability insurance in amounts and in such form as
reasonably satisfactory to Licensor, protecting Licensor against any liability,
damages, cost or

 

B-1

 

expenses, in connection with the installation, use, maintenance and
removal of the Equipment, Fence and Cables and shall supply the appropriate
certificates of such insurance upon request.

 

M.                                 Licensee
and its contractors shall comply with all applicable federal, state and local
laws, regulations, and building codes in connection with the installation, use,
maintenance and removal of the Equipment, Fence and Cables. In the event any
such laws, regulations, or codes requires physical improvements be made to the
Building or other expenditures by or on behalf of the Building and/or its
owner, the costs of the same shall be borne by Licensee. Notwithstanding the
foregoing, any physical improvements, whether required by law, regulation, code
or otherwise, shall be subject to Licenser’s approval, which approval may be
given or denied in Licensor’s sole discretion. If any law, regulation or code
prohibits or disallows the Equipment, Fence and/or Cables or the effective use
of the license granted hereby, whether now or in the future, Licensor shall be
entitled to terminate the license granted hereby, without penalty; and Licensee
shall take such action so as to allow the Building to again be in compliance with
such law, regulation or code, including, if necessary, the removal of the
Equipment, Fence and/or Cables.

 

N.                                    Licensor
agrees to permit Licensee reasonable access to the Roof Space and other areas
so as to facilitate the installation, use, maintenance and removal of the
Equipment, Fence, and Cables. Licensee shall have access to the Roof Space on a
24 hour per day, 7 days per week basis, in order to facilitate maintenance and
repairs. Licensee agrees to sign the Building’s log book on each occasion Licensee
enters the Roof Space, during normal business hours. At times other than normal
business hours, or when the log book is not available for signing, Tenant shall
page Landlord at 470-4500 or shall leave a message by calling 481-9999 or shall
notify Landlord by such other reasonable means as Landlord shall inform Tenant
in writing.

 

O.                                    Notwithstanding
anything else contained herein to the contrary, the license granted herein is
subject to the non-interference of Licensee’s Equipment with the normal operation,
functioning and use of any other equipment (whether owned by Licensor or by
other licensees and/or tenants of Licensor) currently existing upon the roof of
the Building. In the event of any such interference, Licensor may terminate the
License granted hereunder if such interference is not corrected within three
(3) days notice from Licensor to Licensee. Notwithstanding anything else
contained herein to the contrary, Licensor does not guaranty nor warrant the
reception, noninterference or effective use of Licensee’s antenna, or
Equipment, either at initial installation nor thereafter.

 

P.                                      Licensee
shall be required to get prior approval from Licensor pertaining to the Antenna
size, color, Fence specifications, location on roof; method of mounting and the
location of all Cables. In no instance shall this installation breach or
penetrate the roof membrane.

 

Q.                                    Any
notice required or desired under this License Agreement shall be deemed
sufficiently given if given in compliance with the Licensee’s lease agreement
for the Premises.

 

B-2

 

R.                                     Licensee
shall pay to Licensor, without set-off or demand the sum of $0 per month for
all Antennae (as listed on Exhibit A, or otherwise located on the Building
pursuant to this License Agreement or the license created hereunder) for use of
the roof space (“License Fee”) during the Term of this License Agreement.
Failure by Licensee to pay said License Fee shall entitle Licensor, upon 10
days written notice to Licensee, to terminate this License Agreement and the
license created hereunder, and to such other relief as may be allowed by law or
equity. No other Equipment or antennae shall be permitted by this license,
without Licensor’s prior written consent, which consent shall not be
unreasonably withheld for a reasonable increase in equipment, provided the
License Fee shall be increased to Licensor’s then rate for each additional
antennae.

 

S.                                      In
the event of default by Licensee of any of the terms and conditions set forth
in this License Agreement, whether suit be commenced or not, Licensee agrees to
pay the attorneys’ fees, costs and expenses of Licensor incurred in enforcing
or attempting to enforce this License Agreement.

 

T.                                     Licensee
shall operate the Licensee facilities in a manner that will not cause
interference to Licensor and other Licensees of the Property provided that
their installations predate that of the Licensee’s facilities. All operations
by Licensee shall be in compliance with all Federal Communications Commission
(“FCC”)
requirements.

 

U.                                    Licensor
waives any lien rights it may have concerning the Equipment which are deemed
Licensee’s personal property and not fixtures, and Licensee has the right to
remove the same at any time without Licensor’s consent.

 

V.                                     This
Agreement may be terminated without further liability on thirty (30) days prior
written notice as follows: (i) by either party upon a default of any covenant
or term hereof by the other party, which default is not cured within sixty (60)
days of receipt of written notice or default provided that the grace period for
any monetary default is ten (10) days from receipt of notice; or (ii) by
Licensee for any reason or for no reason, provided Licensee delivers written
notice of early termination to Licensor with a thirty (30) day notice provision
prior to termination; or (iii) by Licensee if it does not obtain or maintain
any license, permit or other approval necessary for the construction and
operation of the Equipment; or (iv) by Licensee if Licensee is unable to occupy
and utilize the Premises under Licensee’s lease due to an action of the FCC,
including without limitation, a take back of channels or change in frequencies;
or (v) by Licensee if Licensee determines that the Premises are not appropriate
for its operations for technological reasons, including, without limitation,
signal interference.

 

W.                                If
the Premises or Equipment are damaged, destroyed, condemned or transferred in
lieu of condemnation, Licensee may elect to terminate this Agreement as of the
date of the damage, destruction, condemnation or transfer in lieu of
condemnation by giving notice to Licensor no more than forty-five (45) days
following the date of such damage, destruction, condemnation or transfer in
lieu of condemnation.

 

X.                                    Licensee
may not assign, or otherwise transfer all or any part of its interest in this
Agreement without the prior written consent of Licensor, provided, however,
that

 

B-3

 

Licensee may assign its interest to any party to which it is assigning
its interest in the Premises under its lease.

 

Y.                                     Licensor
shall be responsible for compliance with all marking and lighting requirements
of the Federal Aviation Administration (“FAA”) and the FCC. Should Licensee be cited
because the Property is not in compliance and, should Licensor fail to cure the
conditions of noncompliance, Licensee may either terminate this Agreement or
proceed to cure the conditions of noncompliance at Licensor’s expense, which
accounts may be deducted from the rent under Licensee’s lease.

 

Z.                                     In
no event shall Licensee be entitled to erect any mono pole or other tower-type
structure.

 

U. In the event the Equipment, Fence and/or Cables should interfere
with any roof maintenance, repair and/or replacement which Licensor deems
necessary to perform, Licensor shall first notify Licensee and then Licensee
shall cooperate with Licensor and its contractors to remove such interference,
including if necessary, the relocation and/or temporary relocation of the Equipment,
Fence and/or Cables. Such cooperation including such relocations and/or
temporary relocations shall be at the cost and expense of Licensee.

 

	
   

  	
  LICENSOR:

  
	
   

  	
  TIMESHARE SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LICENSEE;

  
	
   

  	
  ADVANCED TELECOMMUNICATIONS, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 

EXHIBIT
A TO ANTENNAE LICENSE AGREEMENT

Equipment

 

Up to one (1) antenna as well as related base site cabinets and any
other appropriate ancillary equipment so long as it is contained within 100
square feet of roof space and does not exceed 10 feet in height. No additional
antennae may be installed without Landlord’s written consent.

 

B-4

 

EXHIBIT C

LICENSE
AGREEMENT

MINNEAPOLIS
TECHNOLOGY CENTER

WEST
PARKING LOT (UNASSIGNED)

 

This License Agreement is made as of the 3rd day of March, 1999, by and
between TIMESHARE SYSTEMS, INC., a Minnesota corporation (“Licensor”) and ADVANCED
TELECOMMUNICATIONS, INC. (“Licensee”),

 

In consideration of the covenants and agreements contained herein, and
other good and valuable consideration, receipt and sufficiency of which is
acknowledged, Licensor and Licensee mutually agree as follows:

 

A.                                   GRANT:
Licensor hereby grants to Licensee, for the sole purpose of parking the
automobile(s) described in Licensee’s application attached
hereto,                                 (          )
unassigned parking space(s) in the restricted parking areas of the West parking
lot (“Lot”)
located at Minneapolis Technology Center, 511 South Eleventh Avenue South,
Minneapolis, Minnesota.

 

2.                                       TERM:
The term of this License commences this date and expires at midnight
April 30, 2099.

 

3.                                       LICENSE FEE:
Licensee shall pay as its fee for this License the sum of $95 per admittance
card on or before the first day of each month to Timeshare Systems, Inc., 511
South Eleventh Avenue South, Minneapolis, Minnesota, 55415, or at such other
address that Licensor may designate; together with any use, sales or other tax
(excepting income tax) payable or which may become payable by Licensor as a result
of said fee. In the event the term of this License commences on other than the
first day of a month, the fee will be prorated for such month. The license fee
shall commence on the date Licensor delivers a Lot gate operator(s) or
admittance card(s) to Licensee. The license fee shall terminate on the
expiration date of the license or on the date the Licensee returns the Lot gate
operator(s) and/or admittance card(s) whichever occurs last. The fee for this
License may be adjusted from time to time beginning January 1, 2000 to
whatever fee Licensor is then charging for Lot parking stalls; provided that
Licensor shall give thirty (30) days prior written notice of any such increase
and Licensee may, within thirty (30) days subsequent to any such increase, terminate
this License by giving ten (10) days written notice to Licensor.

 

4.                                       NEGATIVE
COVENANTS: Licensee shall not:

 

a)                                      Park
more than one (l) standard sized (or smaller) automobile per admittance card in
the Lot, at any one time.

 

b)                                     Allow
any non-authorized automobile to be parked in the Lot through use of Licensee’s
issued admittance card.

 

c)                                      Allow
any automobile to be stored overnight in the Lot.

 

C-1

 

Upon breach of any covenant set forth in this Paragraph 4 by Licensee,
Licensor may, at its option, and in addition to Licensor’s remedies provided in
paragraph 5 hereof, charge Licensee the sum of $25.00 for each day of any such
violation, and/or may tow or have towed any automobile which is parked in
violation of any covenant set forth in this paragraph 4, and in such case
Licensee agrees to pay Licensor as an additional license fee hereunder all
towing and storage costs associated with said towing.

 

5.                                       RIGHT OF
RE-ENTRY AND EXPIRATION: Licensee agrees that this License is made
upon the condition that if the Licensee shall fail to pay the license fee
within ten (10) days of when due, fail to keep any term or condition of this
license, or shall neglect or fail to keep, observe and perform any of the rules
and regulations from time to time adopted and promulgated by Licensor for the
operation of tine Lot, then in any of said cases the Licensor may immediately
or at any time thereafter and without notice or demand, retake possession of
the parking stall(s), without such re-taking working a forfeiture of the
license fee to be paid by Licensee for the full term of this License. In the
event of such retaking or at the end of the Tern, Licensee agrees to return to
Licensor any and all Lot gate operator(s) and/or admittance cards, upon notice
from Licensor. Licensee shall pay to Licensor, Licensor’s replacement/lost fee
for all such operator(s) and/or admittance cards not returned.

 

6.                                       PARKING LOT
OPERATION: It is specifically understood and agreed that the Lot area
is operated without constant staffing and that Licensor shall not be
responsible for any loss, damage or casualty sustained by Licensee’s automobile
or for the loss of any articles, personal property or any such other items from
Licensee’s automobile.

 

7.                                       OFFICE LEASE:
Licensee presently has (or is contemporaneously executing) a lease for office
space within the Minneapolis Technology Center (“Office Lease”).

 

a)                                      A
termination of the Office Lease, whether by expiration of the term or
otherwise, shall automatically constitute a termination of this License
Agreement.

 

8.                                       AUTHORIZED
VEHICLES: Licensee agrees, upon request from Licensor, to furnish
Licensor or its authorized agent, the state automobile license number(s)
assigned to those automobile(s) of those persons employed on the premises and
who are designated by Licensee to use the Lot. Any such designation shall not
exceed the number of stalls licensed hereunder. If any automobile of Licensee
or of Licensee’s officers, agents or employees who is not designated to park in
the Lot is parked therein, then Licensee shall pay to Licensor an amount equal
to $25 per day for each such vehicle for each day, or a part thereof; such
amount to be due and payable by Licensee within three (3) days after demand
therefor.

 

9.                                       CANCELLATION:
Licensor shall have the right, upon thirty (30) days prior written notice to
Licensee, to cancel this License Agreement and allow the Parking Lot to be used
on an unrestricted basis for all tenants and their invitees. Licensee from and
after the cancellation date specified in such written notice, shall have no
further obligation for the payment of the fee hereunder but the use of such
Parking Lot shall be subject to the terms of paragraphs 4(c), 6 and 7 hereof.

 

C-2

 

10.                                 LICENSE
HOURS: Notwithstanding anything else contained herein to the contrary, the
license granted hereunder shall be limited to the following hours: Monday
through Friday (legal holidays specifically excluded) from 7:00 a.m. to 6:00
p.m. Licensee specifically agrees that should Licensee violate the foregoing
hours during a time period in which there is an event (“Event”) at the Hubert H.
Humphrey Metrodome (located across 11th Avenue from the Minneapolis Technology
Center) Licensee shall pay to Licensor $25.00 for each such Event violation (or
such higher rate which Licensor may then be charging for dome Event parking).

 

	
  (LICENSEE)

  	
  (LICENSOR)

  	
   

  
	
  ADVANCED TLECOMMUNICATIONS, INC.

  	
  TIMESHARE SYSTEMS

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
										

 

C-3

 

EXHIBIT D

 

RULES
AND REGULATIONS

 

1.                                       No
sign, placard, picture, advertisement, name or notice shall be installed or
displayed on any part of the outside or inside of the Building without the
prior written consent of the Landlord. Landlord shall have the right to remove,
at Tenant’s expense and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on doors and walls
shall be printed, painted, affixed or inscribed at the expense of Tenant by a
person or vendor chosen by Landlord. In addition, landlord reserves the right
to change from time to time the format of the signs or lettering and to require
previously approved signs or lettering to be appropriately altered.

 

2.                                       If
Landlord objects in writing to any curtains, blinds, shades or screens attached
to or hung in or used in connection with any window or door of the Premises,
Tenant shall immediately discontinue such use. No awning shall be permitted on
any part of the Premises. Tenant shall not place anything or allow anything to
be placed against or near any glass partitions or doors or windows which may
appear unsightly, in the opinion of Landlord, from outside the Premises.

 

3.                                       Tenant
shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators,
escalators or stairways of the Building. The halls, passages, exits, entrances,
shopping malls, elevators, escalators and stairways are not for the general
public, and Landlord shall in all cases retain the right to control and prevent
access to the Building of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character, reputation and
interests of the Building and its tenants provided that nothing contained in
this rule shall be construed to prevent such access to persons with whom any
tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No tenant and no employee or invitee
of any tenant shall go upon the roof of the Building.

 

4.                                       The
directory of the Building will be provided exclusively for the display of the
name and location of tenants only and Landlord reserves the right to exclude
any other names therefrom.

 

5.                                       Tenant
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the Premises. Landlord shall not in any way be
responsible to any Tenant for any loss of property on the Premises, however
occurring, or for any damage to any Tenant’s property by the janitor or any
other employee or any other person.

 

6.                                       Landlord
will furnish Tenant free of charge with two keys to each door in the Premises.
Landlord may make a reasonable charge for any additional keys, and Tenant shall
not make or have made additional keys, and Tenant shall not alter any lock or
install a new or additional lock or bolt on any door of its Premises. Tenant,
upon the termination of its tenancy, shall deliver to Landlord the keys of all
doors which have been furnished to Tenant, and in the event of loss of any keys
so furnished, shall pay Landlord therefor.

 

7.                                       If
Tenant requires telegraphic, telephonic, burglar alarm or similar services, it
shall first obtain, and comply with, Landlord’s instructions in their
installation.

 

D-1

 

8.                                       No
equipment, materials, furniture, packages, supplies, merchandise or other
property will be received in the Building or carried in the elevators except
between such hours and in such elevators as may be designated by Landlord.

 

9.                                       Tenant
shall obtain Landlord’s consent prior to placing a load upon any floor which
may exceed the load per square foot which such floor was designed to carry and
which is allowed by law. Landlord shall have the right to prescribe the weight,
size and position to all equipment, materials, furniture or other property
brought into the Building. Heavy objects shall stand on such platforms as
determined by Landlord to be necessary to properly distribute the weight.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that my be transmitted to the structure of the Building or
to any space in the Building to such a degree as to be objectionable to
Landlord or to any tenant shall be placed and maintained by Tenant, at Tenant’s
expense on vibration eliminators or other devices sufficient to eliminate noise
or vibration. The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord. Landlord will not be responsible for
loss of or damage to, any such equipment or other property from any cause, and
all damage done to the Building by maintaining or moving such equipment or
other property shall be repaired at the expense of Tenant.

 

10.                                 Tenant
shall not waste electricity, water or air conditioning. Tenant shall keep
corridor doors closed.

 

11.                                 Landlord
reserves the right to exclude from the Building between the hours of 6 p.m. and
7 a.m. the following day, or such other hours as may be established from time
to time by Landlord, and on Sundays and legal holidays any person unless that
person is known to the person or employee in charge of the Building as being an
employee of Tenant and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall not be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person.

 

12.                                 Tenant
shall close and lock the doors of its Premises and entirely shut off all water
faucets or other water apparatus and electricity, gas or air outlets before
Tenant and its employees leave the Premises. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants of the Building
or by Landlord for noncompliance with this rule.

 

13.                                 The
toilet rooms, toilets, urinals wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, no foreign
substance of any kind whatsoever shall be thrown into any of them, and the
expense of any breakage, stoppage or damage resulting front the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees, shall
have caused it.

 

14.                                 Tenant
shall not install any radio or television antenna, satellite dish, loudspeaker
or other device on the roof or exterior walls of the Building except by virtue
of a separate license negotiated with Landlord. Tenant shall not interfere with
radio or television broadcasting or reception from or in the Building or
elsewhere.

 

D-2

 

15.                                 Except
as approved by Landlord, Tenant shall not mark, drive nails, screw or drill
into the partitions, woodwork or plaster or in any way deface the Premises.
Tenant shall not cut or bore holes for wires. Tenant shall not affix any floor
covering to the floor of the Premises in any manner except as approved by
Landlord. Tenant shall repair any damage resulting from noncompliance with this
rule.

 

16.                                 No
animals are allowed in the Building with the exception of seeing-eye or hearing
animals. In the event any injuries are caused to Tenant’s employees or
invitees, the owner of said animal agrees to indemnify and hold the Landlord
and its managing agent and all other tenants harmless front all costs
(including reasonable attorneys’ fees) with respect to the presence of any
animals in the Building.

 

17.                                 Tenant
shall store all its trash and garbage within its Premises. Tenant shall not
place in any trash box or receptacle any material which cannot be disposed of
in the ordinary and customary manner of trash and garbage disposal. All garbage
and refuse disposal shall be made in accordance with directions issued from
time to time by Landlord.

 

18.                                 No
cooking shall be done or permitted by any Tenant on the Premises, except by the
Tenant of Underwriters’ Laboratory approved microwave oven or equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted
provided that such equipment and use is in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations.

 

19.                                 Tenant
shall not use in any space or in the public halls of the Building any hand
trucks except those equipped with the rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.

 

20.                                 Tenant
shall not use the name of the Building in connection with or in promoting or
advertising the business of Tenant except as Tenant’s address.

 

21.                                 The
requirements of Tenant will be attended to only upon appropriate application to
the office of the Building by an authorized individual. Employees of Landlord
shall not perform any work or do anything outside of their regular duties
unless under special instruction from Landlord, and no employee of Landlord
will admit any person (Tenant or otherwise) to any office without specific
instructions from Landlord.

 

22.                                 Parking
is allowed between the hours of 7:00 a.m. to 6:00 p.m., Monday through Friday,
holidays excepted, in the east parking lot only, subject to availability and at
such rates as Landlord is then charging. Notwithstanding the foregoing, no
parking is allowed during professional sporting events and/or other events
occurring at the Hubert H. Humphrey Metrodome located at across 11th Avenue
South from the Building. All visitors to the Building parking in such parking
lot shall pay the then prevailing parking charges. Any visitor drop-offs are
allowed only on the east side of the Building. Notwithstanding the foregoing,
parking by Tenant pursuant to a specific license agreement shall be 24 hours
per day, 7 days a week.

 

23.                                 Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant or tenants, but no such waiver by Landlord shall be construed

 

D-3

 

as a waiver of such Rules and Regulations in favor of any other tenant
or tenants, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building. The foregoing
shall not be construed to allow Landlord to discriminatorily enforce these
Rules and Regulations as against Tenant and not other tenants of the Building.

 

24.                                 These
Rules and Regulations are in addition to, and shall not be construed to in any
way modify or amend, in whole or in part, the terms, covenants, agreements and
conditions of any lease of premises in the Building.

 

25.                                 Landlord
reserves the right to make such other and reasonable rules and regulations as
in its judgment may from time to time be needed for safety and security, for
care and cleanliness of the Building and for the preservation of good order in
and about the Building. Tenant agrees to abide by all such rules and
regulations in this Exhibit stated and any additional rules and regulations
which are adopted.

 

26.                                 Tenant
shall be responsible for the observance of all of the foregoing rules by
Tenant’s employees, agents, clients, customers, invitees and guests.

 

D-4

 

EXHIBIT E

 

LICENSE
AGREEMENT TO USE BUILDING CHILLER

 

This License Agreement (the “Agreement”), entered into as of the 3rd
day of March, 1999, is between TIMESHARE SYSTEMS, INC., a Minnesota corporation
(the “Licensor”),
having an address at 511 Eleventh Avenue South, Minneapolis, Minnesota 55415
and Advanced Telecommunications Inc. (the “Licensee”), laving an address at Suite 409,
511 Eleventh Avenue South, Minneapolis, Minnesota 55415 (the “Premises”),
with a notice address at 730 2nd Avenue South, Suite 1200,
Minneapolis, MN 55402.

 

1.                                       Licensor
agrees to permit Licensee to utilize for purposes provided herein one of the chiller
systems (as designated by Licensor) together with associated plumbing and
electrical and mechanical controls (the “Chiller”), which are located on and at the
building (“Building”) in which the Premises are located. This license
shall be subject to automatic termination in the event Licensee’s lease for the
Premises dated March 3rd, 1999 (“Lease”) is terminated or
canceled, but otherwise the term of this Agreement shall be the same as the
Lease. Upon termination of Licensee’s Lease for any reason, this License
Agreement and the license created hereby shall automatically expire with said
termination. The termination, cancellation or expiration of this License
Agreement shall not be cause or grounds for the cancellation or termination of
Licensee’s Lease.

 

2.                                       Licensee
may use the Chiller for purposes of cooling Licensee’s telecommunication and
other related equipment (“Equipment”). Licensee acknowledges that the
license to utilize the Chiller is non-exclusive. This Agreement and the license
granted hereby is specifically limited to Licensee’s utilization of not more
than 50 tons of the Chiller’s capacity. Licensor, from time to time may provide
such 50 tons of cooling capacity by any one of the Building’s chillers, but the
fees and other obligations hereunder shall continue to be applicable
nonetheless.

 

3.                                       Licensor
agrees that Licensee may run utility lines (the “Cables”) between the Chiller
and the Premises. Any damages to the Building or fixtures or equipment located
upon or within the Building resulting therefrom shall be promptly repaired by
Licensee.

 

4.                                       The
Chiller shall remain the property of Licensor and any improvements made to the
Chiller shall likewise become the property of Licensor. Licensee acknowledges
that Licensor makes no representations or warranties as to the condition,
fitness or purpose for which Licensee intends to use the Chiller. Licensee
acknowledges and agrees that its use of the Chiller shall be in its current “AS-IS”
condition. This License shall extend to any maintenance or improvements
Licensee may desire and need to make to the Chiller, providing however,
Licensee shall use a contractor authorized and approved by Licensor (“Authorized
Contractor”) and Licensee obtains Licensor’s prior written consent.
No work or maintenance shall be performed on the Chiller except by an
Authorized Contractor, nor without the express written consent of Licensor.

 

5.                                       For
purposes of this License Agreement Licensee’s “Pro Rata Share” shall be
equal to 20.8% and assumes the Chiller to which Licensee shall be connected
shall have an

 

E-1

 

approximately 240 rated capacity. If the Chiller to which Licensee has
a different rated capacity, then Licensee’s Pro Rata Share shall be adjusted
accordingly.

 

6.                                       Licensee
shall bear all expenses in connection with its use and maintenance of the
Chiller, including: i) Licensee’s Pro Rata Share of periodic maintenance costs
(no less frequently than quarterly plus an annual preventative maintenance
inspection by an Authorized Contractor) for the Chiller, including any repairs,
whether or not such repairs involve what may be typically considered capital
items, but not including capital improvements or similar capital additions; ii)
the “User Fee” (as defined in paragraph 7 below); and iv) the “Utility Fee” (as
defined in paragraph 8 below). The foregoing maintenance costs shall
specifically include any up-grades and/or capital costs required or mandated by
any governmental authority, law, rule or regulation.

 

7.                                       Licensee
shall pay to Licensor a monthly “User Fee” to compensate Licensor for a
share of the supervision costs for approximately one (1) hour daily by the
Building’s facility maintenance person for daily logging, adjusting, switching
and for maintaining the cooling tower water and other costs associated with the
use, capital investment and operation of the Chiller. The User Fee shall be
Licensee’s Pro Rata Share of such costs (said costs initially being $5,400 and
Licensee’s initial Pro Rata Share shall initially be $1123 per month), but said
User Fee shall be adjusted upward in the amount of 3% annually, on each
anniversary date of this Agreement. Licensee acknowledges the costs to connect
the Premises to the Chiller shall be borne by Licensee and are not part of any
of the fees referred to elsewhere in this License Agreement. The User Fee shall
not commence until the Premises are actually connected to the Chiller and being
utilized (the “Effective Date”).

 

Effective 7/1/99:

 

8.                                       Commencing
with the Effective Date, Licensee agrees to pay to Licensor at the rate of
$1950 per month (“Utility Fee”), which represents Licensee’s
Pro Rata Share of Licensor’s electrical utility usage of approximately $9375
per month for electrical consumption by the Chiller, cooling tower, cooling
tower pumps, etc., such Utility Fee to be prorated for any partial
calendar month, and to be adjusted after each calendar year (up or down) at the
same average rate as Landlord’s average electrical rates change from year to
year. In the event, whether through more efficient equipment upgrades, changes
in electrical rates or otherwise, it can be shown that the overall utility
costs to operate the Chiller differs from the estimated $9375 per month (“Adjusted
Utility Costs”), then Tenant’s Utility Fee shall be adjusted to its
Pro Rata Share of the Adjusted Utility Costs Landlord shall provide to Tenant
all reports and other back-up supporting any adjustments to the Utility Fee.

 

Effective 7/1/99:

 

9.                                       Prior
to the Effective Date Licensee agrees to pay to Licensor a one time “Start-Up Fee”
of $10,000, representing a portion of the “upgrade/start-up” and accessory
costs which were necessary to put the Chiller into operational condition (“Start Up
Costs”).

 

10.                                 Licensee’s
contractor shall maintain in force during the term of this License Agreement
comprehensive liability insurance in amounts and in such form as reasonably
satisfactory to Licensor, protecting Licensor against any liability, damages,
cost or expenses, in connection with the maintenance and alteration of the
Chiller and Cables and shall supply the appropriate certificates of such
insurance upon request.

 

E-2

 

11.                                 Licensee
and its contractors shall comply with all applicable federal, state and local
laws, regulations, and building codes in connection with the use, maintenance
and alteration of the Chiller and Cables. In the event any such laws,
regulations, or codes requires physical improvements be made to the Building or
other expenditures by or on behalf of the Building and/or its owner, the costs
of the same shall be borne by Licensee. Notwithstanding the foregoing, any
physical improvements, whether required by law, regulation, code or otherwise,
shall be subject to Licensor’s approval, which approval may be given or denied
in Licensor’s sole discretion. If any law, regulation or code prohibits or
disallows the Chiller and/or Cables or the effective use of the license granted
hereby, whether now or in the future, Licensor shall be entitled to terminate
the license granted hereby, without penalty; and Licensee shall take such
action so as to allow the Building to again be in compliance with such law,
regulation or code, including, if necessary, the removal of Cables; provided
however, Licensor agrees to cooperate, without cost to Licensor, with
Licensee’s efforts to comply with such laws, regulation or codes, including any
legal challenges thereto. Licensee shall have the right to challenge, at
Licensee’s sole cost, any governmental requirement imposed or sought to be
imposed with respect to the Chiller during the term of this Agreement and in
connection therewith, to delay compliance with such requirements until
resolution of the contest or challenge; provided that neither Licensor nor the
Building is subject to the risk of any fine, penalty, cost, lien or forfeiture
during such contest.

 

12.                                 Licensor
agrees to permit Licensee reasonable access to the Chiller and other areas so
as to facilitate the use, maintenance and alterations of the Chiller and Cables.
Licensee shall indemnify and hold Licensor harmless from and against liability,
damages, costs and expenses, including reasonable attorneys’ fees incurred by
Licensor, arising out of Licensee’s use, maintenance and alterations of the
Chiller and Cables, except if due to the negligence or willful misconduct of
Licensor. This obligation shall survive the expiration, cancellation or
termination of this License Agreement and the license created hereunder.

 

13.                                 Any
notice required or desired under this License Agreement shall be deemed
sufficiently given if given in compliance with the Licensee’s Lease.

 

14.                                 In
the event of default by either Licensor or Licensee of any of the terms and
conditions set forth in this License Agreement, whether suit be commenced or
not, the defaulting party agrees to pay the reasonable attorneys fees, costs
and expenses of the non-defaulting party incurred in enforcing or attempting to
enforce this License Agreement.

 

15.                                 If
the Licensor is in default of any of its obligation to provide services or
maintain the Chiller as specified in this Agreement, Licensee shall notify
Licensor that Licensee is dissatisfied with the services and/or maintenance so
to be provided and, if following such notice, the same shall not have been cured
to Licensee’s reasonable satisfaction within thirty (30) days of such notice,
then Licensee shall have the right to assume on the expiration of such 30 day
period the obligation to so provide the services and/or maintenance. During the
period that Licensee is performing Licensor’s obligations, Licensee shall be
entitled to a credit against the User Fee otherwise due hereunder equal to the
actual cost of such service and/or maintenance.

 

16.                                 Licensor’s
right to assign this License Agreement is and shall remain unqualified upon any
sale or transfer of the Building and provided the purchaser succeeds to the
interests of Licensor and assumes all obligations of Licensor hereunder,
Licensor shall thereupon be entirely

 

E-3

 

free of all obligations of the Licensor hereunder and shall not be
subject to any liability resulting from any act or omission or event occurring
after such conveyance.

 

	
  (LICENSEE)

  	
  (LICENSOR)

  	
   

  
	
  ADVANCED TELECOMMUNICATIONS, INC.

  	
  TIMESHARE SYSTEMS

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
   

  	
   Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
										

 

E-4

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