Document:

Exhibit 10.8

 

Restated and Amended

LEASE

TWO MERIDIAN CROSSINGS

 

THIS RESTATED AND AMENDED LEASE dated as of
May 1, 1998, by and between MERIDIAN
CROSSINGS II LLC, a Minnesota limited liability company (d/b/a TOLD
Development Company) (“Landlord”), and FOURTH
SHIFT CORPORATION, a Minnesota corporation (“Tenant”).

 

WITNESSETH:

 

A.                                   Tenant previously executed a Lease (“Phase I
Lease”) dated November 12, 1997 with Meridian Crossings LLC, for certain
Premises in One Meridian Crossings, Richfield, Minnesota which was amended by a
certain Amendment to Lease dated February 2, 1998 (herein referred to as “Amendment
to Lease Phase I” attached hereto as Exhibit ”J” and made a part
hereof);

 

B.                                     Tenant agreed to relocate to Two Meridian
Crossings as evidenced by a certain Amendment to Lease dated February 2,
1998;

 

C.                                     To that effect, certain Lease
clarifications were necessary such that Tenant and the Landlord agreed to amend
and restate the Lease in its entirety.

 

FOR AND IN CONSIDERATION of the rents and covenants
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

DATA SHEET

 

The following terms shall have the meanings set forth
in this section, unless otherwise specifically modified by provisions of this
Lease:

 

(a)                                  “Facility” or “Project”: 
The Building and the Property including all appurtenant easements and
personal property used in connection with the Building or Property located
therein and thereon.

 

(b)                                 “Building”: 
The approximately 190,506 rentable square foot building which is located
on the Property, the floor plan of which is attached hereto as Exhibit A.

 

(c)                                  “Property”: 
The real property, known as Two Meridian Crossings, Richfield, Minnesota
55423, more particularly described on Exhibit ”B”.

 

1

 

(d)                                 “Premises”: 
The areas outlined on Exhibit A. 
For purposes of this Lease, Landlord and Tenant agree that the Premises
shall be deemed to contain approximately 57,000 rentable square feet of space
located as follows:

 

7,766 rentable square feet on Floor 6;

24,617 rentable square feet on Floor 7; and

24,617 rentable square feet located on Floor 8.

 

Landlord and Tenant agree that upon completion by
Tenant of its space planning, Landlord’s architect will reasonably determine
and certify the actual area of the Premises, pursuant to the standard set forth
in Article XXXIII hereto and it shall be deemed the area of the Premises.

 

(e)                                  “Commencement Date”:            January 1,
1999, subject to Article IV.

 

(f)                                    “Expiration Date”:                                           December 31, 2009, or (10) full
years from the Commencement Date.

 

(g)                                 “Term”:                                                                                                 Ten (10) full years, from the
Commencement Date.

 

(h)                                 “Base Rent”:

 

	
  With respect to the following

  years of the Term:

  	
   

  	
  Annual Base Rent shall

  be as follows:

  	
   

  	
  Payable in advance in equal

  monthly installments as follows:

  
	
  Years 1-5

  	
   

  	
  $14.50 per
  rentable square foot of Premises

  	
   

  	
  1/12 of Annual
  Base Rent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Years 6-10

  	
   

  	
  $15.95 per
  rentable square foot of Premises

  	
   

  	
  1/12 of Annual
  Base Rent

  

 

(i)                                     “Additional Rent”: 
Tenant’s Share of Operating Expenses, Tenant’s Share of Taxes, Service
Charges and other payments to be made by Tenant to Landlord pursuant to this
Lease.

 

(j)                                     “Tenant’s Percentage”: 
Twenty-nine and ninety-two hundredths percent (29.92%).  Tenant’s Percentage shall be adjusted in the
event of a change in the number of rentable square feet of space in the
Building or Premises and as set forth in Article 2 herein.

 

(k)                                  “Guarantor”: 
Not applicable.

 

(l)                                     “Security Deposit”: 
$500,000.00 Letter of credit.

 

(m)                               “Permitted Use”: 
For general office and related purposes (including, for purposes of
illustration and not limitation, vending machines for non-public use, employee
lunchroom (with microwave oven) and a computer room and for no other
purpose.  Tenant understands that
Landlord has granted a tenant the exclusive right in the Facility to operate an
office suites business and Tenant agrees it will not operate the Premises, or
allow the operation by others claiming through Tenant, as an office suites
business.

 

2

 

(n)                                 Notice and Payment
Addresses:

 

	
  Landlord:

  	
   

  	
  Meridian
  Crossings II LLC 

  c/o TOLD Development Company 

  6900 Wedgwood Road, Suite #100 

  Maple Grove, MN 55311 

  Ph:     #(612)420-9000 

  Attn:  Law Department

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Prior to Commencement Date:

  	
   

  	
  Fourth Shift
  Corporation 

  7900 International Drive 

  Minneapolis, MN 55425 

  Attn:Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  w/ a copy to:

  	
   

  	
  Fourth Shift
  Corporation 

  3000 Executive Parkway, Suite #140 

  San Ramone, CA 94583 

  Attn:

  
	
   

  	
   

  	
   

  
	
  after Commencement Date:

  	
   

  	
  Fourth Shift
  Corporation 

  Two Meridian Crossings, Suite 800 

  Richfield, MN 55423 

  Attn:Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  w/ a copy to:

  	
   

  	
  Fourth Shift
  Corporation 

  3000 Executive Parkway, Suite #140 

  San Ramone, CA 94583 

  Attn:

  

 

(o)                                 “Lease
Year”:  The twelve-month
period commencing January 1 and ending December 31, adjusted for
partial Lease Years during which the Term commences and terminates.

 

(p)                                 “Landlord’s
Improvements”:  Improvements
to the Premises to be performed by Landlord as set forth in Exhibit D.

 

(q)                                 “Broker
Or Tenant Representative”: 
Welsh Companies and CB Commercial, which receive no additional
compensation for this Restated and Amended Lease.

 

(r)                                    Exhibits: 
the following exhibits are attached to this Lease and are incorporated
herein by reference:

 

3

 

	
  Rider to Lease

  	
   

  	
   

  	
   

  
	
  Exhibit A -

  	
  Premises

  	
  Exhibit D -

  	
  Landlord’s
  Improvements

  
	
  Exhibit B -

  	
  Legal
  Description & Site Plan

  	
  Exhibit E -

  	
  Services

  
	
  Exhibit C -

  	
  Rules and
  Regulations

  	
  Exhibit E-1
  -

  	
  Janitorial
  Specifications

  
	
   

  	
   

  	
  Exhibit F -

  	
  Reserved Parking
  Lease

  
	
   

  	
   

  	
  Exhibit G -

  	
  Estoppel
  Certificate

  
	
   

  	
   

  	
  Exhibit H -

  	
  Letter of Credit
  Form

  
	
   

  	
   

  	
  Exhibit I -

  	
  Open Stairwell

  
	
   

  	
   

  	
  Exhibit J -

  	
  “Amendment to
  Lease Phase I”

  

 

ARTICLE I

BASE RENT

 

1.01                           Rent
Reserved and Monthly Payments.  In
consideration of the leasing of the Premises, Tenant agrees to pay to Landlord
without setoff, deduction or demand, unless specifically provided for herein,
at the address set forth in the Data Sheet, or at such other place as Landlord
from time to time may designate in writing, Base Rent as set forth in Article 2,
commencing on the Commencement Date and continuing on the first day of each and
every month thereafter for the next succeeding months during the balance of the
Term.  If the Term commences on a date
other than the first day of a calendar month or ends on a date other than on
the last day of a calendar month, monthly rent for such partial month, as the
case may be, shall be obtained by multiplying the number of days in the term
within such month by a fraction, the numerator of which is the annual Base Rent
and the denominator of which is 365.

 

ARTICLE II

ADDITIONAL RENT

 

2.01                           Additions
to Base Rent.  In addition to the Base
Rent payable by Tenant under the provisions of Article 1 hereof, Tenant
shall pay to Landlord “Additional Rent” as hereinafter provided.

 

2.02                           Definitions.  For purposes of this Article 2, the
parties hereto agree upon the following definitions:

 

A.                                   The
term “Taxes” shall mean and include all personal property taxes of Landlord
relating to Landlord’s personal property located in the Facility and used or
useful in connection with the operation and maintenance thereof, real estate
taxes and installments of special assessments, including interest thereon
(excluding penalties or penalty interest except to the extent resulting from
late payments of Tenant), relating to the Property and Facility, and all other
governmental charges, general and special, ordinary and extraordinary, foreseen
as well as unforeseen, of any kind and nature whatsoever, or other tax, however
described, that is levied or assessed by the United States of America or the
state in which the Facility is located or any political subdivision thereof,
against Landlord or all or any part of the Facility as a result of Landlord’s
ownership of the Property or Facility, and due and payable during the
respective Lease Year.  It shall not
include any gross receipts or income tax, estate tax, capital gains, or
inheritance tax of Landlord.

 

B.                                     (1)                                  The
term “Operating Expenses” shall mean and include all expenses incurred with
respect to the maintenance and operation of the Property and Facility,
including without limitation the parking areas and parking structures, as
reasonably determined by Landlord’s accountant in accordance with generally
accepted accounting principles consistently followed, including, but not
limited to, insurance premiums, maintenance and repair costs, steam,
electricity, water, sewer, gas, and other utility charges; fuel, lighting,
window washing, janitorial services, trash and rubbish removal; wages payable
to employees of Landlord whose duties are related directly to the operation and
maintenance of the Property and Facility pro rated for time actually spent at
the Property and excluding any personnel above the rank of building
superintendent; amounts paid to contractors or subcontractors for work or
services performed related directly to the operation and maintenance of the
Property and Facility; all costs 

 

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of uniforms, supplies and
materials used in direct support of the operation and maintenance of the
Property and Facility; all payroll taxes, unemployment insurance costs,
vacation allowances, and the cost of providing disability insurance or
benefits, pensions, profit sharing benefits, hospitalization, retirement or
other so-called fringe benefits; and any other expense imposed on Landlord,
pursuant to law or pursuant to any collective bargaining agreement covering
such employees; reasonable attorney’s fees, and costs in connection with appeal
or contest of real estate taxes or valuation or other taxes or levies, and such
other expenses as may be ordinarily incurred in the operation and maintenance
of an office complex, including reasonable management fees not to exceed three
percent (3%) of gross rental income from the Facility (for the purpose of this
calculation, any free or abated rent shall be included as if rent was being
paid at the amount due immediately after expiration of said free rent period),
the cost of a management office, and assessments reasonably attributable to the
Facility on account of costs incurred by any business park association for the
business park in which the Facility is located. 
Operating Expenses shall also be deemed to include expenses incurred by
Landlord in connection with city sidewalks adjacent to the Property or other
public facility to which Landlord or the Facility is from time to time subject
in connection with operations of the Property and Facility.

 

(2)                                  The
term “Operating Expenses” shall not include any capital improvement to the
Facility, nor shall it include repairs, restoration or other work occasioned by
fire, windstorm or other insured casualty, expenses incurred in leasing to or
procuring tenants, costs that are separately billed to tenants or any other
expenses for which Landlord receives reimbursement, leasing commissions,
expenses for renovating space for new tenants, legal expenses incident to
enforcement by Landlord of the terms of any lease, interest or principal
payments on any mortgage or other indebtedness, depreciation allowance or
expense other than depreciation on Building equipment to the extent expressly
permitted in paragraph 2.02(B)(3) of this Lease.

 

(3)                                  Notwithstanding
the foregoing, in the event Landlord installs equipment in or makes
improvements or alterations to the Facility that are for the purpose of
reducing energy costs, maintenance costs or other Operating Expenses or that
are required under any governmental laws, regulations, or ordinances which were
not required at the date of commencement of the term of this Lease, Landlord
may include in Operating Expenses reasonable charges for interest on such investment
and reasonable charges for depreciation on the same so as to amortize such
investment over the reasonable life of such equipment, improvement or
alteration on a straight line basis provided, however, the annual amount added
to Operating Expenses for equipment, improvements or alterations (“Equipment”)
for the purpose of reducing energy costs, maintenance costs or other Operating
Expenses shall not exceed Landlord’s reasonable estimate (at the time of
installation, improvement, or alteration) of the annual savings resulting from
such Equipment.

 

C.                                     The
terms “Tenant’s Share of Taxes” and “Tenant’s Share of Operating Expenses”,
unless specifically otherwise defined herein, shall each mean the percentage
that the rentable area of Tenant’s Premises is of the total rentable area in
the Facility, subject to adjustment as set forth in Paragraph D.  If said percentage shall change during a
Lease Year, it shall be averaged by applicable days, and the average shall be
Tenant’s Share for that year.

 

D.                                    Notwithstanding
anything herein to the contrary, it is agreed that (i) in the event the
Facility is not fully occupied during any Lease Year, a reasonable and
equitable adjustment shall be made by Landlord to those charges only which vary
with the occupancy of the Facility in computing the Operating Expenses for such
year so that the Operating Expenses shall be adjusted to the amount that would
have been incurred had the Facility been fully occupied during such year, and
(ii) Tenant’s share shall be amended for each Lease Year to the percentage
that the average rentable area of the Premises bears to the greater of (y)
ninety-five percent (95%) of the total rentable area of the Facility for such 

 

5

 

Lease Year, or (z) to the total average rentable area leased (pursuant
to leases under which the term has commenced) in the Facility for such Lease
Year.

 

E.                                      The
term “Service Charge” shall mean any fee or other charge for service specified
in this Lease as payable by Tenant.

 

2.03                           Additional
Rent Estimates:  As to each Lease Year
after the initial Lease Year, Landlord shall estimate for each such Lease Year
(i) the total amount of Taxes; (ii) the total amount of Operating
Expenses; (iii) Tenant’s Share of Taxes; (iv) Tenant’s Share of
Operating Expenses; (v) the computation of the annual and monthly rental
payable during such Lease Year as a result of increases or decreases in Tenant’s
Share of Taxes and Tenant’s Share of Operating Expenses.  Said estimate shall be in writing and
Landlord shall use reasonable efforts to deliver or mail same to Tenant at the
Premises within ninety (90) days of the close of each Lease Year.  Landlord may adjust such estimates from time
to time during the Lease Year.

 

2.04                           Payment
of Additional Rent Estimates.  Tenant
shall pay the Additional Rent so estimated, in equal monthly installments, in
advance, on the first day of each month during each applicable Lease Year.  In the event that said estimate is delivered
to Tenant after the first day of January of the applicable Lease Year,
said amount, so estimated, shall be payable as Additional Rent, in equal
monthly installments, in advance, on the first day of each month over the
balance of such Lease Year, with the number of installments being equal to the
number of full calendar months remaining in such Lease Year.

 

2.05                           Annual
Determination of Additional Rent.  Upon
completion of each Lease Year, Landlord shall determine the actual amount of
Taxes and Operating Expenses for such Lease Year and Tenant’s Share thereof and
deliver a written, itemized certification of the amounts thereof to
Tenant.  If Tenant has paid less than its
Share of Taxes or its Share of Operating Expenses for any Lease Year, Tenant
shall pay the balance of its Share of the same within twenty (20) days after
the receipt of such statement.  If Tenant
has paid more than its Share of Taxes or its share of Operating Expenses for
any Lease Year, Landlord shall, at Tenant’s option, either (i) promptly
refund such excess, or (ii) credit such excess against the most current
monthly installment or installments due Landlord for Base Rent and Additional
Rent estimates.  A pro rata adjustment
shall be made for a fractional Lease Year occurring during the term of this
Lease or any renewal or extension thereof based upon the number of days of the
term of this Lease during said Lease Year as compared to three hundred
sixty-five (365) days and all additional sums payable by Tenant or credits due
Tenant as a result of the provisions of this Article 2 shall be adjusted
accordingly.

 

2.06                           Rental
Taxes.  Further, Tenant shall pay, also
as Additional Rent, any tax or excise on rents, gross receipts tax, or other
tax, however described, which is levied or assessed by the United States of
America or the state in which the Facility is located or any political
subdivision thereafter, against Landlord in respect to the Base Rent,
Additional Rent, or other charges reserved under this Lease or as a result of
Landlord’s receipt of such rents or other charges accruing under this Lease,
all of which shall herein be termed “Rental Taxes”; provided, however, Tenant
shall have no obligation to pay income or capital gains taxes of Landlord.

 

2.07                           Tenant’s
Taxes.  Tenant shall pay, prior to
delinquency, all taxes assessed or levied upon its occupancy of the Premises,
or upon the trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises, and when possible, Tenant shall
cause such trade fixtures, furnishing, equipment and other personal property to
be assessed and billed separately from the property of Landlord.  In the event any or all of Tenant’s trade
fixtures, furnishings, equipment or other personal property, or Tenant’s
occupancy of the Premises, shall be assessed and taxed with the property of
Landlord, Tenant shall pay to Landlord its share of such taxes within ten (10)
days after delivery to 

 

6

 

Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant’s personal property.

 

ARTICLE III

OVERDUE AMOUNTS; RENT INDEPENDENT

 

3.01                           Payment
of Rent.  Any installment of Base Rent,
Additional Rent, or any other charges to be paid by Tenant accruing under the
provisions of this Lease that shall not be paid when due, shall bear interest
at the rate of two (2) points over the quoted prime rate of interest charged by
Norwest Bank Minnesota, N.A. (or its successor) per annum from the date when
the same is due until the same shall be paid, but if such rate exceeds the
maximum interest rate permitted by law, such rate shall be reduced to the
highest rate allowed by law under the circumstances.  Landlord agrees that it will waive the
initial twenty (20) days interest accrued in any twelve (12) consecutive month
period.  Tenant’s covenants to pay the
Base Rent and the Additional Rent are independent of any other covenant,
condition, provision or agreement herein contained.

 

3.02                           No
Accord and Satisfaction.  No payment by
Tenant or receipt by Landlord of a lesser amount than the Base Rent, Additional
Rent, Service Charge or other charges (“Rent”) stipulated herein shall be
deemed to be other than on account of the earliest stipulated Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord shall accept
such check or payment without prejudice to Landlord’s right to recover the
balance of such Rent or pursue any other remedy in this Lease.

 

ARTICLE IV

TERM AND COMMENCEMENT

 

4.01                           Demise.  Landlord hereby demises and leases to Tenant
and Tenant hereby rents and takes from Landlord the Premises for the Term and
subject to and with the benefit of the terms, covenants and conditions of this
Lease to be occupied and used by Tenant solely for the purposes stated on the
Data Sheet and for no other purpose. 
Landlord shall have the right to grant exclusive rights to parties in
the Facility to conduct service businesses serving the Property but in no event
shall this conflict with Tenant’s use as set forth on the Data Sheet.

 

4.02                           Commencement
Date.  Tenant shall have and hold the
same Premises, without any liability or obligation on the part of Landlord to
make any alterations, improvements or repairs of any kind in or about the
Premises, except as expressly provided herein, for the Term set forth on the
Data Sheet, unless sooner terminated in the manner provided herein.  The Term hereof shall commence on the
Commencement Date.  Except as
specifically set forth in Section 27.2 hereinafter, if Landlord is unable
to give possession of the Premises on the Commencement Date because the
construction of the Facility or the completion of the Premises has not been
sufficiently completed to make the Premises ready for occupancy, or for any
reason, Landlord shall not be subject to any claims, damages or liabilities for
the failure to give possession on said date. 
Substantial completion of the Premises shall be evidenced by the
issuance of a certificate of occupancy (whether full or partial, temporary or
permanent) for the Premises, provided, however this provision shall not limit
Tenant’s right to require Landlord to correct incomplete or defective work
pursuant to Section 4.03, in the Building or Premises.  Under said circumstances, the Rent reserved
and covenant to pay same shall not commence until possession of the Premises is
given and the Premises are ready for occupancy, whichever is earlier, and
failure to give possession on the Commencement Date shall in no way affect the
validity of this Lease or the obligations of Tenant hereunder, except that
Tenant’s obligation to make rental and other required payments (other than
pursuant to Article XXIII herein) shall be deferred and there shall be a
corresponding extension of the Expiration Date.

 

7

 

4.03                           Acceptance
of Premises.  The acceptance of
possession by Tenant shall be deemed conclusively to establish that the
Premises and all other improvements of the Facility required to be constructed
by Landlord for use thereof by Tenant have been completed unless Tenant
notifies Landlord in writing within thirty (30) days after commencement of the
term as to any items not completed. 
Tenant waives any claim as to matters not listed in said notice other
than latent defects for which Tenant provides Landlord notice within twelve
(12) months from substantial completion of the Premises.

 

ARTICLE V

SERVICES

 

5.01                           Landlord’s
Services.  Subject to including the cost
thereof in Article 2, Landlord shall provide services as stated in
Exhibit ”E”, without further charge except as expressly stated otherwise.

 

5.02                           Interruption
of Services.  No interruption in, or
temporary stoppage of, any of the aforesaid services caused by repairs,
renewals, improvements, alterations, strikes, lockouts, labor controversy,
accidents, inability to obtain fuel or supplies or other causes shall be deemed
an eviction or disturbance of Tenant’s use and possession, or render Landlord
liable for damages, by abatement of rent or otherwise or relieve Tenant from
any obligation herein set forth.  In no
event shall Landlord be required to provide any heat, air conditioning,
electricity or other service in excess of that permitted by involuntary
guidelines or laws, ordinances or regulations of governmental authority.

 

5.03                           Anything
in this Lease to the contrary notwithstanding, Landlord shall have the right to
specially assess Tenant a Service Charge for additional services specially
requested by Tenant or other items of Operating Expenses (and shall reduce the
total of Operating Expenses accordingly) to the extent Landlord can reasonably
demonstrate Tenant’s use or consumption thereof due to hours of operation,
equipment operated from the Premises, or other reasons, warrant such assessment.

 

ARTICLE VI

INSURANCE

 

6.01                           Landlord’s
Insurance.

 

A.                                   Landlord’s
Casualty Insurance.  Landlord shall, as a
portion of Operating Expenses, keep the Facility insured for the benefit of
Landlord in an amount equivalent to the full replacement value thereof
(excluding foundation, grading and excavation costs) against (a) loss or damage
by fire; and (b) such other risk or risks of a similar or dissimilar nature as
are now, or may in the future be, customarily covered with respect to buildings
and improvements similar in construction, general location, use, occupancy and
design to the Facility, including, but without limiting, the generality of the
foregoing, windstorms, hail, explosions, vandalism, theft, malicious mischief,
civil commotion, law and ordinance, and such other coverage as may be deemed
necessary by Landlord, provided such additional coverage is obtainable and
provided such additional coverage is such as is customarily carried with
respect to buildings and improvements similar in construction, general
location, use, occupancy and design to the Facility.

 

B.                                     Landlord’s
Liability Insurance.  Landlord shall, as
a portion of the Operating Expenses, maintain, for its benefit and the benefit
of its managing agent and lender, commercial general liability insurance
against claims for personal injury, death or property damage occurring upon, in
or about the Facility.

 

These insurance provisions shall in no way limit or
modify any of the obligations of Tenant under any provision of this Lease.

 

8

 

6.02                           Tenant’s
Insurance.

 

(a)                                  Tenant’s
Casualty Insurance.  Tenant shall keep
all of its machinery, equipment, furniture, fixtures, personal property
(including also property under the care, custody, or control of Tenant) and
business interests that may be located in, upon, or about the Premises insured
for the benefit of Tenant in an amount equivalent to the full replacement value
or insurable value thereof against (a) loss or damage by fire; and (b) such
other risk or risks of a similar or dissimilar nature as are now, or may in the
future be, customarily covered with respect to a tenant’s machinery, equipment,
furniture, fixtures, personal property and business located in a building
similar in construction, general location, use, occupancy and design to the
Facility, including, but without limiting the generality of the foregoing,
windstorms, hail, explosions, vandalism, theft, malicious mischief, civil
commotion, and such other coverage as Tenant may deem appropriate or
necessary.  Tenant shall have the right
to provide this coverage by means of blanket coverage.

 

(b)                                 Tenant’s
Liability Insurance.  Tenant shall, at
Tenant’s sole cost and expense maintain commercial general liability insurance
against claims for bodily and personal injury, death or property damage
occurring upon, in or about the Premises, such insurance to afford protection
to the limit of not less than One Million and No/100 Dollars ($1,000,000.00)
per each occurrence, and to the amount of not less than Two Million and No/100
Dollars ($2,000,000.00) in general aggregate. 
Such policies of insurance shall be written in companies reasonably
satisfactory to Landlord, naming Landlord, its lender and Landlord’s managing
agent as additional insureds thereunder, and certificate of such insurance
shall be delivered to Landlord by the company or agency issuing the same.  Tenant agrees to include in such policy
contractual liability coverage insuring Tenant’s indemnification obligations
provided for herein.  Tenant shall have
the right to provide this coverage by means of blanket coverage.

 

6.03                           Releases
and Indemnity.

 

(a)                                  Tenant’s
Indemnification.  Tenant agrees to
indemnify and save Landlord and its managing agent harmless against and from
any and all claims, loss, damage and expense by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising from any breach or
default on the part of Tenant in the performance of any covenant or agreement
on the part of Tenant to be performed, pursuant to the terms of this Lease, or
arising from any act or negligence on the part of Tenant or its agents,
contractors, servants, employees or licensees, or arising from any accident,
injury or damage to the extent caused by Tenant, its agents, and employees to
any person, firm or corporation occurring during the term of this Lease or any
renewal thereof, in or about the Premises and Project, and from and against all
costs, reasonable counsel fees, expenses and liabilities incurred in or about
any such claim or action or proceeding which may be brought thereon; and in
case any action or proceeding be brought against Landlord or its managing agent
by reason of any such claim, Tenant, upon notice from Landlord, covenants to
resist or defend such action or proceeding by counsel reasonably satisfactory
to Landlord.

 

(b)                                 Landlord’s
Indemnification.  Landlord agrees to
indemnify and save Tenant harmless against and from any and all claims, loss,
damage and expense by or on behalf of any person or persons, firm or firms,
corporation or corporations, arising from any breach or default on the part of
Landlord in the performance of any covenant or agreement on the part of
Landlord to be performed, pursuant to the terms of this Lease, or arising from
any act or negligence on the part of Landlord or its agents, contractors,
servants, employees or licensees, or arising from any accident, injury or
damage to the extent caused by Landlord, its agents, and employees to any
person, firm or corporation occurring during the term of this Lease or any
renewal thereof, in or about the Premises and Project, and from and against all
costs, reasonable counsel fees, expenses and liabilities incurred in or about
any such claims, actions or proceeding brought thereon; and in case any action
or proceeding is brought against Tenant by 

 

9

 

reason of any such claim,
Landlord, upon notice from Tenant, covenants to resist or defend such action or
proceeding with competent counsel.

 

(c)                                  Tenant’s
Waiver.  Tenant agrees, to the extent not
expressly prohibited by law, that Landlord, its agents, employees and servants
shall not be liable, and Tenant waives all claims for damage to property and
business sustained during the term of this Lease by Tenant occurring in or
about the Facility, resulting directly or indirectly from any existing or
future condition, defect, matter or thing in the Premises, the Facility, or any
part thereof, or from equipment or appurtenances becoming out of repair or from
accident, or from any occurrence or act or omission of Landlord, its agents,
employees or servants, or any tenant or occupant of the Building or any other
person unless caused by the negligence or intentional act of Landlord, its
agents or employees.  This paragraph
shall apply especially, but not exclusively, to damage caused as aforesaid or
by the flooding of basements or other subsurface areas, or by refrigerators,
sprinkling devices, air conditioning apparatus, water, snow, frost, steam,
excessive heat or cold, falling plaster, broken glass, sewage, gas, odors or
noise, or the bursting or leaking of pipes or plumbing fixtures, and shall
apply equally, whether any such damage results from the act or omission of
other tenants or occupants in the Facility or any other persons, and whether
such damage be caused by or result from any of the aforesaid, or shall be
caused by or result from other circumstances of a similar or dissimilar nature.

 

(d)                                 Tenant’s
Liability.  All property in the Facility
or on the Premises belonging to Tenant, its agents, employees, invitees or
otherwise located at the Premises, shall be at the risk of Tenant only, and
Landlord shall not be liable for damage thereto or theft, misappropriation or
loss thereof unless caused by the gross negligence or willful misconduct of
Landlord, it agents, or employees and Tenant agrees to defend and hold
Landlord, its agents, employees and servants harmless and indemnify them
against claims and liability for injuries to such property other than that caused
by the gross negligence or willful misconduct of Landlord, its agents, or
employees.

 

(e)                                  Releases.  Landlord and Tenant each agree that such
policy or policies of insurance for loss or damage by fire or other risks shall
permit releases of liability as herein provided and include a waiver of
subrogation clause as to Tenant and Landlord respectively.  Each party hereto waives, releases and
discharges the other party from all claims or demands whatsoever which the waiving
party may have arising out of damage to or destruction of the waiving party’s
property or loss of use thereof occasioned by fire of other casualty, which
such claim or demand may arise because of the negligence or fault of the other
party, its agents, employees, customers or business invitees, or otherwise and
the waiving party agrees to look to its insurance coverage only in the event of
such loss.

 

ARTICLE VII

CERTAIN RIGHTS RESERVED BY LANDLORD

 

7.01                           Rights
Reserved.  Landlord reserves the
following rights exercisable without notice unless otherwise noted and without
liability to Tenant and without affecting an eviction, constructive or actual,
or disturbance of Tenant’s use of possession, or giving rise to any claim for
setoff or abatement of rent:

 

A.                                   To
control, install, affix and maintain any and all signs on the Property, or on
the exterior of the Facility and in the corridors, entrances and other common
areas thereof, except as provided in Article XXX hereof, and except those
signs within the Premises not visible from outside the Premises.

 

B.                                     To
reasonably designate, limit, restrict and control any service in or to the
Facility, including but not limited to the designation of sources from which
Tenant may obtain sign painting and lettering. 
Any restriction, designation, limitation or control imposed by reason of
this subparagraph shall be imposed uniformly on Tenant and other tenants in the
Facility.

 

10

 

C.                                     To
retain at all times and to use in appropriate instances, keys or other means of
access to all doors within and into the Premises.  No locks shall be changed without prior
written consent of Landlord.  This
provision shall not apply to Tenant’s safes, or other areas maintained by
Tenant for the safety and security of monies, securities, negotiable
instruments or like items.

 

D.                                    To
make repairs, alterations, additions, or improvements, whether structural or
otherwise, in and about the Facility, or any part thereof, and for such
purposes to enter upon the Premises, and during the continuation of any of said
work, to temporarily close doors, entryways, public spaces, and corridors in
the Facility and to temporarily interrupt or temporarily suspend services and
facilities.

 

E.                                      To
restrict or prohibit vending or dispensing machines of any kind in or about the
Premises for use by the general public (as opposed to Tenant’s employees and
business invitees).

 

F.                                      To
approve the weight, size and location of safes and other heavy equipment and
articles in and about the Premises and the Facility and to require all such
items to be moved into and out of the Facility and the Premises only at such
times and in such manner as Landlord shall direct in writing.

 

ARTICLE VIII

ALTERATIONS AND IMPROVEMENTS

 

8.01                           Alterations.  Tenant shall not make any improvements,
alterations, additions or installations in or to the Premises (hereinafter
referred to as the “Work”) without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.  Along with any request for Landlord’s consent
and before commencement of the Work or delivery of any materials to be used in
the Work to the Premises or into the Facility, Tenant shall furnish Landlord
with plans and specifications, names and addresses of contractors, copies of
contracts, necessary permits and licenses, and except when Landlord, its agent
or affiliate is contractor, an indemnification in such form and amount as may
be reasonably satisfactory to Landlord. 
Tenant agree to defend and hold Landlord harmless from any and all
claims and liabilities of any kind and description that may arise out of or be
connected in any way with said improvements, alterations, additions or
installations.  All work done by Tenant,
its agents, employees, or contractors shall be done in such a manner as to
avoid labor disputes.  Tenant shall pay
the cost of all such improvements, alterations, additions or installations, and
also the cost of painting, restoring, or repairing the Premises and the
Facility occasioned by such improvements, alterations, additions or
installations.  Upon completion of the
Work, Tenant shall furnish Landlord with contractor’s sworn affidavits and full
and final waivers of liens, or receipted bills covering all labor and materials
expended and used.  The Work shall comply
with all insurance requirements and all laws, ordinances, rules and regulations
of all governmental authorities and shall be constructed in a good and
workmanlike manner.  Tenant shall permit
Landlord to inspect construction operations in connection with the Work.  Tenant shall not be allowed, without Landlord’s
reasonable approval, to perform such Work if such action results or would
result in a labor dispute or otherwise would materially interfere withLandlord’s
operation of the Facility.

 

ARTICLE IX

REPAIRS

 

9.01                           Tenant’s
Duty of Repair.  Tenant shall, during the
term of this Lease, at Tenant’s expense, keep the Premises in as good order,
condition and repair as they were at the time Tenant took possession of the
same, reasonable wear and tear and damage from fire and other casualties
excepted.  Tenant shall keep the Premises
in a neat and sanitary condition and shall not commit any nuisance or waste on
the Premises or in, on, or about the Facility, throw foreign substances in the
plumbing facilities, or waste any of the utilities furnished by the
Landlord.  All uninsured damage or injury
to the Premises, or to the Facility caused by Tenant moving furniture,
fixtures, equipment, or other devices in or out of the 

 

11

 

Premises or Facility or
by installation or removal of furniture, fixtures, equipment, devices or other
property of Tenant, its agents, contractors, servants or employees, due to
carelessness, omission, neglect, improper conduct, or other cause of Tenant,
its servants, employees, agents, visitors, or licensees, shall be repaired,
restored and replaced promptly by Tenant at its sole cost and expense to the
reasonable satisfaction of Landlord.  All
repairs, restorations and replacements shall be in quality and class equal to
the original work.

 

9.02                           Right
of Entry.  Landlord or its employees or
agents shall have the right to enter the Premises at any reasonable time or
times for the purpose of inspection, cleaning, repairs, altering, or improving
the same but nothing contained herein shall be construed as imposing any
obligation on Landlord to make any repairs, alterations or improvements that
are the obligation of Tenant.  See Rider Article XXX.

 

ARTICLE X

ASSIGNMENT AND SUBLETTING

 

10.01                     Assignment by Tenant.  Tenant shall not, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld delayed
or conditioned, (i) transfer, pledge, mortgage or assign this Lease or any
interest hereunder; (ii) permit any assignment of this Lease by voluntary
act, operation of law or otherwise; (iii) sublet the Premises or any part
thereof; or (iv) permit the regular use of the Premise by any parties
other than Tenant, its agents and employees. 
Tenant shall seek such written consent of Landlord by a written request
therefore, setting forth such information as Landlord may reasonably deem
necessary.  Tenant shall, by notice in
writing, advise Landlord of its intention from, on and after a stated date
which shall not be less than thirty (30) days after date of Tenant’s notice, to
assign this Lease or sublet any part or all of the Premises for the balance of
the Term.  Tenant’s notice shall state
the name and address of the proposed assignee or subtenant and a true and
complete copy of the proposed assignment or sublease shall be delivered to
Landlord with Tenant’s notice along with any consideration therefor.  Landlord will not unreasonably withhold,
delay, or condition its consent to Tenant’s assignment of the Lease or
subletting of such space and incidental rights to the party identified in
Tenant’s notice.

 

10.02                     Payment to Landlord.

 

A.                                   Landlord
will not unreasonably withhold, delay, or condition its consent to Tenant’s
assignment of the Lease or subletting of such space and incidental rights to
the party identified in Tenant’s notice, provided, however, in the event
Landlord consents to any such assignment or subletting, and as a condition
thereto, Tenant shall pay to Landlord, fifty percent (50%) of all net profit
derived by Tenant from such assignment or subletting other than to affiliates
of Tenant.  For purposes of the
foregoing, net profit shall be deemed to include, but not be limited to, the
amount of all rent payable by such assignee or sublessee in excess of the Base
Rent and rent adjustments payable by Tenant under this Lease, net of all
reasonable expenses (including new tenant improvements, commissions, rent
abatement and similar costs of subleasing) incurred by Tenant in obtaining said
assignee or sublessee.

 

If a part of the consideration for such assignment or
subletting shall be payable other than in cash, the payment to Landlord shall
be in cash for its share of any non-cash consideration based upon the fair
market value thereof.

 

B.                                     Tenant
shall furnish to Landlord upon request a complete statement, certified by an
independent certified public accountant, setting forth in detail the
computation of all profit, pursuant to generally accepted accounting
principles.  Tenant agrees that Landlord
shall have the right to review its books and records used to determine profit
for the assignment or sublease.  Any
profit shall be paid to Landlord within fifteen (15) days of receipt by Tenant
of all payments made from time to time by such assignee or sublessee to Tenant.

 

12

 

10.03                     Terms of Sublease.  Any subletting or assignment hereunder shall
not release or discharge Tenant of or from any liability, whether past, present
or future, under this Lease, and Tenant shall continue fully liable thereunder
unless Landlord shall agree otherwise in writing.  The subtenant or assignee shall agree in a
form satisfactory to Landlord to comply with and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease to the extent of
the space sublet or assigned, and Tenant shall deliver to Landlord promptly
after execution an executed copy of each such sublease or assignment and an
agreement of compliance by each such subtenant or assignee.  Consent by Landlord to any assignment of this
Lease or to any subletting of the Premises shall not be a waiver of Landlord’s
rights under this Article as to any subsequent assignment or subletting.

 

10.04                     As long as Tenant remains a
publicly-held corporation, a transfer of any shares in Tenant shall not be
deemed an assignment under this Lease.

 

10.05                     Miscellaneous.  Any sale, assignment, mortgage, transfer, or
subletting of this Lease which is not in compliance with the provisions of this
Article 10 shall be of no effect and void. 
Landlord’s right to assign its interest in this Lease shall remain
unqualified.

 

ARTICLE XI

DAMAGE BY FIRE OR OTHER CASUALTY

 

11.01                     Premises Destruction.  If fire or other casualty shall render the
whole or any material portion of the Premises untenantable, then:

 

A.                                   If
the Premises can reasonably be expected to be made tenantable within two
hundred ten (210) days from the date of such event, Landlord shall repair and
restore the Premises and the Facility to as near their condition prior to the
fire or other casualty as is reasonably possible within such two hundred ten
(210) day period (subject to delays for causes beyond Landlord’s reasonable
control) and notify Tenant that it will be doing so, such notice to be mailed
within thirty (30) days from the date of such damage or destruction, and this
Lease shall remain in full force and effect, but the Rent for the period during
which the Premises are untenantable shall be abated pro rata (based upon the
portion of the Premises which is untenantable).

 

B.                                     If
the Premises cannot reasonably be expected to be made tenantable within two
hundred ten (210) days from the date of such event, either Landlord or Tenant
by notice in writing to the other mailed within forty-five (45) days from the
date of such damage or destruction, may terminate this Lease effective upon a
date within thirty (30) days from the date of such notice.

 

11.02                     Complex Destruction.  In the event that more than fifty percent
(50%) of the value of the Facility is damaged or destroyed by fire or other casualty,
and irrespective of whether damage or destruction can be made tenantable within
two hundred ten (210) days thereafter, then at Landlord’s option, by written
notice to Tenant, mailed within thirty (30) days from the date of such damage
or destruction, Landlord may terminate this Lease effective upon a date within
ninety (90) days from the date of such notice to Tenant.  In the event of a termination of this Lease
pursuant to this Article 11, Rent shall be apportioned on a per diem basis
to the date of the fire or casualty.  If
fifty percent (50%) or more of the value of the Facility is damaged and
destroyed by fire or other casualty during the last year of the Lease Term and
Tenant’s Premises are substantially damaged and made untenantable, Tenant may,
upon thirty (30) days written notice to Landlord mailed within thirty (30) days
from the date of such damage or destruction, terminate this Lease effective
upon the date of notice.

 

11.03                     Duty to Repair; Rent
Abatement.  If fire or other casualty
shall render the whole or any part of the Premises untenantable and the
Premises cannot reasonably be expected to be made tenantable within two hundred
ten (210) days from the date of such event and neither Landlord nor Tenant 

 

13

 

terminates this Lease
pursuant to its right herein; or in the event that more than fifty percent
(50%) of the value of the Facility is damaged or destroyed by fire or other
casualty, and neither party hereto terminates this Lease pursuant to the
options granted herein, or in the event that fifty percent (50%) or less of the
value of the Facility is damaged or destroyed by fire or other casualty and
neither the whole nor any material portion of the Premises is rendered
untenantable, then Landlord shall repair and restore the Premises and the
Facility to as near their condition prior to the fire or other casualty as is
reasonably possible, the work to be commenced and prosecuted with all due
diligence and speed (subject to delays for causes beyond Landlord’s reasonable
control), and the Rent for the period during which the Premises are
untenantable shall be abated pro rata (based upon the portion of the Premises
that is untenantable).  In no event shall
Landlord be obligated to repair or restore any special equipment or
improvements installed by Tenant at Tenant’s expense.

 

ARTICLE XII

EMINENT DOMAIN

 

12.01                     Public Taking.  If the whole of or any substantial part of
the Premises is taken by any public authority under the power of eminent
domain, or taken in any manner for any public or quasi-public use, so as to
render (in Tenant’s reasonable judgment) the remaining portion of the Premises
unsuitable for the purposes intended hereunder, then the term of this Lease
shall cease as of the day possession shall be taken by such public authority
and Landlord shall make a pro rata refund of any prepaid Rent.  All damages awarded for such taking under the
power of eminent domain or any like proceedings shall belong to and be the
property of Landlord, Tenant hereby assigning to Landlord its interest, if any,
in said award.  In the event that fifty
percent (50%) or more of the building area or fifty percent (50%) or more of
the value of the Facility is taken by public authority under the power of
eminent domain, then, at Landlord’s option, by written notice to Tenant, mailed
within sixty (60) days from the date possession shall be taken by such public
authority, Landlord may terminate this Lease effective upon a date within
ninety (90) days from the date of such notice to Tenant.

 

12.02                     Tenant’s Election.  Further, if the whole or any material part of
the Premises is taken by public authority under the power of eminent domain, or
taken in any manner for any public or quasi-public use, so as to render the remaining
portion of the Premises unsuitable in Tenant’s reasonable opinion, for the
purposes intended hereunder, upon delivery of possession to the condemning
authority pursuant to the proceedings, Tenant may, at its option, terminate
this Lease as to the remainder of the Premises by written notice to Landlord,
such notice to be given to Landlord within sixty (60) days after Tenant
receives notice of the taking.  Tenant
shall not have the right to terminate this Lease pursuant to the preceding
sentence unless (i) the business of Tenant conducted in the portion of the
Premises taken cannot, in Tenant’s reasonable judgment, be carried on with
substantially the same utility and efficiency in the remainder of the Premises
[or any substitute space securable by Tenant pursuant to clause (ii)
hereof]; and (ii) Tenant cannot secure substantially similar (in Tenant’s
reasonable judgment) alternate space upon the same terms and conditions as set
forth in this Lease (including rental) from Landlord in the Facility.  Any notice of termination shall specify a
date no more than one hundred sixty (160) days after the giving of such notice
as the date for such termination.

 

12.03                     Tenant’s Damages.  Anything in this Article 12 to the
contrary notwithstanding, Tenant shall have the right to prove in any
condemnation proceedings and to receive any separate award which may be made
for damages to or condemnation of Tenant’s movable trade fixtures and equipment
and for moving expenses; provided, however, Tenant shall in no event have any
right to receive any award for its interest in this Lease or for loss of
leasehold.

 

12.04                     Restoration and Rent.  Anything in this Article 12 to the
contrary notwithstanding, in the event of a partial condemnation of the
Facility or the Premises and this Lease is not terminated, Landlord 

 

14

 

shall, at its sole cost
and expense, expeditiously restore the Premises and Facility to a complete
architectural unit and the Base Rent provided for herein during the period from
and after the date of delivery of possession pursuant to such proceedings to
the termination of this Lease shall be reduced to a sum equal to the product of
the Base Rent provided for herein multiplied by the area of the Premises
restored after the condemnation.

 

ARTICLE XIII

SURRENDER OF PREMISES

 

13.01                     Surrender by Tenant.  On the last day of this Lease, or on the
sooner termination thereof, Tenant shall peaceably surrender the Premises in
good condition and repair consistent with Tenant’s duty to make repairs as
herein provided.  On or before the last
day of the term of this Lease, or the date of sooner termination thereof,
Tenant shall, at its sole cost and expense, remove all of its property and
trade fixtures and equipment from the Premises, and all property not removed
shall be deemed abandoned.  Tenant hereby
appoints Landlord its agent to remove all property of Tenant from the Premises
upon termination of this Lease and to cause its transportation and storage for
Tenant’s benefit, all at the sole cost and risk of Tenant, and Landlord shall
not be liable for damage, theft, misappropriation or loss thereof, and Landlord
shall not be liable in any manner in respect thereto.  Tenant shall pay all costs and expenses of
such removal, transportation and storage. 
Tenant shall leave the Premises in good order, condition and repair,
reasonable wear and tear and damage from fire and other casualty excepted.  Tenant shall reimburse Landlord upon demand
for any expenses incurred by Landlord with respect to removal, transportation,
or storage of abandoned property and with respect to restoring said Premises to
good order, condition and repair.  All
alterations, additions and fixtures, other than Tenant’s trade fixtures and
equipment, that have been made or installed by either Landlord or Tenant upon
the Premises, shall remain the property of Landlord and shall be surrendered
with the Premises as a part thereof. 
Tenant shall promptly surrender all keys for the Premises to Landlord at
the place then fixed for the payment of Rent and shall inform Landlord of
combinations on any vaults, locks and safes left on the Premises.

 

13.02                     Holding Over.  In the event Tenant remains in possession of
the Premises after expiration of this Lease, and without the execution of a new
lease, but with Landlord’s written consent, it shall be deemed to be occupying
the Premises as a tenant from month-to-month, subject to all the provisions,
conditions and obligations of this Lease insofar as the same can be applicable
to a month-to-month tenancy, except that the Base Rent shall be escalated to
Landlord’s then current Base Rent for the Premises according to Landlord’s then
current rental rate schedule for prospective tenants.  In the event Tenant remains in possession of
the Premises after expiration of this Lease and without the execution of a new
lease and without Landlord’s written consent, Tenant shall be deemed to be
occupying the Premises without claim of right and Tenant shall pay a charge for
each day of occupancy an amount equal to one hundred fifty percent (150%) of
the Base Rent and Additional Rent (on a daily basis) then currently being
charged by Landlord on new leases in the Facility for space similar to the
Premises.

 

ARTICLE XIV

DEFAULT

 

14.01                     Remedies Cumulative.  All rights and remedies of Landlord herein
enumerated shall be cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Landlord may lawfully be entitled
in case of any breach or threatened breach of Tenant of any provision of this
Lease.  The failure of Landlord to insist
in any one or more cases upon the strict performance of any of the covenants of
this Lease or to exercise any option herein contained shall not be construed as
a waiver or relinquishment for the future of such covenant or option.  A receipt by Landlord of Rent with knowledge
of the breach of any covenant hereof (other than breach of the obligation to
pay the portion of such Rent paid) shall not be deemed a waiver of such breach,
and no waiver by Landlord or Tenant of any 

 

15

 

provisions of this Lease
shall be deemed to have been made unless expressed in writing and signed by
Landlord or Tenant, as the case may be. 
In addition to the other remedies in this Lease provided, Landlord or
Tenant shall be entitled to the restraint by injunction of the violation or
attempted or threatened violation of the covenants, conditions and provisions
of this Lease.

 

14.02                     Tenant Change in Status.  If, during the term of this Lease or any
renewal term, (i) Tenant shall make an assignment for the benefit of
creditors, or (ii) a voluntary petition be filed by Tenant under any law
having for its purpose the adjudication of Tenant a bankrupt, or Tenant be
adjudged a bankrupt pursuant to an involuntary petition in bankruptcy and the
same not be dismissed or stayed within sixty (60) days of its filing, or
(iii) a receiver be appointed for the property of Tenant by reason of the
insolvency of Tenant, or (iv) any department of the state or federal
government, or any officer thereof, duly authorized, shall take possession of
the business or property of Tenant by reason of the insolvency of Tenant and
such action not be stayed or terminated within sixty (60) days thereafter,
then, the occurrence of any of such contingencies shall be deemed a breach of
this Lease and this Lease shall ipso facto upon the happening of any of said
contingencies be terminated and the same shall expire as fully and completely
as if the day fixed for the expiration of the initial term of this Lease or any
renewal term, as the case may be, had occurred, and Tenant will then quit and
surrender the Premises, but Tenant shall remain liable as hereinafter
provided.  As used in this paragraph, the
term “Tenant” shall also mean any guarantor of Tenant’s obligations under this
Lease.

 

14.03                     Tenant Breach.  If, during the initial term of this Lease or
any renewal term, (i) Tenant defaults in any payment of the Rent expressly
reserved hereunder for ten (10) days after receipt of written notice thereof,
or any part of the same; (ii) Tenant shall default in fulfilling any of
the covenants, obligations, or agreements of this Lease (other than the
covenants for the payment of Rent payable by Tenant hereunder), or (iii) this
Lease, without the prior written consent of Landlord or except as expressly
permitted, shall be assigned, pledged, mortgaged, transferred, or sublet in any
manner, and such default in (ii) shall continue for thirty (30) days after
service of notice of the default by Landlord, or in the event of a default or
contingency set forth in (ii) hereinabove cannot with due diligence be
cured within a period of thirty (30) days, if Tenant fails to proceed promptly
after the service of said notice and with all due diligence to commence to cure
the same and thereafter to prosecute the curing of such default with all due
diligence [it being intended that in connection with a default not susceptible
of being cured with diligence within thirty (30) days, the time within which
Tenant is to cure the same shall be extended for such period as may be
reasonably necessary to complete the same with all due diligence], Landlord, at
its option, may pursue the remedies as set forth hereinafter.

 

14.04                     Remedies upon Default.  In the event of a default by Tenant as set
forth hereinabove, Landlord, at its option, may (i) terminate this Lease
and upon such termination Tenant will quit and surrender the Premises to
Landlord but Tenant shall remain liable as hereinafter provided, or (ii) without
terminating the Lease, Landlord or Landlord’s agent or servant may re-enter the
Premises and remove all persons and all or any property therefrom, either by
summary dispossession proceedings or otherwise, without being liable to
indictment, prosecution, or damage therefore and repossess and enjoy the
Premises, together with all additions, alterations and improvements, without
such re-entry and repossession working a forfeiture or waiver of the Rents to
be paid and the covenants to be performed by Tenant during the full term of
this Lease.

 

A.                                   Reletting.

 

(1)  Upon
termination of this Lease or expiration of Tenant’s right to occupy the
Premises by reason of the happening of any of the foregoing events, or in any
other manner or circumstances whatsoever, whether with or without legal
proceedings, by reason of or based upon or arising out of a default or breach
of this Lease on the part of Tenant, 

 

16

 

Landlord may, at its option, at any time and from time
to time relet the Premises or any part or parts thereof, for the account of
Tenant or otherwise, and receive and collect the rent therefore, applying the
same first to the payment of such expenses as Landlord may have incurred in
recovering possession of the Premises, including the attorney’s fees and
expenses for putting the same into good order and condition or preparing or
altering the same for re-rental to the extent Landlord deems necessary or
desirable and all other commercially reasonable expenses, commissions and
charges paid, assumed or incurred by Landlord in or about reletting the
Premises and then to the fulfillment of the covenants of Tenant hereunder.  Any such reletting herein provided for may be
for the remainder of the initial term or any renewal term of this Lease, as
originally granted, or for a longer or shorter period; Landlord shall have the
right to change the character and use made of the Premises, and Landlord shall
not be required to accept any substitute tenant offered by Tenant or to observe
any instructions given by Tenant about reletting.

 

(2)  In any such
case, and whether or not the Premises or any part thereof be relet, Tenant
shall pay to Landlord the Base Rent and all Additional Rent and other charges
required to be paid by Tenant up to the later of the time of such termination
of the Lease or of such recovery of possession of the Premises by Landlord, as
the case may be, and thereafter, except in a case in which liability of Tenant
(as hereinafter provided), arises by reason of the happening of the insolvency
of Tenant, Tenant covenants and agrees, if required by Landlord, to pay to
Landlord until the end of the initial term of this Lease, or any renewal term,
as the case may be, the equivalent of the amount of all Rent reserved
hereunder, and all other charges required to be paid by Tenant, less the net
proceeds of reletting, if any.  Landlord
shall have the election in place of holding Tenant so liable forthwith to
recover against Tenant as damages for loss of the bargain and not as a penalty,
an aggregate sum which at the time of such termination of this Lease or of such
recovery of possession of the Premises by Landlord, as the case may be,
represents the then present worth of the excess, if any, of the aggregate of
the Rent and all other charges payable by Tenant hereunder that would have
accrued for the balance of the initial term, or any renewal term, as the case
may be, over the then present worth of the fair market rents and all other
charges for the Premises for the balance of such term.

 

14.05                     Remedies Upon Insolvency.  If this Lease shall terminate by reason of
the bankruptcy or insolvency of Tenant, as above set forth, Landlord shall be
entitled, notwithstanding any other provisions of this Lease or any present or
future law, to recover from Tenant or Tenant’s estate (in lieu or the
equivalent of the amount of all rent unpaid at the time of such termination) as
damages for loss of the bargain, and not as a penalty, an aggregate sum which,
at the time of such termination of this Lease, represents the excess, if any,
of the then present worth of the aggregate of the Rent and other charges
payable by Tenant hereunder that would have accrued for the balance of the
initial term and/or renewal term, as the case may be, over the then present
worth of the fair market rents and all other charges for the Premises for the
balance of the initial term or any renewal term, as the case may be, unless any
statute or rule of law governing the proceedings in which such damages are to
be proved shall limit the amount of such claim capable of being so proved.  In such case, Landlord shall be entitled to
prove, as damages by reason of such breach and termination, the maximum amount
allowed by law or statute.  Nothing
herein contained shall limit or prejudice Landlord’s right to prove and obtain
as liquidated damages arising out of such breach or termination the maximum
amount allowed by any such statute or rule of law which may govern the
proceedings in which such damages are to be proved whether or not such amount
be greater, equal to, or less than the amount of the excess of the then present
worth of the rent and all other charges reserved herein over the then present
worth of the fair market rents and all other charges, referred to above.

 

17

 

14.06                     Fees and Expenses.  Tenant shall pay, upon demand, all of
Landlord’s costs, charges and expenses, including reasonable attorney’s fees
and fees of agents and others retained by Landlord, for the enforcement of
Tenant’s obligations hereunder or incurred by Landlord in any litigation,
negotiation or transaction in which Tenant causes Landlord without Landlord’s
fault to become involved or concerned. 
The prevailing party in any litigation concerning this Lease shall
recover all reasonable attorney’s fees and other expenses in addition to costs
taxable at law.

 

ARTICLE XV

SUBORDINATION AND ESTOPPEL

 

15.01                     Subordination of Lease.  This Lease shall be subject and subordinate
to any mortgage, deed of trust or ground lease now or hereafter placed upon the
Premises, the Facility, the Property, or any portion thereof by Landlord, its
successors or assigns, and to amendments, replacements, renewals and extensions
thereof, provided that any holder of any mortgage or deed of trust shall, as a
condition for such subordination, agree not to disturb Tenant’s Lease or
occupancy of the premises provided Tenant is not in default beyond the period
allowed for cure hereunder.

 

A.                                   Subject
to the foregoing provision of this Section 15.01, Tenant agrees at any
time hereafter, upon demand, to execute and deliver any instruments, releases,
or other documents reasonably acceptable to Tenant that may reasonably be
required for the purpose of subjecting and subordinating this Lease, as above
provided, to the lien of any such mortgage, deed of trust or ground lease.  The above subordination shall be effective
without the necessity of the execution and delivery of any further instruments
on the part of Tenant to effectuate such subordination.  Notwithstanding anything hereinabove
contained in this Article 15, in the event the holder of any mortgage,
deed of trust or ground lease, shall so elect, then, and in such event, upon
any such holder or landlord notifying Tenant to that effect in writing, this
lease shall be deemed prior and superior in lien to such mortgage, deed of
trust, ground lease, whether this Lease is dated prior to or subsequent to the
date of such mortgage, deed of trust or ground lease and Tenant shall execute
such attornment agreement as may be reasonably requested by said holder.

 

B.                                     Provided
that the mortgagee, ground lessor or trust deed holder under any first
mortgage, ground lease, first deed of trust or other security instrument shall
have notified Tenant in writing (by the way of a notice of assignment of lease
or otherwise) of its address, Tenant shall give such mortgagee, ground lessor
or trust deed holder, or other secured party (“Mortgagee”), simultaneously with
delivery of notice to Landlord, by registered or certified mail, a copy of any
such notice of default served upon Landlord. 
Tenant further agrees that said Mortgagee shall have the right to cure
any alleged default during the same period that Landlord has to cure such
default.

 

C.                                     Tenant
agrees from time to time upon not less than ten (10) days prior written request
by Landlord to deliver to Landlord a statement in writing certifying in the
form set forth on Exhibit ”G” attached hereto and made a part hereof by
reference (i) this Lease is unmodified and in full force and effect (or if
there have been modifications, that the Lease as modified is in full force and
effect and stating the modifications); (ii) the dates to which the rent
and other charges have been paid; (iii) Landlord is not default in any provision
of this Lease or, if in default, the nature thereof specified in detail;
(iv) the amount of monthly rental currently payable by Tenant;
(v) the amount of any prepaid rent, and (vi) such other matters as
may reasonably be requested by Landlord or any Mortgagee or prospective
purchaser of the Facility.

 

18

 

ARTICLE XVI

HAZARDOUS MATERIALS

 

16.01                     Landlord warrants and represents
to Tenant, that, to the best of Landlord’s knowledge and after reasonable inquiry,
the Premises and Landlord’s Improvements will be in compliance with all
applicable environmental laws, rules, requirements, orders, directives,
ordinances and regulations of the United States of America or any state, city
or municipal government or lawful authority having jurisdiction or affecting
the Premises (collectively “Environmental Laws”) and that none of the
insulation materials or any other materials within the Premises are or contain
asbestos, or any other known Regulated Material as defined below.  Except as set forth in Sections 16.03
and 16.05, Landlord shall, at its expense, take all action necessary to ensure
that the Facility complies with all Environmental Laws and that the Facility
is, and remains at all times, safe for use and occupancy.

 

16.02                     Except as set forth in
Sections 16.03 and 16.05, Landlord shall defend, indemnify and save
Tenant, its officers, directors, agents and employees, harmless from and
against all claims, obligations, demands, actions, proceedings and judgments,
loss, damage, liability and expense (including reasonable attorneys’ fees and
expenses) which any one or more of them may sustain in connection with any
non-compliance with any environmental condition affecting the Facility
resulting from violation of environmental laws which are not caused by or
resulting from Tenant’s use and occupancy of the Premises or Facility.  This indemnity shall not apply to Landlord’s
Mortgagee, successors-in-interest to Mortgagee or anyone acquiring the Premises
through Landlord’s Mortgagee.

 

16.03                     Tenant shall at Tenant’s own cost
and expense, timely comply with all applicable, rules, requirements, orders,
directives, ordinances and regulations arising from Tenant’s use and occupancy
of the Premises, including but not limited to the Environmental Laws, and shall
indemnify, defend, save and hold harmless Landlord, its directors, officers,
agents and employees from and against any and all claims, demands, losses and
liabilities (including reasonable attorneys’ fees) resulting from any violation
of the Environmental Laws when caused by or results from Tenant’s use and
occupancy of the Premises.

 

16.04                     The provisions of this Article 16
shall survive the expiration or earlier termination of this Lease.

 

16.05                     A.                                   The following terms
and conditions regarding environmental matters and the Premises are included in
this Lease:

 

(1)                                  For
the purpose of this Lease, the phrase “Regulated Materials” shall include, but
shall not be limited to, those materials or substances defined as “hazardous
substances”, “hazardous materials”, “hazardous waste”, “toxic substances”, “toxic
pollutant” or other similar designations under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601, et seq.,
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901, et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. 1801, et seq.,
or regulations promulgated pursuant thereto (herein “Environmental Laws”).  “Tenant’s Regulated Materials” shall mean those
Regulated Materials, brought onto, created, stored at, handled, or generated at
the Premises by or on behalf of Tenant, its agents, employees, contractors
(other than Landlord), subtenants, assignees, suppliers or other invitees.  “Landlord’s Regulated Materials” shall mean
all other “Regulated Materials” including those brought onto, created, stored
at, handled or generated at the Premises by Landlord, its agents, employees,
contractors, subtenants, assignees, suppliers or other invitees.  Also the phrase “Governmental Agency or
Agencies” means any federal, state, local or foreign government, political
subdivision, court, agency or other entity, body, organization or 

 

19

 

group exercising any executive, legislative, judicial,
quasi-judicial, regulatory or administrative function of government.

 

B.                                     Tenant
hereby covenants to Landlord and its Mortgagee that:

 

(1)                                  Except
for the obligations of Landlord pursuant to Section 16.01 and 16.02,
Tenant shall (x) comply and shall instruct all occupants of the Premises to
comply with all federal, state and local laws, rules, regulations and orders
with respect to the discharge, generation, removal, transportation, storage and
handling of Tenant’s Regulated Materials, (y) remove any Tenant’s Regulated
Materials immediately upon discovery of the same, and (z) pay or cause to be
paid all costs associated with such removal;

 

(2)                                  Tenant
shall keep the Premises free of any lien imposed pursuant to any state or
federal law, rule regulation or order in connection with the existence of
Tenant’s Regulated Materials on the Premises;

 

(3)                                  Tenant
shall not install or permit to be installed on the Premises any Tenant’s
Regulated Material including, but not limited to, asbestos, asbestos-containing
materials, urea formaldehyde insulation or any other chemical or substance
which has been determined to be a hazard to health and environment other than
supplies and materials used in the ordinary course of its business and for
which use all applicable laws, ordinances, rules and regulations are complied
with;

 

(4)                                  Tenant
shall not cause or permit to exist as a result of an intentional or
unintentional act or omission on the part of Tenant or any occupant of the
Premises, a releasing, spilling, leaking, pumping, emitting, poring, emptying
or dumping of any Tenant’s Regulated Materials onto the Premises or into
surrounding waters or other lands; and

 

(5)                                  Tenant
shall promptly provide a copy of any summons, citation, directive, letter or
other communication which it receives from any Government Agency or Agencies
concerning any Regulated Matters on the Premises.

 

C.                                     It
shall constitute a Default hereunder and either party shall be entitled to
exercise all remedies available to it hereunder if:

 

(1)                                  Tenant
or Landlord shall fail to comply with the covenants contained in this Article 16
within thirty (30) days after notice or fails to commence such compliance
within such time and diligently continues such compliance to completion;

 

(2)                                  any
Tenant’s or Landlord’s Regulated Materials are hereafter found to exist on the
Premises or in its soil or groundwater and such Regulated Materials come to be
on the Premises because of the act, omission or breach of this Lease by
Landlord or Tenant, or any of their agents, employees, contractors, subtenants
or assignees, as to Tenant, on or after the date Tenant takes possession or
enters the Premises to commence work, and either party shall fail within
seventy-five (75) days after notice thereof, to commence and diligently pursue
such actions as are necessary to remove the same from the Premises or Facility
or obtain any and all necessary no action or no association letters for the
Premises or Facility and Landlord or Tenant such that no further action need be
taken to satisfy the applicable environmental agency; or

 

20

 

(3)                                  any
summons, citation, directive, letter or other communication, written or oral,
shall be issued by any Governmental Agency or Agencies concerning the matters
described in Subparagraph 16.05A(1) above and Landlord or Tenant fail to
cure the condition occasioning the same within the time limit set forth in this
Section 16.05C.

 

In the event Landlord or Tenant fails to comply with
the terms of this Article 16, each party hereby grants the other and its
employees and agents an irrevocable and non-exclusive license to enter the
Premises in order to inspect, conduct testing and remove Tenant or Landlord’s
Regulated Materials.  All costs of such
inspection, testing and removal related to Tenant’s Regulated Materials shall
be due and payable from Tenant as Additional Rent hereunder upon demand, and
all costs relating to Landlord’s Regulated Materials incurred by Tenant shall
be paid by Landlord to Tenant upon demand.

 

16.06                     The representations, covenants and
indemnifications given by Tenant to Landlord and Landlord to Tenant in this Article 16
shall be a separate agreement between the parties, and shall survive any
termination of the Lease.

 

16.07                     Landlord warrants and represents
that it is not otherwise aware of any violation of the statutes, rules and
regulations set forth in Section 16.05A(i) above as it relates to the
Premises or Facility except, however, that Landlord has received an off-site
source and no association letter from the Minnesota Pollution Control Agency
dealing with apparent groundwater contamination affecting the Facility
resulting from dry-cleaning solvent released by a former dry-cleaning operation
previously located adjacent to the Facility.

 

16.08                     Landlord hereby covenants to
Tenant that Landlord shall comply with all federal, state and local laws,
rules, regulations and orders with respect to the discharge, generation,
removal, transportation, storage and handling of Landlord’s Regulated
Materials, (y) remove any Landlord’s Regulated Materials required by said laws
to be removed immediately upon discovery thereof; and (z) pay or cause to be
paid all costs associated with such removal. 
It shall constitute a default by Landlord if Landlord fails to comply
with this covenant within seventy-five (75) days after Tenant mails notice to
Landlord hereof or fails to commence such compliance within such time and
diligently continue such compliance to completion.

 

ARTICLE XVII

MISCELLANEOUS

 

17.01                     Further Terms.  The parties also agree:

 

A.                                   Tenant
represents that Tenant has dealt directly with and only with the broker or
tenant representative set forth on the Data Sheet, in connection with this
Lease and that insofar as Tenant knows, no other broker or tenant
representative negotiated or participated in negotiations of this Lease or
submitted or showed the Premises or is entitled to any commission in connection
therewith.  Landlord shall be responsible
for payment of Welsh Companies and CB Commercial arising from this Lease.

 

B.                                     All
notices, demands and requests shall be in writing, and shall be effectively
served by forwarding such notice, demand or request by certified or registered
mail, postage prepaid, addressed to the respective party at the address set
forth on the Data Sheet, or at such other address as such party may hereafter
designate by written notice to the other party, in which case said notice shall
be effective at the time of mailing such notice.

 

C.                                     All
rights and remedies of Landlord under this Lease or that may be provided by law
may be executed by Landlord in its own name, individually, or by its agent of
whose appointment Tenant shall have written notice in the name of Landlord, and
all legal proceedings for the enforcement of 

 

21

 

any such rights or
remedies, including those set forth in Article 14, may be commenced and
prosecuted to final judgment and execution by Landlord or its agent.

 

D.                                    Landlord
covenants and agrees that Tenant, upon paying the Base Rent, Additional Rent
and other charges herein provided for and observing and keeping the covenants,
agreements and conditions of this Lease on its part to be kept and performed,
shall lawfully and quietly hold, occupy and enjoy the Premises during the term
of this Lease.

 

E.                                      The
covenants and agreements herein contained shall bind and inure to the benefit
of the Landlord, its successors and assigns, and Tenant and its permitted
successors and assigns.

 

F.                                      If
any term or provision of this Lease shall to any extent be held invalid or
unenforceable, the remaining terms and provisions of this Lease shall not be
affected thereby, but each term and provisions of this Lease shall not be
affected thereby, but each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.  This Lease shall be construed and enforced in
accordance with the laws of the state in which the Premises are located.

 

G.                                     (1)                                  Subsequent
to the Commencement Date and payment by Landlord of the allowances set forth in
Section 22.0 (a) and (b) and any signage allowance (as opposed to the
refurbishment allowance) due to Tenant under Section 22.0(c) for exterior
Building signage initially installed by Tenant, the term “Landlord” as used in
this Lease so far as covenants or obligations on the part of Landlord are
concerned shall be limited to mean and include only the owner or owners of the
Facility at the time in question, and in the event of any transfer or transfers
or conveyances in which the transferee assumes all obligations of Landlord
under the Lease accruing after said transfer, the then grantor shall be
automatically freed and released from all personal liability accruing from and
after the date of such transfer or conveyance as respects the performance of
any conveyance or obligation on the part of Landlord contained in this Lease to
be performed, it being intended hereby that the covenants and obligations
contained in this Lease on the part of Landlord shall be binding on the Landlord,
its successors and assigns, only during and in respect to their respective
successive periods of ownership.

 

(2)                                  In
the event of a sale or conveyance by Landlord of the Facility or any part of
the Facility, the same shall operate to release Landlord from any future
liability upon any of the covenants or conditions herein contained and in such
event Tenant agrees to look solely to the responsibility of the successor in
interest of Landlord in and to this Lease. 
This Lease shall not be affected by any such sale or conveyance, and
Tenant agrees to attorn to the purchaser or grantee, which shall be personally
obligated on this Lease only so long as it is the owner of Landlord’s interest
in and to this Lease.

 

H.                                    The
marginal or topical headings of the several Articles and sections are for
convenience only and do not define, limit or construe the contents of said
Articles and sections.

 

I.                                         All
preliminary negotiations and written commitments are merged into and
incorporated in this Lease, except for written collateral agreements executed
contemporaneously herewith.

 

J.                                        This
Lease can only be modified or amended by an agreement in writing signed by the
parties hereto.  No receipt of money by
Landlord from Tenant or any other person after termination of this Lease or
after the service of any notice or after the commencement of any suit, or after
final judgment for possession of the Premises shall reinstate, continue or
extend the term of this Lease or affect any such notice, demand or suit, or
imply consent for any action for which Landlord’s consent is required, unless
specifically agreed to in writing by Landlord. 
Any amounts received by Landlord may be allocated to any specific
amounts due from Tenant to Landlord as Landlord determines.

 

22

 

K.                                    Landlord
shall have the right to close any portion of the building area or land area to
the extent as may, in Landlord’s reasonable opinion, be necessary to prevent a
dedication thereof or the accrual of any rights to any person or the public
therein.  Landlord shall at all times
have full control, management and direction of the Facility, subject to the
rights of Tenant in the Premises, and Landlord reserves the right at any time
and from time to time to reduce, increase, enclose or otherwise change the
size, number and location of buildings, layout and nature of the Facility and
the other tenancies, premises and buildings included in the Facility, to
construct additional buildings and additions to any building, and to create
additional rentable areas through use and/or enclosure of common areas, or
otherwise, and to place signs on the Facility, and upon reasonable advance
written notice to Tenant to change the name, address, number or designation by
which the Facility is commonly known.  In
the event the notice of name change is less than nine (9) months in advance of
the effective date, Landlord shall pay the reasonable costs of replacement
stationery, business cards and similar items on which the name of the Building
is utilized.  Landlord will not name the
Building after a direct competitor of Tenant. 
No implied easements are granted by this Lease.  Tenant shall have the nonexclusive right in
common with Landlord and tenants and occupants of the Facility, to ingress and
egress to and through the common areas of the Facility.

 

L.                                      Tenant
shall permit Landlord (or its designees) to erect, use, maintain, replace and
repair pipes, cables, conduits, plumbing, vents, and telephone, and other wires
or other items, in, to and through the Premises in chases, floors or above the
dropped ceiling, as and to the extent that Landlord may now or hereafter deem
necessary or appropriate for the proper operation and maintenance of the
Facility.

 

M.                                 Employees
or agents of Landlord have no authority to make or agree to make a lease or
other agreement or undertaking in connection herewith.  The submission of this document for
examination does not constitute an offer to lease, or a reservation of, or
option for, the Premises.  This document
becomes effective and binding only upon execution and delivery hereof by the
proper officers of Landlord and by Tenant. 
Tenant confirms that Landlord and its agents have made no
representations or promises with respect to the Premises or the making of or
entry into this Lease except as in this Lease expressly set forth, and agrees
that no claim or liability shall be asserted by Tenant against Landlord for,
and Landlord shall not be liable by reason of, breach of any representations or
promises not expressly stated in this Lease. 
This Lease, except for the Building Rules and Regulations, in respect to
which subparagraph ”N” of this Article shall prevail, can be modified
or altered only by agreement in writing between Landlord and Tenant, and no act
or omission of any employee or agent of Landlord shall alter, change or modify
any of the provisions hereof.

 

N.                                    Tenant
shall perform, observe and comply with the Building Rules and Regulations of
the Facility, as set forth in Exhibit C attached hereto, with respect to the
safety, care and cleanliness of the Premises and the Facility, and the
preservation of good order thereon, and, upon written notice thereof to Tenant,
Tenant shall perform, observe, and comply with any reasonable changes,
amendments or additions thereto consistent with Tenant’s rights under this
Lease as from time to time shall be established and deemed advisable by
Landlord for tenants of the Facility. 
Landlord shall not be liable to Tenant for any failure of any other
tenant or tenants of the Facility to comply with such Building Rules and
Regulations.

 

O.                                    All
rights and occupancy of Tenant herein shall be subject to all governmental
laws, ordinances and regulations, and Tenant shall comply with the same.

 

P.                                      All
obligations of Tenant hereunder not fully performed as of the expiration or
earlier termination of the term of this Lease shall survive the expiration or
earlier termination of the term 

 

23

 

hereof, including,
without limitation, all payment obligations with respect to Operating Expenses
and Real Estate Taxes and all obligations concerning the condition of the
Premises.

 

Q.                                    Subsequent
to delivering occupancy of the Premises to Tenant substantially completed and
all improvements paid in full including payment to Tenant by Landlord of the
allowances set forth in Section 22.0 (a) and (b) hereof, and any signage
allowance (as opposed to the refurbishment allowance) due to Tenant under Section 22.0(c)
for exterior Building signage initially installed by Tenant, Tenant agrees to
look solely to Landlord’s interest in the Facility for the recovery of any
judgment from Landlord, it being agreed that Landlord, or if Landlord is a
partnership, its partners whether general or limited, or if Landlord is a corporation,
its directors, officers or shareholders, shall never be personally liable for
any such judgment.

 

R.                                     The
Tenant, if any, shall furnish to Landlord promptly upon demand, a corporate
resolution, proof of due authorization of partners, or other appropriate
documentation reasonably requested by Landlord evidencing the due authorization
of Tenant to enter into this Lease.

 

ARTICLE XVIII

OTHER PROVISIONS

 

18.01                     Addenda.  The provisions set forth in the Exhibits
attached to this Lease are hereby incorporated by reference.

 

24

 

IN WITNESS WHEREOF, the parties hereto have executed
this Lease to be effective on the day and year first above written.

 

	
  LANDLORD:

  	
  Meridian Crossings II
  LLC, a Minnesota limited liability company

  
	
   

  	
  By: Meridian Properties
  Real Estate Development LLC,

  a Minnesota limited liability company, its manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant J. Wangard

  
	
   

  	
   

  	
  Bryant J. Wangard

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  Fourth Shift
  Corporation, a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David G. Latzke

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  VP & CFO

  
	
   

  	
   

  
	
  ACKNOWLEDGMENT:

  	
  Meridian Properties
  Real Estate Development LLC has

  executed the Lease solely for purposes of Section 27.2 of

  the Lease and for no other purpose.

  
	
   

  	
   

  
	
   

  	
  MERIDIAN
  PROPERTIES REAL ESTATE DEVELOPMENT LLC, a Minnesota limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant J. Wangard

  
	
   

  	
   

  	
  Bryant J. Wangard

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  Meridian Crossings LLC
  has executed this Lease solely

  for purpose of Article 35 of the Rider and for no other

  purpose.

  
	
   

  	
   

  	
   

  
	
   

  	
  MERIDIAN
  CROSSINGS LLC, a Minnesota limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant J. Wangard

  
	
   

  	
   

  	
  Bryant J. Wangard

  
	
   

  	
  Its:

  	
  Manager

  

 

25

 

RIDER TO LEASE

 

ARTICLE XIX

OPTION TO RENEW

 

Section 19.0 Tenant
shall have the right, subject to the provisions hereinafter provided, to extend
the term of this Lease for one (1) period of five (5) years each on the terms
and provisions of this Article provided hereafter, such five (5) year
renewal period being sometimes herein referred to as a “Renewal Term”.  The conditions to such renewal shall be as
follows:

 

(a)          That this Lease is in
full force and effect and Tenant is not in default in the performance of any of
the terms, covenants and conditions herein contained, in respect to which
notice of default has been given hereunder which has not been or is not being
remedied in the time limited in this Lease, at the time of exercise of the
right of renewal, but Landlord shall have the right at its sole discretion to
waive the non-default conditions herein;

 

(b)         That such Renewal Term
shall be on the same terms, covenants and conditions as in this Lease provided;
provided, however, that annual Base Rent for each such renewal space on the
date such renewal term shall commence in relation to comparable (in quality and
location) office space located in the relevant market area which shall be
deemed to be the Southwest Minneapolis 494 corridor.  The fair market Base Rent of the Premises
shall be determined as of the date six (6) months prior to commencement of the
Renewal Term.  Provided Tenant has
properly elected to renew the term of this Lease, and if Landlord and Tenant
fail to agree at least eleven (11) months prior to commencement of the applicable
Renewal Term upon the fair market Base Rent of the Premises, the amount of the
fair market Base Rent of the Premises shall be determined by arbitration in
accordance with the provisions of Article 20 hereof.  The fair market Base Rent of the Premises
shall be based upon the highest and best use of the Premises and shall be
determined separately on a per square foot basis for the initial Premises and
each separate additional space added to the Premises, if any, pursuant to
Tenant’s options to expand herein.  In no
event shall the Base Rent of the Premises for the Renewal Term be less than the
Base Rent payable by Tenant under the terms of this Lease immediately prior to
commencement of such applicable Renewal Term.

 

(c)          That Tenant shall
exercise its right to a Renewal Term provided herein, if at all, by notifying
Landlord in writing of its election to exercise the right to renew the term of
this Lease no later than the date two hundred seventy (270) days prior to the
date of commencement of the applicable Renewal Term.  Upon notification with respect to such
renewal, and for a period of thirty (30) days thereafter, the parties hereto
shall make a good faith effort to agree upon the fair market Base Rent of the
Premises for such renewal term.  Any
agreement reached by the parties hereto with respect to such fair market Base
Rent of the Premises for such renewal term shall be expressed in writing and
shall be executed by the parties hereto, and a copy thereof delivered to each
of the parties.  In the event that
Landlord and Tenant fail to agree within the thirty (30) day time prior set
forth in this subparagraph (c), the fair market Base Rent for the Premises
for such Renewal Term shall be determined by arbitration in the manner set
forth in Article 20 (“Arbitration”) hereof.  However, such arbitrators shall be directed
to determine the fair market Base Rent for the Premises as above provided and
in determining same said appraisers shall be instructed to make said appraisal
independently, without consulting with each other.  Upon established date at an established time
all three (3) arbitrators shall simultaneously submit their determinations as
to fair market Base Rent, such determinations to be submitted in sealed
envelopes and to be opened jointly by Landlord and Tenant.  The fair market Base Rent for the Renewal
Term shall be determined by averaging the two (2) arbitrators’ fair market Base
Rent 

 

1

 

determinations
which are closets in amount to each other (or if one appraisal is less than one
of the other appraisals and more than the other appraisal by the same amount,
all three appraisals shall be averaged).

 

ARTICLE XX

ARBITRATION

 

Section 20.0 Any
disagreement, dispute or determination required by or arising under the
provisions of Article XIX (“Option to Renew”), of this Lease requiring
arbitration shall be carried on and concluded in accordance with the provisions
of paragraphs (a) and (b) hereof:

 

(a)          In each case where it
shall become necessary to resort to arbitration, and the subject of the
arbitration is to determine fair market Base Rent, all arbitrators appointed by
or on behalf of either party or appointed pursuant to the provisions hereof
shall be MAI members of the American Institute of Real Estate Appraisers with
not less than ten (10) years of experience in the appraisal of improved
commercial and industrial real estate in the Minneapolis, Minnesota
metropolitan area and be devoting substantially all of their time to
professional appraisal work at the time of appointment and be in all respects
impartial and disinterested.  In
determining fair market Base Rent the arbitrators shall consider the status of
tenant improvements in the Premises in comparison to leasehold improvements in
market comparables and shall take into consideration that no leasing commission
is payable in respect to any leasing by Tenant or Landlord as compared to
market comparables where such commissions may be payable, unless a commission
is payable by Landlord as a result of the proposed renewal, in which case it
shall be considered by the Arbitrators.

 

(b)         The party desiring such
arbitration shall give written notice to that effect to the other party,
specifying in such notice the name, address and professional qualifications of
the person designated to act as arbitrator on its behalf.  Within twenty (20) days after service of such
notice, the other party shall give written notice to the party desiring such
arbitration specifying the name, address and professional qualifications of the
person designated to act as arbitrator on its behalf.  If the two (2) arbitrators so selected cannot
agree within fifteen (15) days after the appointment of the second arbitrator,
the two (2) arbitrators shall, within ten (10) days thereafter, select a third
arbitrator.  The decision of the
arbitrators so chosen shall be given within a period of thirty (30) days after
the appointment of such third arbitrator. 
Each party shall pay the fees and expenses of the arbitrator appointed
by or on behalf of such party and the fees and expenses of the third arbitrator
shall be borne equally by both parties. 
If the party receiving a request for arbitration fails to appoint its
arbitrator within the time above specified, or if the two (2) arbitrators so selected
cannot agree on the selection of the third arbitrator within the time above
specified, then either party, on behalf of both parties, may request such
appointment of such second or third arbitrator within the time above specified,
as the case may be, by application to any Judge of the District Court of the
County of Hennepin, State of Minnesota, upon ten (10) days prior written notice
to the other party of such intent.  The
arbitrators so selected shall have all rights and powers conferred on them by the
Uniform Arbitration Act of the state in which the Premises are situated, and
except as otherwise provided for herein, the arbitration proceedings shall be
carried on and governed by such Act.

 

ARTICLE XXI

RIGHT OF NOTICE

 

Section 21.0
Landlord agrees, from time to time, upon written request of Tenant to advise
Tenant as to space available on the sixth floor (6th) of the
Facility (“Notice Space”), provided Tenant treats such 

 

2

 

information as
confidential and does not disclose said information.  If during the initial or any renewal term of
this Lease any occupied area on the sixth (6th) floor of the
Facility is vacated or to be vacated by the present tenant, its successors and
assigns, and Landlord desires to lease any of such space (subject to the terms
of Article XXV herein), Landlord shall deliver a notice of such intent to
lease in writing to Tenant offering to lease such space to Tenant upon the
terms and conditions (including rent) as set forth in the Lease for the
Premises initially demised except that (i) if the space was previously
unimproved Tenant shall receive an “Allowance” per rentable square foot of the
as leased Notice Space (as determined as set forth below) for tenant
improvements pro rated for the number of years remaining in the initial Term
from the date the term commences on the Notice Space so leased, and
(ii) if the space was previously improved, the Tenant shall accept the
Premises in “as-is” condition without contribution from Landlord for tenant
improvements.  For purposes of this Section 21.0,
“Allowance” shall be determined as follows:

 

Upon completion of
Landlord’s Improvements, Landlord shall determine an “Allowance” number to be
used for purposes of Section 21.0 hereof based upon the cost to Landlord
of all Landlord’s Improvements to the Premises below the finished ceiling,
specifically excluding from such costs (i) any amounts reimbursed by
Tenant, and (ii) the amount of the Construction Allowance set forth in Section 23.1;
and including an amount equal to the upgrade cost set forth in Section 23.1
(b)(8) for the executive offices, if any, added in the to be leased Notice
Space.  Said net amount shall be divided
by the rentable area of the Premises and said amount shall be the Allowance per
rentable square foot utilized in this Section 21.0.  Landlord shall provide reasonable evidence
documenting said costs if requested by Tenant. 
In addition to the Allowance, the allowance described in Section 22.0(b)
shall be provided to Tenant for each rentable square foot of space so taken
under this Section 21.0.

 

Tenant shall have ten
(10) business days from receipt of such notice to deliver Landlord notice that
Tenant desires to execute the lease amendment with Landlord for such proposed
space upon the conforming terms and conditions specified in Landlord’s
notice.  If Tenant fails to deliver such
notice to Landlord within such ten (10) business day period or fails to execute
an amendment as above provided within an additional ten (10) business day
period, Landlord may lease such space to a third party.  These rights of Tenant herein shall become
inoperative as to any space in respect to which the Tenant does not exercise
its rights to lease as set forth herein or in respect to space for which Tenant
does not execute the lease amendment within the above required ten (10) day
period.  The Term shall commence on the
Notice Space to be leased the first date that said space is available for
Tenant to take possession, if the space has previously been fit-up or thirty
(30) days after the space is made available to Tenant if said space has not
previously been improved.

 

Landlord agrees, that
Tenant shall have the right, until July 1, 1998 to expand the Premises
initially demised by up to 5,000 rentable square feet and Landlord agrees that
it will retain at a minimum approximately 5,000 rentable square feet adjacent
to the Premises (in a location acceptable to Landlord which results in a
readily leasable configuration for the balance of the sixth (6th)
floor not leased to Tenant).  Said space
shall be leased to Tenant upon all of the terms, conditions and rent set forth
herein for the Premises initially intended to be demised hereunder, except that
there shall be no Section 23.1 Construction Allowance other than for item
(b) (8), to the extent executive offices are included in such additional space
and there shall be included the Space Planning Allowance set forth in Section 22.0(b).

 

Section 21.1
Landlord agrees that all office space on the sixth (6th) floor of
the Building shall be subject to the provisions of this Article 21.1.  Landlord agrees that without the written
consent of Tenant it will not initially lease any office space on the sixth (6th)
floor of the Building either (i) that is larger than 5,000 rentable square
feet, or (ii) for a term that terminates after January 1, 2004
(including all options to renew or extend the term of said lease) or in the
alternative does not allow Landlord to relocate said premises.  The term “initially lease” refers to the
first lease of said space to a tenant.

 

3

 

ARTICLE XXII

TENANT ALLOWANCES

 

Section 22.0
Provided Tenant is not in default under the terms of the Lease, has taken
possession of the Premises and paid the Base Rent due for the initial one (1)
month of the Term, Landlord shall provide and pay to Tenant the following
allowances:

 

(a)          Moving Allowance:  Three Hundred Thousand dollars ($300,000.00),
payable thirty (30) days after the Commencement Date, irrespective of actual
moving costs.

 

(b)         Space Planning
Allowance:  Eighty-five cents ($.85) per
rentable square foot of Premises initially demised for space planning performed
by Tenant’s space planner and all costs associated with Tenant’s jet plan
previously completed by Tenant’s architect, irrespective of the actual costs of
said space planning.

 

(c)          Signage and
Refurbishment Allowance:  Collectively in
the amount of One Hundred Fifty Thousand and NO/100 Dollars ($150,000.00).  Tenant shall have the right to utilize said
allowance for the actual, demonstrable costs of designing, manufacturing, and
installing the exterior building sign more particularly described in Article XXX
hereof.  Any amount used for said signage
shall be deducted from the One Hundred Fifty Thousand and NO/100 Dollars
($150,000.00) and the balance shall be utilized by Tenant for refurbishment of
the Premises and be due and payable to Tenant at the end of the fifth full year
of the Lease Term.

 

ARTICLE XXIII

LANDLORD’S IMPROVEMENTS

 

Section 23.0
Landlord, in addition to the payment of the allowance set forth in Section 23.1,
and Section 22.0, at its sole cost and expense, shall construct and
improve the Building and Premises in accordance with the outline plans and
specifications which are indicated and specified on Exhibit ”D” attached
hereto and incorporated herein by reference (“Outline Plans and Specifications”).  Prior to or simultaneously with the execution
and delivery of this Lease, Landlord has furnished Tenant, for information
purposes only, with copies of all available plans and specifications for the
Base Building requested by Tenant. 
Thereafter, Landlord agrees upon request to provide from time to time,
any plan or specification modifications which affect Tenant’s Premises.  Tenant shall provide, at its sole cost and
expense, complete construction plans and specifications (“Construction
Documents”) for all improvements to the Premises based on the Outline Plans and
Specifications, in the following detail at the time set forth hereinafter:

 

(a)          An issue package of mechanical,
electrical and plumbing plans, along with all dimensioned construction plans,
reflective ceiling plans, lighting plans and power and data plans sufficient
such that Landlord can obtain MEP bids on such matters (“MEP SET”), no later
than July 7, 1998; and

 

(b)         Complete Construction
Documents sufficient for Landlord to bid the entire tenant improvement package,
no later than July 21, 1998.

 

Upon receipt of the MEP
SET Landlord shall submit same to its contractor for development of mechanical
electrical and plumbing (“MEP”) plans and specifications based upon said
Construction Documents.  Landlord shall
have ten (10) business days to review the Construction Documents and provide
Tenant with detailed comments and recommendations.  Upon receipt of the MEP plans and
specifications, Landlord shall provide copies of same to Tenant for Tenant’s
review and comment, which shall occur within ten (10) business days of said
delivery.  In the event Landlord and
Tenant are unable to 

 

4

 

agree as to the final
Construction Documents (including MEP plans and specifications) on or before August 15,
1998, either party, upon ten (10) days’ written notice to the other, may
request arbitration of said dispute.  If
arbitration is requested, the procedure described in Article XIX (c) and Article XX
shall be utilized, except the arbitrators shall be design professionals
(architects or engineers) with at least ten (10) years experience in design and
construction of office buildings in the Minneapolis-St. Paul metropolitan
area, all licensed to do business in Minnesota. 
Landlord shall not be required to install any improvements to the
Premises except those specified on Exhibit ”D”, or such changes required
by the municipalities in its review and approval of the Construction Documents
as to their compliance with local building codes unless the timing, price and
all other matters relating to such other improvements have been agreed upon in
writing between Landlord and Tenant. 
Anything herein to the contrary notwithstanding, in the event Tenant
desires any improvements in excess of those set forth on Exhibit ”D”, on
improvements which are the result of changes in Tenant plans subsequent to
delivery of the MEP SET, or any change orders after final approval of
Construction Documents, Landlord shall provide same [not to exceed the final
amount of (i) the Construction Allowance described below, and
(ii) the Moving Allowance set forth in Article XXII hereof], and the
costs of such excess improvements shall be charged against Tenant by reducing
the Construction Allowance and Moving Allowance amounts provided for in Article XXII
herein on a “dollar-for-dollar” basis. 
Landlord will agree to additional improvements costing in excess of the
Construction Allowance and Moving Allowing provided Tenant shall be responsible
for timely payment of Landlord’s increased costs therefor pursuant to a
standard construction draw process (monthly). 
Landlord agrees that the charge to Tenant for change orders shall be a
direct pass through of the cost charged Landlord by its General
Contractor.  Further, and anything herein
to the contrary notwithstanding, in the event of a delay in delivery to
Landlord of complete Construction Documents for the improvements in the
Premises in accordance herewith, which results in delay in construction of the
Landlord’s Improvements due to Tenant’s failure to deliver its Construction
Documents complete in all manners (including selection of all finishes) in
accordance with the above requirements or requires changes to improvements
after delivery of MEP SET which affect the improvements covered by the MEP SET,
the Lease shall in any event commence January 1, 1999, subject to
extension for any portion of such delay not caused by such delay by
Tenant.  Tenant shall, in any event, be
responsible at its sole costs and expense to provide all cabling, wiring and
furniture and equipment necessary for its business, provided any cabling and
wiring in the Building or Premises shall be removed by Tenant at its sole cost
and expense upon expiration of the Term or earlier termination of the
Lease.  Tenant’s rights to enter the
Premises are as set forth in Article XXVI. 
In the event of a delay in delivery of the Premises after January 1,
1999, any portion of the delay caused independently by Landlord (not resulting
from a delay caused by Tenant) shall not act to excuse Landlord for the
penalties set forth in Section 27.2 hereof and Landlord shall be excused
from such penalties only to the extent the delay was the result of the action
or inaction of Tenant.

 

Section 23.1
Construction Allowance.  Landlord shall
provide to Tenant a Construction Allowance of Sixty Thousand and NO/100 Dollars
($60,000.00) to be used by Tenant solely for the purpose of providing upgrades
to Landlord’s Improvements from those specified on Exhibit ”D” in the
following areas:

 

(a)          Wood and plastic -

2.               Reception
desk;

3.               Boardroom
A\V cabinets; and

4.               CIM
Center.

 

(b)         Finishes –

6.               Upgrade
specialty carpet in reception, elevators, lobby, CIM Center and Boardroom;

7.               Stone
or wood accent flooring in elevator lobby and reception;

8.               Upgrade
carpet in executive offices;

 

5

 

9.               EDS
floor in computer room; and

10.         Upgrade
ceiling tile in CIM Center and Boardroom.

 

(c)          Electrical –

3.               Upgrade
lighting in lobby, reception, CIM Center, Boardroom, Training Rooms and Customer
Conference Rooms.

 

Landlord’s contractor
shall provide all such upgraded finishes as selected by Tenant, subject to the
Sixty Thousand and NO/100 Dollars ($60,000.00) allowance limitation.  Tenant may elect to exceed any allowance
amount at its sole cost and expense provided that no delays result in Landlord’s
construction and Tenant provides Landlord with acceptable means of payment for
said excess improvements.  Any
improvements to be paid by Tenant by utilization of an allowance or otherwise,
shall be performed on an open book basis and to the extent feasible considering
schedule, market conditions and construction coordination, bid out to the
trades by Landlord’s general contractor; Landlord’s general contractor shall
use reasonable efforts under the circumstances described above to bid all
material portions of the job to three (3) separate, responsible bidders.  Tenant may add subcontractors to the bid
list, if done in a timely, responsible manner. 
Said improvements shall be performed by Landlord’s general contractor at
cost plus five percent (5%) without any additional upcharge by Landlord.

 

ARTICLE XXIV

PARKING RIGHTS OF TENANT

 

Section 24.0
Facility Parking.  Tenant shall have the
right in common with other tenants to have the use for its employees and
invitees of the common parking facilities at the Facility other than 226 stalls
designated for the specific use by others in the parking ramp, such use to be
in common with the other tenants in the Facility.  Landlord reserves the right to designate and
redesignate areas of the appurtenant common parking facilities where Tenant, its
agents, employees and invitees shall park and may exclude Tenant, its agents,
employees and invitees from parking in other areas as designated and
redesignated by Landlord; provided, however, Landlord shall not be liable to
Tenant for the failure of any tenant, its invitees, employees, agents and
customers to abide by Landlord’s designations or restrictions.  Landlord shall have the right to designate,
and Tenant shall thereupon have the right to use as the exclusive parking
spaces to be used by Tenant, its agents, employees and invitees, only that
percentage that the rentable office area of the Premises bears to the rentable
office area of the Facility.  Tenant, its
agents, employees and invitees shall not use more (in absolute numbers) of the
common parking facilities (less said 226 designated stalls) at the Facility
(exclusive of the underground garage) than Tenant could use if Landlord made
the designations permitted herein. 
Anything in this Lease to the contrary notwithstanding, all costs and
expenses of such special parking control, signs in connection therewith, and
costs of any enforcement shall be an Operating Expense pursuant to the
provisions of Article II G hereof. 
The Facility contains 745 stalls excluding the 226 excluded stalls.

 

Section 24.1
Reserved Parking.  In addition thereto,
Landlord hereby leases to Tenant and Tenant leases from Landlord three (3)
contract executive reserved parking stalls on the lower level of the Facility
for the Term of this Lease.  Tenant
agrees to execute the reserved stall parking lease attached hereto as
Exhibit ”F” upon execution of this Lease. 
The rental for said reserved stalls shall be $95.00 per stall per month
during the initial ten (10) year Term of this Lease.  Tenant, upon request, may lease up to seven
(7) additional stalls at the same initial rate, and Landlord shall provide same
if available at the time of request.

 

6

 

ARTICLE XXV

INITIAL EXPANSION RIGHT

 

Section 25.0 On or
before July 1, 1998, Tenant shall have the right to increase the area of
the Premises by 5,700 rentable square feet upon written notice to Landlord,
said additional area to be located on the sixth floor of the Building.

 

ARTICLE XXVI

INSTALLATION OF TENANT’S TRADE FIXTURES

 

Section 26.0 Tenant
shall be allowed to install its fixtures and furniture and equipment in the
Premises during the final sixty (60) days of construction of Landlord’s
Improvements provided that Tenant does not thereby interfere with the
completion of Landlord’s Improvements or occasion any labor dispute as a result
of such installation and provided further that Tenant does hereby agree to
assume all risk of loss or damage to such property and other personal property
of Tenant, and to indemnify, defend and hold harmless Landlord from any loss or
damage to such property and other personal property of Tenant, and to
indemnify, defend and hold harmless Landlord from any loss or damage to such
trade fixtures and improvements and property, and from all liability, loss or
damage arising from any injury to the property of Landlord, or its contractors,
subcontractors or material men and any death or personal injury to any person
or persons arising out of such installations. 
Tenant shall be responsible for loss or damage (including loss of rents
from Tenant) arising out of delays caused by interference with Landlord’s
Improvements.

 

ARTICLE XXVII

DELIVERY OF PREMISES

 

27.1 Landlord agrees that
in the event Landlord fails to deliver possession of the Premises substantially
completed and ready for Tenant’s occupancy (other than for delays resulting
from the failure of Tenant to perform its covenants and obligations under this
Lease within the timetable required herein including delays due to changes to
MEP SET and/or Construction Documents after the July 7th and July 21st
dates respectively set forth in Article XXIII hereinbefore) on or before December 31,
1998, Landlord shall be responsible to reimburse Tenant for all costs and
damages resulting from Landlord’s failure to deliver possession of the Premises
to Tenant on or before December 31, 1998 including but not limited to
holdover rent and other lease charges and liabilities in excess of the amount
due from Tenant under its existing lease immediately prior to November 1,
1998 (“Holdover Costs”).  Failure to give
possession of the Premises on or before December 31, 1998 shall in no way
affect the validity of this Lease or the obligations of Tenant hereunder.  Tenant agrees to use all reasonable efforts
to minimize and mitigate the Holdover Costs. 
Meridian Properties Real Estate Development LLC acknowledges that it
shall be liable to Tenant for any costs, damages or liabilities arising under
this Section 27.1.

 

ARTICLE XXVIII

REAL ESTATE TAX REBATE

 

Section 28.0 During
the initial ten (10) year Term of the Lease only, provided Tenant is not in
default beyond the notice and cure period set forth herein, Landlord agrees to
pay and rebate to Tenant two (2) times per Lease Year (approximately in April and
November), ten percent (10%) of the amount of real estate taxes only (excluding
special assessments included within the real estate tax bill issued by the
taxing authority and paid or payable by Tenant) actually paid by Tenant to
Landlord pursuant to Article II hereof. 
The initial payment would occur in 2000.

 

7

 

ARTICLE XXIX

SECURITY DEPOSIT

 

Section 29.0 Within
ten (10) business days of full execution hereof, Tenant shall deposit with
Landlord the sum of Two Hundred Fifty Thousand Dollars ($250,000.00) in the
form of an irrevocable sight draft Letter of Credit in form attached hereto as
Exhibit ”H”, and issued by a Silicon Valley Bank as and for a security
deposit for the full and faithful performance by Tenant of each and every term,
provision, covenant and condition of this Lease.  Said Letter of Credit shall be automatically
increased to the sum of Five Hundred Thousand Dollars ($500,000.00) upon the
date thirty (30) days prior to the scheduled commencement of tenant improvement
work in the Premises by Landlord.  Such
Letter of Credit shall be issued in the name of Landlord in the form attached
hereto as Exhibit ”H” shall be held by Landlord.  In the event that Tenant defaults in respect
to any of the terms, provisions, covenants and conditions of this Lease,
including, but not limited to, the payment of any rentals or other charges or
items to be paid or provided for by Tenant, Landlord may use, apply or retain
the whole or any part of the security so deposited for the payment of any such
rentals in default or for any other sum which Landlord may expend or be
required to expend by reason of Tenant’s default, including, but not limited
to, any damages or deficiency in the reletting of the Premises, whether such
damages or deficiency may accrue before or after re-entry by Landlord.  It is expressly understood and agreed that
such deposit is not an advance rental deposit or a measure of Landlord’s
damages in case of Tenant’s default. 
Upon application of any part of the deposit by Landlord as provided
herein, Tenant shall pay to Landlord on demand the amount so applied in order
to restore the security deposit to its original amount.  Any application of the deposit by Landlord
shall not be deemed to have cured Tenant’s default except to the extent of
payment resulting from such application provided the security deposit is
immediately restored to the full amount held prior to said application.  Landlord agrees, for the period prior to January 1,
1999, to provide Tenant with an allowance, to be paid upon the Commencement
Date, equal to one-half (1/2) of the fee charged by the Bank for issuance of
the Letter of Credit.  Tenant shall
provide Landlord with evidence of the fee charged by the issuing bank, and
Tenant agrees it will negotiate the best available fee from said bank for
issuance.

 

In the event of a bona fide sale of the Building of
which the Premises are a part, Landlord shall have the right to transfer the
security deposit to its vendee for the benefit of Tenant, and thereafter
Landlord shall be released of all liability for the return of such deposit and
Tenant agrees to look to said vendee for the return of its security
deposit.  Upon request, Tenant will
re-issue the Letter of Credit in the name of vendee, subject to payment by
Landlord of reasonable administrative and legal costs of reissuance.  It is agreed that this Article XXIX
shall apply to every transfer or assignment made of the security deposit to any
new landlord.

 

This security deposit shall not be assigned or
encumbered by Tenant.  It is expressly
understood that the re-entry of the Premises by Landlord for any default on the
part of Tenant prior to the expiration of the term of this Lease shall not be
deemed a termination of this Lease so as to entitle Tenant to recover the
security deposit, and the security deposit shall be retained and remain in the
possession of Landlord until the end of the term of this Lease, except as set
forth below.

 

Actions by Landlord against Tenant for breach of this
Lease shall in no way be limited or restricted by the amount of this security
deposit and resort to such deposit shall not waive any other rights or
constitute an election of remedies which Landlord may have.

 

Notwithstanding the foregoing provisions, if , as of January 1,
2000, there have been no uncured defaults by Tenant under this Lease, and the
Lease is then in full force and effect, the amount of the security deposit held
by Landlord shall be reduced to Four Hundred Thousand and NO/100 Dollars
($400,000.00) and a replacement Letter of Credit supplied evidencing the new amount
shall be substituted for the above Letter of Credit; and, if, as of January 1,
2001, there have been no uncured defaults by 

 

8

 

Tenant under this Lease,
and the Lease is then in full force and effect, the amount of the security
deposit held by Landlord shall be reduced to Three Hundred Thousand and NO/100
Dollars ($300,000.00) and a replacement Letter of Credit supplied evidencing
the new amount shall be substituted for the above Letter of Credit; and, if, as
of January 1, 2002, there have been no uncured defaults by Tenant under
this Lease, and the Lease is then in full force and effect, the amount of the
security deposit shall be reduced to Two Hundred Thousand and NO/100 Dollars
($200,000.00) and a replacement Letter of Credit supplied evidencing the new
amount shall be substituted for the above Letter of Credit; and, if, as of January 1,
2003 there have been no uncured defaults by Tenant and the Lease remains in
full force and effect, the amount of the security deposit shall be reduced to
One Hundred Thousand and NO/100 Dollars ($100,000.00) and a replacement Letter
of Credit supplied evidencing the new amount shall be substituted for the above
Letter of Credit; and, if, as of January 1, 2004 there have been no
uncured defaults by Tenant under this Lease and the Lease is then in full force
and effect, the requirement for a security deposit hereunder shall be
terminated, and the security deposit then held by Landlord shall be returned to
Tenant.

 

ARTICLE XXX

EXTERIOR BUILDING SIGNAGE

 

Section 30.0
Landlord shall allow Tenant the non-exclusive right to erect a sign on the
exterior of the Facility, which sign shall be Tenant’s name and/or “logo”, all
at Tenant’s sole cost and expense. 
Tenant shall pay all costs of maintenance thereof and shall keep same in
good condition, order and repair at its sole cost and expense and shall remove
same prior to termination of the Term of this Lease and shall repair and
restore any damage to the Facility caused by such installation and/or
removal.  Any such sign shall be subject
to the terms of any restrictive covenants recorded in connection with the
Property and all applicable laws, ordinances and regulations.  Landlord (at its cost) has designed the
Building such that the brackets and connectors, including electric feeds, are
existing in the curtain wall and curtain wall system to support exterior
signage.

 

ARTICLE XXXI

NOTICE UPON ENTRY

 

Section 31.0
Anything in this Lease to the contrary notwithstanding, Landlord shall give
Tenant reasonable notice, written or oral, in the event Landlord intends to
enter the Premises for purposes of inspection, repair, maintenance or
alterations of the Facility or Premises, but in no event shall more than
twenty-four (24) hours notice be required and no notice shall be required in
the event of routine janitorial services or an emergency.  Landlord shall perform its repair or other
operations in the Premises with all due diligence and care and, in connection
therewith, shall interfere with the business of Tenant as little as reasonably
possible under the circumstances; provided, however, nothing herein shall
require Landlord to perform any necessary work during other than normal
business hours.

 

ARTICLE XXXII

INTERRUPTION OF SERVICE

 

Section 32.0
Interruption of Services.  No
interruption in, or temporary stoppage of, any of the aforesaid services caused
by repairs, renewals, improvements, alterations, strikes, lockouts, labor
controversy, accidents, inability to obtain fuel or supplies or other causes
beyond Landlord’s reasonable control shall be deemed an eviction or disturbance
of Tenant’s use and possession, or render Landlord liable for damages, by
abatement of rent or otherwise or relieve Tenant from any obligation herein set
forth.  In no event shall Landlord be
required to provide any heat, air conditioning, electricity or other service in
excess of that permitted by voluntary or involuntary guidelines or laws,
ordinances or regulations of governmental authority.

 

9

 

ARTICLE XXXIII

COMMUNICATION ANTENNA

 

Section 33.0
Landlord licenses Tenant to use up to 100 square feet of the rooftop area of
the Facility in a location reasonably designated by Landlord for the purpose of
installing an antenna (if such dish is not larger than ten feet (10’) in
diameter and the top of such dish is not more than six feet (6’) above the
roof) and for the use and operation of that antenna and the area reasonably
necessary to connect the antenna by cable to the Premises.  Said installation shall be in accordance with
plans and specifications approved by Landlord (which approval shall not
unreasonably be withheld) to include the means of attaching the portion of such
equipment to the roof of the Facility or improvements located thereon and to
include painting or screening reasonably acceptable to Landlord.  Tenant shall have the responsibility to
secure all necessary approvals from State, Federal and other governmental
authorities to construct, operate and maintain such equipment.  All such equipment shall be operated,
constructed and maintained by Tenant in accordance with applicable laws,
ordinances, rules and regulations in compliance with the requirements of the
insurers of the Facility and in accordance with reasonable rules and
regulations of Landlord relating to use of the roof.  Tenant shall indemnify and defend Landlord
from and against all loss, claim damage and expense arising out of the
construction, maintenance and operation of such equipment.  Said antenna may be used solely for internal
business purposes of Tenant and shall in no event be used for any commercial
purpose.  All work in connection with
such equipment shall be done by Tenant as an alteration or improvement under Article VIII
hereof; provided, no such action shall materially interfere with work being
performed by Landlord or cause a labor dispute. 
Tenant shall give to Landlord notice of any notices which Tenant
receives from third parties that any of the equipment is or may be in violation
of any law, ordinance, or regulation. 
Tenant shall pay all taxes of any kind or ature whatsoever levied upon
said equipment and all licensing fees, franchise taxes and other charges,
expenses and other costs of any nature whatsoever relating to the construction,
ownership, maintenance and operation of said equipment.  Landlord shall provide reasonable access for
Tenant to the roof.  Tenant agrees to
refrain from interference with the operation of radio, television or other
electromagnetic radiation and reception facilities or AM or FM broadcasting and
two-way radio and microwave transmission in and around the Facility which
comply with U.S. Government regulations. 
Nothing herein shall prevent Landlord from licensing others to use the
roof in other areas of the Facility for development, installation and operation
of electromagnetic radiation and reception facilities or FM broadcasting and
two-way radio and microwave transmission. 
Landlord agrees that in any other leases or licenses of antenna on the
Facility roof, that such leases and licenses will contain similar language
prohibiting interference with other rooftop antenna as is contained herein.

 

ARTICLE XXXIV

MEASUREMENT OF RENTABLE AREA

 

Section 34.0 In
respect to measurement of rentable area of the Building or Premises or any
expansion area added to the Premises, if any, pursuant to the terms of this
Lease, Landlord shall first determine the useable area and rentable area of
each floor (using the BOMA measurement standard ANSI-BOMA 265.1-1996).  The Landlord shall add the (i) total
rentable area of the Building, and (ii) the total useable area as
determined for each floor measured using the aforementioned standard and then
divide (i) by (ii) to determine the building rentable/useable factor (“Factor”).  Finally, for each floor of the Premises,
Landlord shall multiply Tenant’s useable area by the Factor to determine Tenant’s
rentable square foot area for each floor. 
The total of said rentable square foot area for each floor of the
Premises shall be deemed to be the rentable square foot area of the Premises,
subject to change pursuant to Section 2.02 D herein.  The same methodology shall be utilized to
determine and/or adjust the total Building rentable area and usable area.

 

10

 

ARTICLE XXXV

TERMINATION OF PHASE I LEASE; SURVIVAL OF CERTAIN OBLIGATIONS

 

Section 35.0 Upon
full execution of this Restated and Amended Lease by Landlord and Tenant, the
Phase I Lease shall terminate ab initio, without further action of the
Landlord thereunder or Tenant.  The terms
and provisions of Section 2a and 5 of that certain Amendment to Lease
Phase I, shall survive the termination of the Phase I Lease.

 

11

 

FIRST
AMENDMENT TO RESTATED

AND AMENDED LEASE

 

THIS FIRST AMENDMENT dated as of December 9,
1998, by and between MERIDIAN CROSSINGS II LLC (“Landlord”) and FOURTH SHIFT
CORPORATION (“Tenant”).

 

RECITALS:

 

A.                                   Landlord
and Tenant entered into a Restated and Amended Lease dated May 1, 1998 for
certain Premises located at Two Meridian Crossings, Richfie1d, Minnesota.

 

B.                                     Landlord
and Tenant desire to clarify certain rights of Tenant as to the Sixth (6th)
Floor of the Building.

 

NOW, THEREFORE, in
consideration of the rents and covenants hereinafter set forth and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Section 21.1. 
Anything contained in Section 21.1 to the contrary notwithstanding,
Landlord shall have the right to enter into leases on the portion of the Sixth
(6th) Floor not a part of the initial Premises, as follows:

 

	
  Space

  	
   

  	
  Rentable Area

  	
   

  	
  Lease Termination Date

  	
   

  
	
  A

  	
   

  	
  Not to exceed
  4,300

  	
   

  	
  March 31,
  2004

  	
   

  
	
  B

  	
   

  	
  Not to exceed
  5,100

  	
   

  	
  March 31,
  2006

  	
   

  
	
  C

  	
   

  	
  Not to exceed
  3,700

  	
   

  	
  March 31,
  2004 with renewal through March 31, 2007

  	
   

  
	
  D

  	
   

  	
  Not to exceed
  5,100

  	
   

  	
  August 31,
  2004

  	
   

  

 

The Spaces are indicated on attached Exhibit A-1.

 

2.                                       Ratification. 
Unless specifically modified, amended or changed by this First
Amendment, the Restated and Amended Lease shall remain unchanged and in full
force and effect.

 

 

IN WITNESS WHEREOF, the parties hereto have executed
this First Amendment as of the date first written above.

 

	
  LANDLORD:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  MERIDIAN
  CROSSINGS II LLC, A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Minnesota
  limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Authorized Signer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  FOURTH
  SHIFT CORPORATION, a

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Minnesota
  corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ David G.
  Latzke

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  VP & CFO

  	
   

  
											

 

2

 

SECOND
AMENDMENT TO RESTATED

AND AMENDED LEASE

 

THIS SECOND AMENDMENT dated February 4, 2000, by
and between *MERIDIAN CROSSINGS II LLC (“Landlord”) and FOURTH SHIFT
CORPORATION (“Tenant”).

 

RECITALS:

 

A.                                   Landlord
and Tenant entered into a Restated and Amended Lease dated May 1, 1998, for
certain Premises located at Two Meridian Crossings, Richfield, Minnesota, which
was amended as of December 9, 1998 (“Lease”).

 

B.                                     Tenant
desires to add additional rentable area to the Premises pursuant to Article XXI,
Right of Notice, of the Lease,

 

NOW, THEREFORE, in consideration of the rents and
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

1.                                       Additional
Premises: Effective April 17, 2000, the Lease shall be deemed modified
as follows:

 

Data Sheet

 

(d)                                 “Premises”: 
The area outlined on Exhibit A to the Lease and Exhibit A-1 to this
Second Amendment.  For purposes of this
Lease, Landlord and Tenant agree that the Premises shall be deemed to contain
61,804 rentable square feet of space located as follows;

 

12,570 rentable square
feet on Floor 6;

24,617 rentable square
feet on Floor 7; and

24,617 rentable square
feet on Floor 8.

 

(h)                                 “Base Rent”:

 

	
  With respect to the

  following years of

  the Term:

  	
   

  	
  Annual Base Rent

  shall be as follows:

  	
   

  	
  Payable in advance in

  equal monthly

  installments as follows:

  	
   

  
	
  Years 1-5

  	
   

  	
  $

  	
  896,158.00

  	
   

  	
  $

  	
  74,679.83

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Years 6-10

  	
   

  	
  $

  	
  985,773.80

  	
   

  	
  $

  	
  82,147.82

  	
   

  

 

(j)                                     “Tenant’s Percentage”: Thirty-two and forty-four hundredths
percent (32.44%).  Tenant’s percentage
shall be, adjusted in the event of a change in the number of rentable square
feet of space in the Building or Premises and as set forth in Article 2
herein.

 

 

2.                                       Landlord’s
Improvements.  Landlord has provided
certain improvements as described in Exhibit D to the Lease, “Base Building
Specifications” (excluding “Leasehold Improvement Specifications” in Exhibit D)
and will provide to Tenant an allowance for construction of all Leasehold
Improvements in excess of Base Building Specifications of Seventeen and 77/100
Dollars ($17.77) per rentable square foot (which includes the Space Planning
Allowance) (hereinafter “Allowance”).

 

Landlord’s contractor
shall perform all Leasehold Improvements at the Premises.  Tenant may elect to exceed the Allowance at
its sole cost and expense provided that Tenant provides Landlord with
acceptable means of payment for said excess improvements, Any improvements to
be paid by Tenant by utilization of the Allowance or otherwise, shall be
performed on an open book basis and to the extent feasible considering
schedule, market conditions and construction coordination, bid out to the
trades by Landlord’s general contractor; Landlord’s general contractor shall
use reasonable efforts under the circumstances described above to bid all
material portions of the job to three (3) separate, responsible bidders.  Tenant may add subcontractors to the bid
list, if done in a timely, responsible manner. 
Said improvements shall be performed by Landlord’s general contractor at
cost plus five percent (5%) without any additional upcharge by Landlord.  Any delays by Tenant in completing Space
Planning or selecting improvements shall not act to extend the Commencement
Date, Tenant agrees to refrain from ordering long lead time items.

 

3.                                       Articles
XXII, XXIII, XXVII and XXX are not applicable for the additional rentable area
to the Premises added by this Amendment.

 

4.                                       Ratification.  Unless specifically modified, amended or
changed by this Second Amendment, the terms of the Lease sha1l remain in full
force and effect and unchanged.

 

2

 

IN WITNESS WHEREOF, the parties hereto have executed
this Second Amendment as of the date first written above.

 

	
  LANDLORD:

  	
   

  	
  OTR,
  An Ohio general partnership acting as

  
	
   

  	
   

  	
  nominee for The
  State Teachers Retirement

  
	
   

  	
   

  	
  Board of Ohio, a
  public fund**

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Authorized Signer

  
	
   

  	
   

  	
  Its:

  	
  Director — Midwestern Region

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
  FOURTH
  SHIFT CORPORATION, a

  
	
   

  	
   

  	
  Minnesota
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David G. Latzke

  
	
   

  	
   

  	
  Its:

  	
  VP & CFO

  

 

**created pursuant
to the provisions of Chapter 3307 of the Ohio-Revised Code

 

3Exhibit
10.1.1

 

FIFTH
AMENDMENT TO LEASE

 

THIS FIFTH AMENDMENT TO LEASE
made as of this 16th day of July, 2004 
(hereinafter referred to as this “Amendment”), between ALFRED SANZARI
ENTERPRISES, L.P., having an office c/o Alfred Sanzari Enterprises, Court Plaza
North, 25 Main Street, 6th Floor, Hackensack, New Jersey 07601 (hereinafter
referred to as “Landlord”), and BIO-REFERENCE LABORATORIES, INC., a New Jersey
corporation, having an office at 481 Edward H. Ross Drive, Elmwood Park, New
Jersey 07407 (hereinafter referred to as “Tenant”).

 

WITNESSETH:

 

WHEREAS, Alfred
Sanzari (Landlord’s predecessor-in-interest), as landlord (hereinafter referred
to as “Sanzari”), and Pharmadyne Laboratories, Inc. (Tenant’s predecessor-
in-interest), as tenant (hereinafter referred to as “Pharmadyne”), heretofore
entered into a certain written Lease dated as of November 7, 1978, wherein
and whereby Landlord leased to Tenant, and Tenant hired from Landlord, certain
premises consisting of approximately thirty-one thousand five hundred
twenty-seven (31,527) square feet (hereinafter referred to as the “Original
Premises”) in the building located at 481 Edward H. Ross Drive, in the Borough
of Elmwood Park, County of Bergen and State of New Jersey (hereinafter referred
to as the “Original Building”), as more particularly described therein, for a
term which commenced on March 1, 1979, and was scheduled to expire on February 28,1989,
at the Basic Rent and additional rent, and upon the terms, covenants,
conditions, provisions and agreements contained in said Lease; and

 

WHEREAS, said Lease
was modified by that certain First Amendment to Lease dated November 1,
1979, wherein and whereby, inter  alia, Landlord and Tenant
settled certain disputes; and

 

WHEREAS, said Lease
and the interest of Pharmadyne as tenant thereunder, was assigned to CL
Laboratories of New Jersey, Inc. (hereinafter referred to as “CL”), pursuant to
that certain Assignment and Assumption of Lease Agreement dated December 10,
1981; and

 

WHEREAS, said Lease
was further modified by that certain Agreement dated as of March 23,1988,
wherein and whereby, inter  alia the Lease and the interest of CL
as tenant thereunder, was assigned to Med-Mobile, Inc. (hereinafter referred to
as “Med-Mobile”), and the term of the Lease was extended for a further period
of five (5) years, commencing on March 1, 1989, and expiring on February 28,
1994; and

 

WHEREAS, said Lease
was further modified by that certain Second Amendment to Lease dated as of March 23,
1988; and

 

WHEREAS, said Lease
was further modified by that Third Amendment to lease dated January 31,1992,
wherein and whereby, inter  alia, Landlord and Tenant settled
certain defaults by Tenant under the Lease and discontinued litigation
instituted by Landlord against Tenant in connection therewith; and

 

WHEREAS, on or about
November 15, 1989, Med-Mobi1e changed its name to Bio- Reference
Laboratories, Inc.; and

 

WHEREAS, said Lease
was further modified by that certain Third Amendment to Lease dated as of February 28,1994,
wherein and whereby, inter  alia, the term of the Lease was
extended for a further period of five (5) years, commencing on March 1,1994,
and expiring on February 28,1999; and

 

WHEREAS, said Lease
was further modified by that certain Fourth Amendment to Lease dated as of October 9,1998
(hereinafter sometimes referred to as the “Fourth Amendment to Lease”), wherein
and whereby, inter  alia, the term of the Lease was extended for a
further period of five (5) years, commencing March 1,1999, and expiring on
February 28,2004, and Landlord leased to Tenant, and Tenant hired from
Landlord, a portion of the building located at 487 Edward H. Ross Drive,
Borough of Elmwood Park, County of Bergen and State of New Jersey (hereinafter
referred to as the “Adjacent Building”), consisting of approximately twenty-
four thousand (24,000) square feet (hereinafter referred to as the “ Additional
Space”); and

 

WHEREAS, the
Original Premises and the Additional Space are sometimes hereinafter
collectively referred to as the “Premises”; and

 

WHEREAS, said Lease,
as so modified, and as the same may have been otherwise amended and/or
modified, is hereinafter collectively referred to as the “Lease”; and

 

WHEREAS, Landlord
and Tenant desire to extend the term of the Lease, upon the terms, covenants
and conditions hereinafter set forth; and

 

WHEREAS, Landlord
and Tenant desire to further modify the Lease only in the respects hereinafter
stated.

 

NOW, THEREFORE, in
consideration of the Premises demised by the Lease and the mutual covenants
hereinafter contained, and for other good and valuable consideration paid by
each party to the other, the receipt and adequacy

 

1

 

of which is hereby acknowledged, the parties hereto by these presents
covenant and agree as follows:

 

I. The recital clauses set forth above shall be deemed a part of this
Amendment as though set forth verbatim and at length herein.

 

2. Except as otherwise expressly set forth herein, all capitalized
terms in this Amendment shall have the meanings set forth for such terms in the
Lease.

 

3. A. The “Term” of the Lease (as defined in Paragraph B of Schedule “C”
attached to the Lease) shall be deemed to be further extended for a period of
five (5) years, commencing March 1,2004, to and including February 28,2009,
inclusive, upon the terms, covenants, conditions, provisions and agreements
contained in the Lease, as modified by this Amendment.

 

B. Effective as of March 1, 2004, “Basic Rent” (as defined in
Paragraph A of Schedule “C” attached to the Lease) shall be:

 

( 1) solely with respect to the Original Premises, “the sum of Two
Hundred Thirty-Six Thousand Four Hundred Fifty- Two and 50/lOO ($236,452.50)
Dollars per annum, payable in equal monthly installments of Nineteen Thousand
Seven Hundred Four and 38/lOO ($19,704.38) Dollars.”

 

(2) solely with respect to the Additional Space: “(i) the sum of One
Hundred Seventy-Four Thousand and 00/lOO ($174,000.00) Dollars per annum,
payable in equal monthly installments of Fourteen Thousand Five Hundred and
00/lOO ($14,500.00) Dollars, for the period commencing March 1, 2004,
through and including August 31, 2006, and (ii) the sum of One Hundred
Eighty Thousand and 00/1 00 ($180,000.00) Dollars per annum, payable in equal
monthly installments of Fifteen Thousand and 00/100 ($15,000.00) Dollars, for
the period commencing September 1, 2006, through and including February 28,
2009. “

 

4. Effective as of July 1, 2005:

 

A. (I) Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, a portion of the Original Building, consisting of approximately
thirty-one thousand seven hundred forty-four (31,744) square feet, as shown on
the plan attached hereto and made a part hereof as Schedule “ A-3”
(hereinafter referred to as the “Second Additional Space”).

 

(2) The “Demised Premises” (as defined in Article 1 of the Lease)
shall be and be deemed to be: “(i) the entire Original Building, consisting of
approximately sixty-three thousand two hundred seventy-one (63,271) square
feet, as shown on Schedule “ A “ attached to the Lease and as shown on Schedule “
A-3” attached hereto; and (ii) a portion of the Adjacent Building, consisting
of approximately twenty-four thousand (24,000) square feet, as shown on Schedule “
A-I “ attached to the Fourth Amendment to Lease.”

 

B. The following shall be applicable solely with respect to the Second
Additional Space:

 

(1) “Basic Rent” (as defined in Paragraph A of Schedule “C”
attached to the Lease) shall be “the sum of Two Hundred Thirty-Eight Thousand
Eighty and 00/lOO ($238,080.00) Dollars per annum, payable in equal monthly
installments of Nineteen Thousand Eight Hundred Forty and 00/lOO ($19,840.00)
Dollars.”

 

(2) “Proportionate Share” (as defined in Paragraph E of Schedule “C”
attached to the Lease) shall be “fifty and twenty hundredths (50.20%) percent.”

 

(3) The number of parking spaces shall be “twenty- five (25)”, as shown
on the plan attached hereto and made a part hereof as Schedule “A-4”.

 

C. Tenant has examined and inspected the Second Additional Space and
agrees to accept the same in the condition in which it exists on July 1,
2005. Tenant hereby acknowledges and agrees that no materials whatsoever are to
be furnished by Landlord and no work whatever is to be performed by Landlord in
Connection with said Second Additional Space or any part thereof.

 

5. Effective as of the date hereof:

 

A. Article 40 of the Lease and Paragraph 6 of the Fourth Amendment
to Lease shall be deemed to be deleted in their entireties.

 

B. The following paragraph shall be deemed to be added to the Lease as Article 45
thereof:

 

“45. CROSS-DEFAULT: Landlord and Tenant acknowledge that Tenant
is the assignee to the interest of M.O. Air International, Inc. (“M.O. Air”),
under that certain Lease, dated as of May 31, 2000, between Landlord and M.O.
Air, covering a portion of the Original Building consisting of approximately
thirty-one thousand seven hundred forty-four (31,744) square feet, located at
481 Edward H. Ross Drive, Borough of Elmwood Park, County of Bergen and State
of New Jersey, as more particularly described on Schedule “A” attached
thereto and made a part thereof (hereinafter referred to as the “Other Lease”).
It is specifically understood and agreed that: (i) a default by Tenant under
the Other Lease shall, at Landlord’s option, without Landlord being required to
give any other or further notice to Tenant, be deemed a default by Tenant under
this

 

2

 

Lease, as though the same circumstance(s) which gave rise to the
default by Tenant under the Other Lease has occurred under this Lease and,
unless Tenant shall cure such default under the Other Lease within the time
provided therein for the curing of such default thereunder, Landlord may, at
its option, terminate this Lease and/or exercise its other remedies as if such
default had occurred and remained uncured under this Lease; and (ii) a default
by Tenant under this Lease shall, at Landlord’s option, without Landlord being
required to give any other or further notice to Tenant, be deemed a default by
Tenant under the Other Lease, as though the same circumstance(s) which gave
rise to the default by Tenant under this Lease has occurred under the Other
Lease and, unless Tenant shall cure such default under this Lease within the
time provided herein for the curing of such default hereunder, Landlord may, at
its option, terminate the Other Lease and/or exercise its other remedies as if
such default had occurred and remained uncured under the Other Lease.”

 

6. A. Tenant hereby affirms that it has heretofore deposited with
Landlord, the sum of One Hundred Two Thousand Four Hundred Sixty- Two and
72/100 ($102,462.72) Dollars, as security under the Lease (hereinafter referred
to as the “Existing Security”).

 

B. Tenant hereby affirms that, as assignee to the interest of M.O. Air
under the Other Lease, there is currently on deposit with Landlord, the sum of
Forty-Seven Thousand One Hundred Ninety-Two and 32/100 ($47,192.32) Dollars
(hereinafter referred to as the “Other Security”).

 

C. Notwithstanding anything to the contrary contained herein or in the
Lease, Tenant hereby acknowledges and agrees that, provided Tenant is not in
default under the Lease or the Other Lease as of July 1, 2005, then,
Landlord will add the Other Security to the Existing Security (hereinafter
collectively referred to as “Security”), such that the aggregate amount of
security heretofore deposited by Tenant to Landlord under the Lease shall be
One Hundred Forty-Nine Thousand Six Hundred Fifty-Five and 04/100 ($149,655.04)
Dollars.

 

D. Tenant hereby affirms that, if Landlord shall have applied all or
any part of the Existing Security or the Other Security, in accordance with the
provisions of the Lease or the Other Lease, respectively, as the case may be,
prior to July 1, 2005, Tenant shall replenish any amount so applied,
pursuant to the terms of the Lease and the Other Lease, respectively, as the
case may be.

 

7. Tenant hereby represents and warrants to Landlord, that: (i) Tenant
has not dealt with any real estate agent or broker in connection with this
Amendment and/or the Second Additional Space; (ii) that this Amendment was not
brought about or procured through the use or instrumentality of any agent or
broker, and (iii) that all negotiations with respect to the terms of this
Amendment were conducted between Landlord and Tenant. Tenant hereby covenants
and agrees to indemnify and hold Landlord harmless from and against any and all
claims for commissions and other compensation made by any agent or agents
and/or any broker or brokers based on any dealings between Tenant and any agent
or agents and/or broker or brokers, together with all costs and expenses
incurred by Landlord in resisting such claims (including, without limitation,
attorneys’ fees and disbursements).

 

8. A. Except as expressly modified by this Amendment, the Lease and all
the terms, covenants, conditions, provisions and agreements thereof, are hereby
in all respects, ratified, confirmed and approved.

 

B. Tenant hereby affirms that, as of the date hereof, no breach or
default by Landlord has occurred, and that the Lease and all of its terms,
covenants, conditions, provisions and agreements, except as modified by this
Amendment, are in full force and effect, with no defenses or offsets thereto.

 

C. Tenant hereby releases Landlord of and from all liabilities, claims,
controversies, causes of action and other matters of every nature which,
through the date hereof, have or might have arisen out of or in any way in
connection with the Lease and/or the Demised Premises.

 

9. This Amendment and the Lease contains the entire understanding
between the parties with respect to the matters contained herein. No
representations, warranties, covenants or agreements have been made concerning
or affecting the subject matter of this Amendment, except as are expressly
contained herein.

 

10. This Amendment may not be changed orally, but only by an agreement
in writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.

 

11. This Amendment shall be binding upon, and inure to the benefit of
the parties hereto, their respective legal representatives, successors and,
except as otherwise provided in the Lease, as modified by this Amendment, their
respective assigns.

 

12. The submission of this Amendment to Tenant shall not be construed
as an offer, nor shall Tenant have any rights with respect hereto, unless and
until Landlord shall execute a copy of this Amendment and unconditionally
deliver the same to Tenant.

 

13. Tenant hereby represents and warrants to Landlord that: (i) the
execution, performance and delivery by Tenant of this Amendment does not
violate any provisions of its Charter or By-Laws, or any indenture, document,
agreement or other instrument which may be heretofore binding upon Tenant, and
has been fully and validly authorized and approved by any required corporate
action of Tenant; (ii) the obligations of Tenant under this

 

3

 

Amendment are legal, valid, binding and enforceable against Tenant in
accordance with its terms; and (iii) the person executing this Amendment on
behalf of Tenant has the authority to so execute, perform and deliver same.

 

14. Tenant hereby acknowledges and agrees that this Amendment is the
result of extensive negotiations between the parties. This Amendment shall be
construed without regard to any presumption or other rule requiring
construction against the party causing this Amendment to be drafted or
prepared.

 

15. A determination that any provision of this Amendment is void, unenforceable
or invalid shall not affect the enforceability or validity of any other
provision, and any determination that the application of any provision of this
Amendment to any person or to particular circumstances is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

 

16. Tenant hereby acknowledges and agrees that Landlord’s remedies are
cumulative, and that mention of a particular remedy in this Amendment, does not
preclude Landlord from exercising any and all other rights and remedies
available to it, whether herein, under the Lease or otherwise, whether at law
and/or in equity.

 

17.  This
Amendment may be executed in one or more counterparts, each of which, when so
executed and delivered, shall be deemed original, but all of which taken
together shall constitute but one and the same instrument.

 

18. This Amendment may be executed by facsimile transmission and shall
be deemed to have been executed and delivered by each party on the date so
transmitted to the other party, and in such event, each party will promptly
furnish to the other party, an original counterpart hereof executed by such
party.

 

19. The validity, performance and enforcement of this Amendment shall
be governed by and construed in accordance with the laws of the State of New
Jersey, without regard to conflicts of law principles.

 

IN WITNESS WHEREOF, the parties hereto have respectively executed this
Fifth Amendment to Lease as of the day and year first written above.

 

	
  ALFRED SANZARI ENTERPRISES, L.P. (Landlord)

  
	
   

  
	
  By: Alfred Sanzari Enterprises, Inc.,

  
	
   

  
	
   

  	
  its General Partner

  
	
   

  
	
  By: 

  	
  s/ David Sanzari

  	
   

  
	
   

  
	
  Name: David Sanzari

  
	
  Title: President

  
	
  BIO-REFERENCE LABORATORIES, INC.

  
	
   

  
	
  (Tenant)

  
	
  By:

  	
  s/ Warren Erdmann

  	
   

  
	
   

  
	
  Title: Vice-President

  
				

 

4

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