Document:

Exhibit 10.1

 

LEASE

 

	
  Hopkins Eleventh Avenue LLC

  	
   

  	
   

  	
  2/21/2003

  	
   

  	
  $31,912.00 yrs 1-3

  $34,829.00 yrs 4-6+

  
	
  (Owner/Landlord)

  	
   

  	
  (Lease Date)

  	
   

  	
  (Monthly Base Rent)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MagStar Technologies, Inc.

  	
   

  	
   

  	
  109,410

  	
   

  	
  -0-

  
	
  (Tenant)

  	
   

  	
  (Unit(s))

  	
   

  	
  (Security Deposit)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hopkins Building

  	
   

  	
   

  	
  79 Months

  	
   

  	
  31,912

  
	
  (Project)

  	
   

  	
  (Term)

  	
   

  	
  (First Month’s Rent)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  410 11th Avenue South

  	
   

  	
   

  	
  2/21/2003

  	
   

  	
   

  
	
  (Address)

  	
   

  	
  (Beginning)

  	
   

  	
  (Improvements)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hopkins, MN 
  55343

  	
   

  	
   

  	
  8/20/2009

  	
   

  	
   

  
	
  (City, State, Zip)

  	
   

  	
  (Ending)

  	
   

  	
  (Receipt by)

  

 

THIS LEASE is made and entered into this 21st day of
February, 2003, between Hopkins Eleventh Avenue LLC with its principal place of
business at 7808 Creekridge Cir, #200 Mpls, MN 55439 (herein called
“Landlord”), and MagStar Technologies, Inc a (corporation) (partnership)
(proprietorship) organized under the laws of the State of Minnesota with its
principal business at 410 11th Avenue So, Hopkins, MN  55343 (herein called “Tenant,” whether one or more).

 

WITNESSETH:

 

1. PREMISES.

In consideration of the
obligation of Tenant to pay rent as herein provided, and in consideration of
the other terms, provisions and covenants hereof, Landlord hereby leases to
Tenant, and Tenant hereby takes from Landlord certain Premises (herein called
the “Premises”) situated in the County of Hennepin, State of Minnesota,
consisting of approximately 109,410 square feet of gross rentable area outlined
in red on the floor plan attached hereto Exhibit A and made a part hereof in
the building commonly known as Hopkins Building (herein called the “Building”)
located at  410 11th Avenue
So, Hopkins, MN  55343, which building
is situated upon the real property described on Exhibit B attached hereto and
hereby made a part hereof (the Building and said real property are herein
called the “Project”), together with the right to use in common with Landlord
and other Tenants in the Project, and their employees, agents, representatives,
and invitees, any common areas and facilities of the Project and together with
the right to use any parking area (herein called the ‘Shared Parking Area”)
located outside of the Project which is designated by Landlord, by written
notice from Landlord to Tenant, as a parking area which Tenant may use in
common with other parties designated by Landlord.

 

2.  TERM.

This Lease shall be for a
term of 6 years and 6 months, commencing on February 21, 2003, and expiring on
August 20, 2009, except as the same may be extended or earlier terminated in
accordance herewith.

 

 

3.  WORK LETTER.

Landlord, at its sole
cost and expense, shall construct any leasehold improvements required to be by
Landlord constructed pursuant to the Work Letter (herein called the “Work
Letter”) attached hereto as Exhibit C and made a part hereof.

 

4.  RENT.

Tenant shall pay
Landlord, without deduction or setoff, an annual minimum rental (herein
sometimes called “Base Rent) of  Three
hundred eighty two thousand nine hundred thirty five and /100 Dollars ($  382,935) payable, in advance, without
demand, on or before the first day of each and every month during the term
hereof; provided, however, that if the term hereof shall commence upon a day
other than the first day of a calendar month or expire upon a day other than
the last day of the calendar month, Base Rent for the partial calendar month
shall be prorated on a per diem basis and shall be paid by Tenant on the
commencement date of the term hereof (in the case of an initial partial month)
or on the first day of the month in which the term hereof expires (in the case
of a terminal partial month).

(31,912.00 per month years 1-3)

(34,829.00 per month years 4-6+6 months)

 

5.  SECURITY DEPOSIT.

Tenant agrees to deposit
with Landlord on the date hereof the sum of None and  /100 Dollars ($0.00), which sum shall be held by Landlord,
without obligation for interest, as security for the performance of Tenant’s
covenants and obligations under this Lease, it being 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 the occurrence of any
event of default by Tenant, Landlord may, from time to time without prejudice
to any other remedy provided herein or provided by law, use such fund to the
extent necessary to make good any areas of rent and any other damage, injury,
expense or liability caused by such event of default, and Tenant shall pay to
Landlord on demand the amount so applied in order to restore the security
deposit to its original amount.  If
Tenant is not then in default hereunder, any remaining balance of such deposit
shall be returned by Landlord to Tenant upon termination of this Lease.

 

6.  USE.

Subject to the following
provisions of this Paragraph 6, the Premises may be used for any lawful
purpose. Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the Premises and shall promptly comply with all
governmental orders and directives for the correction, prevention and abatement
of nuisances in, upon or connected with the Premises, all at Tenant’s sole
expenses.  Tenant shall not receive,
store or otherwise handle any product, material or merchandise which is
explosive or highly inflammable and will not permit the Premises to be used for
any purpose which would render the insurance thereon void or the insurance risk
more hazardous, or increase the premiums therefore, and in the event of any
such increase by reason of any activity conducted by Tenant in, on or about the
Premises, Tenant shall be liable for such increase and shall reimburse Landlord
therefor.  Tenant shall not store any
material or merchandise outside the Premises.

 

7.  OPERATING COSTS.

Prior to the commencement
of the term of this Lease and prior to March 1 of each calendar year
thereafter, or as soon thereafter as practicable, Landlord shall furnish Tenant
with a written statement of the estimated operating costs per square foot of
gross rentable area of the Building for such calendar year.  During the remainder of such calendar year,
Tenant shall pay Landlord at the times that the monthly Base Rent is due and payable
hereunder an amount equal to one-twelfth (1/12) of the product of the number of
gross square feet in the Premises times such estimate.  If Tenant’s monthly payment of estimated
operating costs is greater than the monthly amount of operating expenses Tenant
paid for the then elapsed calendar months of such calendar year, then, within
ten (10) days after such written estimate is given, Tenant shall also pay to
Landlord the deficiency for said elapsed calendar months. After the expiration
of each calendar year falling in whole or in part within the term hereof,
Landlord shall furnish Tenant with a written statement of the actual operating
costs of the Project (and, if applicable, the Shared Parking Area) for the
preceding calendar year, and if such actual operating costs for such preceding
calendar year are more or less than the estimate, an appropriate adjustment
shall be made within ten (10) days after such written statement is furnished.

 

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For the purposes hereof,
operating costs shall be deemed to mean all taxes (both general and special,
and whether now or hereafter enacted), assessments or governmental charges
levied or assessed against the Project (and, if applicable, the Shared Parking
Area) or any part thereof, and all costs which, for federal tax purposes, may
be expensed rather than capitalized, and which Landlord will or does incur, pay
or become obligated to pay in owning, maintaining, operating and leasing the
Project (and, if applicable, the Shared Parking Area) and appurtenances
thereto, exclusive of interest and depreciation.  Without limiting the generality of the foregoing, operating costs
shall include personal property taxes, fees or permits or licenses, a
management fee or fees not to exceed
      percent of the Base Rent, landscaping and
gardening, cleaning, painting, decorating, paving, lighting, security guards,
leasing and maintenance of music and intercom systems, if any, removal of snow,
trash, garbage and other refuse, heating, ventilating and air-conditioning,
costs and expenses in connection with meeting federal, state, or local
environmental energy standards, fire protection, water and sewage and other
utility charges not separately metered and charged to particular Tenants, the
cost of all types of insurance carried or paid for by Landlord, accounting
costs, all costs of maintaining, repairing, and replacing paving, curb,
sidewalks, roadways, landscaping, drainage, lighting and utility systems, the
cost of maintaining and repairing the walls, roof and other portions of the
Building, the cost of maintaining and repairing all heating, ventilating and
air-conditioning equipment and depreciation thereof, rental charges for
machinery and equipment used in maintaining and operating the Project (and, if
applicable, the Shared Parking Area), salaries and compensation of personnel
connected with such operation and maintenance and deductible amounts payable
under insurance policies.  Landlord, in its
reasonable discretion, shall from time to time determine the method of
computing the operating costs, the allocation of operating costs to various
types of space within the Building, and the extent of the appurtenances to the
Project, and Tenant shall be bound thereby.

 

Tenant’s failure to pay
Tenant’s share of operating costs in the manner herein provided shall be
treated hereunder in the same manner as a default in the payment of Base Rent.

 

8.  LANDLORD’S REPAIRS.

Landlord shall, at its
expense, maintain only the roof, foundation and the structural soundness of the
exterior walls of the Building in good repair, reasonable wear and tear
excepted.  Tenant shall reimburse
Landlord upon demand, however, for any maintenance or repairs necessitated by
the act or negligence of Tenant for Tenant’s employees, agents, representatives
or invitees, or caused by Tenant’s default hereunder.  The term “walls” as used herein shall not include windows, glass
or plate glass or doors.  Tenant shall
immediately give Landlord written notice of defect or need for repairs, after
which Landlord shall have reasonable opportunity to repair same or cure such
defect.  Landlord’s liability hereunder
shall be limited to the cost of such repairs or curing such defect.

 

9.  TENANT’S REPAIRS.

Tenant shall, at its own
cost and expense, maintain all other parts of the Premises in good repair,
reasonable wear and tear excepted, and shall take good care of the Premises and
its fixtures and suffer no waste. 
Tenant will keep the whole of the Premises in clean, sanitary and safe
condition, and will at the expiration or earlier termination of this Lease
surrender the same to Landlord, broom clean, and in the same order and
condition as they were in at the commencement of this Lease, reasonable wear
and tear excepted.

 

10. ALTERATIONS.

Tenant shall not make
structural additions or alterations to the Building or the Premises or install
any equipment which defaces the Building interior or exterior or bolt or
otherwise physically attach machinery or equipment to the floors or walls of
the Premises.  Except for alterations
which do not violate the provisions of the preceding sentence and the aggregate
cost of which does not exceed three (3) months Base Rent during any twelve (12)
month period, Tenant shall not make any alterations of, or additions to, the
Premises without the prior written consent of Landlord.  Tenant will not permit any mechanics’ ,
laborers’ or materialmen’s liens to stand against the Premises or the Project
for any labor or material furnished to, or for the account of, Tenant or
claimed to have been so furnished in connection with any work performed or
claimed to have been performed in or about the Premises.

 

At the expiration or
earlier termination of this Lease, Tenant shall, if the Landlord so elects,
remove all alterations and additions erected by Tenant and restore the Premises
to their original condition; otherwise such improvements shall be delivered up
to the Landlord with the Premises.  All
movable office furnishings and trade fixtures installed by Tenant may be removed
by Tenant at the termination of this Lease if Tenant so elects, and shall be
removed if required by Landlord.  All
such removals and restoration shall be accomplished in a good and workmanlike
manner so as not to damage the primary structure or structural qualities of the
Premises.  Personal property remaining
in the Premises at the

 

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expiration or earlier
termination of the term of this Lease shall be deemed abandoned, and Landlord
may dispose of the same as Landlord deems expedient.

 

11.  SIGNS.

Tenant shall not erect
any exterior signs, advertising media or lettering without the prior written
consent of Landlord.  Any such items
consented to by Landlord and installed by Tenant shall comply with any applicable
governmental laws, ordinances, regulations and other requirements.  Tenant shall remove all such signs at the
termination of this Lease.  Such
installations and removals shall be made in such manner as to avoid injury or
defacement of the Premises.

 

12. INSPECTION.

Upon reasonable notice to
Tenant, Landlord and Landlord’s agents and representatives shall have the right
to enter the Premises for the purpose of ascertaining the condition thereof or
in order to make such repairs as may be required to be made by Landlord
hereunder or as Landlord may deem necessary or for the purpose of showing the
Premises and shall have the right to erect on the Premises a suitable sign
indicating that the Premises are available for sale or rent.  Any such entry by Landlord shall never be
deemed an eviction or disturbance of Tenant’s possession of the Premises, or
render Landlord liable to Tenant for damages, or relieve Tenant from
performance of Tenant’s obligations under this Lease.

 

13. UTILITIES.

Tenant shall pay for all
heating, air conditioning, ventilation, electricity, gas, water, sewer,
telephone, waste removal and other services and utilities used in the Premises
commencing on the date Tenant has access thereto for the purpose of installing
leasehold improvements and continuing throughout the term hereof.  All utilities, except water, will be
separately metered and Tenant shall contract for the same in its own name and
shall promptly and directly pay all charges for such utilities consumed in the
Premises.  If, in Landlord’s opinion,
Tenant’s use of water service is greater than the average use of water service
by other Tenants in the Project, Landlord may require Tenant to install a
separate meter for water and, in such an event, Tenant shall pay the cost of purchasing,
installing and maintaining such a metering device.  In the event that Tenant fails to install such a separate
metering device within thirty (30) days of notice of Landlord’s requirement
that such a device be installed, Landlord may, but shall not be obligated to,
install such a device and all sums and incidental costs and expenses paid by
Landlord in connection with the purchase and installation of such device shall
be payable by Tenant to Landlord on demand.

 

Landlord does not warrant
that any of the utilities and services referred to in this paragraph, whether
furnished by Landlord or by any other supplier of any utility or other service,
will be free from interruption. 
Interruption of service shall never be deemed an eviction or disturbance
of Tenants; use and possession of the Premises or any part thereof, or render
Landlord liable to Tenant from performance of Tenant’s obligations under this
Lease.

 

14.  ASSIGNMENT AND SUBLETTING.

Tenant shall not have the
right to assign this Lease, by operation of law or otherwise, or to sublet the
whole or any part of the Premises without the prior written consent of
Landlord.  Consent by Landlord to one or
more assignment or subletting shall not operate as a waiver of Landlord’s
rights under this paragraph as to any subsequent assignment or subletting.  Notwithstanding any permitted assignment or
subletting, Tenant shall at all times remain fully responsible and liable for
the payment of the rent herein and for compliance with all of its other
obligations under the terms, provisions, and covenants of this Lease.  If Tenant is a corporation or partnership or
other entity, any change in the control of Tenant shall be deemed to be an
assignment which shall require Landlord’s consent as set forth above.  Landlord shall have the right to assign any
of its rights under this Lease, and upon any such assignment, and provided that
the assignee assumes all of the Landlord’s obligations hereunder, Landlord
shall be relieved of any and all such obligations.

 

15.  FIRE OR OTHER CASUALTY DAMAGE.

A. If the Project or any
part thereof is damaged or destroyed by fire or other casualty, Landlord shall
have the right to terminate this Lease, provided it gives written notice
thereof to Tenant within ninety (90) days after such damage or
destruction.  If a portion of the
Premises is damaged by fire or other casualty and this Lease is not thereby
terminated, Landlord shall, at its expense, restore the Premises, exclusive of
any improvements or other changes made to the Premises by Tenant, to as near
the condition which existed immediately prior to such damage or destruction as
reasonably possible, and rent shall abate during such period of time as the
Premises are untenantable in the proportion that the untenantable portion of
the Premises bears to the entire Premises. 
Landlord shall not be responsible to Tenant

 

4

 

for damage to, or
destruction of, any furniture, equipment, improvements or other changes made by
Tenant in, or about the Premises regardless of the cause of the damage or
destruction.

 

B. Landlord and Tenant
each hereby release the other from any and all liability or responsibility to
the other or anyone claiming through or under them by way of subrogation or
otherwise for any loss or damage to property caused by fire or any of the
extended coverage casualties covered by the insurance maintained hereunder,
even if such fire or other casualty shall have been caused by the fault or
negligence of the other party or anyone for whom such party may be responsible;
provided, however, that this release shall be applicable and in force and
effect only with respect to loss or damage occurring during such times as the
releasor’s policies shall contain a clause or endorsement to the effect that
any release shall not adversely affect or impair said policies or prejudice the
right of the releasor to recover thereunder. 
Landlord and Tenant each agree that it will require its insurance
carriers to include in its policies such a clause or endorsement.

 

C. Landlord covenants and agrees to maintain standard fire and extended
coverage insurance covering the Building in an amount not less than eighty
percent (80%) of the replacement cost thereof. 
Tenant covenants and agrees to maintain standard fire and extended
coverage insurance covering its property located in, on or about the Premises
in an amount not less than eighty percent (80%) of the replacement cost
thereof.  Tenant agrees that said
property is kept in the Premises Tenant’s sole risk.

 

Tenant assumes full responsibility for protection of the Premises from
theft, robbery, and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secured after normal business hours.

 

16. LIABILITY.

Tenant agrees to
indemnify and save Landlord harmless against any and all claims, demands,
damages, costs and expenses, including reasonable attorney’s fees for the
defense thereof, arising from the conduct or management of the business
conducted by Tenant in the Premises or 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 from any act or negligence of Tenant, its agents,
contractors, servants employees, subleases, concessionaires, licenses or
invitees, or any other person entering upon the Premises under express or
implied invitation of Tenant.  In case
of any action or proceeding brought against Landlord by reason of any such
claim upon notice from Landlord, Tenant covenants to defend such action or
proceeding by counsel satisfactory to Landlord.  Landlord shall not be liable and Tenant waives all claims for
damage to person or property sustained by Tenant or Tenant’s agents,
contractors, servants, employees, subleases, concessionaires, licensees or
invitees resulting from the Building or the Premises or any equipment or
appurtenances thereunto appertaining becoming out of repair, or resulting from
any accident in or about the Premises, the Project or resulting directly or
indirectly from any act or neglect of any other Tenant in the Project.  This shall apply expressly, but not
exclusively, to the flooding of the Premises, and to damage caused by
refrigerators, sprinkling devices, air-conditioning apparatus, water, snow,
frost, steam, excessive heat or cold, falling plaster, broken glass, sewage,
gas, odors and noise, or the bursting or leaking of pipes or plumbing
fixtures.  Tenant, at its sole cost and
expense, shall procure and maintain throughout the term hereof a policy or
policies of insurance.  Insuring both
Landlord and Tenant against all claims, demands or actions arising out of or in
connection with Tenant’s use or occupancy of the Premises, or by the condition
of the Premises, the limits of such policy or policies to be in an amount not
less than $1,000,000.00 combined single limits of liability, and to be written
by insurance companies satisfactory to Landlord and qualified to do business in
the state in which the Premises are located. 
Such policies or duly executed certificates of insurance shall be
promptly delivered to Landlord and renewals thereof as required shall be
delivered to Landlord at least ten (10) days prior to the expiration of the
respective policy terms, shall contain an agreement by the insurer that the
same may not be canceled or materially modified without at least ten (10) days
prior written notice to Landlord.

 

17. CONDEMNATION.

A. If the entire Project is taken by eminent domain, this Lease shall
automatically terminate as of the date of taking.  If a material portion of the Project is taken by eminent domain,
Landlord shall have the right to terminate this Lease by giving written notice
thereof to Tenant within ninety (90) days after the date of taking.  “If a material portion of the Premises is
taken by eminent domain and this Lease is not thereby terminated, Landlord
shall, at its expense, restore the Premises, exclusive of any improvements or
other changes made to the Premises by Tenant, to as near the condition which
existed immediately prior to the date of taking as reasonably possible, and
rent shall abate during such period of

 

5

 

time as the Premises are untenantable in the proportion that the
untenantable portion of the Premises bears to the entire Premises.

 

B. Any compensation or award paid or payable on account of any such
taking shall belong to, and be the sole property of, Landlord or the then owner
or owners of the Project.

 

18.  SURRENDER OF POSSESSIONS, HOLDING
OVER.

At the expiration
or earlier termination of the term of this Lease, Tenant shall return all keys
to the Premises to Landlord and shall surrender the Premises in good condition
and repair, except for reasonable wear and tear, any repairs specifically
required herein to be performed by Landlord and loss by fire or other causes
covered by Landlord’s insurance.  Should
Tenant, or any of its successors in interest, holdover the Premises or any part
thereof, after the expiration of the term of this Lease, without Landlord’s
written consent, such holding over shall, at the Landlord’s option, constitute
and be construed as a tenancy from month to month only, at a rental equal to
twice the rental payable for the last month of the term of this Lease.  The inclusion of the preceding sentence
shall not be construed as Landlord’s permission for Tenant to hold over.

 

19.  QUIET ENJOYMENT.

Landlord represents and warrants that it has full rights and authority
to enter into this Lease and that Tenant, upon paying the rental herein set
forth and performing its other covenants and agreements herein set forth, shall
peaceably and quietly have, hold and enjoy the Premises for the term hereof
without hindrance or molestation from Landlord, subject to the terms and provisions
of this Lease.

 

20.  EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of
default under this Lease:

 

A. If Tenant fails to
pay, when due, any installment of Base Rent or Tenant’s share of operating
costs or any other payment required to be by Tenant paid hereunder.

 

B. If Tenant fails to perform or comply with any of the other terms,
conditions and obligations of this Lease.

 

C. If a writ of execution, attachment or other process of law shall
cause levy on or against the property of Tenant or a receiver or trustees shall
be appointed for all or substantially all of the assets of Tenant;

 

D. If Tenant shall become insolvent, or shall make a transfer in fraud
of creditors, shall admit in writing its inability to pay its debts as they
become due, or shall commence any proceeding or file a petition under the
provisions of the Federal Bankruptcy Code for liquidation, reorganization or
adjustment of debts, or under any insolvency law or other statute or law
providing for the modification or adjustment of the rights of creditors, or
shall file an answer admitting to or not contesting the material allegations of
a petition filed against it in any such proceeding, or an order for relief
shall be entered by a federal Bankruptcy Court in any such proceeding or Tenant
shall not, within sixty (60) days after the commencement of any such proceeding
or the filing of any such petition without its consent, have the same dismissed
or vacated, or shall consent to the appointment of a custodian (as that term is
defined in the Federal Bankruptcy Code) for, or assignment  to a custodian of, the whole or any
substantial part of its properties, or shall not, within sixty (60) days after
such an appointment or assignment without its consent or acquiescence, have
such appointment or assignment vacated or set aside;

 

E. If Tenant shall vacate or abandon the Premises or the Premises shall
become vacant; or

 

F. If Tenant shall have been notified by Landlord of a default by
Tenant under this Lease more than three (3) times in any calendar year.

 

21. REMEDIES.

Upon the occurrence of any of such events of default described in
Paragraph 20 hereof, Landlord shall have the option to pursue any one or more
of the following remedies without any notice or demand whatsoever:

 

A. Terminate this Lease,
in which event Tenant shall immediately surrender the Premises to Landlord, and
if Tenant fails so to do, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in

 

6

 

rent, enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying the Premises or any part thereof, by force if necessary,
without being liable for prosecution or any claim for damages therefore, and
Tenant agrees to pay to Landlord on demand the amount of all loss and damage
which Landlord may suffer by reason of such termination.  In the event of termination of this Lease as
aforesaid, Landlord may elect to recover from Tenant, as and for liquidated
damages for loss of the bargain and not as a penalty, an amount equal to the
difference between (1) the Base Rent, Tenant’s share of operating costs and
other charges reserved hereunder for the period which otherwise should have
been the balance of the term hereof; and (2) the fair rental value of the
Premises for the balance of such term.

 

B. Enter upon and take possession of the Premises and expel or remove
Tenant and any other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefore, all without terminating this Lease or any of
Tenant’s obligations hereunder.  In such
event, Landlord may make alterations and repairs and redecorate the Premises to
the extent deemed by Landlord necessary or desirable, and may relet the
Premises, or any part thereof, for the account of Tenant, to any person, firm
or corporation, other than Tenant, for such rent, for such time and upon such
terms as Landlord in Landlord’s sole discretion, shall determine.  In so doing, Landlord shall not be required
to accept any tenant offered by Tenant or to observe any instruction given by
Tenant concerning such reletting.  Any
rent and other amounts received by Landlord upon such reletting shall be
applied first to the costs and expenses of Landlord in regaining possession of
the Premises, storing property removed from the Premises, making alterations or
repairs, redecorating the Premises and reletting the Premises including without
limitation, brokerage and attorney’s fees and then such rent and other amounts
shall be applied to the Base Rent, operating costs and other obligations of
Tenant under this Lease, and Tenant agrees to pay to Landlord on demand any
deficiency that may arise by reason of such reletting.

 

C. Enter upon the Premises, by force if necessary, without being liable
for prosecution or any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this Lease, and Tenant agrees to reimburse
Landlord on demand for any expenses which landlord may incur in this effecting
compliance with Tenant’s obligations under this Lease, with interest as
provided in Paragraph 26F hereof, and Tenant further agrees that Landlord shall
not be liable for any damages resulting to Tenant from such action, whether
caused by the negligence of Landlord or otherwise.

 

Pursuit of any of the
foregoing remedies shall not preclude pursuit of any of the other remedies
herein provided or any other remedies provided by law.  Landlord may at any time elect to terminate
this Lease as described in A above despite a prior election to exercise its
remedies under B or C above.  Pursuit of
any remedy herein provided shall not constitute a forfeiture or waver of any
rent due to Landlord hereunder or of any damages accruing to Landlord by reason
of the violation of any of the terms, provisions and covenants herein
contained.  No waiver by Landlord of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other
violation or breach of any of the terms, provisions and covenants herein
contained.  Landlord’s acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default unless Landlord
so notifies Tenant in writing. 
Forbearance by Landlord to enforce one or more of the remedies herein
provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default. 
If, on account of default by Tenant as described in Section 20, it
becomes necessary or appropriate for Landlord to employ or consult with an attorney
concerning or to enforce or defend any of Landlord’s rights or remedies
hereunder, Tenant agrees to pay any reasonable attorneys’ fees and a management
fee in the amount of Three Hundred and no/100 Dollars ($300.00).  No act or thing done by Landlord or its
agents during the term hereby granted shall be deemed an acceptance of the
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless in writing signed by Landlord.

 

22.  LANDLORD’S RIGHT TO CURE.

If Tenant defaults in the
making of any payment or the doing of any act required to make such payment or
do such act, and the costs incurred by Landlord in doing so, with interest
thereon as provided in paragraph 26F hereof, shall be paid by Tenant to
Landlord upon demand.  The making of
such payment or the doing of such act by Landlord shall not operate to cure
such default by Tenant or to prevent or stop Landlord from enforcing or
pursuing any rights and remedies which Landlord would otherwise have.

 

7

 

23.  MORTGAGES.

Tenant accepts this Lease
subject and subordinate to any mortgage(s) and/or deed(s) of trust and/or
ground lease(s) or other underlying lease(s) now or at any time hereafter
constituting a lien or charge upon the Premises, and Tenant shall at any time
hereafter on demand execute any instruments, releases or other documents which
may be required by any mortgagee, trustee or lessor for the purpose of
subjecting and subordinating this Lease to the lien of any such mortgage, deed
of trust, ground leases or other underlying lease.  In the event Tenant fails to comply with any such demand within
ten (10) days following the demand, Tenant shall be deemed to have appointed
Landlord as Tenant’s attorney-in-fact to execute any such instruments, releases
or other documents.  With respect to any
mortgage(s) and/or deed(s) of trust and/or ground lease(s) or other underlying
lease(s) now or at any time hereafter created which constitute a lien or charge
upon the Premises, Landlord at its sole option shall have the right to waive
the applicability of this paragraph so that this Lease would not be subject and
subordinate to such mortgage(s) or deed(s) of trust or ground lease(s) or other
underlying lease(s).

 

24.  NOTICES.

Each provision of this instrument or of any applicable law or
regulation with reference to the sending, mailing or delivery of any notice or
the making of any payment by Landlord or by Tenant to Landlord shall be deemed
to be complied with when and if the following steps are taken:

 

A. All rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at the address herein below set
forth or at such other address as Landlord may specify from time to time by
written notice delivered in accordance herewith.

 

B. Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered, whether actually received or not
when deposited in the United States mail, postage prepaid, certified or
registered mail, addressed to the parties hereto at the respective addresses
set out opposite their names below, or at such other address as they have
theretofore specified by written notice delivered in accordance herewith:

 

8

 

	
  Landlord:

  	
   

  	
   

  	
  Tenant:

  	
   

  
	
   

  	
   

  	
   

  
	
  Hopkins Eleventh Avenue LLC

  	
   

  	
   

  	
  MagStar Technologies, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  7808 Creekridge Circle, #200

  	
   

  	
   

  	
  410 11th Avenue South

  	
   

  
	
   

  	
   

  	
   

  
	
  Minneapolis, MN55439

  	
   

  	
   

  	
  Hopkins, MN 
  55343

  	
   

  

 

C. Any notice or document required or permitted to be delivered
hereunder by Landlord to Tenant also shall be deemed to be delivered if and
when delivered personally to Tenant (or to an agent of Tenant if Tenant is not
an individual) at the Premises.

 

25.  RULES AND REGULATIONS.

Tenant shall use the
Premises and the common areas of the project in accordance with such rules and
regulations as may from time to time be made by Landlord for the general
safety, convenience and comfort of the owners, occupants and tenants of the
project, and shall cause Tenant’s employees, agents, representatives and
invitees to abide by such rules and regulations.  The rules and regulations now in effect are attached hereto as
Exhibit D and are hereby made a part hereof, and Tenant hereby acknowledges
receipt of the same.

 

26.  MISCELLANEOUS.

A. Words of any gender
used in this Lease shall be held and construed to include any other gender, and
words in the singular number shall be held to include the plural, unless the
context otherwise requires.  The
headings of the paragraphs of this Lease are for convenience only and do not
limit or define the contents of said paragraphs.

 

B. The terms, provisions, and covenants and conditions contained in
this Lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns, except as otherwise herein expressly
provided.

 

C. Tenant agrees, within ten (10) days after request of Landlord, or
Landlord’s designee, including without limitation, the present or any future
holder of a mortgage(s) and/or deed(s) of trust and/or ground lease(s) and/or
other underlying lease(s) on the Premises, or any prospective purchaser of the
Premises, an estoppel certificate stating that this Lease is in full force and
effect, the date to which rent and other charges have been paid, the unexpired
term of this Lease, whether or not Landlord is in default hereunder, and the
nature of any such default, and such other matters pertaining to this Lease as
may be reasonably requested by Landlord.

 

D. If any term, provision
or covenant of this Lease or the application thereof to any person or
circumstances shall, to any extent, be held to be invalid or unenforceable, the
remainder thereof and the application of such term, provision or covenant to
other persons or circumstances shall not be affected thereby, and this Lease
and all the terms, provisions and covenants hereof shall, in all other
respects, continue to be valid and enforceable and to be complied with to the
full extent permitted by law.

 

E. This Lease may not be altered, changed or amended except by an
instrument in writing signed by Landlord and Tenant.

 

F. Base Rent, Tenant’s share of operating costs and all other payments
required of Tenant pursuant to the provisions of this Lease, shall be deemed
rent due hereunder whether or not so designated.  All such rent shall bear interest from the due date thereof (or
from the date of advancement of funds by Landlord if the payment by Tenant is
required by virtue of Landlord’s advancement of funds to cure Tenant’s default
hereunder) until paid at a rate equal to the lesser of (i) the highest rate
permitted by law, and (ii) two (2) percentage points in excess of the reference
rate from time to time announced by First National Bank of Minneapolis.

 

27.  ACCEPTABLE BY LANDLORD.

This Lease shall not be
binding upon Landlord until approved in writing by, and signed by an officer
of, Landlord.

 

                EXECUTED the 19th
day of February, 2003.

 

9

 

	
  LANDLORD:

  	
   

  	
  INDIVIDUAL TENANT:

  
	
   

  	
   

  	
   

  
	
  Hopkins Eleventh Avenue LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  An agent but not an Officer

  	
   

  	
  CORPORATE OR BUSINESS TENANT:

  
	
   

  	
   

  	
   

  
	
  Approved:

  	
   

  	
   

  	
  MagStar Technologies, Inc

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/  Richard F. McNamara

  	
   

  	
  By:

  	
    /s/ James
  L. Reissner

  
	
   

  	
  Its:

  	
    CEO

  	
   

  	
   

  	
  Title:

  	
    CEO

  
	
   

  	
   

  	
   

  
	
  Dated this 19th day of February, 2003 at

  	
   

  	
   

  
	
   

  	
   

  	
  And

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated this 19th day of February,
  2003  at

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
													

 

10Exhibit 10.2

 

Promissory

Note

 

 

February 21, 2003

 

For

value received, I promise to pay to the order of MagStar Technologies, Inc. at

its banking house in 410 11th Avenue So, Hopkins, MN 55343 Five Hundred Ten

Thousand Eight Hundred Fifty One and 97/100 

dollars ($510,851.97)  with

interest at the rate of six percent (6.00%) per annum, from April 1, 2003 until

paid, interest payable at maturity.

 

Upon

any default in the payment of interest or installment, the note shall become

immediately due and payable at the option of the holder hereof.

 

The

makers, endorsers, sureties, and guarantors hereof hereby severally agree to

pay all costs of collection, or a reasonable attorney’s fee in case payment

shall not be made at maturity, and severally waive presentment for payment,

notice of non payment, protest and notice of protest, and diligence in

enforcing payment or bringing suit against any party hereto.  The endorsers, sureties, and guarantors

hereof, hereby severally consent that the time of payment may be extended or

this note renewed from time to time without notice to them and without

affecting their liability hereon.

 

Said

sum to be paid on demand.

 

 

	

   

  	

  By:

  	

  Hopkins Eleventh

  Avenue LLC

  
	

   

  	

   

  
	

   

  	

  /s/ Richard F.

  McNamara

  	

   

  
	

   

  	

  Its CEO

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