Document:

LEASE AGREEMENT

 

Exhibit 10.5

LEASE AGREEMENT

(Office)

	 	 	 	 	 	 	 
	INDEX	 	 	 	 	 	 
	
	 	 	 	 	 	 
	ss	 	SECTION	 	PAGE
	
	 	
	 	

	1.	 	
Summary of Terms and Certain Definitions
	 	 	1	 
	2.	 	
Certain Definitions
	 	 	2	 
	3.	 	
Premises
	 	 	2	 
	4.	 	
Construction of the Base Building
	 	 	3	 
	5.	 	
Tenant Improvements; Tenant Allowance
	 	 	7	 
	6.	 	
Term
	 	 	9	 
	7.	 	
Permitted Use
	 	 	10	 
	8.	 	
Minimum Annual Rent
	 	 	10	 
	9.	 	
Operation of Property; Payment of Expenses
	 	 	11	 
	10.	 	
Compliance with Laws
	 	 	17	 
	11.	 	
Signs
	 	 	19	 
	12.	 	
Alterations and Fixtures
	 	 	21	 
	13.	 	
Mechanics’ Liens
	 	 	22	 
	14.	 	
Landlord’s Right of Entry
	 	 	22	 
	15.	 	
Damage by Fire or Other Casualty
	 	 	23	 
	16.	 	
Condemnation
	 	 	24	 
	17.	 	
Non-Abatement of Rent
	 	 	25	 
	18.	 	
Indemnification
	 	 	25	 
	19.	 	
Waiver of Claims
	 	 	25	 
	20.	 	
Quiet Enjoyment; Warranty of Title
	 	 	26	 
	21.	 	
Assignment and Subletting
	 	 	26	 
	22.	 	
Subordination
	 	 	27	 
	23.	 	
Recording; Tenant’s Certificate
	 	 	28	 

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	24.	 	
Surrender; Abandoned Property
	 	 	28	 
	25.	 	
Curing Tenant’s Defaults
	 	 	29	 
	26.	 	
Defaults — Remedies
	 	 	29	 
	27.	 	
Representations of Tenant
	 	 	31	 
	28.	 	
Liability of Landlord
	 	 	32	 
	29.	 	
Interpretation; Definitions
	 	 	32	 
	30.	 	
Notices
	 	 	33	 
	31.	 	
Option to Extend Term
	 	 	35	 
	32.	 	
Expansion Option
	 	 	37	 
	33.	 	
Right of First Offer
	 	 	40	 
	34.	 	
Parking
	 	 	41	 
	35.	 	
Antenna; Satellite Dish
	 	 	41	 
	36.	 	
Tenant’s Option to Terminate
	 	 	42	 
	37.	 	
Termination of Existing Lease
	 	 	42	 
	38.	 	
Standards; Curing Landlord’s Defaults; Set-off
	 	 	43	 
	39.	 	
Hazardous Substances
	 	 	43	 
	40.	 	
Brokerage Fee
	 	 	44	 

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          THIS LEASE AGREEMENT is made by and between LIBERTY PROPERTY LIMITED
PARTNERSHIP, a Pennsylvania limited partnership (“LANDLORD”), with its address
at Suite 390, 330 Second Avenue South, Minneapolis, MN 55401, and ONTRACK DATA
INTERNATIONAL, INC., a corporation organized under the laws of Minnesota
(“TENANT”), with its address at 6321 Bury Drive, Suites 13-21, Eden Prairie,
Minnesota 55436, and is dated as of the date on which this Lease has been fully
executed by Landlord and Tenant.

1. SUMMARY OF TERMS AND CERTAIN DEFINITIONS.

	 	 	 	 	 	 
	 	(a)	“PREMISES”:	 	 Approximate rentable square feet: 80,119 (See Section 2)
	 	 	 	 	 	 
	 	(b)	“BUILDING”:	 	 Approximate rentable square feet: 80,119 (See Section 2)
	 	 	 	 	 	 
	 	(c)	“TERM”:
(ss 5)	 	 One Hundred Twenty (120) months plus any partial  month from the Commencement Date until the first day of the first full calendar month during the Term; See Section 6
	 	 	 	 	 	 
	 	 	(i)	“COMMENCEMENT DATE”: See Section 6
	 	 	(ii)	“EXPIRATION DATE”: See Section 6
	 	 	 	 	 	 
	 	(d)	MINIMUM RENT (ss 8) & OPERATING EXPENSES (ss 9)
	 	 	 	 	 	 
	 	 	(i)	“MINIMUM ANNUAL RENT”:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	Minimum Annual	 	 	 	 	 	 	 	 
	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 	 	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 
	Year	 	Square Foot	 	Annual	 	Monthly	 	Year	 	Square Foot	 	Annual	 	Monthly
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	1
	 	$	9.950	 	 	$	797,184.00	 	 	$	66,432.00	 	 	 	6	 	 	$	10.986	 	 	$	880,187.28	 	 	$	73,348.94	 
	2
	 	$	10.149	 	 	$	813,127.68	 	 	$	67,760.64	 	 	 	7	 	 	$	11.205	 	 	$	897,733.44	 	 	$	74,811.12	 
	3
	 	$	10.352	 	 	$	829,391.88	 	 	$	69,115.99	 	 	 	8	 	 	$	11.429	 	 	$	915,680.04	 	 	$	76,306.67	 
	4
	 	$	10.559	 	 	$	845,976.51	 	 	$	70,498.04	 	 	 	9	 	 	$	11.658	 	 	$	934,027.32	 	 	$	77,835.61	 
	5
	 	$	10.770	 	 	$	862,881.62	 	 	$	71,906.80	 	 	 	10	 	 	$	11.891	 	 	$	952,695.00	 	 	$	79,391.25	 

	 	 	 	 	 	 
	 	 	(ii)	 ESTIMATED “ANNUAL OPERATING EXPENSES”: $289,229.64
(Two Hundred Eighty-nine Thousand Two Hundred
Twenty-nine and 64/100 Dollars) estimated for
calendar year 1999 (based on $3.61 per rentable
square foot), payable in monthly installments of
$24,102.47 (Twenty-four Thousand One Hundred Two and
47/100 Dollars), subject to adjustment (ss 9(a))
	 
	 	(e)	“PROPORTIONATE SHARE” (ss 9(a)): 100% (Ratio of approximate
rentable square feet in the Premises to approximate rentable
square feet in the Building)
	 
	 	(f)	“USE” (ss 4): See Section 7
	 
	 	(g)	CONTENTS: This Lease consists of the Index, pages 1 through 45
containing Sections 1 through 40 and the following, all of
which are attached hereto and made a part of this Lease:

	 	 	 	 
	 	Exhibits: “A” — Site Plan	 	
“A-1” — Legal Description
	 	“B” — Commencement Certificate Form	 	
“C” — Building Rules
	 	“D” — Cleaning Schedule	 	
“E” — Estoppel Certificate Form
	 	“F-1” — Scope Drawings	 	
“F-2” — Architectural Standards
	 	“F-3” — Minimum Shell Condition Requirements	 	
“G” — Exclusions from Operating Expenses
	 	“H” — Substantial Completion Items	 	
“I” — Existing Title Encumbrances
	 	“J” — Environmental Information	 	 

2

 

2. CERTAIN DEFINITIONS. In this Lease:

“BUILDING” means the building in which the Premises are located.
“LAND” means that portion of the land on which the Project is situated
allocated to the Building, Building parking, Building driveways, Building
setbacks, landscaping, signage and green space. That portion of the Project
area included in the “Land” shall generally be the area south of the line
designated “Limit of Building A Land” on the Site Plan. The Land shall not
include (i) excess land in the Project being held by Landlord for future
development or otherwise not properly attributable to the Building and its
amenities as provided above and (ii) the ponding area as identified and
delineated on the Site Plan as the “Excluded Pond Area.” At the request of
either party following substantial completion of the Base Building and Site
Improvements, Landlord and Tenant shall enter into a written agreement
stipulating as to the precise boundaries of the Land, the square footage of the
Land (exclusive of the pond area described above) and the square footage of the
land included in the tax parcel of which the Land is then a part.

“PREMISES” means approximately 80,119 rentable square feet (subject to
confirmation as provided in Section 4(g) below), consisting of 100% of the
rentable square footage of the Building identified as Building A on the Site
Plan, which Building will be constructed by Landlord in accordance with the
terms and provisions of this Lease.

“PROJECT” means the Flying Cloud Corporate Campus, a business park consisting
of one or more buildings that may be developed by Landlord in accordance with
the Site Plan on a portion of the property legally described on attached
EXHIBIT AA-1”.

“PROPERTY” means the Building and the Land.

“SITE PLAN” means the Site Plan attached to this Lease as EXHIBIT “A”. Landlord
shall not make any alterations to the Site Plan materially and adversely
affecting Building A or the parking, access or other amenities serving Building
A, without Tenant’s prior written consent.

“TENANT’S PROPORTIONATE SHARE” means the percentage obtained by dividing the
rentable square footage of the Premises (as the same may expand or contract
pursuant to the provisions of this Lease) by the rentable square footage of the
Building or Buildings in which the Premises are located. Tenant’s initial
Proportionate Share is 100%.

3. PREMISES.

Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises, together with the nonexclusive right with Landlord and
other occupants of the Building to use all areas and facilities provided by
Landlord for the use of all tenants in the Property including any lobbies,
hallways, driveways, sidewalks and parking, loading and landscaped areas

3

 

(the “COMMON AREAS”). So long as Tenant is leasing 100% of the rentable square
footage of the Building, Tenant shall have the exclusive use of those Common
Areas exclusively serving the Building, subject only to Landlord’s rights of
access and use contemplated in this Lease. So long as Tenant is leasing at
least 75% of the rentable square footage of the Building, Landlord will not
make any material alterations to the Common Areas without Tenant’s consent,
which consent shall not be unreasonably withheld, conditioned or delayed.

4. CONSTRUCTION OF THE BASE BUILDING.

          (a) LANDLORD’S CONSTRUCTION OBLIGATION. Landlord shall construct the base
building (“Base Building”) and related site improvements, including, but not
limited to, grading, parking areas, access drives, sidewalks, monument signs to
be constructed by landlord under this Lease and landscaping (the “Site
Improvements”) substantially in accordance with the “Approved Plans” (as
defined below) in accordance with the terms and conditions of this Section 4.
All construction shall be done at Landlord’s expense in a good and workmanlike
manner, free of mechanic’s liens that are not promptly discharged, and shall
comply in all material respects with all applicable laws codes, regulations,
rules and requirements of the governmental authorities having jurisdiction, as
applied, enforced and interpreted as of the date the building permit is issued,
including, but not limited to, all requirements of Title III of the ADA as
applicable to commercial facilities.

          (b) PLAN APPROVAL PROCESS. Landlord and Tenant have approved the following
preliminary plans and specifications for the Base Building and Site
Improvements (the “Preliminary Plans”): (1) Scope Drawings listed on attached
EXHIBIT “F-1”, Architectural Standards listed on attached EXHIBIT “F-2”, and
the Minimum Shell Condition Requirements listed on attached EXHIBIT “F-3”. To
the extent there is any conflict between the Scope Drawings or the
Architectural Standards and the Minimum Shell Condition Requirements, the
Minimum Shell Condition Requirements shall control. During the design process,
Landlord and Tenant will hold at least bi-weekly status meetings consisting of
the respective team managers and other appropriate personnel. Landlord will
endeavor to provide Tenant, on or before the date that is 60 days after the
date of this Lease, detailed plans and specifications for the construction of
the Base Building and Site Improvements (the “Construction Plans”). The
Construction Plans shall be consistent with the Preliminary Plans. Within 8
business days after its receipt of the Construction Plans (or receipt of any
modified Construction Plans as provided below), Tenant shall notify Landlord of
its approval or disapproval of the Construction Plans (which approval shall not
be unreasonably withheld), and if Tenant disapproves the Construction Plans,
the revisions that Tenant requires in order to obtain such approval. It is
agreed that Tenant will not object to Construction Plans to the extent that
they conform to the Preliminary Plans; without limiting the foregoing,
specifications included in the Construction Plans shall be consistent with the
high quality materials (taking into account useful life, future operating costs
and maintenance) contemplated in the Preliminary Plans. As promptly as
reasonably possible thereafter, but no later than 30 days after Tenant’s
response, Landlord shall submit to Tenant modified Construction Plans
incorporating appropriate revisions. Tenant’s approval of the final
Construction Plans shall be evidenced by the signature of Tenant’s authorized
representative on the top of each sheet of the

4

 

approved construction drawings and specifications. The approved construction
drawings and specifications are herein termed the “Approved Plans”. If within
the time periods provided above Tenant fails to approve or disapprove any
submittal from Landlord to Tenant, said submittal shall be deemed approved.
Once approved by Tenant, Landlord will not change any of the Approved Plans
without Tenant’s consent, which consent shall not be unreasonably withheld,
conditioned or delayed provided such change is not material to the design or
quality of the Base Building or Site Improvements; if such change is material
to the design or quality of the Base Building or Site Improvements, Tenant may
withhold its consent in Tenant’s sole discretion.

          (c) CONSTRUCTION DEADLINES; REMEDIES. Landlord shall cause the Base
Building and Site Improvements to be substantially completed in accordance with
the requirements of Section 4(a) above on or before MAY 1, 1999, subject only
to (1) any delay caused by Tenant (“Tenant Delay”) or (2) any delay caused by
Force Majeure (as defined below).

          If Landlord fails to so substantially complete the Base Building and Site
Improvements on or before MAY 1, 1999 (as the same may be extended as a result
of any Tenant Delay or delay caused by Force Majeure), then Tenant shall
receive, for the first 30 days of such delay, two (2) days of gross free rent
for each day of such delay, and after first 30 days of such delay, Tenant shall
receive three (3) days of gross free rent for each day of delay beyond the
initial 30-day delay. In addition, Tenant shall have the right to hold over in
Tenant’s Existing Premises (as defined in Section 37 below), at the same rent
and on all of the same terms as provided in Tenant’s Existing Lease (as defined
in Section 37 below), until the Commencement Date of this Lease. The foregoing
shall be Tenant’s sole and exclusive remedies for any delay in the substantial
completion of the Base Building. During any “free rent” period described above,
Tenant shall be obligated to pay for all utilities used by Tenant.
For purposes of this Section “Force Majeure” delays shall mean the time
lost by Landlord or Landlord’s contractors, subcontractors or suppliers due to
floods, fire, tornado, earthquake or other casualties or natural disasters, war
or national emergency, governmental restrictions and limitations or any cause
similar to the foregoing beyond the reasonable control of Landlord or
Landlord’s contractors, subcontractors or suppliers, except that the term
“Force Majeure” delays shall expressly exclude delays due to snow, cold weather
or similar adverse weather conditions, strikes or other labor troubles or due
to scarcity or unavailability of fuel, labor or materials (unless directly
related to one of the expressly enumerated causes above).

          For purposes of this Section 4, “substantial completion” shall be deemed
to have occurred as of the date Landlord provides Tenant a notice of
substantial completion enclosing: (1) a certificate of substantial completion
signed by Landlord’s architect and certifying to Tenant that the Base Building
and Site Improvements have been completed in accordance with the Approved Plans
except for enumerated punch list items, and (2) a copy of a certificate of
occupancy (temporary or permanent) issued by the City of Eden Prairie for the
Base Building. The foregoing notwithstanding, substantial completion shall not
be deemed to occur unless the minimum requirements listed on attached EXHIBIT
“H” are satisfied. Completion of landscaping, monument

5

 

signs, and completion of the final wearing course of the parking lot shall not
be deemed requirements of substantial completion, but Landlord shall
nevertheless complete such items following substantial completion with
reasonable diligence (but no later than July 1, 1999 unless Landlord and Tenant
otherwise agree) in accordance with the requirements of Section 4(a) above.
Moreover, clause (2) in the first sentence of this paragraph notwithstanding,
and provided that all other conditions of substantial completion set out in
this paragraph are satisfied, the Base Building and Site Improvements shall be
deemed substantially complete if Landlord has satisfied all conditions to
obtaining a certificate of occupancy as such conditions pertain to Landlord’s
construction obligations, and the sole reason for a delay in the issuance of
such a certificate is unfinished Tenant improvements or fixturing.

          Upon Landlord’s delivery to Tenant of a proper notice of substantial
completion, Landlord and Tenant shall jointly perform an inspection of the Base
Building and identify any incomplete items or other elements of work not
materially conforming to the Approved Plans. The list resulting from such
inspection shall be deemed the “punch list.” If Landlord has not completed the
punch list items within 45 days of substantial completion or within such
additional reasonable time as may be necessary provided Landlord is proceeding
with all due diligence to cause such punch list items to be corrected, then
Tenant may complete such punch list items and Landlord shall reimburse Tenant
for Tenant’s cost of completion, plus an administrative fee of 10% of the cost
thereof.

          (d) APPROVAL & CONSTRUCTION CONTINGENCIES. In the event Landlord has not
received all necessary governmental approvals for the development of the site
and the construction of the Base Building and Site Improvements and commenced
construction (meaning the commencement of construction of the Building
footings) of the Base Building on or before JANUARY 1, 1999, either Landlord or
Tenant may terminate this Lease by giving written notice of termination to the
other. Landlord shall use all reasonable efforts to obtain such approvals and
commence construction on or before January 1, 1999.

          If either party so terminates the Lease, Tenant shall have the right to
remain in Tenant’s Existing Premises (as defined in Section 37 below) pursuant
to Tenant’s Existing Lease (as defined in Section 37 below) for any period up
to and including June 30, 2000, at the rental rate provided under the Existing
Lease, or, if such holdover continues beyond the scheduled expiration of the
Existing Lease, at the rental rate in effect at the time of such scheduled
expiration, without any “holdover” increase or premium. In such event, the
Existing Lease shall terminate at 11:59 p.m. on June 30, 2000, or such earlier
date as Tenant may state in a notice of termination given by Tenant to Landlord
at least 90 days prior to the stipulated termination date, which date shall be
the last day of a month.

          If either party so terminates the Lease, Landlord shall reimburse Tenant
for the following costs: (i) the following actual out-of-pocket costs incurred
by Tenant in connection with the Premises or this Lease: costs of architectural
and engineering services, real estate consultant fees, project management fees,
telecommunications costs, planning costs, and (ii) reasonable costs of

6

 

construction within the Existing Premises (including leasehold improvements
[excluding trade fixtures and equipment] installed in the Existing Premises but
constructed or assembled off-site, such as millwork or specialty items) to
making the Existing Premises suitable for the holdover period.

          (e) CHANGE ORDERS. If Tenant requests Landlord’s approval of a change
order to modify any portion of Landlord’s work from that shown on the Approved
Plans (“Change Order”), Landlord’s approval of the Change Order will not be
unreasonably withheld provided the requested change does not result in a
material change in the quality or character of the Project. Landlord shall
respond to any such Tenant proposed Change Order with reasonable promptness
taking into consideration the complexity of the proposal. If Landlord approves
a requested Change Order, Landlord shall prepare and submit to Tenant a written
certification of the Change Order (the “Verification”), which shall state the
amount, if any, of the increase or decrease in the cost (which shall be the
actual costs or savings to Landlord) of Landlord’s work as set forth in the
Approved Plans. The Verification will also state Landlord’s reasonable estimate
of any delays in completion of Landlord’s work expected to result from the
Change Order. Within five business days after Tenant’s receipt of the
Verification, Tenant shall approve or reject the same in writing. If the
requested Change Order results in an increase in Landlord’s cost or a delay in
the completion of Landlord’s work, Tenant shall acknowledge in writing its
consent to the increase and/or delay and to the Change Order before Landlord
shall be obligated to do the work contemplated by the Change Order. If the
increase and/or delay is so approved by Tenant, 90% the amount of the increase
will be paid by Tenant to Landlord within 10 days after completion of the work
covered by the Change Order, with the balance to be paid upon final completion
of the Base Building; savings, if any, resulting from any particular Change
Order shall be netted against the total increases resulting from Change Orders.
If any Change Order requires an additional period of time for completion of
Landlord’s Work, all completion deadlines relating to Landlord’s construction
obligations will be extended by that same period of time, provided, if Tenant
approves a Change Order, Landlord will be bound by the time frames and amounts
set out in the Verification. Approved Change Orders shall be deemed to be a
part of the Approved Plans.

          (f) PRE-COMPLETION TRANSFER OF LANDLORD’S INTEREST. Landlord shall not
sell, transfer or otherwise assign any interest in this Lease or in the
Building or Land prior to Substantial Completion of the Base Building without
first obtaining the written consent of Tenant. The foregoing shall not apply to
a transfer to any successor to the interest of Landlord by merger, a transfer
to any entity acquiring substantially all of the assets of Landlord, or a
transfer to any entity controlled by, controlling or under common control with
Landlord or Liberty Property Trust, all of which may proceed without Tenant’s
consent, provided such transfer shall not release Landlord of its obligations
hereunder.

          (g) CERTIFICATION AS TO “AS BUILT” SQUARE FOOTAGE. Prior to the
Commencement Date, Landlord will cause Landlord’s architect to determine the
actual rentable square footage of the Building as constructed, and to deliver
to Landlord and Tenant an appropriate certificate certifying to the as-built
rentable square footage. Such certificate will be conclusive unless objected to
by

7

 

Landlord or Tenant by written notice to the other party given within 30 days
after receipt of the certificate. If the as-built rentable square footage is
greater than or less than the 80,119 stipulated in Section 1(b), the Minimum
Annual Rent shall be adjusted, as appropriate, based on the Minimum Annual Rent
Per Square Foot set forth in Section 1(d)(i). In such event, Landlord and
Tenant shall enter into an amendment of this Lease setting forth the as-built
rentable square footage of the Building and the adjusted schedule of Minimum
Annual Rent. Rentable square footage shall be measured in accordance with
Building Owners and Managers Association (BOMA) measurement standards for full
floor tenants.

          (h) LANDLORD’S CONSTRUCTION WARRANTY. Landlord warrants to Tenant for a
period commencing on the date of substantial completion of the Base Building
and Site Improvements and ending one year later that the Base Building and Site
Improvements will be free from improper or defective workmanship and materials.
Landlord further warrants to Tenant for a period commencing on the date of
substantial completion of the Base Building and Site Improvements and ending
one year later that there will be no material defect in the Base Building or
Site Improvements, or any portion thereof, caused by a failure to design the
Base Building or Site Improvements, or any portion thereof, in accordance with
all applicable codes, laws, ordinances, regulations and professional standards
of care in force and as interpreted as of the date of this Agreement.
5. TENANT IMPROVEMENTS; TENANT ALLOWANCE.

          (a) BASE BUILDING STATUS; ACCESS FOR TENANT IMPROVEMENTS. On or about the
date (the “TENANT ACCESS DATE”) that construction of the Base Building has
progressed to the point that Tenant and Tenant’s Agents may proceed with the
construction of the Initial Tenant Improvements without any material
interference with or delay in the construction of the Initial Tenant
Improvements resulting from any uncompleted Landlord’s work or the construction
activities of Landlord or Landlord’s Agents that cannot be resolved by
reasonable mutual cooperation and sequencing of activities, Landlord shall so
notify Tenant. Landlord shall cause the Tenant Access Date to occur on or
before MARCH 1, 1998, subject to extension only for Tenant Delays or any delay
resulting from Force Majeure. From and after the Tenant Access Date, Tenant and
Tenant’s Agents shall have continuous non-exclusive access to the Premises on
the terms described above, at Tenant’s own risk, expense (except as expressly
provided herein) and responsibility, for the construction of the Initial Tenant
Improvements without material interference from Landlord or Landlord’s Agents.
Tenant and Tenant’s Agents will consult and cooperate with Landlord’s general
contractor regarding the scheduling of Tenant’s work so as to coordinate
Tenant’s activities after the Tenant Access Date with any Base Building work
still being performed by Landlord’s general contractor and to prevent any
interference on the part of Landlord’s Agents with Tenant’s work and on the
part of Tenant’s Agents with Landlord’s work. The foregoing notwithstanding,
during that portion of the pre-Commencement Date period starting with the date
that is 60 days after the Tenant Access Date Tenant shall have exclusive access
to the Premises (other than access on the part of Landlord or its Agents to
complete punchlist items,

8

 

conduct inspections, or complete any items of unfinished work provided such
access does not interfere with or delay Tenant’s work).

          In connection with such access prior to the Commencement Date, Tenant
shall abide by the terms and conditions of this Lease including carrying the
insurance specified by the Lease, as if the term of this Lease had already
commenced, except that Tenant shall have no obligation to pay the Minimum
Annual Rent, Annual Operating Expenses or utilities until the Commencement Date
(as defined below).

          During such pre-Commencement Date access, Landlord shall provide Tenant,
without charge, utilities, heat, air conditioning (when reasonably required by
Tenant), general building security, and staging areas. Tenant shall be
responsible at its expense for all trash removal directly related to the
construction of the Initial Tenant Improvements or Tenant’s furnishing and
equipping the Premises.

          (b) TENANT IMPROVEMENTS. Landlord is responsible for completion of the
Base Building and Site Improvements in accordance with the Approved Plans on
the terms and conditions set forth in this Lease. All other improvements in and
to the Premises required by Tenant shall be completed by Tenant and its
contractor(s), at Tenant’s sole expense (subject to reimbursement in the amount
of the Tenant Improvement Allowance as provided in this Section 5), in
accordance with plans and specifications approved in writing by Landlord, which
approval will not be unreasonably withheld, delayed or conditioned (the
“Initial Tenant Improvements”). Tenant shall comply with Sections 12 and 13 of
this Lease and the following conditions with respect to the Initial Tenant
Improvements:

                    (i) Tenant shall obtain Landlord’s approval of Tenant’s general
contractor, which approval shall not be unreasonably withheld, conditioned or
delayed;

                    (ii) at least ten (10) days prior to commencement of construction, Tenant
shall deliver to Landlord a certificate of insurance for each of Tenant’s
contractors evidencing adequate insurance coverage naming Landlord as
additional insured;

                    (iii) all construction shall be done in a good and workmanlike manner and
shall comply at the time of completion with all Laws and Requirements (as
defined in Section 10(a)). Tenant shall deliver to Landlord copies of all
certificates of occupancy, permits and licenses required to be issued by any
authority in connection with Tenant’s construction.

          (c) TENANT IMPROVEMENT ALLOWANCE. Landlord shall provide Tenant a tenant
improvement allowance (the “Tenant Improvement Allowance”) in an amount equal
to $4.50 per rentable square foot of the Premises toward Tenant’s actual,
out-of-pocket costs incurred for design, architectural, engineering and other
fees (including consulting and project management fees) related to, and for the
hard costs of construction of, the Initial Tenant Improvements. The Tenant
Improvement Allowance shall be disbursed by Landlord in a manner consistent
with typical

9

 

construction draw procedures; Tenant may submit draw requests not more
frequently than monthly, such requests to be accompanied by such reasonable and
customary documentation as Landlord may require, including lien waivers. Draws
may commence at any time after Lease execution, but may only be submitted for
expenses actually incurred by Tenant. If Landlord defaults in the payment of
the Tenant Improvement Allowance, and such default continues for 5 business
days after written notice of default given by Tenant to Landlord, Tenant may
set off amounts due and unpaid (together with interest at the rate provided in
this Lease) against the installment(s) of Minimum Annual Rent next due.

6. TERM.

     (a)  COMMENCEMENT DATE. This Lease, and the obligation to pay Minimum
Annual Rent and additional Rent hereunder (subject to any rent-free period as
provided under Section 4(c) above), shall commence on the date (the
“Commencement Date”) that is the earlier to occur of:

          (i) The Monday following Tenant’s occupancy of substantially all of the
Premises for the purpose of conducting Tenant’s business in and from the
Premises (Tenant plans to move into and occupy the Building in phases over
several weeks and the fact that Tenant occupies and opens for business in a
part, but less than substantially all, of the Premises shall not in itself
trigger Lease Commencement);

          (ii) If Tenant uses a contractor other than Landlord’s Base Building
general contractor for the construction of the Initial Tenant Improvements, the
later of (1) 120 days after the Tenant Access Date, or (2) 60 days after the
substantial completion of the Base Building and Site Improvements, it being the
intent of the parties that if Tenant uses a contractor other than Landlord’s
general contractor, Tenant shall have nonexclusive and unrestricted (subject to
the provisions of Section 5(a) above) access to the Premises for the 60-day
period from 120 days to 60 days prior to the Commencement Date and exclusive
access to the Premises (other than access on the part of Landlord or its Agents
to complete punchlist items, conduct inspections, or complete any items of
unfinished work provided such access does not interfere with or delay Tenant’s
work) for the 60-days preceding the Commencement Date.

          (iii) If Tenant uses Landlord’s general contractor for the construction of
the Initial Tenant Improvements, the later of (i) the first Monday following
the date that is 60 days after the date of substantial completion of the
Initial Tenant Improvements (exclusive of the installation of the Tenant’s
equipment, furniture and personal property; this work is contemplated to occur
during the 60-day period following the substantial completion of the Initial
Tenant Improvements), or (ii) the date of substantial completion by Landlord of
the Base Building and Site Improvements. Tenant shall use all reasonable
diligence to cause substantial completion of the Initial Tenant Improvements
(exclusive of the installation of the Tenant’s equipment, furniture and
personal property; this work is contemplated to occur during the 60-day period
following the substantial completion of the Initial Tenant Improvements) to
occur within 60 days of the Tenant Access Date. Without limiting the foregoing,
If Tenant uses Landlord’s general contractor for the

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construction of the Initial Tenant Improvements, Tenant shall contract with
Landlord’s general contractor, and provide Landlord’s general contractor with
construction plans and specifications, material selections and other
appropriate information sufficiently in advance of the Tenant Access Date so
that such general contractor can commence construction of the Initial Tenant
Improvements as of the Tenant Access Date and proceed with construction without
delay resulting from failure of Tenant to timely approve plans or select
materials. Tenant’s construction contract shall obligate such general
contractor to substantially complete the Initial Tenant Improvements within 60
days of the Tenant Access Date. If construction of the Initial Tenant
Improvements is delayed as a result of any such delay caused by Tenant, the
Commencement Date shall be the date this Lease would have commenced but for
such delay.

     The 60-day period for completion of the Initial Tenant Improvements
contemplated in subsections (ii) and (iii) above shall be extended for delay
resulting from Force Majeure events, applying to Tenant the same definition of
“Force Majeure” applicable to Landlord under Section 4(c) above.

     (b)  EXPIRATION DATE. The term of this Lease shall expire at 11:59 p.m. on
the last day of the tenth “lease year” (the “Expiration Date”). The first
“lease year” means the period of 12 consecutive full calendar months commencing
on the later of the following two dates (including for the first lease year any
partial month from such date until the first day of the first full calendar
month thereafter): (1) the Commencement Date or (2) the date any “rent free”
period afforded Tenant pursuant to Section 4(c) above expires. Each subsequent
“lease year” means each period of 12 full calendar months thereafter during the
Term. Subject to Section 36 (entitled “Tenant’s Option to Terminate”), the
parties intend that Tenant pay rent for 120 full calendar months
notwithstanding any ‘rent free” period afforded Tenant following the
Commencement Date as a result of construction delays.

     (c)  COMMENCEMENT CERTIFICATE. At Landlord’s request, Tenant shall confirm
the Commencement Date and the Expiration Date by executing a lease commencement
certificate in the form attached as EXHIBIT “B”.

7.     PERMITTED USE. Tenant shall occupy and use the Premises for and only for
general office purposes and/or for any other lawful use permitted under
applicable zoning provided that such use is compatible with and appropriate for
a class A suburban office park in the Minneapolis/St. Paul metropolitan area.
Tenant will use the Premises in such a manner as is lawful, reputable and will
not create a nuisance or otherwise unreasonably interfere with any other
tenant’s normal operations or the management of the Building. Tenant shall not
use or permit the use of any portion of the Common Areas for other than their
intended use.

8.     MINIMUM ANNUAL RENT. Tenant agrees to pay to Landlord the Minimum Annual
Rent in equal monthly installments in the amount set forth in Section l(d) (as
increased at the beginning of each lease year as set forth in Section l(d)), in
advance, on the first day of each calendar month during the Term, without
notice, demand or setoff (except as expressly provided in this Lease), at

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Landlord’s address designated at the beginning of this Lease unless Landlord
designates otherwise (Landlord shall not require Tenant to pay rent to an
address outside of the United States). If the Commencement Date falls on a day
other than the first day of a calendar month, the rent shall be apportioned pro
rata on a per diem basis for the period from the Commencement Date until the
first day of the following calendar month and shall be paid on or before the
Commencement Date.

9. OPERATION OF PROPERTY; PAYMENT OF EXPENSES.

     (a)  PAYMENT OF OPERATING EXPENSES. Tenant shall pay to Landlord the Annual
Operating Expenses in equal monthly installments in the amount set forth in
Section l(d) (prorated for any partial month), from the Commencement Date and
continuing throughout the Term on the first day of each calendar month during
the Term, as additional rent, without notice, demand or setoff (except as
expressly provided in this Lease). Landlord shall apply such payments to the
annual operating costs to Landlord of operating and maintaining the Property
during each calendar year of the Term, which costs may include by way of
example rather than limitation: insurance premiums, fees, Impositions, costs
for repairs, maintenance, service contracts, management and administrative fees
(management and administrative fees shall not exceed 3% of the total Minimum
Annual Rent and Operating Expenses payable by Tenant [excluding Impositions and
excluding utilities separately metered to Tenant], and shall be in the nature
of Avalue added A fee for which services such as accounting, bill-paying and
senior management [i.e. above the level of building manager] are provided),
governmental permits, overhead expenses, costs of furnishing water, sewer, gas,
fuel, electricity, other utility services, janitorial service, trash removal,
security services, landscaping and grounds maintenance, and the costs of any
other items attributable to operating or maintaining any or all of the Property
excluding any costs listed on attached EXHIBIT “G” and any costs which under
generally accepted accounting principles are capital expenditures; provided,
however, that annual operating costs shall include the annual amortization
(over an assumed useful life of fifteen years) of the costs (including
financing charges) of building improvements made by Landlord to the Property
that are required by any governmental authority or, to the extent of the actual
reduction in operating expenses, for the purpose of reducing operating
expenses. The amount of the Annual Operating Expenses set forth in Section 1(d)
represents Landlord’s estimate of Tenant’s share of the estimated operating
costs during the first calendar year of the Term on an annualized basis; from
time to time (but not more than quarterly) Landlord may adjust such estimated
amount if the estimated operating costs increase or decrease. Tenant’s
obligation to pay the Annual Operating Expenses pursuant to this Section 7, and
Landlord’s obligation to refund any overpayments, shall survive the expiration
or termination of this Lease. Landlord and Tenant shall, at the request of
either party, consult with each other regarding the level of services to be
provided by Landlord and standard of maintenance to be observed by Landlord
with a view toward managing and controlling Operating Expenses in a reasonable
and prudent manner consistent with the standards observed with respect to
comparable class A suburban office buildings in the Minneapolis/St. Paul
metropolitan area. In no event shall Landlord be obligated to reduce services
or standards of maintenance below those appropriate and necessary to maintain
the Building and Site Improvements in good condition and repair, consistent
with the maintenance

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standards prevailing among comparable class A suburban office buildings in the
Minneapolis/St. Paul metropolitan area.

          (i) COMPUTATION OF TENANT’S SHARE OF ANNUAL OPERATING COSTS. After the end
of each calendar year of the Term, Landlord shall compute Tenant’s share of the
annual operating costs described above incurred during such calendar year by
(A) calculating an appropriate adjustment, using generally accepted accounting
principles, to avoid allocating to Tenant or to any other tenant (as the case
may be) those specific costs which Tenant or any other tenant has agreed to
pay, (B) subject to the provisions set forth below in this subsection (i),
calculating an appropriate adjustment, using generally accepted accounting
principles, to avoid allocating to any vacant space those specific costs
(limited to costs which may vary depending upon the occupancy level of the
Building) which were not incurred for such space; and (C) multiplying the
adjusted annual operating costs by Tenant’s Proportionate Share. Any adjustment
or “gross up” pursuant to clause (B) shall be determined as follows: If the
Building is not at least ninety-five percent (95%) occupied by tenants during
all or any portion of a calendar year, or if during all or a portion of any
calendar year Landlord is not furnishing to any tenant or tenants any
particular service, the cost of which, if furnished by Landlord, would be
included in Operating Expenses, then Landlord may elect to make an adjustment
for such year of components of Operating Expenses and the amounts thereof which
may vary depending upon the occupancy level of the Building. Provided such
amounts are otherwise properly includable in Operating Expenses, any such
adjustments shall be deemed costs and expenses paid or incurred by Landlord and
included in Operating Expenses for such year, as if the Building had been
ninety-five percent (95%) occupied during the entire calendar year, Landlord
had furnished such service at its expense for the entire calendar year and
Landlord had paid or incurred such costs and expenses for such year.

          (ii) RECONCILIATION. By April 30th of each year (and as soon as practical
after the expiration or termination of this Lease or at any time in the event
of a sale of the Property), Landlord shall provide Tenant with an itemized
statement of the actual amounts included in such annual operating costs for the
preceding calendar year or part thereof, together with a summary of the manner
in which any adjustments made pursuant to Section 9(a)(i) above were computed.
Landlord or Tenant shall pay to the other the amount of any deficiency or
overpayment then due from one to the other or, at Tenant’s option, Landlord
shall credit Tenant’s account for any overpayment. If Landlord has
overestimated annual operating costs for any calendar year by more than 5%,
Landlord shall pay or, at Tenant’s option, credit to Tenant interest on the
amounts over-collected from Tenant at the rate set forth in Section 29 of this
Lease.

     If at any time during a calendar year Landlord materially increases or
decreases Landlord’s estimate of Operating Expenses, Landlord shall, upon
request of Tenant, promptly provide Tenant a detailed written explanation of
the reason for the increase.

     Tenant shall also be entitled at any reasonable time during regular
business hours, but no more than once in each calendar year, after giving to
Landlord at least five (5) business days prior

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written notice, to inspect in Landlord’s business office all Landlord’s records
necessary to satisfy itself that all charges have been correctly allocated to
Tenant, for any of the four (4) calendar years immediately preceding the year
during which such notice is given (throughout the Term Landlord’s books
relating to Operating Expenses shall be maintained on a calendar year basis),
and/or to obtain an audit thereof by an independent certified public accountant
(selected by Tenant with Landlord’s written consent, which shall not be
withheld unreasonably) to determine the accuracy of Landlord’s certification of
the amount of additional rent charged Tenant. In no event shall Tenant be
entitled to audit the books for any calendar year more than once. If it is
determined that Tenant’s liability for additional rent for any such calendar
year is less than the amount which Landlord previously certified to Tenant for
such calendar year, Landlord shall refund promptly to Tenant the amount of the
additional rent paid by Tenant for such calendar year which exceeds the amount
for which Tenant actually is liable, as determined following such audit,
together with interest on such amount at the rate set forth in Section 29 of
this Lease. If it is determined that Tenant’s liability for additional rent for
any such calendar year is greater than the amount which Landlord previously
certified to Tenant for such calendar year, Tenant shall promptly pay to
Landlord the amount of the additional rent payable by Tenant for such calendar
year which exceeds the amount which Tenant had previously paid, as determined
following such audit. Tenant shall bear the total cost of any inspection or
audit of Landlord’s books and records conducted by Tenant, except that if it is
determined that Tenant’s liability for additional rent for such calendar year
is less than ninety-seven percent (97%) of that amount which Landlord
previously certified to Tenant for such calendar year, Landlord shall pay to
Tenant the cost of such audit (provided, however, that Landlord shall not be
required to pay the cost of any audit based on a contingency fee or percentage
of the amount recovered for Tenant).

     (b)  IMPOSITIONS. As used in this Lease the term “Impositions” refers to
all levies, taxes (including sales taxes and gross receipt taxes) and
installments of assessments (including interest thereon), which are applicable
to the Term, and which are imposed by any authority or under any law, ordinance
or regulation thereof, and the reasonable cost of contesting any of the
foregoing, upon or with respect to the Property or any part thereof, or any
improvements thereto. Except as provided below, Tenant shall pay to Landlord
with the monthly payment of Minimum Annual Rent any Imposition imposed directly
upon this Lease or the Rent (defined in Section 9(g)) or amounts payable by any
subtenants or other occupants of the Premises, or against Landlord because of
Landlord’s estate or interest herein. Tenant’s Proportionate Share of real
estate taxes and installments of special assessments payable therewith with
respect to the Property shall be paid by Tenant to Landlord on or before the
later of: (1) 15 days after Landlord furnishes Tenant a copy of the tax
statement received from the taxing authority, or (2) 20 calendar days prior to
the due date of the semi-annual installments of such real estate taxes and
special assessments. Notwithstanding any provision to the contrary in this
Lease, Tenant shall not be obligated to pay for any special assessments
relating to the acquisition, original construction or development (including
any special assessments or similar taxes levied as a condition of municipal
approvals) of the Building, Site Improvements or Project, or any special
assessments levied or pending as of the date of this Lease.

14

 

     Tenant acknowledges that the Property might not constitute a separate and
discrete tax parcel. In such event, Tenant shall pay Tenant’s Proportionate
Share of the sum of the Land Tax Cost and the Building Tax Cost, as defined and
determined below. “Land Tax Cost” shall mean the total real estate taxes
payable in the year in question allocable to all of the land (exclusive of
ponding areas as provided below) included in the tax parcel of which the Land
is a part (based on the assessed value of all of the land [exclusive of
buildings] included in the tax parcel of which the Land is a part and shown on
the applicable tax statement), prorated to the Land on a strict land-area
[exclusive of ponding areas as provided below] square footage basis. “Building
Tax Cost” shall mean the total real estate taxes payable in the year in
question allocable to all of the buildings included in the tax parcel of which
the Building is a part (based on the total assessed value of the buildings
[exclusive of land] included in said tax parcel and shown on the applicable tax
statement) multiplied by a fraction, the numerator of which is the assessor’s
estimated value of the Building, and the denominator of which is the assessor’s
estimated value of all of the buildings included in the overall tax parcel.
Landlord shall fully disclose to Tenant the assessor’s allocation of the total
building portion of the taxes among the various buildings included in the tax
parcel, as and when such information is provided to Landlord by the assessor.
Installments of special assessments, if any, properly includable in Operating
Expenses shall be apportioned and allocated between the Land and the remainder
of the tax parcel of which the Land is a part based on a strict land-area
[exclusive of ponding areas as provided below] square footage basis, provided,
however, that no special assessment exclusively benefitting a portion of the
Project outside of the Land shall be so allocated to the Land . For purposes of
all land-area calculations in this paragraph, the square footage (as determined
in accordance with the provisions under the definition of “Land” in Section 2
above) of any ponding areas within the Land or Project shall be excluded from
the land-area square footages used.

     Provided Tenant is then leasing not less than 50% of the Building, Tenant
shall have the independent right to contest, at its sole cost and expense, the
valuation of, and real estate taxes assessed against, the Property for any
period falling within the lease Term. Tenant shall provide Landlord notice of
any such contest and copy Landlord on all filings, settlement offers and
counter-offers, correspondence and other documents relating to such contest. If
Tenant is leasing less than 50% of the Building, Tenant shall not initiate any
proceeding to contest or dispute the amount of any real estate taxes or the
assessed value of the Property. However, at the written request of Tenant,
Landlord shall, unless Landlord has reasonable grounds for refusing, bring
proceedings to contest the validity or amount of any real estate taxes or
valuation. Tenant shall cooperate with Landlord with respect to such
proceedings to the extent reasonably necessary and shall pay Landlord Tenant’s
Proportionate Share of all reasonable costs, fees and expenses incurred in
connection with such proceedings as additional rent promptly upon being billed.

     Nothing herein contained shall be interpreted as requiring Tenant to pay
any income, excess profits, estate or gift, transfer or corporate capital stock
tax imposed or assessed upon Landlord, unless such tax or any similar tax is
levied or assessed in lieu of all or any part of any Imposition or an increase
in any Imposition.

15

 

     If it shall not be lawful for Tenant to reimburse Landlord for any of the
Impositions, the Minimum Annual Rent shall be increased by the amount of the
portion of such Imposition allocable to Tenant, unless prohibited by law.

     (c)  INSURANCE.

          (i) PROPERTY. Landlord shall keep in effect insurance against loss or
damage to the Building or the Property by fire and such other casualties as may
be included within fire, extended coverage and special form insurance covering
the full replacement cost of the Building (but excluding coverage of Tenant’s
personal property in, and any alterations [including, but not limited to, the
Initial Tenant Improvements] by Tenant to, the Premises as constituted from
time to time), and such other insurance as Landlord may reasonably deem
appropriate or as may be required from time-to-time by any mortgagee. Provided
Tenant is leasing the entire Building, at the request of Tenant Landlord will
consult with Tenant regarding the amount of any deductible, it being understood
that although a higher deductible will result in lower insurance costs passed
through to Tenant, Tenant will, if and only if Tenant is leasing the entire
Building, be responsible for payment of the deductible in the event of a loss.
The foregoing notwithstanding, Landlord shall not carry casualty insurance with
a deductible in excess of $10,000 ($25,000 in the case of flood and earthquake)
without Tenant’s prior written consent. Tenant shall be responsible for
insuring the Initial Tenant Improvements, any other of Tenant’s leasehold
improvements in the Premises (as constituted from time to time), and all trade
fixtures, equipment, furnishings and personal property of Tenant on or about
the Premises or Property. Landlord shall carry commercially reasonable
builder’s risk insurance with respect to the construction of the Base Building
and Site Improvements.

          (ii) TENANT’S LIABILITY INSURANCE. Tenant, at its own expense, shall keep
in effect comprehensive general public liability insurance with respect to the
Premises and the Property, including contractual liability insurance, with such
limits of liability for bodily injury (including death) and property damage as
reasonably may be required by Landlord from time-to-time, but not less than a
combined single limit of $1,000,000 per occurrence and a general aggregate
limit of not less than $2,000,000 (which aggregate limit shall apply separately
to each of Tenant’s locations if more than the Premises); however, such limits
shall not limit the liability of Tenant hereunder. The policy of comprehensive
general public liability insurance also shall name Landlord and Landlord’s
agent as insured parties with respect to the Premises, shall be written on an
“occurrence” basis and not on a “claims made” basis, shall provide that it is
primary (with respect to the acts or omissions of Tenant or Tenant’s Agents)
with respect to any policies carried by Landlord and that any liability
coverage carried by Landlord shall be excess insurance, shall provide that it
shall not be cancelable or reduced without at least 30 days prior written
notice to Landlord and shall be issued in form reasonably satisfactory to
Landlord. The insurer shall be a responsible insurance carrier which is
authorized to issue such insurance and licensed to do business in the state in
which the Property is located and which has at all times during the Term a
rating of no less than A VII in the most current edition of BEST’S INSURANCE
REPORTS. Tenant shall

16

 

deliver to Landlord on or before the Commencement Date, and subsequently
renewals of, a certificate of insurance evidencing such coverage and the waiver
of subrogation described below.

          (iii) LANDLORD’S LIABILITY INSURANCE. Landlord will maintain comprehensive
general public liability insurance with respect to the Property, including
contractual liability insurance, with such limits of liability for bodily
injury (including death) and property damage, equal to or greater than the
minimum limits for the liability insurance to be carried by Tenant under this
Section. The insurer shall be a responsible insurance carrier which is
authorized to issue such insurance and licensed to do business in the state in
which the Property is located and which has at all times during the Term a
rating of no less than A VII in the most current edition of BEST’S INSURANCE
REPORTS. At Tenant’s request, Landlord will provide Tenant with a certificate
or certificates evidencing such insurance.

          (iv) WAIVER OF SUBROGATION. Landlord and Tenant shall have included in
their respective property insurance policies waivers of their respective
insurers’ right of subrogation against the other party.

     (d)  REPAIRS AND MAINTENANCE; COMMON AREAS; BUILDING MANAGEMENT.

          (i) Tenant at its sole expense shall maintain the Premises in a neat and
orderly condition.

          (ii) Landlord, shall make all necessary repairs (including, but not
limited to, repairing defects in the design or construction of the Base
Building or Site Improvements) to the Premises, the Common Areas and any other
improvements located on the Property. Landlord shall operate and manage the
Property and shall maintain all Common Areas and any paved areas appurtenant to
the Property in a clean and orderly condition. Tenant shall promptly notify
Landlord of any conditions known to Tenant that require repair. Landlord shall
maintain and repair the Property in a manner consistent with the standards
prevailing in comparable class A suburban office buildings in the
Minneapolis/St. Paul metropolitan area.

          (iii) Notwithstanding anything herein to the contrary, repairs and
replacements to the Property including the Premises made necessary solely by
Tenant’s particular or unique use or occupancy (as opposed to typical general
office use or occupancy), or alteration of, or Tenant s installation in or upon
the Property or by any act or omission of Tenant or its Agents shall be made at
the sole expense of Tenant to the extent not covered by any applicable
insurance proceeds paid to Landlord. Tenant shall not bear the expense of any
repairs or replacements to the Property arising out of or caused by Landlord’s
or any other tenant’s use, occupancy or alteration of, or by Landlord’s or any
other tenant’s installation in or upon, the Property or by any act or omission
of Landlord or any other tenant or Landlord’s or any other tenant’s Agents.

     (e)  UTILITIES. All utilities serving the Premises shall be separately
metered to the Premises (such metering to be installed at Landlord’s expense)
and, to the extent permissible,

17

 

directly billed to Tenant by the applicable utility company. Heating,
ventilation and air conditioning systems serving the Premises will be designed
and constructed by Landlord to be under Tenant’s control and may be used on
such days and during such hours as Tenant may determine in its discretion.
Provided Landlord constructs the Premises in accordance with the mechanical and
electrical specifications included in the Approved Plans, Tenant shall not
place loads on any of the building systems in excess of the capacity for which
they were designed.

     Tenant shall pay all separately metered utility charges as and when billed
to Tenant, without delinquency. Landlord shall not be responsible or liable for
any interruption in utility service not arising out of any act or omission of
Landlord, nor shall such interruption affect the continuation or validity of
this Lease. Landlord will make all reasonable efforts to cause service to be
restored as soon as possible after any interruption.

     (f)  JANITORIAL SERVICES. Landlord will provide Tenant with trash removal
and janitorial services pursuant to a cleaning schedule attached as Exhibit
“D”. Tenant shall have the right to modify the services scheduled on Exhibit
“D” with Landlord’s consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Tenant may, by written notice to Landlord, elect to
provide, at its sole cost or expense, all or a portion of its own janitorial
services to the Premises, provided that Tenant at all times maintains
janitorial standards that are consistent with those prevailing in comparable
class A suburban office buildings.

     (g)  “RENT.” The term “RENT” as used in this Lease means the Minimum Annual
Rent, Annual Operating Expenses and any other additional rent or sums payable
by Tenant to Landlord pursuant to this Lease, all of which shall be deemed rent
for purposes of Landlord’s rights and remedies with respect thereto. Tenant
shall pay all Rent due to Landlord within 30 days after Tenant is billed,
unless otherwise provided in this Lease, and interest shall accrue on all sums
due but unpaid within such time at the rate provided in Section 29. All
scheduled monthly payments of Minimum Annual Rent and estimated Annual
Operating Expenses not paid when due shall bear interest from the due date at
the rate provided in Section 29.

10. COMPLIANCE WITH LAWS.

     (a)  LANDLORD’S OBLIGATIONS. Except as expressly provided in Section 10(b),
Landlord shall be responsible for maintaining the Base Building, including any
restroom facilities and exterior areas constructed by Landlord as part of
Landlord’s initial work, in compliance with all applicable laws, ordinances,
notices, orders, rules, regulations and requirements regulating the Property
during the Term (as the same may be amended, the “LAWS AND REQUIREMENTS”). The
foregoing shall not be construed to obligate Landlord to comply with changes in
Laws and Requirements unless and until the time compliance is required under
the applicable Laws and Requirements. Following the initial construction of the
Base Building, all capital expenditures made by Landlord with respect to
complying with Laws and Requirements may be amortized over a stipulated useful
life of fifteen years, and, notwithstanding any provision in this Lease to the

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contrary, such annual amortization of such costs (including reasonable
interest) may be included in Operating Expenses.

     (b)  TENANT’S OBLIGATIONS. Tenant shall use and occupy the Premises and
Common Areas in compliance with all Laws and Requirements and the building
rules attached as Exhibit “C”, as reasonably amended by Landlord from time to
time, (the “BUILDING RULES”).

     Moreover, Tenant shall bear the entire cost and expense of complying with
Laws and Requirements (i) relating to Tenant’s unique or particular use or
occupancy of the Premises and which would not be applicable to Tenant if Tenant
were a typical general office user, (ii) relating to the Initial Tenant
Improvements or any alterations to the Premises made by or on behalf of Tenant,
(iii) relating to any property or equipment of Tenant placed or installed on
the Premises (other than standard office equipment), (iv) triggered by any
alterations (other than alterations performed by Landlord necessary to
implement any express expansion or contraction options provided Tenant in this
Lease) to the Premises made by or on behalf of Tenant (provided, however, that
any required update of Base Building elements to existing Laws and Requirements
applicable to office users and office buildings generally that may be triggered
by Tenant alterations shall be Landlord’s obligation, subject to inclusion of
the costs thereof in Operating Expenses as provided in Section 10(a) above), or
(v) resulting from any act or omission of Tenant or any employees, agents,
contractors, licensees or invitees (“AGENTS”) of Tenant.

     (c)  ACCESSIBILITY REGULATIONS. The parties acknowledge that the Americans
With Disabilities Act of 1990 (42 U.S.C. ‘ 1201 et seq.) and regulations and
guidelines promulgated thereunder, as all of the same may be amended and
supplemented from time to time (collectively referred to herein as the “ADA”)
establish requirements under Title III of the ADA (‘Title III”) pertaining to
business operations, accessibility and barrier removal, and that such
requirements may be unclear and may or may not apply to the Premises and the
Building depending on, among other things: (1) whether Tenant’s business
operations are deemed a “place of public accommodation” or a “commercial
facility,” (2) whether compliance with such requirements is “readily
achievable” or “technically infeasible,” and (3) whether a given alteration
affects a “primary function area” or triggers so-called “path of travel”
requirements. The parties acknowledge and agree that Tenant has been provided
an opportunity to review the plans and specifications for the construction of
the Base Building and Site Improvements from the perspective of Tenant’s
intended use and occupancy, that Tenant will prepare and review the plans and
specifications for the Initial Tenant Improvements for Tenant’s use and
occupancy, and that Tenant has independently determined that such plans and
specifications are in conformance with ADA Accessibility Guidelines (“ADAAG”)
and any other requirements of the ADA, except that, notwithstanding the
foregoing, Landlord, and not Tenant, shall be responsible for causing the Base
Building and Site Improvements to be designed and constructed in compliance
with Title III of the ADA as applicable to commercial facilities. Tenant
further acknowledges and agrees that to the extent that Landlord prepared,
reviewed or approved any of those plans and specifications, such action shall
in no event be deemed any representation or warranty that the same comply with
any requirements of the ADA, except that Landlord warrants that the Base
Building and Site

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Improvements will comply with the requirements of Title III of the ADA
applicable to commercial facilities as applied, enforced and interpreted as of
the date the building permit is issued. Notwithstanding anything to the
contrary in this Lease, the parties hereby agree to allocate responsibility for
Title III compliance as follows: (a) Landlord shall be responsible to construct
and maintain the Base Building and Site Improvements in compliance with Title
III of the ADA as applicable to commercial facilities, (b) Tenant shall be
responsible for all other Title III compliance and costs in connection with the
Premises, the Initial Tenant Improvements or any work performed or to be
performed by or on behalf of Tenant in the Premises under or in connection with
this Lease (other than alterations separately performed by Landlord or
alterations performed by Landlord necessary to implement any express expansion
or contraction options provided Tenant in this Lease), and (c) Landlord shall
perform, and Tenant shall be responsible for the cost of, any so-called Title
III “path of travel” requirements triggered solely by any construction
activities or alterations in the Premises by or on behalf of Tenant as
referenced in clause (b) above. Except as set forth above with respect to
Landlord’s Title III obligations, Tenant shall be solely responsible for all
other requirements under the ADA relating to the Tenant or any affiliates or
persons or entities related to the Tenant (collectively, “Affiliates”),
operations of the Tenant or Affiliates, or the Premises, including, without
limitation, requirements under Title I of the ADA pertaining to Tenant’s
employees. Nothing in this subsection (c) shall be construed to excuse or limit
Landlord’s obligation pursuant to Section 4(a) of this Lease to construct the
Base Building and Site Improvements in accordance with all local building codes
as applied, enforced and interpreted as of the date the building permit is
pulled.

     (d)  ENVIRONMENTAL. Tenant shall comply, at its sole expense, with all Laws
and Requirements as set forth above, all manufacturers’ instructions and all
requirements of insurers relating to the treatment, production, storage,
handling, transfer, processing, transporting, use, disposal and release of
hazardous substances, hazardous mixtures, chemicals, pollutants, petroleum
products, toxic or radioactive matter (the “RESTRICTED ACTIVITIES”) by Tenant
or Tenant’s Agents. Tenant shall deliver to Landlord copies of all Material
Safety Data Sheets or other written information, if any, prepared by
manufacturers, importers or suppliers of any chemical and all notices, filings,
permits and any other written communications, if any, from or to Tenant and any
entity regulating any Restricted Activities.

     (e)  NOTICE. If at any time during or after the Term, Landlord or Tenant
becomes aware of any inquiry, investigation or proceeding regarding the
Restricted Activities affecting or concerning the Property or activities
conducted thereon or becomes aware of any claims, actions or investigations
regarding the ADA affecting or concerning the Property, such party shall give
the other party written notice, within 5 days after first learning thereof,
providing all available information and copies of any notices.
11. SIGNS. Except for signs which are located wholly within the interior of the
Premises and not visible from the exterior of the Premises, no signs shall be
placed on the Property without the prior written consent of Landlord. All signs
installed by Tenant shall be maintained by Tenant in

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good condition and Tenant shall remove all such signs at the termination of
this Lease and shall repair any damage caused by such installation, existence
or removal.

     The foregoing notwithstanding, and subject to the terms and conditions
below, Tenant shall have the right to procure, install and maintain, at
Tenant’s sole cost and expense, the following identification signage (with
Tenant’s logo type and colors) on or about the Building:

     (a)  Up to two signs on the top or exterior of the Building;

     (b)  Up to two monument signs to be located around the Building in the area
between the parking lot curb line and the Building, it being agreed that so
long as no other tenant in the Project shall construct signs between the street
and the outside edge of the parking lot curb (the “Park Perimeter”), Tenant’s
monument signage shall not be placed in the Park Perimeter.

     The design, size and location of all Tenant signage, other than the
exterior building signage described in subsection (a) above, shall be
consistent with Landlord’s sign criteria set forth in the materials entitled
“Identity/Sign System Standards, Liberty Property Trust” (“Landlord’s Sign
Criteria”), a copy of which has been provided to Tenant, and otherwise subject
to Landlord’s approval, which approval shall not be unreasonably withheld,
conditioned or delayed. With respect to the permitted exterior Building signage
contemplated in subparagraph (a) above, Tenant shall have discretion regarding
the size and design of the signage subject to the following: (i) the signage
must be compatible with and appropriate to a single-tenant class A suburban
office building, as reasonably determined by Landlord based on the standards
generally prevailing with respect to such buildings, (ii) the signage must be
designed and installed in a manner that will not adversely affect any Building
structures, systems or amenities, as reasonably determined by Landlord and
(iii) single panel plastic backlit signs are prohibited. Upon the expiration or
termination of this Lease, Tenant shall remove the signage and shall repair any
damage occasioned by such removal.

     Tenant shall cause all Tenant signage to comply with all applicable laws
and ordinances, provided that this provision shall not prevent Tenant from
seeking a variance or conditional use permit for any non-complying signage
approved by Landlord. Landlord will not oppose any such variance or conditional
use permit.

     In addition, Landlord shall construct, at no cost to Tenant, one of
Landlord’s typical monument signs in the Park Perimeter at each of two access
driveways to the Building. Tenant understands that such signage must conform to
Landlord’s Sign Criteria (as defined above in this Section). If Tenant desires
any upgrade in the size or quality of Landlord’s standard monument signage,
Tenant shall bear the entire expense of such upgrade. Landlord’s name and
Tenant’s name will be included on the monument signs described in this
paragraph.

     If, pursuant to the exercise of the contraction rights provided in
Tenant’s extension options or otherwise, Tenant at any time is leasing less
than 100% of the rentable square footage of the

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Building, Landlord shall have a limited right to cause Tenant to reasonably
scale back its signage rights hereunder to a level approximately consistent
with the signage being afforded to comparable tenants in the Project, so as to
afford signage for other significant tenants or occupants of the Building
appropriate to the respective percentage of the Building occupied by Tenant and
such other tenants or occupants.

12. ALTERATIONS AND FIXTURES.

     (a)  Tenant shall have the right to install its trade fixtures in the
Premises, provided that no such installation or removal thereof shall
materially and adversely affect any structural portion of the Property or any
utility lines, communications lines, equipment or facilities in the Building
serving any tenant other than Tenant. At the expiration or termination of this
Lease and at the option of Landlord or Tenant, Tenant shall remove such
installation(s) and, in the event of such removal, Tenant shall repair any
damage caused by such installation or removal; if Tenant, with Landlord’s
written consent, elects not to remove such installation(s) at the expiration or
termination of this Lease, all such installations shall remain on the Property
and become the property of Landlord without payment by Landlord.

     (b)  Tenant shall have the right to make the following alterations in and
to the Premises without Landlord’s consent: nonstructural additions,
alterations or improvements (collectively, “alterations”) which, taken as a
whole, (i) do not exceed $100,000, excluding the Initial Tenant Improvements,
(ii) do not materially and adversely affect the HVAC, mechanical, electrical,
plumbing or other Building systems and do not otherwise materially and
adversely impact the Building, and (iii) are appropriate to a class A suburban
office building devoted primarily to office uses. The foregoing
notwithstanding, Tenant shall not be required to obtain Landlord’s consent with
respect to normal interior redecorating or refinishing, such as re-painting
walls or replacing wall coverings or floor coverings.

     Tenant will not make alterations in or to the Premises or Property other
than those permitted under the preceding paragraph without first obtaining the
written consent of Landlord, which consent shall not be unreasonably withheld,
delayed or conditioned. Tenant shall pay any reasonable out-of-pocket costs
incurred by Landlord to third parties for any required
architectural/engineering reviews, provided that Tenant shall not be required
to reimburse Landlord for such costs relating to Landlord’s review of the plans
and specifications for the Initial Tenant Improvements.

     In making any alterations (including alterations for which Landlord’s
consent is not required), (i) Tenant shall deliver to Landlord the plans,
specifications and necessary permits, together with certificates evidencing
that Tenant’s contractors and subcontractors have adequate insurance coverage
naming Landlord and Landlord’s agent as additional insureds, at least 10 days
prior to commencement thereof, (ii) such alterations shall not impair the
structural strength of the Building or any other improvements or reduce the
value of the Property or materially and adversely affect any utility lines,
communications lines, equipment or facilities in the Building

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serving any tenant other than Tenant, (iii) Tenant shall comply with Section 13
and (iv) the occupants of the Building and of any adjoining property shall not
be unreasonably disturbed thereby.

     All alterations to the Premises by Tenant shall be the property of Tenant
until the expiration or termination of this Lease; at that time all such
alterations shall remain on the Property and become the property of Landlord
without payment by Landlord unless Landlord gives written notice to Tenant to
remove the same, in which event Tenant will remove such alterations and repair
any resulting damage. The foregoing notwithstanding, Tenant shall not be
required to remove (i) the Initial Tenant Improvements, (ii) any alteration for
which Tenant has requested and received from Landlord prior to the performance
of the alteration, a written determination by Landlord that Landlord will not
require the removal of the alteration, and (iii) any alterations that are
compatible with and appropriate to a class A suburban office building devoted
primarily to office uses, provided, however, that Landlord nevertheless
reserves the right to require removal of structural alterations and alterations
to restroom areas. Landlord agrees to provide the written determination
contemplated under clause (ii) above on or before the date that is 10 business
days following the receipt by Landlord of Tenant’s request together with plans
and specifications for the proposed alteration.

13.     MECHANICS’ LIENS. Tenant shall pay promptly any contractors and materialmen
who supply labor, work or materials to Tenant at the Property and shall take
all steps permitted by law in order to avoid the imposition of any mechanic’s
lien upon all or any portion of the Property. Should any such lien or notice of
lien be filed for work performed for Tenant other than by Landlord, Tenant
shall bond against or discharge the same within 30 days after Tenant has notice
that the lien or claim is filed regardless of the validity of such lien or
claim.
Landlord shall pay promptly any contractors and materialmen who supply
labor, work or materials to Landlord at the Property and shall take all steps
permitted by law in order to avoid the imposition of any mechanic’s lien upon
all or any portion of the Property that could attach to or have priority over
Tenant’s interest in the Property. Should any such lien or notice of lien be
filed for work performed for Landlord, Landlord shall bond against or discharge
the same within 30 days after Landlord has notice that the lien or claim is
filed regardless of the validity of such lien or claim.

     Throughout this Lease the term “MECHANIC’S LIEN” is used to include any
lien, encumbrance or charge levied or imposed upon all or any portion of,
interest in or income from the Property on account of any mechanic’s,
laborer’s, materialman’s or construction lien or arising out of any debt or
liability to or any claim of any contractor, mechanic, supplier, materialman or
laborer and shall include any mechanic’s notice of intention to file a lien
given to Landlord or Tenant, any stop order given to Landlord or Tenant, any
notice of refusal to pay naming Landlord or Tenant and any injunctive or
equitable action brought by any person claiming to be entitled to any
mechanic’s lien.

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14.     LANDLORD’S RIGHT OF ENTRY. Tenant shall permit Landlord and its Agents to
enter the Premises at all reasonable times following not less than 24 hours
notice (except in the event of an emergency), for the purpose of inspection,
maintenance or making repairs, alterations or additions (Landlord shall not
make any alterations or additions to the Building or Site Improvements that are
not contemplated under this Lease without first obtaining Tenant’s written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned) as to exhibit the Premises for the purpose of sale or mortgage
and, during the last 9 months of the Term, to exhibit the Premises to any
prospective tenant. The requisite notice prior to entry contemplated above may
be given by telephone or other informal means. Except in the event of an
emergency, Tenant shall have the right to have an employee or representative of
Tenant accompany Landlord and its Agents to the extent necessary and
appropriate to protect and limit access to trade secrets or other confidential
information of Tenant and Tenant’s customers. Moreover, Tenant shall be
entitled to designate, by written notice to Landlord, portions of the Premises
as “Secured Areas” which Landlord may not enter except in the presence of
Tenant’s authorized personnel or in emergencies or following a default. If
Tenant designates any area as a “Secured Area” or “Secured Room” on plans
submitted and approved by Landlord, such plans shall constitute the written
notice required pursuant to the preceding sentence. In an emergency situation,
Landlord, as well as the applicable emergency personnel, shall have the right
to access the Secured Areas by any means and using any force as may be
reasonable under the circumstances without liability to Tenant of any kind
therefor. Tenant may install locks and security devices therefor, provided that
Tenant shall, upon Landlord’s request during normal business hours, provide an
authorized person to escort Landlord or its employees in inspecting the Secured
Areas and provided Tenant delivers to Landlord keys and other information
necessary to access such Secured Areas at the expiration or earlier termination
of the Lease Term. Tenant’s installation of any such locks and security devices
shall be performed in accordance with Section 12 of this Lease. Landlord will
make reasonable efforts not to inconvenience Tenant or interfere with Tenant’s
business in exercising the foregoing rights, but shall not be liable for any
loss of occupation or quiet enjoyment thereby occasioned.

15. DAMAGE BY FIRE OR OTHER CASUALTY.

     (a)  If the Premises or Building and/or Site Improvements shall be damaged
or destroyed by fire or other casualty, Tenant promptly shall notify Landlord
and Landlord, subject to the conditions set forth in this Section, shall repair
such damage and restore the Premises, Building and/or Site Improvements to
substantially the same condition in which they were immediately prior to such
damage or destruction, but not including the repair, restoration or replacement
of the Initial Tenant Improvements or other fixtures or alterations installed
by Tenant. Landlord shall notify Tenant in writing, within 30 days after the
date of the casualty, if Landlord anticipates that the restoration will take
more than 180 days from the date of the casualty to complete; in such event,
either Landlord or Tenant may terminate this Lease effective as of the date of
casualty by giving written notice to the other within 10 days after Landlord’s
notice. Further, if a casualty occurs during the last 12 months of the Term or
any extension thereof, Landlord may cancel this Lease unless Tenant has the
right to extend the Term for at least 3 more years and does so within 30 days
after the date of the casualty.

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     (b)  Landlord shall maintain a 12 month rental coverage endorsement or
other comparable form of coverage as part of its fire, extended coverage and
special form insurance. Tenant will receive an abatement of its Minimum Annual
Rent and Annual Operating Expenses to the extent the Premises are rendered
untenantable.

16. CONDEMNATION.

     (a)  TERMINATION. If (i) all of the Premises are taken by a condemnation or
otherwise for any public or quasi-public use, (ii) any part of the Premises or
Property is so taken and the remainder thereof is insufficient for the
reasonable operation of Tenant’s business or (iii) any of the Property is so
taken, and, in Landlord’s opinion, it would be impractical or the condemnation
proceeds are insufficient to restore the remainder of the Premises or Property,
then this Lease shall terminate and all unaccrued obligations hereunder shall
cease as of the day before possession is taken by the condemnor.

     (b)  PARTIAL TAKING. If there is a condemnation and this Lease has not been
terminated pursuant to this Section, (i) Landlord shall restore the Property
and the improvements which are a part of the Premises to a condition and size
as nearly comparable as reasonably possible to the condition and size thereof
immediately prior to the date upon which the condemnor took possession and (ii)
the obligations of Landlord and Tenant shall be unaffected by such condemnation
except that there shall be an equitable abatement of the Minimum Annual Rent
according to the rental value of the Premises before and after the date upon
which the condemnor took possession and/or the date Landlord completes such
restoration.

     (c)  AWARD. In the event of a condemnation affecting Tenant, Tenant shall
have the right to make a separate claim against the condemnor for moving
expenses and business dislocation damages, and also for the value of any
leasehold improvements installed or constructed in the Premises by Tenant
(provided Tenant reimburses Landlord for the unamortized value [based on the
initial Lease Term], including interest, of any tenant improvements or tenant
improvement allowance provided by Landlord) to the extent Tenant’s right to any
separate award would not be directly deducted from or would not indirectly
reduce the award made to Landlord for the taking of the Base Building, Site
Improvements and/or Land. Except as aforesaid and except as set forth in (d)
below, Tenant hereby assigns all claims against the condemnor to Landlord,
including, but not limited to, any claim for, the value of this Lease.

     (d) TEMPORARY TAKING. If all or any part of the Property is subjected to a
taking for temporary use, this Lease shall continue in full force and effect
despite the taking and Tenant shall continue to comply with all of its
obligations pursuant to this Lease, except that Tenant’s obligations relating
to use and maintenance of the Premises shall be suspended to the extent
compliance with this Lease is otherwise rendered impossible or impractical as a
result of the temporary taking. Any award arising from a temporary taking shall
be allocated between Landlord and Tenant in accordance with their respective
interests as determined within the taking proceeding.

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17.     NON-ABATEMENT OF RENT. Except as otherwise expressly provided in this
Lease, there shall be no abatement or reduction of the Rent for any cause
whatsoever, and this Lease shall not terminate, and Tenant shall not be
entitled to surrender the Premises.

18.     INDEMNIFICATION. Subject to Sections 9(c)(iv) and 19, Tenant will protect,
indemnify and hold harmless Landlord and its Agents from and against any and
all claims, actions, damages, liability and expense (including fees of
attorneys, investigators and experts) in connection with loss of life, personal
injury or damage to property in or about the Premises or arising out of the
occupancy or use of the Premises by Tenant or its Agents or occasioned wholly
or in part by any act or omission of Tenant or its Agents, whether prior to,
during or after the Term, except to the extent such loss, injury or damage was
caused by the negligence of Landlord or its Agents. In case any action or
proceeding is brought against Landlord and/or its Agents by reason of the
foregoing, Tenant, at its expense, shall resist and defend such action or
proceeding, or cause the same to be resisted and defended by counsel
(reasonably acceptable to Landlord and its Agents) designated by the insurer
whose policy covers such occurrence or by counsel designated by Tenant and
approved by Landlord and its Agents. Tenant’s obligations pursuant to this
Section shall survive the expiration or termination of this Lease.

     Subject to Sections 9(c)(iv) and 19, Landlord will protect, indemnify and
hold harmless Tenant and its Agents from and against any and all claims,
actions, damages, liability and expense (including fees of attorneys,
investigators and experts) in connection with loss of life, personal injury or
damage to property caused to any person in or about the Property occasioned
wholly or in part by the negligence of Landlord or its Agents, except to the
extent such loss, injury or damage was caused by the negligence of Tenant or
its Agents. In case any action or proceeding is brought against Tenant and/or
its Agents by reason of the foregoing, Landlord, at its expense, shall resist
and defend such action or proceeding, or cause the same to be resisted and
defended by counsel (reasonably acceptable to Tenant and its Agents) designated
by the insurer whose policy covers such occurrence or by counsel designated by
Landlord and approved by Tenant and its Agents. Landlord’s obligations pursuant
to this Section shall survive the expiration or termination of this Lease.
19. WAIVER OF CLAIMS. Landlord and Tenant each hereby waives all claims for
recovery against the other for any loss or damage which may be inflicted upon
the property of such party even if such loss or damage shall be brought about
by the fault or negligence of the other party or its Agents; provided, however,
that such waivers by Landlord and Tenant shall be limited to loss or damage
that is covered by “special form of loss” or “all risk” property insurance or
would have been covered had such party maintained a “special form of loss” or
“all risk” form of property insurance with such endorsements and coverages as
are customarily maintained by, in the case of Landlord, prudent owners and
operators of real property, and in the case of Tenant, prudent business owners
in the same industry as Tenant. The waivers in this Section will be effective
whether or not the loss was actually covered by insurance. This waiver shall
not operate to relieve Tenant of its obligation to pay the amount of any
reasonable “deductible” in the event of any loss

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     covered by Landlord’s property insurance, unless the loss was caused by the
fault or negligence of Landlord.

20.     QUIET ENJOYMENT; WARRANTY OF TITLE. Landlord covenants that Tenant, upon
performing all of its covenants, agreements and conditions of this Lease,
shall, on the terms and conditions of this Lease, have quiet and peaceful use
and possession of the Premises as against anyone claiming by or through
Landlord or asserting title paramount to Landlord’s. Landlord warrants as of
the date hereof that Landlord is the fee owner of the Property, subject only to
the encumbrances listed on attached EXHIBIT “I”.

21.     ASSIGNMENT AND SUBLETTING.

     (a)  LIMITATION. Tenant shall have the right to freely assign this Lease or
sublet all or any part of the Premises to any person or entity at any time
provided that the nature of the tenancy is compatible with and appropriate for
a class A suburban office park in the Minneapolis/St. Paul metropolitan area.
Tenant may also freely assign this Lease, or sublet all or any part of the
Premises, to any entity controlling, controlled by or under common control with
Tenant or to any successor by merger to the interests of Tenant. Tenant shall
give Landlord prompt notice of any assignment or subletting.

     Except as provided above, Tenant shall not sublet the Premises or assign
this Lease, voluntarily or by operation of law, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. Any
transfer not in conformity with this Section 21 shall be void at the option of
Landlord, and Landlord may exercise any or all of its rights under Section 25.
A consent to one transfer shall not be deemed to be a consent to any subsequent
transfer. Prior to a contemplated assignment or subletting, Tenant may, but
shall be under no obligation to, request a written determination from Landlord
as to whether or not Landlord deems a proposed assignment or subletting
compatible with and appropriate for a class A suburban office park in the
Minneapolis/St. Paul metropolitan area. Such request shall be in writing, shall
include adequate detail as to the proposed assignee or subtenant and the nature
of its business, and shall include an express warning that if Landlord fails to
respond to such request within 10 business days, Landlord, pursuant to this
Lease, shall be deemed to have approved of the proposed assignment or
subletting. Landlord agrees to provide Landlord’s determination within 10
business days of Tenant’s request. If Landlord fails to provide its
determination within 10 business days of Tenant’s written request (and provided
the request includes the warning notice described above), Landlord shall be
deemed to have approved the proposed assignment or subletting.

     (b)  CONDITIONS. Notwithstanding the above, the following shall apply to
any transfer, with or without Landlord’s consent:

          (i) Except as expressly provided below, no transfer shall relieve Tenant
of its obligation to pay the Rent and to perform all its other obligations
hereunder. The acceptance of Rent by Landlord from any person shall not be
deemed to be a waiver by Landlord of any

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provision of this Lease or to be a consent to any transfer. The foregoing
notwithstanding, in the event of a permitted assignment of this Lease by Tenant
to any successor by merger to the interests of Tenant or in the event of a
permitted assignment to a third party, Tenant shall be released from all
liability under this Lease with respect to matters and obligations arising from
and after the date of the assignment if, and only if, such assignee has a
tangible net worth at the time of the assignment equal to $47,000,000. Such
release must be in writing, and will be issued by Landlord upon receipt of
reasonable documentation from Tenant confirming the net worth of the assignee.

          (ii) Any assignment shall be by a written instrument in form and substance
reasonably satisfactory to Landlord which shall (A) include an assumption of
liability by any transferee of all Tenant’s obligations arising from and after
the date of the transfer and the transferee’s ratification of and agreement to
be bound by all the provisions of this Lease, (B) afford Landlord the right of
direct action against the transferee pursuant to the same remedies as are
available hereunder to Landlord against Tenant and (C) be executed by Landlord,
Tenant and the transferee.

          (iii) Except as provided below, in the event that the rent due and payable
by a subtenant under any such permitted sublease (or a combination of the rent
payable under such sublease plus any bonus or other consideration therefor or
incident thereto) exceeds the rent payable under this Lease, or if with respect
to a permitted assignment, permitted license, or other transfer by Tenant
permitted by Landlord or this Lease , the consideration payable to Tenant by
the assignee, licensee, or other transferee exceeds the rent payable under this
Lease, then Tenant shall be bound and obligated to pay Landlord 50% of such
excess rent and other excess consideration, after deduction of “Tenant’s Costs”
from such excess rent and other excess consideration. “Tenant’s Costs” mean (i)
Annual Minimum Rent and Operating Expenses paid by Tenant during any time the
Premises being assigned or sublet were vacant, (ii) reasonable leasing costs
incurred by Tenant in connection with such assignment or subletting, including
marketing costs, attorneys’ fees, leasing commissions, and leasehold
improvements or allowances, and (iii) the unamortized value of all leasehold
improvements constructed by Tenant in the Premises so assigned or sublet. The
excess rent or other excess consideration so payable to Landlord shall be
remitted by Tenant to Landlord within ten (10) days following receipt thereof
by Tenant from such sublessee, assignee, licensee, or other transferee, as the
case may be. The foregoing notwithstanding, Tenant shall not be obligated to
pay Landlord the excess rent or other excess consideration described in this
subsection (i) if Tenant leases from Landlord other additional premises as a
replacement for the Premises so being assigned or sublet, or (ii) in the case
of an assignment or subletting by Tenant to any entity controlled by, under
common control with or controlling Tenant.

22.     SUBORDINATION. This Lease shall be subordinate to any first mortgage or
other primary encumbrance now or hereafter affecting the Premises. Although the
subordination is self-operative, within 10 days after written request, Tenant
shall execute and deliver any further commercially reasonable and customary
instruments of attornment and nondisturbance that may be desired by any such
mortgagee (“mortgagee” for purposes of this Section meaning the holder of any
first mortgage or other primary encumbrance, whether or not such encumbrance is
a mortgage)

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or Landlord. The foregoing notwithstanding, (i) so long as Tenant is not in
default under this Lease, this Lease shall remain in full force and effect and
the mortgagee and any purchaser at a foreclosure sale thereof shall not disturb
Tenant’s possession (including expansion options) hereunder, and (ii) the
mortgagee or purchaser at a foreclosure sale shall be bound to recognize all of
the terms and conditions of this Lease and the rights of the Tenant hereunder.
However, any mortgagee may at any time subordinate its mortgage to this Lease,
without Tenant’s consent, by giving written notice to Tenant, and thereupon
this Lease shall be deemed prior to such mortgage without regard to their
respective dates of execution and delivery.

23. RECORDING; TENANT’S CERTIFICATE.

     (a)  All parties will, upon the request of any other party, execute a short
form lease (“Memorandum of Lease”), in a form suitable for recording. Such
Memorandum of Lease will be dated as of the date of this Lease and will
disclose the parties, the Term of this Lease, a description of the Premises and
such other terms and conditions as the parties agree upon. The party requesting
the execution of such Memorandum will bear all costs of the Memorandum,
including any recording fees. All parties will, following any termination of
this Lease and upon the written request of any other party, execute a document
setting forth the date of termination, in a form suitable for recording.
Failure of a party to execute such a document will not affect the termination,
and in such event the party requesting the document may execute and file an
affidavit setting forth the date of termination. The party requesting the
execution of a document setting forth the date of termination will bear all
costs thereof, including any recording fees.

     (b)  Within 10 days after Landlord’s written request from time to time:

          (i) Tenant shall execute, acknowledge and deliver to Landlord a written
statement certifying the Commencement Date and Expiration Date of this Lease,
that this Lease is in full force and effect and has not been modified and
otherwise as set forth in the form of estoppel certificate attached as EXHIBIT
“E” or with such modifications as may be reasonably necessary to reflect
accurately the stated facts and/or such other certifications as may be
reasonably requested by a mortgagee or purchaser.

          (ii) Tenant shall furnish to Landlord, Landlord’s mortgagee, prospective
mortgagee or purchaser reasonably requested financial information. Tenant shall
be excused from this requirement during any period Tenant is a public company
whose stock is traded on a national exchange.
24. SURRENDER; ABANDONED PROPERTY.

     (a)  Subject to the terms of Sections 12, 15 and 16, at the expiration or
termination of this Lease, Tenant promptly shall yield up in the same
condition, order and repair in which they are required to be kept throughout
the Term, the Premises and all improvements thereto, and all fixtures and
equipment servicing the Building, ordinary wear and tear excepted.

29

 

     (b)  Upon or prior to the expiration or termination of this Lease, Tenant
shall remove any of Tenant’s personal property from the Property. Any such
personal property remaining thereafter shall be deemed conclusively to have
been abandoned, and Landlord, at Tenant’s expense, may remove, store, sell or
otherwise dispose of such property in such manner as Landlord may see fit
and/or Landlord may retain such property as its property. If any part thereof
shall be sold, then Landlord may receive and retain the proceeds of such sale
and apply the same, at its option, against the expenses of the sale, the cost
of moving and storage and any Rent due under this Lease.

     (c)  If Tenant, or any person claiming through Tenant, shall continue to
occupy the Premises after the expiration or termination of this Lease or any
renewal thereof, such occupancy shall be deemed to be under a month-to-month
tenancy under the same terms and conditions set forth in this Lease, except
that the monthly installment of the Minimum Annual Rent during such continued
occupancy shall be 150% of the amount applicable to the last month of the Term.
Anything to the contrary notwithstanding, any holding over by Tenant without
Landlord’s prior written consent shall constitute a default hereunder and shall
be subject to all the remedies available to Landlord.

25.     CURING TENANT’S DEFAULTS. If Tenant shall be in default in the performance
of any of its obligations hereunder, Landlord, without any obligation to do so,
in addition to any other rights it may have in law or equity, may elect to cure
such default on behalf of Tenant after written notice (except in the case of
emergency) to Tenant. Tenant shall reimburse Landlord upon demand for any sums
paid or costs incurred by Landlord in curing such default, including interest
thereon from the respective dates of Landlord’s incurring such costs, which
sums and costs together with interest shall be deemed additional rent.

26.     DEFAULTS — REMEDIES.

     (a)  TENANT DEFAULTS. It shall be an event of default by Tenant:

          (i) If Tenant does not pay in full when due any and all Rent;

          (ii) If Tenant fails to observe and perform or otherwise breaches any
other provision of this Lease;

          (iii) [Intentionally Deleted]

          (iv) If Tenant becomes insolvent or bankrupt in any sense or makes a
general assignment for the benefit of creditors or offers a settlement to such
creditors, or if a petition in bankruptcy or for reorganization or for an
arrangement with creditors under any federal or state law is filed by or
against Tenant, or a bill in equity or other proceeding for the appointment of
a receiver for any of Tenant’s assets is commenced; provided, however, that any
proceeding brought by anyone other than Landlord or Tenant under any
bankruptcy, insolvency, receivership or similar

30

 

law shall not constitute a default until such proceeding has continued unstayed
for more than 60 consecutive days.

     (b)  REMEDIES. Then, and in any such event, Landlord shall have the
following rights:

          (i) To charge a late payment fee equal to the greater of $100 or 2% of any
amount owed to Landlord pursuant to this Lease which is not paid within 5
business days after the due date.

          (ii) To enter and repossess the Premises, by breaking open locked doors if
necessary, and remove all persons and all or any property therefrom, by action
at law or otherwise, without being liable for prosecution or damages therefor,
and Landlord may, at Landlord’s option, make alterations and repairs in order
to relet the Premises and relet all or any part(s) of the Premises for Tenant’s
account. Tenant agrees to pay to Landlord on demand any deficiency that may
arise by reason of such reletting. In the event of reletting without
termination of this Lease, Landlord may at any time thereafter elect to
terminate this Lease for such previous breach.

          (iii) To accelerate the whole or any part of the Rent for the balance of
the Term, and declare the same to be immediately due and payable.

          (iv) To terminate this Lease and the Term without any right on the part of
Tenant to save the forfeiture by payment of any sum due or by other performance
of any condition, term or covenant broken.

     (c)  GRACE PERIOD. Notwithstanding anything hereinabove stated, neither
party will exercise any available right because of any default of the other,
except those remedies contained in subsection (b)(i) of this Section, unless
such party shall have first given written notice of default to the defaulting
party, and the defaulting party shall have failed to cure the default within 5
business days of such notice in the case of monetary defaults or in the case of
Tenant’s failure to take any action with respect to which a time period for
performance is specifically enumerated in this Lease, or within 30 days of such
notice in the case of other nonmonetary defaults; provided, however, that:

          (i) No such notice shall be required in the event of any default
enumerated in subsection (a) (iv) of this Section.

          (ii) Landlord shall not be required to give notice of default more than 2
times during any 12-month period; thereafter in such 12-month period Landlord
may declare a default and exercise its remedies without notice, except that,
notwithstanding the foregoing, Landlord will not exercise its remedies under
subsection (b)(iii) [acceleration] unless Landlord first gives Tenant written
notice of such default.

31

 

          (iii) If the default consists of something other than the failure to pay
money which cannot reasonably be cured within 30 days, neither party will
exercise any right if the defaulting party begins to cure the default within
the 30 days and continues actively and diligently in good faith to completely
cure said default.

          (iv) Landlord and Tenant agree that any notice given by the other party
pursuant to this Section which is served in compliance with Section 30 shall be
adequate notice for the purpose of the noticing party’s exercise of any
available remedies.

     (d)  NON-WAIVER; NON-EXCLUSIVE. No waiver by Landlord or Tenant of any
breach by the other shall be a waiver of any subsequent breach, nor shall any
forbearance by Landlord or Tenant to seek a remedy for any breach by the other
be a waiver by Landlord or Tenant of any rights and remedies with respect to
such or any subsequent breach. Efforts by Landlord or Tenant to mitigate the
damages caused by the other’s default shall not constitute a waiver of
Landlord’s or Tenant’s right to recover damages hereunder. Unless this Lease
expressly so provides to the contrary, no right or remedy herein conferred upon
or reserved to Landlord or Tenant is intended to be exclusive of any other
right or remedy provided herein or by law, but each shall be cumulative and in
addition to every other right or remedy given herein or now or hereafter
existing at law or in equity. No payment by Tenant or Landlord or receipt or
acceptance by Landlord or Tenant of a lesser amount than the total amount due
Landlord or Tenant, as the case may be, under this Lease shall be deemed to be
other than on account, nor shall any endorsement or statement on any check or
payment be deemed an accord and satisfaction, and Landlord or Tenant, as the
case may be, may accept such check or payment without prejudice to such party’s
right to recover the balance of the amount due, or such party’s right to pursue
any other available remedy.

     (e)  COSTS AND ATTORNEYS’ FEES. If either party commences an action against
the other party arising out of or in connection with this Lease, the prevailing
party shall be entitled to have and recover from the losing party attorneys’
fees, costs of suit, investigation expenses and discovery costs, including
costs of appeal.

27.     REPRESENTATIONS OF TENANT. Tenant represents to Landlord and agrees that:

     (a)  The word “TENANT” as used herein includes the Tenant named above as
well as its successors and assigns, each of which shall be under the same
obligations and liabilities and each of which shall have the same rights,
privileges and powers as it would have possessed had it originally signed this
Lease as Tenant.

     (b)  If Tenant is a corporation, partnership or any other form of business
association or entity, Tenant is duly formed and in good standing, and has full
corporate or partnership power and authority, as the case may be, to enter into
this Lease and has taken all corporate or partnership action, as the case may
be, necessary to carry out the transaction contemplated herein, so that when
executed, this Lease constitutes a valid and binding obligation enforceable in
accordance with its

32

 

terms. Tenant shall provide Landlord with corporate resolutions or other proof
in a form acceptable to Landlord, authorizing the execution of this Lease at
the time of such execution.

28.     LIABILITY OF LANDLORD. The word “LANDLORD” as used herein includes the
Landlord named above as well as its successors and assigns, each of which shall
have the same rights, remedies, powers, authorities and privileges as it would
have had it originally signed this Lease as Landlord. Any such person or
entity, whether or not named herein, shall have no liability hereunder after it
ceases to hold title to the Premises except for obligations already accrued
(and, as to any unapplied portion of Tenant’s Security Deposit, Landlord shall
be relieved of all liability therefor upon transfer of such portion to its
successor in interest) and Tenant shall look solely to Landlord’s successor in
interest for the performance of the covenants and obligations of the Landlord
hereunder which thereafter shall accrue. Neither Landlord (from and after the
Commencement Date) nor any principal of Landlord nor any owner of the Property,
whether disclosed or undisclosed, shall have any personal liability with
respect to any of the provisions of this Lease or the Premises, and if Landlord
is in breach or default with respect to Landlord’s obligations under this Lease
or otherwise (other than defaults occurring prior to the Commencement Date and
relating to Landlord’s construction and completion obligations hereunder),
Tenant shall look solely to the equity of Landlord in the Property and to any
rents, income or proceeds from the Property for the satisfaction of Tenant’s
claims. Notwithstanding the foregoing, no mortgagee or ground lessor succeeding
to the interest of Landlord hereunder (either in terms of ownership or
possessory rights) shall be (a) liable for any previous act or omission of a
prior landlord (but shall be subject to any rental offsets relating to acts or
omissions of a prior landlord) or (b) bound by any amendment of this Lease made
without its written consent and made after Tenant shall have been notified of
the existence of such mortgage or ground lease, or by payment by Tenant of
Minimum Annual Rent in advance in excess of one monthly installment.

29.     INTERPRETATION; DEFINITIONS.

     (a)  CAPTIONS. The captions in this Lease are for convenience only and are
not a part of this Lease and do not in any way define, limit, describe or
amplify the terms and provisions of this Lease or the scope or intent thereof.

     (b) ENTIRE AGREEMENT. This Lease represents the entire agreement between
the parties hereto and there are no collateral or oral agreements or
understandings between Landlord and Tenant with respect to the Premises or the
Property. No rights, easements or licenses are acquired in the Property or any
land adjacent to the Property by Tenant by implication or otherwise except as
expressly set forth in the provisions of this Lease. This Lease shall not be
modified in any manner except by an instrument in writing executed by the
parties. The masculine (or neuter) pronoun and the singular number shall
include the masculine, feminine and neuter genders and the singular and plural
number. The word “including” followed by any specific item(s) is deemed to
refer to examples rather than to be words of limitation. Both parties having
participated fully and equally in the negotiation and preparation of this
Lease, this Lease shall not be more strictly construed, nor any ambiguities in
this Lease resolved, against either Landlord or Tenant.

33

 

     (c)  COVENANTS. Except as otherwise expressly provided herein, each
covenant, agreement, obligation, term, condition or other provision herein
contained shall be deemed and construed as a separate and independent covenant
of the party bound by, undertaking or making the same, not dependent on any
other provision of this Lease unless otherwise expressly provided. All of the
terms and conditions set forth in this Lease shall apply throughout the Term
unless otherwise expressly set forth herein.

     (d)  INTEREST. Wherever interest is required to be paid hereunder, such
interest shall be at the ‘prime rate” plus two percent (2%). “Prime rate”
herein means the rate of interest per annum from time to time published in The
Wall Street Journal (or comparable financial publication if The Wall Street
Journal ceases to be published or ceases to publish a prime rate) as the “High
Prime Rate”, or the “Prime Rate” if only one “Prime Rate” is published, as the
same may fluctuate from time to time.

     (e)  SEVERABILITY; GOVERNING LAW. If any provisions of this Lease shall be
declared unenforceable in any respect, such unenforceability shall not affect
any other provision of this Lease, and each such provision shall be deemed to
be modified, if possible, in such a manner as to render it enforceable and to
preserve to the extent possible the intent of the parties as set forth herein.
This Lease shall be construed and enforced in accordance with the laws of the
state in which the Property is located.

     (f)  “MORTGAGE” AND “MORTGAGEE.” The word “mortgage” as used herein
includes any lien or encumbrance on the Premises or the Property or on any part
of or interest in or appurtenance to any of the foregoing, including without
limitation any ground rent or ground lease if Landlord’s interest is or becomes
a leasehold estate. The word “mortgagee” as used herein includes the holder of
any mortgage, including any ground lessor if Landlord’s interest is or becomes
a leasehold estate. Wherever any right is given to a mortgagee, that right may
be exercised on behalf of such mortgagee by any representative or servicing
agent of such mortgagee.

     (g)  “PERSON.” The word “person” is used herein to include a natural
person, a partnership, a corporation, an association and any other form of
business association or entity.

30.     NOTICES. Any notices or election required or permitted to be given or
served by any party hereto upon any other shall be deemed given or served in
accordance with the provisions of this Agreement if said notice or election is
to the parties, with copies, at the addresses listed below, by one of the
following methods: (a) delivered personally; (b) sent by certified or
registered mail, return receipt requested, postage prepaid; (c) sent by
reputable overnight delivery service designated for next business day delivery,
with delivery charge prepaid; or (d) sent by facsimile transmission provided a
copy of the notice is simultaneously sent by method (a), (b) or (c) above.
Communications personally delivered will be deemed received upon delivery,
communications sent by certified mail will be deemed received two (2) business
days following the date of the postmark, communications sent by overnight
delivery will be deemed received on the next business day and communications
sent by facsimile will be deemed received on the day sent if sent

34

 

on a business day before 3:00 P.M. All other communications sent by facsimile
will be deemed received on the first business day after they are sent.
Communications addressed to the parties shall be sent as follows:

          If intended for Tenant:

	 	ONTRACK Data International, Inc.

6321 Bury Drive, Suites 13-21

Eden Prairie, Minnesota 55346

Attn: Thomas Skiba

Facsimile No.: 612/949-4083

	 	and to:

	 	ONTRACK Data International, Inc.

6321 Bury Drive, Suites 13-21

Eden Prairie, Minnesota 55346

Attn: John Bujan

Facsimile No.: 612/949-4083

	 	with a copy to:

	 	Joseph J. Christensen

Snelling, Christensen & Laue, P.A.

Suite 400

5101 Vernon Avenue South

Minneapolis, MN 55436

Facsimile No.: 612/927-5427

          If intended for Landlord:

	 	Liberty Property Limited Partnership

330 Second Avenue South, Suite 390

Minneapolis, Minnesota 55401

Attn: John S. Gattuso

Facsimile No.: 612/375-8958

35

 

          with a copy to:

	 	Dorsey & Whitney

Pillsbury Center South

220 South Sixth Street

Minneapolis, Minnesota 55402

Attn: Jeff Benson

Facsimile No.: 612/340-2644

Any party hereto may change its address for the service of notice hereunder by
giving written notice of said change to the other party hereunder in the manner
specified above. By notice to the other, either party may require that copies
of notices be given to any mortgagee or other party designated by Landlord or
Tenant. The giving of notice by a party’s attorneys, representatives and agents
under this Section shall be deemed to be the acts of such party; however, the
foregoing provisions governing the date on which a notice is deemed to have
been received shall mean and refer to the date on which a party to this Lease,
and not its counsel or other recipient to which a copy of the notice may be
sent, is deemed to have received the notice.

31.     OPTION TO EXTEND TERM. Provided that at the time of such notice of exercise
and at the time of the commencement of the applicable extension term, there
exists no monetary default (beyond any applicable notice and cure period in
this Lease) and no default described in Section 26(a)(iv), Tenant shall have
the right and option, exercisable by giving Landlord prior written notice
thereof at least nine (9) months in advance of the applicable Expiration Date,
to extend the Term (for all or a portion of the PremisesBas described in
subsection (d) below) for up to three (3) additional consecutive periods of
thirty-six (36) months each, the first such extended term or any subsequent
extended term to begin on the Expiration Date of the initial Term or the
Expiration Date of any previous extended term, as the case may be. Such
extension shall be under the same terms and conditions as provided in this
Lease except as follows:

     (a)  all references to the Term in this Lease shall be deemed to mean the
Term as extended pursuant to this Section;

     (b)  there shall be no further options to extend the Term except as
expressly provided herein;

     (c)  Minimum Annual Rent for each Lease Year of the extension terms shall
be as follows:

36

 

          First Extension:

	 	 	 	 	 
	 	 	Annual Minimum Rent
	Lease Year	 	Per Rentable Sq. Ft.
	
	 	

	11
	 	$	12.129	 
	12
	 	$	12.371	 
	13
	 	$	12.619	 

          Second Extension:

	 	 	 	 	 
	 	 	Annual Minimum Rent
	Lease Year	 	Per Rentable Sq. Ft.
	
	 	

	14
	 	$	12.871	 
	15
	 	$	13.129	 
	16
	 	$	13.391	 

          Third Extension:

	 	 	 	 	 
	 	 	Annual Minimum Rent
	Lease Year	 	Per Rentable Sq. Ft.
	
	 	

	17
	 	$	13.659	 
	18
	 	$	13.932	 
	19
	 	$	14.211	 

     (d)  With respect to any extension option, Tenant may elect to extend this
Lease, on the terms and conditions stated above, for all or less than all of
the Premises then being leased by Tenant under this Lease. If Tenant desires to
extend this Lease for less than the entire Premises then being leased by
Tenant, Tenant shall include in its extension notice a detailed description of
the space in which Tenant is extending. In no event shall Tenant extend with
respect to less than 20,000 rentable square feet, and in no event shall Tenant
leave Landlord with less than 20,000 rentable square feet within the Building.
Moreover, any portion of the Premises that Tenant so surrenders to Landlord in
connection with an extension as to less than all of the Premises must be (1)
Leasable Space (as that term is defined below) and (2) must be surrendered to
Landlord in the condition required under this Lease with respect to surrender
of space at the expiration or termination of this Lease. If Tenant so extends
for less than all of the then Premises, Tenant and Landlord shall each pay
one-half of the cost of constructing any demising wall between the space
surrendered and the Premises retained by Tenant.

“Leasable Space” as used in this Lease means space that is located, configured
and sized in such a manner that, in Landlord’s reasonable judgment, such space
has appropriate access to entrances

37

 

and restroom facilities, is useable for general office purposes and is
marketable to a general office user.

     (e)  if Tenant should exercise the extension option(s), at the request of
either party Landlord and Tenant shall execute and deliver an amendment to the
Lease documenting the terms, covenants and conditions applicable to the
extension term, as provided herein.

32.     EXPANSION OPTION. Landlord presently intends, but shall have no obligation
other than as expressly provided in this Section with respect to Building B, to
develop at least three additional buildings in the Project, identified as
Buildings B (consisting of buildings B-1 and B-2), C and D, substantially as
shown on the Site Plan. Landlord hereby grants Tenant the right and option to
lease all or a portion of Building B on the terms and conditions provided in
this Section. Landlord agrees that it shall construct Building B, if at all,
after the construction of the Premises (Building A), Building C and Building D,
unless the earlier construction of Building B is requested by Tenant pursuant
to the exercise of its expansion option provided in this Section. Following the
construction of Buildings A, C and D, Landlord may construct all or a portion
of Building B at any time (Landlord agrees that if only a portion of Building B
is so constructed, Landlord will construct Building B-2 before constructing
Building B-1), and shall have no obligation to wait for Tenant to exercise its
expansion option with respect thereto. If Landlord constructs or proposes to
construct all or a portion of Building B absent Tenant’s exercise of its
expansion rights hereunder, such portion of Building B to be so constructed
shall nevertheless be subject to Tenant’s right of first offer set forth in
Section 33 below. If Landlord constructs only a portion of Building B prior to
Tenant’s exercise, if any, of its expansion rights, Tenant’s expansion option
under this Section 32 shall continue with respect to the remainder (i.e.
unconstructed portion) of Building B.

     Tenant shall have the option at any time to cause Landlord to construct
Building B, and lease the “Building B Expansion Space” to Tenant, if all of the
following conditions are met:

     (a)  There is not then existing any monetary default (beyond any applicable
notice and cure period in this Lease) or default described in Section
26(a)(iv);

     (b)  Tenant is then leasing all or substantially all of Building A, Tenant
is not planning to vacate, assign or sublet any of the space in Building A at
the time Tenant expands into Building B.

     (c)  Tenant delivers to Landlord written notice exercising its right to
Lease the Building B Expansion Space, which notice shall specify the rentable
square footage in Building B that Tenant is committing to Lease. Said notice
shall not specify less than 25,000 rentable square feet. Moreover, said notice
shall not specify more than 50,000 rentable square feet unless Tenant, in such
notice, elects to expand into all of Building B. Landlord presently
contemplates that Building B will contain approximately 80,000 rentable square
feet. If Landlord decides to increase the size of Building B in excess of
80,000 rentable square feet, the 50,000 ceiling noted above shall be increased
by the amount of such excess. In no event, however, shall Landlord be required
to

38

 

construct more than the actual rentable square footage committed to by Tenant
in Tenant’s notice of exercise.

     If Tenant timely exercises the Building B Expansion Space option as
provided above, Landlord and Tenant shall enter into a lease of the Building B
Expansion Space containing the following terms:

     (a)  Landlord will be obligated to construct the Building B base building
and related site improvements, including parking areas and driveways, within 9
months of the date such lease is entered into by Landlord and Tenant, subject
only to delays outside of the reasonable control of Landlord. Building B shall
be of a type and quality comparable to Building A so as to keep the relative
cost (adjusted for changes in the costs of labor and materials) per rentable
square foot of Building B comparable to that of Building A.

     (b)  The term of the lease for the Building B Expansion Space shall not be
less than five (5) years, commencing upon the substantial completion of
Landlord’s construction of the Building B Expansion Space. If less than 5 years
remains on the Term of this Lease (including any extension options exercised by
Tenant as of the commencement date of the lease for the Building B Expansion
Space), then the Term of this Lease (Section 36 [Tenant’s Option to Terminate]
notwithstanding) shall be extended so that this Lease shall be co-terminus with
the term of the lease for the Building B Expansion Space. If the Term is so
extended, any unexercised and unexpired options to extend the Term under
Section 31 shall be pushed out so that the full extension term, if exercised,
would commence as of the expiration of the Term or extended Term, as the case
may be, as extended pursuant to this subsection (b). If such extension term, as
pushed back, goes beyond lease year 19, Minimum Annual Rent for subsequent
lease years shall continue to increase at 2% per annum. For example, if Tenant
entered into a five-year lease for the Building B Expansion Space commencing at
the beginning of year eight of the ten-year initial Term of this Lease, the
Term of this Lease would be extended through year twelve, and the first
three-year extension term would commence, if exercised, at the beginning of
year thirteen (and the scheduled rental rates under Section 31 for years 13
through 15 would apply to the first extension term).

     (c)  The Annual Minimum Rent for the first lease year shall be an amount
equal to the product of (i) the “Expansion Building Costs” (as defined below),
multiplied by (ii) the “Finance Rate” (as defined below), appropriately
apportioned to the Building B Expansion Space based on Tenant’s Proportionate
Share if the Building B Expansion Space does not include 100% of the building
constructed. The Annual Minimum Rent for each lease year subsequent to the
first lease year shall be an amount equal to 102% of the scheduled Annual
Minimum Rent for the immediately preceding lease year.

     “Expansion Building Costs” means all of the out-of-pocket costs incurred
by Landlord with respect to the acquisition and construction of Building B and
related site improvements, including the cost of purchasing the land
appropriately allocated to Building B and the Building B site improvements
(which allocation shall be consistent with the manner in which the Land was

39

 

allocated to Building A), Landlord’s actual cost of carry of such land,
including real estate taxes, from the time of its acquisition through the
substantial completion of Landlord’s construction, title and recording fees,
legal fees, architectural and engineering fees, all government fees and utility
connection charges, construction costs and expenses, including costs of
constructing landscaping, required parking and access drives and related site
improvements, signage, brokerage fees, a development fee equal to 2% of such
costs (exclusive of real estate taxes and construction interest), construction
interest at 8.75% and a construction contingency not to exceed 2%. Expansion
Building Costs will not include any costs or expenses relating to defaults by
Landlord, claims or penalties arising from Landlord’s intentional wrongdoing ,
negligent acts or omissions or violations of law, or costs of grading,
utilities, site work or other improvements not related to Building B and its
related site improvements or otherwise primarily benefitting another parcel or
building.

     Prior to entering into a lease for the Building B Expansion Space,
Landlord and Tenant shall have agreed upon a budget of the Expansion Building
Costs, based on plans and specifications for the Expansion Building approved by
Landlord and Tenant. If Landlord and Tenant are unable to agree upon such
budget, Landlord shall not be obligated to construct the Building B Expansion
Space and neither Landlord nor Tenant shall have any obligation to enter into
such lease.

     The foregoing notwithstanding, the cost of any leasehold improvements
constructed by landlord in and to the Building B Expansion Space and the cost
of any brokerage fees payable with respect to the lease of the Building B
Expansion Space may be amortized on a straight line basis, without interest,
over the term of the lease for the Building B Expansion Space, and in such case
the annual amortized cost shall be added to the Minimum Annual Rent, provided,
however, that the total expenses that may be so amortized shall not exceed an
amount which will result in annual amortized costs in excess of $1.60 per
rentable square foot.

     The “Finance Rate” shall be a number determined by adding 350 basis points
to the actual yield, on the date of Tenant’s notice of exercise, from U.S.
Treasury Notes or Bonds having a term equal to the term of the lease for the
Building B Expansion Space, provided, however, that if the Finance Rate as
determined above would yield a result of less than 10%, the Finance Rate shall
be the lower of (i) 10% or, (ii) 400 basis points above the actual yield, on
the date of Tenant’s notice of exercise, from US Treasury Notes or Bonds having
a term equal to the term of the lease for the Building B Expansion Space.

     (d) The lease for the Building B Expansion Space will otherwise be on the
substantially the same basic terms and conditions as provided in this Lease,
except that, unless otherwise agreed upon in writing by Landlord and Tenant,
(1) there will be no rent concessions, inducements, allowances or similar
provisions applicable to the Building B Expansion Space, and (2) there shall be
no extension, renewal, offer, expansion or similar rights.

40

 

     The rights of Tenant under this section shall not be severed from the
Lease or separately sold, assigned or transferred, and will expire according to
the terms of this section, or upon the termination of the Lease, whichever
occurs first.

33.     RIGHT OF FIRST OFFER. In the event any space in the Building or, if and
when constructed or proposed to be constructed, in any other buildings in the
Project, becomes available for lease at any time during the Term of this Lease,
Landlord shall give Tenant written notice of the availability of such space for
lease (the “Offer Space”). Tenant shall have the right, at its option, to lease
all or a portion (subject to the conditions set out below) of such Offer Space
provided (a) Tenant delivers to Landlord written notice exercising its right to
lease such Offer Space within 15 business days of receipt of Landlord’s notice
of availability of such Offer Space, (b) Tenant is not in default in any
material respect under this Lease at the time Tenant exercises its right to
lease such Offer Space and at the time Tenant is to take possession of such
Offer Space, (c) if Tenant exercises its right to lease less than all of the
Offer Space, then (i)Tenant shall take at least 10,000 rentable square feet,
(ii) the remainder of the Offer Space not taken by Tenant shall not be less
than 5,000 rentable square feet, and (iii) the remainder of the Offer Space not
taken by Tenant must be “Leasable Space” (as defined in Section 31(d) above) .
If Tenant fails to exercise timely its right to lease such Offer Space with
respect to a particular notice of availability given by Landlord, Landlord
shall be free to lease such Offer Space to such person or entity, and on such
terms and conditions, as Landlord may choose (provided, however, if Landlord
has not leased all such Offer Space on or before the date that is six months
from the date such Offer Space was first offered to Tenant, Landlord shall
re-offer the remaining Offer Space to Tenant on the terms and conditions of
this Section). If Tenant elects to exercise its right to lease such Offer
Space, the terms, conditions and covenants applicable to such Offer Space shall
be as set forth in this Lease, except that the Offer Space shall be delivered
to Tenant in an “as is” condition and the Minimum Annual Rent regarding such
space shall be as follows: (1) if the Offer Space is previously unoccupied
space, the Annual Minimum Rent shall be determined pursuant to the formula
provided in Subsection 32(c) above, and (2) if the Offer space is previously
occupied space, the Minimum Annual Rent shall be Minimum Annual Rent that was
scheduled to be paid (without addition of any amounts due to any default,
failure, wrongful act or omission of such tenant) by the prior tenant of such
Offer Space during the last full month in which such tenant paid or was to pay
full Minimum Annual Rent during the term of the applicable lease, and such
Minimum Annual Rent shall increase 2% per annum commencing at the end of the
first lease year of such Offer Space. The commencement date for the lease
covering such space shall be the date following the exercise of such option on
which such space is first made available to Tenant. If Tenant exercises its
right to lease such space, Landlord and Tenant shall execute and deliver an
appropriate amendment to this Lease regarding the lease of such space. The
rights of Tenant under this section shall not be severed from the Lease or
separately sold, assigned or transferred, and will expire according to the
terms of this section, or upon the termination of the Lease, whichever occurs
first.

Any provision to the contrary in this Section notwithstanding, with respect to
Buildings B and C, the right of first offer granted Tenant under this Section
shall be prior to the rights of any other present or future tenant of the
Project, and, with respect to any buildings constructed in the Project

41

 

other than Buildings B and C, the right of first offer granted Tenant under
this Section shall be subject and subordinate to any expansion options, rights
of first offer, rights of first refusal and the like that Landlord may now or
in the future grant to any other present or future tenant of the Project.

34.     PARKING. Landlord shall provide, and Tenant shall be entitled to the use
of, five (5) parking spaces for each 1,000 rentable square feet of the
Premises. Such parking shall be nonexclusive, undesignated and unreserved
parking provided as part of the Building’s common area parking facilities,
provided, however, that so long as Tenant is leasing 100% of the Building,
Tenant shall have the right, at its expense, to sign all or any portion of the
parking allocated to the Building to limit it to Tenant’s employees, visitors
and business invitees. Landlord shall not allocate any of the parking provided
to Tenant under this Section to any other building in the Project or to any
other tenant of the Project. If Tenant is leasing less than 100% of the
Building, Landlord will afford Tenant such rights to exclusive or designated
parking as are consistent with those afforded to comparable tenants in the
Project.

35.     ANTENNA; SATELLITE DISH. Tenant shall have the right to install, maintain
and repair, for Tenant’s own use, communications antennae, satellite dishes
and/or similar communications equipment (such antennae, dishes and all related
equipment is herein collectively termed the “Antenna”) on the roof of the
Building under and subject to the following conditions:

     (a)  Tenant shall comply with all Laws and Requirements, including, without
limitation, any applicable Federal Communication Commission rules, regulations
and guidelines.

     (b)  Tenant shall obtain Landlord’s prior approval of the location of the
Antenna on the Property and of the specifications for the Antenna and the
installation thereof, which approval will not be unreasonably withheld,
conditioned or delayed. Tenant agrees to consult with Landlord’s roofing
contractor prior to installation and strictly to comply with the roofing
contractor’s reasonable recommendations and requirements. Tenant shall pay all
reasonable out-of-pocket costs incurred by Landlord to a third party in
connection with the Antenna including without limitation all architectural,
engineering and contractors’ fees. Landlord agrees that it will not seek
independent architectural or engineering review provided Tenant uses an
architect and/or engineer approved in advance by Landlord. At least 3 business
days prior to installation, Tenant shall notify Landlord of the date and time
of the installation.

     (c)  Tenant shall maintain the Antenna in a safe, good and orderly
condition. The installation, maintenance, repair and removal of the Antenna
shall be performed at Tenant’s sole expense in a manner which will not impair
the integrity of, damage or adversely affect the warranty applicable to, the
roof or any other portion of the Property.

     (d)  Tenant’s indemnification of Landlord pursuant to Section 18 of this
Lease also applies to the Antenna and Tenant’s use of any portion of the
Property therefor. Without limiting the foregoing, Tenant solely shall be
responsible for any damages or injury caused by or in any

42

 

way relating to the Antenna, including, but not limited to, damage or injury
caused by reason of the Antenna collapsing or being blown from the roof or any
other portion of the Property.

     (e)  The Antenna shall remain the property of Tenant, and upon the
expiration or earlier termination of this Lease or of Tenant’s rights under
this Section, Tenant shall remove the Antenna, shall repair, at Tenant’s
expense, any damage resulting from such removal, and shall restore the Building
to its condition existing prior to the installation of the Antenna, normal wear
and tear and casualty excepted. Without limiting the foregoing, Tenant shall
repair all damage and mounting holes so as to leave the roof weatherproof.
Landlord shall have the right to have its roofing contractor supervise the
removal of any such equipment affixed to the roof, at Tenant’s expense, but
which charges shall not exceed a reasonable amount for such services.

     (f)  The Antenna shall be for the personal use of Tenant, and the rights of
Tenant under this section shall not be severed from the Lease or separately
sold, assigned or transferred.

36.     TENANT’S OPTION TO TERMINATE. Tenant shall have the right and option,
exercisable by giving Landlord a minimum of nine (9) months prior written
notice thereof, to terminate this Lease effective as of the expiration of the
sixth lease year and by paying Landlord on the effective date of termination a
sum equal to (i) the total rentable square feet of the Premises, multiplied by
(ii) $4.86. Tenant shall pay all Rent under the Lease and abide by all of the
terms and conditions of the Lease through and including such early termination
date.
37. TERMINATION OF EXISTING LEASE. Tenant is currently leasing the following
premises (the “Existing Premises”) from Landlord:

	 	(a)	 	Suite 150, 5610 Rowland Pond, Minnetonka, Minnesota consisting
of approximately 6,970 rentable square feet;
	 
	 	(b)	 	Approximately 40,898 rentable square feet in the Westwood IV
Building, 6321 Bury Drive, Eden Prairie, Minnesota;
pursuant to the following leases (whether one or more, the “Existing Lease”):
	 
	 	(a)	 	Lease dated December 11, 1997 by and between Landlord and
Tenant (Rowland Pond premises), as extended by letter
agreement dated April 15, 1998;
	 
	 	(b)	 	Lease dated November 2, 1988 between Lyndale Associates, as
the original landlord, and Ontrack Computer Systems, Inc., as
tenant, as amended, and as extended by letter agreement dated
April 15, 1998.

Upon the Commencement Date of this Lease, the Existing Lease shall terminate.
At the request of either party, Landlord and Tenant shall enter into an
agreement stipulating as to the termination date of the Existing Lease.

43

 

38.     STANDARDS; CURING LANDLORD’S DEFAULTS; SET-OFF . If (i) Landlord shall be
in default of any of its maintenance and repair obligations under the Lease or
shall fail to provide any of the services to be provided by Landlord under this
Lease, and (ii) such default interferes with Tenant’s use and occupancy of the
Premises for the conduct of Tenant’s business therein, and (iii) Tenant gives
Landlord written notice specifying the nature of the default, and (iv) Landlord
fails to cure such default within 10 business days (or within a period of 72
hours if an emergency or shorter reasonable period if Landlord fails to timely
remove snow) after Landlord receives Tenant’s notice (or within such reasonable
additional time as may be necessary to cure such default provided Landlord
commences such cure within said period and thereafter diligently prosecutes
such cure to completion), then Tenant may, without any obligation to do so,
cure such default on behalf of Landlord. Landlord shall reimburse Tenant within
30 days of demand for any out-of-pocket sums paid or costs incurred by Tenant
in curing such default, together with an administrative fee equal to 10% of
such costs, plus interest at the rate specified in Section 29 and reasonable
attorneys fees, if any (collectively, “Tenant’s Cost of Cure”), which demand
shall be accompanied by invoices or other reasonable documentation evidencing
amounts incurred by Tenant. If Landlord fails to reimburse Tenant within said
30-day period, Tenant shall have the right to set-off Tenant’s Cost of Cure
against the monthly installments of Minimum Annual Rent next due under the
Lease, until Tenant shall have recovered in full Tenant’s Cost of Cure,
provided, however, in no event, except as provided in the following sentence,
shall Tenant be entitled to set-off in any month more than 15% of the scheduled
installment of Minimum Annual Rent for such month. The preceding sentence
notwithstanding, during the last 12 months of the Term (including any extension
option exercised by Tenant), Tenant may offset against Minimum Annual Rent such
amount as necessary for Tenant to recover in full Tenant’s Cost of Cure prior
to the expiration of this Lease. To the extent Tenant’s Cost of Cure include
items properly includable in Operating Expenses, Landlord may include such
amounts reimbursed by Landlord or set off by Tenant in Operating Expenses, but
only to the extent of the amount the repair or service would have cost Landlord
had Landlord or its vendor performed it. Landlord’s reimbursement obligations
under this Section shall survive the expiration or termination of this Lease.

39.     HAZARDOUS SUBSTANCES. The term “Hazardous Substances”, as used in this
Section, means pollutants, contaminants, toxic or hazardous wastes or any other
substances, the removal of which is required or the use of which is restricted,
prohibited or penalized by an “Environmental Law”, which term means any
federal, state or local law or ordinance relating to pollution or the
protection of the environment.

Landlord agrees to indemnify and hold Tenant harmless from any and all claims,
causes of action, damages, penalties and costs (including attorneys’ fees,
consultant fees and related expenses) (collectively, “claims”) which may be
asserted against or incurred by Tenant resulting from: (a) the presence of any
Hazardous Substance on or in the Project as of the date hereof or caused or
permitted by Landlord or Landlord’s Agents (without being caused or permitted
by Tenant) after the date hereof; or (b) any violation or alleged violation of
any Environmental Law existing as of the date hereof or caused or permitted by
Landlord or Landlord’s Agents (without being caused or permitted by Tenant)
after the date hereof. Anything to the contrary in this Lease

44

 

notwithstanding, Landlord shall have no obligation to indemnify Tenant with
respect to any claim by third parties (including, but not limited to employees
of Tenant) relating to any substances that are not legally deemed Hazardous
Substances under applicable Environmental Laws as enacted and interpreted as of
the date hereof. Landlord shall, however, be obligated at Landlord’s expense,
to comply with any requirements of any Environmental Laws relating to the
removal, management or other treatment of any substances which, although not
legally deemed a Hazardous Substance under Environmental Laws as enacted and
interpreted as of the date hereof, are determined to be a Hazardous Substance
in the future as a result of new or changed Environmental Laws.

     Landlord represents and warrants to Tenant that all environmental reports
and studies relating to the Property which are in the possession of or known to
Landlord as of the date of this Lease are listed on attached EXHIBIT “J”.
Landlord represents and warrants to Tenant that, except as disclosed in the
information listed on Exhibit J, Landlord has no knowledge of the presence of
Hazardous Substances on or in the Project or of any violations or alleged
violations of Environmental Laws with respect to the Project. References to
Landlord’s knowledge in this paragraph mean the actual knowledge as of the date
hereof of John S. Gattuso, Senior Vice President of Liberty Property Trust.
40. BROKERAGE FEE. Landlord shall pay a brokerage fee of $3.00 per rentable
square foot of the initial Premises to The Keewaydin Group, Inc. (“Keewaydin”).
Such fee shall be payable one half upon Lease execution and one half upon
commencement of Minimum Annual Rent. The fee payable upon execution shall
relate to the square footage stated in Section 1(a) and the fee shall be
adjusted either up or down based on actual square footage of the Building as
constructed. In addition, the Landlord shall pay Keewaydin a brokerage fee of
$3.00 per rentable square foot (this rate applies to leases of three years or
more; for leases of less than three years, the commission will be reduced pro
rata, e.g. the commission for a 2-year lease would be $2.00 per square foot)
for all space committed to, or taken by, Tenant within the first six lease
years following Tenant’s initial occupancy (provided that Tenant has not
notified Landlord in writing that it has retained an unrelated real estate
agent to represent it in connection with such renewal and further provided that
Landlord is not obligated to and does not pay a fee to such unrelated real
estate agent. No fee shall be payable with respect to space taken after the
sixth lease year or upon extensions of the Term of the Lease unless a separate
agreement is reached at that time. Keewaydin may assign any rights to collect
brokerage fees to Tenant. Tenant shall be permitted to pay any past due
brokerage commissions to Keewaydin and offset any such payments against the
monthly installments of Minimum Annual Rent next due under the Lease, until
Tenant shall have recovered in full any past due brokerage commissions so paid
by Tenant. Within 10 business days of Landlord’s request, Tenant shall deliver
to Landlord a written statement signed by Tenant and Keewaydin certifying that
there are no brokerage commissions payable hereunder by Landlord that are due
and unpaid, or, if that is not the case, certifying to amounts due and unpaid.

45

 

     IN WITNESS WHEREOF, and in consideration of the mutual entry into this
Lease and for other good and valuable consideration, and intending to be
legally bound, Landlord and Tenant have executed this Lease.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LANDLORD:
	 	 	 	 	 	 	 	 	 	 	 
	Date signed:	 	
	 	, 1998	 	LIBERTY PROPERTY LIMITED

PARTNERSHIP
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Liberty Property Trust, Sole General
	 	 	 	 	 	 	 	 	Partner
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	John Gattuso, Senior Vice

President
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TENANT:
	 	 	 	 	 	 	 	 	 	 	 
	Date signed:	 	 	 	, 1998	 	ONTRACK DATA INTERNATIONAL, INC.
	 	 	
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Its:	 	 
	 	 	 	 	 	 	 	 	 	 	

46

 

EXHIBIT A

[SITE PLAN — Flying Cloud corporate campus]

 

 

EXHIBIT A-1

LEGAL DESCRIPTION

Outlot C, Staring Lake Clubs Courts and Villages, and that part of the vacated
Public Street (former Columbine Road Extension) as dedicated in the plat of
Research Farm 2nd Addition, lying Easterly of the following described line:

	 	 	 	Commencing at the Northwest corner of Outlot C, Staring Lake Clubs
Courts and Villages, according to the record plat thereof; thence
Southerly 148.22 feet along the West line of said Outlot C having a
radius of 952.73 feet and a central angle of 8 degrees 54 minutes 49
seconds to the East line of said Public Street and the point of
beginning of said line to be described; thence Southerly 11.78 feet
along the Southerly extension of said West lien having a central angle
of 0 degrees 42 minutes 31 seconds to a point of compound curvature;
thence Southerly 120.71 feet along a 533.58 foot radius curve having a
central angle of 12 degrees 57 minutes 41 seconds to the intersection
with a line drawn parallel with and distant 35 feet Easterly from the
centerline of Columbine Road as dedicated in said plat of Staring Lake;
thence Southerly 80.27 feet along said parallel line having a radius of
946.73 feet and a central angle of 4 degrees 51 minutes 29 seconds to
the South line of said Public Street and there terminating. The
following portion being registered property:

	 	 	 	That part of Outlot C, Staring Lake Clubs Courts and Villages,
lying Northerly of the center line of the former County Road
No. 2 as delineated in the plat of Research Farm Addition, and
that part of the Public Street (Columbine Road Extension) as
dedicated in the plat of Research Farm 2nd Addition, lying
Easterly of the following described line:

	 	 	 	Commencing at the Northwest corner of Outlot C,
Staring Lake Clubs Courts and Villages, according to
the record plat thereof; thence Southerly 148.22 feet
along the West line of said Outlot C having a radius
of 952.73 feet and a central angle of 8 degrees 54
minutes 49 seconds to the East line of said Public
Street and the point of beginning of said line to be
described; thence Southerly 11.78 feet along the
Southerly extension of said West line having a
central angle of 0 degrees 42 minutes 31 seconds to a
point of compound curvature; thence Southerly 120.71
feet along a 533.58 foot radius curve having a
central angle of 12 degrees 57 minutes 41 seconds to
the intersection with a line drawn parallel with and
distant 35 feet Easterly from the centerline of
Columbine Road as dedicated in said plat of Staring
Lake; thence Southerly 80.27 feet along said parallel
line having a radius of 946.73 feet and a central
angle of 4 degrees 51 minutes 29 seconds to the South
line of said Public Street and there terminating.

 

Hennepin County, Minnesota

 

 

EXHIBIT “B”

LEASE COMMENCEMENT CERTIFICATE

     The undersigned, as duly authorized officers and/or representatives of
LIBERTY PROPERTY LIMITED PARTNERSHIP (“Landlord”) and (“Tenant”),
hereby agree as follows with respect to the Lease Agreement (the “Lease”)
between them for premises located at (the “Premises”):

	 	1.	 	DATE OF LEASE:  , 19
	 
	 	2.	 	COMMENCEMENT DATE:  , 19
	 
	 	3.	 	RENT COMMENCEMENT DATE:  , 19 [based on period of
gross free rent, if any, contemplated in Section 4(c) of the
Lease]
	 
	 	4.	 	EXPIRATION DATE:  , 19
	 
	 	5.	 	Rent and operating expenses due on or before the Commencement
Date (or Rent Commencement Date, as applicable) for the period
from the Commencement Date until the first day of the next
calendar month (Not applicable if the Commencement Date is the
first day of the calendar month):

	 	 	 	 	 	 	 
	APPORTIONED MINIMUM RENT:	 	 	
$	 	 	 
	 	 	 	 	 	 	

	APPORTIONED OPERATING EXPENSES:	 	 	
$	 	 	 
	 	 	 	 	 	 	

	TOTAL:	 	 	
$	 	 	 
	 	 	 	 	 	 	

		
	 	     Thereafter regular monthly payments due in the following
amounts until adjusted in accordance with the Lease:

	 	 	 	 	 	 	 
	MONTHLY RENT INSTALLMENT:	 	 	
$	 	 	 
	 	 	 	 	 	 	

	MONTHLY OPERATING PAYMENT:	 	 	
$	 	 	 
	 	 	 	 	 	 	

	TOTAL MONTHLY PAYMENT:	 	 	
$	 	 	 
	 	 	 	 	 	 	

	 	5.	 	Tenant certifies that, as of the date hereof, (a) the Lease is
in full force and effect and has not been amended, (b) Tenant
has no offsets or defenses against any provision of the Lease
except as set forth on Schedule A attached, if any and (c)
Landlord has substantially completed any improvements to be
performed by Landlord in accordance with the Lease, excepting
the Punch List items set forth on Schedule B attached hereto
and initialed by Landlord and Tenant, if any.

B-1

 

 

IN WITNESS WHEREOF, Landlord and Tenant, intending to be legally bound,
have executed this Certificate as of        , 19 .

	 	 	 
	 	 	
LANDLORD:
	 	 	 
	 	 	
LIBERTY PROPERTY LIMITED
PARTNERSHIP

	 	 	 	 	 
	 	 	By:    Liberty Property Trust, Sole General
Partner
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	TENANT:
	 
	 
	Witness/Attest:	 	

	 	 	 	 	 
	 	 	
By:	 	 
	
	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

B-2

 

EXHIBIT C

RULES AND REGULATIONS

SINGLE STORY BUILDING

     1.     Except for the placement of appropriate trash containers, Tenant shall
not block or obstruct any entries, passages, doors, loading docks of the
Building, or place, empty or throw any rubbish, letter, trash or material of
any nature into such areas, or permit such areas to be used at any time except
for ingress or egress of Tenant.

     2.     Except as otherwise contemplated or permitted under the Lease, Tenant
shall not install or operate any refrigerating, heating or air conditioning
apparatus or carry on any mechanical operation or bring into the Premises any
inflammable fluids or explosives without written permission of Landlord.

     3.     Tenant shall not use the Premises for housing, lodging or residential
purposes or for the cooking or preparation of food (other than in employee
break rooms, coffee stations and similar kitchenette areas for Tenant’s
employees) without written permission of Landlord.

     4.     Subject to the express provisions of this Lease regarding Landlord’s
access to the Premises, including the provisions relating to Tenant’s “Secure
Areas,” Landlord may at all times keep a pass key to the Premises and Tenant
shall provide any keys required to be provided to the fire department or other
governmental authority. All keys shall be delivered to Landlord promptly upon
termination of this Lease. The term “keys” in this paragraph shall include
access cards, access codes and the like.

     5.     Tenant shall not permit the operation of any musical or sound-producing
instruments or device which may be heard outside the Premises, or which may
emanate electrical waves or x-rays or other emissions which will impair radio
or television broadcasting or reception from or in the Building, or be
hazardous to health, well-being or condition of persons or property.

     6.     All plate and other glass now in the Premises or building which is
broken through cause attributable to Tenant, customers, visitors or invitees
shall be replaced by and at expense of Tenant under the direction of Landlord.

     7.     Tenant shall give Landlord prompt notice of all accidents to or defects
in air conditioning equipment, plumbing, lighting electric facilities or any
part of appurtenance of the Premises.

     8.     The plumbing facilities shall not be used for any other purpose than
that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the

 

 

expense of any breakage, stoppage or damage resulting from a violation of this
provision shall be borne by Tenant, who shall have caused it.

     9.     Except as otherwise contemplated or permitted under the Lease, no signs
showcases or other articles shall be put in front of or affixed to any part of
the exterior of the Building, without prior written consent of Landlord.

     10.     The access of Tenant, its vendors or invitees to the roof shall be
coordinated through Landlord so that Landlord will be informed of, and may
monitor if it chooses, the persons gaining access to the roof and the
activities conducted thereon.

     11.     If the Premises shall become infested with vermin, roaches, or other
undesirable creatures, Tenant will promptly notify Landlord and Landlord shall
cause the Premises to be professionally treated.

     12.     Except as otherwise contemplated or permitted under the Lease, Tenant
shall not install any antenna or aerial wires, radio or television equipment or
any other type of equipment outside of the Building without Landlord’s prior
approval in writing and upon such terms and conditions as may be specified by
Landlord in each and every instance.

     13.     Tenant shall not make or permit any use of the Premises or the
Building which, directly or indirectly, is forbidden by law, ordinance or
governmental or municipal regulation, code or order to which may be
disreputable or dangerous to life, limb or property.

     14.     No outside storage of any material, pallets, trailers, disabled
vehicles, etc., will be permitted including but not limited to trash, except in
approved containers. Tenant shall ensure that all trash is properly contained
to avoid from being blown about the property.

     15.     Tenant shall not allow a fire or bankruptcy sale or any auction to be
held on the Premises, or allow the Premises to be used for the storage of
merchandise held for sale to the general public.

     16.     Canvassing, soliciting, distribution of hand-bills or any other
written material peddling in the Building and the complex are prohibited, and
each Tenant shall cooperate to prevent the same.

     17.     Except as otherwise contemplated or permitted under the Lease, Tenant,
its employees and invitees, agree not to park in those stalls designated for a
restricted use, i.e., handicapped parking, visitor parking or parking
designated for a specific tenant other than Tenant.

     18.     Tenant shall not possess any weapons, explosives, combustibles or
other hazardous devices in or about the Building and/or Premises, without the
prior written approval of

C-2

 

 

     Landlord. The foregoing notwithstanding, Tenant may maintain armed security in
or about the Premises in cases of emergency, disaster, failure of Tenant’s
security systems or other reasonable circumstances; Tenant shall give Landlord
notice of the presence of armed security, which notice shall be given, except
in the case of an emergency, prior to the deployment of armed security.

     19.     Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

     20.     Except as otherwise contemplated or permitted under the Lease,
skylights, windows, doors and transoms, shall not be covered or obstructed by
Tenant, and Tenant shall not install any window covering which would affect the
exterior appearance of the Building, except as approved in writing by Landlord.
Should the Landlord establish a building standard window treatment, Tenant
shall not remove or change such window treatment without Landlord’s prior
written consent.

     21.     Any low voltage writing added in the Premises and the Building to
serve Tenant’s telephone, computer, security monitoring, etc., requirements,
shall be installed in accordance with the local, state and federal codes and
ordinances and clearly identified.

     22.     These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any Lease on premises in the complex.
In the event of any conflict between these Rules and Regulations and the terms
and conditions of the Lease, the terms and conditions of the Lease shall
control.

     23.     Landlord reserves the right to rescind, suspend or modify any rules or
regulations and to make such other rules and regulations as, in Landlord’s
reasonable judgment, may from time to time be needed for the safety, care,
maintenance, operation and cleanliness of the Property. Notice of any action by
landlord referred to in this paragraph, given to Tenant, shall have the same
force and effect as if originally made a part of the foregoing lease. New rules
or regulations will not, however, be unreasonably inconsistent with the proper
and rightful enjoyment of the Premises by Tenant under the lease. No
modification to or amendment of these Rules and Regulations shall be deemed an
amendment or modification of the terms of the Lease.

C-3

 

 

EXHIBIT D

CLEANING AND JANITOR SERVICES

Landlord shall furnish cleaning and janitor services to the Project as
described below:

DAILY:

	 	•	 	Sweep, dry mop or vacuum, as appropriate, all floor areas;
remove material such as gum and tar which has adhered to the
floor.
	 
	 	•	 	Empty waste baskets and containers; remove all trash from the
Leased Premises.
	 
	 	•	 	Dust all horizontal surfaces with treated dust cloth,
including furniture, files, equipment, that can be reached
without a ladder.
	 
	 	•	 	Damp wipe all telephones, including dials and crevices.
	 
	 	•	 	Spot wash to remove smudges, marks and fingerprints from such
areas as walls, equipment, doors, partitions and light
switches within reach.
	 
	 	•	 	Wash water fountains, chalkboards, cafeteria tables and
chairs.
	 
	 	•	 	Damp mop all non-resilient floors such as concrete, terrazzo
and ceramic tile. Damp mop floors using detergent
disinfectant.
	 
	 	•	 	Clean freight and passenger elevator cabs and landing doors.
	 
	 	•	 	Clean mirrors, soap dispensers, shelves, wash basins, exposed
plumbing, dispenser and disposal container exteriors, using
detergent disinfectant and water. Damp wipe all ledges, toilet
stalls and toilet doors.
	 
	 	•	 	Clean toilets and urinals with detergent disinfectant,
beginning with seats and working down. Pour one ounce of bowl
cleaner into urinal after cleaning and do not flush.
	 
	 	•	 	Furnish and refill all soap, toilet, sanitary napkin and towel
dispensers.
	 
	 	•	 	Clean all baseboards.
	 
	 	•	 	Remove all litter from parking area and grounds.

 

 

WEEKLY:

	 	•	 	Spot clean carpet stains.
	 
	 	•	 	Wash glass in building directory, entrance doors and frames
and show windows, both sides.
	 
	 	•	 	Spot wash interior partition glass and door glass to remove
smudge marks.
	 
	 	•	 	Sweep all stair areas.
	 
	 	•	 	Brush all fabric covered chairs with a lint brush.
	 
	 	•	 	Vacuum edges and corners.

MONTHLY:

	 	•	 	Scrub and recondition resilient floor areas using buffable
non-slip type floor finish.
	 
	 	•	 	Clean all area roof drains.
	 
	 	•	 	Wash all interior glass, both sides.
	 
	 	•	 	Wash all stairwell landings and treads.

QUARTERLY:

	 	•	 	High dust all horizontal and vertical surfaces not reached in
nightly cleaning, such as pipes, light fixtures, door frames,
picture frames and other wall hangings.
	 
	 	•	 	Wash all ceramic tile walls in restroom by hand.
	 
	 	•	 	Vacuum or dust all books in place.
	 
	 	•	 	Wash and polish vertical terrazzo or marble surfaces.
	 
	 	•	 	Damp wash diffusers, vents, grills, and other such items,
including surrounding wall or ceiling areas that are spoiled.
	 
	 	•	 	Vacuum all ceiling and wall air supply and exhaust diffusers
or grills.

D-2

 

 

SEMI-ANNUALLY:

	 	•	 	Dust all storage areas, including shelves and contents, such
as supply and stock closets, and damp mop floor areas.
	 
	 	•	 	Strip and refinish all resilient floor areas using buffable
non-slip floor finish.
	 
	 	•	 	Shampoo all carpeted areas.
	 
	 	•	 	Wash building perimeter glass, outside only.

ANNUALLY:

	 	•	 	Wash light fixtures, including reflectors, globes, diffusers
and trim.
	 
	 	•	 	Wash walls in corridors, lounges, classrooms, demonstration
areas, cafeterias and washrooms.
	 
	 	•	 	Clean all vertical surfaces not attended to during nightly,
weekly, quarterly, or semi-annual cleaning.
	 
	 	•	 	Wash building perimeter glass, inside only.

D-3

 

 

EXHIBIT “E”

TENANT ESTOPPEL CERTIFICATE

     Please refer to the documents described in Schedule I hereto, (the “Lease
Documents”) including the “Lease” therein described; all defined terms in this
Certificate shall have the same meanings as set forth in the Lease unless
otherwise expressly set forth herein. The undersigned Tenant hereby certifies
that it is the tenant under the Lease. Tenant hereby further acknowledges that
it has been advised that the Lease may be collaterally assigned in connection
with a proposed financing secured by the Property and/or may be assigned in
connection with a sale of the Property and certifies both to Landlord and to
any and all prospective mortgagees and purchasers of the Property, including
any trustee on behalf of any holders of notes or other similar instruments, any
holders from time to time of such notes or other instruments, and their
respective successors and assigns (the “Mortgagees”) that as of the date
hereof:

     1.     The information set forth in attached Schedule 1 is true and correct.

     2.     Tenant is in occupancy of the Premises and the Lease is in full force
and effect, and, except by such writings as are identified on Schedule 1, has
not been modified, assigned, supplemented or amended since its original
execution, nor are there any other agreements between Landlord and Tenant
concerning the Premises, whether oral or written.

     3.     All conditions and agreements under the Lease to be satisfied or
performed by Landlord have been satisfied and performed, except matters, if
any, listed on Part N of Schedule 1.

     4.     Tenant is not in default under the Lease Documents, Tenant has not
received any notice of default under the Lease Documents, and, to Tenant’s
knowledge, there are no events which have occurred that, with the giving of
notice and/or the passage of time, would result in a default by Tenant under
the Lease Documents.

     5.     Tenant has not paid any Rent due under the Lease more than 30 days in
advance of the date due under the Lease and Tenant has no rights of setoff,
counterclaim, concession or other rights of diminution of any Rent due and
payable under the Lease except as set forth in Schedule 1.

     6.     To Tenant’s knowledge and except matters, if any, listed on Part N of
Schedule 1, there are no uncured defaults on the part of Landlord under the
Lease Documents, Tenant has not sent any notice of default under the Lease
Documents to Landlord, and there are no events which have occurred that, with
the giving of notice and/or the passage of time, would result in a default by
Landlord thereunder, and that at the present time Tenant has no claim against
Landlord under the Lease Documents.

     7.     Except as expressly set forth in Part G of Schedule 1, there are no
provisions for any, and Tenant has no, options with respect to the Premises or
all or any portion of the Property.

E-1

 

 

     8.     Except as set forth on Part M of Schedule 1, no action, voluntary or
involuntary, is pending against Tenant under federal or state bankruptcy or
insolvency law.

     9.     The undersigned has the authority to execute and deliver this
Certificate on behalf of Tenant and acknowledges that all Mortgagees will rely
upon this Certificate in purchasing the Property or extending credit to
Landlord or its successors in interest.

     10.     This Certificate shall be binding upon the successors, assigns and
representatives of Tenant and any party claiming through or under Tenant and
shall inure to the benefit of all Mortgagees.

     IN WITNESS WHEREOF, Tenant has executed this Certificate this day of  , 19  .

	 	 	 	 	 
	 	 	

Name of Tenant
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

E-2

 

 

SCHEDULE 1 TO TENANT ESTOPPEL CERTIFICATE

Lease Documents, Lease Terms and Current Status

	A.	 	Date of Lease:
	 
	B.	 	Parties:

	 	1.	 	Landlord:
	 
	 	2.	 	Tenant d/b/a:

	C.	 	Premises known as:
	 
	D.	 	Modifications, Assignments, Supplements or Amendments to Lease:
	 
	E.	 	Commencement Date:
	 
	F.	 	Expiration of Current Term:
	 
	G.	 	Options:
	 
	H.	 	Security Deposit Paid to Landlord: $
	 
	I.	 	Current Fixed Minimum Rent (Annualized): $
	 
	J.	 	Current Additional Rent (and if applicable, Percentage
Rent)(Annualized): $
	 
	K.	 	Current Total Rent: $
	 
	L.	 	Square Feet Demised:
	 
	M.	 	Tenant’s Bankruptcy or other Insolvency Actions:
	 
	N.	 	Landlord Defaults & Unperformed Landlord Obligations:

E-3

 

 

EXHIBIT F-1

[Scope Drawings]

 

 

EXHIBIT F-2

ARCHITECTURAL STANDARDS

FOR

ONTRACK DATA INTERNATIONAL, INC.

	1.	 	Site Preparation

		
	 	Mass excavate top soil, organic and soft natural soils to underlying
lean clays or sandy lean clays; stockpile suitable from on-site
material, supplemented with imported granular material; mass excavation
and controlled backfill to bring entire building area to elevation
100.00’ (assumed finish floor elevation 101.00’); to be approved by
soils engineer.

	2.	 	Earthwork

		
	 	Excavate to footing depths on controlled backfill; after footings are
poured and foundation walls are laid, backfill with approved material;
rough grade site to subgrade elevations for lawns and paving; after
paving and other site improvements are in place, spread stockpiled
topsoil and fine grade to finish elevations.

	3.	 	Paving and Surfacing

	 	(a)	 	Bituminous paving: 7-ton asphaltic concrete paving for all
driveways and 5-ton construction for staff parking lot.
	 
	 	(b)	 	Concrete paving: 4-inch thick light broom finished concrete
sidewalks; 6 by 12 inches light broom finished concrete curb
and gutter at building side of all bituminous pavement.

	4.	 	Site Improvements

	 	(a)	 	Irrigation System: Automated underground lawn irrigation
system for lawns and plantings adjacent to building.

	5.	 	Landscaping

	 	(a)	 	Topsoil preparation: Rake and drag topsoil provided under
earthwork.
	 
	 	(b)	 	Lawns and grasses: Cultured sod in lawn areas adjacent to
building and at boulevards and between street and entrance
drive.

F-2-1

 

 

	 	(c)	 	Trees and shrubs: A sum to be allowed for trees and shrubs;
quantity and species to be determined in final design.
	 
	 	(d)	 	Maintenance: Building owner responsibility.

	 

	6.	 	Foundations

	 	(a)	 	Footings (type): Reinforced concrete spread footings;
continuous below frost level at exterior walls and pad type
below mechanical depth for interior columns.
	 
	 	(b)	 	Foundation walls (type and material): Reinforced cast in place
concrete or masonry.
	 
	 	(c)	 	Slabs-on-grade: Welded wire fabric reinforced concrete stabs,
thickened at edges.

	7.	 	Exterior Walls

	 	(a)	 	Materials:

	 	(1)	 	Brick veneer with minimum 6 inch by 16 ga. Structural
“C” stud backup cavity wall construction consisting
of 2 inch airspace, 2 inches extruded polystyrene
(minimum R-value = 10) and 1/2” Dens-Glas Gold
sheathing with Tyvek building wrap, or equal.
Interior face of exterior metal stud walls to receive
6 mill poly vapor barrier and drywall to be taped,
floated, sanded and ready to receive final ONTRACK
finishes.
	 
	 	(2)	 	Thermally broken aluminum framed window walls,
U-values listed below.

	8.	 	Parapets

	 	(a)	 	Provide integral parapet consistent with the design and makeup
of the exterior wall materials to screen from view all
mechanical equipment.
	 
	 	(b)	 	All roof-top mechanical units shall be screened from view.
Screening may be adjacent to units or may be integral with the
parapet. Screening shall be subject to the reasonable approval
of ONTRACK and shall meet all appropriate codes.

	9.	 	Exterior Doors and Frames

	 	(a)	 	Heavy duty aluminum entrance and frames; glazed with 1/4 inch
clear tempered float glass; frames thermally improved; finish:
standard anodized colors to be selected. ONTRACK shall have
the right to select custom colors and shall be responsible for
the incremental cost of such custom colors.

F-2-2

 

 

	 	(b)	 	Hollow metal service doors and frames: Insulated flush hollow
metal doors; thermally broken hollow metal frames: finish:
enamel.

	10.	 	Windows and Curtainwalls

	 	(a)	 	Windows: Thermal break continuous aluminum fixed strip
windows: 1 inch insulating glass with high efficiency low-E
metallic coating; finish: standard anodized colors to be
selected. ONTRACK shall have the right to select custom colors
and shall be responsible for the incremental cost of such
custom colors. U-values not to exceed 0.36 glass, 0.68 frame;
condensation resistance factor (CRF) not less than 50.
	 
	 	(b)	 	Curtainwalls: Pre-glazed thermally broken system; Wausau or
approved equal; inserts for entrance doors; one inch clear
insulating glass; U-value not to exceed 0.36 glass, 0.68
frame; CRF not less than 55 glass, 73 frame.

	11.	 	Roof/Ceiling Assemblies

	 	(a)	 	Roof coverings: Single ply 45 mil EPDM rubber membrane,
loose-laid/ballasted.
	 
	 	(b)	 	Insulating: Tapered polyisocyanurate foam 2-1/2 inch minimum
thickness, minimum R=20, taper for backslopes and crickets.
	 
	 	(c)	 	Roof deck: Metal roof decking on open web steel joists.
	 
	 	(d)	 	Roof drainage: Provide roof and roof overflow drains, overflow
scuppers are not acceptable.

F-2-3

 

 

EXHIBIT F-3

MINIMUM SHELL CONDITION REQUIREMENTS

FOR

ONTRACK DATA INTERNATIONAL, INC.

ALL PROPOSALS SHALL, IN ADDITION TO THE ALLOWANCES PROVIDED, INCLUDE THE
FOLLOWING MINIMUM “SHELL CONDITION” IMPROVEMENTS:

	1.	 	Floor Finishes

		
	 	Concrete stab cleaned and leveled to 1/4” tolerance within a 10’0” x
10’0” given area (tolerances are not cumulative, elevator sills are to
be established elevation 0’0”) (FL20). Areas leveled subsequent to
initial pouring of slab to be sealed after setting. Finished surfaces
to be ready to receive carpet, ceramic tile, resilient tile, wood
parquet or stone flooring without additional preparation other than
cleaning.

	2.	 	Floor Loading

		
	 	Floor loads shall be per applicable codes and base building standards
throughout but not less than 50 pounds per square foot dead load plus
20 pounds per square foot for partitions. All areas within the core
perimeter should accommodate 150 pounds per square foot of dead load
and the area immediately adjacent to the core perimeter should
accommodate 100 pounds per square foot dead load.

	3.	 	Wall, Column and Perimeter Bulkhead Construction

		
	 	All perimeter walls, core walls, freestanding and engaged columns and
perimeter top and bottom bulkheads to be furred, drywalled, taped,
floated, sanded, and ready to receive final ONTRACK finishes.

	4.	 	Other Perimeter Finishes

		
	 	Building perimeters shall be fully finished with respect to insulation,
waterproofing, caulking, glazing and metal finishing, including all
required glass replacement (in the event of defects or cracked or
broken panes), glass cleaning on interior and exterior, metal touch up
and cleaning and any other actions required to render the perimeters to
a

F-3-1

 

 

		
	 	tenant-ready condition. Building standard window coverings (1”
mini-blinds) shall be provided and installed by Landlord just before
occupancy.

	5.	 	Other Core Finishes

		
	 	The following shall be required to be completed and installed at
agreeable locations at Landlord’s cost:

	 	(a)	 	Women’s and men’s restrooms. It is anticipated that complete
restrooms shall be located at 3 locations within the premises.
Restrooms should be designed to provide flexibility in
distribution of stalls between men’s and women’s, and at a
minimum shall provide code required stalls plus 1 for men and
women at each of three restroom locations. Accessible
restrooms shall be provided at each of the three restroom
locations.
	 
	 	(b)	 	Janitor closets;
	 
	 	(c)	 	Electrical closets with service and distribution panelboards
and transformers 480/277V, 120/208V, (See Paragraph 9 below);
	 
	 	(d)	 	Core walls, columns and perimeter bulkhead completed with
finished drywall ready for paint;
	 
	 	(e)	 	Three water coolers shall be provided;
	 
	 	(f)	 	Fire sprinklers as required by code, based on ONTRACK’s plans;
	 
	 	(g)	 	Exit signs as required per code, based on ONTRACK’s plans;
	 
	 	(h)	 	If the building contains more than one floor, Landlord shall
provide a passenger elevator lobby complete in all respects
including finishes to be reviewed and approved by ONTRACK;
	 
	 	(i)	 	Core corridor doors shall be primed and ready to receive
ONTRACK’s finish;
	 
	 	(j)	 	Closures and appropriate looking devices for all exit,
stairwell, and electrical/telephone doors, and closures on
women’s/mens toilets. All exterior doors and all stairwell
doors shall have locking and unlocking devices controlled by
Landlord’s building management system. Landlord shall, upon
request from ONTRACK and at ONTRACK’s cost, also provide an
electronic card access security system as approved by ONTRACK
on all exterior doors. In such event the cost shall not exceed
$10,000.

F-3-2

 

 

	 	(k)	 	All ceiling space shall be sufficiently clear of all pipes,
ductwork, etc., to provide for a minimum finished ceiling
height of eleven (11) feet. All base building systems shall be
coordinated such that the intersection of the building
structural system, medium pressure ductwork, the fire
protection system and the base building light fixture will all
fit within the ceiling cavity. Indicated heights shall include
room to place conventional florescent light fixtures at any
(and every) place on the floor;
	 
	 	(l)	 	All pipe sleeves in beams and walls shall be packed airtight
and complete;
	 
	 	(m)	 	Domestic cold water, valved and capped at four locations
within the premises;
	 
	 	(n)	 	Landlord shall provide for all Fire and Life Safety
requirements per City and State codes, including installation
of all required annunciators, strobes and other warning
devices;
	 
	 	(o)	 	All code required general exhaust requirements shall be
provided;
	 
	 	(p)	 	A Certificate of Occupancy shall be obtained by Landlord.

	6.	 	Sprinkler System

		
	 	Sprinkler piping shall be provided to include main runs with crosses to
achieve a 15’ x 15’ grid for future extensions and locations of branch
piping, drops and heads. Landlord shall provide as many semi-recessed
sprinkler heads as necessary to meet code (presuming ordinary hazard)
to be located, at Landlord’s expense, in the suspended acoustical tiles
per ONTRACK’s final space plans, provided that, on average, no more
than 25% of each floor shall be enclosed offices or conference rooms.
Sprinkler heads shall be centered in the ceiling tiles. Landlord shall
provide for concealed heads in 10% of the space and provide a unit
price for adds and deducts on a single unit basis for more or less
concealed heads.

	7.	 	Ceilings

		
	 	Completed and laser-leveled grid suspension system capable of receiving
2’0” x 2’0” exposed t-bar acoustic tile insulation. Ceiling tile must
be 2’ x 2’ lay-in tegular edge regressed, noncombustible mineral,
foil-backed, fissured, acoustical tile, with a minimum thickness of
3/4”, an NRC rating of .55 to .65, an STC rating of 35 to 39, and a
light reflectance rating of LRI. Alternative lay-in ceiling systems
shall be considered provided they meet the above standards. If ONTRACK
accepts Second Look II tiles, it will receive a credit of $.40 per
square foot for all areas in which such tile is used.

F-3-3

 

 

	8.	 	Light Fixtures

	 	(a)	 	Landlord shall provide 2’ x 4’ parabolic light fixtures with a
minimum louver depth of 3 inches, electronic ballasts and 10’
plug-in pigtails (manufactured wiring system). Light fixtures
shall be 2 x 4 — 3 lamp fixtures. Fixtures shall be provided
at a rate of one per 80 rentable square feet. Two tube
fixtures will not be acceptable. Bulbs shall be T-8 (FO32/830)
energy saving lamps, or an energy efficient alternative
approved by ONTRACK. Provide units cost for adds and deducts
of lighting fixtures.
	 
	 	(b)	 	The light fixture louver shall create a low level of ceiling
brightness and comply with the requirements of ANSI/IES RP-1
1993.
	 
	 	(c)	 	Fixtures shall be provided in a quantity sufficient to achieve
a minimum of 50 foot candles of maintained light at the
desktop in all areas although it is understood that the
standard recited above will require more fixtures. The higher
standard of the two will be met. Landlord shall provide
electrical distribution from panel boards to junction boxes in
the ceiling to accommodate plug-in pigtails (manufactured
wiring system).

	9.	 	Electrical Distribution and Service

		
	 	As part of the Base Building or shelf condition work, Landlord shall
provide an electrical distribution and service system as follows:

	 	(a)	 	All power shall be provided to ONTRACK’s initial space by a
dedicated, separately metered switchboard with surge
suppression.
	 
	 	(b)	 	Basic electrical service of 480/277 volts, 3 phase, 4 wire, 60
cycles through a grounded switchboard suitable for such
service. The electrical service conductor and switchboard
shall be oversized 20% to anticipate possible growth in future
requirements. Switchboard devices shall be selectively
coordinated with a ground fault protection system.
	 
	 	(c)	 	Distribution voltages shall be 480/277 volts, 3 phase, 4 wire
for fluorescent lighting and motors 1/2 horsepower and larger;
and 120/208 volts, 4 wire, 3 phase for receptacle circuits,
small motors and incandescent lighting. Landlord shall provide
all required transformers and an enclosed pad area where the
transformers are located adjacent to the building.
	 
	 	(d)	 	The electrical service shall be sized to provide a minimum of
eight (8) watts per rentable square foot for ONTRACK’s
lighting and receptacles in all areas (other than ONTRACK’s
clean room where additional power may be required),

F-3-4

 

 

	 	 	 	excluding HVAC equipment, special systems, miscellaneous
electrical loads and elevator equipment requirements. All of
ONTRACK’s power shall be separately metered.

	 
	 	(e)	 	Power which serves HVAC equipment, special systems,
miscellaneous electrical loads and electrical equipment must
be a separate distribution riser which is not part of the
lighting and receptacle bus duct.
	 
	 	(f)	 	Distribution shall be to one electrical room for approximately
each 15,000 square feet of rentable area. Each electrical room
shall be connected to each other electrical room by suitable
ducts or conduit. Each electrical room must be provided with
an exhaust system.
	 
	 	(g)	 	Circuit breaker panelboards shall be located in each
electrical room (at least one per 40,000 rentable square feet)
to serve electrical loads and the portion of the leased
premises on the floor as follows:

	 	(1)	 	Provide one 480/277 volt panelboard in each
electrical room. Each panelboard shall have 100 amp
main breaker and provision for at least 42 one pole
bolt on breakers. Panelboard shall include at least
one 20 amp circuit breaker per 500 square feet of
usable space (exclusive of the 20% growth
requirement).
	 
	 	(2)	 	In each electrical room provide one 480/277 volt
lighting panelboard, one 75 KVA — K13 dry type
transformer, with 200% neutral. Provide wall space
for one additional 50 KVA transformer and one
additional 120/208 volt panelboard. Each panelboard
shall have a 225 amp main breaker and provisions for
42 one pole bolt-on breakers. Panelboards shall
include at least one 20 amp circuit breaker per 250
square feet of usable space. Each panel shall have
its own main breaker. Panels shall be electronic
grade with metal oxide varistors. Each 120/208 panel
shall be equipped with a 200% neutral, ground and
isolated ground bus.
	 
	 	(3)	 	Panelboards and cabinets shall contain space for 20%
additional circuit breakers for future requirements.

	 	(h)	 	Landlord shall provide, at no cost to ONTRACK, adequate space
in the building or exterior pad space for ONTRACK’s 250 KW
diesel generator. Provide empty conduit system to electrical
closets for separate standby power system. Landlord shall
provide an interior room with 24 hour cooling for ONTRACK’s 75
KVA UPS system. Landlord shall also provide appropriate fuel
storage system. Landlord shall also provide space to
accommodate sound attenuation, and shall provide large
openings to the outside for air requirement. ONTRACK has not
yet

F-3-5

 

 

	 	 	 	decided whether or not a full UPS and back-up power system
will be required. Liberty shall, however, design the building
to provide a connection from the backup power location to
ONTRACK’s electrical closets.

	 

	 	(i)	 	If required to maintain utility billing power factor of 0.90,
Landlord shall provide power factor correction capacitors
appropriately sized. Capacitors shall be non- PCB filled
complete units with current limiting indicating fuses and
dust-tight enclosures.
	 
	 	(j)	 	The entire electrical system and equipment shall be grounded
in accordance with the National Electrical Code. In addition,
ground counterpoise shall be a 350 MCM ground conductor
installed around the perimeter of the building and connected
to building steel. ONTRACK’s switchboard shall be connected to
this ground and a 350 MCM riser run through each ONTRACK
electrical and telephone and data room. Provide in each
electrical, telephone and data room a 1/4” x 2” x 24” ground
bus connected to the 350 MCM ground riser.

	 
	 	(k)	 	
Provide a masters label lightening protection system on the
building.

	10.	 	Heating, Ventilation and Air-Conditioning (“HVAC”)

		
	 	Landlord shall cause its mechanical and electrical engineers to prepare
the plans for the HVAC distribution system for the leased premises,
which plans shall be subject to the review and approval of ONTRACK and
shall meet the following criteria:

	 	(a)	 	The system shall include the following features:

	 	(1)	 	Outside air economizer, enthalpy-controlled, capable
of 100% outside air.
	 
	 	(3)	 	Minimum outside air provision shall be based on ASHRE
Standard 62-89 (Ventilation for Acceptable Indoor Air
Quality).
	 
	 	(3)	 	Humidification is not required.

	 	(b)	 	The system, including exhaust fans, shall be designed to
conform to ONTRACK’s plans and to operate so that sound
transmission levels do not exceed NC40. Landlord shall be
required to take appropriate corrective measures to eliminate
any disturbing noise or vibration of any mechanical equipment
or system furnished and installed by Landlord.
	 
	 	(c)	 	The system shall be designed with roof-top units that will
provide a minimum of one ton of cooling for each 300 rentable
square feet of space in the Premises. Landlord shall provide
one VAV box for each 1500 rentable square feet of

F-3-6

 

 

	 	 	 	building area. In addition, all conference rooms shall be
separately zoned and all building corners shall be separately
zoned if they contain a private office, and an additional VAV
box shall be added for each such conference room or corner
office.

	 	(d)	 	The system shall be able to efficiently and economically
accommodate 24 hour per day cooling in the company’s lab and
clean room facilities. All roof top units shall be high
efficiency with a minimum EER of 12. If roof top units are not
available with an EER of 12, Liberty shall provide such units
with the highest EER rating available provided they shall have
a minimum EER of 9.
	 
	 	(e)	 	The design of the air-conditioning system shall take into
account the following occupancy schedule:

		
	 	General Offices — One person per 150 usable square feet and
two personal computers per person, assuming each personal
computer generates 850 BTU’s.

		
	 	Meeting and Conference Rooms — One person per 15 usable square
feet.

	 	(f)	 	The occupancy schedule of particular areas shown on ONTRACK’s
plans may vary between one person per 50 usable square feel
and one person per 200 usable square feet, provided that the
entire floor division of the leased premises does not assume
more than one person per 150 usable square feet and that such
variances are reasonably distributed. The heating, ventilating
and air-conditioning system shall meet the following design
conditions, at the stated outside design conditions:

	 	(1)	 	Summer — Outdoor conditions 92(degree) Fahrenheit dry
bulb, 75(degree) Fahrenheit wet bulb (2-1/2%
coincidence); indoor conditions 75(degree) Fahrenheit
dry bulb, 50% relative humidity maximum.
	 
	 	(2)	 	Winter — Outdoor conditions minus 19(degree)
Fahrenheit dry bulb; 72(degree) Fahrenheit dry bulb,
inside.
	 
	 	(3)	 	Regardless of the design standards, Landlord shall
(to the extent that it controls the system) operate
the HVAC system to achieve a space temperature of
72(degree) Fahrenheit dry bulb inside whenever
possible.
	 
	 	(4)	 	The air handling unit and distribution system shall
be sized adequately to accommodate all external and
internal heat gains resulting from base building
mechanical systems, from people load and from heat
generated by lighting and miscellaneous equipment
power including up to 4.8 watts per square foot of
lighting and miscellaneous equipment load.

F-3-7

 

 

	 	(g)	 	All interior areas shall be suitably zoned, with independent
zone controls.
	 
	 	(h)	 	Supply outlets and equipment shall be selected for minimum
drafts and noiseless air distribution.
	 
	 	(i)	 	The type and size of the diffusers shall be determined by
Landlord’s engineer after consultation with ONTRACK’s
architect or engineer.
	 
	 	(j)	 	All supply and/or return ducts shall be equipped with fusible
link dampers as prescribed by applicable laws, if any.
	 
	 	(k)	 	ONTRACK intends to have lunch rooms, clean-rooms, meeting
rooms and conference rooms. The building shall provide
separate heating and cooling zones for each such room. The
heating and cooling of each room will be controlled by a
separate thermostat.
	 
	 	(l)	 	Exhaust fans shall be exhausted to the return air plenum.
Exhaust fans for conference rooms shall be located away from
the conference room to avoid noise levels above those
specified in Section 12 below. Electrical closets shall be
equipped with exhaust fans.
	 
	 	(m)	 	Air filtration shall be provided at each unit by two sets of
particulate filters, one pre-filter set of 30% efficient
filters and one final filter set of at least 65% efficiency.
	 
	 	(n)	 	A direct digital control system (energy management system)
shall be provided with the features listed below as a minimum:

	 	(1)	 	Provide run time status of HVAC equipment.
	 
	 	(2)	 	Control each zone to maintain set-point temperature.
The set-point temperatures shall be adjustable
remotely.
	 
	 	(3)	 	Provide alarms indicating equipment failure, zone
high/low temperatures, etc.
	 
	 	(4)	 	Provide cooling during winter months for ONTRACK HVAC
equipment in computer room, telephone switch rooms,
network and communications closets.

	11.	 	Telephone and Data

	 	(a)	 	ONTRACK will construct telephone and data rooms within or
adjacent to the

F-3-8

 

 

		
	 	building core as part of its tenant improvement package.

	 	(b)	 	Liberty shall provide one dedicated 300 square foot Main Point
of Presence (MPOP) room for ONTRACK’s telephone and data
service entry into the building. This room shall be used
exclusively by ONTRACK.
	 
	 	(c)	 	Liberty shall also construct one dedicated Alternate Point of
Presence (APOP) room for alternate telephone and data service
entry into the building.
	 
	 	(d)	 	Liberty shall provide one non-exclusive fiber optic hub room
for telephone and data service into the building. The MPOP,
APOP and fiber rooms are not alternates, all will be required.
	 
	 	(e)	 	Landlord shall provide dedicated empty conduits from the
outside of the building near available services to ONTRACK’s
MPOP, APOP and fiber hub rooms. Secure empty conduits must be
provided from the MPOP and APOP to each of the ONTRACK
telephone and data rooms within its space and to its expansion
space. Landlord must provide such conduits to serve two
locations on each floor of the building occupied by ONTRACK
and conduits must be provided between each of the two
locations.
	 
	 	(f)	 	Landlord shall provide an adequately sized empty conduit
between the MPOP and the APOP.

	12.	 	Acoustical Attenuation Acoustical attenuation shall be designed within
walls separating elevators, toilet rooms, fan rooms, and switchgear
from occupied ONTRACK spaces and five specified rooms within ONTRACK’s
space. The system design criteria for ambient noise level in the
ONTRACK’s space, when unoccupied, shall meet NC40 standards when all
building systems are operating and standard floor and ceiling finishes
are installed.
	 
	13.	 	Loading Dock A single loading dock most be provided. Such loading dock
must be enclosed and equipped with dock leveler, seals and lights.

F-3-9

 

 

EXHIBIT G

EXCLUSIONS FROM OPERATING EXPENSES

FOR

ONTRACK DATA INTERNATIONAL, INC.

	1.	 	Original Construction
	 
	 	 	All costs incurred in connection with or directly related to the
original construction (as distinguished from operation, repair, and
maintenance) of the Project.
	 
	2.	 	Initial Development
	 
	 	 	Legal and other fees, leasing commissions, advertising expenses and
other costs incurred in connection with acquisition of the land, or
the
original development or original leasing of the Project.
	 
	3.	 	Costs Caused by Construction
	 
	 	 	Any expenses incurred during construction of the Site Improvements or
Building or any improvements therein in excess of those that would be
expended if construction were completed and the building were fully
occupied.
	 
	4.	 	Equipment and Systems Leasing
	 
	 	 	The costs of renting or leasing anything other than items, the
purchase
price of which could be included in Operating Expenses hereunder.
	 
	5.	 	Hazardous Substances
	 
	 	 	All costs related to the removal of substances or materials from the
Building, Site Improvements or the Project which are presently, or at
any time in the future may be, deemed hazardous.
	 
	6.	 	Compliance with Laws
	 
	 	 	The cost of changes to the Building or Site Improvements in compliance
with any laws, statutes, ordinances, rules, or directives, except as
otherwise expressly permitted under the Lease, including Sections 9(a)
(entitled “Payment of Operating Expenses”) and 10 of the Lease
(entitled, “Compliance with Laws”).

G-1

 

	7.	 	Employee Limitation
	 
	 	 	All costs for any employees above the rank of building manager and
reasonable allocation of the costs of all employees at or below the
rank of building manager whose duties include work on other buildings
or projects or on activities the costs of which are otherwise excluded
from operating costs.
	 
	8.	 	Management and Accounting Services
	 
	 	 	Other than a specifically agreed upon management fee, all costs and
expenses associated with management and accounting services for the
Project including but not limited to all expenses of a centralized
office, the wages, salaries, bonuses, and benefits of all management
personnel, costs of preparation and handling of accounts receivable
and
accounts payable, and the payment of any rent, operating expenses, or
taxes for an on-site management office.
	 
	9.	 	Capital Costs
	 
	 	 	The costs (or any amortization thereof) of any alteration, addition,
change, replacement, improvement, repair, or other item which are
properly capitalized under either generally accepted accounting
principles or under federal income tax accounting principle, except as
otherwise expressly permitted under the Lease, including Sections 9(a)
(entitled “Payment of Operating Expenses”) and 10 of the Lease
(entitled, “Compliance with Laws”).
	 
	10.	 	Depreciation
	 
	 	 	Any charge for depreciation or amortization of any of the improvements,
except as otherwise expressly permitted under the Lease, including
Sections 9(a) (entitled “Payment of Operating Expenses”) and 10 of the
Lease (entitled, “Compliance with Laws”).
	 
	11.	 	Ground Leases and Easements
	 
	 	 	Any charges for ground leases or other underlying leases, easements, or
any other similar or dissimilar use fees or other costs related to the
use of the land.
	 
	12.	 	Financing Costs
	 
	 	 	Financing and refinancing costs, interest on debt or amortization
payments on any mortgage or mortgages.

G-2

 

	13.	 	Correcting Defects
	 
	 	 	Costs of correcting defects in the design or construction of the Base
Building or Site Improvements, the major Base Building systems or the
material used in the construction of the Base Building or Site
Improvements (including latent defects in the Base Building or Site
Improvements or the inadequacy of design of the Base Building or Site
Improvements) or in the Base Building equipment or appurtenances
thereto.
	 
	14.	 	Damage by Other Tenants
	 
	 	 	The cost of any repair to remedy damage caused by or resulting from the
negligence of any other tenants in the Project, including their agents,
servants, employees, or invitees, together with the costs and expenses
incurred by Landlord in attempting to recover such costs.
	 
	15.	 	Leasing Costs
	 
	 	 	All costs related to any leasing or releasing of the Project. In the
event the building management company is responsible for leasing or
re-leasing of the Building a reasonably allocable share of the
management fee shall be therefore excluded.
	 
	16.	 	Improvements to Rentable Areas
	 
	 	 	Costs incurred in renovating or otherwise improving or decorating or
redecorating space (including painting, carpet shampooing, drapery
cleaning and wall washing) for tenants or other occupants in the
Building or vacant rentable space in the Building or costs related
thereto and costs incurred by Landlord, whether or not reimbursed to
Landlord, by other tenants in connection with maintenance or repair of
above-shell condition improvements.
	 
	17.	 	Bad Debts or Rent Loss
	 
	 	 	A bad debt loss, rent loss or reserves for bad debts or rent loss,
provided, however, the cost of purchasing rent loss insurance to cover
losses occasioned by a casualty shall not be excluded.
	 
	18.	 	Affiliates — Excessive Payments
	 
	 	 	Any item of cost, including a building management fee, which represents
an amount paid to an affiliate of Landlord or an affiliate of any
partner or shareholder of Landlord, or to the building management
company or an affiliate of the building management company, to the
extent the same is in excess of the lowest reasonable cost of said item
or service in an arms length transaction. For the purposes hereof
“affiliate” shall include subsidiaries of Landlord or any person or
entity that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with Landlord
or the building management company.

G-3

 

	19.	 	Bad Faith Payments — Kickbacks
	 
	 	 	Costs or expenses incurred by Landlord which represent amounts spent by
Landlord or its agents in bad faith and an amount equal to any costs
which represent any payments received by Landlord or the building
manager, or the employees or officers of either, from suppliers of
goods or services as kick-backs, finders fees, expediting fees, or
other similar and dissimilar fees.
	 
	20.	 	Operation of Landlord’s Business; Preservation of Asset
	 
	 	 	Any and all costs (including legal fees and costs of lawsuits)
associated with the operation of the business of the entity which
constitutes Landlord or preservation of the Landlord’s interest in the
Building; excluded items shall specifically include, but shall not be
limited to, formation of the entity, internal accounting and legal
matters, including but not limited to preparation of tax returns and
financial statements and gathering of data therefor, costs of defending
any lawsuits with any mortgagee, costs of selling, syndication,
financing, mortgaging or hypothecating any of the Landlord’s interest
in the Project, costs of any disputes between Landlord and its
employees (if any), costs of disputes between Landlord and managers of
the project, costs of collecting rent or other charges, and costs of
disputes between Landlord and tenants within the project including,
without limitation, the Tenant.
	 
	21.	 	Tenant Specific Costs
	 
	 	 	All costs and expenses arising solely out of the specific needs or
character of a particular tenant or such tenant’s officers, employees,
agents or customers, whether or not Landlord recovers such costs from
such tenant. And, any increased costs resulting from Landlord
permitting third parties to use the common elements of the Project for
income producing activities.
	 
	22.	 	Disproportionate Costs; Excess Services
	 
	 	 	All costs and expenses resulting from the delivery to other tenants of
services, utilities, or the use of Building facilities or other
benefits which are either greater in quantity or higher in quality than
those delivered to Tenant regardless of whether or not the cost of such
services is recovered by Landlord.
	 
	23.	 	Excess HVAC
	 
	 	 	Landlord’s costs of excess electricity, incremental heating,
ventilation or air conditioning and other services sold or provided to
tenants which are greater than those provided to Tenant whether or not
Landlord is entitled to be reimbursed by such tenants.

G-4

 

	24.	 	Landlord’s Negligence
	 
	 	 	Any expense incurred as a result of the negligence of Landlord, its
agents, servants, or employees or arising out of Landlord’s negligent
failure to manage the Project consistently with the standards required
by the Lease.
	 
	25.	 	Insurance on Above Standard Tenant Improvements
	 
	 	 	Any cost or expense for insurance against loss due to damage or
destruction resulting from fire or an extended coverage risk to
improvements within rentable areas in the Project if, and to the
extent, the improvements are not paid for by Landlord.
	 
	26.	 	Reimbursed Costs
	 
	 	 	Any items not otherwise excluded to the extent Landlord is reimbursed
therefore by insurance or otherwise compensated, including direct
reimbursement by any tenant, less the out-of-pocket cost of collection.
	 
	27.	 	Interest and Penalties
	 
	 	 	All interest or penalties incurred as a result of Landlord’s failure to
pay any costs or taxes as the same shall become due.
	 
	28.	 	Duplicate Charges
	 
	 	 	Any costs which would duplicate other costs theretofore included in
Operating Expenses.
	 
	29.	 	Rent Insurance
	 
	 	 	The cost of rent insurance which insures against rent loss for a period
in excess of 24 months.

G-5

 

EXHIBIT H

LIBERTY/ONTRACK LEASE

LIST OF MINIMUM ELEMENTS REQUIRED

FOR “SUBSTANTIAL COMPLETION” OF THE

BASE BUILDING AND SITE IMPROVEMENTS

MINIMUM ELEMENTS:

	 	1.	 	All parking areas must be completed including lighting,
traffic control signs, curbing and first lift of black top.
	 
	 	2.	 	All exterior walkways between building and curb, entrances,
exits, driveways and loading docks must be finished and
functional.
	 
	 	3.	 	All exterior surfaces of the building shall be fully completed
(except only minor punch list items) and shall be completely
weather tight in accordance with the Approved Plans.
	 
	 	4.	 	All Building doors, windows, locks and other points of ingress
and egress shall be lockable and all locks (other than Tenant
installed security systems) shall be completed, functional and
under the control of Tenant.
	 
	 	5.	 	All base building mechanical systems serving any portion of
the Building shall be completed and fully functioning as
designed (except only minor punch list items not materially
affecting functionality), including, without limitation,
sprinklers, plumbing, electrical and HVAC systems.
	 
	 	6.	 	All interior portions of Building entries and exits, all rest
room facilities and other elements which would be common
elements if the Building were occupied on a multi-tenant basis
shall be complete and functional (except only minor punch list
items not materially affecting functionality).

The foregoing list does not, and is not intended to, define “substantial
completion”; pursuant to Article 4 of the Lease, “substantial completion” shall
not be deemed to have occurred until the foregoing minimum elements are
satisfied and Landlord has obtained the requisite architect’s certificate and
certificate of occupancy required under the fourth paragraph of Section 4(c) of
the Lease.

H-1

 

EXHIBIT I

EXISTING TITLE ENCUMBRANCES

	1.	 	Real estate taxes for and payable in the year 1998, first half paid, second
half due October 15, 1998.
	 
	2.	 	Drainage and utility easement(s) as shown on the recorded plat of
Staring Lake Clubs Courts and Villages and Research Farm 2nd Addition.
	 
	3.	 	Resolution dated November 5, 1996, filed of record December 30, 1996,
as Document Nos. 2773427 (T) and 6669002 (A).
	 
	4.	 	Rights of Access as contained in Deed Document No. 2733662.
	 
	5.	 	Notice of Lis Pendens for highway purposes as contained in Document
No.
1993044.
	 
	6.	 	Drainage and utility easements as retained in Vacation, Document Nos.
5741642 and 2149455.

Note: The following items do not affect the Property, but do however appear on
the Certificate of Title for the Property; Landlord has no obligation to cause
these items to be removed from the Certificate of Title:

	 	 	Easement dated August 7, 1996, filed of record August 13, 1996, as
Document No. 2733665 (T).
	 
	 	 	Easement contained in Book 1545 Deed page 162 and Book 126
Miscellaneous page 160.

I-1

 

EXHIBIT J

ENVIRONMENTAL INFORMATION

	1.	 	Svoboda Ecological Resources Wetlands Delineation Report dated
December
5, 1995.
	 
	2.	 	Phase I Environmental Site Assessments issued by American Engineering
testing dated December 15, 1996.
	 
	3.	 	Report of Geotechnical Exploration and Review dated December 20, 1995.
	 
	4.	 	Phase I Environmental Site Assessment issued by Northern Environmental
dated July 22, 1996.
	 
	5.	 	Limited Subsurface Investigation Report, issued by Northern
Environmental dated August 2, 1996.
	 
	6.	 	Revised Limited Subsurface Investigation Report, issued by Northern
Environmental dated August 5, 1996.
	 
	7.	 	U.S. Department of Agriculture Wetlands Determination Review
Memorandum
dated August 5, 1996.
	 
	8.	 	Minnesota Pollution Control Agency Approval of Response Action Plan,
dated November 22, 1996.
	 
	9.	 	Minnesota Department of Agriculture Approval of Agricultural Chemical
Incident Remedial Investigation dated November 26, 1996.

J-1

 

FIRST AMENDMENT TO LEASE

               This Amendment (“Agreement”) is made as of the      day of January, 1999
by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited
partnership (“Landlord”), and ONTRACK DATA INTERNATIONAL, INC., a corporation
organized under the laws of Minnesota (“Tenant”).

BACKGROUND:

     A.     Landlord and Tenant are parties to that certain Lease dated as of
September 21, 1998, for certain premises to be constructed by Landlord in the
Flying Cloud Corporate Campus, Eden Prairie, Minnesota.

     B.     Tenant has requested and Landlord has agreed, subject to the terms and
conditions set forth below, to reduce the size of the Premises to be initially
constructed by Landlord.

     C.     Landlord and Tenant desire to amend the Lease to reduce the rentable
area of the Premises and modify certain other provisions of the Lease, all as
provided below.

AMENDMENT:

               Now therefore, for good and valuable consideration, the receipt and legal
sufficiency of which the parties acknowledge, the parties agree as follows:

     1.     PREMISES. The rentable area of the Premises is hereby reduced from
80,119 rentable square feet to 62,200 rentable square feet. All references in
the Lease to the Premises containing 80,119 rentable square feet are hereby
amended to read 62,200 rentable square feet.

     2.     SITE PLAN. The Site Plan attached to the Lease as EXHIBIT “A” is hereby
replaced with the Site Plan attached hereto as ATTACHMENT 1. All references in
the Lease to Exhibit “A” or to the Site Plan shall mean the Site Plan attached
hereto as Attachment 1.

     3.     SCOPE DRAWINGS. The Scope Drawings attached to the Lease as EXHIBIT
“F-1” are hereby replaced with the Scope Drawings attached hereto as ATTACHMENT
2. All references in the Lease to Exhibit “F-1” or to the Scope Drawings shall
mean the Scope Drawings attached hereto as Attachment 2.

     4.     MINIMUM ANNUAL RENT AND ESTIMATED ANNUAL OPERATING EXPENSES. Section
1(d) of the Lease is hereby amended and restated in its entirety as follows:

 

 

     “d. MINIMUM RENT (ss 8) & OPERATING EXPENSES (ss 9)

	 	(i)	 	“MINIMUM ANNUAL RENT”:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	Minimum Annual	 	 	 	 	 	 	 	 
	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 	 	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 
	Year	 	Square Foot	 	Annual	 	Monthly	 	Year	 	Square Foot	 	Annual	 	Monthly
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	1
	 	$	11.450	 	 	$	712,190.04	 	 	$	59,349.17	 	 	 	6	 	 	$	12.642	 	 	$	786,332.40	 	 	$	65,527.70	 
	2
	 	$	11.679	 	 	 	726,433.80	 	 	 	60,536.15	 	 	 	7	 	 	$	12.895	 	 	 	802,068.96	 	 	 	66,839.08	 
	3
	 	$	11.913	 	 	 	740,988.60	 	 	 	61,749.05	 	 	 	8	 	 	$	13.152	 	 	 	818,054.40	 	 	 	68,171.20	 
	4
	 	$	12.151	 	 	 	755,792.16	 	 	 	62,982.68	 	 	 	9	 	 	$	13.415	 	 	 	834,413.04	 	 	 	69,534.42	 
	5
	 	$	12.394	 	 	 	770,906.79	 	 	 	64,242.23	 	 	 	10	 	 	$	13.684	 	 	 	851,144.76	 	 	 	70,928.73	 

	 	(ii)	 	ESTIMATED “ANNUAL OPERATING EXPENSES”: $224,541.96
(Two Hundred Twenty-four Thousand Five Hundred
Forty-one and 96/100 Dollars) estimated for calendar
year 1999 (based on $3.61 per rentable square foot),
payable in monthly installments of $18,711.83
(Eighteen Thousand Seven Hundred Eleven and 83/100
Dollars), subject to adjustment (ss 9(a))”

     5.     PARKING. Consistent with the provisions of Section 34 of the Lease
(entitled “Parking”), Landlord will provide five (5) parking spaces for each
1,000 rentable square feet of the Premises, for a total of 311 spaces based on
the reduced size of the Premises. Landlord will preserve the ability to expand
the parking area in order to maintain the 5 spaces per 1,000 square foot ratio
in the event Tenant exercises its expansion option provided for in SECTION 9
below.

     6.     CONSTRUCTION DEADLINES; REMEDIES.

	 	6.1	 	The date of substantial completion of the Base Buildings and
Site Improvements (see the first paragraph of Section 4(c) of
the Lease) shall be JUNE 1, 1999, not May 1, 1999.
	 
	 	6.2	 	Any provision of the Lease to the contrary notwithstanding, no
penalty shall be incurred by Landlord in the event Landlord
fails to achieve substantial completion by June 1, 1999.
Accordingly, the second paragraph of SECTION 4(c) of the Lease
is hereby amended and restated in its entirety as follows:

	 	 	 	“If Landlord fails to so substantially complete the
Base Building and Site Improvements on or before JUNE
1, 1999 (as the same may be extended as a result of
any Tenant Delay or delay caused by Force Majeure or
any other reason outside of Landlord’s control), then
Tenant shall have the right to hold over in Tenant’s
Existing Premises (as defined in Section 37 below),
at the same rent and on all of the same terms as
provided in Tenant’s Existing Lease (as defined in
Section 37 below), until the Commencement Date of
this Lease. The foregoing shall be Tenant’s sole and
exclusive remedy for any delay in the substantial
completion of the Base Building.”

2

 

     7.     APPROVAL AND CONSTRUCTION CONTINGENCIES. SECTION 4(d) of the Lease
(entitled “Approval & Construction Contingencies”) is hereby deleted in its
entirety.

     8.     TENANT ACCESS DATE. The Tenant Access Date (as defined in SECTION 5(a)
of the Lease) is hereby extended to APRIL 1, 1999.

     9.     EXPANSION OPTION. Tenant shall have the option at any time during the
Term to cause Landlord to expand the original Premises (Building A) to
approximately 80,000 rentable square feet and lease the expansion space (the
“Building A Expansion Space”) to Tenant, subject to all of the terms and
conditions of this Section 9.

     A.     The following are the conditions precedent to Tenant’s right to
exercise its Building A Expansion Option:

     (i)  Tenant must deliver to Landlord written notice exercising its right to
Lease the Building A Expansion Space;

     (ii)  Tenant, at the time of such notice, must not be in monetary default
(beyond any applicable notice and cure period in this Lease) or default
described in Section 26(a)(iv); and

     (iii)  Tenant, at the time of such notice, must be leasing all or
substantially all of Building A, and Tenant must not be planning to vacate,
assign or sublet any of the space in Building A at the time Tenant expands into
the Building A Expansion Space.

     B.     If Tenant properly exercises the Building A Expansion Option as
provided above, Landlord and Tenant shall enter into a lease or amendment to
this Lease with respect to the Building A Expansion Space containing the
following terms:

     (i)  Landlord will be obligated to construct the Building A Expansion Space
and requisite parking and other related site improvements, if any, within 9
months of the date such lease or amendment to lease is entered into by Landlord
and Tenant, subject only to delays outside of the reasonable control of
Landlord. The design, exterior materials and quality of the Building A
Expansion Space shall be consistent with the remainder of the Building A base
building so as to keep the relative cost (adjusted for changes in the costs of
labor and materials) per rentable square foot of the Building A Expansion Space
comparable to that of the remainder of Building A.

     (ii)  The term of the lease for the Building A Expansion Space shall
commence upon the substantial completion of Landlord’s construction of the
Building A Expansion Space (the “Building A Expansion Space Commencement
Date”), and shall expire upon the expiration or termination of the Term of this
Lease; provided, however, that if less than 5 years remains on the Term of this
Lease (including any extension options exercised by Tenant as of the Building A
Expansion Space Commencement Date), then the Term of this Lease (Section 36
[Tenant’s

3

 

Option to Terminate] notwithstanding) shall be extended so that this Lease and
the lease of the Building A Expansion Space shall expire on the fifth
anniversary of the Building A Expansion Space Commencement Date or such other
date as to which Landlord and Tenant may mutually agree. If the Term is so
extended, any unexercised and unexpired options to extend the Term under
Section 31 of the Lease shall be pushed out so that the full extension term, if
exercised, would commence as of the expiration of the Term or extended Term, as
the case may be, as extended pursuant to this subsection (b). If such extension
term, as pushed back, goes beyond lease year 19, Minimum Annual Rent for
subsequent lease years shall continue to increase at 2% per annum. For example,
if Tenant entered into a five-year lease for the Building A Expansion Space
commencing at the beginning of year eight of the ten-year initial Term of this
Lease, the Term of this Lease would be extended through year twelve, and the
first three-year extension term would commence, if exercised, at the beginning
of year thirteen (and the scheduled rental rates per rentable square foot under
Section 31 for years 13 through 15 would apply to the first extension term with
respect to the original Premises).

     (iii)  The Annual Minimum Rent for the Building A Expansion Space for the
first lease year shall be an amount equal to the product of (i) the “Building A
Expansion Costs” (as defined below), multiplied by (ii) the “Finance Rate” (as
defined below). The Annual Minimum Rent for the Building A Expansion Space for
each lease year subsequent to the first lease year shall be an amount equal to
102% of the scheduled Annual Minimum Rent for the immediately preceding lease
year.

     “Building A Expansion Costs” means all of the out-of-pocket costs incurred
by Landlord with respect to the construction of the Building A Expansion Space
and related site improvements, including, but not limited to, architectural and
engineering fees, all government fees and utility connection charges,
construction costs and expenses, including costs of constructing landscaping,
required parking and related site improvements, if any, signage, brokerage
fees, a development fee equal to 2% of such costs (exclusive of construction
interest), construction interest at 8.75% and a construction contingency not to
exceed 2%. Building A Expansion Costs will not include any costs or expenses
relating to land acquisition, defaults by Landlord, claims or penalties arising
from Landlord’s intentional wrongdoing , negligent acts or omissions or
violations of law, or costs of grading, utilities, site work or other
improvements not related to Building A and its related site improvements or
otherwise primarily benefitting another parcel or building.

     The “Finance Rate” shall be the greater of (i) a number determined by
adding 350 basis points to the actual yield, on the date of Tenant’s notice of
exercise, from U.S. Treasury Notes or Bonds having a term equal to the term of
the lease for the Building A Expansion Space, or (ii) 10% per annum.

     Prior to entering into a lease for the Building A Expansion Space,
Landlord and Tenant shall have agreed upon a budget of the Building A Expansion
Costs, based on plans and specifications for the Building A Expansion Space
approved by Landlord and Tenant. If

4

 

Landlord and Tenant are unable to agree upon such budget, Landlord shall not be
obligated to construct the Building A Expansion Space and neither Landlord nor
Tenant shall have any obligation to enter into such lease or lease amendment
for the Building A Expansion Space. Except as expressly provided herein or
otherwise clearly inapplicable, any such lease for the Building A Expansion
Space shall be on the same terms and conditions as the original Lease.

     10.     BROKERAGE FEE. The brokerage fee payable by Landlord to the Keeywaydin
Group, Inc., pursuant to Section 40 of the Lease regarding the initial Premises
shall remain at the same square foot rate set forth in Section 40 (i.e. $3.00
per rentable square foot), but shall be calculated based on the reduced square
footage of the Premises.

     11.     LEASE IN FULL FORCE. Except as expressly amended by this Agreement,
all of the terms and conditions the Lease remain unmodified and continue in
full force and effect. All capitalized terms used herein and not separately
defined herein shall bear the meaning assigned to them in the Lease.
The parties have executed this First Amendment as of the date stated in
the opening paragraph of this Amendment.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	LANDLORD:
	 	 	 	 	 	 	 	 	 
	Date signed:	 	, 1999	 	LIBERTY PROPERTY LIMITED PARTNERSHIP
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: Liberty Property Trust, Sole General Partner
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	John Gattuso, Senior Vice President
	 	 	 	 	 	 	 	 	 
	 	 	 	 	TENANT:
	 	 	 	 	 	 	 	 	 
	Date signed:	 	, 1999	 	ONTRACK DATA INTERNATIONAL, INC.
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Its:	 	 
	 	 	 	 	 	 	 	 	

5LEASE AGREEMETN

 

Exhibit 10.6

SECOND AND THIRD AMENDMENT TO THE LEASE AGREEMENT BETWEEN

LIBERTY PROPERTY LIMITED PARTNERSHIP AND THE REGISTRANT

SECOND AMENDMENT TO LEASE

          This Amendment (“Amendment”) is made as of the 26th day of February, 2001
by and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited
partnership (“Landlord”), and ONTRACK DATA INTERNATIONAL, INC., a Minnesota
corporation (“Tenant”).

BACKGROUND:

     A.     Landlord and Tenant are parties to that certain Lease dated as of
September 21, 1998, as amended by First Amendment to Lease (the “First
Amendment”) dated January 26, 1999 (collectively, the “Lease”) for certain
premises located at 9023 Columbine Road in the Flying Cloud Corporate Campus,
Eden Prairie, Minnesota and known as Building A as shown on the Site Plan
attached to this Amendment as Exhibit A-2 (the “Site Plan”).

     B.     The initial Term of the Lease expires on September 30, 2009. The first
lease year for the Building A Premises ended on September 30, 2000, and the
term “lease year” for the Building A Premises means each 12-month period
thereafter commencing on October 1 and ending on September 30.

     C.     Landlord is constructing Building B-1 (as shown on the Site Plan) in
the Campus and Tenant desires to lease Building B-1 and Landlord has agreed,
subject to the terms and conditions set forth below, to lease Building B-1 to
Tenant. The address of Building B-1 is 8995 Columbine Road.

     D.     Landlord and Tenant desire to amend the Lease to add Building B-1 to
the Premises and modify certain other provisions of the Lease, all as provided
below.

AMENDMENT:

          Now therefore, for good and valuable consideration, the receipt and legal
sufficiency of which the parties acknowledge, the parties agree as follows:

     1.     DEFINITIONS.

		
	 	     1.1 The definition of“Premises” in Section l(a) of the Lease
is hereby modified to read:
	 
	 	     “PREMISES”:

	 	 	 	Building A Premises: approximate rentable square
feet: 62,200 (see ss.2)
	 
	 	 	 	Building B-1 Premises: approximate rentable square
feet: 45,817 which consists of all of the rentable
area of Building B-1 except for a maintenance room
reserved to Landlord consisting of 295 rentable
square feet (see ss.2)

 

 

		
	 	     1.2 The
definition of “Building” in Section 1(b) of the Lease
is hereby modified to read:
	 
	 	     “BUILDING”:

	 	 	 	Building A: approximate rentable square feet: 62,200
(see ss.2)
	 
	 	 	 	Building B-1: approximate rentable square feet:
46,112 (see ss.2)

		
	 	     1.3 The definition of Building in Section 2 is hereby amended
to read: “Building A and Building B-1.”
	 
	 	     1.4 The 2nd sentence of the definition of “Land” in Section 2
is amended to read: “That portion of the Project area included in the
“Land” shall generally be the areas designated “Building A Land” and
“Building B-1 Land” on the Site Plan.
	 
	 	     1.5 The definition of “Premises” in Section 2 is amended to
include the following: “and approximately 45,817 rentable square feet
(subject to confirmation as provided in Section 4(g) below) consisting
of 99.36% of the rentable square feet of the Building identified as
Building B-1 on the Site Plan, which Building will be constructed by
Landlord in accordance with the terms and provisions of this Lease. The
Building B-1 Premises includes all of the rentable area of Building B-l
except for a maintenance room reserved to Landlord consisting of
approximately 295 rentable square feet and shown on attached Exhibit
D-2. Tenant acknowledges that Landlord may include in Operating
Expenses, prorated to all Buildings within the Project, Landlord’s
reasonable expenses of maintaining and operating the maintenance room,
including a reasonable “rental” allocated to that space.
	 
	 	     1.6 The Site Plan attached hereto as Exhibit A-2 hereby
replaces Exhibit A attached to the Lease, as amended by the First
Amendment. All references in the Lease to the Site Plan or Exhibit “

     2. MINIMUM ANNUAL RENT AND ESTIMATED ANNUAL OPERATING EXPENSES. Section
1(d) of the Lease is hereby amended to add the following subsections:
“d. MINIMUM RENT (‘8) & OPERATING EXPENSES (‘9)

	 	(iii)	 	“MINIMUM ANNUAL RENT FOR BUILDING B-1”:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	Minimum Annual	 	 	 	 	 	 	 	 
	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 	 	Lease	 	Rent Per Rentable	 	 	 	 	 	 	 	 
	Year	 	Square Foot	 	Annual	 	Monthly	 	Year	 	Square Foot	 	Annual	 	Monthly
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	1
	 	$	10.39	 	 	$	476,038.68	 	 	$	39,669.89	 	 	 	6	 	 	$	11.47	 	 	$	525,521.04	 	 	$	43,793.42	 
	2
	 	 	10.59	 	 	 	485,202.00	 	 	 	40,433.50	 	 	 	7	 	 	 	11.70	 	 	 	536,058.96	 	 	 	44,671.58	 
	3
	 	 	10.81	 	 	 	495,281.76	 	 	 	41,273.48	 	 	 	8	 	 	 	11.93	 	 	 	546,596.76	 	 	 	45,549.73	 
	4
	 	 	11.02	 	 	 	504,903.36	 	 	 	42,075.28	 	 	 	9	 	 	 	12.17	 	 	 	557,592.84	*	 	 	46,466.07	 
	5
	 	 	11.24	 	 	 	514,983.12	 	 	 	42,915.26	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	*	 	prorated to any partial year

2

 

	 	(iv)	 	ESTIMATED “ANNUAL OPERATING EXPENSES FOR BUILDING
B-1”: $212,132.76 estimated for calendar year 2001
(based on $4.63 per rentable square foot), payable in
monthly installments of $ 17,677.73, subject to
adjustment (‘9(a))”

From and after the Commencement Date for Building B-1, Minimum Annual Rent
shall mean the Building A Minimum Annual Rent plus the Building B-1 Minimum
Armnal Rent, and Tenant shall pay annual Operating Expenses with respect to the
Building A Premises and the Building B-1 Premises.

The first “lease year” for the Building B-1 Premises means the period of 12
consecutive full calendar months commencing on the Commencement Date for
Building B-1 (including for the first lease year, if the Commencement Date is
not the first day of the month, any partial month from the Commencement Date
until the first day of the first full calendar month thereafter). Each
subsequent “lease year” for the Building B-1 Premises means each period of 12
full calendar months thereafter during the Term.

     3.     PROPORTIONATE
SHARE. Section l(e) is hereby modified to include the
following: “Tenant’s Proportionate Share of Building B-1 will be 99.36%.
Landlord shall treat the entire Project, or such Buildings within the Project
as Landlord shall from time to time own, manage or operate, as a single unified
project for purposes of determining and allocating Operating Expenses.
Operating Expenses shall include the aggregate of all expenses properly
includable in Operating Expenses under this lease for all buildings and their
attendant common areas owned, managed or operated by Landlord in the Project,
and Tenant’s Proportionate Share shall be equal to a fraction, the numerator of
which shall be the rentable square footage of the Premises, and the denominator
of which shall be the rentable square footage of all buildings owned, managed
or operated by Landlord in the Project. If, in the future any building within
the Project ceases to be owned, managed or operated by Landlord and therefore
ceases to be included in the Project for purposes of determining and allocating
Operating Expenses, and in the event such building nevertheless continues to
use common amenities of the Project (such as the drainage pond, for example)
then there shall be excluded from Project Operating Expenses that portion of
the expense of operating and maintaining the amenity or amenities that is
reasonably and equitably attributable to the use thereof by such building, and
no other expenses of owning, managing or operating any such building shall be
included in Operating Expenses allocated to the Premises; moreover, all
Operating Expenses allocated to the Premises shall be fairly and equitably
determined, and shall be consistent with, and without duplication of,
allocations to all other buildings in the Project. Landlord will notify Tenant
within 30 days in the event any building in the Project ceases to be owned,
managed or operated by Landlord.”

3

 

     4.     COMMENCEMENT DATE; CONSTRUCTION.

          4.1 The Commencement Date for Building B-1 will be the later of (i) May 1,
2001 or (ii) the date of substantial completion of the Building B-1 Base
Building and Building B-1 Site Improvements. If construction of the Building
B-1 Base Building is delayed by any delay caused by Tenant, the Commencement
Date shall be the date this Lease would have commenced but for such delay. The
term of this Lease with respect to Building B-1 shall expire on November 30,
2009, unless sooner terminated pursuant to the provisions of the Lease.

          4.2 Landlord will construct the base building for Building B-1 (“Building
B-l Base Building”) and related site improvements, including, but not limited
to, grading, parking areas, access drives, sidewalks, monument signs and
landscaping (the “Building B-1 Site Improvements”) substantially in accordance
with the Plans described on Exhibit B-2 attached hereto in accordance with the
terms of this Section 4. All construction shall be done at Landlords expense in
a good and workmanlike manner, free of mechanic’s liens that are not promptly
discharged, and shall comply in all material respects with all applicable laws
codes, regulations, rules and requirements of the governmental authorities
having jurisdiction, as applied, enforced and interpreted as of the date the
building permit is issued, including, but not limited to, all requirements of
Title III of the ADA as applicable to commercial facilities. The foregoing
notwithstanding, Tenant has requested, and Landlord has agreed, that Landlord
not include in the Building B-1 Base Building the following items shown on the
Plans: (i) the fireplace, (ii) the ceiling tile and grid, and (iii) the 2 x 4
light fixtures. In consideration of this reduction in the scope of the Building
B-1 Base Building, Landlord shall provide Tenant the credit described in
Section 4.7 below.

          4.3 For purposes of this Section 4, “substantial completion” shall be
deemed to have occurred as of the date Landlord provides to Tenant a notice of
substantial completion enclosing: (1) a certificate of substantial completion
signed by Landlords architect and certifying to Tenant that the Building B-l
Base Building and Building B-1 Site Improvements have been completed in
accordance with the Plans except for enumerated punch list items, and (2) a
copy of a certificate of occupancy (temporary or permanent) issued by the City
of Eden Prairie for the Building B-1 Base Building. The foregoing
notwithstanding, substantial completion shall not be deemed to occur unless the
minimum requirements listed on attached C-2 are satisfied. Completion of
landscaping, monument signs, and completion of the final wearing course of the
parking lot shall not be deemed requirements of substantial completion, but
Landlord shall nevertheless complete such items following substantial
completion with reasonable diligence (but no later than September 1, 2001
unless Landlord and Tenant otherwise agree) in accordance with the requirements
of Section 4.2 above. Moreover, clause (2) in the first sentence of this
paragraph notwithstanding, and provided that all other conditions of
substantial completion set out in this paragraph are satisfied, the Building
B-1 Base Building and Building B-1 Site Improvements shall be deemed
substantially complete if Landlord has satisfied all conditions to obtaining a
certificate of occupancy as such conditions pertain to Landlords construction
obligations, and the sole reason for a delay in the issuance of such a
certificate is unfinished Tenant improvements or fixturing.

4

 

     Upon Landlords delivery to Tenant of a proper notice of substantial
completion, Landlord and Tenant shall jointly perform an inspection of the
Building B-1 Base Building and identify any incomplete items or other elements
of work not materially conforming to the Plans. The list resulting from such
inspection shall be deemed the “punch list.” If Landlord has not completed the
punch list items within 45 days of substantial completion or within such
additional reasonable time as may be necessary provided Landlord is proceeding
with all due diligence to cause such punch list items to be corrected, then
Tenant may complete such punch list items and Landlord shall reimburse Tenant
for Tenants cost of completion, plus an administrative fee of 10% of the cost
thereof.

          4.4 CERTIFICATION AS TO “AS BUILT” SQUARE FOOTAGE. Prior to the
Commencement Date, Landlord will cause Landlords architect to determine the
actual rentable square footage of Building B-1 and of the Building B-1 Premises
as constructed, and to deliver to Landlord and Tenant an appropriate
certificate certifying to the as-built rentable square footage. Such
certificate will be conclusive unless objected to by Landlord or Tenant by
written notice to the other party given within 30 days after receipt of the
certificate. If the as-built rentable square footage of the Building B-1
Premises is greater than or less than the rentable square footage stipulated in
Section 1.1 hereof, the Minimum Annual Rent shall be adjusted, as appropriate,
based on the Minimum Annual Rent Per Square Foot set forth in Section 2 hereof.
In such event, Landlord and Tenant shall enter into an amendment of this Lease
setting forth the as-built rentable square footage of the Building B-1
Premises, the adjusted schedule of Minimum Annual Rent, and any adjustment to
Tenant’s Proportionate Share. Rentable square footage shall be measured in
accordance with Building Owners and Managers Association (BOMA) measurement
standards for full floor tenants.

          4.5 LANDLORD’S CONSTRUCTION WARRANTY. Landlord warrants to Tenant for a
period commencing on the date of substantial completion of the Building B-1
Base Building and Building B-1 Site Improvements and ending one year later that
the Building B-1 Base Building and Building B-1 Site Improvements will be free
from improper or defective workmanship and materials. Landlord further warrants
to Tenant for a period commencing on the date of substantial completion of the
Building B-1 Base Building and Building B-1 Site Improvements and ending one
year later that there will be no material defect in the Building B-1 Base
Building or Building B-1 Site Improvements, or any portion thereof, caused by a
failure to design the Building B-1 Base Building or Building B-1 Site
Improvements, or any portion thereof, in accordance with all applicable codes,
laws, ordinances, regulations and professional standards of care in force and
as interpreted as of the date of this Agreement.

          4.6 INAPPLICABLE PROVISIONS. Sections 4, 5, 6(a), 32, and 37 of the Lease
do not apply to Building B-1.

          4.7 CREDITS AND DEBITS. In consideration of the Landlord’s agreement to
extend the Commencement Date of this Lease for the Building B-1 Premises to May
1, 2001 as provided above, Tenant has agreed to pay to Landlord $15,870 to
compensate Landlord for Landlord’s additional cost of carry. In consideration
of the reduction in the scope of the Building B-I Base Building described at
the end of Section 4.2 above, Landlord has agreed to give Tenant a credit of
$59,690. Accordingly, the net credit to Tenant is $43,820. This credit will be
provided to Tenant by Landlord paying on Tenant’s behalf, or causing to be paid
on Tenant’s behalf, $43,820 to Tenant’s Initial Tenant Improvements general
contractor to be applied against the cost of the Initial Tenant Improvements.

5

 

     5.     LEASEHOLD IMPROVEMENTS.

          5.1 BUILDING B-1 BASE BUILDING STATUS; ACCESS FOR TENANT IMPROVEMENTS.
From and after the date of this Amendment (the “Tenant Access Date”), Tenant
and Tenant’s Agents shall have continuous non-exclusive access to Building B-l,
at Tenant’s own risk, expense and responsibility, for the construction of the
Initial Tenant Improvements (defined below) without material interference from
Landlord or Landlord’s Agents. Tenant and Tenant’s Agents will consult and
cooperate with Landlord’s general contractor regarding the scheduling of
Tenant’s work so as to coordinate Tenant’s activities after the Tenant Access
Date with any Building B-1 Base Building work still being performed by
Landlord’s general contractor and to prevent any interference on the part of
Landlord’s Agents with Tenant’s work and on the part of Tenant’s Agents with
Landlord’s work.

     In connection with such access prior to the Commencement Date, Tenant
shall abide by the terms and conditions of this Lease including carrying the
insurance specified by the Lease, as if the term of this Lease had already
commenced, except that Tenant shall have no obligation to pay the Minimum
Annual Rent, Annual Operating Expenses or utilities until the Commencement
Date.

     During such pre-Commencement Date access, Landlord shall provide Tenant,
at Tenant’s expense, utilities, heat, air conditioning (when reasonably
required by Tenant), general building security, and staging areas. Tenant shall
be responsible at its expense for all trash removal directly related to the
construction of the Initial Tenant Improvements or Tenants furnishing and
equipping of Building B-l.

          5.2 TENANT IMPROVEMENTS. The initial tenant improvements in and to
Building B-1 required by Tenant (including but not limited to a link between
Building A and Building B-1) (the “Link”) shall be completed by Tenant and its
contractor(s), at Tenants sole expense, in accordance with plans and
specifications approved in writing by Landlord, which approval will not be
unreasonably withheld, delayed or conditioned (the “Initial Tenant
Improvements”). Tenant shall comply with Sections 12 and 13 of the Lease and
the following conditions with respect to the Initial Tenant Improvements:

               5.2.1 at least ten (10) days prior to commencement of construction, Tenant
shall obtain Landlords approval of Tenants general contractor, which approval
shall not be unreasonably withheld, conditioned or delayed;

               5.2.2 at least ten (l 0) days prior to commencement of construction,
Tenant shall deliver to Landlord a certificate of insurance for each of Tenants
contractors evidencing adequate insurance coverage naming Landlord as
additional insured;

6

 

               5.2.3 all construction shall be done in a good and workmanlike manner and
shall comply at the time of completion with all Laws and Requirements (as
defined in Section 10(a) of the lease). Tenant shall deliver to Landlord copies
of all certificates of occupancy, permits and licenses required to be issued by
any authority in connection with Tenants construction.

     6.     SIGNS. Subparagraphs (a) and (b) of the 2nd paragraph and all of the
5th paragraph of Section 11 are deleted and replaced with the following
language:

		
	 	     “For each of Building A and Building B-1, either:
	 
	 	     (a) one sign on the exterior of the Building.
	 
	 	     (b) One monument sign to be located outside the Building in
the area between the parking lot curb line and Building A or Building
B-1, as applicable, it being agreed that so long as no other tenant in
the Project shall construct signs between the street and the outside
edge of the parking lot curb (the “Park Perimeter”), Tenant’s monument
signage shall not be placed in the Park Perimeter.”

     7.     SURRENDER. The following language is hereby added to Section 24(a) of
the Lease: “Landlord may, at its option, require Tenant to remove the Link at
the expiration or termination of this Lease, or, if earlier, at the expiration
or termination of this Lease with respect to the entire B-1 Building Premises.
If Landlord desires to exercise its option to require Tenant to remove the
Link, Landlord must give Tenant written notice to remove the Link on or before
the date of such expiration or termination.”

     8.     EXTENSION OPTION. Section 31 of the Lease is hereby amended and
restated in its entirety as follows:

	 	 	 	     “31. OPTION TO EXTEND TERM. Provided that at the time of such
notice of exercise and at the time of the commencement of the
applicable extension term, there exists no monetary default (beyond any
applicable notice and cure period in this Lease) and no default
described in Section 26(a)(iv), Tenant shall have the right and option,
exercisable by giving Landlord prior written notice thereof at least
nine (9) months in advance of the applicable Expiration Date, to extend
the Term (for all or a portion of the Premises as described in
subsection (d) below) for up to three (3) additional consecutive
periods of thirty-six (36) months each, the first such extended term or
any subsequent extended term to begin on the Expiration Date of the
initial Term or the Expiration Date of any previous extended term, as
the case may be. Such extension shall be under the same terms and
conditions as provided in this Lease except as follows:
(a) all references to the Term in this Lease shall be deemed to mean
the Term as extended pursuant to this Section;
	 
	 	 	 	(b) there shall be no further options to extend the Term except as
expressly provided herein;

7

 

	 	 	 	(c) throughout each extension term, the Minimum Annual Rent for the
respective Premises shall continue to increase by 2% per respective
lease year, so that at the beginning of each lease year (based on the
respective commencement dates for the respective portions of the
Premises [e.g. the Building B-1 Premises, the Building A Premises, and
any future Building A expansion premises, as applicable]), the Minimum
Annual Rent for such Premises shall increase to 102% of the Minimum
Annual Rent payable for such Premises in the preceding lease year;
(d) With respect to any extension option, Tenant may elect to extend
this Lease, on the terms and conditions stated above, for all or less
than all of the Premises then being leased by Tenant under this Lease.
If Tenant desires to extend this Lease for less than the entire
Premises then being leased by Tenant, Tenant shall include in its
extension notice a detailed description of any space as to which Tenant
is not extending (the “Surrendered Space”). The following provisions
shall apply to any surrender of space pursuant to an extension of this
Lease on less than the entire Premises: (1) Tenant must surrender all
space in Building B-1 prior to, or simultaneously with, surrendering
any space in Building A, (2) with respect to the Building B-1 Premises,
space must be surrendered working from north to south (i.e. starting
with the portion of the Building B-1 Premises furthest from the planned
Link), (3) with respect to the Building B-1 Premises, Tenant may
surrender the space in up to two increments, the first increment must
be either (i) the approximately 25,187 rentable square feet depicted on
Exhibit E-2 or (ii) the entire Building B-l Premises, and the second
increment (which would apply only in the event Tenant surrendered less
than all of Building B-1 in connection with a prior Lease extension)
must be the remainder of the Building B-1 Premises, and (4) with
respect to the Building A Premises, in no event shall Tenant extend
with respect to less than 20,000 rentable square feet, and in no event
shall Tenant leave Landlord with less than 20,000 rentable square feet
within Building A. Moreover, any Surrendered Space must be (1) Leasable
Space (as that term is defined below) and (2) must be surrendered to
Landlord in the condition required under this Lease with respect to
surrender of space at the expiration or termination of this Lease. If
Tenant so extends for less than all of the then Premises, Tenant and
Landlord shall each pay one-half of the cost of constructing any
demising wall between the space surrendered and the Premises retained
by Tenant.
	 
	 	 	 	’Leasable Space’ as used in this Lease means space that is located,
configured and sized in such a manner that, in Landlords reasonable
judgment, such space has appropriate access to entrances and restroom
facilities, is useable for general office purposes and is marketable to
a general office user.
	 
	 	 	 	(e) if Tenant should exercise the extension option(s), at the request
of either party Landlord and Tenant shall execute and deliver an
amendment to the Lease documenting the terms, covenants and conditions
applicable to the extension term, as provided herein.”

     8.     EXPANSION OPTION; RIGHT OF FIRST OFFER. Section 32 of the Lease
(entitled “Expansion Option”) is hereby deleted. Tenant acknowledges that it
has waived its right of first offer (as described in Section 33 of the Lease)
with respect to the initial leasing of Buildings B-2, C, D, and E as shown on
the Site Plan.

8

 

     9.     PARKING. The 1st sentence of Section 34 of the Lease is hereby modified
to read as follows: “Landlord shall provide and Tenant shall be entitled to the
use of, 4.81 parking spaces for each 1,000 rentable square feet of the
Premises.” Section 5 of the First Amendment is hereby deleted. Landlord has
provided Tenant a total of 302 spaces for the Building A Premises, as shown on
the Site Plan; Landlord will preserve the ability to expand the Building A
parking in the area identified as “Building A Expansion Parking” on the Site
Plan attached to this Amendment as Exhibit A-2 in order to maintain a ratio of
no less than 4.81 spaces per 1,000 rentable square feet in the event Tenant
exercises its expansion option provided for in Section 9 of the First Amendment
to this Lease. The Building A expansion parking will be constructed by Landlord
as part of any expansion of Building A, and the cost thereof shall be included
in Building A Expansion Costs, all in accordance with the provisions of the
First Amendment. Landlord will provide, within the boundaries of the Building
B-1 Land, at least 4.81 parking spaces for each 1,000 rentable square feet of
the Building B-1 Premises, for a total of at least 220 spaces, as shown on the
Site Plan. In the event Tenant contracts its Premises pursuant to any provision
of this Lease, the parking available to Tenant shall be reduced to an amount
equal to 4.81 spaces for each 1,000 rentable square feet of the contracted
Premises.

     10.     TENANT’S OPTION TO TERMINATE. Section 36 of the Lease is hereby
amended and restated in its entirety as follows:

		
	 	     “Tenant shall have the right and option to terminate this
Lease effective as of April 30, 2007, exercisable by giving Landlord a
minimum of nine (9) months prior written notice thereof and by paying
Landlord on the effective date of termination a sum equal to (i) the
total rentable square feet of the Premises (including the entire
Building A Premises and Building B-1 Premises), multiplied by (ii)
$4.86. Tenant shall pay all Rent under the Lease and abide by all of
the terms and conditions of the Lease through and including such early
termination date.”

     11.     EXTENSION OF BUILDING A LEASE. The initial Term of this Lease for the
Building A Premises is hereby extended by 2 months, so as to expire on November
30, 2009. Minimum Annual Rent for October and November 2009 for the Building A
Premises (other than space, if any, expanded into pursuant to the First
Amendment to this Lease) shall be equal to $13.958 per rentable square foot
(102% of the Minimum Annual Rent payable at the end of the 10th lease year for
the Building A Premises). In the event this lease is extended with respect to
the Building A Premises or any portion thereof, Minimum Annual Rent for the
Building A Premises shall remain at $ 13.958 per rentable square foot for the
balance of the lease year in which the first extension term commences, and
thereafter shall escalate by 2% per lease year as provided in Section 31 of the
Lease (as restated in this Second Amendment). The “lease year” for the Building
A Premises throughout the term and all extension terms shall remain October 1
through September 30. For example, if Tenant exercises its first extension
option, Minimum Annual Rent shall remain at $ 13.958 per rentable square foot
for the period of December 1, 2009 through September 30, 2010, and shall
increase by 2% at the beginning of the 11th lease year (October 1, 2010) and at
the beginning of each lease year thereafter within the term.

9

 

     12.     LEASE IN FULL FORCE. Except as expressly amended by this Amendment,
all of the terms and conditions the Lease remain unmodified and continue in
full force and effect. All capitalized terms used herein and not separately
defined herein shall bear the meaning assigned to them in the Lease. The
parties have executed this Amendment as of the date stated in the opening
paragraph of this Amendment.

	 	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 	 	 	 	 	 	 
	Date signed: 2/28, 2001	 	LIBERTY PROPERTY LIMITED PARTNERSHIP
	 	 	 	 	 	 	 
	 	 	By:	 	Liberty Property Trust, Sole General

Partner
	 	 	 	 	 	 	 
	 	 	 	 	BY:
	 	/s/ Robert L. Kiel
	 	 	 	 	 	 	

	 	 	 	 	 	 	Robert L. Kiel

Senior Vice President

Regional Director
	 	 	 	 	 	 	 
	 	 	TENANT:
	 	 	 	 	 	 	 
	Date signed: ____, 2001	 	ONTRACK DATA INTERNATIONAL, INC.
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Skiba

	 	 	 	 	Its:
	 	CFO
	 	 	 	 	 	 	

	 	 	 	 	 	 	Thomas Skiba

CFO

10

 

THIRD AMENDMENT TO LEASE

          This Amendment (“Amendment”) is made as of the 30th day of April, 2001 by
and between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited
partnership (“Landlord”), and ONTRACK DATA INTERNATIONAL, INC., a Minnesota
corporation (“Tenant”).

BACKGROUND:

     A.     Landlord and Tenant are parties to that certain Lease dated as of
September 21, 1998, as amended by First Amendment to Lease dated January 26, l
999 and Second Amendment to Lease (the “Second Amendment”) dated February 26,
2001 (collectively, the “Lease”) for certain premises located at 9023 Columbine
Road in the Flying Cloud Corporate Campus, Eden Prairie, Minnesota (the
“Campus”) and known as Building A as shown on the Site Plan (as defined in the
Second Amendment) and for certain premises located at 8995 Columbine Road in
the Campus and known as Building B-l as shown on the Site Plan.

     B.     Tenant is constructing a Link (as defined in the Second Amendment)
between Building A and Building B-1 (as shown on the Site Plan) and since the
Link will encroach on a public utilities easement, Landlord requires certain
protections from Tenant.

     C.     Landlord and Tenant desire to amend the Lease as provided below.
AMENDMENT:

          Now therefore, for good and valuable consideration, the receipt and legal
sufficiency of which the parties acknowledge, the parties agree as follows:

     1.     ENCROACHMENT AGREEMENT. Tenant acknowledges that the Link will be
constructed over a public utilities easement in favor of the City of Eden
Prairie (the “City”). The City has required Landlord to enter into an
Encroachment Agreement in the form attached hereto as Exhibit A (the
“Encroachment Agreement”). Tenant agrees to abide by the terms and conditions
of the Encroachment Agreement, including but not limited to the construction,
maintenance, repair, and reimbursement obligations of Landlord as described in
the Encroachment Agreement. Except to the extent arising out of Landlord’s
negligence or willful misconduct, Tenant will indemnify, defend and hold
Landlord harmless from and against any and all claims, actions, damages,
liabilities, costs and expense (including reasonable fees of attorneys,
investigators and experts) arising from and after the date hereof, out of, or
in connection with the Encroachment Agreement or the construction, maintenance,
repair, replacement, use, or operation of the Link.

     2.     LEASE IN FULL FORCE. Except as expressly amended by this Amendment, all
of the terms and conditions the Lease remain unmodified and continue in full
force and effect. All capitalized terms used herein and not separately defined
herein shall bear the meaning assigned to them in the Lease.

 

 

     The parties have executed this Amendment as of the date stated in the
opening Paragraph of this Amendment.

	 	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 	 	 	 	 	 	 
	Date signed: 4/30, 2001	 	LIBERTY PROPERTY LIMITED PARTNERSHIP
	 	 	 	 	 	 	 
	 	 	By:	 	Liberty Property Trust, Sole General

Partner
	 	 	 	 	 	 	 
	 	 	 	 	BY:
	 	/s/ Robert L. Kiel
	 	 	 	 	 	 	

	 	 	 	 	 	 	Robert L. Kiel

Senior Vice President

Regional Director
	 	 	 	 	 	 	 
	 	 	TENANT:
	 	 	 	 	 	 	 
	Date signed: 4/27, 2001	 	ONTRACK DATA INTERNATIONAL, INC.
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ [illegible]

	 	 	 	 	Its:
	 	VP & CFO
	 	 	 	 	 	 	

2

 

EXHIBIT A

ENCROACHMENT AGREEMENT

 

 

ENCROACHMENT AGREEMENT

     THIS ENCROACHMENT AGREEMENT is made this      day of      , 2001,
by and between Liberty Property Limited Partnership, a Pennsylvania limited
partnership, hereinafter referred to as “Liberty,” and the City of Eden
Prairie, a Minnesota municipal corporation, hereinafter referred to as “City”;

     WHEREAS, Liberty is the fee owner of land located in Hennepin County,
Minnesota, more fully described in Exhibit A, attached hereto and made a part
hereof, and said land hereinafter referred to as “the Property”; and,

     WHEREAS, City has an easement in the Property as described on Exhibit B
attached hereto and made a part hereof, and said easement hereinafter referred
to as “the Easement”; and,

     WHEREAS, Liberty desires to construct a covered walkway on the Property
and across the Easement as described on Exhibit C, attached hereto and made a
part hereof, and said walkway hereinafter referred to as “the Walkway”; and,

     WHEREAS, Liberty and City wish to enter into an agreement which will allow
Liberty to construct, maintain, and use the Walkway;

     NOW, THEREFORE, in consideration of the premises contained herein, it is
agreed by the parties as follows:

	 	1.	 	GRANT OF ENCROACHMENT. City covenants and agrees that: a)
Liberty shall have the right to construct the Walkway so that
it encroaches upon the Easement; b) so long as the Walkway
shall remain standing, Liberty shall have the right to have
the Walkway encroach upon the Easement; and c) Liberty shall
have the right to use the Walkway for pedestrian travel.
	 
	 	2.	 	CONSTRUCTION. Liberty shall be responsible for all
construction costs of the Walkway. The plans and
specifications for the WalLway must be approved by the City
before construction and the Walkway shall be designed to
bridge the existing public utility pipes in the Easement. The
City may require inspections of the utilities before, during,
and after construction of the Walkway.

	 	3.	 	MAINTENANCE. Liberty shall be responsible for all
construction, maintenance, upkeep, repair, and replacement
costs for the Walkway and Walkway components as may be
necessary from time to time.
	 
	 	4.	 	WAIVER. City shall not be responsible for any damage to the
Walkway caused by the public utilities contained in the
Easement or caused by the City in repairing or maintaining the
public utilities contained in the Easement. Liberty hereby
waives any such claims it may have or hereafter acquire
against the City.
	 
	 	5.	 	DURATION OF ENCROACHMENT. The Encroachment shall be perpetual,
shall run with the land and shall be binding upon both parties
and their successors and assigns.
	 
	 	6.	 	NONEXCLUSIVE. The Encroachment shall be nonexclusive.
	 
	 	7.	 	INTERFERENCE. Liberty’s construction, maintenance, and use of
the Walkway shall in no way interfere with the City’s Easement
or the public utilities contained therein. In the event that
the Walkway in any way interferes with or damages the
Easement, or public utilities contained therein, Liberty shall
reimburse the City for all costs and expenses, including
attorney fees, reasonably incurred to eliminate the
interference or repair any damage done to the Easement or
utilities.
	 
	 	8.	 	LIMITATIONS. Nothing contained herein shall impair any right
of City now held or hereafter acquired to construct or
maintain public utilities in or on the Easement. Nothing
contained in this Agreement shall be construed or be deemed to
constitute a dedication, express or implied, of any part of
the Encroachment to or for any public use whatsoever.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

2

 

     IN WITNESS WHEREOF, the parties to this Agreement have caused these
presents to be executed as of the day and year aforesaid.

	 	 	 	 	 
	GRANTOR	 	GRANTEE
	 	 	 	 	 
	LIBERTY PROPERTY LIMITED	 	CITY OF EDEN PRAIRIE PARTNERSHIP,
	 	 	 	 	 
	By	 	
/s/ [illegible]	 	 
	 	 	

	 	

	 	 	 	 	Jean L. Harris, Mayor
	 	 	 	 	 
	Its	 	
V.P. & City Mgr.	 	 
	 	 	

	 	

	 	 	 	 	Christopher M. Enger, City Manager

	 	 	 	 
	STATE OF MINNESOTA	 	)	 
	 	 	
)ss.	 
	COUNTY OF HENNEPIN	 	)

     The foregoing instrument was acknowledged before me this      day of
     , 2001 by Jean L Harris and Christopher M Enger, respectively
the Mayor and City Manager of the City of Eden Prairie, a Minnesota municipal
corporation, on behalf of said corporation.

	 	

Notary Public

	 	 	 	 
	STATE OF MINNESOTA	 	)
	 	 	
)ss.
	COUNTY OF HENNEPIN	 	)

     The foregoing instrument was acknowledged before me this 26th day of
April, 2001 by [illegible], the [illegible] of [illegible] the general partner
of Limited Partnership, on behalf of said limited partnership.

	 	/s/ Carla L. Puckett

Notary Public

Document drafted by:

Lang, Pauly, Gregerson & Rosow, Ltd.

1600 Park Building

650 Third Avenue South

Minneapolis, Minnesota 55402

(612) 338-0755

	 	 	 
	 	 	
[STAMP]

CARLA L. PUCKETT

NOTARY PUBLIC-MINNESOTA

My Comm. Expires Jan. 31, 2005

 

 

Exhibit A

Property Description

(Per Commonwealth Land Title Insurance Company Commitment File No. 44355C,
effective date March 4, 1998)

Outlot C, Staring Lake Clubs Courts and Villages, the following portion being
registered property:

That part of Outlot C, Staring Lake Clubs Courts and Villages, lying Northerly
of the center line of former County Road No. 2 as delineated in the plat of
Research Farm Addition, Hennepin County, Minnesota.

AND

(Per Resolution dated November 5, 1996, filed of record December 30, 1996 as
Document No. 2773427 (T) and 6669002 (A).

That part of the Public Street (Columbine Road Extension) as dedicated in the
plat of Research Farm 2nd Addition, lying easterly of the following described
line:

Commencing at the northwest corner of Outlot C, Staring Lake Clubs Courts and
Villages, according to the record plat thereof; thence southerly 148.22 feet
along the west line of said Outlot C having a radius of 952.73 feet and a
central angle of 8 degrees 54 minutes 49 seconds to the east line of said
Public Street and the point of beginning of said line to be described; thence
southerly 11.78 feet along the southerly extension of said west line having a
central angle of 0 degrees 42 minutes 31 seconds to a point of compound
curvature; thence southerly 120.71 feet along a 533.58 foot radius curve having
a central angle of 12 degrees 57 minutes 41 seconds to the intersection with a
line drawn parallel with and distant 35 feet easterly from the centerline of
Columbine Road as dedicated in said plat of Staring Lake; thence southerly
80.27 feet along said parallel line having a radius of 946.73 feet and a
central angle of 4 degrees 51 minutes 29 seconds to the south line of said
Public Street and there terminating.

 

 

Exhibit B

Easement Description

     An easement for drainage and underground utility purposes over, under and
across that part of Outlot C, STARRING LAKE CLUBS COURTS AND VILLAGES,
according to the recorded plat thereof, Hennepin County, Minnesota, described
as follows:

          A 20.00 foot strip of land lying 10.00 feet either side of the following
described centerline: Commencing at the Southeasterly corner of said Outlot C;
thence on an assumed bearing of North 00 degrees 08 minutes 03 seconds East,
along the Easterly line of said Outlot C, a distance of 579.52 feet, to the
actual point of beginning of said centerline; thence South 89 degrees 54
minutes 36 seconds West a distance of 625.90 feet; thence North 68 degrees 29
minutes 40 seconds West a distance of 328.04 feet; thence North 07 degrees 30
minutes 51 seconds West a distance of 90.75 feet; thence North 89 degrees 03
minutes 47 seconds West a distance of 26.35 feet to the intersection with the
Westerly line of said Outlot C, and there terminating.

     Sidelines of said easement are to be lengthened or shortened to terminate
at said Easterly and Westerly lines of Outlot C.

 

 

EXHIBIT C

PROPOSED LEGAL DESCRIPTION:

That part of Outlot C, STARING LAKE CLUBS COURTS AND VILLAGES, according to the
recorded plat thereof, Hennepin County, Minnesota, described as follows:
Commencing at the southeast corner of said Outlot C; thence North 00
degrees 08 minutes 03 seconds East, assumed bearing along the east line
of said Outlot C, a distance of 589.52 feet; thence South 89 degrees 54
minutes 36 seconds West; a distance of 362.04 feet to the actual point
of beginning; thence continuing South 89 degrees 54 minutes 36 seconds
West, a distance of 16.33 feet; thence on a bearing of South, a
distance of 20.00 feet; thence North 89 degrees 54 minutes 36 seconds
East, a distance of 16.33 feet; thence on a bearing of North, a
distance of 20.00 feet to the point of beginning.

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