Document:

exv10w12

 

EXHIBIT 10.12

FACTORING AGREEMENT

     THIS FACTORING AGREEMENT (“Agreement”) made and executed this 23rd day of May, 2005 by and
between Wireless Ronin Technologies, Inc., a Minnesota corporation (“Client”) and Barry Butzow and
Stephen E. Jacobs (Mr. Butzow and Mr. Jacobs herein known as “Factor”)

1. PURCHASE OF ACCOUNTS RECEIVABLE

     1.1 Appointment as Factor. Client hereby appoints Factor to act as a factor. Client hereby
agrees to assign and sell, and does hereby assign and sell, to Factor, and Factor hereby agrees to
purchase the Client’s Receivables whether now existing or hereafter arising without any further act
or instrument. For all purposes hereof, the term “Receivables” shall mean and include accounts,
contract rights, general intangibles, chattel papers, instruments, documents and forms of
obligations owing to Client arising from or out of the sale of merchandise and/or the rendition of
services, proceeds thereof, Client’s: a) rights to merchandise represented thereby; b) rights under
insurance policies covering merchandise or services; c) rights against carriers of said
merchandise; and d) right, title, security interests and guarantees with respect to each
Receivable, including all rights of replevin and reclamation and stoppage in transit and all other
rights of an unpaid seller of merchandise or services.

     1.2 Remittances. All remittances, checks, bills and other proceeds from the payment of the
Receivables shall be property of Factor. If any remittances are made directly to Client, Client
shall hold the same in trust for the benefit of Factor and will pay Factor the full amount of the
Receivable within ten (10) business days upon receipt of payment from customer plus interest as
specified in Section 4.1.

     1.3 Credit Limits. Factor may limit its purchase of Receivables arising from sales to any one
customer or a portion of the net amount of the Receivable.

2. REPRESENTATIONS AND WARRANTIES

     2.1 Receivables. Client represents and warrants that each and every Receivable now or
hereafter assigned to Factor: a) represents a bona fide sale and delivery of merchandise or
rendition of services to customers in the ordinary course of its business; b) represents
merchandise or services which have been received and accepted by Client’s customers without dispute
or claim of any kind and shall be free and clear of any offset, deduction, counterclaim, lien,
encumbrance or any other claim or dispute (real or claimed), including, without limitation, claims
or disputes as to price, terms, delivery, quantity or quality; c) will be for an amount certain
payable in United States funds in accordance with the terms of the invoice covering said sale,
which shall not be changed without Factor’s written approval; d) there are no security interests,
liens or encumbrances thereon and it will at all times be kept free and clear of sane except in
Factor’s favor; e) Client has title thereto and Client has the legal rights to sell, assign,
transfer and set over the same to Factor; f) all documents to be delivered to Factor in connection
therewith will be genuine and be enforceable. Client agrees to indemnify Factor against any
liability, loss or expense caused by or arising out of the rejection of merchandise or
services or claims or deductions of every kind and nature by Client’s customers, other than those
resulting

 

 

from the financial inability of Client’s customer, whose credit standing Factor has
approved, to make payment.

     2.2 Chargebacks. In the event of Client’s breach of any of the foregoing representations
and/or warranties, Factor shall have, in addition to all other rights under this Agreement, the
right to chargeback to Client immediately the full amount of the Receivables affected thereby
together with interest, but such chargeback shall not be deemed a reassignment thereof, and Factor
shall retain a security interest in such Receivable and in the merchandise represented thereby
until such Receivable is fully paid, settled or discharged and all Client’s Obligations (as
hereinafter defined) to Factor are fully satisfied. Factor shall not, however, have the right to
chargeback to Client any Approved Receivable which is unpaid solely because of such customer’s
financial inability to pay.

3. PURCHASE PRICE

     3.1 Calculation of Purchase Price. The purchase price (“Purchase Price”) of Receivables sold
and assigned hereunder shall be the net amount thereof, as herein defined. As used herein, the term
“net amount” of Receivables shall mean the gross amount of Receivables less returns, allowances and
discounts to, or taken by, customers upon shortest or longest selling terms, as Factor may elect.
Such Purchase Price shall be payable by Factor to Client five (5) business days after the
Receivable is submitted by Client to Factor.

4. INTEREST AND WARRANT

     4.1 Factor Interest. For its services hereunder Factor shall receive interest equal to 2 times
the prime rate of interest published by the Signature Bank applied to the net amount of Receivables
purchased. The interest rate is subject to change based on changes of the prime rate. Interest is
calculated by applying the prime rate in effect at the time of purchase to the net amount of the
receivable computed on a 365/360 basis annually. The current prime rate is six percent (6.00%).

     4.2 Factor warrants. For its services hereunder, Factor shall receive warrants equal to 100%
of the net amount of Receivable.

     4.3 Extended Terms. The interest specified in Section 4.1 hereof is based upon maximum selling
terms of ninety (90) days, and no more extended terms or additional dating shall be granted by
Client to any customer without Factor’s prior written approval. If such approval is given by
Factor, Factor’s interest with respect to the Receivables covered thereby shall be increased by an
additional one-quarter of one (1/4%) percent for each additional thirty (30) days or portion
thereof of extended terms or additional dating.

5. SECURITY INTEREST

     5.1 Grant of Security Interest. As security for all “Obligations” (as herein defined), Client
hereby grants to Factor a continuing security interest in, a general lien upon and/or a right of
setoff of, all of the Receivables purchased herein.

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     5.2 Cooperation. Client agrees to execute such further instruments and financing statements as
may be required by any law in connection with the transactions contemplated hereby and to cooperate
with Factor in the filing or recording and renewal thereof, and Client hereby authorizes Factor
(and appoints any person whom Factor designates as its attorney with power) to sign Client’s name
on any such instrument and on financing statements under the Uniform Commercial Code. Client hereby
authorizes Factor to file financing statements containing the following collateral description:
“All of Debtor’s Assets now owned or hereafter acquired” or such lesser amount of assets as Factor
may determine. Recourse to security shall not be required and Client shall at all times remain
liable for the repayment on demand of all Obligations.

6. CUSTOMER DISPUTES AND CLAIMS: RETURNED GOODS

     6.1 Disputes and Claims. Client shall immediately notify Factor in each instance of the
return, rejection, loss of or damage to merchandise represented by any Receivable, of any request
for extension of time to pay or request for credit or adjustment, or of any merchandise dispute or
other dispute or claim relating to any Receivable or to the merchandise or services covered thereby
or tending in any way to diminish the sum certain payable thereon. If any such dispute, controversy
or claim is not promptly settled by Client, Factor may, if it so elects, settle, compromise, adjust
or otherwise enforce or dispose of by litigation or otherwise, any such dispute, controversy or
claim, at Client’s expense, and upon such terms and conditions as Factor in its sole discretion
shall deem proper, but Factor shall have no obligation to do so. Client shall not grant any
allowances, credits or adjustments to customers, nor accept any return of merchandise, without
Factor’s prior written consent in each instance

     6.2 Credit Memoranda. Copies of all credit memoranda to be issued to any customer shall be
furnished by Client to Factor and only the customer shall he entitled to the benefit thereof.

7. INDEMNITIES

     7.1 Indemnification. Client hereby indemnifies and holds Factor and its affiliates, and their
respective employees, attorneys and agents (each, an “Indemnified Person”), harmless from and
against any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses
of any kind or nature whatsoever (including attorneys’ fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal) which may be instituted or
asserted against or incurred by any such Indemnified Person as the result of any financial
accommodation having been extended, suspended or terminated under this Agreement or any Other
Agreement or with respect to the execution, delivery, enforcement, performance and administration
of, or in any other way arising out of or relating to, this Agreement or any other Agreement, and
any actions or failures to act with respect to any of the foregoing, except to the extent that any
such indemnified liability is finally determined by a court of competent jurisdiction to have
resulted solely from such Indemnified Person’s gross negligence or willful misconduct. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO CLIENT OR TO ANY OTHER PARTY FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF ANY FINANCIAL
ACCOMMODATION HAVING BEEN EXTENDED, SUSPENDED OR

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TERMINATED UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.

     7.2 Taxes. If any tax by any governmental authority (other than income and franchise taxes) is
or may be imposed on or as a result of any transaction between Client and Factor, or in respect to
sales or the merchandise affected by such sales, which Factor is or may be required to withhold or
pay, Client agrees to indemnify and hold Factor harmless in respect of such taxes, and Client will
repay Factor the amount of any such taxes, which shall be charged to Client’s account, and until
Client shall furnish Factor with indemnity there for (or supply Factor with evidence satisfactory
to Factor that due provision for the payment thereof has been made), Factor may hold without
interest any balance standing to Client’s credit and Factor shall retain its security interest in
any and all collateral held by Factor.

8. TERMINATION AND DEFAULT

     8.1 Term. The term of this Agreement shall begin as of the effective date hereof and continue
until the last day of the twenty-fourth month hereafter (as such date may be renewed from time to
time pursuant to the terms hereof, the “Maturity Date”) and thereafter shall be automatically
renewed from year to year unless terminated on such last day of such month or any anniversary
thereof by Client giving Factor at least sixty (60) days prior written notice. Factor shall have
the right to terminate this Agreement at any time by giving Client sixty (60) days prior written
notice. Notwithstanding the foregoing, Client shall be allowed to terminate this Agreement prior to
the Maturity Date: (1) for any reason, with a minimum of ninety (90) days prior written notice,

     8.2 Defaults. Notwithstanding the foregoing, Factor may terminate this Agreement without
notice and all obligations shall, unless and to the extent that Factor otherwise elects, become
immediately due end payable without notice or demand upon the occurrence and during the continuance
of any one or more of the following events (each an “Event of Default”): a) Client fails to pay any
obligation when due; b) Client commits any breach of or default in the performance of its
representations, warranties or covenants whether contained herein or in any instrument or document
delivered pursuant hereto or in any other Agreement, instrument, or document under which it is
obligated to Factor; c) or a petition in bankruptcy or for an arrangement or reorganization under
the Federal Bankruptcy Code is filed by or against Client or any such other party or a custodian or
receiver (or other court designee performing the functions of a receiver) is appointed for or takes
possession of Client’s or any such other party’s assets or affairs or an order for relief in a case
commenced under the Federal Bankruptcy Code is entered.

     8.3 Continuing Obligations. Notwithstanding any termination of this Agreement Client shall
continue to deliver Receivables information to Factor and turn over all collections to Factor as
herein provided until all Obligations shall have been fully paid and satisfied, and until then this
Agreement shall remain in full force and effect as to and be binding upon Client, and Factor shall
be entitled to retain its security interest in all existing and future Receivables and other
security and collateral.

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     8.4 Remedies. Upon the occurrence of any of the Events of Default specified in Section 8.2
hereof, Factor shall have all the rights and remedies of a secured party under the uniform
Commercial Code and other applicable laws with respect to all collateral in which it has a security
interest, such rights and remedies being in addition to all of its other rights and remedies
provided for herein. Factor may sell or cause to be sold any or all of such collateral, in one or
more sales or parcels, at such prices and upon such terms as it may deem best, and for cash or on
credit or for future delivery, without its assumption of any credit risk, and at a public or
private sale as it may deem appropriate. Unless the collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized market, Factor will give
Client reasonable notice of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be made.

9. MISCELLANEOUS

     9.1 No Pledge of Credit. Client shall not be entitled to pledge Factor’s credit for any
purpose whatsoever.

     9.2 Waivers. Client waives presentment and protest of any instruments and all notices thereof,
notice of default and all other notices to which it might otherwise be entitled. Client shall
maintain, at its expense, proper books of account.

     9.3 Right of Inspection. Factor shall have the right to inspect and make extracts from such
books and all files, records and correspondence at all reasonable times.

     9.4 No Pledge or Sale of Receivables. During the term of this Agreement Client shall not sell
or assign, negotiate, pledge or grant any security interest in any Receivables or Goods (as said
term is defined in Article 9 of the Uniform Commercial Code) to any one other than Factor.

     9.5 Governing Law; Jurisdiction. The validity of this Agreement, its construction,
interpretation, and enforcement and the rights of the parties hereto shall be determined under,
governed by, and construed in accordance with the laws of the State of Minnesota; provided,
however, that the laws of the state in which the collateral is located shall govern with respect to
(a) the creation of liens on collateral located in such state and (b) the method, manner and
procedure for foreclosure of Factor’s lien upon any portion of the collateral located in such state
and she enforcement in such state of Factor’s other remedies with respect to the collateral located
in such state.

     9.6 No Waiver of Rights. No failure or delay by Factor in exercising any of its powers or
rights hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
such power or right preclude other or further exercise thereof or the exercise of any other right
or power. Factor’s rights, remedies and benefits hereunder are cumulative and not exclusive of any
other rights, remedies or benefits which Factor may have. This Agreement may only be modified in
writing and no waiver by Factor will be effective unless in writing and then only to the extent
specifically stated.

     9.6 Notices. All notices and other communications by either party hereto shall be in writing
and shall be sent to the other party at the address specified herein.

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     9.7 Assignment. Factor shall have the right to assign this Agreement and all of Client’s
rights hereunder shall inure to the benefit of Factor’s successors and assigns; and this Agreement
shall inure to the benefit of and shall bind Client’s respective successors and assigns.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.

Client:

	 	 	 	 	 
	Wireless Ronin Technologies, Inc.	 	 
	By:

	 	     /s/ Jeffrey Mack	 	 
	 

	 	 

	 	 
	Its:

	 	     CEO	 	 
	 

	 	 

	 	 

	 	 	 
	Address:

	 	14700 Martin Drive
	 

	 	Eden Prairie, MN 55344
	 
	 	 
	Factor:
	 	 

	 	 	 
	/s/ Barry Butzow
 

	 	 
	Barry Butzow
	 	 
	 
	 	 
	/s/ Stephen E. Jacobs
 

	 	 
	Stephen E. Jacobs
	 	 

6exv10w13

 

EXHIBIT 10.13

LEASE

     THIS LEASE, made this 15th day of November, 2004, between THE BRASTAD/LYMAN PARTNERSHIP,
(hereinafter designated as “Landlord”) and WIRELESS RONIN TECHNOLOGIES, INC., an Minnesota
corporation (hereinafter designated “Tenant”);

     WITNESSETH:

     ARTICLE 1 —  PREMISES AND TERM. The Landlord, in consideration of the rental
herein agreed to be paid by the Tenant and the other conditions, agreements and stipulations of the
Tenant herein expressed and agreed to be kept and performed by the Tenant, does hereby demise and
lease unto the Tenant the building containing approximately 8,610 square feet situated in the City
of Eden Prairie, County of Hennepin, State of Minnesota, located at 14700 Martin Drive, together
with parking areas, sidewalks and yard areas adjacent thereto, hereinafter referred to as the
“leased premises”.

     TO HAVE AND TO HOLD the leased premises and appurtenances for a term commencing December 1,
2004, and shall continue for a period of sixty (60) months unless sooner terminated, as hereinafter
provided until November 30, 2009.

     ARTICLE 2 —  RENT. Landlord reserves and Tenant covenants to pay to Landlord,
without demand, at its office, or at such other place as Landlord may, from time to time, designate
in writing, a base rent of Five Thousand Four Hundred Fifteen Dollars and 46/cents ($5,415.46) plus
any sales tax applicable thereto on the first day of each and every calendar month in advance
during the first two (2) years of the term, Five Thousand Five Hundred Ninety Four Dollars and
80/cents ($5,594.80) per month during the 3rd year of the term, and Five Thousand Seven Hundred
Seventy Four Dollars and 18/cents ($5,774.18) per month during the 4th year of the term, and Five
Thousand Nine Hundred Seventeen Dollars and 67/cents ($5917.67) per month during 5th year of the
term. Partial months shall be pro-rated.

     ARTICLE 3 —  BUSINESS USE. The leased premises shall be used and occupied by
Tenant for the commercial purpose of designing computer software, providing software and
maintenance services, designing graphic content, providing networking services, and for the
operation of warehousing, display, and sales of electronic equipment and related products, and for
no other purpose. Such use and occupancy shall be in compliance with all applicable laws,
ordinances and governmental regulations. The leased premises shall not be used in such manner that
in accordance with any requirement of law or of any public authority, Landlord shall be obliged on
account of the purpose or manner of said use to make any addition or alteration to or in the
building.

     ARTICLE 4A —  SUBORDINATION. Tenant agrees that this Lease shall be
subordinate to any mortgages that may hereafter be placed upon said premises and to any and all
advances to be made hereunder, and to the interest thereon, and all renewals, replacements and
extensions thereof. In the event any mortgagee elects to have this Lease prior in lien to its
mortgage, then and in such event upon such mortgagee notifying Tenant to that effect, this Lease
shall be deemed prior to said mortgage, whether this Lease is dated prior to or subsequent to the
date of

 

 

said mortgage. Landlord, however, shall have and reserves the right to grant to any such
mortgagee, by any such mortgage, and whether this Lease be prior or subordinate to such mortgage,
the tight to receive, for application to the debt secured by such mortgage, all or any part of the
proceeds of any condemnation of the leased premises, or all or any portion of the rents payable
hereunder and Tenant shall acknowledge same to such Mortgagee upon request.

     ARTICLE 4B — CERTIFICATION THAT LEASE IS IN FULL FORCE AND EFFECT. For the
purposes of mortgaging the leased premises or for the sale of the leased premises, Tenant shall, at
any time, on fifteen (15) days’ prior written notice by Landlord, execute, acknowledge, and deliver
to Landlord a written statement certifying that this Lease continues unmodified and is in full
force and effect (or if there have been modifications, that this Lease continues in full force and
effect as modified and stating the modifications), and the dates to which the rent and the
additional rent have been paid, and stating whether Tenant is in default in performing any covenant
to this Lease, and, should Tenant be in default, specifying each and every such default, and such
other matters relating to this Lease that such lender, mortgagee or purchaser may further request,
it being intended that any such statement delivered pursuant to this paragraph may be relied on by
Landlord or any prospective purchaser or mortgagee of the fee or any assignee of any mortgages on
the fee of the leased property.

     Tenant’s failure to execute and deliver to Landlord the above described certification within
the time specified shall be deemed the equivalent of the delivery of the certification by the
Tenant to the Landlord to the effect that this Lease continues in full force and effect (as
modified, if any modifications have been made) and that Landlord has complied with all the terms,
covenants and conditions of this Lease.

     ARTICLE 5 —  CARE OF PREMISES. Tenant shall, at its expense, keep the leased
premises and all parts thereof used by it and all of Tenant’s leasehold improvements used by it in
a clean, safe and sanitary and a good and reasonable condition, conform the leased premises and
conform its business to applicable laws, ordinances, regulations and codes; store within the leased
premises and remove regularly all trash and garbage; forthwith replace broken glass in exterior and
interior windows and doors with glass of same quality. Tenant shall not deface, injure, waste, or
damage the leased premises; conduct business so as to constitute a nuisance; overload any floor or
facility; make any structural alterations; throw foreign substances in plumbing facilities or use
the same for any purpose other than that for which constructed.

     ARTICLE 6 —  REPAIRS. Tenant shall at all times keep the leased premises, all
of Tenant’s leasehold improvements, exterior walls and entrances, all glass, and window moldings,
parking areas (including snow removal, striping, seal-coating thereof and the surface thereof) and
all partitions, floors, fixtures, equipment and appurtenances thereof (including lighting, light
bulbs and ballasts, heating and plumbing fixtures, heating and air conditioning systems which are
located in or about the leased premises) in good order, condition, replacement and repair
(including reasonable periodic painting as may be required, of which requirement Landlord shall be
the judge). Structural portions of the building shall be the responsibility of Landlord. For
purposes of this Article, structural portions of the building shall include the outer walls, roof,
foundation and supporting members of the building structure of which the leased premises constitute
a part.

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     Tenant shall secure maintenance contracts or other contracts for all heating, venting, and air
conditioning systems constituting a part of the leased premises in order to assure that Tenant’s
obligations pursuant to this Lease. If Tenant refuses or neglects to reasonably maintain, replace
or repair the leased premises as required hereunder as soon as reasonably possible after written
demand, Landlord may make such repairs or replacements or provide for such maintenance without
liability to Tenant, for any loss or damage that may accrue to Tenant’s merchandise, trade
fixtures, fixtures, leasehold improvements or other property or to Tenant’s business and the cost
to the Tenant shall be the Landlord’s cost plus 15% for overhead and said cost shall be payable as
additional rent, upon presentation of a bill from the Landlord.

     Tenant has inspected the leased premises and is thoroughly acquainted with its condition and
agrees to take Tenant leasehold the same in an “AS-IS” condition and Tenant shall be responsible
and complete any initial improvements at Tenant’s costs and expense which leasehold improvements
are specifically itemized in the attached Exhibit A. Landlord has made no representation or
promises with respect to the physical condition of the leased premises or any other matter relating
thereto and Tenant acknowledges that it has not relied upon statements of Landlord as to the
condition of the leased premises.

     ARTICLE 7 —  SIGNS. The Tenant shall not erect, place or display or allow to
be erected, placed, or displayed any lettering, sign, advertisement, awning, or other projection in
or on the leased property or in or on the building of which it forms a pail without the Landlord’s
written consent, which consent shall not be unreasonably withheld or delayed. Landlord has sole
right of approval relating, but not limited to, size, type, materials and location.

     The Tenant agrees to keep the signs erected, placed or maintained by it on the demised
premises in a good state of repair and to save the Landlord harmless from any loss, cost, or damage
resulting from the erection, maintenance, existence, or removal of any of its signs.

     At the end of the term of this Lease or of any renewal thereof, the Tenant shall remove its
signs at its own expense and repair any damage to the demised premises resulting from the erection,
maintenance, or removal of its sign.

     ARTICLE 8 —  ALTERATIONS, INSTALLATIONS, FIXTURES. Except as hereinafter
provided, Tenant shall not make any alterations in or additions to the leased premises which exceed
$5,000.00 in costs without the written consent of Landlord. If alterations become necessary because
of the application of laws or ordinances or of the directions, rules or regulations of any
regulatory body, Tenant shall make such alterations at its own cost and expense after first
obtaining Landlord’s written approval of plans and specifications and furnishing such
indemnification against liens, costs, damages, and expenses as Landlord may reasonably require.
Tenant shall not, without the advance written consent of Landlord, install any exterior lighting or
plumbing fixtures, shades, awnings, canopies, marquees or any exterior decorations or painting or
similar devices on the roof or exterior walls of the building or change or alter any structural
elements of the building, walls or roof. At the expiration or sooner termination of this Lease,
Tenant, at the option of the Landlord shall return the premises to their original condition,
subject to normal wear and tear. Title to any and all such leasehold improvements, alterations,
installations or additions shall revert to Landlord upon expiration or sooner termination of this
Lease at Landlord’s option.

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     ARTICLE 9 —  PUBLIC LIABILITY INSURANCE. During the occupancy of the leased
premises by the Tenant, Tenant shall keep in full force and effect at its expense a policy or
policies of public liability insurance with respect to the leased premises and the business of
Tenant and any subtenant, on terms and with companies with a Best’s Rating of AA or better, in
which both Tenant and Landlord shall be named insured with respect to claims resulting from
Tenant’s use of the leased premises under limits of liability of at least: $1,000,000 for injury or
death to any one person; $1,500,000 for injury or death to more than one person; and $500,000 with
respect to damage to property. Tenant shall furnish Landlord with certificates or other acceptable
evidence that such insurance is in effect naming Landlord as a named insured with respect to claims
resulting from Tenant’s use of the leased premises. Tenant shall keep in full force and effect
worker’s compensation insurance on its employees and upon request shall provide Landlord with
acceptable evidence that such insurance is in effect.

     ARTICLE 10 —  COVENANTS TO HOLD HARMLESS. Unless the liability for damage or
loss is caused by intentional acts or the negligence of Landlord, its agents or employees, Landlord
shall be held harmless by Tenant from any liability for damages to any person or property in or
upon the leased premises, including the person and property of Tenant and its employees and all
persons in the building at its or their invitation. All property kept, stored or maintained in the
leased premises shall be so kept, stored or maintained at the sole risk of Tenant. Tenant agrees to
pay all sums of money in respect of any labor, services, materials, supplies, or equipment
furnished or alleged to have been furnished to Tenant in or about the leased premises, and not
furnished on order of Landlord, which may be secured by any Mechanic’s, Materialmen’s or other lien
against the leased premises or the Landlord’s interest therein and will cause each such lien to be
discharged at the time performance of any obligation secured thereby matures. Landlord shall have
the right to post and maintain on the leased premises, notice of non-responsibility under the laws
of Minnesota. Tenant shall have the reasonable right to protest any such Mechanic’s, Materialmen’s
or other such lien through appropriate legal proceedings provided Tenant shall provide Landlord a
bond or other evidence satisfactory to Landlord evidencing Tenant’s ability to pay such lien even
if so contested.

     ARTICLE 11 —  ASSIGNMENT OR SUBLETTING. Tenant agrees not to sell, assign,
mortgage, pledge, sublease, or in any manner transfer this Lease or any estate or interest
thereunder without the previous written consent of Landlord in each instance which consent will not
be unreasonably withheld. Consent by Landlord to one assignment of this Lease or to one subletting
of the leased premises shall not be a waiver of Landlord’s rights under this Article as to any
subsequent assignment or subletting. Landlord shall receive 100% of any increase in rent upon an
approved sublet for the leased premises.

     Landlord’s right to assign this Lease is and shall remain unqualified. Upon any sale of the
leased premises and providing the purchaser assumes all obligations under this Lease from and after
the date of conveyance, Landlord shall thereupon be entirely free of all obligations of the
Landlord hereunder and shall not be subject to any liability resulting from any act or omission or
event occurring after such conveyance.

     ARTICLE 12 —  ACCESS TO PREMISES. Landlord reserves the right to enter upon
the leased premises at reasonable business hours, to inspect the same or to make repairs, additions
or alterations to the leased premises or other property, or to exhibit the premises to prospective
tenants, purchasers or others; to enter at any time in the event of an emergency, and to display

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during the last year of the term or renewal term, without hindrance or molestation by Tenant,
“For Rent” or similar signs on windows or doors in the leased premises, or on or around the yard
areas or on the building. Tenant shall not change keys or locks for the leased premises without
notifying the Landlord and providing Landlord with copies of all keys for the leased premises.

     ARTICLE 13 —  UTILITY SERVICE. Gas, Water, and Electricity. Landlord agrees to
cause mains, conduits, and other facilities to be provided to the property lines and to supply gas,
water, electricity and sanitary sewer to the property lines. Tenant shall pay, when billed, for all
water, gas and electricity or other utility services used in the leased premises and shall
maintain, replace and repair such utilities, systems and services.

     ARTICLE 14 —  EMINENT DOMAIN. In the event of any eminent domain or
condemnation proceeding commenced by the filing of a petition in respect to the leased premises
during the term hereof, the following provisions shall apply:

	 	(a)	 	Total Condemnation of Leased Premises. If the whole of the leased
premises shall be acquired or condemned by eminent domain for any public or
quasi-public use or purpose, then the term of this Lease shall cease and terminate as
of the date possession shall be taken in such proceeding and all rentals shall be paid
up to that date and Tenant shall have no claim against Landlord nor the condemning
authority for the value of any unexpired term of this Lease.
	 
	 	(b)	 	Partial Condemnation. If any part of the leased premises shall be
acquired or condemned as aforesaid, and in the event that such partial taking or
condemnation shall render the leased premises substantially unsuitable for the business
of the Tenant in the reasonable opinion of Landlord, then the teen of this Lease shall
cease and terminate as of the date possession shall be taken in such proceeding. Tenant
shall have no claim against Landlord nor the condemning authority for the value of any
unexpired term of this Lease and rent shall be adjusted to the date of such
termination. In the event of a partial taking or condemnation which is not extensive
enough to render the premises unsuitable for the business of the Tenant in the
reasonable opinion of the Tenant and Landlord, then Landlord shall promptly restore the
leased premises so as to constitute the remaining premises a complete architectural
unit, and this Lease shall continue in full force and effect with a proportionate
abatement of rent based on the portion of the leased premises taken. The rent shall
also abate during restoration as to the portion of the leased premises rendered
untenantable.
	 
	 	(c)	 	Landlord’s Damages. In the event of any condemnation or taking as
aforesaid, whether whole or partial, the Tenant, except as set forth in paragraph (d)
below shall not be entitled to any part of the award paid for such condemnation and
Landlord is to receive the full amount of such award, the Tenant hereby expressly
waiving any right or claim to any part thereof.
	 
	 	(d)	 	Tenant’s Damages. Although all damages in the event of any condemnation
are to belong to the Landlord whether such damages are awarded as compensation for
diminution in value of the leasehold or to the fee of the leased premises, Tenant shall
have the right to claim and recover from the condemning authority, but not

5

 

	 	 	 	from Landlord, such compensation as may be separately awarded or recoverable by
Tenant in Tenant’s own right on account of any cost or loss to which Tenant might be
put in removing and relocating Tenant’s inventory, merchandise, equipment and
personal property.

     ARTICLE 15 —  DAMAGE.

	 	(a)	 	Partial or Total Destruction. In case the leased premises shall be
partially or totally destroyed by fire or other casualty insurable under full standard
fire and extended coverage insurance so as to become partially or totally untenantable,
the same, unless Landlord shall elect not to rebuild, shall be repaired as speedily as
possible at the cost of Landlord and unless such destruction was wholly or partially
caused by the negligence or breach of the terms of this Lease by Tenant, its employees,
licensees, agents, subtenants or contractors, a portion of the rent based upon the
amount of the leased premises rendered untenantable shall be abated until so repaired.
If the destruction or damage was wholly or partially caused by negligence or breach of
the terms of this Lease by Tenant as aforesaid and if Landlord shall elect to rebuild,
the rent payable for the period beginning with the date of the damage and ending with
the date of completion of all reconstruction and all repairs shall not be abated and
the Tenant shall remain liable for the same unless insurance proceeds are sufficient
for such rental loss proceeds to cover the amount of rent during such period. Landlord
shall not be responsible for restoring or repairing leasehold improvements of the
Tenant or any other property of the Tenant.
	 
	 	(b)	 	Fire Insurance Provision.

	 	(1)	 	Tenant shall not carry any stock of goods or do anything in or
about the leased premises which will in any way impair or invalidate the
obligation of any policy of insurance on or in reference to the leased premises
or the building in which the leased premises are situated. Tenant agrees to pay
upon demand, as additional rent, any premiums for insurance that may be charged
during the term of this Lease on the amount of insurance to be cat-tied by
Landlord on said leased premises or the building located thereon resulting from
the business cat-tied on in the leased premises by Tenant, whether or not the
Landlord has consented to same.
	 
	 	(2)	 	Landlord hereby waives and releases all claims, liabilities and
causes of action against Tenant and its employee: for loss or damage to, or
destruction of, the leased premises or buildings and other improvements
situated on the property resulting from fire, explosion or the other perils
included in standard extended coverage insurance, whether caused by the
negligence of any of said persons or otherwise provided its insurers also waive
their rights of subrogation. Likewise, Tenant hereby waives and releases all
claims, liabilities and causes of action against Landlord and its employees or
other tenants in the building for loss or damage to, or destruction of, any of
the improvements, fixtures, equipment, supplies, merchandise and other
property, whether that of Tenant or of others in,

6

 

	 	 	 	upon or about the leased premises or the buildings or improvements of which
the leased premises are a part resulting from any casualty, including but
not limited those resulting from fire, explosion or the other perils
included in standard extended coverage insurance for property, whether
caused by the negligence of any of said persons or otherwise. If an
additional “waiver of subrogation premium” is charged because of Landlord or
Tenant, Tenant shall be required to pay the same to keep these waivers in
force.

	 	(3)	 	Landlord will keep in force a standard form of Fire and
Extended Coverage Insurance with replacement cost endorsement, which policy
will contain one years loss of rental provisions in the event of damage or
destruction of the building and including public liability insurance of the
Landlord with respect to the leased premises with limits of $1,000,000 for
injury or death to any one person, $1,500,000 for injury or death to more than
one person, and $500,000 with respect to damage to property. The Tenant shall
pay 100% of the annual cost of such insurance premiums as additional rent to
the extent that such annual cost for such premiums exceeds $850.00 for any
given year or proportion thereof for any partial year. The Landlord shall
furnish the Tenant with a copy of the actual premiums and the Tenant shall pay
such additional rent to the Landlord within ten (10) days after receipt of such
information from the Landlord. Tenant shall have sole responsibility to insure
its leasehold improvements, trade fixtures, fixtures, furnishings, inventory,
personal property and equipment. Tenant shall have the right to obtain
competitive bids for said insurance, as long as provider has an AA+ credit
rating or higher.

     ARTICLE 16 —  SURRENDER. On the last day of the term demised or on the sooner
termination thereof, Tenant shall peaceably surrender the leased premises in good order, condition
and repair, broom-clean, reasonable wear and tear and casualty loss only excepted. On or before the
last day of the term or the sooner termination thereof, Tenant shall, at its expense, remove its
trade fixtures, personal property and equipment and signs from the leased premises and any property
not removed shall be deemed abandoned. Any damage caused by Tenant in the removal of such items
shall be repaired by and at Tenant’s expense. All alterations, additions, improvements and fixtures
(other than Tenant’s trade fixtures and equipment) which shall have been made or installed by
either Landlord or Tenant upon the leased premises and all flooring shall remain upon and be
surrendered with the leased premises as a part thereof, without disturbance, molestation or injury,
and without charge, at the expiration or termination of this Lease; however Landlord shall have the
option of requiring Tenant to return the premises to their original state, subject to reasonable
wear and tear and casualty loss. If the leased premises be so surrendered at the end of the term or
the sooner termination thereof, Tenant shall indemnify Landlord against loss or liability resulting
from delay by Tenant in so surrendering the premises, including, without limitation, claims made by
any succeeding tenant founded on such delay. Tenant shall promptly surrender all keys for the
leased premises to Landlord at the place then fixed for payment of rent and shall inform Landlord
of combinations of any locks and safes on the leased premises. Tenant hereby waives any and all
rights it may have, at law or equity, to redeem or reinstate this lease upon or after a default by
Tenant to the maximum extent permitted by law.

7

 

     ARTICLE 17 —  DEFAULT OF TENANT AND REMEDIES.

	 	(a)	 	Right to Re-Enter. In the event of any failure of Tenant to pay any
rental within five (5) days after the same shall be due, or any failure to perform any
other of the terms, conditions or covenants of this Lease to be observed or performed
by Tenant for more than thirty (30) days after written notice of such other default
shall have been given to Tenant, (or in the event such other default cannot reasonably
be cured within thirty (30) days and Tenant commences to cure and diligently pursue a
course of action to so cure and continue towards completion then for a reasonable
period of time not to exceed 90 days) or if Tenant or an agent of Tenant shall
substantially falsify any report required to be furnished to Landlord pursuant to the
terms of this Lease, or if Tenant or any guarantor of this Lease shall become bankrupt
or insolvent, or file any debtor proceedings or take or have against Tenant or any
guarantor of this Lease in any court pursuant to any statute either of the United
States or of any state a petition in bankruptcy or insolvency or for reorganization or
for the appointment of a receiver or trustee of all or a portion of Tenant’s or any
such guarantor’s property, or if Tenant or any such guarantor makes an assignment for
the benefit of creditors, or petitions for or enters into an arrangement, or if tenant
shall abandon said premises or any part thereof, or vacate all or any pail of the
leased premises, or fail to operate its business in the leased premises (except during
any time when the leased premises may be untenantable by reason of fire or other
casualty), or suffer this Lease to be taken under any writ of execution, then Landlord,
besides other rights or remedies it may have (including the continuing right to
immediately terminate this Lease), shall have the immediate right of re-entry and may
remove all persons and property from the leased premises in accordance with applicable
law and such property may be removed and stored in a public warehouse or elsewhere at
the cost of, and for the account of Tenant, all after the written notice specified
herein, if any, and then without further service of notice or resort to legal process
and without being deemed guilty of trespass, or becoming liable for any loss or damage
which may be occasioned thereby.
	 
	 	(b)	 	Right to Relet. Should Landlord elect to re-enter, as herein provided,
or should it take possession, it may either terminate this Lease or it may from time to
time, without terminating this Lease, make such reasonable alterations and repairs as
may be necessary in order to relet the premises, and relet said premises or any part
thereof for such term or terms (which may be for a term extending beyond the term of
this Lease) and at such rental or rentals and upon such other terms and conditions as
Landlord in its reasonable discretion may deem advisable, upon each such reletting all
rentals received by the Landlord from such reletting shall be applied first to the
payment of any indebtedness other than rent due hereunder from Tenant to Landlord;
second, to the payment of any costs and expenses of such reletting, including brokerage
fees and attorney’s fees and of costs of such alterations and repairs; third, to the
payment of rent due and unpaid hereunder, and the residue, if any, shall be held by
Landlord and applied in payment of future rent as the same may become due and payable
hereunder. If such rentals received from such re-letting during any month be less than
that to be paid during that month by Tenant hereunder, Tenant shall pay any such
deficiency to Landlord.

8

 

	 	 	 	Such deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of said Premises by Landlord shall be construed as an election on its
part to terminate this Lease unless a written notice of such intention be given to
Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination, Landlord may
at any time hereafter elect to terminate this Lease for such previous breach.
Whether or not Landlord at any time has elected to terminate this Lease for any
breach, in addition to any other remedies it may have, it may recover from Tenant
all damages it may incur by reason of such breach, including the cost of recovering
the leased premises, reasonable attorney’s fees, and also including the present
value (discounted at a rate equal to 4% in excess of the prime rate, or reference
rate then in effect at Wells Fargo Bank of Minnesota, N.A. but not less than 12% per
annum) at the time of such termination or default of the amount of rent (including
additional rent) and charges equivalent to rent reserved in this Lease for the
remainder of tile stated team all of which amounts shall be immediately due and
payable by Tenant hereunder and such obligations and Landlord’s right to accelerate
such rents shall survive any termination of the Lease.

	 	(c)	 	Landlord’s Rights to Cure Tenant’s Default. Landlord may, at its
option, instead of exercising any other rights or remedies available to it in this
Lease or otherwise by law, statute or equity, spend such money as is reasonably
necessary to cure any default of Tenant herein following Tenants failure to cure any
such default or following Tenant’s failure to commence curing non monetary defaults
within 10 days of written notice from Landlord to Tenant and the amount so spent, and
costs incurred, including attorney’s fees in curing such default, shall be paid by
Tenant, as additional rent, upon demand.
	 
	 	(d)	 	Legal and Other Expenses. In case suit shall be brought for recovery of
possession of the leased premises, for the recovery of rent or any other amount due
under the provisions of this Lease, or because of the breach of any other covenant
herein contained on the part of Tenant or Landlord to be kept or performed, and a
breach shall be established, or a party shall successfully defend against an alleged
breach, the party so breaching or unsuccessfully defending against an alleged breach
shall pay to the party establishing the breach or successfully defending against an
alleged breach, all expenses incurred therefor, including a reasonable attorney’s fee
and costs and any court having jurisdiction over the matter shall fix and order payment
of same. The parties hereto waive any right to a trial by a jury to the maximum extent
waivable.
	 
	 	(e)	 	Cumulative Remedies. No remedy herein or elsewhere in this Lease or
otherwise by law, statute or equity, conferred upon or reserved to Landlord or Tenant
shall be exclusive of any other remedy, but shall be cumulative, and may be exercised
from time to time and as often as the occasion may arise.

     ARTICLE 18 —  GENERAL. This Lease does not create the relationship of
principal and agent or of partnership or of joint venture or of any association between Landlord
and Tenant, the sole relationship between Landlord and Tenant being that of Landlord and Tenant. No
waiver

9

 

of any default by a patty hereunder shall be implied from any omission by the other patty to
take any action on account of such default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in the express waiver and that
only for the time and to the extent therein stated. One or more waivers shall not be construed as a
waiver of a subsequent breach of the same covenant, term or condition. The consent to or approval
by Landlord of any act by Tenant requiring Landlord’s consent or approval shall not waive or render
unnecessary Landlord’s consent to or approval of any subsequent similar act by Tenant. Each term
and each provision of this Lease performance by a party shall be construed to be both a covenant
and a condition. No action required or permitted to be taken by or on behalf of Landlord under the
terms or provisions of this Lease shall be deemed to constitute an eviction or disturbance of
Tenant’s possession of the leased premises. The marginal or topical headings of the several
articles, paragraphs and clauses are for convenience only and do not define, limit or construe the
contents of such articles, paragraphs or clauses. All preliminary negotiations are merged into and
incorporated in the Lease. The laws of the State of Minnesota shall govern the validity,
performance and enforcement of the Lease. This paragraph likewise applies in favor of the Tenant to
the same extent as if it had been retyped with the applicable terminology reversed.

	 	(a)	 	Entire Agreement. This Lease and the Exhibits attached hereto and
forming a part hereof, set forth all the covenants, promises, agreements, conditions
and understandings between Landlord and Tenant concerning the leased premises and there
are no covenants, promises, agreements, conditions or understandings, either oral or
written, between them other than are herein set forth. Except as herein otherwise
provided, no subsequent alteration, amendment, change or addition to this Lease shall
be binding upon Landlord or Tenant unless reduced to writing and signed by them.
	 
	 	(b)	 	Partial Invalidity. If any term, covenant or condition of this Lease or
the application thereof to any person or circumstance shall, to any extent, be invalid
or unenforceable, the remainder of this Lease, or the application of such term,
covenant or condition to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby and each term, covenant or
condition of this Lease shall be valid and be enforced to the fullest extent permitted
by law.

     ARTICLE 19 —  HOLDING OVER. In the event Tenant remains in possession of the
premises herein leased after the expiration of this Lease and without the execution of a new lease,
it shall be deemed to be occupying said premises as a tenant from month-to-month, subject to all
the conditions, provisions and obligations of the Lease insofar as the same can be applicable to a
month-to-month tenancy except that the base monthly rental referred to in Article 2 shall be
increased to 150% of the amount due on the last month prior to such expiration.

     ARTICLE 20 —  QUIET ENJOYMENT. Landlord covenants and agrees with Tenant and
upon Tenant paying the rent and performing all of the terms and conditions on Tenant’s part to be
observed and performed, Tenant may peaceably and quietly enjoy the premises hereby leased for the
business uses permitted hereunder, subject, nevertheless, to the terms and conditions of this
Lease.

10

 

     ARTICLE 21 —  REAL ESTATE TAXES. Tenant shall pay, as additional rent, all of
the real estate taxes and installments of assessments (including interest thereon) attributable to
the land and building of the leased premises, including the parking area and any and all charges or
fees imposed by any City County or State, whether by special assessment or otherwise, for services
rendered or to be rendered in the future to or for the benefit of all or any part of the leased
premises and which are due and payable during the term or any renewal term of this Lease to the
extent such amount exceeds $16,716.54 for any given year in which such taxes and assessments are
due and payable. Such amount shall be paid, upon demand, twenty (20) days in advance of the date
they are due and payable. Partial years shall be equitably prorated. Landlord shall have the right,
if Landlord’s future mortgagee so requires or if Tenant shall be in default with respect to any of
the terms or conditions of this Lease, to call for Tenant to escrow such real estate taxes and
special assessments and insurance premiums in advance on a monthly basis.

     Landlord reserves the right to appeal and abate the real estate taxes due and payable during
any year during the term or terms of this Lease and if any such real estate taxes are reduced,
Tenant’s obligation shall only be with respect to the actual amount so determined (plus reasonable
attorneys’ fees and costs incurred in so appealing or abating), and Tenant shall receive a rebate
from Landlord of any amount in excess thereof. If Landlord does not contest real estate taxes,
after first consulting with Landlord and receiving Landlord’s consent and approval, Tenant shall
have the right, at its own expense and in its own name, or Landlord’s name, to contest any such
real estate taxes and seek to abate real estate taxes due and payable during any year of the term
of this lease, by appropriate proceedings diligently conducted in good faith, but only after
payment of such amount and/or item in question unless said payment would operate as a bar to such
contest or appeal or interfere materially with the prosecution thereof. Upon final determination of
any such proceedings, Tenant shall immediately pay any amount plus interest, fees, penalties or
other liability in connection therewith as finally determined in such proceedings to be due. If
real estate taxes paid or to be paid by Tenant are reduced or increased, Tenant’s obligation shall
only be with respect to the actual amount so determined, and Tenant shall be entitled to an
equitable a rebate from Landlord of any amount in excess of said reduced real estate taxes and
costs incurred in appealing or shall pay the increased amount of such taxes if they are increased
together with the costs incurred in appealing.

     ARTICLE 22 —  RECORDING. Tenant shall not record this Lease without the
written consent of Landlord, however, upon the request of Landlord, the Tenant shall join in the
execution of a memorandum or so-called “short form” of this Lease for the purposes of recordation.
Said memorandum or short form of this Lease shall describe the parties, the leased premises and the
term of this Lease and shall incorporate this Lease by reference.

     ARTICLE 23 —  OVERDUE PAYMENTS. All monies due hereunder from Tenant to
Landlord, unless otherwise specified, shall be due on demand, and if not paid when due, shall bear
interest at the rate of twelve percent (12%) per annum until paid and Landlord shall have the right
to charge a late charge of $150.00 for each month that any installment remains unpaid.

     ARTICLE 24 —  NOTICES. Any notice required or permitted under this Lease shall
be deemed sufficiently given or served if sent by registered or certified return receipt mail to
Tenant at the address of the leased premises, and to Landlord at Brastad/Lyman Partnership, 6437
McCauley Terrace, Edina, MN 55439, and either party may by like written notice at any time
designate a different address to which notices shall subsequently be sent.

11

 

     ARTICLE 25 —  SUCCESSORS AND ASSIGNS. The terms, covenants and conditions
hereof shall be binding upon and inure to the successors in interest and assigns of the parties
hereto.

     ARTICLE 26 —  NON-LIABILITY. Landlord, except for Landlord’s intentional or
negligent acts, shall not be liable for any damage to property of Tenant or of others located on
the leased premises, nor for the loss of or damage to any property of Tenant or of others by theft
or otherwise. Landlord shall not be liable for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or snow or
leaks from any part of the leased premises or from the pipes, appliances, or plumbing works or from
the roof, street or sub-surface or from any other place or by dampness or by any other cause of
whatever nature, except for Landlord’s intentional or negligent acts. Landlord shall not be liable
for any such damage caused by other tenants or persons in the leased premises, occupants of
adjacent property, of the entire building, or the public or caused by operations in construction of
any private, public or quasi-public work. Landlord shall not be responsible for any defects in the
portions of the building which forms a part of the leased premises. All property of Tenant kept or
stored on the leased premises shall be so kept or stored at the risk of Tenant only and Tenant
shall hold Landlord harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant’s insurance carrier, unless such damage shall be caused by the willful
act or negligence of the Landlord

     ARTICLE 27 —  HAZARDOUS MATERIALS INDEMNITY.

     Tenant covenants, represents and warrants to Landlord, its successors and assigns, (i) that it
will not use or permit the leased premises to be used, whether directly or through contractors,
agents or tenants, for the generating, transporting, treating, storage, manufacture, emission of,
or disposal of any dangerous, toxic or hazardous pollutants, chemicals, wastes or substances as
defined in the Federal Comprehensive Environmental Response Compensation and Liability Act of 1980
(“CERCLA”), the Federal Resource Conservation and Recovery Act of 1976 (“RCRA”), or any other
federal, state or local environmental laws, statutes, regulations, requirements and ordinances
(“Hazardous Materials”) in violation of any applicable law (provided that Tenant shall not use the
leased premises or permit the uses specified in this subparagraph if any permit is necessary by any
Federal, State, or local government or any agency or department thereof without the written consent
of the Landlord which consent may be withheld by Landlord if any such use would be other than minor
in nature); (ii) that it will disclose within 3 business days any investigations or reports
involving Tenant, or the leased premises by any governmental authority which in any way pertain to
Hazardous Materials (iii) that Tenant shall not bring upon, use in, or incorporate into the leased
premises any polychlorinated biphenyls (PCB’s), petroleum or petroleum based derivations, urea
formaldehyde, or asbestos.

     Landlord covenants, represents and warrants to Tenant, its successors and assigns, (i) that to
the best of Landlord’s knowledge, information and belief, it has not used or permitted the leased
premises to be used, for the generating, transporting, treating, storage, manufacture, emission of,
or disposal of any Hazardous Materials in violation of any applicable law; (ii) that to the best of
Landlord’s knowledge, information and belief, but without having conducted any due diligence or
investigation, there have been no investigations or reports involving Landlord, or the leased
premises by any governmental authority which in any way pertain to Hazardous Materials (iii) that
to the best of Landlord’s knowledge, information and belief, but without

12

 

having conducted any due diligence or investigation, the operation of the leased premises is
not currently violating any federal, state or local law, regulation, ordinance or requirement
governing Hazardous Materials; (iv) that to the best of Landlord’s knowledge, information and
belief, but without having conducted any due diligence or investigation, the leased premises is not
listed in the United States Environmental Protection Agency’s National Priorities List of Hazardous
Waste Sites nor any other list, schedule, log, inventory or record of Hazardous Materials or
hazardous waste sites, whether maintained by the United States Government or any state or local
agency; and (v) that to the best of Landlord’s knowledge, information and belief, but without
having conducted any due diligence or investigation, the leased premises will not contain any
PCB’s, petroleum or petroleum based derivations, urea formaldehyde, or asbestos, except as may have
been disclosed in writing to Tenant by Landlord at the time of execution and delivery of this
Lease.

     Each party agrees to indemnify and reimburse the other party, its successors and assigns, for:

	 	(a)	 	any breach of any representations or warranties, and
	 
	 	(b)	 	any loss, damage, expense or cost arising out of or incurred by the other party
which is the result of a breach of, misstatement of or misrepresentation of the above
covenants, representations and warranties, and

together with all attorneys’ fees, costs and disbursements incurred in connection with the defense
of any action brought by third parties against either party arising out of the above. These
covenants, representations and warranties shall be deemed continuing covenants, representations and
warranties for the benefit of each party, and their successors, heirs and assigns of and shall
survive expiration or sooner termination of this Lease. The amount of all such indemnified loss,
damage, expense or cost, shall bear interest thereon at the rate of 3% in excess of the prime rate
or reference rate established from time to time by Wells Fargo Bank of Minnesota, N.A. and shall
become immediately due and payable in full on demand of any party so indemnified and entitled to
reimbursement, its successors and assigns. The indemnification contained herein shall survive
expiration or sooner termination of this Lease.

     ARTICLE 28 —  MISCELLANEOUS.

	 	(a)	 	It is agreed by and between the parties hereto that all the agreements herein
contained upon the part of Tenant, whether technically covenants or conditions, shall
be deemed conditions for the purpose hereof, conferring upon Landlord, in the event of
breach of any of said agreements, the right to terminate this Lease.
	 
	 	(b)	 	Tenant shall at Landlord’s request execute such documents and instruments,
including but not limited to an “assignment of rents” that may be required, from time
to time, by Landlord’s mortgagee(s) provided that such documents and instruments are in
form and content reasonably satisfactory to Tenant.
	 
	 	(c)	 	In case there is more than one Landlord the obligation of Landlord executing
this Lease shall be joint and several. The words “Landlord” and “Tenant” as used herein
shall include the plural as well as the singular. The covenants and

13

 

	 	 	 	agreements contained herein shall be binding upon and be enforceable by the parties
hereto and their respective heirs, executors, administrators, successors and
assigns, subject to the restrictions herein imposed on assignment by Tenant.

	 	(d)	 	Time is of the essence of this Lease and of each and every covenant, condition
and provision herein contained. Tenant hereby waives any rights of redemption or
reinstatement of this Lease (whether at law or in equity) in the event of an expiration
or sooner termination of this Lease. This Lease has been a negotiated lease and neither
party shall be deemed the drafter of this lease and in construing and determining the
intent of the parties or interpreting any language herein there shall not be a
determination that any term or condition or any language shall be construed for or
against any party merely because of such parties possible status as a drafter of all or
any portion of this Lease.
	 
	 	(e)	 	The paragraph headings of this Lease are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope or
intent of this agreement or any provision thereof or in any way affect this agreement.
	 
	 	(f)	 	Should the demised premises contain accessways to the roof, sprinkler
equipment, electrical equipment or any other such mechanical equipment whether
contained in a separate room or not, Landlord reserves the right of free access to same
through Tenant’s premises for his agents and representatives at reasonable business
hours.
	 
	 	(g)	 	This Lease may be executed in counterparts and when so executed shall
constitute one agreement binding on all parties hereto, notwithstanding that they are
not signatory to the original or same counterpart.

     ARTICLE 29 —  SECURITY DEPOSIT. Simultaneously with the execution of this
Lease, Tenant shall deposit with Landlord the sum of Five Thousand Four Hundred Fourteen and 46/100
Dollars ($5,415.46) as a security deposit (the “Security Deposit”). The Security Deposit (which
shall not bear interest to Tenant) shall be considered as security for the payment and performance
of the obligations, covenants, conditions and agreements contained herein. The Security Deposit
shall not constitute an advance payment of any amounts owed by Tenant under this Lease, or a
measure of damages to which Landlord shall be entitled upon a breach of this Lease by Tenant or
upon termination of this Lease. Landlord may, without prejudice to any other remedy, use the
Security Deposit to the extent necessary to remedy any default in the payment of rent or additional
rent or to satisfy any other obligation of Tenant hereunder, and Tenant shall promptly, on demand,
restore the Security Deposit to its original amount. If Landlord transfers its interest in the
premises during the term, Landlord may assign the Security Deposit to the transferee who shall
become obligated to Tenant for its return pursuant to the terms of this Lease, and thereafter
Landlord shall have no further liability for its return.

14

 

     IN WITNESS WHEREOF, the Landlord and the Tenant have hereunto set their hands the day and year
first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	BRASTAD/LYMAN PARTNERSHIP	 	 
	 
	 	 	 	 	 	 
	     /s/ Harold C. Lyman

	 	 	 	     /s/ Neil A. Brastad	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	     /s/ Daniel K. Brastad	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	WIRELESS RONIN TECHNOLOGIES, INC	 	 
	 	 	A Minnesota corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steve Jacobs
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	CFO	 	 
	 

	 	 	 	 	 	 

15

 

TENANT IMPROVEMENTS

     Tenant is taking space in its current “As-Is” condition, and shall be responsible for the cost
of all build out, remodeling, and all improvements done by the Tenant. It is understood
construction costs are estimated at $70,000.00 of which Landlord is giving a $30,000.00 rent
reduction for said build-out. In the event Tenant does not complete at least $55,000.00 of
remodeling to include new carpet, paint, upgrading of bathrooms, and kitchen area, and/or other
common areas, Tenant will reimburse the Landlord the unused portion of the $55,000.00 Improvement
dollars x 50%. Said payment shall be due immediately after the completion of Tenant build-out.
Tenant shall furnish to Landlord receipt and Lien Waivers for all work completed. Landlord to
approve Tenant work prior to build-out.

16

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