Document:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE

NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

Exhibit

10.67

 

THIS WARRANT AND

THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933.  THEY MAY

NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED

EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT

OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR UNLESS

SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

WARRANT TO PURCHASE COMMON STOCK

of

VCAMPUS

CORPORATION

 

This Warrant (the “Warrant”) is issued to                      or their permitted

assigns (“Holder”) by VCampus Corporation, a Delaware corporation (the

“Company”), on                  , 2002  (the “Warrant Issue Date”) for consideration

of $5.00 in the aggregate, receipt of which is hereby acknowledged.

 

1.             Purchase

Shares.  Subject to the terms and

conditions hereinafter set forth, the Holder is entitled, upon surrender of

this Warrant at the principal office of the Company (or at such other place as

the Company shall notify the holder hereof in writing), to purchase from the

Company up to              shares of

Common Stock of the Company (the “Warrant Shares”) at the Exercise Price

(defined below), subject to adjustment as provided in Section 8 (and subject to

adjustment as provided in Section 5 in the event the Holder elects the

“cashless exercise” procedure in Section 5).

 

2.             Exercise

Price.  The purchase price for the

Shares shall be $0.40 per Warrant Share, as adjusted from time to time pursuant

to Section 8 hereof (the “Exercise Price”).

 

3.             Exercise

Period.

 

(a)           This Warrant shall be exercisable

commencing immediately upon issuance and ending at 5:00 p.m. on the earlier of:

(i) the fifth anniversary of the Warrant Issue Date; or (ii) fifteen (15) days

after the Company notifies the Holder in writing that the average closing bid

price of the Company’s Common Stock on its Principal Market for twenty (20)

consecutive trading days was a price equal to at least three (3) times the

Exercise Price.

 

(b)           Notwithstanding any other provision

herein, the Company shall not be obligated to issue any Warrant Shares upon

exercise of this Warrant if and to the extent the issuance of such Warrant

Shares would exceed the number of shares of the Company’s Common Stock (the

“Exchange Cap”) then permitted to be issued without violation of the rules or

regulations of the Principal Market, except that such limitation shall not

apply in the event that the Corporation obtains the approval of its

stockholders as required by applicable rules and regulations of the Principal

Market for issuances of the

 

 

Company’s Common Stock in excess of the Exchange

Cap.  If and to the extent the Exchange

Cap applies, no Holder shall be issued, upon exercise of this Warrant, shares

of Common Stock in an amount greater than the product of (x) the Exchange Cap

amount multiplied by (y) a fraction, the numerator of which is the number of

Warrant Shares originally obtainable upon exercise of this Warrant and the

denominator of which is the aggregate amount of all Warrant Shares obtainable

upon exercise by all holders of warrants of like tenor issued in connection

with the Company’s Series F Preferred Stock financing, the Series F-1 financing

and the Series F-2 financing (the “Cap Allocation Amount”).  In the event that any Holder shall sell or

otherwise transfer all or a portion of this Warrant, the transferee shall be

allocated a pro rata portion of such Holder’s Cap Allocation Amount.  In the event that a requested exercise would

violate the aforementioned rules, the Corporation agrees to undertake best

efforts to obtain such approval within 180 days of such request for

exercise.  For the purposes of this

Warrant, “Principal Market” shall mean the American Stock Exchange, the New York

Stock Exchange, the Nasdaq National Market, or the Nasdaq Smallcap Market,

whichever is at the applicable time the principal trading exchange or market

for the Company’s Common Stock, based upon share volume.

 

4.             Method

of Exercise.  While this Warrant

remains outstanding and exercisable in accordance with Section 3 above,

the Holder may exercise, in whole or in part, the purchase rights evidenced

hereby.  Such exercise shall be effected

by:

 

(a)           the surrender of the Warrant,

together with a duly executed copy of the form of Notice of Exercise attached

hereto, to the Secretary of the Company at its principal offices; and

 

(b)           the payment to the Company of an

amount equal to the aggregate Exercise Price for the number of Warrant Shares

being purchased.

 

5.             Net

Exercise.  In lieu of exercising this

Warrant pursuant to Section 4, the Holder may elect to receive, without the

payment by the Holder of any additional consideration, Warrant Shares equal to

the value of this Warrant (or the portion thereof being canceled) by surrender

of this Warrant at the principal office of the Company together with the Notice

of Exercise attached hereto indicating such election, in which event the

Company shall issue to the holder hereof a number of Warrant Shares computed

using the following formula:

 

	

   

  	

   Y (A - B)

  	

   

  
	

   

  	

  X =

  	

  A

  
					

 

Where:         X =          The number of Warrant Shares to be

issued to the Holder pursuant to this net exercise;

 

                                                Y =          The number of Warrant Shares in

respect of which the net issue election is made;

 

                                                A =         The fair market value of one Warrant

Share at the time the net issue election is made;

 

2

 

                                                B =          The Exercise Price (as adjusted to the

date of the net issuance).

 

For purposes of

this Section 5, the fair market value of one Warrant Share as of a particular

date shall be determined as follows: 

(i) if traded on a securities exchange or through the Nasdaq

National Market or the Nasdaq SmallCap Market, the value shall be deemed to be

the average of the closing sale prices of the securities on such exchange over

the five (5) trading day period ending one day prior to the net exercise

election; (ii) if traded over-the-counter, the value shall be deemed to be

the average of the closing bid or sale prices (whichever is applicable) over

the five (5) trading day period ending one day prior to the net exercise; and

(iii) if there is no active public market, the value shall be the fair

market value thereof, as determined in good faith by the Board of Directors of

the Company.

 

6.             Certificates for Shares.  Upon the exercise of the purchase rights

evidenced by this Warrant, one or more certificates for the number of Warrant

Shares so purchased shall be issued as soon as practicable thereafter (with

appropriate restrictive legends, if applicable), and in any event within ten (10)

days of the delivery of the subscription notice.

 

7.             Issuance of Shares.  The Company covenants that the Warrant

Shares, when issued pursuant to the exercise of this Warrant, will be duly and

validly issued, fully paid and nonassessable and free from all taxes, liens,

and charges with respect to the issuance thereof.

 

8.             Adjustment

of Exercise Price and Kind and Number of Shares.  The number and kind of securities purchasable upon exercise of

this Warrant and the Exercise Price shall be subject to adjustment from time to

time as follows:

 

(a)           Subdivisions, Combinations and

Other Issuances.  If the Company

shall at any time prior to the expiration of this Warrant (i) subdivide its

Common Stock, by split–up or otherwise, or combine its Common Stock, (ii)

issue additional shares of its Common Stock or other equity securities as a

dividend with respect to any shares of its Common Stock, or (iii) declare a

cash dividend with respect to any shares of its Common Stock, the number of

shares of Common Stock issuable on the exercise of this Warrant shall forthwith

be proportionately increased in the case of a subdivision or stock or cash

dividend, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made

to the purchase price payable per share, but the aggregate purchase price

payable for the total number of Warrant Shares purchasable under this Warrant

(as adjusted) shall remain the same. 

Any adjustment under this Section 8(a) shall become effective at

the close of business on the date the subdivision or combination becomes

effective, or as of the record date of such dividend, or in the event that no

record date is fixed, upon the making of such dividend.

 

(b)           Reclassification, Reorganization

and Consolidation.  In case of any

reclassification, capital reorganization, or change in the Common Stock of the

Company (other than as a result of a subdivision, combination, or stock

dividend provided for in Section 8(a) above), then, as a condition of such

reclassification, reorganization, or change, lawful provision shall be made,

and duly executed documents evidencing the same from the Company or its

successor shall be delivered to the Holder, so that the Holder shall have the

right at any time prior to the expiration of this Warrant to purchase,

 

3

 

at a total price equal to that payable upon the

exercise of this Warrant (subject to adjustment of the Exercise Price as

provided in Section 8), the kind and amount of shares of stock and other

securities and property receivable in connection with such reclassification,

reorganization, or change by a holder of the same number of shares of Common

Stock as were purchasable by the Holder immediately prior to such

reclassification, reorganization, or change. 

In any such case appropriate provisions shall be made with respect to

the rights and interest of the Holder so that the provisions hereof shall

thereafter be applicable with respect to any shares of stock or other

securities and property deliverable upon exercise hereof, and appropriate

adjustments shall be made to the purchase price per share payable hereunder,

provided the aggregate purchase price shall remain the same.

 

(c)           Notice of Adjustment.  When any adjustment is required to be made

in the number or kind of shares purchasable upon exercise of the Warrant, or in

the Exercise Price, the Company shall promptly notify the holder of such event

and of the number of shares of Common Stock or other securities or property

thereafter purchasable upon exercise of this Warrant.

 

(d)           Issuance of New Warrant.  Upon the occurrence of any of the events

listed in this Section 8 that results in an adjustment of the type, number or

exercise price of the securities underlying this Warrant, the Holder shall have

the right to receive a new warrant reflecting such adjustment upon the Holder

tendering this Warrant in exchange.  The

new warrant shall otherwise have terms identical to this Warrant.

 

9.             Covenants

and Conditions.

 

(a)           No Impairment.  Pursuant to the terms and conditions of this

Warrant, Company shall: (i) reserve an appropriate number of shares of

Company’s Common Stock to facilitate the issuance of shares to Holder pursuant

to this Warrant, (ii) not amend its articles or take any other action that

would materially impair Company’s ability to comply with the terms of the

Warrant or otherwise unfairly impair the rights of the Holder, and (iii)

provide Holder with reasonable notice before Company undertakes any significant

corporate action that would have a material impact upon Holder’s rights under

the Warrant or upon the rights of the holders of Common Stock generally.

 

(b)           Registration Rights.  The Holder shall have the same registration

rights with respect to the Warrant Shares as the holders of Registrable

Securities under that certain Registration Rights Agreement dated as of the

date hereof by and between the Company and the Holder.

 

4

 

10.           Representations

and Warranties.  Pursuant to the

terms and conditions of this Warrant, the Company represents and warrants that

(i) the Company is properly organized and structured  pursuant to all applicable corporate laws of the State of

Delaware, (ii) the issuance of this Warrant has been duly authorized by all

necessary corporate action of the Company and does not conflict with the terms

any of the bylaws, articles of incorporation or material agreements of the

Company, and (iii) all reports and other information filed with the United

States Securities Exchange Commission were, on the date they were filed,  complete and accurate in all material

respects, and do not make any material misstatement or omit to state any facts

that are material to the operations, financial results or prospects of the

Company.

 

11.           No

Fractional Shares or Scrip.  No

fractional shares or scrip representing fractional shares shall be issued upon

the exercise of this Warrant, but in lieu of such fractional shares the Company

shall make a cash payment therefor on the basis of the Exercise Price then in

effect.

 

12.           No

Stockholder Rights.  Prior to

exercise of this Warrant, the Holder shall not be entitled to any rights of a

stockholder with respect to the shares of Common Stock issuable on the exercise

hereof, including (without limitation) the right to vote such shares of Common

Stock, receive dividends or other distributions thereon, exercise preemptive

rights or be notified of stockholder meetings, and such holder shall not be

entitled to any notice or other communication concerning the business or

affairs of the Company.  However,

nothing in this Section 12 shall limit the right of the Holder to be provided

the Notices required under this Warrant.

 

13.           Successors

and Assigns.  The terms and

provisions of this Warrant shall inure to the benefit of, and be binding upon,

the Company and the Holder and their respective successors and assigns.

 

14.           Amendments

and Waivers.  Any term of this

Warrant may be amended and the observance of any term of this Warrant may be

waived (either generally or in a particular instance and either retroactively

or prospectively), with the written consent of the Company and the Holder.  Any waiver or amendment effected in

accordance with this Section shall be binding upon each holder of any shares of

Common Stock purchased under this Warrant at the time outstanding (including

securities into which such shares have been converted), each future holder of

all such Shares, and the Company.

 

15.           Notices.  All notices required under this Warrant and

shall be deemed to have been given or made for all purposes (i) upon

personal delivery, (ii) upon confirmation receipt that the communication

was successfully sent to the applicable number if sent by facsimile;

(iii) one day after being sent, when sent by professional overnight

courier service, or (iv) five days after posting when sent by registered

or certified mail.  Notices to the

Company shall be sent to the principal office of the Company (or at such other

place as the Company shall notify the Holder hereof in writing).  Notices to the Holder shall be sent to the

address of the Holder on the books of the Company (or at such other place as

the Holder shall notify the Company hereof in writing).

 

16.           Attorneys’ Fees.  If any action of law or equity is necessary

to enforce or interpret the terms of this Warrant, the prevailing party shall

be entitled to its reasonable attorneys’ fees, costs and disbursements in

addition to any other relief to which it may be entitled.

 

5

 

17.           Captions.  The section and subsection headings of this

Warrant are inserted for convenience only and shall not constitute a part of

this Warrant in construing or interpreting any provision hereof.

 

18.           Governing

Law.  This Warrant shall be governed

by the laws of the State of Delaware as applied to agreements among Delaware

residents made and to be performed entirely within the State of Delaware.

6

 

IN WITNESS WHEREOF, VCampus Corporation caused this

Warrant to be executed by an officer thereunto duly authorized.

 

	

   

  	

   

  	

  VCAMPUS

  CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address: 1850 Centennial Park Drive, Suite 200

  
	

   

  	

   

  	

  Reston, Virginia

  20191

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Fax Number: (703) 654-7311

  

 

7

 

NOTICE OF EXERCISE

 

To:

The

undersigned hereby elects to [check applicable subsection]:

 

(a)           Purchase                    shares of Common Stock of                , pursuant to the terms of the

attached Warrant and payment of the Exercise Price per share required under

such Warrant accompanies this notice;

 

OR

 

(b)           Exercise the attached Warrant for [all

of the shares]  [          of the shares]  [cross out inapplicable phrase]

purchasable under the Warrant pursuant to the net exercise provisions of

Section 5 of such Warrant.

 

The

undersigned hereby represents and warrants that the undersigned is acquiring

such shares for its own account for investment purposes only, and not for

resale or with a view to distribution of such shares or any part thereof.

 

	

   

  	

  WARRANTHOLDER:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Address:

  

 

Date:

 

 

Name in which shares should be registered:

 

8LEASE AGREEMENT

Exhibit 10.1 (am)

 

LEASE AGREEMENT

 

THIS IS A LEASE AGREEMENT (hereinafter “Lease”) made

by and between Landlord and Tenant upon the following terms and conditions:

 

1.             DEFINITIONS.  When

used in this Lease, unless otherwise required by the context:

 

(a)                                  “Base Rental” shall have the meaning set

forth in paragraph 4.

 

(b)                                 “Commencement Date” shall have the meaning

set forth in paragraph 3.

 

(c)           “Common

Maintenance Area” shall have the meaning set forth in paragraph 18.

 

(d)                                 “Expiration Date” shall have the meaning

set forth in paragraph 3.

 

(e)           “Hazardous Material” means any hazardous or toxic substance,

material or waste, including petroleum products and including, but not limited

to, those substances, materials, and wastes listed in the United States Department

of Transportation hazardous materials Table (49 CFR 172.101) or by the

Environmental Protection Agency as hazardous substances (40 CFR Part 302) or

amendments thereto, and such substances, materials and wastes that are or

become regulated under any applicable local, state or federal law.

 

(f)            “Initial Term” shall have the meaning set

forth in paragraph 3.

 

(g)           “Landlord”

means Airport Road Developers, L.C., an Iowa limited liability company, whose

mailing address for purposes of this Lease is P.O. Box 1652, Ames, Iowa 50010.

 

(h)           “Lease” means

this instrument in its entirety as signed by the parties and any subsequent

amendments thereto.

 

(i)            “Leased Area” means the real property (together with all

easements and servient estates appurtenant thereto) situated in Story County,

Iowa, consisting of 67,500 square feet located in the commercial building

located at 300 Airport Road, Ames, Iowa 50010, as shown on Exhibit “A” attached

hereto and by this reference made a part thereof.

 

(j)            “Rental Year” means each consecutive twelve-month

period commencing on April 1 and ending on March 31 during which this Lease is

in force.

 

(k)           “Tenant” means

Sauer-Danfoss (US) Company, whose mailing address for purposes of this Lease is

2800 East 13th Street, Ames, Iowa 50010.

 

 

2.             AGREEMENT TO LEASE.  Landlord

agrees to lease the Leased Area to Tenant and Tenant agrees to lease the Leased

Area from Landlord upon the terms and conditions set forth herein.

 

3.             INITIAL TERM.  The

initial term of this Lease shall be for a period of three (3) years (“Initial

Term”) commencing on April 1, 2002 (“Commencement Date”), and expiring at

midnight on March 31, 2005 (“Expiration Date”).  Unless subsequently agreed to in writing between Landlord and Tenant,

there are no renewal or extension options.

 

4.             BASE RENTAL.  Tenant

shall pay in advance to Landlord, on the first day of the Initial Term of this

Lease and on the 25th day of each month thereafter, so long as this

Lease is in force, base rental (“Base Rental”) according to the following schedule:

 

	

  Lease Years

  	

   

  	

  Base

  Annual Rental

  	

   

  	

  Base

  Monthly Rental

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Year 1

  	

   

  	

  $

  	

  218,010.00

  	

   

  	

  $

  	

  18,167.50

  	

   

  
	

  Year 2

  	

   

  	

  $

  	

  251,760.00

  	

   

  	

  $

  	

  20,980.00

  	

   

  
	

  Year 3

  	

   

  	

  $

  	

  246,360.00

  	

   

  	

  $

  	

  20,530.00

  	

   

  

 

5.             TAX ON RENT.  If

any governmental authority, during any period of time that this Lease is in

force, assesses a sales tax or other comparable tax on the rental payments

received by Landlord under this Lease, Tenant shall contemporaneously pay to

Landlord with each monthly payment of Base Rental an additional sum equal to

the Landlord’s liability for such tax.

 

6.             LATE PAYMENT CHARGE.  Landlord

may assess a “late payment charge” to Tenant equal to five percent (5%) of the

Base Rental and any additional rental due each month whenever such payment

becomes more than five (30) days overdue.

 

7.             REAL PROPERTY TAXES.  Landlord

shall timely pay all real property taxes due and payable for the Leased Area

for any period of time during which this Lease is in force.

 

8.             PERSONAL PROPERTY TAXES. 

Tenant agrees to timely pay all taxes, assessments or other

public charges levied or assessed by lawful authority (but reasonably

preserving Tenant’s right of appeal) against Tenant’s personal property on the

Leased Area during the term of this Lease. 

The term “Tenant’s personal property” as used in this paragraph, shall

include all fixtures attached to the leased area by Tenant and all other improvements

made by Tenant to the Leased Area which Tenant has the right to remove upon the

expiration of this Lease and which may be separately assessed for taxation.

 

9.             SPECIAL ASSESSMENTS.  Special

assessments levied or assessed against the Leased Area for the cost of public

improvements shall be timely paid by Landlord.

 

2

 

10.           CASUALTY INSURANCE - PERSONAL PROPERTY.  Tenant shall keep its personal

property brought upon the Leased Area insured against loss by fire and other hazards

and shall furnish to Landlord the insurer’s certificate evidencing such coverage.

 

11.           CASUALTY INSURANCE.  Landlord

and Tenant will each keep its respective property interests in the Leased Area

and its liability in regard thereto, and the personal property on the premises,

reasonably insured against hazards and casualties; that is, fire and those

items usually covered by extended coverage. 

Tenant will not do or omit the doing of any act which would vitiate any

insurance, or increase the insurance rates in force upon the real estate

improvements on the premises.  Tenant

further agrees to be liable for and to promptly pay, as if current rental, any

increase in insurance rates on the leased area and on the building located

thereon, due to increased risks or hazards resulting from Tenant’s use of the

premises otherwise than as herein contemplated and agreed.

 

12.           LIABILITY INSURANCE.  Tenant

shall, at its cost, at all times while this Lease is in force, maintain in

force an insurance policy or policies, naming Tenant and Landlord as insureds,

against all liability resulting from injury occurring to persons or damage

occurring to property upon the Leased Area during Tenant’s occupancy of the

Leased Area.  The liability coverage of

such insurance shall be not less than $250,000 for any one-person injury,

$500,000 for any one accident and $100,000 for property damage.  Certificates or copies of said policies

naming the Landlord and providing for 10 days’ notice to the Landlord before

cancellation shall be delivered to the Landlord on or before the date of the

beginning of the Initial Term of this Lease. 

Tenant further covenants to hold Landlord free and harmless from any and

all liability for personal injury or property damage arising out of Tenant’s

use and occupancy of the Leased Area, provided, however, that the proximate

cause thereof is not Landlord’s negligence.

 

13.           ENVIRONMENTAL REPRESENTATIONS

AND WARRANTIES.  Landlord

represents and warrants to Tenant, to the best of Landlord’s knowledge, that

prior to April 1, 2002, (i) no hazardous material has emanated from the

property of which the Leased Area is a part; (ii) no hazardous material has

been disposed of or released upon the property of which the Leased Area is a

part; (iii) except for hazardous material used in the ordinary course of the

business activities conducted at the property of which the Leased Area is a

part, no hazardous material has been used, generated, handled, transported or

stored at the property of which the Leased Area is a part; and (iv) any

hazardous material used in the ordinary course of the business activities

conducted at the property of which the Leased Area is a part has been

generated, used, stored, handled and removed in compliance with environmental

laws.  Landlord will indemnify Tenant in

connection with any voluntary or involuntary action by, against or involving

Tenant that, in any way, results from or relates to any breach of Landlord’s

representations in this paragraph or from the discovery or removal of any

hazardous material upon, over, under, in or emanating from the property of

which the Leased Area is a part that was not or is not deposited, installed or

permitted to be placed or disposed of upon, over, in or under the property of which the Leased

Area is a part by or on behalf of Tenant, whether or not Landlord has knowledge

of its presence.

 

3

 

14.           USE OF HAZARDOUS MATERIAL. 

If the presence of hazardous material on the Leased Area

caused or permitted by Tenant results in contamination of the Leased Area, or

if contamination of the Leased Area by hazardous material otherwise occurs for

which Tenant is legally liable to Landlord for damage resulting therefrom, then

Tenant shall indemnify, defend and hold Landlord harmless from any and all

claims, judgments, damages, penalties, fines, costs, liabilities or losses

(including, without limitation, diminution in value of the Leased Area, damages

for the loss or restriction on use of rentable or usable space or of any

amenity of the Leased Area, damages arising from any adverse impact on

marketing of space, and sums paid in settlement of claims, attorneys’ fees,

consultant fees and expert fees) which arise during or after the lease term as

a result of such contamination.  This

indemnification of Landlord by Tenant includes, without limitation, costs

incurred in connection with any investigation of site conditions or any

clean-up, remedial, removal or restoration work required by any federal, state

or local governmental agency or political subdivision because of hazardous

material present in the soil or ground water on or under the Leased Area.  Without limiting the foregoing, if the

presence of any hazardous material on the Leased Area caused or permitted by

Tenant results in any contamination of the Leased Area, Tenant shall promptly

take all actions at its sole expense as are necessary to return the Leased Area

to the condition existing prior to the introduction of any such hazardous

material to the Leased Area; provided that Landlord’s approval of such actions

shall first be obtained, which approval shall not be unreasonably withheld so

long as such actions would not potentially have any material adverse long-term

or short-term effect on the Leased Area. 

The foregoing indemnity shall survive the expiration or earlier

termination of this Lease.

 

15.           UTILITIES.  Tenant

shall pay all charges of public or private utility companies for utility

services furnished to the Leased Area, including charges for gas, water, electricity,

sewage, garbage removal and telephone, as they become due and before same become

delinquent.  If Tenant fails to timely

pay such utility charges, Landlord may, at its election, pay same and in such

event Tenant shall repay to Landlord, upon demand, such amount together with

interest thereon at the rate of 12 percent per annum payable monthly.  Tenant shall receive a credit from Landlord

for any utility expenses caused by other tenants.  Within ten (10) days following the end of each month during the

Initial Term of this Lease, Tenant shall submit to Landlord an itemized

statement showing all such utility expenses not caused by Tenant and Landlord

shall credit Tenant the amount of such costs within 15 days after receipt of

such itemized statement Minimum credit shall not be less than $75.00 per month.

 

16.           POSSESSION.  So

long as Tenant pays the rents reserved and performs and observes all other

terms and conditions of this Lease, Tenant shall at all times during the

Initial Term and any extended term of this Lease peaceably and quietly have the

possession, use and enjoyment of the Leased Area and all rights, easements and

servient estates appurtenant thereto without any disturbance from Landlord or

from any other person claiming through Landlord.

 

4

 

17.           COMPLIANCE WITH LAW.  Tenant,

at Tenant’s expense, shall comply with all laws, rules, orders, ordinances,

directions, regulations and requirements of federal, state, county and

municipal authorities pertaining to Tenant’s use of the leased area, regardless

of when they become effective, including, without limitation, all applicable

federal, state and local laws, regulations or ordinances pertaining to air and

water quality, hazardous material, waste disposal, air emissions and other

environmental matters, all zoning and other land use matters, and with any

direction of any public officer or officers, pursuant to law, which shall

impose any duty upon Landlord or Tenant with respect to the use or occupation

of the leased area.  Tenant shall

contemporaneously furnish to Landlord a copy of any written report that Tenant

receives from or is required to file with any governmental entity concerning

the contamination of the Leased Area with hazardous material.

 

18.           COMMON MAINTENANCE AREA AND PARKING.  Tenant shall at all times during

the Initial Term of this Lease maintain the Common Maintenance Area.  The Common Maintenance Area shall consist of

that portion of Lot 8, Airport Road Subdivision, Ames, Iowa, that is exterior

to the commercial building containing the Leased Area and which is north of the

drive south of the commercial building. Tenant shall keep the Common

Maintenance Area in good condition, including lawn mowing, weed and debris

removal, and snow removal.  Tenant, its

employees, customers, agents and invitees shall have the right to park

automobiles in the Common Maintenance Area.

 

19.           ACCESS BY TENANT.  Tenant

and its employees, customers, agents and invitees, shall have the nonexclusive

right to use, for ingress to and egress from the Leased Area, the Parking Area,

the Common Maintenance Area and any common hallway, door, sidewalk and driveway

providing reasonable and convenient access between the Leased Area and a public

right-of-way.

 

20.           ACCESS BY LANDLORD.  Landlord

shall have reasonable access to the Leased Area during business hours for

purposes of examining or exhibiting same or for such other reasonable purposes

as may be necessary to protect or enforce Landlord’s rights under this

Lease.  During the 60-day period next

preceding the expiration of this Lease, Landlord may display upon the Leased

Area a sign indicating that the Leased Area is available for rental.

 

21.           SIGNS.  Tenant

shall have the right to erect one (1) sign identifying the Tenant on the

building in which the Leased Area is located. 

The sign shall comply with applicable statutes and ordinances.  All costs to erect, maintain and remove said

sign shall be paid by Tenant and Tenant shall remove the sign upon the

Expiration Date without damage to the building.  Tenant shall not erect or display on or about the exterior of the

building containing the Leased Area any advertising or identification sign

unless first approved by Landlord. 

Landlord may grant to other persons the right to erect signs in the

Common Maintenance Area.

 

5

 

22.           LOADING

DOCKS.  Tenant shall

have the nonexclusive right to use the loading docks located at the southeast

and northwest corners of the building in which the Leased Area is located.

 

23.           MAINTENANCE BY LANDLORD. 

Landlord shall be responsible for and shall keep in good

repair and operating condition at Landlord’s expense (a) all structural parts

of the existing building containing the Leased Area, including the roof, plate

glass windows, doors, foundation and all structural parts of the floors, walls

and ceilings; (b) all mechanical and utility systems serving the Leased Area,

including electrical systems (exclusive of lighting fixtures and bulbs), water

supply, plumbing, heating and cooling. 

Landlord shall be responsible for having all such mechanical and utility

systems in good working order upon the commencement of the Initial Term of this

Lease.  Landlord shall be responsible

for damage to the Leased Area or property of Tenant located therein caused by

the acts or negligence of Landlord.

 

24.           MAINTENANCE BY TENANT. 

Tenant shall, at Tenant’s expense, care for, keep in good

repair and maintain the Leased Area in a reasonably safe, clean and serviceable

condition.  Tenant shall provide all

necessary repairs, replacements and maintenance required during the term of the

Lease for all improvements now located on or hereafter added to the leased area

including the Parking Area and the Common Maintenance Area.  The quality of all repairs, replacements and

maintenance shall be at least equal to that of the original work.  Tenant shall keep the Leased Area free of

all accumulations of trash and debris. 

Tenant shall be responsible to Landlord for damage to the Leased Area

caused by by acts or negligence of Tenant or Tenant’s agents, employees or

invitees.

 

25.           IMPROVEMENTS BY TENANT. 

Tenant shall have the right, at Tenant’s expense and with the

prior written consent of Landlord, to make improvements, additions and

alterations to the Leased Area.  Tenant

shall, at Tenant’s expense, secure all governmental permits required for such

improvements, additions or alterations; pay all fees and charges, including

“impact fees,” assessed in connection with the issuance of such permits; and

comply with all conditions of such permits for landscaping and other required

site improvements.  All alterations,

additions and improvements made to the Leased Area at Tenant’s expense may be

removed from the Leased Area along with Tenant’s equipment, fixtures and all

other personal property, upon the termination of this Lease provided Tenant

bears the cost of repairing any physical injury caused to the Leased Area by

such removal or otherwise restores the Leased Area to the condition in which it

existed prior to the making of such additions and alterations, ordinary wear

and tear excepted.

 

26.           MECHANICS’ LIENS.  Tenant

shall do all things necessary to prevent the filing of any mechanics’ or other

liens against the Leased Area or any part thereof by reason of work, labor,

services or materials supplied or claimed to have been supplied to Tenant.  If any such lien shall at any time be filed

against the leased area, Tenant shall either cause the same to be discharged of

record within 20 days after the date of filing the same or, if Tenant, in

Tenant’s discretion and in good faith, determines that such lien 

 

6

 

should be contested, Tenant shall furnish such security as may be

necessary or required to prevent any foreclosure proceedings against any

interest in the leased area during the pendency of such contest.  If Tenant shall fail to discharge such lien

within such period or fail to furnish such security, then, in addition to any

other right or remedy of Landlord resulting from Tenant’s default, Landlord

may, but shall not be obligated to, discharge the same either by paying the

amount claimed to be due or by procuring the discharge of such lien by giving

security or in such other manner as is, or may be, prescribed by law.  Nothing contained herein shall imply any

consent or agreement on the part of Landlord to subject Landlord’s estate to

liability under any mechanics’ or other lien law.  Tenant shall repay Landlord, as additional rental, on demand, all

sums disbursed or deposited by Landlord pursuant to this paragraph, including

costs, expenses and reasonable attorney fees incurred by Landlord in connection

therewith.

 

27.           PARTIAL DESTRUCTION OF PREMISES.  In the event of a partial destruction or damage of the

Leased Area which is a business interference, that is, which prevents the

conducting of a normal business operation and which damage is reasonably

repairable within 60 days after its occurrence, this Lease shall not terminate

but the rent for the leased premises shall abate during the time of such

business interference.  In the event of

partial destruction, Landlord shall repair such damages within 60 days of its

occurrence unless prevented from so doing by acts of God, strikes, the

elements, government regulations, city ordinances, labor, material or

transportation shortages, or other causes beyond Landlord’s reasonable

control.  Should the zoning ordinance of

the municipality in which this leased area is located make it impossible for

Landlord, using diligent and timely effort to obtain necessary permits, to

repair and/or rebuild so that Tenant is not able to conduct its business on the

Leased Area, then such partial destruction shall be treated as a total destruction.

 

28.           TOTAL DESTRUCTION OF BUSINESS USE.  In the event of destruction or damage of the Leased

Area so that Tenant is not able to conduct its business on the premises for the

then current legal use for which the premises are being used and which damages

cannot be repaired within 60 days, this lease may be terminated at the option

of either Landlord or Tenant.  Such

termination in such event shall be effected by written notice of one party to

the other, within 20 days after such destruction.  Tenant shall surrender possession within 10 days after such

notice issues, and each party shall be released from all future obligations

hereunder, Tenant paying rental prorata to the date of such destruction.  In the event of such termination of this

lease, Landlord at its option may rebuild or not, according to its own wishes

and needs.

 

29.           CONDEMNATION.  If

a part or all of the Leased Area is taken by a legally constituted authority

under the power of eminent domain (“condemnation”) or is sold by Landlord under

the threat of the exercise of such power, the effect thereof upon the rights

and duties of Landlord and Tenant under this lease shall be as follows:

 

(a)           If

a partial taking or sale does not substantially interfere with the purposes for

which Tenant entered into the lease, the lease, without any change in its

terms, shall continue in force as to the part of the leased area not included

in such taking or sale.

 

7

 

(b)           If

a partial taking or sale does substantially interfere with the purposes for

which Tenant entered into the lease, the lease may be terminated at the option

of either Landlord or Tenant.  Such

termination in such event shall be effected by written notice of either party

to the other within 20 days after the condemning authority takes title or possession,

whichever is earlier.  Tenant shall

surrender possession of the remaining leased area within 10 days after such notice

issues, and each party shall be released from all future obligations under the

lease.  Tenant shall pay rental prorata

to the date Tenant surrenders possession.

 

(c)           If

there is a taking or sale of the entire leased area, the lease shall terminate

on the date that the condemning authority takes title or possession, whichever

is earlier, and each party shall be released from all future obligations under

the lease.

 

(d)           All

compensation paid by the condemning authority for such taking or sale, whether

for the entire leased area or for part of the leased area and for diminution in

value of the remaining leased area, shall belong to and be the sole property of

Landlord.  However, nothing herein shall

be construed to preclude Tenant from prosecuting any claim directly against the

condemning authority in such condemnation proceedings for loss of business and

damage to stock, trade fixtures, furniture, equipment and other personal

property belonging to Tenant.

 

(e)           If

Landlord contests in a judicial proceeding the compensation awarded to Landlord

by the condemning authority, any award of attorneys’ fees and costs by the

court shall be payable to Landlord in full reimbursement of all costs and

attorneys’ fees incurred by Landlord in connection with the condemnation

including any costs (excluding principal and interest prepayments) required to

be paid to any mortgagee as a result of the condemnation, with any balance of

fees and costs awarded by the court being payable to Tenant to the extent of

costs and attorneys’ fees incurred by Tenant in such judicial proceeding.

 

30.           SURRENDER OF PREMISES. 

Tenant agrees that upon the termination of this Lease, it

will surrender, yield up and deliver the Leased Area in good and clean condition,

except the effects of ordinary wear and tear and depreciation arising from

lapse of time, or damage without fault or liability of Tenant.

 

31.           ACTS OF DEFAULT BY TENANT. 

Each of the following shall be deemed a default by Tenant and

a breach of this lease:

 

(a)           Failure

to pay the rent or any part thereof.

 

(b)           Failure

to do, observe, keep and perform any of the terms, covenants, conditions,

agreements and provisions in this lease contained on the part of Tenant to be

done, observed, kept and performed.  (If

a default complained of under this subparagraph be a default other than one

which may be cured by the payment of money, no default on the part of Tenant in

performance of work required to be performed or acts to be done or

 

8

 

conditions to be met shall be deemed to exist if steps shall have been

in good faith commenced promptly by Tenant to rectify same and shall be

prosecuted to completion with diligence and continuity.)

 

(c)           Abandonment

of the Leased Area by Tenant, assignment of this Lease by Tenant without

Landlord’s prior written approval, adjudication of Tenant as a bankrupt, making

by Tenant of a general assignment for benefit of creditors, taking by Tenant of

the benefit of any insolvency law, the appointment of a permanent receiver or

trustee in bankruptcy for Tenant’s property, and appointment of a temporary

receiver or trustee for Tenant’s property which is not vacated or set aside

within 30 days after such appointment.

 

32.           TERMINATION ON TENANT’S DEFAULT.  In the event of any default by Tenant, and at any time

thereafter, Landlord may serve a written notice upon Tenant that Landlord

elects to terminate this Lease upon a specified date not less than 10 days

after the date of serving such notice and this Lease shall then expire on the

date so specified as if that date had been originally fixed as the Expiration

Date of this Lease unless such default, as described in said notice, shall have

been cured within the applicable period provided in said notice.  A termination of the Lease under this

paragraph shall terminate all rights of first refusal granted herein to Tenant.

 

33.           REENTRY BY LANDLORD.  In

the event this Lease shall be terminated by reason of Tenant’s default,

Landlord may immediately reenter and resume possession of the Leased Area and

remove all persons and property therefrom by reasonable and necessary force

without being liable for any damages therefor.

 

34.           LANDLORD’S SECURITY INTEREST.  In addition to such other rights as Landlord may have

by statute and common law, Landlord shall have a security interest, as provided

by the Uniform Commercial Code, upon all personal property and upon all substitutions

therefor, kept and used on the Leased Area by Tenant.  In the event this Lease is terminated by Tenant’s default, Landlord

may immediately reenter and resume possession of the Leased Area and take

possession of all of the aforesaid personal property as to which Landlord shall

have all of the rights and remedies of a secured party under the Uniform

Commercial Code.

 

35.           LANDLORD’S RIGHT TO RELET. 

In the event this Lease shall be terminated by reason of

Tenant’s default, Landlord may relet the whole or any portion of the Leased

Area, for a period equal to or greater or less than the remainder of the then

current term, for any rent which it may deem reasonable, to any Tenant which it

may deem suitable, and for any use and purpose which it may deem appropriate,

and in connection with any such reletting Landlord may make such changes in the

character of the improvements on the leased area as Landlord may determine to

be appropriate or helpful in effecting such reletting.  Landlord shall in no event be required to

pay Tenant any surplus of any rent received by Landlord on a reletting of the

Leased Area in excess of the rent reserved in this Lease.

 

9

 

36.           MEASURE OF DAMAGES ON DEFAULT.  In the event this Lease shall be terminated by reason

of Tenant’s default, Landlord shall be entitled to recover from Tenant and

Tenant shall pay to Landlord the following:

 

(a)           A

sum equal to all expenses incurred by Landlord in recovering possession of the

Leased Area and all reasonable costs and charges for the care and maintenance

of the Leased Area while vacant, which damages shall be due and payable by

Tenant to Landlord at such time or times as such expenses shall have been

incurred by Landlord.

 

(b)           A

sum equal to the amount of all rent reserved under this Lease, less the rent,

if any, collected by Landlord on reletting the Leased Area, which shall be due

and payable by Tenant to Landlord on the several days on which the rent

reserved in this Lease would have become due and payable.

 

(c)           All

other damages accruing to Landlord under the terms of this Lease or allowed by

law.

 

(d)           Reasonable

attorney fees incurred by Landlord in connection with the enforcement and

recovery of the aforesaid damages.

 

(e)           Interest

on the aforesaid damages, from the several dates due, at the rate of twelve

percent (12%) per annum payable monthly or the long term “Applicable Federal

Rate” of interest on the date of termination of the lease as fixed by the

Internal Revenue Service, whichever is greater.

 

37.           WAIVER BY LANDLORD.  The

failure of Landlord to enforce any term, covenant, condition or agreement

hereof by reason of its breach by Tenant after notice thereof is given shall

not be deemed to avoid or affect the right of Landlord to enforce the same

term, covenant, condition or agreement on the occasion of a subsequent default

or breach.

 

38.           DELAY EXCUSED.  Whenever

Tenant shall be required by the terms of this Lease or by law to pay any sum of

money (other than the Base Rental and additional rental) or to perform or

observe any condition or provision, Tenant shall not be deemed to be in default

under this Lease, and Landlord shall not enforce or exercise any of Landlord’s

rights hereunder, if and so long as such default shall be directly caused by

strikes, lockouts, non-availability of labor or materials, war, government restrictions,

civil commotions, acts of God or other similar causes beyond the control of

Tenant.

 

39.           LANDLORD’S RIGHT TO MORTGAGE, SUBORDINATION.  This Lease is subject and

subordinate to all ground or underlying leases and to all mortgages which may

now or hereafter affect the Leased Area and to all renewals, modifications,

consolidations, replacements and extensions thereof.  This clause shall be self-operative and no further instrument of

subordination shall be required by any mortgagee.  In confirmation of such subordination, Tenant shall execute

promptly any certificate that

 

10

 

Landlord may request.  For so

long as Tenant shall be in full compliance with all the terms and conditions of

this Lease, the rights of the holders of the underlying leases or mortgages, if

exercised, will not interfere with the Tenant’s rights of possession hereunder.

 

40.           RIGHTS CUMULATIVE.  The

various rights, powers, options, elections and remedies of either party

provided in this Lease, shall be construed as cumulative and no one of them as

exclusive of the others, or exclusive of any rights, remedies or priorities allowed

either party by law, and shall in no way affect or impair the right of either

party to pursue any other equitable or legal remedy to which either party may

be entitled so long as any default remains in any way unremedied, unsatisfied

or undischarged.

 

41.           ASSIGNMENT/SUBLEASE.  Tenant

shall have the right to assign this Lease or sublet the whole or any part of

the Leased Area provided the Landlord’s written consent therefor is first

obtained, which written consent shall not be unreasonably withheld.  Assignment of this Lease shall not operate

to release Tenant from liability thereunder.

 

Nothwithstanding

anything to the contrary contained in this Lease, Tenant may, without the

consent of Landlord, sublet or assign this Lease to (i) any corporation,

limited liability company, general or limited partnership, limited liability

partnership, trust or other entity that controls or is controlled by, or is

under common control with Tenant, or (ii) any entity that purchases all or

substantially all of the assets of the business being conducted from the Leased

Area.

 

42.           FIRST RIGHT OF REFUSAL. 

If and when, during the Initial Term of this Lease, Landlord

proposes to sell real estate which includes the Leased Area, Landlord shall

first offer Tenant the right and option to purchase such real estate under the

same terms constituting such proposal to sell, subject to the following terms

and conditions:

 

(a)           This

option shall be effective only during the Initial Term of this Lease.

 

(b)           Landlord

shall promptly give written notice to Tenant of any such proposal to sell the

Leased Area; and Tenant shall, within seven (7) days thereafter, exercise its

option to accept such proposal by giving written notice thereof to Landlord,

otherwise Tenant’s option as to such proposal shall terminate.

 

(c)           If,

after exercising this option, Tenant fails to perform the terms thereof in any

respect, time being of the essence, then Landlord may forfeit the purchase

contract arising out of the exercise of the option as provided by Chapter 656

of the Iowa Code and all payments made shall be forfeited; or Landlord may

proceed by suit at law or in equity to foreclose such purchase contract, in which

event Tenant agrees to pay costs and attorney fees.

 

(d)           The

rights granted by this option shall be personal to Tenant, and shall not be

assignable to or otherwise inure to the benefit of any other person.

 

11

 

(e)           If

Tenant shall exercise this option, Tenant shall receive a credit off the

purchase price for such real estate in the amount of $50,000 per Rental Year

not to exceed $150,000 prorated on a daily basis to the date of closing.

 

43.           NOTICES.  Unless

otherwise required by law, any notice or demand required or permitted by the

terms of this Lease shall be sufficient and deemed complete when expressed in

writing and either (a) personally delivered to the person entitled thereto, or

(b) deposited at any office of the United States Postal Service in the form of

certified mail addressed to the last known mailing address of the person

entitled thereto, or (c) served on the person entitled thereto in the manner of

an original notice under the Iowa Rules of Civil Procedure.

 

44.           ENTIRE AGREEMENT.  This

instrument constitutes the entire agreement between the parties with respect to

the subject matter thereof and supersedes all prior statements,

representations, promises and agreements, oral or written.  No addition to or change in the terms of

this agreement shall be binding upon the parties unless it is expressed in a

writing signed by the parties. Included as part of this agreement is attached

addendum “Additional Provisions”.

 

45.           SUCCESSORS BOUND.  This

Lease shall be binding upon and inure to the benefit of the respective

successors and assigns of all parties executing this Lease.

 

46.           SEVERABILITY.  If

any part of this Lease shall be adjudged invalid or unenforceable, such

adjudication shall not affect the validity or enforceability of this lease as a

whole or any part thereof not adjudged invalid or unenforceable.

 

47.           CONSTRUCTION.  Words

and phrases used in this Lease shall be construed as in the single or plural

number, and as masculine, feminine or neuter gender, according to the context.

This Lease shall be governed exclusively by and construed in accordance with

the laws of the State of Iowa. The paragraph headings in this Lease are for

convenience only and in no way define or limit the scope or intent of any provisions

of this Lease.

 

48.           MULTIPLE COPIES.  This Lease may be executed in any

number of counterparts, each of which shall be regarded as an original and all

of which shall constitute but one and the same instrument.

 

12

 

IN WITNESS OF THIS LEASE Landlord and Tenant have

executed this instrument under date of

                               ,

2002.

 

	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

   

  
	

  AIRPORT ROAD DEVELOPERS, L.C., an Iowa limited

  liability company

  
	

   

  	

   

  
	

   

  	

   

  
	

  BY:

  	

   

  	

   

  
	

   

  	

  MARVIN J. WALTER, Manager

  
	

   

  	

   

  
	

   

  	

   

  
	

  BY:

  	

   

  	

   

  
	

   

  	

  DEAN E. HUNZIKER, Manager

  
	

   

  	

   

  
	

   

  	

   

  
	

  TENANT:

  
	

   

  
	

   

  
	

  SAUER-DANFOSS (US) COMPANY

  
	

   

  	

   

  
	

   

  	

   

  
	

  BY:

  	

   

  	

   

  
	

  PRINT NAME:

  	

   

  	

   

  
	

  TITLE:

  	

   

  	

   

  
						

 

13

 

ADDENDUM

 

Landlord:                                         Airport

Road Developers, L.C.

Tenant:                                                      Sauer-Danfoss

(US) Company

Property:                                          300

Airport Road

Ames, Iowa

 

Additional Provisions

 

The

Additional Provisions of this Addendum modify and supplement the form of Lease

(the “Lease Form”) to which this Addendum is attached, and, in the event of

ambiguity or conflict, these Additional Provisions shall control.

 

1.             Additional Definitions.

 

“Property” shall mean the real property

consisting of approximately 16 acres of land owned by Landlord and the

improvements thereon, in which the Leased Area is located, which real property

is generally located at the southeast corner of the intersection of South Duff

Avenue (Highway 69 South) and Airport Road, is legally described as: Airport

Road SD Lot 8, Section 14, Township 83 North, Range 24 West, Washington

Township, Story County, Iowa, all as more generally depicted on Exhibit “B”

attached hereto and fully incorporated herein.

 

“Building” shall mean the approximately

90,000 square foot warehouse building comprising a part of the Property and

commonly known and numbered as 300 Airport Road, Ames, Iowa.

 

“Phase I Assessment” shall mean the March

2002 Phase I Environmental Site Assessment of the Property prepared by MWH of

Des Moines, Iowa under its Project No. 1912348.0101, which Phase I Assessment

is fully incorporated herein by reference thereto.

 

“Environmental Matters” shall mean the soil

and ground water contamination and other environmental concerns described in

the Phase I Assessment or as may otherwise be determined in respect of the

Property subsequent to the Phase I Assessment

 

“Environmental Facilities” shall mean the

soil and ground water remediation and sampling system and facilities described

in the Phase I Assessment, together with such additions and changes as are made

to address the Environmental Matters.

 

“Parking Area” shall mean the paved parking

areas located on the Property to the east of the Building, together with the

drives and driveways and other means of ingress and egress, as shown on Exhibit

“B”, including any rights to the use of properties to the east of the Property

as shown thereon.

 

 

“Leased Area”  shall mean the 67,500 square feet located within the improvements

and shown on Exhibit “A” to the Lease Form, together with the Parking Area as

now constructed and situated on the property, together with ingress and egress

thereto and therefrom.   Notwithstanding

anything herein to the contrary, the Leased Area shall not include any of the

Environmental Facilities

 

“Other Tenants” shall means other tenants

or occupants of the Building from time to time by agreement or sufferance of

Landlord, including ACI Mechanical (“ACI”) but not including the existing

tenant of the Leased Area (“Existing Tenant”).

 

“Landlord’s Work” shall mean the work and

materials to be done and furnished to the Property by Landlord prior to the

Commencement Date to ready the same for Tenant’s occupancy and use.

 

2.             Tenant’s Access.    Between the date of the Lease and the

Commencement Date, Tenant shall have full access to and use of the Leased Area

for the purpose of moving its equipment and readying the Leased Area for its

occupancy, free from interference or hindrance by the Existing Tenant or by

ACI. If Tenant is delayed or prevented from such full access, the Commencement

Date, may, at its option, be extended for a like period of time, in which event

the Expiration Date shall likewise be so extended.

 

3.             Existing Tenant.    If Landlord is unable to

deliver the Leased Area to Tenant on the Commencement Date free of the tenancy

and occupancy of the Existing Tenant and any Other Tenants, then the

Commencement Date may, Tenant’s option, be extended for a period of time equal

to such delay, in which event the Expiration Date shall likewise be so

extended.

 

4.              Landlord’s Work.   Landlord shall complete Landlord’s Work in

good and workmanlike manner prior to the Commencement Date, and if Landlord’s

Work is not so completed, the Commencement Date, may, Tenant’s option, be

extended for a period of time equal to such delay, in which event the

Expiration Date shall likewise be so extended.

 

5.             Base Rent.    Rental payments for the second and all

subsequent months of the Initial Term shall be paid on the 25th day

of such month.

 

6.             Late Payment Charge.    No late payment charge shall accrue or be

owing unless the amount in question remains unpaid after five (5) written

notice to Tenant of the nonpayment.

 

7.             Taxes.    Notwithstanding anything in the Lease Form

to the contrary, Landlord shall be responsible for and pay all taxes in the

nature of income or earnings taxes in respect of the Base Rental and or in

respect of its ownership of the Property.

 

Landlord shall pay, prior to any delinquency thereof,

all ad valorem real estate taxes and installments of special assessments due at

the date hereof and accruing during the 

 

2

 

Initial Term, and Landlord shall, at the request of Tenant, furnish

Tenant with written evidence of such payments.

 

8.             Casualty Insurance.  Upon notice to Landlord, Tenant may

self-insure its personal property in or about the Leased Area. Otherwise,

Tenant’s insurance may be provided as part of a blanket or master policy

maintained by Tenant.

 

Landlord will maintain fire and casualty insurance in

respect of the Building and other improvements at the Property in at least

their full replacement value and shall fully insure its personal property at

the Property, shall furnish Tenant upon request certificates of all such

insurance, and shall cause Tenant to be named as an additional insured as its

interests may appear by virtue of this Lease.

 

Tenant will not do or omit the doing of any act which

would nullify any insurance, or increase the insurance rates in force, upon the

Building or other improvements. Tenant shall to be liable for and to promptly

pay, as if current rental, any increase in insurance rates on the Leased Area

and on the Building due to increased risks or hazards resulting directly from

Tenant’s use of the Leased Area other than for general warehouse, storage and

distribution purposes.

 

Notwithstanding anything to the contrary herein,

Landlord and Tenant hereby mutually release and discharge each other, and all

persons against whom their insurance companies would have a right or claim by

virtue of subrogation, of and from all suits, claims and demands whatsoever for

loss or damage to the property of the other, even if caused by or occurring

through or as a result of any negligent act or omission of the party released

hereby, so long as and to the extent such loss or damage is covered by insurance

benefiting the party suffering such loss or damage or was required to be so

covered under this Lease.  Each party

further agrees that each will cause its policies of insurance for fire and

extended coverage to be so written as to include a waiver of subrogation to

effect the foregoing.

 

9.             Liability Insurance.   Tenant’s insurance may be provided as part of a blanket or master

policy maintained by Tenant.

 

Tenant shall have no responsibility or obligation, in

whole or in part, directly or indirectly, for the Environmental Matters or the

Environmental Facilities, or any consequences thereof or any governmental or

third party  action in respect thereof.

 

Tenant’s indemnification shall be limited to claims

and occurrences proved by Landlord to be solely attributable to and the direct

result of the action or neglect of Tenant during the Initial Term and not

resulting in whole or in part from conditions existing at or prior to the

Commencement Date or a result of the acts or neglect of others, including

without limitation all claims involving the Environmental Matters and

Environmental Facilities.

 

3

 

10.           Environmental

Matters, Facilities, Compliance with Law.    Notwithstanding anything in the Lease Form to the contrary:

 

(1)                                The

Leased Area shall not include the Environmental Matters or Environmental

Facilities, Tenant shall have no right to use the Environmental Facilities or

that portion of the Property on or in which the Environmental Matters are

located, and Landlord shall be fully responsible for the Environmental Matters

and Environmental Facilities, including without limitation the operation,

maintenance, repair, removal and compliance with all applicable legal

requirements, and Landlord shall fully indemnify, protect, defend and hold

Tenant harmless from and against any and all loss, cost, liability and expense

in any way arising and/or resulting therefrom;

 

(2)                                There

shall be excluded from Tenant’s obligations to comply with legal requirements

any and all obligations to comply with legal requirements in respect of the

Environmental Matters or the Environmental Facilities, and Landlord shall take

all actions necessary and appropriate to comply with legal requirements in

respect of the Environmental Matters and the Environmental Facilities, and

Landlord shall fully indemnify, protect, defend and hold Tenant harmless from

and against any and all loss, cost, liability and expense in any way arising

and/or resulting therefrom; and

 

(3)                                For

the purposes of Tenant’s obligations in respect of the Leased Area and

otherwise, Landlord approves the use, storage, generation, transport and

disposal of any such hazardous substances which are used or useful in the

operation of Tenant’s business and the use, storage, transport and disposal of

which complies with applicable laws, and the routine and general uses of fuels,

paints, cleaning products and office supplies and the like (herein “de minimis

uses”), and for such purposes hazardous material shall be deemed not to include

such substances.

 

11.           Utilities. 

Tenant shall not be obligated to pay any charges to public or private

utility companies for utility services charged for or utilities consumed by

Other Tenants of the Property. If any such bills contain such charges, Landlord

shall cause them to be appropriately adjusted or shall reimburse Tenant for or

allow Tenant a credit for the amount of such charges.

 

12.           Common Maintenance Areas. Notwithstanding

anything herein to the contrary, the Common Maintenance Area shall not include

any of the Property involved in the Environmental Matters or the Environmental

Facilities or groundwater therefrom. 

Tenant’s obligations to maintain the Common Maintenance Area shall be

only to the condition existing as of the Commencement Date, reasonable wear and

tear excepted, and shall not include replacements or substantial repairs (that

is to say, repairs out of the ordinary course), which work shall be done by

Landlord at its expense.

 

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13.           Access by Landlord.    Landlord shall in good faith to give Tenant

as much advance notice of such entry as is reasonably practicable.

 

14.           Signs.   

Landlord may not allow any other sign in the Common Maintenance Area

without Tenant’s prior consent.  Existing

sign for Nissan of Ames is approved by tenant.

 

15.           Loading Docks.    Landlord shall allow no one other than Other Tenants to use the

loading docks or any other part of the Property, and all rights granted to

Other Tenants shall be subject to the rights of Tenant herein.

 

16.           Maintenance by Landlord.   Landlord’s maintenance, repair, replacement

obligations shall additionally include, without limitation, all roofs and

roofing materials, exterior walls and interior demising walls, plumbing,

exteriors, Parking Area lighting, gutters, down spouts and drainage facilities,

and the Environmental Facilities.

 

17.           Maintenance by Tenant.   All of Tenant’s maintenance and repair

obligations shall be subject to the performance by Landlord of its obligations

as provided in the Lease.

 

18.           Destruction of Premises or Business Use.    If because of damage or partial

destruction there is material interference with the use of the Leased Area by

Tenant for its business purposes, all rental shall abate during and to the

extent of such untenantability.  If it

is reasonably foreseeable that the Leased Area may be fully restored within

such 60-day period, Tenant may terminate this Lease upon written notice to

Landlord.

 

19.           Act of Default by Tenant, Landlord’s Remedies.   Notwithstanding anything in the Lease Form to the contrary, Tenant

shall not be deemed in default, nor shall any interest, service charge or

liquidated damages accrue, unless Tenant shall have failed to pay any

delinquent sum of money or have failed to perform any other of its obligations

hereunder within ten (10) days after its receipt of written notice thereof from

Landlord, provided, however, if the cure or correction of any default would

reasonably take more than ten (10) days, Tenant shall not be in default if the

cure or correction of such default has commenced within such ten (10) day

period and Tenant is proceeding with a cure or correction of the same with

reasonable diligence.  Landlord shall

use reasonable diligence to mitigate its damages, and liquidated damages shall

not be recoverable.  Landlord

 

20.           Landlord’s Nonperformance.    If Landlord shall fail to perform any of

its obligations in respect of the Leased Area and continues such failure for

fifteen (15) days after written notice thereof from Tenant, Tenant shall have

the right but not the obligation to perform such work or take such action and

may thereafter deduct the reasonable cost thereof from future payments due from

it to Landlord or recover the same directly from Landlord.  Any warranties or guaranties available with

respect to the Building may be used by Tenant in its own name or in Landlord’s

name as may be appropriate.  Tenant

shall have all other rights and remedies for Landlord’s nonperformance as

provided in the Lease and as provided in law or at equity.

 

5

 

21.           Security

Interest.   Landlord waives and releases any right to a

UCC security it may have under or by virtue of the Lease Form.

 

22.           Assignment, Sublease.    Tenant may assign this Lease to a parent,

subsidiary or affiliated corporation or entity or in connection with the sale

of all or substantially all of its assets or the assets of the operating

division occupying the Leased Area, and Tenant may sublease the Leased Area in

whole or in part so long at it remains primarily obligated to Landlord for the

performance of its obligations herein.

 

23.           Subordination.   This Lease shall not be subordinate to any ground or underlying

lease or mortgage whether now existing or hereafter created, nor to any

mortgage hereafter created, unless Tenant is furnished with a nondisturbance

agreement executed by the holder of such interest in form and content

reasonably satisfactory to Tenant.

 

24.           Landlord Representations and Warranties.  Landlord represents to and covenants and

agrees with Tenant that:

 

(1)                                Landlord

is the owner of good and marketable title to the Leased Area and that it has

full right and authority to make this Lease and to make and bind the Property

to the provisions hereof;

 

(2)                                All

usual utilities serve the Building and service is available to the Building

upon normal and nondiscriminatory deposits and without any requirements for

connection fees or charges;

 

(3)                                All

Building systems (including without limitation HVAC, electrical, plumbing,

water, sewer, gas and the like are fully operable and in good condition and

repair, and Landlord shall be responsible for any repairs or other work to put

and/or maintain any of the same in such condition and state of repair.

 

(4)                                Except

for the Existing Tenant and ACI, there are no leases, tenancies or other rental

arrange­ments pertaining to any portion of the Property except as herein

specifically provided.

 

(5)                                All

buildings and improvements on the Property (including all streets, curbs,

sidewalks, sewers and other utilities) have been completed and installed in

accordance with the plans and specifications approved (if required) by the

various governmental authorities having jurisdiction.  Permanent certificates of occupancy, all licenses, permits,

authorizations and approvals required by all governmental authorities having

jurisdiction have been issued for such buildings and improvements and have been

paid for and, as of the date of execution and the commencement date of this

lease, all of the same will be in full force and effect.

 

6

 

(6)                                The

Property is properly zoned for a warehouse and distribution facility and

associated offices, facilities and parking including trucks and trailers, and

such use meets all applicable governmental and legal requirements. No zoning,

building or similar law, ordinance or regulation is, or as of the date hereof

will be, violated by the continued maintenance, operation or use of any

buildings, improvements or structures presently erected on the Property or by

the continued maintenance, operation or use of the Parking Area.

 

(7)                                There

are not, except only matters specifically set forth in the Phase I Assessment

and as of the Commencement Date hereof there will not be, any uncured

violations of federal, state or municipal laws, ordinances, orders, regulations

or requirements affecting any portion of the Property.  No heating equipment, incinerators or other

burning devices on the Property violate, or as of the date hereof will violate,

any applicable federal, state or municipal laws, ordinances, orders,

regulations or requirements.

 

(8)                                The

Property is served by water, sewer, electrical, gas and telephone lines and

systems having adequate capacity for the reasonably foreseeable operation of

the Property.

 

(9)                                The

Property has full, free and adequate access to and from public highways and

roads, and Landlord has no knowledge of any fact or condition which would

result in the termination or limitation of access.

 

(10)                          Landlord

has no information or knowledge of any pending or threatened condemnation or

similar proceeding affecting any portion of the Property.  Landlord has no information or knowledge of

any change contemplated in any applicable laws, ordinances or restrictions or

any judicial or administrative action or any action by adjacent landowners or

natural or artificial conditions upon the Property which would prevent, limit,

impede or render more costly Tenant’s contemplated use of the Property.  Landlord has no information or knowledge of

any legal actions, suits or other legal or administrative proceedings, pending

or threatened with respect to the Property, and Landlord is not aware of any

facts which might result in any such action, suit or other proceedings.  Landlord has no information or knowledge of

any significant adverse facts or conditions relating to the Property or its

present or intended use which have not been specifically disclosed in writing

by Landlord to Tenant, and Landlord knows of no fact or condition of any kind

or character which adversely affects the present or intended use of the

Property.

 

7

 

(11)                          Landlord

has no information or knowledge of any special taxes or assessments levied

against the Property which are not yet due and payable at the office of the tax

collection authority having jurisdiction or of any existing or proposed

improvements to be paid for by special taxes or assessments subsequent to the

date hereof.

 

(12)                          All

statements made by Landlord are true and correct and the information provided

and to be provided by Landlord to Tenant relating to this Lease do not and will

not contain any statement which, at the time and in the light of the

circumstances under which it is made, is false or misleading with respect to

any material fact, or omits to state any material fact (which is known, or, in

the exercise of reasonable diligence by Landlord, should have been known)

necessary in order to make any statement not false or misleading in any material

respect.

 

(13)                          To

the best of Landlord’s knowledge and belief, the Phase I Assessment is true and

correct and does  not contain any

statement which is false or misleading with respect to any material fact, or

omits to state any material fact necessary in order to make any statement not

false or misleading in any material respect.

 

Landlord’s representations, warranties and agreements herein shall be

continuing and shall survive the expiration of the Initial Term.

 

25.           Reasonableness.   

Landlord acknowledges its duty to exercise its rights and

remedies and perform its obligations reasonably and in good faith.  Whenever its consent or approval is

required, such consent or approval shall not be unreasonably withheld or

delayed.  Whenever the provisions of

this Lease allow Landlord to perform or not perform some act at its option, in

its judgment or to its satisfaction, Landlord’s decision to perform or not

perform such act must be commercially reasonable.

 

26.           Notices.    Any

and all notices required or permitted to be given to Tenant shall additionally

be given to it at the following address:

 

Sauer-Danfoss (US) Company

2800 East 13th Street

Ames, Iowa 50010

 

Attn:

 

and/or to such other address(es) as Tenant may from time to time

designate.

 

8

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