Document:

Exhibit 10.19

 

EXECUTION COPY

 

RESTRICTED STOCK AGREEMENT

 

THIS AGREEMENT (the “Agreement”)
is made and entered into as of this 31st day of October, 2004, by
and between Real Mex Restaurants, Inc., a Delaware corporation (the “Company”)
and Steven Lau Tanner (the “Employee”).

 

WHEREAS, the Company
regards the Employee as a key employee and in connection with his employment by
the Company effective January 12, 2004, the Company has determined that it
would be in the best interests of the Company and its stockholders to issue a
certain number of shares of restricted Series C 15% Cumulative Compounding
Participating Preferred Stock, par value $0.001 per share of the Company (the “Series C
Preferred Stock”) and to issue a certain number of shares of restricted Series A
12.5% Cumulative Compounding Preferred Stock, par value $0.001 per share of the
Company (the “Series A Preferred Stock”) and to issue a certain
number of shares of restricted Series B 13.5% Cumulative Compounding
Preferred Stock, par value $0.001 per share of the Company (the “Series B
Preferred Stock”) to the Employee as an inducement for him to remain in the
employ of the Company and as an incentive for his continuing effort during his
employment with the Company; and

 

WHEREAS, the Restricted
Shares (as defined below) shall, subject to the terms and conditions set forth
herein, be non-transferable and subject to forfeiture and repurchase by the
Company in certain cases;

 

NOW THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Employee hereby agree as follows:

 

1.                                       Issuance
and Sale of Restricted Shares. 
Subject to the restrictions, terms and conditions of this Agreement, the
Company hereby issues to the Employee 232 shares of the Company’s Series C
Preferred Stock, 295 shares of the Company’s Series A Preferred Stock and
208 shares of the Company’s Series B Preferred Stock (collectively the “Restricted
Shares”).  Subject to the
restrictions, terms and conditions of this Agreement, the Employee hereby
purchases the Restricted Shares for a purchase price of $594,208 payable as
follows:

 

	
   

  	
   

  	
  Restricted

  Shares

  	
   

  	
  Purchase

  Price

  	
   

  	
  Original

  Consideration

  	
   

  	
  Additional

  Consideration

  	
   

  
	
  Series C Preferred Stock

  	
   

  	
  232

  	
   

  	
  $

  	
  414,000

  	
   

  	
  $

  	
  232

  	
   

  	
  $

  	
  413,768

  	
   

  
	
  Series A Preferred Stock

  	
   

  	
  295

  	
   

  	
  180,000

  	
   

  	
  295

  	
   

  	
  179,705

  	
   

  
	
  Series B Preferred Stock

  	
   

  	
  208

  	
   

  	
  208

  	
   

  	
  208

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
  594,208

  	
   

  	
  $

  	
  735

  	
   

  	
  $

  	
  593,473

  	
   

  

 

(a)                                  $1.00
per share of Restricted Shares ($735) is being paid by the Employee to the
Company as of the date hereof (the “Original Consideration”); and

 

(b)                                 the
remaining price for the Restricted Shares ($593,473) (the “Additional
Consideration”) is payable by the Employee to the Company upon the
occurrence of a Liquidity

 

 

Event (as defined below).  In the event that the Additional
Consideration is not paid when due, the Employee shall forfeit the Restricted
Shares and there shall be no further recourse to the Employee.

 

2.                                       Vesting
of Restricted Shares.

 

(a)                                  The
Restricted Shares so issued to the Employee shall vest only upon the occurrence
of the following events:  (i) a sale
of the Company to an unaffiliated third person, whether by merger,
consolidation, reorganization, sale of all or substantially all of the Company’s
assets, or sale of a majority of the outstanding shares of the Company’s
capital stock, (ii) an Initial Public Offering (as defined below), and (iii) for
each series of Preferred Stock, a voluntary redemption of that series of
Preferred Stock at the option of the Company in connection with a refinancing
or similar event (each of the events described in clause (i), (ii) and (iii) above,
a “Liquidity Event”, and for item (iii) the Liquidity Event shall
only be for that series of Preferred Stock voluntarily redeemed.

 

(b)                                 Until
vested in accordance with Section 2(a) hereof, the Restricted Shares
shall be held by the Company on behalf of the Employee in a custodial
capacity.  The Restricted Shares shall
bear the legend(s) required by Paragraph 6 of this Agreement.  Upon the occurrence of a Liquidity Event, the
Restricted Shares shall immediately vest in full and, upon receipt by the
Company of the payment by the Employee of the Additional Consideration pursuant
to Section 2(c) below, the Company shall promptly release the
Restricted Shares to the Employee.

 

(c)                                  Upon
the occurrence of a Liquidity Event, the Employee shall pay to the Company an
amount equal to the Additional Consideration by wire transfer in same day funds
to an account designated by the Company to the Employee.

 

For purposes of this Section 2,
an “Initial Public Offering” means a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) (other than a Special
Registration Statement or a registration statement relating to a Unit Offering
(in each case as defined below)) in respect of the offer and sale of shares of Class A
Common Stock, par value $.001 per share of the Company (the “Common Stock”)
for the account of the Company resulting in aggregate net proceeds to the
Company and any stockholders selling shares of Common Stock in such offering of
not less than $20,000,000; “Special Registration Statement” means a
registration statement on Form S-8 or S-4 or any similar or successor form
or any other registration statement relating to an exchange offer or an
offering of securities solely to the Company’s employees or security holders or
used in connection with the acquisition of the business of another person or
entity; and “Unit Offering” shall mean a public offering of a
combination of debt and equity securities of the Company in which (i) not
more than 10% of the gross proceeds received from the sale of such securities
is attributed to such equity securities, and (ii) after giving effect to
such offering, the Company does not have a class of equity securities required
to be registered under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).

 

2

 

3.                                       Representations
and Warranties of the Employee.  The
Employee hereby represents and warrants to and covenants with the Company as
follows:

 

(a)                                  The
Employee has full legal right and capacity to enter into this Agreement and to
perform his obligations hereunder without the need for the consent of any other
person or entity; this Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of the Employee enforceable
against the Employee in accordance with the terms hereof; and the execution,
delivery and performance of this Agreement by the Employee do not contravene or
violate any laws, rules or regulations applicable to him.

 

(b)                                 The
Restricted Shares being acquired hereunder are being acquired by such Employee
for investment and not with a view to any distribution thereof that would
violate the Securities Act or the applicable state securities laws of any
state; and such Employee will not distribute the Restricted Shares in violation
of the Securities Act or the applicable securities laws of any state.

 

(c)                                  The
Employee understands that the Restricted Shares being acquired hereunder have
not been registered under the Securities Act or the securities laws of any state
and must be held indefinitely unless transfer thereof is subsequently
registered under the Securities Act and any applicable state securities laws or
unless an exemption from such registration becomes or is available.

 

(d)                                 The
Employee is financially able to hold the Restricted Shares being acquired
hereunder for long-term investment, believes that the nature and amount of the
Restricted Shares being purchased are consistent with such Employee’s overall
investment program and financial position, and recognizes that there are
substantial risks involved in the purchase of the Restricted Shares.

 

(e)                                  The
Employee acquiring Restricted Shares hereunder confirms that (i) the
Employee is familiar with the business of the Company, (ii) the Employee
has had the opportunity to ask questions of the officers and directors of the
Company and to obtain (and that the Employee has received to its satisfaction)
such information about the business and financial condition of the Company as
he has reasonably requested, and (iii) the Employee has such knowledge and
experience in financial and business matters such that such Employee is capable
of evaluating the merits and risks of the prospective investment in the
Restricted Shares.

 

(f)                                    The
Employee’s residence and social security number are as set forth below the
Employee’s signature to this Agreement.

 

(g)                                 In
formulating a decision to enter into this Agreement, such Employee has relied
solely upon an independent investigation of the Company’s business and upon
consultations with the Employee’s legal and financial advisors with respect to
this Agreement and the nature of the Employee’s investment.

 

3

 

(h)                                 Such
Employee represents and warrants to the Company that it qualifies as an “accredited
investor” within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.

 

4.                                       Securities
Holders Agreement.  The Employee
hereby acknowledges and agrees that the Restricted Shares shall be treated as “Securities”
under the Amended and Restated Securities Holders Agreement, dated as of June 28,
2000, among the Company, Bruckmann, Rosser, Sherrill & Co., L.P.,
Furman Selz Investors II, L.P. and the other investors named therein, as
amended from time to time in accordance with its terms (the “Securities
Holders Agreement”).

 

5.                                       Rights
of Stockholder.  Subject to the
applicable terms and provisions of the Delaware General Corporation Law (or
other applicable law), the Securities Holders Agreement and this Agreement, the
Employee shall have all the rights of a stockholder with respect to the
Restricted Shares, including, without limitation (a) the right to vote the
Restricted Shares and to receive all cash dividends or other cash distributions
paid or made with respect thereto, and (b) the right to receive (i) any
stock and other securities of the Company (or any corporation which shall be
combined with or into which the Company shall be merged) and (ii) any
other assets which are distributed with respect to, or in exchange for, the
Restricted Shares; provided, however, that the Employee agrees
that (x) the stock and other securities and other assets as described above
shall be subject to the same restrictions as herein provided with respect to
the Restricted Shares and shall continue to be held by the Company, as
custodian, in accordance with and subject to the same terms and conditions
herein provided with and respect to the Restricted Shares and (y) any cash
dividends or any distributions paid or made with respect to any unvested
Restricted Shares shall be held in escrow by the Company, as escrowee for the
benefit of the Employee, until such time as the Restricted Shares with respect
to which any such cash dividends or cash distributions were paid or made vest
in accordance with Section 2 hereof. 
The Employee agrees and understands that nothing contained in this
Agreement provides, or is intended to provide, the Employee with any protection
against potential future dilution of his stockholder interest in the Company
for any reason.

 

6.                                       Restricted
Share Certificate.  Upon the issuance
of the Restricted Shares pursuant to Section 1 hereof, the Company shall
prepare a share certificate or share certificates registered in the name of the
Employee (but held by the Company as custodian until such Restricted Shares
shall vest in accordance with Section 2(a) hereof) bearing the
following legend (and any other legends determined by the Company to be
required by any applicable law):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,

 

4

 

SATISFACTORY TO REAL MEX RESTAURANTS, INC., THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
ALSO SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED SECURITIES
HOLDERS AGREEMENT, BY AND AMONG REAL MEX RESTAURANTS, INC. AND THE HOLDERS
SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE
OF REAL MEX RESTAURANTS, INC.  THE SALE,
TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH
AGREEMENT AND THE SECURITIES ARE TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE
THEREWITH.

 

IN ADDITION, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS OF A
RESTRICTED STOCK AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND BETWEEN MR.
STEVEN L.TANNER AND THE COMPANY, AND THE COMPANY RESERVES THE RIGHT TO REFUSE
TO RECORD THE TRANSFER OF THIS CERTIFICATE UNTIL ALL SUCH RESTRICTIONS ARE
SATISFIED, ALL SUCH TERMS ARE COMPLIED WITH AND ALL SUCH CONDITIONS ARE MET.

 

7.                                       Non-transferability.  Subject to the terms and provisions of this
Agreement and the Securities Holders Agreement, the vested Restricted Shares
received under this Agreement may be sold by the Employee (unless such sale
would violate any applicable securities laws). 
Unvested Restricted Shares issued to the Employee pursuant to this
Agreement may not be sold, pledged or otherwise transferred in any way
(including, without limitation, in connection with the exercise of any “tag-along”
or similar rights of the Employee pursuant to the Stockholders Agreement of
otherwise), and shall not be subject to execution, attachment, or similar
process.  Any attempt to sell, transfer,
pledge, or otherwise dispose of or hypothecate any of the Restricted Shares
contrary to the terms and provisions of this Agreement, or the levy of any
execution, attachment or similar process upon the Restricted Shares, shall be
null and void and without legal force or effect.

 

8.                                       The
Company’s Obligation to Repurchase Unvested Restricted Shares; Forfeiture of
Unvested Restricted Shares.  The
Employee and the Company agree that, upon the termination of the Employee’s
employment with the Company for any reason at any time (including, without
limitation, upon the Employee’s death, permanent disability or otherwise), the
Company shall redeem by purchase, and the Employee shall be obligated to sell
to the Company, all of the unvested Restricted Shares then held by the
Employee.  The price to be paid to the
Employee by

 

5

 

the Company for each such unvested Restricted Shares
shall be the Original Consideration per share. 
Such redemption transaction shall close on a date to be determined by
the Company and reasonably acceptable to the Employee, but in no event shall
such closing occur more than 60 days after the effective date of any
termination of the Employee’s employment. 
Regardless of whether the Company makes the payment described in this Section 8
to the Employee upon any such termination of the Employee’s employment, all
Restricted Shares that are unvested as of the date of the Employee’s
termination for any reason shall be forfeited as of the date of any such
termination (and shall be returned to the Company’s treasury for
cancellation).  In addition, all (x)
stock and securities and other assets and (y) any cash dividends or
distributions paid in respect of the unvested Restricted Shares as of the date
of the Employee’s termination for any reason shall also be forfeited.

 

9.                                       No
Corporate Restrictions; Restricted Stock Not to Affect Employment.  Nothing contained in this Agreement shall be
deemed to prevent the Company from taking any corporate action which it deems
to be appropriate or in its best interests, whether or not such action would
have an adverse effect on the value of any of the Restricted Shares issued to
the Employee (and the Employee and/or any other person or entity shall have no
claim against the Company, its directors or its shareholders as a result of any
such actions).  The Restricted Shares
granted hereunder shall not confer upon the Employee any right to continue in
the employment of the Company.

 

10.                                 Notices.  All notices and requests hereunder shall be
in writing and delivered personally, by facsimile transmission, telex, telecopy
or sent by overnight courier or via certified mail, return receipt requested,
postage prepaid, properly addressed as follows:

 

	
  To the Company,
  at:

  	
   

  	
  Real Mex
  Restaurants, Inc..

  
	
   

  	
   

  	
  4001 Via Oro
  Avenue

  
	
   

  	
   

  	
  Suite 200

  
	
   

  	
   

  	
  Long Beach, CA
  90810

  
	
   

  	
   

  	
  Attention: Chairman
  of the Board

  
	
   

  	
   

  	
  Facsimile No.:
  (310) 834-2762

  
	
   

  	
   

  	
   

  
	
  To the Employee,
  at:

  	
   

  	
  Mr. Steven
  L. Tanner

  
	
   

  	
   

  	
  [Intentionally
  withheld]

  

 

or such other
address as may be stated in a notice given as hereinabove provided.

 

11.                                 Entire
Agreement.  This Agreement contains
the entire agreement between the parties with respect to the subject matter
contained herein, and supersedes all prior agreements or prior understanding,
whether oral or written, between the parties relating to such subject matter.  No modification or amendment of this
Agreement shall be effective unless in writing and signed by the party against
which it is sought to be enforced.

 

12.                                 Withholding;
Taxes.  As a condition precedent to
the actual receipt of any certificates for any vested Restricted Shares, the
Employee shall, at the time the Restricted

 

6

 

Shares vest, pay to the Company in cash an amount
equal to the applicable withholding, excise, employment or other taxes
determined by the Company as being required to be withheld or collected under
applicable federal, state or local laws; provided, however that
in lieu of such cash payment, the Company may redeem a number of such vested
Restricted Shares having a fair market value (as determined in good faith by
the board of directors of the Company) equal to such applicable withholding,
excise, employment or other taxes. 
Furthermore, the Company shall have the right to deduct and withhold any
such applicable taxes from, or in respect of, any dividends or other
distributions paid on the Restricted Shares. 
All taxes, if any, on any payments to the Employee hereunder shall be
the responsibility of and shall be paid by the Employee.

 

13.                                 Compliance
with Laws.  The issuance of the
Restricted Shares pursuant to this Agreement shall be subject to, and shall
comply with, any applicable requirements of federal and state securities laws, rules and
regulations (including, without limitation, the provisions of the Securities
Act, the Exchange Act and the respective rules and regulations promulgated
thereunder) and any other law or regulation applicable thereto, and the Company
shall not be obligated to issue or deliver any of the Restricted Shares
pursuant to this Agreement if such issuance or delivery would violate any such
requirements.  The foregoing shall not,
however, be deemed to require the Company to effect any registration or the
Restricted Shares under any such law or rules or regulations.

 

14.                                 Binding
Agreement.  This Agreement shall
inure to the benefit of and be binding upon, and enforceable by (a) the
Company and its successors and assigns, and (b) the Employee and his
heirs, estate, legal representatives or other beneficiaries; provided, however,
that the Employee shall not be entitled to assign or otherwise transfer any of
its rights hereunder without the prior written consent of the Company.

 

15.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to the principles of conflict of laws.

 

16.                                 References
to the Employee.  For purposes of
this Agreement, any reference to the Employee shall include, if appropriate,
his spouse, heirs, legatees, devisees, estate, legal representatives and/or
other beneficiaries.

 

17.                                 Miscellaneous.  No benefit under this Agreement shall be
taken into account in determining any benefits under any retirement,
profit-sharing, life insurance or other employee benefit plan maintained by the
Company.

 

[signature page follows]

 

7

 

IN WITNESS WHEREOF, this
Agreement has been executed by the undersigned as of the day and year above
written.

 

 

	
   

  	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Harold O. Rosser

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Harold O. Rosser

  
	
   

  	
   

  	
   

  	
  Title: Compensation Committee
  Chairman of

  the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Steven Lau Tanner

  	
   

  
	
   

  	
   

  	
   

  	
  Steven Lau Tanner

  
	
   

  	
   

  	
   

  	
  [Intentionally
  withheld]

  

 

8Exhibit 10.8

 

LEASE AGREEMENT

 

THIS
LEASE AGREEMENT, made this 31st day of January, 2004 by and between
JAMES JAGODZINSKI d/b/a JAGODZINSKI PROPERTIES (“Landlord”) and Enpath Medical,
Inc.; a Minnesota corporation (“Tenant”);

 

WITNESSETH THAT:

 

1.                                                                                       DEFINITIONS.
For purposes of this Lease Agreement the following words or phrases shall have
the following meanings:

 

“Building”.  That certain office/warehouse building
situated at the following described address: 15301 Highway 55 West, Plymouth,
Minnesota 55447 (the “Building”).

 

“Leased
Premises”. That portion of the Building containing
approximately 38,728 square feet measured from the exterior surface of the
exterior walls to the center of the interior walls.

 

“Rentable
Area.” Approximately 38,728 square feet, being the sum of the
square footage contained in the Leased Premises including Tenant’s
proportionate share of the common areas such as lobbies, entry ways, toilets,
hallways, loading docks and mechanical rooms that Tenant shares in common with
other tenants

 

“Tenant’s
Percentage.” Eighty–four and seven tenths percent (84.7%)
being the percentage of the total area of the Building contained within the
Rentable Area.

 

2.                                                                                       DEMISE
AND PREMISES.  Subject to the terms
and conditions hereof, Landlord leases to Tenant, and Tenant hires and takes of
and from Landlord the Leased Premises.

 

3.                                                                                       TERM.  The Term of this Lease shall commence on February 1,
2004, and shall terminate on June 31, 2006, unless earlier terminated as
hereinafter provided.

 

4.                                                                                       BASE
RENT.  Tenant agrees to pay Landlord,
at 15301 Highway 55 West, Plymouth, Minnesota 55447, or such other place as
Landlord may from time to time designate in writing, an initial monthly base
rent of $17,524.42 per month, subject to adjustment as provided in paragraph 28
below, payable in advance on the first day of each month during the term of
this Lease without demand therefore or deduction or set off.  In the event the commencement date of this
Lease falls on a date other than the first day of the month, the rent payable
for the first month shall be adjusted on a pro rata basis and shall be payable
on or before the commencement date.

 

5.                                                                                       ADDITIONAL
RENT.  Tenant agrees to pay to
Landlord as additional rent hereunder payable at the same time and location as
the base rent, the following:

 

(a)                                  Taxes
and Special Assessments.  Tenant’s
Percentage is eighty four and seven tenths of a   percent (84.7%) of combined annual real
estate taxes and installments of special assessments payable during the Term
(amortized over the longest time period) 
with respect to the Building and the real estate upon which it is
situated (whether or not the same are levied or pending) on the date
hereof.  Tenant will receive a copy of
annual tax and special assessment statement and Tenant shall pay its pro rata
share on a monthly basis concurrent with Base Rental Payments. Real estate
taxes are currently estimated to $1.86 per square foot. Landlord will notify
Tenant within (30) days of Landlords initial receipt of the final annual tax
statement if Tenant’s obligation hereunder increases or decreases from the
estimate of $1.86 per square foot.

 

(b)                                 Common
Area Maintenance (Operating Expenses) – The Tenant’s Percentage is
eighty-four and seven tenths percent (84.7%) of the total operating expenses
for the Building and the real estate upon which it is situated.  For purposes of this Lease, operating
expenses shall mean all 

 

 

costs
which, for federal tax purposes, may be expensed rather than capitalized and
which Landlord will incur in owning, maintaining and operating the Building and
real estate including, but not by way of limitation, property and liability
insurance for Building, charges for cutting, fertilizing and maintaining grass,
shrubbery and trees, roofs, downspouts, sewer, water; management fees,  building insurance, scheduled HVAC
maintenance, sprinkler alarm system, plumbing and other utility service (gas
and electric) to the Building and grounds payable by Landlord; cleaning,
maintaining, repairing, resurfacing and snow removal of driveways and parking
areas; lighting, sodding, planting, operating and policing the grounds.  Operating expenses shall not include
principal payments on any mortgage or encumbrance on the Building or real
estate.  Currently, operating expenses
and common area maintenance charges are approximately $.80 per square foot.
This rate will be fixed for the entire Term. Common area maintenance (operating
expenses) charges shall be payable monthly concurrent with Base Rental Payments
and shall be $30,982.40 or $2,581.86 per month.

 

6.                                                                                       SERVICE
AND UTILITIES. Tenant agrees that it shall pay all costs incurred in
operating maintaining and repairing all heating, ventilating, air conditioning,
plumbing and other utility systems serving the Leased Premises in as good order
and condition as they were at the outset of the Lease, provided that
Landlord warrants the condition of and will repair or replace all HVAC,
plumbing, electrical and other systems during the first thirty (30) days of the
Lease in that area not previously occupied by Tenant prior to the commencement
of this lease.  Tenant agrees to pay all
charges for heat, air conditioning and utility services furnished to the Leased
Premises during the term of this Lease including, but not by way of limitation,
gas, electric, sewer, water, telephone, sprinkler alarm system and rubbish
removal. Payments for utility services shall be paid by Tenant directly to the
appropriate utility authorities, when due, if such utility authorities permit
or accept direct payment.  If any HVAC
unit should require replacement due to normal wear and tear or as caused by
Acts of God, during the term of the Lease, Landlord shall pay for the cost of
such replacement.  Landlord’s service
technician shall determine replacement needs, but in any case in which repair
estimates exceed 50% of replacement costs, the unit shall be replaced and the
cost shall be Landlords.

 

All
payments to be made by Tenant pursuant to this Section 6 shall be in
addition to payments for repair, maintenance and utility services furnished to
the grounds and common areas and payable by Landlord which are included in the
operating expenses to be paid by Tenant. 
Landlord shall not be liable for failure to furnish, or for delay or
suspension in furnishing, lighting, heat, air conditioning, water service or
other utilities if such failure or suspension is caused by breakdown,
maintenance, repairs, strikes, scarcity of labor or materials, acts of third
parties or causes beyond Landlord’s control.

 

7.                                                                                       USE
OF PREMISES. Tenant agrees that it will use and occupy the Leased Premises
solely for office/warehouse and processing purposes. Tenant will not use or
occupy the Leased Premises for any unlawful purpose and will comply with all
future laws, ordinances, regulations and orders of all governmental units
having jurisdiction over the Leased Premises. (the “Laws”) Landlord covenants
to the best of his knowledge that the Leased Premises complies with all past
and present laws. Tenant shall not cause or permit any unusual noise, odors or
nuisance in or about the Leased Premises and the Building and grounds nor shall
Tenant permit any debris, property or merchandise of Tenant, its officers,
employees or agents to be placed or left upon the grounds.  Tenant, its officers and employees shall
observe all reasonable rules and regulations adopted by Landlord for the
general safety, comfort and convenience of Landlord, Tenant and other Tenants
including the reasonable assignment of parking spaces for the exclusive use of
Tenant or other tenants of Landlord in the Building.  Landlord disclaims any warranty that the
premises are suitable for Tenant’s use and Tenant acknowledges that it has had
full opportunity to make its own determination in this regard.

 

Tenant
warrants that the operation of its business will not be harmful to the Building
or the mechanical equipment within the Building and Tenant shall be liable in
the event of damage arising from such harmful operation.  In the event Landlord’s insurance premiums
are increased above the standard building rate as a result of Tenant’s use of
the Leased Premises, Tenant will pay to Landlord as additional rent the amount
of such increase.

 

 

In the
event Tenant shall cause or permit any unusual noise, odor or nuisance or the
storage of any debris, property or merchandise of Tenant, its officers,
employees or agents, in or about the Leased Premises, Building or grounds in
violation of the terms of this Section 7, and has not corrected the
condition within a reasonable time after written notice from the Landlord of
the violation, Landlord will be entitled to take any steps it deems reasonably
necessary to correct or remove such violation and Tenant shall pay Landlord, as
additional rent hereunder, all costs and expenses incurred in such correction
or removal.

 

8.                                                                                       ASSIGNMENT
AND SUBLETTING. Tenant will not assign, transfer, mortgage or encumber its
interest in this Lease, nor sublet, rent, nor permit occupancy or use of the
Leased Premises, or any part thereof by any third party, nor shall any
assignment or transfer of this Lease be effectuated by operation of law or
otherwise, without in each such case obtaining the prior written consent of
Landlord.  Landlord’s consent will not be
unreasonably withheld.  Tenant shall seek
such consent of Landlord by a written request, setting forth such information
as Landlord may deem necessary.  The
consent by Landlord to any assignment or subletting shall not be construed as a
waiver or release of Tenant from the terms of any covenant or obligation under
this Lease, nor shall the collection or acceptance of rent from any transferee
under an assignment constitute an acceptance of the assignment or a waiver or
release of Tenant from any covenant or obligation contained in this Lease, nor
shall any assignment be construed to relieve Tenant from the requirement of
obtaining the consent in writing of Landlord of any further assignment or
subletting.  No assignment or sublease or
other transfer of this Lease shall be effective unless the assignee, sub-lessee
or transferee shall at the time of such assignment, sublease or transfer,
assume in writing, all of the terms, covenants and conditions of this Lease to
be performed by Tenant. A merger, consolidation or sale of substantially all of
the assets of Tenant shall not constitute an assignment hereunder.

 

Whether
or not Landlord has consented to an assignment or sublease, Tenant shall pay
directly to Landlord the amount by which the rent or other payments received by
Tenant pursuant to such assignment or sublease exceeds, in any month, the base
rent and additional rent payable by Tenant to Landlord hereunder (excluding
Tenants reletting expenses).  Should the
Tenant improve its space (at its own expense) which is then assigned or
subleased to a third party at a rental rate higher than Tenant is paying
Landlord under this lease or any future lease or extension of this lease,
Tenant shall have the right to keep the difference between rent it pays to
Landlord and rent it collects from the third party until tenants expense for
improvements are amortized.  Tenant shall
be allowed to add interest at prime rate plus two (2) percent to its cost of
improvements on behalf of such third party. 
Interest rate shall be prime rate plus 2% (two percent) set on the date
of first day of construction of said improvements.

 

9.                                                                                       SUBORDINATION.  Tenant agrees that this Lease is subject and
subordinate to the lien of all first mortgages which may now or hereafter
encumber the Building or real estate and to all renewals, extensions,
modifications or re-financings thereof. 
Tenant shall, at Landlord’s request, promptly execute any reasonable
certificate or other document requested by any first mortgagee.  Tenant agrees that in the event that any
proceedings are brought for the foreclosure of any first mortgage, Tenant shall
attorn to the purchaser, at such foreclosure sale, if requested to do so by
such purchaser and Tenant waives the provisions of any statute or rule of law,
now or hereafter in effect, which may give or purport to give Tenant any right
to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder in the event that any such foreclosure proceeding is
prosecuted or completed.  Notwithstanding
anything to the contrary in this Lease, this Lease shall remain in full force
and effect and the mortgagee shall not disturb Tenant’s possession hereunder.

 

10.                                                                                 SALE
OR MORTGAGE OF THE BUILDING.  In the
event of a sale of the Building, Landlord shall be relieved of all liability
under this Lease accruing from and after the date of sale, provided Landlord
has obtained the written agreement of its transferee or assignee to assume and
carry out all of the covenants and obligations of the Landlord hereunder.

 

The
Tenant agrees at any time and from time to time, upon not less than ten (10)
days prior written request by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that the Lease is not modified (or
if modified, stating the modification) that the Lease is in full force and
affect, stating the dates to which the base rent and additional rents have been
paid in advance and stating whether 

 

 

the Landlord is in
default hereunder.  It is intended that
any such statement may be relied upon by any prospective purchaser of the fee
or mortgagee or assignee of any mortgage upon the Building or real estate.

 

11.                                                                                 TENANT
INSURANCE.  Tenant agrees that it
shall purchase in advance and carry the following insurance at its own expense:
(a) fire and extended coverage insurance insuring Tenant’s personal property,
furniture, trade fixtures, inventory, business record and leasehold
improvements against loss from all insurable events for the full replacement
value thereof; and (b) comprehensive liability insurance covering all acts of
Tenant, its employees, agents, representatives and guests and insuring against
all claims arising from injury to persons or damage to property in or about the
Leased Premises, Building or real estate in a single limit amount of not less
than $500,000.00 for personal injury or death and not less than $100,000.00 for
property damage and fire legal liability.

 

All
such insurance shall name Landlord as an additional insured and shall provide
for thirty (30) days written notice to Landlord prior to cancellation,
non-renewal or material modification. 
Certificates of all such insurance shall be delivered to Landlord prior
to occupancy of the premises by Tenant and at least thirty (30) days prior to
the termination date of any existing policy. 
If Tenant fails to produce such insurance after (10) days notice from
Landlord, Landlord may obtain such insurance and Tenant shall pay to Landlord,
upon demand, as additional rent the cost of securing such insurance. However,
it is not Landlord’s duty nor obligation to secure such insurance for Tenant.

 

12.                                                                                 FIRE
OR OTHER CASUALTY.  If the Leased
Premises or the Building shall be damaged or destroyed by fire or other cause,
without the fault or neglect of Tenant, Landlord may (taking into account the
time necessary to effectuate a satisfactory settlement with any insurance
company) undertake to repair such damage at its own expense, provided, however,
in the event the Leased Premises or the Building are damaged by fire or other
cause to such extent that the damage cannot be economically repaired within
approximately one hundred twenty (120) days after the date of such damage,
Landlord and Tenant shall have the option, by notice given to the other within
(30) days of the date of the damage, to terminate this Lease as of the date of
the damage.  This Lease shall, unless
terminated pursuant to this Section 12, remain in full force and effect
following such damage, and the Base Rent and additional rent, prorated to the
extent that the Leased Premises are rendered untenantable, shall be equitably
abated until such repairs are completed.

 

13.                                                                                 CONDEMNATION.  If the whole or any part of the Leased
Premises shall be taken or condemned or purchased under threat of condemnation
by any governmental authority, then the Term of this Lease shall cease and
terminate as of the date when the interference with possession, enjoyment or
value of the Leased Premises occurs and Tenant shall have no claim against the
condemning authority, Landlord or otherwise for any portion of the amount that
may be awarded as damages as a result of such taking or condemnation or for the
value of any unexpired Term of this Lease, provided, however, that Landlord
shall not be entitled to any award made to Tenant for loss of business or the
fair value of and the cost of removal of stock and trade fixtures or any other
award not otherwise available to Landlord. 
In the event part of the Building, but not the Leased Premises, is
condemned to the extent that it cannot be economically restored within
approximately one hundred twenty (120) days, Landlord and Tenant shall have the
option, by notice given to Tenant within thirty (30) days of the date of
interference with possession, to terminate this Lease as of the date of such
interference with possession.

 

14.                                                                                 ALTERATIONS
AND SIGNS.  Tenant will not make or
permit anyone to make any alterations, decorations, additions or improvements,
structural or otherwise with a cost in excess of $5,000 in or to the Leased
Premises or the Building without the prior written consent of Landlord, except
as set forth in Section 29.  Any
alterations shall be out of identical or improved building materials and
construction methods as was used in original structure.  As a condition precedent to written consent
of Landlord hereunder, Tenant agrees to obtain and deliver to Landlord such security
against mechanic’s liens as Landlord shall reasonably request.  If any mechanic’s lien is filed against any
part of the Building or real estate for work claimed to have been done for or
labor or materials claimed to have been furnished to or authorized by Tenant,
such mechanic’s lien shall be discharged by Tenant within ten (10) days
thereafter, at Tenant’s sole cost and expense, by the payment and satisfaction
thereof or by filing any bond required or permitted by law.  Should Tenant fail to obtain the discharge of
any such mechanic’s lien within ten (10) 

 

 

days
of the filing thereof, Landlord shall be entitled to obtain such discharge by
whatever reasonable means Landlord deems expedient, and all costs incurred by
Landlord in obtaining such discharge including reasonable attorneys fees, shall
be paid by Tenant as additional rent hereunder.

 

Unless
otherwise agreed, all alterations, decorations, additions or improvements in or
to the Leased Premises or the Building made by either party shall immediately
become the property of the Landlord and shall remain upon and be surrendered
with the Leased Premises as a part thereof at the end of the term hereof
without disturbance, molestation or injury; provided that if any and all damage
resulting therefrom be repaired, Tenant shall have the right to remove at its
own expense, prior to the expiration or termination of the term of this lease,
all movable furniture, trade fixtures and manufacturing equipment installed in
the Leased Premises.

 

Tenant
shall have the right to remodel any existing monument signs at Tenant’s
expense, subject to the approval by the City of Plymouth,and Landlord.  Tenant agrees not to place or maintain any
sign, advertisement or notice on any part of the outside or the inside of the
Building without Landlord’s prior written approval which shall not be
unreasonably withheld.   Any such
approved use shall be at the sole expense and cost of Tenant.

 

15.                                                                                 WAIVER
OF SUBROGATION.  Notwithstanding any
other provision in this Lease to the contrary, Landlord and Tenant hereby
release one another, their respective officers, agents, partners and employees,
from any and all liability or responsibility (to the other or anyone claiming
through or under them by way of subrogation or otherwise) for any loss or
damage covered by casualty insurance actually carried or coverable by the
insurance required by Sections 5 (b) and 11 hereof.

 

16.                                                                                 WAIVER
AND INDEMNITY.  Tenant agrees that
Landlord, its officers, agents, partners and employees shall not be liable to
Tenant or those claiming through or under Tenant for any injury, death or
property damage occurring in, on or about the Leased Premises. Without
limitation of the foregoing, Landlord shall not be liable to Tenant for any
damage, compensation or claims arising from: loss or damage to books, records,
files, money, securities, negotiable instruments or other papers in or about
the Leased Premises; any fire, robbery, theft, or any other casualty or event;
any leakage or bursting of pipes or water vessels or any roof or wall leakage,
in any part or portion of the Leased Premises or the Building; water, rain,
snow or underground water that may leak into, flow on, or flow from, any part
of the Leased Premises.

 

Tenant
agrees to indemnify and hold harmless Landlord from and against all claims of
whatever nature arising or resulting from any act, omission or negligence of
Tenant, its officers, employees and agents in or about the Leased Premises,
Building or grounds or in connection with its use of the Leased Premises and to
indemnify and hold harmless Landlord against all costs, expenses and
liabilities, including reasonable attorney fees, incurred in connection with
any such claim or proceeding brought thereon, and the defense thereof.

 

Landlord agrees that the
Tenant, its officers, agents, partners and employees shall not be liable to
Landlord or those claiming through or under Landlord for any injury, death or
property damage occurring in, on or about the Building (exclusive of the Leased
Premise).

 

Landlord agrees to
indemnify and hold harmless Tenant from and against all claims of whatever
nature arising or resulting from any act, omission or negligence of Landlord,
its officers, employees and agents in or about the Building or grounds
(exclusive of the Leased Premise) or in connection with its use of the Building
or its failure to perform his obligation under this Lease, and to indemnify and
hold harmless Tenant against all costs, expenses and liabilities, including
reasonable attorney fees, incurred in connection with any such claim or
proceeding brought thereon, and the defense thereof.

 

17.                                                                                 REPAIRS.  Tenant shall put, keep, repair and maintain
the Leased Premises at all times in a good, neat, clean and sanitary condition
and state of repair, reasonable wear and tear and casualty 

 

 

excepted,
free of debris and other similar obstructions, and shall repair and replace
broken plate and window glass and damage caused by the negligence or
intentional act of Tenant, its officers, employees and agents.  Tenant shall allow Landlord access to the
Leased Premises during all reasonable hours to make repairs required to be made
by Tenant which Tenant fails or refuses to make, and shall pay Landlord as
additional rent the cost of such repairs made for Tenant by Landlord. Landlord
shall make all necessary repairs to the outer walls, roof, and structural
elements of the Building.  Landlord shall
keep the plumbing, sewage, heating, air conditioning, electrical and
ventilating systems of the Building outside the perimeter of the Leased
Premises in good repair, ordinary wear and tear and casualty damage covered by
insurance.   Landlord shall maintain and
keep the common areas, grounds, driveways and parking areas in a safe, neat and
clean condition.  Notwithstanding the
foregoing, any cost of repairs or improvements to the Building, to the Leased
Premises or to any common areas which are occasioned by the negligence or
default of Tenant, its officers, employees, agents or invitees, or by
requirements of law, ordinance or other governmental directive and which arise
out of the nature of Tenant’s use and occupancy of the Leased Premises or the
installations of Tenant in the Leased Premises shall be paid for by Tenant, as
additional rent hereunder, immediately upon billing unless covered by Landlord’s
Insurance.

 

18                                                                                    ENTRY
AND INSPECTION.  Tenant shall permit
Landlord, its agents or representatives to enter the Leased Premises to examine
and inspect the same or, with Tenant’s written permission, to make such
alterations, renovations or repairs to the Leased Premises or the Building as
Landlord may deem necessary or desirable, or to exhibit the Leased Premises to
prospective Tenants during the last ninety (90) days of the term of this Lease
or to Prospective purchasers at any time during the term, upon reasonable
notice during normal business hours. Landlord shall take such action as may be
necessary to avoid any interruption or interference with Tenant’s use of the
Leased Premise.

 

19.                                                                                 MAINTENANCE.  Tenant shall keep the Leased Premises, and
the fixtures and equipment therein, in good, safe and sanitary condition, will
suffer no waste or injury thereto and will, at the expiration or termination of
the Term of this Lease, surrender the same with all walls, carpets and other
improvements in the same order and condition as on the commencement date of
this Lease, ordinary wear and tear and casualty damage covered by insurance
excepted.

 

20.                                                                                 IMPROVEMENTS.  Tenant agrees that it has had ample
opportunity to inspect the Leased Premises, and agrees to take the same on an “as
is” basis and agrees that Landlord shall not be obligated to do any work in the
Leased Premises.  The taking of
possession of the Leased Premises or renewal of this Lease by Tenant shall be
conclusive evidence that the Leased Premises and the Building are in good and
satisfactory condition at the time of such taking of possession or renewal
(subject to Paragraph 6).

 

21.                                                                                 WAIVER.  No waiver by either party of any breach of
any covenant, condition or agreement herein contained shall operate as a waiver
of such covenant, condition, or agreement itself, or of any subsequent breach
thereof. No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly installations of rent herein stipulated shall be deemed to be other
than on account of the earliest stipulated rent nor shall any endorsement or
statement on any check or letter accompanying a check for payment of rent be
deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord’s right to recover the balance of such
rent, to terminate this Lease, to repossess the Leased Premises or to pursue
any other remedy provided in this Lease. 
No re-entry by Landlord, and no acceptance by Landlord of keys from
Tenant, shall be considered an acceptance of a surrender of the Lease.

 

22.                                                                                 COVENANTS
OF LANDLORD.  Landlord covenants that
it has the right to make this Lease for the aforesaid and that there is no
interest senior or superior to Tenant’s rights under this Lease. Landlord covenants
that if Tenant shall pay the rent and perform all of the covenants, terms and
conditions of this Lease to be performed by Tenant, Tenant shall, during the
term of this Lease freely, peaceably and quietly occupy and enjoy the full
possession of the Leased Premises without molestation or hindrance.

 

 

23.                                                                                 DEFAULT.

 

(a)                                  Any
one of the following events shall constitute an Event of Default:

 

(i)            Tenant
shall fail to pay any monthly installment of Base Rent or additional rent as
herein provided within seven (7) days of when it is due;

 

(ii)           Tenant
shall violate or fail to perform any of the other terms, covenants or
conditions of this Lease and such default shall continue for thirty (30) days
after notice from Landlord; provided, however, if the violation or failure is
such that additional time is necessary to effectuate the cure. Tenant will not
be in default as long as it acts diligently towards such cure; and

 

(iii)          Tenant
shall file or have filed against it any bankruptcy or other creditor’s action,
or make an assignment for the benefit of its creditors.

 

(b)                                 If
any Event of Default shall have occurred and be continuing, Landlord may at its
sole option by written notice to Tenant terminate this Lease.  Neither the passage of time after the
occurrence of the Event of Default nor exercise by Landlord or any other remedy
with regard to such Event of Default shall limit Landlord’s right under this
Paragraph 23 (b).

 

(c)                                  If
an Event of Default shall have occurred and be continuing, whether or not
Landlord elects to terminate this Lease, Landlord may enter upon and repossess
the Leased Premises (said repossession being hereinafter referred to as “Repossession”)
by force, summary proceedings, ejectment or otherwise, and may remove Tenant
and all other persons and property therefrom.

 

(d)                                 From
time to time after Repossession of the Leased Premises, whether or not this
Lease has been terminated, Landlord may attempt to relet the Leased Premises
for the account of Tenant in the name of Landlord or otherwise, for such term
or terms (which may be greater or less than the period which would otherwise
have constituted the balance of the Term) and for such terms (which may include
concessions or free rent) and for such uses as Landlord, in its sole and
unqualified discretion, may determine, and may collect and receive the rent
therefor.  Landlord shall not be
responsible or liable for any failure to collect any rent due upon any such
reletting.

 

(e)                                  No
termination of this Lease pursuant to paragraph 23 (b) and no Repossession of
the Leased Premises pursuant to paragraph 23(c) or otherwise shall relieve
Tenant of its liabilities and obligations under this Lease, all of which shall
survive any such termination or Repossession.

 

In the
event if any termination or Repossession, whether or not the Leased Premises
shall have been relet, Tenant shall pay to Landlord the Base Rent and other
sums and charges to be paid by Tenant up to the time of such termination or
Repossession, and thereafter Tenant, until the end of what would have been the
term in the absence of such termination or Repossession, shall pay to Landlord,
as and for liquidated and agreed current damages for Tenant’s default, the
equivalent of the amount of the Base Rent, additional rent and such other sums
and charges which would be payable under this Lease by Tenant if this Lease
were still in effect, less the net proceeds, if any, of any reletting effected
pursuant to the provisions of paragraph 23(d) after deducting all of Landlord’s
expenses in connection with such reletting, including without limitation, all
repossession costs, brokerage and management commissions, operating expenses,
legal expenses, reasonable attorneys’ fees, alteration costs, and expenses of
preparation for such reletting.  Tenant
shall pay such current damages to Landlord monthly on the days on which the 

 

 

Base
Rent would have been payable under this Lease if this Lease were still in
effect, and Landlord shall be entitled to recover the same from Tenant on each
such day.  At any time, after such
termination or Repossession, whether or not Landlord shall have collected any
current damages as aforesaid, Landlord shall be entitled to recover from
Tenant, and Tenant shall pay to Landlord on demand, as and for liquidated and
agreed final damage for Tenant’s default, an amount equal to the then present
worth of the excess of the Base Rent and other sums or charges reserved under
this Lease from the day of such termination or Repossession for what would be
the then unexpired term if the same had remained in effect, over the then net
fair rental value of the Leased Premises for the same period.

 

(f)                                    If
an Event of Default shall have occurred and Landlord places in the hands of an
attorney the enforcement of all or any of the terms, covenants, agreements or
conditions of this Lease, the collection of any rent due or to become due, or
the recovery of possession of the Leased Premises, Tenant agrees to reimburse
Landlord, as additional rent hereunder, for Landlord’s reasonable attorneys
fees, together with the actual cost of maintaining any action commenced in law
or equity by said attorneys for the services of the attorneys, whether suit is
actually filed or not.  Such
reimbursement shall be payable within thirty (30) days of demand therefore.

 

(g)                                 If
Tenant is required to commence a court action to enforce its rights under this
Lease, and Tenant prevails with such action, Landlord shall reimburse Tenant
reasonable fees and costs, including attorney fees.

 

24.                                                                                 SURRENDER.  Tenant shall surrender the Leased Premises to
Landlord upon termination of this Lease, whether such termination occurs at the
end of the Term or sooner, together with all utility systems, improvements,
replacements, alterations and decorations thereto and operating bulbs or tubes
in all light fixtures, broom clean and in good order, condition and repair
except for ordinary wear and tear. 
Tenant shall remove promptly, upon request by Landlord, alterations,
modifications and the like to the Leased Premises made by Tenant, or on behalf
of Tenant, and not consented to by Landlord, and shall restore and repair
damage caused by such removal.  Should
Tenant fail to surrender the Leased Premises in the condition required by this
section, Landlord shall be entitled to take whatever steps may, in Landlord’s
sole discretion, be required to restore the Leased Premises to said condition
and Tenant agrees that it shall pay to Landlord all costs incurred by Landlord
in so restoring the premises.

 

25.                                                                                 HOLDING
OVER. Should the Tenant continue to occupy the Leased Premises, or any part
thereof, after the expiration or termination of the Term of this Lease whether
with or against the consent of the Landlord, such Tenancy shall be from month
to month and Tenant shall pay Landlord the additional rent set forth in Section 5
plus two times the Base Rent set forth in Section 4 during the entire
period that Tenant continues to so occupy the Leased Premises after the term of
this Lease.

 

26.                                                                                 LATE
PAYMENT.  Other remedies for
nonpayment of rent notwithstanding and without prejudice to such remedies, if
Tenant fails to pay the monthly base rent, additional rent or any other payment
due hereunder within the seven days immediately following the date on which
such payment is due, Tenant shall pay the following amounts to Landlord as
additional rent hereunder:

 

(a)                                  Interest
on all such past due payments at the rate of one and one-half % per month or at
the maximum rate permitted by law whichever rate is lower.  Interest shall accrue from the date each such
late payment became due and shall be payable to the date of payment thereof by
Tenant;

 

(b)                                 A
service charge equal to the costs actually incurred by Landlord as a result of
Tenant’s failure to make payments due hereunder including, but not limited to,
reasonable attorney’s fees and costs incurred in the collection or attempted
collection of such past due amounts.

 

 

27.                                                                                 HAZARDOUS
SUBSTANCES/ENVIRONMENTAL REGUALTIONS.  Tenant
warrants and represents that: (a) its use of the Leased Premises and the
operation of its business thereon shall not violate any law, statute,
ordinance, rule, regulation, order or determination of any governmental
authority pertaining to hazardous substances, toxic waste, asbestos, health or
the environment (hereinafter if sometimes collectively called “Environmental
Regulations”) including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended by the
Superfund Amendments and Reauthorization Act of 1986 (“SARA”) (collectively “CERCLA/SARA”)
and the Resource Conservation and Recovery Act of 1976 (“RCRA”) and the
Minnesota Environmental Response and Liability Act (“MERLA”); (b) Tenant has
obtained and shall continue to maintain all permits, licenses or similar
authorizations required by Environmental Regulations to conduct its business on
the Leased Premises; and (c) Tenant’s use of the Leased Premises will not
result in the disposal or release of any hazardous substance, toxic waste,
asbestos or other substance regulated by Environmental Regulations on or about
the Leased Premises, Building or the real property on which it is situated. In
the event Tenant, its officers, agents or employees shall breach or fail to
perform any of the warranties and representations contained in this Section:
(a) upon notice from Landlord, Tenant shall remove from the Leased Premises,
Building or real property on which it is situated, at Tenant’s sole expense,
any hazardous substance, toxic waste, asbestos or other substance regulated by
Environmental Regulations introduced by Tenant which is not in compliance with
Environmental Regulations or this Lease; (b) Landlord and such Environmental
Engineers as it may employ shall be entitled to enter upon the Leased Premises
for the purpose of conducting such environmental audits or similar tests as
Landlord may deem necessary and the cost and expense of such environmental
audits or tests incurred by Landlord shall be paid by Tenant as additional rent
hereunder with the next installment of base rent; and  (c) Tenant shall protect, indemnify and save
Landlord harmless from all costs, fines, claims, demands, actions, proceedings,
judgments and damages, including court costs and reasonable attorneys’ fees,
resulting from or arising out of any breach or non-performance by Tenant of the
representations and warranties contained in this Section including,
without limitation, the cost of removal or remediation of any disposal, release
or contamination on or about the Leased Premises, Building or the real property
on which it is situated.  It is expressly
acknowledged by Tenant that all of the terms, covenants and conditions of this
paragraph pertaining to Environmental Regulations including, but not by way of
limitation, the indemnifications herein provided shall survive the termination
of this Lease.

 

Landlord
warrants to Tenant, that in the best of his knowledge, the Building currently
complies with all Environmental Regulations. Landlord shall protect, indemnify
and save Tenant harmless from all costs, fines, claims, demands, actions,
proceedings, judgments, and damages, including court costs and reasonable
attorneys’ fees, resulting from or arising out of any breach or non-performance
by Landlord of the representations and warranties contained in this Section including,
without limitation, the cost of removal or remediation of any disposal, release
or contamination on or about the Leased Premises, Building or the real property
on which it is situated.

 

28.                                                                                 BASE
RENT ADJUSTMENT.  On June 1,
2005, the monthly base rent will be adjusted from $17,524.42 per month to
$19,276.86 per month through the remainder of the initial Term.

 

29.                                                                                 TENANT
IMPROVEMENTS.  The prior lease
agreement signed on the 31st day of January, 2000 (the” Prior Lease”)
contained a provision stating the following; Landlord will provide Tenant a
remodeling allowance up to an amount not to exceed $150,000.  The allowance shall be used for, but not
limited to:  (1) new paint, wallpaper,
floor tile replacement and bathroom and office upgrades to Tenant’s existing
space, and (2) upgrade of new space to Tenant’s specifications.  Tenant shall use contractors satisfactory to
Landlord.  Tenant shall provide invoices
of completed work to Landlord and Landlord shall promptly pay each invoice
according to the terms of the invoice.

 

Tenant
will continue to repay the disbursed amount of the remodeling allowance on the
terms stated in the Prior Lease. The current unpaid balance is $85,984.59.
Tenant will repay such amount together, with interest, at a rate of 8% per
annum, amortized over the Term of the Lease, exclusive of renewal periods.  Monthly payments of $3,171.83 will be made
concurrent with the payment of monthly rent. Tenant shall have the right to
prepay the outstanding balance of this loan at any time.

 

 

30.                                                                                 EXPANSION
SPACE.  If Tenant is not in default
under the terms of this Lease, Tenant shall have an option to lease part or all
of any space in the Building which is or becomes available during the
Term.  Should such an expansion space become
available for rent, Landlord or Landlord’s agent shall notify Tenant in writing
and Tenant shall have thirty (30) days to notify Landlord or Landlord’s agent
in writing whether or not it intends to exercise this option.  Should Tenant elect to exercise this option,
Tenant and Landlord shall enter into a mutually acceptable agreement for the
lease of the expansion space within thirty (30) days after Tenant’s notice of
its intent to exercise the option. 
Should Landlord and Tenant be unable to reach an agreement within that
thirty (30) day period, Tenant’s option shall expire and become null and void.

 

31.                                                                                 OPTION
TO RENEW.   If Tenant is not in
default under the terms of this Lease, Landlord shall grant Tenant the option
to renew the term of this Lease for three (3) successive one-year periods.  Tenant may exercise the options to extend the
Term of this Lease by providing written notice to Landlord, one hundred eighty
(180) days prior to the termination of the initial Term of this Lease or the
then current extended Term of this Lease, as the case may be. The monthly rent
may be adjusted by the increase or decrease in the Consumers Price Index of the
Bureau of Labor Statistics of the U.S. Department of Labor for all Urban
Consumers; Minneapolis-St. Paul Metropolitan Area, “all-Items Index”, herein
referred to as “C.P.I.U.

 

32.                                 TERMINATION
OF PRIOR LEASE. The party hereby terminates the prior Lease.

 

33.                                                                                 MISCELLANEOUS.

 

(a)                                  All
notices or other communications hereunder shall be in writing and shall be hand
delivered or sent by first class United States mail to the following address:

 

Landlord:

 

James
Jagodzinski d/b/a Jagodzinski Properties

100
Gideon Point Road

Tonka
Bay, Minnesota 55331

 

Tenant:

 

Enpath
Medical, Inc.

15301
Highway 55 W

Plymouth,
Minnesota 55447

 

Mailed
notice shall be effective the day following the day of mailing;

 

(b)                                 This
Lease Agreement is made and executed in the State of Minnesota, and shall be
constructed according to the laws of Minnesota;

 

(c)                                  The
invalidity or unenforceability of any provision of this agreement shall not
affect or impair the validity of any other provisions; and section titles
and captions in this Agreement are for convenience only and do not define,
limit or construe the contents of such paragraphs;

 

(d)                                 If
more than one person or entity shall sign this Lease as Tenant, the obligations
set forth herein shall be deemed joint and several obligations of each such
party;

 

(e)                                  This
Lease shall be binding upon and inure to the benefit of the parties thereto
and, subject to the restrictions and limitations herein contained, their
respective heirs, successors and assigns.

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Lease Agreement as of
the day and year so indicated below.

 

 

	
  JAMES JAGODZINSKI d/b/a

  	
  ENPATH MEDICAL, INC.

  
	
  JAGODZINSKI PROPERTIES

  	
   

  
	
   

  	
   

  
	
    /s/ James Jagodzinski

  	
   

  	
  By:   James D. Hartman

  	
   

  
	
  James Jagodzinski

  	
  Its President and Chief Executive Officer \

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