This is a document preview
OPUS NORTHWEST, L.L.C., AS LANDLORD,
INSIGNIA SYSTEMS, INC., AS TENANT.
PARK WEST BUSINESS CENTER
BROOKLYN PARK, MINNESOTA
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
TABLE OF CONTENTS
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
Industrial/Warehouse Lease Agreement
Opus Legal 1-31-01
INDUSTRIAL/WAREHOUSE LEASE AGREEMENT
This Industrial/Warehouse Lease Agreement is made and entered into as of the Effective Date by and between OPUS NORTHWEST, L.L.C., a Delaware limited liability company, as Landlord, and INSIGNIA SYSTEMS, INC., a Minnesota corporation, as Tenant.
Capitalized terms used in this Lease have the meanings ascribed to them on the attached EXHIBIT ”A.”
The following Basic Terms are applied under and governed by the particular section(s) in this Lease pertaining to the following information:
Months 1 -4:
Zero Dollars ($0.00) (Base Rent is abated for the first four months of the term).
LEASE OF PREMISES AND LEASE TERM
1.1 Premises. In consideration of the covenants and agreements set forth in this Lease and other good and valuable consideration, Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord, upon and subject to the terms, covenants and conditions set forth in this Lease. This Lease does not include any right to use of the roof of the Building.
1.2.1 Commencement and Expiration of Term . The Term of this Lease is the period stated in the Basic Terms. The Term commences on the Commencement Date and expires ninety-one (91) months thereafter on February 29, 2016.
1.2.2 Tender of Possession . Landlord will use commercially reasonable efforts to achieve Substantial Completion and tender possession of the Premises to Tenant on or before the Delivery Date. If Landlord is unable to achieve Substantial Completion on or before the Delivery Date for any reason, this Lease remains in full force and effect and Landlord is not liable to Tenant for any resulting loss or damage except that, if Landlord does not achieve Substantial Completion and does not deliver possession of the Premises to Tenant on or before the date eight (8) days after the Delivery Date, Tenant will receive the lesser of (a) two (2) days rent credit or (b) the daily holdover damages that Tenant incurs because of such delay beyond the Delivery Date for each day of such delay beyond the date eight (8) days after the Delivery Date. Notwithstanding anything herein to the contrary, for purposes of the foregoing sentence, the date eight (8) days after the Delivery Date shall be extended by the number of days of delay in Substantial Completion and tender of possession arising out of Force Majeure and/or Tenant Delay.
1.2.3 Commencement Date Memorandum . Promptly after the Commencement Date, Landlord will deliver to Tenant the Commencement Date Memorandum with all blanks properly completed. Within 10 days after receipt, Tenant will execute and deliver the Commencement Date Memorandum to Landlord. If Tenant does not timely execute and deliver to Landlord the Commencement Date Memorandum unmodified or modified appropriately to make the statements therein true, Landlord and any prospective purchaser or encumbrancer may conclusively rely on the information contained in the unexecuted Commencement Date Memorandum Landlord delivered to Tenant.
1.2.4 Access Prior to Substantial Completion . Landlord will allow Tenant limited access to the Premises prior to Substantial Completion on June 23, 2008, for partial occupancy if all governmental requirements for occupancy have been met and to begin installing equipment, fixtures, and cabling and/or to properly coordinate such work with the construction of the Tenant Improvements. Landlord has
no obligation to provide a certificate of occupancy until Substantial Completion. Any such access will be subject to Landlord’s prior consent in each instance, which consent will not be unreasonably withheld but may be conditioned on Tenant’s work not interfering with the construction of Tenant Improvements or causing a labor dispute. Any such use of the Premises is also subject to, and Tenant must comply with and observe, all applicable Laws and all other terms and conditions of this Lease provided that Tenant shall not be required to pay Rent during such period. In no event may Tenant conduct business in the Premises during such early access period unless an occupancy permit has been received allowing same. All Tenant’s alterations shall be subject to the provisions of Article 8 hereof.
RENTAL AND OTHER PAYMENTS
2.1 Base Rent . Except for the first four months of the lease term, and except that Base Rent for the fifth month of the lease term shall be payable at the time of execution of this Lease, Tenant will pay Base Rent in monthly installments to Landlord, in advance, without offset or deduction (except as otherwise permitted in this Lease), commencing on the Rent Commencement Date and continuing on the first day of each and every calendar month after the Rent Commencement Date during the Term. Tenant will make all Base Rent payments to Property Manager at the address specified in the Basic Terms or at such other place or in such other manner as Landlord may from time to time designate in writing. Tenant will make all Base Rent payments without Landlord’s previous demand, invoice or notice for payment. Landlord and Tenant will prorate, on a per diem basis, Base Rent for any partial month within the Term.
2.2 Additional Rent . Article 3 of this Lease requires Tenant to pay Tenant’s Share of Property Expenses as Additional Rent pursuant to estimates Landlord delivers to Tenant. Tenant will make all such payments in accordance with Section 3.3 without deduction or offset and without Landlord’s previous demand, invoice or notice for payment. Tenant will pay all other Additional Rent described in this Lease within 20 days after receiving Landlord’s invoice for such Additional Rent. Tenant will make all Additional Rent payments to the same location and, except as described in the previous sentence, in the same manner as Tenant’s Base Rent payments.
2.3 Delinquent Rental Payments . If Tenant does not pay any installment of Base Rent or any Additional Rent within five (5) days after the due date, Tenant will also pay Landlord a Late Charge. Further, if Tenant does not pay any installment of Base Rent or any Additional Rent when the payment is due, Tenant will pay Landlord interest on the delinquent payment calculated at the Maximum Rate from the date when the payment is due through the date the payment is made. The parties agree that such amounts represent a fair and reasonable estimate of the damages Landlord will incur by reason of such late payment. Such charges will be considered Additional Rent and Landlord’s right to such compensation for the delinquency is in addition to all of Landlord’s rights and remedies under this Lease, at law or in equity. Anything herein to the contrary notwithstanding, the first $100.00 of interest accruing in each calendar year under this Paragraph 2.3 shall be abated.
2.4 Independent Obligations . Notwithstanding any contrary term or provision of this Lease, Tenant’s covenant and obligation to pay Rent is independent from any of Landlord’s covenants, obligations, warranties or representations in this Lease.
3.1 Payment of Property Expenses . Tenant will pay, as Additional Rent and in the manner this Article 3 describes, Tenant’s Share of Property Expenses for each calendar year of the Term. Landlord will prorate Tenant’s Share of Property Expenses for the calendar year in which this Lease commences or terminates as of the Rent Commencement Date or termination date, as applicable, on a per diem basis based on the number of days of the Term within such full or partial calendar year.
3.2 Estimation of Tenant’s Share of Property Expenses . Landlord will deliver to Tenant a written estimate of the following for each calendar year of the Term: (a) Property Expenses, (b) Tenant’s Share of Property Expenses and (c) the annual and monthly Additional Rent attributable to Tenant’s Share of Property Expenses. Landlord may re-estimate Property Expenses from time to time during the Term. In such event, Landlord will re-estimate the monthly Additional Rent attributable to Tenant’s Share of Property Expenses to an amount sufficient for Tenant to pay the re-estimated monthly amount over the balance of the calendar year. Landlord will notify Tenant of the re-estimate and Tenant will pay the re-estimated amount in the manner provided in the last sentence of Section 3.3.
3.3 Payment of Estimated Tenant’s Share of Property Expenses . Tenant will pay the amount Landlord estimates as Tenant’s Share of Property Expenses under Section 3.2 in equal monthly installments, in advance, commencing on the Rent Commencement Date and thereafter on the first day of each and every calendar month during the Term. Partial months shall be appropriately prorated. If Landlord has not delivered the estimates to Tenant by the first day of January of the applicable calendar year, Tenant will continue paying Tenant’s Share of Property Expenses based on Landlord’s estimates for the previous calendar year. When Tenant receives Landlord’s estimates for the current calendar year, Tenant will pay the estimated amount for such calendar year (less amounts Tenant paid to Landlord in accordance with the immediately preceding sentence) in equal monthly installments over the balance of such calendar year, with the number of installments being equal to the number of full calendar months remaining in such calendar year.
3.4 Confirmation of Tenant’s Share of Property Expenses . Within 120 days after the end of each calendar year within the Term, Landlord will determine the actual amount of Tenant’s Share of Property Expenses for the expired calendar year and deliver to Tenant a written statement of such amount. If Tenant paid less than the amount of Tenant’s Share of Property Expenses specified in the statement, Tenant will pay the difference to Landlord as Additional Rent in the manner described in Section 2.2. If Tenant paid more than the amount of Tenant’s Share of Property Expenses specified in the statement, Landlord will, at Landlord’s option, either (a) refund the
excess amount to Tenant if such amount is more than one month’s Base Rent, or (b) if such amount is equal to or less than one month’s Base Rent, credit the excess amount against Tenant’s next due monthly installment or installments of Base Rent. If the Term has expired or has been terminated, Tenant shall pay the balance due to Landlord or, alternatively, Landlord shall refund the surplus to Tenant, whichever the case may be, within 30 days after Tenant’s receipt of Landlord’s Property Expense statement. If Landlord is delayed in delivering such statement to Tenant, such delay does not constitute Landlord’s waiver of Landlord’s rights under this section; provided, however, that in no event shall Tenant be responsible to Landlord under this Paragraph 3.4 for any item which is first invoiced by Landlord more than one(1) year after the date such item is incurred by Landlord.
3.5 Tenant’s Inspection and Audit Rights . Landlord shall keep and maintain reasonably complete, legible and accurate records of the Property Expenses for a period of three (3) years from the date such Property Expenses are incurred. If Tenant desires to audit Landlord’s determination of the actual amount of Tenant’s Share of Property Expenses for any calendar year, Tenant must deliver to Landlord written notice of Tenant’s election to audit within 180 days after Landlord’s delivery of the statement of such amount under Section 3.4. If such notice is timely delivered, then Tenant (but not any subtenant) or its representatives may audit Landlord’s records relating to such amounts. Such audit will take place during regular business hours at a time and place reasonably acceptable to Landlord (which may be the location where Landlord or Property Manager maintains the applicable records). Tenant’s election to audit Landlord’s determination of Tenant’s Share of Property Expenses is deemed withdrawn unless Tenant completes and delivers the audit report to Landlord within 90 days after the date Tenant delivers its notice of election to audit to Landlord under this section. If the audit report shows that the amount Landlord charged Tenant for Tenant’s Share of Property Expenses was greater than the amount this Article 3 obligates Tenant to pay, unless Landlord reasonably contests the audit, Landlord will refund the excess amount to Tenant, together with interest on the excess amount (computed at 10% per annum from the date Tenant delivers its dispute notice to Landlord) within 30 days after Landlord receives a copy of the audit report. If the amount charged pursuant to Landlord’s annual statement exceeds the final amount actually payable by more than 3%, Landlord will pay the cost of Tenant’s audit not to exceed $2,500. If the audit report shows that the amount Landlord charged Tenant for Tenant’s Share of Property Expenses was less than the amount this Article 3 obligates Tenant to pay, Tenant will pay to Landlord, as Additional Rent, the difference between the amount Tenant paid and the amount determined in the audit. Pending resolution of any audit under this section, Tenant will continue to pay to Landlord all estimated amounts of Tenant’s Share of Property Expenses in accordance with Section 3.3. Except for disclosures required by law, Tenant must keep all information it obtains in any audit confidential and may only use such information for the limited purpose this section describes and for Tenant’s own account. If Landlord desires to contest such audit results, Landlord may do so by submitting the results of the audit to arbitration with an arbitrator jointly appointed and compensated (50% each) by Landlord and by Tenant. The decision of the arbitrator shall be binding on the parties.
3.6 Adjustments . If all of the rentable area of the Building is not occupied at all times during any calendar year pursuant to leases under which the terms and rents have commenced for such calendar year or if the Building has not commenced business operations, Landlord will reasonably and equitably adjust its computation of Property Expenses for that calendar year to include all components of Property Expenses that vary based on occupancy or lack of operation (for example, management fees) in an amount equal to Landlord’s reasonable estimate of the amount Landlord would have paid for such components of Property Expenses had all of the rentable area of the Building been so occupied at all times during such calendar year assuming an average rental rate equal to the average rate under existing leases.
3.7 Personal Property Taxes . Tenant will pay, prior to delinquency, all taxes charged against Tenant’s Personal Property. Tenant will use all reasonable efforts to have Tenant’s Personal Property taxed separately from the Property. If any of Tenant’s Personal Property is taxed with the Property, Tenant will pay the taxes attributable to Tenant’s Personal Property to Landlord as Additional Rent.
3.8 Landlord’s Right to Contest Property Taxes . Landlord may, but is not obligated to, contest the amount or validity, in whole or in part, of any Property Taxes. If Property Taxes are reduced (or if a proposed increase is avoided or reduced) because Property Taxes are contested, Landlord may include in its computation of Property Taxes the reasonable costs and expenses incurred in connection with such contest, including without limitation reasonable attorney’s fees, up to the amount of any Property Tax reduction obtained in connection with the contest or any Property Tax increase avoided or reduced in connection with the contest, as the case may be. Tenant may not contest Property Taxes. Tenant shall be credited with its equitable share of any refund of Property Taxes, using the Tenant’s Share of Property Expenses Percentage, to the extent paid by Tenant and, if applicable, such refund shall be made to Tenant after the term of this Lease.
3.9 Rent Tax. Upon enactment of state or federal or local law requiring payment of a Rent Tax, Tenant will pay to Landlord all Rent Tax due in connection with this Lease or the payment of Rent hereunder, which Rent Tax will be paid by Tenant to Landlord concurrently with each payment of Rent made by Tenant to Landlord under this Lease.
3.10 Management. Landlord will use reasonable commercial effort to cause the Property to be managed in an efficient and prudent manner.
4.1 Permitted Use . Tenant will use the Premises only for the permitted use specified in the Basic Terms and may not use the Premises for any other purposes. Tenant will not use the Property or permit the Premises to be used in violation of any Laws or in any manner that would (a) violate any certificate of occupancy affecting the Property; (b) make void or voidable any insurance now or after the Effective Date in
force with respect to the Property; (c) cause injury or damage to the Property or to the person or property of any other tenant on the Property; (d) cause substantial diminution in the value or usefulness to Landlord of all or any part of the Property reasonable wear and tear and damage from casualty excepted; or (e) constitute a public or private nuisance or waste. Tenant will obtain and maintain, at Tenant’s sole cost and expense, all permits and approvals required under the Laws for Tenant’s use of the Premises. Tenant shall have exclusive use of the trash enclosure immediately outside the Premises which is to be constructed as part of the Tenant’s Improvements.
4.2 Limitation on Representations and Warranties . Except as otherwise provided in this Lease, Tenant acknowledges that neither Landlord nor any agent, contractor or employee of Landlord has made any representation or warranty of any kind with respect to the Premises, the Building or the Property, specifically including, but not limited to, any representation or warranty of suitability or fitness of the Premises, Building or the Property for any particular purpose.
4.3 Increased Insurance . Tenant will not do or permit to be done on the Premises and/or the Property anything that will (a) increase the premium of any insurance policy Landlord carries covering the Premises or the Property; (b) cause a cancellation of or be in conflict with any such insurance policy; (c) result in any insurance company’s refusal to issue or continue any such insurance in amounts reasonably satisfactory to Landlord; or (d) subject Landlord to any liability or responsibility for injury to any person or property by reason of Tenant’s operations in the Premises or use of the Property. Tenant, at Tenant’s sole cost and expense, will comply with all rules, orders, regulations and requirements of its insurers. Tenant will reimburse Landlord, as Additional Rent, for any additional premium charges for such policy or policies resulting from Tenant’s failure to comply with the provisions of this section.
4.4 Laws/Property Rules . This Lease is subject and subordinate to all Laws. A copy of the current Property Rules is attached to this Lease as EXHIBIT “E.” Upon not less than 30 days prior written notice to Tenant, Landlord may revise the Property Rules from time to time in Landlord’s reasonable discretion provided such Property Rules shall not be enforced more rigorously against Tenant than against other tenants. Revised Property Rules will not materially adversely affect rights granted to Tenant in this Lease.
4.5 Common Area . Subject to the express provisions of this Lease related to parking, Landlord grants Tenant the non-exclusive right, together with all other occupants of the Property and their agents, employees and invitees, to use the Common Area during the Term for the purposes intended, subject to all Laws. Subject to the express provisions of this Lease related to parking, Landlord may, at Landlord’s sole and exclusive discretion, make changes to the Common Area so long as such changes do not materially and adversely impact access to the Premises or the parking rights granted herein. Landlord’s rights regarding the Common Area include, but are not limited to, the right to (a) restrain unauthorized persons from using the Common Area; (b) temporarily close any portion of the Common Area (i) for repairs,
improvements or Alterations, (ii) to discourage unauthorized use, (iii) to prevent dedication or prescriptive rights, or (iv) for any other reason Landlord deems sufficient in Landlord’s reasonable judgment; (c) change the shape and size of the Common Area; (d) add, eliminate or change the location of any improvements located in the Common Area and construct buildings or other structures in the Common Area; and (e) impose and revise Property Rules concerning use of the Common Area, including without limitation any parking facilities comprising a portion of the Common Area. Except for the provisions herein relating to Property Expenses and subject to the provisions of Article 20, in no event shall Landlord charge either Tenant or its customers, guests, invitees, licensees, permitted subtenants, employees, suppliers or agents for parking.
5.1 Compliance with Hazardous Materials Laws . Tenant will not cause any Hazardous Materials to be brought upon, kept or used on the Property in a manner or for a purpose prohibited by or that could result in liability to Landlord under any Hazardous Materials Law. Tenant, at its sole cost and expense, will comply with all Hazardous Materials Laws. On or before the expiration or earlier termination of this Lease, Tenant, at its sole cost and expense, will completely remove from the Property (regardless of whether any Hazardous Materials Law requires removal), in compliance with all Hazardous Materials Laws, all Hazardous Materials Tenant causes to be present in, on, under or about the Property. Upon Landlord’s written request, Tenant will promptly deliver to Landlord documentation acceptable to Landlord disclosing the nature and quantity of any Hazardous Materials brought upon, kept or used on the Property by or at the direction of Tenant or its agents, employees, or contractors, and evidencing the legal and proper handling, storage and disposal of all Hazardous Materials kept at or removed or to be removed from the Premises and/or the Property. All such documentation will list Tenant or its agent as the responsible party and will not attribute responsibility for any such Hazardous Materials to Landlord or Property Manager. Landlord represents and warrants that as of the date hereof Landlord has no actual knowledge of any Hazardous Materials on the Property or Premises which are required by applicable law to be remediated. Further, Landlord represents to Tenant, as follows, as of the date hereof:
(a) To Landlord’s actual knowledge, any handling, transportation, storage, treatment or usage of Hazardous Materials that has occurred on the Premises prior to the date of this Lease has been in compliance with all Hazardous Materials Laws and no Release of Hazardous Materials in violation of law has occurred on the Premises prior to the date of this Lease. To Landlord’s knowledge, no Hazardous Materials on the Property or Premises are required by applicable law to be remediated.
(b) To Landlord’s actual knowledge, there are no underground storage tanks (including, but not limited to, underground storage tanks for the storage of petroleum or petroleum products) at the Premises.
When any representation herein is to Landlord’s actual knowledge, such representation is limited to the actual knowledge of Tom Shaver and Tony Phelps. Further, any representation made in this Paragraph 5.1 is subject to matters described in that certain Phase I Environmental Report prepared by Landmark Environmental, LLC dated February 28, 2007, and in documents referred to therein.
5.2 Notice of Actions . Tenant will notify Landlord of any of the following actions affecting Landlord, Tenant or the Property that result from or in any way relate to Tenant’s use of the Property immediately after receiving notice of the same: (a) any enforcement, clean-up, removal or other governmental or regulatory action instituted, completed or threatened under any Hazardous Materials Law; (b) any Claims made or threatened by any person relating to damage, contribution, liability, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Material; and (c) any reports, records, letters of inquiry and responses, manifests or other documents made by any person, including Tenant, to or from any environmental agency relating to any Hazardous Material, including any complaints, notices, warnings or asserted violations. Tenant will also deliver to Landlord, as promptly as possible and in any event within five Business Days after Tenant first receives or sends the same, copies of all Claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Premises or Tenant’s use of the Premises and/or the Property. Tenant will not take any remedial action in response to the presence of any Hazardous Materials in on, under or about the Property, nor enter into any settlement agreement, consent decree or other compromise with respect to any Claims relating to or in any way connected with Hazardous Materials in, on, under or about the Property, without first notifying Landlord of Tenant’s intention to do so and affording Landlord reasonable opportunity to investigate, appear, intervene and otherwise assert and protect Landlord’s interest in the Property.
5.3 Disclosure and Warning Obligations . Tenant acknowledges and agrees that all reporting and warning obligations required under Hazardous Materials Laws arising from Tenant’s use or occupancy of the Premises or Property are Tenant’s sole responsibility, regardless of whether the Hazardous Materials Laws require Landlord to report or warn.
5.4 Indemnification by Tenant . Tenant will indemnify, protect, defend (with counsel reasonably acceptable to Landlord) and hold harmless the Landlord Parties from and against any and all Claims whatsoever to the extent arising or resulting, in whole or in part, directly or indirectly, from the presence, treatment, storage, transportation, disposal, release or management of Hazardous Materials in, on, under, upon or from the Property (including water tables and atmosphere) to the extent caused by and arising from Tenant’s wrongful act or from Tenant’s use or occupancy of the Premises or Property. Tenant’s obligations under this section include, without limitation and whether foreseeable or unforeseeable, (a) the costs of any required or necessary repair, compliance, investigations, clean-up, monitoring response, detoxification or decontamination of the Property; (b) the costs of implementing any closure, remediation or other required action in connection therewith as stated above; (c) the costs arising out of any loss of use and any diminution in value of the Property and adjacent and
nearby properties including groundwater; and (d) consultants’ fees, experts’ fees and response costs. The obligations of Tenant under this Article survive the expiration or earlier termination of this Lease.
5.5 Indemnification by Landlord . Landlord will indemnify, protect, defend (with counsel reasonably acceptable to Tenant) and hold harmless the Tenant Parties from and against any and all Claims whatsoever to the extent arising or resulting, directly or indirectly, from the presence, treatment, storage, transportation, disposal, release or management of Hazardous Materials in, on, under, upon or from the Property (including water tables and atmosphere) to the extent caused by and arising from Landlord’s wrongful act