STANDARD OFFICE LEASE AGREEMENT (NET)
THIS LEASE AGREEMENT (hereafter called the "LEASE AGREEMENT") made as of the 30th day of May, 1997, by and between MIDWEST REAL ESTATE HOLDINGS, INC., a Minnesota corporation, having offices at Suite 200, 3500 West 80th Street, Blooming ton, Minnesota, 55431 (hereafter called the "LANDLORD"), and RETEK INFORMATION SYSTEMS, INC., a Delaware corporation (hereafter called the "TENANT").
WITNESSETH
FOR AND IN CONSIDERATION of the sum of One Dollar ($1.00) in hand paid by each of the parties to the other, and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, Landlord does hereby lease and let unto Tenant, and Tenant does hereby hire, lease and take from Landlord, those areas described in Article 3 below as (i) the entire eleventh (11th) floor of the West Tower containing approximately 12,300 rentable square feet and graphically shown on Exhibit A-1 attached hereto and a portion of the eleventh (11th) floor of the East Tower containing approximately 17,666 rentable square feet and graphically shown on Exhibit A-2 attached hereto (hereafter called the "PHASE 1 PREMISES") and (ii) all of the remaining portion of the eleventh (11th) floor of the East Tower containing approximately 12,300 rentable square feet and graphically shown on Exhibit A-3 attached hereto (hereafter called the "PHASE 2PREMISES") (hereafter the Phase 1 Premises and the Phase 2 Premises containing in the aggregate approximately 42,266 rentable square feet are sometimes referred to together as the "PREMISES") at 801 Nicollet Mall and 800 Marquette Avenue, containing two towers (the "West Tower" and the "East Tower") commonly known as the Midwest Plaza Building (hereafter called the "BUILDING") in the City of Minneapolis, County of Hennepin, State of Minnesota to be occupied by Tenant on the respective Commencement Dates indicated in Article 3 below. The term Building as it is used herein shall consist of the West Tower and the East Tower (the "West Tower and the East Tower are sometimes each referred to as a "Tower") including the parking ramp under the East Tower ("PARKING RAMP") on all the real estate legally described on Exhibit A-4 hereto.
It is acknowledged by the parties hereto that the Premises under this Lease Agreement shall be measured by Landlord's architect or other design professional to obtain the useable square footage of the Premises and then converting the useable square footage number to rentable square feet by utilizing the Building's R/U factor (Rentable/Useable) which is 1.06 for single tenant floors and 1.15 for multi-tenant floors. Such area determination shall be used in connection with determining Tenant's "Pro Rata Share of Real Estate Taxes and Operating Expenses" pursuant to Article 6 below and to make any necessary proportionate adjustments in the Minimum Rental, Improvement Allowance, Leasing Commissions and PM Fees payable under this Lease Agreement.
ARTICLE 1- TERM
To have and to hold said Premises, or portions thereof as hereinafter provided, for a term commencing August 18, 1997 and terminating August 31, 2004 (hereafter called the "term") upon the rentals and subject to the conditions set forth in this Lease Agreement, and the Exhibits attached hereto. The commencement and termination dates are specifically subject to the provisions of Article 5 hereof.
ARTICLE 2- USE
The Premises shall be used by the Tenant solely for the following purposes: General office use and any other legally permitted uses incidental thereto
ARTICLE 3- RENTALS
Tenant agrees to pay to Landlord as minimum rental (hereafter called "MINIMUM RENTAL") for the Premises, except as may be otherwise required herein, without notice, set-off or demand, the amounts set forth below commencing on the dates indicated (each a "Commencement Date"):
THE PHASE 1 PREMISES CONTAINING APPROXIMATELY 29,966 RENTABLE SQUARE FEET IN THE AGGREGATE AS DEPICTED ON EXHIBITS A-1 AND A-2 ATTACHED HERETO:
Commencement Date |
Annual Rate Per RSF |
Monthly Minimum Rental |
8/18/97 |
$9.00 |
$22,474.50 |
THE PHASE 2 PREMISES CONTAINING APPROXIMATELY 12,300 RENTABLE SQUARE FEET AS DEPICTED ON EXHIBIT A-3 ATTACHED HERETO:
Commencement Date |
Annual Rate Per RSF |
Monthly Minimum Rental |
3/1/98 |
$9.00 |
$ 9,225.00 |
The Minimum Rental shall be payable in equal monthly installments, said monthly installments to be due and payable by Tenant in advance on the first day of each calendar month during the Term of this Lease Agreement, or any extension or renewal thereof, at the office of Landlord set forth in the preamble to this Lease Agreement or at such other place as Landlord may designate. In the event of any fractional calendar month, Tenant shall pay for each day in such partial month a rental equal to 1/30 of the Minimum Rental. Tenant agrees to pay, as Additional Rent, which shall be collectible to the same extent as Minimum Rental, all amounts which may become due to Landlord hereunder and any tax, charge or fee that may be levied, assessed or imposed upon or measured by the rents reserved hereunder by any governmental authority acting under any present or future law before any fine, penalty, interest or costs may be added thereto for non-payment. Pursuant to Article 6 hereof, Landlord's estimated Operating Expenses for 1997 are$6.14 per rentable square foot and estimated Real Estate Taxes payable in 1997 are$3.84 per rentable square foot.
ARTICLE 4- CONSTRUCTION
A.1. Landlord agrees to make the "Tenant Improvements"(as defined below) to the Premises (including the Phase 1 Premises and the Phase 2 Premises) to be shown on the "Approved Plans"(as defined below) pursuant to the provisions of this Article 4 A. In consideration of Landlord making such Tenant Improvements, Tenant agrees to pay to Landlord all costs exceeding the "Improvement Allowance"(as defined below) as Tenant's share of the cost of such Tenant Improvements, said payment to be made without demand in cash within fifteen (15) days following "Substantial Completion" (as defined below) of the Tenant Improvements and submission by Landlord to Tenant of an itemized statement of construction costs of such Tenant Improvements and if so requested by Tenant, supporting invoices or other written evidence substantiating said construction costs. Any other improvements to the Premises, and the furnishing of the Premises, shall be made by Tenant, at the sole cost and expense of Tenant, subject to all other provisions of this Lease Agreement.
2. After execution of this Lease Agreement, Tenant's architect ("Tenant's Architect") shall prepare plans based on information as to Tenant's requirements supplied directly by Tenant for the improvements to be made to the Premises (herein called the "Tenant Improvements", which term is more fully defined below). Tenant agrees to diligently work with Tenant's Architect in providing such information so as to enable Tenant's Architect to (i) complete final construction drawings for the Tenant Improvements (the "Construction Drawings") and to submit said Construction Drawings to Landlord for approval no later than May 30, 1997, time being of the essence and (ii) complete final construction plans for the mechanical, electrical and plumbing components of the Tenant Improvements (the "MEP Construction Plans") and submit said MEP Construction Plans to Landlord for approval no later than June 6, 1997, time being of the essence. Said Construction Drawings and MEP Construction Plans shall be subject to Landlord's reasonable approval. Said Construction Drawings and MEP Construction Plans shall:
a. provide for the Building's standard grade of materials, or upgrades thereof;
b. provide that the electrical wiring, HVAC and other Building systems to be installed or affected by said final plans shall be approved, at no cost to Tenant, by Landlord's contractors, and/or electrical, HVAC or other systems' subcontractors and/or consultants as being of a quality comparable to the systems installed elsewhere in the Building; and
c. provide only for permanent improvements to the Premises, as opposed to personal property, equipment, trade fixtures and furnishings of Tenant or of the business to be conducted by Tenant within the Premises.
Once so approved, said Construction Drawings and MEP Construction Plans shall be initialed by the parties and shall be deemed the "Approved Plans." Thereafter, any changes to the Approved Plans shall require Landlord's reasonable approval.
3. Subject to the conditions set forth below, Landlord agrees to provide Tenant with an allowance towards the actual costs of constructing the Tenant Improvements to the Premises (the "Improvement Allowance"). The Improvement Allowance shall be up to$633,990.00 (i. e., $15.00 per rentable square foot of the Premises). The Improvement Allowance shall be available towards the cost of:
a. Construction of the Tenant Improvements;
b. Engineering and architectural fees in connection with the preparation of the Approved Plans (including those prepared by Tenant's Architect);
c. Cabling costs;
d. Installation of the light fixtures and ceiling tiles;
e. Any modifications to the Building's sprinkler and HVAC systems required under the Approved Plans;
f. Ceramic tile for the floors and walls of the Existing Bathroom Facilities (as defined below) being renovated by Landlord;
g. All building and other permits and governmental fees relating to the Tenant Improvements;
h. The cost of hoists (other than use of the freight elevators which shall be provided at no cost to Tenant);
i. Project supervision (labor only) at Landlord's normal and customary rate; and
j. A construction management fee payable to Landlord of three percent (3%) and project administration and overhead of five percent (5%) of the total cost (exclusive of the costs under g. and i. above) of the Tenant Improvements.
In addition to the Tenant Improvements and the Improvement Allowance, Landlord shall provide Tenant with the following at Landlord's expense:
a. asbestos abatement, if necessary;
b. new 2 x 4 light fixtures (stacked on the floor);
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