Exhibit 10.87
LEASE AGREEMENT
VALLEY RANCH BUSINESS PARK
Ann Arbor, Michigan
THIS LEASE is made as of the 8th day of April, 1997, by and between AMR
HOLDINGS, L.L.C., a Michigan limited liability corporation, the address of which
is 0000 Xxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx, as Lessor, and FAAC Corp., a
Michigan corporation, the current address of which is 000 Xxxxxxx Xxx, Xxx
Xxxxx, Xxxxxxxx, as Lessee.
IN CONSIDERATION OF the rents to be paid and the mutual covenants, promises and
agreements herein set forth, Lessor and Lessee agree as follows:
LESSOR hereby leases unto Lessee Lot 9 situated in the Township of Pittsfield,
County of Washtenaw, State of Michigan, in a single story office/industrial
building located at Valley Ranch Business Park (the "Building"), which
development is shown on the site plan marked Exhibit "A".
TO HAVE AND TO HOLD for a term of Eighty Four (84) months from and after the
commencement of the term as hereinafter provided.
SECTION 1
Construction of Building
Section 1.01: Lessor agrees, prior to commencement of the term of this Lease, to
complete construction of the Leased Premises and related improvements on the
site in accordance with the plans enumerated on Exhibit "C", attached hereto and
made a part hereof, which shall be deemed part of the Building referred to
above. The Leased Premises shall consist of an exterior approximately 13,704
square feet on one (1) floor. No minor change from such plans which may be
necessary during construction shall affect, change, or invalidate this Lease. If
Lessor shall be in good faith delayed in construction by any labor dispute,
strike, lockout, fire, unavailability of material, weather, or casualty or any
other cause beyond its reasonable control, then the period of delay necessarily
caused thereby shall be added to the time limit provided for such construction.
SECTION 2 Possession and Commencement of Term
Section 2.01: Except as herein provided, Lessor shall deliver possession of the
Leased Premises to Lessee on or before December 1, 1997. The Leased Premises
shall be deemed ready for Lessee's occupancy when Lessor shall have
substantially completed construction of said Leased Premises pursuant to the
plans on Exhibit "A" and receive a temporary Certificate of Occupancy from the
Township of Pittsfield. By occupying the Leased Premises, Lessee will be deemed
to have accepted the Leased Premises and acknowledged that they are in the
condition called for hereunder. Upon occupying the Leased Premises, the Lessee
will provide the Lessor with a completed punchlist. The Lessor will complete the
items not completed according to the term hereunder, in no later than 30 days.
The rentals herein reserved and the term of this Lease shall commence on the
date when the premises are delivered to Lessee as required hereunder. Lessor
will require its contractors to cooperate with Lessee's installers of equipment
trade fixtures, furnishings, and decorations attached to the real estate
improvements to the maximum extent possible, but delay of or interference with
construction caused by such installers shall not postpone the commencement of
the term or the obligation to commence paying rent.
Section 2.02: In the event Lessor fails to deliver the Leased Premises on the
commencement date because the Leased Premises are not then ready for occupancy,
or because the previous occupant of said Leased Premises is holding over, or for
any other cause whatsoever, except as provided in Section 1.01, Lessor shall not
be liable to Lessee for damages, as a result of Lessor's delay in delivering
such promises, and Lessee shall have no right to terminate the Lease or contest
the validity of the Lease, and the commencement date of the _Lease shall be
postponed until such time as the leased premises are ready for Lessee's
occupancy, and the termination date of this Lease shall be extended for a period
equivalent to the period of such postponement, provided such postponed
termination date shall occur on the last day of a calendar month; if not, then
such termination date shall be extended by an additional period so as to fall on
the last day of such calendar month in which it would otherwise occur.
Section 2.03: On the commencement date, or within fifteen (15) days thereafter
upon request by Lessor, Lessee shall execute a written instrument confirming the
commencement date and the termination date of the Lease, that the Lease is in
full force and effect, the rent is paid currently without any offset or defense
thereto, the amount of rent, if any, paid in advance, and that there are no
uncured defaults by Lessor, or stating those claimed by Lessee, provided that,
such facts are accurate and ascertainable.
SECTION 3
Basic Rental
Section 3.01: In consideration of the leasing aforesaid, Lessee hereby covenants
and agrees to pay Lessor, at such place as Lessor may hereafter from time to
time designate in writing, a minimum net rental payable monthly in advance on
the first day of each and every month in equal monthly installments as follows:
Months 1 - 84 = $12.48 per square foot NNN, or $14,252.16 per month Receipt of
Seven Thousand and 00/xx ($7,000.00) Dollars, representing a Security Deposit is
hereby acknowledged. The rental payments shall be made by Lessee at the office
of Lessor without any prior demand. therefore and without any deductions or
set-offs whatsoever.
Section 3.02: Lessor and Lessee intend that the minimum net rental shall be net
to Lessor, so that this Lease shall yield, net, to Lessor, not less than the
minimum net rent specified in Section 3.01 hereof during the term of this Lease,
and that all costs, expenses, and charges of every kind and nature relating to
the Leased Premises which may be attributable to, or become due during the term
of this Lease, shall be paid by Lessee, and that Lessor shall be indemnified and
held harmless by Lessee from and against the same. Provided, however, that if
the Lease term shall commence on a day other than the first day of a calendar
month, then the rental for such month shall be prorated upon a daily basis based
upon a thirty (30) day calendar month.
SECTION 4
Taxes, Assessments and Utilities
Section 4.01: Lessee agrees to pay Lessor its proportionate share of all taxes
and assessments which have been or may be levied or assessed by any lawful
authority, for any calendar year during the term hereof, against the land and
Leased Premises presently and/or at any time during the term of this Lease
comprising the Building. Lessee's proportionate share shall be equal to the
product obtained by multiplying such taxes and assessments by a fraction, the
numerator of which shall be the number of square feet of floor area in the
Leased Premises, and the denominator of which shall be the total number of
square feet of constructed leasable floor area in the Building. Any tax and/or
assessment of any kind or nature presently or hereafter imposed by the State of
Michigan or any political subdivision thereof or any governmental authority
having jurisdiction there over upon, against or with respect to the rentals
payable by tenants in the Building to Lessor or on the income of Lessor derived
from the Building or with respect to the Lessor's, or the individuals or
entities which form the Lessor herein, ownership of the land and buildings
presently and/or at any time during the term of this Lease comprising the
Building, either by way of substitution for all or any part of the taxes and
assessments levied or assessed against such land and such buildings, shall be
deemed to constitute a tax and/or assessment against such land and such
buildings for the purpose of this Section, and Lessee shall be obligated to pay
its proportionate share thereof as provided herein. In addition, Lessee shall
also be obligated to pay any sales tax imposed by any governmental authority on
the payments by Lessee or on the receipt by Lessor of any and all payments from
Lessee. If the sales tax is separately assessed, then Lessee shall pay that
amount imposed on the individual payments of Lessee; if the sales tax is not
separately assessed, the Lessee shall pay its proportionate share monthly as
provided herein.
Section 4.02: Lessee's share of all of the aforesaid taxes and assessments
levied or assessed for or during the term hereof, as determined by Lessor, shall
be paid in monthly installments on or before the first day of each calendar
month, in advance, in an amount estimated by Lessor, provided, that in the event
Lessor is required under any mortgage covering the land and improvements leased
to Lessee to escrow real estate taxes, Lessor may, but shall not be obligated
to, use the amount required to be so escrowed as a basis for its estimate of the
monthly installments due from Lessee hereunder. Upon receipt of all tax bills
and assessment bills attributable to any calendar year during the term hereof,
Lessor shall furnish Lessee with a written statement of the actual amount of
Lessee's share of the taxes and assessments for such year. In the event no tax
xxxx is available, Lessor will compute the amount of such tax. If the total
amount paid by Lessee under this Section for any such year, as shown on such
statement, Lessee shall pay to Lessor the difference between the amount paid by
Lessee and the actual amount due, such deficiency to be paid within thirty (30)
days after demand therefore by Lessor, and if the total amount paid by Lessee
hereunder for such calendar year shall exceed such actual amount due from Lessee
for such calendar year, such excess shall be credited against the next
installment of taxes and assessments due from Lessee to Lessor hereunder. All
amounts due hereunder shall be payable to Lessor at the place where the fixed
annual rental is payable. For the calendar years in which this Lease commences
and terminates, the provisions of this Section shall apply, and Lessee's
liability for its proportionate share of any taxes and assessments for such
years shall be subject to a pro rata adjustment based on the number of days of
said calendar years during which the term of this Lease is in effect A copy of a
tax xxxx or assessment xxxx submitted by Lessor to Lessee shall at all times be
sufficient evidence of the amount of taxes and/or assessments assessed or levied
against the property to which such xxxx relates. Prior to or at the commencement
of the term of this Lease and from time to time thereafter throughout the term
hereof; Lessor shall notify Lessee, in writing, or Lessor's estimate of Lessee's
monthly installments due hereunder. Lessors and Lessee's obligations under this
Section shall survive the expiration of the term of this Lease.
Section 4.03: Lessee also agrees to pay all charges made against the Leased
Premises for gas, heat, electricity, and all other utilities separately metered
during the continuance of this Lease as the same shall become due.
Section 4.04: In the event any or all of the foregoing utilities are to be paid
from an escrowed fund required to be established by Lessor or its financial
institution under the terms of any financing, the Lessor shall notify Lessee and
Lessee shall be required to include with the additional monthly payments
referred to in Section 4.02 a monthly amount to satisfy the estimated monthly
utility costs. If the utilities, when due, exceed the total amount then in the
utility escrow, then the Lessee shall, upon demand, pay any deficiency to
Lessor. If such payments by Lessee, over the term of the Lease, exceed the
amount of utilities paid from the escrow, such excess shall be refunded by
Lessor to Lessee at the expiration of the Lease term, or when such excess is
refunded by the financial institution to Lessor, whichever first occurs. The
utility escrow shall be adjusted as often as necessary to provide sufficient
funds to pay current utilities.
SECTION 5
Use of Premises
Section 5.01: It is understood and agreed between the parties, that the Leased
Premises, during the continuance of this Lease, shall be used and occupied for
office, research and storage use only and for no other purpose without the prior
written consent of Lessor. Lessee agrees that it will not use or permit any
person to use the Leased Premises or any part thereof for any use or purpose in
violation of the laws of the United States, the State of Michigan, the
ordinances or other regulations of the Township of Pittsfield or of any other
lawful authorities. During the original term or any extended term, the Lessee
will keep the Leased Premises and every part thereof and the area adjacent to
the Leased Premises (including service areas), orderly, neat, safe, and clean
and free from rubbish and dirt, and at all times shall store all trash, garbage,
or any other material solely within the leased premises and Lessor shall arrange
for the regular pickup of such trash and garbage at Lessee's expense. Lessee
shall not bum any trash or garbage at any time in or about the building. If
Lessor shall provided any services or facilities for such pickup, then Lessee
shall be obligated to use the same and shall pay a proportionate share of the
actual cost thereof within ten (10) days after being billed therefor. Lessee
shall not store or leave any material outside of the building at any time. All
signs and advertising displayed in and about the Leased Premises shall be such
only as to advertise the business carried on upon the Leased Premises, and
Lessor shall control the location, character, and size thereof. No signs shall
be displayed except as approved in writing by the Lessor, and no awning shall be
installed or used on the exterior of said building unless approved in writing by
the Lessor.
SECTION 6
Operation and Maintenance of Common Areas
Section 6.01: Lessor agrees, at Lessors sole cost and expense, to construct the
building and hard surface, to properly drain, landscape, and light a parking
area or parking areas, all substantially as shown on Exhibit "A". Lessor further
agrees to cause to be operated, managed, and maintained during the term of this
Lease, all parking areas, roads, sidewalks, landscaping, drainage, and common
area lighting facilities in the Building. The manner in which such areas and
facilities shall be maintained and operated, and the expenditures therefore,
shall be at the sole discretion of the Lessor, and the use of such areas and
facilities shall be subject to such reasonable regulations as Lessor shall make
from time to time.
Section 6.02: Lessee agrees to pay to Lessor in the manner hereinafter provided,
but not more often than once each month, Lessee's proportionate share of all
costs and expenses of every kind and nature paid or incurred by Lessor in
operating, equipping, policing and protecting, lighting, insuring, repairing,
replacing, and maintaining the common areas of the Building. Such costs and
expenses shall include, but not be limited to, illumination and maintenance of
the Building signs, cleaning, lighting, line painting and landscaping, premiums
liability and property insurance. Any utilities furnished or supplied to common
areas of the Building which are not separately metered shall be considered a
cost to maintain the common areas and shall be included as part of such cost.
For the purpose hereof, any charges for utilities contained in the foregoing
costs and expenses shall be at the same rates as the rates for comparable
service from the applicable utility company serving the area in which the
Building is located. The proportionate share to be paid by Lessee shall be
computed on the basis that the total number of square feet of floor area in the
Leased Premises bears to the total number of square feet of the Building. .
Lessee's proportionate share of such costs and expenses for each lease year and
partial lease year shall be paid in monthly installments on the first day of
each month, in advance, in an amount established by Lessor. Within one hundred
eighty (180) days after the end of each lease year or partial lease year, Lessor
shall furnish Lessee with a statement of the actual amount of Lessee's
proportionate share of such costs and expenses for such period. If the total
amount paid by Lessee under this Section for any calendar year shall be less
than the actual amount due from Lessee for such year as shown on such statement,
Lessee shall pay to lessor the difference between the amount paid by Lessee and
the actual amount due, such deficiency to be paid within thirty (30) days after
the furnishing of each such statement, and if the total amount paid by Lessee
hereunder for any such calendar year shall exceed such actual amount due from
Lessee for such calendar year, such excess shall be credited against the
installment due from Lessee to Lessor under this Section 6.02.
SECTION 7
Maintenance and Repairs of Leased Premises
Section 7.01: Lessor shall keep and maintain the foundation, exterior walls, and
roof of the Building in which the Leased Premises are located and the structural
portions of the Leased Premises which were originally installed by Lessor,
exclusive of door, door frames, door checks, windows, and exclusive of window
frames located in exterior building walls, in good repair, except that Lessor
shall not be called upon to make any such repairs occasioned by the act or
negligence of Lessee, its agents, employees, invitees, licensees, or
contractors, except to the extent that Lessor is reimbursed therefore under any
policy of insurance permitting waiver of subrogation in advance of loss. Lessor
shall not be called upon to make any other improvements or repairs of any kind
upon said premises and appurtenances, except as may be required under Section 11
and 12 hereof.
Section 7.02: Except as provided in Section 7.01 of this Lease, Lessee shall
keep and maintain in good order, condition and repair (including replacement of
parts and equipment if necessary) the Leased Premises and every part thereof and
any and all appurtenances thereto wherever located, including, but without
limitation, the exterior and interior portion of all doors, door checks,
windows, plate windows, store front, all plumbing and sewage facilities within
the Leased Premises, including free flow up to the main sewer line, fixtures,
heating and air conditioning, and electrical systems (whether or not located in
the Leased Premises), sprinkler system, walls, floors, and ceilings. The
plumbing and sewage facilities shall not be used for any other purpose than that
for which they are constructed, and no foreign substance of any kind shall be
introduced therein. Lessee hereby agrees to be responsible for any expenses
incurred in connection with any breakage, stoppage, or damage resulting from a
violation of this provision by Lessee, its agents, employees, invitees,
licensees, or contractors.
Lessor shall be responsible for all costs, as long as such costs are not due to
the negligence of Lessee, related to the following: (1) replacement of the main
electrical distribution panel if such panel cannot be repaired but rather needs
complete replacement; (2) the roof-top H.V. A.C. units, if such components
cannot be repaired but rather such X.X.XX. units need complete replacement, and
(3) if the underground sewer or water system shall burst or break. Lessee shall
keep and maintain the Leased Premises in a clean, sanitary, and safe condition
in accordance with the laws of the State of Michigan and in accordance with all
direction, rules, and regulations of the health office, fire xxxxxxxx, building
inspector, or other proper officials of the governmental agencies having
jurisdiction, at the sole cost and expense of Lessee, and Lessee shall comply
with all requirements of law, ordinance, and otherwise, affecting said Leased
Premises. If Lessee refuses or neglects to commence or complete repairs required
by Section 7.02 hereof promptly and adequately, Lessor may, but shall not be
required to do so, make all or any part of said repairs, and Lessee shall pay
the cost thereof to Lessor upon demand, non-payment of which shall entitle
Lessor to exercise any remedy available to it in the event of the non-payment by
Lessee of rental or any other charge due to Lessor under this Lease. At the time
of the expiration of the tenancy created herein, Lessee shall surrender the
premises in good condition, reasonable wear and tear, loss by fire, or other
unavoidable casualty excepted.
Lessee, at its own expense, shall maintain fire extinguishers and other fire
protection devices as may be required from time to time by any agency having
jurisdiction thereof and the insurance underwriters insuring the building in
which the Leased Premises are located.
Section 7.03: All damages or injury done to the Leased Premises by the Lessee,
or by any person who may be in or upon the Leased Premises with the consent,
invitation or license of the Lessee, shall be repaired and paid for by the
Lessee.
SECTION 8
Alterations
Section 8.01: Lessee agrees that the Leased Premises shall not be altered,
improved, or changed without the written consent of Lessor, and that unless
otherwise provided by written agreement, all alterations, improvements, and
changes which may be desired by the Lessee and so consented to by the Lessor
shall be done either by or under the direction of the. Lessor, but at the cost
of Lessee. All alterations, additions, and improvements made in or to the
Building or the Leased Premises, except movable office furniture put in at the
expense of the Lessee and removable without defacing or injuring the building or
Leased Premises, shall, unless otherwise provided by written agreement, be the
property of Lessor and remain upon and be surrendered with the Leased Premises;
provided, however, the Lessor will designate by written notice to Lessee those
alterations, additions, and improvements which shall be removed by Lessee at the
expiration or termination of the Lease, and Lessee shall promptly remove the
same and repair any damage to the Leased Premises caused by such removal.
SECTION 9
Liens
Section 9.01: Lessee shall keep the Leased Premises free from any and all liens
arising out of any work performed, materials furnished, or obligations incurred
by or for Lessee, and agrees to bond against or discharge any mechanic's or
material-men's lien within ten (10) days after written request therefore by
Lessor. Lessee shall reimburse Lessor for any and all costs and expenses which
may be incurred by Lessor by reason of the filing of any such liens and/or the
removal of same, such reimbursement to be made within ten (10) days after
receipt by Lessee from Lessor of a statement setting forth the amount of such
costs and expenses. The failure of Lessee to pay any such amount to Lessor
within said ten (10) day period shall carry with it the same consequences as
failure to pay any installment of rental.
SECTION 10
Insurance and Indemnity
Section 10.01: Lessee shall, during the entire term hereof, keep in full force
and effect a policy of public liability and property damage insurance with
respect to the Leased Premises, and the business operated by Lessee and any
subtenants of Lessee in the Leased Premises, including steam boiler insurance if
applicable, in which the limits of public liability shall be not less than One
Million Dollars ($1,000,000.00) per occurrence, and in which the limit of
property damage liability shall be not less than Five Hundred Thousand Dollars
($500,000.00). The policy shall name Lessor, any other parties in interest
designed by Lessor, and Lessee as insured, and shall contain a clause that the
insurer will not cancel or change the insurance without first giving the Lessor
thirty (30) days prior written notice. Such insurance may be furnished by Lessee
under any blanket policy carried by it or under a separate policy therefor. The
insurance shall be with an insurance company approved by Lessor and a copy of
the paid-up policy evidencing such insurance or a certificate of insurer
certifying to the issuance of such policy shall be delivered to Lessor prior to
commencement of Lease Term and upon renewals not less than thirty (30) days
prior to the expiration of such coverage.
Section 10.02: Lessor agrees, during the term hereof, to carry insurance against
fire, vandalism, malicious mischief, and such other perils as are from time to
time included in a standard extended coverage endorsement and, at Lessor's
option, special extended coverage endorsements including rental interruption
insurance equal to twelve (12) full months of rental and tax obligations,
insuring the improvements of the Building in an amount determined solely by
Lessor, but not less than one hundred percent (100%) of the full replacement
cost, if available, and with or without deductible, at the option of Lessor.
Lessee agrees, from time to time, to pay Lessor, Lessee's proportionate share of
the cost of such insurance, such payment to be made within ten (10) days after
receipt of a written statement from Lessor setting forth such cost. The
proportionate share to be paid by Lessee shall be computed on the basis that the
total number of square feet of floor area in the Leased Premises bears to the
total number of square feet of constructed leasable floor area in the Building.
Lessee shall not carry any stock of goods or do anything in or about said Leased
Premises which will in any way tend to increase the insurance rates on said
Leased Premises and/or the Building of which they are a part. If Lessee installs
any electrical equipment that overloads the lines in the Leased Premises, Lessee
shall, at its own expense, make whatever changes are necessary to comply with
the requirements of the insurance underwriters and governmental authorities
having jurisdiction.
Section 10.03: Lessee covenants to indemnify Lessor, and save it harmless
(except for loss or damage resulting from the negligence of Lessor, its agents,`
or employees) from and against any and all claims, action, damages, liability,
and expense, including attorney's fees, in connection with loss of life,
personal injury, and/or damage to property arising from or out of any occurrence
in, upon, or at the Leased Premises or the occupancy or use by Lessee of the
Leased Premises or any part thereof, or arising from or out of Lessee's failure
to comply with Section 7.02 hereof, or occasioned wholly or in part by any actor
omission of Lessee, its agents, contractors, employees, servants, customers, or
licensees. For the purpose hereof, the Leased Premises shall include the service
areas adjoining the same and the loading platform area allocated to the use of
Lessee. In case Lessor shall, without fault on its part, be made a party to any
litigation commenced by or against Lessee, then Lessee shall protect and hold
Lessor harmless, and shall pay all costs, expenses, and reasonable attorneys'
fees incurred or paid by Lessor in connection with such litigation. Lessee shall
also pay all of Lessor's costs, expenses, and reasonable attorneys' fees that
may be incurred by Lessor in enforcing the Lessee's covenants and agreements in
this Lease.
SECTION 11
Destruction of Leased Premises
Section 11.01: In the event the Leased Premises shall be partially or totally
destroyed by fire or other casualty insured under the insurance carried by
Lessor pursuant to Section 10.02 of this Lease, as to become partially or
totally untenantable, the damage to the Leased Premises shall promptly be
repaired by Lessor, to the extent of any proceeds received from any insurance,
unless Lessor shall elect not to rebuild as hereinafter provided, and a just and
proportionate part of the fixed minimum rental and all other charges shall be
abated, annually, until so repaired. The obligation of Lessor hereunder shall be
limited to reconstruction of the Leased Premises in accordance with the initial
plans and specifications for the construction of the Leased Premises. In no
event shall Lessor be required to repair or replace Lessee's merchandise, trade
fixtures, furnishings, or equipment If more than thirty-five (35%) percent of
the Leased Premises or more than thirty-five (35%) of the floor area of the
Building in which the Leased Premises are located shall be destroyed by fire or
other casualty, then Lessor may elect either to repair or rebuild the Leased
Premises or the Building of which the Leased Premises are a part, as the case
may be, or to terminate this Lease by giving written notice to Lessee of its
election to so terminate, such notice to be given within sixty (60) days after
the occurrence of such damage or destruction. If Lessor elects to restore the
Leased Premises, Lessor shall do so within one hundred eighty (180) days after
giving notice to Lessee of such election. If Lessor fails to tender possession
to Lessee after the one hundred eighty (160) days, Lessee shall have the option
of terminating this Lease by sending notice on the one hundred eightieth (180th)
day to Lessor. Such notice shall inform Lessor of Lessee's election to
terminate.
Section 11.02: Each party hereto does hereby remise, release, and discharge the
other party hereto and any officer, agent, employee, or representative of such
party, of and from any liability whatsoever hereafter arising from loss, damage,
or injury caused by fire or other casualty from which insurance (permitting
waiver of liability and containing a waiver of subrogation) is carried by the
injured party at the time of such loss, damage, or injury to the extent of any
recovery by the injured party under such insurance.
SECTION 12
Eminent Domain
Section 12.01: In the event, during the term of this Lease, proceedings shall be
instituted under the power of eminent domain which shall result in the taking of
any part of the Leased Premises or the floor area of the Building in which the
Leased Premises are a part, or the taking of a material portion of the parking
area so that the number of spaces is thereby reduced to such an extent that
Lessee's business is significantly and adversely affected, and which shall
result in an eviction total or partial of the Lessee therefrom, then at the time
of such eviction, this Lease shall be void and the term above demised shall
cease and terminate; and if Lessee shall thereafter continue in possession of
the Leased Premises or any part thereof, it shall be a Lease from month to month
and for no longer term, anything in this instrument to the contrary
notwithstanding. If there is only a partial taking, not including a portion of
the Building but reducing the parking to the extent described in the previous
sentence, the Lessor shall restore the parking to the extent necessary to permit
Lessee to continue the use of the premises and there shall be no reduction in
the monthly rental. Provided, further, that the whole of any award for any
portion of the Building taken by reason of said condemnation proceedings shall
be the sole property of, and be payable to, the Lessor, and provided, further,
that the whole of any award for loss of business and for removal and relocation
expenses in any condemnation proceedings shall be the sole property of, and be
payable to, the Lessee. It is further agreed that in any such condemnation
proceedings, the Lessor and Lessee shall each seek its own award at its own
expense.
SECTION 13
Assignment
Section 13.01: Lessee shall not assign or sublet the Leased Premises or any part
thereof without first obtaining the Lessor's written consent, except that the
Lessee may, without Lessors consent, assign or sublet all or any of the part of
the premises to wholly or substantially owned subsidiaries of the Lessee, for a
use permitted pursuant to Section 5.01 hereof, and provided that Lessee is not
at such time in default hereunder, and provided further that such successor
shall execute an instrument in writing assuming all of the obligations and
liabilities to the Lessor, and provided further that such assignment or
subletting shall not operate to release Lessee from any of its obligations under
the Lease.
SECTION 14
Inspection of Premises
Section 14.01: Lessee agrees to permit Lessor and the authorized representatives
of Lessor to enter the Leased Premises at all reasonable times during business
hours for the purpose of inspecting the same.
SECTION 15
Fixtures and Equipment
Section 15.01: All fixtures and equipment paid for by the Lessor and all
fixtures and equipment which may be paid for and placed on the Leased Premises
by the Lessee from time to time, but which are so incorporated and affixed to
the Building that their removal would involve damage or structural change to the
Building, shall be and remain the property of the Lessor.
Section 15.02: All furnishings, equipment, and fixtures other than those
specified in Section 15.01, which are paid for and placed on the Leased Premises
by Lessee from time to time (other than those which are replacements for
fixtures originally paid for by Lessor) shall remain the property of the Lessee.
SECTION 16
Notice or Demands
Section 16.01: All notices to or demands upon Lessor or Lessee desired or
required to be given under any of the provisions hereof shall be in writing. Any
notices or demands from Lessor to Lessee shall be deemed to have been duly and
sufficiently given if a copy thereof has been mailed by United States mail in an
envelope properly stamped and addressed to Lessee, at the address of the Leased
Premises, or at such other address as Lessee may have last furnished in writing
to Lessor for such purpose, and any notices or demands from Lessee to Lessor
shall be deemed to have been duly and sufficiently given if mailed by United
States mail in an envelope properly stamped and addressed to Lessor at the
address last furnished by written notice from Lessor to Lessee. The effective
date of such notice shall be one (1) business day following the delivery of the
same to the United States Post Office for mailing.
SECTION 17
Bankruptcy
Section 17.01: Lessee covenants and agrees that if any one or more of the
following events occur, namely: (a) Lessee shall be adjudged a bankrupt or
insolvent or trustee shall be appointed for Lessee after a petition has been
filed for Lessee's reorganization or arrangement under the Federal Bankruptcy
Laws, as now or hereafter amended, or under the laws of any State, and any such
adjudication or appointment shall not have been vacated or stayed or set aside
within thirty (30) days from the date of the entry or granted thereof; or (b)
Lessee shall file, or consent to any petition in bankruptcy or arrangement under
the Federal Bankruptcy Laws, as not or hereafter amended, or under the laws of
any State; or 8 A decree or order appointing a receiver of the property of
Lessee shall be made and such decree or order shall not have been vacated,
stayed or set aside within thirty (30) days from the date of the entry or
granted thereof, or Lessee shall apply for or consent to the appointment of a
receiver for Lessee; or (d) Lessee shall make any assignment for the benefit or
credits; then it.shall be lawful for Lessor, at his election, to declare a
default as hereinafter defined and the term of the Lease ended.
SECTION 18
Default, Re-entry, and Damages
Section 18.01: In case any rent or other payments required to be made by Lessee
shall be due and remain unpaid for more than ten (10) days after due, or if
default be made in any of the other covenants, agreements, stipulations, or
conditions herein contained and such default shall continue for a period of
thirty (30) days after written notice of such default, or if the leased premises
shall be deserted, or vacated, or if Lessee is declared bankrupt or insolvent as
detailed in Section 17.01 herein, Lessor, in addition to other rights or
remedies it may have, shall have the immediate right of re-entry and may remove
all persons and property from the Leased Premises pursuant to applicable
Michigan law, such property may be removed and stored in any other place in the
Building in which the Leased Premises are situated, or in any other place, for
the account of, and at the expense and at the risk of Lessee. Lessee hereby
waives all claims for damages which may be caused by the re-entry of Lessor and
taking possession of the Leased Premises or removing or storing of furniture and
property as herein provided, and will hold Lessor harmless from any and all
losses, costs, or damages occasioned Lessor thereby, and no such re-entry shall
be considered or construed to be a forcible entry.
Section 18.02: Should Lessor elect to re-enter as herein provided, or should it
take possession pursuant to legal proceedings or pursuant to any notice provided
for by law, it may either terminate this lease or it may, from time to time,
without terminating this Lease, re-let the Leased Premises or any part thereof
for such term or terms and at such rental or rentals and upon such other terms
and conditions as Lessor, in its sole discretion, may deem advisable, with the
right to make alterations and repairs to the Leased Premises. Rentals received
by Lessor from such re-letting shall be applied as follows: First, to the
payment of any indebtedness, other than rent due hereunder from Lessee to
Lessor, including all damages sustained by Lessor as a result of the default of
Lessee; Second, to the payment of rent or other payments required of Lessee for
taxes, insurance, or utilities due and unpaid hereunder,
Third, to the payment of any other sum specified in Section 3.02 hereof;
Fourth, to the payment of any cost of such re-letting;
Fifth, to the payment of the cost of any alterations or repairs to the Leased
Premises; and the residue, if any, shall be held by Lessor and applied in
payment of further rent, as the same may become due and payable hereunder.
Should such rentals received from such re-letting during any month be less than
the amount agreed to be paid that month by Lessee hereunder, the Lessee shall
pay such deficiency to Lessor. Such deficiency shall be calculated and paid
monthly.
No such re-entry or taking possession of the Leased Premises by Lessor shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Lessee or unless the termination thereof be
decreed by a court of competent jurisdiction. Notwithstanding any such
re-letting without termination, Lessor may, at any time thereafter, elect to
terminate this Lease for such previous breach. Should Lessor, at any time,
terminate this Lease for any breach, in addition to any other remedy, it may
recover, from Lessee all damages it may incur by reason of such breach,
including the cost of recovering the Leased Premises, and including the worth at
the time of such termination of the excess, if any, of the amount of rent and
other payments required of Lessee hereunder and charges equivalent to rent
reserved in this Lease for the remainder of the stated term, over the then
reasonable rental value of the premises for the remainder of the stated term.
SECTION 19
Surrender of Premises on Termination
Section 19.01: Whenever this Lease shall be terminated, whether by lapse of
time, forfeiture, or in any other way, Lessee will yield and deliver up the
Leased Premises, including the Building and improvements thereon and the
fixtures and equipment belonging to lessor therein contained, peaceably to
Lessor in as good repair as when taken, except for reasonable and normal wear
and tear.
SECTION 20
Performance by Lessor of the Covenants of Lessee
Section 20.01: Should Lessee at any time fail to do any of the things required
to be done by it under the provisions of this Lease, Lessor, at its option and
in addition to any and all other rights and remedies of Lessor in such event,
may (but shall not be required to) do the same or cause the same to be done, and
the reasonable amount of any money expended by Lessor in connection therewith
shall be due from Lessee to Lessor as additional rent on or before the next
rental due date, bearing interest at the rate of one and one half (1.5%) percent
per month from the date of payment until the repayment thereof to Lessor by
Lessee. On default of such payment, Lessor shall have the same remedies as on
default in the payment of rent.
SECTION 21
Rights to Mortgage
Section 21.01: Lessor reserves the right to subject and subordinate this Lease,
at all times, to the lien of any mortgage or mortgages now or hereafter placed
upon Lessor's interest in the said Leased Premises and on the land and Buildings
of which the said Leased Premises are a part or upon any Buildings hereafter
placed upon the land of which the Leased Premises form a part. Lessee covenants
and agreed to execute and deliver, upon demand, such further instrument or
instruments subordinating this Lease to the lien of any such mortgage or
mortgages as shall be desired by Lessor and any mortgagees or proposed mortgage,
and hereby irrevocably appoints Lessor the attorney-in-fact of Lessee to execute
in compliance with this Section 21.01 and deliver any such instrument or
instruments for and in the name of Lessee. Lessor acknowledges that Lessee shall
be permitted to remain in possession of the Premises under the terms of this
Lease as long as Lessee is not in default under the terms of this Lease or any
subordination.
SECTION 22
Covenants of Quiet Enjoyment
Section 22.01: Lessor covenants and agrees to and with Lessee that, at all times
when Lessee is not in default under the terms of and during the term of this
Lease, Lessee's quiet and peaceable enjoyment of the Leased Premises shall not
be disturbed or interfered with by Lessor or any person claiming by, through, or
under Lessor.
SECTION 23
Security Deposit
Section 23.01: Pursuant to Section 3.01 hereof, Lessee shall deposit the sum of
Seven Thousand and 00/xx Dollars ($7,000.00) which Lessor agrees to retain as
security for the faithful performance of all of the covenants, conditions, and
agreements of this Lease, but in no event shall the Lessor be obliged to apply
the same upon rents or other charges in arrears, or upon damages for the
Lessee's failure to perform the said covenants, conditions, and agreements; the
Lessor may so apply the security at its option; and the Lessor's right to the
possession of the premises for nonpayment of rent or for any other reason shall
not in any event be affected by reason of the fact that the Lessor holds this
security. The said sum, if not applied toward the payment of rent or other
charges in arrears, or toward the payment of damages suffered by Lessor by
reason of the Lessee's breach of the covenants, conditions, and agreements of
this Lease, shall be returned to the Lessee when this Lease is terminated,
according to these terms, and in no event is the said security to be returned
until the Lessee has vacated the premises, delivered possession to the Lessor,
and Lessor has inspected said premises.
In the event that the Lessor repossesses itself of the said premises because of
the Lessee's default or because of the Lessee's failure to carry out the
covenants, conditions, and agreements of the Lease, the Lessor may apply the
said security upon all damages suffered to the date of said repossession and may
retain the said security to apply upon such damages as may be suffered or shall
accrue thereafter by reason of the Lessee's default or breach. The Lessor shall
not be obliged to keep the said security as a separate fund, but may mix the
said security with its own funds and there shall be paid no interest on said
security deposit.
SECTION 24
Holding Over
Section 24.01: In the event of Lessee herein holding over after the termination.
of this Lease, thereafter the tenancy shall be from month to month in the
absence of a written agreement to the contrary subject to all the conditions,
provisions and obligations of this Lease insofar as the same are applicable to a
month to month tenancy, but at a monthly rental of one hundred percent (125%) of
the monthly rental stipulated in Section 3.
SECTION 25
Remedies Not Exclusive; Waiver
Section 25.01: Each and every of the rights, remedies, and benefits provided by
this Lease shall be cumulative, and shall not be exclusive of any other of said
rights, remedies and benefits, or of any other rights, remedies, and benefits
allowed by law.
Section 25.02: One or more waivers of any covenant or condition by Lessor shall
not be construed as a waiver of a further or subsequent breach of the same
covenant of condition, and the consent or approval by Lessor to or of any act by
Lessee requiring Lessors consent or approval shall not be deemed to waive or
render unnecessary Lessors consent or approval to or of any subsequent similar
act by Lessee.
SECTION 26
Right to Show Premises
Section 26.01: The Lessee hereby agrees that, for a period commencing one
hundred eighty (180) days prior to the termination of this Lease, the Lessor may
show the Leased Premises and building to prospective Lessees, and one hundred
eighty (180) days prior to the termination of this Lease, Lessor may display
about said Leased Premises the usual and ordinary "For Lease" signs.
SECTION 27
Lessee's Property
Section 27.01: Lessee shall be responsible for and shall pay before delinquency
all municipal, county, state, and federal taxes assessed during the term of this
Lease against any lease-hold interest or personal property of any kind, owned by
or placed in, upon, or about the leased premises by the Lessee.
Section 27.02: The Lessor shall not be responsible or liable to the Lessee for
any loss or damage that may be occasioned by or through the acts or omissions of
persons occupying adjoining premises, or any part of the Leased Premises
adjacent to or connected with the Leased Premises hereby leased, or any part of
the Building of which the Leased Premises are a part, or for any loss or damage
resulting to the Lessee or its property from bursting, stoppage, or leaking of
water, gas, sewer, or steam pipes, or for any damage or loss of property on or
within the Leased Premises from any cause whatsoever.
SECTION 28
Renewal Option
Section 28.01: The Lessee will have one five year option to renew this Lease, if
at the time of renewal, the Lessee is not in default under the terms of this
Lease, the Lessee can exercise this option in a written notification to the
Lessor 8 months before the termination of this Lessee, with the understanding
that all terms of this Lease will remain except that the monthly rental rate
will be renegotiated. The new rate will not exceed 125% of the original rate.
Additionally, the Lessee will receive a $5 per square foot allowance for tenant
improvements upon exercising the option.
SECTION 29
Future Expansion
Section 29.01: During the term of this Lease, the Lessee has the option of
requesting an expansion of up to 5,000 square feet as shown on Exhibit
(degree)A". The Lessor is obligated to build the expansion according to Lessee
requirement's, so long as both Lessor and Lessee agree on the cost and method of
payment of such said improvements. Costs will be based on true expenses plus ten
percent (10%) profit. The method of payment will use a twenty (20) year
amortization calculation for shell costs and an amortization calculation equal
to the actual remaining term for the leasehold improvement costs.
SECTION 30
Miscellaneous
Section 28.01: This Lease shall be governed by and construed in accordance with
the laws of the State of Michigan. If any provisions of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and each provision of the Lease shall be valid and enforceable to the
fullest extent permitted by the law.
Section 28.02: The captions of this Lease are for convenience only, and are not
to be construed as part of this Lease, and shall not be construed as defining or
limiting, in any way, the scope of intent of the provisions hereof.
Section 28.03: Whenever herein the singular member is used, the same shall
include the plural, and the masculine gender shall include the feminine and
neuter genders.
Section 28.04: This Lease shall constitute the entire agreement of the parties
hereto; all prior agreements between the parties, whether written or oral, are
merged herein and shall be of no force and effect. This lease cannot be changed,
modified, or discharged orally, but only by an agreement in writing, signed by
the party against whom enforcement of the change, modification, or discharge is
sought.
Section 28.05: If Lessor shall fail to perform any covenant, term, or condition
of this Lease upon Lessors part to be performed, and if as a consequence of such
default Lessee shall recover a money judgment against Lessor, such judgment
shall be satisfied only out of the proceeds of sale received upon execution of
such judgment and xxxxx thereon against the right, title, and interest of Lessor
in the Building and property of which the Leased Premises are a part and out of
the rents or other income from such property receivable by Lessor, and neither
Lessor nor any of the members comprising. the limited liability corporation
which is the Lessor herein shall be liable for any deficiency.
Section 28.06: In the event any proceedings are brought for the foreclosure of
or in the event of exercise of the power of sale under any mortgage made by
Lessor covering the leased premises, Lessee shall, at the option and request of
Purchaser, attom to the Purchaser upon any such foreclosure or sale and
recognize such Purchaser as the Lessor under this Lease.
Section 28.07: In the event of any transfer or transfers of Lessor's interest in
the Premises, the transferor shall be automatically relieved of any and all
obligations and liabilities on the part of Lessor accruing from and after the
date of such transfer. Lessor acknowledges that the obligation of the Lessor
under this Lease shall be transferred to the party receiving the interest of
Lessor.
Section 28.08: All rights and liabilities herein given to or imposed upon the
respective parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors, and assigns of the said parties; and if
there shall be more than one Lessee, they shall all be bound jointly and
severally by the terms, covenants, and agreements herein. No rights, however,
shall inure to the benefit of any assignee of Lessee unless the assignment to
such assignee has been approved by Lessor, in writing, as provided in Section
13.01 hereof.
Section 28.09: This agreement shall inure to the benefit of and be binding upon
the parties hereto, their respective heirs, administrators, executors,
representatives, successors, and permitted assigns.
Section 28.10: No payment by Lessee or receipt by Lessor of a lesser amount than
the monthly 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 any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Lessor shall accept such check or payment without
prejudice to Lessor's right to recover the balance of such rent or pursue and
other remedy in this Lease.
Section 28.11: The submission of this Lease for examination does not constitute
a reservation of or option for the Leased Premises. This Lease shall become
effective only upon execution and delivery thereof by Lessor to Lessee.
SECTION 29
Environmental
Section 29.01: Lessee shall neither generate, store, discharge nor bury any
toxic or hazardous waste or substance or material or any chemicals or substances
which are either toxic or hazardous at or upon the Leased Premises and Building,
as the terms "toxic" or "hazardous" are defined under all currently existing or
future applicable federal, state or local environmental laws, Lessor and Lessee
understand and acknowledge, however, that Lessee may utilize certain substances
or materials in the Leased Premises incidental to its operations which are or
may be classified as hazardous or toxic substances, such as cleaning solvents,
degreasing agents, adhesives, greases, oils and lubricants, and the like. All
such substances may be utilized and stored in proper containers only temporarily
on the Leased Premises and shall be properly disposed of and transported off the
Leased Premises in compliance with all applicable environmental and other laws
and ordinances.
All other substances which are non-toxic or non-hazardous shall be stored in
proper containers. No substances or materials shall be stored outside of the
Building which constitutes the Leased Premises without Landlord's prior written
approval. Tenant shall forever indemnify and hold harmless and defend Landlord,
its successors and assigns and any mortgagee from and against all loss, damage,
claim and expense, including attorney's fees, incurred in connection with the
generation, burial, storage or disposal by Tenant of said hazardous or toxic
substances upon the Premises, and such indemnification shall survive the
expiration or termination of this Lease or any extensions.
IN WITNESS WHEREOF, the Lessor and Lessee have executed this Lease as of the
date set forth at the outset hereof.
WITNESS: LESSOR:
AMR HOLDINGS, L.L.C.
a Michigan Lim Limited Liability Corporation
LESSEE:
FAAC Corp.
A Michigan Corporation
