LEASE AGREEMENT Valley Ranch Business Park Ann Arbor, Michigan 48108
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
THIS
LEASE is
made
as of the ____ day of February 2006, by
and
between ARBOR
DEVELOPMENT COMPANY, LLC,
a
Michigan
Limited Liability Company, the address of which is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ as Lessor, and FAAC
Incorporated,
a
Michigan Corporation, the current address of which is ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as Lessee.
THIS
LEASE REVISES, UPDATES AND SUPERSEDES
all
prior lease agreements between Lessor and 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 ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇
▇▇▇▇▇ 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").
TO
HAVE AND TO HOLD
for a
term of Twenty (20) months from and after the commencement of the term as
hereinafter provided.
SECTION
1
Construction
of Building
Section
1.01: The Leased Premises shall consist of an exterior of approximately 10,936
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 June 1, 2006. 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 punch list. 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
- 20 = $10.50 per square foot NNN, or $9,569.00 per month
Receipt
of Five Thousand and 00/100 ($5,000.00) 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
▇▇▇▇ 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 ▇▇▇▇ or assessment ▇▇▇▇ 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 ▇▇▇▇ 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. Lessor's 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 burn
any
trash or garbage at any time in or about the building. If Lessor shall provide
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 Lessor's sole cost and expense, to construct the
building and hard surface, to properly drain, landscape, and light a parking
area or parking areas. 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 H.V.A.C. 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 marshal,
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 act
or
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 (180) 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 there from, 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 Lessor's 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
(c)
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 Five
Thousand and 00/100 Dollars ($5,000.00) 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 twenty five 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 Lessor's consent or approval shall not be deemed to waive or render
unnecessary Lessor's 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 leasehold 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 three 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 Eight
(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.
SECTION
29
Miscellaneous
Section
29.01: 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
29.02: 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
29.03: 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
29.04: 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
29.05: If Lessor shall fail to perform any covenant, term, or condition of
this
Lease upon Lessor's 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 levied 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
29.06: 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, atone to the Purchaser upon any such foreclosure or sale and
recognize such Purchaser as the Lessor under this Lease.
Section
29.07: 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
29.08: 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
29.09: 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
29.10: 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
29.11: 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
30
Late
Payments
Section
30.01: Whenever the Tenant fails to make any payment of monthly rent or
additional rent hereunder within ten (10) days after the payment is due, the
Tenant shall pay the Landlord, in' addition thereto, five (5%) percent thereof
as liquidated damages to cover the Landlord's costs of administration in
collecting the payment and the losses incurred by the Landlord in not receiving
timely payment.
SECTION
31
Environmental
Section
31.01: 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
substance 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 onset hereof.
WITNESS: LESSOR:
ARBOR
DEVELOPMENT COMPANY, LLC
a
Michigan Limited Liability Company
___________________________ By:___________________________
___________________________ Its:___________________________
WITNESS: LESSEE:
FAAC
Incorporated
a
Michigan Corporation
_____________________________ By:___________________________
______________________________ Its:_____________________________