<PAGE>
EXHIBIT 10.2
LEASE AGREEMENT
LANDLORD: GSI LUMONICS CORPORATION
TENANT:
SEWS-DTC, INC.
LOCATION: 22300 HAGGERTY ROAD,
FARMINGTON HILLS, MICHIGAN
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TABLE OF CONTENTS
<TABLE>
<S>
<C>
ARTICLE I - GRANT AND TERM
................................... 3
ARTICLE II - RENT
............................................ 4
ARTICLE III - CONDUCT OF BUSINESS BY TENANT
.................. 6
ARTICLE IV - TENANT'S WORK; CONSTRUCTION,
MAINTENANCE, AND
ALTERATIONS BY TENANT
..................................... 6
ARTICLE V - INSURANCE AND INDEMNIFICATION
.................... 14
ARTICLE VI - UTILITY CHARGES
................................. 17
ARTICLE VII - ASSIGNMENT AND TRANSFER
........................ 17
ARTICLE VIII - OFFSET STATEMENT, ATTORNMENT
AND
SUBORDINATION
............................................ 18
ARTICLE IX - DESTRUCTION OF LEASED PREMISES
.................. 19
ARTICLE X - CONDEMNATION
..................................... 20
ARTICLE XI - DEFAULT OF TENANT
............................... 20
ARTICLE XII - QUIET ENJOYMENT
................................ 22
ARTICLE XIII - ENVIRONMENTAL COMPLIANCE
...................... 22
ARTICLE XIV - MISCELLANEOUS
.................................. 25
EXHIBIT A - LEGAL DESCRIPTION
EXHIBIT B - TENANT'S WORK
EXHIBIT C - DESIGN WORK
EXHIBIT D - INSURANCE
</TABLE>
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LEASE
THIS LEASE
("LEASE") is made this 11 day of February, 2005 ("Execution
Date"), by and between GSI Lumonics
Corporation, a Michigan corporation, whose
address is 39 Manning Road, Billerica, MA
01821 ("LANDLORD"), and SEWS-DTC,
Inc., a Delaware corporation authorized to
conduct business in Michigan, whose
address is currently 5850 Mercury Drive,
Suite 250, Dearborn, MI 48126
("TENANT").
WITNESSETH:
ARTICLE I
GRANT AND TERM
1.01
LEASED PREMISES.
Landlord, in consideration of the rent to be paid
and the covenants to be performed by
Tenant, does hereby demise and lease unto
Tenant, and Tenant hereby rents from
Landlord, a building and related site
improvements, including 155 parking spaces
described in Section 4.8 below on
land located at 22300 Haggerty Road,
Farmington Hills, Oakland County, Michigan,
more particularly described on EXHIBIT A
attached (the "Leased Premises"). The
building on the Leased Premises consists of
56,290 square feet for purposes of
calculating rent as set forth in Article
II.
1.02
LEASE TERM AND ACCESS.
The Landlord shall give Tenant access to the
Leased Premises for Tenant's Work that will
not materially interfere with
Landlord's operations starting April 1,
2005, through May 31,2005. Starting June
1,2005, (the "Access Date") Landlord will
not have access to the space. Tenant
will then have full control for purposes of
completing all remaining Tenant's
Work described in Article IV. Tenant will
be allowed to move into the space if
it finishes Tenant's Work earlier any time
following this date. The Tenant has
inspected the Leased Premises, and Tenant
accepts the Leased Premises "as is"
(except for items to be fixed in Exhibit B)
in its existing condition. The
initial term of this Lease ("Initial Term")
shall be sixty-six (66) months
after the Rent Commencement Date (as such
term is defined in Section 2.01
below). The phrase "Lease Term" or "Term"
as used in this Lease shall be the
Initial Term of this Lease including the
Renewal Term, if properly elected and
permitted pursuant to Section 1.03
below.
1.03
RENEWAL TERM. If at
the time of Tenant's Renewal Notice, Tenant has
the financial ability to meet its
obligations for the Renewal Term as determined
by Landlord based on standards of
commercial reasonableness, Tenant shall have
the option to extend the Initial Term for
an additional sixty (60) months (the
"Renewal Term") by giving written notice to
Landlord at least six (6) months
prior to the expiration of the Initial Term
("Renewal Notice"). Landlord shall
review Tenant's credit, upon receiving
Tenant's Renewal Notice, and if Tenant's
credit is not acceptable to Landlord based
on standards of commercial
reasonableness, Tenant shall have no right
to renew this Lease. Rent during the
Renewal Term shall be determined by taking
ninety-five (95%) percent of fair
market rent for a building of similar
standard and located within a three (3)
mile radius of the Premises as determined
by averaging the rental rates quoted
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by three brokers experienced in commercial
leasing in the area of the Premises,
unless there is no brokerage commission due
with respect to the exercise of the
Renewal Term, in which case base rent shall
be established at ninety-three (93%)
percent of fair market rent for a building
of similar standard and located
within a three (3) mile radius of the
Premises; provided, however, in no event
shall Base Rent be lower than Base Rent for
the immediately preceding year.
1.04
SECURITY DEPOSIT.
Landlord acknowledges receipt of Fifty Six
Thousand Two Hundred Ninety ($56,290.00)
Dollars from Tenant on the Execution
Date which shall act as security for
Tenant's faithful performance of its
obligations under this Lease (the "Security
Deposit"). Landlord shall hold the
Security Deposit until the expiration or
earlier termination of this Lease.
Landlord shall not be required to account
for any interest on the Security
Deposit nor maintain the Security Deposit
in a segregated account. Landlord
shall have the right but not the obligation
to use the Security Deposit or any
portion thereof in the performance of
Tenant's obligations in the event of
Tenant's default. Tenant shall promptly
replace any portion of the Security
Deposit used by Landlord as provided under
this Section 1.04 upon written notice
from Landlord.
1.05
LANDLORD'S CONTINUED
OCCUPANCY. Notwithstanding anything to the
contrary contained herein, any or all of
Landlord's employees and property
presently located at the Leased Premises
shall be removed prior to the Access
Date. If Landlord is one day late past June
1, 2005, then the rent commencement
date will be pushed back one month and
Landlord will provide another two month's
free rent. If the Landlord is not out by
July 1, 2005, then it will owe another
two month's free rent, and so on.
ARTICLE II
RENT
2.01
BASE RENT. Tenant
shall pay Base Rent in monthly installments in
advance on or before the fifteenth day of
each month of the Term commencing on
the earlier of a Temporary Certificate of
Occupancy (for work done in Exhibits B
& C) or the first day of the month
following 90 days after Landlord has fully
exited the building (the "Rent Commencement
Date") and each month thereafter; in
accordance with the schedule set forth in
Exhibit E ("Base Rent"). Exhibit E to
be finalized and executed within 10
business days of building Access Date.
Base Rent
together with any and all other payments due under this Lease
shall be referred to herein as "Rent."
2.02
TENANT'S TAX
OBLIGATION.
(a)
As of the Rent
Commencement Date, Tenant shall pay to Landlord a
prorated share of current real estate taxes
and assessments levied against the
Leased Premises on a due date basis as if
paid in advance. Upon expiration of
the Term, so long as Tenant is not in
default, Landlord shall pay to Tenant a
prorated share of then current real estate
taxes and assessments levied against
the Leased Premises on a due date basis as
if paid in advance.
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<PAGE>
(b) Subject to (c) below,
commencing with Rent Commencement Date, Tenant
shall be responsible for reimbursement to
Landlord for all real estate taxes,
assessments, general and special, personal
property taxes pertaining to the
Leased Premises. Such taxes shall be paid
monthly by Tenant as follows: Tenant
shall pay to Landlord, on dates upon which
Base Rent is payable hereunder, such
amounts as the Landlord, from time to time
shall estimate as necessary to create
and maintain a reserve fund from which to
pay before the same become due all
real estate taxes, assessments, general and
special, personal property taxes and
other reasonable charges which may
thereafter become due and payable on or with
respect to the Leased Premises and all
improvements located thereon for the
balance of the Term. Such reserve fund
shall not bear interest. If allowed by
the taxing authority, payment of special
assessments shall be made on an
installment basis extending over the
maximum period of time available and Tenant
shall only be liable for installments due
during the Term, subject to prorations
described in (a) above. Should the State of
Michigan or any political
subdivision thereof, or any governmental
authority having jurisdiction
thereover, impose a sales or other tax
and/or assessment of any kind or nature
upon, against or with respect to the
rentals payable by Tenant to Landlord, or
on the income of Landlord derived from the
Leased Premises, or with respect to
the ownership of land and building
comprising the Leased Premises, by way of
substitution for all or any part of the
taxes and assessments levied or assessed
against the Leased Premises, such tax
and/or assessment shall be deemed to
constitute a tax and/or assessment against
the Leased Premises for the purposes
of this section, provided, however,
Tenant's obligations hereunder shall be
computed as if the Leased Premises and the
rents reserved were the only factors
subject to such tax and/or assessment.
Tenant shall pay all sales and other such
taxes on rents hereunder (other than
Landlord's income tax and single business
tax) to the requisite receiving authority
with proper returns, discharging such
obligations when due. Tenant shall pay all
personal property taxes levied
against personal property of any kind or
nature on the Leased Premises for and
during the Term prior to the date penalty
attaches and evidence of such payment
shall promptly thereafter be furnished to
Landlord.
(c)
In the event
Landlord sells the Leased Premises and such sale
results in an increase in the taxable value
of the Leased Premises, then so long
as Tenant is not in default and this Lease
remains in full force and effect,
then Landlord shall pay one-half (1/2) of
the increase in the real estate taxes
for the Leased Premises resulting from the
sale billed during the first year
after such sale, and one-fourth (1/4) of
such tax increase resulting from the
sale billed during the second year after
such sale. With the consent of the
Landlord, including Landlord's successor
upon the sale of the Premises, which
shall not be unreasonably withheld, Tenant
shall have the right to appeal any
increase in the real estate taxes resulting
from the sale in accordance with the
procedures established by applicable
governmental authorities including the
Michigan Tax Tribunal, and the laws of the
State of Michigan. Provided, however,
Tenant shall pay all interest, costs and
attorneys fees associated with such
appeal, and the tax being appealed shall be
paid pending a decision on the
appeal, to the extent that payment is
required to prevent accrual interest or
penalties.
2.03
NON-ABATEMENT. Rent
shall not abate for any reason during the Term
except as otherwise expressly permitted by
law, and subject to the provisions of
Section 14.22 below.
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2.04
NET LEASE. Except as
provided in Section 1.02 above, and Section
4.04 below concerning Landlord's
corrections and Landlord's responsibility for
certain structural and capital
improvements, the Rent payable by Tenant to
Landlord, shall be net to Landlord so that
this Lease shall yield, net, to
Landlord, the Base Rent specified in
Article II hereof in each month and year
during the term of the Lease, and all
costs, expenses, and obligations of every
kind and nature whatsoever relating to the
Leased Premises which may arise or
become due during the Term of this Lease,
shall be paid by Tenant.
ARTICLE III
CONDUCT OF BUSINESS BY TENANT
3.01
USE OF PREMISES.
Tenant shall occupy and continually use, and
conduct business in and on the Leased
Premises under the terms of this Lease for
the Term only for the purposes permitted in
the OS-4 zoning district of
Farmington Hills, and for no other purpose.
The Tenant shall comply with all
laws, governmental ordinances, rules and
regulations and orders with respect to
the use and occupancy of the Leased
Premises.
ARTICLE IV
TENANT'S WORK; CONSTRUCTION, MAINTENANCE, AND ALTERATIONS BY
TENANT
4.01
TENANT'S WORK. The
work to be performed by Tenant to prepare the
Leased Premises for use is more fully
described in EXHIBIT B ("Tenant's Work"),
which work shall be completed on or before
120 days after Landlord has fully
moved out of the space (the "Tenant
Completion Date"). Tenant's Work shall be
completed in accordance with the approved
Tenant's Plans, as described in
Section 4.03 below. Landlord shall not be
required to remove its network cabling
installed by Landlord in the building.
Tenant shall include in Tenant's Plans
all wiring and cabling to be installed by
Tenant in the building, including any
wiring in the building common area
("Tenant's Wiring"). At the termination of
this Lease, Tenant shall not be required to
remove Tenant's Wiring so long as
Landlord has approved the plans for
Tenant's Wiring. Tenant's Plans shall also
include the location and specifications for
the satellite dish and the cabling,
conduits and underground and roof
connections described in Section 4.02 F below.
4.02
CONDITION OF LEASED
PREMISES; MODIFICATIONS ALLOWED BY TENANT.
Landlord shall deliver the Leased Premises
to Tenant in "as is" condition.
Landlord and Tenant each acknowledge:
A.
FOUNDATION. The building on the Leased Premises was
constructed in 1999 and sits on a cement slab foundation.
B. HEATING
AND COOLING. The building on the Leased Premises
is heated
by hot water radiant heat around the perimeter of the building.
There are
two 90-ton HVAC units and one 30-ton HVAC unit placed on the
roof.
Tenant shall have the
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right,
subject to Landlord's prior written approval, to install one or
more HVAC
units necessary to supply supplemental service to any portion
of
the Leased
Premises.
C.
GENERATORS A back-up generator exists on the Leased
Premises
as of the date hereof. Tenant shall have the right to use the
existing
back-up generator during the Term, but any repairs, maintenance
or
replacement shall be Tenant's responsibility.
D.
EMERGENCY POWER SUPPLIES. Tenant shall have the right,
subject to Landlord's
prior written approval, to install: (i) an
uninterrupted power source (UPS) system; (ii) an emergency
stand-by
battery
system; and/or (iii) fuel tank and generator, or to use
portable
generators
during emergencies. Upon expiration or earlier termination of
this
Lease, Tenant shall have the right to remove any of the systems
installed
pursuant to this Section 4.02 D. so long as Tenant restores the
Leased
Premises to the condition existing at the Rent Commencement
Date.
E.
UTILITIES; SERVICES AND EASEMENTS. Subject to Landlord's
prior
written approvals, Tenant may: (i) introduce new utilities or
other
communication services into the building at the existing or new
penetration
points; and (ii) install pipe chase and/or conduits for
telecommunication cabling, fiber optics, and other services in an
area on
the roof
to be designated by Landlord and other areas throughout the
building.
Prior to any such installation, Tenant shall provide to
Landlord
Tenant's
proposed plans and specifications as well as the proposed uses
of
any
installations and any other information Landlord reasonably
deems
necessary
to complete Landlord's review and to give or withhold his
consent.
In the event that Tenant installs additional systems or
services
in the
building at the Leased Premises, Tenant shall have the right,
at
the
expiration or earlier termination of the Lease, to remove any of
the
systems
installed pursuant to Section 4.02 E(i). so long as Tenant
restores
the Leased Premises to the condition existing at the Rent
Commencement Date.
F. ROOF
RIGHTS. Tenant shall have the right to use the roof
of the
building in which the Lease Premises is located for installation
of
a
non-penetrating satellite dish and the right to connect cabling
from
under the
building with pipe chase and/or conduits for telecommunications
cabling
and fiber optics at a designated area on the roof of the
building
so long as
the plans, specifications and locations for such satellite
dish,
cabling, conduits and connections are shown on Tenant's Plans
and
approved
by Landlord.
4.03
CONSTRUCTION. Tenant
shall, at its sole cost, undertake construction
of Tenant's Work and provide the
construction material, hardware and equipment
and the labor to construct and install the
improvements to the Leased Premises
in accordance with Tenant's Plans referred
to below. Attached hereto as EXHIBIT
C are Tenant's design drawings for the
Leased Premises (the "Design Drawings"),
which Design Drawings include the following
information: partition layout;
ceiling plans; general information in
specification form for all proposed
electrical, mechanical, fire protection,
communications technology and plumbing
requirements, sample
7
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boards with color finishes and graphic
illustrations. Landlord has reviewed the
Design Drawings and advised Tenant of any
changes required by Landlord; Tenant
shall promptly revise the Design Drawings
to incorporate Landlord's required
changes and deliver revised plans to
Landlord within ten (10) business days.
Landlord may require further changes to the
revised Design Drawings and Tenant
shall similarly revise and resubmit the
same to Landlord within ten (10)
business days and continue such process
until Landlord approves Tenant's Design
Drawings (final Design Drawings as approved
by Landlord shall be referred to
herein as "Tenant's Plans"). Tenant shall
apply for all building permits and
approvals by governmental agencies
necessary for the construction of Tenant's
Work in accordance with the Tenant's Plans.
The Tenant's general contractor is
required to post the building permit at the
job site and a copy of the building
permit must be delivered to Landlord prior
to the start of the construction or
delivery of materials. The Tenant's Work
shall be promptly commenced and
thereafter continued with due diligence to
the end that it shall be fully
completed and the Leased Premises opened
for business in accordance with the
provisions hereof not later than the Tenant
Completion Date. The Tenant's Work
shall be completed in strict compliance
with the Tenant's Plans. Tenant shall
perform no work in the Leased Premises
until Tenant's Plans have been approved
by Landlord. Landlord's approvals required
hereunder shall be given as soon as
is commercially reasonable and shall not be
unreasonably withheld, it being
understood that Landlord has contracted
with a third party to complete such
reviews and advise Landlord. During the
construction of Tenant's Work, Landlord
agrees to review and approve or disapprove
Tenant's requests for change orders
to Tenant's Plans within five (5) business
days of receipt of the change order
by Landlord and Landlord's reviewing
agent.
Construction of Tenant's Work shall be subject to, and in full
compliance
with, the following conditions:
A. COST. All of Tenant's Work shall be completed at Tenant's
sole cost
and expense.
B. INSURANCE. In addition to the insurance required by Article
V below,
Tenant or Tenant's general contractor shall secure, pay for and
maintain,
during the continuance of its work within the Leased Premises,
policies
of insurance with such coverages and such amounts as set forth
in
EXHIBIT D
attached hereto and made a part hereof, which policies shall be
endorsed
to include Landlord and Landlord's respective employees and
agents and
Landlord's mortgagees as additional insured parties and which
shall
provide thirty (30) days prior written notice of any alteration
or
termination of coverage. Tenant shall not permit Tenant's
contractors to
commence
any work until all required insurance has been obtained by
Tenant
or
Tenant's general contractor as the case may be, and
certificates
evidencing
such coverage have been delivered to Landlord.
C. REPAIR/RECONSTRUCTION. Repair and/or reconstruction of all
or any
portion of Tenant's Work damaged or destroyed by any casualty
before
Tenant's Completion Date shall be commenced by Tenant as soon
as
possible
after such casualty.
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D. COMPLIANCE WITH LAWS; APPROVAL BY LANDLORD. The Tenant's
Work and
any and all other improvements constructed by Tenant shall
comply
with all
applicable federal, state and local laws, ordinances, rules and
regulations, including without limitation, the Americans with
Disabilities
Act and
similar state and local laws. Any approval or consent by
Landlord
of the
Tenant's Plans and any or all of Tenant's criteria, systems,
plans,
specifications or drawings shall neither constitute an assumption
of
responsibility or liability by Landlord for any aspect of such
criteria,
systems,
plans, specifications or drawings, including, but not limited
to,
their
accuracy or efficiency, their failure to comply with applicable
laws
or
regulations, building codes and other governmental agencies nor
obligate
Landlord in any manner with respect to Tenant's Work and Tenant
shall be
solely responsible for any deficiency in design or construction
of all
portions of Tenant's Work. Tenant acknowledges that Landlord's
approval
is based on aesthetics only and does not signify compliance
with
any
governmental, engineering or safety standards.
E. PERMITS. Tenant shall obtain and pay for all necessary
permits
and shall pay all other fees required by public authorities or
utility
companies with respect to Tenant's Work. Tenant shall secure a
Certificate of Occupancy for
the Leased Premises prior to occupying the
Leased
Premises if required by the municipality having jurisdiction
over
the Leased
Premises. To the extent Tenant obtains a Temporary Certificate
of
Occupancy, Tenant shall diligently complete the remaining work
and
obtain the
Final Certificate of Occupancy as soon as possible thereafter.
F. CONSTRUCTION MAINTENANCE. Tenant shall maintain the Leased
Premises
and the Common Areas adjoining the same in a clean and orderly
condition
during construction. Tenant shall promptly remove all unused
construction materials, equipment shipping containers, packaging,
debris
and waste
from the Building and deposit it in receptacles, or otherwise
remove the
same from the Building. Tenant shall contain all construction
materials,
equipment, fixtures, merchandise, shipping containers and
debris
within the Leased Premises
G. ENTRY TO THE LEASED PREMISES. At any time and from time to
time
during the performance of Tenant's Work, Landlord or Landlord's
designee
may enter upon the Leased Premises to inspect the work being
performed
by Tenant and take such steps as they may deem necessary or
desirable
to assure the proper performance by Tenant of Tenant's Work
and/or to
protect the Leased Premises. In addition, Tenant's Work shall
be
performed
in a thoroughly first-class and workmanlike manner, shall
incorporate only new or like new materials and shall be in good and
usable
condition
at the date of completion.
H. LIENS. In the event any lien shall at any time be filed
against
the Leased Premises by reason of work, labor or services
performed
or alleged
to have been performed or materials furnished or alleged to
have been
furnished by, for or to Tenant, Tenant shall forthwith cause
the
same to be
discharged of record or bonded to the
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satisfaction of Landlord. Tenant shall have a reasonable period of
time,
not more
than ninety (90) days after filing of the lien to dispute the
lien prior
to payment and discharge or bonding over. Provided, however,
any filed
lien shall be immediately discharged or bonded over in the
event
an action
to foreclose the lien is threatened or commenced. If Tenant
shall fail
to cause such lien forthwith to be so discharged or bonded
after
being notified of the filing thereof, then, in addition to any
other
right or
remedy of Landlord, Landlord may, following notice to Tenant,
discharge
the same by paying the amount claimed to be due, and the amount
so paid by
Landlord and all costs and expenses, including reasonable
attorneys
fees incurred by Landlord in procuring the discharge of such
lien,
shall be due and payable by Tenant to Landlord as additional rent
on
the first
day of the next following month.
I. TENANT ALLOWANCE; FINAL DOCUMENTATION.
(a) Upon compliance with this Section, Tenant shall be
entitled
to a Tenant Allowance of $225,460 ("Tenant Allowance").
(b) On the Access date, provided that Tenant is not in default
under this
Lease, Landlord has approved Tenant's Plans, and Tenant has
provided
to Landlord Tenant's signed construction contract for Tenant's
Work and
all necessary permits, approvals and insurance certificates,
then
Landlord
shall advance to Tenant and Tenant's contractor, jointly, the
Tenant
Allowance to be used solely for Tenant's Work and incorporated
in
the Leased
Premises. Within 150 days following construction completion,
Tenant
shall supply to Landlord the following: (i) Original final
waivers
of lien
and contractor's affidavits in such form as may be required by
Landlord,
from all parties performing labor or supplying materials in
connection
with the Tenant's Work and sworn statements and long form
affidavits
and final waiver's from Tenant's architect, engineer and
contractors and any other party with whom Tenant contracted
directly for
labor and
materials furnished in or for the Leased Premises, (ii) Copies
of all warranty documents
relating to Tenant's Work and identifying
Landlord
as an intended beneficiary thereof, (iii) A set of mechanical,
electrical, plumbing and fire protection as-built plans and
specifications
for
Tenant's Work prepared and sealed by Tenant's architect, together
with
names and
addresses of Tenant's electrical, plumbing, and other
contractors and copies of all operating manuals for equipment
installed as
part of
Tenant's Work, (iv) Properly issued Final Certificate of
Occupancy
evidencing
acceptance or approval by appropriate governmental authorities,
and (v)
Such other supporting documentation as Landlord may reasonably
require.
Notwithstanding the foregoing, during the Term, so long as
Tenant
is not in
default, Tenant shall have the option to apply Tenant's
Allowance,
or any portion thereof, to future improvements, including
additional
parking spaces as provided in Section 4.08 below, or to
fixtures
permanently installed at the Leased Premises. If any portion of
Tenant's
Allowance remains at the expiration or earlier termination of
this
Lease, such sum shall be retained by Landlord.
4.04
OBLIGATION FOR REPAIRS
AND MAINTENANCE.
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(a)
Except as
provided in (d) below, Tenant covenants during the Term of
this Lease to keep in good order and
repair, reasonable wear and tear excepted,
inside and outside, structural and
nonstructural, all buildings, structures and
improvements which shall hereafter be
constructed on, or be part of, the Leased
Premises, including all interior walls and
ceilings, all plumbing, heating,
air-conditioning and any other equipment or
facilities installed in or on the
Leased Premises. Tenant agrees from time to
time to make repairs and
replacements, as necessary, of such
equipment or facilities at least equal to
the original and sufficient for the same
services so that at all times such
buildings, structures, equipment and
facilities shall be in good order,
condition and repair, reasonable wear and
tear excepted. Tenant further
covenants that during the term of this
Lease, it will keep the Leased Premises,
and every part thereof, and the buildings
and structures thereon, in a clean and
wholesome condition, and that all health,
safety, fire and police regulations
shall, at all times and in all respects, be
fully complied with by Tenant.
(b)
Tenant, at its
sole expense, shall retain certified contractors to
inspect and maintain all mechanical
equipment at the Leased Premises as required
but no less than semi-annually and provide
Landlord with copies of such
maintenance contracts and work performed.
Tenant further covenants that the
buildings, structures, improvements and
mechanical systems at any time existing
upon the Leased Premises shall be kept and
maintained by Tenant in a safe and
secure manner and in conformity with any
and all requirements of controlling
governmental authority. Landlord or
Landlord's designee shall have the right to
enter and inspect the Leased Premises, from
time to time, upon reasonable
notice, except in the case of an emergency,
provided, however, Landlord's
inspections shall not unreasonably
interfere with Tenant's use of the Premises.
(c)
In the event
Tenant fails to make any of the repairs which it is
obligated to make under the provisions of
this Lease immediately if required,
and in all other cases within thirty (30)
days after receipt of written notice
from Landlord specifying such repairs, or
if the repairs are of such character
as to require more than thirty (30) days to
correct and Tenant shall fail to use
reasonable diligence in making such repairs
after receiving such notice,
Landlord shall be entitled but not
obligated to enter upon the Leased Premises
and to make or cause the same to be made,
and, after notice to Tenant that the
same has been done and the cost thereof, to
add the cost of such repairs to the
next installment of rent, and Tenant agrees
to pay to Landlord such amounts plus
interests as hereinafter provided, at the
due date of the rent installment next
becoming due. At the time of the expiration
of the tenancy created herein,
Tenant shall surrender the Leased Premises
in a good condition, reasonable wear
and tear and loss by fire or other casualty
covered by insurance excepted
(provided insurance proceeds therefor are
received by the Landlord).
(d)
Landlord shall
be responsible for structural or capital repairs or
replacements (as determined in accordance
with generally accepted accounting
principals) required to keep the roof,
outer walls, structural elements and
foundation, HVAC system and electrical
transformers of the Leased Premises in
good order, condition and repair,
reasonable wear and tear excepted, and
excepting repairs and replacements
resulting from Tenant's Work or the act or
negligence of
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Tenant or its contractors, agents or
employees ("Landlord's Responsibility").
The cost of any structural or capital
repairs or replacements made to the Leased
Premises by Landlord during the Term as a
result of Landlord's Responsibility
shall be amortized over such periods as
determined in accordance with generally
accepted accounting principles, together
with interest on the unamortized
balance at the rate of two percent (2%) in
excess of the then current "prime
rate" of Comerica Bank or such higher rate
as may have been paid by Landlord on
funds borrowed for the purpose of
constructing such capital improvements
provided said interest shall not exceed the
maximum legal rate available, and
shall be paid by Tenant monthly as
additional Rent.
4.05
EXPANSION OF BUILDING
the current design of the building allows for
the construction of an additional 15,000 to
20,000 square feet ("Expansion"). In
the event during the Term, and so long as
Tenant is not in default, Tenant
desires to construct such Expansion, Tenant
shall have the opportunity to
negotiate with Landlord for the purchase of
the Leased Premises. Provided,
however, Landlord is under no obligation to
sell the Leased Premises to Tenant
in the event Landlord and Tenant are unable
to reach an agreement on the terms
for sale and purchase of the Leased
Premises. In the event of such purchase the
purchase price shall be based on fair
market value method appraisals, but in no
event less than $6.5 million. In the event
that Landlord and Tenant consummate
the purchase of the Leased Premises, this
Lease shall terminate upon transfer of
title of the Leased Premises to Tenant. In
the event that Landlord and Tenant
fail to agree upon the terms of a sale,
this Lease shall continue in full force
and effect until its expiration or earlier
termination and Tenant shall not
construct the Expansion of the building on
the Leased Premises.
In the
event Tenant requests and Landlord, at its sole option, agrees
to
assume the responsibility and expense of
construction of the Expansion, then
Landlord and Tenant shall amend this Lease,
in writing, which amendment shall
contain the following provisions: (a) Base
Rent shall include, in addition to
that provided in Section 2.01, Rent on the
Expansion square footage equivalent
to market rent for similar build to suit
projects and (b) the Lease Term for the
Leased Premises plus the Expansion shall
expire ten (10) years from the date the
certificate of occupancy is issued for the
Expansion. In the event that such
certificate of occupancy is issued after
the expiration of the Initial Term or
the Renewal Term, as the case may be, this
Lease shall be deemed to have been
extended automatically under the terms
hereof.
4.06
REMODELING AND
IMPROVEMENTS AFTER INITIAL CONSTRUCTION So long as
Tenant is not in default, after the Rent
Commencement Date and during the Term,
Tenant shall have the right, upon written
notice to Landlord, to remodel or make
improvements to the Leased Premises, at
Tenant's expense, provided such
remodeling or improvement does not affect
the mechanical systems, the electrical
systems or the structure of the building
("Non-Structural Work") and which do
not exceed $20,000.00. So long as Tenant is
not in default, Tenant shall have
the right, upon written notice to Landlord
and receipt of Landlord's written
consent, to perform Non-Structural Work in
excess of $20,000.00; provided,
however, Landlord may require Tenant to
remove all such Non-Structural Work in
excess of $20,000.00 upon expiration of the
Lease and to restore the Leased
Premises to the condition existing prior to
the Non-Structural Work. Tenant
shall not make any changes to mechanical
systems, the electric system or the
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structure of the building on the Leased
Premises without Landlord's prior
written consent. Tenant shall, in all
instances, provide architectural drawings,
plans and specifications for any and all
improvements made by Tenant to the
Leased Premises. Landlord agrees to review
and approve or deny Tenant's request
for modifications to the Leased Premises
within ten (10) business days of
receipt by Landlord of Tenant's request
along with Tenant's proposed plans and
specifications for such work. All
construction shall comply with all laws and
ordinances relating thereto and shall be
performed in a good and workmanlike
manner. In the event any lien shall at any
time be filed against the Leased
Premises by reason of work, labor or
services performed or alleged to have been
performed or materials furnished or alleged
to have been furnished by, for or to
Tenant, Tenant shall forthwith cause the
same to be discharged of record or
bonded to the satisfaction of Landlord. If
Tenant shall fail to cause such lien
forthwith to be so discharged or bonded
after being notified of the filing
thereof, then, in addition to any other
right or remedy of Landlord, Landlord
may, following notice to Tenant, discharge
the same by paying the amount claimed
to be due, and the amount so paid by
Landlord and all costs and expenses,
including reasonable attorneys fees
incurred by Landlord in procuring the
discharge of such lien, shall be due and
payable by Tenant to Landlord as
additional Rent on the first day of the
next following month.
4.07
REMOVAL BY TENANT. All improvements to the Leased Premises made
by
Tenant shall become the property of
Landlord upon installation thereof, and
shall then be considered as part of the
Leased Premises except that any signs,
trade fixtures (including Tenant's
installed cooling tower and pump), trade
equipment, appliances, furniture and other
personal property of any nature
installed in the Leased Premises at any
time by Tenant and any replacement
thereof by Tenant shall not become a part
of the Leased Premises but shall
retain their status as personality and
shall remain the property of Tenant and
portions thereof may be removed from the
Leased Premises at any time and from
time to time by Tenant during the term of
this Lease, providing the same shall
be immediately replaced by comparable
property unless the unreplaced removal of
reasonable portions thereof does not hinder
or interfere with the continuity of
the conduct of the Tenant's business in the
Leased Premises during the Term, and
providing Tenant repairs any, damage to the
Leased Premises by any such removal.
Landlord shall be entitled to take all
depreciation on the building and real
estate fixtures and improvements,
allowable, under the income tax laws; and, the
Tenant shall likewise be entitled to take
all investment tax credit for personal
property purchased for the building on the
Leased Premises, allowable under the
income tax laws, corresponding to its
expenditures therefor. Landlord shall have
the option of requiring Tenant to remove
any improvement or fixture (except
Tenant Wiring described in Section 4.01
above) at the end of the Term and in
such event Tenant shall restore the Leased
Premises to the condition existing
prior to installation, unless otherwise
agreed by Landlord at the time of
consent for installation of said
improvements.
4.08
PARKING. The Leased Premises contains 155 parking spaces. Subject
to
issuance of appropriate permits and
Landlord's written approval, which approval
shall not be unreasonably withheld or
delayed, of plans for installation of
additional parking spaces, Tenant shall
have the right, during the Term, if
Tenant is not in default, at Tenant's own
expense, to
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construct additional parking spaces in
accordance with the plans approved by
Landlord and all applicable laws and
ordinances.
ARTICLE V
INSURANCE AND INDEMNIFICATION
Commencing
on the Rent Commencement Date and during the entire Lease Term,
Tenant shall obtain the following insurance
with respect to the Leased Premises.
5.01
LIABILITY INSURANCE. Tenant shall, during the Term, keep in
full
force and effect policies of commercial
general liability, insurance (including
premises, operation, bodily injury,
personal injury, death, independent
contractors, products and completed
operations, broad form contractual liability
and broad form property damage coverage),
in an amount of One Million Dollars
($1,000,000.00), per occurrence and excess
liability (umbrella) with limits of
not less than Five Million Dollars
($5,000,000.00), per occurrence (exclusive of
defense costs), against all claims, demands
or actions with respect to damage,
injury or death made by or on behalf of any
person or entity, arising from or
relating to the conduct and operation of
Tenant's business in, on or about the
Leased Premises (which shall include
Tenant's signs, if any), or arising from or
related to any act or omission of Tenant or
of Tenant's principals, officers,
agents, contractors, servants, employees,
licensees and invitees. Whenever, in
commercially reasonable judgment, good
business practice and changing conditions
indicate a need for additional amounts or
different types of insurance coverage,
Tenant shall, within sixty (60) days after
Landlord's request, obtain such
insurance coverage, at Tenant's sole cost
and expense.
5.02
PROPERTY INSURANCE. Tenant shall keep the buildings and all
other
improvements located on the Leased Premises
insured against loss or damage by
fire, windstorm, hail, explosion, and smoke
damage and such other risks as are
from time to time covered under "extended
coverage" endorsements and special
extended coverage endorsements commonly
known as "all risks" endorsements in an
amount equal to the full replacement cost
thereof (exclusive of the cost of
excavation, foundations and footings)
without co-insurance penalty, containing a
deductible provision not in excess of
$5,000.00, with a change of conditions
provision, and flood insurance if the
Leased Premises are in a special flood
hazard area, so designated pursuant to the
Flood Disaster Protection Act of
1973, as amended, and requiring such
insurance if a regulated lender were to
make a loan secured thereby.
5.03
WORKER'S COMPENSATION. Commencing on the Rent Commencement
Date,
Tenant shall obtain and maintain policies
of workers' compensation and
employers' liability insurance, which shall
provide for statutory workers'
compensation benefits and employers'
liability limits of not less than that
required by law.
5.04
PERSONAL PROPERTY. Commencing on the Rent Commencement Date,
Tenant
shall obtain and maintain insurance
protecting and indemnifying Tenant against
any and all damage to or loss of any
personal property, fixtures, leasehold
improvements, alterations, decorations,
installations, repairs, additions,
replacements or other physical changes in
or about
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the Leased Premises, including but not
limited to the Tenant Improvements, and
all claims and liabilities relating
thereto, for their full replacement value
without deduction or depreciation. In
addition, if Tenant shall install or
maintain one or more pressure vessels to
serve Tenant's operations on the Leased
Premises, Tenant shall, at Tenant's sole
cost and expense, obtain, maintain and
keep in full force and effect appropriate
boiler or other insurance coverage
therefore in an amount not less than One
Million and No/100 Dollars
($1,000,000.00) (it being understood and
agreed, however, that the foregoing
shall not be deemed a consent by Landlord
to the installation and/or maintenance
of any such pressure vessels in the Leased
Premises, which installation and/or
maintenance shall at all times be subject
to the prior written consent of
Landlord). All insurance policies required
pursuant to this Section 5.04 shall
be written on a so-called "all risk" form
and shall be carried in sufficient
amount so as to avoid the imposition of any
co-insurance penalty in the event of
a loss. Such insurance shall provide the
broadest coverage then available,
including coverage for loss of profits or
business income or reimbursement for
extra expense incurred as the result of
damage or destruction to all or a part
of the Leased Premises.
5.05
BUSINESS INTERRUPTION INSURANCE. Tenant shall provide business
interruption insurance during the Term.
5.07
POLICIES. Such insurance shall be carried with a financially
responsible insurance company or companies
reasonably satisfactory to Landlord
(if the insurer A.M. Best Rating is A minus
or better is will be satisfactory),
and may be carried under a policy or
policies covering other property owned or
controlled by Tenant, provided that such
policy or policies allocate to the
property required to be insured by this
Article an amount not less than the
amount of insurance required to be carried
by Tenant with respect thereto
pursuant to this Article. Tenant shall
furnish to Landlord such evidence as
Landlord may require that the insurance
referred to in this Article is in full
force and effect and that the premiums
therefor have been paid, and all rental
policies or certificates of insurance shall
be delivered to Landlord not less
than thirty (30) days prior to the date of
expiration of the then existing
policy. Tenant agrees that such policies
shall contain a provision that the same
may not be cancelled without at l
