LEASE AGREEMENT
1195 OAK VALLEY
DRIVE
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 1263 Crosby Crescent, Ann Arbor,
Michigan, 48103 as Lessor, and FAAC Incorporated ,
a Michigan Corporation, the current address of which is 1229 Oak
Valley Drive, Ann Arbor, Michigan, 48108, 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 1195 Oak .
Valley Drive 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 bill 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
bill or assessment bill 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
bill 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
