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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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(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
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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 least thirty (30) days prior
written notice
being giv
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