LEASE AGREEMENT VALLEY RANCH BUSINESS PARK

 

 

 

                                                                   Exhibit 10.87

 

 

                                 LEASE AGREEMENT

 

                           VALLEY RANCH BUSINESS PARK

                               Ann Arbor, Michigan

 

THIS   LEASE   is made   as of the   8th day of   April,   1997,   by and   between   AMR

HOLDINGS, L.L.C., a Michigan limited liability corporation, the address of which

is 1174 Oak Valley Drive,   Ann Arbor,   Michigan,   as Lessor,   and FAAC Corp.,   a

Michigan   corporation,   the   current   address of which is 825 Victors   Way,   Ann

Arbor, Michigan, as Lessee.

 

IN CONSIDERATION OF the rents to be paid and the mutual covenants,   promises and

agreements herein set forth, Lessor and Lessee agree as follows:

 

LESSOR hereby   leases unto Lessee Lot 9 situated in the Township of   Pittsfield,

County of   Washtenaw,   State of Michigan,   in a single   story   office/industrial

building   located   at   Valley   Ranch   Business   Park   (the   "Building"),    which

development is shown on the site plan marked Exhibit "A".

 

TO HAVE AND TO HOLD for a term of   Eighty   Four (84)   months   from and after the

commencement of the term as hereinafter provided.

 

 

                                    SECTION 1

                            Construction of Building

 

Section 1.01: Lessor agrees, prior to commencement of the term of this Lease, to

complete   construction   of the Leased   Premises and related   improvements on the

site in accordance with the plans enumerated on Exhibit "C", attached hereto and

made a part   hereof,   which   shall be deemed   part of the   Building   referred to

above.   The Leased   Premises shall consist of an exterior   approximately   13,704

square   feet on one (1) floor.   No minor   change   from such   plans   which may be

necessary during construction shall affect, change, or invalidate this Lease. If

Lessor   shall be in good faith   delayed in   construction   by any labor   dispute,

strike, lockout, fire,   unavailability of material,   weather, or casualty or any

other cause beyond its reasonable control,   then the period of delay necessarily

caused thereby shall be added to the time limit provided for such construction.

 

SECTION 2 Possession and Commencement of Term

 

Section 2.01: Except as herein provided,   Lessor shall deliver possession of the

Leased   Premises to Lessee on or before   December 1, 1997.   The Leased   Premises

shall   be   deemed    ready   for   Lessee's    occupancy    when   Lessor   shall   have

substantially   completed   construction of said Leased   Premises   pursuant to the

plans on Exhibit "A" and receive a temporary   Certificate   of Occupancy from the

Township of Pittsfield.   By occupying the Leased Premises, Lessee will be deemed

to have   accepted   the Leased   Premises   and   acknowledged   that they are in the

condition called for hereunder.   Upon occupying the Leased Premises,   the Lessee

will provide the Lessor with a completed punchlist. The Lessor will complete the

items not completed   according to the term hereunder,   in no later than 30 days.

The rentals   herein   reserved   and the term of this Lease shall   commence on the

date when the premises are   delivered   to Lessee as required   hereunder.   Lessor

will require its contractors to cooperate with Lessee's   installers of equipment

trade   fixtures,   furnishings,   and   decorations   attached   to the   real   estate

improvements to the maximum extent possible,   but delay of or interference   with

construction   caused by such installers   shall not postpone the   commencement of

the term or the obligation to commence paying rent.

 

Section   2.02:   In the event Lessor fails to deliver the Leased   Premises on the

commencement   date because the Leased Premises are not then ready for occupancy,

or because the previous occupant of said Leased Premises is holding over, or for

any other cause whatsoever, except as provided in Section 1.01, Lessor shall not

be liable to Lessee for   damages,   as a result of Lessor's   delay in   delivering

such promises,   and Lessee shall have no right to terminate the Lease or contest

the   validity of the Lease,   and the   commencement   date of the _Lease   shall be

postponed   until   such   time as the   leased   premises   are   ready   for   Lessee's

occupancy, and the termination date of this Lease shall be extended for a period

equivalent to the period of such postponement, provided such postponed

 

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termination   date shall occur on the last day of a calendar   month; if not, then

such termination date shall be extended by an additional period so as to fall on

the last day of such calendar month in which it would otherwise occur.

Section 2.03: On the   commencement   date, or within fifteen (15) days thereafter

upon request by Lessor, Lessee shall execute a written instrument confirming the

commencement   date and the termination   date of the Lease,   that the Lease is in

full force and effect,   the rent is paid currently without any offset or defense

thereto,   the amount of rent,   if any,   paid in   advance,   and that there are no

uncured defaults by Lessor,   or stating those claimed by Lessee,   provided that,

such facts are accurate and ascertainable.

 

                                    SECTION 3

                                  Basic Rental

 

Section 3.01: In consideration of the leasing aforesaid, Lessee hereby covenants

and agrees to pay   Lessor,   at such place as Lessor may   hereafter   from time to

time designate in writing,   a minimum net rental   payable   monthly in advance on

the first day of each and every month in equal monthly   installments as follows:

Months 1 - 84 = $12.48 per square foot NNN, or   $14,252.16   per month Receipt of

Seven Thousand and 00/xx ($7,000.00) Dollars, representing a Security Deposit is

hereby   acknowledged.   The rental payments shall be made by Lessee at the office

of Lessor   without any prior   demand.   therefore   and without any   deductions or

set-offs whatsoever.

 

Section 3.02:   Lessor and Lessee intend that the minimum net rental shall be net

to Lessor,   so that this Lease shall   yield,   net, to Lessor,   not less than the

minimum net rent specified in Section 3.01 hereof during the term of this Lease,

and that all costs,   expenses,   and charges of every kind and nature relating to

the Leased Premises which may be attributable   to, or become due during the term

of this Lease, shall be paid by Lessee, and that Lessor shall be indemnified and

held harmless by Lessee from and against the same.   Provided,   however,   that if

the Lease   term shall   commence   on a day other than the first day of a calendar

month, then the rental for such month shall be prorated upon a daily basis based

upon a thirty (30) day calendar month.

 

                                    SECTION 4

                        Taxes, Assessments and Utilities

 

Section 4.01: Lessee agrees to pay Lessor its   proportionate   share of all taxes

and   assessments   which   have been or may be levied or   assessed   by any   lawful

authority,   for any calendar   year during the term hereof,   against the land and

Leased   Premises   presently   and/or at any time   during   the term of this   Lease

comprising   the   Building.   Lessee's   proportionate   share shall be equal to the

product   obtained by multiplying   such taxes and assessments by a fraction,   the

numerator   of which   shall be the   number   of square   feet of floor   area in the

Leased   Premises,   and the   denominator   of which   shall be the total   number of

square feet of constructed   leasable floor area in the Building.   Any tax and/or

assessment of any kind or nature presently or hereafter   imposed by the State of

Michigan or any   political   subdivision   thereof or any   governmental   authority

having   jurisdiction   there over upon,   against or with   respect to the   rentals

payable by tenants in the Building to Lessor or on the income of Lessor   derived

from the   Building   or with   respect   to the   Lessor's,   or the   individuals   or

entities   which   form the Lessor   herein,   ownership   of the land and   buildings

presently   and/or   at any time   during   the term of this   Lease   comprising   the

Building,   either   by way of   substitution   for all or any part of the taxes and

assessments   levied or assessed   against such land and such buildings,   shall be

deemed   to   constitute   a tax   and/or   assessment   against   such   land   and such

buildings for the purpose of this Section,   and Lessee shall be obligated to pay

its proportionate   share thereof as provided herein.   In addition,   Lessee shall

also be obligated to pay any sales tax imposed by any governmental   authority on

the payments by Lessee or on the receipt by Lessor of any and all payments   from

Lessee.   If the sales tax is   separately   assessed,   then Lessee   shall pay that

amount   imposed on the   individual   payments of Lessee;   if the sales tax is not

separately   assessed,   the Lessee shall pay its   proportionate   share monthly as

provided herein.

 

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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.   Lessors and Lessee's obligations under this

Section shall survive the expiration of the term of this Lease.

 

Section   4.03:   Lessee also agrees to pay all   charges   made   against the Leased

Premises for gas, heat, electricity,   and all other utilities separately metered

during the continuance of this Lease as the same shall become due.

 

Section 4.04: In the event any or all of the foregoing   utilities are to be paid

from an escrowed   fund   required to be   established   by Lessor or its   financial

institution under the terms of any financing, the Lessor shall notify Lessee and

Lessee   shall be   required   to   include   with the   additional   monthly   payments

referred to in Section 4.02 a monthly   amount to satisfy the   estimated   monthly

utility costs.   If the utilities,   when due, exceed the total amount then in the

utility   escrow,   then the Lessee   shall,   upon demand,   pay any   deficiency   to

Lessor.   If such   payments   by Lessee,   over the term of the   Lease,   exceed the

amount of   utilities   paid from the   escrow,   such   excess   shall be refunded by

Lessor to Lessee at the   expiration   of the Lease   term,   or when such excess is

refunded by the financial   institution to Lessor,   whichever   first occurs.   The

utility   escrow shall be adjusted as often as   necessary   to provide   sufficient

funds to pay current utilities.

 

                                    SECTION 5

                                 Use of Premises

 

Section 5.01: It is understood and agreed   between the parties,   that the Leased

Premises,   during the continuance of this Lease,   shall be used and occupied for

office, research and storage use only and for no other purpose without the prior

written   consent of   Lessor.   Lessee   agrees   that it will not use or permit any

person to use the Leased   Premises or any part thereof for any use or purpose in

violation   of the   laws   of the   United   States,   the   State   of   Michigan,   the

ordinances   or other   regulations   of the Township of Pittsfield or of any other

lawful   authorities.   During the original term or any extended   term, the Lessee

will keep the Leased   Premises and every part   thereof and the area   adjacent to

the Leased Premises   (including service areas),   orderly,   neat, safe, and clean

and free from rubbish and dirt, and at all times shall store all trash, garbage,

or any other material solely within the leased premises and Lessor shall arrange

for the regular   pickup of such trash and garbage at   Lessee's   expense.   Lessee

shall not bum any trash or   garbage   at any time in or about   the   building.   If

Lessor shall   provided any services or facilities   for such pickup,   then Lessee

shall be   obligated to use the same and shall pay a   proportionate   share of the

actual cost   thereof   within ten (10) days after being billed   therefor.   Lessee

shall not store or leave any material   outside of the building at any time.   All

signs and   advertising   displayed in and about the Leased Premises shall be such

 

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only as to   advertise   the   business   carried on upon the Leased   Premises,   and

Lessor shall control the location,   character,   and size thereof. No signs shall

be displayed except as approved in writing by the Lessor, and no awning shall be

installed or used on the exterior of said building unless approved in writing by

the Lessor.

 

                                    SECTION 6

                    Operation and Maintenance of Common Areas

 

Section 6.01: Lessor agrees, at Lessors sole cost and expense,   to construct the

building and hard surface,   to properly   drain,   landscape,   and light a parking

area or parking areas, all substantially as shown on Exhibit "A". Lessor further

agrees to cause to be operated,   managed, and maintained during the term of this

Lease, all parking areas, roads,   sidewalks,   landscaping,   drainage, and common

area lighting   facilities   in the   Building.   The manner in which such areas and

facilities   shall be maintained and operated,   and the   expenditures   therefore,

shall be at the sole   discretion   of the   Lessor,   and the use of such areas and

facilities shall be subject to such reasonable   regulations as Lessor shall make

from time to time.

 

Section 6.02: Lessee agrees to pay to Lessor in the manner hereinafter provided,

but not more often than once each   month,   Lessee's   proportionate   share of all

costs and   expenses   of every   kind and   nature   paid or   incurred   by Lessor in

operating,   equipping,   policing and protecting,   lighting, insuring, repairing,

replacing,   and   maintaining   the common areas of the   Building.   Such costs and

expenses shall include,   but not be limited to,   illumination and maintenance of

the Building signs, cleaning, lighting, line painting and landscaping,   premiums

liability and property insurance.   Any utilities furnished or supplied to common

areas of the Building   which are not   separately   metered   shall be considered a

cost to   maintain   the common   areas and shall be included as part of such cost.

For the purpose   hereof,   any charges for   utilities   contained in the foregoing

costs   and   expenses   shall be at the same   rates as the   rates   for   comparable

service   from the   applicable   utility   company   serving   the area in which   the

Building   is   located.   The   proportionate   share to be paid by Lessee   shall be

computed on the basis that the total   number of square feet of floor area in the

Leased Premises bears to the total number of square feet of the Building. .

Lessee's   proportionate share of such costs and expenses for each lease year and

partial   lease year shall be paid in   monthly   installments   on the first day of

each month, in advance,   in an amount established by Lessor.   Within one hundred

eighty (180) days after the end of each lease year or partial lease year, Lessor

shall   furnish   Lessee   with   a   statement   of the   actual   amount   of   Lessee's

proportionate   share of such costs and expenses   for such   period.   If the total

amount paid by Lessee   under this   Section for any   calendar   year shall be less

than the actual amount due from Lessee for such year as shown on such statement,

Lessee shall pay to lessor the difference   between the amount paid by Lessee and

the actual amount due, such   deficiency to be paid within thirty (30) days after

the   furnishing of each such   statement,   and if the total amount paid by Lessee

hereunder   for any such   calendar   year shall exceed such actual amount due from

Lessee for such   calendar   year,   such   excess   shall be   credited   against   the

installment due from Lessee to Lessor under this Section 6.02.

 

                                    SECTION 7

                   Maintenance and Repairs of Leased Premises

 

Section 7.01: Lessor shall keep and maintain the foundation, exterior walls, and

roof of the Building in which the Leased Premises are located and the structural

portions   of the Leased   Premises   which were   originally   installed   by Lessor,

exclusive of door, door frames,   door checks,   windows,   and exclusive of window

frames located in exterior   building walls,   in good repair,   except that Lessor

shall   not be   called   upon to make any such   repairs   occasioned   by the act or

negligence   of   Lessee,   its   agents,    employees,    invitees,    licensees,    or

contractors,   except to the extent that Lessor is reimbursed therefore under any

policy of insurance   permitting waiver of subrogation in advance of loss. Lessor

shall not be called upon to make any other   improvements   or repairs of any kind

upon said premises and appurtenances, except as may be required under Section 11

and 12 hereof.

 

Section   7.02:   Except as provided in Section   7.01 of this Lease,   Lessee shall

keep and maintain in good order,   condition and repair (including replacement of

parts and equipment if necessary) the Leased Premises and every part thereof and

any and all   appurtenances   thereto   wherever   located,   including,   but without

 

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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.AC. 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 marshall, 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 t