NET LEASE
This Lease is made as of August 11, 1999, by and between XXXX XXXXXXXXX,
whose address is X.X. Xxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
("Landlord"), and SPEEDRING SYSTEMS, INC. , a Delaware corporation, whose
address is 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx 00000 ("Tenant"), who
agree as follows:
A. Landlord and Tenant entered into a lease dated February 1, 1999 with
respect to the subject premises. Landlord and Tenant have agreed to terminate
said lease and to substitute, therefore, the following:
SECTION 1
THE PREMISES
1.01 Landlord hereby leases to Tenant the real property located in the
City of Rochester Hills, County of Oakland, and State of Michigan, more
particularly described in Exhibit "A" attached to, and made an integral part of,
this Lease (the "Land"), together with the buildings and other improvements on
the Land, (the "Improvements")(the Land and the Improvements collectively will
constitute and be referred to in this Lease as the "Premises"), more commonly
known as 0000 Xxxxxxxxx Xxxxx.
SECTION 2
CONSTRUCTION OF IMPROVEMENTS
THIS SECTION HAS BEEN INTENTIONALLY DELETED
SECTION 3
THE TERM
3.01 The Term will commence (the "Commencement Date") on the later
of (i) February 1, 2000 or (ii) the date Tenant takes possession of the
Premises.
The Term will be 36 months, from and after the Commencement Date. If
the Commencement Date is other than the first day of the calendar month the term
will be extended to terminate at the end of the calendar month in which it would
otherwise terminate under the preceding sentence.
3.02 If Landlord is unable, for any reason, to tender possession on
or before the Commencement Date, Tenant may not terminate this Lease, and
Landlord will have no liability for damages provided however, rent shall not be
paid as provided in Section 4.01 until possession of 0000 Xxxxxxxxx Xxxxx is
tendered.
3.03 Tenant will inspect the Premises at 0000 Xxxxxxxxx Xxxxx prior
to occupancy to assure that the facilities and equipment are in good condition
and Landlord will agree to repair facilities or equipment reasonably identified
as substandard. Landlord shall not be required to replace the carpeting or to
repaint provided the walls and floors are in good condition reasonable wear and
tear excepted.
3.04 If Landlord permits Tenant to enter into possession of the
Premises, prior to the Commencement Date, Tenant agrees that such occupancy will
be deemed to be under all the provisions of this Lease, including but not
limited to the rental established therein.
3.05 Upon request by Landlord, Tenant will execute a written
instrument confirming the Commencement Date and the expiration date of the Term.
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SECTION 4
THE BASE RENT
4.01 Tenant agrees to pay to Landlord, as minimum net rental for the
original Term of this Lease, the total amount of Five Hundred Fifty Eight
Thousand ($558,000.00) Dollars in monthly installments of Fifteen Thousand Five
Hundred ($15,500.00) Dollars:
4.02 Each monthly installment of minimum net rental will be paid in
advance without any setoffs or deductions, on the first day of each and every
month (the "Rent Day") during the Term, at the office of the Landlord at the
address first shown above, or at such other place as Landlord from time to time
may designate in writing. In the event the Commencement Date is other than the
first day of a calendar month, the rental for the partial first calendar month
of the Term will be prorated accordingly.
4.03 THIS SECTION INTENTIONALLY DELETED
SECTION 5
LATE CHARGES AND INTEREST
5.01 Any rent or other sums, if any, payable by Tenant to Landlord under
this Lease which are not paid within ten (10) days after they are due, and any
rent or other sums received and accepted by Landlord more than ten (10) days
after they are due, will be subject to a late charge of five (5%) percent of the
amount due. Such late charges will be due and payable as additional rent on or
before the next Rent Day.
5.02 Any rent, late charges or other sums payable by Tenant to Landlord
under this Lease not paid within thirty (30) days after the same are due will
bear interest at a per annum rate equal to the greater of eleven (11%) percent
or four percentage points above the effective prime interest rate per annum
charged by Comerica Bank to its best commercial customers on the date when the
rent, late charges or other sums became due, but not in excess of the maximum
interest rate permitted by law. Such interest will be due and payable as
additional rent on or before the next Rent Day, and will accrue from the date
that such rent, late charges or other sums are payable under the provisions of
this Lease until actually paid by Tenant.
5.03 Any default in the payment of rent, late charges or other sums will
not be considered cured unless and until the late charges and interest due
hereunder are paid by Tenant to Landlord. If Tenant defaults in paying such late
charges and/or interest, Landlord will have the same remedies as on default in
the payment of rent. The obligation hereunder to pay late charges and interest
will exist in addition to, and not in the place of, the other default provisions
of this Lease.
SECTION 6
TAXES, ASSESSMENTS AND UTILITIES
6.01 Tenant agrees to pay as additional rent for the Premises all taxes
and assessments, general and special, all water rates and all other governmental
impositions which may be levied on the Premises or any part thereof, or on any
building or improvements at any time situated thereon, during or pertaining to
the Term and any extensions thereof. All such taxes, assessments, water rates
and other impositions will be paid by Tenant before they become delinquent. The
property taxes and assessments for the first and last years of the Term or any
extension thereof, will be prorated between Landlord and Tenant so that Tenant
will be responsible for any such tax or assessment attributable to the period
during which Tenant has possession of the Premises.
The so-called "due-date" method of proration will be used, it being
presumed that taxes and assessments are payable in advance. In the event that
during the Term or any extension
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thereof (I) the real property taxes levied or assessed against the Premises are
reduced or eliminated, whether the cause is a judicial determination of
unconstitutionality, a change in the nature of the taxes imposed or otherwise,
and (ii) there is levied, assessed or otherwise imposed on the Landlord, in
substitution for all or part of the tax thus reduced or eliminated, a tax (the
"Substitute Tax") which imposes a burden upon Landlord by reason of its
ownership of the Premises, then to the extent of such burden the Substitute Tax
will be deemed a real estate tax for purposes of this paragraph.
6.02 Tenant agrees to pay all charges made against the Premises for gas,
heat, electricity and all other utilities as and when due during the continuance
of this Lease.
6.03 In the event that payment of any or all of the foregoing taxes,
assessments and utilities are to be made from an escrowed fund required to be
established by Landlord as Mortgagor under the terms of any first mortgage on
the Premises, then Landlord will so notify Tenant. Tenant will not be required
to pay directly such taxes, assessments and utilities as are paid from the
escrowed fund, but will instead, as additional rent, pay to Landlord on the
first day of each month of the Term an amount equal to the amount required to be
paid by Landlord under the terms of such first mortgage to the escrowed fund on
account of such charges. If the actual taxes, assessments and utilities, when
due, exceed the total amounts from time to time paid therefor by Tenant, then
Tenant will pay on demand any deficiency to Landlord. If such payments by
Tenant, over the Term, exceed the amount of taxes; assessments and utilities
paid therefrom, such excess will be refunded by Landlord to Tenant promptly.
6.04 Tenant also agrees to pay as additional rent for the Premises all
dues and assessments levied against or in regard to the Premises by Rochester
Hills Corporate Center Subdivision Association until the termination of the Term
and of any extended term of this Lease. Tenant will pay all such dues and
assessments before they become delinquent. Such dues and assessments which
relate to specific periods of time which periods include the Commencement Date
and/or the termination date of this Lease or any extension thereof, will be
prorated between Landlord and Tenant so that Tenant will be responsible for any
such dues and assessments attributable to the period during which Tenant has
possession of the Premises.
6.05 Tenant, at its expense, may contest, by appropriate legal proceedings
conducted in good faith and with due diligence, the amount or validity or
application, in whole or in part, of any tax, assessment, imposition or any
legal requirements applicable to the Premises or any lien, encumbrance or
charge, provided that (a) in the case of an unpaid tax, assessment, imposition,
lien, encumbrance or charge, the commencement of such proceedings shall suspend
the collection thereof from Landlord and from the Premises, (b) neither the
Lease Property nor any rent therefrom nor any part thereof or interest therein
would be in any immediate danger of being sold, forfeited, attached or lost, (c)
in the case of a legal requirement applicable to the Premises, Landlord would
not be in any immediate danger of civil or criminal liability for failure to
comply therewith pending the outcome of such proceedings, (d) in the case of an
insurance requirement, the coverage required by Section 8 shall be maintained,
(e) if such contest be finally resolved against Tenant, Tenant shall promptly
pay the amount required to be paid, together with all interest and penalties
accrued thereon, or comply with the applicable legal requirement or insurance
requirement, and (f) no default shall exist hereunder: Landlord, at Tenant's
expense, shall execute and deliver to Tenant such authorizations and other
documents as may reasonably be required in any such contest, and, if reasonably
requested by Tenant, Landlord shall join as a party therein. Tenant shall
indemnify and save Landlord harmless against any cost or expense of any kind
that may be imposed upon Landlord in connection with any such contest any loss
resulting therefrom.
6.06 Landlord shall give prompt notice to Tenant of all taxes, assessments
or impositions payable by Tenant hereunder of which Landlord at any time has
knowledge, but Landlord's failure to give any such notice shall in no way
diminish Tenant's obligations hereunder.
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SECTION 7
USE OF PREMISES
7.01 The Premises during the continuance of this Lease will be used and
occupied for office, engineering, light manufacturing, sales, distribution, and
warehouse uses including, the manufacture of optical scanners and air bearings.
Tenant agrees that it will not use or permit any person to use the Premises or
any part thereof for any use or purposes in violation of the laws of the United
States, the laws, ordinances or other regulations of the State and municipality
in which the Premises are located, or of any other lawful authorities, or the
Declaration of Covenants and Restrictions, dated July 9, 1987, recorded in
Oakland County records (a copy of which is attached hereto as Exhibit "B"), to
which Declaration this Lease is hereby expressly made subject. During the Term
or any extended term, Tenant will keep the Premises and every part thereof and
all buildings at any time situated thereon generally in compliance with all
lawful health and policy regulations. All signs and advertising displayed in'
and about the Premises will be such only as to advertise the business carried on
upon the Premises and Landlord will control the location, character and size
thereof. No signs will be displayed except as approved in writing by Landlord,
which approval shall not be unreasonably withheld or delayed and no awning will
be installed or used on the exterior of the building unless approved in writing
by Landlord.
SECTION 8
INSURANCE
(LANDLORD TO OBTAIN)
THIS SECTION INTENTIONALLY DELETED
INSURANCE
(TENANT TO OBTAIN)
8.01 Tenant, at its sole expense, will obtain and maintain at all times
until termination of this Lease and surrender of the Premises to Landlord, a
primary policy of insurance covering the Premises and providing the insurance
protection described in this Section 8.
8.02 The liability coverage under the primary policy will name Landlord
and Landlord's mortgagee as additional insured parties, and will provide
comprehensive general public liability insurance coverage against claims for or
arising out of bodily injury, death or property damage, occurring in, on or
about the Premises or property in, on or about the streets, sidewalks or
properties adjacent to the Premises. The limits of coverage will be, if dual
limits are provided, initially, not less than Two Million ($2,000,000.00)
Dollars with respect to injury or death of a single person, not less than Two
Million ($2,000,000.00) Dollars with respect to any one occurrence and not less
than One Million ($1,000,000.00) Dollars with respect to any one occurrence of
property damage, or, in the alternative, a single limit policy in the amount of
Two Million ($2,000,000.00) Dollars, and thereafter in such reasonably
appropriate increased amounts as may be determined by Landlord or Landlord's
mortgagee; provided, however, that the amount of coverage will not be increased
more frequently than at one (1) year intervals. The policy will contain
cross-liability endorsements.
8.03 The primary policy will insure the Improvements, as defined in
Section 1.01 hereof (but not any personal property, fixtures or equipment of
Tenant), for full replacement cost against loss by fire, with standard extended
risk coverage, vandalism, malicious mischief, sprinkler leakage and all other
risk perils. The named insureds will be Landlord and Landlord's mortgagee, only.
The initial amount of this insurance will be: One Million, Eight Hundred and
Fifty Thousand ($1,850,000.00) 00/100 Dollars, but such amount may be increased
upon notice to Tenant on the recommendation or requirement of Landlord or
Landlord's mortgagee, in order to reflect increases in the replacement cost of
the Improvements.
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8.04 The primary policy also will provide loss of rents coverage
sufficient, as reasonably determined by Landlord, to cover the net rental and
all other charges which are the obligation of Tenant under this Lease for a
12-month period from the date of any loss or casualty.
8.05 The insurance policy or policies to be provided by Tenant hereunder
shall be issued by an insurance company or companies having an A.M. Best Company
rating of not less than "A". Each policy procured by Tenant under this Section 8
must provide for at least thirty (30) days' written notice to Landlord of any
cancellation. At Landlord's option, either certificates of insurance or the
original policy or policies will be delivered by Tenant to Landlord prior to the
effective date thereof, together with receipts evidencing payment of the
premiums therefor. Tenant will deliver certificates of renewal for such policies
to Landlord at least thirty (30) days prior to the expiration dates thereof. The
insurance provided by Tenant under this Section 8 may be in the form of a
blanket insurance policy covering other properties as well as the Premises;
provided, however, that any such policy or policies of blanket insurance (I)
must specify therein, or Tenant must furnish Landlord with a written statement
from the insurers under such policy or policies specifying, the amount of the
total insurance allocated to the Premises, which amounts will not be less than
the amounts required by Subsections 8.02, 8.03 and 8.04 hereof, and (ii) such
amounts so specified must be sufficient to prevent Landlord or Landlord's
mortgagee from becoming a co-insurer within the terms of the applicable policy
or policies, and provided further, however, that any such policy or policies of
blanket insurance must, as to the Premises, otherwise comply as to endorsements
and coverage with the other provisions of this Section 8.
8.06 Except with respect to the insurance required by Subsections 8.02,
neither Landlord nor Tenant may take out separate insurance concurrent in form
or contributing in the event of loss with that required under this Section 8
unless Landlord and Tenant are included therein as the insured payable as
provided in this Lease. Each party will notify the other immediately of the
placing of any such separate insurance.
8.07 If Tenant fails to provide all or any of the insurance required by
this Section 8, or subsequently fails to maintain such insurance in accordance
with the requirements of this Section, Landlord may (but will not be required
to) procure or renew such insurance, and any amounts paid by Landlord for such
insurance will be additional rental due and payable on or before the next Rent
Day, together with late charges and interest as provided in Section 5.
8.08 In the event of loss under any policy or policies provided by Tenant
to Landlord under this Section 8, other than the liability policy required by
Subsection 8.02, the insurance proceeds will be payable to Landlord or
Landlord's mortgagee; thereafter, such proceeds, with the exception of the loss
of rents insurance proceeds, will be used for the expense of repairing or
rebuilding the Improvements which have been damaged or destroyed if Landlord and
its mortgagee are satisfied that the amount of insurance proceeds are and will
be at all times sufficient to pay for the completion of the repairs or
rebuilding.
8.09 Landlord's mortgagee under any first mortgage on the Premises at any
time requires, pursuant to the terms of the mortgage, that payment of insurance
premiums be made from an escrowed fund, then Landlord will so notify Tenant. In
such event, Tenant will not directly pay the insurance premiums, but instead
such excess is refunded by the mortgagee to Landlord, whichever occurs first.
SECTION 9
DAMAGE BY FIRE OR OTHER CASUALTY
9.01 It is understood and agreed that if the building is damaged or
destroyed in whole or in part by fire or other casualty during the term, the
Landlord shall have the right to demolish or to repair and restore the damaged
building. If the Landlord elects not to repair and restore the damaged building,
Landlord may cancel this Lease within 30 days after such fire or other casualty
by giving Tenant notice of Landlord's intention to so do. The Lease shall
terminate, 60 days after such cancellation notice to Tenant. If Landlord elects
to repair and restore the damaged building the rent and all other charges which
are the obligation of Tenant under this Lease will xxxxx for the period the
building is untenable. Notwithstanding anything to the
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contrary, if in the reasonable opinion of the Landlord and/or Tenant the
premises cannot be or are in fact are not restored to its prior condition within
six months after the date of such casualty than either party shall have the
option to terminate this Lease as to the building which was subject to such fire
or other casualty; provided, however, that if Tenant shall fail to adjust its
own insurance or remove its damaged property and equipment within a reasonable
time and as a result thereof the repair and restoration is delayed, the
aforesaid 6-month period shall be extended for an additional period equal to the
delay.
9.02 If Tenant has elected, under Alternate Section 8, to carry its own
insurance, and the insurance proceeds therefrom are insufficient, in Landlord's
judgment, to cover the cost of repairing and restoring the Premises to good
tenantable condition, Tenant will deposit with Landlord or the mortgagee of any
first mortgage on the Premises the amount by which such proceeds are
insufficient and Landlord thereupon will proceed with such repairs and
restoration; if Tenant fails to make such a deposit, Landlord will be under no
obligation to make such repairs or undertake such restoration, or to use any
portion of the insurance proceeds for such restoration and repair, but Tenant
will not thereby be relieved of its obligations to repair and restore the
Premises to good tenantable condition.
9.03 Tenant will have the option, exercisable by written notice to
Landlord upon restoration of the Premises, to extend the original Term of this
Lease (or the extension of the Term during which the damage or destruction
occurred, as the case may be) for a period equal to the period, if any, during
which Tenant was deprived of the use of all or a significant portion of the
Premises by reason of such damage or destruction. Tenant's option must be
exercised within twenty (20) days following completion of the work of
restoration and repair.
SECTION 10
REPAIRS
10.01 Except as otherwise provided in this Section 10, Tenant agrees at
its own expense to keep the Improvements, including all structural, electrical,
mechanical and plumbing systems at all times in good appearance and repair
except for reasonable and normal wear and tear. Tenant will also pay all other
expenses in connection with the maintenance of the Premises including repair and
upkeep of grounds, sidewalks, driveways and parking areas in a first class
condition.
10.02 Notwithstanding any other provision of this Lease, from and after
the date Tenant takes occupancy of the Premises any repairs, additions or
alterations to the improvements or any of its systems (e.g., plumbing,
electrical, mechanical) structural or non-structural, which are required by any
law, statute, ordinance, rule, regulation or governmental authority or insurance
carrier, including, without limitation, OSHA, will be the obligation of Tenant.
Provided, however, that Tenant shall not be responsible for any repairs,
additions or alterations to the building or any of its systems (e.g. plumbing,
electrical, mechanical) structural or non-structural which are required by any
law, statute, ordinance rule, regulation or governmental authority or insurance
carrier, including without limitation, OSHA if a violation or noncompliance
existed at the time Tenant took occupancy of the Premises, in which case
Landlord shall be responsible for the repairs, additions or alterations as
required.
10.03 Tenant acknowledges that he has examined the Premises prior to the
making of this Lease, that he knows the condition thereof, that no
representations as to the condition of the state of repairs thereof have been
made by Landlord or Landlord's agent which are not expressly set forth herein,
and that except as otherwise specifically set forth herein, Tenant hereby
accepts the Premises in their present condition at the date of execution of this
Lease. Anything contained herein to the contrary notwithstanding, the Premises
at 0000 Xxxxxxxxx Xxxxx shall be in good order and repair upon the date
occupancy is delivered to Tenant. Tenant will inspect the Premises at 0000
Xxxxxxxxx Xxxxx prior to occupancy to assure that the facilities and equipment
are in good condition and Landlord will agree to repair facilities or equipment
reasonably identified as substandard. Landlord shall not be required to replace
carpeting or repaint provided the walls and floors are in good condition,
reasonable wear and tear excepted.
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SECTION 11
PAYMENT FOR SERVICES RENDERED BY LANDLORD
11.01 If Landlord at any time: (I) does any work or performs any service
in connection with the Premises, or (ii) supplies any materials to the Premises,
and the cost of the services, work or materials is Tenant's responsibility under
the provisions of this Lease, Landlord will invoice Tenant for the cost, payable
within thirty (30) days after delivery of the invoice. This Section will apply
to any such work, services or materials, if furnished at Tenant's request or on
its behalf when failure by Tenant to furnish same constitutes a default
hereunder and whether furnished or caused to be furnished by Landlord or its
agents, employees or contractors. All amounts payable under this Section will be
additional rental, and failure by Tenant to pay them when due will be a default
under this Lease and further will result in the assessment of late charges and
interest under Section 5.
SECTION 12
ALTERATIONS
12.01 The parties agree that Tenant will not make any alterations,
additions, or improvements to the Premises without the written consent of
Landlord, which consent shall not be unreasonably withheld or delayed, and if
required by the terms of any mortgage on the Premises, the written consent of
the mortgagee (which consent shall not be unreasonably withheld or delayed). All
alterations, additions or improvements made by either of the parties hereto on
the Premises after the commencement date will be the property of Landlord and
will remain on and be surrendered with the Premises at the termination of this
Lease, except that alterations, additions or improvements made by Tenant must be
removed and the Premises restored by Tenant if so requested by Landlord.
12.02 If Landlord shall determine to repair, alter, remove, reconstruct or
improve any part of the Premises, then Landlord shall do such work with
reasonable dispatch and with minimal interference with Tenant's use and
enjoyment of the Premises as is reasonably necessary under the circumstances.
SECTION 13
LIENS
13.01 After the Commencement Date, Tenant will keep the Premises free of
liens of any sort and will hold Landlord harmless from any perfected liens which
may be placed on the Premises except those attributable to the acts of Landlord.
SECTION 14
EMINENT DOMAIN
14.01 If fifty (50%) percent or more of a building's net rentable area is
condemned or taken in any manner (including without limitation any conveyance in
lieu thereof) for any public or quasi-public use, the Term of this Lease as to
that building shall cease and terminate as of the date title is vested in the
condemning authority. If twenty-five (25%) percent or less of a building's net
rentable area is so condemned or taken, the Landlord may terminate this Lease as
to that building if it determines, in the reasonable exercise of its business
judgment, that continued operation of the Premises under this Lease would be
uneconomic. If more than twenty-five (25%) percent but less than fifty (50%)
percent of a building's net rentable area is so condemned or taken, with the
result that Tenant's business is significantly and adversely affected thereby,
or if such a portion of the parking area is so condemned or taken that the
number of parking spaces remaining are less than the number required by
applicable zoning or other code for the building, then either Landlord or Tenant
may terminate this Lease as of the date title is vested in the condemning
authority by written notice to the other.
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14.02 If this Lease is not terminated following such a condemnation or
taking, Landlord, as soon as reasonably practicable after such condemnation or
taking and the determination and payment of Landlord's award on account thereof,
shall expend as much as may be necessary of the net amount which is awarded to
Landlord and released by Landlord's mortgagee, if any, in restoring, to the
extent originally constructed by Landlord (consistent, however, with zoning laws
and building codes then in existence), so much of the building as was originally
constructed by Landlord to an architectural unit as nearly like its condition
prior to such taking as shall be practicable. Should the net amount so awarded
to Landlord be insufficient to cover the cost of restoring the building, in the
reasonable estimate of Landlord, Landlord may, but shall have no obligation to,
supply the amount of such insufficiency and restore the building to such an
architectural unit, with all reasonable diligence, or Landlord may terminate
this Lease by giving notice to Tenant not later than a reasonable time after
Landlord has determined the estimated net amount which may be awarded to
Landlord and the estimated cost of such restoration.
14.03 If this Lease is not terminated pursuant to Section 14.01, the
minimum net rental payable by Tenant shall be reduced in proportion to the
reduction in net rentable area of the building by reason of the condemnation or
taking. If this Lease is terminated pursuant to Section 14.01, the minimum net
rental and other charges which are the obligation of Tenant hereunder shall be
apportioned and prorated accordingly as of the date of termination.
14.04 The whole of any award or compensation for any portion of the
Premises taken, condemned or conveyed in lieu of taking or condemnation shall be
solely the property of and payable to Landlord. Nothing herein contained shall
be deemed to preclude Tenant from seeking, at its own cost and expense, an award
from the condemning authority for loss of its business, the value of any trade
fixtures or other personal property of Tenant in the Premises, moving expenses
or any other damages, provided that the award for such claim or claims shall not
be in diminution of the award made to Landlord.
SECTION 15
ASSIGNMENT OR SUBLETTING
15.01 Tenant agrees not to assign or in any manner transfer this Lease or
any interest in this Lease without the previous written consent of Landlord, and
not to sublet the Premises or any part of the Premises or allow anyone to use or
to come in with, through or under it without like consent, which consent will
not be unreasonably withheld. One such consent will not be deemed a consent to
any subsequent assignment, subletting, occupation, or use by any other person.
Tenant may, however, assign this Lease to a corporation with which it may merge
or consolidate, to any parent or subsidiary of Tenant or subsidiary of Tenant's
parent, or to a purchaser of substantially all of Tenant's assets if the
assignee has assets and creditworthiness substantially equal to or greater than
Tenant and if the assignee executes an agreement required by Landlord assuming
Tenant's obligations. The acceptance of rent from an assignee, subtenant or
occupant will not constitute a release of Tenant from the further performance of
the obligations of Tenant contained in this Lease. Tenant acknowledges that
Landlord selected Tenant in part on the basis of Tenant's proposed use and
occupation of the Premises, and agrees that Landlord may withhold consent to any
proposed sublease or assignment if the subtenant's or assignee's business or
proposed use of the Premises would be physically injurious to the Building or
would detract from the reputation of the industrial park within which the
premises are located.
SECTION 16
INSPECTION OF PREMISES
16.01 Tenant agrees to permit Landlord and the authorized representatives
of Landlord to enter the Premises at all reasonable times and upon reasonable
prior notice during business hours for the purpose of inspecting the same.
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SECTION 17
FIXTURES AND EQUIPMENT
17.01 All fixtures and equipment paid for by Landlord and all fixtures and
equipment which may be paid for and placed on the Premises by Tenant from time
to time but which are so incorporated and affixed to Improvements that their
removal would involve damage or structural change to Improvements, will be and
remain the property of Landlord.
17.02 All furnishings, equipment and fixtures other than those specified
in Section 17.01, which are paid for and placed on the Premises by Tenant from
time to time (other than those which are replacements for fixtures originally
paid for by Landlord) will remain the property of Tenant.
SECTION 18
SECURITY
18.01 THIS SECTION HAS BEEN INTENTIONALLY DELETED
SECTION 19
NOTICE OR DEMANDS
19.01 All bills, notices, statements, communications to or demands
(collectively, "notices or demands") upon Landlord or Tenant desired or required
to be given under any of the provisions hereof must be in writing. Any such
notices or demands from Landlord to Tenant will be deemed to have been duly and
sufficiently given if a copy thereof has been mailed by United States mail in an
envelope properly stamped and addressed to Tenant at the address of the Premises
or Tenant's registered office in the State in which the Premises are located at
such time, or at such other address as Tenant may have last furnished in writing
to the Landlord for such purpose, and any such notices or demands from Tenant to
Landlord will be deemed to have been duly and sufficiently given if personally
delivered to Landlord or mailed by United States mail in an envelope properly
stamped and addressed to Landlord at the address last furnished by written
notice from Landlord to Tenant. The effective date of such notice or demand will
be deemed to be the time when personally delivered or mailed as herein provided.
SECTION 20
BREACH; INSOLVENCY; RE-ENTRY
20.01 If any rental payable by Tenant to Landlord remains unpaid for more
than seven (7) days after written notice to Tenant of non-payment, or if Tenant
violates or defaults in the performance of any of its obligations in this Lease
and the violation or default continues for a period of thirty (30) days after
written notice (or if such violation or default cannot reasonably be cured
within such 30-day period, then such longer period as may be reasonably
necessary, provided Tenant commences such cure within such 30-day period and
diligently pursues such cure to completion), then Landlord may (but will not be
required to) declare this Lease forfeited and the Term ended, or re-enter the
Premises, or may exercise all other remedies available under Michigan law.
Landlord will not be liable for damages to person or property by reason of any
legitimate re-entry or forfeiture, and Landlord will be aided and assisted by
Tenant, its agents, representatives and employees. Tenant, by the execution of
this Lease, waives notice of re-entry by Landlord. In the event of re-entry by
Landlord without declaration of forfeiture, the liability of Tenant for the rent
provided herein will not be relinquished or extinguished for the balance of the
Term, and any rentals prepaid may be retained by Landlord and applied against
the cost of re-entry, or as liquidated damages, or both. Tenant will pay, in
addition to the rentals and other sums agreed to be paid hereunder, reasonable
attorneys' fees, costs and expenses in any suit or action instituted by or
involving Landlord to enforce the provisions of, or the collection of the
rentals due Landlord under this Lease, including any proceeding under the
Federal Bankruptcy Code.
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If Tenant is adjudged bankrupt or insolvent, files or consents to the
filing of a petition in bankruptcy under Federal or State law, applies for or
consents to the appointment of a receiver for all or substantially all of its
assets, makes a general assignment for the benefit of its creditors, or does
anything which, under the applicable provisions of the Federal Bankruptcy Code
would permit a petition to be filed by or against Tenant, and such petition is
not removed within sixty (60) days then Tenant shall be in default under this
Lease and, to the extent from time to time permitted by applicable law,
including but not limited to the Federal Bankruptcy Code, Landlord shall be
entitled to exercise all remedies set forth in the preceding paragraph of this
Section 20. In a reorganization under Chapter 11 of the Federal Bankruptcy Code,
the debtor or trustee must assume this Lease or assign it within sixty (60) days
from the filing of the proceeding, or he shall be deemed to have rejected and
terminated this Lease. Tenant acknowledges that its selection to be the tenant
hereunder was premised in material part on Landlord's determination of Tenant's
creditworthiness and ability to perform the economic terms of this Lease, and
Landlord's further determination that Tenant and the character of its occupancy
and use of the Premises would be compatible with the nature of the Premises and
other adjacent properties of Landlord. Therefore, if Tenant, as debtor, or its
trustee elects to assume or assign this Lease, in addition to complying with all
other requirements for assumption or assignment under the Federal Bankruptcy
Code, then Tenant, as debtor, or its trustee or assignee, as the case may be,
must also provide adequate assurance of future performance, including but not
limited to a deposit, the amount of which shall be reasonably determined based
on the duration of time remaining in the Term, the physical condition of the
Premises at the time the proceeding was filed, and such damages as may be
reasonably anticipated after reinstatement of the Lease, taking into account
rental market conditions at the time of the reinstatement. In the event of an
assignment, the Landlord must be reasonably assured that the financial condition
of the assignee is sound, and that its use of the Premises will be compatible
with the nature of the Premises and other adjacent properties of Landlord.
In the event of declaration of forfeiture at or after the time of
re-entry, Landlord may re-lease the Premises or any portion (s) of the Premises
for a term or terms and at a rent which may be less than or exceed the balance
of the Term of and the rent reserved under this Lease. In such event Tenant will
pay to Landlord as liquidated damages for Tenant's default any deficiency
between the total rent reserved and the net amount, if any, of the rents
collected on account of the lease or leases of the Premises which otherwise
would have constituted the balance of the term of this Lease. In computing such
liquidated damages, there will be added to the deficiency any expenses which
Landlord may incur in connection with re-leasing, such as legal expenses,
attorneys' fees, brokerage fees and expenses, advertising and for keeping the
Premises in good order or for preparing the Premises for re-leasing. Any such
liquidated damages will be paid in monthly installments by Tenant on the Rent
Day and any suit brought to collect the deficiency for any month will not
prejudice Landlord's right to collect the deficiency for any subsequent month by
a similar proceeding. In lieu of the foregoing computation of liquidated
damages, Landlord may elect, at its sole option, to receive liquidated damages
in one payment equal to any deficiency between the total rent reserved hereunder
and the fair and reasonable rental of the Premises, both discounted at ten (10%)
percent per annum to present value at the time of declaration of forfeiture.
Whether or not forfeiture has been declared, Landlord will not be obliged
or be responsible in any way for failure to re-lease the Premises or, in the
event that the Premises are re-leased, for failure to collect the rent under
such re-leasing. The failure of Landlord to re-lease all or any part of the
Premises will not release or affect Tenant's liability for rent or damages.
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SECTION 21
SURRENDER OF PREMISES ON TERMINATION
21.01 At the expiration (or earlier termination) of the Term, Tenant will
surrender the Premises broom clean and in as good condition and repair as they
were at the time Tenant took possession, reasonable wear and tear excepted, and
promptly upon surrender will deliver all keys and building security cards for
the Premises to Landlord at the place then fixed for payment of rent. All costs
and expenses incurred by Landlord in connection with repairing or restoring the
Premises to the condition called for herein, together with the costs, if any, of
removing from the Premises any property of Tenant left therein, together with
liquidated damages in an amount equal to the amount of minimum net rental plus
all other charges which would have been payable by Tenant under this Lease if
the term of this Lease had been extended for the period of time reasonably
required for Landlord to repair or restore the Premises to the condition called
for herein, shall be invoiced to Tenant and shall be payable as additional
rental within thirty (30) days after receipt of notice.
SECTION 22
PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT
22.01 If Tenant fails to pay any sum of money, other than rental, required
to be paid hereunder or fails to perform any act on its part to be performed
hereunder, including without limitation the performance of all covenants
pertaining to the condition and repair of the Premises pursuant to Section 10,
above, and such failure shall continue for a period of thirty (30) days (or a
reasonable period of less than thirty (30) days when life, person or property is
in jeopardy) after notice thereof by Landlord, Landlord may (but shall not be
required to), and without waiving or releasing Tenant from any of Tenant's
obligations, make any such payment or perform any such other act. All sums so
paid by Landlord and all necessary incidental costs, including without
limitation the cost of repair, maintenance or restoration of the Premises if so
performed by Landlord hereunder, shall be deemed additional rental and, together
with interest thereon at the rate set forth in Section 5.02, from the date of
payment by Landlord until the date of repayment by Tenant to Landlord, shall be
payable to Landlord within thirty (30) days after receipt of invoice by Tenant.
On default in such payment, Landlord shall have the same remedies as on default
in payment of rent. The rights and remedies granted to Landlord under this
Section 22 shall be in addition to, and not in lieu of all other remedies, if
any, available to Landlord under this Lease or otherwise, and nothing herein
contained shall be construed to limit such other remedies of Landlord with
respect to any matters covered herein.
SECTION 23
SUBORDINATION; ESTOPPEL CERTIFICATES
23.01 Tenant agrees that Landlord may choose to make this lease
subordinate or paramount to any construction loans, mortgages, trust deeds and
ground or underlying leases now or hereafter affecting the Premises and to any
and all advances to be made thereunder, and to the interest and charges thereon,
and all renewals, replacements, and extensions thereon, provided the mortgagee,
lessor or trustee named in any such mortgages, trust deeds or leases agrees to
recognize the lease of Tenant in the event of foreclosure if Tenant is not in
default provided that no such loan, mortgage, trust deed, or lease shall
materially and adversely affect any substantial right of Tenant hereunder.
Tenant will execute promptly any instrument or certificate that Landlord may
request to confirm such subordination, and hereby irrevocably appoints Landlord
as Tenant's attorney-in-fact to execute such instrument or certificate on its
behalf.
23.02 Tenant, within ten (10) days after request (at any time or times) by
Landlord, will execute and deliver to Landlord, an estoppel certificate
identifying the Commencement Date and expiration date of the Term and stating
that this Lease is unmodified and in fill force and effect, or is in full force
and effect as modified, stating the modifications, and stating that Tenant does
not claim that Landlord is in default in any way, or listing any such claimed
defaults. The certificate also will confirm the amount of monthly Base Rent and
additional rent as of the date
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of the certificate, the date to which the rent has been paid in advance, and the
amount of any security deposit or prepaid rent. If Tenant fails to deliver the
executed certificate to Landlord within the ten (10) day period, then after an
additional ten (10) day notice by Landlord to Tenant, the accuracy of the
proposed certificate will be deemed conclusively confirmed.
23.3 Notwithstanding anything to the contrary contained in this Lease,
Landlord agrees that Tenant may pledge, hypothecate or otherwise encumber its
interests in the leased property and under this Lease in connection with its or
its corporate parent's existing or future secured borrowing arrangements.
SECTION 24
QUIET ENJOYMENT
24.01 Landlord agrees that at all times when Tenant is not in default
under the provisions and during the Term of this Lease, Tenant's quiet and
peaceable enjoyment of the Premises will not be disturbed or interfered with by
Landlord or any person claiming by, through, or under Landlord.
SECTION 25
HOLDING OVER
25.01 If Tenant remains in possession of the Premises after the expiration
date of this Lease without executing a new lease, it will be deemed to be
occupying the Premises as a tenant from month to month, subject to all the
provisions of this Lease to the extent that they can be applicable to a
month-to-month tenancy, except that the minimum net rental for each month will
be one hundred fifty (150%) percent of the regular monthly installments of
minimum net rental set forth in Section 4.01, above.
SECTION 26
REMEDIES NOT EXCLUSIVE; WAIVER
26.01 Each and every of the rights, remedies and benefits provided by this
Lease are cumulative, and are not exclusive of any other of said rights,
remedies and benefits, or of any other rights, remedies and benefits allowed by
law.
26.02 One or more waivers of any covenant or condition by Landlord will
not be construed as a waiver of a further or subsequent breach of the same
covenant or condition, and the consent or approval by Landlord to or of any act
by Tenant requiring Landlord's consent or approval will not be deemed to waive
or render unnecessary Landlord's consent or approval to or of any subsequent
similar act by Tenant.
SECTION 27
WAIVER OF SUBROGATION
27.01 Landlord and Tenant hereby waive any and all right of recovery
against each other for any loss or damage caused by fire or any of the risks
covered by standard fire and extended coverage, vandalism and malicious mischief
insurance policies.
SECTION 28
RIGHT TO SHOW PREMISES
28.01 For a period commencing one hundred eighty (180) days prior to the
termination of this Lease or any extension thereof, Landlord may show the
Premises and may display about the Premises signs advertising the availability
of the Premises.
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SECTION 29
SECURITY DEPOSIT
29.01 Tenant shall pay Landlord a security deposit in the sum of Fifteen
Thousand Five Hundred ($15,500.00) Dollars on or before November 1, 1999. If
Tenant defaults in any of the provisions of this Lease, Landlord may use, apply
or retain all or any part of the Security Deposit for the payment of any minimum
net rental and/or other charges which are the obligation of Tenant under this
Lease in default or for any other sum which Landlord may expend by reason of
Tenant's default, including any damages or deficiency in the releasing of the
Premises.
SECTION 30
INDEMNIFICATION
30.01 Tenant at its expense will defend, indemnify and save Landlord, its
licenses, servants, agents, employees and contractors, harmless from any loss,
damage, liability or expense to or for any person or property, whether based on
contract, tort, negligence or otherwise, arising directly or indirectly out of
or in connection with (i) the condition of the Premises, to the extent arising
out of the use or misuse thereof by Tenant or any of its licensees, servants,
agents, employees or contractors, (ii) the acts or omissions of Tenant, its
licensees, servants, agents, employees or contractors, and (iii) any failure by
Tenant to comply with any provision of this Lease; provided that nothing herein
shall be construed to require Tenant to indemnify Landlord against the acts,
omissions or negligence of Landlord, its licensees, servants, agents, employees
or contractors.
30.02 Landlord at its expense will defend, indemnify and save Tenant, its
licencees, servants, agents, employees and contractors, harmless from any loss,
damage, liability or expense to or for any person or property, whether based on
contract, tort, negligence or otherwise arising directly or indirectly out of or
in connection with (i) any failure by Landlord to comply with any provision of
this Lease and (ii) any action taken by Landlord on or concerning the Premises
during the term of this Lease.
SECTION 31
PREVENTING REMOTE VESTING
31.01 Notwithstanding any other provisions of this Lease, if the Term of
this Lease does not commence within three (3) years from the date hereof, this
Lease will be deemed terminated three (3) years from the date hereof without
necessity of any notice or act by Landlord or Tenant. It is the intention of
this Section to prevent this Lease from becoming unenforceable by reason of any
claim that it might violate the rule against perpetuities.
SECTION 32
DEFINITION OF LANDLORD; LANDLORD'S LIABILITY
32.01 The term "Landlord" as used in this Lease so far as covenants,
agreements, stipulations or obligation on the part of the Landlord are concerned
is limited to mean and include only the owner or owners of fee title (or of a
ground leasehold interest) to the Premises at the time in question, and in the
event of any transfer or transfers of the title to such fee the Landlord herein
named (and in case of any subsequent transfers or conveyances the then grantor)
will automatically be freed and relieved from and after the date of such
transfer or conveyance of all personal liability for the performance of any
covenants or obligations on the part of the Landlord contained in this Lease
thereafter to be performed.
If Landlord fails to perform any provision of this Lease upon
Landlord's part to be performed, and if as a consequence of such default Tenant
recovers a money judgment against Landlord, such judgment may be satisfied only
out of the proceeds of sale received upon execution of such judgment and levied
thereon against the right, title and interest of Landlord in
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the Premises and out of rents or other income from such property receivable by
Landlord and Landlord shall not be personally liable for any deficiency.
SECTION 33
ENTIRE AGREEMENT
33.01 This Lease and the Exhibits attached hereto and forming a part
hereof, set forth all of the covenants, agreements, stipulations, promises,
conditions and understandings between Landlord and Tenant concerning the
Premises and there are no covenants, agreements, stipulations, promises,
conditions or understanding, either oral or written, between them other than
herein set forth.
SECTION 34
GENERAL
34.01 Many references in this Lease to persons, entities and items have
been generalized for ease of reading. Therefore, references to a single person,
entity or item will also mean more than one person, entity or thing whenever
such usage is appropriate (for example, "Tenant" may include, if appropriate, a
group of persons acting as a single entity, or as tenants-in-common). Similarly,
pronouns of any gender should be considered interchangeable with pronouns of
other genders.
34.02 All agreements and obligations of Tenant under this Lease are joint
and several in nature. Any waiver or waivers by Landlord of any of the
provisions of this Lease will not constitute a waiver of any later breach of
that provision, and any consent or approval given by Landlord with respect to
any act, neglect or default by Tenant will not waive or make unnecessary
Landlord's consent or approval with respect to any later similar act, neglect or
default by Tenant.
34.03 Topical headings appearing in this Lease are for convenience only.
They do not define, limit or construe the contents of any paragraphs or clauses.
34.04 This Lease can be modified or amended only by a written agreement
signed by Landlord and Tenant.
34.05 All provisions of this Lease are and will be binding on the heirs,
executors, administrators, personal representatives, successors and assigns of
Landlord and Tenant.
34.06 The laws of the State of Michigan will control in the construction
and enforcement of this Lease.
SECTION 35
HAZARDOUS MATERIALS
35.01 A. Tenant shall be fully responsible, at its own expense, for
compliance with all laws and/or regulations governing the handling of Hazardous
Materials or other substances used or stored on the Leased Premises in
connection with Tenant's business conducted therein. All hazardous or
potentially Hazardous Materials shall be stored in proper containers and shall
be further protected against spills by secondary containment facilities. Tenant
shall not, in violation of any applicable law or regulation, spill, introduce,
discharge or bury any Hazardous Materials, substance or contaminant of any kind
in, on, or under the Leased Premises or any portion thereof or any adjacent
premises or into the ambient air. Tenant shall not permit the discharge of any
Hazardous Materials into the sanitary or storm sewer or water system serving the
Leased Premises or any adjacent premises or into any municipal or other
governmental water system or storm and/or sanitary sewer system. Tenant shall
employ all appropriate safeguards and procedures necessary or appropriate to
protect such systems from contamination. Tenant shall undertake, at its expense,
any necessary and/or appropriate cleanup process in connection with any breach
of the foregoing covenants, and without limiting Tenant's other indemnity or
insurance obligations under this Lease. Tenant shall indemnify and hold harmless
Landlord from
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and against all liability whether direct, indirect, consequential or otherwise,
arising from any incident or occurrence on or about the Leased Premises or any
adjacent premises pertaining to Hazardous Materials which results from the acts
or omissions of Tenant, its agents, employees or invitees, during the term
hereof. The obligations of Tenant under this section shall survive the
termination of this Lease.
B. "Hazardous Materials" shall include, without limitation, any
chemical or other material which is or may become injurious to the public
health, safety or welfare, or to the environment, flammable explosives,
petroleum fractions, pesticides, radioactive materials, Hazardous Materials,
regulated substances, hazardous or toxic substances, contaminating pollutants or
related or similar materials, including by way of example, substances or
materials defined by any federal, state or local environmental law, ordinance,
rule or regulation, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Federal Insecticide, Fungicide, and Rodenticide Act or the Michigan
Environmental Response Act, and the regulations adopted and publications
promulgated thereto, all as amended.
C. Landlord agrees to indemnify and hold Tenant harmless from and
against any and all actions, claims, suits, damages, judgments, costs, charges,
expenses, attorney fees or liabilities arising out of or as a result of any
toxic or hazardous wastes or substances that may have been deposited on or about
the premises prior to occupancy of the Premises by Tenant. Prior to commencement
of the term, Landlord shall have an updated Phase I environmental audit
conducted at 0000 Xxxxxxxxx Xxxxx. Landlord shall take such corrective action as
shall be necessary in order to place said Premises in a lawful condition should
the audit establish that such corrective action is required
D. Upon termination hereof, Tenant, at its own cost and expense,
shall conduct an environmental audit of the property. Such audit shall be
conducted pursuant to Standard Quality Control/Quality Assurance Procedures
reasonably satisfactory to Landlord. Tenant shall promptly furnish Landlord with
a copy of the report of the firm conducting such audit and Tenant shall, if
necessary, at its sole expense, promptly take all steps required to repair
and/or restore the Premises to a lawful condition.
SECTION 36
OPTION TO EXTEND LEASE TERM
36.0 1 Providing that Tenant has not defaulted in the terms or conditions
of this Lease, Tenant shall have one (1) option to extend the Term of this Lease
from and after the expiration of the original Term for a period of three (3)
years. Should Tenant decide to exercise this option, same shall be deemed
validly exercised only if Landlord shall have received written notice of
exercise of option from Tenant in writing on or before twelve (12) months prior
to the expiration of the original Term. TIME SHALL BE DEEMED TO BE OF THE
ESSENCE IN CONNECTION WITH THE EXERCISE OF THIS OPTION. In the event of the
exercise of this option, all terms and conditions of this Lease shall continue
and remain in full force and effect during the three (3) year option term,
provided, however, that the minimum net monthly rental installments during the
three (3) year option term shall be Seventeen Thousand Fifty ($17,050.00)
Dollars. Tenant is also a Tenant of Landlord in the adjacent premises commonly
known as 0000 Xxxxxxxxx Xxxxx, under a Lease which is co-terminus with this
Lease. The Lease for said adjacent premises also grants Tenant an option to
extend the term of that Lease for an equal additional three (3) year period.
Anything contained herein to the contrary not withstanding Tenant's right and
option to extend the term hereof is conditioned upon Tenant simultaneously
exercising its option to extend the term of the Lease for 0000 Xxxxxxxxx Xxxxx.
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SECTION 37
TENANT'S OPTION TO TERMINATE LEASE
37.01 Tenant may elect to terminate this Lease effective January 31, 2002.
Tenant may exercise its right to so terminate the term hereof by (i) giving
Landlord notice to that effect by registered or certified mail, return receipt
requested, during the month of July 2001; (ii) accompanying the notice of
termination shall be a termination fee in the sum of Ninety Three Thousand
($93,000.00) Dollars; (iii) performing all of Tenant's obligations hereunder
through such termination date, including the surrender of the Leased Premises on
or before that date.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease as of
the date set forth at the outset hereof.
WITNESSES: LANDLORD:
/s/ Xxxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxxxxx
----------------------------- ----------------------------------
Xxxxxxxx Xxxxxxxxx XXXX XXXXXXXXX
-----------------------------
TENANT: SPEEDRING SYSTEMS,
INC., A Delaware corporation
By: /s/ Xxxx Xxxxxxxxx
----------------------------- ----------------------------------
Its: President
----------------------------- ----------------------------------
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EXHIBIT A
A parcel of land located in the City of Rochester Hills, Oakland County,
Michigan described as:
Xxx 00 xx Xxxxxxxxx Xxxxx Xxxxxxxxx Xxxxxx Subdivision, accordingly to the plat
thereof recorded in Liber 193 of Plats, Pages 32, 33, 34, and 35, Oakland County
Records.
Also known as 0000 Xxxxxxxxx Xxxxx.
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