EXHIBIT 10.11
LEASE
THIS LEASE is made as of the 16th day of January, 2002, by and between
TECHNICAL PROPERTIES, L.L.C., a Michigan limited liability company, having its
principal office at 00000 X. Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx,
Xxxxxxxx 00000, as lessor ("Landlord"), and ASSET ACCEPTANCE CORP., a Nevada
corporation, having its principal office at 0000 Xxxxxx Xxxx, Xxxxxx, XX 00000,
as lessee ("Tenant"), who agree as follows:
SECTION 1
THE PREMISES
1.01 Landlord, in consideration of the rents to be paid and the
covenants and agreements to be performed by Tenant, hereby leases to Tenant the
real property (the "Land") located in the City of Xxxxxx, County of Macomb, and
State of Michigan, described in Exhibit "A" attached hereto and made an integral
part of this Lease, together with the 25,200 square foot building and the 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.
SECTION 2
LANDLORD'S REPAIRS AND IMPROVEMENTS
2.01 Landlord shall perform the repairs and construct the improvements
listed on the attached Exhibit "B" ("Landlord's Repairs and Improvements") in a
good and workmanlike manner and in full compliance with all applicable laws.
Landlord's Repairs and Improvements which are to be done on the interior of the
building, and item no. 1 on the attached Exhibit B pertaining to the pipe below
the parking lot (the "Pre-Commencement Repairs and Improvements"), will be
substantially completed by February 1, 2002 (the "Scheduled Completion Date")
provided the Lease is signed by Tenant no later than January 15, 2002.
2.02 The Scheduled Completion Date represents the date Landlord
estimates that the Pre-Commencement Repairs and Improvements listed on Exhibit B
will be completed and the Premises will be ready for occupancy. Landlord shall
tender possession to Tenant on the Scheduled Completion Date. If, in good faith,
Landlord is delayed or hindered in construction by Force Majeure Events, as
defined in Section 29.01, or as a result of requests by or acts of Tenant
(collectively an "Excusable Event"), the Scheduled Completion Date shall be
extended for the period of delay caused by the Excusable Event, and Landlord
shall have no liability for damages for a delay caused by an Excusable Event.
Landlord and Tenant acknowledge that the Landlord's Repairs and Improvements on
Exhibit B which are not Pre-Commencement Repairs and Improvements are outdoor
Repairs and Improvements (the "Outdoor Repairs") which may not be completed
prior to the Commencement Date of the Lease if there is inclement weather.
Landlord will endeavor to complete the Outdoor Repairs as soon as reasonably
possible during the Spring of 2002. The Premises will not be considered unready
or incomplete if only minor or unsubstantial details of construction,
decoration or mechanical adjustments remain to be done within the Improvements,
or if the Outdoor Repairs are not completed, or if the delay in the availability
of the Premises for Tenant's occupancy is caused in whole or in part by Tenant.
2.03 Tenant shall be given an opportunity by Landlord to inspect
Landlord's Repairs and Improvements prior to the Commencement Date. At such
time, Tenant may create a "punch list" of Landlord's Repair and Improvement
items which remain to be completed or corrected, in Tenant's reasonable
judgment. Tenant's punch list shall include only those items listed on Exhibit B
attached which remain to be completed or corrected. All punch list items for
which Landlord is responsible shall be completed or corrected by Landlord
promptly after Tenant's inspection.
SECTION 3
THE TERM
3.01 The original term (the "Term") of this Lease will commence (the
"Commencement Date") on the Scheduled Completion Date, which is projected to be
February 1, 2002. Unless sooner terminated or extended in accordance with the
terms hereof, the Lease will terminate on August 31, 2004.
3.02 By occupying the Premises, Tenant will be deemed to have accepted
the Premises and acknowledged that they are in the condition called for in this
Lease, subject only to the "punch list" items identified by Tenant by written
notice delivered to Landlord under Section 2.03 above.
3.03 Tenant covenants and agrees that on the Commencement Date Tenant
shall use, occupy and take possession of the Premises in accordance with the
provisions of this Lease.
SECTION 4
THE BASE RENT; OPTION TO RENEW
4.01 Tenant agrees to pay to Landlord, as net rent for the Term of this
Lease, as follows:
(a) From the Commencement Date through the end of the twelfth (12th)
month, the net rent shall be $17,850.00 per month.
(b) From the thirteenth (13th) through the end of the twenty-fourth
(24th) month, the net rent shall be $18,375.00 per month.
(c) From the twenty-fifth (25th) through the end of the thirty-first
(31st) month, the net rent shall be $18,900.00 per month.
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4.02 Each monthly installment of rental will be paid in advance,
without any setoffs or deductions, on the first day of each and every calendar
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 on a daily basis based on a thirty (30) day month
and will be paid in addition to the net minimum rent provided in Section 4.01
above. Net rent for such partial calendar month and for the first full calendar
month of the Lease shall be paid on the Commencement Date.
4.03 Landlord and Tenant acknowledge and agree that the net rental due
hereunder together with any adjustments thereto made during the term of this
Lease shall be net of all costs, expenses, taxes (real and personal),
assessments, management fees and charges of every kind and nature whatsoever
relating to the ownership, occupancy or use of the Premises so that the rental
together with any such adjustments constitute the minimum income realized by
Landlord from the Premises. Tenant will indemnify and hold harmless Landlord
from and against such costs, expenses and charges.
4.04 Provided that (i) Tenant shall not then be in default under any of
the terms and conditions of this Lease, and (ii) this Lease is then in full
force and effect, Tenant shall have the right to extend the Term of this Lease
for one (1) additional successive period of five (5) years (the "Option Term")
commencing September 1, 2004, provided that Tenant shall deliver to Landlord
written notice of its election to extend the Term of this Lease at least six (6)
months prior to the expiration date of the Term of this Lease. Except as
expressly otherwise provided herein, all the covenants, agreements, terms and
conditions contained herein shall remain in full force and effect during the
Option Term.
The net annual rental during the Option Term shall be the following
amounts:
Option Months Net Monthly Rental
------------- ------------------
32-43 $18,900.00
44-55 $19,425.00
56-67 $19,950.00
68-79 $20,475.00
80-91 $21,000.00
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 five (5) business days after they are
due, and any rent or other sums received and accepted by Landlord more than five
(5) business days after they are
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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 ten (10) business days after the same are due
will bear interest at a per annum rate equal to fifteen (15%) percent or if
lower, the highest 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, provided that Tenant shall receive an
offset against such interest in the amount of any late fee paid by Tenant under
Section 5.01 with respect to said late payment.
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, at least thirty (30) days before they become
delinquent, as additional rent for the Premises all Real Estate Taxes (as
hereinafter defined) which may be levied, assessed or imposed on the Premises or
any part thereof, or on any building or improvements at any time situated
thereon, during or pertaining to the Term of this Lease, and Tenant shall
provide Landlord with receipts evidencing payment of the Real Estate Taxes at
least ten (10) days before such Real Estate Taxes become delinquent. Real Estate
Taxes for the first year of the Term and the last year of the Term of this Lease
will be prorated between Landlord and Tenant so that Tenant will be responsible
for any such Real Estate Taxes attributable to the period during which Tenant is
entitled to possession of the Premises. At the end of the Lease Term, provided
Tenant is not then in default under the Lease, Landlord will reimburse Tenant
for any Real Estate Taxes paid by Tenant for the time period after the end of
the Lease Term. The so-called "due date" method of proration will be used (as if
Public Act 80 of 1994 were never enacted), it being presumed that Real Estate
Taxes are payable in advance. For example, if Real Estate Taxes were due and
payable on July 1, 2001 and December 1, 2001, and the Commencement Date is
February 1, 2002, then Tenant shall reimburse Landlord on the Commencement Date
for Tenant's pro rata share of Real Estate Taxes for that period from February
1, 2002 to July 1, 2002, and for that period from February 1, 2002 to December
1, 2002. Tenant shall pay to Landlord its pro rata portion of the current Real
Estate Taxes for the first year of this Lease on the Commencement Date. If at
any time during the term hereof the Premises are not taxed by separate
assessment, Tenant shall pay its pro rata share of the assessment of Real Estate
Taxes that covers the Premises, computed based on the percentage that the total
square footage of the improvements bears to the total square footage of all
buildings and
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improvements, including the improvements, covered by the assessment of Real
Estate Taxes which covers the improvements, reduced by that portion of such Real
Estate Taxes attributable to land without buildings thereon, and Tenant shall
pay its proportionate share of such Real Estate Taxes within ten (10) days after
receipt of an invoice therefore from Landlord. If Tenant shall fail to timely
pay the Real Estate Taxes as provided herein, Landlord may, at its option, pay
such Real Estate Taxes, and any amount so paid by Landlord 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 hereof.
6.02 Real Estate Taxes as used herein shall mean ad valorem real estate
taxes, assessments (general, special, ordinary or extraordinary), sewer rents,
taxes based upon the receipt of rent, rates and charges including, without
limitation, the industrial facility tax which may be levied pursuant to the
Plant Rehabilitation and Industrial Development Districts Act, being Sections
207.551 through 207.571 of the Michigan Compiled Laws, and any other federal,
state or local charge (general, special, ordinary or extraordinary) which may
now or hereafter be imposed, levied or assessed against the Premises in lieu of
ad valorem real estate taxes or industrial facility tax. In the event the State
of Michigan or any political subdivision thereof having taxing authority shall
modify, repeal or abolish the ad valorem tax on real property, or impose a tax
or assessment of any kind or nature upon, or against or with respect to the
Premises or the rents payable by Tenant or on the income of the Landlord derived
from the Premises, or with respect to the Landlord's ownership interest in the
Premises, which tax is assessed or imposed by way of substitution for or in
addition to all or any part of the Real Estate Taxes, then Tenant shall pay to
Landlord a just and proportionate amount of Landlord's total tax obligation
arising out of its ownership of the Premises; provided however, nothing herein
contained shall impose an obligation on Tenant to pay general income tax
liabilities of Landlord, except to the extent such income tax is being used to
fund items presently or previously funded by ad valorem taxes and is so
designated by the legislature of the State of Michigan.
6.03 If Tenant shall fail at any time to timely pay the Real Estate
Taxes or if Landlord, as mortgagor, is required to establish an escrow fund with
its mortgagee for the payment of such Real Estate Taxes, Tenant shall, at
Landlord's request, pay the Real Estate Taxes by depositing with Landlord on
each Rent Day an amount equal to one-twelfth (1/12) of the estimated current
Real Estate Taxes assessed, levied or imposed against the Premises or otherwise
payable by Tenant hereunder or, if higher, the amount Landlord is required to
pay each month to the said escrow fund. If the funds deposited with Landlord
hereunder shall be insufficient to enable Landlord to pay the Real Estate Taxes
in full on the due date thereof, Tenant shall, immediately upon demand by
Landlord, deposit with Landlord such additional sums as may be required by
Landlord to enable it to make such payment on or before the due date thereof. In
the event the funds deposited with Landlord shall exceed the amount required for
the payment of current Real Estate Taxes, the excess shall be credited by
Landlord to the subsequent deposits required to be made by Tenant to pay future
Real Estate Taxes. Tenant's obligation to pay the Real Estate Taxes shall be
considered as additional sums payable hereunder subject to the terms of Section
5 hereof. Upon request, Landlord shall furnished Tenant with copies of bills for
the Real Estate
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Taxes assessed, levied or imposed against the Premises pursuant to which the
amount payable by Tenant under this Section 6 shall be computed.
6.04 Tenant shall be responsible for and pay before delinquent all
municipal, county and state taxes assessed, levied or imposed during the term of
this Lease, and all extensions thereof, upon the leasehold interest and all
furniture, fixtures, machinery, equipment, apparatus, systems and all other
personal property of any kind whatsoever owned by Landlord or Tenant and located
at, placed in or used in connection with the Premises or the operation thereof.
6.05 Tenant may contest the amount or validity of any imposition of
Real Estate Taxes against the Premises or the personal property thereon by
appropriate proceedings if Tenant notifies Landlord in writing at least thirty
(30) days prior to the date of filing such application to contest. However,
Tenant shall continue to pay the installments due Landlord under Section 6.03
above. During such contest Tenant shall, and Landlord shall have a right to, pay
such taxes as and when due unless the proceeding commenced by Tenant or Tenant's
posting of a bond or other security shall operate to stay the collection of the
Real Estate Taxes so contested. At Tenant's request, Landlord shall join in any
such proceeding if it shall be required properly to contest the assessed value
of the Premises or the Real Estate Taxes, and Tenant shall reimburse Landlord
for Landlord's reasonable out-of-pocket costs and expenses incurred, if any, in
participating in the proceeding to contest taxes applicable during the Lease
Term. If Landlord incurs out-of-pocket costs and expenses to contest taxes
applicable to a time period before or after the Lease Term, Tenant shall not be
obligated to reimburse Landlord's out-of-pocket costs and expenses covering
taxes due during any time period before or after the Lease Term. Landlord shall
also have the right to contest taxes, and in such event, Tenant shall be
responsible for all of Landlord's costs in contesting the taxes to the extent
that the costs are less than or equal to the savings realized by contesting such
taxes.
6.06 Tenant agrees to pay all charges made against the Premises for
gas, heat, electricity, sewer, water and all other utilities used upon or
furnished to the Premises as and when due during the continuance of this Lease.
At the end of the Lease Term, provided Tenant is not then in default under the
Lease, Landlord will reimburse Tenant for any utilities paid by Tenant for the
time period after the end of the Lease Term.
6.07 Tenant agrees to pay as additional rent for the Premises all dues
and assessments levied against or in regard to the Premises by any subdivision
association existing or subsequently formed or such other person or entity who
maintains or is responsible for maintaining the common areas within the complex,
if any, in which the Premises are located, during or attributable to the Term of
this Lease. Tenant will pay all such dues and assessments before they become
delinquent. Such dues and assessments which relate to the first and last years
of the Lease 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 or is entitled to possession of the Premises.
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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 offices and warehouse space and for no other purpose whatsoever
without the prior written consent of Landlord. Tenant agrees that it will not
use or permit any person to use the Premises or any part thereof for any use or
purpose in violation of the laws of the United States, the laws, ordinances or
other regulations of the State or municipality in which the Premises are
located, or of any other lawful authorities, or any building and use
restrictions, or restrictive covenants, now or hereafter affecting the Premises
or any part thereof. Tenant shall not use the Premises so as to cause the
cancellation of, or prevent the use of, the insurance policies required in this
Lease. During the term hereof, Tenant will keep the Premises and every part
thereof and all buildings at any time situated thereon in a clean and wholesome
condition and generally will comply with all laws, ordinances, orders and
regulations affecting the Premises and the cleanliness, safety, occupancy and
use thereof. 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 external
signs will be displayed except as approved in writing by Landlord, and no awning
will be installed or used on the exterior of the building unless approved in
writing by Landlord. Any and all permitted signs shall be installed, maintained
and removed by Tenant at Tenant's sole expense.
7.02 Tenant shall not discharge, release, generate, treat, store,
dispose of or deposit in, on or under the Premises, or permit to be discharged,
released, generated, treated, stored, disposed of or deposited in, on or under
the Premises, and during the term hereof the Premises shall be free of and will
not be contaminated by any "toxic or hazardous substance", asbestos, urea
formaldehyde insulation, PCB's, radioactive materials, flammable explosives or
any other hazardous or contaminated substance (collectively "Hazardous
Materials") prohibited, limited or regulated under the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA") or under any
other applicable federal, state or local statutes, regulations or ordinances
(collectively the "Environmental Laws"), and Tenant agrees to indemnify and hold
Landlord harmless from and against any and all claims, liabilities, damages,
fines, penalties, costs and expenses (including attorney fees) incurred by
Landlord relating to or arising as a result of Tenant's breach of this
representation and warranty, including, without limitation, clean-up costs and
future response costs under CERCLA or other environmental laws, and such
obligations shall survive termination of this Lease. Tenant, at Tenant's sole
cost and expense, shall be responsible for obtaining all permits, licenses or
approvals under Environmental Laws necessary for Tenant's operation of its
business on the premises and shall make all notifications and registrations
required by any applicable Environmental Laws. Tenant shall at all times comply
with such permits, licenses, approvals, notifications and registrations.
7.03 Within thirty (30) days of the Commencement Date and, thereafter
upon the reasonable request of Landlord or its lender from time to time, but not
more frequently than
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once every twelve months unless required of any of the parties by any applicable
law or governmental authority, Tenant shall furnish Landlord a list of all
Hazardous Materials used or stored on the Premises. Tenant further agrees to
keep Landlord reasonably informed of any investigations by regulatory agencies
of hazardous materials on the Premises. Landlord shall have the right, but not
the obligation, to enter the Premises at reasonable times, after prior written
notice to Tenant, to inspect the Premises for Tenant's compliance with
Environmental Laws if in Landlord's sole discretion there exists reasonable
cause to inspect.
SECTION 8
INSURANCE
8.01 Tenant, at its sole expense, will obtain and maintain at all times
until termination of this Lease and the surrender of the Premises to Landlord,
policies of insurance covering the Premises and providing the insurance
protection to Landlord and the Premises described in this Section 8.
8.02 Tenant shall, during the Term of this Lease, maintain in full
force and effect policies of Commercial General Liability insurance providing
coverage for the operation of the premises, including the parking areas and the
ways and means adjacent thereto, with policy limits of not less than $7,000,000
per occurrence exclusive of defense costs. All policies maintained pursuant to
this paragraph 8.02 shall be written on an occurrence basis and shall name
Landlord (and its lender, if any) as an additional insured.
8.03 Tenant shall obtain and maintain policies of worker's compensation
and employer's liability insurance which shall provide for statutory worker's
compensation benefits and employer's liability limits of not less than $500,000
(or statutory limits, whichever is greater) per occurrence.
8.04 Tenant shall obtain and maintain during the term hereof insurance
covering the Improvements on the Premises to their full replacement value
without deduction for depreciation. All insurance policies required pursuant to
this paragraph 8.04 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, and shall not provide for a deductible in excess
of $1,000.00. Such insurance policies shall also include flood insurance if the
Premises is located in a flood hazard area, as well as boiler and machinery
insurance and loss of rents insurance coverage in an amount equal to the sum of
all rentals and other charges, including Real Estate Taxes, that Tenant shall be
required to pay to or on behalf of Landlord during the twelve (12) month period
next succeeding the effective date of such policy and providing that such loss
of rentals and other charges shall be payable for a period of twelve (12) months
from the date of any loss or casualty. All such policies of insurance shall be
further endorsed to name Landlord as an additional named insured and provide a
mortgagee clause in favor of Landlord's mortgagee, if any. The policies shall
further provide that all claims for damages to the Premises or the Improvements
shall be negotiated and adjusted directly with Landlord and that Landlord
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and its mortgagee shall be the sole loss payees for any loss with respect to the
Premises and the Improvements.
8.05 All insurance policies which Tenant shall be required to maintain
pursuant to this Section 8 shall, in addition to any of the foregoing: be
written by insurers which have an A.M. Best & Company rating of A+ 15 or better
and who are authorized to write such business in the State of Michigan; name
Landlord and its mortgagee as additional named insureds; be endorsed to provide
that they shall not be canceled for any reason, materially changed, or reduced
in the amounts of insurance, except on 30 days prior written notice to Landlord
and its mortgagee; and provide coverage to Landlord and its mortgagee whether or
not the event or occurrence giving rise to the claim is alleged to have been
caused in whole or in part by the acts or negligence of the Landlord or its
mortgagee. A certificate of insurance, or such other evidence of the insurance
coverages required by this Lease as is required by and acceptable to Landlord
and its mortgagee, 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 not less than 30 days prior to the expiration dates thereof.
Insurance provided by Tenant under this Section 8 may be in the form of a
blanket insurance policy covering the properties as well as the Premises;
provided, however that: (i) with respect to any property insurance issued on a
blanket basis, the per location or per occurrence limit of coverage shall not be
less than the full replacement cost of the Improvements on the Premises plus the
value of any property of Tenant on the Premises and insured under such policy
without deduction for depreciation, and (ii) with respect to liability insurance
that the overall annual aggregate limit of liability applicable to the Premises
is not less than $7,000,000.
8.06 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 thereof, Landlord may (but will not be required to)
procure or renew such insurance to protect its own interests only, and any
amounts paid by Landlord for such insurance will be additional rent due and
payable on or before the next Rent Day, together with late charges and interest
as provided in Section 5 hereof. Landlord and Tenant agree that no insurance
acquired by Landlord pursuant hereto shall cover any interest or liability of
Tenant.
8.07 If Tenant shall fail at any time to maintain and timely pay the
premiums for the insurance required hereunder or if Landlord, as mortgagor, is
required to establish an escrow fund with its mortgagee for the payment of such
insurance premiums, Tenant shall, at Landlord's request and for the remaining
Term hereof, pay the insurance premiums by depositing with Landlord on each Rent
Day an amount equal to one-twelfth (1/12) of the estimated cost of the insurance
premiums or, if higher, the amount Landlord is required to pay each month to the
said escrow fund. If the funds deposited are insufficient to enable Landlord to
pay the insurance premiums as and when due, upon demand Tenant shall deposit
with Landlord such additional funds as may be required to pay such premiums, and
any excess payments of Tenant will be credited by Landlord to the subsequent
deposits for insurance premiums required hereunder. Tenant acknowledges that the
payment of the
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premiums is Tenant's responsibility, and Landlord will not be required to have
paid the premiums prior to payment therefor by Tenant.
8.08 Landlord may at any time, but not more than once in any twelve
(12) month period, request a review of insurance coverages and limits of
liability set forth in this Section to determine whether the coverages and
limits are reasonable and adequate in the then existing circumstances. In its
review, Landlord shall consider the requirements of this Section, the cost of
insurance to be obtained, inflation, changes in condition, the requirements of
Landlord's Mortgagee, and the insurance then being carried by similar industrial
use developments in the area of the Premises. If after such review, in
Landlord's reasonable judgment, the coverages and/or limits require adjustment,
Tenant agrees to adjust such coverages and/or limits accordingly.
SECTION 9
DAMAGE BY FIRE OR OTHER CASUALTY
9.01 Subject to the other provisions of this Section 9, if, during the
Term of this Lease, the Improvements shall be damaged or destroyed in whole or
in part by fire or other casualty with respect to which Tenant is required to
provide insurance pursuant to Section 8 of this Lease, provided there has been
no Event of Default by Tenant under the Lease which has not been cured within
any applicable cure period, Landlord shall, with reasonable dispatch and at
Landlord's expense, cause the Improvements to be repaired and restored to their
condition existing immediately prior to such damage or destruction; provided,
however, that: (a) if any such casualty is not covered by insurance, Landlord
shall have no obligation to repair the damaged Improvements, but may elect to do
so by notifying Tenant in writing within 30 days of the date of such casualty of
its intention to so repair, and (b) if Tenant has committed and Event of Default
which has not been cured within any applicable cure period, Landlord shall have
the right, but not the obligation, to repair the damaged Improvements, at
Landlord's sole option. In the event Landlord does not elect to repair such
uninsured casualty damage, this Lease shall automatically terminate unless the
Landlord and Tenant agree otherwise.
9.02 Landlord shall be entitled to receive the proceeds of any
insurance covering the Premises. If the proceeds of such insurance are
inadequate for purposes of repairing or restoring the Improvements to the
condition required pursuant to Section 9.01, Tenant promptly shall pay to
Landlord, upon demand, the amount of any such deficiency (provided Tenant shall
not be obligated with respect to any deficiency applicable to the Improvements
prior to the Commencement Date). Notwithstanding the foregoing, if Landlord's
mortgagee, if any, is entitled to apply and does in fact apply all or any
portion of the proceeds of such insurance to any loan of Landlord secured by a
mortgage on the Premises, Tenant shall not be required to pay to Landlord the
amount of the insurance proceeds so applied by Landlord's mortgagee to such
loan.
9.03 If the damage or destruction occurs during the last year of the
Lease Term and the period of time estimated by Landlord in good faith to be
necessary to accomplish such
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repairs or restoration shall exceed sixty (60) days, Landlord and Tenant shall
each have the right, exercisable upon written notice to the other, to terminate
this Lease. Such termination shall be effective thirty (30) days from the date
of such notice.
9.04 Tenant shall give immediate notice to Landlord in case of fire to
or accident at the Premises. If Landlord repairs or restores the Improvements as
provided in Subsection 9.01 above, Tenant shall promptly repair or replace the
leasehold improvements in a manner and to a condition equal to that existing
prior to the occurrence of such damage or destruction.
9.05 If the casualty, repairing or rebuilding of the Improvements
pursuant to this Section 9 shall render the Premises untenantable, in whole or
in part, a proportionate abatement (based on square footage of the Building
rendered untenantable and vacated by Tenant) of the rent due hereunder shall be
allowed from the date when the damage occurred until the date Landlord
substantially completes the repairs on the improvements or, in the event this
Lease is terminated as provided herein, until the date of termination, but in
any event, only if and to the extent such abatement of rent is otherwise covered
by rental interruption insurance.
9.06 Without limiting any of Tenant's other obligations or liabilities
to Landlord under this Lease or otherwise, Tenant shall be liable to Landlord
for damage to the Premises caused by the acts or omissions of Tenant, or
otherwise arising out of Tenant's operations and use of the Premises, to the
extent such damage is not covered by insurance.
9.07 Notwithstanding anything in this Lease to the contrary, any
casualty to the Improvements which occurs prior to the Commencement Date shall
be deemed an Excusable Event with respect to the construction of the Landlord's
Repairs and Improvements.
SECTION 10
REPAIRS
10.01 Upon written notice from Tenant, Landlord will, during the term
of the Lease, promptly repair or replace the following items in the Premises if
and as necessary:
(a) Roof;
(b) Exterior walls; and
(c) HVAC; provided Tenant undertakes routine maintenance of the
HVAC system using reputable, experienced, commercial
contractors and the repair or replacement requires an
expenditure in excess of $350.00 per occurrence.
In the event Landlord incurs costs in excess of $350.00 for repairs or
replacements of the HVAC pursuant to its obligation set forth herein, Tenant
shall be responsible for the first
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$350.00 of the repair or replacement cost, and Landlord shall be responsible for
the remaining cost. Tenant's $350.00 portion of the repair or replacement cost
for the HVAC shall be paid by Tenant to Landlord no later than thirty (30) days
after Tenant has received an invoice therefor accompanied by reasonable
supporting data detailing the basis for the charge.
If any repair or replacement to the above items are necessitated by damage done
by Tenant or its employees, agents or contractors, or if a repair or replacement
is required to the HVAC as a result of Tenant not undertaking routine
maintenance of the HVAC system using reputable, experienced, commercial
contractors, the repair or replacement shall be undertaken by Landlord upon
written notice from Tenant, and the cost of the repair or replacement shall be
Tenant's sole responsibility. Tenant shall reimburse Landlord for the repair or
replacement cost no later than thirty (30) days after Tenant has received
invoices therefor accompanied by reasonable supporting data detailing the basis
for the charges.
Any amounts not paid timely by Tenant will be additional rent due and payable on
or before the next Rent Day, together with late charges and interest as provided
in Section 5 hereof.
10.02 Tenant covenants and agrees that it will, at its own expense,
during the term of this Lease, keep and maintain the remainder of the Premises
and every part thereof including without limitation, the items listed on the
attached Exhibit B after Landlord has completed Landlord's Improvements and
Repairs to such items; routine maintenance of the HVAC system; repairs or
replacements to the HVAC which do not exceed $350.00 per occurrence; the
interior of all walls, the doors, door frames, the window glass, casings, window
frames, windows (including all appliances, window appurtenances and attachments
thereto); all plate glass; the electrical, plumbing; and other mechanical
systems and equipment and appurtenances thereto, in good order, condition and
repair. Tenant further shall keep and maintain the Premises in a clean, sanitary
and safe condition in accordance with the laws of the State of Michigan, all
directions, rules and regulations of any health officer, fire xxxxxxxx, building
inspector, or other proper officials of any governmental agencies having
jurisdiction over the Premises, and the reasonable and customary requirements of
Landlord's mortgagee, all at its full cost and expense. The maintenance and
repair of the Premises shall also include, but shall not be limited to,
cleaning, weed cutting and removal, ice, snow, water and rubbish clearance,
security of the Premises and upkeep of walkways, landscaping, parking
facilities, driveways, drainage facilities and lighting facilities. At the
expiration of the Lease Term, Tenant shall yield and deliver the Premises to
Landlord in the like condition as when it was taken, except for reasonable use
and wear, damage by casualty and condemnation, and will, at its own cost and
expense, repair or pay the cost of restoration with respect to any damage to the
Premises arising from the removal of any trade fixtures or similar items. Tenant
shall have no rights of removal as to property affixed or otherwise placed on or
in the building on the Premises by or at the expenses of Landlord, its
predecessors, successors or assigns.
10.03 In the event Tenant refuses, neglects or fails to commence and
complete any repairs to the Premises or maintain the Premises as provided
herein, Landlord may, at its sole option, after written notice to Tenant and
Tenant's failure to cure the default within ten
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(10) days thereafter (except in case of an emergency, in which event no such
notice shall be required), enter onto the Premises and make and complete such
repairs or perform such maintenance and shall not be responsible to Tenant for
any loss or damage that may be incurred by Tenant by reason thereof, nor shall
such entry by Landlord be considered a trespass. All sums expended by Landlord
to make such repairs or maintenance shall be additional rent due and payable on
the next Rent Day, together with late charges and interest as provided in
Section 5 hereof.
10.04 Tenant shall make no renovations, alterations, additions or
improvements to the Premises without the prior written consent of Landlord and,
if applicable, Landlord's mortgagee. Landlord's consent shall not be
unreasonably withheld or delayed if such proposed renovations, alterations,
additions or improvements only affect the interior of the Improvements and do
not affect the foundation, walls (interior or exterior) and roof of the
Improvements. All plans and specifications for such renovations, alterations,
additions or improvements shall be approved by Landlord, prior to commencement
of any work. All renovations, alterations, additions or improvements made by
Tenant upon the Premises, except for movable office furniture and trade fixtures
put in at the expense of Tenant, shall be the property of Landlord, and shall be
surrendered with the Premises at the termination of this Lease, without
molestation or injury. If Landlord so requires, Tenant shall remove any or all
such alterations as Landlord designates at termination and shall repair any
damage to the Premises caused thereby. If Tenant seeks Landlord's consent to
such alterations and such consent is granted, Landlord shall notify Tenant, no
later than the time such consent is granted, whether Landlord requires such
alterations to be removed upon termination of this Lease.
10.05 Tenant agrees that all renovations, alterations, additions and
improvements made by it pursuant to Section 10.04, notwithstanding Landlord's
approval thereof, shall be done in a good and workmanlike manner and in
conformity with all laws, ordinances and regulations of all public authorities
having jurisdiction, that materials of a similar kind, size and quality as those
currently on the Premises shall be employed therein, that the structure of the
Improvements shall not be impaired thereby, that the said work shall be carried
out and completed in an orderly, clean and safe manner, and that Tenant will
maintain customary insurance coverage while the work is being performed with
Landlord named as an additional insured.
10.06 Tenant shall obtain all necessary governmental permits before
making any renovations, improvements, alterations or additions to the Premises
pursuant to Sections 10.04 or 10.05 hereof. Landlord agrees to cooperate with
Tenant in obtaining such permits; provided however, Landlord shall have no
obligation to pay any fees or charges for building permits or the like which
Tenant is required to obtain from such governmental agencies or authorities.
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SECTION 11
LIENS
11.01 Tenant will keep the Premises free of liens of any sort and will
hold Landlord harmless from any liens which may be placed on the Premises except
those attributable to the acts of Landlord. In the event a construction or other
lien shall be filed against the Improvements, the Premises or Tenant's interest
therein as a result of any work undertaken by Tenant, or as a result of any
repairs or alterations made by Tenant, or any other act of Tenant, Tenant shall,
within ten (10) business days after receiving notice of such lien, discharge
such lien either by payment of the indebtedness due the lien claimant or by
filing a bond (as provided by statute) as security for the discharge of such
lien, or post other reasonable security therefor. In the event Tenant shall fail
to discharge such lien, or post other reasonable security therefor, Landlord
shall have the right after written notice to Tenant and Tenant's failure to cure
such default within ten (10 ) days thereafter, to procure such discharge by
filing such bond, and Tenant shall pay the cost of such bond to Landlord as
additional rent upon the next Rent Day in accordance with Section 5 hereof.
SECTION 12
EMINENT DOMAIN
12.01 (a) If the entire Premises is taken or condemned for a public or
quasi-public use, this Lease shall terminate as of the earlier of: (i) the date
title to the condemned real estate vests in the condemnor, or (ii) the date on
which Tenant is deprived of possession of all of the Premises. In such event,
the base rent and all additional rent and other sums payable hereunder shall be
apportioned and paid in full by Tenant to that date; all base rent, additional
rent and other sums payable hereunder prepaid for periods beyond that date shall
forthwith be repaid by Landlord to Tenant; and neither party shall thereafter
have any liability hereunder, except that any obligation or liability of either
party, actual or contingent, under this Lease which has accrued on or prior to
such termination date shall survive.
(b) In the event of a taking of "Substantially All of the
Premises" (as herein defined), Tenant may, at its option, upon thirty (30) days'
written notice to Landlord, which shall be given no later than sixty (60) days
following the taking, terminate this Lease. All base rent and other sums payable
by Tenant hereunder shall be apportioned and paid through and including the date
of taking, and neither Landlord nor Tenant shall have any rights in any
compensation or damages payable to the other in connection with such
condemnation. For purposes of this provision, "Substantially All of the
Premises" shall mean (i) so much of the Premises as, when taken, leaves the
untaken portion unsuitable, in the reasonable opinion of Tenant and Landlord,
for the continued feasible and economic operation of the Premises by Tenant for
the same purposes as immediately prior to such taking or as contemplated herein,
or (ii) so much of the Premises that access to the Premises is materially
impeded, as reasonably determined by Tenant and Landlord.
12.02 If this Lease is not terminated following such 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
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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 Improvements 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 Improvements, in the reasonable
estimate of Landlord, Landlord or Tenant may, but shall have no obligation to,
supply the amount of such insufficiency and if so supplied, Landlord shall
restore the Improvements to such architectural unit, with all reasonable
diligence, or, if not so supplied, either Landlord or Tenant may terminate this
Lease by giving notice to the other 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.
12.03 If this Lease is not terminated pursuant to Section 12.01, the
base rent payable by Tenant shall be reduced in proportion to the reduction in
net useable area of the Building by reason of the condemnation or taking. If
this Lease is terminated pursuant to Section 12.01, the base rent and other
charges which are the obligation of Tenant hereunder shall be apportioned and
prorated accordingly as of the date of termination.
12.04 The whole of any award or compensation for any portion of the
Premises taken, condemned or conveyed in lieu of taking or condemnation,
including the value of Tenant's leasehold interest under the Lease, 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 or moving
expenses, provided Landlord's award is not diminished thereby.
SECTION 13
ASSIGNMENT OR SUBLETTING
13.01 Tenant agrees not to assign or in any manner transfer this Lease
or any interest in this Lease without the prior 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 Landlord's consent, or if required,
the consent of Landlord's lender. Landlord's consent shall not be unreasonably
withheld or delayed. In no event may Tenant assign, sublet or otherwise transfer
this Lease or any interest in this Lease at any time while in default hereunder.
One such consent by Landlord will not be deemed a consent to any subsequent
assignment, subletting, occupation or use by any other person. Neither the
consent to any assignment or subletting nor the acceptance of rent from an
assignee, subtenant or occupancy will constitute a release of Tenant from the
further performance of the obligations of the Tenant contained in this Lease.
13.02 Notwithstanding the above, Tenant may assign or sublet this Lease
with prior written notice and a copy of such assignment or sublease to Landlord,
but without Landlord's prior written consent, to Tenant's parent, subsidiary,
successor, or affiliated corporation, or any corporation or entity which
acquires all or substantially all of the assets
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or issued and outstanding shares of capital stock of Tenant, provided the
parent, subsidiary, successor, affiliated corporation, or entity which acquires
the assets or shares of Tenant is at least as economically viable as Tenant and
that there is no material change in the use of the Premises without Landlord's
prior written consent.
13.03 In the event of any assignment or sublease of all or any portion
of the Premises to a non-affiliated entity where the rental or other
consideration reserved in the sublease or by the assignment exceeds the rental
or pro-rata portion of the rental, as the case may be, for such space reserved
in this Lease, Tenant agrees to pay Landlord monthly, as additional rent, on the
Rent Day, the excess of the rental or other consideration reserved in the
sublease or assignment over the rental reserved in this Lease applicable to the
subleased/assigned space.
13.04 Landlord shall have the right to assign this Lease at any time.
SECTION 14
INSPECTION OF PREMISES
14.01 Tenant agrees to permit Landlord and the authorized
representatives of Landlord to enter the Premises at all reasonable times during
business hours for the purpose of inspecting the same. Landlord shall provide
Tenant with reasonable advance notice of Landlord's entry onto the Premises,
unless Landlord's entry is necessitated by an emergency on the Premises, in
which case Landlord shall not be required to give advance notice.
14.02 If, after inspection, Landlord deems any repairs which are
Tenant's obligation to make, necessary to protect the structure of the
Improvements, for the health and safety of all persons using the Premises, or
required pursuant to Tenant's obligations hereunder, Landlord may demand that
Tenant make the repairs. If Tenant refuses or neglects to commence such repairs
within ten (10) business days of such demand or if Tenant fails to complete the
repairs within a reasonable time thereafter, Landlord may make or cause to be
made such repairs. The cost of any repairs so made by Landlord shall be deemed
additional rent payable on the later of ten (10) days or the next Rent Day in
accordance with Section 5 hereof. If any such repairs are made by Landlord, then
Landlord shall not be responsible to Tenant for any loss or damage that may
occur to Tenant while completing such repairs, except for damage due to
Landlord's gross negligence or willful acts or the gross negligence or willful
acts of its agents.
SECTION 15
FIXTURES AND EQUIPMENT
15.01 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
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but which are so incorporated and affixed to the Improvements that their removal
would involve damage or structural change to the Improvements, will be and
remain the property of Landlord.
15.02 All tenant furnishings, office equipment and tenant fixtures
(other than those specified in Section 15.01), 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 16
NOTICE OR DEMANDS
16.01 All bills, notices, statements, communications, 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 personally delivered, mailed by
United States certified mail, returned receipt requested, postage prepaid, sent
via telecopier, or sent via overnight courier service to Tenant at the address
or fax number of the Premises or at such other address or fax number as Tenant
may have last furnished in writing to the Landlord for such purpose. Any such
notices or demands from Tenant to Landlord will be deemed to have been duly and
sufficiently given if delivered to Landlord in the same manner as provided above
at the address set forth at the heading of this Lease or at the address last
furnished by written notice from the Landlord to Tenant, or if a receipt
generated by the sender's telecopier showing that the communication was sent to
the appropriate number on a specified date is presented to Landlord. The
effective date of such notice or demand will be deemed to be the time when
personally delivered, mailed, faxed or sent via overnight courier as herein
provided.
SECTION 17
BREACH; INSOLVENCY; RE-ENTRY
17.01 Each of the following shall constitute an Event of Default under
this Lease or any extensions or renewals under this Lease: (i) Tenant's failure
to pay rent or any other charges payable hereunder when due, if such failure
continues for more than seven (7) days after written notice from Landlord; (ii)
Tenant's failure to pay rent or any other charges payable hereunder timely more
than three (3) times in any twelve (12) month period, notwithstanding that such
payments have been made within the applicable cure period; (iii) Tenant's
failure to perform any of the non-monetary terms, conditions or covenants of
this Lease to be observed or performed by Tenant if such failure continues for
more than thirty (30) days after written notice from Landlord unless, with
respect to a failure which Tenant is able to cure but which cannot be cured
within said thirty (30) day period, within the thirty (30) day period Tenant has
begun to pursue performance and continues to diligently
17
pursue performance of any such term, condition or covenant so as to cure such
default within a reasonable time after such notice; (iv) if Tenant is named as
the debtor in any bankruptcy proceeding, or similar debtor proceeding, and the
bankruptcy proceeding, or similar debtor proceeding, and any such proceeding, if
involuntary, is not dismissed or set aside within sixty (60) days from the date
thereof; (v) if Tenant makes an assignment for the benefit of creditors or
petitions for or enters into an arrangement with creditor; or (vi) if Tenant
shall fail to take possession of the Premises on the Commencement Date (or
within a reasonable time thereafter), or abandon the Premises, or vacate the
Premises for a period of more than thirty (30) consecutive days, or suffer this
Lease to be taken under any writ of execution.
17.02 Upon the occurrence of an Event of Default, Landlord shall have
the right to terminate the Lease and shall be entitled to possession of the
Premises. Landlord may make its election to terminate known to Tenant by
delivery of a notice of termination. No agreement to accept a surrender of the
Premises and no act or omission by Landlord shall constitute an acceptance of
surrender of the Premises unless made in writing and signed by Landlord. No
re-entry or taking possession of the Premises by Landlord shall constitute an
election by Landlord to terminate this Lease unless written notice of such
intention is given to Tenant. Any termination shall be immediately effective and
Landlord shall be entitled to forthwith commence an action in summary
proceedings to recover possession of the Premises. Tenant waives all notice in
connection with such termination, including by way of illustration but not
limitation notice of intent to terminate, demand for possession or payment, and
notice of re-entry.
17.03 No receipt of money by the Landlord from the Tenant after the
termination of this Lease shall reinstate, continue or extend the Term, nor
affect or waive any notice given by the Landlord to the Tenant prior to such
receipt of money.
17.04 Should Landlord at any time terminate this Lease for any breach,
in addition to any other remedies it may have, it may recover from Tenant all
damages it may incur by reason of such breach, including without limitation the
cost of recovering the Premises, reasonable attorneys' fees, and damages equal
to lost rent, all of which amount shall be immediately due and payable from
Tenant to Landlord. Additionally, if Landlord has incurred any costs or
expenditures to fit the Premises to the needs of Tenant, Tenant agrees to
reimburse Landlord such costs and expenditures, including for purposes of
illustration but not by way of limitation, expenditures for interior partitions,
floor coverings, special paint, plaster or any counter, cabinet, shelving,
paneling or other special work done at the request of Tenant and not previously
paid for by Tenant, plus the estimated cost to Landlord of restoring the
Premises to their original condition as of the Commencement Date except for
normal wear and tear.
17.05 Upon the occurrence of an Event of Default, Landlord may, as an
alternative to terminating the Lease, serve a written demand for possession or
payment of any sums due hereunder. Unless the rent is paid in accordance with
the demand for possession or payment or such other Event of Default is cured
within the grace period provided in Section 17.01, Landlord shall be entitled to
possession of the Premises and Tenant shall have no
18
further right to possession under the Lease. Tenant shall remain liable to
Landlord for the payment of all rent and other charges which Tenant has agreed
to pay under the Lease throughout the remainder of its Term. Should Landlord
elect to re-enter, as herein provided, it may from time to time, without
terminating this Lease, make such alterations and repairs as may be necessary in
order to relet the Premises, and relet the Premises or any part thereof for such
term or terms (which may be for a term extending beyond the Term of this Lease)
and at such rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable, provided that, except as otherwise required
by law, Landlord shall not be required to expend any funds to relet the Premises
except as Landlord may elect in its sole discretion. Upon each such reletting
all rentals and other sums received by Landlord from such reletting shall be
applied, first, to the payment of any indebtedness other than rent due hereunder
from Tenant to Landlord; second, to the payment of any costs and expenses of
such reletting, including reasonable brokerage fees and attorneys' fees and of
costs of such alterations and repairs; third, to the payment of rent and other
charges due from Tenant; and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same may become due and payable. If
such rentals and other sums received from such reletting during any month are
insufficient to pay the rent and other charges due from Tenant, Tenant shall pay
such deficiency to Landlord. Such deficiency shall be calculated and paid
monthly. No such entry or taking possession of said Premises by Landlord shall
be construed as an election on its part to terminate this Lease. Notwithstanding
any such reletting without termination, Landlord may at any time hereafter elect
to terminate this Lease for such previous breach.
17.06 The Landlord's rights, remedies and benefits provided by this
Lease shall be cumulative, and shall not be exclusive of any other rights,
remedies and benefits allowed by law.
17.07 Except as provided in Section 17.06, the parties agree that they
shall rely solely upon the terms of this Lease to govern their relationship.
They further agree that reliance upon any representation, act or omission
outside the terms of this Lease shall be deemed unreasonable, and shall not
establish any rights or obligations on the part of either party.
17.08 One or more waivers of any covenant, term, condition or provision
of the Lease by either party shall not be construed as a waiver of a subsequent
breach of the same covenant, term, condition or provision, and the consent or
approval by Landlord to or of any act by Tenant requiring Landlord's consent or
approval shall not be deemed a waiver of Landlord's consent or approval to or of
any subsequent similar act by Tenant. No breach of a covenant, term, condition
or provision of this Lease shall be deemed to have been waived by Landlord,
unless such waiver (i) is in writing signed by Landlord, (ii) identifies the
breach, and (iii) expressly states that it is a waiver of the identified breach.
17.09 No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly rental herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and
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Landlord shall accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or pursue any other remedy.
17.10 Tenant acknowledges and agrees that its obligation to pay rent
under this Lease is an independent covenant, and that such obligation to pay
rent is not subject to setoff or recoupment in connection with any action or
summary proceedings to recover possession of the Premises.
17.11 Landlord and Tenant hereby waive trial by jury in connection with
any action for summary proceedings to recover possession of realty. Further,
Landlord and Tenant waive trial by jury in connection with any action arising
out of or relating to the covenants, terms, conditions or provisions of this
Lease, with the exception of actions for personal injury or property damage.
17.12 In the event that either Landlord or Tenant is required to bring
an action arising out of the covenants, terms, conditions or provisions of this
Lease, or in the event Landlord undertakes an action for summary proceedings to
recover possession of realty, the non-prevailing party agrees to pay the
prevailing party such reasonable costs and attorneys' fees as the prevailing
party may incur in connection with such action.
17.13 Landlord and Tenant hereby represent that in the event an action
for summary proceedings to recover possession of realty is commenced, the amount
set forth in this Lease shall be deemed reasonable rent for the Premises.
SECTION 18
SURRENDER OF PREMISES ON TERMINATION
18.01 At the expiration (or earlier termination) of the Term hereof,
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 for the Premises to
Landlord at the place then fixed for the 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, shall be invoiced to
Tenant and shall be payable as additional rental within ten (10) business days
after receipt of invoice.
SECTION 19
PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT
19.01 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 not otherwise be cured
20
within the time, if any, provided herein, Landlord may (but shall not be
required to), and without waiving or releasing Tenant from any of Tenant's
obligation, make any such payment or perform any such other act. All sums so
paid or incurred by Landlord and all necessary incidental costs, including
without limitation the cost of repair, maintenance or restoration of the
Premises if so performed by or on behalf of Landlord hereunder, shall be deemed
additional rental and, together with interest thereon computed at the rate set
forth in Section 5 hereof from the date of payment by Landlord until the date of
prepayment by Tenant to Landlord, shall be payable to Landlord within ten (10)
business 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 19 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 20
SUBORDINATION; ESTOPPEL CERTIFICATES
20.01 This Lease and the rights of Tenant hereunder shall automatically
and without further action by Landlord or Tenant be subject and subordinate at
all times to the lien of any mortgage or mortgages now or hereinafter placed
upon Landlord's interest in the Premises and on the Land and Building of which
the Premises are a part or upon any building hereafter placed upon the Land of
which the Premises form a part; subject to the agreement of the mortgagee that
in the event of foreclosure or the assertion of any other rights under the
mortgage, this Lease and the rights of Tenant hereunder shall continue in effect
and shall not be terminated or disturbed so long as Tenant continues to perform
and is not in default under this Lease. Tenant covenants and agrees to execute
and deliver, within five (5) business days after requested by Landlord, such
further instrument or instruments subordinating this Lease to the lien of any
such mortgage or mortgagees as shall be desired by the Landlord and any
mortgagees or proposed mortgagees and if Tenant fails to execute and deliver the
same within such five (5) business days period, Tenant hereby irrevocably
appoints the Landlord the attorney-in-fact of the Tenant to execute and deliver
any such instrument or instruments for and in the name of Tenant. In the event
said mortgagee(s) shall not accept any instrument or instruments executed by
Landlord pursuant to the power of attorney contained herein, Landlord, at its
option, may declare Tenant's failure to execute and deliver said instruments a
default in the performance of the Lease and may proceed to enforce any and all
remedies accruing to Landlord upon a default by Tenant hereunder.
20.02. In the event any proceedings are brought for foreclosure of, or
in the event of the conveyance by deed in lieu of foreclosure of, or in the
event of the exercise of the power of sale under, any mortgage made by Landlord
covering the Premises, Tenant hereby attorns to, and covenants and agrees to
execute any instrument in writing reasonably satisfactory to the new owner,
whereby Tenant attorns to such successor in interest and recognizes such
successor as the Landlord under this Lease.
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20.03 Tenant, within five (5) business days after request (at any time
or times) by Landlord, will execute and deliver to Landlord, an estoppel
certificate, in form acceptable to Landlord, certifying: (i) to the Commencement
Date and expiration date of the Term; (ii) that this Lease is unmodified and in
full force and effect, or is in full force and effect as modified, stating the
modification; (iii) that Tenant does not claim that Landlord is in default in
any way, or listing any such claimed default and that Tenant does not claim any
rights of setoff, or listing such rights of setoff; (iv) to the amount of
monthly rent and additional rent due hereunder as of the date of the
certificate, the date to which the rent has been paid in advance, and the amount
of any security deposit or prepaid rent; (v) Tenant has accepted the Premises
and is conducting its business therein (if such is the case); and (vi) such
other matters as may be reasonably requested by Landlord. Any such certificate
may be relied on by any prospective purchaser, mortgagee or lessor of the
Premises or any part thereof.
SECTION 21
QUIET ENJOYMENT
21.01 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 22
HOLDING OVER
22.01 If Tenant remains in possession of the Premises after the
expiration 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 rental for each month will be one
hundred fifty (150%) percent of the regular monthly installments of rental
payable the last month during the term of this Lease. This provision shall not
preclude Landlord from recovering immediate possession of the Premises and any
and all damages Landlord may incur as a result of Tenant's failure to timely
deliver possession of the Premises to Landlord.
SECTION 23
WAIVER OF SUBROGATION
23.01 Landlord and Tenant hereby release each other and their
respective agents and employees from any and all liability to each other or
anyone claiming through or under them by way of subrogation or otherwise for any
loss or damage to property caused by or resulting from risks insured against
under fire or other extended coverage casualty insurance carried by the parties
hereto and in force at the time of any such loss or damage;
22
provided, however, that this release shall be applicable only with respect to
loss or damage occurring during such time as the releasor's policies of
insurance contain a clause or endorsement to the effect that any such release
shall not adversely affect or impair such policies or prejudice the right of the
releasor to recover thereunder. Landlord and Tenant each agree that they will
request their insurance carriers to include in their policies such a clause or
endorsement, and will include such clause if available at reasonable cost.
SECTION 24
RIGHT TO SHOW PREMISES
24.01 For a period commencing nine (9) months prior to the termination
of the Term of this Lease, or upon an Event of Default under this Lease by
Tenant as defined in Section 17.01 herein and for so long as Tenant is in
default under the Lease, Landlord may show the Premises and may display about
the Premises signs advertising the availability of the Premises.
SECTION 25
SECURITY DEPOSIT
25.01 Deleted.
SECTION 26
INDEMNIFICATION
26.01 Tenant at its expense will defend, indemnify and save Landlord,
its licensees, servants, agents, employees and contractors, harmless from any
loss, theft, damage, claim of damage, liability or expenses, (including
reasonable attorney fees) 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 the condition of the Premises, the use or misuse thereof
by Tenant or any other person, the acts or omissions of Tenant, its licensees,
servants, agents, employees or contractors, the failure of Tenant to comply with
any provision of this Lease, or any event on or relating to the Premises,
whatever the cause; provided, however, that nothing herein shall be construed to
require the Tenant to indemnify Landlord against the sole negligence of
Landlord, or its employees or agents. Such obligations of Tenant shall survive
termination of this Lease.
26.02 Subsequent to the Commencement Date of this Lease, Landlord at
its expense will defend, indemnify and save Tenant, its licensees, servants,
agents, employees and contractors, harmless from any damage, liability or
expenses arising out of or in connection any physical damage done to the
Premises by Landlord, its licensees, servants, agents, employees or contractors;
provided, however, that nothing herein shall be construed to require the
Landlord to indemnify Tenant against the negligence of Tenant, or its
23
employees, contractors, licensees, servants or agents. Such obligations of
Landlord shall survive termination of this Lease.
SECTION 27
DEFINITION OF LANDLORD; LANDLORD'S LIABILITY
27.01 The term "Landlord" as used in this Lease so far as covenants,
agreements, stipulations or obligations on the part of the Landlord are
concerned is limited to mean and include only the owner or owners of 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 the 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,
provided that such transferee agrees to perform Landlord's obligations
hereunder.
27.02 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 the Premises and
out of rents or other income from the Premises, and neither Landlord nor any
shareholder, officer, director or partner thereof shall be personally liable for
any deficiency or in any other manner hereunder.
SECTION 28
ENTIRE AGREEMENT
28.01 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 understandings either oral or written, between them other than set
forth herein or therein.
SECTION 29
GENERAL
29.01 If, by reason of the occurrence of unavoidable delays due to acts
of God, governmental restrictions, strikes, labor disturbances, shortages of
materials or supplies or for any other cause or event beyond Landlord's
reasonable control, Landlord is unable to furnish or is delayed in furnishing
any service required by Landlord under the provisions of this Lease, or Landlord
is unable to perform or make or is delayed in performing or making any
installations, decorations, repairs, alterations, additions, or improvements,
required to be performed or made under this Lease, or is unable to fulfill or is
delayed in
24
fulfilling any of Landlord's other obligations under this Lease, no such
inability or delay shall constitute an actual or constructive eviction in whole
or in part, or, except as otherwise expressly provided herein, entitle Tenant to
any abatement or diminution of rental or other charges due hereunder or
otherwise relieve Tenant from any of its obligations under this Lease, or impose
any liability upon Landlord or its agents by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of Tenant's business, or
otherwise.
29.02 This Lease is being entered into and executed in the State of
Michigan, and all questions with respect to the construction of this Agreement
and the rights and liabilities of the parties shall be determined in accordance
with the provisions of the laws of the State of Michigan.
29.03 Tenant shall not commit or suffer to be committed any waste upon
the Premises or allow any act to occur at the Premises which would constitute a
nuisance.
29.04 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.
29.05 Neither party shall record this Lease or any portion thereof.
Tenant may prepare and Landlord will execute, a Memorandum of Lease in
substantially the form attached hereto as Exhibit C, and Tenant may record same
at Tenant's expense.
29.06 Section headings appearing in this Lease are for convenience
only. They do not define, limit or construe the contents of any paragraphs or
clauses contained herein.
29.07 This Lease can be modified or amended only by a written agreement
signed by Landlord and Tenant.
29.08 All provisions of this Lease are and will be binding on the
successors and permitted assigns of Landlord and Tenant.
29.09 Time shall be and is of the essence in this Lease and with
respect to the performance of all obligations of Landlord and Tenant hereunder.
29.10 Tenant, and each person executing this Lease on behalf of Tenant,
hereby warrant and represent to Landlord that Tenant is validly organized and
existing and authorized to do business under the laws of the State of Michigan,
that the Tenant has full power and lawful authority to enter into this Lease,
and that the execution of this Lease by such individuals is legally binding in
accordance with the terms hereof.
25
29.11 Landlord, and each person executing this Lease on behalf of
Landlord, hereby warrant and represent to Tenant that Landlord is validly
organized and existing and authorized to do business under the law of the State
of Michigan, that Landlord has full power and lawful authority to enter into
this Lease, and that the execution of this Lease by such individual is legally
binding in accordance with the terms and conditions hereof.
29.12 In case any provision of this Lease or any agreement or
instrument executed in connection herewith shall be invalid, illegal or
unenforceable, such provision shall be enforced to the fullest extent permitted
by applicable law, and the validity, legality and enforceability of the
remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby. This Lease shall not be construed more strictly against one
party than against the other, merely by virtue of the fact that it may have been
prepared by counsel for one of the parties, it being recognized that both
Landlord and Tenant have contributed substantially and materially to the
preparation of this Lease.
29.13 At Landlord's request, but no more frequently than once every
twelve (12) months, Tenant shall timely submit to Landlord and Landlord's lender
the Tenant's annual financial statements, including balance sheet and profit and
loss statements, audit reports, budgets and such information as may reasonably
be requested from time to time by Landlord or Landlord's lender; said financial
statements shall be prepared by a certified public accountant in accordance with
generally accepted accounting principles, consistently applied.
29.14 Tenant shall not take any action to terminate, rescind or void
this Lease solely as a result of any bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding affecting Landlord or any assignee
of Landlord.
SECTION 30
30.01
Exhibit A Legal Description
Exhibit B Landlord's Repairs and Improvements
Exhibit C Form of Memorandum of Lease
26
IN WITNESS WHEREOF the Landlord and Tenant have executed this Lease as
of the date and year first above written.
WITNESSES: LANDLORD:
TECHNICAL PROPERTIES, L.L.C.
___________________________ _________________________________
By: ______________________________
Its: _____________________________
TENANT:
ASSET ACCEPTANCE CORP.
___________________________ ___________________________________
By: _______________________________
Its:_______________________________
27
EXHIBIT A
LEGAL DESCRIPTION
Real property situated in the City of Xxxxxx, Macomb County, Michigan described
as:
Xxxx 00 xxx 00, Xxxxxx Xxxxxxxxxx Subdivision, according to the plat thereof
recorded at Liber 78, page 24 of Plats, Macomb County Records.
Commonly known as: 0000 Xxxxxx Xxxx
Xxx XX No. 00-00-000-000
28
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, dated ______________________, 200__ between
TECHNICAL PROPERTIES, L.L.C., a Michigan limited liability company, as lessor
("Landlord"), whose address is 00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, XX 00000 and ASSET ACCEPTANCE CORPORATION, a Nevada
corporation, as lessee ("Tenant"), with a principal business address of 0000
Xxxxxx Xxxx, Xxxxxx, XX 00000.
WITNESSETH:
In consideration of the rents, covenants and conditions more
particularly set forth in a certain unrecorded lease between Landlord and Tenant
dated __________________, 200__ ("Lease"), which Lease is incorporated herein by
reference, Landlord and Tenant represent as follows:
1. Landlord has leased to Tenant certain premises, consisting of
land described in Exhibit A attached hereto and the building
and related improvements to be constructed thereon, located in
the City of Xxxxxx, Macomb County, Michigan.
2. The term of the Lease is to commence on or about February 1,
2002 and continues until August 31, 2004, unless the option to
renew the Lease for an additional five (5) year period is
validly exercised, in which case the Lease will continue until
August 31, 2009.
This Memorandum is intended solely to give notice of the Lease and is
not a complete summary of terms and conditions thereof. Provisions in this
Memorandum shall not be used in interpreting provisions in the Lease. In the
event of conflict between this Memorandum and the Lease, the Lease shall
control.
WITNESS: LANDLORD:
TECHNICAL PROPERTIES, L.L.C.
__________________________
______________________________
___________________________ By: J. Xxxxxxx Xxxxxxxxx, Xx.
Its: Manager
WITNESS: TENANT:
ASSET ACCEPTANCE CORPORATION
___________________________
_________________________
__________________________ By: _____________________
Its:_____________________
STATE OF MICHIGAN)
) ss
COUNTY OF _______)
The foregoing instrument was acknowledged before me this _____ day of
____________, 200__, by J. Xxxxxxx Xxxxxxxxx, Xx., Manager of Technical
Properties, L.L.C., on behalf of the Company.
______________________________________
________________________, Notary Public
______________________ County, Michigan
My Commission Expires: _______________
STATE OF MICHIGAN)
) ss
COUNTY OF _______)
The foregoing instrument was acknowledged before me this _____ day of
___________, 200__, by _______________________ the _________________________ of
Asset Acceptance Corporation, on behalf of the Corporation.
________________________________________
_________________________, Notary Public
______________________ County, Michigan
My Commission Expires: _________________
Drafted by and When Recorded Return To:
Xxxxxxx X. Xxxxx
Xxxxxxxx Xxxxx & Xxxxxxxx, P.C.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
EXHIBIT B
LANDLORD'S REPAIRS AND IMPROVEMENTS
VIA FACSIMILE EMAIL & U.S. MAIL
-------------------------------
December 10, 2001
Xx. Xxxxxx Xxxxx
Xxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
RE: Site Inspection 0000 Xxxxxx Xxxxx Xxxxxx XX 00000
Dear Xxx,
You are in receipt of a request for proposal (''RFP'') from me regarding the
above-referenced transaction dated November 21, 2001. The RFP requested a
seventy five thousand dollar ($75,000.00) Tenant Improvement Allowance in
Section 10. Your client has requested a list of concerns from my client
regarding tenant improvements rather than an allowance. We have had an
opportunity to complete our inspection of the building including the HVAC
system. Additionally, we are including as an attachment the necessary
construction to meet the specific needs of Asset Acceptance Corp.
Our concerns are the following:
1) The integrity of the pipe that runs below the parking lot between
the building seems to be in question. Specifically, there is water in
the pump, which needs to be cleaned out. Additionally, we were unable
to test the entrance of the pipe at 0000 Xxxxxx Xxxxx. We are in
receipt of an estimate of $8,500 to correct the problem. (Copy
attached.)
2) The south rooftop unit was replaced in 1996 and seems to be in good
working order with the exception of some dirty filters. However, the
north rooftop unit is in excess of sixteen years old and needs
considerable work. Please see report from All Suburban Heating and
Cooling dated November 28, 2001. (Copy attached.)
3) Approximately 400 2' x 4' florescent light fixtures using 4 bulbs in
each fixture. Needs either bulb replacement and or ballasts.
4) Ceiling tiles of approximately 100, need replacement do to either
water stain or damaged.
5) At the interior window there appears to be water damage to the
drywell area that meets the windowsill. See photo.
6) There are numerous areas to the walls that need drywall repair and
painting. Some areas have severe stains and may need a kills applied prior
to a finish coat of paint. See photo.
7) The mechanical rooms will need ceiling tiles installed and abandoned
wires, equipment removed prior to receiving occupancy certificate. See
photo.
8) The exit lights and emergency lights need to be brought to a good working
order. Code issues may require some additional emergency lights. See photo.
9) The fire suppression system does not appear to have been maintained with
inspections and testing based on the tag at the riser in the mechanical
room.
10) The irrigation system does not appear to have been winterized. It does not
appear that it was utilized this season. See photo.
11) At the front entrance, off the parking lot, a crack and shifting of the
concrete walkway needs attention. This also is the handicap ramp entrance.
See photo.
12) There is one two headed light pole at the entrance to the parking lot. We
were not able to determine if it was in good working order. This is the
only light that would light the front walkway and parking lot at night.
The recessed light fixtures at the front entrance will light the immediate
doorway however there may be a deficiency coming off the face of the
building itself into the parking lot. Also the light fixtures that were on
the South and North ends could not be tested.
13) Where the sidewalk meets the brick of the building there is a shift of the
concrete. The result is an area about 1" to 2" that allows water to drain.
This could be a concern due to our weather change especially a freeze thaw
scenario. See photo.
14) All the exterior windows and doorways have lost the integrity of caulk and
or seal. See photo.
15) The exterior of the property over all needs a clean up with special
attention given to the dumpster enclosure and along the fenced areas. See
photo.
16) The brick on the building in numerous areas needs tuck-pointing. See photo.
17) The coping on the building at roof height in areas has lost its integrity
and needs to be replaced or repaired.
18) It appears there are 3 catch basins on the property. At least one needs to
be vacuumed out. At that point we would recommend all be done.
19) Additionally, because there will be some demolition to the existing
conditions, the carpet needs to be replaced throughout. Our building
standard is Triad Brittany #7073-05 (26 oz.)
I am confident that the attached list of concerns along with the request for
proposal submitted on November 21, 2001 provides you with enough information to
draft a proposal to lease. As you are aware, we are prepared to take occupancy
as soon as the work is completed with the lease term through August 31, 2004,
which is continuous with our existing leases with the two other buildings that
we occupy on Xxxxxx road. If you have any questions regarding the attached,
kindly feel free to contact me at (000) 000-0000.
Sincerely,
SIGNATURE ASSOCIATES, INC.-ONCOR INTERNATIONAL
Xxxxxxxxx X. Xxxxxx
Associate Broker/Principal
XXX/jjk
Attachments
CC: Xxxx Xxxxxx
Xxxx Xxxx
