Exhibit 10(a)

 

COMMERCIAL LEASE

 

This Lease (“Lease”) is dated the 3rd day of December, 2004, by and between
CANTON COMMERCE PARK, LLC, a Michigan limited liability company (“Landlord”),
whose address is 30100 Telegraph Road, Suite 366, Bingham Farms, Michigan 48025
and MATERIAL SCIENCES CORPORATION, ENGINEERED MATERIALS AND SOLUTIONS GROUP,
INC., an Illinois corporation (“Tenant”), whose address is 39033 Country Club
Drive, Suite A-11, Farmington Hills, Michigan 48331.

 

1. LEASE. Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord, upon the terms, conditions and covenants set
forth in this Lease.

 

2. PREMISES. The premises leased hereunder (the “Premises”) shall consist of a
building containing approximately fifty-six thousand seven hundred twenty-seven
(56,727) square feet (“Building”), excluding the mezzanine, located on
approximately twelve (12) acres of land in the Township of Canton, Wayne County,
Michigan (the “Site”), legally described on Exhibit A attached hereto and
incorporated herein. The Building and Site shall collectively be referred to as
the “Premises”. The office area shall consist of two (2) floors totaling
approximately twenty thousand eight hundred thirty-seven (20,837) square feet.
The Site includes the land and all exterior improvements, landscaping, and
on-grade parking areas to be built in accordance with the final Site Plan and
the Plans to be developed as provided in Section 3. Landlord represents that,
based upon the size of the Site and the current zoning ordinances of Canton
Township, the Site will accommodate at least twenty thousand (20,000) square
feet of additional building footprint if constructed as a ground-level addition
to the Building. Landlord represents to Tenant that, if the Building is
constructed as shown on the site plan attached as Exhibit B, there is sufficient
room to construct a twenty thousand (20,000) square foot addition in the
location shown in Exhibit B, which addition will comply with the Canton Township
Zoning Ordinance as it exists at the date of this Lease.

 

3. CONSTRUCTION OF PREMISES.

 

  3.1. Landlord shall construct the Building shell and finish the interior of
the office portion of the Building according to the Scope of Work attached as
Exhibit C. All of the work to be performed and the materials to be supplied by
Landlord shall be referred to herein as the “Work.”

 

  3.2.

Landlord and Tenant will work with Gillett and Associates, Landlord’s
independent architect, to cause the architect to design the Building in a manner
that accommodates Tenant’s requirements for the lab/shop area. Landlord and
Tenant shall schedule meetings with the architect as needed to complete
schematic design, design development, and thereafter, construction plans and
specifications. Landlord will be responsible for the cost of all of the items
delineated as Landlord’s responsibility in Exhibit C. Subject to the Tenant
Improvement Allowance set forth in Section 3.4, which is applicable to the
office portion of the Premises, Tenant shall

 

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be solely responsible for the cost of all other improvements which are included
in the construction plans and specifications, including the cost to finish the
lab/shop area of the Building. Tenant shall install all improvements (in excess
of those specified in Exhibit C) which Tenant desires for the lab/shop area of
the Premises (“Tenant’s Work”). Tenant shall have seven (7) days from receipt of
any proposed plan or proposed element of the construction drawings to give
Landlord and the architect written notice of Tenant’s approval or rejection of
the proposal, with reasons for any objection. Any objection Tenant may have
shall be made in writing, and Landlord and the architect shall be justified in
concluding that Tenant has no comments or objections if Tenant does not furnish
Landlord with written comment within seven (7) days of the submission by
Landlord. Landlord shall cause the architect to address Tenant’s comments and
objections and resubmit the plans to Tenant within seven (7) days for re-review
and written comment and/or approval. If Landlord deems that the changes
requested by Tenant are not reasonable, Landlord shall furnish Tenant with a
written justification within seven (7) days of receiving written comments from
Tenant. The architect shall make all changes requested by Tenant, provided the
parties recognize that such changes may affect the Budget (as referred to
below), in which case Tenant shall pay the increased costs caused to the Work by
the changes and time for completion of the Work and the Commencement Date shall
be affected.

 

  3.3. The Budget for the Work is attached as Exhibit D. The Budget forms the
basis for the Base Rent set forth in Article 5. When Landlord and Tenant have
agreed upon the final design and specifications for Landlord’s Work, Landlord
shall solicit bids to construct the Work (and the work, if any, Landlord has
agreed to do for Tenant) on a competitive basis. Landlord will group
subcontractors into bidding categories, based upon Landlord’s customary bidding
policies, subject to tenant’s reasonable approval. Landlord will solicit bids
from at least three (3) firms for each bidding category necessary to construct
and complete the Work. Landlord and Tenant shall consult with one another about
the list of subcontractors from whom bids will be solicited, and Landlord shall
solicit a bid from any subcontractor suggested by Tenant. All bids shall be
solicited on an open book basis. Landlord shall notify Tenant of and allow
Tenant to participate in all pre-bid meetings, bid review meetings, and all
other pre-award meetings. If a sub-contractor Tenant suggests is the low bidder,
but Landlord believes the bidder does not have a history of quality work and/or
timely performance, Landlord will nonetheless utilize such contractor if Tenant
insists in writing, but Landlord will not be responsible for delays or quality
problems caused by such contractor. If the actual cost of carrying out the scope
of work required of Landlord in Exhibit C differs from the Budget, the Base Rent
shall be adjusted as provided in Section 5.3 below. Landlord shall make
available to Tenant all Landlord’s records concerning the cost of carrying out
the construction plans so that Tenant may verify the actual costs.

 

  3.4.

Tenant has provided Landlord with a floor plan for the Tenant Improvements for
the office portion of the Premises (the first two pages of Exhibit E), and
specifications

 

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for the Tenant Improvements for the office portion of the Premises (Exhibit F).
Landlord will provide Tenant with construction plans for the finish to the
office area (the “Tenant Improvement Plans”) as soon as reasonably possible.
Upon receipt of the Tenant Improvement Plans, Landlord will provide Tenant with
an estimate of the cost of carrying out the Tenant Improvement Plans. Tenant
will review the cost estimate with Landlord within seven (7) days of receipt.
Landlord will work with Tenant, at Tenant’s request, to adjust the Tenant
Improvement Plans to reduce the costs of installing the Tenant Improvements.
Landlord will pay the cost of carrying out the final Tenant Improvement Plans,
not to exceed Eight Hundred Eighty-Five Thousand Eight Hundred Twelve and
twenty-nine/hundredths ($885,812.29) Dollars, provided if the Building is
greater or larger than fifty-six thousand seven hundred twenty-seven (56,727)
square feet as certified by Landlord’s architect pursuant to Section 3.10 below,
the amount Landlord will pay toward the cost of carrying out the Tenant
Improvement Plans will be Fifteen and six hundred fifteen/thousandths ($15.615)
Dollars multiplied by the actual area of the Building as determined by
Landlord’s architect pursuant to Section 3.10 below (the “Tenant Improvement
Allowance”). The Tenant Improvement Allowance shall include a five (5%) percent
construction management fee payable to BURTON-KATZMAN DEVELOPMENT COMPANY, INC.
If the final cost Landlord estimates of carrying out the Tenant Improvement
Plans differs from the Tenant Improvement Allowance, the cost differential shall
be handled as provided in Section 5.3 below. Landlord and Tenant will use the
bidding process set forth in Section 3.3 above to establish the contracts and
the contractors for the Tenant Improvement Plans.

 

  3.5.

When the Tenant Improvement Plans have been finalized pursuant to Section 3.2,
Landlord shall promptly commence and diligently pursue completion of the Work.
Landlord and Tenant recognize that construction of the Building may commence
before the Tenant Improvement Plans have been finalized. All Work shall be
completed in a good and workmanlike manner in accordance with the Final Plans
and the final Tenant Improvement Plans. The Work shall be completed by Landlord
or its contractor’s or sub-contractors’ forces, in full compliance with all
applicable laws and codes, including the Americans with Disabilities Act, and
all Work shall be of good workmanship and materials. Landlord warrants that the
Work shall be free from defects in materials and workmanship arising during the
first (1st) year after the Commencement Date and Landlord, at its sole cost and
expense (but with the right to rely on the warranty of the contractor,
sub-contractor or supplier who provided the labor or materials) shall correct
any item not in conformity with this warranty; provided Tenant gives Landlord
written notice of the defect on or prior to the first anniversary of the
Commencement Date. Landlord specifically warrants that during the entire Lease
Term, the basement of the Building will not permit the entry of water through
joints, cracks or cement failure, provided this warranty will not cover leaks
resulting from the actions of Tenant, such as vibration caused by Tenant’s
installation and use of dynamometers or other testing equipment which creates
abnormal or sustained vibration; damage to the Building caused by Tenant or the
agents,

 

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contractors, employees or sub-contractors of Tenant, or alterations Tenant makes
to the basement, the foundations, the footing drains or the grade of any of the
land shown on the Site Plan. Landlord shall seek to obtain manufacturer
warranties in excess of one (1) year. Tenant shall have the benefit of any such
longer warranties during the term of this Lease. Landlord shall assist Tenant in
making any claims that arise more than one (1) year after the commencement Date
under the available manufacturer warranties.

 

  3.6. Prior to the Commencement Date, Tenant shall be entitled to undertake
installation of Tenant’s fixtures, furnishings and specialty items within the
Premises, including the improvements to finish the lab/shop area, only with
Landlord’s prior approval, which approval shall not be unreasonably withheld,
and only so long as Tenant’s activities do not interfere with the Work to be
undertaken by Landlord and do not delay the Commencement Date. Landlord and
Tenant have agreed upon a construction schedule, attached as Exhibit G, that
sets forth the order in which each of the trades performing work for Landlord
and Tenant may have access to the Premises. Landlord and Tenant shall coordinate
the activities of their respective work forces to obtain an efficient
construction process Tenant shall not be required to pay base rental or other
amounts provided for herein to Landlord as a result of Tenant’s activities in
the Premises prior to the Commencement Date.

 

  3.7. The parties acknowledge that despite any determination that the Work has
been substantially completed in accordance with the construction drawings and
the Tenant Improvement Plans, there may be punch list items that do not prevent
Tenant’s use of the Building for the permitted uses and which require completion
by Landlord before or after the Commencement Date. An item shall be a punch list
item only if it is the type customarily considered as a punch list item in
commercial construction and does not impair Tenant’s ability to use the Premises
for a permitted purpose. In such event, Tenant shall furnish Landlord with
written notification of such punch list items within thirty (30) days after the
Commencement Date, and Landlord shall thereafter correct such items as
expeditiously as possible within ninety (90) days from notice thereof, subject
to delays necessitated for weather dependent items or other items beyond
Landlord’s control.

 

  3.8.

If Tenant makes any request for changes to the construction drawings or the
Tenant Improvement Plans after each is finalized, Landlord shall price the cost
of those changes out and promptly meet with Tenant to determine whether Tenant
wishes to execute a Change Order incorporating the changes into the construction
drawings or the Tenant Improvement Plans, as applicable, and to pay the
additional cost of those changes by cash payment within ten (10) days of billing
or in the form of additional rent (as provided in Section 5.3) so long as the
aggregate costs in excess of the Tenant Improvement Allowance which is converted
to rent does not exceed Eight Hundred Fifty Thousand ($850,000.00) Dollars (the
“Limit”). Even if Tenant elects to pay additional costs by increasing the rent,
Tenant shall pay all additional costs of

 

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the changes in excess of the Limit within ten (10) days of Landlord’s billings
therefore accompanied by evidence that the costs being billed are in excess of
the Limit. Landlord and Tenant will cooperate with one another to minimize the
number of changes, the cost of carrying out changes, and to reduce the
construction delay caused by any changes.

 

  3.9. Tenant shall not have the right to order extra work or change orders with
respect to the Work without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed. Tenant shall be
responsible for the reasonable cost incurred by Landlord with respect to any
such extra work required by Tenant. The parties acknowledge that the undertaking
by Landlord of any such additional or changed Work may, pursuant to Section
4.1(b), result in the Commencement Date occurring before the Building is
complete.

 

  3.10. Upon the completion of the Work, Landlord shall cause Landlord’s
independent architect to certify the number of square feet within the Building,
including the amount of office space and lab/shop space, by applying the
Building Owners’ and Managers Association International Standard method for
measuring floor area in office buildings (ANSI/BOMA Z65.1-1996; approved June 7,
1996) to the final measurements of the Building, the office area and the
lab/shop area. The number so determined will be utilized to compute the Base
Rent for the Premises. Further, upon completion of the Work, Landlord shall
provide Tenant with one (1) set of as-built plans for the Building.

 

4. TERM.

 

  4.1. Commencement Date. The term of this Lease shall begin on the
“Commencement Date”, which shall be defined as the earlier of:

 

  a) date on which all of the following contingencies have occurred:

 

  i) Landlord has substantially completed the Work; and

 

  ii) Landlord has delivered to Tenant a certificate of occupancy, either
temporary or permanent, issued by Canton Township, Michigan, permitting Tenant
to occupy the Premises for uses permitted in this Lease; and

 

  iii) Landlord has delivered possession of the Premises to Tenant, broom-clean
and in a condition which permits Tenant to occupy the Premises for the uses
permitted in this Lease; or

 

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  b) the date on which the foregoing three (3) items would have occurred but for
delays caused by Tenant (or Tenant’s contractors) in requesting change orders or
in carrying out Tenant’s Work.

 

The Expiration Date of the Lease shall be the last day of the calendar month
which is one hundred fifty (150) months after the Commencement Date occurs. When
the Commencement Date is known, Landlord shall submit to Tenant and Tenant shall
execute a letter stating that Tenant has accepted the Premises for occupancy,
and setting forth the Commencement Date, Expiration Date and such other
information as Landlord may reasonably request. In the event Tenant disagrees
with Landlord’s determination of the Commencement Date, Landlord and Tenant
shall promptly meet to resolve any disagreement. If Landlord and Tenant are
unable to resolve their disagreement, the Commencement Date shall be
conclusively determined by the architect, in reference to the standards of
Section 4.1 (a) or (b) as applicable. Each of Landlord and Tenant shall pay
one-half (2) of the architect’s fee for this determination.

 

  4.2. As used in the Lease, “Lease Year” means a period of three hundred
sixty-five (365) days [three hundred sixty-six (366) days in leap years)
beginning with the Commencement Date, and each anniversary of the Commencement
Date.

 

  4.3. Extension. Provided Landlord has not given Tenant written notice of
Tenant’s default under this Lease which remains uncured at the date of the
giving of notice of extension or at the beginning of the extended term, the term
of this Lease may be extended by Tenant for five (5) additional periods of five
(5) years each if Tenant shall give written notice of election to extend the
Lease term to Landlord not less than two hundred twenty-five (225) days prior to
the next scheduled Expiration Date. Tenant’s failure to give timely written
notice of an extension shall terminate Tenant’s right to all future extensions.
All of the terms and conditions of this Lease shall apply to the extended term
with the exception of the Base Annual Rate, which shall be as set forth in
Section 5.5 below.

 

5. RENT.

 

  5.1. Base Rent. The Base Annual Rent shall be the number of square feet of
Building area determined pursuant to Section 3.10, multiplied by the Base Annual
Rate. The Base Monthly Rent shall always be one-twelfth (1/12th) of the Base
Annual Rent. Whenever the Base Annual Rent increases, the Base Monthly Rent
shall increase correspondingly.

 

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  5.2. The Base Annual Rate shall be:

 

MONTH

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BASE ANNUAL RATE*

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1-6

   Free

7-42

   $8.30/sq. foot

43-78

   $8.77/sq. foot

79-114

   $9.26/sq. foot

115-150

   $9.78/sq. foot

 

During the first six (6) months of the term of the Lease, Tenant shall otherwise
be obligated as provided in this Lease from and after the Commencement Date,
including paying for all utilities consumed or utilized at the Premises, during
the Lease term, paying all Additional Rent, and paying any damage to the
Premises caused by Tenant, its agents, employees, contractors and invitees.

 

  5.3. The Base Annual Rate set forth above is based on the Budget attached as
Exhibit D. If the actual cost of carrying out the Work and the Tenant
Improvement Plans is lower than the total amount of the Budget attached as
Exhibit D, the Base Annual Rent for each Lease Year shall be adjusted to:

 

  a) decrease the Base Annual Rent by One Thousand Four Hundred Forty-Eight
($1,448.00) Dollars for each Ten Thousand ($10,000.00) Dollars by which the cost
of construction is less than the Budget, up to One Hundred Fifty-Six Thousand
Five Hundred Seventeen ($156,517.00) Dollars; and

 

  b) decrease the Base Annual Rent by One Thousand Twenty-Three ($1,023.00)
Dollars for each Ten Thousand ($10,000.00) Dollars by which the cost of
construction is more than One Hundred Fifty-Six Thousand Five Hundred Seventeen
($156,517.00) Dollars less than the amount of the Budget.

 

If the actual cost of carrying out the Work and the Tenant Improvement Plans
exceeds the total amount of the Budget attached as Exhibit D, Tenant shall have
the option to pay the excess to Landlord in a lump sum within seven (7) days of
billings from Landlord, or increasing the Base Annual Rent by One Thousand Four
Hundred Forty-Eight ($1,448.00) Dollars for each Ten Thousand ($10,000.00)
Dollars of additional costs (in excess of the Budget) up to Eight Hundred Fifty
Thousand ($850,000.00) Dollars; provided Tenant shall pay all costs of
construction which are more than Eight Hundred Fifty Thousand ($850,000.00)
Dollars in excess of the cost shown in the Budget to Landlord in cash within
seven (7) days of receipt of billings from Landlord accompanied by conditional
lien waivers and the certificate of the architect verifying the completion of
the work for which payment is sought.

 

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When the actual costs are determined, Landlord and Tenant shall sign a lease
addendum which sets forth the Annual Base Rent for the Premises, as adjusted as
provided in this Section 5.3.

 

  5.4. Additional Rent. All charges payable by Tenant other than Base Rent are
called “Additional Rent”. Unless this Lease expressly provides otherwise, all
Additional Rent shall be paid with the next monthly installment of Base Rent.
Failure to pay Additional Rent shall entitle Landlord to all remedies provided
hereunder in the same manner as nonpayment of Base Rent. The term “Rent” shall
mean Base Rent (i.e. Base Annual Rent and Base Monthly Rent) and Additional
Rent.

 

  5.5. Extended Terms. The Base Annual Rate established at the beginning of each
of the extended term(s) of this Lease shall be:

 

  a) for the first two (2) extensions, one hundred six (106%) percent of the
Base Annual Rate in effect during the last year of the initial Lease term [as to
the first (1st) extension], or the last year of the first (1st) extension [as to
the second (2nd) extension];

 

  b) for the third (3rd) extension, the greater of:

 

  i) ninety-five (95%) percent of the fair market rental rate (projected to the
beginning of the extended term) for comparable buildings in the Canton Township,
Michigan area, determined no earlier than the date of exercise of the extension;
and

 

  ii) one hundred six (106%) percent of the Base Annual Rate in effect in the
last Lease Year of the second (2nd) extension; and

 

  c) for the fourth (4th) and fifth (5th) extensions, one hundred six (106%)
percent of the Base annual Rate in effect in the last year of the third (3rd)
extension [as to the fourth (4th) extension], and the fourth (4th) extension [as
to the fifth (5th) extension]; and

 

  d) the Base Annual Rate, as determined for the beginning of each extended
Lease term shall be increased by six (6%) percent, effective at the beginning of
the third (3rd) Lease Year of each extended term.

 

In the event Landlord and Tenant are unable to agree upon the fair market rental
rate, the fair market rental rate shall be determined by an appraisal process.
Each of Landlord and Tenant shall appoint an individual commercial real estate
broker who shall have at least ten (10) years experience in the leasing of
buildings comparable to the Leased Premises in Oakland County, Michigan. The two
(2) brokers shall meet

 

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to determine the fair market rental rate for the Premises. If the two (2)
brokers provide a rental rate within ten (10%) percent of each other, measured
against the higher value (i.e., the difference is not more than ten [10%]
percent of the higher value), the fair market rental rate shall be the average
of the two (2) values. If the difference between the valuations of the two (2)
brokers exceeds ten (10%) percent of the higher valuation, then the two (2)
brokers shall jointly appoint a third (3rd) broker with at least ten (10) years
experience in the leasing of buildings comparable to the Leased Premises in
Canton Township, Michigan, and the fair market rent shall be the average of the
two (2) values of the three (3) which are closest to one another.

 

The amount of the Base Annual Rate, Base Annual Rent and Base Monthly Rent
during the extended term shall be confirmed by the parties in a written
document.

 

  5.6. Payment of Rent. Tenant agrees to pay Landlord the Base Monthly Rent,
without prior demand and without any deduction or set-off whatsoever (except as
provided in Section 10.1 below), in advance, on or before the first day of each
calendar month (“Due Date”) at the address set forth above or as designated by
Landlord. Tenant shall pay all Rent to Landlord, in immediately available
federal funds, or in the event of payment by check or money order, such funds
shall be cleared and available for use by Landlord by the Due Date. Landlord
shall have no obligation to accept the Rent after the Due Date or to accept less
than the full amount of Rent due and owing. If Landlord accepts less than the
full amount of Rent owing, Landlord may apply the sum received toward any of
Tenant’s obligations to Landlord. Landlord’s acceptance of partial payment of
Rent shall not be construed as a waiver of (i) the amount still unpaid, or (ii)
a default under this Lease. In the event the Lease term begins on a day other
than first day of the calendar month, the first and last month’s Rent shall be
adjusted on a pro rata basis.

 

  5.7. Late Charges. All Rent not paid by the tenth (10th) day of the month
shall be assessed a Two Hundred Fifty ($250.00) Dollar late fee in consideration
of Landlord’s extra administrative expense. Landlord’s acceptance of a late
rental payment shall not constitute a waiver of Tenant’s obligation to pay the
late fee. In addition, all unpaid sums due Landlord pursuant to this Lease shall
bear interest at the lower of three (3%) percent in excess of the prime rate of
interest publicly announced by Bank One, N.A. or its successors from time to
time, adjusting and changing as and when such prime rate changes, or the highest
rate allowed by law, commencing on the Due Date and accruing through the date of
actual payment.

 

6.

USE. Tenant may use and occupy the Premises solely for any purpose permitted by
local zoning at the date of this Lease, and for no other purpose without written
consent of Landlord, which consent shall not be unreasonably delayed or
withheld. Tenant shall not use or permit any person to use the Premises or any
part thereof, for any use or purpose in violation of any law or ordinance or
regulation of any public authority or since the Premises is a part of a larger
development, in violation of any applicable subdivision or industrial park

 

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rules or regulations. If the conduct or operations of Tenant result in increased
insurance premiums for the Building, Tenant shall, at Tenant’s option:

 

  6.1. immediately cease or correct such conduct or operations, or

 

  6.2. pay the increase in insurance premiums for the entire building until the
cause is removed.

 

7. POSSESSION. Landlord shall not be liable to Tenant for delay in delivering
the Premises if the delay is caused by unavoidable delay in preparing the
Premises for Tenant’s occupancy, delays due to unavailability of materials
Tenant has specified, changes Tenant makes in the Final Plans or the Tenant
Improvement Plans, or by reason of any other cause beyond the reasonable control
of the Landlord. Notwithstanding the foregoing to the contrary, Landlord shall
make a reasonable effort to specify materials which are readily available, to
hire contractors with an adequate work force to complete the Work in timely
fashion, and to inform Tenant if Tenant specifies any construction materials
which are not readily available (although Landlord shall have no responsibility
with respect to the availability of Tenant’s equipment or installers for
Tenant’s equipment). In the event of such delay, rent shall not commence until
possession is delivered to the Tenant and the Commencement Date, the rent
adjustment dates and the Expiration Date shall be extended for the period of the
delay, unless the delay results from any act or omission of Tenant, for example,
Tenant’s failure to specify materials for construction which are readily
available, in which case the Commencement Date shall be the day the Premises
would have been delivered to Tenant but for Tenant’s acts or omissions.

 

8. TAXES AND ASSESSMENTS.

 

  8.1. Tenant shall pay to the taxing authority all Real Estate Taxes during the
term of this Lease before interest or penalty attaches. “Real Estate Taxes”
shall include, without limitation, all taxes and assessments levied or assessed
by any lawful authority during the term of this Lease against the Premises,
including land, buildings, improvements, or any appurtenance thereto, or public
utility system, sidewalk, or street in front of, adjoining, or servicing the
Premises or against Landlord’s ownership interest in the Premises, or against
this Lease or the leasehold interest of Tenant and, if the present system of
real estate taxation in Michigan is changed, any substitute tax such as any tax
on rents or other income, excluding only general income taxes. Real Estate Taxes
shall not include federal or state income taxes or single business tax. Tenant
shall pay all personal property and other ad valorem taxes applicable to
fixtures and equipment in the Premises and shall be responsible for all matters
relating to the assessment thereof. During the initial the term of this Lease
(i.e., not during any renewal periods), Tenant shall not be required to pay any
Real Estate Taxes to the extent they result from an uncapping of the real estate
tax assessment of the Premises due to a sale or other transfer by Landlord.

 

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  8.2. Landlord shall elect to pay all special assessments in the maximum number
of installments permitted, and Tenant shall only be obligated to pay those
installments which become due during the term of the Lease. Landlord represents
and warrants that, to the best of Landlord’s knowledge, there are no special
assessments affecting the Premises as of the date of this Lease, and there is no
such special assessment proposed by any governmental authority other than an
assessment for the Tonquish Creek storm sewer and an assessment for Commerce
Boulevard, each of which will be paid in full with the winter 2004 tax bill.

 

  8.3. The Real Estate Taxes for the first and last year of the Lease Term shall
be allocated between Landlord and Tenant, pro rata as of the Commencement and
Expiration Dates of this Lease, utilizing the “due date” method which presumes
that Real Estate Taxes are payable in advance.

 

  8.4. At Tenant’s sole expense, Tenant may, in good faith, contest the
assessment or payment of any Real Estate Taxes, provided Tenant demonstrates to
Landlord’s reasonable satisfaction, that non-payment of the Real Estate Taxes
will (i) not subject the Premises to tax sale, and (ii) be reasonably secured by
bond, escrow or otherwise. Notwithstanding the foregoing to the contrary, Tenant
may not prosecute any Real Estate Tax appeal where, in Landlord’s good faith
opinion, there is a substantial risk of an increase in the tax assessment
applicable to the Premises which will affect the Premises after the termination
of this Lease.

 

  8.5. Tenant shall provide Landlord with copies of paid Real Estate Tax bills
on or before the date when any installment of Real Estate Taxes is last payable
without penalty and, if Tenant is contesting the taxes and not paying the Real
Estate Taxes, that the conditions of Section 8.4 are satisfied. Upon Tenant’s
failure to comply with the requirements of this Section 8.5, Landlord may pay
the Real Estate Taxes and the amount so paid shall be Additional Rent and/or
Landlord may treat such failure as a default under the terms of this Lease and
exercise any remedy provided for under this Lease or applicable law.

 

9. UTILITIES. As part of the Work, Landlord shall bring connections for sanitary
sewer, storm sewer, water, gas, electricity and telephone to the Building.
Tenant shall pay the actual cost of all gas, electricity, light, heat, power,
water, sewer, telephone, and other services used, rendered or supplied to, upon
or in connection with the Premises during the continuance of this Lease. Tenant
shall purchase utilities from the provider of its choice and be billed directly
for the cost of utilities consumed. Landlord shall not be liable to Tenant for
damages or otherwise should the furnishing of any utility services to the
Premises be interrupted by fire, accident, governmental fuel and energy
conservation programs, riot, strike, act of God, or the undertaking of necessary
repairs or improvements, or by other causes beyond the reasonable control of
Landlord.

 

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10. REPAIRS AND CARE OF PREMISES.

 

  10.1. Landlord shall, at Landlord’s sole cost, maintain, repair and replace,
as necessary: defects in the initial construction of the Premises pursuant to
and as limited by Section 3.5 above. Additionally, during the term of this
Lease, Landlord shall, at Landlord’s sole cost, maintain, repair and replace, as
necessary, the foundation of the Building; the structural aspects of the
exterior Building walls; and the roof deck (but not the roof membrane). Landlord
shall not be required to repair, replace or maintain any item damaged by Tenant
(including by vibrations caused by the operation or installation of any of
Tenant’s equipment) or any of Tenant’s employees, contractors, agents or
sub-contractors. If Landlord fails to carry out any of Landlord’s duties under
this Section 10.1, Tenant may give Landlord written notice thereof, specifying
the failure, the action necessary to correct the failure, and the consequence to
Tenant of the failure. If Landlord does not cure the default within ten (10)
days of written notice (or such longer period as shall be reasonably necessary
if the failure is of such a character that it cannot be cured within ten (10)
days and Landlord commences the cure within ten (10) days and proceeds
diligently thereafter to complete the cure), Tenant may cure the failure itself
and Landlord shall reimburse the Tenant for the reasonable cost of curing the
failure based upon competitive pricing. Additionally, if the failure is not due
to reasons beyond Landlord’s reasonable control, and if Tenant gave Landlord
written notice that (and specify how) the failure is having a material adverse
impact on Tenant’s ability to conduct its business, and if the failure actually
does materially impair Tenant’s ability to conduct its business, Tenant may set
off the amount due from Landlord to Tenant under this Section 10.1 against the
next rent due.

 

  10.2. Except for the repairs and maintenance required to be performed by
Landlord under Section 10.1 above, Tenant shall, at its sole cost and expense,
keep the Premises and every part thereof in good order and repair including,
without limitation, the roof membrane, inner walls, exterior painting and
caulking, HVAC, elevator, plumbing, electrical, plate glass, drives, parking
areas and landscaped areas. Alterations that may be required by any code,
regulation or OSHA shall be made and paid for by Tenant. Tenant shall promptly
make any repairs or replacements necessary for such purpose, ordinary as well as
extraordinary, whether or not foreseen, or within the present contemplation of
the parties.

 

  10.3. All repairs and replacements required to be made by Tenant under this
Section 10 shall be made within a reasonable time after receiving notice or
having actual knowledge of the need for such repair or replacement. Such repair
or replacement shall be performed in a good and workmanlike manner and Tenant
shall keep the Premises free from any liens arising out of work performed,
materials furnished or obligations incurred as a result of such repair or
replacement.

 

  10.4.

Tenant shall not perform any acts or carry on any practices which may injure the
Premises or be a nuisance or menace to adjacent property owners or occupants and

 

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shall keep the Premises under its control (including adjoining drives, streets,
alleys or yards) clean and free from rubbish, dirt, snow and ice. All storage
shall be confined to the interior of the Premises or shall be appropriately
secured. Trash and waste shall be kept in commercial containers and emptied
regularly. The outside of the Premises shall always be kept neat and orderly.
Tenant shall not interfere with the free flow of traffic through the various
roads, sidewalks, drives and other easements of which the Premises are a part.

 

  10.5. Tenant shall peacefully surrender and deliver possession of the Premises
to Landlord upon termination (by expiration, default or otherwise) in as good
order, condition and repair as when delivered to Tenant, ordinary wear and tear
excepted.

 

11. INSURANCE.

 

  11.1. Landlord shall, at Tenant’s cost and expense, procure and keep in effect
insurance covering the buildings, improvements and fixtures on, in or
appurtenant to the Premises at the commencement of the term and thereafter
erected thereon or therein, including all alterations, rebuilding, replacements,
changes, additions and improvements, for the benefit of Landlord, Tenant and the
holders of any mortgages on the fee or the leasehold of the Premises
(“Mortgagee”), as their respective interests may appear, providing insurance
against loss or damage by fire, casualty and all risks comprehended from the
so-called “all risk” endorsements on fire policies, other hazards and similar
insurance (including rent loss) (“Hazard Insurance”) as may from time to time be
reasonably required by Landlord or any Mortgagee, all such insurance to be in an
aggregate amount which shall equal the full replacement value thereof, to be
carried in such insurance companies in such form and with such endorsements as
shall be reasonably satisfactory to Landlord and to any Mortgagee, all of which
policies shall provide that loss, if any, payable thereunder shall be adjusted
with and shall be payable to Landlord and Mortgagee as their respective
interests may appear. Landlord may provide such insurance through a blanket
policy maintained by an affiliate of Landlord as long as the policy specifically
covers the Premises, Landlord is a named insured on the policy, and the insurer
or insurance agent allocates a specific portion of the overall premium to this
coverage. Landlord shall obtain competitive pricing for the hazard insurance,
although the pricing need not be the lowest available cost in the marketplace.
The cost of the Hazard Insurance shall be Additional Rent due from Tenant to
Landlord upon the Due Date next following Tenant’s receipt of a bill from
Landlord for the cost of such insurance. Tenant shall be solely responsible to
obtain, at its expense, hazard, theft or other insurance covering the personal
property Tenant owns which is located at the Premises.

 

  11.2.

Tenant shall, at its sole cost and expense, procure and keep in effect public
liability and property damage insurance (including contractual liability), with
a single combined liability limit of not less than Two Million ($2,000,000.00)
Dollars per occurrence and property damage limits of not less than One Million
($1,000,000.00)

 

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Dollars per occurrence, insuring against all liability of Tenant, Landlord (and
if requested, any Mortgagee) and their authorized representatives, including
bodily injury or property damage occurring on or about the Premises and any loss
arising out of and in connection with Tenant’s use, occupancy and condition of
the Premises and any improvement thereon. Such insurance shall name Landlord as
an additional insured. Landlord may periodically require Tenant to purchase
increased limits of liability insurance to account for inflation, provided
Landlord may not require Tenant to purchase limits which exceed those which are
then customary for new leases of similar buildings in Canton Township, Michigan.

 

  11.3. Each insurance policy required to be maintained by Landlord or Tenant
under this section shall:

 

  a) be issued by an insurance company licensed in the State of Michigan
reasonably acceptable to Landlord (Best rated “A” or better and Class XII or
higher);

 

  b) require thirty (30) days written notice to Landlord and to any Mortgagee,
before cancellation or change in the coverage, scope or amount of the policy;
and

 

  c) provide that the insurance company waives all right of recovery by way of
subrogation against Landlord (or Mortgagee) in connection with any damage
covered by any such policy.

 

Landlord and Tenant shall each provide the other with certificates of the
insurance they are required to maintain for the other party’s review and
approval, which shall not be unreasonably delayed, withheld or conditioned.

 

  11.4. A certified copy of the policy required to be obtained by Tenant,
together with evidence of payment of premium, shall be delivered to Landlord
prior to commencement of this Lease and thereafter not less than thirty (30)
days prior to the expiration of the term of the policy. If Tenant fails to
provide evidence of such paid policies and/or renewals, Landlord may (but is not
obligated to) procure or renew such insurance and charge the cost thereof to
Tenant as Additional Rent payable with the next monthly rental payment to be
maintained by Tenant in this Section 11.

 

12. COMPLIANCE WITH LAWS, RULES AND REGULATIONS.

 

  12.1. 

Except as otherwise provided in Section 3 or this Section 12, Tenant shall, at
its sole cost and expense, promptly comply with all governmental laws,
ordinances, rules and regulations, including compliance with OSHA and other
commissions which may regulate or have jurisdiction over the Premises or
activities conducted therein. The foregoing does not relieve Landlord of the
obligation to construct the Building in

 

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accordance with applicable laws, and obtain a certificate of occupancy for the
Building, as provided in Section 3. If a change in the law makes the structural
portion of the Building legally non-conforming as a general office/research use,
and not because of Tenant’s specific use, and the Building’s structural
components must be retrofitted at that time under applicable law, Landlord shall
make the Building’s structural components comply with applicable law, provided
Tenant shall make the necessary modifications if the need arises because of a
permit Tenant has sought for work it desires, or because of changes in the law
applicable to Tenant’s particular use of the Building, and provided further,
Tenant shall move its equipment, fixtures and property as necessary for Landlord
to complete its work, and there shall be no resulting reduction in rent. It
shall be the responsibility and obligation of Tenant to secure a certificate of
occupancy for any improvements or equipment Tenant installs within the Building.
Further, if required by Canton Township, Tenant shall obtain a business license
or similar governmental certificate from the appropriate governmental agency.

 

  12.2. The parties agree that the liabilities and obligations of Landlord and
Tenant under that certain federal statute commonly known as the Americans With
Disabilities Act (42 U.S.C. 12101 et seq.) as well as the regulations and
accessibility guidelines promulgated thereunder as each of the foregoing is
supplemented or amended from time to time (collectively, the “ADA”) shall be
apportioned as follows:

 

  a) Landlord represents and warrants to Tenant that the Premises, including,
but not limited to, exterior and interior horizontal and vertical routes of
ingress and egress, off-street parking, entrances, doors, lobby areas, toilet
rooms and stalls, signage, life-safety systems will comply at the Commencement
Date, with the ADA assuming the Building is used for general office and general
research purposes and for no specialized use.

 

  b)

From and after the Commencement Date, Tenants covenants and agrees to conduct
its operations within the Leased Premises so that all elements of the Premises
will comply with the ADA. If Tenant uses the Leased Premises for any specialized
use and the nature of that use causes the Premises to violate the ADA, Tenant
will, at its sole expense, promptly either alter its use or modify the Premises
(according to plans submitted to and approved by Landlord, which approval will
not be unreasonably delayed or withheld) so that the Premises complies with the
ADA. In the event that Tenant elects to undertake any alterations to, for or
within the Premises, including initial build-out work, and if such work,
pursuant to the other terms of this Lease, is the responsibility of Tenant to
design or perform, then Tenant agrees to cause such alterations to be performed
in compliance with the ADA. In the event that Tenant shall be required to make
any alterations to the Premises in order to make the Premises comply with the
ADA and such required alterations are not required because of Landlord’s failure
to perform its obligations under

 

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subparagraph A immediately above, then, to the extent any other term of this
Lease requires the Tenant to obtain the Landlord’s consent to make such
alterations, Landlord hereby agrees not to unreasonably withhold or delay such
consent.

 

13. ALTERATIONS. Tenant shall not make any alterations to the Premises which
affect the structure of the Building or the mechanical, electrical or plumbing
systems of the Premises, without Landlord’s prior written consent, which shall
not be unreasonably delayed, conditioned or withheld. Landlord may approve or
disapprove such alterations, regulate the manner in which the work may be
performed, require, among other things, the use of contractors Landlord
approves, require lien and completion bonds, and insurance, in such form and
amount reasonably satisfactory to Landlord. Landlord’s consent shall not be
required for normal decorating or redecorating of the interior of the Premises,
such as the painting of walls, the installation of wall or floor coverings or
replacement of light fixtures; provided that such work does not impact the
structure, plumbing, mechanical or electrical systems of the Building. Tenant
shall promptly remove all debris from the Premises in the event alterations are
performed by Tenant or at its direction. Tenant shall provide Landlord with
“as-built” plans, copies of all construction contracts and proof of payment for
all labor and materials. Tenant shall keep the Premises free from any liens
arising out of work performed, materials furnished or obligations incurred by or
for Tenant or, if any such lien is filed against the Premises, Tenant shall
promptly bond over the lien to the reasonable satisfaction of Landlord. Tenant
shall reimburse Landlord for all costs and expenses, including attorneys’ fees,
reasonably incurred by Landlord due to the filing and/or removal of such liens
that are not satisfactorily bonded over. Tenant’s failure to pay such costs and
expenses within ten (10) days after written demand shall be a default in the
same manner as nonpayment of Rent and Landlord may pay or bond over such lien
and charge the cost to Tenant as Additional Rent. However, Tenant shall have no
obligation to remove any such lien, and Landlord shall have no right to cause
such removal in the event Tenant provides Landlord with security against the
enforcement of such lien in an amount and a manner reasonably acceptable to
Landlord. All alterations, additions or improvements made by either party upon
the Premises, including floor coverings (except movable office furniture and
trade fixtures installed at the Tenant’s expense), shall remain upon and be
surrendered with the Premises at the termination of this Lease, without
molestation or injury, and shall thereupon become the property of Landlord;
provided, however, that Landlord may designate by written notice to Tenant those
alterations and additions which shall be removed by Tenant at the expiration or
termination of the Lease, and Tenant shall promptly remove the same and repair
any damage (including screw holes, mollies, unmatched wallpaper or paint, etc.)
to the Premises caused by such removal. If Landlord directs Tenant to remove any
alterations from the Premises, including any specialty items installed by or at
the request of Tenant, Tenant will remove such items at the end of the Lease
term and restore the Premises to a good condition. In the event Landlord
approves any alteration, Tenant shall:

 

  13.1. comply with all governmental codes and ordinances; and

 

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  13.2. perform all such alterations in a first-class, workmanlike manner.

 

14. CONDITION UPON TERMINATION.

 

  14.1. Upon termination of this Lease, Tenant shall surrender the Premises to
Landlord, broom clean, without damage and in the same condition as received,
except for ordinary wear and tear which Tenant is not otherwise obligated to
remedy under any provision of this Lease. With respect to the removal of
alterations to the Premises (including any floor covering and whether or not
performed with Landlord’s consent) at the end of the Lease term:

 

  a) if Tenant is entitled to make the alteration to the office portion of the
Premises under the terms of Section 13 above without obtaining Landlord’s
consent, Tenant need not remove the alteration;

 

  b) if Tenant must request Landlord’s permission to make an alteration or if
the alteration is to the lab/shop area, or if the alteration consists of block
walls or a similar heavy construction, Tenant must remove the alteration if
directed to do so by Landlord at the time Landlord gives consent to the
alteration; and

 

  c) with respect to the initial work of Landlord and Tenant, Landlord shall
give Tenant written notice of the Work that must be left at the Premises and the
work that must be removed, within thirty (30) days of receipt of Tenant’s
construction plans.

 

If Landlord directs Tenant to remove any alterations from the Premises,
including any specialty items installed by or at the request of Tenant, Tenant
will remove such items at the end of the Lease term and restore the Premises to
a standard office facility/shop area finish, all at Tenant’s sole expense.
Tenant may, without expense to Landlord, remove all trade fixtures, moveable
partitions and machines which are installed and can be removed without damage to
the Building or Premises, and other articles of personal property owned by
Tenant. Tenant shall, at its expense, repair any damage to the Premises or the
Building caused by the installation or removal of such furniture, fixtures,
alterations or additions so removed and restore the Premises to its original
condition.

 

  14.2.

Notwithstanding anything in Section 13 or Section 14.1 to the contrary, Landlord
will install a basement in the building to house a dynamometer or other testing
equipment. In lieu of leaving or removing the basement, pursuant to the notice
provided for in Section 14.1 above, at Landlord’s written request made prior to
the end of the Lease term, Tenant shall, prior to the expiration of the Lease
Term (as it may be extended pursuant to Section 4.2), at Tenant’s sole cost,
fill the basement with engineered fill compacted to ninety-five (95%) percent
modified proctor, and install a six (6) inch reinforced concrete cap, sufficient
in the opinion of Landlord’s independent

 

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professional engineer utilizing accepted engineering criteria, to support
structural loads up to four hundred fifty (450) pounds per square foot.

 

15. ASSIGNMENT, TRANSFER, SUBLETTING. Except as otherwise provided in this
Section 15, Tenant may not assign, transfer or encumber its interest in this
Lease, or sublease all or any part of the Premises, or allow any other person or
entity to occupy or use all or any part of the Premises without the prior
written consent of Landlord, which shall not be unreasonably delayed,
conditioned or withheld. Any such assignment, transfer, encumbrance or
permission to occupy the Premises without Landlord’s prior written consent shall
be void. In the event Landlord shall so consent, Tenant shall (a) remain liable
for all of its obligations under this Lease, and (b) in addition to other
payments due under this Lease, shall pay Landlord monthly, in advance, fifty
(50%) percent of any amount charged any sublessee in excess of the Base Monthly
Rent due to Landlord hereunder. Notwithstanding any other term or condition
contained in this Section 15 to the contrary, Tenant may assign or transfer,
either directly or by operation of law or sublease, without Landlord’s consent
(but following written notice to Landlord) and without paying any consideration
to Landlord to:

 

  15.1. any person or entity which, directly or indirectly controls, is
controlled by or is under common control with Tenant; or

 

  15.2. any person or entity in which or with which Tenant or its successors or
assigns is merged or consolidated (by share exchange or otherwise), in
accordance with applicable statutory provisions; or

 

  15.3. any person or entity acquiring all or substantially all of the assets of
Tenant or its successors or assigns, provided that, with regard to this
sub-section 15.3, such person or entity assumes and agrees to perform all of the
obligations of Tenant under this Lease arising from and after the date of such
sale by written instrument reasonably satisfactory to Landlord, and

 

  15.4. any entity who provides services to Tenant within the Building,
including those who install and/or operate dynamometers or other testing
equipment for Tenant within the shop area of the Premises.

 

No such assignment shall relieve Tenant of liability under this Lease.

 

16. SUBORDINATION, ATTORNMENT, NON-DISTURBANCE AND ESTOPPEL.

 

  16.1.

Subject to the terms of this Section 16, Landlord reserves the right to
subordinate this Lease to the lien of any mortgage now or hereafter placed upon
the Premises. Tenant agrees to promptly, but in any event within ten (10)
business days of the written request of Landlord, execute any documents
reasonably requested by Landlord or Mortgagee (as defined in Section 11) to
confirm any such subordination so long as the mortgagee agrees not to terminate
this Lease or disturb Tenant’s possession or

 

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other rights under this Lease if Tenant is not in default under this Lease
beyond any applicable notice and cure period. At the request of the Mortgagee,
this Lease may be made prior to any such mortgage and Tenant shall execute such
other documents and agreements giving priority to this Lease as such Mortgagee
shall require. Tenant agrees that upon such mortgagee’s filing for record in the
applicable Register of Deed’s Office of a Notice of Subordination or any
document executed unilaterally by such mortgagee subordinating the lien of the
mortgage to this Lease, such lease shall be prior to such mortgage. Tenant shall
not be required to pay any fees or costs to Landlord or the Mortgagee, in
connection with any such subordination, non-disturbance and attornment
agreement, but shall be responsible for the fees and expenses of Tenant’s own
counsel.

 

  16.2. Tenant shall, in the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under any
mortgage or deed in lieu of foreclosure heretofore or hereafter made relating to
the Premises, attorn to the purchaser upon any such foreclosure or sale and
recognize such purchaser as the Landlord under this Lease.

 

  16.3. Tenant agrees to execute and deliver within ten (10) business days after
request by Landlord a written statement in recordable form which certifies:

 

  a) that this Lease is in full force and effect;

 

  b) the date of commencement of this Lease;

 

  c) that rent is paid currently without any set-off or defense thereto;

 

  d) the amount of rent, if any, paid in advance; and

 

  e) that there are no uncured defaults by Landlord or stating those claimed by
Tenant,

 

provided that such facts are accurate and ascertainable.

 

17. ACCESS.

 

  17.1.

Landlord shall have the right, but not the obligation, to enter the Premises at
any time should Landlord reasonably determine that a hazard or emergency exists
to which Tenant is not responding appropriately. In such event, Landlord may
immediately perform all necessary repairs, and charge all reasonable expenses to
Tenant as Additional Rent. Landlord shall otherwise have the right to enter the
Premises at any reasonable time upon reasonable notice to inspect the Premises
during normal business hours. Nothing contained in this Section 17.1 shall be
deemed or construed to impose upon Landlord any obligation, responsibility or
liability whatsoever for the

 

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care, supervision or repair of all or any part of the Premises or the building
in which the Premises is located.

 

  17.2. Upon providing Tenant reasonable prior notice, Landlord shall have the
right to show the Premises to prospective tenants or purchasers at all
reasonable times commencing two hundred seventy (270) days prior to the
expiration of the term of this Lease. Any such showings shall be: conducted at
reasonable times; in a manner designed to minimize the interference with
Tenant’s business; in the presence of a representative of Tenant if Tenant
requests; and Tenant may restrict access to parts of the Building if necessary
to preserve legitimate commercial confidentiality, but Tenant shall not, in so
restricting access, impair Landlord’s ability to show an adequate amount of the
Building to allow a prospective tenant or purchaser to evaluate the Building for
tenancy. Two hundred seventy (270) days prior to termination of this Lease,
Landlord may display “TO RENT” signs in reasonable locations in the windows or
elsewhere on or around the Premises.

 

18. FIRE, DAMAGE, AND DESTRUCTION. In the event the Premises, or any portion
thereof, or any improvements or equipment on, in or appurtenant to the Premises
at any time erected or placed thereon or therein shall be destroyed or damaged
by fire or other cause during the term of this Lease, Tenant shall give to
Landlord prompt notice thereof, and Landlord shall promptly proceed to repair,
replace and rebuild the same (hereinafter called “such work”), at least to the
extent of the value and as nearly as possible to the size, design,
specifications character of the building, improvements and equipment existing
immediately prior to such occurrence (assuming the Premises were being properly
maintained and repaired). In the event of any such damage, this Lease shall
continue in full force and effect (except as specifically set forth below) with
an abatement or reduction in rent for the period (and to the extent) the
Building is not usable for the permitted purposes under this Lease.

 

For the purpose of paying the cost of such work, Landlord and Tenant shall make
available all sums (net of the cost of securing the payment of such sums by the
insurance company) received under insurance policies covering such loss as
provided in this Lease. Unless the Lease is terminated as permitted in the next
paragraph, Landlord and Tenant shall each have the right to participate with one
another in the settlement of any insurance claims to the extent the insurance
settlement pays for the reconstruction of the Building or the tenant
improvements.

 

If the Premises are substantially damaged and are rendered substantially
untenantable by fire or other casualty, Landlord and Tenant shall each have the
option, to be exercised by either party, in writing, within forty-five (45) days
after the occurrence of the damage or, in the case of the Landlord, after
receipt of notice of the damage, to terminate this Lease, unless more than three
(3) years remain under the term of this Lease at the date of the casualty, and
Tenant shall have thirty (30) days from the casualty in which to exercise any
available renewal option under Section 4.2 above by written notice to Landlord,
which, if so timely exercised shall be deemed to have extended the term of this
Lease as of the date of the

 

20

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casualty. If more than three (3) years remain in the term of this Lease (as
provided in the preceding sentence), and Tenant elects to continue the term of
this Lease by written notice to Landlord given within forty-five (45) days of
the occurrence of the damage, the Lease shall continue and Landlord shall make
the repairs as provided in this Section 18. If this Lease is terminated as
permitted in this Section 18, the term of this Lease shall expire and Tenant
shall vacate the Premises and surrender the same to Landlord, and Landlord shall
be entitled to settle the insurance claim itself and to all proceeds of
insurance. The Premises shall be deemed to be “substantially damaged” for the
purposes of this paragraph if the cost of repairing or restoring the Premises
exceeds fifty (50%) percent of the full insurable value of the Premises and the
Premises shall be deemed to be “rendered substantially untenantable” for the
purposes of this paragraph if loss by fire or other cause exceeds fifty (50%)
percent of the area of the Building.

 

19. EMINENT DOMAIN. If all or substantially all of the Building or Site, or the
use and occupancy thereof, shall be taken under the power of eminent domain, or
if so much of the Building is taken under the power of eminent domain that
Tenant is prevented from effectively using the Building for its intended purpose
(ie., Tenant must relocate its heavy equipment or is otherwise prevented from
using the laboratory area for its intended purpose), Landlord or Tenant may, at
any time after the entry of the verdict or order for such taking, terminate this
Lease by not less than thirty (30) days notice in writing to the other. All
damages and compensation awarded for any taking under the power of eminent
domain shall belong to and be the property of Landlord, whether such damages or
compensation be awarded for the leasehold or the fee or other interest of
Landlord or Tenant in the Premises; provided, however, that Landlord shall not
be entitled to any award made for Tenant’s loss of business, the removal of
Tenant’s property or Tenant’s relocation costs. If all the Building and Site
shall be taken under the power of eminent domain, then the term of this Lease
shall cease as of the day actual possession shall be taken by such power and the
rent shall be paid up to that day with a pro rata refund by Landlord of any
prepaid rent. If a portion of the Premises is taken by eminent domain, this
Lease shall terminate only as to that part so taken as of the day possession
shall be taken by such public authority, and thereafter, all the terms herein
shall continue in effect, except the Base Annual Rent shall be reduced in
proportion to the amount of the Building area of the Premises so taken.

 

20. DAMAGES. Landlord shall not be liable to Tenant for any damage to Tenant or
Tenant’s property from any cause other than the negligent or willful acts of
Landlord or its agents. Tenant waives all claims against Landlord for damage to
persons or property arising from any reason, including, but not limited to,
leakage, overflow, stoppage, backing up or other condition of any facilities or
utilities, or from fire, explosion or other casualty other than that caused by a
breach of this Lease by Landlord or the wilfull acts or gross negligence of
Landlord or its agents. Tenant shall defend, indemnify and hold Landlord
harmless from all liability for damage to any person or property occurring in,
on or about the Premises or resulting from Tenant’s occupancy and use of the
Premises. Landlord shall defend, indemnify and hold Tenant harmless from all
liability for damage caused by:

 

  20.1. the breach by Landlord of any covenant, agreement, representation or
warranty made by Landlord and contained in this Lease; and

 

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  20.2. damage to any person or property arising by virtue of the negligence or
wilfull misconduct of Landlord.

 

21. WAIVER OF SUBROGATION. Landlord and Tenant each hereby release and discharge
the other, and any officer, agent, employee or representative of such party, of
and from any liability whatsoever hereafter arising from loss, damage or injury
caused by fire or other casualty for which insurance (permitting waiver of
liability and containing waiver of subrogation) is carried by the injured party
at the time of such loss, damage or injury to the extent of any recovery by the
insured party under such insurance.

 

22. BANKRUPTCY. The interest of Tenant in this Lease may not be assigned by
operation of law or other involuntary assignment. Landlord may terminate this
Lease upon any involuntary assignment, including the following events:

 

  22.1. if Tenant is or becomes bankrupt or insolvent, makes an assignment for
the benefit of creditors or institutes a proceeding under the Bankruptcy Code in
which Tenant is the bankrupt; or if any one of the individuals comprising Tenant
is or becomes bankrupt or insolvent or makes an assignment for the benefit of
creditors;

 

  22.2. if a Writ of Attachment or Execution is levied on this Lease and is not
released or discharged within sixty (60) days; and

 

  22.3. if, in any proceeding or action to which Tenant is a party, a receiver
is appointed with authority to take possession of the Premises.

 

An involuntary assignment shall constitute a default by Tenant and shall
terminate Tenant’s right to possession of the Premises, and Landlord shall have
the right to elect to terminate this Lease. This Lease shall not be treated as
an asset of Tenant in the event Landlord terminates this Lease. Notwithstanding
the foregoing to the contrary, in the event of Tenant’s bankruptcy (voluntary or
involuntary), other than a liquidation proceeding, Landlord shall not seek to
terminate this Lease or otherwise disturb Tenant’s possession so long as Tenant
is not in default under this Lease. If Tenant, as a debtor-in-possession
pursuant to the Bankruptcy Code, or its trustee, elects to assume this Lease,
adequate assurance of future performance must be given in addition to the cure
of all outstanding defaults. Adequate assurance of future performance shall
constitute the posting of three (3) months advance rent and reasonable financial
assurance that such debtor, trustee or assignee is financially capable of
continued performance of all obligations under this Lease. In the event of a
Chapter 11 reorganization under the Bankruptcy Code, this Lease must be assumed
or assigned within sixty (60) days of filing or this Lease will be deemed
rejected.

 

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23. FAILURE TO PERFORM. If Tenant shall fail to pay or perform any obligation of
Tenant hereunder, Landlord may, after the expiration of any applicable grace or
notice period contained in this Lease, at its option, pay or perform such
obligation and the cost thereof shall be deemed Additional Rent payable by
Tenant upon demand.

 

24. HOLDING OVER. If Tenant, with Landlord’s prior consent, remains in
possession of the Premises after expiration or termination of this Lease, such
possession by Tenant shall be deemed to be a month-to-month tenancy terminable
by thirty (30) days notice given at any time by either party. All provisions of
this Lease, except those pertaining to the term hereof, shall apply to the
month-to-month tenancy; provided, however, that the Base Monthly Rent for each
of the first two (2) months of the holdover period shall be one hundred
twenty-five (125%) percent of the Base Monthly Rent in effect in the month
immediately preceding the commencement of the holdover and, for each month
beginning with the third (3rd) month of the holdover period, the Base Monthly
Rent shall be one hundred fifty (150%) percent of the Base Monthly Rent in
effect in the month immediately preceding the commencement of the holdover.

 

25. DEFAULT. The occurrence of any of the following shall constitute a default
by Tenant:

 

  25.1. failure to pay any rent within seven (7) days of the Due Date when such
failure is not cured within seven (7) days of written notice from Landlord
(which may be in the form of a Notice to Quit). In such instance, Landlord may,
in addition to all remedies provided hereunder, thereafter require Tenant to
make any future payments by cash or by certified funds; or

 

  25.2. Landlord gives Tenant written notice of non-payment of rent which
remains uncured for more than seven (7) days after Tenant’s receipt of such
notice more than two (2) times during any calendar year. Such default shall
entitle Landlord to all remedies hereunder, including immediate termination of
the Lease and may not be cured by subsequent payment; or

 

  25.3. failure to perform any other provision of this Lease if the failure to
perform is not cured within thirty (30) days after notice has been given to
Tenant. If the default cannot reasonably be cured within thirty (30) days,
Tenant shall not be in default if Tenant commences to cure the default within
such thirty (30) day period and thereafter diligently and in good faith proceeds
to cure the default within a reasonable time thereafter.

 

26. REMEDIES. Landlord shall have the following remedies in the event of default
by Tenant:

 

  26.1.

Landlord may, without terminating this Lease, terminate Tenant’s right to
possession, enter the Premises and relet the Premises, or any part thereof, on
such terms as Landlord, in the exercise of its reasonable discretion, deems
advisable. Tenant shall

 

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be immediately liable to Landlord for all costs Landlord reasonably incurs in
reletting the Premises, including, without limitation, brokers’ commissions and
tenant improvements. This Lease shall continue in full force and effect although
Landlord terminates Tenant’s right to possession, and Landlord shall have the
right to collect rent and other sums when due. The proceeds of such reletting
shall be applied in the following order:

 

  a) payment of any indebtedness of Tenant to Landlord other than rent;

 

  b) reasonable costs of reletting, including brokers’ commissions, attorneys’
fees and tenant repairs and improvements;

 

  c) payment of rent due and unpaid; and

 

  d) payment of future rent which shall become due and payable.

 

Tenant shall pay the deficiency to Landlord within ten (10) days after notice if
the sum received from reletting during any month is less than the rent due by
Tenant under this Lease. Landlord shall use reasonable efforts to relet the
Premises.

 

  26.2. Landlord may terminate this Lease. No act by Landlord other than written
notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to
relet the Premises, termination of Tenant’s right to possession or appointment
of a receiver shall not constitute a termination of this Lease. Upon
termination, Landlord shall be entitled to:

 

  a) all accrued rent at the time of termination;

 

  b) the present value of all future rent at the time of termination, less the
present value of the fair market rent for the remainder of the Lease term, each
determined as of the date of termination;

 

  c) the unamortized amount of the free rent, Tenant Improvement Allowance and
brokerage commission, amortized over the initial term of this Lease, commencing
on the first day of the seventh (7th) month of the Lease term, using an interest
factor of seven and one/tenth (7.1%) percent per annum;

 

  d) all costs, reasonable attorneys’ fees and other damage proximately caused
by Tenant’s default; and

 

  e) all other amounts allowable by law.

 

  26.3.

Landlord may cure the default at Tenant’s cost. The sum paid by Landlord shall
be due immediately as Additional Rent and bear interest at the lower of five
(5%)

 

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percent in excess of the prime rate of interest publicly announced by Bank One,
N.A. or its successor from time to time adjusting and changing as and when such
prime rate changes, or the highest rate allowed by law.

 

  26.4. Upon the occurrence of each default under Section 25.2, Landlord may, as
an alternative to the remedies provided for in Sections 26.1 or 26.2, either
terminate this Lease or increase the Base Rent by five (5%) percent, effective
upon and for all periods after the date of such default (even if Tenant
subsequently cures the default).

 

  26.5. Each of Landlord’s remedies provided in this Lease is cumulative and in
addition to any remedies now or hereafter allowed by law. No delay or omission
in the exercise of any right or remedy of Landlord shall impair such right or
remedy or be construed as a waiver of such breach or waiver of the further
breach of the same covenant or condition. The receipt and acceptance by Landlord
of delinquent rent shall not constitute a waiver of any other default and shall
not constitute a waiver of any interest and/or late charge due to the failure to
make timely payments.

 

27. HAZARDOUS MATERIALS.

 

  27.1. Tenant shall not permit the use, storage, generation or disposal of any
Hazardous Materials on, in or about the Premises during the term of this Lease
in violation of any federal, state or local laws, ordinances, rules, regulations
or policies governing the use of Hazardous Materials. Tenant shall indemnify and
hold Landlord harmless from and against any claims, demands, penalties, fines,
damages, losses, costs, liabilities or expenses of whatever kind, including
expert fees, clean-up costs and attorneys’ fees, arising out of or in any way
related to the use, storage, generation, disposal or introduction of Hazardous
Materials to the Premises by Tenant or to the Premises during Tenant’s occupancy
(excepting only the acts of Landlord and excepting the acts of third parties
other than an assignee or sub-tenant of Tenant). “Hazardous Materials” includes,
without limitation, any flammables, explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances or related materials
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et. seq.) (“CERCLA”), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et.
seq.) (“HMTA”, the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901, et. seq.) (“RCRA”), the Environmental Response Act (MCLA Sections
299.601, et. seq., “Polluters’ Pay”) (“ERA”), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
governmental law, ordinance, rule or regulation.

 

  27.2.

Tenant shall deliver the Premises to Landlord at the termination of this Lease
(whether by expiration or early termination) free of Hazardous Materials and in
conformity with CERCLA, HMTA, RCRA, ERA and all other applicable federal,

 

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state and local laws, ordinances, rules and regulations upon expiration or
termination of this Lease (regardless of whether resulting from early
termination due to Tenant’s default, bankruptcy, condemnation or other
non-Landlord triggered events). Landlord may require Tenant to commission and
pay for an environmental audit and deliver a written report if Landlord
reasonably suspects that Tenant has stored, generated or disposed of Hazardous
Materials on, in or about the Premises. Tenant’s obligation to conduct clean-up
operations and provide written environmental reports shall continue until a
report is received in form and substance reasonably acceptable to Landlord which
certifies that the Premises is free from all Hazardous Materials.

 

  27.3. Tenant’s obligations and liability under this Section 27 shall include
adjoining property owned by Landlord or others to the extent Tenant’s actions
may have contaminated such common or adjoining areas. The terms of this Section
27, including the obligations and liabilities herein, shall survive termination
of this Lease.

 

  27.4. Landlord represents and warrants that there will be no Hazardous
Materials located on or under the Premises as of the date of the Commencement
Date in concentrations which violate any federal, state or local laws,
ordinances, rules or regulations, or policies governing the use of hazardous
materials. Landlord further represents and warrants that no Hazardous Materials
shall be used, generated, stored or disposed of on the Premises during the term
of this Lease through the acts or omissions of Landlord, its agents, employees
or contractors. Notwithstanding any other provision of this Lease to the
contrary, Tenant shall have no responsibility or liability to Landlord with
respect to any Hazardous Materials located on the Premises as of the
Commencement Date or placed or disposed of on the Premises solely through the
acts or omissions of Landlord, its agents, employees or contractors.

 

28. NOTICES. Notices shall be deemed properly given and received pursuant to
this Lease:

 

  28.1. as to Tenant, if it is in writing, addressed to Tenant at its last known
post office address, or at the Premises, with a copy sent to Chief Financial
Officer, 2200 East Pratt Boulevard, Elk Grove Village, Illinois 60007, and
deposited in the United States mail, certified mail, return receipt requested,
and postage prepaid, or delivered by a recognized national delivery service; and

 

  28.2. as to Landlord, each notice shall be in writing, addressed to the last
known post office address of Landlord, and deposited in the United States mail,
certified mail, return receipt requested, and postage prepaid, or delivered by a
recognized national delivery service.

 

29. CONSENT. Except as otherwise provided in Sections 8.4 and 24 of this Lease,
any consent or approval required by either Landlord or Tenant shall not be
unreasonably withheld conditioned or delayed.

 

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30. QUIET ENJOYMENT. Tenant, subject to the terms of this Lease, and upon
payment of all rents, including Additional Rent, and performance of all
covenants and terms of this Lease, shall peacefully and quietly hold and enjoy
the Premises for the term granted hereby, without interruption by Landlord or
any other person lawfully claiming through or under Landlord or any predecessor
in interest to Landlord.

 

31. NON-LIABILITY AND LIMITATION OF REMEDIES. Except with respect to a failure
of Landlord to complete or correct the Work as required of Landlord in Section 3
of this Lease, any money judgment recovered by Tenant against Landlord for
Landlord’s failure to perform a covenant, term or condition of this Lease shall
be satisfied if not voluntarily paid by Landlord, solely 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 Building and out of rents or other
income from the Premises receivable by Landlord, or out the consideration
received by Landlord from the sale or other disposition of all or any part of
the Landlord’s right, title and interest in such building. Neither Landlord nor
any of its members shall be liable for any deficiency. If Landlord is found to
have unreasonably withheld its consent or approval in any manner, an action for
declaratory judgment or specific performance will be Tenant’s sole right and
remedy and Tenant hereby waives all rights for damages therefor.

 

32. TIME IS OF THE ESSENCE. Time is of the essence for each provision of this
Lease.

 

33. MISCELLANEOUS PROVISIONS.

 

  33.1. The captions and paragraph numbers appearing in this Lease are inserted
only as a matter of convenience and in no way define, limit, expand or describe
the scope or intent of such paragraphs or sections of this Lease, nor in any way
affect this Lease.

 

  33.2. This Lease shall inure to the benefit of the successors and assigns of
Landlord and shall be binding upon the successors and permitted assigns of
Tenant. If Landlord sells or transfers all or any portion of the Premises to an
owner with net assets at the date of the sale reasonably sufficient to allow the
new owner to perform the obligations of the Landlord under this Lease, Landlord
shall be released from any liability thereafter accruing under this Lease upon
the written assumption by the transferee of Landlord’s obligations under this
Lease; provided that in no event will Landlord be released of its obligation to
perform the Work, including the correction of any defects covered by the
Landlord’s warranty contained in Section 3.5 above.

 

  33.3. One or more waivers of the breach of any covenant or condition by the
Landlord shall not be construed as a waiver of the further breach of the same
covenant or condition.

 

  33.4.

Tenant may not record a Memorandum of Lease, unless the Memorandum contains a
provision reasonably satisfactory to Landlord (as evidenced by Landlord’s
written

 

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approval) that the Memorandum shall automatically be of no force or effect upon
the termination of this Lease, for any reason.

 

  33.5. This Lease contains all of the agreements of the parties hereto and
cannot be amended or modified except by written agreement of the parties. This
Lease shall be construed and interpreted in accordance with the laws of the
State of Michigan.

 

  33.6. The submission of this Lease to Tenant shall not be construed as an
offer, nor shall Tenant have any rights with respect hereto unless and until
Landlord shall execute a copy of this Lease and deliver same to Tenant.

 

  33.7. Subject to applicable ordinances and Landlord’s approval (as to
aesthetics, size and method of affixation to the Building or the Site), which
shall not be unreasonably delayed or withheld, Tenant shall have the right, at
its sole expense, to erect signage on the exterior of the Building or within the
Site. At the end of the Lease term, Tenant shall remove the signage and restore
any damage caused by such removal, all at Tenant’s sole expense, unless Landlord
shall request, in writing, that Tenant leave the signage. If Tenant is required
to remove the sign and restore the Building, and Tenant has failed to remove the
signage and restore the Premises by the Expiration Date, Tenant shall, at
Landlord’s option, be a holdover Tenant under Section 24 until the removal and
restoration are complete.

 

  33.8. All obligations of Landlord and Tenant under this Lease which accrue on
or before the date of expiration, termination or cancellation, survive such
expiration, termination or cancellation.

 

  33.9. If any provision of this Lease or its application to any specific
situation shall be invalid or unenforceable to any extent, the remainder of this
Lease or the application thereof to situations other than that as to which it is
invalid or unenforceable, shall not be affected and shall be deemed valid and
enforceable to the fullest extend permitted by law.

 

  33.10.  Nothing contained herein shall be deemed or construed by the parties
hereto, nor by any third party, as creating the relationship of principal and
agent or partnership or of joint venture between the parties hereto, it being
understood and agreed that neither the method of computation of rent, nor any
other provision contained herein, nor any acts of the parties herein, shall be
deemed to create any relationship between the parties hereto other than the
relationship of Landlord and Tenant.

 

34. PERSONAL PROPERTY TAXES. Tenant shall pay all taxes, assessments and charges
of any kind which shall be levied, assessed or charged upon any leasehold
interest or personal property located in the Premises during the term of the
Lease.

 

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35. CONSTRUCTION LIENS. Tenant will not directly or indirectly create or permit
to be created or to remain, and promptly discharge, at its sole cost and
expense, any lien, encumbrance or charge on the Building or Site hereunder
including, but not limited to, construction liens. This shall not be construed
as constituting the consent of Landlord to performance of any services or
furnishing of any materials for any alterations of the Leased Premises.

 

36. WAIVER OF JURY TRIAL. It is mutually agreed by and between Landlord and
Tenant that the respective parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or counter-claim brought by either of the
parties hereto against the other (except for personal injury or property damage)
on any matters whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of
said Premises and any statutory remedy. Tenant shall not interpose any
counter-claim(s) in a suit by Landlord to recover rents payable under this
Lease. Tenant shall be permitted to start a separate suit to pursue any of its
lawful remedies.

 

37. BROKER. Landlord and Tenant hereby represent and warrant to each other that
the only brokers or finders involved in the procurement or negotiation of this
Lease are Signature Associates and Friedman Real Estate Group (the “Brokers”).
Landlord will pay the Brokers any and all fees, commissions or other
remuneration owed to the Brokers as a result of this Lease pursuant to separate
written agreements between Landlord and the Brokers. Landlord and Tenant each
agree to indemnify and hold the other harmless from all loss, liability, cost or
expense of any kind or nature arising by virtue of the inaccuracy of their
respective representations and warranties in this Section 37.

 

38.

SECURITY DEPOSIT. Tenant shall pay a security deposit in the amount of
Thirty-Four Thousand One Hundred Sixty-Five ($34,165.00) Dollars to Landlord
within ten (10) business days of the execution of this Lease by the last of
Landlord and Tenant. The security deposit shall be held by Landlord to secure
the performance of all Tenant’s obligations under this Lease. The security
deposit shall not be considered an advance payment of rent or a measure of
Landlord’s damages in the event of default by Tenant. Landlord may mingle such
security deposit with other funds, and shall refund to Tenant, without interest
and within thirty (30) days after the expiration of the Lease term, the security
deposit, provided, however, that Tenant has performed all the terms of this
Lease and delivered possession of the Premises in the condition required hereby.
Landlord may, at its sole option, apply any part of the security deposit to cure
any default of Tenant, including to repair any damage which is the
responsibility of Tenant hereunder. If so, Tenant shall, upon demand, deposit
with Landlord the amount so applied so Landlord shall have the full security
deposit at all times during the term of this Lease. Landlord may deliver the
security deposit to a purchaser who assumes Landlord’s interest in the Premises.
Landlord shall then be discharged by Tenant from all liability for return of the
security deposit to the extent such security deposit was paid to the purchaser,
and Tenant shall look solely to the new owner for the return of the security
deposit. Tenant hereby agrees not to look to the mortgagee (as defined in
Section 11 above)

 

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as mortgagee-in-possession or successor in title to the Premises, for
accountability for any security deposit required by Landlord hereunder unless
and to the extent that the security deposit has actually been received by
mortgagee as security for the Tenant’s performance under this Lease. At the
earlier of the date Landlord sells all or substantially all of its interest in
the Premises or the fifth (5th) anniversary of the Commencement Date, Landlord
shall return the Security Deposit to Tenant, without interest, if (a) Landlord
has not previously given Tenant written notice of a default which remains
uncured, and (b) Landlord has not previously applied the Security Deposit to any
sum Tenant owes Landlord.

 

39. OPTION TO PURCHASE.

 

  39.1.

Provided that Landlord has not notified Tenant in writing that Tenant is in
default under the terms of this Lease, and such default remains uncured at the
time of the exercise of this Option to Purchase or at the time of closing,
Landlord grants to Tenant the option of purchasing the Premises, together with
all Landlord-owned improvements, fixtures, and equipment located thereon, upon
the terms and conditions contained in this paragraph. The option to purchase may
be exercised only by Tenant by delivering written notice of exercise to Landlord
at any time: after (i) the first (1st) day of the ninth (9th) Lease Year and
prior to the expiration of the first (1st) six (6) months of the ninth (9th)
Lease Year; or (ii) if the first (1st) extension provided for in Section 4.3
above is properly exercised, after the first (1st) day of the last Lease Year of
the first (1st) extension and prior to the expiration of the first (1st) six (6)
months of such last Lease Year; or (iii) if the second (2nd) extension provided
for in Section 4.3 above is properly exercised, after the first (1st) day of the
last Lease Year of the second (2nd) extension and prior to the expiration of the
first six (6) months of such last Lease Year. Closing shall take place at a time
and place mutually satisfactory to Landlord and Tenant, no earlier than the
first (1st) day of the tenth (10th) Lease Year or the end of the applicable
extension, if applicable, and no later than thirty (30) days after the tenth
(10th) anniversary of the Commencement Date or the end of the applicable
extension. Possession of the Premises shall be delivered on the date of Closing,
subject to the rights of Tenant and any subtenants in the Premises existing on
the date of Closing. Promptly upon receipt of Tenant’s exercise of the Option to
Purchase, Landlord shall obtain a commitment for an ALTA title insurance policy
naming Tenant as the proposed insured in the amount of the Purchase price.
Tenant shall have thirty (30) days from receipt of the title insurance
commitment in which to give Landlord written notice of objection to any title or
survey matters. Landlord shall use reasonable efforts (but shall not be required
to commence litigation) to resolve the objections to Tenant’s satisfaction.
Landlord shall be entitled to apply the Purchase Price to discharge any lien
capable of discharge by payment of a liquidated sum and which was created
through the acts of Landlord or persons claiming through Landlord (other than
Tenant or its sub-tenants or assignees). If Landlord is unable or unwilling to
resolve any objection to Tenant’s satisfaction within thirty (30) days of
receipt of Tenant’s notice, Tenant may either waive the objection and purchase
the Premises without reduction of the Purchase

 

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Price, or rescind the purchase exercise, in which event this Lease shall
continue but with this Section 39 stricken. At the Closing, Landlord shall
furnish to Tenant a policy of title insurance in accordance with the title
insurance commitment, and guaranteeing marketable title to the Premises in
Tenant, free and clear of all encumbrances, but subject to easements,
restrictions and covenants of record, and Landlord’s mortgage, if assumed by
Tenant. Rent shall be prorated to the date of Closing, current real estate taxes
and any special assessments outstanding against the Premises as of the date of
Closing shall be assumed by Tenant, and Landlord shall pay applicable transfer
taxes. Landlord shall pay for the owner’s policy of title insurance. Tenant
shall pay for any endorsements Tenant desires to the title insurance policy.
Conveyance of the Premises to Tenant shall be by a good and sufficient warranty
deed.

 

  39.2. The purchase price (“Purchase Price”) for the Premises shall be the sum
determined by capitalizing the Base Annual Rent in effect during the Lease Year
in which the option is exercised at a capitalization rate of seven and
one-quarter (7.25%) percent. All prepayment and/or assumption fees (if any)
under Landlord’s mortgage on the Premises will be added to the Purchase Price,
if Tenant is unable or unwilling to assume Landlord’s mortgage without cost to
Landlord. Tenant shall have the right to direct Landlord to convey the Premises
to a designee, including a third party, parent, subsidiary or affiliate by
written notice to Landlord given prior to closing. Payment of the Purchase
Price, plus or minus the net of additions and prorations, shall be made by wire
transfer of immediately available federal funds to Landlord’s account. Before
obtaining permanent financing for the Premises, and one (1) year prior to the
expiration of any such financing, Landlord shall show Tenant the financing
commitment, if any, Landlord has received (or expects to receive). Landlord and
Tenant shall discuss whether Tenant can assist Landlord to obtain more favorable
terms. Landlord shall consider what Tenant proposes, particularly with regard to
avoiding or minimizing prepayment penalties, but Landlord shall retain the sole
right to determine the identity of its lender and all the terms and conditions
of its financing.

 

BALANCE OF PAGE INTENTIONALLY LEFT BLANK

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.

 

CANTON COMMERCE PARK LLC, a Michigan limited liability company BY:
BURTON-KATZMAN DEVELOPMENT COMPANY, INC., a Michigan corporation, Manager BY  
/s/    Peter K. Burton    

Its

  President         “Landlord”

 

MATERIAL SCIENCES CORPORATION, ENGINEERED MATERIALS AND SOLUTIONS GROUP, INC.,
an Illinois corporation BY   /s/    Ronald L. Stewart    

Its

  President and Chief Executive Officer         “Tenant”

 

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LIST OF EXHIBITS

 

Exhibit A    Legal Description Exhibit B    Proposed Site Plan Exhibit C   
Scope of Landlord’s Work Exhibit D    Budget Exhibit E    Floor Plans for Tenant
Improvements Exhibit F    Specifications for Tenant Improvements Exhibit G   
Construction Schedule

 

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