EXHIBIT 10.5
AMENDMENT TO COMMERCIAL LEASE
     This Amendment to Commercial Lease (“Amendment”) is made this 14th day of
August, 2007, by and between Jerry L. Helmer and Ruthann Helmer, husband and
wife, whose address is 7171 E. Michigan Avenue, Saline, Michigan 48176,
hereinafter called “Landlord,” and Mercantile Bank of Michigan, a Michigan
banking corporation, whose address is 310 Leonard Street NW, Grand Rapids,
Michigan 49504, hereinafter called “Tenant.”
Background
     On or about July 13, 2005, Landlord and Tenant entered into a Commercial
Lease (“Lease”) for property located in the City of Ann Arbor, County of
Washtenaw, and State of Michigan, whereby Tenant leased from Landlord an
approximately 10,000 square foot building (the “Premises”).
     Landlord and Tenant agree that Tenant may construct for its use a building
addition which will be attached to the current building. The plans for the
addition shall be approved by Landlord, whose consent shall not be unreasonably
withheld, delayed, or conditioned. The building addition to be constructed by
Tenant shall have approximately 4,900 square rentable feet, and Tenant shall pay
all costs related to construction of the Additional rental space and site work.
Tenant agrees that if it is to construct the Additional Rental Space, it will
commence construction by June 30, 2010; if Tenant fails to meet that deadline,
Tenant will not have the right to construct the Additional Rental Space, without
written approval from Landlord.
     In consideration of Tenant constructing the Additional Rental Space and
enlarging the rentable building space on Landlord’s property, which shall, after
the term of the Lease, become the property of the Landlord, Landlord agrees to
extend the original term of the Lease and adjust the rent.
     The purpose of this Amendment is to amend the provisions of the Lease to
provide for the possible construction of the Additional Rental Space and if so,
to adjust the term of the Lease and the payment of rent by the Tenant.
Agreement
     The parties agree to the following for which there is adequate
consideration:
     1. Paragraph 2 of the Lease shall be deleted in its entirety and replaced
with the following:
     2. Term.
     a. The term of the initial Lease for the Premises, without the Additional
Rental Space, is for five (5) years ending June 30, 2010.
     b. If Tenant timely commences construction on the Additional Rental Space
timely (i.e., by June 30, 2010), then paragraph 2a shall not apply and there
shall be a new lease term for Tenant’s occupancy of the Premises and the
Additional Rental Space, which collectively shall be referred herein to as the
“Leased Premises.” Thus, the Leased Premises shall mean the current Premises
plus the Additional

 

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Rental Space that Tenant builds. The new term for the lease of the Leased
Premises shall be for ten (10) years and shall commence upon the earlier of
(1) the date on which Tenant has obtained an occupancy permit to occupy the
Additional Rental Space from the City of Ann Arbor, or (2) January 11, 2011 (the
“Commencement Date”). Thus, the Commencement Date shall occur not later than
Janaury 1, 2011, even if the Tenant has not then obtained an occupancy permit
for the Additional Rental Space by that date. All references to lease term set
forth in this Amendment shall refer to the new ten (10) year term and all
Renewal Periods.
     c. If Tenant fails to commence physical construction of the Additional
Rental Space by June 30, 2010, then the Tenant shall not have the right to
construct the Additional Rental Space, and there shall not be a new lease term
for the Premises, and thus the Lease for the Premises will end on June 30, 2010,
but Tenant shall have the right to the three (3) Renewal Periods set forth
below.
     d. Each “Lease Year” shall be a twelve (12) month period during the initial
or new term of this Lease and during any Renewal Period.
     2. Paragraph 3 of the Lease shall be deleted in its entirety and replaced
with the following:
     3. Option to Renew. Tenant shall have the option to renew the Lease for
three (3) additional terms of five (5) years each. Each “Renewal Period” shall
commence immediately after the end of either the original term of this Lease for
the Premises as set forth in paragraph 2a or at the end of the new lease term
for the Leased Premises described in paragraph 2b, whichever applies. To
exercise the option, Tenant must give Landlord written notice of the exercise of
such option not less than six (6) months prior to the end of the original term
of this Lease (either for the Premises or Leased Premises if Tenant constructs
the Additional Rental Space) or the then current Renewal Period, as appropriate.
Notwithstanding the foregoing, if Tenant renews the Lease for the Premises but
thereafter timely builds the Additional Rental Space, then the new Lease for the
Leased Premises will trump the Renewal Period notice and Tenant shall have a new
ten (10) year Lease and 3 Renewal Periods per paragraph 2b. The terms of the
Lease, during Renewal Periods, shall remain the same as during the initial term,
except as otherwise expressly set forth herein.
     3. Paragraph 4 of the Lease shall be deleted in its entirety and replaced
with the following:
     4. Rent. Currently, Tenant pays the Landlord, as minimum monthly rent
(sometimes referred to as the “Rent”) for said Premises, the sum of $15.76
dollars per square foot (from July 1, 2007 to June 30, 2008), but which is
subject to the provisions to increase rent pursuant to the consumer price index
as set forth in the paragraph below.

 

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If Tenant does not construct the Additional Rental Space, then Rent for the
original Premises shall continue to increase during the amended lease term and
Renewal Periods, if any, pursuant to the consumer price index as set forth
below.
If Tenant constructs the Additional Rental Space, then Tenant shall pay rent for
the Additional Rental Space on a square foot basis as set forth below.
Notwithstanding the foregoing, the Tenant shall owe no Rent or Additional Rent
for the Additional Rental Space (if any) until the end of the new lease term set
forth in paragraph 2b. Thus, if Tenant constructs Additional Rental Space, then
Tenant shall pay Rent and Additional Rent for the entire Leased Premises only
beginning in the first Renewal Period. Tenant shall, however, be responsible at
all times to insure the Additional Rental Space as set forth in paragraph 6 of
the Lease, and shall be responsible to pay its personal and real property taxes
pursuant to paragraph 7(b) of the Lease.
Thus, on the Commencement Date for the entire Leased Premises (i.e., per
paragraph 2b), Tenant shall continue to pay rent per the Lease only on the
Premises for the ten (10) year term. During the First Renewal Period, if any,
Tenant shall pay rent for the Additional Rental Space at the same rate as for
the Premises; thus rent for the entire Leased Premises shall be at the same per
square foot rate. Tenant shall pay to the Landlord one-twelfth of the annual
Rent due on or before the first day of each month of the first Lease Year of the
Lease term commencing on the Commencement Date. Rent shall be prorated if the
Commencement Date begins on a date which is not the first day of the month. Rent
for the entire Leased Premises shall therefore increase based on the timing of
CPI increase for the Premises under the initial Lease (i.e., beginning July 1
each year), even if this increase does not coincide with the anniversary of the
Commencement Date for the Leased Premises which will commence pursuant to
paragraph 2c. Thus, rent for the Leased Premises will increase per the CPI in
July of every year, even if the Commencement Date falls on September 1 and the
ten (10) year term would end on August 31.
Notwithstanding the foregoing, an annual per square foot Rent increase for any
Lease Year during any term of this Lease, including any Renewal Period, may not
exceed 2.5% from the previous Lease Year and the annual rent increases for any
Lease Year during the Renewal Periods shall be 75% of the CPI increase (not to
exceed 7%).
     4. Paragraph 10 of the Lease shall be deleted in its entirety.
     5. Definition of Leased Premises. Except as expressly set forth herein, the
term “Leased Premises” shall include the Additional Rental Space and, therefore,
for purposes of the Commercial Lease and this Amendment, all obligations for the
Leased Premises for which the Landlord or Tenant are responsible shall extend to
the Additional Rental Space. For illustrative purposes only, the Tenant, who is
responsible to maintain, repair, and replace the entire interior of the Leased
Premises, shall also be responsible to maintain, repair, and replace the
interior of the Additional Rental Space.
     6. Terms of Amendment. The terms of this Amendment shall control the rights
and obligations of the parties hereto. Otherwise, the Commercial Lease and this
Amendment shall be deemed one fully integrated agreement and together control
the rights and obligations of the parties.
     7. Entire Agreement. This Amendment constitutes the entire agreement
between the parties with respect to the matters set forth herein, and there are
no representations, warranties, covenants, or obligations except as set forth
herein. This Amendment supersedes all prior and contemporaneous agreements,
understandings, negotiations, statements, and discussions, written or oral, of
the parties hereto, relating to the matters contemplated by this Amendment.

 

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     8. Benefit of Agreement. The terms of this Amendment shall be binding upon
and inure to the benefit of the assigns, heirs, agents, and representatives of
the parties hereto.
     IN WITNESS WHEREOF, the parties hereto have executed this Amendment.

              Witnesses:       Landlord:
 
            /s/ Philip Conlin       /s/ Jerry L. Helmer                   Jerry
L. Helmer
 
            /s/ Philip Conlin       /s/ Ruthann Helmer                   Ruthann
Helmer
 
            Witnesses:       Tenant:
 
                    Mercantile Bank of Michigan,         a Michigan banking
corporation,
 
           
/s/ Dana O’Patik
      By:   /s/ Joseph S. Calvaruso
 
           
 
               Joseph S. Calvaruso
 
               Its: Senior Vice President
 
           
 
      Executed on: August 14, 2007

Effective Date:
(The Effective Date of the Agreement shall mean the date the last party signs
this Agreement)