Unassociated Document


    LEASE
      AGREEMENT

    1195
      OAK VALLEY DRIVE

    Valley
      Ranch Business Park

    Ann
      Arbor, Michigan 48108

    


     

    THIS
      LEASE is
      made
      as of the ____ day of February 2006, by
      and
      between ARBOR
      DEVELOPMENT COMPANY, LLC,
      a
      Michigan
      Limited Liability Company, the address of which is 1263 Crosby Crescent, Ann
      Arbor, Michigan, 48103 as Lessor, and FAAC
      Incorporated,
      a
      Michigan Corporation, the current address of which is 1229 Oak Valley Drive,
      Ann
      Arbor, Michigan, 48108, as Lessee.

    


    THIS
      LEASE REVISES, UPDATES AND SUPERSEDES
      all
      prior lease agreements between Lessor and Lessee.

    


    IN
      CONSIDERATION OF
      the
      rents to be paid and the mutual covenants, promises and agreements herein set
      forth, Lessor and Lessee agree as follows:

    


    LESSOR
      hereby
      leases unto Lessee 1195 Oak.
      Valley
      Drive situated in the Township of Pittsfield, County of Washtenaw, State of
      Michigan, in a single story office/industrial building located at Valley Ranch
      Business Park (the "Building").

    


    TO
      HAVE AND TO HOLD
      for a
      term of Twenty (20) months from and after the commencement of the term as
      hereinafter provided.

    


    SECTION
      1

    Construction
      of Building

    


    Section
      1.01: The Leased Premises shall consist of an exterior of approximately 10,936
      square feet on one (1) floor. No minor change from such plans which may be
      necessary during construction shall affect, change, or invalidate this Lease.
      If
      Lessor shall be in good faith delayed in construction by any labor dispute,
      strike, lockout, fire, unavailability of material, weather, or casualty or
      any
      other cause beyond its reasonable control, then the period of delay necessarily
      caused thereby shall be added to the time limit provided for such
      construction.

    


    SECTION
      2

    Possession
      and Commencement of Term

    


    Section
      2.01: Except as herein provided, Lessor shall deliver possession of the Leased
      Premises to Lessee on June 1, 2006. By occupying the Leased Premises, Lessee
      will be deemed to have accepted the Leased Premises and acknowledged that they
      are in the condition called for hereunder. Upon occupying the Leased Premises,
      the Lessee will provide the Lessor with a completed punch list. The Lessor
      will
      complete the items not completed according to the term hereunder, in no later
      than 30 days. The rentals herein reserved and the term of this Lease shall
      commence on the date when the premises are delivered to Lessee as required
      hereunder. Lessor will require its contractors to cooperate with Lessee's
      installers of equipment trade fixtures, furnishings, and decorations attached
      to
      the real estate improvements to the maximum extent possible, but delay of or
      interference with construction caused by such installers shall not postpone
      the
      commencement of the term or the obligation to commence paying rent.

    


    Section
      2.02: In the event Lessor fails to deliver the Leased Premises on the
      commencement date because the Leased Premises are not then ready for occupancy,
      or because the previous occupant of said Leased Premises is holding over, or
      for
      any other cause whatsoever, except as provided in Section 1.01, Lessor shall
      not
      be liable to Lessee for damages, as a result of Lessor's delay in delivering
      such promises, and Lessee shall have no right to terminate the Lease or contest
      the validity of the Lease, and the commencement date of the Lease shall be
      postponed until such time as the leased premises are ready for Lessee's
      occupancy, and the termination date of this Lease shall be extended for a period
      equivalent to the period of such postponement, provided such postponed
      termination date shall occur on the last day of a calendar month; if not, then
      such termination date shall be extended by an additional period so as to fall
      on
      the last day of such calendar month in which it would otherwise
      occur.

    


    Section
      2.03: On the commencement date, or within fifteen (15) days thereafter upon
      request by Lessor, Lessee shall execute a written instrument confirming the
      commencement date and the termination date of the Lease, that the Lease is
      in
      full force and effect, the rent is paid currently without any offset or defense
      thereto, the amount of rent, if any, paid in advance, and that there are no
      uncured defaults by Lessor, or stating those claimed by Lessee, provided that,
      such facts are accurate and ascertainable.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      3

    Basic
      Rental

    


    Section
      3.01: In consideration of the leasing aforesaid, Lessee hereby covenants and
      agrees to pay Lessor, at such place as Lessor may hereafter from time to time
      designate in writing, a minimum net rental payable monthly in advance on the
      first day of each and every month in equal monthly installments as
      follows:

    


    Months
      1
      - 20 = $10.50 per square foot NNN, or $9,569.00 per month

    


    Receipt
      of Five Thousand and 00/100 ($5,000.00) Dollars, representing a Security Deposit
      is hereby acknowledged. The rental payments shall be made by Lessee at the
      office of Lessor without any prior demand therefore and without any deductions
      or set-offs whatsoever.

    


    Section
      3.02: Lessor and Lessee intend that the minimum net rental shall be net to
      Lessor, so that this Lease shall yield, net, to Lessor, not less than the
      minimum net rent specified in Section 3.01 hereof during the term of this Lease,
      and that all costs, expenses, and charges of every kind and nature relating
      to
      the Leased Premises which may be attributable to, or become due during the
      term
      of this Lease, shall be paid by Lessee, and that Lessor shall be indemnified
      and
      held harmless by Lessee from and against the same. Provided, however, that
      if
      the Lease term shall commence on a day other than the first day of a calendar
      month, then the rental for such month shall be prorated upon a daily basis
      based
      upon a thirty (30) day calendar month.

    


    SECTION
      4

    Taxes,
      Assessments and Utilities

    


    Section
      4.01: Lessee agrees to pay Lessor its proportionate share of all taxes and
      assessments which have been or may be levied or assessed by any lawful
      authority, for any calendar year during the term hereof, against the land and
      Leased Premises presently and/or at any time during the term of this Lease
      comprising the Building. Lessee's proportionate share shall be equal to the
      product obtained by multiplying such taxes and assessments by a fraction, the
      numerator of which shall be the number of square feet of floor area in the
      Leased Premises, and the denominator of which shall be the total number of
      square feet of constructed leasable floor area in the Building. Any tax and/or
      assessment of any kind or nature presently or hereafter imposed by the State
      of
      Michigan or any political subdivision thereof or any governmental authority
      having jurisdiction there over upon, against
      or with respect to the rentals
      payable
      by
      tenants
      in
      the
      Building
      to
      Lessor
      or on the income of Lessor
      derived from the Building or with respect to the Lessor's, or the individuals
      or
      entities which form the Lessor herein, ownership of the land and buildings
      presently and/or at any time during the term of this Lease comprising the
      Building, either by way of substitution for all or any part of the taxes and
      assessments levied or assessed against such land and such buildings, shall
      be
      deemed to constitute a tax and/or assessment against such 'land and such
      buildings for the purpose of this Section, and' Lessee shall be obligated to
      pay
      its proportionate share thereof as provided herein. In addition, Lessee shall
      also be obligated to pay any sales tax imposed by any governmental authority
      on
      the payments by Lessee or on the receipt by Lessor of any and all payments
      from
      Lessee. If the sales tax is separately assessed, then Lessee shall pay that
      amount imposed on the individual payments of Lessee; if the sales tax is not
      separately assessed, the Lessee shall pay its proportionate share monthly as
      provided herein.

    


    Section
      4.02: Lessee's share of all of the aforesaid taxes and assessments levied or
      assessed for or during the term hereof, as determined by Lessor, shall be paid
      in monthly installments on or before the first day of each calendar month,
      in
      advance, in an amount estimated by Lessor; provided, that in the event Lessor
      is
      required under any mortgage covering the land and improvements leased to Lessee
      to escrow real estate taxes, Lessor may, but shall not be obligated to, use
      the
      amount required to be so escrowed as a basis for its estimate of the monthly
      installments due from Lessee hereunder. Upon receipt of all tax bills and
      assessment bills attributable to any calendar year during the term hereof,
      Lessor shall furnish Lessee with a written statement of the actual amount of
      Lessee's share of the taxes and assessments for such year. In the event no
      tax
      bill is available, Lessor will compute the amount of such tax. If the total
      amount paid by Lessee under this Section for any such year, as shown on such
      statement, Lessee shall pay to Lessor the difference between the amount paid
      by
      Lessee and the actual amount due, such deficiency to be paid within thirty
      (30)
      days after demand therefore by Lessor; and if the total amount paid by Lessee
      hereunder for such calendar year shall exceed such actual amount due from Lessee
      for such calendar year, such excess shall be credited against the next
      installment of taxes and assessments due from Lessee to Lessor hereunder. All
      amounts due hereunder shall be payable to Lessor at the place where the fixed
      annual rental is payable. For the calendar years in which this Lease commences
      and terminates, the provisions of this Section shall apply, and Lessee's
      liability for its proportionate share of any taxes and assessments for such
      years shall be subject to a pro rata adjustment based on the number of days
      of
      said calendar years during which the term of this Lease is in effect. A copy
      of
      a tax bill or assessment bill submitted by Lessor to Lessee shall at all times
      be sufficient evidence of the amount of taxes and/or assessments assessed or
      levied against the property to which such bill relates. Prior to or at the
      commencement of the term of this Lease and from time to time thereafter
      throughout the term hereof, Lessor shall notify Lessee, in writing, or Lessor's
      estimate of Lessee's monthly installments due hereunder. Lessor's and Lessee's
      obligations under this Section shall survive the expiration of the term of
      this
      Lease.

    


    Section
      4.03: Lessee also agrees to pay all charges made against the Leased Premises
      for
      gas, heat, electricity, and all other utilities separately metered during the
      continuance of this Lease as the same shall become due.

    


    Section
      4.04: In the event any or all of the foregoing utilities are to be paid from
      an
      escrowed fund required to be established by Lessor or its financial institution
      under the terms of any financing, the Lessor shall notify Lessee and Lessee
      shall be required to include with the additional monthly payments referred
      to in
      Section 4.02 a monthly amount to satisfy the estimated monthly utility costs.
      If
      the utilities, when due, exceed the total amount then in the utility escrow,
      then the Lessee shall, upon demand, pay any deficiency to Lessor. If such
      payments by Lessee, over the term of the Lease, exceed the amount of utilities
      paid from the escrow, such excess shall be refunded by Lessor to Lessee at
      the
      expiration of the Lease term, or when such excess is refunded by the financial
      institution to
      Lessor, whichever
      first
      occurs. The utility escrow shall
      be
adjusted
      as
      often
      as
      necessary to provide
      sufficient funds to pay current utilities.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      5

    Use
      of Premises

    


    Section
      5.01: It is understood and agreed between the parties, that the Leased Premises,
      during the continuance of this Lease, shall be used and occupied for office,
      research and storage use only and for no other purpose without the prior written
      consent of Lessor. Lessee agrees that it will not use or permit any person
      to
      use the Leased Premises or any part thereof for any use or purpose in violation
      of the laws of the United States, the State of Michigan, the ordinances or
      other
      regulations of the Township of Pittsfield or of any other lawful authorities.
      During the original term or any extended term, the Lessee will keep the Leased
      Premises and every part thereof and the area adjacent to the Leased Premises
      (including service areas), orderly, neat, safe, and clean and free from rubbish
      and dirt, and at all times shall store all trash, garbage, or any other material
      solely within the leased premises and Lessor shall arrange for the regular
      pickup of such trash and garbage at Lessee's expense. Lessee shall not burn
      any
      trash or garbage at any time in or about the building. If Lessor shall provide
      any services or facilities for such pickup, then Lessee shall be obligated
      to
      use the same and shall pay a proportionate share of the actual cost thereof
      within ten (10) days after being billed therefor. Lessee shall not store or
      leave any material outside of the building at any time. All signs and
      advertising displayed in and about the Leased Premises shall be such only as
      to
      advertise the business carried on upon the Leased Premises, and Lessor shall
      control the location, character, and size thereof. No signs shall be displayed
      except as approved in writing by the Lessor; and no awning shall be installed
      or
      used on the exterior of said building, unless approved in writing by the
      Lessor.

    


    SECTION
      6

    Operation
      and Maintenance of Common Areas

    


    Section
      6.01: Lessor agrees, at Lessor's sole cost and expense, to construct the
      building and hard surface, to properly drain, landscape, and light a parking
      area or parking areas. Lessor further agrees to cause to be operated, managed,
      and maintained during the term of this Lease, all parking areas, roads,
      sidewalks, landscaping, drainage, and common area lighting facilities in the
      Building. The manner in which such areas and facilities shall be maintained
      and
      operated, and the expenditures therefore, shall be at the sole discretion of
      the
      Lessor, and the use of such areas and facilities shall be subject to such
      reasonable regulations as Lessor shall make from time to time.

    


    Section
      6.02: Lessee agrees to pay to Lessor in the manner hereinafter provided, but
      not
      more often than once each month, Lessee's proportionate share of all costs
      and
      expenses of every kind and nature paid or incurred by Lessor
      in
      operating, equipping, policing and protecting, lighting, insuring, repairing,
      replacing, and maintaining the
      common
      areas of the Building. Such costs and expenses shall include, but not be limited
      to, illumination and maintenance of the Building signs, cleaning, lighting,
      line
      painting and landscaping, premiums liability and property insurance. Any
      utilities furnished or supplied to common areas of the Building which are not
      separately metered shall be considered a cost to maintain the common areas
      and
      shall be included as part of such cost. For the purpose hereof, any charges
      for
      utilities contained in the foregoing costs and expenses shall be at the same
      rates as the rates for comparable service from the applicable utility company
      serving the area in which the Building is located. The proportionate share
      to be
      paid by Lessee shall be computed on the basis that the total number of square
      feet of floor area in the Leased Premises bears to the total number of square
      feet of the Building.

    


    Lessee's
      proportionate share of such costs and expenses for each lease year and partial
      lease year shall be paid in monthly installments on the first day of each month,
      in advance, in an amount established by Lessor. Within one hundred eighty (180)
      days after the end of each lease year or partial lease year, Lessor shall
      furnish Lessee with a statement of the actual amount of Lessee's proportionate
      share of such costs and expenses for such period. If the total amount paid
      by
      Lessee under this Section for any calendar year shall be less than the actual
      amount due from Lessee for such year as shown on such statement, Lessee shall
      pay to Lessor the difference between the amount paid by Lessee and the actual
      amount due, such deficiency to be paid within thirty (30) days after the
      furnishing of each such statement, and if the total amount paid by Lessee
      hereunder for any such calendar year shall exceed such actual amount due from
      Lessee for such calendar year, such excess shall be credited against the
      installment due from Lessee to Lessor under this Section 6.02.

    


    SECTION
      7

    Maintenance
      and Repairs of Leased Premises

    


    Section
      7.01: Lessor shall keep and maintain the foundation, exterior walls, and roof
      of
      the Building in which the Leased Premises are located and the structural
      portions of the Leased Premises which were originally installed by Lessor,
      exclusive of door, door frames, door checks, windows, and exclusive of window
      frames located in exterior building walls, in good repair, except that Lessor
      shall not be called upon to make any such repairs occasioned by the act or
      negligence of Lessee, its agents, employees, invitees, licensees, or
      contractors, except to the extent that Lessor is reimbursed therefore under
      any
      policy of insurance permitting waiver of subrogation in advance of loss. Lessor
      shall not be called upon to make any other improvements or repairs of any kind
      upon said premises and appurtenances, except as may be required under Section
      11
      and 12 hereof.

    


    Section
      7.02: Except as provided in Section 7.01 of this Lease, Lessee shall keep and
      maintain in good order, condition and repair (including replacement of parts
      and
      equipment if necessary) the Leased Premises and every part thereof and any
      and
all
      appurtenances
      thereto wherever located, including, but without limitation, the exterior and
      interior portion of all doors, door checks, windows, plate windows, store front,
      all plumbing and sewage facilities within the Leased Premises, including free
      flow up to the main sewer line, fixtures, heating and air conditioning, and
      electrical systems (whether or not located in the Leased Premises), sprinkler
      system, walls, floors, and ceilings. The plumbing and sewage facilities shall
      not be used for any other purpose than that for which they are constructed,
      and
      no foreign substance of any kind shall be introduced therein. Lessee hereby
      agrees
      to
      be responsible for any expenses incurred in connection with any breakage,
      stoppage, or damage resulting from a violation of this provision by Lessee,
      its
      agents, employees, invitees, licensees, or contractors.

    


    Lessor
      shall be responsible for all costs, as long as such costs are not due to the
      negligence of Lessee, related to the following: (1) replacement of the main
      electrical distribution panel if such panel cannot be repaired but rather needs
      complete replacement; (2) the roof-top H.V.A.C. units, if such components cannot
      be repaired but rather such H.V.A.C. units need complete replacement; and (3)
      if
      the underground sewer or water system shall burst or break.

    


    Lessee
      shall keep and maintain the Leased Premises in a clean, sanitary, and safe
      condition in accordance with the laws of the State of Michigan and in accordance
      with all direction, rules, and regulations of the health office, fire marshal,
      building inspector, or other proper officials of the governmental agencies
      having jurisdiction, at the sole cost and expense of Lessee, and Lessee shall
      comply with all requirements of law, ordinance, and otherwise, affecting said
      Leased Premises. If Lessee refuses or neglects to commence or complete repairs
      required by Section 7.02 hereof promptly and adequately, Lessor may, but shall
      not be required to do so, make all or any part of said repairs, and Lessee
      shall
      pay the cost thereof to Lessor upon demand, non-payment of which shall entitle
      Lessor to exercise any remedy available to it in the event of the non-payment
      by
      Lessee of rental or any other charge due to Lessor under this Lease. At the
      time
      of the expiration of the tenancy created herein, Lessee shall surrender the
      premises in good condition, reasonable wear and tear, loss by fire, or other
      unavoidable casualty excepted.

    


    Lessee,
      at its own expense, shall maintain fire extinguishers and other fire protection
      devices as may be required from time to time by any agency having jurisdiction
      thereof and the insurance underwriters insuring the building in which the Leased
      Premises are located.

    


    Section
      7.03: All damages or injury done to the Leased Premises by the Lessee, or by
      any
      person who may be in or upon the Leased Premises with the consent, invitation
      or
      license of the Lessee, shall be repaired and paid for by the
      Lessee.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      8

    Alterations

    


    Section
      8.01: Lessee agrees that the Leased Premises shall not be altered, improved,
      or
      changed without the written consent of Lessor, and that unless otherwise
      provided by written agreement, all alterations, improvements, and changes which
      may be desired by the Lessee and so consented to by the Lessor shall be done
      either by or under the direction of the Lessor, but at the cost of Lessee.
      All
      alterations, additions, and improvements made in or to the Building or the
      Leased Premises, except movable office furniture put in at the expense of the
      Lessee and removable without defacing or injuring the building or Leased
      Premises, shall, unless otherwise provided by written agreement, be the property
      of Lessor and remain upon and be surrendered with the Leased Premises; provided,
      however, the Lessor will designate by written notice to Lessee those
      alterations, additions, and improvements which shall be removed by Lessee at
      the
      expiration or termination of the Lease, and Lessee shall promptly remove the
      same and repair any damage to the Leased Premises caused by such
      removal.

    


    SECTION
      9

    Liens

    


    Section
      9.01: Lessee shall keep the Leased Premises free from any and all liens arising
      out of any work performed, materials furnished, or obligations incurred by
      or
      for Lessee, and agrees to bond against or discharge any mechanic's or
      material-men's lien within ten (10) days after written request therefore by
      Lessor. Lessee shall reimburse Lessor for any and all costs and expenses which
      may be incurred by Lessor by reason of the filing of any such liens and/or
      the
      removal of same, such reimbursement to be made within ten (10) days after
      receipt by Lessee from Lessor of a statement setting forth the amount of such
      costs and expenses. The failure of Lessee to pay any such amount to Lessor
      within said ten (10) day period shall carry with it the same consequences as
      failure to pay any installment of rental.

    


    SECTION
      10

    Insurance
      and Indemnity

    


    Section
      10.01: Lessee shall, during the entire term hereof, keep in full force and
      effect a policy of public liability and property damage insurance with respect
      to the Leased Premises, and the business operated by Lessee and any subtenants
      of Lessee in the Leased Premises, including steam boiler insurance if
      applicable, in which the limits
      of
      public liability shall be not less than One Million Dollars ($1,000,000.00)
      per
      occurrence, and in which the
      limit of
      property damage liability shall be not less than Five Hundred Thousand Dollars
      ($500,000.00). The policy shall name Lessor, any other parties in interest
      designed by Lessor, and Lessee as insured, and shall contain a clause that
      the
      insurer will not cancel or change the insurance without first giving the Lessor
      thirty (30) days prior written notice. Such insurance may be furnished by Lessee
      under any blanket policy carried by it or under a separate policy therefor.
      The
      insurance shall be with an insurance company approved by Lessor and a copy
      of
      the paid-up policy evidencing such insurance or a certificate of insurer
      certifying to the issuance of such policy shall be delivered to Lessor prior
      to
      commencement of Lease Term and upon renewals not less than thirty (30) days
      prior to the expiration of such coverage.

    


    Section
      10.02: Lessor agrees, during the term hereof, to carry insurance against fire,
      vandalism, malicious mischief, and such other perils as are from time to time
      included in a standard extended coverage endorsement and, at Lessor's option,
      special extended coverage endorsements including rental interruption insurance
      equal to twelve (12) full months of rental and tax obligations, insuring the
      improvements of the Building in an amount determined solely by Lessor, but
      not
      less than one hundred percent (100%) of the full replacement cost, if available,
      and with or without deductible, at the option of Lessor. Lessee agrees, from
      time to time, to pay Lessor, Lessee's proportionate share of the cost of such
      insurance, such payment to be made within ten (10) days after receipt of a
      written statement from Lessor setting forth such cost. The proportionate share
      to be paid by Lessee shall be computed on the basis that the total number of
      square feet of floor area in the Leased Premises bears to
      the
      total
      number of square feet of constructed leasable floor area in the
      Building.

    


    Lessee
      shall not carry any stock of goods or do anything in or about said Leased
      Premises which will in any way tend to increase the insurance rates on said
      Leased Premises and/or the Building of which they are a part. If Lessee installs
      any electrical equipment that overloads the lines in the Leased Premises, Lessee
      shall, at its own expense, make whatever changes are necessary to comply with
      the requirements of the insurance underwriters and governmental authorities
      having jurisdiction.

    


    Section
      10.03: Lessee covenants to indemnify Lessor, and save it harmless (except for
      loss or damage resulting from the negligence of Lessor, its agents, or
      employees) from and against any and all claims, action, damages, liability,
      and
      expense, including attorney's fees, in connection with loss of life, personal
      injury, and/or damage to property arising from or out of any occurrence in,
      upon, or at the Leased Premises or the occupancy or use by Lessee of the Leased
      Premises or any part thereof, or arising from or out of Lessee's failure to
      comply with Section 7.02 hereof, or occasioned wholly or in part by any act
      or
      omission of Lessee, its agents, contractors, employees, servants, customers,
      or
      licensees. For the purpose hereof, the Leased Premises shall include the service
      areas adjoining the same and the loading platform area allocated to the use
      of
      Lessee. In case Lessor shall, without fault on its part, be made a party to
      any
      litigation commenced by or against Lessee, then Lessee shall protect and hold
      Lessor harmless, and shall pay all costs, expenses, and reasonable attorneys'
      fees incurred or paid by Lessor in connection with such litigation. Lessee
      shall
      also pay all of Lessor's costs, expenses, and reasonable attorneys' fees that
      may be incurred by Lessor in enforcing the Lessee's covenants and agreements
      in
      this Lease.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      11

    Destruction
      of Leased Premises

    


    Section
      11.01: In the event the Leased Premises shall be partially or totally destroyed
      by fire or other casualty insured under the insurance carried by Lessor pursuant
      to Section 10.02 of this Lease, as to become partially or totally untenantable,
      the damage to the Leased Premises shall promptly be repaired by Lessor, to
      the
      extent of any proceeds received from any insurance, unless Lessor shall elect
      not to rebuild as hereinafter provided, and a just and proportionate part of
      the
      fixed minimum rental and all other charges shall be abated, annually, until
      so
      repaired. The obligation of Lessor hereunder shall be limited to reconstruction
      of the Leased Premises in accordance with the initial plans and specifications
      for the construction of the Leased Premises. In no event shall Lessor
      be
      required to repair or replace Lessee's merchandise, trade fixtures, furnishings,
      or equipment. If more than thirty-five (35%) percent of the Leased Premises
      or
      more than thirty-five (35%) of the floor area of the Building in which the
      Leased Premises are located shall be destroyed by fire or other casualty, then
      Lessor may elect either to repair or rebuild the Leased Premises or the Building
      of which the Leased Premises are a part, as the case may be, or to terminate
      this Lease by giving written notice to Lessee of its election to so terminate,
      such notice to be given within sixty (60) days after the occurrence of such
      damage or destruction. If Lessor elects to restore the Leased Premises, Lessor
      shall do so within one hundred eighty (180) days after giving notice to Lessee
      of such election. If Lessor fails to tender possession to Lessee after the
      one
      hundred eighty (180) days, Lessee shall have the option of terminating this
      Lease by sending notice on the one hundred eightieth (180th) day to Lessor.
      Such
      notice shall inform Lessor of Lessee's election to terminate.

    


    Section
      11.02: Each party hereto does hereby remise, release, and discharge the other
      party hereto 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 from which insurance (permitting waiver
      of liability and containing a 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 injured party under such insurance.

    


    SECTION
      12

    Eminent
      Domain

    


    Section
      12.01: In the event, during the term of this Lease, proceedings shall be
      instituted under the power of eminent domain which shall result in the taking
      of
      any part of the Leased Premises or the floor area of the Building in which
      the
      Leased Premises are a part, or the taking of a material portion of the parking
      area so that the number of spaces is thereby reduced to such an extent that
      Lessee's business is significantly and adversely affected, and which shall
      result in an eviction total or partial of the Lessee there from, then at the
      time of such eviction, this Lease shall be void and the term above demised
      shall
      cease and terminate; and if Lessee shall thereafter continue in possession
      of
      the Leased Premises or any part thereof, it shall be a Lease from month to
      month
      and for no longer term, anything in this instrument to the contrary
      notwithstanding. If there is only a partial taking, not including a portion
      of
      the Building but reducing the parking to the extent described in the previous
      sentence, the Lessor shall restore the parking to the extent necessary to permit
      Lessee to continue the use of the premises and there shall be no reduction
      in
      the monthly rental. Provided, further, that the whole of any award for any
      portion of the Building taken by reason of said condemnation proceedings shall
      be the sole property of, and be payable to, the Lessor, and provided, further,
      that the whole of any award for loss of business and for removal and relocation
      expenses in any condemnation proceedings shall be the sole property of, and
      be
      payable to, the Lessee. It is further agreed that in any such condemnation
      proceedings, the Lessor and Lessee shall each seek its own award at its own
      expense.

    


    SECTION
      13

    Assignment

    


    Section
      13.01: Lessee shall not assign or sublet the Leased Premises or any part thereof
      without first obtaining the Lessor's written consent, except that the Lessee
      may, without Lessor's consent, assign or sublet all or any of the part of the
      premises to wholly or substantially owned subsidiaries of the Lessee, for a
      use
      permitted pursuant to Section 5.01 hereof, and provided that Lessee is not
      at
      such time in default hereunder, and provided further that such successor shall
      execute an instrument in writing assuming all of the obligations and liabilities
      to the Lessor, and provided further that such assignment or subletting shall
      not
      operate to release Lessee from any of its obligations under the
      Lease.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      14

    Inspection
      of Premises

    


    Section
      14.01: Lessee agrees to permit Lessor and the authorized representatives of
      Lessor to enter the Leased Premises at all reasonable times during business
      hours for the purpose of inspecting the same.

    


    SECTION
      15

    Fixtures
      and Equipment

    


    Section
      15.01: All fixtures and equipment paid for by the Lessor and all fixtures and
      equipment which may be paid for and placed on the Leased Premises by the Lessee
      from time to time, but which are so incorporated and affixed to the Building
      that their removal would involve damage or structural change to the Building,
      shall be and remain the property of the Lessor.

    


    Section
      15.02: All furnishings, equipment, and fixtures other than those specified
      in
      Section 15.01, which are paid for and placed on the Leased Premises by Lessee
      from time to time (other than those which are replacements for fixtures
      originally paid for by Lessor) shall remain the property of the
      Lessee.

    


    SECTION
      16

    Notice
      or Demands

    


    Section
      16.01: All notices to or demands upon Lessor or Lessee desired or required
      to be
      given under any of the provisions hereof shall be in writing. Any notices or
      demands from Lessor to Lessee shall be deemed to have been duly and sufficiently
      given if a copy thereof has been mailed by United States mail in an envelope
      properly stamped and addressed to Lessee at
      the
      address of the Leased Premises, or at such other address as Lessee may have
      last
      furnished in writing to Lessor for such purpose, and any notices or demands
      from
      Lessee to Lessor shall
      be
      deemed to have been
      duly
      and
      sufficiently given if mailed by United States mail in an envelope
      properly
      stamped
      and addressed to Lessor at the address last furnished by written notice from
      Lessor to Lessee. The effective date of such notice shall be one (1) business
      day following the delivery of the same to the United States Post Office for
      mailing.

    


    SECTION
      17

    Bankruptcy

    


    Section
      17.01: Lessee covenants and agrees that if any one or more of the following
      events occur, namely:

    


    (a)
      Lessee shall be adjudged a bankrupt or insolvent or trustee shall be appointed
      for Lessee after a petition has been filed for Lessee's reorganization or
      arrangement under the Federal Bankruptcy Laws, as now or hereafter amended,
      or
      under the laws of any State, and any such adjudication or appointment shall
      not
      have been vacated or stayed or set aside within thirty (30) days from the date
      of the entry or granted thereof; or

    


    (b)
      Lessee shall file, or consent to any petition in bankruptcy or arrangement
      under
      the Federal Bankruptcy Laws, as not or hereafter amended, or under the laws
      of
      any State; or

    


    (c)
      A
      decree or order appointing a receiver of the property of Lessee shall be made
      and such decree or order shall not have been vacated, stayed or set aside within
      thirty (30) days from the date of the entry or granted thereof, or Lessee shall
      apply for or consent to the appointment of a receiver for Lessee;
      or

    


    (d)
      Lessee shall make any assignment for the benefit or credits;

    


    then
      it
      shall be lawful for Lessor, at his election, to declare a default as hereinafter
      defined and the term of the Lease ended.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      18

    Default,
      Re-entry, and Damages

    


    Section
      18.01: In case any rent or other payments required to be made by Lessee shall
      be
      due and remain unpaid for more than ten (10) days after due, or if default
      be
      made in any of the other covenants, agreements, stipulations, or conditions
      herein contained and such default shall continue for a period of thirty (30)
      days after written notice of such default, or if the leased premises shall
      be
      deserted, or vacated, or if Lessee is declared bankrupt or insolvent as detailed
      in Section 17.01 herein, Lessor, in addition to other rights or remedies it
      may
      have, shall have the immediate right of re-entry and may remove all persons
      and
      property from the Leased Premises pursuant to applicable Michigan law,
      such
      property may be removed and stored in any other place in the Building in which
      the Leased Premises are situated, or in any other place, for the account of,
      and
      at the expense and at the risk of Lessee. Lessee hereby waives all claims for
      damages which may be caused by the re-entry of Lessor and taking possession
      of
      the Leased Premises or removing or storing of furniture and property as herein
      provided, and will hold Lessor harmless from any and all losses, costs, or
      damages occasioned Lessor thereby, and no such re-entry shall be considered
      or
      construed to be a forcible entry.

    


    Section
      18.02: Should Lessor elect to re-enter as herein provided, or should it take
      possession pursuant to legal proceedings or pursuant to any notice provided
      for
      by law, it may either terminate this lease or it may, from time to time, without
      terminating this Lease, re-let the Leased Premises or any part thereof for
      such
      term or terms and at such rental or rentals and upon such other terms and
      conditions as Lessor, in its sole discretion, may deem advisable, with the
      right
      to make alterations and repairs to the Leased Premises. Rentals received by
      Lessor from such re-letting shall be applied as follows:

    


    First,
      to
      the payment of any indebtedness, other than rent due hereunder from Lessee
      to
      Lessor, including all damages sustained by Lessor as a result of the default
      of
      Lessee;

    


    Second,
      to the payment of rent or other payments required of Lessee for taxes,
      insurance, or utilities due and unpaid hereunder;

    


    Third,
      to
      the payment of any other sum specified in Section 3.02 hereof; 

    


    Fourth,
      to the payment of any cost of such re-letting;

    


    Fifth,
      to
      the payment of the cost of any alterations or repairs to the Leased
      Premises;

    


    and
      the
      residue, if any, shall be held by Lessor and applied in payment of further
      rent,
      as the same may become due and payable hereunder. Should such rentals received
      from such re-letting during any month be less than the amount
      agreed to be paid that month by Lessee hereunder, the Lessee shall pay such
      deficiency to Lessor. Such
      deficiency shall be calculated and paid monthly.

    


    No
      such
      re-entry or taking possession of the Leased Premises by Lessor shall be
      construed as an election on its part to terminate this Lease unless a written
      notice of such intention be given to Lessee or unless the termination thereof
      be
      decreed by a court of competent jurisdiction. Notwithstanding any such
      re-letting without termination, Lessor may, at any time thereafter, elect to
      terminate this Lease for such previous breach. Should Lessor, at any time,
      terminate this Lease for any breach, in addition to any other remedy, it may
      recover, from Lessee all damages it may incur by reason of such breach,
      including the cost of recovering the Leased Premises, and including the worth
      at
      the time of such termination of the excess, if any, of the amount of rent and
      other payments required of Lessee hereunder and charges equivalent to rent
      reserved in this Lease for the remainder of the stated term, over the then
      reasonable rental value of the premises for the remainder of the stated
      term.

    


    SECTION
      19

    Surrender
      of Premises on Termination

    


    Section
      19.01: Whenever this Lease shall be terminated, whether by lapse of time,
      forfeiture, or in any other way, Lessee will yield and deliver up the Leased
      Premises, including the Building and improvements thereon and the fixtures
      and
      equipment belonging to Lessor therein contained, peaceably to Lessor in as
      good
      repair as when taken, except for reasonable and normal wear and
      tear.

    


    SECTION
      20

    Performance
      by Lessor of the Covenants of Lessee

    


    Section
      20.01: Should Lessee at any time fail to do any of the things required to be
      done by it under the provisions of this Lease, Lessor, at its option and in
      addition to any and all other rights and remedies of Lessor in such event,
      may
      (but shall not be required to) do the same or cause the same to be done, and
      the
      reasonable amount of any money expended by Lessor in connection therewith shall
      be due from Lessee to Lessor as additional rent on or before the next rental
      due
      date, bearing interest at the rate of one and one half (1.5%) percent per month
      from the date of payment until the repayment thereof to Lessor by Lessee. On
      default of such payment, Lessor shall have the same remedies as on default
      in
      the payment of rent.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      21

    Rights
      to Mortgage

    


    Section
      21.01: Lessor reserves the right to subject and subordinate this Lease, at
      all
      times, to the lien of any mortgage or mortgages now or hereafter placed upon
      Lessor's interest in the said Leased Premises and on the land
      and
      Buildings of which the said Leased Premises are a part or upon any Buildings
      hereafter placed upon the
      land of
      which the Leased Premises form a part. Lessee covenants and agreed to execute
      and deliver, upon demand, such further instrument or instruments subordinating
      this Lease to the lien of any such mortgage or mortgages as shall be desired
      by
      Lessor and any mortgagees or proposed mortgage, and hereby irrevocably appoints
      Lessor the attorney-in-fact of Lessee to execute in compliance with this Section
      21.01 and deliver any such instrument or instruments for and in the name of
      Lessee. Lessor acknowledges that Lessee shall be permitted to remain in
      possession of the Premises under the terms of this Lease as long as Lessee
      is
      not in default under the terms of this Lease or any subordination.

    


    SECTION
      22

    Covenants
      of Quiet Enjoyment

    


    Section
      22.01: Lessor covenants and agrees to and with Lessee that, at all times when
      Lessee is not in default under the terms of and during the term of this Lease,
      Lessee's quiet and peaceable enjoyment of the Leased Premises shall not be
      disturbed or interfered with by Lessor or any person claiming by, through,
      or
      under Lessor.

    


    SECTION
      23

    Security
      Deposit

    


    Section
      23.01: Pursuant to Section 3.01 hereof, Lessee shall deposit the sum of Five
      Thousand and 00/100 Dollars ($5,000.00) which Lessor agrees to retain as
      security for the faithful performance of all of the covenants, conditions,
      and
      agreements of this Lease, but in no event shall the Lessor be obliged to apply
      the same upon rents or other charges in arrears, or upon damages for the
      Lessee's failure to perform the said covenants, conditions, and agreements;
      the
      Lessor may so apply the security at its option; and the Lessor's right to the
      possession of the premises for nonpayment of rent or for any other reason shall
      not in any event be affected by reason of the fact that the Lessor holds this
      security. The said sum, if not applied toward the payment of rent or other
      charges in arrears, or toward the payment of damages suffered by Lessor by
      reason of the Lessee's breach of the covenants, conditions, and agreements
      of
      this Lease, shall be returned to the Lessee when this Lease is terminated,
      according to these terms, and in no event is the said security to be returned
      until the Lessee has vacated the premises, delivered possession to the Lessor,
      and Lessor has inspected said premises.

    


    In
      the
      event that the Lessor repossesses itself of the said premises because of the
      Lessee's default or because of the Lessee's failure to carry out the covenants,
      conditions, and agreements of the Lease, the Lessor may apply the said security
      upon all damages suffered to the date of said repossession and may retain the
      said security to apply upon such damages as may be suffered or shall accrue
      thereafter by reason of the Lessee's default or breach. The Lessor shall not
      be
      obliged to keep the said security as a separate fund, but may mix the-said
      security with its own funds and there shall be paid no interest on said security
      deposit.

    


    SECTION
      24

    Holding
      Over

    


    Section
      24.01: In the event of Lessee herein holding over after the termination of
      this
      Lease, thereafter the tenancy shall be from month to month in the absence of
      a
      written agreement to the contrary subject to all the conditions, provisions
      and
_obligations
      of this Lease insofar as the same are applicable to a month to month tenancy,
      but at a monthly rental of one hundred twenty five percent (125%) of the monthly
      rental stipulated in Section 3. 

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      25

    Remedies
      Not Exclusive; Waiver

    


    Section
      25.01: Each and every of the rights, remedies, and benefits provided by this
      Lease shall be cumulative, and shall not be exclusive of any other of said
      rights, remedies and benefits, or of any other rights, remedies, and benefits
      allowed by law.

    


    Section
      25.02: One or more waivers of any covenant or condition by Lessor shall not
      be
      construed as a waiver of a further or subsequent breach of the same covenant
      of
      condition, and the consent or approval by Lessor to or of any act by Lessee
      requiring Lessor's consent or approval shall not be deemed to waive or render
      unnecessary Lessor's consent or approval to or of any subsequent similar act
      by
      Lessee.

    


    SECTION
      26

    Right
      to Show Premises

    


    Section
      26.01: The Lessee hereby agrees that, for a period commencing one hundred eighty
      (180) days prior to the termination of this Lease, the Lessor may show the
      Leased Premises and building to prospective Lessees, and one hundred eighty
      (180) days prior to the termination of this Lease, Lessor may display about
      said
      Leased Premises the usual and ordinary "For Lease" signs.

    


    SECTION
      27

    Lessee's
      Property

    


    Section
      27.01: Lessee shall be responsible for and shall pay before delinquency all
      municipal, county, state, and federal taxes assessed during the term of this
      Lease against any leasehold interest or personal property of any kind,
owned
      by
      or
      placed
      in,
      upon,
      or
      about the leased premises by the Lessee.

    


    Section
      27.02: The Lessor shall not be responsible or liable to the Lessee for any
      loss
      or damage that may be occasioned by or through the acts or omissions of persons
      occupying adjoining premises, or any part of the Leased Premises adjacent to
      or
      connected with the Leased Premises hereby leased, or any part of the Building
      of
      which the Leased Premises are a part, or for any loss or damage resulting to
      the
      Lessee or its property from bursting, stoppage, or leaking of water, gas, sewer,
      or steam pipes, or for any damage or loss of property on or within the Leased
      Premises from any cause whatsoever.

    


    SECTION
      28

    Renewal
      Option

    


    Section
      28.01: The Lessee will have one three year option to renew this Lease, if at
      the
      time of renewal, the Lessee is not in default under the terms of this Lease,
      the
      Lessee can exercise this option in a written notification to the Lessor Eight
      (8) months before the termination of this Lessee, with the understanding that
      all terms of this Lease will remain except that the monthly rental rate will
      be
      renegotiated. The new rate will not exceed 125% of the original rate.


    


    SECTION
      29

    Miscellaneous

    


    Section
      29.01: This Lease shall be governed by and construed in accordance with the
      laws
      of the State of Michigan. If any provisions of this Lease or the application
      thereof to any person or circumstances shall, to any extent, be invalid or
      unenforceable, the remainder of this Lease shall not be affected thereby, and
      each provision of the Lease shall be valid and enforceable to the fullest extent
      permitted by the law.

    


    Section
      29.02: The captions of this Lease are for convenience only, and are not to
      be
      construed as part of this Lease, and shall not be construed as defining or
      limiting, in any way, the scope of intent of the provisions hereof.

    


    Section
      29.03: Whenever herein the singular member is used, the same shall include
      the
      plural, and the masculine gender shall include the feminine and neuter
      genders.

    


    Section
      29.04: This Lease shall constitute the entire agreement of the parties hereto;
      all prior agreements between the parties, whether written or oral, are merged
      herein and shall be of no force and effect. This lease cannot be changed,
      modified, or discharged orally, but only by an agreement in writing, signed
      by
      the party against whom enforcement of the change, modification, or discharge
      is
      sought.

    


    Section
      29.05: If Lessor shall fail to perform any covenant, term, or condition of
      this
      Lease upon Lessor's part to be performed, and if as a consequence of such
      default Lessee shall recover a money judgment against Lessor, such judgment
      shall be satisfied only out of the proceeds of sale received upon execution
      of
      such judgment and levied thereon against the right, title, and interest of
      Lessor in the Building and property of which the Leased Premises are a part
      and
      out of the rents or other income from such property receivable by Lessor, and
      neither Lessor nor any of the members comprising the limited liability
      corporation which is the Lessor herein shall be liable for any
      deficiency.

    


    Section
      29.06: 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 made by Lessor
      covering the leased premises, Lessee shall, at the option and request of
      Purchaser, atone to the Purchaser upon any such foreclosure or sale and
      recognize such Purchaser as the Lessor under this Lease.

    


    Section
      29.07: In the event of any transfer or transfers of Lessor's interest in the
      Premises, the transferor shall be automatically relieved of any and all
      obligations and liabilities on the part of Lessor accruing from and after the
      date of such transfer. Lessor acknowledges that the obligation of the Lessor
      under this Lease shall be transferred to the party receiving the interest of
      Lessor.

    


    Section
      29.08: All rights and liabilities herein given to or imposed upon the respective
      parties hereto shall extend to and bind the several respective heirs, executors,
      administrators, successors, and assigns of the said parties; and if there shall
      be more than one Lessee,-they
      shall-all
      be
      bound jointly and severally by the terms, covenants, and agreements herein.
      No
      rights, however, shall inure to the benefit of any assignee of Lessee unless
      the
      assignment to such assignee has been approved by Lessor, in writing, as provided
      in Section 13.01 hereof.

    


    Section
      29.09: This agreement shall inure to the benefit of and be binding upon the
      parties hereto, their respective heirs, administrators, executors,
      representatives, successors; and permitted assigns.

    


    Section
      29.10: No payment by Lessee or receipt by Lessor of a lesser amount than the
      monthly rent herein stipulated shall be deemed to be other than on account
      of
      the earliest stipulated rent, nor shall any endorsement or statement on any
      check or any letter accompanying any check or payment as rent be deemed an
      accord and satisfaction, and Lessor shall accept such check or payment without
      prejudice to Lessor's right to recover the balance of such rent or pursue and
      other remedy in this Lease.

    


    Section
      29.11: The submission of this Lease for examination does not constitute a
      reservation of or option for the
      Leased
      Premises. This Lease shall become effective only upon execution and delivery
      thereof by Lessor to Lessee.

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    SECTION
      30

    Late
      Payments

    


    Section
      30.01: Whenever the Tenant fails to make any payment of monthly rent or
      additional rent hereunder within ten (10) days after the payment is due, the
      Tenant shall pay the Landlord, in' addition thereto, five (5%) percent thereof
      as liquidated damages to cover the Landlord's costs of administration in
      collecting the payment and the losses incurred by the Landlord in not receiving
      timely payment.

    


    SECTION
      31

    Environmental

    


    Section
      31.01: Lessee shall neither generate, store, discharge nor bury any toxic or
      hazardous waste or substance or material or any chemicals or substances which
      are either toxic or hazardous at or upon the Leased Premises and Building,
      as
      the terms "toxic" or "hazardous" are defined under all currently existing or
      future applicable federal, state or local environmental laws, Lessor and Lessee
      understand and acknowledge, however, that Lessee may utilize certain substances
      or materials in the Leased Premises incidental to its operations which
are
      or
      may be classified as hazardous or toxic substances, such as cleaning solvents,
      degreasing agents, adhesives, greases, oils and lubricants, and the like. All
      such substances may be utilized and stored in proper containers only temporarily
      on the Leased Premises and shall be properly disposed of and transported off
      the
      Leased Premises in compliance with all applicable environmental and other laws
      and ordinances.

    


    All
      other
      substances which are non-toxic or non-hazardous shall be stored in proper
      containers. No substances or materials shall be stored outside of the Building
      which constitutes the Leased Premises without Landlord's prior written approval.
      Tenant shall forever indemnify and hold harmless and defend Landlord, its
      successors and assigns and any mortgagee from and against all loss, damage,
      claim and expense, including attorney’s fees, incurred in connection with the
      generation, burial, storage or disposal by Tenant of said hazardous or toxic
      substance upon the Premises, and such indemnification shall survive the
      expiration or termination of this Lease or any extensions.

    


    IN
      WITNESS WHEREOF, the Lessor and Lessee have executed this Lease as of the date
      set forth at the onset hereof.

    


    


    WITNESS:     LESSOR:

    ARBOR
      DEVELOPMENT COMPANY, LLC

    a
      Michigan Limited Liability Company

    


    ___________________________   By:___________________________

    


    ___________________________   Its:___________________________ 

    


    


    WITNESS:     LESSEE:

    FAAC
      Incorporated 

    a
      Michigan Corporation

    


    _____________________________  By:___________________________

    


    ______________________________  Its:_____________________________