LEASE
THIS LEASE is made as of ______by and between The School District of the City of Detroit, a Michigan statutory corporation (“Landlord”), whose address is 3011 West Grand Boulevard, 14th Floor, Detroit, Michigan 48202, and ______, a Michigan ______(“Tenant”), whose mailing address, is ______, who agree as follows:
SECTION I
THE PREMISES
1.01 Landlord hereby leases to Tenant the real property located at ______in the City of Detroit, County of Wayne, and the State of Michigan, the “Land”, together with the building and other improvements on the Land (“Improvement”) (“the Land and the Improvements collectively will constitute and be referred to in this Lease as the “Premises”), as more particularly described in Exhibit A hereto.
1.02 Tenant has inspected the Premises and agrees to take the Premises in the condition existing as of the Commencement Date.
SECTION 2
THE TERM
2.01 The term of this Lease (the “Term”) will commence (the “Commencement Date”) on the earlier of:
(i) The date Tenant takes possession of the Premises;
(ii) The date Landlord tenders possession of the Premises to Tenant, ready for occupancy;
The term will be for a period of ______years, from and after the Commencement Date. If the Commencement Date is other than the first day of a calendar month, the Term will be extended to terminate at the end of the calendar month in which it would otherwise terminate under the preceding sentence.
2.02 If Landlord permits Tenant to enter into possession of the Premises, prior to the Commencement Date, Tenant agrees that such occupancy will be deemed to be under all the provisions of this Lease, including but not limited to the rental established herein.
2.03 Upon request by Landlord, Tenant shall execute a written instrument confirming the Commencement Date and expiration date of the Term.
SECTION 3
RENT; RENT PAYMENT ADDRESS
Choose rent option:
3.01 Beginning on the Commencement Date, Tenant shall pay to the Landlord rent [equal the annual sum of ______and no/100 Dollars ($______) per year, in twelve equal monthly installments of ______and __/100 Dollars ($______)] [(a) for the period ending on ______, 20_, equal the annual sum of ______and no/100 Dollars ($______) per year, in twelve equal monthly installments of ______and __/100 Dollars ($______), (b) for the period ending on ______, 20_, equal the annual sum of ______and no/100 Dollars ($______) per year, in twelve equal monthly installments of ______and __/100 Dollars ($______), and (c) for the period ending on ______, 20_, equal the annual sum of ______and no/100 Dollars ($______) per year, in twelve equal monthly installments of ______and __/100 Dollars ($______)] each without any prior demand therefore and without and deduction or setoff whatsoever, in lawful money of the United States on the 1st day of each and every calendar month during the term of this Lease, at the office of the Landlord, or at such other place as Landlord may designate in writing from time to time. Time is of the essence in this Lease. Tenant’s obligation to pay rent to Landlord shall commence on the Commencement Date. In the event the Commencement Date shall be on a day other that the first of the month, the Commencement Date shall be the first day of the month rent for the period between the date of the occurrence of the events set forth above and the commencement date, which pro-rata amount shall be equal to the monthly rent multiplied by a fraction, the numerator of which shall be the number of days remaining in the month in which the events set forth above have occurred and the denominator of which shall be thirty (30).
3.02 Tenant agrees to pay the rent in a manner such that Landlord shall always have one month’s rent in advance. Tenant agrees that Landlord may apply such amount as payment for the last month’s rent or other rental amount, which becomes due hereunder, pursuant to expiration, or the earlier termination of this Lease. The parties agree that this amount is not a security deposit and is not required to be held by the Landlord in a separate depository account.
3.03 Each installment of rent will be paid to the Landlord, at the office of the Landlord at Attn: Real Estate Administrator, 1601 Farnsworth, Building C, Detroit, Michigan 48211.
3.04 Any installment of rent due or accruing hereunder and any other sum, which is due or becomes due hereunder, whether termed rent or otherwise and payable hereunder by Tenant to Landlord which is not paid when due, shall bear interest at the rate of ten (10%) percent per annum from the date when the same shall respectively become payable until the same is paid.
3.05 The parties agree that rent in the amount of ______Dollars ($_____) is due on the Commencement Date and shall be applied as follows: ______, ______, and ______for the advance amount due under Section 3.02 hereof.
SECTION 4
[RIGHT OF FIRST REFUSAL][OPTION TO PURCHASE]
Option, if offered, to be determined by Landlord, in its sole discretion
Real Estate – please choose and revise section as applicable:
4.01 [During the Term and for consideration in the amount of ______dollars ($______), provided the Tenant is not in default hereunder, the Tenant shall have a right of first refusal with respect to proposed sale of the property, of which Landlord agrees to notify Tenant in writing as set forth herein. Upon Tenant’s receipt of written notice from Landlord that Landlord have received a bona-fide written offer to purchase the Property from a third party which Landlord intends in good faith to accept, Tenant shall have the right to purchase the Property under the terms and conditions set forth in such offer, a copy of which shall be attached to the notice from the Landlord. Within fifteen (15) days of the date of notice to Tenant, Tenant shall furnish written notice to Landlord of its intention to exercise or decline to exercise its right to purchase the Property under the terms set forth in the offer. Tenant’s failure to furnish written notice of its intention within such fifteen (15) day period shall constitute a waiver of its right to purchase.
In the event that Tenant declines to exercise its right to purchase the property and the Property is sold to a third party pursuant to an offer presented to Tenant in accordance with the terms hereof, the right of first refusal shall terminate and be of no further force or effect.
[At any time during the following period of the Term, commencing on ______and ending on ______, provided the Tenant is not in default hereunder, Tenant shall have a right to purchase the Premises for the purchase price of ______Dollars ($______), subject to the execution of a purchase agreement, substantially in the form attached hereto as Exhibit B, satisfactory to the Landlord and its legal counsel.]
SECTION 5
TAXES
5.01 During the term of this Lease, Tenant shall pay before delinquent, in addition to any other sums due hereunder, all taxes, assessments, levies, fines other governmental charges of any kind and nature (collectively, “taxes”) levied or assessed against (i) the Premises or any leasehold interest therein; (ii) Tenant’s personal property located upon the Premises; (iii) alterations, additions or improvements of whatsoever kind or nature made to the Premises; and (iv) rents payable by Tenant to Landlord.
5.02 Tenant shall have the right to contest the validity of any taxes before any assessing or reviewing body or any court having competent jurisdiction over such matters; provided, however, Tenant shall pay any taxes, before the expiration of any appeal period and prior to the commencement of any such action. Landlord agrees to cooperate reasonably with Tenant in such proceedings.
SECTION 6
USE OF PREMISES
6.01 The Premises during the continuance of this Lease will be used for and occupied for ______ and for no other purpose, without the prior written consent of Landlord.
6.02 Tenant agrees that it will not use or permit any person to use the Premises or any part thereof for any use or purposes in violation of the laws of the United States, the laws, ordinances or other regulations of the State and municipality in which the Premises are located, or of any other lawful authorities. During the Term or any renewal thereof, Tenant will keep the Premises and every part thereof and all buildings at any time situated thereon in a clean and wholesome condition and generally will comply with all lawful health and policy regulations.
6.03 Landlord makes no representation that the use permitted under Section 6.01 is consistent with applicable laws, statutes, ordinances or regulations. Tenant assumes all responsibility for obtaining any permits, licenses, variances or other approvals necessary for such use to occur on the Premises.
SECTION 7
UTILITIES
Tenant to show arrangements made prior to execution of Lease:
7.01 Tenant shall make all applications and connections for necessary utility services on the Premises, and, beginning on the Commencement Date, Tenant shall be solely liable to pay when due all bills for water, sewer charges, heat, gas, electricity and telephone used in the Premises from the Commencement Date until the expiration of the Term. In the event the Tenant is not able to have utilities placed in its name, for a reasons not due to the fault of Tenant, as determined by the Landlord in its sole discretion, then the Landlord shall have the right to (a) agree to keep the utilities in the name of the Landlord and submit the utility bills to the Tenant for immediate reimbursement, or (b) immediately terminate the lease. If the Landlord determines to submit any utility bill to the Tenant for reimbursement, then such amount will be due promptly, and in any in event no later than the next due monthly rental payment. Landlord shall have the right, in its sole discretion, to shut-off any utilities in its name for Tenant’s failure to pay such bills or to terminate the Lease, with no more than seven (7) days notice. In the event that any such utility bill becomes due after the termination or expiration of this Lease, Landlord shall submit the bill to Tenant and Tenant agrees to pay such amount immediately upon receipt.
Tenant agrees to maintain all electrical, plumbing, sanitary, heating, ventilation and other facilities and appliances in good and safe working order with legal connectionsgoverned bythe local utility providers. In the event Tenant cannot afford operational coststo maintainthe building satisfactorily, Landlord, in its sole discretion, shall have the right to nullify the lease and began eviction proceedings as long as Tenant has been provided with a reasonable notice for remediation.
SECTION 8
INSURANCE
The following requirements must be met by the Tenant prior to or simultaneously with execution of Lease:
8.01 Property Insurance. Tenant shall procure at its sole cost and expense and keep in effect during the Term hereof, property insurance, known in the industry as “all risk insurance”, in amounts sufficient to cover the personal property of the Tenant, as well as the Tenant’s interest in any Improvements and betterments. This policy will provide coverage for Tenant’s monthly rental income obligation to the Landlord. Tenant explicitly understands and agrees the Landlord is not responsible for any property of the Tenant for any cause.
8.02 Commercial General Liability Coverage. Tenant shall procure at its sole cost and expense and keep in effect during the Term hereof, a commercial general liability (‘CGL”) policy, naming Landlord as an additional insured. The limits of coverage will not be less than the following:
Each Occurrence Limit / $3,000,000Personal & Advertising Injury Limit / $3,000,000
Medical Expense – Any One Person / $5,000
Damage to Premises Rented to You Limit / $500,000
Products/Completed Operations Limit / $3,000,000
General Aggregate Limit / $3,000,000
Tenant can satisfy this requirement through the use of a CGL policy in combination with an umbrella policy. Landlord reserves the right to change these limits to a reasonable amount at any time, if circumstances, in the sole reasonable determination, dictate the need for higher limits. Any policy provided by Tenant under this section must include a separation of insureds clause. In the event Tenant fails to procure the required insurance, Landlord may, at its option, terminate the Lease or procure the same for the account of Tenant, and the cost thereof shall be paid to Landlord as additional Rent upon the delivery to Tenant of a bill therefor.
8.03 Automobile Liability Insurance. Tenant shall procure at its sole cost and expense and keep in effect during the Term hereof, an automobile liability policy for all owned, non-owned and hired vehicles used by Tenant, with a combined single limit for bodily injury and property damage (CSL) of at least $3,000,000.
8.04 Workers Compensation Insurance. The Tenant shall procure at its sole cost and expense and keep in effect during the Term hereof, Workers Compensation insurance meeting the statutory requirements of the State of Michigan including Employers Liability with a limit of BI each accident of $500,000; BI by disease each employee $500,000; and, BI by disease policy limit $500,000. The policy shall provide a waiver of subrogation in favor of The School District of the City of Detroit.
8.05 Carrier Rating, Cancelation and Confirmation of Coverage. The insurance policy or policies to be provided by Tenant shall be issued by an insurance company or companies having an A.M. Best Company rating of not less than “A VII”. Each policy procured by Tenant under this Section 8 must provide for at least thirty (30) days prior written notice to Landlord of any cancellation. At Landlord’s option, either certificate of insurance or the original policy or policies will be delivered by Tenant to Landlord prior to the effective date thereof, together with receipts evidencing payment of the premiums therefor. Tenant will deliver certificates of renewal for such policies to Landlord at least thirty (30) days prior to the expiration dates thereof.