Local Development Finance Authority

CITY OF STERLING HEIGHTS Local Development Finance Authority/SmartZone Board AGENDA FOR REGULAR MEETING Wednesday November 17, 2010 5:30 PM LOCATION: CITY COUNCIL CHAMBERS, CITY HALL, 40555 UTICA ROAD MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE TO THE FLAG ROLL CALL APPROVAL OF AGENDA APPROVAL OF THE MINUTES OF OCTOBER 20, 2010 CONSIDERATION 1. Standard Lease Agreement for Tenants of the Macomb-OU Incubator 2. Events & Meeting Space Rental Agreement as well as Rental Policies & Procedures REPORTS FROM BOARD MEMBERS UNFINISHED BUSINESS NEW BUSINESS ADJOURN  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY MINUTES OF THE MEETING October 20, 2010– 5:30 P.M. CITY CENTER – Council Chambers Draft Victor Martin called the meeting to order at 5:30 p.m. Pledge of Allegiance Members present at roll call: David Corba, Richard Kincaid, John Lettang, Victor Martin, Casey Sobczak, Irene Spanos, David Wilson, Zac Zachary Members absent: Stephan Cassin, Lori Doughty, and John Lamerato, excused Also in attendance: Luke Bonner, Economic Development Manager Motion to Approve the Agenda Moved by Corba, supported by Wilson, to approve the agenda as amended. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of Special Meeting September 15, 2010 Moved by Spanos, supported by Sobczak, to approve the Minutes as presented. Ayes: All Nays: None Motion carried. New Business Mr. Bonner gave a brief presentation about the EDA Grant. Mr. Martin questioned the condition of the award of the grant. Mr. Bonner stated that this is similar to all the other federal grants that City has been awarded. Mr. Kincaid questioned the time restrictions of the grant. Mr. Bonner stated that we have one year. Mr. Martin stated that it would be a tight schedule, and Mr. Bonner stated that these are inside renovations and the administration feels that it will be completed. General discussion ensued about the permit process. Mr. Corba questioned the breakdown of the budget. Mr. Bonner explained the budget line items. Mr. Sobczak stated that the school district was interested in salvaging some of the equipment and questioned if it could be made as donations to the schools. Mr. Bonner will check on that with the grant guidelines. To approve the grant award from Economic Development Administration (EDA) to the Local Development Finance Authority (LDFA) in the amount of $391,482 with a grant match of $20,604 for a total project amount of $412,086 to make upgrades to the building located at 6633 18 Mile Road, an LDFA owned facility. Moved by Lettang supported by Wilson to approve Motion Ayes: All Nays: None Motion carried Mr. Martin questioned who would be the lead agency if this were not approved. Mr. Bonner stated that the LDFA is the recipient of the grant and, this proposal is for the LDFA to allow the City to be the lead agency on the LDFA’s behalf. If this is not approved then we would have to go back to the EDA and renegotiate, who could act on the LDFA’s behalf. To approve the City of Sterling Heights as the lead agency on the EDA grant award Moved by Sobczak, supported by Corba to approve Motion Ayes: All Nays: None Motion carried Mr. Bonner explained the reason for the single source of this proposal. Mr. Corba questioned if we would normally bid this out. Mr. Bonner stated he wasn’t sure because has no experience in this area. Mr. Martin questioned if the EDA requires competitive bidding. Mr. Bonner stated this contract is going to be paid out of a SBA grant and that does not require competitive bidding, but there are also appeals in place for sole source conditions within the grant. Mr. Martin questioned if the grant monies are not awarded how would we move forward. Mr. Bonner stated that the SBA administrator has given us good feed back that this would work, and if it doesn’t work out that we have several other grants that we could ask for funding from. Mr. Martin questioned who would be making all the decisions regarding design and construction. Mr. Bonner stated that there would be several meetings with a team to make these decisions. Floor plans have already been done to make these spaces usable for businesses. To approve the contract for services with George Hartman Architects contingent upon SBA 3 Grant approval and final EDA review; and authorize City Administration to amend the contract per EDA’s request Moved by Wilson, supported by Corba to approve Motion Ayes: All Nays: None Motion carried Old Business Mr. Bonner gave an update about Kosch, General Dynamics, and next months meeting. Mr. Corba questioned the signage for the INCubator. Mr. Bonner replied the present sign is temporary, and a branding process has started with the County and we should here something next year. Board Members Report None Public Comment None Adjournment Moved by Zachary supported by Corba to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 5:55 p.m. TJ Minutes Approved 11/17/10 John Lettang Secretary  LDFA Business Sterling Heights, Michigan 11/17/2010 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To Approve a Standard Lease Agreement for Tenants of the Macomb-OU Incubator located at 6633 18 Mile Road Submitted By: Denice A. Gerstenberg, Public Services Manager, 446.2361 Executive Summary The City has provided the attached Macomb-OU Incubator Standard Lease Agreement for LDFA review and approval. Future lease agreements would be presented to the LDFA only in the event that substantial changes are made to the standard lease agreement. This is a one-year agreement. Lease revenues would be collected by the City and re- invested in the building. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to Approve the Standard Lease Agreement for Tenants of the Macomb-OU Incubator located at 6633 18 Mile Road and direct the City Manager or his designate to sign all future Standard Lease Agreements on behalf of the LDFA.  LEASE AGREEMENT This Lease Agreement ( “Agreement”), dated ______________, , is entered into between _____________, a Michigan _______________ (“Tenant”), the City of Sterling Heights Local Development Financing Authority, a local development financing authority, c/o City of Sterling Heights, whose address is 40555 Utica Road, P.O. Box 8009, Sterling Heights, Michigan 48311- 8009 (“Landlord”), RECITALS A. Landlord owns the building (“Building”) and property commonly known as 6633 18 Mile Road, Sterling Heights, Michigan 48314 (collectively referred to as the “Property”). B. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, Lab # _____ in Section ___ of the Building, containing approximately ____square feet as depicted on attached Exhibit A referred to as the “Premises”. Now therefore, in consideration of the Premises and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereby agree as follows: 1. Premises. Landlord leases to Tenant, and Tenant leases from Landlord, the Premises. Landlord also grants Tenant the non-exclusive use of common areas on the Property which include the reception area, designated conference rooms, restrooms, shipping and receiving area, hallways, driveways, roadways, parking areas, sidewalks, and exterior grounds, (the “Common Areas”). 2. Term. The term of this Agreement (the “Term”) shall commence on _________, (“Commencement Date”) and shall end on ___________, 3. Rent. Commencing on the Commencement Date and throughout the Term, Tenant shall pay monthly to Landlord, on or before the first day of each month, gross rent (“Rent”) in the following amount: Period Annual Rent Monthly Rental Rental Rate Installments (per RSF) $ .00 $ .00 $ Rent shall be pro rated for any partial months at the beginning or the end of the Term. Except as specifically provided in this Agreement to the contrary, Tenant shall not be obligated to pay Landlord any other amounts in connection with its use and occupancy of the Premises; the cost of all utilities and services is included in Rent, except as specifically provided in this Agreement to the contrary. 4. Use. The Premises shall be used for office use only, except for uses specifically approved in writing by Landlord. Tenant shall not use the Premises in any manner which is in violation of any federal, state, or local law, ordinance or regulation that relate to the use of the Premises. Tenant shall use the Premises in compliance with any established building and use restrictions imposed by the developer of the industrial park and any rules and regulations established by Landlord with respect to use of the Building and Property. 5. Utilities and Services. A. Services. Landlord shall operate and maintain the Building in a manner in accordance with standards customarily followed in the operation of comparable office buildings in the Sterling Heights, Michigan area. Tenant shall have access to the Premises twenty-four (24) hours per day seven (7) days per week. Landlord shall furnish services and utilities, operate the Building’s systems and have maintenance personnel available during customary business hours of the City which are currently Monday-Friday, 8:30 a.m. - 5:00 p.m. (“Business Hours”), excluding holidays officially recognized by the City of Sterling Heights. Landlord shall provide Tenant with the following utilities and services, the cost of which shall be included in gross Rent, in accordance with the standards and specifications customarily followed in the operation of comparable buildings in the Sterling Heights, Michigan area: (i) hot and cold water for drinking, lavatories, toilets and drinking water in the Premises at all times; (ii) window washing of all windows in the Premises, outside only, weather permitting, at intervals to be determined by Landlord; (iii) parking spaces in the parking lot located adjacent to the Building; (iv) lighting of the parking lot and other Common Areas during evening hours; (v) landscaping of the exterior of Common Areas and building management services for the Premises; (vi) snow removal of parking lot and sidewalks in accordance with practices applicable to the City-owned facilities; (vii) utilities, including, but not limited to, gas, electric and other utilities necessary or appropriate for the operation of the Common Areas; (viii) heating, air-conditioning and ventilation (“HVAC”) of the Premises and Common Areas during Business Hours whenever heat or air conditioning shall be reasonably required to maintain comfortable temperature and humidity; and (xii) all janitorial and cleaning services (including rubbish removal associated with a general office use) incurred in connection with the interior Common Areas. B. Tenant Services. Tenant shall be responsible for and shall pay for telephone, internet and data services to the Premises. If Tenant generates excessive amounts of trash (or waste which requires special handling or disposal such as medical or other hazardous waste Tenant shall be responsible for disposal of such trash waste at its sole expense. 6. Approvals. Tenant shall be responsible for obtaining any required approvals and paying any applicable permit fees relating to its use and occupancy of the Premises. 7. Maintenance. During the Term of this Agreement, Landlord, at Landlord’s sole cost and expense, shall perform all maintenance, repairs and replacements relating to the Common Areas, roof, building footings, foundations, walls, the building skeleton, bearing columns, interior bearing walls, floor slabs, structural elements, underground utility and sewer pipes, driveways, parking lots, fire protection sprinkler system, all exterior painting (at reasonable intervals), mechanical, plumbing, electrical, and HVAC systems serving the Premises. Landlord agrees that it will use reasonable efforts to cause any such work to be performed in a manner minimizing interference with Tenant’s business and use of the Premises. Except as provided above, Tenant shall keep and maintain the Premises in good order and repair. 2  8. Condition of Premises. Tenant acknowledges and agrees that Tenant accepts the Premises in an “as is” condition, with no obligation on the part of Landlord to improve, cause to be improved or pay Tenant to improve the Premises, or any part of them. Tenant shall not be permitted to make any improvements or alterations to the Premises during the Term. 9. Relocation of Business. In consideration of the benefits which Tenant receives as a result of its occupancy of the Leased Premises within the Building, Tenant agrees to contact the City’s Economic Development Manager not less than 45 days prior to the date that it intends to vacate the Premises to see whether the City can assist Tenant in finding a suitable location to operate its business. 10. Insurance and Indemnity. A. Indemnification. Subject to waiver of subrogation in Paragraph 17, Tenant and its respective successors and assigns agrees to defend, indemnify and hold harmless Landlord, and its respective successors and assigns, from and against any and all costs, losses, claims, liabilities, fines, expenses, penalties, and damages (including reasonable legal fees) in connection with or resulting from any injury or damage to the Premises or third parties caused by Tenant or its employees, agents or invitees during the Term. B. Landlord’s Insurance. Throughout the Term, Landlord shall, at its sole cost and expense, maintain insurance insuring: (i) the Building and other improvements located upon the parcel or parcels on which the Building is located (the “Land”), against loss or damage by fire, lightning, wind storm, hail storm, aircraft, vehicles, smoke, explosion, riot or civil commotion as provided by the Standard Fire and Extended Coverage Policy and all other risks of direct physical loss as insured against under Special Form (“all risk” coverage). The insurance coverage shall be for not less than one hundred percent (100%) of the full replacement cost of such improvements with agreed amount endorsement and building ordinance coverage; and (ii) Landlord from all claims, demands or actions made by or on behalf of any person or persons, firm or corporation and arising from, related to or connected with the Building, the Land or the Premises, for bodily injury to or personal injury to or death of any person, or more than one person, or for damage to property in an amount of not less than $2,000,000.00 combined single limit per occurrence/aggregate. Landlord may elect to satisfy this obligation through an established self-insurance program operated by the City of Sterling Heights. C. Tenant’s Insurance. Tenant shall maintain the following insurance in force at all times during the Initial Term and any Renewal Term(s) of this Lease, with an “A” rated Best insurance carrier acceptable to the Landlord. It is agreed that Tenant shall name Landlord, City of Sterling Heights including all elected and appointed officials, all of their employees and volunteers, all boards, commissions and/or authorities and board members, including employees and volunteers, as an “Additional Insured” under each separate policy of insurance scheduled below, in a form of endorsement to the policies approved by the Landlord in writing. Policy Minimum Limits 3 (a) Workers’ Compensation Statutory (b) Commercial General Liability (1) Bodily Injury Liability $300,000 each person $300,000 each occurrence (2) Property Damage Liability $300,000 each occurrence (c) Business Automobile Liability (1) Bodily Injury Liability $300,000 each person $300,000 each occurrence (2) Property Damage Liability $300,000 each occurrence (e) Employer’s Liability Insurance $300,000 each occurrence Note: Commercial General Liability to include, but not limited to: i) Contractual obligations; ii) Negligent hiring. [MARK CARUFEL TO ADVISE] These coverages and limits are to be considered minimum requirements under this Lease and shall in no way limit the liability or obligations of Tenant under this Lease. Tenant shall cause all policies to include an endorsement to the effect that the policies shall not be modified, canceled or terminated without thirty (30) days prior written notice to Landlord, as well as the requirement that the insurance carrier immediately notify Landlord when fifty percent (50%) of any aggregate limits on any of the above-require policies have been reached. In case of termination of coverage, Tenant shall provide evidence of new insurance at the earliest possible date, but not later than ten (10) days prior to the termination of the original policy. Tenant shall provide the insurance before the commencement of the Term of this Lease and prior to the beginning of each lease renewal term. Moreover, Tenant agrees to notify Landlord immediately of any claim arising pursuant to such policies. Tenant shall not commence operations under this Lease until Tenant has obtained all insurance stated in these requirements, all insurance has been reviewed by Landlord, and certificates of such insurance have been made available to Landlord. D. Form of Insurance. All of the aforesaid insurance policies shall be issued by companies with a Best financial quality rating of A- or better and a financial size rating of XII or better. Certificates of the insurance for the policies required to be carried under the Lease on City Form 2021, together with satisfactory evidence of payment of the premiums thereon, shall be deposited by Tenant with the Landlord. 4  11. Casualty and Condemnation. In the event any part of the Premises is damaged by fire or other casualty or taken under the power of eminent domain by any legally constituted authority (each a “Taking Event”), then Landlord and Tenant shall each have the right to terminate this Agreement. Such termination shall be without prejudice to the rights of Landlord to recover compensation from the condemning authority for any loss or damage caused by such condemnation. Tenant shall have the right to make its own claim for any separate award that may be made by the condemning authority for Tenant’s loss of business or on account of any costs or loss Tenant may sustain in the removal of Tenant’s trade fixtures, equipment, or other removable personal property. In the event this Agreement is not terminated in accordance with this Paragraph, then Landlord shall restore the Premises to its substantial condition existing prior to the Taking Event with reasonable dispatch by and at the sole cost and expense of Landlord, provided, however, that Landlord shall not be obligated to expend any funds beyond the amount of the insurance or condemnation proceeds received as a result of such Taking Event. During the period beginning as of the date of the Taking Event and ending on the date of substantial completion of Landlord’s restoration of the Premises, Rent shall be abated proportionately based on the portion of the Premises rendered unfit for Tenant’s use. 12. Assignment and Subletting. Tenant shall have no right to sublet the Premises or assign its interest in this Agreement or in the Premises. Notwithstanding the foregoing, Tenant may, without Landlord’s consent, assign this Lease all or any portion of Premises to any business entities directly or indirectly, controlling, controlled by or under common control with Tenant, or to successors to Tenant by merger, consolidation, realignment, reorganization or purchase of Tenant, or to a purchaser of all or substantially all of the assets of Tenant used in the operation of Tenant’s business at the Premises. 13. Default. Tenant shall be deemed to be in default under this Lease upon occurrence of any of the following events: (a) any failure of Tenant to pay any sum of money due, or (b) any failure of Tenant to perform any other of the terms, conditions or covenants of this Lease. Upon the occurrence of any of the events of default described above, Tenant shall be deemed to be in default of this Lease, and Landlord may terminate this Lease. In no event shall Tenant be liable for any punitive, exemplary or consequential damages in connection with this Lease. 14. Surrender. On or before the expiration of the term of this Lease, Tenant shall vacate and deliver possession of the Premises to Landlord, in good order and condition, reasonable wear and tear, damage by casualty, condemnation and the acts and omissions of Landlord and Landlord’s employees, agents and contractors excepted. 15. Notices. All notices or demands required or permitted to be given or served pursuant to this Lease shall be in writing (except as otherwise expressly provided herein) and shall be deemed to have been given or served when received or refused, if sent by United States registered or certified mail, postage prepaid, or by nationally recognized overnight courier, and addressed to either party at the following addresses: Landlord: Sterling Heights Local Development Authority 5  City of Sterling Heights 40555 Utica Rd. Sterling Heights, MI 48311-8009 Attn: Denice Gerstenberg, Public Services Manager with a copy to: O’Reilly Rancilio P.C. 12900 Hall Rd., Ste. 350 Sterling Heights, MI 48313 Attn: Clark A. Andrews, Esq. Tenant: _________________ _________________ _________________ Attn: _____________ Telephone: ____________ Email: ______________ Such addresses may be changed from time to time by either party by serving notice as above provided. 16. Bankruptcy. If Tenant shall file a petition in voluntary bankruptcy or be voluntarily or involuntarily adjudicated bankrupt or insolvent, or shall make an offer of composition to its creditors, or shall make an assignment for the benefit of creditors, or shall file a petition or answer seeking reorganization or readjustment under the federal bankruptcy laws or any other law or statute of the United States or any state thereof, or if a receiver or trustee shall be appointed for Tenant or for all or a substantial part of the property of Tenant and Tenant is not released from such receiver or trustee within thirty (30) days after appointment, or if an order shall be entered approving the reorganization of Tenant or the readjustment of Tenant’s debts or obligations under the federal bankruptcy laws or any other law or statute of the United States or any state thereof, then any of such events shall be deemed to be a breach, default and anticipatory breach of this Lease. In any of such events and whenever and as often as any such failure, default, breach or anticipatory breach shall occur, the term hereof, at the option of Landlord, shall cease and determine and from thenceforth it shall be lawful for Landlord to re- enter into and repossess the Leased Premises situated thereon and Tenant and each and every occupant to remove and put out and to relet said Leased Premises for his own benefit; but reserving to Landlord all such rights as he may have for damages or otherwise because of said default, breach or anticipatory breach of Tenant. 17. Waiver of Subrogation. Notwithstanding anything in this Lease to the contrary, whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other 6 casualty or occurrence is incurred by either of the parties to this Lease, or anyone claiming by, through, or under it in connection with the Premises and (b) such party is then covered in whole or in part by insurance with respect to such loss, cost, damage or expense or would have been covered if such party carried the insurance required under this Lease, then the party so insured or insurable releases the other party from any liability said other party may have on account of such loss, cost, damage or expense to the extent of any amount recovered by reason of such insurance (or which could have been recovered had such insurance been carried) and waives any right of subrogation which might otherwise exist in or accrue to any person on account thereof. 18. Indemnification. Except to the extent caused by the willful negligence or willful misconduct of the Landlord, Tenant shall indemnify, defend and hold Landlord, its members, the City of Sterling Heights, its elected and appointed officials, their administrators, employees, agents, volunteers and invitees harmless from and against any and all claims, counter-claims, suits, debts, demands, actions, judgments, liens, liabilities, costs, expenses, including actual attorneys fees and actual expert witness fees, arising out of or in connection with Tenant’s use and occupancy of the Leased Premises, from the acts or omissions of Tenant, its agents, representatives, employees, tenants, licensees, invitees, and/or from Tenant’s violation of any of the terms of this Lease. 19. Environmental Warranty and Indemnification. Tenant represents, warrants and covenants to Landlord that Tenant’s use of the Leased Premises and its activities on the Leased Premises shall comply with all “Environmental Laws,” which, for purposes of this lease, shall mean all federal, state and local environmental laws, including, but not limited to, the Hazardous Materials Transportation Act, (47 USC §§ 1801 et seq.), Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.) (“Clean Water Act”), the Resource Conservation & Recovery Act (42 U.S.C. §§ 6901 et seq.) (“RCRA”), Safe Drinking Water Act (42 U.S.C. §§ 300f-j-26), Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et seq.) (“CERCLA”), the Emergency Planning and Community Right to Know Act, 42 U.S.C. §§ 11001 et seq. (“EPCRA”), the Michigan Natural Resources and Environmental Protection Act (MCL § 324.101 et seq.) the administrative rules and regulations promulgated under such statutes, or any other similar federal, state or local law or administrative rule or regulation of similar effect, each as amended and as in effect and as adopted as of the date of execution of this Lease. Tenant shall immediately and promptly notify Landlord of any release, discharge, spill or emission of Hazardous Substances on, to or from the Leased Premises, and any complaint, summons, citation, notice, directive, order, claim, litigation, judicial or administrative proceeding, inquiry or investigation judgment, letter or other communication from any governmental agency, department, bureau, office or other authority, or any third party involving violations of Environmental Laws with respect to the Leased Premises. Tenant agrees to indemnify, defend and hold harmless Landlord, its successors, assigns, the City of Sterling Heights, its elected and appointed officials, administrators, employees, agents, from and against any and all fines, charges, penalties, losses, costs, damages, liabilities, cleanup or response activity costs and/or expenses (including reasonable attorneys’ fees and 7 actual consultants’ fees) incurred by Landlord as a result of any claims, demands, actions, causes of action, suits, proceedings, investigations, assessments and audits, whether of law or in equity (collectively “Claims”) attributable to (a) any third party claim or demand in connection with any Hazardous Substances generated, stored, leaked, spilled, discharged, emitted, or otherwise disbursed, in, on, under, above or about the Leased Premises or the Property, or violation of any Environmental Laws, from and after the date of this Lease; (b) injuries sustained or other tort actions brought for Claims arising out of or related to any Hazardous Substances; (c) the presence, disposal (including off-site disposal), escape, leakage, discharge, emission, release or threatened release of any Hazardous Substances in, on, under, above, from or about the Leased Premises or the Property; and (d) compliance with any administrative notice, order, request or demand relative to any Hazardous Substances on the Leased Premises or violation of any Environmental Laws. Tenant’s indemnification described above specifically includes, but is not limited to, the direct obligation of the Tenant to promptly perform any remedial or other activities required or ordered by any administrative agency or government official, or are otherwise necessary to avoid injury or liability to any person or property, to prevent the spread of any pollution and/or contamination, or to permit the continued safe use of the Leased Premises. 20. Mechanics’ Liens. Tenant shall keep the Building, its improvements, and the Property, or addition of equipment or fixtures free and clear of all mechanics’ liens resulting from any approved construction done by or for Tenant. 21. Holding Over. Any holding over by Tenant after the expiration or termination of this Lease, without the written consent of Landlord, shall be construed to be a tenancy from month to month and the Rent and Additional Rent to be paid by Tenant shall be at 2.5 times the Rent then in effect, as determined by Landlord in it sole discretion. Acceptance by Landlord of such payments after such expiration or termination shall not constitute a renewal of this Lease. This provision shall not operate as a waiver of Landlord’s right to re-entry or any other right of Landlord, and Tenant shall be a Tenant at sufferance only during the period of any such holding over without the consent of Landlord. 22. Taxes and Special Assessments. If the Leased Premises, Building, Property or Equipment are placed on the tax assessment rolls based upon Tenant’s usage, then any real estate taxes, personal property taxes, other applicable taxes and/or special assessments assessed or levied against the Premises, Building, Property or equipment during the Term of this Lease shall be solely borne by Tenant as further Additional Rent. 23. No Waiver. The failure of either party to enforce any covenant or condition of this Lease shall not be deemed a waiver thereof or of the right of either party to enforce each and every covenant and condition of this Lease. No provision of this Lease shall be deemed to have been waived unless such waiver is in writing. 24. Prohibitions. The following general types of activities shall be prohibited within the Building or on the Property: 8  A. When the purpose of such use is to promote activities subversive to the laws of the United States or any subdivision thereof, or to overthrow the government of the United States, or supporting doctrines of violence, hatred, and/or discrimination. B. Any activity that may violate the canons of good morals, manners or taste, or be injurious to the buildings, facilities, grounds or equipment, or interfere with the programs, activities or operations of the Landlord. C. Any political forum that is not made available to all sides of an issue on an equitable basis and political campaign activities such as collection and/or solicitation of campaign funds, solicitations for campaign workers, and distribution of political campaign advertisement. D. No alcoholic beverages, illegal drugs, or controlled substances are permitted in or around the Building or upon any Landlord property. E. Activities that block fire doors, means of egress, block or tamper with any fire protection apparatus. F. Smoking or use of tobacco products in the Building or on the Property. G. The Leased Premises are made available with the understanding that direct payment to Landlord employees is not permitted. Employees shall not accept under any circumstances direct payments in lieu of fees, labor charges, or other services. H. Guns, weapons or guard dogs (except dog guides assisting blind individuals) are not allowed in the Building or upon the Property without prior written permission from the City of Sterling Heights City Manager, or their designees. (Governmental law enforcement officers are exempt; private security guards are not exempt.) I. Signs or other materials may not be posted without the approval of the Landlord. J. Subleasing or shared used (not authorized by Landlord in writing) is prohibited. 25. Miscellaneous Provisions. The following miscellaneous provisions shall form a part of this Lease: A. Tenant agrees to supervise its employees during use of the Building and/or Leased Premises. B. Tenant agrees to adhere to energy conservation practices adopted by Landlord or the City of Sterling Heights. C. The parties to this Lease agree that no employees, volunteers, agents and personnel of either party shall be considered to be employees of the other, and acknowledge that this Lease does not create a partnership or joint venture between them. 9  D. This Lease shall be construed and interpreted in accordance with the laws of the State of Michigan. E. This Lease contains all of the agreements of the parties and cannot be amended or modified except by a mutual written agreement. F. The captions of this Lease shall have no effect on its interpretation. 26. Brokers. Landlord and Tenant hereby represent and warrant to one another that neither party nor their respective managers, officers or agents nor anyone acting on their behalf has dealt with any real estate broker in the negotiation or making of this Lease, and both Landlord and Tenant agree to indemnify and hold one another harmless from the claim or claims of any broker or brokers claiming to have caused the parties to enter into this Lease. 27. Binding Effect. This Lease shall be binding upon and shall inure to the benefit of the parties and their respective beneficiaries, successors and assigns. 28. Governing Law. This Lease shall be governed by and construed under the laws of the State of Michigan. 29. Arbitration. Any controversy or claim between the parties arising out of or relating to this Lease or a breach thereof (other than a dispute regarding or a claim for non- payment of Rent) shall be settled by arbitration in Macomb County, Michigan under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) and shall be administered by the AAA. In no such event shall a demand for arbitration be made after the date when legal or equitable proceedings based upon such controversy or claim would be barred by the applicable statute of limitations. Any arbitration hearing conducted pursuant to this Agreement shall be held in Macomb County, Michigan. The arbitrator(s) shall issue a written statement specifying the reasons for the award, which shall be final and binding on both parties, and in such format that judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. The arbitrator(s) (a) shall have the authority to award injunction relief or to direct specific performance, if warranted, and (b) shall not have the authority to award punitive or consequential damages. Each party shall bear its own attorneys’ fees, witness fees, and other costs in preparing and presenting its position at arbitration. The fee of the arbitrator, however, shall be borne and paid by the party not substantially prevailing in the matter arbitrated, as specifically so determined by the arbitrator. 30. Subordination; Landlord’s Lien Waiver. This Lease shall be subordinate to any mortgage, deed of trust, hypothecation or other security device which encumbers the Building or any ground or underlying lease which is intended to be superior to this Lease (“Security Device”) provided that Landlord provides to Tenant from the holder of such Security Device a subordination, non-disturbance and attornment agreement reasonably acceptable to Tenant. Landlord hereby waives and releases all liens, right of distraint or security interests (whether arising by statute or at common law) in all property, chattels or merchandise which may be placed in the Premises and also upon all proceeds of insurance which may accrue to Tenant by reason of damage to or destruction of any such property, chattels or merchandise. 10  31. Quiet Enjoyment; Entry into the Premises. Landlord covenants that so long as Tenant is not in default hereunder after the expiration of any applicable cure periods under this Lease, Tenant shall have quiet and peaceful possession and enjoyment of the Premises and shall not be interfered with by Landlord, or any party claiming by, through or under Landlord or any party claiming title superior to Landlord. Notwithstanding the foregoing, Landlord and Landlord’s representatives shall be permitted to enter the Premises during Business Hours and upon forty-eight (48) hours prior oral notice (except in the case of emergency, in which case notice reasonable under the circumstances shall suffice). During any entry into the Premises by Landlord or Landlord’s representatives (except in case of emergency), at Tenant’s option, a representative of Tenant shall accompany Landlord and/or Landlord’s representatives through the Premises at all times. 32. Attorneys’ Fees. All reasonable attorneys’ fees, including actual expenses and court costs, incurred by the prevailing party to enforce the terms of this Lease against the non- prevailing party shall be paid by the non-prevailing party. 33. Counterparts. This Lease may be executed in any number of counterparts and by each of the undersigned on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 34. Option. Provided Tenant is not then in default, Tenant shall have and is granted two options to extend the term of the Lease for a period of one (1) year at a mutually agreeable rental rate. The option granted by this provision shall be exercised by notice by Tenant in writing to the Landlord not less than thirty (30) days prior to the expiration of the then current term and agreement in writing as to a rental rate. All of the terms and conditions of the original lease shall remain in full force and effect during such extended term except for the rental rate. [Signatures follow on next page] 11  The parties have duly executed this Agreement pursuant to proper authority duly granted, as of the dates set forth below. LANDLORD: City of Sterling Heights Local Development Financing Authority By: _________________________________ Its: Dated: ______________________ TENANT: ____________________________________ By: _________________________________ Its: _________________________________ Dated: ______________________ 12  EXHIBIT A Location of the Premises (Floor Plan)  LDFA Business Sterling Heights, Michigan 11/17/2010 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To Approve an Events & Meeting Space Rental Agreement as well as Rental Policies & Procedures for the Macomb-OU Incubator located at 6633 18 Mile Road Submitted By: Denice A. Gerstenberg, Public Services Manager, 446.2361 Executive Summary Oakland University has provided the attached Macomb-OU Incubator Events & Meeting Space Rental Agreement as well Rental Policies & Procedures for LDFA review and approval. Comments and recommendations from City staff and the City Attorney have already been included in these documents. The City Attorney reviewed the document because the City owns the building. At an October 26, 2010 incubator staff meeting the following was agreed: • OU would create the Agreement and establish the pricing, policies & procedures. • OU would be responsible for programming these meeting spaces and therefore rental revenues would be re-invested in the Macomb OU Incubator. • Tenants can use all the meeting spaces and atrium space for free. Tenants can use the innovation lab 2x per year. Private companies would pay a fee. Promotional events could be free, TBD by OU. No alcohol is allowed in the building at this time. The City Attorney is drafting a separate alcohol policy that will be presented to the LDFA at a later date. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to Approve an Events & Meeting Space Rental Agreement as well Rental Policies & Procedures for the Macomb-OU Incubator located at 6633 18 Mile Road.  Host a Meeting or Event at the Macomb-Oakland University INCubator The Macomb-Oakland University INCubator has a 2,931 square foot Atrium and Innovation Lab available for use by Macomb-OU INC tenants, partners and community members. The Atrium can comfortably seat 25-115 and is equipped with wireless internet access and a computer projection system. The Innovation Lab is 1,211 square feet and seats 22. Equipped with a projector, the room can be rented with optional use of a breakout room, which is 1,272 square feet. Both rooms are equipped with wireless internet access. Equipment Available Upon Request: • Overhead projector • Screen • Podium • White board • Flip chart stands • Wireless microphone system Normal hours of operation for Macomb-OU INC are Monday-Friday from 8:30 a.m.-5 p.m. There is a special fee for evening events. Rooms may be scheduled up to six months in advance. Tech support will be available on a fee basis. To view Macomb-OU INC’s rental policy, click here. For more information or to book a room, contact Karen Pikunas at ___________. 10/21/10 Page 1  Macomb-Oakland University INCubator Room Rental Information The Macomb-OU INCubator, located at 663318 Mile Road in Sterling Heights, is a driver of business innovation and job growth for Michigan. The goal of Macomb-OU INC is to create jobs and advance the development of Defense & Homeland Security, Alternative Energy and Advanced Manufacturing businesses. The INCubator provides entrepreneurial resources, business solutions, access to student interns and proactive support to businesses at every stage, in an effort to help startups on their path to success. In support of this goal, a variety of events and meetings may take place. Meeting Rooms Macomb-OU INC features a 2,931 square foot Atrium and Innovation Lab available for use by INCubator tenants, partners and community members. Tenants and Macomb-OU INC partners are allocated free use of the Atrium and Innovation Lab 2 days per year and charged a discounted fee once a member company has exceeded this usage. Tenants have unlimited free use of the small conference rooms throughout the duration of their lease on a first come, first serve basis. To ensure availability, tenants can book a small conference room by contacting Karen Pikunas at ______. Companies, organizations and community members may reserve meeting rooms for a fee. A $50 deposit fee will be assessed upon booking. Additional equipment is available at no charge with any reservation. Fees are as follows: Atrium: The Atrium comfortably seats 25-115 and is equipped with an audio system, wireless internet access and a computer projection system. Atrium Room Rental Fee $300 full day $150 quarter day (2 hours) $200 half day (3 or 4 hours) Innovation Lab: The Innovation Lab seats 22 and can be rented with an optional breakout room. It is equipped with wireless internet access and a computer projection unit is available upon request. Innovation Lab Room Rental Fee* $200 full day $100 quarter day (2 hours) $150 half day (3 or 4 hours) The Innovation Lab also hosts facilitated Collaboratory sessions. Please visit the Macomb-OU INC website for more details. *This room can be equipped with laptops or without. Use of the rented laptops results in a $25/hr lab tech support fee with a $50 minimum. 10/21/10 Page 2  Macomb-Oakland University INCubator Meeting Room Policies & Procedures • Macomb-OU INC’s business hours are Monday–Friday, 8:30 a.m.-5:00 p.m. All scheduled meetings cannot start before 8:30 a.m. and must end by 4:30 p.m. Access to the building will not be available before 8:30 a.m. • Meeting room reservations cannot be made more than six months in advance. • Payment for meeting rooms, when applicable, must be received at least two weeks in advance. A full refund will be given if a room is canceled at least two business days prior to the event. • Any damage to the rented equipment, property and/or facility resulting from the use of the room(s), including meeting rooms and restrooms, is the liability of the company or organization hosting the event. Any fees incurred as a result of damage will be the responsibility of the company or organization. • The renting company or organization agrees to indemnify and hold the City of Sterling Heights and Oakland University, their officers, agents, and employees harmless from any and all claims for injuries, including death, damages, and losses, including reasonable attorneys’ fees, which may arise or may be alleged to have arisen out of, or in connection with, the above meeting(s) held at 6633 18 Mile Road. • The use of tape, glue or thumb tacks on meeting room walls is prohibited. • Event attendees are asked to refrain from loud conversations and cell phone usage in the general reception area. Cell phones may be used in the hallway behind the conference rooms. The receptionist can direct attendees to this area if requested. • Macomb-OU INC is a public facility, so smoking inside is prohibited under Michigan law. • Kosch Catering is on-site and can provide food service for events. Macomb-OU INC does not provide any food or beverage services. The kitchen area, coffee machines and refrigerator are for staff use only. • A fee will be assessed to rearrange the Atrium from its standard setup. Room setup is coordinated through Kosch Catering. • Cancellation Policy: Due to the high demand of the meeting rooms, we ask that the Notice of Cancellation be filled out and faxed to Karen Pikunas at least two business days prior to the event or meeting at ___________. This must be done in order to receive a refund of the $50 deposit. __________ Initials 10/21/10 Page 3  Macomb-Oakland University INCubator Meeting Room Reservations To confirm your booking, please review and return the signed copy. Company Name: Date of Event: Estimated Attendance: Event Start Time: Event Finish Time: Conference Room: Requested Equipment: Room Rental Fee (if applicable): Contact Name: Contact Phone Number: Contact E-mail: I agree to indemnify and hold the City of Sterling Heights, its officers, agents, and employees harmless from any and all claims for injuries, including death, damages, and losses, including reasonable attorneys’ fees, which may arise or may be alleged to have arisen out of, or in connection with, the above meeting(s) held at 6633 18 Mile Road. I received, read, understand, and agree to comply with this Meeting Rooms Use Policy, whose terms are incorporated herein by reference. By signing below, I acknowledge that I have reviewed the room rental policies and procedures as they apply to my event and accept all responsibility and/or fees that are outlined within the room rental policy. I understand that my reservation will not be confirmed until this page is signed and returned to Macomb-OU INC within two business days. Please return to Karen Pikunas at _________. Agreed and Accepted: __________________________________ Authorized Signature ______________________________________ Date 10/21/10 Page 4