Lease Agreement

THIS LEASE, made as of the 1st day of February, 1994, by and between 1500 Limited Partnership, a Michigan limited partnership, whose address is 1500 West Big Beaver Road, Troy, Michigan 48084 (hereinafter referred to as "Landlord"), and Sandy Corporation, a Michigan corporation, whose address is 1500 West Big Beaver, Troy, Michigan 48084 (hereinafter referred to as "Tenant").


WHEREAS, Landlord owns that certain office building located at 1500 West Big Beaver, Troy, Michigan (hereinafter referred to as the "Building"), as more particularly described on Exhibit A attached hereto, together with all buildings, structures, improvements and parking areas constructed thereon and all easements, rights and appurtenances thereto (collectively, the "Property"); and


WHEREAS, Tenant desires to lease a portion of the Building and Landlord agrees to lease the Leased Premises to Tenant.


NOW THEREFORE, Landlord, in consideration of the rents to be paid and the covenants and agreements to be performed by the Tenant, does hereby lease to the Tenant the Leased Premises defined in Section 1 hereof upon the terms and conditions hereinafter set forth and Landlord and Tenant agree as follows:


1. Basic Lease Provisions.


The following are certain basic lease provisions, which are part of, and in certain instances referred to in subsequent provisions of, this Lease:


A. Address and Building: 1500 West Big Beaver Road,
Troy, Michigan 48084.


B. Leased Premises: 62,772 rentable square feet of area
which space is located on the second floor and a portion of the first
floor as designated and more particularly described by the area
outlined on Exhibit "B" attached hereto (the "Leased Premises").


C. Term: From February 1, 1994 through and including
May 31, 2006


D. Commencement Date: February 1, 1994.


E. Termination Date: May 31, 2006.


F. Basic Annual Rent:


Period Annual Rent
------ -----------

2/1/94 - 1/31/99 $1,129,896.00
2/1/99 - 1/31/04 1,192,668.00
2/1/04 - 5/31/06 1,224,054.00


G. Monthly Rental Installments:


Period Monthly Rent
------ ------------

2/1/94 - 1/31/99 $ 94,158.00
2/1/99 - 1/31/04 99,389.00
2/1/04 - 5/31/06 102,004.50


H. Basic Monthly Expense: Tenant is responsible for all
electric costs within the Leased Premises other than heating and air
conditioning costs, as set forth in Section 6.2 of this Lease. Tenant
is also responsible for Tenant's Proportionate Share (as hereinafter
defined) of "Increased Charges," as set forth in Section 4.3 hereof. 2
I. Tenant's Proportionate Share: 81.8% (subject to
decrease if the area of the Leased Premises decreases when compared to
the gross leaseable area of the Building).


J. Tenant's Use: general business offices and such
other office, medical, research, training and seminar presentation
uses (other than use by any governmental agency) as are consistent
with uses permitted in other first class office buildings in Troy,
Michigan, and are in compliance with applicable zoning ordinances.


2. Leased Premises.


2.1 Landlord does hereby lease to Tenant the space specified in Section 1(B) of the Basic Lease Provisions, as shown on Exhibit "B" attached hereto, together with the nonexclusive right and easement to use the parking and certain common areas and facilities, which are furnished by the Landlord at or in the Building, in common and conjunction with the Landlord, the other tenants of the Building, and their respective agents, employees, customers and invitees (the "Common Areas"). Landlord shall not reduce, alter, modify or change in any manner the Common Areas without the consent of Tenant, which consent shall not be unreasonably withheld or delayed, provided that: (i) the rear portion of the parking lot area may be so altered, so long as same does not affect Tenant's rights hereunder, and (ii) the interior hallway may be reconfigured to accommodate a new tenant, so long as access to and visibility of the Leased Premises is not adversely affected thereby. Tenant and its agents, employees, customers and invitees shall continue to have the exclusive right to use the parking spaces currently designated for Tenant's use as of the date hereof. In the event the size of the Leased Premises is reduced in accordance with Section 36 of the Lease, the number of parking spaces designated for Tenant's use shall be proportionately reduced. Tenant further acknowledges that Landlord shall have no obligation to police, monitor or enforce the usage of Tenant's designated parking spaces.


2.2 Landlord and Tenant acknowledge that the entire Building including the Leased Premises is currently covered by an existing lease (the "Existing Lease") dated May 18, 1983, between Landlord, as lessor, and Tenant, as lessee, as amended (collectively, the "Existing Lease"). Contemporaneously herewith, Landlord and Tenant shall execute an amendment (the "Amendment") to the Existing Lease excluding the Leased Premises from the Premises (as defined in the Existing Lease) for purposes of the Existing Lease. Pursuant to such Amendment, the Existing Lease will cover only those portions of the Building currently subleased by Tenant to: (i) Henry Ford Health System/Invitro Fertilization of Australia Partnership d/b/a Henry Ford IVF Australia Program ("HFIAP") under a Sublease dated June 15, 1992 (the "HFIAP Sublease"), and (ii) Henry Ford Health System d/b/a Henry Ford Medical Group ("HFHS") under a Sublease dated June 15, 1992 (the "HFHS Sublease"). The portion of the Building covered by the HFHS Sublease (the "HFIAP Space") is also subject to a Lease dated June 15, 1992 (the "HFIAP Lease") between Landlord and HFHS, which HFIAP Lease commences upon expiration of the HFIAP Sublease. The portion of the Building covered by the HFHS Sublease (the "HFHS Space") is also subject to a Lease dated June 15, 1992 (the "HFHS Lease") between Landlord and HFHS, which HFHS Lease commences upon expiration of the HFHS Sublease. The HFHS Space is more particularly described in the HFHS Lease and the HFIAP Space is more particularly described in the HFIAP Lease. From and after the date hereof, Landlord and Tenant shall use their best efforts to obtain the consent of HFIAP and HFHS to: (i) the immediate termination of the HFIAP Sublease and HFHS Sublease (the "Subleases") effective as of the first day of the first month following the granting of such consent by both HFIAP and HFHS (the "Termination Date"), and (ii) amendments to the HFIAP Lease and the HFHS Lease (the "Leases") such that such Leases shall commence as of the Termination Date rather than June 1, 1996 (the "Amendments"). Upon the granting of such consent of HFIAP and HFHS, termination of the Subleases, and the execution of the Amendments by Landlord, HFIAP and HFHS, the Existing Lease will be terminated and of no further force or effect. In the event that HFIAP or HFHS refuses to grant such consent, Tenant shall assign all of its right, title, and interest in and to the Subleases to Landlord, Landlord shall assume the obligations of Tenant thereunder, and the Existing Lease shall be terminated and of no further force or effect as of the date of such assignment. In the event of a conflict between this Lease and the Existing Lease as to the Leased Premises, this Lease shall control.


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2.3 Landlord and Tenant acknowledge that Landlord is entitled to reimbursement from Tenant pursuant to the Existing Lease for all payments made by Landlord for insurance premiums with respect to the Building during the term of the Existing Lease. Landlord hereby waives its right to reimbursement for all such premiums paid by Landlord other than premiums for the previous twelve (12) months for which Landlord shall receive reimbursement from Tenant.


2.4 Landlord executed a certain letter dated February 28, 1992, with respect to the proposed sub-tenancy of HFHS. Landlord and Tenant acknowledge and agree that such letter is null and void and of no further force or effect.


2.5 Tenant hereby agrees to indemnify and hold Landlord harmless from and against any and all liabilities, claims, demands, obligations, costs and expenses arising under the Subleases prior to the date hereof. Landlord hereby agrees to indemnify and hold Tenant harmless from and against any and all liabilities, claims, demands, obligations, costs and expenses arising under the Subleases from and after the date hereof.


3. Term and Possession.


3.1 The term (the "Term") of this Lease shall be for the period from and after the Commencement Date and ending on May 31, 2006.


3.2 Tenant accepts the Leased Premises in its "as is" condition as of the Commencement Date.


4. Rent.


4.1 Tenant shall pay to Landlord as rent for the Leased Premises during the Term of this Lease the sum shown in Section 1(F) of the Basic Lease Provisions, payable in advance, in equal monthly installments in the amount shown in Section 1(G) of the Basic Lease Provisions, upon the first day of each and every month throughout the term of this Lease.


4.2 Rental and all other charges hereunder shall be paid promptly without prior demand therefor and without deductions or set-offs for any reason whatsoever, except as otherwise hereinafter provided, and overdue rent shall bear interest from and after the tenth (10) day of each calendar month if not previously paid at the rate of twelve percent (12%) per annum, but in no event higher than the highest rate which may be charged without the same being usurious, during delinquency until paid. Landlord shall have no obligation to accept less than the full amount of all installments of rental and interest thereon and all charges hereunder which are due and owing by Tenant to Landlord, and if Landlord shall accept less than the full amount owing, Landlord may apply the sums received toward any of Tenant's obligations in Landlord's discretion.


4.3 In addition to the Basic Annual Rent set forth above, Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share of any "Increased Charges" (as hereinafter defined). "Increased Charges" shall mean that portion of the "Charges" (as hereinafter defined) incurred by Landlord during each calendar year in excess of the Charges incurred by Landlord during calendar year 1994. Charges for calendar year 1994 shall be calculated by annualizing the actual charges incurred during the period from February 1, 1994 through December 31, 1994. Notwithstanding anything contained herein to the contrary, for purposes of the calculation of Charges incurred by Landlord during calendar year 1994, the amount of Taxes (as hereinafter defined) incurred by Landlord during calendar year 1993 shall be substituted for the amount of Taxes incurred by Landlord during calendar year 1994, unless the amount of Taxes incurred in 1994 is higher, in which case 1994 Taxes shall be used. With respect to such Increased Charges, prior to the beginning of each calendar year during the term of this Lease or as soon thereafter as is practicable, Landlord shall give Tenant notice of Landlord's estimate of Tenant's Proportionate Share of Increased Charges for the ensuing calendar year which will be based on actual charges for the previous calendar year. On or before the first day of each month during such ensuing calendar year, Tenant shall pay to Landlord one-twelfth (1/12) of such estimated amount, provided that until such notice is given with respect to such calendar year, Tenant shall


- 3 - 4 continue to pay the amount then currently payable pursuant hereto until after the month such notice is given, at which time, the following month's share of Increased Charges shall include the shortfall in amounts paid by Tenant for such calendar year to date. Within ninety (90) days of the close of each calendar year, Landlord shall deliver to Tenant a statement prepared by Landlord of the amount of the actual Tenant's Proportionate Share of Increased Charges for the prior calendar year and reasonable evidence and background information relating to such Increased Charges and the calculation thereof. The amount charged to Tenant by Landlord hereunder shall not include any profit, fee, or other mark up benefiting Landlord, but shall be based upon the actual amounts paid by Landlord as Charges or at Tenant's option, such amount shall be refunded to Tenant. If on the basis of such statement, Tenant owes an amount that is less than the estimated payments made during such prior calendar year by Tenant, Landlord shall credit such excess amount against the next payments due from Tenant to Landlord of Increased Charges. If on the basis of such statement, Tenant owes an amount that is more than the estimated payment for such calendar year made by Tenant, Tenant shall pay the deficiency to Landlord within one hundred fifty (150) days after delivery of such statement. Tenant shall have the right to audit Landlord's calculation of Increased Charges on an annual basis within thirty (30) days after Tenant's receipt of Landlord's statement of the amount of the Increased Charges due.


As used herein, "Charges" shall mean the following costs of operating, repair, maintenance and taxes incurred by Landlord in connection with the Property.


(i) all charges for gas, steam, heat, air-conditioning,
power, water and sewer rents for the Property, electricity for the
Common Areas, and all costs of light bulbs and ballasts for the Common
Areas;


(ii) all insurance premiums incurred by Landlord for
insurance which Landlord is required to carry under this Lease;


(iii) all real estate taxes, and other taxes, assessments,
special assessments, ordinary and extraordinary (which, if permitted
by law, may be paid in installments over the longest legally allowable
term) and other governmental charges, whether of a like or different
nature, levied upon or assessed against the Property or any buildings,
structures, fixtures or improvements now or hereafter located thereon,
or arising in respect of the occupancy, use or possession thereof, any
sales taxes applicable to commercial rents, and any tax that may be
levied, assessed or imposed by the State, County or Municipality in
which the Property is located, or by any political or taxing
subdivision thereof, upon or measured by the rents hereunder or the
rental income arising from Property in lieu of or as a substitute for
any tax upon the Property (but not general income taxes of Landlord),
and including the Michigan Single Business Tax, but excluding any of
Landlord's general income taxes, capital stocks tax or other tax
imposed against Landlord for the privilege or franchise of doing
business as a corporation, or any estate, inheritance, devolution,
succession, transfer, stamp, legacy or gift tax which may be imposed
upon or with respect to any transfer of Tenant's interest in the
Property (collectively the "Taxes"); and


(iv) the following reasonable, normal and recurring
expenses of operating, maintaining and repairing the Property: the
cost of landscaping, resealing, repairing, interior painting,
lighting, cleaning, and snow removal with respect to the Common Areas;
the cost of regular preventative maintenance and repair (including
replacement of parts) to the Building utility systems, Building
mechanical systems, exterior walls and roof of the Building, and
parking lot to keep same in good condition over their useful life; the
cost of ordinary trash disposal services; the cost of routine
maintenance of the elevator system; the cost of janitorial services;
reasonable management, legal, accounting and consulting fees and
expenses incurred in connection with the management and operation of
the Building and Common Areas which are payable to parties other than
Landlord, Landlord's general partner and their respective affiliates;
reasonable actual compensation (including employment taxes and fringe
benefits) of all persons who perform duties connected with the
operation, maintenance and repair of the Building or Common Areas; and
amortization of capital improvements which are either (i)
non-structural improvements


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required by changes in the law enacted after the Commencement Date
which are required as a result of occupancy of space within the
Building by Tenant, or (ii) installed for the purpose of reducing
Charges over the period of such amortization, provided the amortized
amount of such capital improvement does not exceed the good faith
estimate of the amount of the Increased Charge saved in any given
calendar year.


Notwithstanding anything contained in this Lease to the contrary, Charges shall not include the following costs and expenses relating to the operation, maintenance, repair and replacement of the Building and the Common Areas:


(i) Structural building and roof repair costs;


(ii) Costs incurred when due to normal wear and tear,
exposure to the elements, corrosion or obsolescene, the parking lot,
roof, HVAC rooftop units and boilers are no longer usable or
repairable (other than costs incurred in connection with regular
preventative maintenance and necessary repairs, overhauls and
replacement of parts perfomed with respect to the parking lot, roof,
HVAC rooftop units and boilers to keep same in good condition for
their useful life which costs shall be included in Charges);


(iii) Any cost or expense related to removal or cleanup of
Hazardous Materials (as defined in Section 35 hereof) (except that
Tenant remains liable for all costs of any removal or cleanup caused
by Tenant);


(iv) Landlord's debt service on any mortgage encumbering
the Property;


(v) Items which would be considered capital expenditures
by Landlord under generally accepted accounting principles relating to
the Building or the Common Areas except as otherwise specifically
included above;


(vi) Cost of repair of damage caused by casualty or
condemnation;


(vii) Costs of Landlord associated with portions of the
Building leased to other tenants;


(viii) Depreciation;


(ix) Leasing commissions fees, tenant improvement costs
and incentives to new tenants;


(x) Expenses for services provided to another tenant of
the Building but not Tenant;


(xi) Penalties or fines payable by Landlord;


(xii) Expenses for which Tenant reimburses Landlord in
accordance with other provisions of this Lease;


(xiii) Costs incurred by Landlord as a result of a violation
of another lease for space in the Building;


(xiv) Costs incurred because of Landlord's negligence or
willful act or omission; and


(xv) Overhead and profit to Landlord.


4.4 Landlord agrees to not unreasonably reduce expenditures which would be included in Charges during calendar year 1994. In addition, with respect to the janitorial expenses, in the event the remainder of tenants in the Building receive janitorial services in the future, janitorial


- 5 - 6 service expenses for 1994 shall be "grossed up" as if 100% of the Building was using janitorial services in 1994 as part of the calculation of Charges.


4.5 Notwithstanding anything contained in this Lease to the contrary, the amount of "Controllable Charges" (as hereafter defined) for which Tenant shall pay Tenant's Proportionate Share as part of Tenant's obligation to pay Increased Charges shall not increase each calendar year by more than five (5%) percent per annum on a cumulative basis, so that if Charges for 1994 are $1.00, Charges for 1995 would not be higher than $1.05, Charges for 1996 would not be higher than $1.1025, Charges for 1997 would not be higher than $1.1576, and so forth. The term "Controllable Charges" shall mean all Charges, except for Taxes, insurance premiums, and utility costs.


5. Use.


5.1 The Leased Premises shall be used only for the purposes of Tenant's Use as set forth in Section 1(I) of the Basic Lease Provisions, and for no other purpose or purposes whatsoever, subject to the provisions of Section 5.3 hereof. Tenant agrees, at its own cost and expense, to obtain all necessary governmental approvals, certificates, licenses and permits, that may be required for Tenant's use and occupancy of the Leased Premises; provided, however, Landlord agrees to cooperate with Tenant in applying for any certificate, license or permit required and Landlord will sign, if required, any necessary applications and related documents.


5.2 Tenant acknowledges that (i) the Leased Premises are suitable for Tenant's use in the conduct of its business; (ii) Tenant has inspected the Leased Premises and the Building and both are, in all respects, satisfactory to Tenant; (iii) Landlord has not had, and will not in the future, have any responsibility in connection with any improvements to the Leased Premises or the Property and Landlord has made no representations or warranties with respect to the condition, state or workmanship of any building or improvements on the Property or the condition, state or workmanship of the Leased Premises, and, except for Landlord's repair obligations set forth in this Lease, arising with respect to events or circumstances occurring subsequent to the date hereof, if any portion of the Leased Premises shall be found to be faulty, incomplete or unsatisfactory in any way, Tenant shall have no recourse against Landlord, any and all rights which it may have against Landlord for any damages or other relief in connection therewith being expressly waived. Tenant shall not do or permit to be done in or about the Leased Premises, nor bring or keep or permit to be brought or kept therein, anything which is prohibited by or will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated, or which is prohibited by the standard form of fire insurance policy, or will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause a cancellation of any insurance policy covering the Building or any part thereof or any of its contents, or adversely and demonstrably affect or interfere with any services required to be furnished by Landlord to Tenant, or to any other tenants or occupants of the Building, or with the proper and economical rendition of any such service. Tenant shall not do or permit anything to be done in or about the Leased Premises which will in any way obstruct or interfere with the rights of other tenants or subtenants of the Building, or injure them, or use or allow the Leased Premises to be used for any unlawful or objectionable (i.e. not consistent, in Landlord's reasonable discretion, with the operation of a first class office building) purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Leased Premises or commit or suffer to be committed any waste in, on or about the Leased Premises. If anything done, omitted to be done or suffered to be done by Tenant, or kept or suffered by Tenant to be kept in, upon or about the Leased Premises shall cause the rate of fire or other insurance on the Building in companies acceptable to Landlord to be increased beyond the minimum rate from time to time applicable to the Building, Tenant shall pay the amount of any such increases. Landlord acknowledges that Tenant's current business and current use of the Leased Premises do not violate this Section 5.2 and will not cause an increase in any insurance rate.


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6. Utilities and Services.


6.1 Provided Tenant is not in Default hereunder, and subject to Tenant's agreement to pay Increased Charges and other charges set forth in this Lease, Landlord agrees to furnish to the Leased Premises, at Landlord's expense, all utilities and services currently being provided to Tenant, at Tenant's expense, under the Existing Lease, which services are consistent with services typically provided in first class office buildings in the Troy, Michigan area, subject to the conditions and in accordance with the standards set forth in this Section 6 and which services include, but are not limited to, the following:


A. Heat and/or air conditioning on Monday through
Friday from 7 a.m. to 7 p.m., except on legal holidays, at a range
within tolerances normal in first class office buildings.


B. Water for drinking, cleaning, and lavatory purposes
only.


C. Janitorial services.


D. Maintenance and replacement of the parking areas,
sidewalks, and landscaping, as needed in the discretion of Landlord.


E. Snow removal services.


F. Other services currently being provided to Tenant as
of the date hereof, at Tenant's expense.


6.2 Tenant shall be responsible for its own electrical usage and shall pay same within ten (10) days of a receipt of an invoice therefor from Landlord, as additional rent. Tenant may, at its expense, arrange for the Leased Premises to be separately metered for electricity (except for that electricity consumed in connection with the heating and cooling systems). Landlord and Tenant acknowledge and agree that Tenant's share of electrical usage shall be determined by an electrical consumption consultant mutually acceptable to Landlord and Tenant. Tenant shall also be responsible for all costs (including electricity) incurred in connection with any heating or cooling systems installed by Tenant relating to Tenant's unique use of the Leased Premises.


6.3 Landlord may impose a reasonable charge (but not including profit to Landlord) for any utilities and services, including without limitation, heat and air conditioning provided by Landlord by reason of any use of the Leased Premises at any time other than the hours set forth in Section 6.1 above.


6.4 Tenant agrees to pay any reasonable charge imposed by Landlord pursuant to Section 6.3 within thirty (30) days after receipt of an inv ...