LEASE AGREEMENT
BETWEEN
EYDE BROTHERS DEVELOPMENT COMPANY
LANDLORD
AND
MICHIGAN BREWERY, INC.
TENANT
TABLE OF CONTENTS
PAGE
DATA SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1: PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 2: TERM OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1: Commencement Date . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2: Termination Date. . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3: Option to Extend. . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4: Lease Year. . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 3: RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.1: Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2: Percentage Rent . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.3: Gross Sales . . . . . . . . . . . . . . . . . . . . . . . . 4
Article 4: USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. 1: Permitted Use. . . . . . . . . . . . . . . . . . . . . . . 4
Article 5: OBLIGATION TO REPAIR AND MAINTAIN . . . . . . . . . . . . . . . . . 4
Section 5.1: Tenant's Obligations. . . . . . . . . . . . . . . . . . . . 4
Article 6: INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 6.1: Tenant's Obligation . . . . . . . . . . . . . . . . . . . . 4
Section 6.2: Mutual Waiver of Subrogation. . . . . . . . . . . . . . . . 5
Article 7: ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Article 8: SIGNAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Article 9: ADDITIONAL RENT CHARGES . . . . . . . . . . . . . . . . . . . . . . 5
Section 9.1: Maintenance and Repairs. . . . . . . . . . . . . . . . . . . 5
Section 9.2: Utilities . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 9.3: HVAC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 9.4: Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Article 10: DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . 6
Article 11: EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Article 12: DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Article 13: SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Article 14: SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Article 15: RIGHT OF FIRST REFUSAL . . . . . . . . . . . . . . . . . . . . . . 7
Article 16: OPTION TO PURCHASE/OPTION TO SELL. . . . . . . . . . . . . . . . . 7
PAGE
Article 16.1: Option to Purchase . . . . . . . . . . . . . . . . . . . . 7
Article 16.2: Option to Sell . . . . . . . . . . . . . . . . . . . . . . 7
Article 16.3: Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Article 16.4: Title, Defects . . . . . . . . . . . . . . . . . . . . . . 7
Article 16.5: Closing Payments . . . . . . . . . . . . . . . . . . . . . 8
Article 16.6: Taxes, Prorations . . . . . . . . . . . . . . . . . . . . . 8
Article 16.7: Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Article 16.8: Claim of Interest . . . . . . . . . . . . . . . . . . . . . 8
Article 17: MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 17.1: Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 17.2: Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 17.3: Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . 8
Section 17.4: Mutual Force Majeure . . . . . . . . . . . . . . . . . . . 8
Section 17.5: Legal Expenses. . . . . . . . . . . . . . . . . . . . . . . 8
Section 17.6: Joint and Several Liability. . . . . . . . . . . . . . . . 8
Section 17.7: Arbitration . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 17.8: Entire Agreement . . . . . . . . . . . . . . . . . . . . . 9
Section 17.9: Additional Construction or Changes by Landlord . . . . . . 9
Section 17.10: Successors and Assigns. . . . . . . . . . . . . . . . . . 9
Section 17.11: Landlord's Agreement . . . . . . . . . . . . . . . . . . 9
Section 17.12: Recording . . . . . . . . . . . . . . . . . . . . . . . . 9
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
DATA SHEET
THIS LEASE AGREEMENT, executed this 11th day of April, l997, by and between EYDE
BROTHERS DEVELOPMENT COMPANY, a Michigan co-partnership ("Landlord"), and
MICHIGAN BREWERY, INC., a Michigan corporation ("Tenant"), subject to the
following terms and conditions:
A. LEASED PREMISES: Landlord hereby leases to Tenant and Tenant hereby rents
from Landlord the premises (the "Premises") legally described on Exhibit A
attached hereto located at 0000 00xx Xx. XX, Xxxxx Xxxxxx, XX 00000 in the
city of Grand Rapids, Kent County, Michigan.
B. TERM OF LEASE: The Term of the Lease shall be ten (10) full Lease Years,
as that term is defined in Article 2 herein, together with two (2) options
to renew the Lease of five (5) years each.
The Term shall commence on the Commencement Date, as defined in Article 2,
and shall expire at midnight on the tenth (10th) anniversary of the
Commencement Date, unless this Lease is extended, renewed or sooner
terminated as otherwise set forth herein.
C. BASE RENT: Tenant shall pay the following as its Base Rent annually:
Initial Term: From the Commencement Date through and including the fifth
full Lease Year, Tenant shall pay $140,000 per annum, in twelve (12) equal
monthly installments of $11,666.67.
Base Rent shall be adjusted on the sixth (6th ) anniversary of the
Commencement Date of this Lease as follows:
Annual Base Rent for the sixth through tenth years of the Lease shall be
equal to the product of multiplying the sum of One Million Four Hundred
Thousand and no/100 ($1,400,000.00) dollars by the sum of one and three-
quarters (1.75%) percent per annum plus the prime commercial lending rate
for NBD Bank, established by NBD Bank from time to time in the ordinary
course of its business ("Prime Rate") existing on the first day of the
sixth Lease Year of the Lease, with a minimum Annual Base Rent of
$140,000.00 and a maximum Annual Base Rent of $192,500.00.
Annual Base Rent under the first option term, if same shall be exercised by
Tenant, shall be equal to the product of multiplying the sum of One Million
Four Hundred Thousand and no/100 ($1,400,000.00) dollars by the sum of one
and three-quarters (1.75%) percent per annum plus the Prime Rate existing
on the first day of the first option term under the lease, with a minimum
Annual Base Rent of $140,000.00 and a maximum Annual Base Rent of
$192,500.00.
Annual Base Rent under the second option term, if same shall be exercised
by Tenant, shall be equal to the product of multiplying the sum of One
Million Four Hundred Thousand and no/100 ($1,400,000.00) dollars by one and
three-quarters (1.75%) percent per annum plus the Prime Rate existing on
the first day of the second option term under the lease, with a minimum
Annual Base Rent of $140,000.00 and a maximum Annual Base Rent of
$192,500.00.
In the event that the Prime Rate of NBD Bank shall be unavailable for
purposes of these calculations, then the parties shall use the Prime Rate
of Comerica Bank, and if such rate shall not be available, the parties
shall mutually select a prime rate being charged by similar reputable banks
in the Detroit Metropolitan Area.
D. PERMITTED USE: Tenant's use of the Premises shall be for any legal
purpose.
E. NOTICE ADDRESSES:
LANDLORD: Eyde Brothers Development Company,
a Michigan co-partnership
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Professional Building
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
TENANT: Michigan Brewery, Inc.
000 X. Xxxxxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
With a copy to: Xxxx X. Xxxxxx, Esq.
Butzel Long
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
F. PERCENTAGE RENT: Five percent (5%) of Gross Sales on Gross Sales in
excess of $2,900,000
IN WITNESS of the attached Lease and any Exhibits, the parties hereto have
executed this Lease the day and year first above written.
EYDE BROTHERS DEVELOPMENT COMPANY MICHIGAN BREWERY, INC.
("LANDLORD") ("TENANT")
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. Xxxxxxxx
----------------------------- ------------------------------
Its: Owner Its: President
----------------------------- ------------------------------
LEASE
Article 1: PREMISES
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the
Premises legally described on Exhibit A, together with all rights, privileges,
easements and appurtenances belonging or pertaining to the Premises, and
together with any and all improvements now or hereafter situated upon the
Premises.
Article 2: TERM OF LEASE
The Term of this Lease shall be for the number of Lease Years as set forth on
the DATA SHEET after the Commencement Date as set forth below.
Section 2.1: COMMENCEMENT Date: The Commencement Date and Tenant's obligation
to pay Base Rent and other charges hereunder shall commence on April 11, 1997.
Section 2.2: TERMINATION DATE: The Term of this Lease shall expire at midnight
on the tenth (10th) anniversary of the Commencement Date, unless Tenant
exercises its option(s) to extend hereunder or this Lease is otherwise
terminated as set forth herein.
Section 2.3: OPTION TO EXTEND: Tenant shall have the option to extend the Term
of this Lease for two additional periods of five (5) Lease Years each. If
Tenant desires to exercise such option or options, Tenant shall give Landlord
written notice exercising its option to extend the Term no later than thirty
(30) days prior to the expiration of the initial Term, or the expiration of the
first option period, as applicable. The Base Rent for such option periods shall
be as stated in Item C of the DATA SHEET.
Section 2.4: LEASE YEAR: A Lease Year shall be the period from the
Commencement Date through and including the date immediately preceding the first
(1st ) anniversary of the Commencement Date and each successive twelve (12)
month period thereafter during the Term.
Article 3: RENT
Section 3.1: BASE RENT: Beginning with the Commencement Date and on the first
(1st ) of every month thereafter without demand, Tenant shall pay 1/12th of the
then applicable Base Rent to Landlord at the address set forth on the DATA SHEET
(unless otherwise notified by Landlord of a change of address). If the
Commencement Date occurs on a day other than the first day of a calendar month
or the termination date occurs on a day other than the last day of a calendar
month, the Base Rent for such partial calendar month(s) shall be prorated on a
per diem basis (calculated based on the actual number of days in such month[s]).
In the event that any payment of Base Rent shall not be received by Landlord
within five (5) days after same shall become due, then Tenant shall pay to
Landlord an additional sum equal to five per cent (5%) of such monthly payment
as a late charge.
Section 3.2: PERCENTAGE RENT:
(a) In addition to the payment of the fixed annual Base Rent, as
hereinbefore provided, Tenant shall pay to Landlord during each lease year of
the term hereof as annual percentage rental, a sum equal to the percent set
forth in paragraph F of the Data Sheet hereof of all Gross Sales resulting from
the sale of food and beverages in, on or from the leased premises during such
lease year. The annual percentage rental shall be payable annually, within sixty
(60) days after the end of each Lease Year, at the office of the Landlord, or
such other place as the Landlord may designate.
(b) The term "lease year" as used herein shall be defined to mean a period
of twelve (12) consecutive calendar months. The first lease year shall begin on
the date of Commencement Date of the
term of this Lease. Each succeeding lease year shall commence on the
anniversary date of the first lease year.
Section 3.3: GROSS SALES:
(a) DEFINED: The term "Gross Sales" as used herein shall be construed to
include the entire amount of the actual sales price, of all sales of food ,
beverages and merchandise conducted in or from the Demised Premises, and sales
by any sublessee, concessionaire or licensee in said premises. Said term shall
not include, however, any sums collected and paid out for any sales, excise, or
gross receipts tax imposed upon the sale of any food or beverages by any duly
constituted governmental authority nor shall it include the exchange of food or
beverages between the stores of Tenant, if any, where such exchange of food or
beverages are made for the convenient operation of the business of Tenant and
not for the purpose of consummating elsewhere a sale which has theretofore been
made at, in, from or upon the Demised Premises, or for the purpose of depriving
Landlord of the benefit of a sale which otherwise would be made at, in, from or
upon the Demised Premises, nor the amount of returns to shippers or
manufacturers, nor the amount of any complimentary food, beverages or
merchandise given out at the Demised Premises for promotional or other purposes,
nor the amount of any cash or credit refund made upon any sale where the
merchandise sold, or some part thereof, is thereafter returned by the purchaser
and accepted by Tenant, nor receipts from public telephones, stamp machines,
public toilet locks or vending machines, nor to sales of furniture, equipment,
property or bulk sales not in the ordinary course of Tenant's business, nor
sales to employees, nor any credit card charges payable by Tenant.
(b) REPURCHASE OBLIGATION: In the event that Gross Sales shall not exceed
the sum of Two Million Nine Hundred Thousand and no/100 ($2,900,000.00) annually
for any two (2) consecutive full Lease Years during the term of the Lease, then
Tenant shall be obligated to repurchase the Premises from Landlord, upon
Landlord's written request, within one hundred eighty (180) days after receipt
of such request from Landlord. The purchase price for the Premises in such
circumstances shall be equal to the sum of $1,400,000.00, plus $70,000 for each
full lease year, plus a pro rata portion of a partial lease year, measured from
the Commencement Date of this Lease to the date of receipt of such request from
Landlord. The pro rata portion of the Purchase Price for such partial year
shall be prorated on a per diem basis at the rate of $191.78 per day ($70,000 /
365).The closing shall otherwise be governed by Paragraphs 16.3 through 16.8
hereof, inclusive.
Article 4: USE
Section 4. 1: PERMITTED USE: Tenant shall be allowed to use the Premises as
set forth in Item D on the DATA SHEET.
Article 5: OBLIGATION TO REPAIR AND MAINTAIN
Section 5.1: TENANT'S OBLIGATIONS: Tenant shall make and perform all necessary
maintenance and repairs to the Premises, other than repairs due to Landlord's
negligence or as a result of damage or destruction as set forth in Article 10,
in order to maintain the Premises in good condition, ordinary wear and tear
excepted .
Article 6: INSURANCE
Section 6.1: TENANT'S OBLIGATION: Tenant shall maintain a comprehensive policy
of liability insurance with respect to the Premises, with Landlord named as an
additional insured. The policy shall be with companies licensed to do business
in the State of Michigan and shall have coverage limits of at least
$1,000,000.00 combined single limit. All insurance policies required hereunder
shall provide that Landlord be given at least thirty (30) days written notice
prior to its cancellation.
Tenant shall have the right to self-insure for its merchandise, trade fixtures,
furnishings, operating equipment, personal property and plate glass, if any.
Tenant shall be responsible for replacing any broken glass in the Premises.
Any insurance required of Tenant hereunder may be furnished by Tenant under a
blanket policy carried by Tenant or under a separate policy therefor, at
Tenant's option.
Section 6.2: MUTUAL WAIVER OF SUBROGATION: Landlord and Tenant hereby waive
any rights each may have against the other arising out of any loss or damage
connected in any way to, or arising in any way out of an occurrence related to
the Premises to the extent that such damage or loss is coverable by insurance.
Landlord and Tenant, on behalf of their respective insurance companies, waive
any right of subrogation they may have against each other where such waiver of
subrogation is not invalidated by State Law.
Article 7: ASSIGNMENT
Tenant shall not assign this Lease or sublet all of the Premises without
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, if any such proposed successor entity
has a net worth of at least Ten Million and No/100 Dollars ($10,000,000.00) and
Tenant furnishes Landlord with reasonable evidence of such proposed successor
entity's net worth, Landlord's consent shall not be required, and in the event
of such sublease or assignment by Tenant, Tenant shall automatically be released
from all obligations under this Lease.
Article 8: SIGNAGE
Tenant may, without Landlord's consent, construct exterior signage in accordance
with the requirements of governmental authorities have jurisdiction. Tenant
shall be responsible for obtaining any necessary governmental permits relating
to its exterior signage, at its sole cost, but Landlord will cooperate with
Tenant and assist Tenant in obtaining any and all necessary approvals, permits
and variances for such sign(s). Tenant shall maintain its exterior signage in
good condition throughout the Term of this Lease. Tenant may, without
Landlord's consent, install any and all signs, displays, and other advertising
matter within the Premises as Tenant elects, in its sole discretion.
Article 9: ADDITIONAL RENT CHARGES
Section 9.1: MAINTENANCE AND REPAIRS: Tenant shall be responsible to pay all
expenses, costs, disbursements and charges incurred for the operation,
maintenance and repair of the Premises, including but not limited to,
landscaping, parking lot paving and striping, snow removal, utilities, sanitary
control, sprinkler, removal of common area trash, security and repainting.
Section 9.2: UTILITIES: Tenant shall promptly pay for all gas, electricity and
water used in the Premises during the Term of this Lease. Tenant shall pay for
such utility services directly to the public utility supplying the same.
Section 9.3: HVAC: Tenant will perform all maintenance, repairs and
alterations to the HVAC system on an as needed basis.
Section 9.4: TAXES: Tenant shall pay the real estate taxes ("Taxes") levied
against the Premises during the term of the Lease. Tenant shall pay such Taxes
before same shall become delinquent.
Nothing contained herein shall be construed to include as a tax which shall be
the basis of real estate taxes, any inheritance, estate, succession, transfer,
gift, franchise, corporation, income or profit tax or capital levy that is or
may be imposed upon Landlord.
Notwithstanding anything in this Lease to the contrary, in the event that during
the Lease Term any governmental entity makes any improvement and assesses any
portion of the Premises therefor, Tenant shall be liable only for so much of its
such assignment as the remainder of the Lease Term relates to the useful life of
such improvement. Additionally, with respect to any special assessments which
may be levied as part of the Taxes, Tenant shall have the right to pay such
assessments in equal installments over the longest legally available period,
whether or not Landlord elects to pay in installments, provided that Landlord
has the option of paying said assessment over the longest period of time.
Article 10: DAMAGE AND DESTRUCTION
If the Premises are damaged by peril coverable by the insurance required
hereunder, Tenant shall promptly repair and restore the Premises to its
condition immediately prior to such damage.
Article 11: EMINENT DOMAIN
In the event a portion of the Premises shall be taken or appropriated by any
lawful power or authority by the exercise of the right of condemnation or
eminent domain, (a) Landlord shall immediately restore such to at least a
condition equal to that existing prior to such taking or appropriation,
sufficient to make the Premises a whole architectural unit, and Base Rent shall
xxxxx until Tenant is able to reopen for business, and (b) Tenant's Base Rent
and other charges shall be equitably adjusted as of the date of such taking to
reflect the reduction in the square footage of the Premises. In the event such
partial taking materially interferes with Tenant's use of the Premises, or in
the event a temporary taking exceeds six (6) months, Tenant may terminate this
Lease upon thirty (30) days written notice to Landlord.
In the event all of the Premises shall be taken or appropriated by any lawful
power or authority by the exercise of the right of condemnation or eminent
domain, this Lease shall terminate as of the date of such taking. Landlord
shall promptly refund any prepaid rents.
Article 12: DEFAULT
The following shall be deemed a Default: (i) Tenant's failure to make a rental
payment within thirty (30) days after receipt of written notice that said amount
is past due; (ii) Tenant's failure to observe and perform its obligations
hereunder (other than a payment of rental) within thirty (30) days after receipt
of written notice of such curable violation; provided, however, if such default
cannot be cured within said thirty (30) day period, then in that event, a
Default shall occur only if Tenant shall fail to have commenced a cure within
such thirty (30) day period.
In the event of a default which is not cured within the applicable grace period,
Landlord shall have the right to re-enter and repossess the Premises, whereupon
this lease shall terminate and Landlord may recover from Tenant all unpaid rent
which is due at the time of termination, as well as the rent and all other
charges payable by Tenant hereunder, all of which sums shall be payable to
Landlord on a monthly basis over what would have been the balance of the Term.
Landlord agrees to use best efforts to mitigate damages and relet the Premises.
Article 13: SUBORDINATION
Tenant agrees to subordinate this Lease to any mortgage, deed of trust, ground
lease or other lien or lease now on the Premises or any mortgage, deed of trust,
ground lease or other lien or lease placed thereon during the Term of this Lease
or any extension thereof, and shall execute and deliver to Landlord upon demand
and at Landlord's cost, such instruments necessary to effect such subordination,
all of the
foregoing on the condition that the holder shall provide Tenant with a written
non-disturbance agreement, in form acceptable to Tenant, wherein the holder
agrees to recognize the validity and continuance of this Lease and agrees not to
disturb Tenant's possession of the Premises.
Landlord agrees to obtain a Non-Disturbance and Attornment Agreement from its
current lenders, and the ground lessor, if any, and deliver same to Tenant
within thirty (30) days from the date hereof, in form and substance acceptable
to Tenant. If any said Non-Disturbance and Attornment Agreement is not so
delivered, Tenant may, at its option, terminate this Lease by written notice to
Landlord.
Article 14: SECURITY
This Lease constitutes a lien as security for the rent and other amounts payable
hereunder and for the performance by Tenant of every other obligation herein
contained upon all the personal property and fixtures, of any nature, which are
or may hereafter be placed on the Premises by Tenant, which lien may be enforced
on the nonpayment of any rent or other amount due under this Lease or the
nonperformance of any obligations herein contained.
Article 15: RIGHT OF FIRST REFUSAL
Tenant is hereby granted a right of first refusal on the Property during the
term of this Lease and any extensions or renewals thereof ("Right of First
Refusal"). If at any time during the term of this Lease or any extensions or
renewals thereof, Landlord receives a bona fide offer from a third party to
purchase the Property, Landlord shall, within two (2) days from the date of
execution thereof, supply Tenant with a complete copy of the executed purchase
agreement and all exhibits and addenda thereto ("Sale Notice"). Landlord's Sale
Notice shall constitute an offer to sell the Property to Tenant at the price and
upon substantially the same terms and conditions as are contained in Landlord
Sale Notice. Tenant shall have thirty (30) days after receipt of Landlord's
Sale Notice and after all contingencies contained therein have been satisfied or
waived (the "Offer Period"), in which to accept such offer and to agree to
purchase the Property from Landlord at the price and upon substantially the same
terms and conditions contained in the Sale Notice.
Article 16: OPTION TO PURCHASE/OPTION TO SELL
Article 16.1: OPTION TO PURCHASE: Landlord hereby grants to Tenant the option
(the "Purchase Option") to purchase the Premises by written notice from Tenant
to Landlord (the "Purchase Option Notice") given at any time after the end of
the seventh full Lease Year of the term of the Lease and prior to the expiration
of the original term of the Lease, or the end of the fifteenth Lease Year, if
the First Option to Extend the Lease is exercised by Tenant, or the end of the
eighteenth Lease Year, if the Second Option to Extend the Lease is exercised by
Tenant. The purchase price for the Premises shall be equal to the sum of
$1,400,000.00, plus $70,000 for each full lease year, plus a pro rata portion
of a partial lease year, measured from the Commencement Date of this Lease to
the date of exercise of the Purchase Option. The pro rata portion of the
Purchase Price for such partial year shall be prorated on a per diem basis at
the rate of $191.78 per day ($70,000 / 365).
Article 16.2: OPTION TO SELL. Landlord shall have the right to require Tenant
to purchase the premises from Landlord ("Sale Option") by giving written notice
from Landlord to Tenant (the "Sale Option Notice") given at any time after the
end of the seventh full Lease Year of the term of the Lease and prior to the
expiration of the original term of the Lease, or the end of the fifteenth Lease
Year if the first option to extend the lease is exercised by Tenant, or the end
of the eighteenth Lease Year, if the Second Option to Extend the Lease is
exercised by Tenant. The purchase price for the Premises shall be equal to the
sum of $1,400,000.00, plus $70,000 for each full lease year, plus a pro rata
portion of a partial lease year, measured from the Commencement Date of this
Lease to the date of exercise of the Sale Option. The pro rata portion of the
Purchase Price for such partial year shall be prorated on a per diem basis at
the
rate of $191.78 per day ($70,000 / 365).
Article 16.3: CLOSING: The closing shall occur on a date mutually agreeable to
Landlord and Tenant, which date shall not be later than six (6) months after the
date Tenant delivers its Purchase Option Notice to Landlord, or the date
Landlord delivers its Sale Option Notice to Tenant, whichever is applicable.
The closing shall be held at the offices of Tenant's lending institution, or at
any other place agreed to by Landlord and Tenant.
Article 16.4: TITLE, DEFECTS: The Premises shall be conveyed by standard
warranty deed, subject to easements and restrictions now of record, the rights
of the public in all streets and roads abutting the Premises, liens for unpaid
property taxes first coming due and payable after the Commencement Date, and
zoning and such other matters created by Tenant or arising out of Tenant's use
and occupancy of the Premises (the "Permitted Exceptions"), but free and clear
of the lien of any mortgage, deed of trust, or security interest created by or
resulting from acts of the Landlord, any successor of Landlord, any party
claiming through Landlord, or any other person, without the express consent of
Tenant. Landlord shall, within fifteen (15) days after delivery of the Purchase
Option Notice to Landlord or delivery of the Sale Option Notice to Tenant,
whichever is applicable, obtain and deliver to Tenant a commitment for an ALTA
owners form of title insurance, without standard exceptions, in the amount of
the Purchase Price. Within fifteen (15) days thereafter, Tenant shall notify
Landlord in writing of any claimed defect in title. Within thirty (30) days
after receipt of such notice, Landlord shall notify Tenant of Landlord's
election whether or not to cure any or all of such defects. In the event that
Landlord shall be unable or unwilling to cure any such claimed defects, Tenant
shall have the option to (i) accept title to the Premises subject to such
claimed defects, with a credit against the Purchase Price in an amount necessary
to discharge any lien against the premises, the amount of which is liquidated as
of closing, (including interest and penalties thereon accrued to the date of
closing) which is not a Permitted Exception, or (ii) terminate and rescind the
exercise of the Purchase Option or the Sale Option, whichever is applicable,
without any liability to Landlord, and Tenant's right to exercise such Purchase
Option and Landlord's right to exercise such Sale Option thereafter shall be
terminated.
Article 16.5: CLOSING PAYMENTS: All transfer taxes, documentary deed stamps,
and the title insurance premiums for an ALTA owners policy of title insurance,
with standard exceptions deleted, in the amount of the Purchase Price shall be
paid by Tenant at the closing.
Article 16.6: TAXES, PRORATIONS: Tenant shall pay all taxes and assessments
which have become a lien against the Premises and which shall become due and
payable prior to the closing. Rents shall be prorated as of the date of closing.
Article 16.7: SURVEY: Tenant may obtain prior to closing, at Tenant's expense,
a mortgage survey of the Premises.
Article 16.8: CLAIM OF INTEREST: Tenant shall be free to record an affidavit of
claim of interest against the Premises with the Kent County Register of Deeds;
provided, if Tenant does not exercise this Option within the time provided,
Tenant shall promptly record a release of such affidavit of claim of interest
promptly upon expiration of all of Tenant's rights under this option.
Article 17: MISCELLANEOUS
Section 17.1: NOTICE: Whenever notice or consent is required hereunder, such
notice shall be sent to the address set forth in the DATA SHEET (or such
subsequent address provided by either party to the other in writing by proper
notice), by United States certified mail, return receipt requested, or by
overnight carrier and shall be deemed delivered when received or rejected as
evidenced by return receipt.
Section 17.2: BROKERAGE: Landlord and Tenant represent to each other that they
have not utilized the
services of any broker in connection with the transaction evidenced by this
Agreement. Accordingly, Tenant agrees to indemnify and hold harmless Landlord
from payment of any brokerage fees or any liability or obligation therefor to
any person or party claiming a fee or commission through Tenant and Landlord
agrees to indemnify and hold harmless Tenant from payment of any brokerage fees
or any liability or obligation therefor to any person or party claiming a fee or
commission through Landlord.
Section 17.3: QUIET ENJOYMENT: Landlord covenants that Landlord has the right
to enter into this Lease and Tenant shall lawfully, peaceably and quietly have,
hold, occupy and enjoy the Premises through the Term and any extension thereof
without hindrance or ejection by Landlord or any person claiming, by, through or
under Landlord or landlord's successors, and Landlord shall defend Tenant's
right to such quiet enjoyment.
Section 17.4: MUTUAL FORCE MAJEURE: The time within which any of the parties
hereto shall be required to perform any act or acts under this Lease (other than
the payment rent or other monies owing hereunder) shall be extended to the
extent that the performance of such act or acts shall be delayed by acts of God,
fire, windstorm, flood, delays or restrictions by governmental bodies, or any
other cause beyond the reasonable control of such party; provided, however, that
the party entitled to such extension hereunder shall give reasonable notice to
the other party of the occurrence causing such delay.
Section 17.5: LEGAL EXPENSES: In the event either party hereto institutes legal
action or proceedings arising out of or in any way connected with this Lease,
the non-prevailing party shall reimburse the prevailing party for all reasonable
attorney's fees and costs incurred in connection therewith.
Section 17.6: JOINT AND SEVERAL LIABILITY: In the event two or more
individuals, corporations, partnerships or other business associations (or any
combination thereof) shall execute this Lease as Landlord, the liability of each
to comply with all other terms, covenants and conditions of this Lease shall be
joint and several. In like manner, in the event Landlord is a partnership or
other business association, the members of which are, by virtue of statute or
general law, subject to personal liability, then the liability of each member
shall be joint and several.
Section 17.7: ARBITRATION: In the event of a dispute between the Landlord and
the Tenant, arising out of the terms, covenants and conditions of this Lease,
such dispute shall be submitted to arbitration in accordance with the Rules of
the American Arbitration Association then pertaining, except that the arbitrator
shall have no power to modify or alter the terms of this Lease. The party in
whose favor an award is rendered may cause judgment on the award to be entered
in any court having jurisdiction.
Section 17.8: ENTIRE AGREEMENT: This Lease and the Exhibits attached hereto
and forming a part hereof set forth all the covenants, promises, agreements,
conditions and undertakings between Landlord and Tenant concerning the Premises,
and there are no covenants, promises, agreements, conditions or undertakings,
either oral or written, between them except as set forth herein. No subsequent
alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless reduced to writing and signed by both parties hereto.
Section 17.9: ADDITIONAL CONSTRUCTION OR CHANGES BY LANDLORD: Notwithstanding
anything in this Lease to the contrary, no modifications, additions or
construction to the Premises shall alter the dimensions, location or
configuration of the Premises adversely affect the use, operation or conduct of
Tenant's business being conducted in the Premises, or adversely affect the
accessibility or visibility of the Premises or Tenant's signage.
Section 17.10: SUCCESSORS AND ASSIGNS: Except as expressly provided herein,
this Lease and the obligations of Landlord and Tenant contained herein shall
bind and benefit the successors and assigns of the parties hereto.
Section 17.11: LANDLORD'S AGREEMENT: Landlord represents, covenants and
warrants that it has full right, power and authority to enter into this Lease.
Section 17.12: RECORDING: Neither Landlord nor Tenant shall record this Lease.
However, at the request of either Landlord or Tenant, the parties shall join in
the execution of a memorandum or so-called "short form" of this Lease for
purposes of recordation. Any recording costs associated with the memorandum or
short form of this Lease shall be borne by the party requesting recordation.
EYDE BROTHERS DEVELOPMENT COMPANY MICHIGAN BREWERY, INC.
("LANDLORD") ("TENANT")
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. Xxxxxxxx
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Its: Owner Its: President
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