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EXHIBIT 10.2
LEASE
THIS LEASE is entered into as of AUGUST 6, 1997, by and between DIVISION
AVENUE PARTNERS, L.L.C., a Michigan limited liability company of Grand Rapids,
Michigan ("Landlord"), and MERCANTILE BANK OF WEST MICHIGAN, a Michigan
corporation ("Tenant").
1. PREMISES
For the rent and in consideration of the agreements contained in this
Lease, Landlord leases to Tenant and Tenant rents from Landlord the warehouse
and office space, comprising approximately eleven thousand one hundred (11,100)
square feet located at 000 X. Xxxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxx
(the "Building"), as more particularly described on Exhibit A attached hereto
together with that portion of the parking lot lying contiguous to, and south of
the Building, identified on Exhibit A attached hereto, containing approximately
twenty-four (24) parking spaces, together with all of the easements, rights,
privileges and appurtenances thereunto belonging and together with all of the
improvements presently constructed thereon in their present condition and
together with all fittings and fixtures of every kind whatsoever now or
hereafter owned by Landlord and used or procured for use in connection with the
operations and maintenance of said improvements (all of the foregoing are
hereinafter referred to as the "Premises"). This Lease is not subject to any
conditions, covenants, easements, restrictions or right-of-ways, nor are the
Premises encumbered with the leasehold interest of any other party except for
the leasehold interest of Brian's Books which occupies 1,850 square feet of the
Premises, and which Landlord warrants is terminable upon sixty days notice in
writing, which notice was given on July 22, 1997.
2. ACCEPTANCE OF PREMISES
The Landlord represents to Tenant that the Premises are in good condition,
and Tenant agrees to accept the Premises in the condition in which it is on the
date that this Lease is executed.
3. TERM
The term of this Lease shall commence upon the date Tenant's contractors
are ready to commence making of improvements to the Premises, but no later than
September 1, 1997. The foregoing notwithstanding, the term of this Lease with
respect to that portion of the Premises occupied by Brian's Books shall
commence when Brian's Books vacates the Premises. Landlord shall use its
best efforts to cause Brian's Books to vacate the Premises in a timely manner,
including commencement and diligent prosecution of an eviction proceeding, if
necessary. The term of this Lease shall end on August 31, 2007.
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Tenant shall have the option to extend the term of this lease for four (4)
successive 5-year periods by delivering notice, in writing, to Landlord at
Landlord's address or otherwise where designated by Landlord, no later than 12
months prior to the end of the term of this lease, or any extension. Such
extension or extensions shall be upon the same terms and conditions as herein
set forth and such extension shall be treated as if a part of the original term
of this Lease.
4. USE
It is understood and agreed between the parties that the Premises during
the continuance of this Lease shall be used and occupied only for lawful
purposes and uses in connection with Tenant's business as it is presently
constituted, and for no other purpose or purposes without the prior written
consent of Landlord. Tenant shall not use the Premises or permit the Premises
to be used for the doing of any act or anything that constitutes the violation
of any law, order, ordinance, or regulation of any governmental authority and
any rules, regulations, standards or guidelines issued pursuant to any of the
aforesaid. Tenant shall not, in any manner, deface or injure the Premises, or
permit any objectionable noise or odor, or any hazardous substances, material,
contaminate or waste to be released, emitted, or spilled or permit anything to
be done on the Premises intending to create a health hazard or a nuisance or to
disturb others or to injure the reputation of the Premises.
5. RENT
(a) Tenant agrees to pay to Landlord as rent for the Premises
during the term of this Lease the sum of twelve thousand four
hundred eighty-seven dollars and fifty cents ($12,487.50) each
month, commencing on the 1st day of October, 1997, and on the same
day of each month thereafter, payable to Landlord at the address
of Landlord or such other place as may be designated in writing by
Landlord. Past due payments of rent shall bear interest at the
rate of 18% per annum. The foregoing notwithstanding, rent (to be
prorated on the basis of area) with respect to that portion of the
Premises occupied by Brian's Books shall not commence until such time as
Brian's Books has vacated the Premises.
(b) Commencing with the due date of the first monthly rent
payment of the second lease year and every lease year thereafter
the rent shall be increased by the greater of three percent (3%)
of the rent for the preceding lease year, or by the same
percentage as there is an increase in the "Consumer Price Index
for All Urban Consumers (United States) (1984=100)", or any
successor Consumer Price Index, as published by the Bureau of
Labor Statistics, United States Department of Labor (the "Index").
On such date, if rent is to be increased by the percentage
increase in the Index, rent shall be subject to increase (but not
decrease) based upon the following formula:
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First, the figure shown by such Index for the date of
calculation shall be divided by the figure shown by
such Index for the Lease commencement date or the date
of the last rent adjustment (as applicable), and the
integer one (1) shall be subtracted from the quotient
so obtained.
Second, the fraction obtained in step one shall be
multiplied by the amount of the annual rent for the
most recently concluded lease year; and
Third, the product obtained in step two shall be added
to the annual rent for the most recently concluded
lease year and the sum so obtained shall be the new
annual rent until the next adjustment made pursuant to
this Lease.
6. TAXES
(a) Tenant shall pay, before any penalty or interest
attaches, all real estate taxes, special assessments, water
charges, sewer service charges, and other governmental charges of
any kind whatsoever, levied or assessed against or with respect to
the Premises at any time during the term of this Lease, and shall,
upon written request, furnish to Landlord duplicate receipts
therefore. In the event Tenant fails to make payment as required
under this Section, Landlord shall be entitled to make payment
directly to the appropriate governmental subdivision. Tenant
agrees that it will, on demand, reimburse Landlord for the amount
of such payment. For purposes of this paragraph, real property
taxes shall be prorated on a calendar year basis for the first and
last calendar years of this Lease.
(b) Tenant shall pay before any penalty or interest attaches,
all personal property taxes levied or assessed against the
personal property of Tenant located upon the Premises, and shall,
upon written request, furnish to Landlord duplicate receipts
thereof.
(c) Tenant shall have the right to contest the amount or
validity, in whole or in part, of any tax, assessment or charge
described in (a) or (b) above by appropriate proceedings
diligently conducted in good faith.
(d) Tenant shall have a right to seek a reduction in the
valuation of the Premises assessed for tax purposes and to
prosecute any action or proceeding heretofore commenced by Tenant.
To the extent to which any tax refund payable as a result of any
such proceeding which Tenant may institute, or payable by reason
of the compromise or settlement of any such proceeding, may be
based upon a payment made by Tenant and shall not relate to a
period as to which apportionment thereof has been made with
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Landlord, Tenant shall be authorized to collect the same, subject
to Tenant's obligation to reimburse Landlord forthwith for any
expenses and fees incurred by Landlord in connection therewith.
Landlord may at its own expense and for its and Tenant's benefit,
if it shall so desire, endeavor at any time or times to obtain a
lowering of the assessed valuation upon the Premises or any part
thereof for the purpose of reducing taxes thereon, and in such
event, Tenant will cooperate in effecting such a reduction. If
required by law in order to so contest such tax, assessment,
valuation or charge, Landlord shall join in such proceedings or
permit the same to be brought in its name. Landlord shall not
ultimately be subjected to any liability for the payment of any
costs or expenses in connection with any proceedings brought by
Tenant, and Tenant will indemnify and save harmless Landlord from
any such costs and expenses, including, without limitation,
reasonable attorneys fees.
7. ALTERATIONS AND INSTALLATIONS DURING TERM AND REMOVAL OF IMPROVEMENTS
BY TENANT
(a) Tenant shall not, without the prior written approval of
Landlord, which approval shall not unreasonably be withheld, make
any material alterations, improvements, or additions to the
Premises. Any alteration, improvement or addition shall
conclusively be deemed material if it involves alterations,
improvements or additions exceeding in cost the sum of Ten
Thousand Dollars ($10,000.00). If Tenant desires to make any
material alterations, improvements, or additions to the Premises,
Tenant shall first submit to Landlord plans and specifications
therefore and obtain Landlord's written approval thereof, which
approval shall not unreasonably be withheld. Landlord shall not
withhold or delay its approval of any nonstructural alterations
unless, in the opinion of Landlord, Tenant's proposal would be
detrimental to the long term value of the Premises. Any such
approved alterations, improvements, or additions shall be made at
Tenant's sole expense with such contractor or contractors, as
shall be approved by Landlord, which approval shall not
unreasonably be withheld. Unless otherwise directed by Landlord in
writing, no alterations, improvements, additions or physical
changes made by Tenant, shall be removed by Tenant from the
Premises at the termination of the Lease with the exception of,
(i) Tenant's trade fixtures, (ii) those improvements identified on
Exhibit B, attached hereto, as from time-to-time supplemented by
mutual agreement of the parties. In the event the parties are
unable to agree upon a characterization of a particular asset as a
trade fixture, the matter shall be submitted to arbitration under
the auspices of the American Arbitration Association. All
alterations, improvements, or additions exclusive of those assets
enumerated above, shall immediately upon installation become
Landlord's property and shall be deemed to be a part of the
Premises.
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(b) Tenant shall, before making any improvements,
alterations, additions, installations or improvements, at its
expense, obtain all permits, approvals and certificates required
by any governmental or quasi-governmental bodies and (upon
completion) certificates of final approval therefore, and shall
deliver promptly, upon request, duplicates of all such permits,
approvals and certificates to Landlord, and Tenant agrees to carry
and will cause Tenant's contractors and sub-contractors to carry
such workers' compensation, general liability, and personal and
property damage insurance as Landlord may reasonably require.
(c) Nothing in this Lease shall authorize Tenant to, and
Tenant shall not, do any act which will in any way encumber the
title of Landlord to the Premises. If a lien is filed against the
Premises or Tenant's interest therein to secure payment of an
indebtedness or other obligation of the Tenant, Tenant shall,
within ten (10) days after receiving a request from the Landlord
that such lien be discharged, discharge such lien either by
payment of the indebtedness due the lien claimant or by filing a
bond (as provided by statute) as security therefor. If Tenant
fails to discharge such lien, Landlord shall have the right to
procure its discharge by filing such bond or making payment to
such lien claimant and Tenant shall reimburse Landlord for all
costs and expenses incurred by Landlord as additional rent upon
the first day that rent shall become due thereafter.
8. REPAIRS AND MAINTENANCE BY TENANT
(a) Tenant shall, at its expense, keep and maintain the
Premises, and each component of the Premises, and all of Tenant's
property upon the Premises, in good and clean operating condition.
Tenant's obligations shall include, but not be limited to,
roadway, parking, landscaping, exterior and structural
maintenance, reconstruction and repairs (including all necessary
replacements), the replacement of broken glass and the repair and
maintenance (including all necessary replacements) of the interior
portions and components of the Premises, such as the walls,
ceiling, heating, air conditioning, electrical, plumbing, dust
collecting and sprinkler systems, any building security system and
other interior components. Landlord shall be given notice of and
Tenant's plan for any major repair or replacement undertaken.
Tenant shall also, at its expense, remove snow, ice and rubbish
from the Premises.
(b) If Tenant does not renew the term of this Lease through
the full amortization period or acquire ownership of the Premises
at or before the termination of this Lease, Landlord agrees to
reimburse Tenant for the unamortized cost for the replacement of
any building elements treated for tax purposes as capital assets
and required to have been replaced by Tenant under the terms of
this Lease. Any such reimbursement shall be made by
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Landlord to Tenant no later than the date the Lease terminates.
The unamortized cost of any such replacements shall be agreed upon
by the parties. If the parties are unable to agree, the matter
shall be submitted to arbitration under the auspices of the
American Arbitration Association.
(c) If Landlord reasonably deems any unperformed cleaning
maintenance, repairs or replacements by Tenant necessary, it may
demand that Tenant make the same. If Tenant refuses or neglects to
do so or fails to complete the same within a reasonable time,
Landlord may make or cause such reasonable cleaning, maintenance,
repairs or replacements to be made and shall not be responsible to
Tenant for any loss or damage that may accrue to Tenant by reason
thereof. Tenant agrees that it will, on demand, pay to Landlord
the cost of any such cleaning, maintenance, repairs or
replacements.
9. UTILITIES
Charges for utilities used in or about the Premises, including, without
limitation, gas, electricity, light, heat, power and telephone or other
communication services, water and sewage, to be paid by Tenant as they are
incurred. Tenant shall furnish to Landlord upon demand receipts or other
satisfactory proof of payment of such charges.
10. INSURANCE
(a) Tenant, at its sole cost and expense, shall keep the
Premises with all improvements thereon insured under a policy or
policies of "all risk" fire and casualty coverage insurance, to
the full extent of their replacement costs, underwritten by such
carriers as Landlord shall approve, which approval shall not
unreasonably be withheld. Landlord shall be named as an
additional insured in such policy or policies. In the case of
damage, the proceeds of the policy shall be paid over jointly to
Landlord and Tenant, and applied to the restoration of the
Premises. The foregoing notwithstanding, if the Lease is
terminated under paragraph 12, as a consequence of the damage or
destruction of the Premises, the proceeds of the insurance shall
be paid over solely to Landlord.
(b) Tenant shall maintain, at its expense, public liability
and property damage insurance in the amounts of not less than one
million dollars ($1,000,000) for each occurrence, one million
dollars ($1,000,000) for each accident, and one million dollars
($1,000,000) for property damage, which insurance shall name
Landlord as additional insured.
(c) With respect to the insurance to be provided by Tenant in
this Paragraph, policies or certificates of insurance, in form and
substance satisfactory to Landlord and written by companies
acceptable to Landlord,
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shall be furnished to Landlord. Such policies shall be
non-cancelable unless ten (10) days prior written notice to
Landlord is given.
(d) All policies of insurance purchased by the parties with
respect to the Premises shall contain clauses or endorsements
under which the insurer waives all right of subrogation against
Landlord or Tenant, as the case may be, or any of their agents,
employees, invitees and licensees, with respect to losses payable
under any such policy or policies.
11. INDEMNIFICATION
The Tenant agrees to indemnify and save harmless the Landlord against and
from any and all claims by or on behalf of any person or persons, firm or
firms, corporation or corporations arising from the conduct or management of or
from any work or thing whatsoever done (other than by Landlord or its
contractors or the agents or employees of either) in and on the premises during
the term of this Lease and during the period of time, if any, prior to the term
commencement date that the Tenant may have been given access to the premises
for the purpose of making improvements, and will further indemnify and save the
Landlord harmless against and from any and all claims arising from any
condition of the premises due to or arising from any act or negligence of the
Tenant or any of its agents, contractors, servants, employees, licensees or
invitees, and from and against all costs, expenses and liabilities incurred in
or in connection with any such claim or claims or action or proceeding brought
thereon; and in case any action or proceeding be brought against the Landlord
by reason of any such claim, the Tenant, upon notice from the Landlord, agrees
to resist or defend such action or proceeding and to employ counsel therefor
reasonably satisfactory to the Landlord.
12. DAMAGE OR DESTRUCTION OF PREMISES
Landlord and Tenant agree that if at any time during the continuance of
this Lease the Premises shall be destroyed or so injured by fire, or by other
casualty as to be unfit for occupancy, and such destruction or injury can
reasonably be repaired within one hundred eighty (180) days from the date of
such destruction or injury, then Tenant shall not be entitled to surrender
possession of said Premises; but in case of any such destruction or injury,
Tenant shall immediately commence the restoration of the Premises and shall
complete the same with all reasonable speed. The restoration of the Premises
shall be performed by contractors approved in advance by Landlord. If the
Premises shall be so destroyed or injured by fire or other casualty that such
destruction or injury, cannot reasonably be repaired within one hundred eighty
(180) days from the date of such destruction or injury either Landlord or
Tenant shall have the option, upon written notice given to the other within
thirty (30) days from the date of destruction or injury, to terminate this
Lease. In the event of such a termination, Landlord shall be entitled to all
insurance proceeds with respect to the Premises. Tenant shall be entitled to
make use of the proceeds of insurance upon the Premises to pay for the
restoration of the Premises. If the insurance proceeds are inadequate to
restore the Premises as nearly as possible to the
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condition existing immediately prior to such occurrence it shall be the
obligation of the Tenant to pay the additional cost required. Irrespective of
the tenantability of the Premises rent shall not xxxxx. If the Lease is
terminated under the terms of this paragraph 12, Tenant shall be relieved of
the obligation to repair the Premises and to make future payments of rent.
13. EMINENT DOMAIN
In the event the Premises or any part thereof shall be taken for public or
quasi-public use or condemned under eminent domain, then if and when there is
an actual taking of physical possession of the Premises or of any part thereof
which shall render the remainder unfit for use by Tenant as hereinafter
defined, Tenant shall have the right to terminate this Lease. The Premises
shall be deemed to be unfit for use by Tenant if the area of such portion
remaining after such taking is less than reasonably sufficient to accommodate
the activities of Tenant conducted from the Premises immediately prior to such
taking. If Tenant elects to terminate this Lease as provided above, it shall
give written notice to Landlord within thirty (30) days after the entry of the
final order of the court authorizing the taking or appropriation or the date of
settlement, as the case may be. If the term of this Lease is terminated by
Tenant, Tenant shall be entitled to receive that portion of any award of
damages specifically allocated in the final order to the loss of its leasehold
estate or costs of relocation. The balance of any award of damages shall be
the property of Landlord.
In the event of any such taking which does not result in the termination
of this Lease, rent shall xxxxx in proportion to the value of the Premises
taken.
14. DEFAULT
(a) Events of Default. In the event of any default by Tenant
in the payment of any rent provided for herein on the day it
becomes due and payable, and if such default continues for ten
(10) days, after notice, in writing, is given by Landlord to
Tenant , or if default shall be made or suffered by Tenant in any
of the other covenants and conditions of this Lease required to be
kept or performed by Tenant (other than payment of rent), and if
Tenant fails to commence to cure such default or defaults within
ten (10) days after written notice thereof given by Landlord to
Tenant, specifying the default or defaults complained of, and
thereafter to diligently cure such default or defaults; or, if
Tenant shall become insolvent or make an assignment for the
benefit of creditors, file, or have filed against it, a petition
in bankruptcy, which shall not be vacated, set aside or dismissed
within thirty (30) days, or seek the benefit of any bankruptcy,
composition or insolvency law or act, of if Tenant shall be
adjudged a bankrupt, or if Tenant's leasehold interest herein
shall be levied on execution, or a receiver be appointed for
Tenant, whether by virtue of state or Federal law; then Landlord
may, in addition to any other remedy, re-enter into and repossess
the Premises and remove Tenant and every other occupant, and may
relet the Premises or any part
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thereof for any term, either shorter, longer, or the same, at a
higher, lower, or the same rental, making such alterations as may
be necessary, and the Lease shall terminate.
(b) Expenses of Default. If Landlord shall, on any such
default by Tenant, obtain possession of the Premises by re-entry,
summary proceedings, or otherwise, Tenant shall pay to Landlord
all expenses incurred in obtaining possession of the Premises,
including reasonable attorneys fees, all expenses and commissions
which may be paid for the reletting of the same, and all other
damages resulting from Tenant's default.
(c) Termination of Lease. No termination of this Lease
pursuant to this Section or repossession of the Premises or any
part thereof shall relieve Tenant of its liabilities and obligations
under this Lease, all of which shall survive any such termination
or repossession. Tenant shall pay to Landlord, as and for
liquidated and agreed damages for Tenant's default, (i) the then
present value of the rent and other sums and charges to be paid
by Tenant until what would have been the end of the term in the
absence of such termination or repossession (the "Scheduled Amount"),
less (ii) the then present value of the net proceeds, if any, of the
reletting of the Premises (including any parts thereof), for any
periods within such term, after deducting all of Landlord's expenses
in connection with such reletting, including, without limitation,
all repossession costs, brokerage and management commissions,
operating expenses, legal expenses, attorney fees, alteration costs
and expenses of preparation of such reletting (the "Reletting Amount").
The Tenant shall be entitled to the benefit of all Reletting Amounts,
whenever arising or determined, and Landlord shall promptly pay to
Tenant any overpayments that are made to Landlord under the prior
sentence as additional Reletting Amounts are determined. Landlord
shall use reasonable efforts to re-let the Premises and otherwise
mitigate damages. Exercise of any remedy hereunder by the Landlord
shall not exclude the right to exercise any other remedy hereunder,
but in no event will Landlord be entitled to be paid more than once
for the same loss.
15. ACCESS
Landlord shall have the right to enter upon the Premises at all reasonable
hours for the purpose of inspecting the same.
16. SIGNS AND ADVERTISING
Tenant shall have the right to install, maintain and display upon the
Premises such inside and outside signs as Tenant may reasonably deem necessary
or desirable for the carrying on of its business at Tenant's expense; provided,
however, that it is Tenant's obligation to comply with any and all applicable
laws or ordinances affecting the placing, location, size and type of signs.
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17. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATE
(a) This Lease shall, at the option of Landlord or its
lenders, be subject and subordinate to the interests of the
holders of any notes secured by mortgages on the Property or the
Premises, now or in the future, and to all renewals,
modifications, consolidations, replacements and extensions
thereof. While the provisions of this section are self-executing,
Tenant shall execute such documents as may be desired by Landlord
or any mortgagee to affirm or give notice of such subordination.
In turn, Tenant shall be entitled to receive the customary
non-disturbance agreement from each such lender whereby the lender
agrees to recognize Tenant's rights under this Lease following
foreclosure so long as Tenant is not in default hereunder.
(b) Tenant shall attorn to any foreclosing mortgagee, or to
any purchaser of the Property or the Premises at any foreclosure
sale, or sale in lieu of foreclosure, for the balance of the Term
on all the terms and conditions herein contained.
(c) At the request of Landlord, Tenant shall within ten (10)
days, deliver to Landlord, Tenant shall within ten (10) days,
deliver to Landlord, or anyone designated by Landlord, a
certificate stating and certifying to such information as may
reasonably be requested to verify the state of the Landlord-Tenant
relationship established by this Lease.
18. RIGHT OF FIRST REFUSAL
(a) Landlord agrees that if at any time during the term of
this Lease, Landlord shall receive a bonafide offer (the "Offer"),
acceptable to Landlord for the sale of the Premises, Landlord,
prior to acceptance thereof, will give Tenant, with respect to the
Offer, written notice thereof, and a copy of the Offer, including
the name and address of the proposed purchaser, Tenant shall have
the option of first refusal for thirty (30) days after receipt of
such notice, within which to elect to purchase the Premises on the
terms of the Offer. If Tenant shall elect to purchase the
Premises, it shall provide written notice of such election to
Landlord within said 30-day period, and upon such notice having
been given, the transaction shall be closed on the terms of the
Offer, except that any such closing shall be no longer than 90
days after the date of Tenant's notice to Landlord. Tenant's
rights under this paragraph shall terminate upon the termination
of this Lease for any reason.
(b) Xxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxx ("Xxxxxxxx"), the
owners of one hundred percent (100%) of the membership interests
in Landlord, do hereby grant to Tenant a right of first refusal to
purchase their membership interests in the event they receive a
bonafide offer (the "Offer")
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acceptable to them for the sale of more than fifty percent (50%)
of their membership interest. Upon the receipt of an Offer
acceptable to Xxxxxxxx, Xxxxxxxx will give Tenant, with respect to
the Offer, written notice thereof, including the name and address
of the proposed purchaser, and Tenant shall have the option of
first refusal for thirty (30) days after receipt of such notice,
within which to elect to purchase Xxxxxxxx'x membership interest
upon the terms of the Offer. If Tenant shall elect to purchase
the membership interest of Xxxxxxxx, it shall provide written
notice of such election to Xxxxxxxx within said thirty (30) day
period, and upon such notice having been given, the transaction
shall be closed upon the terms of the Offer except that any such
closing shall be no longer than ninety (90) days after the date of
Tenant's notice to Xxxxxxxx. Tenant's right under this paragraph
shall terminate upon the termination of this Lease for any reason.
The foregoing notwithstanding, Xxxxxxxx shall have the right to
make gifts of any portion of their membership interest in Landlord
to family members or to any Inter-vivos Trust established by
Xxxxxxxx, so long as the transferred interests shall remain subject to
Tenant's right of first refusal.
19. OPTION TO PURCHASE
(a) If this Lease is not terminated by Landlord for a default
by Tenant, and if Landlord should refuse to extend the term of
this Lease upon the same terms and conditions as herein set forth
following the exercise by Tenant of its rights to extend under
paragraph 3 hereof, and for continuing and successive five (5)
year terms, Tenant shall have the option to purchase the Premises
for its fair market value minus, (i) the unamortized cost of any
capital improvements exclusive of trade fixtures made to the
Premises by Tenant, and (ii) the amount of all Landlord's
indebtedness and other obligations of Landlords secured by a lien
on all or any part of the Premises which is not discharged by
Landlord prior to the Closing. Fair market value shall be
determined by an appraiser mutually agreed upon by the parties.
If the parties are unable to agree upon an appraiser then each
party shall select an appraiser and the two parties selected shall
select a third. The average value of the appraisals of the two
appraisals most closely approximately one another shall control
for purposes of determining fair market value. If the parties are
unable to agree upon the unamortized cost of capital improvements,
the matter shall be submitted to arbitration under the auspices
of the American Arbitration Association.
(b) Tenant shall exercise its option to purchase by
delivering notice in writing, to Landlord, no later than
forty-five (45) days following the date Tenant has given notice in
writing of Landlord's refusal to extend the term of the Lease
beyond the period described in subparagraph (a).
(c) At the closing which shall occur no later than sixty (60)
days after Tenant exercises its option to purchase, Landlord shall
convey title to
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the Premises to Tenant by warranty deed subject only to easements
and restrictions of record.
(d) The purchase price of the Premises shall be payable in
immediately available funds at the closing.
20. HOLDING OVER
It is agreed that, in the event Tenant holds over after the termination of
the term of this Lease, the tenancy shall be from month-to-month in the absence
of a written agreement to the contrary.
21. ASSIGNMENT AND SUBLETTING
Tenant shall not, without Landlord's prior written consent, which consent
shall not be unreasonably withheld, have the right to sublease the Premises or
assign Tenant's rights under this Lease. Notwithstanding any such sublease or
assignment, Tenant and all assignees and sublessees shall remain liable for the
performance of all of Tenant's obligations contained in this Lease. Any
assignee or sublessee will be required to execute an instrument in writing
assuming all of Tenant's obligations and liabilities to Landlord.
Notwithstanding any other provision of this Lease, Tenant may at any time
and for any period, sublease all or any portion of the Premises to Mercantile
Bank Corporation (which is or will be an affiliate of the Tenant), or any other
entity or entities, at least a majority of which is owned directly or
indirectly, by Mercantile Bank Corporation.
22. ESTOPPEL AGREEMENT
Tenant shall, without charge and at any time and from time to time, within
ten (10) days after request by the Landlord, certify by written instrument,
duly executed, acknowledged and delivered to any mortgagee, assignee of any
mortgagee or purchaser, or any proposed mortgagee, proposed assignee or
proposed purchaser, or any other person, firm or corporation specified by
Landlord:
(a) That this Lease is unmodified and in full force and
effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications);
(b) Whether or not there are then existing, to the best of
its knowledge, any set-offs or defenses against the enforcement of
any of the agreements, terms, covenants or conditions hereof upon
the part of Tenant to be performed or complied with (and, if so,
specifying the same); and
(c) The dates, if any, to which the rental(s) and other
charges hereunder have been paid in advance.
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23. SURRENDER OF PREMISES
The Tenant shall surrender the Premises to the Landlord at
the expiration of this Lease in like condition as when taken, reasonable use
and wear thereof and damage by the elements excepted.
24. ENVIRONMENTAL LAWS; INDEMNIFICATION
(a) At all times during the term hereof or any extension or
renewal thereof, Tenant shall comply with the requirements of all
applicable Federal, State and local environmental, health, safety
and sanitation laws, ordinances, codes, rules and regulations and
orders of any regulatory and administrative authority with respect
thereto.
(b) Tenant agrees to indemnify, defend and hold harmless
Landlord from and against all loss, liability, damage and expense,
including costs associated with administrative and judicial
proceedings and attorney's fees, ever suffered or incurred by
Landlord on account of (i) Tenant's failure to comply with any
environmental, health, safety or sanitation law, code, ordinance,
rule or regulation or any interpretation or order of any
regulatory or administrative authority with respect thereto; (ii)
any release by Tenant or its agents of petroleum products, or
hazardous materials or substances on, upon, into or from the
Premises that was caused by Tenant; and (iii) any and all damage
to natural resources or real property and/or harm or injury to
persons resulting or alleged to have resulted from such failure
by Tenant to comply and/or such release of petroleum products, or
hazardous materials or substances that was caused by Tenant.
(c) Landlord agrees to indemnify, defend and hold Tenant
harmless from and against all loss, liability, damage and expense,
including costs associated with administrative and judicial
proceedings and attorney's fees, ever suffered or incurred by
Tenant on account of (i) any failure to comply with the
requirements of all applicable Federal, State and local
environmental, health, safety and sanitation laws, ordinances,
codes, rules and regulations of any regulatory and administrative
authority having occurred prior to the commencement date of this
lease; (ii) any release of petroleum products or hazardous
materials or substances on, upon, into or from the Premises having
occurred prior to the commencement date of this Lease; and (iii)
any and all damages to natural resources or real property and/or
harm or injury to persons resulting or alleged to have resulted
from such failure to comply and/or such release of petroleum
products or hazardous materials or substances.
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25. TERMINATION OF LEASE FOR OTHER CAUSES
Notwithstanding any other provisions contained in this Lease, in the event
(i) Tenant or its successors or assignees shall become insolvent or bankrupt,
or if it or their interests under this Lease shall be levied upon or sold under
execution or other legal process, or (ii) the depository institution then
operating on the Premises is closed, or is taken over by any depository
institution supervisory authority ("Authority"), Landlord may, in either such
event, terminate this Lease only with the concurrence of any Receiver or
Liquidator appointed by such Authority; provided, that in the event this Lease
is terminated by the Receiver or Liquidator, the maximum claim of Landlord for
rent, damages, or indemnity for injury resulting from the termination,
rejection, or abandonment of the unexpired Lease shall by law in no event be in
an amount equal to all accrued and unpaid rent to the date of termination.
26. NOTICES
Any notice to be given hereunder shall be deemed duly served if mailed by
certified mail addressed, if to Tenant, at its business address, or if to
Landlord, to its business address, and the customary certified mail receipt
shall be conclusive evidence of such service. Either party hereto may change
its address to which said notice shall be sent by giving written notice of such
change to the other party hereto as here provided.
27. MISCELLANEOUS
QUIET ENJOYMENT. If Tenant shall pay the rents and perform all of the
covenants and conditions of this Lease by it to be paid and performed, Tenant
shall, during the term hereof, peaceably and quietly have, hold and enjoy the
full possession of the Premises, the tenements, hereditaments, and
appurtenances, appertaining, or belonging thereto, and the rights and
privileges granted herein without interference or hindrance by Landlord, or by
any person holding under or through Landlord.
REMEDIES CUMULATIVE. All rights and remedies of Landlord herein
enumerated shall be cumulative and none shall exclude any other right or remedy
allowed by law or equity, and said rights and remedies may be exercised and
enforced concurrently and whenever and as often as occasion therefore arises.
ENTIRE AGREEMENT. This writing constitutes the entire agreement between
the parties hereto. No oral or written prior or contemporaneous agreements
shall have any force or effect, nor shall any subsequent agreements have any
force or effect unless signed and embodied in writing.
SEVERABILITY. Any provision or portion of any provision of this Lease
which is found to be illegal or void shall be treated as if it had never been a
part hereof and shall have no effect whatsoever on the entire agreement or
provisions hereof.
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CONSTRUCTION. This Lease shall be interpreted, construed, enforced and
performed pursuant to the laws of the State of Michigan.
BINDING EFFECT. The covenants and agreement herein contained shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective representatives, successors, assigns, lessees and sublessees.
CAPTIONS. The captions of this Lease shall not be considered part of this
Lease but shall be considered as descriptive only.
GENDER. Any references herein to the neuter gender shall be deemed also
to refer to the masculine and feminine and any references herein to the
singular shall also be deemed to refer to the plural.
[SIGNATURE BLOCK FOLLOWS]
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IN WITNESS WHEREOF, the parties, by their authorized representatives, have
executed this Lease on the day and year first written above.
WITNESSES: LANDLORD:
DIVISION AVENUE PARTNERS, L.L.C.
/s/ XXXXXX X. XXXXXX /s/ XXXXX X. XXXXXXXX
-------------------- ---------------------------------
Xxxxx X. Xxxxxxxx MEMBER
/s/ XXXXX X. XXXXXXXX
/s/ XXXXXX X. XXXXXXXX ---------------------------------
---------------------- Xxxxx X. Xxxxxxxx MEMBER
INDIVIDUALLY:
/s/ XXXXX X. XXXXXXXX
---------------------------------
Xxxxx X. Xxxxxxxx
/s/ XXXXX X. XXXXXXXX
---------------------------------
Xxxxx X. Xxxxxxxx
TENANT:
MERCANTILE BANK OF WEST
MICHIGAN (a Michigan banking
corporation in formation), by
Mercantile Bank Corporation, a
Michigan corporation
/s/ XXXXXX X. XXXXXXX, XX.
By: ---------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: Chairman of the Board and
Chief Executive Officer
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EXHIBIT A
Legal Description of the Leased Premises
City of Grand Rapids, Michigan
KENT COUNTY
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
The South 15 feet of Lot 12, all of Lots 13 and 16, and the North 1/2
of Xxx 00, Xxxxx 00; Dexter Fraction in the City of Grand Rapids, Kent
County, Michigan, as recorded in Liber 39 of Plats, Page 12. This
parcel contains 23,800 square feet (0.546 Acres).
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EXHIBIT B
IMPROVEMENTS
Office Equipment
Furniture
Partitions and Office Dividers whether or not affixed to the Premises
Vault and Safety Deposit Boxes
Automatic Teller Machines
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