EXHIBIT 10
REAL ESTATE PURCHASE AND LEASEBACK AGREEMENT
THIS AGREEMENT, made and entered by and between Michigan Brewery, Inc., a
Michigan corporation, whose address is 000 X. Xxxxxxxxx, X.X. Xxx 0000, Xxxxxxx,
XX 00000 hereinafter referred to as "Seller" and Xxxxxxx X. Xxxx, whose address
is 0000 X. Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 hereinafter referred to as
"Purchaser".
WITNESSETH:
That the Seller hereby agrees to sell and lease back from Purchaser, and the
Purchaser hereby agrees to purchase and lease back to Seller the following
described real estate, hereinafter called the "Property", situated in the City
of Auburn Hills, County of Oakland, State of Michigan, and further described as
follows:
SEE EXHIBIT "A" ATTACHED HERETO
together with and all of the right, title and interest of the Seller in and to
the land lying in the streets and roads abutting the Property, but excluding
therefrom any and all buildings, improvements, appurtenances and personal
property located thereon, all in accordance with the terms and provisions
hereinafter set forth.
1. PURCHASE PRICE: The purchase price shall payable by cashier's check or
federal funds wire transfer at closing and shall be, at Purchaser's option,
either Three Million and no/100 Dollars ($3,000,000.00), Three Million Five
Hundred Thousand no/100 Dollars ($3,500,000.00),or Four Million and no/100
Dollars ($4,000,000.00).
2. DEPOSIT: Immediately upon execution of this Agreement, Purchaser shall
deposit with Seller the sum of One Million and 00/100 ($1,000,000.00) Dollars,
as Purchaser's Good Xxxxx Xxxxxxx Money Deposit, which sum shall be applied to
the purchase price at closing. Purchaser acknowledges that Seller shall have
the right to utilize such funds prior to closing for the construction of a
microbrewery/restaurant on the Property, and may immediately use such funds for
such purposes upon receipt of the funds. With Seller's consent, Purchaser may
deposit additional sums with Seller for such purposes, in an amount not to
exceed Four Million and 00/100 ($4,000,000.00) Dollars. To secure the repayment
of the Deposit, Seller shall grant Purchaser a mortgage lien on the Property,
which mortgage lien shall be subordinated to any construction mortgage given by
Seller to any institutional lender to be used for the construction of a
microbrewery/restaurant on the Premises and shall be discharged upon closing of
this transaction. Purchaser agrees to act as co-borrower in connection with
such construction financing or to provide such financing directly to Seller. In
consideration of Purchaser acting as co-borrower in connection with such
construction financing or for providing such financing directly to Seller as the
case may be, Seller shall grant to Purchaser a stock option in accordance with
the terms of a certain Stock Option Agreement executed contemporaneously
herewith.
3. USE OF THE PROPERTY: Seller intends leaseback to the Property from
Purchaser, and to construct and operate a microbrewery/restaurant as drawn on
plans and specifications prepared by Seller's licensed architect, including off
street parking and serving of food and all legal beverages on the Premises,
hereinafter referred to as Use.
This statement of contemplated Use shall be used solely in connection with
interpretation of conditions, representations and warranties set forth herein,
and shall not be construed to limit or defeat any contemplated Use of the
Property by the Seller.
4. DUE DILIGENCE PERIOD: Purchaser acknowledges that it has had sufficient
opportunity to inspect the Property to conduct such due diligence as Purchaser
deemed necessary to the Property, and that Purchaser is satisfied with the
condition of the Property and all improvements thereon.
5. UTILITIES: In order for the Seller to utilize the Property for its
contemplated Use, all necessary utilities, including, without limiting same,
electricity, water, sanitary and storm sewers and gas must be available, at
costs and with capacities acceptable to Seller as shown on EXHIBIT "B" at or
within the property line. If said utilities are not at or within the property
line of the Premises as above required, Seller shall bring such utilities to the
Premises at its sole cost and expense. The obtaining of such utilities prior to
closing is a condition precedent to the obligation of the parties to close.
6. PERMITS: Seller will use best efforts to obtain at its sole cost and
expense, all necessary licenses, permits and other authorizations to utilize the
Premises for its contemplated Use as stated herein. Such approvals shall be,
without limiting same, curb cuts for reasonable ingress and egress to the
Premises, the right to erect signs acceptable to Seller, all building and
necessary construction permits and the appropriate alcoholic beverage license
issued directly by the appropriate governmental authorities at fees set by
statute, ordinance or regulation. Purchaser agrees to cooperate with Seller (at
no cost to Purchaser) and the state, county or municipal authorities to obtain
such permits and will execute any documents necessary in this regard. The
obtaining of all licenses and permits prior to closing is a condition precedent
to the obligation of the parties to close.
7. TITLE: Seller shall order a commitment for title insurance for the
Property from Metropolitan Title Insurance Company or a similar national
reputable title company acceptable to Seller. Prior to closing, such title
commitment must reveal marketable and insurable title in Seller and must be free
from all standard exceptions. Purchaser shall have a period of ten (10) days
after receipt of the above title commitment in which to give written notice to
Seller specifying Purchaser's objection to the status of title to the Premises
("Objection Period"). At the end of the Objection Period, Purchaser shall have
no further right to object to the status of Seller's title to the Property. In
the event the above referenced title insurance commitment shall reflect defects
or other conditions which would prevent an insurable and marketable title or
prevent the Seller's contemplated Use of the Property, Purchaser shall advise
Seller, and Seller shall proceed diligently and at its own expense to clear
title to the Premises within thirty (30) days from such notice; it being agreed
and understood that any defect or condition not so removed or cured if otherwise
approved or not objected to by Purchaser shall be deemed Permitted Title
Exceptions to be attached hereto as EXHIBIT "C". If Seller is unable to remedy
the title within such thirty (30) day period, then Purchaser may waive the
defect and the parties shall proceed to closing, or Purchaser may terminate this
Agreement in which case the parties shall have no further liability to each
other. Marketable and insurable title for Seller's contemplated Use prior to
closing is a condition precedent to the obligations of the parties to close.
8. LEASEBACK: Seller agrees to leaseback the Property from Purchaser, based
upon the Purchase Price Purchaser elects to pay for the Property, in accordance
with the terms set forth in a Lease Agreement between Seller and Purchaser, a
copy of which is attached hereto as EXHIBITS "D", "E" OR "F". At closing,
Purchaser and Seller shall enter into the Lease Agreement in the form attached
hereto as EXHIBIT "D", "E" OR "F" which shall be determined based upon the
amount of the Purchase Price selected to be paid for the Property by Purchaser.
If Purchaser elects a Purchase Price of Three Million and no/100 Dollars
($3,000,000.00), then the parties shall enter into the Lease Agreement exactly
in the form attached hereto as Exhibit "D". If Purchaser elects a Purchase Price
of Three Million Five Hundred Thousand and no/100 Dollars ($3,500,000.00), then
the parties shall enter into the Lease Agreement exactly in the form attached
hereto as Exhibit "E". If Purchaser elects a Purchase Price of Four Million and
no/100 Dollars ($4,000,000.00), then the parties shall enter into the Lease
Agreement exactly in the form attached hereto as Exhibit "F", and, in addition,
Seller will convey to Purchaser, by Covenant Deed, certain real property
adjacent to the Property, situated in the City of Auburn Hills, County of
Oakland, State of Michigan, and more particularly described on Exhibit G
attached hereto.
9. CORPORATE APPROVAL: This Agreement is conditional upon the approval of
this transaction by President of Seller. The Seller shall have thirty (30) days
from the date of execution hereof to obtain said approval. In the event Seller
does not terminate this Agreement pursuant to this Article on or before said
date, Seller's right to do so hereunder shall be deemed waived. Purchaser shall
have the right to rely on any communication executed by an officer of Seller in
furtherance of this Article.
10. CLOSING: Closing will take place at the offices of Metropolitan Title
Company, 00000 X. XX 00, Xxxxx 00, Xxxxxxx, XX 00000, or at such other location
that is mutually acceptable to the parties within five (5) days after notice
from Seller to Purchaser that it has obtained an occupancy permit for the
microbrewery/restaurant and is prepared to commence the operation of business as
a microbrewery/restaurant. Conveyance will be by a limited or special warranty
deed. Immediately upon execution of this Agreement by Purchaser and delivery by
Purchase of the Good Xxxxx Xxxxxxx Money Deposit to Seller, Seller shall deposit
the Deed in escrow with Metropolitan Title Insurance Company, to be held in
escrow in accordance with the terms of any Escrow Agreement in the form attached
hereto as Exhibit E. Seller shall bear the expense for the preparation of the
deed including, but not limited to, any applicable conveyance taxes. Seller
shall bear the expense of the title policy. Each party shall bear their own
legal fees. Real estate taxes shall not be prorated. All existing mortgages
and liens shall be discharged by the Seller prior to or at closing. In addition
to the deed, the Seller shall deliver at closing an affidavit of possession and
a no lien affidavit and, if appropriate, an affidavit in compliance with Section
1445 of the Internal Revenue Code, reasonably acceptable to Purchaser. The
parties shall execute and deliver the Lease in the form attached hereto as
Exhibit "D" at closing. The parties agree to execute and provide such other and
further documents as may be required either by law or custom and usage in the
jurisdiction in furtherance of Closing hereunder.
11. DEFAULT: In the event all conditions of this Agreement have been satisfied
and in the event Seller refuses to close, Purchaser may seek specific
performance or any other legal or equitable remedies available and recover
reasonable attorney's fees. In the event all conditions of this Agreement have
been satisfied and in the event Purchaser refuses to close, Seller may seek
specific performance or any other legal or equitable remedies available and
recover reasonable attorney's fees.
12. AMENDMENTS: This Agreement once properly signed by both parties can be
changed only by a document of equal dignity, executed by an authorized
representative of the respective parties hereto.
13. NOTICES: All notices, requests, demands or other communications hereunder
shall be in writing and deemed given when delivered personally, when telefaxed,
when sent by nationally known courier or express mail service, or on the day
said communication is deposited in the U.S. mail, by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Seller: Michigan Brewery
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
If to Purchaser: Xxxxxxx X. Xxxx
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
or to such other address as the parties may from time-to-time designate by
notice in writing to the other parties.
14. APPLICATION: This Agreement will be binding on the heirs, executors,
administrators, successors and assigns of the parties hereof and shall be deemed
effective for the purpose of each party undertaking its obligation herein as of
the last date of execution as set forth below.
15. OFFER: The offer extended by one party signing this Agreement shall expire
after five (5) business days unless accepted, rejected or revoked prior to such
expiration.
16. SURVIVAL: All representations, warranties and obligations of Seller as set
forth herein shall survive the Closing of this transaction.
17. EFFECTIVE DATE: This Agreement shall become effective when signed by all
parties hereto upon the date of the last party signing or initialing hereunder.
In the event Purchaser shall execute this Agreement first and thereafter Seller
shall execute same and said fully Agreements are not received by Purchaser from
Seller within five (5) business days from the date of the last signing or
initialing thereof, the conditions precedent as herein defined shall be
calculated from the date of receipt of fully executed Agreements by Purchaser.
18. FORCE MAJEURE: Anything contained herein to the contrary notwithstanding,
Seller and/or Purchaser shall be excused for the period of delay in the
performance of any and all of their obligations under this Agreement, and shall
not be considered in default when prevented from so performing by cause or
causes beyond Seller's or Purchaser's control, including, but not limited to,
war, fire or other casualty, government regulations or through act of God.
19. NO BROKER: Purchaser and Seller represent to each other that they have not
utilized the services of any broker in connection with the transaction evidenced
by this Agreement. Accordingly, Seller agrees to indemnify and hold harmless
Purchaser from payment of any brokerage fees or any liability or obligation
therefor to any person or party claiming a fee or commission through Seller and
Purchaser agrees to indemnify and hold harmless Seller from payment of any
brokerage fees or any liability or obligation therefor to any person or party
claiming a fee or commission through Purchaser.
20. MISCELLANEOUS: TIME IS OF THE ESSENCE. The laws of the State of Michigan
shall govern and control the interpretation and enforcement of the terms and
provisions of this Agreement. This Agreement shall not be recorded.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals.
SELLER: PURCHASER:
Michigan Brewery,
a Michigan Corporation
By: /s/ XXXXXXX XXXXXXXX /s/ XXXXXXX X. XXXX
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Xxxxxxx Xxxxxxxx Xxxxxxx X. Xxxx
Its President
Date: August 1, 1997 Date: August 1, 1997
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