Exhibit 10.2
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
AMERICAN COMMERCE CENTRE UNITS 13 & 14
This RECIPROCAL EASEMENT AND OPERATION AGREEMENT (the "Agreement"), is
made and entered into as of May 9, 2005, by and among MEADOWBROOK INSURANCE
GROUP, INC., a Michigan corporation, whose address is 00000 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("Meadowbrook"), and MB CENTER II, LLC, a Michigan
limited liability company, whose address is 000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 000,
Xxxx, Xxxxxxxx 00000 ("Center").
PRELIMINARY STATEMENT
A. Meadowbrook is the fee owner of Unit 13 and land contract vendor of
Xxxx 00, and Center is the land contract vendee of Unit 14 (each a "Unit", and
collectively, the "Units") in the American Commerce Centre, Oakland County
Condominium Subdivision Plan No. 1121 ("Condominium") situated in the City of
Southfield, pursuant to a Master Deed thereof, recorded on July 16, 1998, in
Liber 18714, Pages 477 through 520, inclusive, Oakland County Records (the
"Master Deed") as amended by First Amendment to Master Deed recorded in Liber
19915, Pages 599 through 610, Second Amendment to Master Deed recorded in Liber
20091, Pages 811 through 820, Third Amendment to Master Deed recorded in Liber
20131, Pages 335 through 000, Xxxxxx Xxxxxxxxx to Master Deed in Liber 20998,
Pages 689-698, Fifth Amendment to Master Deed recorded in Liber 22509, Page 798
through 807 and Sixth Amendment to Master Deed has been recorded in Liber 35437,
Page 559 ("Sixth Amendment"). The Sixth Amendment has been recorded to subdivide
Unit 3 of the Condominium as originally established by the Master Deed to create
Units 13 and 14 as depicted on the Sixth Amendment.
B. Meadowbrook has engaged in the construction of an office building on
Unit 13 consisting of approximately 66,427 square feet (which includes a portion
of the Connector, as defined in Section 1.01), an appurtenant parking lot,
driveways, and a Connector which consists of approximately 15,425 square feet
which connects the building on Unit 13 to the proposed building on Unit 14. The
Connector will be appurtenant to Units 13 and 14 and include a certain area
designated as an atrium (the "Atrium") for use by Units 13 and 14. The Connector
also includes certain components which are part of the Unit 13 building
(including an elevator shaft, a third floor and a partial second floor) and
components which are part of the Unit 14 building (including an elevator shaft).
Meadowbrook and Center hereby establish certain common areas (collectively,
"Common Areas") which shall include common driveways on land included in their
respective Units, the Atrium and a certain passenger drop off area at the
entrance of the Atrium. More specifically, the Common Areas consist of the areas
designated as: (i) "Site Access Ingress/Egress Easement" on Sheet No. 3 of
Exhibit "A-2" attached hereto, (ii) the areas designated as "Nonexclusive
Easement Benefiting Unit 14" on Sheet No(s). 5, 6, 7, 8, 9 and 10 of Exhibit
"A-2" attached hereto, and (iii) the areas designated as "Nonexclusive Easement
Benefiting Unit 13" on Sheet No(s). 5, 6, 7, 8, 9 and 10 of Exhibit "A-2"
attached hereto. The
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
1
parking lot and driveway areas within each Unit are depicted on Sheet 3 of
Exhibit "A-2". Meadowbrook and Center are sometimes referred to herein as an
"Owner" or the "Owners." The office buildings, appurtenant drives and parking
lot areas, and the Connector are sometimes referred to herein as the
"Improvements."
C. Owners have agreed to enter this Agreement in order to: (i) grant
each other certain reciprocal easements and (ii) identify the rights,
obligations and restrictions regarding the operation and maintenance of each
Owner's respective Unit and Common Area. Such easements, obligations and
restrictions shall be binding upon the Owners and their successors and assigns
and are imposed upon each Unit and shall be appurtenant to and run with and
against the land.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby grant, covenant, and agree as follows:
ARTICLE I -- IMPROVEMENTS
Section 1.01. Improvements. Each Owner shall construct its building only
in material conformity with the rendering prepared by Xxxxxxxx and Associates
which depicts the buildings on Unit 13 and 14, and a four-story connector
connecting the building on Unit 13 to the building Unit 14 (the "Connector") and
which is attached hereto as Exhibit "A-1".
ARTICLE II -- RECIPROCAL EASEMENTS
Section 2.01. Access to Common Areas. Each Owner hereby grants and conveys
to the other Owner for the benefit of the other Owner, the other Owner's Unit
and its tenants, employees, guests, licensees and invitees (collectively,
"Occupants"), a perpetual non-exclusive, irrevocable and reciprocal easement
over, and right to the use of the Common Areas, for purposes of ingress and
egress during the term of this Agreement and for such other purposes as shall be
consistent with the nature of the Common Areas.
Section 2.02. Ingress, Egress and Parking Easement. Each Owner hereby
grants and conveys to the other Owner for the benefit of the other Owner, the
other Owner's Unit, all future Owners and all present and future Occupants of
the other Unit, a perpetual, non-exclusive, irrevocable and reciprocal easement
over and right to the use of the parking lots, roads (including without
limitation the Park Access Drive depicted on Sheet 3 of Exhibit "A-2" attached
hereto), driveways and sidewalks now or hereafter located on each Owner's Unit,
for purposes of vehicular and pedestrian ingress and egress to and from the
other Unit and to and from all abutting streets or rights-of-way furnishing
access to the Units, and for parking.
Section 2.03. Utility Easements. Each Owner hereby declares, grants and
conveys to the other Owner for the benefit of the other Owner and the other
Owner's Unit, an easement in, to, over, under and across its Unit for the
purposes of permitting the installation, maintenance, repair, replacement,
removal and relocation of underground storm sewer lines, sanitary sewer pipes,
water and gas mains, electric power lines, telephone lines, and other
underground utility lines (each a "Utility Line" and, collectively, the "Utility
Lines"), for the purpose of providing service to the Improvements. The Utility
Line(s) shall be located as shown on Sheet No. 4 of Exhibit "A-2" attached
hereto. Each Owner shall have the right to relocate any Utility Line(s) which
services only that Owner's Unit, but which crosses the other Unit, upon the
written approval as to the exact location of the easement from the Owner of the
Unit being crossed. Such approval shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
2
foregoing, the relocation of the Utility Line(s) shall not materially interfere
with the use of any Owner's Unit and Improvement thereon.
Section 2.04. Temporary Construction Easement. In connection with any
construction work to be performed in the development of the Improvements, each
Owner hereby grants the other temporary easements for incidental temporary
encroachments onto its Unit. The permitted encroachments are those which may
occur as a result of the adjacent Unit's construction, so long as such
encroachments are temporary in nature, kept within the reasonable requirements
of the construction worksite, and do not interfere with the operation of the
constructed Improvement. The encroaching Owner agrees to indemnify, defend and
hold harmless the Owner of the land encroached upon from all claims, liability,
cost and expense (including attorney fees and court costs) arising as a result
of the encroachment. The permitted encroachments are permissible provided that
reasonable liability insurance (not less than $3,000,000.00 per occurrence) is
maintained which protects the Owner being encroached from any and all risks
associated with the encroachment. However, no encroachment in violation of
applicable building, zoning, or land use codes or laws shall be deemed permitted
by this Section 2.04 during any period of the construction. In the event that
the construction of the Unit 13 building is complete and the Owner and its
Occupants have entered the Improvement, the Owner of the Unit 14 building shall
use reasonable and diligent efforts not to unreasonably interfere or impede in
the use of the Common Areas or otherwise interfere with the Occupants' business
activities during construction.
ARTICLE III -- OPERATION OF IMPROVEMENTS AND COMMON AREAS
Section 3.01. Property Management and Maintenance.
(a) Individual Buildings. Each Owner shall manage and maintain and have
the right to contract for its own property management and maintenance company(s)
for its own building, independent of one another. In any event, each party shall
manage and maintain their building in a manner consistent with first-class
office buildings in Southeast Michigan and in accordance with the Bylaws of the
Master Deed for the Condominium. For the purposes of this Agreement, maintenance
shall include all repair and replacement of Improvements.
(b) Connector, Common Area and Parking Lots. The Owner of Unit 13 shall
be responsible for managing, maintaining, cleaning, repairing and replacing the
Atrium, the exterior walls and roof of the Connector and the Common Areas on a
day to day basis. The Owner of Xxxx 00 and the Owner of Unit 14 shall each be
responsible for its Proportionate Share (as defined in Section 3.03) of the
costs incurred with the management, maintenance, cleaning, repair and
replacement thereof. The Owner of Unit 13 shall select the company which will
manage and maintain the Atrium, the exterior walls and roof of the Connector and
the Common Areas but, prior to engaging a property manager, the Owner of Unit 13
shall consult with the Owner of Unit 14. At that time, the Owner of Xxxx 00 may
offer a proposal of its own for the management contract. The Owner of Unit 13
shall consider all proposals including, but not limited to, the proposal made by
the Owner of Xxxx 00. Each Owner shall be responsible for managing, maintaining,
cleaning, repairing and replacing the grounds, landscaped areas and the parking
lots (the "Unit Exterior Maintenance") on that Owner's Unit, on a day to day
basis, including without limitation the repair of lighting fixtures and the
replacement of light bulbs. Notwithstanding the foregoing, the Owners of both
Units shall endeavor to agree on a common manager/maintenance contractor(s) to
perform the Unit Exterior Maintenance on both Units. If the Owners so agree, the
costs of the Unit Exterior Maintenance shall be paid by both owners according to
their Proportionate Share in the same manner as the Common Area maintenance
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
3
expenses as provided above, except for those expenses to be specifically
incurred by each Owner pursuant to Section 3.01(c) which shall be paid
separately by the Owner(s),, unless the Owners shall expressly agree otherwise.
Each Owner shall pay its Proportionate Share for the expenses associated with
having a property manager maintain the Connector and Common Areas and, if
applicable, Unit Exterior Maintenance. If the manager is an affiliate of the
Owner of either Unit, the manager's fees will not exceed those generally charged
by managers of first-class office buildings in Southeast Michigan. The Owner of
Unit 13 shall manage, maintain, clean, repair and replace the Connector and
Common Areas in a manner consistent with first-class buildings in Southeast
Michigan and in compliance with the Master Deed of the Condominium, and the
Owner or Owners responsible for the Unit Exterior Maintenance shall comply with
the same standard. The Owner of Unit 13 shall not have an obligation to consult
with the Owner of Unit 14 until such time as Unit 14's building has been
completed.
(c) Parking Lot Repair and Replacement. Each Owner shall, at all times
and at its own expense, be responsible for repairing, re-paving, re-striping,
and replacing the markings on the surface of the parking lots contained within
the boundaries of such Owner's Unit, from time to time and as necessary, to
provide for orderly parking of automobiles. Each Owner shall repair, re-pave,
re-stripe and otherwise xxxx its parking lots in accordance with Sheet 3 of
Exhibit "A-2" and in a manner consistent with other first-class properties in
Southeast Michigan and in compliance with the Master Deed of the Condominium.
Section 3.02. Proportionate Share Defined. Each Owner's Proportionate
Share of costs incurred shall be a fraction, whereby the numerator shall be the
total square footage of the floor area of an Owner's building and the
denominator is the total square footage of the floor area of both buildings
(hereinafter, the "Proportionate Share"). The calculation of total square
footage of Unit 13 shall consist of the floor area of the building located on
Xxxx 00. The calculation of total square footage for the Unit 14 building shall
consist of the floor area of the building located on Unit 14. The total floor
area of the Unit 13 building is 66,427 square feet and the total floor area of
the Unit 14 building is anticipated to be 82,590 square feet. The actual square
footage of the building on Unit 14 will be determined upon completion of
construction of the same and, if the actual square footage varies from the
anticipated square footage by more than 820 square feet, the Proportionate
Shares of the parties will be recalculated.
The sole purpose of identifying the square footage measurements of each
building, noted in this Section 3.02, is to establish each Owner's Proportionate
Share. The values noted herein are not to be considered a determinative value
for purposes of leasing space within the respective buildings.
Section 3.03. Payment/Reimbursement of Proportionate Share. At reasonable
intervals, not more frequently than monthly nor less frequently than quarterly,
the Owner of Unit 13, or its designated property manager, shall submit invoices
for the expenses incurred for the costs and expenses identified in this
Agreement as costs for which the Owners are proportionately responsible. The
Owner of Unit 14 shall pay its Proportionate Share thereof to the Owner of Unit
13, or its designated property manager, within thirty (30) days of receiving the
invoice, and the Owner of Unit 13 shall pay its Proportionate Share within the
same thirty (30) day period. In the event that either Owner has paid the full
amount of any cost to be shared by the Owners of both Units 13 and 14 pursuant
to this Agreement and is thereby entitled to be reimbursed by the other Owner,
the other Owner shall reimburse the Owner entitled to reimbursement within
thirty (30) days of receiving a written statement of the obligation, together
with paid invoices or other reasonable supporting documentation. Any expenditure
by the
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Xxxxx 00 & 00
0
Xxxxx xx Xxxx 00 and any dispute arising under this Section 3.03 concerning a
reimbursement right or obligation shall be governed by the terms of Article VI,
Remedies.
Section 3.04. Each Owner's Responsibilities. Each Owner shall be
responsible for the maintenance and repair of its own Unit and Improvements
thereon, except as expressly described in this Agreement.
Section 3.05. Parking Area.
(a) Parking Allotment and Location. Each Unit contains a parking lot
intended to serve the Occupants of that Unit. The Owners acknowledge that it is
undesirable to block access to one another's parking lots and that a certain
amount of mutually shared use of their respective parking areas is therefore
likely to occur. Each Unit Owner agrees that neither building will be leased to
or occupied by a user whose intensity of use will unduly burden the parking
areas. To that end, it is agreed that the Owner of Unit 13 will not permit the
Unit 13 building to be occupied by more than one person for each 175 square feet
of "useable floor area" (as defined in Section 3.05(b)) within the Unit 13
building, and the Owner of Unit 14 will not permit the Unit 14 building to be
occupied by more than one person for each 200 square feet of "useable floor
area" within the Xxxx 00 xxxxxxxx.
(x) Useable Floor Area. Shall be the sum of the gross horizontal floor
areas of all the floors of the building or structure and of all accessory
buildings measured from the interior face of the exterior walls and which may be
made usable for human habitation but excludes the horizontal floor area of
heater rooms, mechanical equipment rooms, attics, light shafts, public
corridors, public stairwells, elevator shafts, and public toilets.
(c) Reserved Parking. Notwithstanding the terms of Section 2.02 or this
Section 3.05, each Owner shall have the right to xxxx and reserve up to twenty
(20) parking spaces within the boundaries of its Unit for use exclusively by
visitors or other persons designated by such Owner.
Section 3.06. Utilities.
(a) Each Owner shall be responsible for its own costs associated with
the consumption of all utilities in the operation of the Improvements within
that Owner's Unit.
(b) The heating and cooling system for the Atrium is provided by means
of the Unit 13 heating, ventilating and air-conditioning system. The cost of
providing such service (including equipment maintenance and repair and natural
gas costs, but excluding electricity costs) deemed attributable to the Atrium
shall be one hundred twenty-five one-thousandths (.125) or twelve and one-half
percent (12.5%) of Unit 13's total costs incurred for the service provided in
this Section 3.06(b). (Such percentage represents the ratio of twice the floor
area of the Atrium to the total floor area of the Unit 13 building plus twice
the floor area of the Atrium.) Each Owner shall pay a Proportionate Share of the
cost of heating, ventilating and cooling attributable to the Atrium. The Atrium
is separately metered for electric power. Each Owner shall pay its Proportionate
Share of the cost of electricity attributed to the Atrium. The Owner of Unit 13
or its manager will invoice the Owners for their respective Proportionate
Shares.
(c) There is a single electric meter for lighting both parking lots. A
single water meter for sprinkling the grounds, and landscaping has been or will
be installed for both parking
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Xxxxx 00 & 00
0
xxxx, xxxxxxx and landscaping. The Owner of Unit 13 or its manager will receive
the electric and water bills and will invoice the Owners for their Proportionate
Shares.
Section 3.07. Utility Line and Service. Each Owner shall be solely
responsible for maintenance and repairs associated with the Utility Lines
located on its own Unit to the extent that such Utility Line provides service
solely to that Owner's Unit. If a Utility Line is exclusively servicing one Unit
and crosses the other Unit, such Utility Line shall be maintained by the Owner
of the Unit served by the Utility, subject to the provisions of Section 2.02.
Utility Lines serving both Units and Common Areas shall be serviced by the Owner
of the Unit where the line is located, but each Owner shall pay its
Proportionate Share of the cost of maintenance and repair of such line. In no
event shall either Owner be liable for any costs, expenses, lost profits or
other damages resulting from either Owner's loss of power or other utility
service for any reason, excluding gross negligence or willful misconduct.
Section 3.08. Elevators. The Improvements shall have four (4) elevators
located in the Connector. Two (2) elevators are located in the Improvement of
each Owner's Unit. Each Owner shall maintain and repair their respective
elevators and related elevator equipment which service that Owner's Improvement.
An elevator equipment room located on the first floor of the Connector, depicted
on sheet 5 of Exhibit "A-2", and shall be deemed to be a Common Area. This room
is accessible by both Unit Owners due to their reciprocal easements granted to
each other providing for access.
Section 3.09. Taxes. Each Owner shall pay, prior to any penalty attaching
thereto, all real estate taxes, assessments and personal property taxes, if any,
imposed upon its Unit and the Improvements located thereon.
Section 3.10. City of Southfield Access Easement. Each Owner shall pay a
Proportionate Share of the cost of maintaining, repairing and replacing the
ingress and egress easement which has been granted to the City of Southfield for
the purpose of ingress and egress to the city park known as Pebble Creek as long
as the easement is in existence.
Section 3.11. Roof Maintenance. Each Owner shall be solely responsible for
the cost of repairs of the roof above its own building. In addition, each owner
shall be responsible for its Proportionate Share of expenses attributable to the
repair or replacement of the roof above the Connector as provided in Section
3.01(b). The Owner of Unit 13 shall be responsible for repairing and replacing
the roof above the Connector and shall determine in its reasonable discretion
the necessity of repair or replacement of the roof above the Connector and shall
follow the procedure setout in Section 3.01(b) herein.
Section 3.12. Signage.
(a) Monument Signage. Each Unit Owner or its tenant shall have the right
to display its name and logo on one-half of the visible space on any monument
sign (the "Signage") installed at the entry of the driveway from American Drive.
The Owner of Unit 13 will have the upper half of the sign space. Each owner
shall pay 50% of the cost associated with obtaining, operating and maintaining
the Signage. An Owner, who desires to modify the Signage, must obtain written
approval of its proposed modifications and changes from the other Owner; an
Owner's approval will not be unreasonably withheld or delayed as long as the
proposed modification is in conformity with the first two (2) sentences of this
Section 3.12(a).
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
6
(b) Building Signage. Each Owner shall be responsible for the expense of
its own building signage. Each Owner shall maintain and repair its own building
signage and shall only implement building signage placed on its respective
Improvement that is in compliance with local zoning ordinances and the Master
Deed.
(c) Park Signage. In the event that the Pebble Creek Park is no longer
used for purposes of a public park and the ingress/egress easement for the park
is terminated, the Owners of Unit 13 and 14 shall collectively have the right to
use the monument sign to be installed to identify the park, or to place a new
monument sign at the entrance currently marking the entrance of the park,
provided such additional sign is in compliance with the zoning ordinances and
the Master Deed. The use of, and sharing of the cost of, such sign shall be in
accordance with Section 3.12(a) above.
Section 3.13. Constructing Unit 14's Improvement.
(a) Construction Entrance. Upon the commencement of construction, all
contractors, sub-contractors, vendors and any other person supplying Unit 14
with labor and materials shall enter the Unit from the southern most entrance on
American Drive.
(b) Staging Area. An area which is located in the northwestern region of
Unit 14, to the north of the proposed Improvement and nearest to I-696, shall be
the sole area designated for the collection of construction materials and
vehicles being used in the building of the Improvement.
(c) Fencing. The Improvement shall be secured with a screening fence
around its perimeter during construction. The Owner of Xxxx 00 xxxxx xx
responsible for the removal of all construction debris and trash generated from
performing construction.
(d) Utilities. The Owner of Unit 14 shall have the necessary utility
meters in place at the time construction begins and pay for the expense of
electricity, water, and gas consumed by it and its contractors during
construction.
(e) Prior to commencement of the construction of Unit 14's Improvement
and until full completion thereof, the Owner of Unit 14 shall secure, pay for
and maintain during the construction of and fixturing work within the
Improvement, the following form of insurance coverage:
Comprehensive General Liability Insurance - (including Contractor's
Protective Liability, Completed Operations, Contractual Liability,
Explosive and Collapse Coverage), with Combined Single Limit of
Three Million ($3,000,000) each occurrence with respect to bodily
injury and or property damage.
(f) The Owner of Unit 14 agrees that, during the construction of Unit
14's Improvements, it shall hold and save the Owner of Unit 13 harmless from any
and all liability, claims and damages incurred by the Improvements on Xxxx 00 as
a result of the construction of Unit 14's Improvements. The Owner of Unit 14
shall likewise hold and save the Owner of Unit 13's interest in the Connector
harmless from any and all construction liens and damages incurred as a result of
the construction of Unit 14's Improvements.
(g) The Owner of Unit 14 shall take all reasonably necessary measures to
minimize any damage, disruption or inconvenience caused by such work, and make
adequate provision for the safety and convenience of all persons affected
thereby. Dust, noise and other effects of
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
7
such work shall be controlled using accepted methods customarily utilized in
order to reasonably control such conditions.
Section 3.14. Access. The Owners shall not install or construct a fence or
other barrier anywhere along the common boundary between the Units or in the
Common Areas, or elsewhere in the parking lot areas (other than customary
parking curbs between opposing parking spaces) of Units 13 and 14 which would
obstruct the passage of pedestrian or vehicular travel across the parking lots,
driveways or sidewalks.
ARTICLE IV -- LIABILITY INDEMNIFICATION
Section 4.01. Liability Indemnification. Each Owner shall indemnify and
hold the other Owner and its Occupants (the "Indemnitees") harmless (except for
loss or damage resulting from the tortious acts of the Indemnitee(s)) in
connection with the loss of life, personal injury and damage to property arising
from or out of any occurrence in the indemnifying Owner's Improvement or upon
indemnifying Owner's Unit (except to the extent arising from the willful
misconduct of the Indemnitee being indemnified) or occasioned wholly or in part
by any act or omission of said indemnifying Owner, or its Occupants. This
indemnification shall exist only to the extent that the basis for the indemnity
claim would be covered by insurance the indemnitor Owner is required to carry.
Section 4.02. Liability Coverage for the Unit(s). Each Owner shall
maintain or cause to be maintained comprehensive general commercial liability
insurance insuring against claims on account of loss of life, bodily injury or
property damage that may arise from, or are occasioned by the condition, use or
occupancy of the Unit of the insured Owner. Each Owner's liability insurance
coverage shall name the Association, the other Owner, and both Owners'
mortgagees as additional insureds on their policy. Said insurance shall be
carried by a reputable insurance company qualified to do business in the State
of Michigan, having limits of not less than $3,000,000 per occurrence. Each
Owner shall, upon written request from the other, furnish certificates of
insurance and a copy of the policy evidencing the existence of the insurance
carried pursuant to this Section 4.02.
Section 4.03. Liability Coverage for the Connector and Common Areas. The
Owner of Unit 13 shall maintain or cause to be maintained comprehensive general
commercial liability insurance insuring against claims on account of loss of
life, bodily injury or property damage that may arise from, or are occasioned by
the condition, use or occupancy of the Atrium and Common Areas. Each Owner shall
pay its Proportionate Share of the expense of such insurance. The liability
insurance coverage shall name both Owners and, upon written request by either
Owner, such Owners' mortgagee as additional insureds on the policy. Said
insurance shall be carried by a reputable insurance company qualified to do
business in the State of Michigan, having limits of not less than $3,000,000 per
occurrence. If the Atrium and Common Area liability insurance is included in
Unit 13 building liability insurance, the Owner of Unit 13 shall make an
allocation based exclusively on the relative square footages of the floor area
of the Atrium and the floor area of the remainder of the building(s) covered by
such insurance.
Section 4.04. Waiver of Subrogation. Each Owner hereby grants to the
other, on behalf of its insurer providing such public liability and property
damage insurance, a waiver of any right of subrogation, to the extent available,
that each may acquire against the other by virtue of the payment of any loss
under such insurance, and upon request of the other party shall cause its
insurer to furnish evidence of such waiver of subrogation.
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
8
ARTICLE V -- CASUALTY AND EMINENT DOMAIN
Section 5.01. Casualty.
(a) If either, or both, Owner's Improvement is damaged or destroyed by
fire or other cause, the Owner whose Improvement is damaged shall promptly: (i)
repair, restore, or rebuild the Improvement damaged or destroyed, or (ii) raze
any damaged building, fill any excavation, and perform any other work necessary
to return that portion of the Improvement to a clean, sightly and safe
condition.
(b) In the event the Connector and Common Areas are damaged or
destroyed, then to the extent not covered by insurance proceeds, each Owner
shall pay its Proportionate Share of the cost of restoring or rebuilding the
Common Areas to a clean, sightly, and safe condition. In the event the Connector
and or Common Areas are damaged, the Owner(s) shall collectively perform the
work necessary to return the area to a clean, sightly and safe condition.
Insurance proceeds attributable to the Connector and Common Areas shall be paid
to the Owner of Unit 13 and shall be used to repair and restore the Connector
and Common Areas; provided, if both buildings have been destroyed, and both
Owners have determined not to restore their buildings, then the Connector shall
not be restored, and the proceeds of the Connector insurance shall be used first
to demolish the Connector and return the site to a clean, sightly and safe
condition, and the balance shall be distributed to the parties in accordance
with their Proportionate Shares.
Section 5.02. Casualty Insurance. In order to assure performance of its
obligations under Section 5.01, upon completion of each Owner's building each
Owner shall cause to be carried fire and extended coverage insurance for the
full replacement cost of its own Improvement. The Owner of Unit 13 shall
maintain fire and extended coverage for the full replacement cost of the
Connector and Common Areas naming both Owners as insured parties, and each Owner
shall pay its Proportionate Share of the cost of such policy. The Owners of
Units 13 and 14 shall each have the obligation to pay their Proportionate Share
of the costs of insuring the Connector and Common Areas commencing upon
execution of this Agreement. Insurance coverage shall be in amounts at least
sufficient to avoid the effect of any co-insurance provisions of such policies.
Any cost of repair or restoration of the Connector and Common Areas not covered
by insurance proceeds shall be paid by each Owner in proportion to its
Proportionate Share.
Section 5.03. Eminent Domain. In the event that the whole or any part of a
Unit is taken by right of eminent domain or any similar authority of law (in
each case a "Taking"), the entire award for the value of the land and
improvements taken shall belong to the Owner of the Unit taken or to such
Owner's mortgagees or tenants, as their interest may appear, subject only to the
Owner's mortgage lender's commercially reasonable limitations on the
availability and use of the award; provided, if the Connector is taken the
condemnation proceeds attributable to the Connector shall be paid to the parties
based on their respective percentage ownership interests in the Connector. The
other Owner shall not have a right to claim any portion of such award by virtue
of any interest created by this Agreement. The Owner of a Unit which is not the
subject to a Taking may, however, file a collateral claim with the condemning
authority over and above the value of the property being taken, to the extent of
any damage suffered by such Owner resulting from the severance of the land or
improvements taken, if such claim shall not operate to reduce the award
allocable to the Unit taken. In the event of a partial Taking, the Owner of the
portion of the Unit taken shall maintain and or restore its Improvement and
Common Areas associated
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
9
therewith to the condition existing prior to the Taking, without contribution
from the other Owner. Any portion of any condemnation award necessary for the
maintenance or restoration shall be held in trust and applied for such purpose.
ARTICLE VI -- REMEDIES
Section 6.01. Awards; Lien Rights Disputes.
(a) If either Owner defaults in the performance of its obligations under
this Agreement (for purposes of this section called the "Defaulting Owner") and
which materially and adversely affects the other Owner or any Occupant of the
other Owner's Unit (an "Affected Party"), then the Affected Party shall, after
expiration of thirty (30) days following written notice given to the Defaulting
Owner (or in the event of an emergency after such notice as is practical under
the circumstances) and failure of the Defaulting Owner to cure the default, have
the right to perform such obligation on behalf of the Defaulting Owner. In the
event of a dispute between the Owners concerning whether or not a default has
occurred, either Owner shall be entitled to resolve the dispute as provided in
Section 6.05. The Defaulting Owner shall promptly, and in any event within
thirty (30) days following submission of a statement of same with reasonable and
appropriate supporting documentation, reimburse the Affected Party the
reasonable cost thereof, together with interest thereon from the date of outlay
at a rate equal to the lesser of (i) two percent (2%) in excess of the prime
lending rate published in The Wall Street Journal for commercial loans made by
money center banks or (ii) the highest rate permitted by applicable law (the
"Interest Rate"). If an Owner disputes the existence or amount of liability or
obligation set forth in such notice from the other Owner, then the parties shall
proceed to arbitration.
(b) Any right to reimbursement shall, together with interest thereon as
aforesaid, be secured by a lien on the Unit and Improvement thereon owned by the
Defaulting Owner, which lien shall be effective upon the recording of a notice
of non-payment in the Office of the Register of Deeds in Oakland County,
Michigan. The lien shall be subordinate to the lien of a first mortgage then of
record. The Affected Party may foreclose its lien in the manner provided under
Michigan Law for the judicial foreclosure of mortgages. The Affected Party may
file its notice of lien at any time following a failure to timely pay a required
reimbursement. .
Section 6.02. Non-Waiver. No delay or omission of any Owner in the
exercise of any right accruing upon any default of any other Owner shall impair
such right or be construed to be a waiver thereof, and every such right may be
exercised at any time during the continuance of such default. A waiver by any
Owner of a breach of, or a default in, any of the terms and conditions of this
Agreement by any other Owner shall not be construed to be a waiver of any
subsequent breach of or default in the same or any other provision of this
Agreement. Except as otherwise specifically provided in this Agreement, (i) no
remedy provided in this Agreement shall be exclusive but each shall be
cumulative with all other remedies provided in this Agreement; and (ii) any
decision rendered and award granted by an arbitrator shall be binding unto the
Owners. In any event, neither Owner shall be liable to the other Owner for any
punitive, speculative or consequential damages.
Section 6.03. Non-Terminable Agreement. No breach of a provision(s) of
this Agreement shall entitle an Owner to rescind or otherwise terminate this
Agreement. This limitation shall not affect, in any manner, rights or remedies
which an Owner may have by reason of the breach of a provision(s) of this
Agreement in accordance with Section 6.05. No breach of a provision(s) of this
Agreement shall defeat or render invalid the lien of any mortgage or deed of
trust made in good faith for value recorded on title.
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
10
Section 6.04. Force Majeure. In the event any Owner or any other party who
shall be delayed or hindered in or prevented from the performance of any act
required to be performed by such party by reason of Acts of God, strikes,
lockouts, unavailability of materials, failure of power, prohibitive
governmental laws or regulations, riots, insurrections, the act or failure to
act of the other party, inclement weather conditions which prevent the
performance of work ("Abnormal Weather Conditions") as certified to by the party
claiming Abnormal Weather Conditions, or other reason beyond such party's
control (collectively, "Force Majeure"), then the time for performance of such
act shall be extended for a period equivalent to the period of such delay. Lack
of adequate funds or financial inability to perform shall NOT be deemed to be a
cause beyond the control of such party.
Section 6.05. Arbitration. Disputes, claims, or grievances arising out of
or relating to the interpretation and application of this Agreement, or any
disputes, claims or grievances arising among or between the Owners (but
excluding any claim of a right to foreclose, or foreclosure of, any lien and any
question affecting the claim of title of any person to any Unit, which may only
be resolved by a court of competent jurisdiction), shall be submitted to
arbitration and the parties thereto shall accept the arbitrator's decision as
final and binding. The prevailing party shall be entitled to recover its costs
and reasonable attorney's fees from the losing party, which costs and fees shall
be included in the arbitration award. The Commercial Arbitration Rules of the
American Arbitration Association, as amended and in effect from time to time
hereafter, shall be applicable to any such arbitration. If an arbitrator, as a
result of arbitration, determines that either party is entitled to recover from
the other, then the Affected Party entitled to a recovery may file or maintain a
lien against the Unit of the other Owner and thereafter foreclose the lien in
the manner provided under Michigan Law for the judicial foreclosure of
mortgages.
ARTICLE VII -- TERM
Section 7.01. Term. This Agreement shall be perpetual in term. The
easements, rights, obligations and liabilities created by this Agreement shall
be deemed to be covenants running with the land and be binding upon the Owners
and their respective successors, assigns and designees.
ARTICLE VIII -- EFFECT OF INSTRUMENT
Section 8.01. Mortgage Subordination. Any mortgage or deed of trust
affecting either Unit shall at all times be subject and subordinate to the terms
of this Agreement, except to the extent provided in Section 6.01(b) above or as
otherwise expressly provided to the contrary in this Agreement, and any party
foreclosing any such mortgage or deed of trust, or acquiring title by deed in
lieu of foreclosure or trustee's sale shall acquire title subject to all of the
terms and provisions of this Agreement. Each party hereto represents and
warrants to the other party that there is no presently existing Mortgage or deed
of trust lien on its Unit, other than mortgage or deed of trust liens that are
expressly subordinate to the lien of this Agreement.
Section 8.02. Binding Effect. Every agreement, covenant, promise,
undertaking, condition, easement, right, and restriction made, granted or
assumed, by any Owner to this Agreement is made by such Owner(s) not only
personally for the benefit of the other Unit hereto, but also as a covenant
running with the land and an equitable servitude on the Unit which is
appurtenant to and for the benefit of the other Unit. By acceptance of the title
of a Unit, the transferee shall automatically be deemed to have assumed all
obligations of this Agreement relating thereto from and after the date of such
transfer to the extent of its interest in its Unit. A
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
11
transferee shall execute any and all instruments and perform any and all
obligations reasonably required to carry out the intention of this Agreement.
Upon the completion of such transfer, the transferor shall be relieved of all
further liability under this Agreement, except for such liability associated
with those matters that remain unsatisfied that may have arisen during its
period of ownership of the Unit conveyed.
Section 8.03. Responsibility. Notwithstanding anything to the contrary
contained herein, each party to this Agreement shall be liable and responsible
for the obligations, covenants, agreements and responsibilities created by this
Agreement and any discrepancy, disagreement or denial of responsibility
therewith shall be subject to an arbitration proceeding whereby the arbitrator's
award is binding pursuant to 6.05 above.
Section 8.04. Release. Upon a sale or other transfer of substantially all
of a Unit, the Owner of such Unit shall cease to be responsible or liable for
obligations that become due after the date of such sale or transfer. If the
management rights and duties of the Unit 13 Owner are not assumed by the Unit 13
Owner's successor, in writing and prior to the closing of the transfer of Xxxx
00, the Unit 14 Owner, or its successor, may permanently undertake such duties
and obligations identified in Section 3.01(b). In all events, each Owner of a
Unit shall be liable for its Proportionate Share of Costs as described herein.
ARTICLE IX -- NOTICES
Section 9.01. Any notice, report or demand required, permitted or desired
to be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes if it is sent by a nationally
recognized overnight courier service, delivered personally or mailed by
registered or certified mail, return receipt requested, to the addresses given
below or to such other address as the respective parties may from time to time
designate by like notice, as follows:
If to Unit 13: Meadowbrook Insurance Group, Inc.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to Unit 14: MB Center II, LLC
000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attention: A. Xxxxxx Xxxxxxx, XX
Section 9.02. Copies of all notices to either Owner shall also be
delivered to any holder of a first mortgage on that Owner's Unit who delivers to
the other Owner a written request to receive copies of such notices.
Any notice sent by certified or registered mail, return receipt requested,
shall be deemed given on the third (3rd) business day following the date such
notice was deposited in the U.S. mail. Any notice delivered personally shall be
deemed given upon its delivery and any notice sent via a nationally recognized
overnight courier service shall be deemed given on the next business day after
such notice was sent.
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
12
ARTICLE X -- MISCELLANEOUS
Section 10.01.
(a) If any provision of this Agreement, or portion thereof, or the
application thereof to any person or circumstances, shall be held invalid,
inoperative or unenforceable, the remainder of this Agreement shall not be
affected thereby. Any invalid provision shall not be deemed to affect the
consideration for this Agreement. Each remaining provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
(b) This Agreement shall be construed in accordance with the laws of the
State of Michigan and the Venue for any legal action arising out of this
Agreement shall be Oakland County, Michigan.
(c) The Article headings in this Agreement are for convenience only,
shall in no way define or limit the scope or content of this Agreement, and
shall not be considered in any construction or interpretation of this Agreement
or any part hereof.
(d) This Agreement shall not be construed in any way as to make the
Owners hereto partners or joint venturers or render either of said parties
liable for the debts or obligations of the other.
(e) This Agreement shall be binding upon and inure to the benefit of the
Owners' successors and assigns.
(f) This Agreement may be amended, modified, or terminated at any time
by a declaration in writing, executed and acknowledged by both Owners who have
executed the Agreement or their successors or assigns; in any event, this
Agreement shall not be unilaterally amended, modified or terminated.
(g) This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same document.
(h) Each signatory to this Agreement shall be jointly and severally
liable for the performance of the duties and obligations contained herein.
(i) If any provision of this Agreement is found to be in conflict with
the Master Deed or any Amendment thereof, then the provision in conflict shall
yield to the terms of the Master Deed. All other provisions of this Agreement
shall continue to be binding upon the Owners.
(j) Certain capitalized terms contained herein are depicted and
identified in the Condominium Plans of the Sixth Amendment.
(Signatures to follow on next page.)
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
MEADOWBROOK:
MEADOWBROOK INSURANCE GROUP, INC.,
a Michigan corporation
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
By: Xxxxxx X. Xxxxx
Its: Chairman
CENTER:
MB CENTER II, LLC, a Michigan limited
liability company
By: Kirco Development LLC, a Michigan
limited liability company
Its: Manager
/s/ A. Xxxxxx Xxxxxxx, XX
----------------------------------
By: A. Xxxxxx Xxxxxxx, XX
Its: President
State of Michigan )
) ss
County of )
-----------------
The foregoing instrument was acknowledged before me this ____ day of May,
2005, by Xxxxxx X. Xxxxx, the Chairman of Meadowbrook Insurance Group, Inc., a
Michigan corporation, on behalf of said corporation.
----------------------------------
, Notary Public
-----------------
County, Michigan
--------------
My commission expires
-------------
Acting in the County of
-----------
State of Michigan )
) ss
County of Oakland )
The foregoing instrument was acknowledged before me this ____ day of May,
2005, by A. Xxxxxx Xxxxxxx, XX, the President of Kirco Development LLC, a
Michigan limited liability company, the Manager of MB Center II, LLC, a Michigan
limited liability company, on behalf of said limited liability company.
----------------------------------
, Notary Public
-----------------
County, Michigan
--------------
My commission expires
-------------
Acting in the County of
-----------
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Xxxxx 00 & 00
00
XXXXXXX "X-0"
XXXXXXXXX
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
15
EXHIBIT "A-2"
DEPICTION OF RECIPROCAL EASEMENTS, COMMON AREAS AND
LIMITS OF OWNERSHIP IN THE CONNECTOR AND UNITS 13 AND 14
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
American Commerce Centre Units 13 & 14
16
