EXHIBIT 10.4
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
KIRCO ACQUISITION LLC,
AS PURCHASER
AND
MEADOWBROOK INSURANCE GROUP, INC.,
AS SELLER
TABLE OF CONTENTS
PAGE NO.
1. AGREEMENT TO SELL AND PURCHASE..................................1
2. CONSIDERATION...................................................1
3. ▇▇▇▇▇▇▇ MONEY...................................................2
4. SELLER'S REPRESENTATIONS AND WARRANTIES.........................2
5. LIMITATIONS ON SELLER'S REPRESENTATIONS AND WARRANTIES..........3
6. TITLE EVIDENCE..................................................4
7. ACTIONS PRIOR TO CLOSING/DUE DILIGENCE..........................4
8. CLOSING.........................................................6
9. PRORATIONS, ADJUSTMENTS AND EXPENSES............................7
10. OPERATION AND MAINTENANCE OF THE PROPERTY.......................8
11. CASUALTY LOSS...................................................8
12. CONDEMNATION....................................................8
13. FAILURE TO CLOSE; DEFAULT.......................................9
14. NOTICES.........................................................10
15. BROKERS.........................................................11
16. ASSIGNMENT......................................................11
17. BINDING EFFECT..................................................11
18. ENTIRE AGREEMENT................................................11
19. GOVERNING LAW...................................................11
20. TIME............................................................11
21. CONSTRUCTION....................................................11
22. SEVERABILITY....................................................12
23. PARAGRAPH HEADINGS..............................................12
24. COUNTERPARTS....................................................12
EXHIBIT A DESCRIPTION OF TOTAL DEVELOPMENT PARCEL......................1
EXHIBIT B DESCRIPTION OF PROPERTY......................................1
EXHIBIT C LAND CONTRACT FORM...........................................1
EXHIBIT D APPROVED SITE PLAN...........................................1
EXHIBIT E SUMMARY OF TERMS OF RECIPROCAL EASEMENT AGREEMENT ...........1
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into as
of this 4th day of December, 2003 (the "Effective Date"), by and between Kirco
Acquisition LLC, a Michigan limited liability company ("Purchaser"), and
Meadowbrook Insurance Group, Inc., a Michigan corporation ("Seller").
WITNESSETH:
WHEREAS, Seller is the owner of the real property, containing
approximately nine (9) acres of land, located in the American Commerce Center in
the City of Southfield, Oakland County, Michigan (the "Total Development
Parcel"), all as legally described in EXHIBIT A attached hereto and made a part
hereof.
WHEREAS, Seller proposes to construct an office building on a portion
of the Total Development Parcel and to sell a portion to Purchaser. The portion
to be sold to Purchaser comprises approximately 4.5 acres including a portion of
land now owned by the City of Southfield which is expected to be conveyed as
part of the City Transactions (defined below), together with all rights,
privileges and appurtenances pertaining thereto, including, but not limited to,
all right, title and interest of Seller in and to all easements and
rights-of-way and all improvements situated thereon and further including, but
not limited to, all rights, privileges and easements of, appurtenant to and for
the benefit thereof are herein referred to as the "Property", a legal
description of which is attached hereto as EXHIBIT B.
WHEREAS, Purchaser desires to acquire the Property, pursuant to the
terms and conditions hereinafter set forth herein for the purpose of
constructing an office building on the Property.
WHEREAS, the parties have agreed to construct their respective office
buildings pursuant to a jointly agreed site plan and harmonious architectural
plans, including a four-story connector building connecting their two proposed
office buildings (the "Connector"). The parties have agreed upon a site plan and
architectural plans and elevations prepared by ▇▇▇▇▇▇▇▇ and Associates, Job No.
("▇▇▇▇▇▇▇▇ Plans"). Seller's building and the Connector are now under
construction pursuant to a Development Agreement dated December 3, 2003, between
Seller and Kirco Development LLC (the "Development Agreement"). At such time as
Purchaser shall determine, Purchaser will construct a building materially in
conformity with the ▇▇▇▇▇▇▇▇ Plans.
NOW, THEREFORE, in consideration of the mutual undertakings hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby expressly acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase. Subject to the terms and conditions
contained herein, Seller hereby agrees to transfer and convey to Purchaser, and
Purchaser agrees to accept from Seller all right, title and interest to the
Property on the terms set forth herein.
2. Consideration. Purchaser shall pay to Seller the sum ("Purchase
Price") of [TO BE DETERMINED DURING THE DILIGENCE PERIOD BASED ON (i) $10.75 PER
SQUARE FOOT OF LAND
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COMPRISING THE PROPERTY, INCLUDING PARKING, DRIVEWAYS, SET BACK AREAS, BUILDING
ENVELOPE AND A SHARE OF THE CONNECTOR FOOTPRINT, PLUS (ii) ONE MILLION TWO
HUNDRED THIRTY-NINE THOUSAND THREE HUNDRED TEN DOLLARS ($1,239,310) AS
PURCHASER'S SHARE OF THE COST OF CONSTRUCTING THE CONNECTOR.] Purchaser's share
of the Connector footprint shall be in proportion to the square leasable square
footage of the two buildings to be constructed on the Total Development Parcel.
(a) At Closing (hereafter defined), Purchaser shall pay
Seller twenty percent (20%) of the Purchaser Price.
(b) The balance of the Purchase Price will be payable
pursuant to the terms of a land contract to be delivered to Seller by
Purchaser at the Closing (the "Land Contract"). The Land Contract will
provide for interest to accrue on the unpaid principal balance at:
(i) The rate of seven percent (7%) per annum.
(ii) The Land Contract will mature in thirty-six
(36) months from the date of its execution.
(iii) Interest only shall be payable during the term
of the Land Contract in monthly installments.
The principal balance of the Land Contract will
be payable in a single lump-sum payment, which
will be due and payable three (3) years after
the date of execution of the Land Contract. The
unpaid principal balance of the Land Contract
may be prepaid at any time, without penalty or
premium. However, the Land Contract will
provide that Purchaser must prepay the unpaid
balance prior to commencing any construction of
improvements. The Land Contract will be in the
form attached hereto as EXHIBIT C.
p 3. ▇▇▇▇▇▇▇ Money. Upon full execution and delivery of this Agreement,
Seller and Purchaser shall open an escrow ("Escrow") with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title
Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ("Escrow Agent")
pursuant to a standard title company escrow agreement (the "Escrow Agreement").
Purchaser shall deposit with the Escrow Agent the sum of One and no/100 Dollars
($1.00) no later than three (3) days following the Effective Date. On or before
the end of the Diligence Period, Purchaser shall deposit with the Escrow Agent
the sum of Fifty Thousand and no/100 Dollars ($50,000.00) ("▇▇▇▇▇▇▇ Money). The
▇▇▇▇▇▇▇ Money shall be held in an interest bearing account with the Escrow
Agent. All interest on the ▇▇▇▇▇▇▇ Money shall accrue to the benefit of
Purchaser, unless the ▇▇▇▇▇▇▇ Money is forfeited to Seller as provided in
PARAGRAPH 13(c) hereof. If the transaction contemplated by this Agreement closes
in accordance with the terms hereof, the ▇▇▇▇▇▇▇ Money and all accrued and
unpaid interest thereon shall be applied against the cash portion of the
Purchase Price. In the event this Agreement is not so terminated, and the
transaction does not close, the provisions of PARAGRAPH 13 hereof shall govern
the disposition of the ▇▇▇▇▇▇▇ Money.
4. Seller's Representations and Warranties. Seller hereby represents
and warrants to Purchaser as follows:
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(a) Seller is the legal fee simple titleholder of the Property subject
to matters of record and matters that would be disclosed by a survey or visual
inspection of the property.
(b) Neither the terms of this Agreement nor anything provided to be
done hereunder, including, but not limited to, the conveyance and transfer of
the Property, will violate any contract, agreement or instrument to which Seller
is a party or which affects the Property.
(c) To Seller's best knowledge, there is no threatened or pending
litigation or proceeding, including, but not limited to, proceedings involving
any building code proceedings, condemnation proceedings or proceedings alleging
the violation of any environmental, health or safety law, rule or regulation,
pending or threatened, by third parties which affects or may affect the
Property.
(d) The execution and delivery of this Agreement by the signatories
hereto on behalf of Seller, and the performance of this Agreement by Seller,
have been duly authorized.
5. Limitations in Seller's Warranties and Representations.
(a) Seller makes no representation or warranty whatsoever with respect
to the environmental condition of the Property, except that Seller (i) has
delivered all environmental reports in Seller's possession which relate to the
Property, (ii) shall deliver copies of any and all notices Seller has received
from any governmental or regulatory authority relating to the Property, and
(iii) has no knowledge of any environmental conditions, which are not disclosed
in those reports.
(b) With the exception of the representations and warranties expressly
contained herein and the conditions to closing also expressly contained herein,
Purchaser agrees to accept the Property "as-is, where-is", without any warranty
of habitability, fitness for a particular purpose or other such warranty. As
used herein, knowledge of Seller shall mean the actual knowledge of ▇▇▇▇▇▇▇
▇▇▇▇▇, of Meadowbrook Insurance Group, Inc., whom the Seller represents, acting
in good faith, is the officer of Seller most likely to have such knowledge, and
all knowledge attributable to property level personnel whom Seller represents,
in good faith, are the people most likely to have such knowledge.
(c) If any event shall occur after the Effective Date, and before the
Closing Date, which is not caused by Seller, or, if after the Effective Date and
before the Closing Date, Seller learns that information in Seller's possession
was not disclosed to Purchaser ("Changed Circumstance"), which in either event
renders untrue any such representation or warranty of Seller hereunder, it shall
not constitute a breach by Seller of such representation or warranty, and
Seller's reaffirmation of such representation or warranty at Closing may be
qualified by such Changed Circumstance. If Seller shall obtain knowledge of any
Changed Circumstance, Seller shall provide notice thereof to Purchaser within a
reasonable period of time. In the event Purchaser receives actual notice of any
material Changed Circumstance, whether from Seller or any other source,
including its
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own investigations, then Purchaser shall have the right to terminate this
Agreement, in which event both parties shall be relieved from any further
obligation under this Agreement, and the Deposit shall be returned to Purchaser.
(d) Any claims made regarding the representations and warranties shall
be made in writing within six (6) months following Closing and shall thereafter
expire and be of no force or effect.
6. Title Evidence.
(a) Seller shall, as soon as possible after executing this Agreement,
order a current commitment (the "Title Commitment") for an owner's title
insurance policy on the Property in the amount of the Purchase Price issued by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title Company ("Title Company"), together with Seller's
existing survey of the Property and copies of all documents giving rise to the
exceptions raised in the Title Commitment. Within thirty (30) days (the "Title
Inspection Period") after actual receipt of the Title Commitment, Purchaser
shall- notify Seller of Purchaser's objections to the state of facts disclosed
by the Title Commitment and survey. Seller shall have five (5) days after
receipt of Purchaser's objection to remedy the title or to obtain title
insurance as Purchaser requires; or if Seller fails to remedy the title within
the specified time, then by notice given in writing within ten (10) days,
Purchaser may (i) elect to waive its objections and proceed toward Closing, or
(ii) to terminate this Agreement and receive the Deposit in full. Any mortgage
or lien shall be discharged as to the Property upon Purchaser's payment in full
of the Land Contract, and Purchaser shall not be required to object to the same.
(b) Seller shall, within five (5) business days of the Effective Date,
deliver to Purchaser a survey (the "Survey") of the Property. At Purchaser's
sole cost and expense, Purchaser may have the Survey updated to a date after the
date of this Agreement.
7. Actions Prior to Closing/Due Diligence/Conditions.
(a) Prior to the signing of this Agreement, Seller has furnished
Purchaser with true copies of all reports and other documents in its possession
to assist Purchaser in its review of the Property. Purchaser shall have until
the forty-fifth (45th) day following the Effective Date (the "Diligence Period")
to perform its due diligence, including, without limitation:
(i) Purchaser's physical inspection of the Property including
its review of any soils reports and environmental reports, and
Purchaser's review of zoning, utility availability, survey and any such
other due diligence it as Purchaser deems necessary to complete its
review of the Property.
(ii) Purchaser's review of the Title Commitment and Survey as
set forth above.
(b) Purchaser shall indemnify, defend and hold harmless Seller from any
condition, liability, damages, costs, losses and expenses of every kind or
nature arising
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from or attributable to the due diligence activities of Purchaser, its officers,
employees, agents, attorneys, accountants, architect, engineer and any other
persons acting on behalf of Purchaser. To the extent that Purchaser or its
agents engage any third party to undertake any investigation of the Property,
including without limitation, any appraisal, environmental audit or assessment,
property condition report or other investigation, Purchaser agrees to use
commercially reasonable efforts to ensure that (i) any written report or other
work product generated by such third parties shall be certified to both
Purchaser and Seller and (ii) Purchaser shall deliver copies of all such reports
or work product to Seller promptly upon receipt.
(c) If Purchaser gives written notice to Seller on or before the
expiration of the Diligence Period that, in its sole discretion, Purchaser
elects to proceed with this Agreement, PARAGRAPH 13(a) and PARAGRAPH 7(d) of
this Agreement shall govern the rights and obligations of both Seller and
Purchaser hereunder. If Purchaser notifies Seller of its election to proceed as
provided above, the ▇▇▇▇▇▇▇ Money shall become nonrefundable, except in the
event of a material default by Seller hereunder or a material failure of a
condition listed below in PARAGRAPH 7(d). Notwithstanding the foregoing
sentences of this PARAGRAPH 7, in the event the Purchaser fails to notify the
Seller of the Purchaser's election to proceed with this Agreement prior to the
expiration of the Diligence Period, the ▇▇▇▇▇▇▇ Money shall be returned to the
Purchaser and PARAGRAPH 13(a) shall govern as though Purchaser terminated this
Agreement prior to the expiration of the Diligence Period. Purchaser shall
notify Seller by the date of the expiration of the Diligence Period of those
Contracts, if any, which Seller shall assign to Purchaser at the applicable
Closing ("Assigned Contracts") and those Contracts which Seller shall terminate
on or before the Closing (the "Terminated Contracts").
(d) The obligations of the parties to close shall be subject to the
following conditions precedent. If these conditions are not satisfied or waived
by both parties within forty-five (45) days after the Effective Date, then
either party may terminate this Agreement and Purchaser's deposit shall be
returned; provided, however, notwithstanding the foregoing, if prior to the
expiration of the Diligence Period, the parties have agreed to the terms of an
amendment to the master deed, a reciprocal easement agreement and a legal
description of the Property, but the City of Southfield has not completed the
City Transactions, the parties will proceed to Closing. Following the Closing,
the parties shall be obligated to cooperate in the completion of the City
Transactions.
x(i) Seller shall complete its proposed transaction with the
City of Southfield pursuant to which (A) land adjacent to the Total
Development Parcel, including the currently existing road to Pebble
Creek Park, will be conveyed to Seller and become part of the Total
Development Parcel, and (B) Seller will grant an easement to the City
of Southfield as a replacement means of access to Pebble Creek Park.
The added land and proposed access easement are shown in the site plan
attached hereto as EXHIBIT D. The above-described transactions are
referred to as the "City Transactions".
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(ii) The Total Development Parcel will be divided by
recordation of an amendment to the master deed such that the Property
will henceforth be taxed as a separate tax parcel and the Property may
be conveyed to Purchaser.
(iii) Seller will obtain an amendment to the master deed
governing the Total Development Parcel if and to the extent necessary
to accomplish the site modifications described above. Any applicable
local parcel division ordinances will be satisfied.
(iv) The parties shall agree to the terms of a reciprocal
easement agreement ("REA") governing the maintenance of certain common
facilities and establishing certain architectural controls. A summary
of the terms is attached hereto as Exhibit E.
(e) Seller has obtained site plan approval for the Total Development
Parcel. The site plan attached hereto as Exhibit D is acceptable to the parties,
but the parties will not unreasonably withhold their consent to changes required
by the City of Southfield or other governing agencies whose approval is required
by law.
8. Closing. The closing shall occur on the date which is thirty (30) days
following the date on which the conditions described in PARAGRAPH 7(d) have been
waived or satisfied (the "Closing Date"), at the Seller's offices in Southfield,
Michigan (the "Closing"). The Closing shall be accomplished through a customary
closing escrow, the cost of which shall be divided equally between Seller and
Purchaser except as described below.
(a) Seller shall, at or prior to Closing, at its sole cost and expense,
deliver or cause to be delivered to Purchaser the following:
(i) An ALTA Owner's Policy of Title Insurance on the amount of
the Purchase Price, insuring Purchaser as land contract vendee without
"standard exceptions" in the full amount of the Purchase Price, subject
only to easements and restrictions of record, including the REA and any
matters not objected to or waived by Purchaser pursuant to PARAGRAPH
7(a)(ii).
(ii) The customary title company affidavit executed by Seller
in favor of the Title Company as needed to obtain title insurance
without standard exceptions. (iii) A completed IRS Section 1445
affidavit executed by Seller in favor of Purchaser.
(iv) Evidence of Seller's entity existence and due authority
to sign and deliver the closing documents.
(b) Purchaser shall, at the Closing, at its sole cost and expense,
deliver or cause to be delivered to Seller the following:
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(i) Evidence of Purchaser's entity existence and due authority
to sign and deliver the closing documents.
(c) Each party shall at the Closing deliver to the other party the
following documents in form and substance reasonably satisfactory to the other
party:
(i) The Land Contract and a memorandum of land contract for
(ii) The Reciprocal Easement Agreement in the form attached
hereto as EXHIBIT E, which shall be recorded prior to recording the
memorandum of land contract.
(iii) A Closing statement setting forth the adjustments and
prorations provided for in this Agreement.
(iv) Transfer and transaction tax declarations.
(v) The Development Agreement drafted and approved by the
parties pursuant to PARAGRAPH 7(d).
(d) Seller shall deliver possession of the Property to Purchaser at
Closing.
9. Payment, Prorations. Adjustments and Expenses.
(a) Purchaser shall pay the down payment on the Purchase Price subject
to customary adjustments, including, without limitation, those specifically set
forth herein.
(b) Prorations shall be determined as follows:
(i) General real estate taxes and special assessments (if any)
payable by Seller shall be prorated on a due date basis as of the
Closing Date, based on the most recently issued real estate tax ▇▇▇▇
for the Property. Any special assessments for public improvements
existing on the date of this Agreement shall be paid in full by Seller.
All other special assessments shall be assumed by Purchaser. If
separate tax bills for the current year for the two parcels are not
available, the real estate taxes and special assessments shall be
allocated between the parcels in proportion to the square footages of
the parcels, including the parties' respective shares of the connector
footprint.
(ii) Unless provided otherwise hereinabove, such other items
which are customarily prorated in a purchase and sale of the type
contemplated hereunder shall be prorated as of the Closing Date.
(c) Seller shall pay the following expenses:
(i) the cost of the title premium for Purchaser's title policy
(but not including the cost of extended coverage or any endorsements);
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(ii) one-half (1/2) of the Title Company's customary closing
charges and fees;
(iii) the state transfer taxes required with respect to the
Land Contract, if any; and
(iv) the recording fees for recording any release of lien on
the Property whose release is required to convey title in the manner
provided herein.
(d) Purchaser shall pay the following expenses:
(i)the cost of extended coverage and any endorsements to the
Title Policy;
(ii) and fees; one-half (1/2) of the Title Company's customary
closing charges
(iii) the cost of any new or updated ALTA Survey of the
Property ordered by Purchaser; and
(iv) the recording fees for recording the deed to the
Purchaser and all fees and charges relating to any mortgage or other
financing by Purchaser.
(e) Purchaser shall receive credit for the Deposit and interest, and
the same shall be paid to Seller.
10. Exchange. Either or both parties shall have the right, at its option,
to structure the purchase of the Property as a part of a like-kind exchange,
pursuant to Section 1031 of the Internal Revenue Code. Each agrees to cooperate
with the other in connection with any such exchange, provided that the same does
not increase the other's costs or delay the closing of the transaction
contemplated under this Agreement.
11. Casualty Loss. The Property is now and at Closing will be unimproved
except to the extent Seller has commenced grading, underground improvements and
the connector improvements.
12. Condemnation. In the event all or any portion of the Property is taken
by the exercise of the power of eminent domain (or Seller receives notice of any
threatened condemnation) prior to Closing, Seller shall give Purchaser written
notice of such taking or threatened taking, as the case may be, and Purchaser
may, within twenty (20) business days after receipt of such notice, elect to
terminate this Agreement by delivery of written notice to that effect to Seller,
in which event PARAGRAPH 13(a) of this Agreement shall govern the rights and
obligations of Seller and Purchaser. If Purchaser does not elect to exercise its
option to terminate this Agreement as aforesaid, this Agreement shall remain in
full force and effect and Purchaser shall be entitled to negotiate for, settle
and receive any award relating to such taking, and Seller shall assign to
Purchaser all its rights relating thereto.
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13. Failure to Close, Default. The following provisions shall govern the
rights of the parties in the event the transaction contemplated hereby fails to
close pursuant to the terms hereof
(a) In the event either Seller or Purchaser has terminated
this Agreement pursuant to a right to do so contained in this Agreement
(including any termination pursuant to PARAGRAPH 7(e) of this
Agreement) and Purchaser is not in default hereunder beyond any
applicable notice and cure period (a "Permitted Termination"), this
Agreement shall be of no further force or effect, neither party hereto
shall have any further obligation or liability to the other (after
return of the ▇▇▇▇▇▇▇ Money to Purchaser, if applicable, and the due
diligence material to Seller). Notwithstanding the foregoing, the
▇▇▇▇▇▇▇ Money shall be non-refundable except in the event of Seller's
default or the failure of an express condition precedent under this
Agreement.
(b) In the event any of the representations and warranties of
Seller contained herein shall be materially untrue and incorrect, or if
Seller fails to perform a material obligation under this Agreement in
accordance with their terms for any reason, except for a Permitted
Termination or by reason of a default on the part of Purchaser, Seller
shall be in default under this Agreement, and Purchaser shall be
entitled to a return of the ▇▇▇▇▇▇▇ Money, together with any and all
interest earned thereon, as Purchaser's sole and exclusive remedy.
(c) In the event Purchaser fails to perform all of its
material obligations under this Agreement in accordance with their
terms for any reason, except for a Permitted Termination or by reason
of a default on the part of Seller, Purchaser shall be in default under
this Agreement, and Seller shall be entitled to the ▇▇▇▇▇▇▇ Money
together with any and all interest earned thereon as its sole remedy as
liquidated damages and not as a penalty. The foregoing limitation on
remedies shall not in any way affect or limit Purchaser's
indemnification obligations set forth in PARAGRAPH 7(b) of this
Agreement.
(d) If Seller has failed to deliver the Land Contract for the
Property to Purchaser at Closing for a reason not attributable to
Purchaser's fault (excluding the failure of any condition), Purchaser
shall be entitled to specific performance unless specific performance
is not available for any reason not attributable to Purchaser's fault,
or, at Purchaser's election, Seller shall pay to Purchaser liquidated
damages in an amount equal to Purchaser's out-of-pocket expenses
evidenced by paid invoices or other reasonable evidence not to exceed
$25,000. In addition, in the event that Seller fails to convey the
Property to Purchaser for a reason not attributable to the Purchaser's
fault, and Purchaser elects to terminate the Agreement for Seller's
non-performance, the ▇▇▇▇▇▇▇ Money and any sums paid by Purchaser shall
be returned to the Purchaser.
(e) Both Seller and Purchaser acknowledge and agree that the
foregoing provisions are reasonable in light of the intent of the
parties and the circumstances surrounding the execution of this
Agreement, and they hereby expressly agree that their respective rights
and remedies shall be limited as hereinabove set forth.
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(f) Notwithstanding anything contained herein to the contrary, neither
party shall be deemed to be in default under this Agreement for any failure to
comply with its obligations hereunder, including any failure to close within the
time provided, and this Agreement shall not expire nor shall the aggrieved party
terminate nor take any action to terminate this Agreement, until the
non-performing party has first been given written notice of such default
hereunder and has failed to cure such default within fifteen (15) days after the
non-performing party's receipt of such notice in the event of a payment default,
or within thirty (30) days after the non-performing party's receipt of such
notice in the event of a failure to timely close or any other non-payment
default; provided, if the default is other than a failure to close when required
or to fulfill a monetary obligation such that it cannot be cured within thirty
(30) days, then the non-performing party shall not be in default so long as the
non-performing party commences efforts to cure within thirty (30) days and
thereafter continues to diligently pursue the cure to completion.
14. Notices. Any notices or consents required or permitted to be
given under the terms of this Agreement shall be deemed delivered when actually
received if personally delivered; upon actual receipt at the addressee's fax
machine (with confirmation of successful transmission) if telecopied; or one (1)
business day after delivery of a copy to a nationally recognized overnight
delivery service which provides a receipt of service (other than an overnight
delivery service offered by the United States Postal Service), addressed to the
respective parties as follows:
If to Seller:
Meadowbrook Insurance Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Kirco Acquisition, LLC
Columbia Center - Suite 200
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
10
with a copy to:
Butzel Long
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇ Green
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other party or address as shall be specified by like notice.
15. Brokers. Seller hereby represents and warrants to Purchaser that,
other than GVA Strategis, as Seller's broker, it has not dealt with any broker,
finder or any other similar person in connection with the sale of the Property.
Purchaser hereby represents and warrants to Seller that it has not dealt with
any broker, finder or other similar person in connection with the purchase of
the Property. Seller and Purchaser shall each indemnify the other party from any
claims for commissions or fees which may arise from this transaction as a result
of any breach of the foregoing representations and warranties to include
reimbursement of all costs and fees including legal fees incurred to defend such
claims. Seller shall pay all fees due GVA Strategis.
16. Assignment. Purchaser may not assign this Agreement except to an
entity controlled and substantially owned by Kirco Acquisition or its
principals.
17. Binding Effect. This Agreement and all of the provisions
contained herein shall survive the Closing and be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
18. Entire Agreement. This Agreement, including the attached
exhibits, embodies the complete agreement of the parties hereto with respect to
the subject matter hereof, and cannot be altered, amended or modified except by
their subsequent written agreement.
19. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan.
20. Time. Time is of the essence of this Agreement and each and every
provision hereof. If the performance of any obligation required hereunder or the
last day of any time period determined in accordance with the terms and
provisions of this Agreement is to occur on a Saturday, Sunday or legal holiday
under the laws of the State of Michigan, then the day on which the performance
of any such obligation is to occur or the last day of any such time period, as
the case may be, shall be extended to the next succeeding business day.
21. Construction. This Agreement shall not be construed more strictly
against one party hereto than against the other party merely by virtue of the
fact that it may have been prepared primarily by counsel for one of the parties.
It is understood and recognized that both parties have contributed substantially
and materially to the preparation of this Agreement.
11
22. Severability. In the event any of the covenants,
agreements, terms or provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity of the remaining
covenants, agreements, terms and provisions contained herein shall not in any
way be affected, prejudiced or disturbed thereby.
23. Paragraph Headings. The paragraph headings contained herein
are for convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions contained herein.
24. Counterparts. This Agreement may be executed in any number
of counterparts (and by facsimile), any or all of which may contain the
signature of only one of the parties, and all of which shall be construed
together as a single instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SELLER:
MEADOWBROOK INSURANCE GROUP, INC.,
a Michigan corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Its: Chairman
-----------------------------
PURCHASER:
KIRCO ACQUISITION LLC, a Michigan limited
liability company
By: /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
---------------------------------
Name: A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
----------------------------
Its: President
----------------------------
12
EXHIBIT A
DESCRIPTION OF TOTAL DEVELOPMENT PARCEL
Unit 3, American Commerce Centre, according to the recorded Master Deed recorded
in Liber 18714, Pages 477 through 520, inclusive, Oakland County Records, and
designated as Oakland County Condominium Subdivision Plan No. 1121, together
with rights in general common elements and limited common elements, as set forth
in the above Master Deed, as amended, and as described in Act 59 of the Public
Acts of 1978, as amended.
EXHIBIT B
DESCRIPTION OF PROPERTY
To be determined during the Diligence Period.
EXHIBIT C
FORM OF LAND CONTRACT
Land Contract
▇▇-▇▇▇-▇▇▇ (10/21/03) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title Company, Inc.
THIS CONTRACT, made this_______day of ________ , 2004, between Meadowbrook
Insurance Group, Inc., a Michigan corporation, hereinafter referred to as
"SELLER", whose address is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, and Kirco Acquisition LLC, a Michigan limited liability company,
hereinafter referred to as "PURCHASER", whose address is ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
WITNESSETH:
1. SELLER AGREES AS FOLLOWS:
(a) To sell and convey to Purchaser land in the City of Southfield,
Oakland County, Michigan, the Property ("Property") described as:
See Attached Exhibit "A"
Tax Parcel No.: Common Address:
Tax Parcel ID# ______________ Vacant Property
together with all tenements, hereditaments, improvements and appurtenances now
on the Property, and subject to all applicable building and use restrictions,
easements, and other matters of record, if any, affecting the Property as of the
date hereof, but free of liens and mortgages other than liens created by
Purchaser.
(b) That the consideration for the sale of the above described Property
to Purchaser is _________________Dollars ($ ________________), [TO BE INSERTED.]
of which the sum of [INSERT 20% OF PURCHASE PRICE.] ($ ) Dollars, has
heretofore been paid to Seller, the receipt of which is hereby acknowledged, and
the balance of ___________________________ ($ _______________) Dollars, is to be
paid to Seller, with interest on any part thereof at any time unpaid at the rate
of seven percent (7%) per annum, simple interest. This balance of purchase money
and interest shall be paid in a balloon payment prior to, but in no event later
than thirty-six (36) months after the effective date of this Land Contract.
(c) Upon receiving payment in full of all sums owing herein, less the
amount then due on any existing mortgage or mortgages, and the surrender of the
duplicate of this contract, to execute and deliver to Purchaser or Purchaser's
assigns, a good and sufficient Warranty Deed, subject to aforesaid restrictions,
easements, and matters of record as of the date hereof, and free from all other
encumbrances, except such as may be herein set forth, and except such
encumbrances as shall have accrued or attached since the date hereof through the
acts or omissions of persons other than Seller or its assigns.
(d) To deliver to Purchaser as evidence of title, a Policy of Title
Insurance insuring Purchaser, the effective date of the policy to be the date of
this contract, and issued by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TITLE COMPANY in the amount of the
purchase price without standard exceptions.
2. PURCHASER AGREES AS FOLLOWS:
(a) To purchase said land and pay Seller the sum aforesaid, with the
Interest thereon as above provided.
(b) To use, maintain and occupy said Property in accordance with any
and all restrictions thereon.
(c) To keep the Property in accordance with all police, sanitary and
other regulations imposed by any governmental authority.
(d) To pay all taxes and assessments hereafter levied on said Property
before any penalty for non-payment attaches thereto. Seller will provide to
Purchaser a notice of taxes due, in a timely manner after the taxing authority
has issued the ▇▇▇▇ to Seller. Seller shall reasonably calculate the taxes due
from Purchaser based on the square footage of the Property and the cost of any
improvements if separate tax bills are not available. During the term of the
Land Contract, Purchaser shall procure and maintain public liability Insurance
with commercially reasonable coverage amounts. Said Insurance policy shall name
Seller as an additional Insured and shall have policy limits of not less than
Three Million Dollars ($3,000,000) per occurrence. Proof of such Insurance
shall be delivered to Seller annually and upon request. The Insurance
certificate shall state that it shall not be terminated without at least thirty
(30) days' prior notice to Seller.
(e) That it has examined a Title Insurance Commitment date effective
_______________________, covering the above described Property, and is
satisfied with the marketability of the title shown thereby.
Page 1 of 5
(f) To keep and maintain the Property in as good condition as it is at
the date hereof and not to commit waste, remove or demolish any improvements
thereon, or otherwise diminish the value of Seller's security, without the
written consent of Seller. Construction of improvements to the Property will not
constitute waste.
3. SELLER AND PURCHASER MUTUALLY AGREE AS FOLLOWS:
(a) That Seller may, at any time during the continuance of this contract
encumber said land by mortgage or mortgages, provided, at no time shall the sum
secured by the mortgage exceed eighty percent (80%) of the unpaid balance of
this land contract.
(b) That if Seller's interest in the land is now or hereafter encumbered
by mortgage, Seller shall meet the payments of principal and interest thereon as
they mature and produce evidence thereof to Purchaser on demand, and in default
of Seller, said Purchaser may pay the same. Such payments by Purchaser shall be
credited on the sums first maturing hereon, with interest at the rate provided
in paragraph 1(b) on payments so made. If proceedings are commenced to recover
possession or to enforce the payment of such contract or mortgage because of
Seller's default, Purchaser may, at any time thereafter while such proceedings
are pending, encumber said land by mortgage, securing such sum as can be
obtained, upon such terms as may be required, and with the proceeds, pay and
discharge such mortgage, or purchase money line. Any mortgage so given shall be
a first lien upon the land superior to the rights of Seller therein and
thereafter Purchaser shall pay the principal and interest on such mortgage so
given as they mature, which payments shall be credited on the sums matured or
first maturing hereon. Seller shall be responsible for payment of any prepayment
premium due under Seller's mortgage or the note it secures.
(c) That if default is made by Purchaser in the payment of any taxes,
assessments or insurance premiums, or in the delivery of any policy as
hereinbefore provided, and if Purchaser fails to cure the same within fifteen
(15) days after Seller serves notice reasonably describing Purchaser's default,
Seller may pay such taxes or premiums or procure such insurance and pay the
premium or premiums thereon, and any sum or sums so paid shall be a further lien
on the land and promises, payable by Purchaser to Seller forthwith with interest
at the rate as set forth in paragraph I(b) hereof.
(d) No assignment or conveyance by Purchaser shall create any liability
whatsoever against Seller until a duplicate thereof, duly witnessed and
acknowledged, together with the residence address of such assignee, shall be
delivered to Seller. Purchaser's liability hereunder shall not be released or
affected in any way by delivery of such assignment, or by Seller's endorsement
of receipt and/or acceptance thereon.
(e) Purchaser shall have the right to possession of the Property. During
the term of the Land Contract, Purchaser and its agents shall have possession of
the property and shall be permitted to conduct construction activities as
necessary for Purchaser's development of the property in conformity with all
recorded restrictions, including, but not limited to, those restrictions
reflected in the Master Deed recorded in Liber 18714, Pages 477-520, inclusive,
provided, however, Purchaser assumes all liability for Purchaser's acts and
omissions and the acts and omissions of any of its agents who enter the Property
and shall indemnify, defend and hold Seller harmless from any loss, cost, damage
or expense incurred by Seller as a result of such acts. Purchaser shall maintain
appropriate builders' risk insurance and ▇▇▇▇▇▇▇'▇ compensation insurance and
shall exhibit such to Seller upon request. In the event Purchaser defaults under
the Land Contract and the property is forfeited back to Seller, Purchaser agrees
that title to all improvements shall be vested in Seller.
(f) If Purchaser shall fail to perform this contract or any part
thereof, Seller immediately after such default shall have the right to declare
the same forfeited and void by written notice in the form described below, and
retain whatever may have been paid hereon, and all improvements that may have
been made upon the Property, together with additions and accretions thereto, and
consider and treat Purchaser as its tenant holding over without permission and
may take immediate possession of the Property, and Purchaser and each and every
other occupant remove and put out. Every notice of forfeiture relied upon by
Seller to terminate rights hereunder shall specify all unpaid monies and other
breaches of this contract and shall declare forfeiture of this contract to be
effective fifteen (15) days after service, unless such money is paid and any
other breaches of this contract are cured within that time. The parties have
signed and recorded a memorandum of this Agreement, and Purchaser shall be
deemed to be in actual and constructive possession of the Property for all
purposes including the Michigan Summary Proceedings Act.
(g) If default is made by Purchaser and such default continues for a
period of fifteen (15) days or more after Seller notifies Purchaser in writing
of the nature of the default and states Seller's intention to foreclose, and
Seller desires to foreclose this contract in equity, then Seller shall have, at
its option, the right to declare the entire unpaid balance hereunder to be due
and payable forthwith, notwithstanding anything herein contained to the
contrary.
(h) Time shall be deemed to be of the essence of this contract.
(i) The individual parties hereto represent themselves to be of full
age, and the corporate parties hereto represent themselves to be valid existing
corporations with their charters in full force and effect.
(j) Any declarations, notices or papers necessary or proper to
terminate, accelerate or enforce this contract shall be presumed conclusively to
have been served upon Purchaser if such instrument is enclosed in an envelope
with first class postage fully prepaid, if said envelope is addressed to
Purchaser at the address set forth in the heading of this contract or at the
latest other address which may have been specified by Purchaser and receipted
for in writing by Seller, and if said envelope is deposited in a United States
Post Office Box.
(k) From and after the thirty-sixth (36th) month due date maturity of
this Land Contract, the principal and interest accrued as of the date of such
maturity shall bear interest at eleven percent (11%) simple interest per annum.
Page 2 of 5
(1) If any action is brought by either party to enforce its rights
hereunder, the losing party shall pay the prevailing party's attorney fees and
court costs.
(m) Purchaser and Seller's interest in this Land Contract may be
recorded in the form of a Memorandum of Land Contract.
(n) No breach of any express or implied warranty shall entitle Purchaser
to any delay or set off with regard to payments due under the Land Contract
unless and until a judgment based upon such breach has been rendered by a court
of competent jurisdiction and has become unappealable.
(o) Purchaser is acquiring the Property "As-Is" with all faults and
defects, and Purchaser acknowledges and agrees that Seller has not made, does
not make and specifically disclaims any representations, warranties, promises,
covenants, agreements or guarantees of any kind or character whatsoever whether
express or implied, oral or written, past, present or future, as to, concerning
or with respect to (A) the nature, quality or condition of the Property,
including, without limitation, the water, soil and geology, or the presence or
absence of any pollutant, hazardous waste, gas or substance or solid waste on or
about the Property, (B) the suitability of the Property for any and all
activities and uses which Purchaser may intend to conduct thereon, (C) the
compliance of or by the Property or its operation with any laws, rules,
ordinances or regulations of any governmental authority or body having
jurisdiction, including, without limitation, all applicable zoning laws, (D) the
habitability, merchantability or fitness for a particular purpose of the
Property, or (E) any other matter related to or concerning the Property, except
as expressly set forth in this Agreement; and Purchaser shall not seek recourse
against Seller on account of any loss, cost or expense suffered or incurred by
Purchaser with regard to any of the matters described in Clauses (A) through (E)
above. Purchaser acknowledges that Purchaser, having been given the opportunity
to inspect the Property, is relying solely on its own investigation of the
Property and not on any information provided or to be provided by or on behalf
of Seller. Purchaser further acknowledges that no independent investigation or
verification has been or will be made by Seller with respect to any information
supplied by or on behalf of Seller concerning the Property, and Seller makes no
representation as to the accuracy or completeness of such information, it being
intended by the parties that Purchaser shall verify the accuracy and
completeness of such information itself. Purchaser acknowledges that the
disclaimers, agreements and other statements set forth in this paragraph are an
integral portion of this Agreement and that Seller would not agree to sell the
Property to Purchaser for the purchase price without the disclaimers, agreements
and other statements set forth in this paragraph.
(p) If required by any governmental authorities as a condition of
Purchaser's development of the Property as contemplated in the reciprocal
easement agreement signed simultaneously with this land contract or as shown in
the site plan approved by the parties prior to the date hereof, the parties will
join in the granting of easements to such governmental authorities for access
and public utilities.
(q) Any notices or consents required or permitted to be given under the
terms of this Agreement shall be deemed delivered when actually received if
personally delivered; upon actual receipt at the addressee's fax machine. (with
confirmation of successful transmission) if telecopied; or one (1) business day
after delivery of a copy to a nationally recognized overnight delivery service
which provides a receipt of service (other than an overnight delivery service
offered by the United States Postal Service), addressed to the respective
parties as follows:
If to Seller:
Meadowbrook Insurance Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Kirco Acquisition, LLC
Columbia Center - Suite 200
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Butzel Long
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇ Green
Fax (▇▇▇) ▇▇▇-▇▇▇▇
or to such other party or address as shall be specified by like notice.
Page 3 of 5
Nouns and pronouns will be deemed to refer to the masculine, feminine,
neuter, singular and plural, as the identity of the person or persons, firm or
corporation may in the context require. The covenants herein shall bind the
heirs, devisees, legatees, assigns, and successors of the respective parties.
IN WITNESS WHEREOF, the parties hereto have executed this contract in
duplicate the day and year first above written.
SELLER:
Meadowbrook Insurance Group, Inc., a Michigan
corporation
By:
---------------------------------
Its:
---------------------------------
PURCHASER:
Kirco Acquisition LLC, a Michigan limited liability
company
By:
---------------------------------
Its:
---------------------------------
State of Michigan )
) ss
County of __________________)
The foregoing instrument was acknowledged before me this _______ day of
_______ , 2004, by ______________, ______________ of Meadowbrook Insurance
Group, Inc., a Michigan corporation, on behalf of said corporation.
___________________________________________
____________________________ Notary Public
_________________________ County, Michigan
My commission expires______________________
State of Michigan )
) ss
County of __________________)
The foregoing instrument was acknowledged before me this _______ day of
_______ , 2004, by ______________, ______________ of Kirco Acquisition LLC, a
Michigan limited liability company, on behalf of said company.
___________________________________________
____________________________ Notary Public
_________________________ County, Michigan
My commission expires______________________
DRAFTED BY:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Page 4 of 5
EXHIBIT "A"
[LEGAL DESCRIPTION]
Page 5 of 5
EXHIBIT D
APPROVED SITE PLAN
To Be Determined
EXHIBIT E
SUMMARY OF TERMS
OF
RECIPROCAL EASEMENT AGREEMENT
The reciprocal easement agreement ("REA") will be agreed to prior to the
expiration of the Diligence Period defined in PARAGRAPH 7 of the Agreement. The
REA will require Purchaser to construct improvements on the Property only in
accordance with the Site Plan and Elevations prepared by ▇▇▇▇▇▇▇▇ and Associates
and previously approved by the parties as Job No. .
The REA will also provide that (i) each party will maintain in a good state of
repairs all the parking areas and driveways located on such party's land, and
(ii) the parties will share the cost of maintaining common areas in the
Connector between their two buildings and the shared driveway and drop off area
in front of the Connector. The shared costs will be allocated in proportion to
the respective square footages of each party's condominium unit building,
excluding common elements.