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LEASE AGREEMENT Exhibit 10.21
THIS LEASE made as of this 27th day of June, 1996,
by and between SIRO, L.L.C., a Michigan Limited Liability
Company, whose address is c/o W. Sidney Smith, 108 S. University,
Suite 6, Mt. Pleasant, MI 48858, hereinafter referred to as
"Landlord," and VALASSIS COMMUNICATIONS, INC., a Delaware
Corporation, whose address is Westwood Office Park, 36111
Schoolcraft, Livonia, MI 48150, hereinafter referred to as
"Tenant."
WITNESSETH:
1. DESCRIPTION AND USE OF PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, that certain real property located in the City of
Livonia , County of Wayne, State of Michigan, commonly known as
19975 Victor Parkway, Livonia, MI 48152, and more particularly
described on Exhibit A attached hereto and made a part hereof,
together with all appurtenances, improvements, easements and
rights-of-way thereunto pertaining ("Premises"). Tenant shall
use and occupy the Premises as a corporate office building only
and for no other uses. The building to be constructed on the
premises is agreed to be One Hundred Thousand Five Hundred
Ninety-Seven (100,597) square feet ("Building").
2. CONSTRUCTION
A. LANDLORD'S WORK. Landlord shall perform the work
and make the installations in the Premises substantially as
set forth in the Plans and Specifications prepared by Harley
Ellington Design for Perini Building Company (Perini), which
Tenant acknowledges it has reviewed and approved (such work
and installations being hereinafter referred to as
("Landlord's Work"). Tenant agrees to pay all design and
construction costs incurred prior to Landlord's closing a
certain bond issue in the amount of approximately Twenty
Million ($20,000,000.00) Dollars (Bond Issue) to finance
the construction of the building and improvements. Landlord
shall reimburse Tenant for the amounts advanced in a lump
sum from the Bond Issue. Landlord agrees to pay all design
and construction costs incurred after the closing of the
Bond Issue to Perini. In no event shall Landlord's
reimbursement to Tenant plus payment to Perini or others for
design and building costs (Maximum Costs) exceed, the sum of
Ten Million Five Hundred Thirty-Five Thousand Two Hundred
Eighty-Two & 00\100 ($10,535,282.00) Dollars ("Maximum Cost ").
The Maximum Cost includes an allowance on the Valassis
Communications Headquarters Design Budget Update dated May
6, 1996 (Budget) of One Million Nine Hundred Thirty-Two
Thousand Six Hundred Fifty-Six & 00/100 ($1,932,656.00)
Dollars for interior work performed by Tenant, in accordance
with Paragraph 2.B. hereof. Landlord agrees to increase
this allowance to Two Million Eleven Thousand Nine Hundred-
Forty & 00/100 ($2,011,940.00) Dollars. This allowance
increase shall not increase the Maximum Cost. Tenant shall
cause the scope of interior work set forth in the Budget to
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be performed. See Exhibit B. If Tenant is able to perform
the interior work described in the Budget for less than
$2,011,940.00, it shall be entitled to the savings. If the
interior work costs more, Tenant shall pay the additional
cost. Tenant shall be solely and exclusively responsible
for and pay all design and construction costs that exceed
the Maximum Cost and shall pay for same forthwith upon
demand. In the event that the actual cost of the Landlord s
Work is less than the Maximum Cost, Landlord shall be
entitled to retain the difference. Landlord's obligation to
perform Landlord's Work shall not require Landlord to incur
overtime costs and expenses and shall be subject to
unavoidable delays due to acts of God, governmental
restrictions, strikes, labor disturbances, shortages of
material and supplies, and for any other cause or event
beyond Landlord's reasonable control. Landlord shall, when
construction progress so permits, notify Tenant in advance
of the approximate date on which the Premises will be
substantially completed and ready for Tenant's occupancy, as
evidenced by a temporary occupancy permit, and will notify
Tenant when the Premises is, in fact, so completed and
ready, which latter notice shall constitute delivery of pos-
session of the Premises to Tenant. If any dispute shall
arise as to whether the Premises are substantially completed
and ready for Tenant's occupancy, a certificate furnished by
Landlord's architect or designer certifying the date of
substantial completion shall be conclusive and binding of
that fact and date upon Landlord and Tenant.
B. TENANT'S WORK. Landlord agrees that prior to the
commencement of Tenant s right to possession, Tenant may, at
Tenant's sole cost and expense, provide additional work to
or on the Premises, provided that Tenant has furnished to
Landlord design drawings and/or working drawings and
specifications with respect to the work Tenant wishes to
have performed and Landlord has approved of the same in
writing. All such Tenant's work shall be done at such times
and in such manner as Landlord may designate, and only by
such contractors or mechanics as are approved by Landlord.
No deviations from the final set of plans and
specifications, once approved by Landlord, shall be made by
Tenant without Landlord's prior written consent. Approval
of the plans and specifications by Landlord shall not
constitute the assumption of and responsibility by Landlord
for their accuracy or sufficiency, and Tenant shall be
solely responsible for such items. If such designs and/or
working drawings and specifications are not furnished by
Tenant to the Landlord for approval in time to permit
Landlord's approval, or improvements are commenced or
constructed on the Premises by Tenant without Landlord's
approval, then the Landlord may, at its option, declare the
Tenant in default of this provision, and in addition to any
and all remedies provided in this Lease to the Landlord,
cancel and terminate the Tenant's interest in and to this
Lease by notice in writing to Tenant and forthwith re-enter
and re-take possession of the Premises, it being understood
that time is of the essence.
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C. Upon completion of construction, all the improvements on the
Premises shall be the property of Landlord, and Tenant, except as to
its interest under this Lease, shall have no interest in or to any of
the improvements.
3. RENT
Tenant shall pay Landlord rent of One Million, Six Hundred
Fifty-Nine Thousand Eight Hundred Fifty-One & 00/100
($1,659,851.00) Dollars per year for each year. The rent shall be
payable in semi-annual installments of Eight Hundred Twenty-Nine
Thousand, Nine Hundred Twenty-Five & 00/100 ($829,925.00)
Dollars. The first payment shall be due on the commencement date of
Tenant s right to possession as set forth in Article 4 hereof. Future
payments shall be due in advance of the first day of every six (6)
months thereafter. If the commencement date of this Lease shall fall
on a day other than the first day of a calendar month, then an
additional rental of an amount calculated by prorating the semi-
annual payment set forth above shall be paid by Tenant to Landlord
for the month in which said commencement date shall occur. Tenant
agrees to make all rental payments to Landlord at 108 S. University,
Suite 6, Mt. Pleasant, MI 48858. The rental is calculated at the rate of
sixteen dollars and fifty cents ($16.50) per square foot of the Building.
4. TERM
A. TERM OF RIGHT OF POSSESSION. Provided that the
contingencies herein are satisfied, the commencement of Tenant
s right to possess and use the Premises shall be the first to occur
of the following events: (i) the date Tenant commences
operation of its business on the Premises; (ii) the date the
improvements are substantially complete, as evidenced by a
temporary occupancy permit; or (iii) May 1, 1997. The term of
Tenant s right to possession shall be sixteen (16) years. If the
commencement date is the first day of a calendar month, the
sixteen (16) year term shall begin to run from that date. If the
commencement date is other than the first day of a month, the
sixteen (16) year term shall commence on the first day of the
following month. The term of Tenant s right to possession may
be extended in accordance with Article 5 hereof.
B. TERM OF OBLIGATIONS. Notwithstanding the term of
Tenant's right to possession, all of the provisions of this Lease
Agreement are binding on the parties from the date this
Agreement is executed. As such, Tenant acknowledges that
Tenant is responsible for payments and other obligations, set
forth herein, even though Tenant does not yet have physical
possession of the Premises.
C. Landlord agrees that Tenant shall have possession of the Premises with a
temporary certificate of occupancy issued by the City of Livonia on or before
April 15, 1997. If a temporary certificate of occupancy is not issued on or
before April 15, 1997, Landlord shall pay to Tenant forthwith, the Tenant's
then current rent and Hold-over penalty plus the difference between Tenant's
then current monthly rent and the monthly rent required under this Lease. For
each month or part thereof that a temporary certificate of occupancy is not
issued, three months or a proration thereof, shall be added to the term of this
Lease. The above shall not apply to any delays caused by Tenant's change
orders or natural disasters.
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5. OPTION TO RENEW
A. Provided that this Lease shall be in good standing and
in full force and effect and shall not theretofore have been
terminated and that Tenant shall not be in
default under any of the terms or conditions hereof, Tenant shall
have the option to extend the terms of this Lease, upon the
same terms and conditions, except as to rental, extension or
renewal, as are herein set forth, for an additional term of five (5)
years to commence upon the expiration of the original term
hereof. Such option shall be deemed exercised by Tenant unless
Tenant delivers to Landlord notice in writing of Tenant's election
not to renew between two hundred-ten (210) and one hundred-
eighty (180) days before the end of the original term hereof. In
the event the Tenant shall remain in possession of the Premises
beyond the term of Tenant s right to possession, Tenant shall be
deemed a holdover and subject to Article 39 hereof.
B. Provided the above option is exercised, Tenant shall
have one (1) additional option to extend the term of the Lease
for one (1) additional consecutive term of five (5) years under the
same terms and conditions, by giving Landlord notice at least
one hundred-eighty (180) days prior to the expiration of the then
current term. Rental shall be at an amount equal to the greater
of the then market rate or the rental rate for the preceding five
(5) years.
C. Rental for each five (5) year option period shall be set
at the beginning of each option, at an amount equal to the greater
of the then market rate or $16.50 per square foot per annum.
6. MAINTENANCE, REPAIRS AND ALTERATIONS
A. Tenant covenants and agrees to be responsible for all
maintenance repair and upkeep of the Premises during the term
of Tenant s right to possession. The Premises includes, but is
not limited to, for this purpose, all parking areas, the buildings,
improvements, foundations, exterior and interior walls, windows,
doors, floors, ceilings, downspouts, gutters, roof, skylights,
plumbing and sewerage facilities, air-condition system, heating
system, electrical facilities and equipment, glazing, lighting
fixtures and all other fixtures, equipment and appliances of
every kind and nature. Tenant agrees that Landlord shall not be
called upon or obligated to make any repairs, replacements,
rebuildings, restorations, improvements, alterations, remodeling
or additions whatsoever in or about the Premises.
B. Tenant shall be responsible for all janitorial service on
the Premises during the term hereof.
C. Tenant shall not, without the prior written consent of
Landlord, which shall not be unreasonably withheld, make
alterations, improvements or additions to the Premises and to
the building and improvements thereon. Consent is not required
if it involves less than Eight Thousand (8,000) square feet,
provided it does not diminish the value of the Premises. If
Landlord determines that same injures the Premises or decreases
the value thereof, it will be deemed to be reasonable cause for
withholding consent. Tenant shall pay all costs and expense in
connection with the same and shall hold Landlord harmless
therefrom.
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D. In a situation involving a need to repair, replace, or
restore any portion of the Premises, and which is not covered by
the provisions of "Eminent Domain" or "Damage and
Destruction," Tenant may, claim the benefit of any property
damage insurance which may be payable to Landlord by reason of
the loss or casualty giving rise to such need. However, the
benefits of such property damage insurance may be claimed only
for the purpose of and to the extent necessary to replace, repair
or restore the damaged or condemned portion of the Premises.
7. EFFECT OF BANKRUPTCY OR OTHER PROCEEDINGS
If at any time any bankruptcy or any reorganization proceeding
is instituted by or against Tenant either in the State or Federal
Courts, or if a receiver is appointed under Chapters X or XI of the
Bankruptcy Act, for its business or property on the Premises, Landlord
shall have the option, to be exercised by written notice given to
Tenant, to declare this Lease terminated at any time after the
expiration of twenty (20) days following the commencement of such
proceeding unless the proceeding is dismissed and unless all
payments of rent and other payments required by this Lease to be
made by Tenant to Landlord are paid promptly during said period of
twenty (20) days. Landlord shall under no circumstances be required
to permit a receiver to retain possession of said premises, and
Landlord need not lease said premises to such receivers, but Landlord
shall be entitled to immediate possession of said premises. Any
repossession or termination hereunder shall not operate in any way to
prejudice or affect the right of Landlord for recovery of rent or other
charges theretofore accrued, thereafter accruing or to any other
damages, nor shall any such termination or repossession ever be
construed as a waiver of or an election not to claim future damages on
account of such breach, but all such damages, including all future
rentals, shall be fully recoverable by Landlord.
8. QUIET POSSESSION
The Tenant, upon paying the rent herein provided and
performing all and singular the covenants and conditions of this Lease
on its part to be performed, shall and may peaceably and quietly have,
hold and enjoy the Premises during the term hereof, and Landlord
warrants that Landlord has full right and sufficient title to lease the
Premises for the term herein provided, and agrees to indemnify
Tenant for and against any and all loss and damage that may result to
Tenant on account of any failure of, or defect in, Landlord's title or
right to make and execute this Lease
9. ATTORNEY'S FEES
Should either party hereto institute any action or proceeding in
court to enforce any provision hereof or for damages by reason of any
alleged breach of any provision of this Lease or for a declaration of
such party's rights or obligations hereunder, or for any other judicial
remedy, the prevailing party shall be entitled to receive from the
losing party such amount as the court may adjudge to be reasonable
attorney's fees for the services rendered to the party finally prevailing
in such action or proceeding.
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10. CONSTRUCTION LIENS
Tenant shall keep the Premises free of construction liens and
other liens of like nature other than liens created or claimed by
reason of any work done by or at the instance of Landlord. Tenant
agrees to protect and indemnify Landlord against all such liens, or
claims which may ripen into such liens, and against all attorney's fees
and other costs and expenses arising from any such claim or lien. If
Tenant fails to fully discharge any such lien or claim, the Landlord, at
its option, may pay the same or any part thereof, and shall be the sole
judge of the legality of such lien or claim. Tenant shall repay Landlord
all amounts so paid by Landlord, together with interest thereon at the
maximum rate allowable by law from the time of payment by Landlord
until repayment by Tenant.
11. TENANT TO COMPLY WITH LAW
Tenant shall, from the date of this Lease, and at its own expense,
insure that the Premises conforms to and complies with all laws,
ordinances, and regulations now in force or that are enacted hereafter
affecting the use or occupancy of all or any part of the Premises.
Tenant indemnifies Landlord against and agrees to save Landlord
harmless from all expenses imposed or incurred for or because of any
violation by Tenant or anyone claiming under Tenant of any law,
ordinance, or regulation occasioned by the neglect or omission, or
willful act of Tenant or any person on the Premises by permission or
holding under Tenant unless such violation results solely from an act
or omission on the part of Landlord and/or the agents, servants or
employees of Landlord.
12. TITLE
Tenant acknowledges that Tenant has had the opportunity to
review the commitment for
the owner s policy of title insurance provided to Landlord from Phillip
R. Seaver Title Company, Inc., dated June 25, 1996. Tenant reviewed
all of the matters of record reflected in such commitment and agrees
to insure that the Premises shall at all times comply with those
matters of record affecting the Premises from the date of this
Agreement until the expiration of this Agreement. Tenant shall
indemnify and hold Landlord harmless from all expenses and costs
incurred by Landlord as a result of any of the matters of record
affecting the Premises.
13. SURVEY
Tenant acknowledges that Tenant had a survey of the Premises
prepared by Orchard, Hilz and McClement, Inc. Tenant has expressly
approved such survey and hereby accepts the Premises in accordance
with and subject to all matters set forth on the survey. Tenant
understands that Tenant shall not be released from any of its
obligations under this Agreement due to error(s) on the survey, or any
matters shown on the survey.
14. UTILITIES
Tenant agrees to pay all charges when due for water, gas,
electricity, or other utilities incurred by it in connection with the
Premises.
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15. TAXES
A. From the date of this Agreement until the expiration of the
Term and any renewals thereof, Tenant shall pay all real
property taxes and assessments which may be levied upon
or assessed against those lands comprising the Premises;
except that Landlord shall pay the December, 1996 real
property taxes and assessments. Tenant shall also pay all
taxes or assessments levied upon or assessed against the
improvements situated within the Premises and all taxes
levied upon or assessed against any personal property
situated within the Premises. Tenant understands that
Landlord shall not be required to pay any taxes or
assessments whatsoever which may be or become a lien
upon the lands, improvements and personal property. Any
taxes or assessments which may be levied or assessed for a
period beginning before the commencement of this Lease
or ending after the termination hereof shall be paid by
Tenant. Tenant shall not be obligated to pay any income
tax or other tax, assessment or charge which may be levied
or become due by reason of the rents and profits received
by Landlord as a result of this Lease.
16. CONDOMINIUM
The Tenant agrees to comply with and abide by all the
covenants, conditions, restrictions and terms as set forth in the
condominium documents for Victor Corporate Park Condominium,
according to the Master Deed, all exhibits and condominium
documents. Tenant further agrees to pay any and all condominium
association fees, assessments, common area charges, or any other
charges of any kind attributable to the Condominium Unit, which
become due and payable from and after the commencement date of
Tenant s right to possession. Landlord shall be responsible for all
condominium assessments coming due prior to the commencement
date of Tenant s right to possession.
17. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION;
LANDLORD S MORTGAGEE S APPROVAL OF THIS LEASE
A. Tenant agrees within ten (10) days after request
therefor by Landlord to execute in recordable form and deliver to
Landlord a statement, in writing, certifying if true (a) that this
Lease is in full force and effect, (b) the date of commencement of
the term of this Lease, (c) that rent is paid currently without any
off-set or defense thereto, (d) the amount of rent, if any, paid in
advance, (e) that there are no uncured defaults by Landlord or
stating those claimed by Tenant, and (f) such other information
as Landlord may reasonably request; provided that, in face, such
facts are accurate and ascertainable.
B. Tenant shall, in the event any proceedings are
brought for the foreclosure
of or in the event of exercise of the power of sale under any
mortgage made by Landlord covering the Premises, attorn to the
purchaser upon any such foreclosure or sale and recognize
such purchaser as the Landlord under this Lease.
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C. Tenant agrees that this Lease shall, at the request of
Landlord, be subordinate to any first mortgages or deeds of trust
that may hereafter be placed upon the leased premises and to
any and all advances to be made thereunder, and to the interest
thereon, and all renewals, replacements and extensions thereof,
provided the mortgagee or trustee named in said mortgages or
trust deeds shall agree to recognize the lease of Tenant in the
event of foreclosure if Tenant is not in default. Tenant also
agrees that any mortgagee or trustee may elect to have this
Lease a prior lien to its mortgage or deed of trust, and in the
event of such election and upon notification by such mortgagee
or trustee to Tenant to that effect, this Lease shall be deemed
prior in lien to said mortgage or deed of trust, whether this Lease
is dated prior to or subsequent to the date of said mortgage or
deed of trust. Tenant agrees, that upon the request of Landlord,
any mortgagee or any trustee, it shall execute whatever
instruments may be required to carry out the intent of this
Section.
D. Failure of Tenant to execute any of the above
instruments within fifteen (15) days upon written request so to
do by Landlord, shall constitute a breach of this Lease and
Landlord may, at its option, cancel this Lease and terminate
Tenant's interest herein. Further, Tenant hereby irrevocably
appoints Landlord as attorney-in-fact for Tenant with full power
and authority to execute and deliver in the name of Tenant any
such instruments.
E. If Landlord's mortgagee will approve this Lease, only
upon the basis of modification of the terms and provisions of
this Lease, other than those provisions relating to the size
and location of the Premises, the amount of rent and charges
payable hereunder and the use for which Tenant is permitted to
operate the leased premises, Landlord shall have the right to
cancel this Lease if Tenant refuses to approve in writing any
such modifications within thirty (30) days after Landlord's
request therefor, which request may not be made later than
forty-five (45) days after the delivery of possession of the
Premises to Tenant. If such right to cancel is exercised, this
Lease shall thereafter be null and void, and neither party shall
have any liability to the other by reason of such cancellation.
18. LIABILITY INSURANCE
Tenant shall, from the date this Agreement is executed, keep in
force and effect a policy of public liability and property damage
insurance with respect to the Premises, and the business operated by
Tenant in which the limits of public liability shall be not less than
Three Million Dollars ($3,000,000) per occurrence, and in which the
limit of property damage liability shall be not less than Five Hundred
Thousand Dollars ($500,000). The policy shall name Landlord, any
other parties in interest designated by Landlord, and Tenant as
insured, and shall contain a clause that the insurer will not cancel or
change the insurance without first giving Landlord thirty (30) days
prior written notice. Such insurance may be furnished by Tenant
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under any blanket policy carried by it or under a separate policy
therefor. The insurance shall be with an insurance company approved
by Landlord and a copy of the paid-up policy evidencing such
insurance or a certificate of insurance certifying to the issuance of
such policy shall be delivered to Landlord prior to the commencement
of Tenant's work and upon renewals not less than thirty (30) days prior
to the expiration of such coverage.
19. PROPERTY INSURANCE.
(a) Tenant shall, from the date of this Agreement, carry
insurance for fire and special extended coverage (as determined
by Landlord) insuring the improvements located on the Premises
and all appurtenances thereto for the full insurable value thereof
(with deductibles accepted by Landlord) such insurance coverage
to include the improvements provided by Landlord and Tenant,
and such insurance coverage shall include rental insurance.
Landlord shall not be liable to Tenant for any loss or damage
suffered by Tenant which is not covered by such insurance
(including without limitation, the amount of any such
deductibles). If the cost to repair or replace the damaged
improvements exceeds the full insurable value, Tenant shall pay
the difference. The policy shall name Landlord, any other
parties in interest designated by Landlord, and Tenant as
insured, and shall contain a clause that the insurer will not
cancel or change the insurance without first giving Landlord
thirty (30) days prior written notice. Such insurance may be
furnished by Tenant under any blanket policy carried by it or
under a separate policy therefor. The insurance shall be with an
insurance company approved by Landlord and a copy of the paid-
up policy evidencing such insurance or a certificate of insurance
certifying to the issuance of such policy shall be delivered to
Landlord prior to the commencement of Tenant s work and upon
renewals not less than thirty (30) days prior to the expiration of
such coverage.
(b) Tenant shall pay the cost of the premiums for all such
insurance, and the expenses incurred by Landlord relative to
insurance appraisals, adjusters and reasonable attorneys' fees in
connection therewith. Such statements may include charges for
premiums covering more than a single year.
(c) Tenant will not do or suffer to be done, or keep or suffer to be
kept, anything in, upon or about the Premises which will
contravene policies insuring against loss or damage by fire or
other hazards (including, without limitation, public liability) or
which will prevent Tenant from procuring such policies in
companies acceptable to Landlord.
(d) Tenant agrees to carry, at its expense, insurance against
vandalism, malicious mischief, and such other perils as are from
time to time included in a standard extended coverage
endorsement, insuring Tenant's trade fixtures, furnishings,
operating equipment and personal property, such as signs, wall
coverings, carpeting and drapes located on or within the
Premises, in an amount equal to not less than one hundred
percent (100%) of the actual replacement cost thereof and to
furnish Tenant with a certificate evidencing such coverage.
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20. COVENANT TO HOLD HARMLESS
Tenant agrees, from the date of this Agreement, to indemnify
Landlord and save it harmless from and against any and all claims,
actions, damages, liability and expense in connection with (i) loss of
life, personal injury and/or damage to property arising from or out of
any occurrence in, upon or at the Premises, including the person and
property of Tenant, and its employees and all persons in the building
at its or their invitation or with their consent, (ii) the occupancy or
use by Tenant of the Premises or any part thereof, or (iii) occasioned
wholly or in part by any act or omission of Tenant, its agents,
contractors, employees, servants, customers or licensees. For the
purpose hereof, the Premises shall include the service areas adjoining
the same. All property kept, stored or maintained in the Premises
shall be so kept, stored or maintained at the risk of Tenant only. In
case Landlord shall, without fault on its part, be made a party to any
litigation commenced by or against Tenant, then Tenant shall protect
and hold Landlord harmless and shall pay all costs, expenses and
reasonable attorney fees incurred or paid by Landlord in connection
with such litigation. Tenant shall also pay all costs, expenses and
reasonable attorney fees that may be incurred or paid by Landlord in
enforcing the covenants and agreements of this Lease.
21. WASTE OR NUISANCE
Tenant shall not commit or suffer to be committed any waste or
any nuisance upon the Premises.
22. SUBLETTING AND ASSIGNMENT
A. Tenant shall not sublet the Premises, or any portion
thereof, without the written consent of Landlord, which shall not
unreasonably be withheld, conditioned or delayed. Any such
subletting shall not relieve Tenant of its obligations to Landlord
under this Lease.
B. Tenant shall not have the right to assign this Lease or
to hypothecate or encumber its leasehold interest
hereunder, without the written consent of Landlord, which
shall not be unreasonably withheld, conditioned or
delayed. If Landlord consents; (i) Tenant shall not by
reason of any such assignment be relieved of any
responsibility, liability or obligation to Landlord under the
terms of this Lease; (ii) that any assignee shall agree in
writing to be bound by all the terms, covenants and
conditions of this Lease; and (iii) that an executed original
of such assignment and agreement shall be delivered to
Landlord.
C. Tenant may assign or sublet to a wholly owned
subsidiary of Tenant.
Tenant shall not by reason of any such assignment or sublease
be relieved of any responsibility, liability or obligation under this
Lease.
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23. SURRENDER OF PREMISES
A. Tenant shall, upon termination of the term of Tenant's right to
possession or any earlier termination of this Lease,
surrender to Landlord the Premises, including without
limitations, all building apparatus not covered by Section B of
this Article, and all alterations, improvements and other
additions which may be made or installed by either party.
B. Notwithstanding Section A of this Article, Tenant
shall have the right to remove all trade fixtures, furniture,
equipment and signs, which may be installed in the Premises
prior to or during Tenant s right to possession at Tenant s cost,
if Tenant is not in default at the time of removal. The Tenant
shall at its own cost and expense repair any and all damage to
the Premises resulting from or caused by such removal, and shall
restore the premises to its original condition, reasonable wear
and tear excepted. Tenant shall have sixty (60) days after
termination of this Lease for any reason whatsoever to effect
such removal, repair and restoration; provided, however, no such
fixtures or equipment placed on or in the Premises by Tenant,
and which remain the property of Tenant, may be removed at a
time when Tenant is in default in payment of rent or any other
money payable hereunder, or in the performance of any other
covenant under this Lease.
C. Anything to the contrary herein notwithstanding,
Tenant shall have the right at any time to remove its signs and
other equipment bearing any of its trade names or trademarks,
whether registered or unregistered. Landlord shall have no right
to use and shall not have or acquire any interest in such trade
name and service mark by reason of any of the terms or
provisions of this Lease, or by reason of use of the same on the
Premises.
24. EMINENT DOMAIN
A. In the event that the whole of the Premises shall be
taken under the power of eminent domain, the Tenant shall
continue to pay the balance of the rentals minus the amount of
the condemnation proceeds received by Landlord, provided,
however, that Tenant shall have the right, but not the obligation,
to participate in the Landlord's condemnation proceedings.
B. In the event that a portion of the Premises shall be
taken under the power of eminent domain, the obligation of
Tenant under this Lease to pay rent and all of the other
provisions of this Lease shall remain in full force and effect. All
damages awarded for any such taking under the power of
eminent domain, whether for the whole or part of the Premises,
shall belong to and be the property of Landlord, whether such
damages shall be awarded as compensation for diminution in
value of the leasehold or for the fee of the Premises; provided,
however, that Tenant shall receive credit against rental equal to
the damages paid to Landlord.
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25. HAZARDOUS WASTE
Tenant shall not cause or permit any hazardous material (as
hereinafter defined) to be released, brought upon, stored, produced,
emitted, disposed of or used upon, about or beneath the premises by
Tenant, its agents, employees, contractors or invitees.
Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all environmental damages which arise from: (1)
the presence upon, about or beneath the premises of any hazardous
material or of any chemical substance requiring remediation under
any Federal, State or local statute, regulation, ordinance or policy; or
(2) the breach of any of the provisions of this Lease. For the purpose
of this Lease, "environmental damages" shall mean: (1) all claims,
judgments, damages, penalties, fines, costs, liabilities and losses (in-
cluding, without limitation, diminution in the value of the premises,
damages for the loss of or restriction on rentable or usable space or of
any amenity of the premises and from any adverse impact on
Landlord's marketing of space); (2) all sums paid for settlement of
claims, attorney fees, consultant's fees and expert's fees; and (3) all
costs incurred by Landlord in connection with the investigation of
hazardous material upon, about or beneath the premises, the
preparation of any remedial investigation and feasibility studies or
reports in the performance of any clean up, remediation, removal or
restoration work required by an Federal, State or local governmental
agency or political subdivision necessary for Landlord to make full
economic use of the premises or otherwise required under this Lease.
Tenant's obligations under this Section shall survive the expiration of
this Lease.
Notwithstanding any other obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant shall, at its sole cost and
expense, promptly take all actions required by any Federal, State or
local governmental agency or political subdivision necessary for
Landlord to make full economic use of the premises, which
requirements or necessity arise from presence upon, about or beneath
the premises of any hazardous material. Such action shall include, but
not be limited to, the investigation of the environmental condition of
the premises, the preparation of any remedial investigation and
feasibility studies or reports and the performance of any clean up,
remedial, removal or restoration work. Tenant shall take all actions
necessary to restore the premises to the condition existing prior to
the introduction of the hazardous material upon, about or beneath the
premises, notwithstanding any lesser standard of remediation
allowable under applicable law or government policies. Tenant shall
nevertheless obtain Landlord's approval prior to undertaking any
activities required by this Section, which approval shall not be
unreasonably withheld so long as such actions would not potentially
have a material adverse long-term or short-term affect on the
premises or any other property or business owned or operated by
Landlord. Tenant shall promptly supply Landlord with any notices and
correspondence concerning environmental damages received by
Tenant form the United States Environmental Protection Agency or
the Michigan Department of Natural Resources. The obligations of
Tenant pursuant to this Section shall not apply to situations where
hazardous materials are released, brought upon, stored, produced,
emitted, disposed of or used upon, about or beneath the premises at
the time or times other than during the term of this Lease except
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where such event occurs as a result of the acts or omissions of
Tenant, its agents, employees, contractors or invitees or as a result of
the acts or omissions of any agent, employee, contractor or invitee of
any permitted Sublessee or assignee of Tenant. Tenant's obligation
under this Section shall survive the expiration of this Lease.
"Hazardous Material" means any material or substance: (1)
defined as a "hazardous substance" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act (42 USC
Section 9601 et. seq.) and amendments thereto and regulations
promulgated thereunder; (1) containing gasoline, oil, diesel fuel or
other petroleum products; (3) defined as a "hazardous waste" pursuant
to the Federal Resource Conservation and Recovery Act (42 USC
Section 6901 et. seq.) and amendments thereto and regulations
promulgated thereunder; (4) containing polychlorinated biphenyls
(PCB's); (5) containing asbestos; (6) radioactive; (7) biological or (8) the
presence of which requires investigation or remediation under any
Federal, hazardous substance, material or waste which is or becomes
regulated by any Federal, State or local governmental authority, or
which causes a nuisance upon or waste to the premises.
26. DAMAGE AND DESTRUCTION
A. From the date of this Agreement until the expiration
of the term, including
any renewals or holdover periods, Tenant shall be solely
responsible for the cost of repairing, restoring or replacing any
portion of the Premises (including the Building and any
improvements) that are partially or totally damaged or
destroyed. In such event, Tenant shall, as soon as reasonably
possible, commence and proceed diligently to restore the
Premises substantially to their condition at the time of such
damage or destruction. Tenant shall have the use of any
insurance proceeds resulting from the damage or destruction to
the extent necessary to repair and/or replace the damaged or
destroyed property.
B. Tenant understands that its rent and other
obligations hereunder shall not be abated during the period of
any damage, repair or restoration provided for in this Article.
27. DEFAULTS OF TENANT
The following occurrences shall be deemed defaults by Tenant:
(a) Tenant shall fail to pay when due any rent or
other sum payable under this Lease and such failure continues
for fifteen (15) days after written notice from Landlord.
(b) Tenant shall abandon or vacate the Premises
before the end of the term of this Lease, provided, however, that
Tenant shall not be deemed to have abandoned, vacated or
surrendered the Premises if Tenant meets all its financial and
maintenance obligations under the Lease.
(c) Tenant shall be in breach of any other obligation
under this Lease, and such breach shall continue for thirty (30)
days after written notice from Landlord.
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28. REMEDIES OF LANDLORD
In the event of a default by Tenant, Landlord shall have the
following rights and remedies
in addition to all other rights and remedies otherwise available to
Landlord:
(a) Landlord shall be entitled to immediately
accelerate upon written notice to Tenant the full balance of the
rent payable for the remainder of the term of this Lease.
(b) Landlord shall have the right to terminate this
Lease upon written notice, in accordance with the Summary
Proceedings Act, to Tenant without prejudice to any claim for
rents or other sums due or to become due under this Lease.
(c) Landlord shall have the immediate right of re-
entry and may remove all persons and property from the
Premises. Such property may be removed and stored at the cost
of Tenant. Should Landlord elect to re-enter as herein provided,
or should Landlord take possession pursuant to legal
proceedings, Landlord may either terminate this Lease or, from
time to time, without terminating this Lease, relet the Premises
or any part thereof for such term or terms (which may be for a
term extending beyond the term of this Lease) and at such rental
or rentals and upon such other terms and conditions as
Landlord, in the exercise of its sole discretion, deems advisable,
with the right to make alterations and repairs to the Premises.
Upon each such reletting, (i) Tenant shall be immediately liable
to pay to Landlord, in addition to any indebtedness other than
rent due hereunder, the cost and expense of such reletting and
of any such alterations and repairs incurred by Landlord, and the
amount, if any, by which the rent reserved in this Lease for the
period of the reletting as accelerated under Subparagraph (a) of
this Paragraph, exceeds the amount agreed to be paid for rent for
the Premises by the reletting Tenant; or (ii) at the option of
Landlord, rents received by Landlord from such reletting shall be
applied first, to the payment of any indebtedness other than rent
due hereunder from Tenant to Landlord; second, to the payment
of any costs and expenses of such reletting and of such
alterations and repairs; third, to the payment of rent unpaid
hereunder; and the residue, if any, held by Landlord and applied
in payment of future unaccelerated rent as the same may
become due and payable hereunder.
(d) Landlord may immediately sue to recover from
Tenant all damages Landlord may incur by reason of Tenant's
default, including the cost of recovering the Premises, and
including the rent reserved and charged in this Lease for the
remainder of the stated term as accelerated under Subparagraph
(a) of this Paragraph, all of which shall be immediately due and
payable along with attorneys' fees and Landlord shall attempt to
mitigate damages in a commercially reasonable manner.
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29. LATE CHARGES AND INTEREST FOR PAST DUE PAYMENTS
All installments of rent payable to Landlord under this Lease if
not paid within five (5)
days after they become due shall be subject to a late charge equal to
five percent (5%) of the installment amount. In addition, any
payment rent or other amount due from Tenant to Landlord which is
not made when due under this Lease shall bear interest at the rate of
seven percent (7%) per annum from the date of nonpayment to the
date of payment.
30. LEGAL EXPENSES
In case suit shall be brought by Landlord for recovery of
possession of the Leased
Premises, for the recovery of rent or any other amount due under the
provisions of this Lease, or because of the breach of any other
covenant herein contained on the part of Tenant to be kept or
performed, all expenses incurred therefor (including attorneys' fees)
shall be awarded to Landlord if Landlord is the party prevailing in such
suit.
31. MEMORANDUM OF LEASE
A Memorandum of Lease, suitable for recording in the Office of
the County Register of Deeds of the County within which the Premises
are situated, and satisfactory in form to both Landlord and Tenant,
shall be executed and recorded. Said document shall be entitled
"Memorandum of Lease" and shall incorporate the legal description of
the Premises.
32. SERVICE OF NOTICE
A. All notices or demands of any kind which Landlord is
required to or desires to serve on Tenant with respect to this
Lease may be served by mailing a copy of such notice or demand
to Tenant by certified mail, with return receipt requested and
postage prepaid, addressed to Tenant at the place last
designated by it as the place at which notices may be served, or
if no such written designation is then in effect then addressed to
Tenant at the Premises. Tenant hereby designates the Premises
as the place at which notices shall be served. Service by mail
shall be deemed complete at the expiration of the third day after
the date of delivery thereof to the address specified.
B. All notices or demands of any kind which Tenant is
required to or desires to serve on Landlord with respect to this
Lease may be served by mailing a copy of such notice or demand
to Landlord by certified mail, with return receipt requested and
postage prepaid, addressed to Landlord at the place last
designated by it as the place at which notices may be served.
Landlord hereby designates 108 S. University, Suite 6, Mt.
Pleasant, MI 48858 as the place at which notices shall be served.
Service by mail shall be deemed complete at the expiration of
the third day after the date of delivery thereof to the address
specified.
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33. APPLICABLE LAW AND PARTIES BOUND
This Lease shall be construed under the laws of the State within
which the Premises are situated and shall be binding upon and inure
to the benefit, as the case may require, of the parties hereto and their
respective heirs, executors, administrators, successors and assigns.
34. INTERPRETATION
The words "Landlord" and "Tenant" as used herein, shall include,
apply to, bind and benefit, as the context may permit or require, the
parties executing this Lease and their respective heirs, executors,
administrators, successors and assigns.
Wherever the context so permits or requires, words of any
gender used in this-Lease shall be construed to include any other
gender, and words in the singular number shall be construed to
include the plural.
35. INVALIDITY
In the event that any term, provision, condition or covenant
contained in this Lease, or the application thereof to any person or
circumstance, shall, to any extent, be invalid or unenforceable, or be
held to be invalid or unenforceable by any court of competent
jurisdiction, the remainder of this Lease, or the application of such
term, provision, condition or covenant to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall
not be affected thereby and all such remaining terms, provisions,
conditions and covenants in this Lease shall be deemed to be valid
and enforceable.
36. APPROVALS
Whenever in this Lease the Landlord's approval or consent is
required, such approval or consent shall be in writing and Landlord
covenants and agrees that such approval or consent shall not be
unreasonably withheld.
37. CAPTIONS
The headings and captions contained in this Lease are inserted
only as a matter of convenience and for reference and in no way
define, limit or describe the scope or intent of this Lease nor of any
provision herein contained.
38. CONFIDENTIALITY
Landlord and Tenant each agree that they shall hold in strict
confidence all documents and information concerning this transaction
and the business and property of the other. No press release or public
disclosure, either written or oral, of the terms of this Lease shall be
made by either party without the consent of the other.
Notwithstanding the foregoing, Landlord may make such disclosures
to its lenders or investors as is necessary to obtain the financing in
this transaction.
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39. HOLDING OVER
Any holding over after the expiration of the term, or any renewal
hereof, with or without
the consent of Landlord, shall be construed to be a tenancy from
month to month, at One Hundred-Fifty percent (150%) of the rents
specified for the period immediately preceding the expiration of the
last term or renewal term. The rent will be prorated on a monthly
basis, and payable monthly, and shall otherwise be on the terms and
conditions herein specified, so far as applicable.
40. LANDLORD S OPTION
In the event that Landlord does not close the Bond Issue on or
before November 1, 1996, Landlord has the right and option to sell,
and Tenant shall repurchase the Premises upon the terms and
conditions set forth below:
A. Term of Option: The option granted hereunder shall be
exercisable until November 30, 1996 and all rights hereunder shall expire at
5:00 o clock in the afternoon on said date.
B. Purchase Price: The purchase price, upon exercise of
this option, shall be Three Million Twelve Thousand Two
Hundred Eighty-Six & 00/100 ($3,012,286.00) Dollars, plus an
amount equal seven (7%) percent interest per annum plus any
amount equal to any money owed by Landlord to Tenant as
reimbursement for construction and design costs on or for the
Premises or for any other reason.
C. Exercise of Option: The option granted hereunder
shall be exercisable by the giving of a written notice to
Landlord by certified mail, return receipt requested. Notice shall
be deemed given on the day that the notice is mailed in any U. S.
Post Office.
D. Sale on Exercise: If this option is exercised, the
purchase and sale of the above described property shall then
be made upon the following terms and conditions:
(i) Upon exercise of the option, Landlord shall
secure and deliver to Tenant a commitment for
an owner s title insurance policy, subject to
permitted exceptions. Permitted Exceptions
shall mean all conditions, covenants,
restrictions and conditions which were on title
when Landlord received it from Tenant and
construction liens placed on the premises.
(ii) At time of closing, Landlord shall provide Tenant
with an owners policy of title insurance on ALTA
Owner s Policy Form No. B-1970 with the
standard exceptions for the full amount of the
purchase price.
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(iii) Landlord shall convey a good and marketable
title, subject to existing easements for public
utilities, to serve the premises and zoning
ordinances.
(iv) All real estate taxes and special assessments
shall be assumed by Tenant. All transfer taxes
shall be paid by Landlord.
(v) The sale shall be closed by payment of the full
purchase price upon delivery of an executed
Warranty Deed, subject to permitted exceptions.
(vi) This sale and purchase shall be closed on or
before thirty (30) days after exercise of option.
(vii) Possession shall be delivered at time of closing.
41. NET LEASE; NON-TERMINABILITY
A. Net Lease. This Lease is a net lease and, except as
otherwise expressly
provided herein, any present or future law to the contrary
notwithstanding, shall not terminate, nor shall Tenant be
entitled to any abatement, reduction, set-off, counterclaim,
defense or deduction with respect to any Basic Rent, Additional
Rent or other sum payable hereunder, unless expressly provided
to the contrary herein.
B. Non-Terminability. Tenant shall remain obligated under this Lease in
accordance with its terms and shall not take any action to terminate, rescind
or avoid this Lease, unless expressly provided to the contrary herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the day and year shown opposite their
respective signatures hereinbelow.
LANDLORD:
SIRO, L.L.C.,
a Michigan Limited Liability Company,
By: /s/ W. Sidney Smith
_____________________________________
W. Sidney Smith
Its: Member
By: /s/ Roger E. Hinman
______________________________________
Roger E. Hinman
Its: Member
By: /s/ Stacia S. Smith
______________________________________
Stacia S. Smith
Its: Member
TENANT:
VALASSIS COMMUNICATIONS, INC.,
a Michigan Corporation,
By: /s/ Robert L. Recchia
_______________________________________
Its: CFO
37
STATE OF MICHIGAN
COUNTY OF ISABELLA
On June 27, 1996, before me, a Notary Public ln and for said
County and State, personally appeared W. Sidney Smith and Stacia S. Smith,
known to me to be the Authorized Signators of Siro, L.L.C., who executed the
within instrument, on behalf of the Company.
/s/ Peggy Mangum
__________________________________
Notary Public
Isabella County, Michigan
My commission expires: 9/10/96
STATE OF MICHIGAN
COUNTY OF ISABELLA
On June 27, 1996, before me, a Notary Public in and for said
County and State, personally appeared Roger E. Hinman who, known to be an
Authorized Signator of Siro, L.L.C., who executed the within instrument, on
behalf of the Company.
/s/ Peggy Mangum
_____________________________________
Notary Public
Isabella County, Michigan
My commission expires: 9/10/96
STATE OF MICHIGAN
COUNTY OF OAKLAND
On June 27, 1996, before me, a Notary Public in and for said County
and State, personally appeared Robert L. Recchia known to me to be the
Authorized Signator of Valassis Communication, Inc., who executed the within
instrument, on behalf of the Corporation.
/s/ Terry D. Bowlby
_____________________________________
Notary Public
Oakland County, Michigan
My commission expires: 12/18/96
38
EXHIBIT A
Legal Description
Unit 2, Victor Corporate Park Condominium , according to the
Master Deed recorded in Liber 24532, Pages 729 through 797,
inclusive, Wayne County Records, and amended by First
Amendment to Master Deed recorded in Liber 26231, Pages 860
through 867, inclusive, Wayne County Records, and Second
Amendment to Master Deed recorded in Liber 26733, Pages 491
through 500, inclusive, Wayne County Records, and Third
Amendment to Master Deed recorded in Liber 27753, Pages 538
through 562, inclusive, Wayne County Records, and Fourth
Amendment to Master Deed recorded in Liber 28166, Page 912,
Wayne County Records,, and Fifth Amendment to Master Deed
recorded in Liber 28772, Pages 903 through 916, inclusive, Wayne
County Records, and designated as Wayne County Condominium
Subdivision Plan No. 284, together with rights in common elements
and limited common elements, as set forth in the above Master
Deed (and Amendments thereto) and as described in Act 59 of the
Public Acts of 1978, as amended.
Tax Item No: Part of 024-01-0002-000