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Exhibit 10.12
AGREEMENT OF LEASE
AGREEMENT OF LEASE entered into as of September 1, 1986, by and
between XXXXX ASSOCIATES LIMITED PARTNERSHIP, a Connecticut limited partnership,
registered to transact business in Michigan, 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxxx 00000 (hereinafter referred to as "Landlord") and NEBRASKA BOOK
COMPANY, INC., a Kansas corporation with offices at X.X. Xxx 00000, Xxxxxxx,
Xxxxxxxx 00000 (hereinafter referred to as "Tenant"),
W I T N E S S E T H :
Property Demised and Warranties. Landlord agrees to lease to Tenant,
upon the terms and conditions hereinafter set forth, the property and all
fixtures attached thereto located at 1115-17-19 South University, Second Floor
only, Ann Arbor, Michigan (hereinafter referred to as the "Leased Premises"),
and more fully describe in Schedule A attached hereto and made a part hereof.
Landlord represents and warrants that there are no liens or
encumbrances (except a certain mortgage to Xxxxx X. Xxxxxx, Trustee, dated as of
January 1, 1983, and recorded on February 23, 1983, in Liber 1865, Page 651 of
the Register of Deeds of Washtenaw County, Michigan) that affect or shall affect
Tenant's use of the property as herein set forth. So long as Tenant shall pay
rental and other sums provided herein and shall keep and perform all the terms,
covenants and conditions on its part contained herein, Landlord covenants Tenant
shall have the right to peaceful and quiet enjoyment of the premises.
Landlord further represents and warrants that he has full right,
power, and authority to enter into this Lease for the term herein set forth and
that there exist on the date this agreement is signed no city, county or state
zoning, building, or use restrictions which would prohibit Tenant from
continuing the use of the Leased Premises in its present manner for the purpose
herein contemplated.
Term and Extension. The initial term of this Lease shall be for a
period of three (3) years, commencing September 1, 1986 and terminating August
31, 1989, both dates inclusive. Tenant shall have the option to extend this
Lease for three (3) additional periods of three (3) years each, provided Tenant
is not then in default of any of its obligations hereunder. However, and
notwithstanding anything to the contrary herein, Tenant's right to exercise its
option to extend the term shall in no event lapse until thirty (30) days after
Tenant receives written notice from Landlord that the period for exercise of the
option to extend will lapse after said thirty (30) days.
Tenant shall exercise its options to extend this Lease by giving
written notice of the exercise of each such option prior to a date six (6)
months before the end of the initial term of this Lease or the first extension
term, as the case may be, provided Tenant is not then in default of any of its
obligations hereunder.
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The extended term shall be upon the same terms, covenants, and
conditions, as provided in this Lease for the initial term, except rent which
shall be as provided in the Rent section, below. Any rightful termination of
this Lease during the initial term or during any extension thereof shall
terminate any and all further rights of renewal or extension hereunder.
Rent.
A. The rent for the lease term shall be Two Thousand One Hundred
Forty Dollars ($2,140.00) per month payable in advance, beginning September 1,
1986.
B. For the three (3) three (3) year option periods, the monthly
rental shall be adjusted as the parties agree. In the absence of agreement, the
then existing fair rental value of the Leased Premises shall be determined as
follows:
The then existing fair rental value of the Leased Premises shall be
determined by the average of the appraised rental value determined by
three MAI real estate appraisers; one selected by Landlord; one selected
by Tenant; and the third selected by the first two selected appraisers.
The arbitrators shall be governed by Chapter 50 of the Michigan Revised
Judicature Act, as amended, and a judgment of any Michigan Circuit court
may be rendered upon the award made pursuant to this agreement.
In determining the then existing fair rental value of the Leased
Premises, whether by agreement or arbitration, other rental properties owned by
The Xxxx X. Xxxxxx Trust, by The Xxxxx X. Xxxxxx Trust, by Xxxxxx X. Xxxxx or
the Xxxxx Associates Limited Partnership, any successor thereto or by any other
trust, partnership or entity in which any of the foregoing have a controlling
interest, shall not be utilized or considered in such determination.
PROVIDED, the monthly rental shall not be less than that in effect
for the period immediately preceding adjustment.
PROVIDED, the monthly rental for this initial thirty-six (36) months
of each of the option periods shall be determined not less than sixty (60) days
prior to the last date for the exercise of the option.
C. All rent payments due hereunder shall be payable in accordance
with the terms of this section at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxx or
at such place as Landlord may direct.
Use of Premises, Restrictions, and Quiet Enjoyment. It is understood
and agreed by the parties that Tenant intends to use the Leased Premises for the
operation of a retail bookstore and related retail uses; however, if at any time
during
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this Lease or any period of extension or renewal thereof Tenant desires to use
and occupy the premises for any other lawful purpose, Tenant may do so provided
that Tenant first obtains the prior written consent of Landlord, which consent
shall not be unreasonably withheld, and provided further that the premises shall
not be used or occupied for any unlawful business, use, or purpose, nor for any
business, use, or purpose deemed extrahazardous or in violation of any
governmental law or regulation presently existing or subsequently enacted.
Asbestos and Hazardous Waste Materials. Landlord warrants that it
has not installed asbestos on or about the Leased Premises since after the death
of Xxxx X. Xxxxxx in 1981. To the best of Landlord's knowledge, information and
belief, the Leased Premises do not contain and have not in the past ten (10)
years contained any hazardous waste material subject to local, state or federal
regulations as to use, storage or disposal.
The parties understand that Tenant intends to continue the use of
the Leased Premises in the same manner as currently conducted. Landlord
recognizes that it is essential to Tenant to continue such use without the cost
of revisions or reconstruction required by any governmental authority.
Therefore, in the event asbestos or any hazardous waste material hereinbefore
described is found to be located on the Leased Premises on the date this
agreement is signed, Landlord, at its sole expense, and in compliance with
applicable law and regulation, shall promptly remove or contain any asbestos or
hazardous waste material within the Leased Premises.
Compliance with Law. Except as otherwise agreed in this Lease or
warranted in this Lease, Tenant shall, at its sole expense, comply with all
laws, orders, and regulations of federal, state and municipal authorities and
with any direction of any public officer, pursuant to law, which shall impose
any duty upon Landlord with respect to the Leased Premises and shall obtain all
licenses or permits which may be required for the conduct of its business within
the terms of this Lease or for the making of repairs, alterations, improvements,
or additions, and Landlord, where necessary, will join with Tenant in applying
for all such permits or licenses.
Repairs and Maintenance. Tenant shall, during the term of this Lease
or any renewal or extension thereof, at its sole expense, keep the interior and
exterior, including the roof, of the Leased Premises in as good order and repair
as it is at the date of commencement of this Lease, reasonable wear and tear and
damage by accident, fire, or other casualty excepted. Tenant shall not knowingly
commit or willingly permit to be committed any act or thing contrary to the
rules and regulations prescribed from time to time by the Washtenaw County Board
of Health or which shall be contrary to the rules and regulations of any
federal, state, or municipal authority. Tenant has inspected the premises and is
satisfied with said premises and accepts the premises in its present condition,
subject only to Landlord's representations and undertakings herein.
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Alterations and Improvements. Tenant shall have the right, from time
to time and at its sole expense, provided the same do not affect adversely the
structure of the premises, to make such alterations, improvements, modifications
or changes to, or decoration of the interior or exterior of the Leased Premises
as shall be reasonable or appropriate in Tenant's judgment for Tenant's conduct
thereon of its business. Tenant understands and agrees that prior to any change,
alteration, improvement, or modification to either the interior or exterior of
the Leased Premises, including signage, permission shall first be obtained in
writing from Landlord, such permission not to be unreasonably withheld.
Any such alteration, improvement, modification, or change (except
for movable items and trade fixtures) shall, at termination of this Lease or any
extension thereof, become the exclusive property of Landlord, as his interest
may appear, and be surrendered with and as part of the Leased Premises.
Taxes and Assessments. Landlord shall pay all real estate taxes.
Landlord shall also pay any special assessment imposed upon the Leased Premises
for any purpose whatsoever during the initial term of this Lease or any
extension thereof; except if a parking assessment is imposed, Tenant shall pay
any such assessment.
If the city, county, state, or any other political subdivision
within which the Leased Premises is located shall, during the term of this
Lease, impose upon the Landlord any tax or other governmental charge ("non-real
estate tax") in lieu of all or any part of the real estate taxes which, prior to
such imposition, were assessed or levied against the Leased Premises ("real
property taxes"), such non-real property tax shall, for purposes of this
paragraph, be treated as if it were a real estate tax.
Any personal property tax assessed on inventory or goods shall be
paid by Tenant.
Insurance. Landlord shall keep the Leased Premises insured against
loss or damage by fire with extended coverage endorsement in an amount
sufficient to prevent Landlord from becoming a co-insurer under the terms of the
applicable policies but, in any event, in an amount not less than eighty percent
(80%) of the full insurable value as determined from time to time. The term
"full insurable value" shall mean actual replacement cost (exclusive of
excavation, foundations and footings below the basement floor) without deduction
for physical depreciation. Such insurance shall be issued by financially
responsible insurers duly authorized to do business in the State of Michigan.
Landlord shall pay the cost of fire and extended coverage insurance.
Tenant, at all times during the term of this Lease or any extension
or renewal thereof, at its expense, shall procure, maintain, and keep in force
general public liability insurance for claims for personal injury, death, or
property damage occurring in or about the Leased Premises, with limits of not
less than Five Hundred
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Thousand Dollars ($500,000.00) in respect to death or injury to a single person;
not less than One Million Dollars ($1,000,000.00) in respect to any one
accident; and not less than One Hundred Thousand Dollars ($100,000.00) in
respect to property damage. Tenant shall name Landlord as an additional insured
thereunder.
Tenant shall further procure, maintain, and keep in force building
contents insurance in an amount acceptable and deemed necessary by Tenant.
Tenant shall pay, or reimburse Landlord for, the premiums on a
policy of insurance insuring against loss of rent. Tenant shall also be liable
for plate glass insurance.
Each party agrees to waive any and all claims of subrogation against
the other as to any liability or potential liability of the other to the extent
any such claims are covered from time to time by policies of insurance covering
the Leased Premises.
Tenant shall deliver to Landlord appropriate certificates of
insurance confirming that the insurance to be obtained by Tenant hereunder is in
full force and effect and that prior to any cancellation thereof, notice of such
cancellation shall be given to Landlord.
Utilities and Other Services. Tenant shall make arrangements for and
shall pay, or cause to be paid, charges for any and all gas, electricity, water,
light, heat, air conditioning, power and telephone, or other communication
service used, rendered, or supplied upon or in connection with Tenant's use of
the Leased Premises and shall indemnify and hold Landlord harmless for any
liability or damages on such account.
Property Loss, Damage, Etc. Landlord shall not be liable to Tenant
for any loss or damage:
(a) To property of Tenant, Tenant's agents, servants,
employees, visitors, or licensees entrusted to Landlord or Landlord's agents or
employees, or
(b) For any loss of property due to theft, vandalism, or Acts
of God, or
(c) For any injury or damage to persons or property resulting
from falling plaster, steam, gas, electricity, water, rain, or snow which may
leak from any part of said building or from the pipes, appliances, or plumbing
works thereof or from the street or from any place or by dampness, or
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(d) For any damage caused by other tenants, subtenants, or
persons in the Leased Premises, or
(e) For interference with the light or other incorporeal
hereditaments or caused by operation in construction of any public or
quasi-public work, or
(f) Any latent defect or for the presence of bugs, vermin, or
insects, if any, in the premises.
Fire, Other Casualty Loss. In all cases where the Leased Premises is
damaged in whole or in part by fire or other casualty, Landlord shall repair the
damage with reasonable dispatch, and if the damage has rendered the Leased
Premises untenantable, in whole or in part, there shall be an apportionment of
the rent until the damage has been repaired except as modified by Tenant's
obligation to insure against rent loss (see page 4 - Insurance). In determining
what constitutes reasonable dispatch, consideration shall be given to delays
caused by strikes, adjustment of insurance, and other causes beyond Landlord's
control.
All insurance proceeds paid by reason of any damage or loss
hereinabove described shall be paid to Landlord to be used by Landlord for the
purposes hereinabove set forth.
Condemnation. If the whole of the Leased Premises, or such portion
thereof as will make the Leased Premises unsuitable for the purposes herein
leased, is condemned for any public use or purpose by any legally constituted
authority, then, in either of such events, this Lease shall cease from the time
when possession is taken by such public authority, and rental shall be accounted
for between Landlord and Tenant as of the date of surrender of possession. Such
termination shall be without prejudice to the rights of either Landlord or
Tenant to recover compensation from the condemning authority for any loss or
damage caused by such condemnation. Neither Landlord nor Tenant shall have any
rights in or to any award made to the other by the condemning authority. If a
portion of the Leased Premises is taken by condemnation but the remaining
premises may be still economically used for the purposes set forth herein, there
shall be an equitable apportionment of rent.
Sublet, Assignment. Tenant shall, from time to time, have the right
to sublet all or portions of the Leased Premises for the remainder of the term
or any extension thereof with the prior written approval of Landlord, which
approval Landlord shall not unreasonably withhold. In the event of any sublet of
the Leased Premises contemplated hereunder, Tenant shall remain primarily liable
for the payment of the rent herein reserved and for the performance of all other
terms and conditions of this Lease required to be performed by Tenant.
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It is further understood and agreed that this Lease may be assigned by Tenant
upon written approval of the Landlord, such approval not to be unreasonably
withheld. However, Landlord specifically agrees that this Lease may be assigned
to and assumed by any parent or affiliated corporation of the Company. Landlord
may assign this Lease to any person or persons without written approval of
Tenant, provided that any assignee of Landlord agrees to abide by all of the
terms, covenants, and conditions set forth in this Lease.
Surrender at Termination. Tenant shall, on the expiration or the
sooner termination of the lease term, surrender to Landlord the Leased Premises,
including all replacements, changes, additions, and improvements constructed or
placed by Tenant therein, with all equipment in or appurtenant thereto, except
all movable items and trade fixtures installed by Tenant, in good condition and
repair, reasonable wear and tear excepted. Any movable items, trade fixtures,
equipment, or personal property belonging to Tenant or to any other subtenant,
if not removed at such termination and if Landlord shall so elect, shall be
deemed abandoned and become the property of Landlord without any payment or
offset therefor. If Landlord shall not so elect, Landlord may remove such
fixtures or property from the Leased Premises and store them at Tenant's risk
and expense. Tenant shall repair and restore and save Landlord harmless from all
damage to the Leased Premises caused by such removal, whether by Tenant or by
Landlord.
It is further understood and agreed that at the termination of this
Lease or any period of extension or, renewal hereunder, Tenant shall surrender
the premises to Landlord and, at the time of such surrender, remove, or cause to
be removed, from the Leased Premises any and all items, of whatever nature and
wheresoever situate on the Leased Premises, that may in any way interfere with
Landlord's subsequent rental of the property as standard commercial real estate.
Waiver. One or more waivers of any breach, covenant, or condition of
this Lease by Landlord shall not be construed as a waiver of such covenant or
condition or as a waiver of any subsequent breach of the same covenant or
condition. No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly rent herein stipulated shall be deemed to be other than on account
of Tenant for any balance due and owing, nor shall any endorsement on any
statement or check nor any letter accompanying any check or payment as rent be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's rights to recover the balance of such rent or
pursue any other remedy provided in this Lease.
Breach, Default. The parties hereto expressly covenant and agree
that in the event there is a breach or default by Tenant in the performance of
any term, covenant, or condition herein contained or hereafter established (and,
with respect to any term, covenant or condition other than payment of rent or
other sums due of Tenant hereunder, such breach is not cured by Tenant within
ten (10) days after
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written notice thereof), or if proceedings are commenced against Tenant in any
court under a bankruptcy act or for the appointment of a trustee or receiver of
the Tenant's property, either before or after the commencement of the lease
term, Landlord may, upon the giving of proper notice as provided for by the laws
of the State of Michigan, terminate this Agreement of Lease, and upon Tenant's
failure to vacate the premises, Landlord may re-enter or repossess the Leased
Premises by summary proceedings and dispossess or remove the Tenant or occupants
thereof and their effects. Landlord may store all property of Tenant so removed
and Tenant shall pay Landlord the rate of One Hundred Dollars ($100.00) per day
as storage fees. Upon re-entry or repossession, Landlord shall use all
reasonable diligence to relet the Leased Premises, or any part thereof, and
collect from Tenant the difference between the rent hereby reserved and agreed
to be paid by Tenant for the portion of the term remaining at the time of
re-entry or repossession and the amount, if any, received or to be received
under such reletting for such portion of the term. If the repossessed property
is relet pursuant to the terms of this section, Landlord may collect such
rentals which, in his sole discretion, he may deem advisable, with the right to
make alterations and repairs to the premises. Rentals received by Landlord from
such reletting shall be applied as follows:
1. To the payment of any indebtedness, other than rent, due
hereunder from Tenant to Landlord, including all damages, attorney fees, and
costs sustained by Landlord as a result of the default of Tenant.
2. To the payment of rent due and unpaid hereunder.
3. To the payment of any cost of such reletting.
4. To the payment of the cost of any alteration or repair to the
premises.
The residue, if any, shall be held by Landlord and applied in
payment of future rent as the same may become due and payable hereunder. Should
such rentals received from such reletting during any month be less than the
amount agreed to be paid that month by the Tenant hereunder, then Tenant shall
pay such deficiency to Landlord. Such deficiency shall be calculated and paid
monthly.
No such re-entry and/or taking possession of the premises by
Landlord shall be construed as an election on his part to terminate this Lease
unless written notice of such intent shall be given to Tenant or unless the
termination hereof be decreed by a court of competent jurisdiction.
Should Landlord at any time terminate this Lease for any breach, in
addition to any other remedy he may have, he may recover from Tenant all damages
that may be incurred by reason of such breach, including the cost of recovering
the premises and including the worth at the time of such termination of the
excess, if any,
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of the amount of rent and charges equivalent to rent reserved in this Lease for
the remainder of this date of term over the then reasonable rental value of the
premises for the remainder of this date of term.
If the Landlord shall breach any of the conditions required to be
performed by him under this Lease and such breach is not cured by Landlord
within ten (10) days after written notice thereof, Tenant may either cure such
breach and deduct the cost thereof from rent subsequently becoming due hereunder
or elect to terminate this Lease upon giving at least thirty (30) days notice to
Landlord of its intention to do so, in which event this Lease shall terminate
upon the date fixed in such notice (unless the Landlord shall have meanwhile
cured such default).
Notwithstanding the foregoing, if it is not reasonably possible for
the Landlord or the Tenant, as the case may be, to cure a stated breach within
ten (10) days after written notice thereof, the other party shall withhold
enforcement of its remedies stated in this section for a reasonable period,
PROVIDED that the party to whom such written notice is given must be pursuing a
cure thereof diligently and in good faith. The immediately preceding sentence of
this paragraph, however, shall not apply to any breach or default by Tenant for
which ten (10) days written notice is not required (including Tenant's failure
to pay rent or other sums due of Tenant hereunder).
Notices. Any notice required to be given by the terms of this Lease
shall be in writing and shall be sent by first class: mail to the last address
of the party to whom the notice is to be given, as designated by such party in
writing. Landlord hereby designates his address as 00 Xxxxxxx Xxxxx, Xxxx
Xxxxxxx, Xxxxxxxxxxx. Tenant hereby designates its address as X.X. Xxx 00000,
Xxxxxxx, Xxxxxxxx 00000.
Entire Agreement; Severability. This Lease contains the entire
agreement between the parties and shall not be modified in any manner except by
an instrument in writing executed by the parties. If any term or provision of
this Lease or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid and unenforceable, shall not be affected
thereby and each other term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law. The covenants, conditions, and
agreements contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and their respective heirs, distributees, personal
representatives, trustees, successors, and assigns.
Joint Default. If Tenant shall breach or default in the performance
of any term, covenant or condition contained or hereafter established in any
other lease with Landlord for other property located in Washtenaw County,
Michigan, such breach or default shall be deemed a breach or default under this
Agreement of Lease.
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Access to Leased Premises. If access to the Leased Premises is by
stairway or other areas not within the Leased Premises, Landlord shall provide
all necessary and reasonable access for the benefit of Tenant. If the Leased
Premises includes stairways or other areas that are required for access to other
rental properties not included as part of the Leased Premises, Tenant shall
permit necessary and reasonable access to such other rental properties;
PROVIDED, however, Tenant's consent to such access shall be first obtained.
Tenant shall not unreasonably withhold such consent.
IN WITNESS WHEREOF, the parties have herewith set their hands and
seals as of the day and year first above written.
WITNESS: LANDLORD:
XXXXX ASSOCIATES LIMITED
PARTNERSHIP, a Connecticut
limited partnership
/s/ Xxx Xxxxxx By: /s/ Xxxxxx Xxxxx
-------------------------- -------------------------------------
Xxxxxx Xxxxx, General Partner
/s/ Xxxxxx X. Xxxxxxx
--------------------------
NEBRASKA BOOK COMPANY, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
-------------------------- -------------------------------------
Vice President
/s/ Xxxxx X. Xxxxxx
--------------------------
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STATE OF CONNECTICUT)
) ss.
COUNTY OF FAIRFIELD )
The foregoing instrument was acknowledged before me this 27th day of
August, 1986, by Xxxxxx Xxxxx, General Partner of Xxxxx Associates Limited
Partnership, a Connecticut limited partnership.
/s/ Xxxx X. Santa
----------------------------------
Notary Public
Fairfield County, Connecticut
My Commission Expires: 3/31/91
STATE OF MICHIGAN )
) ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this28th day of
August, 1986, by Xxxx Xxxx, Vice President of Nebraska Book Company, Inc., a
Kansas corporation, on behalf of the corporation.
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Notary Public
Weshtenaw County, Michigan
My Commission Expires: 12/28/88
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Schedule A
AGREEMENT OF LEASE
Xxxxxx Trust - Nebraska Book Company, Inc.
Premises located in the City of Xxx Arbor, Washtenaw County,
Michigan, described as:
The Second Floor only at the following described premises:
AS TO 1115 - 1117 SOUTH UNIVERSITY: Beginning at a point in the North line of
South University Avenue 157.36 feet East of the SW corner of Lot 21, X. X.
Xxxxx'x Addition to the City of Xxx Arbor, as recorded in Liber 42 of Deeds,
pages 446 and 447, Washtenaw County Records; thence East in the North line of
South University Avenue 41.72 feet to the BE corner of Lot 29; thence N'ly 92.0
feet in the East line of said Lot 29; thence West parallel to Xxxxx Xxxxxxxxxx
Xxxxxx 41.82 feet; thence S'ly 92.0 feet to the Place of Beginning, being a part
of Lot 29, X. X. Xxxxx'x Addition to the City of Xxx Arbor.
AS TO 0000 XXXXX XXXXXXXXXX: Part of Lot 30, X. X. Xxxxx'x Addition to the City
of Xxx Arbor, as recorded in Liber 42 of Deeds, pages 446 and 447, Washtenaw
County Records, described as: Commencing at the
SW corner of said Xxx 00 xxx xxxxxxx Xxxx xxxxx Xxxxx Xxxxxxxxxx Xxxxxx, 00 and
36/100 feet to a stake; thence North parallel with the West line of said Lot, 82
feet to a stake; thence West 22 and 26/100 feet to the West line of said Lot;
thence South 82 feet to the Place of Beginning. Also a right of way along and
over a parcel of land ten feet in width having Ats south boundary line 82 feet
North from the South line of said Lot and extending parallel with the South line
of said Lot from the East to the West line thereof.
