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RECIPROCAL EASEMENT AND OPERATION AGREEMENT

Real Estate Easement Agreement

RECIPROCAL EASEMENT AND OPERATION AGREEMENT | Document Parties: MEADOWBROOK INSURANCE GROUP INC | MB CENTER II, LLC, You are currently viewing:
This Real Estate Easement Agreement involves

MEADOWBROOK INSURANCE GROUP INC | MB CENTER II, LLC,

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Title: RECIPROCAL EASEMENT AND OPERATION AGREEMENT
Governing Law: Michigan     Date: 8/5/2005
Industry: Insurance (Prop. and Casualty)    

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                                                                    Exhibit 10.2

 

 

                   RECIPROCAL EASEMENT AND OPERATION AGREEMENT

 

                     AMERICAN COMMERCE CENTRE UNITS 13 & 14

 

      This RECIPROCAL EASEMENT AND OPERATION AGREEMENT (the "Agreement"), is

made and entered into as of May 9, 2005, by and among MEADOWBROOK INSURANCE

GROUP, INC., a Michigan corporation, whose address is 26255 American Drive,

Southfield, Michigan 48034 ("Meadowbrook"), and MB CENTER II, LLC, a Michigan

limited liability company, whose address is 101 West Big Beaver Road, Suite 200,

Troy, Michigan 48084 ("Center").

 

                              PRELIMINARY STATEMENT

 

      A.     Meadowbrook is the fee owner of Unit 13 and land contract vendor of

Unit 14, and Center is the land contract vendee of Unit 14 (each a "Unit", and

collectively, the "Units") in the American Commerce Centre, Oakland County

Condominium Subdivision Plan No. 1121 ("Condominium") situated in the City of

Southfield, pursuant to a Master Deed thereof, recorded on July 16, 1998, in

Liber 18714, Pages 477 through 520, inclusive, Oakland County Records (the

"Master Deed") as amended by First Amendment to Master Deed recorded in Liber

19915, Pages 599 through 610, Second Amendment to Master Deed recorded in Liber

20091, Pages 811 through 820, Third Amendment to Master Deed recorded in Liber

20131, Pages 335 through 344, Fourth Amendment to Master Deed in Liber 20998,

Pages 689-698, Fifth Amendment to Master Deed recorded in Liber 22509, Page 798

through 807 and Sixth Amendment to Master Deed has been recorded in Liber 35437,

Page 559 ("Sixth Amendment"). The Sixth Amendment has been recorded to subdivide

Unit 3 of the Condominium as originally established by the Master Deed to create

Units 13 and 14 as depicted on the Sixth Amendment.

 

      B.     Meadowbrook has engaged in the construction of an office building on

Unit 13 consisting of approximately 66,427 square feet (which includes a portion

of the Connector, as defined in Section 1.01), an appurtenant parking lot,

driveways, and a Connector which consists of approximately 15,425 square feet

which connects the building on Unit 13 to the proposed building on Unit 14. The

Connector will be appurtenant to Units 13 and 14 and include a certain area

designated as an atrium (the "Atrium") for use by Units 13 and 14. The Connector

also includes certain components which are part of the Unit 13 building

(including an elevator shaft, a third floor and a partial second floor) and

components which are part of the Unit 14 building (including an elevator shaft).

Meadowbrook and Center hereby establish certain common areas (collectively,

"Common Areas") which shall include common driveways on land included in their

respective Units, the Atrium and a certain passenger drop off area at the

entrance of the Atrium. More specifically, the Common Areas consist of the areas

designated as: (i) "Site Access Ingress/Egress Easement" on Sheet No. 3 of

Exhibit "A-2" attached hereto, (ii) the areas designated as "Nonexclusive

Easement Benefiting Unit 14" on Sheet No(s). 5, 6, 7, 8, 9 and 10 of Exhibit

"A-2" attached hereto, and (iii) the areas designated as "Nonexclusive Easement

Benefiting Unit 13" on Sheet No(s). 5, 6, 7, 8, 9 and 10 of Exhibit "A-2"

attached hereto. The

 

 

                                     RECIPROCAL EASEMENT AND OPERATION AGREEMENT

                                          American Commerce Centre Units 13 & 14

 

                                       1

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parking lot and driveway areas within each Unit are depicted on Sheet 3 of

Exhibit "A-2". Meadowbrook and Center are sometimes referred to herein as an

"Owner" or the "Owners." The office buildings, appurtenant drives and parking

lot areas, and the Connector are sometimes referred to herein as the

"Improvements."

 

      C.     Owners have agreed to enter this Agreement in order to: (i) grant

each other certain reciprocal easements and (ii) identify the rights,

obligations and restrictions regarding the operation and maintenance of each

Owner's respective Unit and Common Area. Such easements, obligations and

restrictions shall be binding upon the Owners and their successors and assigns

and are imposed upon each Unit and shall be appurtenant to and run with and

against the land.

 

      NOW, THEREFORE, in consideration of the mutual covenants and agreements

hereinafter set forth, the parties hereby grant, covenant, and agree as follows:

 

                            ARTICLE I -- IMPROVEMENTS

 

      Section 1.01. Improvements. Each Owner shall construct its building only

in material conformity with the rendering prepared by Rossetti and Associates

which depicts the buildings on Unit 13 and 14, and a four-story connector

connecting the building on Unit 13 to the building Unit 14 (the "Connector") and

which is attached hereto as Exhibit "A-1".

 

                        ARTICLE II -- RECIPROCAL EASEMENTS

 

      Section 2.01. Access to Common Areas. Each Owner hereby grants and conveys

to the other Owner for the benefit of the other Owner, the other Owner's Unit

and its tenants, employees, guests, licensees and invitees (collectively,

"Occupants"), a perpetual non-exclusive, irrevocable and reciprocal easement

over, and right to the use of the Common Areas, for purposes of ingress and

egress during the term of this Agreement and for such other purposes as shall be

consistent with the nature of the Common Areas.

 

      Section 2.02. Ingress, Egress and Parking Easement. Each Owner hereby

grants and conveys to the other Owner for the benefit of the other Owner, the

other Owner's Unit, all future Owners and all present and future Occupants of

the other Unit, a perpetual, non-exclusive, irrevocable and reciprocal easement

over and right to the use of the parking lots, roads (including without

limitation the Park Access Drive depicted on Sheet 3 of Exhibit "A-2" attached

hereto), driveways and sidewalks now or hereafter located on each Owner's Unit,

for purposes of vehicular and pedestrian ingress and egress to and from the

other Unit and to and from all abutting streets or rights-of-way furnishing

access to the Units, and for parking.

 

      Section 2.03. Utility Easements. Each Owner hereby declares, grants and

conveys to the other Owner for the benefit of the other Owner and the other

Owner's Unit, an easement in, to, over, under and across its Unit for the

purposes of permitting the installation, maintenance, repair, replacement,

removal and relocation of underground storm sewer lines, sanitary sewer pipes,

water and gas mains, electric power lines, telephone lines, and other

underground utility lines (each a "Utility Line" and, collectively, the "Utility

Lines"), for the purpose of providing service to the Improvements. The Utility

Line(s) shall be located as shown on Sheet No. 4 of Exhibit "A-2" attached

hereto. Each Owner shall have the right to relocate any Utility Line(s) which

services only that Owner's Unit, but which crosses the other Unit, upon the

written approval as to the exact location of the easement from the Owner of the

Unit being crossed. Such approval shall not be unreasonably withheld,

conditioned or delayed. Notwithstanding the

 

 

                                     RECIPROCAL EASEMENT AND OPERATION AGREEMENT

                                          American Commerce Centre Units 13 & 14

 

                                        2

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foregoing, the relocation of the Utility Line(s) shall not materially interfere

with the use of any Owner's Unit and Improvement thereon.

 

      Section 2.04. Temporary Construction Easement. In connection with any

construction work to be performed in the development of the Improvements, each

Owner hereby grants the other temporary easements for incidental temporary

encroachments onto its Unit. The permitted encroachments are those which may

occur as a result of the adjacent Unit's construction, so long as such

encroachments are temporary in nature, kept within the reasonable requirements

of the construction worksite, and do not interfere with the operation of the

constructed Improvement. The encroaching Owner agrees to indemnify, defend and

hold harmless the Owner of the land encroached upon from all claims, liability,

cost and expense (including attorney fees and court costs) arising as a result

of the encroachment. The permitted encroachments are permissible provided that

reasonable liability insurance (not less than $3,000,000.00 per occurrence) is

maintained which protects the Owner being encroached from any and all risks

associated with the encroachment. However, no encroachment in violation of

applicable building, zoning, or land use codes or laws shall be deemed permitted

by this Section 2.04 during any period of the construction. In the event that

the construction of the Unit 13 building is complete and the Owner and its

Occupants have entered the Improvement, the Owner of the Unit 14 building shall

use reasonable and diligent efforts not to unreasonably interfere or impede in

the use of the Common Areas or otherwise interfere with the Occupants' business

activities during construction.

 

            ARTICLE III -- OPERATION OF IMPROVEMENTS AND COMMON AREAS

 

      Section 3.01. Property Management and Maintenance.

 

      (a)    Individual Buildings. Each Owner shall manage and maintain and have

the right to contract for its own property management and maintenance company(s)

for its own building, independent of one another. In any event, each party shall

manage and maintain their building in a manner consistent with first-class

office buildings in Southeast Michigan and in accordance with the Bylaws of the

Master Deed for the Condominium. For the purposes of this Agreement, maintenance

shall include all repair and replacement of Improvements.

 

      (b)    Connector, Common Area and Parking Lots. The Owner of Unit 13 shall

be responsible for managing, maintaining, cleaning, repairing and replacing the

Atrium, the exterior walls and roof of the Connector and the Common Areas on a

day to day basis. The Owner of Unit 13 and the Owner of Unit 14 shall each be

responsible for its Proportionate Share (as defined in Section 3.03) of the

costs incurred with the management, maintenance, cleaning, repair and

replacement thereof. The Owner of Unit 13 shall select the company which will

manage and maintain the Atrium, the exterior walls and roof of the Connector and

the Common Areas but, prior to engaging a property manager, the Owner of Unit 13

shall consult with the Owner of Unit 14. At that time, the Owner of Unit 14 may

offer a proposal of its own for the management contract. The Owner of Unit 13

shall consider all proposals including, but not limited to, the proposal made by

the Owner of Unit 14. Each Owner shall be responsible for managing, maintaining,

cleaning, repairing and replacing the grounds, landscaped areas and the parking

lots (the "Unit Exterior Maintenance") on that Owner's Unit, on a day to day

basis, including without limitation the repair of lighting fixtures and the

replacement of light bulbs. Notwithstanding the foregoing, the Owners of both

Units shall endeavor to agree on a common manager/maintenance contractor(s) to

perform the Unit Exterior Maintenance on both Units. If the Owners so agree, the

costs of the Unit Exterior Maintenance shall be paid by both owners according to

their Proportionate Share in the same manner as the Common Area maintenance

 

 

                                      RECIPROCAL EASEMENT AND OPERATION AGREEMENT

                                          American Commerce Centre Units 13 & 14

 

                                       3

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expenses as provided above, except for those expenses to be specifically

incurred by each Owner pursuant to Section 3.01(c) which shall be paid

separately by the Owner(s),, unless the Owners shall expressly agree otherwise.

Each Owner shall pay its Proportionate Share for the expenses associated with

having a property manager maintain the Connector and Common Areas and, if

applicable, Unit Exterior Maintenance. If the manager is an affiliate of the

Owner of either Unit, the manager's fees will not exceed those generally charged

by managers of first-class office buildings in Southeast Michigan. The Owner of

Unit 13 shall manage, maintain, clean, repair and replace the Connector and

Common Areas in a manner consistent with first-class buildings in Southeast

Michigan and in compliance with the Master Deed of the Condominium, and the

Owner or Owners responsible for the Unit Exterior Maintenance shall comply with

the same standard. The Owner of Unit 13 shall not have an obligation to consult

with the Owner of Unit 14 until such time as Unit 14's building has been

completed.

 

      (c)    Parking Lot Repair and Replacement. Each Owner shall, at all times

and at its own expense, be responsible for repairing, re-paving, re-striping,

and replacing the markings on the surface of the parking lots contained within

the boundaries of such Owner's Unit, from time to time and as necessary, to

provide for orderly parking of automobiles. Each Owner shall repair, re-pave,

re-stripe and otherwise mark its parking lots in accordance with Sheet 3 of

Exhibit "A-2" and in a manner consistent with other first-class properties in

Southeast Michigan and in compliance with the Master Deed of the Condominium.

 

      Section 3.02. Proportionate Share Defined. Each Owner's Proportionate

Share of costs incurred shall be a fraction, whereby the numerator shall be the

total square footage of the floor area of an Owner's building and the

denominator is the total square footage of the floor area of both buildings

(hereinafter, the "Proportionate Share"). The calculation of total square

footage of Unit 13 shall consist of the floor area of the building located on

Unit 13. The calculation of total square footage for the Unit 14 building shall

consist of the floor area of the building located on Unit 14. The total floor

area of the Unit 13 building is 66,427 square feet and the total floor area of

the Unit 14 building is anticipated to be 82,590 square feet. The actual square

footage of the building on Unit 14 will be determined upon completion of

construction of the same and, if the actual square footage varies from the

anticipated square footage by more than 820 square feet, the Proportionate

Shares of the parties will be recalculated.

 

      The sole purpose of identifying the square footage measurements of each

building, noted in this Section 3.02, is to establish each Owner's Proportionate

Share. The values noted herein are not to be considered a determinative value

for purposes of leasing space within the respective buildings.

 

      Section 3.03. Payment/Reimbursement of Proportionate Share. At reasonable

intervals, not more frequently than monthly nor less frequently than quarterly,

the Owner of Unit 13, or its designated property manager, shall submit invoices

for the expenses incurred for the costs and expenses identified in this

Agreement as costs for which the Owners are proportionately responsible. The

Owner of Unit 14 shall pay its Proportionate Share thereof to the Owner of Unit

13, or its designated property manager, within thirty (30) days of receiving the

invoice, and the Owner of Unit 13 shall pay its Proportionate Share within the

same thirty (30) day period. In the event that either Owner has paid the full

amount of any cost to be shared by the Owners of both Units 13 and 14 pursuant

to this Agreement and is thereby entitled to be reimbursed by the other Owner,

the other Owner shall reimburse the Owner entitled to reimbursement within

thirty (30) days of receiving a written statement of the obligation, together

with paid invoices or other reasonable supporting documentation. Any expenditure

by the

 

 

                                     RECIPROCAL EASEMENT AND OPERATION AGREEMENT

                                          American Commerce Centre Units 13 & 14

 

                                       4

<PAGE>

Owner of Unit 14 and any dispute arising under this Section 3.03 concerning a

reimbursement right or obligation shall be governed by the terms of Article VI,

Remedies.

 

      Section 3.04. Each Owner's Responsibilities. Each Owner shall be

responsible for the maintenance and repair of its own Unit and Improvements

thereon, except as expressly described in this Agreement.

 

      Section 3.05. Parking Area.

 

      (a)    Parking Allotment and Location. Each Unit contains a parking lot

intended to serve the Occupants of that Unit. The Owners acknowledge that it is

undesirable to block access to one another's parking lots and that a certain

amount of mutually shared use of their respective parking areas is therefore

likely to occur. Each Unit Owner agrees that neither building will be leased to

or occupied by a user whose intensity of use will unduly burden the parking

areas. To that end, it is agreed that the Owner of Unit 13 will not permit the

Unit 13 building to be occupied by more than one person for each 175 square feet

of "useable floor area" (as defined in Section 3.05(b)) within the Unit 13

building, and the Owner of Unit 14 will not permit the Unit 14 building to be

occupied by more than one person for each 200 square feet of "useable floor

area" within the Unit 14 building.

 

      (b)    Useable Floor Area. Shall be the sum of the gross horizontal floor

areas of all the floors of the building or structure and of all accessory

buildings measured from the interior face of the exterior walls and which may be

made usable for human habitation but excludes the horizontal floor area of

heater rooms, mechanical equipment rooms, attics, light shafts, public

corridors, public stairwells, elevator shafts, and public toilets.

 

      (c)    Reserved Parking. Notwithstanding the terms of Section 2.02 or this

Section 3.05, each Owner shall have the right to mark and reserve up to twenty

(20) parking spaces within the boundaries of its Unit for use exclusively by

visitors or other persons designated by such Owner.

 

      Section 3.06. Utilities.

 

      (a)     Each Owner shall be responsible for its own costs associated with

the consumption of all utilities in the operation of the Improvements within

that Owner's Unit.

 

      (b)    The heating and cooling system for the Atrium is provided by means

of the Unit 13 heating, ventilating and air-conditioning system. The cost of

providing such service (including equipment maintenance and repair and natural

gas costs, but excluding electricity costs) deemed attributable to the Atrium

shall be one hundred twenty-five one-thousandths (.125) or twelve and one-half

percent (12.5%) of Unit 13's total costs incurred for the service provided in

this Section 3.06(b). (Such percentage represents the ratio of twice the floor

area of the Atrium to the total floor area of the Unit 13 building plus twice

the floor area of the Atrium.) Each Owner shall pay a Proportionate Share of the

cost of heating, ventilating and cooling attributable to the Atrium. The Atrium

is separately metered for electric power. Each Owner shall pay its Proportionate

Share of the cost of electricity attributed to the Atrium. The Owner of Unit 13

or its manager will invoice the Owners for their respective Proportionate

Shares.

 

      (c)    There is a single electric meter for lighting both parking lots. A

single water meter for sprinkling the grounds, and landscaping has been or will

be installed for both parking

 

 

                                     RECIPROCAL EASEMENT AND OPERATION AGREEMENT

                                          American Commerce Centre Units 13 & 14

 

                                       5

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lots, grounds and landscaping. The Owner of Unit 13 or its manager will receive

the electric and water bills and will invoice the Owners for their Proportionate

Shares.

 

      Section 3.07. Utility Line and Service. Each Owner shall be solely

responsible for maintenance and repairs associated with the Utility Lines

located on its own Unit to the extent that such Utility Line provides service

solely to that Owner's Unit. If a Utility Line is exclusively servicing one Unit

and crosses the other Unit, such Utility Line shall be maintained by the Owner

of the Unit served by the Utility, subject to the provisions of Section 2.02.

Utility Lines serving both Units and Common Areas shall be serviced by the Owner

of the Unit where the line i


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