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EXHIBIT 10.66
ASSIGNMENT OF LEASE
AND
AMENDMENT OF LEASE
THIS ASSIGNMENT OF LEASE AND AMENDMENT TO LEASE ("ASSIGNMENT") is made
by and between ELECTRIC MOTOR SYSTEMS, INC. (incorrectly referred to in the
Lease as Electric Motor Services, Inc.), an Ohio corporation (herein referred to
as "EMS"), AND MAGNETEK, INC., a Delaware corporation (hereinafter referred to
as "MagneTek"), under the following circumstances:
A. EMS is the tenant under a certain Lease Agreement dated April 19,
1995 (the LEASE") by and between XXXXXX X. XXXXX (herein, the "LESSOR") and EMS
pursuant to which EMS leases from Lessor the property located at 00000 Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxx (the "LEASED PREMISES").
B. In connection with MagneTek's purchase of the assets of EMS, EMS has
agreed to assign its interests in the Lease to MagneTek, and MagneTek has agreed
to assume the obligations of EMS under the Lease.
C. As a condition of such assignment and assumption of the Lease,
Lessor and MagneTek desire to make certain amendments to the Lease as set forth
in this Assignment.
NOW THEREFORE, in consideration of the covenants and agreements
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. ASSIGNMENT. Effective as of the Effective Date (as defined below),
EMS assigns and transfers to MagneTek all of EMS's right, title and interest
under and in the Lease. EMS covenants that EMS has performed all of its
obligations under the Lease which are to be performed before the Effective Date,
and EMS further agrees to indemnify and hold harmless MagneTek from any and all
such obligations.
2. ASSUMPTION. Effective as of the Effective Date, MagneTek assumes all
of the obligations of EMS under the Lease which, pursuant to the terms and
provisions of the Lease, are to be performed on and after the Effective Date,
and MagneTek further agrees to indemnify and hold harmless EMS from any and all
such obligations.
3. EFFECTIVE DATE. The effective date of this Assignment ("EFFECTIVE
DATE") shall be the date that the closing of the asset purchase transaction
occurs, which the parties presently anticipate will occur on or about JULY 23,
1999. At the request of either party, upon such closing, the parties shall sign
a letter confirming the Effective Date. If the closing does not occur on or
before August 31, 1999, this Assignment shall automatically become null and
void.
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4. AMENDMENTS TO THE LEASE. Lessor and MagneTek agree to the following
amendments to the Lease, which amendments shall become effective on the
Effective Date:
(A) Renewal Option. The parties acknowledge that, pursuant to section 2
of the Lease, the present term of the Lease is scheduled to expire on April 18,
2000. All but the first sentence of section 2 of the Lease is deleted and the
following is inserted in its place:
"Provided that, at the time of Lessee's exercise of the renewal
option and at the commencement of the renewal period, Lessee is not
in default under this Lease beyond any applicable notice or grace
period, Lessee shall have one (1) option to extend the term of this
Lease for a renewal period of five (5) years (being the period from
April 19, 2000 through April 18, 2005). The renewal shall be on the
same terms and conditions as set forth in this Lease, except that
(i) rent payable during the renewal period shall be adjusted as
described in section 3 of this Lease, and (ii) upon the expiration
of the renewal term, Lessee shall have no further renewal options.
To exercise the renewal option, Lessee must notify the Lessor in
writing no less than one hundred twenty (120) days prior to the
date that the initial term of this Lease would otherwise have
expired. If Lessee does not exercise its renewal option, Lessor
shall have the right to place one or more "for rent" signs on the
Leased Premises during the last six (6) months of the term and to
exhibit the Leased Premises to prospective tenants."
(B) Rent for Current Term. Paragraph 3.B. of the Lease is revised to
provide that, effective as of the Effective Date and continuing through the
remainder of the current term of the Lease, rent payable by Lessee under section
3 of the Lease shall be equal to Seventy-Eight Thousand Dollars ($78,000.00),
payable in advance on the first day of each month, without demand or set off, in
equal monthly installments of Six Thousand Five Hundred Dollars ($6,500.00)
each. Rent for any partial calendar month falling within the term shall be
prorated on a per diem basis.
(C) Rent for Renewal Period. Paragraph 3.C. of the Lease is revised to
provide that, if Lessee timely exercises the renewal option, rent payable by
Lessee under section 3 of the Lease during the renewal period shall be equal to
the then Fair Market Rental Rate (as defined below) of the Leased Premises,
determined as follows:
(i) Within thirty (30) days after Lessor receives Lessee's notice
of exercise of its renewal option, Lessee shall furnish to Lessee written notice
of Lessor's determination of the Fair Market Rental Rate. If Lessee does not
accept Lessor's determination of the Fair Market Rental Rate and lessor and
Lessee are unable to agree upon same, then Lessee shall, within thirty (30) days
after Lessee's receipt of written notice of Lessor's determination of the Fair
Market Rental Rate, notify Lessor in writing that either (a) Lessee elects to
rescind its exercise of the renewal option, whereupon such exercise shall become
immediately null and void, or (b) Lessee
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elects to invoke the Fair Market Rental Rate determination procedure described
in the following subparagraph (iii).
(ii) If Lessee elects (b) above, Lessor and Lessee shall each
designate a local, disinterested, professional real estate appraiser who is a
member of the American Institute of Real Estate Appraisers ("MAI") and who has
at least seven (7) years experience appraising similar properties in the
geographical are in which the Leased Premises is located. Each such appraiser
shall have thirty (30) days (after being designated) within which to determine
the Fair Market Rental Rate. If the two (2) appraisers agree on the Fair Market
Rental Rate, or if the higher of the two Fair Market Rental Rates is not more
than five percent (5%) higher than the lower of the two Fair Market Rental
Rates, the agreed upon rate (or the average of the two rates, whichever is
applicable) will become the Fair Market Rental Rate and will be binding upon
Lessor and Lessee. If the higher of the two Fair Market Rental Rates is more
than five percent (5%) higher than the lower of the two Fair Market Rental
Rates, the highest ranking officer of the local chapter of the American
Institute of Real Estate Appraisers who is not related to either of the parties
or the MAIs previously designated shall select a third MAI, and the third
appraiser shall have thirty (30) days after being designated within which to
determine the Fair Market Rental Rate. The agreement of two (or of all three) of
the appraisers as to the Fair Market Rental Rate will be binding upon Lessor and
Lessee. If no two appraisers agree, the average of the Fair Market Rental Rates
determined by the three appraisers will become the Fair Market Rental Rate and
will be binding upon Lessor and Lessee. Each party shall pay the fee and any
associated expenses charged by the MAI which it selects, and the fee and any
associated expenses charged by the third MAI shall be split evenly between the
parties.
(iii) Promptly after the Fair Market Rental Rate has been
determined in accordance with this paragraph (C), Lessor shall provide Lessee,
and the parties shall promptly execute, a Lease extension agreement which
memorializes the extension of the term of the Lease and the rent payable during
the renewal period.
(iv) The term "FAIR MARKET RENTAL RATE", as used herein, shall mean
the amount of rent that a willing tenant would pay and a willing landlord would
accept for the Leased Premises, in an open market and on an arms-length basis,
taking into consideration the then existing age and condition of the building
and other improvements on the leased Premises, the location of the Leased
Premises, and other relevant factors, and assuming that the other terms and
conditions of such tenant's lease of the Leased Premises were comparable to
those set forth in the Lease.
D. Permitted Use. Lessee shall use the Leased Premises for the
following purposes and for no other p purpose without the Lessor's prior written
consent, which consent shall not be unreasonably withheld: Manufacturing
facility, office, distribution, R & D center, and for such other uses as may be
necessary in connection with or incidental to Lessee's business. Lessee shall
ensure that its use of the Leased Premises complies at all times with applicable
zoning, building, environmental and other laws.
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E. Alterations and Improvements. The first sentence of section 9 of the
Lease is revised to provide that Lessee may, with our receiving Lessor's prior
written consent, make alterations and improvements to the Leased Premises
costing, in the aggregate (per construction project), Ten Thousand Dollars
($10,000.00) or less. Lessee shall not make any alterations or improvements to
the Leased Premises costing, in the aggregate (per construction project), in
excess of Ten Thousand Dollars ($10,000.00) without the prior written consent of
Lessor, which consent Lessor agrees shall not be unreasonably withheld.
F. Notice. With reference to section 25 of the Lease, the address of
Lessee, for purposes of receiving notices from Lessor under the Lease, is
changed to the following:
MagneTek, Inc.
00 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
G. No Purchase Option. Section 21 of the Lease is deleted.
All terms of the Lease not amended hereby or not inconsistent herewith shall
remain in full force and effect.
5. SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon and
shall operate to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment.
Signed and acknowledged Assignor:
in the presence of: ELECTRIC MOTOR SYSTEMS, INC.
By:
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Xxxxxxx Xxxxx
President
Printed Name:
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(witness 1 as to Assignor)
Assignee:
MAGNETEK, INC.
By:
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Printed Name: Printed Name:
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(witness 1 as to Assignee)
Title:
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Printed Name:
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(witness 2 as to Assignee)
STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX )
The foregoing instrument was acknowledged before me this ___ day of
July, 1999, by Xxxxxxx Xxxxx, President of ELECTRIC MOTOR SYSTEMS, INC., an Ohio
corporation, on behalf of the corporation.
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Notary Public
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STATE OF ____________ )
) SS:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ___ day of
July, 1999 by ___________________, the _________________ of MAGNETEK, INC., a
Delaware corporation, on behalf of the corporation.
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Notary Public
LESSOR'S CONSENT
The undersigned, XXXXXX X. XXXXX, the Lessor under the Lease referred
to in the foregoing Assignment, hereby consents to the assignment of the Lease
and agrees to the amendments to the Lease as hereinabove set forth. Effective as
of the Effective Date, EMS is released from all liability under the Lease.
Lessor:
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Xxxxxx X. Xxxxx
Date: July , 1999
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