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Exhibit 2.2
LEASE
THIS LEASE (the "LEASE") is made as of July 31, 1997, between THE
MONARCH MACHINE TOOL COMPANY, an Ohio corporation ("LESSOR"), whose address is
000 Xxxxx Xxx Xxxxxx, Xxxxxx, Xxxx 00000, and MONARCH LATHES, L.P., an Ohio
limited partnership ("LESSEE"), whose address is c/o Lucas Precision, Inc.,
General Partner, 00000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxx 00000.
SECTION 1. GRANT OF LEASE. Lessor leases to Lessee, and Lessee leases from
Lessor, upon the terms and conditions set forth below, the property (the "LEASED
PREMISES") consisting of: (i) the real property located at 000 Xxxxx Xxx Xxxxxx,
Xxxxxx, Xxxx, as more particularly described in Exhibit A attached to and made a
part of this Lease (the "LAND"), (ii) the buildings and all other improvements
and appurtenances located thereon (collectively the "BUILDING"), (iii) all
systems, fixtures, equipment, cranes, and other improvements now or in the
future located on the Land, and (iv) all other rights and easements appurtenant
to the Land, the Building and other improvements.
SECTION 2. TERM. The term of this Lease (the "Term") shall be for five (5)
years commencing on July 31, 1997 and ending on July 31, 2002.
SECTION 3. RENT. Lessee shall pay Lessor as rent for the Leased Premises (the
"Base Rent") during the Term the following amounts for the corresponding periods
set forth below:
1. from the commencement date of the Term to and including December
31, 1997, $161,439.74 per annum, payable in equal monthly
installments, in advance, at the rate of $13,453.32 per month;
2. from January 1, 1998 to and including December 31, 1998,
$159,679.59 per annum, payable in equal monthly installments, in
advance, at the rate of $13,306.63 per month;
3. from January 1, 1999 to and including December 31, 1999,
$157,919.24 per annum, payable in equal monthly installments, in
advance, at the rate of $13,159.94 per month;
4. from January 1, 2000 to and including December 31, 2000,
$156,407.78 per annum, payable in equal monthly installments, in
advance, at the rate of $13,033.98 per month;
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5. from January 1, 2001 to and including the end of the Term,
$154,221.84 per annum, payable in equal monthly installments, in
advance, at the rate of $12,851.82 per month.
The Base Rent shall be payable on the first day of each month during the Term to
Lessor at its notice address or at such other place as Lessor may designate by
written notice to Lessee. The Base Rent for any partial month at the beginning
or end of the Term shall be prorated on a per diem basis and shall be payable in
advance on the first day of the partial month.
SECTION 4. NET LEASE. Lessee shall pay all Base Rent and all other charges due
under this Lease without notice or demand and without any deductions, set-offs,
counterclaims or abatement, of any kind, except as specifically permitted
hereby.
SECTION 5. CONDITION OF BUILDING. Except as otherwise provided in this Lease and
the Asset Purchase Agreement (as hereinafter defined), Lessee accepts the Leased
Premises "as is" and agrees that neither Lessor nor any of its agents or
employees have made any other representations or warranties, either written or
oral, express or implied, with respect to the condition, suitability, state of
repair or zoning of the Leased Premises.
SECTION 6. ALTERATIONS. During the term of this Lease, Lessee, at its sole
expense, may make interior, nonstructural alterations and improvements to the
Building, but only if the plans for such alterations or improvements have first
been approved by Lessor. Lessor's approval shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding anything to the contrary, Lessor
acknowledges that Lessee intends to use and occupy approximately 70,000 square
feet of the 450,000 square feet contained in the Building, and that Lessee may
erect such walls, partitions, barricades, and similar improvements to effect
this purpose and "winterize" the balance of the area that it does not plan to
use in its business, including re-routing of, draining, and/or shutting off
mechanical, electrical and plumbing lines and systems therein. Lessee shall make
no exterior or structural alterations or improvements to any portion of the
Leased Premises without Lessor's consent.
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SECTION 7. LESSEE'S REPAIRS AND MAINTENANCE. During the term of this Lease,
Lessee at its expense shall (a) provide all necessary maintenance, repairs and
replacements of, and keep in good working condition and state of repair in
accordance with applicable laws, codes and regulations, the non-structural,
interior portions of the Building, except for normal wear and tear and
obsolescence, and except for damage by fire or other casualty; (b) provide all
necessary maintenance, repairs and replacements of, and keep in good working
condition in accordance with applicable laws, codes and regulations, the water,
gas, electrical, plumbing, heating, ventilating, air conditioning, and all other
mechanical and utility systems and facilities serving the Leased Premises
including all cranes, except that, with respect to repairs or replacements of
such items that will in the aggregate cost more than $17,500 in any year (based
on the year that commences on the commencement date of this Lease and each
anniversary thereof, and prorated for any partial year if this Lease terminates
on a date other than the last day prior to such anniversary date) ("MAJOR
REPAIRS"), Lessee will be responsible only for the first $17,500 of the Major
Repairs, and except for damage by fire or other casualty covered or that would
normally be covered by replacement cost boiler and machinery insurance without
deductibles, coinsurance or self-insurance, Lessor will be responsible for the
excess; (c) keep the sidewalks, parking areas, and drives on or about the
exterior of the Leased Premises in a clean, sightly and sanitary condition, free
of ice and snow; and (d) keep all lawns mowed, shrubbery trimmed and the yards
free of excessive weed growth, so that the lawns and yards shall at all times be
maintained in a neat and presentable condition. Notwithstanding anything to the
contrary herein, Lessor and Lessee acknowledge that portions of the Leased
Premises may not be needed for the operations of Lessee or its permitted
subtenants, and each party agrees with the other that it will not unreasonably
withhold its consent to the deferral of maintenance where (i) the affected space
is not occupied, (ii) the deferral will not result in damage, deterioration or
an unreasonable safety hazard with respect to the Leased Premises or affect
Lessee's use, occupancy and/or enjoyment of the balance of the Leased Premises
and (iii) the maintenance is not required by applicable laws, codes or
regulations. In addition, Lessee shall be responsible for any damage to the
Leased Premises caused by the negligence or other tortious acts of Lessee, its
employees, agents, contractors, licensees, or invitees, except as otherwise
provided in Sections 14, 15, 16 and/or 24 hereof.
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SECTION 8. LESSOR'S REPAIRS AND MAINTENANCE. During the Lease Term, except as
provided in Section 7, Lessor shall, at its expense, (a) provide all necessary
maintenance, repairs and replacement of, and keep in good working condition and
state of repair in accordance with all applicable laws, codes and regulations,
all structural portions of the Leased Premises, including, but not limited to,
the roof, weight-bearing walls and columns, footings, foundations, and floor
slabs, and (b) provide any Major Repairs of the systems, facilities, equipment
and other property described in Section 7(b) and pay for the costs so incurred
to the extent of the excess over $17,500 per year. The parties intend that the
foregoing shall require that the roof be kept in such state of repair that water
and the elements neither injure the contents of the Leased Premises nor
interfere with the processes of production therein. To the extent that
replacements (as opposed to ordinary maintenance and repairs, which are Tenant's
responsibility) of sidewalks, parking areas or drives are required, Lessor shall
provide the same at its expense. Lessor's obligations under this Section shall
not be deemed to relieve Lessee to the extent Lessee is responsible under the
last sentence of Section 7.
SECTION 9. USE OF PREMISES. The Leased Premises shall be used and occupied for
the purpose of conducting a machine tool manufacturing, reconditioning and parts
service business and general manufacturing and warehousing in accordance with
applicable law, and for no other purpose or activity without the prior written
consent of Lessor, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Lessee shall not remove equipment from the
Building except in compliance with applicable law.
SECTION 10. COMPLIANCE WITH LAWS. Except for any obligations that Lessor may
have pursuant to (a) its repair and maintenance obligations under Section 8, or
(b) Article 19 "Environmental," and except as otherwise provided in this Lease,
Lessee at its sole cost shall comply with and cause the Leased Premises to be in
compliance with all laws, ordinances and regulations, and other governmental
rules, orders and determinations, now or in force or subsequently enacted,
whether or not presently contemplated (collectively "LEGAL REQUIREMENTS")
applicable to Lessee's use and occupancy of the Leased Premises and all
contracts (including insurance policies), agreements, covenants, conditions and
restrictions applicable to
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the Leased Premises disclosed to Lessee pursuant to the Asset Purchase
Agreement. Lessee may contest the application and validity of any Legal
Requirements at its cost, provided that, during the pendency of any such
contest, Lessee provides Lessor with adequate security against any loss, damage
or liability to which Lessor may be subject as a result of Lessee's
noncompliance with the Legal Requirement in dispute.
SECTION 11. LIENS.
11.1 Lessee will not create or permit to be created or to remain, and
will promptly discharge, at its sole expense, any lien, encumbrance or charge
upon the Leased Premises or upon Lessee's leasehold interest, of any person
claiming under or through Lessee. This obligation includes, but is not limited
to, any lien, encumbrance or charge that arises out of the use or occupancy of
the Leased Premises by Lessee or by reason of any labor or materials furnished
or claimed to have been furnished to Lessee or by reason of any construction,
addition, alteration or repair of any part of the Leased Premises by Lessee.
11.2 Nothing in this Lease shall be construed as constituting the
consent or request of Lessor, express or implied, to any contractor,
subcontractor, laborer, material man or vendor for the performance of any labor
or services or the furnishing of any materials for any construction, alteration,
addition or repair to the Leased Premises. Lessor gives notice that it will not
be liable for any labor, services or materials furnished or to be furnished to
Lessee, or to anyone holding the Leased Premises or any part or interest in the
Leased Premises through or under Lessee, and that no mechanic's or other lien
for any such labor or materials shall attach to or affect Lessor's interest in
the Leased Premises.
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SECTION 12. TAXES, ASSESSMENTS AND OTHER CHARGES.
12.1 Lessee agrees to pay all "Taxes" (as defined below) levied or
assessed against the Leased Premises that constitute a lien and are payable
during the term of this Lease, but only a pro rata portion of the installments
of Taxes that constitute a lien and are payable in the years in which the
commencement and expiration dates of this Lease occur, such pro rata share to be
determined as of the commencement and expiration dates based upon the actual
number of days elapsed. If any special assessments are levied or assessed during
the Term, Lessor shall elect to pay same in installments over the longest period
therefor then available under applicable law. Lessee shall not be obligated to
pay any installment of any special assessment that may be assessed, levied or
confirmed during the term of this Lease, but does not fall due and is not
required to be paid until after the expiration of this Lease, except for a pro
rata share of the installments that constitute a lien during the Term but are
payable following the expiration of this Lease. The parties intend that the
taxes shall be prorated according to the dates that the taxes become payable,
irrespective of the periods covered by the tax bills, and that the same method
of tax proration shall be used at the commencement and termination of this
Lease.
12.2 As used in this Lease, the term "Taxes" means all ad valorem real
estate taxes, assessments and levies, whether general or special, ordinary or
extraordinary, of every nature or kind whatsoever, that may be taxed, charged,
assessed, levied or imposed and are payable at any time during the Term by any
governmental authority upon or against (a) the Leased Premises (b) the rent or
other sums payable by Lessee under this Lease, or (c) this Lease or the
leasehold estate created by this Lease. Lessee shall not be required to pay any
franchise, estate, inheritance, transfer, income or similar tax of Lessor unless
that tax is imposed, levied or assessed in substitution for any other tax,
assessment, charge or levy that Lessee is required to pay pursuant to this
Section 12, and then only to the extent of the substituted effect.
12.3 Lessee shall pay the Taxes before any delinquency can occur. Proof
of payment shall be delivered promptly to Lessor. If Lessee fails to pay any
Taxes by the due date, then, in addition to any other remedy of Lessor, Lessor
may (but shall not
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be obligated to) pay the same plus any penalties or interest, and Lessee shall
reimburse Lessor for all amounts so paid within 5 days after Lessor notifies
Lessee of the payment.
SECTION 13. UTILITIES AND SECURITY SERVICE. Lessee at its expense shall obtain
and promptly pay for all utility services for the Leased Premises, including,
but not limited to, electricity, gas, water, sewer, steam, telephone, and trash
collection. In addition, Lessee at its expense may continue the security service
for the Leased Premises or may, at its option, terminate such service and make
its own arrangements. All utility services to the Leased Premises are and shall
continue to be separately metered, and shall be billed directly to Lessee.
SECTION 14. INDEMNIFICATION, PUBLIC LIABILITY AND PROPERTY DAMAGE.
14.1 Lessee shall defend all actions against Lessor and any employee,
officer, director or shareholder of Lessor (collectively, the "INDEMNIFIED
PARTIES") with respect to, and shall pay, protect, indemnify and save harmless
the Indemnified Parties against, any and all liabilities, losses, damages,
costs, expenses (including reasonable attorneys' fees and expenses), suits,
claims, demands or judgments of any nature arising from (i) injury to or death
of any person, or damage to or loss of property, on the Leased Premises or on
adjoining streets or sidewalks, or connected with the use, condition or
occupancy of any of the same, (ii) violation of this Lease by Lessee, or (iii)
any act or omission of Lessee or its agents, contractors, licensees, sublessees
or invitees thereon; BUT EXCEPTING any and all liabilities, losses, damages,
costs, expenses (including reasonable attorneys' fees and expenses), suits,
claims, demands or judgments of any nature (a) arising from the negligence or
tortious acts of Lessor, and/or its employees, officers, directors or
shareholders, (b) that Lessor is responsible for under the provisions of Section
19.4 hereof (relating to certain environmental matters), and (c) claims and
liabilities waived by Lessor pursuant to Section 24 hereof.
14.2 Lessor shall defend all actions against Lessee and any employee,
officer, partner, director or shareholder of Lessee (collectively, "LESSEE'S
INDEMNIFIED PARTIES") with respect to, and shall pay, protect, indemnify and
save harmless Lessee's Indemnified Parties against, any and all liabilities,
losses,
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damages, costs, expenses (including reasonable attorneys' fees and expenses),
suits, claims, demands or judgments of any nature arising from (i) injury to or
death of any person, or damage to or loss of property, on the Leased Premises or
on adjoining streets or sidewalks, as a result of the negligence or tortious
acts of Lessor, and/or its employees, officers, directors or shareholders, (ii)
violation of this Lease by Lessor, or (iii) any act or omission or Lessor or its
agents, contractors, licensees or invitees thereon; BUT EXCEPTING any and all
liabilities, losses, damages, costs, expenses (including reasonable attorneys'
fees and expenses, suits, claims, demands or judgments of any nature (a) for
which Lessee is liable as provided in Section 14.1, Section 19.3 or otherwise
under this Lease, or (b) waived by Lessee pursuant to the provisions of Section
24 hereof.
14.3 During the Lease term, Lessee shall keep in effect, at its
expense, commercial general liability insurance against claims for personal
injury, death or property damage covering the Leased Premises and adjoining
streets and sidewalks and providing coverage with maximum limits of liability of
not less than $2,000,000.00 for personal injury or death in any one occurrence,
$2,000,000.00 in the aggregate per policy year, and $1,000,000.00 for property
damage. With respect to this insurance, Lessor shall be an additional insured.
14.4 Lessee's insurance policy shall contain, to the extent obtainable,
an agreement by the insurer that it will not cancel the policy except after 10
days' prior written notice to Lessor, and that any loss otherwise payable under
the insurance policy shall be payable notwithstanding any act or negligence of
Lessor or Lessee that might, absent such agreement, result in a forfeiture of
all or part of the insurance proceeds.
14.5 Before Lessee takes occupancy of the Leased Premises, Lessee shall
deliver to Lessor certificates of the insurance required to be maintained under
this Section. Lessee shall also deliver to Lessor at least 10 days before the
expiration date of each policy (or of any renewal policy), certificates for the
renewal policies of this insurance.
14.6 If Lessee fails to effect, maintain or renew any insurance
provided for in this Lease, or to pay the premiums for the same, or to deliver
to Lessor any required certificates, then, in addition to any other remedy
available to Lessor, Lessor may
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(but shall not be obligated to), upon 5 days' notice to Lessee, procure such
insurance. Lessee shall reimburse Lessor for all amounts so paid within 5 days
after Lessor notifies Lessee of this payment.
14.7 Lessee shall have the right to insure and maintain all insurance
coverages required hereunder under blanket insurance policies covering other
premises so long as such blanket insurance policies comply with the provisions
and amounts of insurance provided under this Lease. Furthermore, such policy or
policies may contain such deductibles as Lessee may reasonably determine in
accordance with sound business practices.
SECTION 15. FIRE AND CASUALTY INSURANCE.
15.1 During the Lease term, Lessor shall keep the Building and all
other improvements now or in the future located on the Leased Premises insured
against loss by fire and extended coverage perils and boiler and machinery, in
such amount as Lessor deems appropriate consistent with its past practices. In
addition, Lessor may obtain rent loss and other insurance reasonably required
for the Leased Premises, all in form and substance and in amounts acceptable to
Lessor.
15.2 During the term of this Lease, Lessee shall reimburse Lessor for
the amount of the premiums incurred by Lessor in carrying the insurance provided
in Section 15.1. This amount shall be payable as additional rent within 10 days
after Lessor notifies Lessee in writing of the sum due, and provides Lessee with
a computation of that sum and copies of the insurance policy and premium bills
upon which the computation is based. Lessee shall be responsible only for a pro
rata share of any such premiums during any partial year in which this Lease
commences or terminates, based upon the actual number of days during which this
Lease was in effect as compared to the period covered by the insurance period.
Lessor shall have the right to insure and maintain the insurance coverages set
forth in Section 15.1 above under blanket insurance policies covering other
premises owned by Lessor so long as such blanket insurance policies comply with
the provision and the amounts of insurance provided in this Lease. In the event
Lessor maintains such blanket insurance policies, the premium shall be prorated
between the Leased Premises and such other premises as may be covered thereunder
by multiplying the annual cost per hundred dollars of property value covered
thereby by the full replacement cost of the Leased Premises for insurance
purposes, which is agreed to be $24 Million. In no event shall Lessee's
reimbursement obligation under this Section 15.2 exceed $13,700 for the first 12
months
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of the Term. Lessor and Lessee agree to work together cooperatively and in good
faith to limit all future increases in such amount. If in any year the amount of
such premiums exceeds $17,000, that portion of the amount of such premiums that
is in excess of $17,000 shall be divided equally between and paid by Lessor and
Lessee. This obligation shall survive the expiration or termination of this
Lease.
SECTION 16. CONDEMNATION AND CASUALTY.
16.1 Lessee irrevocably assigns to Lessor any award, compensation or
insurance payment to which Lessee may become entitled by reason of Lessee's
interest in the Leased Premises (a) if the use or occupancy of or title to the
Leased Premises, or any part of or interest in the Leased Premises, is taken,
requisitioned or sold because of any actual or threatened eminent domain
proceeding or other action by any person having the power of eminent domain
(collectively, a "CONDEMNATION") or (b) if the Leased Premises are damaged or
destroyed, in whole or in part, by fire, flood or other casualty (collectively,
a "CASUALTY"). Lessor may appear in any proceeding, action, negotiation,
prosecution or adjustment and negotiate, prosecute and adjust any claim for any
award, compensation or insurance payment on account of any Condemnation or
Casualty, and Lessor shall collect any award, compensation or insurance payment.
All amounts paid in connection with any Condemnation or Casualty shall be
applied pursuant to this Section 16, and all of those amounts (minus the
reasonable and necessary expense of collecting such amounts) are referred to as
the "NET PROCEEDS." Lessor may advance any reasonable and necessary costs and
expenses in connection with any proceeding, action, negotiation, prosecution and
adjustment. The reasonable and necessary costs and expenses so advanced by
Lessor shall be reimbursed out of any award, compensation or insurance payment
received. Lessee shall not be entitled to participate in any such proceeding,
action, negotiation, prosecution or adjustment, provided that Lessee preserves
its right to pursue a separate claim or claims as set forth in the following
sentence. Nothing in this Lease shall impair Lessee's right to negotiate,
prosecute, obtain and/or collect any separate award or payment relative to any
of Lessee's lost profits, damage to Lessee's business, trade fixtures, equipment
and personal property or Lessee's moving and relocation expenses, but in no
event shall any claim of Lessee be based upon the value of Lessee's leasehold
interest.
16.2 After an occurrence of a Condemnation or Casualty, unless this
Lease is terminated pursuant to the provisions of this Section 16.2 or Section
16.3 below, this Lease shall continue in full effect, and the Base Rent shall be
equitably abated based upon the percentage of, and for the period of time that,
the Leased Premises are rendered untenantable. In that event, Lessor shall,
subject to the termination provisions provided below, rebuild, replace or repair
any damage to the Leased Premises caused by such event so as to restore the
Leased Premises (in the case of Condemnation, as nearly as practicable) to that
which existed prior to such Casualty or Condemnation as the case may be. The
work shall be commenced and completed in a prompt manner, subject to any delays
due to matters beyond Lessor's reasonable control. Any Net Proceeds remaining
after completion of the work to be performed by Lessor pursuant to this Section
16.2 shall be the sole property of Lessor.
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Following the occurrence of a Casualty or Condemnation, Lessor shall
have the right to terminate this Lease upon 60 days notice to Lessee. In the
event of termination, Lessor and Lessee shall be released from all further
obligations under this Lease, and the Base Rent and other sums due under this
Lease shall be prorated to the effective date of the termination.
16.3 If (i) a Condemnation occurs and is of such a nature that the
Building cannot be rebuilt so that upon completion Lessee may again use the
Leased Premises without substantial interference or (ii) at any time during the
Term, a Casualty occurs that will require repairs to the Building reasonably
estimated by Lessor to cost more than 25% of the value of the Building, then, in
either of these events, Lessee shall have the right to terminate this Lease by
giving notice to Lessor within 60 days after the occurrence of the Condemnation
or Casualty. In the event of termination, Lessor and Lessee shall be released
from all further obligations under this Lease, and the Base Rent and other sums
due under this Lease shall be prorated to the effective date of termination.
SECTION 17. ASSIGNMENT AND SUBLETTING.
17.1 Lessee shall not assign this Lease without the prior written
consent of Lessor. If Lessor consents to any assignment, Lessee shall always
remain primarily liable as a principal and not as a guarantor for the payment of
the rent and all other sums due Lessor under this Lease, and for compliance with
and performance of all of Lessee's covenants and conditions of this Lease. Any
purported or attempted assignment of this Lease without Lessor's consent shall
be void. Consent by Lessor to a particular assignment or other transaction shall
not be deemed a consent to any other or subsequent transaction.
17.2 In the event that, during any year of the Term of this Lease, the
aggregate amount of rentals received by Lessee by subletting the Leased
Premises, after deducting the applicable share of taxes, insurance, maintenance
costs and similar items attributable to the subleased premises and not paid
directly by the subtenants (the "Net Subletting Income") exceeds the amount of
Base Rent payable by Lessee during such year, Lessee shall pay to Lessor within
30 days after the end of such year, as additional Base Rent, an amount equal to
one-half of such excess of the Net Subletting Income over the annual Base Rent
for the same period. Nothing contained in this Section 17.2 shall be construed
to permit any subletting other than in accordance with Section 17.1.
SECTION 18. ENTRY. At all reasonable times and after reasonable notice to
Lessee, Lessor may enter the Leased Premises for the purposes of inspecting
them, assuring that Lessee is complying with the requirements of Exhibit C,
performing any repairs and maintenance for which Lessor is responsible, and
exhibiting the Leased Premises to prospective purchasers, mortgagees and
tenants. Lessor's entries shall not unreasonably interfere with Lessee's
business.
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SECTION 19. ENVIRONMENTAL.
19.1 As used in this Lease, the terms "Materials of Environmental
Concern," "Environmental Claims," "Environmental Laws," and "Hazardous
Materials" shall have the respective meanings ascribed thereto in that certain
Asset Purchase Agreement dated July 16, 1997 by and between Lessor and Lessee
(the "ASSET PURCHASE AGREEMENT"), except that the term "Premises" used in such
definitions shall mean the Leased Premises.
19.2 During the Lease term, Lessee shall comply with all Environmental
Laws insofar as the same relate to Lessee's use and occupancy of the Leased
Premises and its business as conducted therein. Further, during the term of this
Lease, neither Lessee nor any agent or party acting at the direction or with the
consent of Lessee shall manufacture, use, treat, store, or dispose of any
Hazardous Substance except (a) in quantities incidental to Lessee's primary use
described in Section 9 and (b) in full compliance with all applicable
Environmental Laws.
19.3 Lessee covenants and agrees at its sole cost and expense, to
defend, indemnify and hold harmless Lessor, its successors and assigns from and
against, and shall reimburse Lessor, its successors and assigns for, any and all
loss, claims, liability, damage, judgment, penalty, injunctive relief, action or
cause of action incurred by or asserted against Lessor, and any cost or expense
resulting therefrom, and arising in connection with or as a result of any one or
more of the following (collectively, "ENVIRONMENTAL LOSS"):
(i) Any existence, use, handling, storage, transportation,
manufacture, release, threat of release, disposal, or
arrangement for disposal of any Materials of Environmental
Concern in, on, under or affecting the Leased Premises during
the occupancy thereof by Lessee which Materials of
Environmental Concern or events in respect thereof were
created, arose or occurred during the occupancy of the Leased
Premises by Lessee;
(ii) Any failure of Lessee, its subtenants, or others claiming
under Lessee (other than Lessor) to comply with any
Environmental Laws during the occupancy of the Leased Premises
by Lessee;
(iii) Any investigation, inquiry, order, hearing, action or other
proceeding by or before any governmental agency in connection
with any release of a Material of Environmental Concern or
non-compliance with Environmental Laws occurring or allegedly
occurring in, on, under, from, or affecting the Leased
Premises, which release or non-compliance arose or occurred
during the occupancy of the Leased Premises by Lessee; and
(iv) Any claim, demand or cause of action, or any action or other
proceedings, whether meritorious or not, brought or asserted
against Lessor, its
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successors, and/or assigns which relates to, arises from or is
based on any of the matters described in clauses (i) through
(iv) of this Section 19.3.
But EXCEPTING (i) any and all claims, demands, losses, liabilities, damages,
injuries, costs and expenses (including, but not limited to, reasonable fees and
disbursements of attorneys, experts and consultants) paid or incurred by, or
asserted against, Lessee, its subtenants and mortgagees, or any other party
claiming by, through or under Lessee, for which Lessor is responsible pursuant
to Section 19.4 hereof, (ii) any violations of Environmental Law and/or
Environmental Claims that arise or occur during any period after possession of
the Leased Premises is returned to Lessor by Lessee, and (iii) any liability or
obligations relative to the presence of Hazardous Substances on any property,
any violations of Environmental Law, and/or any Environmental Claims that arise
or occur at any time out of the acts, omissions or negligence of the Indemnified
Parties, all of which Lessor shall be and remain responsible and liable for.
19.4 Lessor's responsibility for environmental matters concerning the
Leased Premises shall be as set forth in Section 4.10 of the Asset Purchase
Agreement, which is incorporated herein by this reference.
19.5 Each party shall give immediate written notice to the other upon
learning of: (i) any proceeding, inquiry, notice, or other communication by or
from any governmental or non-governmental entity regarding the presence or
suspected presence of any Hazardous Substance at, on, about, under, within, near
or in connection with the Leased Premises; (ii) all claims, demands, suits and
the like, whether by a governmental agency or otherwise, relating to the
environmental condition of the Leased Premises; and (iii) the receipt of any
notice or discovery of any information regarding any actual, alleged, or
potential use, manufacture, production, storage, spillage, seepage, release,
discharge, disposal or any other presence or existence or any Hazardous
Substance at, on, about, under, within, near or in connection with the Leased
Premises.
SECTION 20. DEFAULT.
20.1 If one or more of the following events ("defaults") shall happen
and be continuing: (a) Lessee fails to make punctual payment of the rent or any
other amount to be paid under this Lease by Lessee, and that failure continues
for 10 days after notice from Lessor; (b) Lessee fails to perform or observe any
other covenant or condition to be performed or complied with by Lessee under
this Lease, and that failure continues for 30 days after notice by Lessor to
Lessee; or if the breach is of such a nature that it cannot reasonably be cured
or remedied within the 30 day period, Lessee fails to diligently commence to
cure the same during the 30 day period, or does not thereafter, with reasonable
diligence and in good faith, proceed to remedy or cure the same; (c) an
attachment or execution is levied upon Lessee's property in the Leased Premises
or Lessee's interest under this Lease that is not satisfied or released or
stayed within 30 days of the levy; (d) Lessee files a petition in bankruptcy or
a petition or answer seeking reorganization under the Federal Bankruptcy Code or
any other applicable statute; or (e) an order is entered
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adjudicating Lessee a bankrupt or approving an involuntary petition seeking a
reorganization of Lessee under the Federal Bankruptcy Code or any other
applicable statute or appointing a receiver, trustee or conservator for all or
any substantial part of the property of Lessee, and the order is not vacated or
stayed within 60 days of such entry; then, and in any of these events, Lessor
shall have the right, at its option, then or at any later time while the default
is continuing, to give a written notice specifying a date on which this Lease
shall terminate, and on that date, subject to the provisions of this Section
relating to the survival of Lessee's obligations, this Lease shall terminate and
expire.
20.2 If any default has occurred and is continuing, then whether or not
Lessor has terminated this Lease, Lessor may re-enter and take complete and
peaceful possession of the Leased Premises, and, with or without process of law,
remove all persons and all furniture, fixtures, equipment and other personal
property located in the Leased Premises and owned or leased from third parties
by Lessee ("LESSEE'S PROPERTY"), by force or otherwise, without being liable in
damages. In that event, Lessee shall peacefully and quietly yield up and
surrender the Leased Premises to Lessor and Lessee shall remain liable to Lessor
as provided below.
20.3 Lessee's obligation to pay the Base Rent and other charges under
this Lease shall survive any termination of this Lease due to Lessee's default.
In the event of any default, whether or not this Lease is terminated by Lessor,
Lessor shall be entitled to recover all unpaid rent for the periods prior to the
date of recovery of possession. In addition, Lessor shall be entitled to damages
caused by Lessee's default, which damages may, at Lessor's election, be
determined on the basis of the present value of all future rents that would have
become payable under this Lease, less the present value of rent payments that
Lessor could reasonably expect to receive by reletting the Leased Premises. As
an alternative, Lessor may elect to recover monthly from Lessee the sum of (i)
the current monthly installment of Base Rent and (ii) any amounts expended by
Lessor to pay for taxes, utilities, insurance, maintenance, and all other costs
required to be paid by Lessee under this Lease (the sum of items (i) and (ii)
being referred to as the "MONTHLY DEFAULT PAYMENT"). Lessor shall use reasonable
efforts to mitigate its damages and to relet the Leased Premises upon such
reasonable market terms as Lessor deems advisable in its discretion, and Lessor
shall be entitled to recover from Lessee all reasonable, necessary and customary
costs incurred by Lessor in connection with any such reletting, including, but
not limited to, brokerage commissions, but excluding costs of preparing and
modifying the Leased Premises for the new tenant. Until the expiration of the
Term of this Lease, Lessor shall be entitled to recover from Lessee monthly on
the first day of each month the Monthly Default Payment less the net monthly
rental (after deducting Lessor's expenses) received on account of reletting.
20.4 No right or remedy conferred upon or reserved to Lessor is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given under this Lease, or now or at the future existing in law or in equity or
by statute.
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20.5 If Lessor shall fail or refuse to pay any amount or to observe,
perform and/or comply with any term, covenant, condition, provision or other
obligation to be paid, observed, performed and/or complied with by Lessor under
this Lease and said failure or refusal continues for 30 days after written
notice by Lessee to Lessor; or if such failure or refusal (other than one that
could be cured by the payment of money) is of such a nature that it cannot
reasonably be cured or remedied within said 30-day period, Lessor fails or
refuses to diligently commence to cure or remedy the same within said 30-day
period, and/or does not thereafter, with reasonable diligence and in good faith,
proceed to remedy or cure the same to completion (except that in the case of
emergency involving immediate and serious danger to life, limb and/or property,
as to which only such notice as is reasonable under the circumstances need be
given), then in any of such events, Lessee shall have the right, at its option,
then or at any later time while such default is continuing, to pay and/or
perform said obligation on Lessor's behalf and may thereafter set off and deduct
all amounts reasonably so expended from all rent and other amounts and charges
due Lessor hereunder until recovered in full, and/or pursue any and all other
rights and/or remedies available to Lessee under this Lease, at law, and/or in
equity. Election of one such remedy shall not preclude the contemporaneous or
subsequent pursuit of any other right or remedy.
SECTION 21. HOLDING OVER. Should Lessee remain in possession of the Leased
Premises or any part thereof after expiration of the Term without the execution
of a new lease, such holding over shall, in the absence of a written agreement
to the contrary, be deemed to have created and be construed to be a tenancy from
month-to-month at 125% of the monthly Base Rent payable during the last year of
the Term, terminable on thirty (30) days written notice by either party to the
other on the terms and conditions contained herein (except for the Term).
SECTION 22. SURRENDER. At the expiration of the Term of this Lease, Lessee shall
yield the Leased Premises, including any improvements, additions and other
leasehold improvements made by Lessee that cannot be removed without damage to
the property of Lessor (unless Lessee repairs such damage to Lessor's reasonable
satisfaction), to Lessor in the condition required to be maintained pursuant to
this Lease, normal wear and tear, obsolescence, and damage by fire and other
casualty excepted. By the expiration or earlier termination of this Lease,
Lessee shall remove all of Lessee's Property from the Leased Premises and Lessee
shall repair any damage to the Leased Premises caused by the removal of Lessee's
Property. If Lessee fails to so remove Lessee's Property, Lessor may (but shall
not be obligated to) remove Lessee's Property and store the same and repair all
damage caused by the removal, all at Lessee's expense. In that event, Lessee
shall reimburse Lessor for all costs and expenses incurred in the removal, the
storage of Lessee's Property and the repair of the Leased Premises, within 5
days after Lessor notifies Lessee of the amount of the costs and expenses.
SECTION 23. NOTICES. Any notice required or permitted to be given to a party
under the provisions of this Lease shall be in writing and shall be deemed given
when received (or refused) if mailed by certified or registered United States
mail, postage prepaid, return receipt requested, or by commercial overnight
courier service that furnishes proof of delivery by receipt or otherwise,
addressed as follows:
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Lessor: THE MONARCH MACHINE TOOL COMPANY
000 Xxxxx Xxx Xxxxxx
Xxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, President
Lessee: Monarch Lathes, L.P.
c/o Lucas Precision, Inc., General Partner
00000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
With Copy to: Xxxx X. Xxxxxxxxxxx, Esq.
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., L.P.A.
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Either party may, from time to time, change its notice address by
similar notice to the other party at its then current mailing address, in
accordance with the provisions of this Section.
SECTION 24. WAIVER OF LIABILITY AND SUBROGATION. Neither Lessee nor Lessor shall
be liable for loss or damage caused by fire or other perils that could be
covered or are normally covered by replacement cost insurance policies without
deductibles, co-insurance or self-insurance that could be maintained or are
required by this Lease to be maintained by the other party with respect to the
Leased Premises, the Building or other improvements thereon, or any personal
property contained in the same, and each party on behalf of itself and any
insurer, waives all claims and rights of subrogation against the other with
respect to fire and all such perils. This waiver of claims and subrogation shall
apply regardless of the negligence of either party and shall not be limited by
the amount of insurance coverage.
SECTION 25. ESTOPPEL CERTIFICATE. When needed by Lessor in connection with
mortgage financing or the sale of the Leased Premises, Lessee shall, within 10
days after request by Lessor, execute an estoppel certificate to evidence (a)
the existence or nonexistence of any default under this Lease by Lessor or
Lessee or of amendments to this Lease or prepayments of rentals and (b) such
other facts with respect to this Lease as Lessor may reasonably require.
SECTION 26. SUBORDINATION. Lessee agrees that its rights under this Lease shall
be subordinate to the lien of any first mortgage or any other first lien
resulting from any method of financing or refinancing now or in the future
existing against all or part of the Leased Premises, and to any and all
renewals, modifications, replacements, consolidations and extensions of the
same. Lessee's obligation to subordinate this Lease is on the condition that the
holder of such mortgage to which this Lease is to be subordinated, shall have
executed and delivered to Lessee,
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an instrument in form and substance reasonably satisfactory to Lessee and its
counsel, wherein such mortgagee shall agree that so long as Lessee is not in
default hereunder, or if Lessee is in default, so long as the period for curing
such default has not expired, neither Lessee's possession of the Leased
Premises, nor the term of this Lease, nor any other right granted Lessee
hereunder shall be affected should any such mortgagee commence an action to
foreclose the mortgage held by it or any other action pursuant to its mortgage
or otherwise, and that Lessee shall not be named as a defendant in any such
action.
SECTION 27. OPTION TO TERMINATE. After July 31, 1998, Lessor shall have the
option to terminate this Lease at any time during the Term by giving Lessee
notice at least six (6) months in advance of the effective date of termination.
If Lessor exercises this option, this Lease shall terminate on the date of
termination specified in Lessor's notice in the same manner and with the same
effect as though the term of this Lease expired on that date.
SECTION 28. LIABILITY OF LESSOR. If Lessor fails to perform any of its
obligations under this Lease, and, as a consequence of this default, Lessee
recovers a money judgment against Lessor, that judgment may be satisfied only
out of the proceeds of sale received upon execution of the judgment against the
right, title and interest of Lessor in the Leased Premises, the rents, issues,
income and profits arising therefrom, proceeds from the sale, and insurance
and/or condemnation proceeds arising therefrom, and neither Lessor nor any of
the shareholders, officers, directors or employees of Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy its execution
against any property of Lessor other than its interest in the Leased Premises,
the rents, issues, income and profits arising therefrom, proceeds from the sale,
and insurance and/or condemnation proceeds arising therefrom. In the event of
the sale or other transfer of Lessor's interest in the Leased Premises except as
security for a loan, Lessor shall be released from all liability and obligations
under this Lease that arise, accrue, mature, and/or relate to any period
following the date that any assignee of Lessor shall execute and deliver to
Lessee a written agreement in favor of Lessee assuming and agreeing to observe,
perform, conform to and comply with all obligations and liability of Lessor
under this Lease from and after the date of such assumption.
SECTION 29. BINDING EFFECT. Subject to the provisions of Section 17, this Lease
and the covenants and agreements of the parties shall be binding upon and inure
to the benefit of Lessor and Lessee and their respective heirs, personal
representatives, successors and permitted assigns.
SECTION 30. PARTIAL INVALIDITY. If any provision of this Lease or the
application thereof to any person or circumstance shall to any extent be held
void, invalid or unenforceable, then the remainder of this Lease or the
application of such provision to persons or circumstances other than those to
which it is held void, invalid or unenforceable shall not be affected thereby,
and each provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.
SECTION 31. NO WAIVER. No provision of this Lease shall be deemed to have been
waived unless such waiver shall be in writing signed by the party to be charged.
No waiver of any
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condition or covenant of this Lease shall be deemed to imply or constitute a
further waiver of the same or any other condition or covenant, and nothing
contained in this Lease shall be construed to be a waiver of any right or remedy
in law or otherwise.
SECTION 32. HEADINGS, MEANING OF WORDS, ENTIRE AGREEMENT. The headings used in
this Lease are inserted for convenience and are not to be considered in the
construction of the provisions of this Lease. This Lease constitutes the entire
agreement of the parties with respect to the subject matter hereof and may be
amended or modified only in a writing signed by both parties. All prior
agreements or understandings with respect to the subject matter hereof between
the parties, either oral or written, are merged into this Lease.
SECTION 33. QUIET POSSESSION. Lessor covenants that if Lessee shall pay the rent
and discharge the obligations herein set forth to be performed by Lessee, Lessee
shall have and enjoy, during the Term hereof, the quiet and undisturbed use,
occupancy, possession and enjoyment of the Leased Premises, free of the claims
of Lessor and all persons claiming by, through or under Lessor on and subject to
the provisions of this Lease.
SECTION 34. MEMORANDUM OF LEASE. This Lease shall not be recorded, but, if
requested by Lessor or Lessee, a Memorandum of Lease referring to this Lease and
the date of execution hereof, setting forth the names of Lessor and Lessee and
their addresses, a description of the Leased Premises, the term hereof and
option to terminate, and the date of commencement of the term hereof, and such
other and additional provisions hereof as may be required by law or mutually
agreed to by Lessor and Lessee, shall be executed, attested and acknowledged,
and may be recorded by either party. All costs attributable to the execution and
recording of such Memorandum of Lease shall be charged to and paid by Lessee.
SECTION 35. BROKERS. Each party hereto covenants, warrants and represents to the
other that there are no claims for brokers' commissions or finders' fees arising
out of the covenanting party's acts in connection with the execution and
delivery of this Lease, and such party agrees to indemnify, defend and hold the
other party harmless from and against any and all liability which may arise from
the inaccuracy of the foregoing statement.
SIGNED as of the day and year first written above.
Signed and Acknowledged Lessor:
in the Presence of:
THE MONARCH MACHINE TOOL
COMPANY, an Ohio corporation
_______________________________ By_________________________________
Its_________________________________
_______________________________
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Lessee:
MONARCH LATHES, L.P.,
an Ohio limited partnership
By: XXXXX PRECISION, INC.,
an Ohio corporation
Its: General Partner
_______________________________ By:_____________________________
Xxxx X. Xxxxxxxx, President
_______________________________ And by:__________________________
T. Xxxxxx Xxxxxxx, Secretary
STATE OF OHIO )
) SS:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this ____ day of
__________, 1997 by ________________________________, __________________ of THE
MONARCH MACHINE TOOL COMPANY, an Ohio corporation, on behalf of the corporation.
-----------------------------------
Notary Public
STATE OF OHIO )
) SS:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ____ day of
__________, 1997 by Xxxx X. Xxxxxxxx, President and T. Xxxxxx Xxxxxxx, Secretary
of Xxxxx Precision, Inc., an Ohio corporation, on behalf of the corporation as
General Partner of Monarch Lathes, L.P., an Ohio limited partnership.
-----------------------------------
Notary Public
Exhibit A - Legal Description
This Instrument Prepared By:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx Xxxx & Xxxxx LLP
0000 Xxxxxxxxxx Xxxxx, X.X.
Xxxxxx, Xxxx 00000
(000) 000-0000
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