1
EXHIBIT 2.3
EXECUTION COPY
THIRD AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO ASSET PURCHASE AGREEMENT (the "First
Amendment") is made and entered into as of the 12th day of December 1997, by
and among MACHINE TOOL AND GEAR, INC., a Michigan corporation ("Seller"), XXX X.
XXXXXXX, XXXXXX X. XXXXXXX, XXXXXX X. XXXXXXX, XXXXXX X. XXXXXXX, and XXXXXXX X.
XXXXXXX ("Indemnitors"), JMJ AND COMPANY, a Michigan co-partnership ("JMJ"), and
NEWCOR, INC., a Delaware corporation ("Buyer").
RECITALS
A. Seller, Indemnitors, JMJ and Buyer entered into an Asset Purchase
Agreement dated as of October 1, 1997, as amended by a First Amendment to Asset
Purchase Agreement dated as of October ___, 1997, and amended by a Second
Amendment to Asset Purchase Agreement dated as of November ____, 1997 (the
"Agreement"), but subsequently have determined that certain amendments to the
Agreement are necessary and appropriate and therefore wish to amend the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements, representations and warranties hereinafter set forth, Buyer, Seller,
Indemnitors and JMJ agree as follow:
1. Section 3.01 of the Agreement shall be and hereby is amended and
restated in its entirety to read as follows:
"3.01. Purchase Price. The total consideration for the
purchased Assets and for the Seller's and Indemnitors' agreements
not to compete pursuant to the Non-Competition Agreement and the
Employment Agreements shall be Twenty-Seven Million Two Hundred Fifty
Thousand Dollars ($27,250,000.00), plus the Interim Interest (as
hereinafter defined), plus, if applicable, the Extension Fee (as
hereinafter defined), to be paid to Seller and (because the parties now
agree that the Xxxxx Property shall be an Excluded Asset as provided in
Section 2.01(k)), no amount shall be paid to JMJ (collectively, the
"Purchase Price"), subject to any adjustments made in connection with
the Plant Properties pursuant to Section 2.01(j)."
2. Subsection 3.02(a) of the Agreement shall be and hereby is amended
and restated in its entirety to read as follows:
"(a) (i) The sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00) shall be paid by Buyer to Seller, by bank check or by
wire transfer, on October 20, 1997 or another mutually agreeable date,
provided that the Agreement has been fully executed by all of the
parties and Seller has delivered to Buyer consents to assignments of
certain leases from lessors, Cargill, Metropolitan Life and NBD (the
"Lease
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Assignment Consents"), and (ii) the sum of Two Hundred Fifty Thousand
Dollars ($250,000.00) shall be paid by Buyer to Seller, by bank check or by wire
transfer, on December 12, 1997;"
3. Subsection 3.02(b) of the Agreement shall be and hereby is amended
and restated in its entirety to read as follows:
"(b) Not later than the close of business on the Closing Date,
the sum of Two Million Six Hundred Thousand Dollars ($2,600,000.00)
shall be paid by Buyer to Seller, by bank check or by wire transfer;"
4. Subsection 3.02(d) of the Agreement shall be and hereby is amended
and restated in its entirety to read as follows:
"(d) On the Closing Date, (i) a sum equal to interest, accrued
on the principal sum of $19,850,000 at the rate of 8% per annum, from
December 12, 1997 until the Closing Date (the "Interim Interest"),
shall be paid by Buyer to Seller, by bank check or by wire transfer,
and (ii) a promissory note bearing simple interest at the rate of 8%
per annum in the form attached hereto as Exhibit A, and secured by a
security interest in the Assets (which shall expressly permit sales of
Assets in the ordinary course of business), shall be executed by Buyer
in favor of Seller in the amount of Twenty-One Million Six Hundred
Fifty Thousand Dollars ($21,650,000.00);"
5. The definition of the term "Holdback Amount" as set forth in
Subsection 3.02(f) of the Agreement shall be amended to the sum of One Million
Eight Hundred Thousand Dollars ($1,800,000.00).
6. Notwithstanding anything to the contrary contained in the Agreement,
(i) the so-called "Plant Property" located at 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx, and (ii) the so-called "Xxxxx Property" located at 000 Xxxxx Xxxxx,
Xxxxxx, Xxxxxxxx, shall be "Excluded Assets", which shall be retained by Seller
and JMJ, respectively, and excluded from the sale and transfer to Buyer, but
instead shall be leased by Seller and JMJ, as "Landlord", to Buyer, as "Tenant",
on the terms and conditions of the Lease Agreement in the form attached hereto
as Exhibit B. Furthermore, notwithstanding anything to the contrary contained in
the Agreement, although Buyer has agreed to accept transfer of title as of the
Closing to the so-called "Plant Properties" located at (a) 0000 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx, and (b) 0000 Xxxxx Xxxxxxxxxx, Xxxxxxx, Xxxxxxxx, despite
Seller's failure to satisfy the conditions of Section 10.01 of the Agreement
with respect to said properties, Seller and Buyer agree that (i) following the
Closing and prior to the Financing Date, Seller shall satisfy the conditions of
Section 10.01 with respect to said properties, failing which, on the Financing
Date, Buyer, at its option, shall be entitled to transfer title by quit claim
deeds to said properties to Seller (in such case, Seller being responsible for
all transfer taxes, costs and expenses with respect
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to said transfer), Seller shall pay to buyer the net book value of said
properties as carried on Seller's Financial Statements as of September 30, 1997,
and Seller shall enter into lease agreements for said properties with Seller, as
"Landlord", and, Buyer, as "Tenant", substantially in the same form as the Lease
Agreement attached hereto as Exhibit B, except the term of said lease agreements
shall be ten (10) years, the monthly rental shall be amounts equal to 0.8333%
(or one-twelfth of one-tenth) of the respective net book value for each said
property as carried on Seller's Financial Statements as of September 30, 1997,
and the "Purchase Option Price" for each said property shall be the net book
value for each said property as carried on Seller's Financial Statements as of
September 30, 1997.
7. Section 4 of the Agreement shall be and hereby is amended and
restated in its entirety to read as follows:
"4. ALLOCATION OF PURCHASE PRICE.
The Purchase Price shall be allocated between the Assets and
the non-competition provisions contained in the Non-Competition
Agreement and the Employment Agreements as follows:
Assets: $27,000,000.00, plus
Interim Interest,
Non-competition provisions plus, if applicable,
contained in the Non-Competition the Extension Fee
Agreement and the Employment
Agreements ($50,000 to each of the
five (5) Indemnitors): $250,000.00
The amount allocated to the Assets shall be further allocated among
the various categories and classifications of the Assets discussed in
section 2.01 above. On or before the Closing Date, Seller and Buyer
shall agree upon an allocation of the Purchase Price among the Assets
in accordance with Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code"), and the related Treasury Regulations. If the
parties cannot agree, Buyer, at Buyer's sole expense, shall cause an
independent appraiser selected by Buyer, to prepare a schedule
allocating the Purchase Price among the Assets. The allocation set
forth on such schedule shall be reasonably satisfactory to Seller.
Seller, Indemnitors, JMJ and Buyer agree that after such allocation is
agreed upon (i) Seller, Indemnitors, JMJ and Buyer shall use such
allocation for all purposes related to the valuation of the Assets,
including, without limitation, in connection with any federal, state,
county or local tax returns filed after such allocation shall be
agreed upon, and (ii) unless required to do so in accordance with a
"determination" as defined in Section 1313 (a) (1) of the Code.
Neither Seller, Indemnitors, JMJ nor Buyer shall take any position in
any tax return, tax proceedings tax audit or otherwise that is
inconsistent with such allocation."
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8. The "Closing Date" for purposes of the Agreement shall be that date
determined by Buyer on or before December 24, 1997; provided, however, at
Buyer's option, with the payment of an additional Four Hundred Fifty Thousand
Dollars ($450,000.00) extension fee (the "Extension Fee") to Seller, by bank
check or wire transfer, Buyer shall be entitled to defer the Closing Date to a
date selected by Buyer on or before January 15, 1998.
9. Buyer hereby agrees to waive the requirements of Section 10.15 of
the Agreement, and Section 13.01 of the Agreement shall be amended to include
the following additional provision as subparagraph (g):
"(g) Failure to satisfy the conditions of Section 10.15 of the
Agreement, or otherwise comply with any laws or regulations governing
bulk transfers in connection with the sale and transfer of the Assets,
other than with respect to the Assumed Liabilities."
10. The dollar amounts referenced in Section 15.04(a) and 15.04(b)
shall be amended to the sum of Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000.00), plus, if applicable, the Extension Fee if paid by Buyer to
Seller.
11. In consideration of the foregoing, Buyer agrees that it shall, and
does hereby, waive any right to assert a claim for indemnification or offset
against any of Buyer's obligations to Seller undertaken under or pursuant to
this Agreement based upon adverse financial performance of the Business to the
extent the same and the magnitude thereof was either (i) reported in Seller's
Financial Statements as of September 30, 1997, or other interim financial
statements of Seller delivered to Buyer prior to the Closing, or (ii) otherwise
disclosed by Seller and brought to the actual attention of the President or
Chief Financial Officer of Buyer prior to the Closing, including, without
limitation, operating losses in November and December 1997, and losses in early
1998.
12. Except as amended hereby, the Agreement is ratified and confirmed
in all respects.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date and year first above written.
"SELLER"
MACHINE TOOL AND GEAR, INC.,
a Michigan corporation
By: /s/ Xxx X. XxXxxxx
-----------------------------------
Xxx X. XxXxxxx
Its: President
"BUYER"
NEWCOR, INC., a Delaware corporation
By:
---------------------------------
W. Xxxx Xxxxxxxxx
Its: President
"INDEMNITORS"
/s/ Xxx X. XxXxxxx
--------------------------------------
Name: Xxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date and year first above written.
"SELLER"
MACHINE TOOL AND GEAR, INC.,
a Michigan corporation
By:
---------------------------------
Xxx X. XxXxxxx
Its: President
"BUYER"
NEWCOR, INC., a Delaware corporation
By: /s/ W. Xxxx Xxxxxxxxx
---------------------------------
W. Xxxx Xxxxxxxxx
Its: President
"INDEMNITORS"
--------------------------------------
Name: Xxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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"INDEMNITORS" (continued from
previous page)
/s/ Xxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxxx X. XxXxxxx
Address: c/o North Lakes
Manufacturing, Inc.
0000 Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
"JMJ"
JMJ and Company
/s/ Xxx XxXxxxx
--------------------------------------
Name: Xxx XxXxxxx
Partner
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EXHIBIT A
SECURED PROMISSORY NOTE
$21,650,000.00 Bloomfield Hills, Michigan
________________,19__
For Value Received, the undersigned, NEWCOR, INC., a Delaware
corporation ("Maker"), promises to pay to the order of NORTH LAKES
MANUFACTURING, INC. (formerly known as Machine Tool and Gear, Inc.), a Michigan
corporation ("Holder"), at the office of Holder at 0000 Xxxxx Xxxxxxxxxx,
Xxxxxxx, Xxxxxxxx 00000, or at such other place as the holder of this Note may
from time to time designate in writing, in lawful money of the United States of
America, the principal sum of TWENTY ONE MILLION SIX HUNDRED FIFTY THOUSAND
DOLLARS ($21,650,000.00), plus accrued interest on the unpaid balance from the
date of this Note until paid at the rate of eight percent (8%) per annum, on or
before [May 24, 1998, or, if the Extension Fee has been paid, June 151 1998];
provided, a payment of principal of at least FIVE MILLION DOLLARS ($5,000,000.
00) shall be paid on or before April 15, 1998; and, provided further, Maker
shall extinguish payment of ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS
($1,800,000.00) of the principal balance evidenced by this Note upon payment
thereof to the escrow agent under that certain Holdback Escrow Agreement of even
date herewith between Maker, as the "Buyer", Payee, as the "Seller", and the
escrow agent. Interest shall be calculated for the actual number of days the
principal is outstanding on the basis of a 365-day year. All payments shall be
applied first to the payment of interest and then in reduction of the
outstanding principal balance; provided, a payment of principal of at least FIVE
MILLION DOLLARS ($5,000,000.00) shall be paid on or before April 15, 1998; and,
provided further, Maker shall extinguish payment of ONE MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($1,800,000.00) of the principal balance evidenced by this Note
upon payment thereof to the escrow agent under that certain Holdback Escrow
Agreement of even date herewith between Maker, as the "Buyer", Payee, as the
"Seller", and the escrow agent.
In no contingency or event whatsoever shall the interest charged
hereunder, however such interest may be characterized or computed, exceed the
highest rate permissible under any law which a court or competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that Holder has received interest hereunder in excess of the
highest rate applicable hereto, such amount shall be applied by Holder in
reduction of the principal sum.
This Note and other indebtedness and liabilities of Maker (or any of
them) to Holder is secured by that certain Security Agreement (Accounts, Chattel
Paper, Inventory and Equipment) of even date herewith (the "Security
Agreement"), and that certain Mortgage of even date herewith (the "Mortgage"),
and all of the terms, covenants, and conditions thereof and all other
instruments evidencing and/or securing the indebtedness evidenced by this Note
(collectively, the "Loan Documents"), and the Security Agreement,
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the Mortgage and all other Loan Documents are hereby made a part of this Note
and are deemed incorporated herein in full. The occurrence of an event of
default herein or in the Security Agreement, the Mortgage or any of the Loan
Documents shall entitle Holder to accelerate the entire indebtedness evidenced
by this Note and take such other action as may be provided for in the Loan
Documents and applicable law.
If this Note is signed by two or more parties (whether by all as makers
or by one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Note shall bind Maker, and Maker's successors
and assigns, including, without limitation, a receiver, trustee or debtor in
possession of or for Maker.
Maker waives presentment, demand, protest, notice of dishonor, notice
of demand or intent to demand, notice of acceleration or intent to accelerate,
and all other notices and agrees that no extension or indulgence to Maker (or
any of them) or release, substitution or nonenforcement of any security, or
release or substitution of any Maker, any guarantor or any other party, whether
with or without notice, shall affect the obligations of any Maker.
NEWCOR, INC., a Delaware corporation
By:
--------------------------------
Name: W. Xxxx Xxxxxxxxx
Title: President
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EXHIBIT B
LEASE AGREEMENT
THIS LEASE AGREEMENT, made as of December, 1997, by and between
NORTH LAKES MANUFACTURING, INC. (formerly known as Machine Tool and Gear,
Inc.), a Michigan corporation, and JMJ AND COMPANY, a Michigan
co-partnership (hereinafter collectively referred to as "Landlord"), and
NEWCOR, INC., a Delaware corporation (hereinafter referred to as
"Tenant").
WHEREAS, simultaneously herewith, Landlord has sold and conveyed
certain assets of its business (the "Business") to Tenant under and
pursuant to the terms and conditions of a certain Asset Purchase
Agreement, as amended (the "Asset Purchase Agreement") and
WHEREAS, Tenant desires to accept a lease, and Landlord desires
to grant a lease, of the Leased Premises (hereafter defined) at which
Landlord currently conducts the Business.
NOW THEREFORE, intending to be legally bound, Landlord and Tenant
agree as follows:
ARTICLE 1
Definitions
Section 1.01 Certain Definitions. Landlord and Tenant agree that
the following capitalized terms when used herein shall, unless the context
otherwise requires, have the following meanings:
"Building" shall mean each of the commercial buildings located on
the Land, the current addresses of which are 000 Xxxxx Xxxxx, and 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx.
"Commencement Date" shall mean the day the term of this Lease
begins as identified in Article 3 hereof.
"Expiration Date" shall mean the day the term of this Lease
expires as identified in Article 3 hereof.
"Land" shall mean the parcels of land described on Exhibit A
attached hereto, together with all appurtenances thereto and easements
benefitting such parcel.
"Leased Premises" shall mean the Building and the Land and all
improvements thereon.
"Monthly Rent" shall mean the sum of $3,333.33 per each calendar
month.
"Rent" shall mean the sums payable to Landlord under Section 4.01
hereof.
"Term" shall mean the period commencing on the Commencement Date
and expiring on the Expiration Date.
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ARTICLE 2
Leased Premises
Section 2.01 Demising Clause. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the Leased Premises upon all of the terms,
covenants and conditions set forth herein.
Section 2.02 Representations of Landlord. Landlord represents to Tenant
that it is the lawful owner of and has fee simple title to the Land, Building
and Leased Premises and all fixtures, systems and improvements located therein
or thereon.
Section 2.03 Hazardous Substances.
(a) For the purposes of this Lease:
(i) "Hazardous Substance" means any waste,
pollutant, contaminants, hazardous or toxic substance, petroleum,
petroleum-based or petroleum-derived substance or waste, or
asbestos-containing material with respect to which liability or
standards of conduct are imposed or which are regulated, pursuant to
any Environmental Regulations.
(ii) "Environmental Regulation" means all federal,
state or local (including but not limited to, any governmental
department or agency or any other commission, board or agency or
instrumentality) statute, law, rule, regulation, permit, agreement,
ordinance, or judicial or administrative order relating to or
concerning the pollution or protection of the environment, human health
or safety, including without limitation, the Clean Air Act, the Clean
Water Act, the Solid Waste Disposal Act, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation,
and Liability Act of 1986, the Federal Insecticide, Fungicide and
Rodenticide Act, the Occupational Safety and Health Act, and the
Emergency Planning and Community Right-to-Know Act of 1986.
(c) Tenant shall not locate, store, produce, treat,
transport, discharge, handle or otherwise use any Hazardous Substance at, on, in
or under the Leased Premises, Land or Building, except as normally incident to
the conduct of the Business and at all times in compliance with all
Environmental Regulations.
(d) Tenant agrees to indemnify and hold Landlord harmless
from any and all claims, causes of actions, damages, penalties and out of pocket
costs (including reasonable attorneys' fees, consultant fees and related
expenses) which may be asserted against or incurred by Landlord resulting from
or allegedly resulting from the location, storage, production, treatment,
transportation, emission, spill, disposal, release or other handling of any
Hazardous Substance at, on, in or under the Leased Premises, Land or Building
after the date of this Agreement, caused
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by tenant, its successors or assigns thereafter or resulting from or due
to any violation of any environmental regulation by Tenant, its successors
or assigns during the Term of this Lease or during any holdover period.
Tenant's duty to indemnify and hold harmless includes, but is not limited
to, proceedings or actions commenced by any person against Landlord,
including without limitation any federal, state, or local governmental
agency or entity before any court or administrative agency.
(e) Landlord agrees to indemnify and hold Tenant
harmless from any and all claims, calls of action, damages, penalties and
out of pocket costs (including reasonable attorneys' fees, consultant fees
and related expenses) which may be asserted against or incurred by Tenant
resulting from or allegedly resulting from the location, storage,
production, treatment, transportation, emission, spill, disposal, release
or other handling of any Hazardous Substance at, on, in or under the
Leased Premises, Land or Building, whether existing at, or in or under
the Leased Premises, Land or Building on the date of this Agreement or
caused by Landlord, its successors or assigns thereafter or resulting from
or due to any violation or alleged violation of any Environmental
Regulation by Landlord, its successors or assigns. Landlord's duty to
indemnify and hold harmless includes, but is not limited to, proceedings
or actions commenced by any person against Tenant, including without
limitation any federal, state, or local governmental agency or entity
against Tenant before any court or administrative agency.
(f) The foregoing covenants and indemnifications shall
be deemed continuing covenants and indemnifications for the benefit of
Landlord and Tenant, as the case may be, and their successors and assigns,
and shall survive the expiration or termination of this Lease.
ARTICLE 3
Term of Lease
Section 3.01 Term. The Term of this Lease shall be for a period
commencing on the date hereof (the "Commencement Date"), and terminating
on December 31, 1998 (the "Expiration Date"), unless sooner terminated as
hereinafter provided.
ARTICLE 4
Rent; Other Tenant Costs
Section 4.01 Rent. Tenant shall pay to Landlord during the Term,
at the address set forth in Article 19, or at such other place as
Landlord may from time to time designate in writing, the Monthly Rent for
the Leased Premises, lawful money of the United States, payable in advance
on the first day of each month during the Initial Term.
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Section 4.02 Late Payment. All Rent payable hereunder by tenant
which is not paid within fifteen (15) days after the date due shall bear
interest from the date due to the date paid at the rate of eight percent
(8%) per annum or the highest rate permitted by law, whichever is less.
Section 4.03 Utilities; Taxes; Insurance. Tenant shall be
responsible for all utility costs and expenses, taxes and insurance
costs and expenses associated with the Leased Premises as provided
herein.
ARTICLE 5
Use
Section 5.01 Use. The Leased Premises may be used and occupied
by Tenant only for general office purposes and for the Business and
other uses which are directly related or incidental to the foregoing,
and for no other purpose.
ARTICLE 6
Surrender
Section 6.01 Time; Condition. Upon termination or lapse of this
Lease, Tenant shall immediately surrender possession of the Leased
Premises and all fixtures (except the fixtures specifically set forth in
Schedule 6.01 hereof, and any replacements or substitutions thereof) to
Landlord, in good order, condition and repair, reasonable wear and tear
and loss by casualty excepted, and except as set forth above, all
fixtures on the Leased Premises shall become the property of Landlord
without any obligation on the part of Landlord to compensate Tenant
therefor.
Section 6.02 Removal of Fixtures. Notwithstanding the preceding
paragraph hereof, if this Lease terminates by reason of the expiration
of its Term and if Tenant is not in default of its obligation to make
payment hereunder beyond any applicable grace period, Tenant may remove
any improvements, fixtures, equipment and other property constructed or
installed in or on the Leased Premises at Tenant's expense. All such
removal shall be made prior to the end of the Term and any damage
resulting from removal shall be repaired by Tenant.
ARTICLE 7
Insurance and Taxes
Section 7.01 Building Coverage. Tenant shall keep the Leased
Premises insured at all times during the Term of this Lease, in an
amount not less than $400,000.
Section 7.02 Tenant Coverage. Tenant, at Tenant's sole cost
and expense, shall keep Tenant's improvements, fixtures, equipment and
other property insured at all times during the Term
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of this Lease, in such amounts and coverage as Tenant shall determine, in
its sole discretion. Under no circumstances shall Landlord have any
liability or responsibility for insuring any of Tenant's improvements,
fixtures, equipment and other property.
Section 7.03 Waiver of Insurable Claims. Anything in this Lease to
the contrary notwithstanding, Landlord and Tenant each hereby waives and
releases any and all rights of recovery, claim, action or cause of action,
against the other, its agents or officers, directors, shareholders or
employees, for any loss or damage that may occur to the Leased Premises, or
any improvements thereto, or the Building, or any improvements thereto, or
any property of such party therein, by reason of fire, the elements or any
other cause which could be insured against under the terms of standard fire
and extended coverage insurance policies, regardless of cause or origin,
including negligence of the other party hereto, its agents, officers or
employees, and covenants so that no insurer shall hold any right of
subrogation against such other party. Each party shall cause each insurance
policy obtained by it to provide that the insurer waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by such policy. The releases set forth in this Section shall
be effective whether or not the loss was actually covered by insurance.
Section 7.04 Tenant's Tax Obligation. Tenant agrees, from and af-
ter the date of commencement of the Term, to pay to the public authorities
charged with the collection thereof, promptly as the same become due and
payable, all taxes, general and special assessments and other public
charges thereafter levied or assessed against the Leased Premises and the
Building and any other buildings, structures or improvements now or
hereafter located thereon, or arising in respect of the occupancy, use or
possession of the Leased Premises and which are assessed and are to become
a lien during the continuance of this Lease, except to the extent any such
tax assessments or charges cover, or are measured or determined by, a
period of time following termination of this Lease. Tenant agrees to
provide to Landlord, on receipt of written request, copies of receipts
evidencing payment of all such taxes, assessments or public charges so
payable by Tenant. In no event shall Landlord be responsible for any
interest or penalties assessed as a result of Tenant's late payment of any
such taxes, assessments or public charges. All such taxes for the first and
last years of the Term hereof shall be prorated between the parties on a
due date basis of the appropriate taxing authority and the portion due from
one party to the other shall be paid within fifteen (15) days after the
Commencement Date and Expiration Date, whichever the case may be. Tenant
reserves the right to contest, in good faith, any tax assessment or public
charge levied against the Leased Premises, provided, Tenant holds the
Landlord harmless therefrom. In the event of any such contest initiated by
Tenant, Landlord agrees to cooperate with Tenant in connection with the
processing thereof and to sign all applications required therefor so long
as the foregoing is done at the sole cost of Tenant.
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Tenant shall not be obligated to pay any inheritance,
transfer, estate, succession or other similar tax or United States or the
State of Michigan or imposed by any political taxing subdivision thereof or by
any other governmental agency, by reason of the devolution, succession,
transfer, passing by inheritance, devise, acquisition or becoming effective as
to the right to possession and enjoyment of all or a part of the estate of
Landlord in the demised premises, by descent, deed, testamentary provision,
gift, mortgage or otherwise.
If Tenant shall default in payment of any taxes, assessments
or public charges above required to be paid by Tenant, Landlord shall have the
right to pay same, together with any penalties and interest, in which event
the amount so paid by Landlord shall be paid as additional Rent by Tenant, on
demand, in full, including any penalties and interest paid by Landlord.
In the event that Tenant shall be in default under its
obligations under this Section 7.04 Landlord shall have the right, at its sole
option, to require Tenant to pay to Landlord in twelve (12) monthly
installments on or before the first day of each calendar month, in advance, an
amount necessary for the payment, on an annual basis, of all the taxes and
assessments referred to in this Section levied or assessed for or during the
Term hereof. Landlord shall have the right to initially determine such monthly
installments and thereafter to revise same, from time to time, based upon the
actual tax bills and assessment bills. Failure of Tenant to pay any
installment of such taxes and assessments in the foregoing manner shall be
treated as a failure to pay Rent, entitling Landlord to exercise such rights
and remedies available to it in such instance.
ARTICLE 8
Indemnification
Section 8.01 Indemnification of Landlord. Tenant agrees to hold
harmless and indemnify Landlord and its officers, agents and employees
against all claims, demands, actions, liability, loss, damage, out of pocket
costs and expenses (including reasonable attorneys' fees) for injury, death,
disability or illness of any person, or damage to property, occurring in the
Leased Premises or arising out of the use, condition or occupancy of the
Leased Premises to the extent caused by the negligence of Tenant or any
subtenant, licensee or invitee of Tenant or any of its or their, agents,
contractors, employees, licensees or invitees, except to the extent caused by
the negligence or willful misconduct of Landlord or Landlord's employees,
agents, contractors, licensees, representatives or invitees.
Section 8.02 Indemnification of Tenant. Landlord agrees to hold
harmless and indemnify Tenant and its officers, agents and employees against
all claims, demands, actions, liability, loss, damage, out of pocket costs
and expenses (including reasonable attorneys' fees) for injury, death,
disability or illness of any
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person or damage to property, occurring on or about the Leased Premises,
only to the extent caused by the negligence of Landlord, or any of its
agents, contractors, employees, licensees or invitees.
ARTICLE 9
Repairs and Maintenance; Alterations
Section 9.01 Repair and Maintenance. Tenant at its cost and
expense shall maintain the roof, foundation and the structural soundness
of the exterior walls of the Building, the utility supply systems and the
air conditioning compressor, if any, and all other parts of the Leased
Premises, including, without limitation, the interior, non-structural
portions of the Leased Premises and the fixtures and equipment in the
Leased Premises, if any, in good condition and repair, reasonable wear and
tear excepted. Tenant shall provide at Tenant's sole cost and expense
building cleaning maintenance services, snow removal services and
landscaping services for the Leased Premises by firms of its choosing.
Section 9.02 Standards. The necessity for and adequacy of repairs
to the Leased Premises made or required to be made pursuant to Section 9.01
shall be measured by the standards prevailing from time to time for proper
and adequate maintenance of buildings of similar construction, class and
required standards of use in the vicinity in which the Leased Premises are
located.
Section 9.03 Alterations. Tenant may not make any change,
alteration, restoration or improvement (herein collectively referred to as
an "alteration") in or to the Leased Premises except at Tenant's sole cost
and expense, and (except in an emergency), without first, in each instance,
except in the instance of interior non-structural alterations costing
$250,000 or less, in the aggregate, obtaining the written consent of
Landlord, such consent not to be unreasonably withheld or delayed and shall
not be withheld or delayed in any case if such an alteration is in fact
required to effect compliance with any legal or governmental requirement
arising after the date hereof. Any and all alterations may be made only
subject to and in compliance with the following:
(a) Before the commencement of any alteration herein:
(1) Tenant shall, except in an emergency, give
fifteen (15) days' prior written notice thereof to
Landlord;
(2) Tenant shall, except in the case of an
interior non-structural alteration costing less than
$250,000, obtain Landlord's prior written approval of
plans and specifications prepared and approved in writing
by an architect or engineer selected by Tenant.
(b) No alteration shall be undertaken until Tenant
shall have procured so far as the same may be required from time
to
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time, all permits and authorizations of any federal, state or municipal
government or department, or subdivision of any of them, having or
asserting jurisdiction. Landlord shall join in the application for such
permits or authorizations and otherwise reasonably cooperate, if and to
the extent required, but at Tenant's sole cost and expense.
(c) Any alteration shall be made promptly and in a good and
workmanlike manner and in compliance with all applicable permits and
authorizations and building and zoning laws and with all other laws and
ordinances.
(d) The cost of any alteration shall be paid when due so that
the Leased Premises shall at all times be free of liens for labor and
materials supplied or claimed to have been supplied to the Leased
Premises and free from any encumbrances, chattel mortgages, conditional
bills of sale, or security interests.
(e) Tenant shall provide, at Tenant's sole cost and expense,
during any period of time when alterations are in progress, (1)
builder's risk insurance written on a so-called "completed value" form,
(ii) xxxxxxx'x compensation insurance covering all persons employed in
connection with the work and with respect to whom death or bodily
injury claims could be asserted against Landlord, Tenant or the Leased
Premises, and (iii) comprehensive general public liability insurance,
providing full coverage with respect to any accident, injury or
occurrence involving, relating to, or arising during or as a result of
such alteration, naming Landlord and the holder of any mortgage with
respect to the Leased Premises as additional insureds, with limits of
not less than those required for general liability insurance hereunder.
Tenant shall require that any contractor or subcontractor engaged with
respect to said alterations also maintain insurance in conformity with
the above requirements. Certificates evidencing the insurance required
above shall be provided Landlord at its request except in the case of
an interior non-structural alteration costing less than $250,000.
ARTICLE 10
Discharge of Liens
Section 10.01 No Liens. If any lien for work performed or materials
supplied at the request of Tenant is filed against the Land, Building or Leased
Premises or Landlord's or Tenant's interest therein, other than liens arising as
a result of acts of Landlord, Tenant shall cause same to be discharged of record
or bonded within sixty (60) days after notice of such filing. Tenant, at its
sole expense, shall defend the Leased Premises and Landlord against all suits
for the enforcement of any such lien or any bond in lieu of such lien, and
Tenant hereby indemnifies Landlord against any and all loss, cost, damage,
expense or liability resulting from any such lien or suit. Should Tenant fail to
so
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discharge any such lien, Landlord may do so by payment, bond or otherwise
on fifteen (15) days' written notice to Tenant, and the amount paid
therefor by Landlord shall be reimbursed to Landlord by Tenant forthwith
upon demand.
Section 10.02 Right to Contest. Tenant shall have the right to
contest any such mechanic's or other lien or claim filed against the Leased
Premises or any part thereof, if Tenant notifies Landlord in writing of its
intention so to do, diligently prosecutes any such contest, and pays or
otherwise satisfies any final, nonappealable judgment adjudicating or
enforcing such contested mechanic's or other lien and thereafter promptly
procures of record satisfaction and release of same.
ARTICLE 11
Compliance with Laws, Ordinances, Etc.
Section 11.01 Tenant's Compliance. Tenant shall, at Tenant's sole
cost and expense, promptly remove of record any and all violations noted or
filed against the Leased Premises arising out of or resulting from Tenant's
use and occupancy of the Leased Premises and shall promptly comply with all
laws, ordinances, orders, rules, regulations, requirements and directives
of all federal, state and municipal governments, departments, commissions,
boards and officers, and all orders, rules and regulations of the National
Board of Fire Underwriters, or any other authorities with jurisdiction,
which may be applicable to the Leased Premises, or to the use of the Leased
Premises.
ARTICLE 12
Damage or Destruction
Section 12.01 Damage or Destruction. If the Building or Leased
Premises are rendered partially or wholly untenantable by fire or other
casualty, and if the damaged property, in Landlord's reasonable estimation,
cannot be restored within ninety (90) days of the date of such damage, then
Landlord may, at its sole option, terminate this Lease as of the date of
such fire or other casualty. Landlord shall exercise its option provided
herein by written notice to Tenant within thirty (30) days of the date of
such fire or other casualty. If the Lease is not terminated as provided
above, Landlord shall, at its expense, restore the Leased Premises,
exclusive of any improvements or other changes made to the Leased Premises
by Tenant, to as near the condition which existed immediately prior to such
damage or destruction as reasonably possible, and Rent shall xxxxx during
such period of time as the Building is untenantable in the proportion that
the untenantable portion of the Building bears to the tenantable portion of
the Leased Premises. In the event that Landlord shall fail to materially
restore the Leased Premises within ninety (90) days after the date of such
damage, Tenant may, at its option and as its sole remedy, terminate this
Lease by delivering written notice to Landlord, whereupon the Lease shall
terminate on the date provided
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in such notice; provided, however, that if construction or repair is
delayed because of changes requested by Tenant, strikes, lockouts, acts of
God, war, material or labor shortages, governmental regulation or control
or other causes beyond the reasonable control of Landlord, the period for
restoration and repair shall be extended for the amount of time Landlord
is so delayed. Landlord shall not be responsible to Tenant for damage to,
or destruction of, any furniture, equipment, improvements or other changes
placed, installed or made by Tenant in, on or about the Leased Premises,
caused by fire or other casualty.
ARTICLE 13
Condemnation
Section 13.01 Total Taking. If the entire Building or Leased
Premises shall be condemned or taken through or under the power of eminent
domain, or if such a material portion of the Building or Leased Premises
is so taken that in the reasonable opinion of Landlord or Tenant the
restoration and continued use of the remaining portions of the Building or
Leased Premises for the uses thereof at the time of such partial taking is
economically unfeasible, this Lease and the Term hereof shall cease and
terminate upon the date of the vesting of title in the condemning
authority, and all Rent hereunder shall be apportioned to such date of
termination.
Section 13.02 Partial Taking. If less than such a material
portion of the Leased Premises shall be taken or condemned, as aforesaid,
this Lease shall continue and shall remain in full force and effect;
provided, however, that the Rent hereunder shall thereafter be
appropriately reduced in proportion to that portion of the Leased Premises
so taken. Such reduction in Rent shall become effective as of the date of
vesting of title in the condemning authority. In the event of such a
partial condemnation, Landlord shall promptly make, or cause to be made,
all demolition, repairs, reconstruction, restoration, replacement or
rebuilding and all other work necessary, as nearly as may be practicable,
to restore the Leased Premises to the value, rentability, utility and
condition immediately prior to such taking, exclusive of any improvements
or other changes made to the Leased Premises by Tenant.
ARTICLE 14
Assignment and Subletting
Section 14.01 Assignment By Tenant. Tenant agrees not to sell,
assign, mortgage, pledge or in any manner transfer this Lease to any
estate or interest thereunder and not to sublet the Leased Premises or any
part or parts thereof without the prior written consent of Landlord in
each instance. The preceding sentence notwithstanding, Tenant may assign
the Lease or sublet the Leased Premises or portion thereof to an affiliate
of Tenant. For purposes hereof "affiliate" shall mean any corporation or
other
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entity controlled by, under common control with, or controlling Tenant. If
Landlord shall consent to any assignment, sublease or other transfer of Tenant's
interest hereunder, no such consent shall be deemed a release of Tenant, who
shall continue to be primarily liable for payment and performance of all
obligations hereunder with such assigned sublessee or other transferee. Consent
by Landlord to one assignment of this Lease or to one subletting shall not be a
waiver of Landlord's rights under this Article as to any subsequent assignment
or subletting.
Section 14.02 Assignment by Landlord. If Landlord shall convey or
otherwise dispose of its title, interest or estate, or shall assign Landlord's
interest in this Lease to any party, then such successor to Landlord's interest
shall recognize and attorn in writing to Tenant, as tenant hereunder.
ARTICLE 15
Defaults
Section 15.01 Events of Default. There shall be an "event of default"
hereunder and Landlord may terminate this Lease upon thirty (30) days' written
notice to Tenant:
(a) If Tenant shall be in default in the performance of any
of the terms, covenants, conditions and provisions of this Lease on
Tenant's part to be performed (other than the covenants for the payment
of Rent) and such default is not cured within thirty (30) days after
written notice thereof is received by Tenant; or if such default shall
be of such nature that it cannot be cured completely within said thirty
(30) day period, if Tenant shall not have promptly commenced curing
such default within such period and shall not thereafter proceed with
reasonable diligence to remedy such default; or
(b) If Tenant shall be in default in the payment of Rent and
such default is not cured within fifteen (15) days after the date
such payment is due; or
(c) If Tenant shall be adjudicated a bankrupt, shall make a
general assignment for the benefit of its creditors, or invoke the
benefit of any insolvency act, or if a permanent receiver or trustee in
bankruptcy shall be appointed for Tenant's property and such
appointment is not vacated or bonded within sixty (60) days.
Section 15.02 Termination. If Landlord shall give the thirty (30) days'
notice of termination provided in Section 15.01, then, upon the expiration of
such thirty (30) day period, this Lease shall terminate as completely as if the
date specified in such notice were the date herein fixed for the expiration of
the Term of this Lease by lapse of time, and Tenant shall then quit and
surrender the Leased Premises to Landlord.
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Section 15.03 Remedies. Notwithstanding such termination as provided
in Section 15.02, in the event Landlord shall dispossess Tenant by summary
proceedings, or by any other lawful means, the obligations of Tenant shall
survive and Tenant shall remain liable for all of its obligations hereunder
for the balance of the unexpired Term of this Lease; and Landlord shall make
reasonable efforts to sell or to re-let the Leased Premises, or any part or
parts thereof, either in the name of Landlord, or otherwise, as agent for
Tenant, on such terms and conditions and for such duration as are
commercially reasonable under the circumstances; and Tenant shall pay to the
Landlord, as liquidated and agreed current damages for the failure of Tenant
to observe and perform this Lease, and Tenant's undertakings and obligations
hereunder, any deficiency between the Rent hereby reserved and/or covenanted
to be paid, including all other charges required to be paid by Tenant
hereunder, and the net amounts, if any, of the rents collected on account of
such relettings of the Leased Premises for each month of the period which
would -otherwise have constituted the unexpired Term of this Lease, if this
Lease had remained in effect. In computing such current damages there shall
be added to the said deficiency all out-of-pocket costs and expenses as
Landlord incurs in connection with re-letting, such as reasonable attorneys'
and accountants' fees and reasonable disbursements, reasonable brokerage
commissions, reasonable advertising expenses, and the out-of-pocket cost to
keep and maintain the Leased Premises in good order and repair.
Section 15.04 No Release. Landlord, in putting the Leased Premises
in good order or preparing the same for re-rental may, at Landlord's option,
make reasonable alterations, repairs, replacements, and/or decorations in the
Leased Premises for the purpose of re-letting the Leased Premises, and the
making of such alterations, repairs, replacements and/or decorations shall
not operate or be construed to release Tenant from liability hereunder as
aforesaid. In no event shall Tenant be entitled to receive any excess, if
any, of the total rental collected over the sums otherwise payable by Tenant
to Landlord hereunder.
Section 15.05 Waiver. Landlord and Tenant, so far as permitted by
law, hereby waive and will waive any and all right to a trial by jury in the
event that summary dispossess proceedings shall be instituted by Landlord,
and in any action, proceeding or counterclaim brought by either Landlord or
Tenant against the other, on any matters whatsoever arising out of, or in any
way connected with this Lease, including, but not limited to, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Leased
Premises, or any claim of injury or damage.
Section 15.06 No Waiver. The remedies of Landlord and Tenant
provided this Lease are cumulative and shall not exclude any other remedies
to which either may be lawfully entitled. The failure of either party to
insist upon strict performance by the other of any term, covenant or
condition herein contained shall not be a waiver of such term, covenant or
condition by the non-objecting party for the future. No waiver or change of
any provision of this Lease
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shall be effective unless contained in a written instrument signed by both
Landlord and Tenant.
ARTICLE 16
Subordination
Section 16.01 Lease Subordination. This Lease shall be and it hereby is
made, and shall at all times be, subject and subordinate to the lien of any and
all duly recorded mortgages at any time granted by Landlord, whether heretofore
or hereafter made, affecting or encumbering the Leased Premises, or premises of
which the Leased Premises shall be a part, and to all extensions, renewals,
modifications or replacements thereof; provided, however, that so long as the
Purchase Option provided in Article 20 shall remain in effect, Landlord shall
not grant any mortgage or mortgages at any time or times encumbering the Leased
Premises securing costs and indebtedness in an aggregate amount in excess of the
Purchase Option Price; and provided, further, the foregoing subordination shall
be expressly conditioned on each mortgagee agreeing not to disturb Tenant's
rights of possession, use and occupancy and Purchase Option under this Lease
except on default by Tenant which shall remain uncured after notice and
expiration of any applicable grace period.
Section 16.02 Attornment. The subordination of this Lease and Tenant's
rights hereunder, as provided in Section 16.01, shall be effective without the
execution of any further or other instruments by Tenant, but Tenant shall, at
Landlord's request, and without charges therefor to Landlord, execute and
deliver any further document or instrument to evidence the subordination of this
Lease to such mortgages, subject to the mortgagee's agreement not to disturb
Tenant, as shall comply with the provisions of Section 16.01; and, to the extent
requested by the holder of any such mortgage, Tenant shall execute and deliver
such instruments and documents as shall confirm Tenant's undertaking and
agreement hereunder to attorn under the terms and provisions of this Lease, to
such a mortgagee, or to the purchaser of the mortgaged premises at a foreclosure
sale, or at a sale of the Leased Premises pursuant to such power of sale as may
be contained in such a mortgage, and to recognize such mortgagee, or such
purchaser, as the Landlord hereunder from and after the date of such a transfer
of title, with the same force and effect as if the Leased Premises had been sold
or conveyed to such new landlord by the Landlord hereunder.
ARTICLE 17
Entry by Landlord; Performance of Covenants
Section 17.01 Entry. Tenant shall permit Landlord or its agents to
enter the Leased Premises during normal business hours upon 48 hours prior
written notice (and at any time and without notice in cases of emergency) (i)
for the purpose of inspection thereof, (ii) for showing the Leased Premises to
persons wishing to purchase the same, or in connection with mortgage or other
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financing, and (iii) at any time within three (3) months prior to the
expiration of the term for or exhibition to persons wishing to lease
the same; and Tenant shall, within three (3) months prior to
expiration of the initial term or any extension term, permit the
usual "to let," "for rent" and "for sale" notices to be placed on
the Leased Premises and to remain thereon without hindrance or
molestation, provided said notices are reasonable in size and
appearance. Tenant shall have the right to designate in good faith
"sensitive" or "secure" areas which, except as may reasonably be
required in the case of an emergency, may be entered by Landlord
only in the company of a representative of Tenant and in accordance
with other reasonable security precautions which Tenant may in good
faith require; provided, however, that this provision shall not be
construed to in any manner impair or limit Landlord's exercise of
its remedies under this Lease.
Section 17.02 Cure of Covenants. If Tenant shall be in
default hereunder, Landlord may, with or without declaring an "event
of default," upon ten (10) days' prior notice to Tenant, or without
notice in case of an emergency, cure such default on behalf of Tenant
(unless Tenant shall itself, within such period, commence and
thereafter diligently proceed to cure such default), and for the
purpose thereof may enter upon the Leased Premises and upon demand
Tenant shall reimburse Landlord for any reasonable and necessary
out-of-pocket expenses incurred to effect such cure.
ARTICLE 18
Certificates
Section 18.01 Estoppel Certificates. Landlord and Tenant each
agrees, at any time, and from time to time, upon not less than ten
(10) days' prior written notice to the other, to execute, acknowledge
and deliver to the other, or to any mortgagee, or to any prospective
purchaser, of the Leased Premises, a statement or certificate in
writing setting forth the Rent and other charges then payable, and
specifying each element thereof, and certifying that this Lease is
unmodified and in full force and effect (or if there have been
modifications, that this Lease is in full force and effect as
modified, and setting forth the modifications), and the dates to which
the Rent and other charges payable hereunder have been paid, and
stating (to the extent known to the party so certifying) whether or
not the other party is in default in keeping, observing or performing
any of the terms contained in this Lease and, if in default,
specifying each such default (limited, as regards the other party's
defaults, to those defaults of which the party so certifying has
actual knowledge).
ARTICLE 19
Notices
Section 19.01 Notices. All notices, demands, consents, or
requests under this Lease must be in writing and shall be personally
delivered or sent postage prepaid by registered or
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certified mail or reputable overnight courier, addressed, if the party for
whom intended is the Landlord, to North Lakes Manufacturing, Inc., 0000 Xxxxx
Xxxxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and if such party is the Tenant, to
Tenant, at the Leased Premises (with a copy to Newcor, Inc., 0000 X. Xxxxxxxx
Xxx., Xxxxxxxxxx Xxxxx, Xxxxxxxx 48302), or to such other address as either
party may by like notice designate. Notices, demands, consents or requests
served or given as aforesaid shall be deemed sufficiently served or given for
all purposes hereunder when personally delivered or on the day on which such
notice is deposited in the registered or certified mail or with such
overnight courier. Either party shall have the right to change the address to
which notices shall thereafter be sent by giving notice to the other party as
aforesaid.
ARTICLE 20
Option To Purchase
Section 20.1 Option. During the Term of this Lease (the "Option
Period") , subject to (a) Tenant not being in default under the Lease, and
(b) Tenant having paid in full all principal, accrued interest and other
sums owing from Tenant to Landlord as evidenced by that certain Secured
Promissory Note of even date herewith, made by Tenant and payable to the
order of Landlord in the original principal sum of $21,650,000, Tenant shall
have an option to purchase the Leased Premises (the "Purchase Option") ,
subject to applicable building codes, restrictions of record and other
exceptions to title not materially adversely affecting marketability, use or
enjoyment of the Leased Premises, from Landlord for $400,000 (the "Purchase
Option Price") . In order to exercise the Purchase Option, Tenant must
notify Landlord within the Option Period, in writing, of Tenant's desire to
exercise the Purchase Option. In the event Tenant exercises Tenant's
Purchase Option, Landlord shall transfer title by standard form of corporate
warranty deed subject to matters as aforesaid and shall pay normal costs
customarily paid by sellers of real property, including title commitment and
insurance fees for an owner's policy in favor of Tenant, and transfer taxes.
Section 20.2 Expiration. In the event that during the Option Period
Tenant does not notify Landlord, in writing, of Tenant's desire to exercise
the Purchase Option, the Purchase Option shall expire, become void and be of
no further force or effect.
ARTICLE 21
Miscellaneous
Section 21.01 Quiet Possession. Landlord covenants that Tenant shall
peaceably and quietly enjoy the Leased Premises for as long as Tenant
performs and observes its obligations hereunder.
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Section 21.02 Holding Over by Tenant. In the event of holding over
by Tenant after expiration or termination of this Lease, and any extension
for or renewal thereof, without the written consent of Landlord, Tenant
shall pay as liquidated damages one hundred fifty percent (150%) of the
Rent then applicable to the space then being occupied by Tenant for the
entire holdover period. No holding over by Tenant after the Term of this
Lease shall operate to extend the Lease; in the event of any unauthorized
holding over, Tenant shall indemnify Landlord against all claims for
damages by any other lessee to whom Landlord may have leased all or any
part of the Leased Premises effective upon the termination of this Lease.
Any holding over with the consent of Landlord in writing shall thereafter
constitute this Lease a lease from month to month.
Section 21.03 Run With Leased Premises. The terms, covenants,
conditions and agreements herein contained shall run with the Leased
Premises and shall bind and inure to the benefit of the parties hereto and
their respective representatives, successors and assigns; it being
understood, however, that neither the provisions of this Section 21.03, nor
any other provision in this Lease contained, shall be deemed to authorize
the assignment of this Lease without the prior written consent of Landlord,
as herein required. Upon request of either party, a memorandum of lease
will be executed suitable for recording.
Section 21.04 Captions. The captions of this Lease are for
convenience and ease of reference only, and in no way define, limit or
describe the scope or intent of this Lease, nor anyway affect this Lease,
and shall be disregarded in the interpretation hereof.
Section 21.05 Severable. If any provisions of this Lease shall be
declared invalid or unenforceable, the remainder hereof shall remain
unaffected thereby and shall continue in full force and effect.
Section 21.06 Consents and Approvals. Except as otherwise
expressly provided in this Lease, whenever the consent or approval is
required under this Lease from either party, that party agrees not to
unreasonably or arbitrarily withhold or delay such consent or approval.
Section 21.07 Entire Agreement. This Lease contains the entire and
only agreement between the parties hereto; and no oral statements,
agreements or representations not embodied in this instrument shall have
any force or effect. This Lease shall not be modified or amended in any
manner except in writing, by instrument executed by both parties.
Section 21.08 Interpretation of Terms. All personal pronouns used
in this Lease shall include the other genders whether used in the masculine
or feminine or neuter gender, and the singular shall include the plural
whenever and as often as may be appropriate.
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Section 21.09 No Partnership. This Lease does not create the
relationship of principal and agent or of partnership or of joint venture or of
any association between Landlord and Tenant, the sole relationship between the
parties being that of Landlord and Tenant. The laws of the State of Michigan
shall govern the validity, performance and enforcement of this Lease.
Section 21.10 Brokers. Landlord and Tenant each represents and warrants
to the other that no realtors, brokers or agents were involved in the
negotiation and execution of this Lease. Tenant hereby indemnifies Landlord and
agrees to hold Landlord harmless from and against the claim of any realtor,
broker or agent with whom Tenant may have dealt with regard to this Lease, or
the Leased Premises. Landlord hereby indemnifies Tenant and agrees to hold
Tenant harmless from and against the claims of any realtor, broker or agent with
whom Landlord may have dealt with regard to this Lease.
Section 21.11 Signs. Tenant shall not place or maintain any exterior
sign or advertisement on the Leased Premises without first obtaining the written
approval of Landlord, which shall not be unreasonably withheld or delayed. Any
such signage shall be at the sole expense of the Tenant and shall comply with
all applicable laws, codes and ordinances, including, without limitation,
municipal zoning regulations. Tenant shall remove all Tenant signs at the
expiration or termination of this Lease and shall restore the affected area to
its original condition normal wear and tear excepted.
IN WITNESS WHEREOF, Landlord and Tenant have each duly executed this
instrument as of the date and year first above written.
LANDLORD:
NORTH LAKES MANUFACTURING, INC., a
Michigan corporation
By:
-------------------------------
Its:
---------------------------
TENANT:
NEWCOR, INC., a Delaware corporation
By:
-------------------------------
Its:
---------------------------
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EXHIBIT A
Legal Description of Land
28
SCHEDULE 6.01
Fixtures
Any and all "Assets" (as defined in the Asset Purchase Agreement, as
amended, between Newcor, Inc., a Delaware corporation, as Buyer, and North
Lakes Manufacturing, Inc. (formerly known as Machine Tool and Gear, Inc.), a
Michigan corporation, as Seller).
29
23504
REFERENCE NO. DESCRIPTION INVOICE DATE INVOICE AMOUNT DISCOUNT TAKEN AMOUNT PAID
------------------------------------------------------------------------------------------------------------------------------
Deposit on Machine Tool & 250,000.00
Gear acquisition
CHECK DATE CHECK NO. PAYEE DISCOUNTS TAKEN CHECK AMOUNT
------------------------------------------------------------------------------------------------------------------------------
12/12/97 23504 Machine Tool & Gear, Inc. $250,000.00
==================================================================================================================================
NEWCOR, INC. 23504
CORP. OFFICE ACCOUNT COMERICA BANK
0000 X. XXXXXXXX, XXX. 000 XXXXXXX, XX
XXXXXXXXXX XXXXX, XX 00000 9-33/720 259
23504 Dec 12, 1997 ****$250,000.00
CHECK NO. DATE AMOUNT
Memo:
Two Hundred Fifty Thousand and 0/100 Dollars
PAY
TO THE
ORDER Machine Tool & Gear, Inc.
OF: 0000 X. Xxxxxxxxxx
Xxxxxxx,, XX 00000 /s/ Xxxx Xxxxxx
Authorized Signature
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[SECURITY FEATURES INCLUDED. DETAILS ON BACK.]
023504 072000339 1076004694
