<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
OMB Approval
OMB Number: xxxx-xxxx
Expires: Approval Pending
Estimated Average Burden Hours Per Response: 1.0
(Mark One)
/X/ Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended September 30, 1996
-----------------------------------------
/ / Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from to
----------------- ----------------------
Commission file number 0-3555
--------------------------------------------------------
David White, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Wisconsin 39-0967642
- ------------------------------- -------------------------------
(State or Other Jurisdiction of (I. R. S. Employer
Incorporation or Organization) Identification No.)
11711 River Lane, Germantown, WI 53022
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(414) 251-8100
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
---- ----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at October 31, 1996
- ---------------------------------------- ----------------------------------
Common Stock, $3.00 Par Value Per Share 457,323 Shares
Transitional small business disclosure format (Check One) X
------ ------
Yes No
<PAGE> 2
DAVID WHITE, INC.
INDEX
Page No.
Part I. Financial Information
Consolidated Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Operations -
Three Months and Nine Months Ended September 30,
1996 and 1995 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 5
Notes to Unaudited Consolidated Condensed
Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 & 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 9 - 11
Signature 12
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAVID WHITE, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(000'S)
<TABLE>
<CAPTION>
Assets September 30, December 31,
------
1996 1995
----------- -------------
(Unaudited)
<S> <C> <C>
Current Assets
- --------------
Cash and cash equivalents $ 371 $ 0
Trade accounts receivable, net 1,060 1,479
Inventories 3,792 4,611
Other current assets 48 129
-------- --------
Total current assets 5,271 6,219
Other Assets
- ------------
Technology and patents, net 169 183
Intangible pension asset 127 127
Other 178 183
-------- --------
474 493
Property, plant and equipment, net 2,262 2,465
-------- --------
Total assets $ 8,007 $ 9,177
======== ========
Liabilities and Stockholders' Investment
-----------------------------------------
<CAPTION>
Current Liabilities
- -------------------
<S> <C> <C>
Notes payable to bank $ 0 $ 714
Trade accounts payable 427 763
Accrued liabilities 538 722
Income taxes 59 0
Current maturities of long-term debt 330 309
-------- --------
Total current liabilities 1,354 2,508
Long-term debt, less current maturities 1,590 1,840
Long-term pension liability 197 197
Stockholders' Investment
- ------------------------
Preferred stock, par value $1 a share:
Authorized 1,000,000 shares; none issued
Common stock, par value $3 a share:
Authorized 5,000,000 shares; issued 692,240 shares 2,077 2,077
Additional paid-in capital 1,024 1,024
Retained earnings 4,129 3,895
Additional pension liability (70) (70)
Treasury stock at cost - 234,917 shares (2,294) (2,294)
-------- --------
Total stockholders' investment 4,866 4,632
-------- --------
Total liabilities and stockholders' investment $ 8,007 $ 9,177
======== ========
</TABLE>
See accompanying notes to unaudited consolidated condensed financial
statements.
-3-
<PAGE> 4
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(000'S) EXCEPT SHARE AND PER SHARE DATA
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
1996 1995 1996 1995
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Net sales $ 3,014 $ 3,160 $ 10,285 $ 12,259
Cost of goods sold 2,428 2,320 7,830 9,085
-------- -------- -------- --------
Gross margin 586 840 2,455 3,174
Loss on sale of subsidiary 0 0 0 (722)
Selling and administrative expenses 561 613 1,953 2,295
-------- -------- -------- --------
Earnings from operations before
other expenses and income taxes 25 227 502 157
Other income (expenses)
Other income 2 1 27 35
Interest expense (55) (58) (236) (235)
Amortization of intangible assets 0 0 0 (75)
-------- -------- -------- --------
Earnings (loss) before income taxes (28) 170 293 (118)
Income taxes (benefit) (5) 34 59 (11)
-------- -------- -------- --------
Net earnings (loss) $ (34) $ 136 234 (107)
======== ======== ======== ========
Net earnings (loss) per common share $ (.05) $ .30 $ .51 $ (.22)
Average common shares outstanding 457,323 457,323 457,323 496,490
Dividends per common share outstanding $ .00 $ .00 $ .00 .00
</TABLE>
See accompanying notes to unaudited consolidated condensed financial
statements.
-4-
<PAGE> 5
DAVID WHITE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(000'S)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 234 $ (107)
Adjustments to reconcile net earnings to net
cash used in operating activities:
Depreciation 404 307
Amortization of intangible assets 0 75
Loss on sale of subsidiary 0 722
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 419 493
Inventories 819 (659)
Prepaid expenses and other assets 100 (18)
Increase (decrease) in:
Accounts payable and accrued liabilities (520) (259)
Income taxes 59 0
-------- --------
Net cash provided by operating activities 1,515 554
Cash flows from investing activities:
Additions to property, plant & equipment (201) (690)
-------- --------
Net cash used in investing activities (201) (690)
Cash flows from financing activities:
Principal payments on debt (229) (210)
Net decrease in notes payable to bank (714) (417)
-------- --------
Net cash used in financing activities (943) (627)
Effect of exchange rate changes on cash 0 5
Net increase (decrease) in cash and cash equivalents 371 (758)
Cash and cash equivalents at beginning of year 0 892
------- -------
Cash and cash equivalents at end of period $ 371 $ 134
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest 236 214
Income taxes 8 165
</TABLE>
See accompanying notes to unaudited consolidated condensed financial statements.
-5-
<PAGE> 6
DAVID WHITE, INC.
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction with the
audited financial statements and the notes thereto incorporated by
reference in the Company's latest annual report on Form 10-KSB.
2. In the opinion of management, the aforementioned statements reflect
all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results for the interim
periods. The results of operations for the nine months ended
September 30, 1996 are not necessarily indicative of the results to be
expected for the full year.
3. It is not practicable to segregate the amounts of raw materials, work
in progress, finished goods or supplies.
-6-
<PAGE> 7
DAVID WHITE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors that have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statements of operations.
A summary of the period to period changes in the principal items included in
the consolidated condensed statements of operations is shown below:
<TABLE>
<CAPTION>
Comparison of
----------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
1996 and 1995 1996 and 1995
------------------- -------------------
Increase (Decrease) Increase (Decrease)
(000's) (000's)
<S> <C> <C>
Net sales (146) (1,974)
Cost of goods sold 108 (1,255)
Selling and administrative expenses (52) (342)
Other income 1 (8)
Loss on sale of subsidiary 0 (722)
Interest expense (3) 1
Amortization of intangible assets 0 (75)
Earnings before income taxes (198) 411
Income taxes (benefit) (39) 70
Net earnings (159) 341
</TABLE>
-7-
<PAGE> 8
RESULTS OF OPERATIONS
THIRD QUARTER 1996 COMPARED TO THIRD QUARTER 1995
Sales for the third quarter of 1996 of $3.014 million were 5% less than sales
for the third quarter of 1995. For the third quarter of 1996, the Company
reported a loss of $23,000 versus a profit of $136,000 during the same period
in 1995. Gross margins decreased to 20% in 1996 from 27% in 1995 due to the
Company's efforts to reduce inventories along with a change in sales mix.
Inventories decreased $482,000 in the third quarter of 1996. Reducing
inventories decreases profits temporarily by reducing the Company's ability to
absorb normal manufacturing overhead into inventory. There also was a change
in sales mix. In 1996, laser products were 27% of all sales, up from 18% in
the third quarter of 1995. Shipments of laser products rose 43% in the third
quarter of 1996 while optical and optical related products were down 15%. As
optical products are more profitable than laser products, the change in mix is
reflected in lower gross margins in the third quarter of 1996. Selling and
administrative expenses decreased 8% due to (1) lower health premiums as the
Company changed to a HMO from a traditional health plan and (2) lower expenses
due to the completion of the computer conversion. Interest expense for the
third quarter of 1996 was down $3,000.
FIRST NINE MONTHS 1996 COMPARED TO THE FIRST NINE MONTHS 1995
Sales for the first nine months of 1996 of $10.3 million were down $2 million
from 1995's first nine months sales of $12.3 million. Most of the decrease, or
$1.6 million, is attributed to the inclusion of the Ammann's sales for the
first five months of 1995. The Company sold its former Swiss subsidiary,
Ammann Lasertechnik, in May, 1995. David White's sales, exclusive of Ammann,
are down 3% or $373,000 for the first nine months of 1996. Gross margins
decreased to 24% for the first nine months of 1996, down 2% from 26% for the
first nine months of 1995. Selling and administrative expenses decreased 15%
primarily due to the inclusion of Ammann's selling and administrative expenses
in 1995. Interest expense for the first nine months of 1996 is up $1,000.
LIQUIDITY
At the end of the third quarter, the Company had paid off its revolving debt.
There was $1.9 million remaining on the term debt on September 30, 1996 down
from $2.2 million on September 30, 1995. The term debt agreement allows the
Company to borrow at the bank's prime rate. The term note remaining is payable
in monthly installments of $40,000 through August, 2001. The current ratio was
3.9:1 on September 30, 1996 up slightly from the 3.7:1 on September 30, 1995.
The Company did not have any significant outstanding capital commitments at the
end of the third quarter of 1996.
-8-
<PAGE> 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
3.1 Restated Articles of Incorporation [Incorporated by
reference to Exhibit 3 to the Company's Form 8-K
dated May 8, 1992]
3.2 By-Laws, as amended through February 22, 1996
[Incorporated by reference to Exhibit 3.2 to the
Company's Form 10-KSB for the year ended December 31,
1995]
4.1 Rights Agreement, dated as of August 29, 1988,
between Company and First Wisconsin Trust Company, as
Rights Agent [Incorporated by reference to Exhibit 4
to the Company's Form 8-K dated September 15, 1988]
4.2 Amendment to Rights Agreement, dated as of November
9, 1988, between Company and First Wisconsin Trust
Company, as Rights Agent [Incorporated by reference
to Exhibit 4.1 to the Company's Form 8-K dated
November 10, 1988]
4.3 Amendment No. 2 to Rights Agreement dated as of June
30, 1989 between the Company and First Wisconsin
Trust Company, as Rights Agent [Incorporated by
reference to Exhibit 4.2 to the Company's Form 8-K
dated June 30, 1989]
4.4 Amendment No. 3 to Rights Agreement dated as of
January 22, 1992, between the Company and First
Wisconsin Trust Company, as Rights Agent
[Incorporated by reference to Exhibit 4.3 to the
Company's Form 8-K dated February 7, 1992]
10.1 Amended and Restated 1981 Stock Option Plan
[Incorporated by reference to Exhibit 10.4 to the
Company's Form 10-K for the year ended December 31,
1988]*
10.2 Form of 1981 Incentive Stock Option Agreement, as
amended [Incorporated by reference to Exhibit 10.5 to
the Company's Form 10-K for the year ended December
31, 1988]*
10.3 Form of Amendment to 1981 Incentive Stock Option
Agreement [Incorporated by reference to Exhibit 10.6
to the Company's Form 10-K for the year ended
December 31, 1988]
10.4 Form of Key Executive Employment and Severance
Agreement, dated as of January 25, 1990, entered into
between the Company and each of the following: Tony
L. Mihalovich, Ronald J. Jansen, James L. Younk, E.
Gustav Malm, Larry Clark, Walker J. Young and Robert
L. Underberg [Incorporated by reference to Exhibit
10.4 to the Company's Form 10-K for the year ended
December 31, 1992]*
10.5 Employment Agreement, dated as of January 1, 1994,
between the Company and Tony L. Mihalovich
[Incorporated by reference to Exhibit 10.5 of the
Company's Form 10-KSB for the year ended December 31,
1993, as amended by Form 8 dated April 20, 1994]*
- ------------------------------
* management contract or compensatory plan or arrangement.
-9-
<PAGE> 10
10.6 Amendment to Employment Agreement, dated as of
December 5, 1995, between the Company and Tony L.
Mihalovich [Incorporated by reference to Exhibit 10.6
to the Company's Form 10-KSB for the year ended
December 31, 1995]*
10.7 Stock Option Agreement, dated as of January 1, 1994,
between the Company and Tony L. Mihalovich
[Incorporated by reference to Exhibit 10.6 at the
Company's Form 10-KSB for the year ended December 31,
1993]*
10.8 Amendment to Stock Option Agreement, dated as of
December 5, 1995, between the Company and Tony L.
Mihalovich [Incorporated by reference to Exhibit 10.8
to the Company's Form 10-KSB for the year ended
December 31, 1995]*
10.9 Stock Option Agreement, dated as of January 11, 1990,
between Company and R. Ron Heiligenstein
[Incorporated by reference to Exhibit 10.11 to the
Company's Form 10-K for the year ended December 31,
1989]*
10.10 Form of Indemnity Agreement, dated as of January 24,
1990, entered into between the Company and each of
the following: Charles D. Jacobus, Hans-Rudolf
Ammann, E. Gustav Malm, R. Ron Heiligenstein,
Marshall A. Loewi, Michael S. Ariens and Richard H.
Bromley [Incorporated by reference to Exhibit 10.12
to the Company's Form 10-K for the year ended
December 31, 1989
10.11 1992 Stock Option Plan [Incorporated by reference to
Exhibit 10.9 to the Company's Form 10-K for the year
ended December 31, 1992]*
10.12 Form of 1992 Incentive Stock Option Agreement
[Incorporated by reference to Exhibit 10.10 to the
Company's Form 10-K for the year ended December 31,
1992]*
10.13 1995 Stock Option Plan [Incorporated by reference to
Exhibit 10.11 to the Company's Form 10-QSB for the
end of the second quarter of 1995]*
10.14 Stock Purchase Agreement, dated as of May 31, 1995,
entered into between the Company and Hans-Rudolf
Ammann, Jolanda Ammann, Konrad Bachmaier and Thomas
Ammann [Incorporated by reference to Exhibit 10.12 to
the Company's Form 10-QSB for the end of the second
quarter of 1995]
10.15 License Agreement, dated as of May 31, 1995, entered
into between the Company and Ammann Lasertechnik, AG
[Incorporated by reference to Exhibit 10.13 to the
Company's Form 10-QSB for the end of the second
quarter of 1995]
10.16 Ammann Lasertechnik AG Supply Agreement, dated as of
May 31, 1995, entered into between the Company and
Ammann Lasertechnik, AG [Incorporated by reference to
Exhibit 10.14 to the Company's Form 10-QSB for the
end of the second quarter of 1995]**
- ------------------------------
* management contract or compensatory plan or arrangement.
** Certain information in this Exhibit was omitted pursuant to a
request for confidential treatment. The information and the
request were separately filed with the Commission.
-10-
<PAGE> 11
10.17 David White, Inc. Supply Agreement, dated as of May
31, 1995, entered into between the Company and Ammann
Lasertechnik, AG [Incorporated by reference to
Exhibit 10.15 to the Company's Form 10-QSB for the
end of the second quarter of 1995]**
10.18 Transfer and Assignment Agreement, dated as of May
31, 1995, entered into between the Company and Ammann
Lasertechnik, AG [Incorporated by reference to
Exhibit 10.16 to the Company's Form 10-QSB for the
end of the second quarter of 1995]
10.19 Pledge Agreement, dated as of May 31, 1995, entered
into between the Company and Hans-Rudolf Ammann,
Jolanda Ammann, Konrad Bachmaier and Thomas Ammann
[Incorporated by reference to Exhibit 10.17 to the
Company's Form 10-QSB for the end of the second
quarter of 1995]
10.20 Summary [English Translation] of German Joint Venture
Ammann Lasertechnik GmbH, March 1991 [Incorporated by
reference to Exhibit 10.8 to the Company's Form 10-K
for the year ended December 31, 1991]
10.21 Offer, Addendum and Accepted Counter-Offer between
Tony L. Mihalovich and the Company regarding the
Purchase of the Company's Germantown, Wisconsin
property by Mr. Mihalovich
10.22 Lease dated October 31, 1996, entered into between
the Company and Tony L. Mihalovich
27 Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company
with the Securities and Exchange Commission during the third quarter
of 1996.
- ------------------------------
** Certain information in this Exhibit was omitted pursuant to a
request for confidential treatment. The information and the
request were separately filed with the Commission.
-11-
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAVID WHITE, INC.
------------------------------------
(Registrant)
/s/ Tony L. Mihalovich
------------------------------------
Tony L. Mihalovich
(President)
/s/ James L. Younk
------------------------------------
James L. Younk
(Vice President-Finance)
Date: November 12, 1996
------------------------------
-12-
<PAGE> 1
Approved By Wisconsin Wisconsin Legal Blank Company
Department of Regulation and Licensing Milwaukee, Wisconsin
11-1-95 (Optional Use Date)
4-1-96 (Mandatory Use Date)
WB-15 COMMERCIAL OFFER TO PURCHASE
GENERAL PROVISIONS
The Buyer, Anthony L. Mihalovich, Jr., of his assigns, offers to purchase
the Property known as W180 N11711 River Lane in the _________________of
Germantown, County of Washington, Wisconsin, (Additional description, if
any:) Legal Description Per Title Policy.
/ / PURCHASE PRICE: Six Hundred Fifty Thousand Dollars ($650,000.00).
/ / THE BALANCE OF PURCHASE PRICE will be paid in cash or equivalent at
closing unless otherwise provided below.
/ / ADDITIONAL ITEMS INCLUDED IN PURCHASE PRICE: Seller shall include in the
purchase price and transfer, free and clear of encumbrances, all fixtures,
as defined at lines 190 to 192 and as may be on the Property on the date
of this Offer, unless excluded at lines 18-20 and the following additional
items: None. All personal property included in purchase price will be
transferred by Bill of Sale or _____________.
/ / ITEMS NOT INCLUDED IN THE PURCHASE PRICE: CAUTION: ADDRESS RENTED
FIXTURES OR TRADE FIXTURES OWNED BY TENANTS, IF APPLICABLE.
None.
/ / PROPERTY CONDITION REPRESENTATIONS: Seller represents to Buyer that as of
the date of acceptance Seller has no notice or knowledge of conditions
affecting the Property or transaction (as defined at lines 159 to 178)
[COMPLETE DATE OR STRIKE AS APPLICABLE] and ________________________.
/ / TIME IS OF THE ESSENCE as to: (2) binding acceptance; (3) occupancy;
(4) date of closing and all other dates and deadlines in this Offer.
ACCEPTANCE, DELIVERY AND RELATED PROVISIONS
/ / BINDING ACCEPTANCE: This Offer is binding upon both parties only if a
copy of the accepted Offer is delivered to Buyer on or before September 13th,
1996, 5:00 p.m. CAUTION: THIS OFFER MAY BE WITHDRAWN PRIOR TO DELIVERY OF THE
ACCEPTED OFFER.
/ / DELIVERY OF DOCUMENTS AND WRITTEN NOTICES: Unless otherwise stated in
this Offer, delivery of documents and written notices to a party shall be
effective only when accomplished in any of the following ways:
(1) By depositing the document or written notice postage or fees prepaid
in the U.S. Mail or a commercial delivery system addressed to the party
at:
Buyer: _______________________________________________________________
Seller: _______________________________________________________________
(2) By giving the document or written notice personally to the party;
(3) By electronically transmitting the document or written notice to the
following telephone number: Buyer: (___)_____________________
Seller: (____)____________________. Any signed document transmitted by
fax shall be considered an original document and shall have the binding and
legal effect of an original document. The signature of any Party upon a faxed
document shall be considered an original signature.
OCCUPANCY AND RELATED PROVISIONS
/ / OCCUPANCY of property shall be given to Buyer at time of closing subject
to lease terms.
CAUTION: CONSIDER AN AGREEMENT WHICH ADDRESSES RESPONSIBILITY FOR REMOVAL OF
PERSONAL PROPERTY AND DEBRIS PRIOR TO OCCUPANCY, IF APPLICABLE.
/ / RENTAL WEATHERIZATION: This transaction (is) exempt from State of
Wisconsin Rental Weatherization Standards (ILHR 67, Wisconsin Administrative
Code).
CLOSING AND RELATED PROVISIONS
/ / CLOSING: This transaction is to be closed at the place designated by
Buyer's mortgagee or ________________________ no later than November 6th,
1996 unless another date or place is agreed to in writing.
/ / CLOSING PRORATIONS: See attached Addendum A.
/ / SPECIAL ASSESSMENTS: Special assessments, if any, for work on site
actually commenced or levied prior to date of this Offer shall be paid by
Seller no later than closing. CAUTION: SEE LINES 194 TO 196 REGARDING OTHER
EXPENSES. CONSIDER A SPECIAL AGREEMENT REGARDING THESE EXPENSES, IF
APPLICABLE.
/ / FORM OF TITLE EVIDENCE: Seller shall give evidence of title by an owner's
policy of title insurance [STRIKE AS APPLICABLE] as further described at
lines 141 to 153.
/ / CONVEYANCE OF TITLE: Upon payment of the purchase price, Seller
shall convey the Property by warranty deed free and clear of all liens and
encumbrances, except: municipal and zoning ordinances and agreements entered
under them, recorded easements for the distribution of utility and municipal
services, recorded building and use restrictions and covenants, general
taxes levied in the year of closing (provided none of the foregoing
prohibit present use of the Property), which constitutes merchantable title
for purposes of this transaction. Seller further agrees to complete and
execute the documents necessary to record the conveyance.
ADDENDA TO OFFER SEE LINE 268 TO DETERMINE IF ADDENDA, RIDERS OR OTHER
DOCUMENTS HAVE BEEN MADE A PART OF THIS OFFER.
<PAGE> 2
PROPERTY IMPROVEMENT, DEVELOPMENT PAGE 2 of 4 -- COMMERCIAL OFFER
OR CHANGE OF USE
WARNING: IF BUYER CONTEMPLATES IMPROVING OR DEVELOPING PROPERTY, OR A CHANGE
IN USE, BUYER MAY NEED TO ADDRESS MUNICIPAL AND ZONING ORDINANCES, RECORDED
BUILDING AND USE RESTRICTIONS, COVENANTS AND EASEMENTS WHICH MAY PROHIBIT SOME
IMPROVEMENTS OR USES. THE NEED FOR BUILDING PERMITS, ZONING VARIANCES,
ENVIRONMENTAL AUDITS, ETC. MAY NEED TO BE INVESTIGATED TO DETERMINE FEASIBILITY
OF IMPROVEMENTS, DEVELOPMENT OR USE CHANGES FOR PROPERTY. CONTINGENCIES FOR
INVESTIGATION OF THESE ISSUES MAY BE ADDED TO THIS OFFER. SEE LINES 241 TO 273.
PROPERTY CONDITION PROVISIONS
/ / PROPERTY DIMENSIONS AND SURVEYS: Buyer acknowledges that any Property,
building or room dimensions, or total acreage or building square footage
figures, provided to Buyer by Seller or Seller's agent(s), may be approximate
because of rounding or other reasons, unless verified by survey or other
means. Buyer also acknowledges that there are various formulas used to
calculate total square footage of buildings and that total square footage
figures will vary dependent upon the formula used. CAUTION: BUYER SHOULD VERIFY
TOTAL SQUARE FOOTAGE FORMULA, PROPERTY, BUILDING OR ROOM DIMENSIONS, AND TOTAL
ACREAGE OR SQUARE FOOTAGE FIGURES, IF MATERIAL TO BUYER'S DECISION TO PURCHASE.
/ / INSPECTIONS: Seller agrees to allow Buyer's inspectors reasonable access to
the Property upon reasonable notice if the inspections are reasonably
necessary to satisfy the contingencies in this Offer. Buyer agrees to promptly
provide copies of all such inspection reports to Seller, and to listing broker
if Property is listed. Furthermore, Buyer agrees to promptly restore the
Property to it's original condition after Buyer's inspections are completed,
unless otherwise agreed with Seller. CAUTION: SEE LINES 193 TO 200 FOR
DEFINITIONS OF "INSPECTION" AND "TEST". SELLER'S AUTHORIZATION FOR INSPECTIONS
DOES NOT AUTHORIZE BUYER TO CONDUCT TESTING OF THE PROPERTY. IF BUYER REQUIRES
TESTING CONTINGENCIES, THEY SHOULD BE SPECIFICALLY PROVIDED FOR AT LINES 268 TO
273. SELLER ACKNOWLEDGES THAT CERTAIN INSPECTIONS OR TESTS MAY DETECT
ENVIRONMENTAL POLLUTION WHICH MAY BE REQUIRED TO BE REPORTED TO THE WISCONSIN
DEPARTMENT OF NATURAL RESOURCES.
/ / PROPERTY DAMAGE BETWEEN ACCEPTANCE AND CLOSING: Seller shall maintain the
Property until the earlier of closing or occupancy by Buyer in materially the
same condition as of the date of acceptance of this Offer. If, prior to the
earlier of closing or occupancy by Buyer, the Property is damaged in an amount
of not more than five percent (5%) of the selling price, Seller shall be
obligated to restore the Property. If Seller is unable to restore the
Property, Seller shall promptly notify Buyer in writing and this Offer may be
cancelled at the option of the Buyer. If the damage shall exceed such sum,
Seller shall promptly notify Buyer in writing of the damage and this Offer may
be cancelled at option of Buyer. Should Buyer elect to carry out this Offer
despite such damage, Buyer shall be entitled to any insurance proceeds relating
to the damage to the Property, plus a credit towards the purchase price equal
to the amount of Seller's deductible on such policy.
/ / PRE-CLOSING INSPECTION: At a reasonable time, preapproved by Seller or
Seller's agent, within 3 days before closing, Buyer shall have the right to
inspect the Property to determine that there has been no significant change in
the condition of the Property, except for changes approved by Buyer.
DEFAULT
Seller and Buyer each have the legal duty to use good faith and due diligence
in completing the terms and conditions of this Offer. A material failure to
perform any obligation under this Offer is a default which may subject the
defaulting party to liability for damages or other legal remedies.
If Buyer defaults, Seller may:
(1) sue for specific performance and request the earnest money as
partial payment of the purchase price; or
(2) terminate the Offer and have the option to: (a) request the
earnest money as liquidated damages; or (b) direct broker to
return the earnest money and have the option to sue for actual
damages.
If Seller defaults, Buyer may:
(1) sue for specific performance; or
(2) terminate the Offer and request the return of the earnest
money, sue for actual damages, or both.
In addition, the Parties may seek any other remedies available in law
or equity.
The Parties understand that the availability of any judicial remedy
will depend upon the circumstances of the situation and the discretion of the
courts. If either Party defaults, the Parties may renegotiate the Offer or
seek nonjudicial dispute resolution instead of the remedies outlined above. By
agreeing to binding arbitration, the Parties may lose the right to litigate in
a court of law those disputes covered by the arbitration agreement.
NOTE: WISCONSIN LICENSE LAW PROHIBITS A BROKER FROM GIVING ADVICE OR
OPINIONS CONCERNING THE LEGAL RIGHTS OR OBLIGATIONS OF PARTIES TO A
TRANSACTION OR THE LEGAL EFFECT OF A SPECIFIC CONTRACT OR CONVEYANCE.
AN ATTORNEY SHOULD BE CONSULTED IF LEGAL ADVICE IS REQUIRED. Buyer's or
Seller's legal right to earnest money cannot be determined by broker.
In the absence of a mutual agreement by the Parties, earnest money will
be distributed as set forth in lines 121 to 140.
ENTIRE CONTRACT
This Offer, including any amendments, contains the entire agreement of the
Parties regarding the transaction. All prior negotiations and discussions have
been merged into this Offer. This agreement binds and inures to the benefit of
the Parties to this Offer and their successors in Interest.
<PAGE> 3
TITLE EVIDENCE PAGE 3 OF 4 -- COMMERCIAL OFFER
/ / FORM OF TITLE EVIDENCE: Seller shall give evidence of title (as selected at
lines 64 to 65) to the Property in the form of: an owner's policy of title
insurance in the amount of the purchase price on a current ALTA form issued by
an insurer licensed to write title insurance in Wisconsin.
/ / PROVISION OF MERCHANTABLE TITLE: Seller shall pay all costs of providing
title evidence. For purposes of closing, title evidence shall be acceptable if
the abstract or a commitment for the required title insurance is delivered to
Buyer's attorney or to Buyer not less than 5 business days before closing,
showing title to the Property as of a date no more than 15 days before delivery
of such title to be merchantable, subject only to liens which will be paid out
of the proceeds of closing and standard abstract certificate limitations or
standard title insurance requirements and exceptions, as appropriate.
/ / TITLE ACCEPTABLE FOR CLOSING: If title is not acceptable for closing, Buyer
shall notify Seller in writing of objections to title by the time set for
closing. In such event, Seller shall have a reasonable time, but not exceeding
15 days, to remove the objections, and the time for closing shall be extended
as necessary for this purpose. In the event that Seller is unable to remove
said objections, Buyer shall have 5 days from receipt of notice thereof, to
deliver written notice waiving the objections, and the time for closing shall
be extended accordingly. If Buyer does not waive the objections, this Offer
shall be null and void. Providing title evidence acceptable for closing does
not extinguish Seller's obligations to give merchantable title to Buyer.
SELLER TO PROVIDE GAP COVERAGE AT SELLER'S EXPENSE.
DEFINITIONS
/ / ACCEPTANCE: Acceptance occurs when all Buyers and Sellers have signed an
identical copy of the Offer, including signatures on separate but identical
copies of the Offer. See lines 29 and 30 regarding binding acceptance.
CAUTION: CONSIDER WHETHER SHORT TERM DEADLINES RUNNING FROM ACCEPTANCE PROVIDE
ADEQUATE TIME FOR BOTH BINDING ACCEPTANCE AND PERFORMANCE.
/ / CONDITIONS AFFECTING THE PROPERTY OR TRANSACTION: A "condition affecting
the Property or transaction" is defined as follows:
(a) Planned or commenced public improvements which may result in
special assessments or otherwise materially affect the
Property or the present use of the Property;
(b) Government agency or court order requiring repair, alteration
or correction of any existing condition;
(c) Completed or pending reassessment of the Property for property
tax purposes;
(d) Structural inadequacies which if not repaired will
significantly shorten the expected normal life of the Property;
(e) Any land division involving the Property, for which required
state or local approvals were not obtained;
(f) Construction or remodeling on the Property for which required
state or local approvals were not obtained;
(g) Any portion of the Property being in a 100 year floodplain; a
wetland or shoreland zoning area under local, state or federal
regulations;
(h) That a structure on the Property is designated as a historic
building or that any part of the Property is in a historic
district;
(i) Material violations of environmental laws or other laws or
agreements regulating the use of the Property;
(j) Conditions constituting a significant health or safety hazard
for occupants of the Property;
(k) Underground storage tanks on the Property for storage of
flammable or combustible liquids including but not limited to
gasoline and heating oil; NOTE: The Wisconsin Administrative
Code contains registration and operation rules for such
underground storage tanks.
(l) Underground or aboveground storage tanks for storage of
flammable, combustible or hazardous materials including but not
limited to gasoline and heating oil, which are currently or
which were previously located on the Property;
(m) High voltage electric (100 KV or greater) or steel natural gas
transmission lines located on but not directly serving the
Property;
(n) Material levels of hazardous substances located on Property or
previous storage of material amounts of hazardous substances
on Property;
(o) Other conditions or occurrences which would significantly
reduce the value of the Property to a reasonable person with
knowledge of the nature and scope of the condition or
occurrence.
/ / ENVIRONMENTAL SITE ASSESSMENT: An "environmental site assessment" may
include, but is not limited to: (1) an inspection of the Property: (2) a review
of the ownership and use history of the Property, including a search of title
records showing private ownership of the Property for a period of 80 years
prior to the visual inspection; (3) a review of historic and recent aerial
photographs of the Property, if available; (4) a review of environmental
licenses, permits or orders issued with respect to the Property; (5) an
evaluation of results of any environmental sampling and analysis that has been
conducted on the Property; and (6) a review to determine if the Property is
listed in any of the written compilations of sites or facilities considered to
pose a threat to human health or the environment including the National
Priorities List, the Department of Natural Resources' (DNR) registry of
Abandoned Landfills, the DNR's Registry of Leaking Underground Storage Tanks,
and the DNR's most recent remedial response site evaluation report (including
the Inventory of Sites and Facilities Which May Cause or Threaten to Cause
Environmental Pollution). Any "environmental site assessment" performed under
this Offer shall comply with generally recognized industry standards (e.g.
current American Society of Testing and Materials "Standards for Environmental
Site Assessments for Commercial Real Estate"), state and federal guidelines, as
applicable. CAUTION: UNLESS OTHERWISE AGREED AN "ENVIRONMENTAL SITE ASSESSMENT"
DOES NOT INCLUDE TESTING OF THE PROPERTY FOR ENVIRONMENTAL POLLUTION.
/ / FIXTURES: A "Fixture" is an item of property which is physically attached
to or so closely associated with land and improvements so as to be treated as
part of the real estate, including, without limitation, physically attached
items not easily removable without damage to the Property, items specifically
adapted to the Property, and items customarily treated as fixtures. A "fixture"
does not include trade fixtures owned by tenants of the Property. See Lines 13
to 20.
/ / INSPECTION: An "inspection" is defined as an observation of the Property
which does not include testing of the Property.
/ / OTHER EXPENSES: In addition to "special assessments for work on site",
government entities may charge one-time or ongoing use fees for other public
improvements relating to curb, gutter, street, sidewalk, sanitary and storm
sewer (including all sewer mains and hook-up and interceptor charges), parks,
street lighting and street trees, and impact fees for other public facilities,
as defined in Wis. Stats. Section 66.55(1)(c) & (f).
/ / TEST: A "test" is defined as the taking of samples of materials such as
soils, water or building materials from the Property and the laboratory or
other analysis of these materials. Note: Any contingency authorizing such tests
should specify the areas of the Property to be tested, the purpose of the test,
(e.g. to determine the presence or absence of environmental contamination), any
limitations on Buyer's testing and any other material terms of the contingency
(e.g. Buyer's obligation to return the Property to it's original condition).
PROVISIONS TO RELATED FINANCING
/ / LOAN COMMITMENT: If this Offer is contingent on financing, Buyer agrees to
pay all customary financing costs (including closing fees), to apply for
financing promptly, and to provide evidence of application promptly upon
request of Seller. If Buyer qualifies for said financing or other financing
acceptable to Buyer, Buyer agrees to deliver to Seller, or Seller's agent, a
copy of the written loan commitment no later than the deadline for loan
commitment under the Financing Contingency. If Buyer does not make timely
delivery of said commitment, Seller may terminate this Offer if Seller delivers
a written notice of termination to Buyer prior to Seller's actual receipt of a
copy of Buyer's written loan commitment.
/ / FINANCING UNAVAILABILITY: If this Offer is contingent on financing and
financing is not available on the terms stated, Buyer shall promptly deliver
written notice to Seller of same including copies of lender(s)' rejection
letter(s) or other evidence of unavailability. Unless a specific loan source is
named in the Financing Contingency, Seller shall then have 5 days to give Buyer
written notice of Seller's decision to finance this transaction on the same
terms set forth herein, and this Offer shall remain full force and effect, with
the time for closing extended accordingly. If Seller's notice is not timely
given, this Offer shall be null and void.
<PAGE> 4
PROPERTY DESCRIPTION: W180 N11711 River Lane, page 4 of 4 - COMMERCIAL OFFER
Germantown, WI
OPTIONAL PROVISIONS: THE PROVISIONS ON LINES 222 THROUGH 268 ARE A PART OF
THIS OFFER IF MARKED, SUCH AS WITH AN "X". THEY ARE NOT PART OF THIS OFFER IF
MARKED N/A OR ARE LEFT BLANK.
/X/ FINANCING CONTINGENCY: This Offer is contingent upon Buyer being able to
obtain: [CHECK APPLICABLE FINANCING BELOW]
/ / land contract financing from Seller at closing as further described
at lines 212 to 218 and 226 to 240.
/X/ a fixed rate first mortgage loan commitment as further described
at lines 202 to 211 and 226 to 236, within 40 days of acceptance of this Offer.
The financing selected shall be in an amount of not less than the purchase price
for a term of not less than 20 years, amortized over not less than 20 years. If
the purchase price under this Offer is modified, the financed amount, unless
otherwise provided, shall be adjusted to the same percentage of the purchase
price as in this contingency and the monthly payments shall be adjusted as
necessary to maintain the term and amortization stated above. IF FINANCING IS
FIXED RATE the annual rate of interest shall not exceed 8.5% and monthly
payments of principal and interest shall not exceed $____________. MONTHLY
PAYMENTS MAY ALSO INCLUDE 1/12th of the estimated net annual real estate taxes,
hazard insurance premiums, and private mortgage insurance premiums. The
mortgage may not include a prepayment premium. Buyer agrees to pay a loan fee
in an amount not to exceed 1% of the loan. (Loan fee refers to discount points
and/or loan origination fee, but DOES NOT include Buyer's other closing costs.)
/X/ DOCUMENT REVIEW CONTINGENCY: This Offer is contingent upon Seller
delivering the following documents to Buyer within ______ days of acceptance:
[CHECK THOSE THAT APPLY]
/X/ Documents evidencing that the sale of the Property has been
properly authorized, if Seller is a business entity.
/X/ A complete inventory of all furniture, fixtures and equipment
included in this transaction which is consistent with
representations made prior to and in this Offer.
/X/ Uniform Commercial Code lien search as to the personal property
included in the purchase price, showing the Property to be free and
clear of all liens, other than liens to be released prior to or at
closing.
/ / Other Building and use restrictions.
This contingency shall be deemed satisfied unless Buyer, within 10 days of the
earlier of receipt of the final record to be delivered or the deadline for
delivery of the documents, delivers to Seller a written notice indicating that
this contingency has not been satisfied. The notice shall identify which
document(s) have not been timely delivered or do not meet the standard set
forth for the document(s).
/ / ENVIRONMENTAL EVALUATION/INSPECTION CONTINGENCY: This Offer is contingent
upon: [CHECK THOSE THAT APPLY]
/ / A qualified independent environmental consultant of Buyer's choice
conducting an environmental site assessment of the Property (see lines
179 to 189), at (Buyer's)(Seller's) [STRIKE ONE] expense, which
discloses no defects. A defect is defined as a material violation of
any environmental law, a material contingent liability affecting the
Property arising under any environmental law, the presence of an
underground storage tank(s) or material levels of hazardous substances
either on the Property or presenting a significant risk of contaminating
the Property due to future migration from other properties.
/ / A qualified independent inspector of Buyer's choice conducting an
inspection of the Property and ______________________________________
_____________________________________________ at (Buyer's)(Seller's)
[STRIKE ONE] expense, which discloses no defects. A defect is defined
as a structural, mechanical or other condition would have a significant
adverse effect on the value of the Property; that would significantly
impair the health and safety of future occupants of the Property; or
that if not repaired, removed or replaced would significantly shorten or
have a significantly adverse effect on the expected normal life of the
Property.
This contingency shall be deemed satisfied unless Buyer, within _____ days of
acceptance, delivers to Seller a copy of the environmental site
assessment/inspection report(s) and a written notice listing the defect(s)
identified in the environmental site assessment/inspection report(s) to which
Buyer objects. Defects do not include conditions the nature and extent of
which Buyer had actual knowledge or written notice before signing the Offer.
Buyer agrees to deliver a copy of the report and notice to listing broker, if
Property is listed, promptly upon delivery to Seller.
/X/ ADDENDA: The attached Addendum A is made part of this Offer.
ADDITIONAL PROVISIONS _________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
IF ACCEPTED, THIS OFFER CAN CREATE A LEGALLY ENFORCEABLE CONTRACT. BOTH
PARTIES SHOULD CAREFULLY READ THIS DOCUMENT. BROKERS MAY PROVIDE A GENERAL
EXPLANATION OF THE PROVISIONS OF THE OFFER BUT ARE PROHIBITED BY LAW FROM
GIVING ADVICE OR OPINIONS CONCERNING YOUR LEGAL RIGHTS UNDER THIS OFFER OR HOW
TITLE SHOULD BE TAKEN AT CLOSING. AN ATTORNEY SHOULD BE CONSULTED IF LEGAL
ADVICE IS REQUIRED.
This Offer was drafted on 9/3/96 (date) by Attorney Michael J. Widmann
------ ---------------------------
(Licensee and Firm)
(x) Anthony L. Mihalovich, Jr.
___________________________________________________________________
(Buyer's Signature) Print Name here: Anthony L. Mihalovich, Jr.
____________________________________ ______________________
(Social Security No.) (Date)
(x)_______________________________________________________________________
(Buyer's Signature) Print Name here:
____________________________________ ______________________
(Social Security No.) (Date)
EARNEST MONEY RECEIPT BROKER ACKNOWLEDGES RECEIPT OF EARNEST MONEY AS PER LINE
10 OF THE ABOVE OFFER.
______________________________________Broker (By)_____________________________
SELLER ACCEPTS THIS OFFER. THE WARRANTIES, REPRESENTATIONS AND COVENANTS MADE
IN THIS OFFER SURVIVE CLOSING AND THE CONVEYANCE OF THE PROPERTY. THE
UNDERSIGNED HEREBY AGREES TO CONVEY THE ABOVE-MENTIONED PROPERTY ON THE TERMS
AND CONDITIONS AS SET FORTH HEREIN AND ACKNOWLEDGES RECEIPT OF A COPY OF THIS
OFFER.
(x)_____________________________________ _____________________ ______
(Seller's Signature) Print Name here: (Social Security No.) (Date)
(x)_____________________________________ _____________________ ______
(Seller's Signature) Print Name here: (Social Security No.) (Date)
THIS OFFER WAS PRESENTED TO SELLER BY ______________ ON ____________, 19__, AT
_______a.m./p.m.
THIS OFFER IS REJECTED _________________ ________ THIS OFFER IS COUNTERED [SEE
(Seller Initials) (Date)
ATTACHED COUNTER] __________________ ________
(Seller Initials) (Date)
<PAGE> 5
ADDENDUM A
This Addendum is made part of the Commercial Offer to Purchase dated
September 3, 1996, signed by the Buyer, Anthony L. Mihalovich, Jr., or his
assigns, for the property known as W180 N11711 River Lane, Germantown,
Washington County, Wisconsin.
I. BUYER'S OBLIGATION TO CONCLUDE THIS OFFER IS CONDITIONED UPON THE
CONSUMMATION OF THE FOLLOWING:
1. Seller, at its expense, shall provide to Buyer a copy of a current
(dated within one year of date of closing) certified survey prepared by a
duly-licensed land surveyor, at minimum three (3) days prior to closing. Said
survey shall set forth an accurate metes-and-bounds description of the
Property, locate all existing easements and rights-of-way, alleys, streets and
roads; show any and all encroachments upon the Property, show all existing
improvements (such as the building, power lines, fences, driveways, sidewalks,
etc.).
In the event the survey shows any encroachments of any improvements
upon, from or onto the Property, or any easement which the title company will
not insure over, or which interferes with Buyer's intended use and enjoyment,
then said encroachment and/or easement shall be deemed to be a title defect
and, at Buyer's option, this Offer shall be deemed null and void.
2. Seller shall within ten (10) days from the date of acceptance of this
Offer furnish Buyer with copies of the approved plans and specifications for
the building.
Within ten (10) days from the receipt of all of the above information and
documentation, Buyer shall be entitled to give written notice to Seller, at
Buyer's sole discretion, terminating this Offer to Purchase, if Buyer is
dissatisfied with any of the above documentation. If said notice is received
by Seller within said period of time, then this Offer is deemed null and void.
3. Seller shall execute a "triple net" lease with Buyer to lease the
Property for a term from the date of closing through June 30, 1997, at a rent
rate of $9.50 per square foot.
4. There shall be no proration of real estate taxes, sewer and water
expenses, special assessments, etc. It is understood that Seller shall pay for
all such expenses through the term of the "triple net lease."
Anthony L. Mihalovich, Jr.
------------------------------
Buyer
------------------------------
Seller
<PAGE> 6
WB-44 Counter-Offer Wisconsin Legal Blank Co., Inc.
Approved by the Wisconsin Department Milwaukee, WI
of Regulation and Licensing
7/30/91 (optional use date) 1/1/92 (mandatory use date)
Counter-Offer No. 1 by (Seller)
COUNTER-OFFER
The Offer to Purchase dated September 3, 1996, and signed by Buyer,
Anthony L. Mihalovich, Jr., for purchase of real estate at W180 N11711 River
Lane, Germantown, Wisconsin is countered.
ALL TERMS AND CONDITIONS REMAIN THE SAME AS STATED IN THE OFFER TO PURCHASE
EXCEPT THE FOLLOWING:
[CAUTION: THIS COUNTER-OFFER DOES NOT INCLUDE THE TERMS OR CONDITIONS IN ANY
OTHER COUNTER-OFFER UNLESS INCORPORATED BY REFERENCE.]
(1) The Purchase Price shall be $678,900.
(2) Paragraph 3 of Addendum A will be as follows:
Seller and Buyer will enter into a "triple net" lease to lease
the property for a term from the date of Closing through June
30, 1997, at a rent rate of $8.75 per square foot, with Seller
having the right to extend such lease month-to-month thereafter
if required for occupancy of space in the Germantown Mutual
building under construction.
(3) Seller shall have the right to terminate this agreement without
penalty at any time prior to the scheduled date of Closing if
for any reason the Board determines that the transaction would
not be in the best interests of the shareholders.
(4) The date of Closing shall be November 20, 1996.
Any warranties and representations made in this Counter-Offer survive the
closing of this transaction.
This Counter-Offer is binding upon Seller and Buyer only if a copy of
the accepted Counter-Offer is delivered to the party making the Counter-Offer
on or before October 8, 1996. Delivery of the accepted Counter-Offer may be
made in the following ways: (1) by depositing a copy of the accepted
Counter-Offer postage or fees prepaid in the U.S. mail or a commercial delivery
system addressed to Marshall A. Loewi, c/o Milwaukee Resistor Corporation,
8920 West Heather Avenue, P.O. Box 24200, Milwaukee, WI 53224-0200, (2) by
personal delivery to the party making the Counter-Offer, or (3) by electronic
transmission of the accepted Counter-Offer to the following telephone number:
(414) 362-9876.
The party making this Counter-Offer may withdraw the Counter-Offer prior to
acceptance and delivery as provided in lines 31-36.
DAVID WHITE, INC.
Date: October 4, 1996 Time: ______ a.m./p.m. By: Marshall A. Loewi
(Seller) Chairman
This Counter-Offer was drafted by
(Licensee and Firm): _______________________________
Robert J. Loots, Attorney
_____________________________________________ _______________________________
_____________________________________________ (Seller/Buyer)
_______________________________
- --------------------------------------------------------------------------------
ACCEPTANCE OF COUNTER-OFFER
The above Counter-Offer is accepted.
Date: October 4, 1996 Time: ______ a.m./p.m. Anthony L. Mihalovich, Jr.
(Buyer)
This Counter-Offer was presented by
(Licensee and Firm):
_____________________________________________ _______________________________
___________________________________________on (Buyer/Seller)
Date:__________________Time: ______ a.m./p.m.
ATTACH THIS COUNTER OFFER TO THE OFFER TO PURCHASE
Note: Provisions from a previous Counter-Offer may be included by
reproduction of the entire provision or incorporation by reference.
Provisions incorporated by reference may be indicated in the subsequent
Counter-Offer by specifying the number of the provision or the lines
containing the provision. In transactions involving more than one
Counter-Offer, the Counter-Offer referred to should be clearly
specified.
<PAGE> 1
LEASE
AGREEMENT OF LEASE, made this 31st day of October, 1996 between Anthony L.
Mihalovich (hereinafter referred to as "Landlord") and David White, Inc., a
Wisconsin corporation (hereinafter referred to as "Tenant").
WITNESSETH:
Landlord, in consideration of the rents, covenants and agreements
hereinafter reserved, mentioned and contained on the part of Tenant, to be paid,
kept and performed, has leased, rented, let and demise unto Tenant, and Tenant
does hereby take and hire upon and subject to the conditions hereinafter
expressed, the building and improvements located at 11711 River Lane, Village
of Germantown, County of Washington, Wisconsin, legal description per attached
Exhibit "A" (hereinafter referred to as the "Premises"). The Premises are leased
subject to the following:
a. Zoning regulations and zoning ordinances of the city, town or village
in which the Premises lie;
b. All covenants, reservations, restrictions, agreements and/or easements
of record pursuant to which Landlord acquired title to the Premises;
c. The liens of real estate taxes, sewer and water charges and other
charges, accruing on and after the date of this Lease;
d. Any state of facts an accurate survey may disclose.
TO HAVE AND TO HOLD the Premises unto Tenant, for a term of approximately
eight (8) months, to commence on the 1st day of November, 1996, and to expire at
midnight on the 30th day of June, 1997 or until said term shall sooner cease and
expire under the provisions hereof.
This Lease and agreement is made on the following covenants, agreements,
terms, provisions, conditions and limitations, all of which Landlord and Tenant
covenant and agree to perform and observe:
I. RENT
A. Landlord reserves and Tenant covenants and agrees to pay to Landlord
without demand, at the office of Landlord as set forth hereinabove, or elsewhere
as designated from time to time by written notice to Tenant and in the manner
herein prescribed for payment thereof, a monthly rent for the Premises payable
in equal monthly installments of $9,210.83, plus one twelfth (1/12th) of the
estimated real estate taxes based upon the real estate tax statement for the
year 1995 in the sum of $1,636.53, for a total
<PAGE> 2
monthly payment of $10,847.36 in advance on the first day of each month
throughout the term of the Lease commencing the 1st day of November, 1996.
Commencing January 1, 1997, said monthly rate shall be increased based upon any
increase in real estate taxes for the 1996 year for the premises, so that
Tenant will be paying one twelfth (1/12th) of said tax each month during the
remaining term of this Lease based upon the most recent real estate tax
statement available.
B. It is understood and agreed that 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
Landlord and Tenant being that of Landlord and Tenant.
C. Rent shall be payable in lawful money of the United States which shall
be legal tender for payment of all debts and dues, public and private, at the
time of payment, at the office of Landlord or such place as Landlord may
designate, without any setoff or deduction whatsoever.
D. If Tenant fails to pay rent or any other amount due to Landlord
hereunder, Landlord will be entitled to interest on the unpaid amount at the
rate of one and one-half percent (1 1/2%) per month (or the highest contract
rate permitted to be charged by law, whichever is lower) from the date of
default, compounded monthly.
II. ADDITIONAL RENT
Tenant shall, during the term, as additional rent (hereinafter sometimes
referred to as the "additional rent"), pay and discharge, within thirty (30)
days after the same shall become due and payable, all real property taxes,
assessments, water rates and charges, sewer rates and charges and other
governmental impositions and charges of every kind and nature whatsoever,
extraordinary as well as ordinary, and each and every installment thereof, and
all fees and charges of public and governmental authorities for construction,
maintenance, occupation or use during the term, of any space in, over or under
any sidewalk or street on or adjacent to the Premises, or for construction,
maintenance or use during the term of any part of any building covered hereby
within the limits of any street, which shall or may during the term be charged,
laid, levied, addressed, imposed, become due and payable or liens upon or for
the Premises or any part thereof, or any building, appurtenances or equipment
thereof or therein or any part hereof, or the sidewalks or streets in front of
or adjoining the Premises, and all taxes charged, laid, levied, assessed or
imposed in lieu of the foregoing, together with all interest and penalties
thereof, under or by virtue of all present or future laws, ordinances,
requirements, orders, directions, rules or regulations of the Federal, State,
County and City governments and all other governmental authorities whatsoever.
To the extent that the same
2
<PAGE> 3
may be permitted by law, Tenant shall have the right to apply for the
conversion of any assessment for local improvements in order to cause the same
to be payable in annual installments, and upon such conversion Tenant shall pay
and discharge punctually said installments as they shall become due and payable
during the term, provided, however, that Tenant shall be required to pay and
discharge the prorated share of all of the items enumerated in the first
sentence of this Article II due and payable upon the expiration of the term of
any renewal term hereof. Tenant shall also pay, within ten (10) days after the
same shall become due and payable, all charges for water, heat, gas, hot water,
electricity, sewer, and any other service or services furnished to the Premises
or the occupants thereof during the term of this Lease, it being understood
that no such charge or service shall become a lien against the Premises or be
payable by Landlord. Tenant shall be deemed to have complied with the covenants
of this Article II if payment of such tax, assessment, water charge, sewer
charge or other governmental imposition or charge shall have been made, either
within any grace period allowed by law or by the governmental authority
imposing the same during which payment is permitted without penalty or
interest, or before the expiration of the term or any renewal term hereof,
whichever is the first to occur, and Tenant shall, within five (5) days after
the time above provided for the payment by Tenant of the items enumerated
above, produce and exhibit to Landlord receipted bills or sufficient and
adequate copies of same, as proof of such payment.
III. REPAIRS
Any and all buildings and improvements which are now or may be erected or
placed upon the Premises at any time during said term shall be kept, outside and
inside, including sidewalks, parking areas or lots, and grounds or streets in
front or appurtenant to the same, in good and substantial order and repair by
Tenant at its sole cost and expense, and Tenant shall comply with all the laws,
ordinances, orders, regulations, rules and requirements of every kind and
nature. Tenant shall have the right to contest or review any notice, order,
rule, regulation, requirement, violation or penalty issued against the Premises
by legal proceedings or in such other manner as he deems suitable, provided that
such action will not subject Landlord to criminal penalties of any nature, and
may have, if able, any such notice, order, rule, regulation, requirement,
violation or penalty canceled, removed or revoked without actual compliance with
the same, and if such actions or proceedings are instituted, they shall be
conducted promptly at the expense of Tenant and free of expense to Landlord,
provided, however, that Landlord shall, upon request of Tenant, join as a
party to any such proceeding and shall execute at the request of Tenant all
such documents as shall be necessary to successfully prosecute such
proceedings, and Tenant shall reimburse Landlord for any expenses incurred by
Landlord in connection therewith; and, if as a result of any such actions or
proceedings, any notice, order,
3
<PAGE> 4
rule, regulation, requirement, violation or penalty is modified or partially
revoked or canceled, Tenant shall be obligated to comply only with that part
thereof which shall remain in force and effect. The legal proceedings herein
referred to shall include appropriate appeals from any judgments, decrees or
orders but all such legal proceedings and appeals shall be begun as reasonably
soon as possible after the filing of any such notice, order, rule, regulation,
requirements, violation or penalty and shall be prosecuted to final
adjudication with all promptness and dispatch. If and whenever any such notice,
order, rule, regulation, requirement, violation or penalty shall become
absolute against Tenant and the Premises or against Landlord, after contest
thereof, Tenant shall then comply with the same, with due diligence and if
Tenant, within ten (10) days thereof, shall not be engaged in complying with
the same and diligently prosecute the same, Landlord may comply therewith and
the provisions contained in the paragraph of this Lease headed "REPAYMENT TO
LANDLORD" shall apply. Landlord and its agents and other representatives shall
have the right to enter into and upon the Premises or any part thereof at all
reasonable hours for the purpose of examining the same or making such repairs
or alterations therein as may be necessary for the safety and preservation
thereof, which right to make repairs or alterations shall, however, be subject
and subordinate to each and every provision contained in this Agreement
applicable to repairs or alterations. Tenant, however, is not under any
obligation to make any repairs, alterations or improvements of structural
nature, but Landlord shall make all such repairs, alterations and improvements
at his own cost and expense.
IV. INDEMNIFICATION OF LANDLORD
Tenant shall hold Landlord harmless against any and all claims, damages,
suits or causes of action for damages arising after the commencement of and
during the term hereof, or any renewal term hereof, and any orders, decrees or
judgments which may be entered therein, brought for damages or alleged damages
resulting from any injury to person or property or from loss of life sustained
in or about the Premises and the buildings and improvements thereon, or in or
upon the sidewalks or streets in front of or appurtenant to, by any person or
persons whatsoever, irrespective of how the same may be caused. It is the
intention and agreement that Landlord shall not be liable for any personal
injuries or damage to Tenant, its agents or employees, invitees, trespassers or
to any other persons or to any occupant of any part of the Premises, or for
any injury or damage to any goods, wares, merchandise, equipment or property of
Tenant, or of any occupant of any part of the Premises, irrespective of how the
same may be caused, whether from action of the elements or acts of negligence
of the owner or occupants of the adjacent properties. Tenant shall and will
indemnify and save harmless Landlord of and from any and all liability, loss,
damage or expense, cause of action, suits,
4
<PAGE> 5
claims and judgments, including reasonable legal expenses in connection with
defending against such action, suit or claim, arising from injury to person or
property of any and every nature and for any matter or thing growing out of the
occupation of the Premises, or any part thereof, or arising or growing out of
the use, occupation, management or possession of the Premises, or of any
building thereon, or any part thereof or sidewalks adjacent thereto, occasioned
by Tenant, its agents, employees, occupants, invitees or trespassers of any
part of the Premises, or by their agents or employees, respectively, or which
may be occasioned by any person or thing whatsoever, at any time during the term
hereof, irrespective of how the same may be caused.
V. INSURANCE
A. Tenant shall, throughout the term of this Lease, at its own
cost and expense, provide and keep in force for the benefit of Landlord,
insurance against loss or damage or injury or destruction of any building or
buildings new or hereafter erected on the Premises resulting from fire, or from
any hazard included in the so-called extended coverage endorsement, (including
sprinkler leakage, collapse and vandalism and malicious mischief) in such
company or companies as may be reasonably acceptable to Landlord, and if more
than one company is used, with such distribution of the amount thereof among
such companies as may be approved by Landlord. In addition to the foregoing,
Tenant shall, at its own cost and expense, provide and keep in force for the
benefit of Landlord, insurance against loss or damage or injury or destruction
of any building or buildings now or hereafter erected on the Premises resulting
from water damage. Tenant shall provide and keep in force all such insurance
in an amount equal to one hundred percent (100%) of the full replacement cost
of the building, including the fixtures and equipment therein. If, at any time,
Landlord and Tenant cannot agree as to the full replacement cost of the building
and the fixtures and equipment, the value of same shall be determined by the
insurance company by whom the policy or policies of insurance are being
maintained, and the amount of insurance so determined shall be the amount of
insurance to be carried. Such insurance policies shall exclude foundations,
excavating, and the usual items customarily excluded in such insurance
policies. Where reference is made to fixtures and equipment, the parties hereto
intend that the same be fixtures and equipment appurtenant to and used in
connection with the operation of the building.
B. Tenant shall provide and maintain general liability insurance
(including personal injury and property damage) in the single limit amount of
Five Hundred Thousand and No/100's Dollars ($500,000.00) and an umbrella policy
of Three Million and No/100's Dollars ($3,000,000.00) and such policies shall
inure to both Landlord and Tenant; and Tenant shall pay the premium on all said
policies from time to time; and Tenant shall deliver to Landlord certificates
for said policies. Tenant will arrange to have
5
<PAGE> 6
Landlord named as a party insured under said policy, entitled to the full
benefits and protection afforded by the provisions of said policy.
C. Each such policy or certificate thereof issued by the insurer
shall, to the extent obtainable, contain an agreement by the insurer that such
policy shall not be canceled without at least ten (10) days' prior written
notice to Landlord. Tenant shall have the right to take out such insurance
under a blanket insurance policy or policies which can cover other properties
owned or occupied by Tenant, as well as the Premises.
D. Upon the failure at any time on the part of Tenant to procure
and deliver to Landlord any of the policies of insurance or certificates as
hereinabove provided, at least twenty (20) days before the expiration of the
prior insurance policies, if any, or to pay the premiums therefor, Landlord
shall be at liberty from time to time, as often as such failure shall occur, to
procure such insurance for a term not exceeding one (1) year and to pay the
premiums therefor, and any sums paid for insurance by Landlord shall be and
become and are hereby declared to be rent under this Lease forthwith due and
payable, and shall be collectible accordingly.
VI. BANKRUPTCY OR INSOLVENCY
If at any time during the term of this Lease or any renewal or
extension of this Lease, Tenant shall voluntarily petition or ask for
reorganization under the Bankruptcy Laws or shall take advantage of any
insolvency act by voluntary petition or assignment for the benefit of
creditors, or if Tenant shall be adjudicated a bankrupt through involuntary
proceedings, or if in any such involuntary proceedings a receiver, trustee,
assignee or other similar custodian of Tenant's property shall be appointed,
then and in any such event, Tenant shall be deemed to be in default of this
Lease, and Landlord may, at its option, upon at least ten (10) days' notice,
declare this Lease terminated and of no further force or effect.
VII. LIENS
If any mechanic's or other lien or order for the payment of money
shall be filed against the Premises or any building or improvement thereon by
reason of any change, alteration, addition or new building, or the cost or
expense thereof, or any contract relating to the same, or against Landlord as
owner thereof, as a result of or arising out of any labor or material
furnished, or alleged to have been furnished, or to be furnished, to or for the
Tenant at the Premises, Tenant shall, within thirty (30) days after notice to
Tenant of the filing thereof, cause the same to be canceled and discharged of
record by bond or court order at the election of Tenant, but in a manner to the
reasonable satisfaction
6
<PAGE> 7
of Landlord and shall also defend for Landlord, at Tenant's sole cost and
expense, any action, suit or proceeding which may be brought thereon, or for
the enforcement of the same, and will pay any damages and satisfy and discharge
any judgment entered therein and save harmless Landlord from any liability,
claim or damage resulting therefrom.
VIII. ASSIGNMENT AND SUBLETTING
Tenant may not at any time assign this Lease or sublet or underlet the
Premises to a person, firm or corporation, without the prior written consent of
Landlord. It is expressly agreed between the parties that no assignment,
subletting or underletting of the Premises shall in any way relieve Tenant of
any of his obligations under the terms and provisions of this Lease.
IX. ALTERATIONS, IMPROVEMENTS & ADDITIONS
Subject to the compliance with and observance of all of the terms,
conditions, covenants and agreements provided for in this Lease, Tenant shall
have the right to make alterations, improvements and additions in and to the
Premises, provided, however, that Tenant notify Landlord of his intention to
make such alterations, improvements and/or additions in writing prior to the
commencement of any such work and obtain the prior written approval of the
Landlord. Upon approval of Landlord of such work, Tenant shall, prior to the
commencement of any work procure and deliver to Landlord a performance and
payment bond in an amount equal to the estimated cost of construction of such
alteration, improvement and/or addition executed by a surety company or
companies reasonably satisfactory to Landlord, which shall be in a form
approved by Landlord guaranteeing that Tenant shall and will:
1. Make, erect and complete the proposed improvement in
accordance with such plans and specifications therefor and in
compliance with the building code and all laws, ordinances,
rules, regulations and orders of any governmental bureau, body
or officer having competent authority to make the same and which
may be applicable to the erection or construction of said
improvement.
2. Complete said improvement within the time to be therein
specified and fully pay for the same at the times and in the
manner as fixed by contracts therefor.
3. Perform any and all duties which are or may be legally
imposed on Landlord as owner of the Premises in connection with
the construction and obtain any necessary certificate of
occupancy therefor.
Tenant further agrees that at all time during construction, Tenant will
indemnify and keep indemnified Landlord against loss on
7
<PAGE> 8
account of injuries to person or property and against loss by way of penalties
or otherwise on account of the failure of Tenant to perform or fulfill any duty
imposed upon Landlord in or arising out of or connected with the intended
construction, either by appropriate endorsement on the policy or policies of
general liability insurance referred to in this Lease, or by obtaining policies
of insurance with the same limitations of coverage to cover Landlord and Tenant
during such construction.
X. USE OF PROPERTY
Tenant will not commit or suffer any waste or damage, to the Premises or
any part thereof, nor shall Tenant use or allow the Premises or any part
thereof to be used or occupied for any unlawful purpose or use or occupy the
Premises in any way which may make void or voidable any insurance then in
force with respect to the Premises.
XI. OPTION TO EXTEND LEASE
Provided that Tenant is not in default of any of the terms and
conditions set forth herein, Tenant may extend its Lease on a month-to-month
basis by so notifying Landlord in writing on or before April 30, 1997, that
Tenant desires to occupy the Premises on a month-to-month basis upon the same
terms and conditions as contained herein.
XII. DEFAULT
A. Each of the following shall be an "Event of Default":
1. Failure of Tenant to pay any installment of rent or any
part thereof or any other payments of money, costs or expenses
herein agreed to be paid by Tenant after the same shall become
due and payable and the continuance of such failure for a period
of ten (10) days after the due date;
2. Failure of Tenant to observe or perform one or more of the
other terms, conditions, covenants or agreements of this Lease
and the continuance of such failure for a period of thirty (30)
days after written notice by Landlord specifying such failure
(unless such failure requires work to be performed, acts to be
done or conditions to be removed which cannot by their nature
reasonably be performed, done or removed, as the case may be,
within such thirty (30) day period, in which case no default
shall be deemed to exist so long as Tenant shall have commenced
during the same within such thirty (30) day period and shall
diligently and continuously prosecute the same to completion;
8
<PAGE> 9
3. The filing or execution or occurrence of:
(i) a petition in bankruptcy by or against Tenant;
(ii) a petition by or against Tenant seeking a
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other relief of the same or
different kind under any provision of the Bankruptcy
Act;
(iii) adjudication of Tenant as a bankrupt or
insolvent, or insolvency in the bankruptcy or equity
sense;
(iv) an assignment by Tenant for the benefit of
creditors, whether by trust, mortgage or otherwise;
(v) a petition or other proceeding by or against Tenant
for, or the appointment of, a trustee, receiver,
guardian, conservator or liquidator of Tenant with
respect to all or substantially all of his property; or
(vi) a petition or other proceeding by or against
Tenant for the taking of possession of the property of
Tenant by any governmental authority in connection with
dissolution or liquidation.
4. Abandonment of the Premises for more than thirty (30)
days.
B. In the event of the termination of this Lease either by
operation of law or if an Event of Default shall occur, Landlord may, without
notice, re-enter and repossess the Premises using such force for that purpose
as may be necessary without being liable to indictment, prosecution or damages
therefor, and Tenant shall nevertheless remain and continue liable to Landlord
in a sum equal to all rent and other payments and charges reserved herein for
the remainder of the term hereof. If Landlord shall so re-enter, Landlord may,
at its option, repair and alter the Premises in such manner as Landlord may
deem necessary or advisable and/or let or relet the Premises or any parts
thereof for the whole or any part of the remainder of the term hereof or for a
longer period, in Landlord's name or as agent of Tenant, and out of any rent
collected or received as a result of such letting or reletting Landlord shall
first, pay to itself the cost and expense of retaking, repossession, repairing
and/or altering the Premises and the cost and expenses of removing all persons
and property therefrom; second, pay to itself the cost and expense sustained in
securing any new tenants, and if Landlord shall maintain and operate the
Premises the cost and expense of operating and maintaining the Premises; and
third, pay to itself any balance
9
<PAGE> 10
remaining on account of the liability of Tenant to Landlord for the sum equal
to all rent and other payments and charges reserved herein and unpaid by Tenant
for the remainder of the term hereof. No re-entry by Landlord, whether had or
taken under summary proceedings or otherwise, shall absolve or discharge Tenant
from liability hereunder. Landlord shall in no way be responsible or liable for
any failure to relet the Premises or any part thereof, or for any failure to
collect any rent due on any such reletting. Should any rent so collected by
Landlord after the aforementioned payments be insufficient fully to pay
Landlord a sum equal to all such rent and other payments and charges reserved
herein, the deficiency shall be paid by Tenant on the rent days herein
specified, that is, upon each of such rent days Tenant shall pay to Landlord
the amount of the deficiency then existing; and the Tenant shall be and remain
liable for any such deficiency.
C. Suit or suits for the recovery of such deficiency or damages or for a
sum equal to any installment or installments of rent, taxes, insurance and
other charge hereunder, may be brought by Landlord, from time to time, at
Landlord's election, and nothing herein contained shall be deemed to require
Landlord to await the date whereon this Lease or the term hereof would have
expired had there been no such default by Tenant or termination.
D. No receipt of monies by Landlord from Tenant or any other person after
termination of this Lease, or after the giving of any notice of termination of
this Lease, shall reinstate, continue or extend the term of this Lease or
affect any notice theretofore given to Tenant, or operate as a waiver of the
right of Landlord to enforce the payment of rent and other sum or sums of money
and other charges herein reserved and agreed to be paid by Tenant then due or
thereafter falling due, or operate as a waiver of the right of Landlord to
recover possession of the Premises by proper remedy, except as herein otherwise
expressly provided, it being agreed that after the service of notice to
terminate this Lease or the commencement of suit or summary proceedings, or
after final order or judgment for the possession of the Premises, Landlord may
demand, receive and collect any monies due or thereafter falling due without in
any manner affecting such notice, proceeding, order, suit or judgment, except
as herein otherwise specifically provided, all such monies collected being
deemed payments on account of the use and occupation of the Premises, or at the
election of Landlord, on account of Tenant's liability hereunder.
E. Tenant shall pay to Landlord all costs and expenses, including
reasonable attorneys' fees, incurred in enforcing any of the convenants and
provisions of this Lease and incurred in any action brought on account of the
provisions hereof, and all such costs, expenses and attorneys' fees may be
included in and form a part of any judgment entered in any proceeding brought on
or under this Lease. All of the sums paid or obligations incurred as aforesaid,
with interest and costs, shall be paid within five (5)
10
<PAGE> 11
days of the rendition of any bill or statement therefor.
F. In the event of a termination of this Lease by reason of the occurrence
of an Event of Default or breach by Tenant hereunder: all unexpired insurance
premiums, all deposits theretofore made by Tenant with utility companies, all
rights of Tenant under all insurance policies, any claims for refund of any
impositions any pending claims for insurance proceeds or condemnation awards,
all monies and securities of Tenant then held by Landlord and all fuel and
supplies on the Premises shall be deemed to be and are hereby assigned to and
transferred to Landlord.
G. No failure by Landlord to insist upon the strict performance of any
covenant, agreement, term or condition of this Lease, or to exercise any right
or remedy available upon a breach thereof, and no acceptance of full or partial
rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of such covenant, agreement, term or condition. No covenant,
agreement, term or condition of this Lease to be performed or complied with by
Tenant, and no breach thereof, shall be waived, altered or modified except by
a written instrument executed by Landlord. No waiver of any breach shall affect
or alter this Lease, but each and every covenant, agreement, term and condition
of this Lease shall continue in full force and effect with respect to any other
then existing or subsequent breach thereof.
XIII. HOLDOVER
Subject to Tenant's option to extend the Lease pursuant to Article XI,
Tenant shall pay Landlord for each day Tenant retains possession of the
Premises or any part thereof after termination hereof, by lapse of time or
otherwise, at two (2) times the minimum rental set forth in Article I above
plus all other charges payable by Tenant hereunder, for the last period prior
to the date of such termination, and also pay all damages sustained by Landlord
by reason of such retention or, if Landlord gives written notice to Tenant of
Landlord's election thereof, such holding over shall constitute an extension of
this Lease for a period from month to month on the terms and conditions of this
Lease. This provision shall not be deemed to waive Landlord's right of re-entry
or any other right hereunder or at law.
XIV. SURRENDER
Tenant shall and will on the last day of the term hereof, or upon any
earlier termination of this Lease, or upon any re-entry by Landlord upon the
Premises pursuant to the provisions of this Lease, well and truly surrender and
deliver up into the possession and use of Landlord, without fraud or delay, the
Premises and also all pipes, plumbing, electric wires, heating and air
conditioning
11
<PAGE> 12
systems and equipment in good repair, order and conditions (except for (i)
normal wear and tear, and (ii) damage which Tenant is not obligated to repair
caused by fire or other insured cause or as a result of condemnation), broom
clean and free and clear of all liens and encumbrances other than those, if any,
created by Landlord. Furniture, trade fixtures and business equipment owned by
Tenant and not leased herein (not constituting part of the Premises) may be
removed by Tenant at or prior to the termination of this Lease, and all of
Tenant's signs shall, if requested by Landlord, be removed by Tenant prior to
the termination hereof. Any structural injury to the building or other injury
which necessitates fundamental changes in or repairs to the building caused by
such removal shall be repaired by Tenant. Any personal property of Tenant
which shall remain in the building after the termination of this Lease and/or
the removal of Tenant from the building, may, at the option of Landlord, be
deemed to have been abandoned by Tenant and either may be retained by Landlord
as the property of Landlord or be disposed of without accountability, in such
manner as Landlord sees fit. Any expenses incurred by Landlord in disposing of
same shall be charged to, and paid by, Tenant.
XV. CONDEMNATION
A. If all of the Premises are taken by any condemning authority under the
power of eminent domain or otherwise, or by any purchase or other acquisition in
lieu of eminent domain or otherwise, the term shall terminate as of the date
when title to the Premises is acquired by the condemning authority.
B. If only a part of the Premises is taken by any condemning authority
under the power of eminent domain or otherwise, or by any purchase or other
acquisition in lieu of eminent domain or otherwise, or if such taking results in
a substantial interference with the business which Tenant is conducting on the
Premises, Tenant shall have the option either (a) to terminate the Lease by
giving notice to that effect to Landlord (in which event the Lease shall
terminate as of the date when title to the Premises is acquired by the
condemning authority) or (b) ask Landlord to restore the premises within sixty
(60) days after the date when possession of the Premises is acquired by the
condemning authority to a condition reasonably comparable to the condition
and size of the Premises immediately prior to the date of such possession, in
which event the rent payable by Tenant to Landlord shall be reduced by the same
percentage that the total area of the Premises is reduced as a result of such
taking or other acquisition.
C. If the term is terminated in accordance with subparagraph A or B above,
the rent and any monies payable by Tenant under this Lease shall be apportioned
to the date of possession of the Premises by the condemning authority whose
taking occasioned such termination.
12
<PAGE> 13
D. Any award or payment to which Landlord may be or become entitled by
reason of any taking of the Premises or part thereof in or by condemnation or
other eminent domain proceedings pursuant to any law, general or special, or by
reason of the temporary acquisition of the use or occupancy of the Premises or
part thereof by any governmental authority, civil or military, whether the same
shall be paid or payable in respect of Tenant's leasehold interest hereunder or
otherwise, shall be paid to Landlord.
XVI. SUPPLY OF SERVICES
Landlord shall not be required to furnish any services or facilities or to
make any repairs or alterations in or to the Premises, except as provided in
Article III.
XVII. PRESENT CONDITION
Tenant has examined the Premises and accepts the buildings and improvements
thereon in their present condition and without any representation or warranty by
Landlord as to the condition of said buildings or as to the use or occupancy
which may be made thereof, and Landlord shall not be responsible for any latent
defect or change of condition in the buildings, and the rent hereunder shall in
no case be withheld or diminished on account of any defect in the building, nor
for any change in their conditions, nor for any damage occurring thereto except
as otherwise provided in this Lease, nor because of the existence of any
violations in any Municipal Departments. The approval of Landlord of any
plans or specifications shall not constitute a representation that they comply
with the laws, orders, ordinances and regulations of the public authorities, or
that the use or occupancy indicated in said plans or specifications is legal.
Tenant hereby assumes the full and sole responsibility for the condition,
operation, repair, replacement, maintenance of the Premises and accepts same "As
Is" in its present condition.
XVIII. MODIFICATION
None of the covenants, terms, agreements and conditions of this Lease
shall in any manner be altered, waived, changed or abandoned, nor shall the
term hereof or any part thereof be surrendered except by a written instrument
signed, sealed, acknowledged and delivered by the parties hereto. This Lease
contains the entire agreement between the parties and any executory agreement
hereafter made shall be ineffective to change, modify or discharge it in whole
or in part unless such executory agreement is in writing and signed by the
party against whom enforcement of the change, modification or discharge is
sought.
13
<PAGE> 14
XIX. NOTICES
Any notices required to be given under this Lease, either by Landlord
to Tenant or by Tenant to Landlord, shall be in writing, addressed to the
respective party as set forth herein or to such other address as either party
shall hereafter furnish to the other by registered mail for that purpose, and
the same shall be given and shall be deemed to have been served and given in
the case of Landlord when Tenant shall have received such notice, and in the
case of Tenant when Landlord shall have received such notice.
XX. INVALIDITY OF PARTICULAR PROVISIONS
If any term or provision of this Lease or the application thereof to
any person or circumstances shall, to any extent, be invalid or enforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.
XXI. NO WAIVER
No failure by Landlord or Tenant to insist upon the strict performance
of any covenant, agreement, term or condition of this Lease or to exercise any
right or remedy available upon a breach thereof, and no acceptance of full or
partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of such covenant, agreement, term or condition.
No covenant, agreement, term or condition of this Lease to be performed or
complied with by Tenant or Landlord, as the case may be, and no breach thereof
shall be waived, altered or modified except by a written instrument executed
by Landlord, or Tenant, as the case may be. No waiver of any breach shall
affect or alter this Lease, but each and every covenant, agreement, term and
condition of this Lease shall continue in full force and effect with respect
to any other then existing or subsequent breach thereof.
XII. MISCELLANEOUS
A. As used in this Lease, the term "Landlord" means the owner of the
fee title to the Premises. In the event of any sale or transfer of the fee
title to the Premises, the transferor shall be relieved of all obligations of
Landlord hereunder arising from and after the date of such sale or transfer.
B. Landlord shall not be liable, under any expressed or implied
covenant of this Lease, for any damages to Tenant beyond the loss of rent
reserved by this Lease, for any damages to Tenant beyond the loss of rent
reserved by this Lease accruing after any
14
<PAGE> 15
act or breach of covenant for which damages may be sought to be recovered
against Landlord. Tenant agrees to look solely to the then equity of Landlord
in the Premises for the satisfaction of the remedies by Tenant in the event of
a breach by Landlord of any of the covenants or conditions hereof.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and
executed this Lease on the day and year first above written.
LANDLORD:
Anthony L. Mihalovich, Jr.
---------------------------
Anthony L. Mihalovich, Jr.
TENANT:
DAVID WHITE, INC.
By: James L. Younk
---------------------
Vice-President Finance
was also signed by
Steven M. Smith
15
<PAGE> 16
EXHIBIT "A"
LEGAL DESCRIPTION OF PREMISES
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 371
<SECURITIES> 0
<RECEIVABLES> 1,155
<ALLOWANCES> (95)
<INVENTORY> 3,792
<CURRENT-ASSETS> 5,271
<PP&E> 8,632
<DEPRECIATION> 6,370
<TOTAL-ASSETS> 8,007
<CURRENT-LIABILITIES> 1,354
<BONDS> 1,590
0
0
<COMMON> 2,077
<OTHER-SE> 2,789
<TOTAL-LIABILITY-AND-EQUITY> 8,077
<SALES> 10,285
<TOTAL-REVENUES> 10,285
<CGS> 7,830
<TOTAL-COSTS> 1,953
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 236
<INCOME-PRETAX> 293
<INCOME-TAX> 59
<INCOME-CONTINUING> 234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 234
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
