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EXHIBIT 10.3
LEASE
BETWEEN
CENTURY 21 ASSOCIATES,
AS LESSOR,
AND SANTA FE PLASTIC CORPORATION,
AS LESSEE
DATED: OCTOBER 5, 1989
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INDEX
Article No. Title Page
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1 Rent Payments; Additional Rent............................ 2
2 Repairs .................................................. 3
3 Compliance With Laws...................................... 4
4 Surrender At End Of Term.................................. 6
5 Mechanics' Liens.......................................... 7
6 Inspection by Lessor...................................... 8
7 Mortgaging................................................ 8
8 Indemnification Of Lessor................................. 11
9 Insurance; Restoration.................................... 12
10 Condemnation.............................................. 17
11 Assignment And Subletting................................. 18
12 Taxes..................................................... 20
13 Defaults.................................................. 22
14 No Reinstatement.......................................... 28
15 Subordination............................................. 29
16 Quiet Enjoyment........................................... 31
17 Successors And Assigns.................................... 31
18 Alterations............................................... 31
19 Notices................................................... 33
20 No Waiver................................................. 34
21 Remedies Cumulative....................................... 35
22 Entire Agreement.......................................... 36
23 Representations Of Lessor................................. 36
24 Indemnification Of Lessee................................. 37
25 Estoppel Certificates..................................... 38
26 Certain Definitions....................................... 39
27 Extension of Term......................................... 40
28 Purchase Option........................................... 40
29 Conditions Precedent...................................... 43
30 Hazardous Waste/Substances................................ 46
31 Signage................................................... 48
32 Purposes.................................................. 49
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This Lease made this 5th day of October, 1989, between CENTURY 21
ASSOCIATES, a Tennessee general partnership, having its principal office at
P.O. Box 200, Jackson, Tennessee 38302, attention Larry Becker ("Lessor") and
Santa Fe Plastic Corporation, a California corporation, having its principal
office at 9601 John Street, Santa Fe Springs, Caliornia 90670 ("Lessee").
WITNESSETH:
Lessor leases to the Lessee, and the Lessee leases from the Lessor,
the real property described in Exhibit "A" attached to and made a part of this
Lease, together with all rights, privileges, easements, appurtenances and
amenities belonging or in any way pertaining thereto, and together with a
building containing 104,800 square feet constructed on the real property (the
"Demised Premises").
To have and to hold for a term commencing on the date that the Lessee
has received possession of the Demised Premises in accordance with the
provisions of Article 29 (the "Commencement Date") and ending on the date that
is thirteen (13) years after the Commencement Date (unless sooner terminated as
hereinafter provided) at the net annual rental of Three Hundred Fourteen
Thousand Four Hundred Dollars ($314,400.00) payable commencing upon the
Commencement Date in equal monthly installments of Twenty Six Thousand Two
Hundred Dollars $26,200.00) in advance on the first day of each month during
the term. If the
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Commencement Date does not occur on the first day of the month, Lessee
shall pay rent for the fractional month on a per diem basis, calculated on the
basis of a thirty (30) day month.
The Lessor shall receive the net annual rental free from all taxes,
assessments, charges, expenses, damages, repairs, maintenance and deductions of
every description (except those damages or repairs caused by or resulting from
acts of Lessor or its agents, contractors or employees), and Lessee shall pay
all of these which, except for this Lease, would have been chargeable against
the Demised Premises and payable by the Lessor. However, nothing contained in
this Lease shall obligate Lessee to pay any interest or principal on any
mortgage or other financing of Lessor's interest in the Demised Premises.
Notwithstanding anything herein to the contrary, Lessee shall be entitled to an
abatement of the first three (3) full months' rental payments.
ARTICLE 1
RENT PAYMENTS; ADDITIONAL RENT
1.01. The Lessee will pay to the Lessor the rent reserved in this
Lease, and all other sums that may become due or be payable by the Lessee under
this Lease, at the time and in the manner provided in this Lease. All of such
other sums to be paid may, at the Lessor's option, be deemed to be additional
rent to be added to any fixed rent then due or thereafter falling due,
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and in the event of non-payment, the Lessor shall have all the rights
and remedies provided by this Lease in the case of non-payment of rent or of a
breach of condition. Rental payments shall be tendered in legal tender and
lawful money of the United States at the office of Lessor or such other place
as Lessor may designate in writing. Rental payments shall be without setoff,
abatement, deduction or other reduction whatsoever.
ARTICLE 2
REPAIRS
2.01. The Demised Premises, together with the sidewalks adjacent
thereto, shall be kept in good order and repair by the Lessee at the Lessee's
sole cost and expense, and the Lessee shall make all repairs and replacements,
ordinary as well as extraordinary, foreseen and unforeseen, of every kind and
nature whatsoever, including necessary interior and exterior roof and wall
maintenance and repair, that may be necessary or required in or about the same
so that at all times those buildings, improvements, and sidewalks shall be in
good order, condition, and repair. The Lessor shall, to the extent possible,
assign to the Lessee, on the Commencement Date all manufacturers' and builders'
or contractors' warranties for the improvements and equipment located on, or
installed in, the Demised Premises.
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ARTICLE 3
COMPLIANCE WITH LAWS
3.01. LESSEE'S OBLIGATION TO COMPLY WITH LAWS - Lessee covenants to
comply with any and all laws, statutes, ordinances and regulations, federal,
state, county or municipal, now or hereinafter in force applicable to the
Demised Premises relating to the use or occupancy thereof or to the making of
repairs thereto, or of changes, alterations or, improvements therein, ordinary
or extraordinary, structural or otherwise, seen or unforeseen, including but
not limited to the performance of any duty imposed upon the Lessor or Lessee by
such laws, statutes, ordinances or regulations in respect to the sidewalks,
curbs, streets or vaults adjacent to the Demised Premises. The Lessee also
covenants to comply with any and all regulations and rules applicable to the
Demised Premises issued by the Board of Fire Underwriters, or by any other body
exercising similar functions, and insurance companies writing policies covering
the Demised Premises which now or hereafter may become applicable to the
Demised Premises. Lessee shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, in the name of the Lessee, or
Lessor (if legally required) or both (if legally required), without cost or
expense to Lessor, the validity or application of any law, ordinance, order,
rule, regulation or requirement of the nature referred to in this
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Article 3 and, if by the terms of any such law, ordinance, order, rule,
regulation, or requirement, compliance therewith may legally be delayed pending
the prosecution of any such proceeding, Lessee may delay such compliance
therewith until the final determination of such proceeding. Lessee will
indemnify Lessor against all adverse consequences of such contest, including
court costs, interest, penalties or other expense including attorneys' fees.
Lessee shall pay all costs, expenses, claims, fines, penalties and damages that
may in any manner arise out of or be imposed because of the failure of Lessee
to comply with this Article 3, and in any event agrees to indemnify the Lessor
from all liability with reference to the same. The Lessor and Lessee shall each
promptly give notice to the other in writing at the address listed in the Lease
of any notice of violation received by the Lessee or Lessor, respectively.
Without diminishing the obligation of the Lessee, if the Lessee shall at any
time fail or neglect to comply, to the extent reasonably appropriate and as
expeditiously as reasonably feasible, with any of said laws, rules,
requirements, orders, directions, ordinances or regulations concerning or
affecting the Demised Premises or the use and occupation thereof, or of any
building thereof, as hereinbefore provided and, if a stay is necessary, shall
have failed to obtain the stay or continuance thereof, the Lessor in addition
to other remedies shall be at liberty, after ten (10) days prior written notice
to Lessee, to
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comply therewith, and reasonable expenses consequent thereon shall be
borne and paid by the Lessee; upon Lessee's failure so to pay, Lessor may pay
the same and any payments so made by the Lessor, together with interest thereon
to be computed at the rate of fourteen percent (14%) per annum from date of
payment shall be considered as additional rent to be added to the installment
of rent next accruing, and shall entitle the Lessor to enforce any of the
terms, provisions, conditions and covenants herein contained that may be
applicable to such rent.
ARTICLE 4
SURRENDER AT END OF TERM
4.01. The Lessee will surrender and deliver up the Demised Premises,
including, but not limited to, all buildings, improvements, hoists, pipes,
plumbing, engines, electric wires, and fixtures used in connection with the
operation of the Demised Premises (but no movable trade fixtures and equipment
of occupants in possession of the Demised Premises) at the expiration of the
term of this Lease or sooner termination, if the term, in good repair and
condition, reasonable wear and tear thereof excepted. Notwithstanding the
foregoing, the Lessee may, at its option, remove any furnishings, fixtures and
equipment which it has installed (including, without limitation, any plumbing,
pipes, wires, cables, or other apparatus in connection therewith). Upon any
such removal, Lessee shall restore the
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Demised Premises to its original condition, reasonable wear and tear thereof
excepted. All such removals and restoration shall be accomplished in a good
workmanlike manner so as not to damage the primary structure or structural
qualities of the buildings and other improvements which are a part of the
Demised Premises.
ARTICLE 5
MECHANICS' LIENS
5.01. Neither Lessor nor Lessee shall have the power to subject the
Demised Premises or any interest in the Demised Premises to any mechanics' or
other liens. If the mechanics' or other liens or order for the payment of money
shall be filed against the Demised Premises or any building or improvement
which is a part thereof by reason of or arising out of any labor or material
furnished or alleged to have been furnished or to be furnished to or for the
Lessor or the Lessee at the Demised Premises, or for or by reason of any
change. alteration, or addition or the cost or expense thereof or any contract
relating thereto, the party responsible for such lien (the "Responsible Party")
shall cause the same to be cancelled and discharged of record, by bond or
otherwise as allowed by law at the expense of the Responsible Party, within
thirty-five (35) days after written demand therefor, and shall also defend on
behalf of the party which is not responsible for such lien (the
"Non-Responsible Party") at the Responsible Party's sole cost and expense, any
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action, suit or proceeding that may be brought thereon or for the enforcement
of those liens, lien or orders, and the Responsible Party will pay any damages
and satisfy and discharge any judgment entered therein and save harmless the
Non-Responsible Party from any claim or damage resulting therefrom.
ARTICLE 6
INSPECTION BY LESSOR
6.01. Lessee shall permit the Lessor and Lessor's agents to enter the
Demised Premises, at reasonable hours and upon reasonable prior notice, to
examine them. Lessee shall have the right to accompany or designate an agent
to accompany Lessor on any examination of the Demised Premises made pursuant to
this Article 6.
ARTICLE 7
MORTGAGING
7.01. The term "Mortgage", whenever used herein, shall include
whatever security instruments are used in the locale of the Demised Premises,
such as, without limitation, deeds of trust, security deeds and conditional
deeds, as well as financing statements, security agreements and other
documentation required pursuant to the Uniform Commercial Code. Lessee and
every successor and assignee of Lessee (including, but not limited to,
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any sublessee of Lessee, but only with Lessee's prior consent) is hereby given
the right by Lessor in addition to any other rights herein granted, without
Lessor's prior written consent, to mortgage its interests in this Lease and/or
under a purchase money first or second leasehold Mortgage in connection with
any sale of such interest, and assign this Lease, and any sublease(s) as
collateral security for such Mortgage upon the condition that all rights
acquired under such Mortgage shall be subject to all of the terms, covenants
and conditions of this Lease, and to all rights and interests of lessor herein,
none of which terms, covenants or conditions is or shall be waived by Lessor by
reason of the right given so to mortgage such interest in this Lease, except as
expressly provided herein. If Lessee and/or Lessee's successors and assigns
(including, but not limited to, any sublessee of Lessee, but only with Lessee's
prior consent) shall mortgage this leasehold, or any part or parts thereof, and
if the holder of such Mortgage shall, within twenty (20) days of its execution,
send to Lessor a true copy thereof, together with a notice specifying the name
and address of the Mortgagee and the pertinent recording date with respect to
such Mortgage, Lessor agrees that as long as any leasehold Mortgage shall
remain unsatisfied of record or until a notice of satisfaction is given by the
holder to Lessor, the following provisions shall apply:
(a) Lessor shall, upon serving Lessee with any notice of default,
simultaneously serve a copy of such notice upon the
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holder of such leasehold Mortgage. The leasehold Mortgagee shall thereupon have
the same period, after service of such notice upon it, to remedy or cause to be
remedied the defaults complained of, and Lessor shall accept such performance
by or at the instigation of such leasehold Mortgagee as if the same had been
done by Lessee;
(b) Anything herein contained notwithstanding, while such leasehold
Mortgage remains unsatisfied of record, or until written notice of satisfaction
is given by the holder to Lessor, if any default shall occur which, pursuant to
any provision of this Lease, entitles Lessor to terminate this Lease, and if
before the expiration of ten (10) days from the date of the giving of notice of
termination upon such leasehold Mortgagee, such leasehold Mortgagee shall have
notified Lessor of its desire to nullify such notice and shall have paid to
Lessor all basic rent and additional rent and other charges herein provided for
which are then in default, and shall have complied or shall commence complying
with all of the other requirements of this Lease (except as provided in
paragraph (c) of this Article), if any are then in default, and shall prosecute
the same to completion with reasonable diligence, then in such event, Lessor
shall not be entitled to terminate this Lease and any notice of termination
theretofore given shall be void and of no effect;
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(c) The leasehold Mortgagee shall be given notice of any arbitration
proceedings by the parties hereto, and shall have the right to intervene
therein and be made a party to such proceedings, and the parties hereto do
hereby consent to such intervention. In the event that the leasehold Mortgagee
shall not elect to intervene or become a party to such proceedings, the
leasehold Mortgagee shall receive notice of, and a copy of any award or
decision made in said arbitration proceedings; and
(d) Lessor shall, upon request, execute, acknowledge and deliver to
each leasehold Mortgagee, an agreement prepared at the sole cost and expense of
Lessee, in form reasonably satisfactory to such leasehold Mortgagee, between
Lessor, Lessee and leasehold Mortgagee, agreeing to all of the provisions of
this Article 7. The provisions of this Article 7 shall survive any termination
of this Lease.
ARTICLE 8
INDEMNIFICATION OF LESSOR
8.01. The Lessee shall exonerate, keep, save, hold harmless, protect
and indemnify the Lessor from any and all losses, damages, claims, suits,
liability and costs, including attorneys' fees, for anything and everything
whatsoever (i) arising from or out of the occupancy of the Demised Premises by
or under the Lessee, the Lessee's agents or servants, (ii) from
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any loss or damage arising from any fault or negligence by the Lessee,
or (iii) from any failure on the Lessee's part to comply with any of the
covenants, terms and conditions contained in this Lease. Lessee shall have no
duties and responsibilities under this Article 8 for any losses, damages,
claims, suits, liability or costs incurred by Lessor as a result of any acts of
Lessor.
ARTICLE 9
INSURANCE; RESTORATION
9.01. INSURANCE
(a) During the term of this Lease, Lessee, at its sole cost and
expense, shall carry and maintain the following types of insurance in the
amounts specified:
(i) fire and extended coverage insurance covering the
Demised Premises against loss or damage by fire and against
damage by other risks now or hereafter embraced by the
"extended coverage" so called, in amounts equal to the full
cost of replacing the Demised Premises in the event of total
destruction of same by fire or any other casualty with
appropriate riders to compensate for the effect of inflation
on such replacement cost.
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(ii) comprehensive public liability insurance including
property damage, insuring the Lessor and the Lessee against
liability for injury to persons or property occurring in or
about the Demised Premises or arising out of the ownership,
maintenance or use or occupancy thereof. The liability under
such insurance shall not be less than One Million Dollars
($1,000,000.00) for any one accident and not less than Five
Million Dollars ($5,000,000.00) in the aggregate for all
accidents in any one year period.
(iii) business interruption insurance against loss of
rent or rental value due to fire, including extended coverage
endorsement, in an amount equal to the annual rent for the
Demised Premises plus the estimated amount of real estate
taxes and any other expenses connected with the Demised
Premises payable by the Lessee.
(c) All policies of insurance shall provide by endorsement that any
loss shall be payable to the Lessor or Lessee as their respective interests may
appear at the time of the loss or payable to any mortgagee of Lessor under the
standard
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mortgage clause, if such mortgagee requires. All such policies shall
further provide that not less than thirty (30) days written notice shall be
given to Lessor and Lessee before such policy may be cancelled or changed to
reduce insurance provided thereby. Lessee shall provide Lessor with a duplicate
policy of each insurance policy evidencing such endorsement(s) together with
evidence satisfactory to Lessor that payment of all premiums thereon has been
made.
(d) Each of Lessor and Lessee hereby releases the other from any and
all liability or responsibility to the other or any person or entity claiming
through or under them by way of subrogation or otherwise for any loss or damage
to property caused by fire or any other perils insured in policies of insurance
covering such property, even if such loss or damage shall have been caused by
the fault or negligence of the other party, or anyone for whom such party may
be responsible, provided, however, that this release shall be applicable and in
force and effect only with respect to loss or damage occurring during such
times as the releasor's policies shall contain a clause or endorsement to the
effect that any such release shall not adversely affect or impair said policies
or prejudice the right of the releasor to recover thereunder and then only to
the extent of the insurance proceeds payable under such policies. Each of
Lessor and Lessee agrees that it will request its
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insurance carriers to include in its policies such a clause or endorsement.
(e) In the event that Lessee fails to provide or to keep in force the
insurance required by this Article 9, Lessor shall furnish Lessee with written
notice of failure to provide or keep in force such insurance, and if Lessee
fails to furnish satisfactory evidence of such insurance within five (5) days
of receipt of such notice, Lessor may, if it elects, procure such insurance and
all premiums advanced by Lessor shall be repaid by Lessee, on demand, together
with interest at the rate of 14% per annum from date of advance until paid.
9.02. If any buildings at any time on the Demised Premises shall be
damaged or destroyed by any cause whatsoever, during the term of this Lease,
the Lessee shall give immediate notice thereof to Lessor and, with reasonable
promptness, repair and replace the same at its expense, utilizing the insurance
proceeds paid to the Lessee in conjunction with such damage or destruction so
that the buildings upon the Demised Premises after that repair and replacement
shall be at least equal in value to the buildings existing immediately prior to
such occurrence and as nearly similar to such buildings in character as shall
be practicable and reasonable. Before beginning such repair or rebuilding, or
letting any contracts in connection therewith, Lessee shall submit for Lessor's
approval, which approval Lessor
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shall not unreasonably withhold or delay, complete and detailed plans and
specifications thereof.
9.03. The Lessee shall not be entitled to any abatement of rent except
to the extent to which Lessor shall have received a net sum as proceeds of any
loss or business interruption insurance maintained by Lessee, nor shall its
obligations under this Lease be terminated during the term of this Lease,
notwithstanding any destruction or damage to the Demised Premises by any cause
whatsoever, unless resulting from a defect in construction caused by Lessor or
Lessor's agents, employees, contractors or suppliers.
9.04. In the event of damage to or destruction of any building upon
the Demised Premises during the term of this Lease, Lessor agrees that Lessee
shall be entitled to retain the insurance proceeds paid on account thereof.
Such proceeds shall be received by the Lessee in trust to pay the cost of
restoration, and shall not be commingled with any of Lessee's other funds.
ARTICLE 10
CONDEMNATION
10.01. If any person or corporation, municipal, public, private, or
otherwise shall at any time during the term of this Lease lawfully condemn and
by reason thereof acquire title to
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Lessor's interest in the Demised Premises, in or by condemnation
proceedings in pursuance of the law, general, special or otherwise, the Lessor
shall be entitled to and shall, except as hereinafter provided, receive any
award that may be made, including the award, if any, to the Lessee for the
value of the unexpired term of this Lease, and the Lessee shall and does hereby
assign and transfer to Lessor any award that may be so made to Lessee for any
damages to the term of years set forth in this Lease. This assignment shall not
include any award for taking of or damage to the trade fixtures of Lessee, or
its subtenants.
10.02. In the event of a taking by condemnation as described in
Article 10.01, this Lease shall continue, but the annual rental to be paid by
the Lessee shall thereafter be reduced in proportion to the space taken by
condemnation, and in such event the Lessor will apply (or cause to have
applied) any sum awarded for damage to the building which is a part of the
Demised Premises (but no portion of any award made for the taking of land)
toward the cost of restoring that building as nearly as possible to the
condition in which it was before that taking. The Lessor shall make that
restoration and, upon payment of the award, shall apply (or cause to be
applied) toward the cost of that restoration the said award.
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10.03. Should such taking of a portion of the building which is a part
of the Demised Premises result in a loss of thirty-three and one-third percent
(33-1/3%) or more of the ground floor area of the building which is a part of
the Demised Premises, then Lessee, at its option, may cancel and terminate this
Lease by furnishing written notice to Lessor of its intent to terminate and
cancel the Lease must be furnished within sixty (60) days after vesting of
title in the condemnor, and the Lease shall terminate within thirty (30) days
from receipt by Lessor of such written notice.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
11.01. (a) Lessee shall not assign or sublet its interests, or any
portion thereof, under this Lease without first obtaining Lessor's consent in
writing, which consent shall not be unreasonably withheld or delayed. No
consent in one instance shall prevent this provision from applying to each
subsequent instance. Except as otherwise provided in section 11.01(c) of this
Article 11, this provision shall apply to all transfers by operation of law,
including but not limited to mergers or any change of ownership of fifty-one
percent (51%) or more of the stock or beneficial interest of Lessee.
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(b) In the event Lessee should desire to assign this Lease or sublet
the Demised Premises or any part thereof, Lessee shall give Lessor written
notice of such desire (and the name of the proposed assignee or sublessee) at
least sixty (60) days in advance of the date Lessee proposes to make such
assignment or subletting.
(c) If the entity to whom Lessee proposes to sublet or assign this
Lease is a business entity related to Lessee (i.e., an entity controlling,
controlled by or under common control with Lessee, where control is more than
50% of stock ownership or equity, as the case may be), Lessor's approval for
such subletting or assignment shall not be required provided that the net worth
of the related entity is substantially equal to or greater than that of Lessee.
Lessee shall provide Lessor with proof of the related entity's net worth at the
time of giving written notice of the proposed subletting or assignment of this
Lease.
(d) Lessor's approval in accordance with section 11.01(a) of this
Article 11 shall be deemed given unless Lessee receives notice in writing of
Lessor's disapproval within the ten (10) day period following expiration of
said sixty (60) day period.
(e) Subject to any applicable provisions of Article 15 and Article 26,
Lessor may transfer, convey, assign or
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encumber its interest in this Lease at any time without Lessee's consent.
ARTICLE 12
TAXES
12.01. The Lessee shall pay and discharge all duties, taxes, charges
for water, sewer taxes, assessments and payments, extraordinary as well as
ordinary, whether foreseen or unforeseen, as shall, during the term of this
Lease, be laid, levied, assessed, or imposed upon the Demised Premises, or
become due and payable, or liens upon the Demised Premises, or any part
thereof, or any appurtenances thereto, the leasehold estate created by this
Lease, the sidewalks or streets in front of or adjoining the Demised Premises,
by virtue of any present or future law, order or ordinance of the United States
of America, or of the city, county or other local government, or of any
department, office or bureau thereof, or any other governmental authority. The
duties, taxes, charges, assessments and payments described in this Article
12.01 are sometimes referred to herein collectively as "Impositions".
12.02. All Impositions shall be paid by the Lessee when they become
due and payable without interest or penalty to the department, officer or
bureau charged with the collection thereof. But nothing in this Lease shall
require the Lessee to
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pay any inheritance, franchise, income, payroll, excise, gross
receipts, privilege, rent, capital stock, estate or profit tax, or any tax of
similar nature, that is or may be imposed upon the Lessor, unless those taxes
shall be levied upon the rent reserved in this Lease in the place of taxes upon
the Demised Premises.
12.03. All taxes, assessments, and water rents that are mentioned
above to be paid by Lessee shall be prorated and adjusted for the fiscal years
in which the term of this Lease begins and ends.
12.04. In the case of assessments for local improvements or
betterments that are assessed or imposed during the term of this Lease and that
may be payable in installments, Lessee shall only be obligated to pay the
installments that fall due during the term of this lease.
12.05. The Lessee may contest or review by legal proceedings or in any
manner that Lessee in its opinion shall deem advisable (which proceedings or
other steps taken by Lessee, if instituted, shall be conducted diligently at
its own expense and free of expense to the Lessor) any and all Impositions
levied, assessed or imposed upon or against the Demised Premises or taxes in
lieu thereof, required to be paid by Lessee under this Lease. No such contest
or review shall be undertaken in a manner that exposes the Demised Premises or
Lessor's interest therein to jeopardy.
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12.06. On or before the due date, Lessee shall furnish to Lessor
copies of official receipts of the appropriate taxing authority or other
evidence satisfactory to the Lessor evidencing payment of taxes. Lessee upon
request of Lessor will promptly exhibit to Lessor all paid bills for water
rates and assessments, which bills after inspection by the Lessor shall be
returned to the Lessee. In the event the Lessor shall receive any notice,
correspondence, bill, audit or similar documentation from any entity regarding
the Impositions, the Lessor shall deliver same to the Lessee within five (5)
days of the Lessor's receipt thereof.
ARTICLE 13
DEFAULTS
13.01. Each of the following shall be deemed a default by Lessee and a
breach of this Lease:
(a) Lessee's failure to pay any installment of rent, which failure
persists after the expiration of fifteen (15) days from receipt by Lessee of
written notice from Lessor advising of such failure to pay;
(b) Lessee's failure to pay any additional rent, which failure
persists after the expiration of fifteen (15) days from receipt by Lessee of
written notice from Lessor advising of such failure to pay;
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(c) Lessee's failure to observe or perform any of its obligations
under the other terms, covenants or conditions of this Lease, which failure
persists after the expiration of thirty (30) days from the date Lessor gives
written notice to Lessee calling attention to the existence of that failure,
but, if the matter that is the subject of the notice is of such a nature that
it cannot be reasonably corrected within thirty (30) days then no default shall
be deemed to have occurred if Lessee promptly, upon the receipt of notice,
commences the curing of the default and diligently prosecutes the same to
completion. However, if the default is one relating to a matter that exposes
space occupants or the public to a danger to safety or health of which the
public authorities have given due notice to Lessee, then such shorter notice to
Lessee, whether written or otherwise, shall be sufficient as the circumstances
demand with the responsibility of Lessee to take corrective measures forthwith.
The right to cure provided herein does not grant Lessee any license or
privilege to allow the Demised Premises to be without the insurance coverage
provided for in Article 9 and failure promptly to comply with Article 9 shall
entitle the Lessor to place immediately the necessary insurance, and the cost
thereof shall be additional rent and collectible as such.
(d) The adjudication of Lessee in an involuntary bankruptcy proceeding
and such adjudication is not vacated within sixty (60) days; the taking by
Lessee of the benefit of any other
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insolvency act or procedure, which term includes any form of proceeding
for reorganization or arrangement or rearrangement under the Bankruptcy Code as
well as an assignment for the benefit of creditors; or the appointment of a
receiver for Lessee and such receiver remains undischarged for sixty (60) days.
13.02. Should Lessee default as described in this Article 13, Lessor
at any time thereafter may, at its option give Lessee ten (10) days written
notice of intention to end the term of this Lease and thereupon at the
expiration of those ten (10) days the term of this Lease shall expire as
completely as if that date were the date definitely fixed in this Lease for the
expiration of the term and Lessee will then quit and surrender the Demised
Premises to Lessor, but Lessee shall remain liable as provided in this Article
13. Lessee hereby expressly waives any right under the common law to demand for
rent by the Lessor prior to termination of this Lease in accordance with this
Article 13, provided, however, that this waiver does not waive or diminish
Lessee's rights under this Article 13.
13.03. If the notice provided for in Article 13.02 shall have been
given and the term of this Lease shall expire as described in that Article
13.02, or if the Lease shall be taken from the Lessee as a result of any
execution against Lessee in any proceeding in which the Lessee shall have no
appeal or further appeal, then Lessor may without notice re-enter the
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Demised Premises either by force or otherwise and dispossess Lessee by
summary proceedings or otherwise, and Lessee or other occupant or occupants of
the Demised Premises will remove their effects and hold the Demised Premises as
if this Lease had not been made, and Lessee waives the service of notice of
intention to re-enter or to institute legal proceedings to that end.
In case of any default, re-entry, expiration or dispossession by
summary proceedings or otherwise:
(a) Rent shall become due thereupon and be paid up to the time of that
re-entry, dispossession or expiration, together with any reasonable and
customary expenses that Lessor may incur for legal expenses and attorneys'
fees, including those incident to the recovery of possession, brokerage, and
putting the Demised Premises in good order, or for preparing the same for
re-rental;
(b) Lessor may relet the Demised Premises or any part or parts
thereof, either in the name of Lessor or otherwise, for a term or terms that
may at Lessor's option be less than or exceed the period that would otherwise
have constituted the balance of the term of this Lease and may grant reasonable
and customary concessions or free rent without thereby in any way affecting
Lessee's liability for the rental payable under this Lease for the period of
concession or free rent; and
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(c) Lessee shall also pay Lessor as liquidated damages for the failure
of Lessee to observe and perform Lessee's covenants any deficiency between the
rent reserved in this Lease and the net amount, if any, of the rents collected
by reason of the reletting of the Demised Premises for each month of the period
that would otherwise have constituted the balance of the term of this Lease.
(i) In computing liquidated damages there shall be
added to the said deficiency any reasonable and customary
expenses that Lessor may incur in connection with the recovery
of possession of the Demised Premises and reletting, such as,
but not limited to, legal expenses, attorneys' fees,
brokerage, for keeping the Demised Premises in good order and
for preparing the same for reletting.
(ii) Any such liquidated damages shall be paid in
monthly installments by lessee on the rent day specified in
this Lease and any suit brought to collect the amount of the
deficiency for any month shall not prejudice in any way the
rights of Lessor to collect the
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deficiency for any subsequent month by a similar action
or proceeding.
13.05. Lessor may make any alterations and decorations in the Demised
Premises that Lessor, in its sole judgment, considers reasonably advisable and
reasonably necessary for the purpose of reletting the Demised Premises. The
making of these alterations of decorations shall not operate or be construed to
release Lessee from any liability under this Article 13.
13.06. Lessor shall in no event be liable and Lessee's liability under
this Article 13 shall not be affected or diminished in any way whatsoever for
failure to relet the Demised Premises, or if the Demised Premises are relet,
for failure to collect the rent thereof under such reletting.
13.07. In the event of a breach or threatened breach by Lessee of any
of the covenants or provisions of this Lease, Lessor shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity as if
re-entry, summary disposes proceedings, or other remedies were not provided in
this Lease. Mention in this Lease of any particular remedy shall not preclude
Lessor from any other remedy, in law or in equity.
13.08. Any action taken by Lessor under this Article 13 shall not
waive any right that Lessor would otherwise have against Lessee for rent
reserved in this Lease or otherwise, and
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Lessee shall remain responsible to Lessor for any loss and damage
suffered by Lessor by reason of Lessee's default or breach. The words
"re-enter" and "re-entry" as used in this Lease are not restricted to their
technical legal meanings. Lessor shall, at all times, use its best efforts to
mitigate its damages under this Article 13.
ARTICLE 14
NO REINSTATEMENT
14.01. (a) No receipt of monies by the Lessor from the Lessee after
the lawful termination or cancellation of this lease, shall reinstate, continue
or extend the term of this Lease, or affect any notice theretofore given to the
Lessee, or waive the Lessor's right to enforce the payment of fixed or
additional rent or rents then due, or thereafter falling due, or waive the
Lessor's right to recover possession of the Demised Premises by proper suit,
action, proceeding or remedy;
(b) After the service of notice to terminate or
cancel this Lease, or the commencement of suit, action or summary
proceedings, or any other remedy, or after a final order or
judgement for the possession of the Demised Premises, the Lessor
may demand, receive and collect any monies due, or thereafter
falling due, without in any manner affecting the notice,
proceeding, suit, action, order or judgement. All such monies
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collected shall be deemed to be payments on the account of the use and
occupation or the Lessee's liability under this Lease.
14.02. The Lessor's failure to enforce any term of this Lease, that is
breached by the Lessee, after notice had, shall not be deemed to void or affect
the right of the Lessor to enforce that term on the occasion of a subsequent
default or breach.
ARTICLE 15
SUBORDINATION
15.01. This Lease shall be subject and subordinate to any and all
Institutional Mortgages (as defined in Article 25) that may now or hereafter
affect the Lessor's interest in the real property of which the Demised Premises
form a part, and of all renewals, modifications, consolidations, replacements
and extensions thereof. This clause shall be self-operative and no further
instruments of subordination shall be required. In confirmation of this
subordination, Lessee shall execute promptly any certificate, subordination
agreement or other document that Lessor or its lender may reasonably request.
Lessee constitutes and appoints Lessor as Lessee's attorney-in-fact to execute
any such certificate or certificates for and on behalf of the Lessee.
15.02. (a) The subordination described in Article 15.01 as it pertains
to Institutional Mortgages hereafter made (which
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32
term includes any agreement modifying any Institutional Mortgage now in
existence or hereafter made), is conditioned upon the agreement of the
institutional mortgagee, to be delivered by it to Lessee, in which the
institutional mortgagee agrees in substance that so long as Lessee is not in
default:
(i) The Lessee will not be disturbed in its possession by the
holder of the mortgage;
(ii) Lessee will not be joined in any action or proceeding to
foreclose the mortgage by the holder thereof; and
(iii) Casualty insurance proceeds and condemnation awards to
which the holder of the mortgage is entitled under the
terms of the mortgage will be applied towards restoration
of the Demised Premises consistent with Articles 9 and 10
of this Lease, respectively, and shall be disbursed as
provided for by those Articles.
(b) The giving of any agreement as described in Article 15.02(a) by
the mortgagee may be conditioned by it on the reciprocal agreement by the
Lessee to attorn to the holder of the
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mortgage should it become vested with the Lessor's interest in the Demised
Premises.
ARTICLE 16
QUIET ENJOYMENT
16.01. The Lessee, upon paying the rent and performing its other
obligations under this Lease shall and may, at all times during the term of
this lease, peacably and quietly have, hold and enjoy the Demised Premises free
of molestation by the Lessor.
ARTICLE 17
SUCCESSORS AND ASSIGNS
17.01. The covenants and agreements contained in this Lease inure to
the benefit of and are binding upon the parties to this Lease, their successors
and assigns, but this Article 17 does not modify the provisions governing
assignment, as elsewhere provided for in this Lease.
ARTICLE 18
ALTERATIONS
18.01. Lessee may, without the consent of Lessor, but at its own cost
and expense and in a good workmanlike manner, make nonmechanical or
nonstructural alterations, additions or
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34
improvements to the Demised Premises subject to all conditions contained in
Section 18.03 of this Article 18. Such nonmechanical or nonstructural
alternations, additions or improvements shall comply with all applicable
governmental laws, ordinances and regulations.
18.02. Lessee may, without the consent of Lessor, but at its own cost
and expense and in a good workmanlike manner, make mechanical or structural
alterations, additions or improvements to the Demised Premises subject to all
conditions contained in Section 18.03 of this Article 18 if the cost of such
mechanical or structural alterations does not exceed $200,000.00 and does not
alter the roofline or exterior walls of the Demised Premises. Such mechanical
or structural alterations, additions or improvements shall comply with all
applicable governmental laws, ordinances and regulations. Lessor's prior
written consent shall be required for all mechanical or structural alterations,
additions or improvements exceeding $200,000.00 in cost, which consent shall
not be unreasonably withheld.
18.03. Alterations, additions, improvements and partitions erected by
Lessee shall be and remain the property of Lessee during the term of this
Lease, and Lessee shall, unless Lessor otherwise elects as hereinafter
provided, remove all such alterations, additions, improvements and partitions
erected by Lessee and restore the Demised Premises to their original
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35
condition by the date of termination of this Lease; provided, however, that if
Lessor so elects prior to termination of this Lease, such alterations,
additions, improvements and partitions shall become the property of Lessor as
of the date of termination and shall be delivered up to the Lessor with the
Demised Premises. All shelves, bins, machinery and trade fixtures installed by
Lessee shall be removed by Lessee prior to termination of this Lease if Lessee
so elects and shall be removed if required by Lessor; upon any such removal
Lessee shall restore the Demised Premises to the original condition. All such
removals and restorations shall be accomplished in a good workmanlike manner
so as not to damage the primary structure or structural qualities of the
building and other improvements situated on the Demised Premises.
ARTICLE 19
NOTICES
19.01. All notices to the parties shall be addressed to them at the
respective addresses first given for them in this Lease, or to such other
address, of which either of them, as the case may be, shall notify the other
party and its attorney in the manner stated in this Article 19 for giving
notice. Copies of all notices shall be furnished to the attorneys for the
parties at the addresses hereinafter provided, or at such other addresses which
either of such attorneys, as the case may be, shall notify
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36
the other party and its attorney in the manner stated in this Article 19 for
giving notice. Copies of all notices shall also be then given to Kerr Glass
Manufacturing Corporation, 1840 Century Park East, Los Angeles, California
90067, Attention: Corporate Secretary.
NOTICES TO ATTORNEY'S FOR LESSOR AND LESSEE
Lessor's Attorneys Lessee's Attorney
- - - ------------------ -----------------
Lee J. Chase Joseph L. Broadwin
Glankler, Brown, Gilliland, Wilkie, Farr & Gall
Chase, Robinson & Raines One Citicorp Center
1700 One Commerce Square 153 East 53rd Street
Memphis, Tennessee 38103 New York, New York 10022
The notices to the parties and copies of such notices to the attorneys for the
parties must be given by either registered mail, return receipt requested, or
by certified mail, return receipt requested. In the case of the former service
of the notice shall be deemed completed upon the registration thereof with the
postal authorities, and in the case of the latter upon the due mailing thereof.
ARTICLE 20
NO WAIVER
20.01. The failure of the Lessor to insist in any one or more
instances, upon a strict performance of any of the covenants of this Lease,
shall not be construed as a waiver of or relinquishment for the future
performance of that covenant, or
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37
the right to exercise that option, but the same shall continue and remain in
full force and effect. The Lessor's receipt of net annual or additional rent,
with knowledge of the breach of any covenant of this Lease, shall not be deemed
a waiver of that breach, and no waiver by the Lessor of any provision of this
Lease shall be deemed to have been made unless expressed in writing and signed
by the Lessor.
20.02. The Lessor's receipt of any installment of the net annual rent
under this Lease or of any additional rent shall not be a waiver of any net
annual or additional rent then due. Lessor may, in its sole discretion, apply
any payments made by Lessee to the satisfaction of any debt or obligation of
Lessee to Lessor, regardless of Lessee's instructions as to the application of
those payments, whether those instructions are endorsed on Lessee's check or
otherwise.
ARTICLE 21
REMEDIES CUMULATIVE
21.01. All of the rights and remedies given to the Lessor in this
Lease for the recovery of the Demised Premises because of the default by the
Lessee in the payment of any sums that may be payable pursuant to the terms of
this Lease, or upon the breach of any of the terms of this Lease, or the right
to re-enter and take possession of the Demised Premises upon the happening of
any
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38
of the defaults or breaches of any of the covenants of this Lease, or the
right to maintain any action for rent or damages and all other rights and
remedies allowed at law or in equity, are reserved and conferred upon the
Lessor as distinct, separate and cumulative remedies, and no one of them,
whether exercised by the Lessor or not, shall be deemed to be in exclusion of
any of the others.
ARTICLE 22
ENTIRE AGREEMENT
22.01. This Lease contains the entire agreement between the parties,
and any agreement hereafter made shall not operate to change, modify or
discharge this Lease in whole or in part unless that agreement is in writing
and signed by the party sought to be charged with it.
ARTICLE 23
REPRESENTATIONS OF LESSOR
23.01. Lessor represents and warrants that:
(a) The improvements on the Demised Premises have been constructed in
compliance with all applicable laws, ordinances, regulations and restrictions
affecting the Demised Premises.
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39
(b) All necessary permits and approvals necessary to construct the
Demised Premises including, without limitation, certificates of occupancy, have
been obtained.
(c) All utilities necessary to service the Demised Premises are
adequate for the permitted use thereof and have been connected.
ARTICLE 24
INDEMNIFICATION OF LESSEE
24.01. Lessor shall indemnify Lessee from and hold Lessee harmless
against all costs, legal expenses, liability, and other expenses, claims by any
party or governmental entity, whether grounded in statutory or common law, for
personal injury, wrongful death, property damage, economic loss, abatement,
redemption, damage to natural resources, response costs, civil penalty, or any
other claim, demand or notice arising out of or relating to
(a) the generation, presence, handling, treatment, storage or disposal
of any solid waste, hazardous waste, hazardous substance, toxic
substance, contaminant, or pollutant, or any other environmental
condition, on, at, beneath, or near the property, provided such
generation, presence, handling, treatment, storage or
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40
disposal occurred prior to the Commencement Date of this Lease and
(i) was due to the acts of Lessor or its agents or employees; or
(ii) was due to the acts of third parties, provided that Lessor had
knowledge of such acts prior to the Commencement Date of this
Lease.
24.02. Lessee shall have the right to terminate this Lease in the event
Lessee determines in its reasonable discretion that the condition for which
Lessee is entitled to indemnification under section 24.01 of this Article 24
materially and adversely affects the operation of Lessee's business or the
health or safety of Lessee's employees.
ARTICLE 25
ESTOPPEL CERTIFICATES
25.01. The Lessee agrees at any time and from time to time upon not
less than twenty (20) days prior written request by the Lessor, to execute,
acknowledge and deliver to Lessor a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there have been
modifications that the same is in full force and effect as modified and stating
the modifications) and the dates to which the rent and other charges have been
paid in advance, if any, it being intended that
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41
any such statement delivered pursuant to this Article 24 may be relied upon by
prospective purchasers of Lessor's interest or mortgagees of Lessor's interest
or assignees of any mortgage upon Lessor's interest in the Demised Premises.
ARTICLE 26
CERTAIN DEFINITIONS
26.01. The term "Lessor" as used in this Lease means only the owner of
the current interest of the Lessors in the Demised Premises or, as the case
may be, the successor thereto from time to time. In the event of any transfer
at any time of the interest of the Lessor to (i) an entity which is not
controlled by Lessor, or (ii) an entity which is controlled by Lessor and with
respect to (i) and (ii) has a net worth substantially equal to the net worth of
Lessor, the transferor shall be and is entirely relieved of all convenants
and obligations of the Lessor under this Lease, and shall be deemed and
construed without further agreement between the parties or their respective
successors in interest or between the parties and the transferee that the
transferee of the Lessor's interest has assumed and agreed to carry out any and
all convenants and obligations of the Lessor under this Lease, provided,
however, that transferor shall remain liable of rights representations and
warranties contained in this Lease of a period of one year from the date
hereof. In the event of any transfer at any time of the interest of Lessor to
an entity which
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42
is controlled by Lessor and has a net worth less than the net worth of Lessor,
the transferor shall not be relieved from liability on the covenants and
obligations of Lessor under the Lease.
26.02. An "Institutional Mortgage" is a mortgage held by an
institutional Lender on the interest of the Lessor in the real property
constituting the Demised Premises.
ARTICLE 27
EXTENSION OF TERM
27.01. Provided the Lessee is not then in default, the Lessee shall
have the right to extend the term of this Lease for one twelve (12) year period
as hereinafter provided. The net annual rental during such renewal period shall
be Three Hundred Sixty-One Thousand, Five Hundred Sixty Dollars ($361,560.00).
The Lessee shall have the right to exercise such renewal option by written
notice to the Lessor not later than one year prior to the commencement date of
the proposed renewal term. The Lessee shall exercise the option to renew by
giving notice (the "Renewal Option Notice") to the Lessor in accordance with
Article 19.
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43
ARTICLE 28
PURCHASE OPTION
28.01. The Lessor grants to Lessee the option to purchase the Demised
Premises in accordance with the provisions of this Lease, so long as the Lessee
is not in default at the time it exercises the option.
28.02. The purchase price for the Demised Premises shall be Two
Million Five Hundred Eighty-Seven Thousand Dollars ($2,587,000.00). The Lessee
shall be entitled to apply ten percent (10%) of the aggregate of all net annual
rent payments made to the Lessor during the term of this Lease and any
extensions thereof at the time the option is exercised as a credit toward the
purchase price. The Lessee shall have the right to exercise such purchase
option by written notice to the Lessor at least thirty (30) days prior to the
date of closing of such purchase; provided, however, that any notice of intent
to purchase given by Lessee during the final year of the initial thirteen year
term of this Lease must be given at least twelve months prior to the expiration
of such initial term, and any notice of intent to purchase given by Lessee
during the final year of the twelve (12) year extension term of this Lease must
be given at least twelve (12) months prior to the expiration of such extension
term. The Lessee shall exercise the option to purchase
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44
by giving notice (the "Purchase Option Notice") to the Lessor in accordance
with Article 19.
28.03. The purchase price shall be payable in lawful money of the
United States to the Lessor by the Lessee at the close of escrow as provided in
Section 22.05 of this Article 28.
28.04. The Lessor shall deliver to the Lessee an executed Special
Warranty deed in recordable form conveying fee simple title to the Demised
Premises. Title to the Demised Premises shall be conveyed by the Lessee free
and clear of all liens, encumbrances, convenants, conditions, restrictions,
easements and rights of way of record, leases or other tenancy agreements, and
other matters of record except (i) current taxes, a lien not yet delinquent,
(ii) those portions of current assessments not yet due and payable (iii)
anything of record or not of record that in any way affects title to the
premises resulting from the acts or omissions of the Lessee, (iv) any
covenants, conditions, restrictions, easements, rights of way of record, and
leases or other tenancy agreements existing at the commencement of the term,
and (v) subleases covering portions of the Demised Premises executed by the
Lessee during the term.
28.05. The sale shall be consummated through an escrow with title
company selected by the Lessee. Escrow shall be deemed to be closed pursuant to
this Article 28.05 on the date the deed conveying fee simple title to the
Demised Premises to
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45
the Lessee is recorded. At the close of escrow, the title company must be
prepared to issue an ALTA Owner's Title Insurance Policy in the amount of the
purchase price insuring title to the Demised Premises vested in the Lessee,
subject only to the matters set forth in Article 28.04. Each party shall select
and bear all costs of its attorneys at closing.
ARTICLE 29
CONDITIONS PRECEDENT
29.01. Lessor agrees to complete, and this Lease is subject to and
conditioned upon the Lessor's completing, construction of the improvements to
be located on the Demised Premises in accordance with the requirements of the
work summary attached hereto as Exhibit "B" (the "Lessor's Work").
The Lessee shall perform the work and supply the materials set
forth on the work summary attached hereto as Exhibit "C" (the "Lessee's Work"),
and this Lease shall not be conditioned upon completion of the Lessee's Work.
The Lessee's Work includes certain electrical work on the Demised Premises as
described in Exhibit "B" hereto. Upon (i) satisfactory completion of the
electrical work which is a part of the Lessee's Work, Lessor shall pay Lessee
the sum of $300,000 for completion of such electrical work. Such $300,000
amount is a negotiated sum and shall be payable upon
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46
completion of such electrical work irrespective of the actual "out of pocket"
costs to Lessee for such electrical work. Lessee shall be responsible for all
costs and expenses of all Lessee's Work other than the electrical work.
The Lessor shall submit all proposed building specifications (the
"Specifications") to Lessee for Lessee's review and written approval. If Lessee
determines that the Specifications are not acceptable, Lessee shall so notify
Lessor, and Lessor shall revise them to so conform and shall resubmit the
Specifications to Lessee for review and approval, provided, however, that in no
event shall Lessor be required to incur cost and expenses in excess of One
Million Nine Hundred Three Thousand Two Hundred Forty-One Dollars
($1,903,241.00) which amount is not intended to include and is in excess of the
$300,000 specified above in this Section 29.01 to complete the Lessor's Work.
The initial review by Lessee of the Specifications shall be carried out within
fourteen (14) days of the date of submission thereof by Lessor and any
subsequent review by Lesse of any revisions thereto shall be carried out within
fourteen (14) days of Lessor's submission of such revision. If Lessee has not
notified Lessor of its determination within the fourteen (14) day period,
Lessee shall be deemed to have disapproved the Specifications or any revisions
thereof, Lessor shall have fourteen (14) days after a disapproval of the
Specifications or any revision thereof to resubmit a modification thereof.
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29.02. Lessor shall make a good faith effort to cause the Demised
Premises to be available for occupancy by the Lessee on or before January 2,
1990. Demised Premises are not available for occupancy by Lessee on or before
January 2, 1990, Lessor shall pay a penalty of $1,250.00 per day, which may be
offset against Leessee's first rent payment due under this lease, for each day
after January 2, 1990 that Leesee is unable to occupy the Demised Premises. If
the Demised Premises are not available for occupancy by the Lessee on or before
February 1, 1990, then the Lessee shall have the right to cancel this Lease by
written notice to the Lessor. The penalties and the right to cancel this Lease
which are provided for in this Article 28 shall
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48
not apply if the delay or delays in construction are a result of the acts of
Lessee's agents, employees, contractors, subcontractors or suppliers.
ARTICLE 30
HAZARDOUS WASTES/SUBSTANCES
30.01. The term "Hazardous Substances," as used in this Lease, shall
mean pollutants, contaminants, toxic or hazardous wastes, or any other
substances, (including, without limitation, asbestos and raw materials which
include hazardous constituents), the removal of which or the use of which is
restricted, prohibited or penalized by any "environmental law," which term
shall mean any Federal, State or local law, regulation, or ordinance relating
to pollution or protection of the environment. Lessee hereby agrees that (i) no
activity will be conducted on the Demised Premises by Lessee, its agents,
employees, sublessees, invitees or any other party entering the Demised
Premises with the consent or knowledge of Lessee during the term hereof that
will produce any Hazardous Substance, except for such activities that are part
of the ordinary course of Lessee's business activities (the "Permitted
Activities") provided said Permitted Activities are conducted in accordance
with all environmental laws; (ii) the Demised Premises will not be used by
Lessee, its agents, employees, sublessees, invitees or any other party entering
the Demised Premises with the consent or knowledge
- 46 -
49
of Lessee during the term hereof in any manner for the storage of any Hazardous
Substances except for the temporary storage of such materials that are used in
the ordinary course of Lessee's business (the "Permitted Materials") provided
such Permitted Materials are properly stored in a manner and location meeting
all Environmental Laws; (iii) no portion of the Demised Premises will be used
by Lessee, its agents, employees, sublessees, invitees or any other party
entering the Demised Premises with the consent or knowledge of Lessee during
the term hereof as a landfill or dump; (iv) Lessee will not during the term
hereof install any underground tanks of any type without the prior written
consent of Lessor, which shall not be unreasonably withheld provided that
Lessee complies with all applicable laws regarding such underground tanks.
Lessee shall remove any such underground tanks at the expiration of the term of
this Lease unless Lessee obtains Lessor's written consent to allow the
underground tank or tanks to remain on the Demised Premises after that date;
(v) Lessee will not during the term hereof cause any surface or subsurface
conditions to exist or to come into existence that constitute, or with the
passage of time may constitute, a public or private nuisance; (vi) Lessee will
not during the term hereof permit any Hazardous Substances to be brought onto,
stored, processed, disposed of on, released, discharged from (including ground
water contamination) or otherwise handled on the Demised Premises, except for
the
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50
Permitted Materials described below, and if so brought or found located
thereon, the same shall be immediately removed, with proper disposal, and all
required cleanup procedures shall be diligently undertaken pursuant to all
Environmental Laws. Lessee shall immediately notify Lessor should Lessee become
aware of any Hazardous Substance or other environmental problem or liability
with respect to the Demised Premises. If, at any time during or after the term
of the Lease, the Demised Premises is found to be so contaminated or subject to
said conditions, Lessee agrees to indemnify and hold Lessor (and any mortgagee
and trustee under any deed of trust or mortgage on the Demised Premises)
harmless from all claims, demands, actions, liabilities, costs, (including
reasonable attorney's fees), expenses, damages and obligations of any nature
arising from or as a result of the actions or omissions of the Lessee, its
agents, employees, sublessees, invitees or any other party entering the Demised
Premises with the consent or knowledge of Lessee during the term hereof, but
not further or otherwise. The foregoing indemnifications shall survive the
termination or expiration of this Lease.
ARTICLE 31
SIGNAGE
31.01. Lessee shall have the right, subject to Lessor's prior written
approval, which approval shall not be unreasonably withheld, to place on or in
the Demised Premises such signs
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51
conforming to all laws and municipal regulations as it deems necessary and
proper in the conduct of its business.
ARTICLE 32
PURPOSE
32.01. Lessee agrees that it shall not use or suffer the Demised Premises
to be used for any unlawful purposes or any purposes which violate any public or
private zoning, land use or other applicable covenants, restrictions,
regulations or ordinances. The Demised Premises leased hereunder are to be used
by Lessee for office, warehouse, light manufacturing of plastics and such other
purposes that are usual and normal in connection with Lessee's current business
operations, and no other purpose.
LESSOR:
CENTURY 21 ASSOCIATES
a Tennessee general partnership
BY: /s/ L.P. BECKER
-----------------------------
LESSEE:
SANTA FE PLASTIC CORPORATION
a California corporation
BY: /s/ D.G. STRICKLAND
-----------------------------
ATTEST: /s/ L.R. KNIPPLE
-------------------------
CORPORATE SECETARY
- 49 -
52
GUARANTY
The undersigned, KERR GLASS MANUFACTURING CORPORATION, a Delaware
corporation, hereby irrevocably guarantees to Lessor, its successors and
assigns, the full and due performance by the Lessee, and its successors
and assigns, all of the terms, obligations, covenants and agreements under
the foregoing Lease on the part of Lessee to be observed or performed
including the full and punctual payment by Lessee of all rent, and other
sums of money, as and when they become due and payable by Lessee as
provided in the Lease, during the full term of the Lease, including any
extensions or renewals thereof.
GUARANTOR:
KERR GLASS MANUFACTURING
CORPORATION
By: /s/ D.G. STRICKLAND
------------------------------------
Attest: /s/ L.R. KNIPPLE
--------------------------------
Corporate Secretary
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
Personally appeared before me, Carla E. Andrews, a Notary Public, D. G.
Strickland, with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained,
and who further acknowledged that he is the Sr. VP, Finance of the
Guarantor and is authorized by the Guarantor to execute this instrument on
behalf of the Guarantor.
Witness my hand, at office, this 29th day of Sept. 1989.
/s/ CARLA E. ANDREWS
-------------------------------
Notary Public
My Commission Expires:
Jan. 7th 1992
- - - ---------------------
[SEAL]
- 50 -
53
STATE OF TENNESSEE
COUNTY OF MADISON
Personally appeared before me, Teresa A. Dunn, a Notary Public, Larry P.
Becker, with whom I am personally acquainted and who acknowledged that
he executed the within instrument for the purposes therein contained, and
who further acknowledged that he is the Partner of the Lessor and is
authorized by the Lessor to execute this instrument on behalf of the
Lessor.
Witness my hand, at office, the 5th day of October, 1989.
/s/ TERESA A. DUNN
------------------------------
Notary Public
My Commission Expires:
3/21/93
- - - ---------------------
STATE OF CALIFORNIA
COUNTY OF LAS ANGELES
Personally appeared before me, Carla E. Andrews, a Notary Public, D. G.
Strickland, with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained,
and who further acknowledged that he is the Sr. VP Finance CEO of the
Lessee and is authorized by the Lessee to execute this instrument on
behalf on the Lessee.
Witness my hand, at office, this 29th day of Sept., 1989.
/s/ CARLA E. ANDREWS
------------------------------
Notary Public
My Commission Expires:
Jan. 7, 1992
- - - ---------------------
[SEAL]
- 51 -
54
Lying in Madison County, Jackson, Tennessee in Madison West Industrial
Park, and beginning at an iron pin set in the North margin of Lower
Brownsville Road, which point is the Southeast corner of this tract and
the Southwest corner of Metamora Plastics; thence, from the point of
beginning and with the North margin of Lower Brownsville Road, South 87
degrees 58 minutes West 583.69 feet to a point; thence, with a curve
having a radius of 40 feet for a length of 62.12 feet to a point in the East
margin of Industrial Park Road; thence, with the East margin of Industrial
Park Road, North 3 degrees 03 minutes west 892.48 feet to an iron pin set
at the Southwest corner of Tabuchi; thence, with the South line of
Tabuchi, North 87 degrees 58 minutes East 622.99 feet to an iron pin set
at the Northwest corner of Metamora Products; thence, with the West line
of Metamora Products, South 3 degrees 03 minutes East 931.78 feet to the
point of beginning containing 13.32 acres.
Included in the above description, but to be expressly excluded, is the
following described tract to be used for railroad purposes: BEGINNING at
the Northwest corner of above described tract at an iron pin set in the
East margin of Industrial Park Road, which point is the Southwest corner
of Tabuchi; thence, from the point of beginning and with South line of
Tabuchi, North 87 degrees 58 minutes East 90.7 feet to a point in the
East margin of railroad right-of-way; thence, South 3 degrees 03 minutes
East 931.78 feet to a point in the North margin of Lower Brownsville Road;
thence, with same, South 87 degrees 58 minutes west 51.41 feet to a
point; thence, with a curve having a radius of 40 feet in a Northwesterly
direction and along said curve for a distance of 62.12 feet to a point in the
East margin of Industrial Park Road; thence, with same, North 3 degrees
03 minutes West 892.48 feet to the point of beginning, containing 1.94
acres.
Description from survey of Tony M. Reasons, R.L.S., Tenn. Reg. No. 508.
Being a portion of the property conveyed to Madison County, Tennessee by
Deed of Hugh Pearson, et al, dated May 15, 1975, appearing of record in
Deed Book 313, page 321, in the Register's Office of Madison County,
Tennessee.
EXHIBIT "A"
- REAL PROPERTY DESCRIPTION -
55
OUTLINE SPECIFICATIONS
PROPOSED MANUFACTURING FACILITY
SCP CORPORATION
JACKSON, TENNESSEE
May 10, 1989
SUMMARY OF WORK:
The scope of work included in our proposal consists of the installation of
concrete floors, office finishes, outside improvements, mechanical and
fire protection systems to the existing building located on Lower
Brownsville Road in the Madison West Industrial Park.
The proposed facility shall consist of an existing building with a 100,000
S.F. manufacturing and warehouse area and a 4,800 S.F. office area.
The clear height of the building to the bottom of the steel structure is
24'-0" at the low or eaves side.
This building consists of a free standing steel frame with 8'-0" high block
masonry wainscot and 24 gauge prefinished siding for the perimeter
walls. The prefinished siding is lined with 2" thick vinyl faced insulation.
The block masonry wainscot and the office perimeter walls are finished
with "dryvit" synthetic plaster applied to plastic foam insulation. The
roofing for building is a 45 mil EPDM ballasted roof system. A 48" high
draft curtain will be provided dividing the building into 25,000 S.F. areas.
The draft curtains will be built using 28 gauge corrugated metal attached
to the truss girders.
Included within the manufacturing area is a shipping office with toilet
room and one set of remote toilet rooms, for the plant personnel, sized to
accommodate 115 employees working two shifts.
The plant toilet rooms will be located in the southwest corner of the
building adjacent to the lunchroom. They will have masonry perimeter
walls and a metal roof. The interior finish shall consist of ceramic tile
floor and wainscot, epoxy paint on walls above wainscot and a 2' x 4'
moisture resistant lay-in ceiling. Toilet partitions and toilet accessories
are included.
The interior side of the exterior masonry wainscot shall be painted. The
structural steel in the warehouse and manufacturing is to be painted.
The office finish allowance of $44,400 anticipates carpet floors, drywall
partitions finished with paint and vinyl wall covering, 2' x 4' lay-in
acoustical ceiling, doors and frames. The office rest room walls, finishes,
and accessories are a part of this allowance. The rest room plumbing and
plumbing fixtures are included in the base bid.
EXHIBIT "B"
- LESSOR'S WORK -
56
We have included nine shipping doors, eight levelers and shelters, and one
drive-in door. The nine shipping doors will be 8'-6" x 9'-0" metal sectional
vertical lift doors. The dock shelters will be Frommelt Model WG402 and
the dock levelers will be Rite Hite Model ST968 of 25,000 lb. capacity. The
one drive-in door will be 12'-0" x 14'-0" metal sectional vertical lift door.
The drives and parking will be asphalt paving. The truck drives will have
8" gravel base and 3 1.2" asphalt topping. The automobile parking will have
6" gravel base and 2" asphalt topping. We have provided for parking cf 80
cars. The eight loading doors will have a concrete apron slab extending 50'
from the building. The ninth loading door will have a 50' long ramp. A 24'
wide paved road will be provided around the building connecting the two
loading areas. A 500 S.F. concrete slab for pallet storage will be provided
adjacent to the north loading area.
The manufacturing area will have a 6" thick floor slab consisting 4,000
psi concrete reinforced with #3 reinforcing steel at 20" o.c. both ways.
The office area floor slab will be 4" thick with 4,000 psi concrete
unreinforced. We have not included any thickened slabs or equipment bases
for any production machines.
The chiller pad will be 6" thick with 4,000 psi concrete reinforced with
#3 reinforcing at 20" o.c. both ways. The chiller pad will have a 6' high
masonry wall on two sides and five 12' wide expanded metal gates.
The silo pad will be 72' long x 20' wide with a 72' long x 12' wide pump
pad along side making a 32' wide pad. The silo pad will be 3'-6" thick with
4,000 psi concrete and reinforced with #5's at 12" o.c. each way top and
#8's at 12" o.c. each way bottom. The pump pad will be 8" thick of 4,000
psi concrete and reinforced with #4 reinforcing at 12" o.c. both ways. The
silo and pump pads will be surrounded with a 6' high security fence with a
12' wide gate. The north concrete apron slab will extend across the 32'
width of the silo pad for truck access.
The 1,000 S.F. outside storage building will be an uninsulated pre-
engineered building with a 6" thick concrete floor slab. The building will
have a 14' clear height at the eaves and will have a 12' wide x 14' high
door.
HVAC:
The office area will be air conditioned utilizing two 10 ton gas pack rooftop
units. This should provide a comfort level of 78 degrees Fahrenheit in the
summer and 72 degrees Fahrenheit in the winter.
Plant air conditioning will be accomplished using 5 - 60 ton rooftop units
placed two over the warehouse and three over the manufacturing. Air will
be distributed utilizing factory concentric duct packages. The assumed
heat gains are based on the 200 f.c. lighting required in the injection
molding area and 500 square feet per ton in the remaining area of the
plant. A thru-the-wall unit will be furnished in the receiving office. The
plant toilet rooms and lunchroom will be air conditioned with a separate
unit.
- 2 -
57
PLUMBING:
The office will be provided with plumbing fixtures to meet the code
requirements of fifteen people. Copper water piping and PVC sewer piping
will be furnished as required for their connection. A drinking fountain and
mop sink will be furnished in the office rest room complex. Drinking
fountains will also be provided near the plant rest rooms, near the
shipping office, and near the injection molding machines.
Plumbing fixtures of standard quality will be furnished for a unisex rest
room in the receiving area. Finished rest room facilities will be furnished
for 60 people on one shift. We will also provide one floor drain at the rear
of the building for an air compressor to be furnished by others at a later
date. We will provide a two inch water service to the building and
distribute it to rest rooms and drinking fountains. A two inch valved
connection is provided for future use. All sewer piping will be PVC and all
water piping will be copper. We will provide hose bibbs at intervals
around the perimeter of the building and at the loading docks.
FIRE PROTECTION:
We have included a new 8" tap to the 16" city main on either Lower
Brownsville Road or Industrial Road. An above ground backflow preventer
will be provided in a weather resistant enclosure. Three hydrants will be
provided equally spaced along the north and east sides of the building.
Each of the three sprinkler lead-ins will have a post indicator valve
located approximately 40' from the building.
The water supply in the Industrial Park is more than adequate to supply
high density hydraulically calculated sprinkler systems. The pressures and
supply at Madison West Industrial Park are 95 p.s.i. static, 93 p.s.i.
residual flowing at 2,325 gallons per minute. The manufacturing area will
be protected with a density of 0.18 GPM/S.F over the most remote 3,000
S.F. The warehouse will have a primary density of 0.66 GPM/S.F. over the
most remote 1,000 S.F. and a secondary density of 0.40 GPM/S.F. over the
most remote 3,725 S.F.
The offices will be protected with a density of 0.12 GPM/S.F. over the
most remote 3,000 S.F.
ELECTRICAL:
Our proposal does not include any electrical work. All electrical work will
be performed by SCP Corporation.
- 3 -
58
[LOGO] H and M CONSTRUCTION CO., INC.
INTERNAL CORRESPONDANCE
FROM: DON DANIELS DATE: 5-24-89
TO: DAVID FITE
COPY TO: CURTIS CAIN AND RICHARD FITE
SUBJECT: SCP CORPORATION
JACKSON, TN
The following is a recap of the changes requested by SCP Corporation
during our meeting on April 19, 1989.
1. Move toilet rooms to southwest corner of the building and add a
34' long x 18' wide lunchroom. Included within this change will
be the installation of a 32' long x 5' high window in the
existing south wall of the lunchroom. A separate 3 ton air
conditioning unit will be provided for this lunchroom.
Add $40,327 Accepted
2. Add a 3' x 7' glass door in the west wall of the office building
to match the existing door in the east wall of the office
building. Included within this change is a 4' wide x 80' long
sidewalk between the office building and the employees entrance.
Add $6,789 Accepted
3. Change the block pilasters at the chiller pad from 4' to 2'
making the chiller enclosure 72' x 20'. The chiller pad will
remain 84' x 20'. Included within this change is changing the
gates from wood to expanded metal.
No change Accepted
4. Move the shipping office from its present location near Column
Line 0-11 to a new location near Column Line G-11.
No Change Accepted
- EXHIBITED "B" - CONTINUED -
59
May 24, 1989
Page 2
5. Extend the truck asphalt paving at the north loading area to the
west edge of the silo pad so that trucks can back up to silos.
Add $5,500 Accepted
6. Extend truck asphalt paving from north drive to the 12' x 14'
door on the north side of the building.
Add $3,496 Accepted
7. Provide ladder to roof. Ladder may be interior or exterior.
a. Exterior Ladder
Add $2,396 Not Accepted
b. Interior ladder, including roof hatch.
Add $3,266 Accepted
Total $59,378
SCP has also asked us to paint the structure for an additional
amount of $55,000, as stated in our Outline Specifications dated
March 8, 1989.
They have also agreed to changing the HVAC system to 5 - 60 ton
units for the additional amount of $25,000.
Therefore, the new budget will be as follows:
Budget (my memo to you dated 4-4-89) $1,763,863
Total Requested Changes (Item #1 - 7 above) 59,378
Add Painting Deck 55,000
Add for Changing HVAC to 5 - 60 ton Units 25,000
Revised Budget $1,903,241
In addition to the above, the following additional clarifications
were offered in response to comments by SCP Corporation.
1. We do not include roof walkway treads to the HVAC units.
2. We do not include any electrical work in our proposal.
3. The office finish allowance does not include HVAC, plumbing or
electrical work. The HVAC and plumbing cost for the office is
in our base price.
DD:ef
60
3262N
EXHIBIT C - LESSEE'S WORK
1-1200 MLO 277/4BOV PANEL WITH 4-175A/3P BREAKERS, 2-50A/3P BREAKERS, AND
7 13A/3P BREAKERS. THIS PANEL IS LOCATED ALONG COLUMN LINE G NEAR THE
CHILLER PAD.
1-800A MLO 277/4BOV PANELS ONE WEATHER PROOF LOCATED ON ROOF AT
COLUMN 5D FOR AIR CONDITIONING USE.
2-400 A MLO 277/4BOV LOCATED ALONG COLUMN LINE G NEAR COLUMN 6 FOR
PLANT AND WAREHOUSE LIGHTING USE AND A SECOND LOCATED NEAR THE OFFICE
ALONG COLUMN LINE A AND BETWEEN COLUMNS 5 & 6.
1-100 A MLO 277/ABOV LOCATED NEAR OFFICE ALONG COLUMN LINE A FOR USE IN
OFFICE LIGHTING AND SITE LIGHTING.
2-100 A MB 120/208BV PANELS ONE LOCATED NEXT TO EACH LIGHTING PANEL FOR
RECEPTACLES AND POWER.
- - - -FEEDERS FOR THE ABOVE PANELS ARE AS FOLLOWS 3000A - B RUNS OF 3 1/2" PVC
CONDUIT WITH 4-500 MCM THW WIRE FOR EACH. 1200A - 3 RUNS 3" PVC CONDUIT
WITH 3-400 MCM THW WIRE. 400A NEAR OFFICE 1 RUNS OF 3 1/2 PVC WITH 4-500
MCM WIRE. ALUMINUM CONDUIT WITH 3-500 MCM WIRE. ALL UNDERGROUND FEEDERS
SHALL BE IN PVC CONDUIT AND ALL OVERHEAD FEEDERS SHALL IN RIGID ALUMINUM
CONDUIT.
- - - -120 VOLT CONVENIENCE RECEPTACLES ARE INCLUDED AT EACH MAN DOOR IN
WAREHOUSE AND MANUFACTURING. IN ADDITION THE DOCK DOORS HAVE TWO
DUPLEX RECEPTACLES BETWEEN EACH SET OF DOORS. RECEPTACLES SHALL BE
INSTALLED USING USING EMT CONDUIT.
- - - -ELECTRICAL CONNECTION ARE PROVIDED TO THE FOLLOWING EQUIPMENT:
3-UNIT HEATERS
2-EXHAUST FANS
5-60 TON ROOF TOP AIR CONDITIONING UNITS
1-2 TON ROOF TOP AIR CONDITIONING UNIT FOR CAFETERIA
LIGHTING:
- - - -LIGHTING LEVEL THROUGHOUT FACTORY ACHIEVED USING HUGBELL 1000 WATT HI
BAY HIGH METAL HALIDE FIXTURES SPACED AS PER DRAWINGS. A LEVITON SWITCHING
SYSTEM HAS BEEN PROVIDED AT THE EMPLOYEES ENTRANCE. WE DO NOT PROVIDE
THESE FIXTURES.
- - - -DOCK LIGHTS ARE INCLUDED ON ALL DOCK DOORS.
EXHIBIT "C"
LESSEE'S WORK
61
- - - -EMERGENCY LIGHTING USING 2-HEAD BATTERY PACK FIXTURES IS INCLUDED SPACED
APPROXIMATELY 1 EVERY 12,000 S.F.
- - - -EXIT LIGHTS ARE PROVIDED FOR EVERY EXTERIOR MAN DOOR
- - - -LIGHTING SHALL BE INSTALLED USING EMT CONDUIT.
SITE:
- - - -4 - 30 FOOT PAINTED STEEL POLES WITH 400 WATT METAL HALIDE FIXTURES HAVE
BEEN PROVIDED FOR PARKING LOT LIGHTING.
- - - -SECURITY LIGHTING ON PERIMETER OF BUILDING IS PROVIDED USING 9-250 WATT
METAL HALIDE WALL PACKS.
- - - -CHILLER PAD LIGHTING WAS PROVIDED USING 3-250W METAL HALIDE WALL PACKS
AND 4-175 WATT STANCHION MOUNTED FLOORS.
OFFICE:
- - - -WE PROVIDE A MINIMAL LIGHTING LEVEL (70-300 F.C.) FOR THE OFFICE AND A
MINIMUM NUMBER OF RECEPTACLES.
62
[LETTERHEAD, KERR]
June 27, 1989
Mr. Ken Baye
Willkie, Farr & Gallagher
One Citicorp Center
153 East 53rd. Street
New York, New York 10022
RE: Jackson, Tennessee Environmental Indemnification
Dear Ken:
Attached for your information and files is a copy of the Environmental
Indemnification signed by the County of Jackson, Tennessee.
Very truly yours,
Larry R. Knipple
Corporate Secretary
LRK/jtg:55
Attachment
63
[LETTERHEAD, MADISON COUNTY]
June 26, 1989
Madison County Commission
Jackson, Tennessee
SCP Corporation
9601 John Street
Santa Fe Springs, CA 90670
RE: Environmental Indemnification;
Century 21 Associates/SCP Corporation Lease
Gentlemen:
Reference is made to the lease (the "Lease") dated May ___, 1989, between
Century 21 Associates, as landlord (Century 21) and SCP Corporation, as tenant,
("SCP") for the real property described on Exhibit A hereto together with the
improvements thereon (the "Property").
In consideration for SCP's lease of the Property from Century 21 pursuant to
the Lease and other good and valuable consideration, the receipt of which is
hereby acknowledged, the undersigned, being the prior fee owner of the
Property, hereby indemnifies SCP from and holds SCP harmless against all costs,
legal expenses, liability, and other expenses, claims by any party or
governmental entity, whether grounded in statutory or common law, for personal
injury, wrongful death, property damage, economic loss, abatement, remediation,
damage to natural resources, response costs, civil penalty, or any other claim,
demand or notice arising out of or relating to:
(i) the generation, presence, handling, treatment, storage or disposal of
any solid waste, hazardous waste, hazardous substance, toxic
substance, contaminant, or pollutant, or any other environmental
condition, on, at or beneath the property, provided such generation,
presence, handling, treatment, storage or disposal occurred prior to
the commencement of the Lease or due to the acts of the undersigned or
its agents or employees; or
64
SCP Corporation
June 26, 1989
Page Two
(ii) the generation, handling, transportation, treatment, storage, or
disposal of any solid waste, hazardous waste, hazardous substance,
toxic substance, contaminant, or pollutant, from the property to or
at another facility, site, or property, provided such generation,
handling, transportation, treatment storage, or disposal occurred
prior to the commencement of the Lease or due to the acts of the
undersigned or its agents or employees.
Sincerely,
Madison County Commission
By: /s/ J. ALEX LEECH
--------------------------------
J. ALEX LEECH, County Executive
Madison County, Tennessee