EXHIBIT 10.31
FIRST AMENDMENT TO OPERATING LEASE
THIS FIRST AMENDMENT TO OPERATING LEASE is entered into as of the 30th
day of November, 1990 between R/K VENTURES UNIT I LIMITED PARTNERSHIP, an
Arizona limited partnership ("Landlord"), and XXXXX CONTAINER PRODUCTS GROUP,
INC. (formerly named WMF Container Corporation d/b/a Xxxxxxxx Industries), a
Delaware corporation ("Tenant").
RECITALS
--------
A. Landlord and Tenant are parties to an Operating Lease dated as of
August 20, 1987 (the "Original Lease") relating to the lease by Landlord to
Tenant of certain premises located in Maricopa County, Arizona, more
particularly described therein.
B. As contemplated by the Original Lease, the IDB was issued. On
October 27, 1988, Xxxxx Paper Company, a Pennsylvania corporation, acquired all
the outstanding capital stock of the Tenant, and thereafter the name of Tenant
was changed to its present name. As a consequence of such acquisition, it became
necessary to prepay the IDB in order to avoid loss of its tax-exempt status.
Landlord obtained replacement financing on or about April 19, 1989, and Landlord
and Tenant adjusted the Rent.
C. To confirm the Rent payable by Tenant and certain other matters,
Landlord and Tenant desire to amend the Original Lease as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
AGREEMENT
---------
1. Definitions. All capitalized terms used herein and not defined
-----------
herein have the meanings set forth in the Original Lease.
2. Commencement Date. Landlord and Tenant agree that the
-----------------
Commencement Date was June 1, 1988 and that the term shall expire August 31,
1998.
3. Rent. Landlord and Tenant confirm that paragraph 4(a) of the
----
Original Lease is and has been inapplicable, and it is hereby is deleted. The
following Rent provisions shall apply in lieu of the provisions contained in
paragraph 4(b) of the Original Lease:
(a) For the first through eleventh months following the
Commencement Date (i.e. through April 30, 1989), Tenant's Rent was as set forth
in paragraph 4(b)(i) of the Original Lease plus an adjustment in April 1989 to
take account of the Landlord's financing accomplished in that month. Landlord
confirms that all such Rent has heretofore been paid and received by Landlord.
(b)(i) For the twelfth through the thirtieth months following
the Commencement Date (i.e., through November 30, 1990), Tenant's Rent was
calculated as follows:
($.2797) (R) + ($.0385) + (BC 1) = AMR
------------ --------------
(.0954) (169,840) (12)
Landlord confirms that all such Rent has heretofore been paid and
received by Landlord.
(ii) For the thirty-first through the thirty-ninth months
following the Commencement Date, Tenant's Rent will be calculated as follows:
($.2797) (R) + ($.0385) + $ (BC 1) = AMR
------------ --------------
(.0954) (169,840) (12)
(iii) For the fortieth through sixty-third months following
the Commencement Date, Tenant's Rent will be calculated as follows:
($.2810) (R) + ($.0705) + $ (BC 1) = AMR
------------ --------------
(.0954) (169,840) (12)
(iv) For the sixty-fourth through ninety-ninth months
following the Commencement Date, Tenant's Rent will be calculated as follows:
($.2819) (R) + ($.0935) + $ (BC 1) = AMR
------------ -------------
(.0954) (169,840) (12)
(v) For the one hundredth through one hundred twenty-third
months following the Commencement Date, Tenant's Rent will be calculated as
follows:
($.2835) (R) + ($.1315) + $ (BC 1) = AMR
------------ --------------
(.0954) (169,840) (12)
(c) Tenant acknowledges that additional Rent may become payable
pursuant to the Indemnification Agreement Regarding Determination of Taxability
between the parties dated April 21, 1989.
-2-
(d) If Tenant exercises the options to extend the term as
provided in Section 18(a) of Original Lease, the Rent during the first option
period and the second option period shall be as follows in lieu of the Rent
described in Section 18(a)(i), (ii), and (iii) of the Original Lease:
(i) Rent during the first option period:
(A) For the one hundred twenty-fourth through one
hundred fifty-ninth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2844) (R) + ($.1513) = AMR
-------------
(.0954)
(B) For the one hundred sixtieth through one hundred
eighty-third months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2857) (R) + ($.1850) = AMR
-------------
(.0954)
(C) For the one hundred eighty-fourth through two
hundred nineteenth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2866) (R) + ($.2100) = AMR
-------------
(.0954)
(D) For the two hundred twentieth through two
hundred forty-third months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2883) (R) + ($.2475) = AMR
-------------
(.0954)
(ii) Rent during the second option period:
(A) For the two hundred forty-fourth through two
hundred seventy-ninth months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2892) (R) + ($.2786) = AMR
-------------
(.0954)
(B) For the two hundred eightieth through three
hundred third months following
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the Commencement Date, Tenant's Rent will be
calculated as follows:
($.2905) (R) + ($.3299) = AMR
------------
(.0954)
(C) For the three hundred fourth through three
hundred thirty months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2915) (R) + ($.3651) = AMR
-------------
(.0954)
(D) For the three hundred Fortieth through
three hundred sixty-third months following the
Commencement Date, Tenant's Rent will be calculated
as follows:
($.2931) (R) + ($.4244) = AMR
-------------
(.0954)
Definitions:
"R" is the rate of interest announced by First Interstate Bank of
Arizona, N.A. from time to time as its "prime rate" plus 1%, adjusted to reflect
a thirty (30) year amortization constant. For purposes of calculation of Rent
payable in any month, the prime rate shall be determined as of the first day of
each and every month in which Rent is payable. In the event that the prime rate
changes in the middle of a month, such change shall effect an adjustment of the
Rent payable as of the effective date of the change in the prime rate, and shall
be effected by an appropriate adjustment, upwards or downwards, in the Rent
payable for the following month. In the case of a change in the last month of
the term, any additional payment by Tenant or refund by Landlord, as
appropriate, shall be made within 15 days after the last day of the term.
"BC 1" is the monthly amortization amount of the acquisition costs
(i.e., attorneys' fees, trustee's fees, organization fees, etc.) in obtaining
the IDB, based on a level amortization over ten (10) years, and interest on the
unamortized portion at R. Such acquisition costs were originally $127,870.44,
and the unamortized portion at November 1, 1990 was $92,705.97.
"AMR" is the per square foot monthly Rent payable during the
designated periods.
4. Refinancing. Landlord agree if requested by Tenant to cooperate
-----------
with Tenant at any time or from time to time
-4-
in order to obtain refinancing at a rate of interest lower than R and that, in
the event any such refinancing is completed, Tenant's Rent will be reduced by an
amount equal to such lower interest cost; provided, however, that Tenant shall
--------- --------
pay all costs incurred by Landlord in connection with such refinancing. The
parties shall execute an amendment to the Lease upon the completion of the
refinancing to reflect the adjustment to Tenant's Rent as a result thereof for
the balance of the term of the Lease or, if short, for and during the term of
the financing.
5. Delay Damages. Tenant confirms that no claims against Landlord for
-------------
Delay Damages under Section 2(b)(vi) of the Original Lease exist in connection
with the construction of the Parcel 1 Improvements.
6. Process Equipment. Tenant elected to have Landlord install the
-----------------
Process Equipment pursuant to Section 2(d)(iv) of the Original Lease. Landlord
confirms that it has received full payment in respect of the Process Equipment,
and no Rent or other payments are due from Tenant in respect thereof. The
Process Equipment shall be the property of Tenant and subject to the provisions
of Section 7(c) of the Original Lease.
7. Notices. The addresses for notices contained in Section 25 of the
-------
Original Lease shall be changed to the following addresses, subject to the right
of either party to modify its address in the manner specified in Section 25.
If from Tenant to Landlord:
R-K Ventures Unit I Limited Partnership
c/o Xxxxxx X. Xxxx Company
0000 Xxxxx XxXxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
If from Landlord to Tenant:
Xxxxx Container Products Group, Inc.
0000 Xxxx Xxxxxxxx
Xxxxxxx, XX 00000
Attention: President
with a copy to the Controller at the above address.
8. Confirmation. The parties hereto hereby confirm that the foregoing
------------
constitutes an amendment to the Original Lease
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and that the Original Lease, as so amended, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Operating Lease as of the day and year first above written.
"LANDLORD"
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited
partnership
By /s/ Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx, its general partner
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC. an
Arizona corporation, its general partner
By /s/ Xxxxxx X. Xxxx
-----------------------------------
Its President
-------------------------------
"TENANT"
XXXXX CONTAINER PRODUCTS GROUP, INC.
a Delaware corporation
By /s/ X. X. Xxxx Xx.
-----------------------------------
Its Treasurer
-------------------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 1st day of March 1991, before me, the undersigned Notary Public,
personally appeared XXXXXX X. XXXX, who acknowledged himself to be the general
partner of R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxx X. Xxxxxxx
March 22, 1993 ---------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 6th day of March, before me, the undersigned Notary Public,
personally appeared Xxxxxx X. Xxxx, who acknowledged himself to be the President
of KITE FAMILY COMPANIES, INC., an Arizona corporation, general partner of R/K
VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership, and
acknowledged that he, as such officer, being authorized so to do, executed the
foregoing instrument on behalf of the limited partnership for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxx X. Xxxxxxx
March 22, 1993 ---------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
STATE OF PENNSYLVANIA )
)ss.
County of Delaware )
On this 14th day of March, 1991, before me, the undersigned Notary Public,
personally appeared Xxxxxx X. Xxxx, who acknowledged himself to be the
Treasurer of XXXXX CONTAINER PRODUCTS GROUP, INC., a Delaware corporation, and
acknowledged that he, as such officer of the corporation, being authorized so to
do, executed the foregoing instrument on behalf of the corporation for the
purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Xxxxxxxx X. XxXxxxx
---------------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
RELEASE AND NOVATION
This Agreement is made as of this 6th day of December, 1991, by and
between R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited Partnership
("Ventures"), and XXXXX PAPER COMPANY, a Pennsylvania corporation ("Xxxxx") for
the benefit of its wholly owned subsidiary, XXXXX CONTAINER PRODUCTS GROUP,
INC., a Delaware corporation ("SCPG").
WHEREAS SCPG has entered into an INDEMNIFICATION AGREEMENT REGARDING
DETERMINATION OF TAXABILITY ("Agreement") for the benefit of Ventures, a copy of
which is attached as Attachment A hereto;
AND WHEREAS Xxxxx is in the process of selling all of its shares in SCPG to
a third party, and is desirous of securing the release of SCPG's obligations
under the Agreement;
AND WHEREAS Ventures is desirous of securing an indemnity from a
financially secure party;
NOW THEREFORE, the parties hereby agree as follows:
1. Ventures, for itself, its successors and assigns, hereby releases
and forever discharges SCPG, its successors and assigns, from any and all
obligations, liabilities, claims or damages, based upon or arising under the
Agreement.
2. In consideration of Ventures' release of SCPG, Xxxxx, for itself,
its successors and assigns, hereby agrees to assume responsibility for all
obligations, liabilities, claims or damages, based upon or arising under the
Agreement, to the same extent as if Xxxxx were the original party to the
Agreement.
3. The parties acknowledge that SCPG is a third party beneficiary of this
Release and Novation, and that said Release and Novation may be enforced
directly by SCPG.
IN WITNESS WHEREOF, the parties have executed the said Release and Novation
with the intent of being legally bound.
ACCEPTED: ACCEPTED:
R/K Ventures Xxxxx Paper Company
Unit I Limited Partnership
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------- -------------------------------
Xxxxxx X. Xxxx
Title: General Partner Title: Xxxxxx X. Xxxx, Xx.
------------------------- ----------------------------
Assistant Treasurer
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC., an
Arizona corporation, its general partner
By /s/ Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx
Title: President
-------------------------
2
ATTACHMENT A
------------
INDEMNIFICATION AGREEMENT REGARDING DETERMINATION OF TAXABILITY
---------------------------------------------------------------
THIS INDEMNIFICATION AGREEMENT REGARDING DETERMINATION OF TAXABILITY
("Indemnity Agreement") is made this 21st day of April, 1989, by XXXXX CONTAINER
PRODUCTS GROUP, INC., a Delaware corporation ("Xxxxx container"), in favor of
R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership
("Ventures").
I. RECITALS:
--------
1.1 Pursuant to a resolution of the Industrial Development Authority of
the City of Xxxxxxxx, Arizona (the "XXX") adopted on October 1, 1987, between
the XXX and First Interstate Bank of Arizona, N.A., ("First Interstate") as
Trustee, the XXX issued its $5,800,000.00 Industrial Development Revenue Bonds,
Series 1987(R/K Ventures Unit I Limited Partnership Project) dated October 1,
1987 (the "Bonds").
1.2 The Bonds were issued as one fully registered bond in the principal
amount of $5,800,000.00 and were sold to First Interstate as Purchaser
("Purchaser") pursuant to a Bond Purchase Contract dated December 11, 1987,
between the XXX, Ventures and Purchaser. Simultaneously with the issuance of the
Bonds, an opinion of the law firm of O'Connor, Cavanagh, Anderson, Westover,
Xxxxxxxxxxxxx & Xxxxxxxx ("Bond Counsel") was delivered to Purchaser to the
effect that, with certain exceptions, the interest received on the Bonds is not
includable in the gross income of registered owners of the Bonds for purposes of
federal and State of Arizona income taxation. The delivery of such opinion and
the continued status of the Bonds as "tax exempt" was a material inducement for
the Purchaser's actual purchase of the Bonds.
1.3 The proceeds from the sale of the Bonds were loaned by the XXX to
Ventures (the "Loan") pursuant to a Loan Agreement (the "Loan Agreement") dated
as of October 1, 1987, between the XXX and Ventures. The purpose of the Loan was
to finance all or a portion of the cost of the acquisition, construction and
equipping of a manufacturing facility (the "Project") located within the
boundaries of the City of Xxxxxxxx, Arizona, to be owned by Ventures.
1.4 The Loan is evidenced by a Promissory Note (the "Note") dated
December 11, 1987, made by Ventures, payable to the order of the XXX in the
principal amount of $5,800,000.00 and is secured by a Construction Deed of
Trust and Assignment of Rents (the "Deed of Trust") dated as of December 11,
1987, executed by Ventures, as trustor, for the use and benefit of the XXX, as
beneficiary, recorded December 11, 1987, at Recorder's No. 87-736740, re-
recorded December 14, 1987, at Recorder's No. 87-739244, records of Maricopa
County, Arizona, and encumbering the Project.
1.5 To secure the payment to Purchaser of the principal of and interest on
the Bonds, the XXX assigned its interest in the Loan Agreement, the Note and the
Deed of Trust to Purchaser pursuant to an Assignment of Deed of Trust and
Request for Special Notice dated December 11, 1987, and recorded December 11,
1987, at Recorder's No. 87-736740, re-recorded December 14, 1987, at Recorder's
No. 87-739244, records of Maricopa County, Arizona.
1.6 The Project was leased to WMF Container Corporation, a Delaware
corporation, d/b/a Xxxxxxxx Industries ("WMF"), by an Operating Lease (the
"Lease") dated August 20, 1987, between Ventures and WMF.
1.7 Xxxxx Container has advised Ventures that Xxxxx Paper Company, a
Pennsylvania corporation ("Xxxxx"), acquired all of the stock of WMF, on
October 27, 1988, and that the name of WMF was changed to "Xxxxx Container
Products Group, Inc." Xxxxx Container has further informed Ventures that as a
result of the stock sale to Xxxxx the $40 million limit provided in the Internal
Revenue Code applicable to small issue industrial development bonds would be
exceeded.
1.8 Pursuant to the provisions of certain documents executed in connection
with the Bonds, including Section 3.2(b) of the Loan Agreement, Ventures agreed,
in the event of a Determination of Taxability (as defined in the Loan
Agreement), to pay interest on the Loan at a higher rate of interest and to pay
any Additions to Tax (as defined in the Loan Agreement) paid or incurred by any
holder of the Bonds. Such obligation survives the termination of the Loan
Agreement, the payment of the Bonds, and the payment of the Note. Consequently,
Ventures would like to prepay the Loan and effect a redemption of the Bonds, and
has requested that First Interstate make a loan to Ventures sufficient in amount
to do so. As an accommodation to Ventures, First Interstate has agreed to and is
contemporaneously herewith making a loan (the "New Loan") to Ventures to pay the
Loan.
-2-
1.9 Ventures has requested the New Loan in an effort to avoid any
Determination of Taxability of the Bonds with the concurrence of Xxxxx
Container.
II. AGREEMENT:
---------
NOW, THEREFORE, in consideration of Ventures' agreement to seek the New
Loan, Xxxxx Container agrees as follows:
2.1 Notwithstanding the redemption of the Xxxxx, Xxxxx Container agrees
that its undertaking contained in Section 4(b) of the Lease pertaining to loss
of tax-exempt status shall remain in effect and shall include loss of tax-exempt
status arising from the purchase of the stock of Xxxxx Container (then WMF) by
Xxxxx.
2.2 For purposes of this Agreement and the Lease, "loss of tax-exempt
status" shall mean a "Determination of Taxability" as defined in the Loan
Agreement. The increased Rent referred to in Section 4(b) of the Lease shall be
equal to (a) any additional interest payable retroactively by Ventures to the
Purchaser under Section 3.2(b) of the Loan Agreement, such interest being
payable from the date interest on the Bonds became subject to federal income
taxation at a rate equal to the Prime Rate (as defined in the Loan Agreement)
plus 1% plus (b) any Additions to Tax (as defined in the Loan Agreement) payable
by Ventures to the Purchaser under Section 3.2 of the Loan Agreement. Such
increased Rent shall be payable at such time as such amounts are payable by
Ventures to the Purchaser. Ventures shall promptly notify Xxxxx Container of any
demand by Purchaser for payment of additional amounts by reason of a
Determination of Taxability. In the event that Xxxxx Container fails to pay
amount due hereunder to Ventures, and, as a result thereof, Ventures is required
to pay additional amounts to Purchaser pursuant to Section 10.5 of the Loan
Agreement, Xxxxx Container shall reimburse Ventures for such additional amounts.
2.3 This Indemnity Agreement and the Lease set forth the entire
agreement of Xxxxx Container and Ventures with respect to the subject matter
hereof. No modification or waiver of any provision of this Indemnity Agreement
or any right of Ventures hereunder and no release of Xxxxx Container hereunder
shall be effective unless in a writing executed by an authorized representative
of Ventures. The indemnification provided to Ventures hereby is in addition to
the indemnifications or other agreements that currently exist and are provided
under the Lease.
-3-
2.4 This Indemnity Agreement shall be binding upon all successors and
assigns of Xxxxx Container and shall inure to the benefit of all successors and
assigns of Ventures.
2.5 This Indemnity Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona.
XXXXX CONTAINER PRODUCTS GROUP, INC.
a Delaware Corporation
By: /s/ Xxxxxx X. Xxxx, Xx.
--------------------------
Its: Treasurer
--------------------
Accepted:
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited
partnership
By /s/ Xxxxxx X. Xxxx
---------------------------------------
Xxxxxx X. Xxxx, its general partner
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC. an
Arizona corporation, its general partner
By /s/ Xxxxxx X. Xxxx
---------------------------------------
Its President
-------------------------------
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OPERATING LEASE
between
R-K VENTURES UNIT I LIMITED PARTNERSHIP,
an Arizona Limited Partnership,
as Landlord
and
WMF CONTAINER CORPORATION,
a Delaware corporation dba
XXXXXXXX INDUSTRIES,
as Tenant
August 20, 1987
City of Xxxxxxxx, County of Maricopa, State of Arizona
TABLE OF CONTENTS OF OPERATING LEASE
PARAGRAPH PAGE
--------- ----
1. Lease of Premises.............................................. 1
2. Construction of Parcel 1 Improvements.......................... 1
(a) Plans.................................................... 1
(b) Development Schedule..................................... 3
(c) Excusable Delay.......................................... 5
(d) Process Equipment........................................ 6
(e) Completion of Construction............................... 7
(f) Possession............................................... 7
(g) Discharge of Liens....................................... 9
(h) Changes to Plans......................................... 9
(i) Surety Bonds............................................. 10
(j) Inspection Reports....................................... 10
(k) Early Entry.............................................. 10
(l) Quality of Construction.................................. 10
(m) Punch-List............................................... 10
(n) Nondisclosure of Process Equipment....................... 11
(o) Contractor............................................... 11
(p) Fire Protection Systems.................................. 11
3. Term........................................................... 12
4. Rent........................................................... 12
(a) Payment.................................................. 12
(b) Industrial Development Bonds............................. 13
(c) Warehouse Rent........................................... 14
(d) Due and Payable.......................................... 14
(e) Pro Rata Rent............................................ 14
5. Use............................................................ 15
(a) General.................................................. 15
(b) Compliance with Law...................................... 15
6. Permitted Exceptions; Landlord's Warranties
and Representations; Quiet Enjoyment........................... 15
(a) Permitted Exceptions..................................... 15
(b) Landlord's Warranties and Representations................ 15
(c) Quiet Enjoyment.......................................... 16
7. Maintenance and Repairs; Surrender; Trade Fixtures............. 17
(a) Tenant's Maintenance..................................... 17
(b) Landlord's Obligations................................... 17
(c) Surrender; Removal of Trade Fixtures..................... 17
(d) Depreciation; Repair of Damages.......................... 17
(e) Insurance................................................ 18
(f) Right of Entry........................................... 18
8. Alterations and Additions...................................... 18
PARAGRAPH PAGE
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9. Insurance ........................................................... 18
(a) General Liability .............................................. 18
(b) Extended Coverage .............................................. 18
(c) Landlord's Insurance ........................................... 19
(d) Form ........................................................... 19
(e) Evidence ....................................................... 19
(f) Waiver of Subrogation .......................................... 19
(g) Proceeds ....................................................... 19
(h) Compliance ..................................................... 20
(i) Tenant's Contents .............................................. 20
(j) Worker's Compensation .......................................... 20
(k) Blanket-Policy ................................................. 20
(l) Rent Abatement Insurance ....................................... 20
10. Indemnification ..................................................... 20
(a) Tenant ......................................................... 20
(b) Landlord ....................................................... 21
11. Damage or Destruction ............................................... 21
(a) Landlord's Repair .............................................. 21
(b) Abatement ...................................................... 21
(c) Time for Completion ............................................ 22
(d) Major Damage ................................................... 22
(e) Escrow of Proceeds ............................................. 22
(f) Damage Near End of Term ........................................ 23
12. Property Taxes ...................................................... 23
(a) Payment ........................................................ 23
(b) Definition ..................................................... 23
(c) Separate Assessment ............................................ 24
(d) Personal Property .............................................. 24
(e) Declaration .................................................... 24
(f) Contest ........................................................ 24
(g) Lump-Sum Assessments ........................................... 24
13. Eminent Domain ...................................................... 25
(a) Total Taking ................................................... 25
(b) Partial Taking ................................................. 25
(c) Restoration .................................................... 25
(d) Awards ......................................................... 26
(e) Unsafe Premises ................................................ 26
14. Utilities ........................................................... 26
15. Assignment and Subletting ........................................... 26
(a) No Consent Required ............................................ 26
(b) Notices ........................................................ 27
16. Conveyance by Landlord .............................................. 27
ii
PARAGRAPH PAGE
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17. Access to Premises ............................................... 27
(a) Prior Notice ................................................ 27
(b) Accompanied by Tenant ....................................... 27
(c) Secure Areas ................................................ 27
18. Options to Extend ................................................ 28
(a) Grant of Options; Rent ...................................... 28
(b) Exercise .................................................... 29
(c) Amendments .................................................. 30
19. Parcel 2 ......................................................... 30
(a) Inclusion of Parcel 2 in Lease .............................. 30
(b) Construction of Parcel 2 Improvements ....................... 31
(c) Rent ........................................................ 32
(d) Part of Premises ............................................ 34
(e) Lease Extension ............................................. 34
(f) Amendment ................................................... 34
20. Parcel 3 ......................................................... 34
(a) Inclusion of Parcel 3 in Lease .............................. 34
(b) Construction of Parcel 3 Improvements ....................... 36
(c) Rent ........................................................ 37
(d) Part of Premises ............................................ 38
(e) Lease Extension ............................................. 38
(f) Amendment ................................................... 39
(g) Condition Precedent ......................................... 39
21. Tenant's Default; Remedies ....................................... 39
(a) Defaults .................................................... 39
(b) Remedies .................................................... 39
(c) Rental Late Charges and Interest ............................ 41
22. Landlord's Default; Remedies ..................................... 41
23. Subordination; Non-Disturbance ................................... 42
24. Estoppel Certificates ............................................ 42
25. Notices .......................................................... 42
26. Recordation ...................................................... 43
27. Title Policy ..................................................... 43
28. Dispute and Payment Under Protest ................................ 43
29. Arbitration ...................................................... 44
30. Force Majeure .................................................... 44
31. Brokerage ........................................................ 44
iii
PARAGRAPH PAGE
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32. Miscellaneous .................................................... 44
(a) Headings; Construction; Partial Invalidity;
Governing Law ............................................... 44
(b) Interest on Past-Due Obligations ............................ 45
(c) Time of the Essence ......................................... 45
(d) Counterparts ................................................ 45
(e) Incorporation of Prior Agreements; Amendments ............... 45
(f) Waivers ..................................................... 45
(g) Holding Over ................................................ 45
(h) Covenants and Conditions .................................... 45
(i) Binding Effect .............................................. 45
(j) Attorneys' Fees ............................................. 45
(k) Signs ....................................................... 46
(l) Attornments ................................................. 46
33. Effect of Modifications .......................................... 46
iv
LIST OF EXHIBITS
EXHIBIT "A-1" LEGAL DESCRIPTION OF PARCEL 1
EXHIBIT "A-2" LEGAL DESCRIPTION OF PARCEL 2
EXHIBIT "A-3" LEGAL DESCRIPTION OF PARCEL 3
EXHIBIT "B" DESCRIPTION OF PLANS
EXHIBIT "C" DEVELOPMENT SCHEDULE
EXHIBIT "D" DESCRIPTION OF PROCESS EQUIPMENT
EXHIBIT "E" DESCRIPTION OF PROCESS EQUIPMENT PLANS
EXHIBIT "F" NONDISCLOSURE AGREEMENT
EXHIBIT "G" PERMITTED EXCEPTIONS
EXHIBIT "H" NONDISTURBANCE AGREEMENT
EXHIBIT "I" MEMORANDUM OF LEASE
v
OPERATING LEASE
---------------
THIS OPERATING LEASE (the "Lease") is entered into this 20th day of August
1987, by an between R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware corporation,
dba XXXXXXXX INDUSTRIES ("Tenant").
RECITALS
--------
A. Landlord owns the entire fee simple interest in certain real property
located in Maricopa County, Arizona, and more particularly described on Xxxxxxxx
"X-0" ("Xxxxxx 0"), "X-0" ("Xxxxxx 2") and "A-3" ("Parcel 3") attached hereto
and by this reference incorporated herein.
B. Tenant desires, (1) to lease from Xxxxxxxx Xxxxxx 0, Xxxxxx 2, and
Parcel 3, (2) that Landlord construct or cause to be constructed certain
improvements on Parcel 1 pursuant to preliminary plans and specifications
prepared by Tenant and revised by Landlord and Tenant, and (3) to enter into
certain other agreements with Landlord more specifically described below; all of
which Landlord is willing to do upon and subject to the terms, covenants and
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
LEASE
-----
1. Lease of Premises. Landlord hereby leases to Tenant and Tenant hereby
-----------------
leases from Landlord, upon and subject to the terms, covenants and conditions
hereinafter set forth: (a) Parcel 1, Parcel 2 and Parcel 3; (b) those
improvements to be constructed on Parcel 1 in accordance with the provisions of
Paragraph 2 hereinbelow, which improvements primarily consist of a building of
approximately 169,840 square feet to be used as a manufacturing plant and
warehouse (the "Building"), and associated improvements, and are more
particularly described in the documents listed and described on Exhibit "B"
attached hereto an by this reference incorporated herein (collectively, the
"Parcel 1 Improvements"); and (c) any and all easements, rights, benefits,
rights-of-way, privileges and covenants appurtenant to said Xxxxxx 0, Xxxxxx 0,
Xxxxxx 3 and the Parcel 1 Improvements (the "Appurtenances"). Xxxxxx 0, Xxxxxx
0, Xxxxxx 3, the Parcel 1 Improvements and the Appurtenances are hereinafter
collectively referred to as the "Premises".
2. Construction of Parcel 1 Improvements.
-------------------------------------
(a) Plans. Landlord and Tenant have approved the outline
-----
specifications; architectural, engineering and mechanical specifications; and
site, space, grading, drainage, fire protection and paving plans (collectively,
the "Plans") listed and described on Exhibit "B" attached hereto for the
construction of the Parcel 1 Improvements, which Plans are hereby incorporated
by reference in this Lease the same as if fully set forth herein. Landlord
hereby certifies to Tenant that Landlord has obtained or will obtain from any
and all governmental
agencies having appropriate jurisdiction all permits and approvals necessary for
Landlord to commence and complete construction of the Parcel 1 Improvements in
accordance with the Plans and pursuant to the provisions of subparagraph 2(b).
(i) Landlord and Tenant understand, however, that as of the date of this
Lease, Landlord has not obtained final governmental approval of all
aspects of the Plans and, in the event any governmental agency having
appropriate jurisdiction requires modifications to any aspect of the
Plans, Landlord will prepare and deliver to Tenant plans and
specifications fully disclosing such modifications within five (5)
days after Landlord's receipt of notice that modifications will be
required. Tenant shall have ten (10) days after receipt thereof to
disapprove such modifications, it being understood that Tenant will
not disapprove such modifications provided that: (A) such
modifications are not substantial and do not require additional
expenditures by Tenant in the form of increased Rent (as hereinafter
defined) or other costs payable by Tenant hereunder, and (B) such
modifications do not materially and adversely affect Tenant's
proposed use of the Premises. If Tenant does not disapprove such
modifications within the above-described ten (10)-day period, Tenant
will be deemed to have approved such modifications. In the event
Tenant timely disapproves any such modifications, Tenant shall
prepare or cause to be prepared alternatives to such modifications.
Such alternative modifications shall be prepared and resubmitted to
the appropriate governmental agency within thirty (30) days after the
expiration of the above-described ten (10)-day period. In the event
the appropriate governmental agency disapproves such alternative
modifications, Landlord shall notify Tenant in writing of such within
five (5) days after Landlord's receipt of such disapproval. Tenant
shall thereupon have the option of cancelling this Lease by giving
Landlord written notice of cancellation within ten (10) days after
Tenant's receipt of Landlord's disapproval notice. If Tenant does not
cancel this Lease within said ten (10)-day period, Tenant shall be
deemed to have waived its right to cancel granted herein and the
parties shall proceed with their respective obligations hereunder.
Landlord and Tenant mutually agree to cooperate and use their best
efforts to achieve all necessary governmental approvals of every
aspect of the Plans.
(ii) Landlord and Tenant also understand that as of the date of this
Lease, Tenant has not reviewed and approved the offsite utility and
landscaping plans and shop drawings relating to the Parcel 1
Improvements (collectively, the "Remaining Plans"). Landlord will
promptly prepare and deliver to Tenant the Remaining Plans for
Tenant's approval, which approval shall not be unreasonably withheld.
Tenant shall have ten (10) days after receipt of the Remaining Plans
to give notice to Landlord of Tenant's disapproval of all or any
portion of the Remaining Plans. If Tenant does not timely disapprove
any of
-2-
the Remaining Plans, Tenant will be deemed to have approved same.
In the event Tenant timely disapproves any Remaining Plans, Landlord
shall, within ten (10) days following Tenant's notice of disapproval,
revise and resubmit the disapproved Remaining Plans (the "Resubmitted
Plans") and Tenant shall again have ten (10) days from receipt of the
Resubmitted Plans to give notice to Landlord of Tenant's disapproval
thereof. In the event the Resubmitted Plans are timely disapproved by
Tenant, Tenant shall have the option to cancel this Lease by giving
Landlord written notice of cancellation within the time period
provided for disapproving the Resubmitted Plans. If Tenant does not
give notice of cancellation, Landlord shall again revise and resubmit
the Resubmitted Plans and all time limits and rights, including the
right of cancellation shall again apply.
(b) Development Schedule.
--------------------
(i) Landlord, at its sole cost and expense, shall diligently
construct and complete, or cause to be constructed and completed, the
Parcel 1 Improvements in a good and workmanlike manner, in accordance
with the Plans (as hereinafter used in this Lease, "Plans" shall also
be deemed to include the "Remaining Plans" and the "Resubmitted
Plans"), pursuant to the schedule of construction completion dates
(the "Development Schedule") set forth on Exhibit "C" attached hereto
and by this reference made a part hereof, and in compliance with the
"General Conditions" contained in AIA Document No. A201 (the "General
Conditions") (provided, however, that in the event of a conflict
between the provisions of the General Conditions, and the provisions
of this Lease, the provisions of this Lease shall prevail) and all
applicable governmental rules, regulations and requirements.
(ii) Landlord and Tenant have designated on the Development
Schedule certain construction tasks as "Benchmark Tasks" and the
projected completion dates corresponding to such tasks as "Benchmark
Dates".
(iii) The Key Tasks shall be as follows:
(A) "First Key Task" shall mean substantial completion, in
accordance with the provisions of subparagraph
2(f)(i)and (ii) hereof, of the entire warehouse
facility portion of the Building as shown to the east
of column line seven (7) on that portion of the Plans
identified on Exhibit "B" hereto, as Sverdrup prints A2
and A3 (the "Warehouse").
-3-
(B) "Second Key Task" shall mean completion of construction as
set forth in subparagraph 2(a) hereof.
(iv) The date by which the First Key Task shall be accomplished, as
and if extended pursuant to the provisions of subparagraph 2(b) or
2(c) hereof, shall be December 1, 1987 (the "First Key Date").
(v) The date by which the Second Key Task shall be accomplished, as
and if extended pursuant to the provisions of subparagraph 2(b) or
2(c) hereof, shall be March 1, 1988 (the "Second Key Date").
(vi) Subject to the provisions of subparagraphs 2(c) and 2(d)
hereinbelow, in the event Landlord is unable to perform and complete
a Key Task on or before the corresponding Key Date, Landlord shall
pay Tenant, within thirty (30) days after Tenant's written demand
therefor, an amount equal to one-fifteenth (1/15) of the monthly Rent
(as defined below) payable during the first month of the term of the
Lease for each day following the applicable Key Date until the date
such Key Task is completed (the "Delay Damages"); provided, however,
in the event Tenant, having the right, does not elect to terminate
this Lease pursuant to said subparagraph 2(c) either Tenant or
Landlord shall be entitled to off-set the Delay Damages against the
next ensuing payment(s) of Rent becoming due hereunder. Landlord
understands and agrees that Landlord's failure to complete a Key Task
in a timely fashion will result in Tenant incurring additional
expenses which are extremely difficult to ascertain and that the
Delay Damages are a reasonable estimate, under the circumstances, of
such expenses and do not constitute interest and are not a penalty.
(vii) In the event Landlord is unable to complete a Key Task or
Benchmark Task within thirty (30) days following the corresponding
Key Date or Benchmark Date, as the case may be, Tenant, subject to
the provisions of subparagraph 2(c) hereinbelow (and, with respect to
a delay in timely completing a Key Task, in addition to being
entitled to the Delay Damages), shall have the option of doing either
of the following:
(A) Undertake, at Landlord's sole cost and expense, completion
of construction of the Parcel 1 improvements; or
(B) Allow Landlord an additional thirty (30) days to complete
such task.
-4-
Tenant shall notify Landlord in writing of its election
within five (5) days after the expiration of the initial
thirty (30)-day period following the applicable Key Date
or Benchmark Date. In the event Tenant elects the option
described in 2(b)(vii)(B) hereinabove, at the expiration
of the thirty (30)-day period described therein the
options described in 2(b)(vii)(A) and (B) hereinabove
shall again become available to Tenant. The foregoing to
the contrary notwithstanding, in the event the Parcel 1
improvements and the Premises are not Substantially
Completed (as that term is defined pursuant to sub-
paragraph 8.1.3 of the General Conditions) within sixty-
one (61) days after the Second Key Date, Tenant, in addition
to the options described in 2(b)(vii)(A) and (B) herein-
above, shall also have the option of cancelling this Lease
by giving written notice thereof to Landlord within five
(5) days after expiration of said sixty-one (61)-day period.
For purposes of this subparagraph 2(b), a Key Task or
Benchmark task shall not be deemed completed until every
aspect of such task has been fully completed in strict
accordance with the Plans (except for those items which
cannot be completed due to installation of the Process Equip-
ment) and the architect for the construction of the Parcel 1
Improvements (the "Architect") certifies in a writing
delivered to Tenant that the Key Task or Benchmark Task has
been completed, and the date of such completion.
(viii) If Landlord does not complete the First Key
Task by December 1, 1987, or the Second Key Task by
March 1, 1988, or any Benchmark Task by the date fixed in the
Development Schedule (subject to the provisions of sub-
paragraph 2(c) of this Lease), any time or date for performance
by Tenant under this Lease which is calculated from such date
shall be extended by the number of days completion of such
task is delayed.
(c) Excusable Delay. The provisions of subparagraph 2(b) to the
---------------
contrary notwithstanding, in the event Landlord is delayed in completing a Key
task or Benchmark Task by the corresponding Key Date or Benchmark Date, as the
case may be, for any of the following reasons, the Key Date or Benchmark Date,
as the case may be, shall be deemed to be extended the actual number of days of
such delay; provided, however, in the event such delay is more than one hundred
twenty (120) days, and such delay is not directly caused by Tenant's negligence
or willful wrongful act, Tenant shall have the option of cancelling this Lease
upon written notice to Landlord within ten (10) days after the expiration of the
such one hundred twenty (120)-day period :
(i) Any delay directly resulting from changes in the Plans
or construction work to be performed hereunder made by
Tenant pursuant to the provisions of subparagraph 2(g);
-5-
(ii) Any delay directly resulting from inclement weather; fire,
flood or other natural disaster; inability by the exercise of
reasonable diligence to obtain supplies or parts necessary to
perform and complete Landlord's construction obligations
hereunder; or war or other national emergency;
(iii) Any delay directly resulting from the negligent or wilful,
wrongful act of Tenant or agents acting solely on behalf of
Tenant in the discharge of Tenant's duties under this Lease;
or
(iv) Any delay directly resulting from Tenant's failure to timely
install the Process Equipment (as defined below), provided
Tenant has not elected to require Landlord to install the
Process Equipment pursuant to subparagraph 2(d) hereof.
(d) Process Equipment.
-----------------
(i) Landlord and Tenant acknowledge that the machinery and
equipment described on Exhibit "D" attached hereto and by this
reference made a part hereof (the "Process Equipment") has
been designed and manufactured at Tenant's request and is
essential to the conduct and performance of Tenant's business
to be conducted on the Premises. Landlord and Tenant
understand and agree that, subject to the provisions of
subparagraph 2(d)(iv) hereof, Tenant shall be solely
responsible for installing the Process Equipment in the
Building pursuant to the working drawings and blueprints
listed on Exhibit "E" attached hereto and by this reference
made a part hereof (the "Process Equipment Plans").
(ii) Pursuant to the Development Schedule, the installation of the
Process Equipment is not designated a Key Task or Benchmark
Task. Landlord and Tenant understand and agree, however, that
in the event Tenant elects to have Landlord install the
Process Equipment, the failure to install the Process
Equipment by the date designated on the Development Schedule
shall allow Tenant to avail itself of the options and remedies
to which it would otherwise be entitled due to the failure to
complete a Key Task by a Key Date, provided such delay is not
caused by any of the reasons specified in subparagraph 2(c)
hereof.
-6-
(iii) Upon receipt of Tenant's written notice, Landlord
will allow Tenant reasonable access to the Premises
to install and test the Process Equipment, provided
Tenant first complies with the insurance provisions
applicable to Tenant's early entry set forth in
Paragraph 9 hereof and provided further that Tenant
shall pay Landlord, in addition to the rent otherwise
payable hereunder, a monthly sum for such early entry
(the "Early Entry Rent") equal to one-half (1/2) of
the difference between the monthly rent payable for
the entire Premises during the first twelve (12) months
following the Occupancy Date (as hereinafter defined) and
the monthly Warehouse Rent (as hereinafter defined). The
Early Entry shall commence upon the later of the
Commencement Date or ten (10) days following the notice
provided for in the first sentence of this subparagraph
2(d)(iii) and shall be paid as provided for payment of
Rent; provided, however, that Tenant shall only be
obligated to pay Early Entry Rent for the period of
time between the date of Tenant's Early Entry and the
Occupancy Date. Tenant shall perform the installation
of the Process Equipment diligently and in a good and
workmanlike manner in accordance with the Process
Equipment Plans.
(iv) Anything herein to the contrary notwithstanding,
Landlord, upon Tenant's written demand, shall, within
one hundred eighty (180) days from the giving of such
demand, install, or cause to be installed, the Process
Equipment. In the event Tenant gives Landlord such
written demand, the installation of the Process
Equipment shall thenceforth be Landlord's sole
responsibility and obligation and shall be deemed to
be a Key Task entitling Tenant to exercise any options
and remedies to which Tenant is entitled under this
Lease in the event a Key Task is not timely completed.
(e) Completion of Construction. Landlord shall not have completed
--------------------------
its construction obligations hereunder until Landlord has Substantially
Completed construction of the Premises and the Parcel 1 improvements in
accordance with the Plans and pursuant to the provisions of this Paragraph 2 and
all applicable governmental rules, regulations and requirements.
(f) Possession. Landlord shall deliver possession of the Premises to
----------
Tenant as follows:
-7-
(i) On the First Key Date, Landlord shall deliver actual
possession of the Warehouse to Tenant broom clean and
undamaged, (subject, however, to any debris caused by
Tenant's installation of the Process Equipment) as
follows:
(A) The construction of all aspects of the Warehouse
shall be Substantially Completed in accordance with the
Plans;
(B) All fire protection systems and equipment completed
as provided herein and all utilities, including, without
limitation, sewer, water, drainage, telephone, electric
and natural gas service and all meters, connected to the
Building in the locations depicted in the Plans and in
adequate supply to permit use of the Warehouse in full
accordance with Tenant's intended use of the Warehouse
as depicted in the Plans and elsewhere in this Lease;
(C) The Warehouse shall be in full compliance with all
applicable building codes and other governmental rules,
regulations and requirements;
(D) Landlord's insurance requirements hereunder, shall
be in full force and effect; and
(E) The Warehouse and the Premises shall be free from
the effects of any suppliers, materialmen's and
mechanic's liens.
(ii) On the Second Key Date, Landlord shall deliver actual
possession of the Parcel 1 Improvements and the Premises
to Tenant broom clean and undamaged, (subject, however,
to any debris caused by Tenant's installation of the
Process Equipment) as follows:
(A) The construction of all aspects of the Parcel 1
Improvements and the Premises shall be Substantially
Completed in accordance with the Plans;
(B) All fire protection systems and equipment completed
as provided herein and all utilities, including, without
limitation, sewer, water, drainage, telephone, electric
and natural gas service and all meters, connected to the
Building in the locations depicted in the Plans and in
adequate supply to permit use of the Premises in full
accordance with Tenant's intended use of the Premises as
depicted in the Plans and elsewhere in this Lease;
(C) The Premises shall be in full compliance with all
applicable building codes and other governmental rules,
regulations and requirements;
(D) Landlord's insurance requirements hereunder, shall
be in full force and effect; and
-8-
(E) The Premises and the Parcel 1 Improvements shall be free
from the effects of any suppliers, materialmen's and mechanic's
liens.
(g) Discharge of Liens. Each party hereby agrees to promptly pay, or
------------------
cause to be paid, all suppliers, materialmen, contractors and subcontractors
performing work for it on the Premises in connection with any of its
construction obligations hereunder. At all times during the performance of its
construction obligations hereunder, and from time to time, each party shall
remove and discharge, or cause to be removed or discharged, any and all
suppliers', materialmen's and mechanic's liens recorded against the Premises
within sixty (60) days after their recordation. In lieu of such discharge,
however, each party may instead provide bonds with respect to any such liens in
the form prescribed by A.R.S. (S)33-1004, and thereby satisfy its obligations
set forth in the preceding sentence.
(h) Changes to Plans. Tenant shall have the right to request that
----------------
Landlord make changes to the Plans (a "Change Order"), which requests shall be
in a writing delivered to Landlord and shall not be unreasonably denied;
provided, however, that the incremental increase or decrease of the overall
costs of constructing the Improvements directly attributable to a Change Order
shall be reflected increasing or decreasing the rent payable under this Lease.
(Amount of Cost Increase or Cost Decrease) x (1.09) x *(.0954) =
--------------------------------------------------------------
(12)
(Amount to be Added to or Subtracted from Tenant's Monthly Rent)
In the event a Change Order results in the total square footage of the Building
as set forth in subparagraph 4(a) hereof, being increased or decreased, such
square footage and Rent payable hereunder shall be proportionately adjusted.
Anything herein to the contrary notwithstanding, in the event the additional
work contemplated by a Change Order will result in a delay in completing a Key
Task or Benchmark Task, Landlord, within ten (10) days after receipt of the
Change Order, will notify Tenant of such in a writing specifying the Key Task or
Benchmark Task which will be delayed and the anticipated length of the delay.
Tenant shall have five (5) days following receipt of Landlord's notification in
which to either, at Tenant's option, (i) rescind in writing the Change Order,
(ii) dispute in writing anticipated length of delay set forth in Landlord's
notification, in which event Landlord and Tenant shall have five (5) additional
days in which to arrive at a mutually agreeable length of anticipated delay and,
failing such mutual agreement, the anticipated length of delay shall be
determined pursuant to the arbitration provisions of Paragraph 29 herein,
(provided however, that construction under the Change Order shall commence
immediately and shall not await determination of the length of delay under this
subparagraph 2(h), or (iii) approve the length of the anticipated delay. In the
event Tenant does not notify Landlord of Tenant's election with five (5) days
after receipt of Landlord's notification of anticipated delay, Tenant shall be
deemed to have approved the anticipate length of delay
* This rate is subject to equitable adjustment in the event the Change Order
results in any special additions to the Parcel 1 Improvements not contemplated
by the Plans and not practically capable of amortization as provided for herein.
Any disputes regarding any such adjustment or the need therefore, shall be
settled pursuant to the arbitration provisions of Paragraph 29 hereof.
-9-
specified therein; in which event completion of the Key Task or Benchmark Task
shall be deemed to be delayed as specified by Landlord. In the event Landlord
does not notify Tenant of any anticipated delay within ten (10) days after
receipt of a Change Order, it shall be conclusively deemed that such Change
Order will not result in delay in completing a Key Task or Benchmark Task.
(i) Surety Bond. Prior to commencing construction of the Parcel 1
-----------
Improvements, Landlord shall obtain from a reputable company approved by Tenant,
a surety bond (or other similar bond) guaranteeing to Tenant completion of
construction of the Parcel 1 Improvements. Such surety bond shall be in form
satisfactory to Tenant.
(j) Inspection Reports. Landlord shall provide Tenant, during all
------------------
phases of construction of the Parcel 1 Improvements, with copies of all
inspection reports relating to soils, drainage, roofing and welding. In
addition, Landlord shall, within five (5) days following Landlord's receipt
thereof, provide Tenant with copies of all inspection reports prepared by
Landlord, Landlord's agents, architects, engineers, contractors and consultants,
and any governmental agencies, relating to all utilities, roadways, signage,
structural components, electrical systems, plumbing systems and mechanical
systems to be located, constructed or placed on the Premises.
(k) Early Entry. In addition to Tenant's right of early entry to
-----------
install and test the Process Equipment pursuant to subparagraph 2(d)
hereinabove, Tenant may, at any time prior to the Commencement Date (as defined
below), at its sole risk, enter upon the Premises for purposes of inspection or
installing equipment or furnishings, or for any other purposes not inconsistent
with the provisions of this Lease; provided, however, that (i) Tenant's early
entry shall not unreasonably interfere with Landlord's construction of the
Parcel 1 Improvements, (ii) Tenant shall execute an indemnity agreement with
respect to Tenant's early entry in favor of Landlord in form and substance
reasonably satisfactory to Landlord, and (iii) Tenant shall comply with the
insurance provisions applicable to Tenant's early entry set forth in Paragraph 9
hereof.
(l) Quality of Construction. Landlord warrants and represents that
-----------------------
all work shall be done in a good and workmanlike manner and in compliance with
all applicable laws and lawful ordinances, bylaws, regulations and orders of
governmental authority and of the insurers of the Parcel 1 Improvements and free
from defects in material and workmanship. All warranties that an owner would be
entitled to under the General Conditions will run in favor of Tenant.
(m) Punch-List. Within ten (10) days prior to the Commencement
----------
Date, Landlord, Xxxx (as defined below), the Architect and Tenant shall conduct
a "walk-through" of the Premises and the Parcel 1 Improvements for purposes of
identifying and preparing a list of patent or apparent defects or deficiencies
in the Improvements and the Premises and Landlord's construction work thereon
(the "Punch-List"). Landlord, at its sole cost and expense, shall promptly
repair or cure, or cause to be repaired or cured, the items set forth in the
Punch-List in a good and workmanlike manner. From time to time, within sixty
(60) days following the Commencement Date, Tenant shall have the right and
option to require Landlord, Landlord's contractor, and/or the architect to
conduct an additional "walk-through" of the Premises for purposes of identifying
and preparing a list of additional patent or apparent defects or deficiencies in
the Parcel 1 Improvements and the Premises and Landlord's construction work
thereon, but excluding there-
-10-
from any cosmetic defects or deficiencies (an "Additional Punch-List").
Landlord, at its sole cost and expense, shall promptly repair or cure, or cause
to be repaired or cured, the items set forth on any Additional Punch-List.
(n) Nondisclosure of Process Equipment. Landlord will use its best
----------------------------------
efforts to (i) provide fenced enclosure and access control to insure that the
Premises, Parcel 1 Improvements, Process Equipment, Plans and Process Equipment
Plans are only accessible to and viewed by such persons as are absolutely
necessary to complete construction of the Parcel 1 Improvements, and (ii)
execute and deliver to Tenant and require all persons performing work on the
Premises or the Parcel 1 Improvements on and after the earlier of the Occupancy
Date or the date Early Entry Rent begins to accrue as provided in subparagraph
2(d)(iii) hereof, to execute and deliver to Tenant, a nondisclosure agreement in
the form attached hereto as Exhibit "F."
(o) Contractor. Tenant understands, and Landlord agrees, that Landlord
----------
shall use Xxxxxx X. Xxxx Company ("Xxxx") as primary contractor in constructing
the Parcel 1 Improvements. Landlord agrees that Tenant: (i) shall be a
third-party beneficiary (and shall be expressly identified as such) of any and
all agreements and contracts between Xxxx and Landlord relating to the
construction of the Parcel 1 Improvements (collectively, the "Construction
Contract"), (ii) shall have reasonable approval rights prior to the execution
thereof or the execution of any amendments or modifications thereto, and (iii)
shall have the right to (A) enforce and receive the benefits of, in Landlord's
name and stead, the terms and provisions of the Construction Contract, and (B)
exercise any and all remedies to which Landlord is entitled in the event of
Xxxx'x default under the Construction Contract, and any and all amendments or
modifications thereto, immediately upon Landlord's execution thereof. The
foregoing to the contrary notwithstanding, nothing herein shall be construed to
relieve Landlord, in whole or in part, of any of Landlord's obligations
hereunder; including, without limitation, all of Landlord's construction
obligations set forth in this Paragraph 2.
(p) Fire Protection Systems.
-----------------------
(i) Anything herein to the contrary notwithstanding, within
seven (7) days following the date hereof, Landlord shall
provide, or cause to be provided, to Tenant or the insurer
(the "FPS Insurer") of the fire protection systems to be
installed by Landlord pursuant to the Plans (the "Fire
Protection Systems") with copies of all plans,
specifications, drawings and diagrams relating to the Fire
Protection Systems (the "FPS Plans"). Within twenty-one
(21) days following receipt of the FPS Plans by Tenant, the
FPS Insurer shall notify Landlord whether such plans are
approved or disapproved. If the FPS Plans are disapproved,
the FPS Insurer shall specify the reasons for such
disapproval and Landlord shall promptly correct the FPS
Plans accordingly and submit such corrections to the Fire
Protection Systems Insurer for approval or disapproval
pursuant to the provisions set forth in the first two (2)
sentences of this subparagraph (2)(p). If and when the FPS
Plans are approved by the FPS Insurer, Landlord shall
commence and complete construction
-11-
and installation of the Fire Protection Systems in
accordance with the Development Schedule and the FPS
Plans.
(ii) Landlord shall notify Tenant and the FPS Insurer in
writing immediately following the completion of the
construction and installation of the Fire Protection
Systems. Within twenty-one (21) days following the receipt
by the FPS Insurer of such notice, Landlord and the FPS
Insurer shall commence (at such time or times as may be
reasonably designated by the FPS Insurer) performance
testing of the Fire Protection Systems pursuant to
standards prescribed by the FPS Insurer and delivered or
communicated to Landlord. Landlord's construction
obligations with respect to the Fire Protection Systems
shall not be deemed completed unless and until the FPS
Insurer certifies in writing that the FPS have been
completed in accordance with the FPS Plans and have met or
exceeded the performance standards established by the FPS
Insurer for the Fire Protection Systems.
3. Term. The term of this Lease shall be for a period of ten (10) years
----
and three (3) months, commencing on the later of December 28, 1987 or the date
possession of the Warehouse is delivered to Tenant in accordance with
subparagraph 2(f) of this Lease (the "Commencement Date"); subject, however, to
(a) earlier termination pursuant to Paragraphs 2 and 6 hereof, (b) Tenant's
option to extend the term of this Lease pursuant to Paragraph 18 hereof, and (c)
certain termination and extension rights with respect to Parcel 2 and Parcel 3
pursuant to Paragraphs 19 and 20 hereof. Landlord and Tenant agree to execute an
amendment to this Lease within (30) days following the determination of the
Commencement Date memorializing such date.
4. RENT: Commencing as of the Commencement Date, Tenant shall pay
----
Landlord rent for the Premises (the "Rent") during the term of this Lease as
follows:
(a) Payment. Subject to the provisions of subparagraphs 4(b) and 4(c)
hereinbelow and any other provisions in this Lease adjusting the Rent,
(i) For the first (1st) through thirty-ninth (39th) months
following the Commencement Date, Tenant's Rent shall be an
amount equal to FIFTY TWO THOUSAND THREE HUNDRED TEN and
72/100 DOLLARS ($52,310.72) per month, which amount has
been calculated based on $.308 per square foot of the
Building per month;
(ii) For the fortieth (40th) through sixty-third (63rd) months
following the Commencement Date, Tenant's Rent shall be an
amount equal to FIFTY-SEVEN THOUSAND SEVEN HUNDRED FORTY-
FIVE and 60/100 DOLLARS ($57,745.60) per month, which
amount has been calculated based
on $.340 per square foot of the Building per month;
(iii) For the sixty-fourth (64th) through ninety-ninth (99th)
months following the Commencement Date, Tenant's Rent
shall be SIXTY-ONE THOUSAND SIX HUNDRED FIFTY-ONE and
92/100 DOLLARS ($61,651.92) per month, which amount has
been calculated based on $.363 per square foot of the
Building per month; and
(iv) For the one hundredth (100th) through one hundred twenty
third (123rd) months following the Commencement Date,
Tenant's Rent shall be SIXTY-EIGHT THOUSAND TWO HUNDRED
SEVENTY-FIVE and 68/100 DOLLARS ($68,275.68) per month,
which amount has been calculated based on $.402 per
square foot of the Building per month.
Landlord and Tenant agree that, subject to the provisions of subparagraph 2(h)
hereof, for purposes of calculating Rent hereunder, the Building shall be deemed
to consist of 169,840 square feet.
(b) Industrial Development Bonds. Landlord and Tenant acknowledge
----------------------------
that Landlord is attempting to obtain industrial development bonds (the "IDB"),
to be issued by the city of Xxxxxxxx, Arizona, in the anticipated aggregate
amount of approximately Seven Million and 00/100 Dollars ($7,000,000.00), as an
alternative means of financing Landlord's acquisition of the Premises and
construction of the Improvements and if elected by Tenant, the Process
Equipment. Landlord, however, will not pursue obtaining the IDB if the adjusted
Rent to be paid by Tenant in the event the IDB is obtained is greater than the
Rent specified in subparagraph (a) hereinabove. In the event Landlord obtains
the IDB, Tenant's Rent shall be adjusted and determined pursuant to the
following formula in lieu of the Rent specified in subparagraph 4(a)
hereinabove:
(i) For the first through thirty-ninth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2797)(IDBR) + ($.0385) + (BC 1) + (BC 2)
-------------- --------------- = AMR
(.0954) (169,840)(12)
(ii) For the fortieth through sixty-third months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2810)(IDBR) + ($.0705) + (BC 1) + (BC 2)
-------------- --------------- = AMR
(.0954) (169,840)(12)
(iii) For the sixty-fourth through ninety-ninth months following the
Commencement Date, Tenant's Rent will be calculated as follows:
($.2819)(IDBR) + ($.0935) + (BC 1) + (BC 2)
-------------- --------------- = AMR
(.0954) (169,840)(12)
-13-
(iv) For the one hundredth through one hundred twenty-third months following the
Commencement Date, Tenant's Rent will be calculated as follows:
($.2835) (IDBR) (BC 1) + (BC 2)
--------------- + ($.1315) + --------------- = AMR
(.0954) (169,840)(12)
Definitions:
"IDBR" is the interest rate payable per annum on the IDB adjusted to
reflect a thirty (30)-year amortization constant.
"BC 1" is the acquisition costs (i.e., attorneys' fees, trustee's
fees, organization fees, etc) in obtaining the IDB amortized at the IDBR over
ten (10) years.
"BC 2" is the renewal cost of the IDB for one (1) year.
"AMR" is the per square foot monthly Rent payable during the
designated years.
Provided the IDB will result in lower Rent payments, Landlord shall use its best
----
efforts to obtain the IDB and shall diligently and promptly perform all
requirements and deliver all documents reasonably required in connection
therewith. Tenant will take all reasonable precautions to insure that Tenant
does not cause the IDB to lose tax-exempt status and agrees to reasonably
cooperate with Landlord in obtaining the IDB. If Tenant shall directly cause the
IDB to lose tax-exempt status the Rent payable hereunder will be adjusted as
provided in the IDB. Within thirty (30) days after Landlord obtains the IDB,
Landlord and Tenant shall execute an amendment to this Lease setting forth the
actual amount of the IDB (or a formula therefor in the event the IDBR is a
"floating rate") and Tenant's Rent as revised pursuant to the formula set forth
in this subparagraph 4(b).
(c) Warehouse Rent. Anything herein this paragraph 4 to the
--------------
contrary notwithstanding, from the Commencement Date until the date Landlord
delivers possession of the entire Premises to Tenant pursuant to the
subparagraph 2(f) of this Lease (the "Occupancy Date"), the Rent shall be an
amount equal to the Rent as determined and payable according to this Lease
divided by the total square footage of the Building, multiplied by the total
square footage of the Warehouse (the "Warehouse Rent").
(d) Due and Payable. Tenant's Rent shall be due and payable on
---------------
or before the first (1st) day of each and every month during the term of this
Lease.
(e) Pro Rata Rent. Rent for any month during the term of this Lease
-------------
which is for less than one (1) month shall be a pro rata portion of the Rent due
in that particular month. Rent shall be payable in lawful money of the United
States to Landlord at the address stated in Paragraph 24 hereof or to such other
persons or at such other places as Landlord may designate in writing.
-14-
5. Use.
---
(a) General. The Premises shall be used and occupied for the purpose
-------
of processing, manufacturing, storing and shipping all manner of commercial
products and any other use not inconsistent with the provisions of this Lease or
applicable zoning and governmental laws, orders, rules and regulations.
(b) Compliance with Law. Tenant shall, at Tenant's sole cost and
-------------------
expense, comply with all present and future laws, ordinances, orders,
declarations of covenants and restrictions, rules, regulations and requirements
of all federal, state and municipal governments, courts, departments,
commissions, boards, and officers which may be applicable to Tenant's use of the
Premises.
6. Permitted Exceptions; Landlord's Warranties and Representations; Quiet
----------------------------------------------------------------------
Enjoyment.
---------
(a) Permitted Exceptions. Tenant hereby accepts the Premises subject
--------------------
only to applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises and those matters
set forth on Exhibit "G" attached hereto and by this reference incorporated
herein (collectively, the "Permitted Exceptions").
(b) Landlord's Warranties and Representations. Landlord hereby
-----------------------------------------
warrants and represents to Tenant that:
(i) Landlord owns and is possessed of the entire fee simple
interest in the Premises, subject only to the Permitted
Exceptions;
(ii) Landlord is legally and effectively authorized to enter
into and perform all of Landlord's obligations under this
Lease;
(iii) The person executing this Lease on behalf of Landlord has
been authorized to do so pursuant to a validly executed
and binding partnership resolution executed by all
partners required to do so according to Landlord's
partnership agreement and such execution creates a binding
obligation on behalf of Landlord;
(iv) Landlord has not made, and shall not make, any commitments
or representations to any applicable governmental
authority, or to any adjoining or surrounding property
owner, which would in any manner be binding upon Tenant or
interfere with Tenant's use and enjoyment of or right or
ability to conduct its business in the Premises, all in
full accordance with the provisions of this Lease; and
Landlord has no knowledge of any such commitments or
representations made by any of Landlord's predecessors in
title;
-15-
(v) There are no threatened or pending claims, actions, causes
of action, or annexation proceedings or other litigation or
proceedings against or affecting any part of the Premises;
(vi) There are no pending or proposed zoning or other land use
ordinances, rules, regulations or other actions on the part
of any governmental body, department or agency having
jurisdiction which would adversely affect Tenant's proposed
use of the Premises;
(vii) Landlord has no notice of taking of any part of the Premises
by a governmental or quasi-governmental agency acting under
the power of eminent domain, or that any such taking is
contemplated, and Landlord has not requested or supported
any such taking;
(viii) There are no parties in possession of any portion of the
Premises as Tenant, Tenant at sufferance, or trespasser;
(ix) The Premises have full and free access to and from public
highways, streets, or roads;
(x) Parcel 1 is contiguous with Parcel 2 and Parcel 2 is
contiguous with Parcel 3; and
(xi) The Premises are zoned and otherwise suitable for erecting
and operating the Parcel 1 Improvements.
(xii) The sewer and effluent systems (both on-site and off-site)
servicing the Premises and disposing of effluent discharged
from the Premises to waste-water or other off-site treatment
plants have the capacity to service and dispose of at least
50,000 gallons of effluent discharged from the Premises per
twenty-four (24)-hour period.
The foregoing warranties and representations shall survive the expiration or
earlier termination of this Lease.
(c) Quiet Enjoyment. So long as Tenant is not in breach of its duty
---------------
to pay Rent, or in the performance of any of its other covenants and agreements
hereunder, beyond the applicable grace periods, Tenant shall peaceably and
quietly have, hold and enjoy the Premises, and all rights, covenants,
appurtenances and privileges belonging or in any way appertaining thereto, from
and after the date hereof and throughout the term of this Lease, without
molestation or hindrance by Landlord or anyone claiming by, through or under
Landlord. If at any time during the term hereof, the title of Landlord to the
Premises shall fail or it shall be discovered that Landlord's title shall not
enable it to grant the estate as hereby
-16-
demised and Landlord shall fail to cure such defect within the time frames
specified in Paragraph 22 hereof, Tenant, at its option, shall be entitled to:
(i) correct such defect and deduct the reasonable expenses thereof (including
reasonable attorneys' fees) from the next ensuing payments of Rent due under
this Lease, or (ii) terminate this Lease. Each of the foregoing alternatives
shall be with full reservation of Tenant's right to damages (if any) and to
equitable relief, including specific performance.
7. Maintenance and Repairs; Surrender; Trade Fixtures.
--------------------------------------------------
(a) Tenant's Maintenance. Subject to the provisions of subparagraph
--------------------
7(b) hereinbelow, Tenant shall, as to the Warehouse throughout the term of this
Lease, and from and after the Occupancy Date as to all Parcel 1 Improvements and
the Premises, at Tenant's sole cost and expense, keep and maintain the Premises,
including, without limitation, the roof, outside wall surfaces, subfloors and
floor coverings of the Building and the Parcel 1 Improvements, any and all
alterations and additions made by Tenant pursuant to the provisions hereof, all
walks, driveways, parking and loading areas, lawns and landscaping, fences and
signs located on the Premises, in all respects in good repair and maintained in
a commercially reasonable manner and in a clean and safe condition.
(b) Landlord's Obligations. The provisions of subparagraph 7(a)
----------------------
hereinabove to the contrary notwithstanding, Tenant shall not be required to
make any repairs (i) necessitated because of Landlord's negligence, willful
wrongful act or failure to perform its obligations under this Lease, or (ii) to
be made pursuant to the provisions of Paragraph 11; it being the intention of
the parties that such repairs shall be the obligation of Landlord.
(c) Surrender; Removal of Trade Fixtures. Upon the expiration or
------------------------------------
earlier termination of this Lease, Tenant shall surrender the Premises to
Landlord in the same condition as when received, ordinary wear and tear
excepted; provided, however, Tenant shall be entitled to remove all or any
portion of Tenant's trade fixtures, personal property, furnishings, Process
Equipment and equipment (collectively, the "Trade Fixtures") from the Premises
on or before the expiration or earlier termination of this Lease. In the event
Tenant gives prior written notice thereof, Tenant shall have an additional sixty
(60) days following the expiration or earlier termination of this Lease to
remove such Trade Fixtures as Tenant desires from the Premises, in which event
Tenant shall be deemed to be subject to the hold-over provisions of subparagraph
32(g) hereof until the expiration of said sixty (60)-day period. It is
understood and agreed by Landlord, however, that Tenant shall be under no
obligation whatsoever to remove from the Premises any of Tenant's Trade Fixtures
or any alterations or improvements made by Tenant to the Premises.
(d) Depreciation; Repair of Damage. Unless and until such time as
------------------------------
any of the Trade Fixtures become the property of Landlord pursuant to
subparagraph 7(c), the Trade Fixtures shall be the property of Tenant and Tenant
shall be entitled to all depreciation allowance and other cost recovery
with respect to the Trade Fixtures. Tenant shall repair any damage to
the Premises occasioned by the removal of Tenant's Trade Fixtures, which repair
shall include, without limitation, the patching and filling of holes and repair
of structural damage.
-17-
(e) Insurance. If any repair or restoration that Tenant is required
---------
to make hereunder is the subject of any insurance maintained by or on behalf of
Landlord, Landlord shall, as Tenant is completing such repair or restoration,
remit to Tenant the net proceeds of insurance received therefor by Landlord and
attributable to such repair or restoration.
(f) Right of Entry. If Tenant fails to perform Tenant's obligations
--------------
under this Xxxxxxxxx 0, Xxxxxxxx may, at its option, enter upon the Premises
after thirty (30) days prior written notice to Tenant, and put the same in good
order, condition and repair. Tenant shall pay to Landlord any amounts expended
by Landlord in the performance of Tenant's obligations pursuant to this
subparagraph (f) within fifteen (15) days after receipt of Landlord's invoice
therefor. Nothing herein shall imply any duty upon the part of Landlord to do
any such work and the performance thereof by Landlord shall not constitute a
waiver of Tenant's default in failing to perform the same.
8. Alterations and Additions. Tenant shall be entitled to make such non-
-------------------------
structural alterations, improvements and additions to the Premises as Tenant
desires. Tenant shall not, however, make any structural alterations,
improvements or additions to the Premises without first obtaining Landlord's
written consent thereto, which consent shall not be unreasonably withheld.
9. Insurance.
---------
(a) General Liability. Tenant, at its sole cost and expense, but for
------------------
the mutual benefit of Landlord and Tenant as named insureds, shall maintain com-
prehensive general liability insurance on an "occurrence basis" against claims
for personal injury, including without limitation, bodily injury, death or
property damage, occurring upon, in or about the Premises. Such insurance shall
afford immediate minimum protection at the time of the earlier to occur of (i)
Tenant's early entry of the Premises pursuant to the provisions of Paragraph 2
hereof, or (ii) the Lease Commencement Date, and at all times thereafter until
the expiration or earlier termination of this Lease, to a limit of not less
than One Million Dollars ($1,000,000.00) combined single-limit with respect to
personal injury or death to any one or more persons or to damage to property.
Such insurance shall also provide coverage against liability for bodily injury
or property damage arising out of the use on the Premises, by or on behalf of
Tenant, of automotive equipment.
(b) Extended Coverage. Tenant, at its sole cost and expense, but
------------------
for the mutual benefit of Landlord and Tenant as named insureds, shall maintain
insurance on the Parcel 1 Improvements, effective as of the Lease Commencement
Date and thereafter throughout the term of this Lease, insuring the Parcel 1
Improvements against loss or damage by fire and such other risks as are covered
by endorsements commonly known as "broad form extended coverage" or "all-risk"
to the full extent of the replacement value of the Parcel 1 Improvements
(exclusive of the cost of excavations, foundations, and footings below the
lowest floor of the Buildings) and any improvements constructed or installed on
the Premises. Such full replacement value shall be determined at Landlord's
expense from time to time (but no less frequently than once every twenty-four
(24) calendar months) by (i) the engineering or other appropriate department of
the insurance company issuing the policy, or (ii) application of appropriate
construction cost indexes acceptable to Landlord and Tenant. Tenant shall also,
at its sole cost and expense, keep the Premises insured, in such amounts as are
reasonably approved by Landlord, against fire sprinkler damage.
-18-
(e) Landlord's Insurance. Landlord, at its sole cost and expense
--------------------
(except as hereinafter modified), but for the mutual benefit of Landlord and
Tenant as named insureds, shall maintain "Course of Construction" insurance on
the Parcel 1 Improvements, effective as of the date construction of the Parcel 1
Improvements is commenced and continuing until the Occupancy Date, insuring the
Premises, the Parcel 1 Improvements and the Process Equipment against loss or
damage by fire and such other risks as are covered by endorsements commonly
known as "broad from extended coverage" or "all-risk" to the full extent of the
replacement value thereof. Such full replacement value shall be determined at
Landlord's expense from time to time (but no less frequently than once every
three (3) calender months) by (i) the engineering department or other
appropriate department of the insurance company issuing the policy, or (ii)
application of appropriate construction costs indexes acceptable to Landlord and
Tenant. Such insurance shall remain in full force and effect and shall also
insure any loss occurring during the period of time Tenant enters the Premises
for purposes of installing and testing the Process Equipment; provided, however,
that within fifteen (15) days following Tenant's entry for such purposes, Tenant
shall pay to Landlord an amount equal to the additional premium, if any, payable
by Landlord as a result of Tenant's early on to the Premises.
(d) Form. All insurance provided by the parties hereunder shall be
----
effected under valid and enforceable policies in form mutually satisfactory to
the parties, issued by insurers of recognized responsibility which are licensed
to do business under the laws of the United States and the state wherein the
Premises are located and well rated by national rating organizations.
(e) Evidence. Tenant, on or before the earlier to occur of Tenant's
--------
early entry of the Premises pursuant to the provisions of Paragraph 2, or the
Commencement Date, and Landlord, concurrently with the execution hereof, shall
each deliver to the other duplicates or certificates of the policies to be
obtained by Landlord and Tenant hereunder, bearing notations evidencing the
prepayment of premiums or accompanied by other evidence of such prepayment.
(f) Waiver of Subrogation. Landlord and Tenant hereby waive any and
---------------------
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party or its property or the property of others under its
control to the extent that such loss or damage is insured against under any
insurance policies which either party may have in force at the time of such loss
or damage. Landlord agrees to use its best efforts to obtain a waiver from any
insurance carrier with which Landlord carries insurance required by this
Paragraph 9 releasing such insurance carrier's subrogation rights as against
Tenant. Tenant agrees to use his best efforts to obtain a waiver from any
insurance carrier with which Tenant carries insurance required by this Paragraph
9 releasing such insurance carrier's subrogation rights against Landlord. Each
party hereto agrees to give each insurance company written notice of the terms
of said waivers, and to have said insurance policies properly endorsed, if
necessary, to prevent invalidation of said insurance coverages by reason of said
waivers.
(g) Proceeds. Landlord and Tenant shall cooperate fully with each
--------
other in obtaining recovery of any insurance proceeds and shall execute any and
all consents and other instruments and take any and all other actions necessary
or desirable in order to effectuate the same and to cause such proceeds to be
paid as
-19-
hereinabove provided. Neither Landlord nor Tenant shall carry any insurance
concurrent in coverage and contributing in the event of loss with any other
insurance required to be furnished by the parties hereunder if the effect of
such separate insurance would be to reduce the protection or the payment to be
made pursuant to any insurance as herein provided.
(h) Compliance. Landlord and Tenant shall comply with all
----------
conditions and requirements of the foregoing insurance policies to the extent
such conditions and requirements relate to their respective duties under this
Lease.
(i) Tenant's Contents. Tenant shall assume the risk of damage to
-----------------
any Trade Fixtures which remain the property of Tenant or as to which Tenant
retains the right of removal from the Premises, and Landlord shall not be liable
for injury to Tenant's business or any loss of income therefrom relative to such
damage, unless such damage (i) occurs to the Process Equipment prior to the
Lease Commencement Date and Landlord is responsible for installing the Process
Equipment pursuant to the provisions of subparagraph 2(d) hereof, or (ii) is
caused by Landlord's negligence or willful wrongful act. Tenant shall maintain
insurance coverage with respect to such items during the term of this Lease
against fire, extended coverage, and vandalism and malicious mischief perils in
an amount not less than ninety percent (90%) of the full replacement cost
thereof.
(j) Worker's Compensation.
---------------------
(i) Tenant. Tenant shall, at its sole cost and expense, keep
------
and maintain in full force and effect during the term of
this Lease, a policy or policies of worker's
compensation insurance covering all Tenant's employees
working on the Premises, and shall furnish Landlord with
certificates thereof.
(ii) Landlord. Landlord shall, at its sole cost and expense,
--------
keep and maintain in full force and effect, commencing as
of the date hereof and continuing throughout the term of
this Lease, a policy or policies of worker's compensation
insurance covering any and all of Landlord's employees
working on or about the Premises, and shall furnish
Tenant with certificates thereof.
(k) Blanket-Policy. Tenant may satisfy its insurance obligations
--------------
hereunder by including them in Tenant's "Blanket-Policy" of insurance.
(l) Rent Abatement Insurance. Either party hereto shall have the
------------------------
right, but not the obligation, to obtain rent abatement or rent-interruption
insurance at its sole cost and expense.
10. Indemnification.
---------------
(a) Tenant. Tenant agrees to indemnify and save harmless the
------
Landlord from and against all liability, damages, penalities, judgments and
claims of whatever nature arising from injury or damage to person or property
sustained by anyone in or on the Premises and proximately caused by the
negligence of
-20-
Tenant or Tenant's employees, agents, licensees, invitees and contractors while
acting within the scope of their employment. Tenant shall, at its sole cost and
expense, defend any and all suits or actions (just or unjust) which may be
brought against Landlord, or in which Landlord may be impleaded, based upon any
such matter or claim. This indemnity and hold harmless agreement shall include
indemnity against all costs, expenses (including reasonable attorneys' fees) and
liabilities incurred, in, or in connection with, any such claim or proceeding
brought thereon and the defense thereof. Notwithstanding the foregoing, the
liability of Tenant to indemnity Landlord, as hereinabove set forth, shall not
extend to any matter or claim (i) against which Landlord shall be effectively
protected by insurance, provided, however, that if the amount involved shall
exceed the amount of the effective and collectible insurance in question, the
said liability of Tenant shall apply to such excess, or (ii) arising out of any
negligence or intentional misconduct on the part of Landlord, or Landlord's
agents, contractors or employees while acting within the scope of their
employment, or any breach of Landlord's duties under this lease.
(b) Landlord. Landlord agrees to indemnify and save harmless Tenant
--------
for, from and against all liability, damages, penalties, judgments and claims
of whatever nature arising from injury or damage to person or property sustained
by anyone (i) in or on the Premises and proximately caused by the negligence of
Landlord or Landlord's employees, agents, licensees, invitees or
contractors while acting within the scope of their employment, or (ii) in
connection with any rebuilding, restoration, maintenance, repair or construction
performed on the Premises at Landlord's direction. Landlord shall, at its sole
cost and expense, defend any and all suits or actions (just or unjust) which may
be brought against Tenant, or in which Tenant may be impleaded, based upon any
such matter or claim. This indemnity and hold harmless agreement shall include
indemnity against all costs, expenses (including reasonable attorneys' fees) and
liabilities incurred in, or in connection with, any such claim or proceeding
brought thereon and the defense thereof. Notwithstanding the foregoing, the
liability of Landlord to indemnify Tenant, as hereinabove set forth, shall not
extend to any matter or claim (i) against which Tenant shall be effectively
protected by insurance, provided, however, that if the amount involved shall
exceed the amount of the effective and collectible insurance in question, the
said liability of Landlord shall apply to such excess, or (ii) arising out of
any negligence or intentional misconduct on the part of Tenant, or Tenant's
agents, contractors or employees while acting within the scope of their
employment, or any breach of Tenant's duties under this Lease.
11. Damage or Destruction.
---------------------
(a) Landlord's Repair. If the Premises or Parcel 1 Improvements or
-----------------
any other improvements to the Real Property constructed pursuant to this Lease
are damaged or destroyed by fire or other casualty during the term of this
Lease, Landlord shall, except as hereinafter provided, diligently repair and
restore them to the condition in which they existed immediately prior to such
damage or destruction.
(b) Abatement. Rent due and payable hereunder shall be abated
---------
proportionately during any period in which, by reason of such damage or
destruction, Tenant reasonably determines that there is substantial interference
with Tenant's use or possession of the Premises; provided, however, that Rent
shall not xxxxx in the event such damage or destruction was caused by the
negligent or
21
willful wrongful act of Tenant or Agents acting solely on behalf of Tenant in
the discharge of Tenant's duties under this Lease. Such abatement shall continue
for the period commencing with such damage or destruction and ending with
completion by Landlord of the repair or restoration which Landlord is obligated
or undertakes to do.
(c) Time for Completion. In the event such restoration and repair
-------------------
shall not be completed within six (6) months following such damage or
destruction, then Tenant shall have the right, by written notice to the Landlord
mailed within sixty (60) days after the expiration of such six (6)-month period,
to cancel and terminate this Lease as of the date of such notice.
(d) Major Damage. Notwithstanding the provisions of subparagraphs (a)
------------
and (c) hereinabove, in the event the Premises or the Parcel 1 Improvements
shall be damaged or destroyed by fire or other casualty and such destruction or
damage shall amount to (i) thirty-three and one-third percent (33-1/3%) or more
of the Premises, the Parcel 1 Improvements or the insurable value of the
Premises or the Parcel 1 Improvements (exclusive of the land and foundations)
and such damage or destruction cannot be repaired within forty-five (45) days
after the occurrence thereof, this Lease may be terminated at the election of
Tenant, provided that notice in writing of such election shall be sent by Tenant
to Landlord within thirty (30) days after the occurrence of such destruction or
damage, or (ii) fifty percent (50%) or more of the Premises, the Parcel 1
Improvements or the insurable value of the Premise or the Parcel 1 Improvements
(exclusive of the land and foundations) and such damage or destruction cannot be
repaired within sixty (60) days after the occurrence thereof, this Lease may be
terminated at the election of Landlord, provided that notice in writing of such
election shall be sent by Landlord to Tenant within thirty (30) days after the
occurrence of such destruction or damage. Upon any termination of this Lease as
aforesaid, this Lease and the term hereof shall cease and come to an end, any
unearned Rent or other charges paid in advance shall be refunded to Tenant, and
the parties hereto shall have no further rights or liabilities under this Lease,
except with respect to any defaults which have theretofore occurred. If such
destruction or damage to the Premises or the Parcel 1 Improvements is such that
neither Landlord nor Tenant shall have the right to terminate the Lease under
the provisions of this Paragraph 11, or if, having such right, neither Landlord
nor Tenant shall elect to terminate this Lease within the time periods provided,
then and in either such event, Landlord shall immediately and diligently repair
and restore, or continue to repair or restore, as the case may be, the Premises
or the Parcel 1 Improvements pursuant to the provisions of this Paragraph 11.
(c) Escrow of Proceeds. Unless and until either Landlord or Tenant
------------------
exercises any of its rights to terminate this Lease as herein provided, Tenant
shall be entitled to require, and Landlord shall execute any and all documents
to effect such requirement, that insurance proceeds in excess of Twenty-Five
Thousand and No/100 Dollars ($25,000.00) from the insurance policies enumerated
in Paragraph 9 be deposited in escrow with a banking institution of Tenant's
choosing to be held and paid out by such depository as restoration and repair
progresses in accordance with a payment schedule mutually agreeable to Landlord
and Tenant; provided, however, if Landlord and Tenant cannot agree on an
appropriate payment schedule, the payment schedule shall be determined pursuant
to the arbitration provisions of Paragraph 29. The fees of such depository shall
be borne equally by Landlord and Tenant.
-22-
(f) Damage Near End of Term. If, during the last twenty-four (24)
-----------------------
months of the term or any extended term of this Lease, the Parcel 1 Improvements
are destroyed or damaged to the extent described in subparagraph 11(d)(i)
Landlord may, at Landlord's option, cancel and terminate this Lease as of the
date of occurrence of such damage or destruction by giving written notice to
Tenant of Landlord's election to do so within thirty (30) days after the date of
occurrence of such damage; provided, however, that if such damage or destruction
occurs during any term of this Lease that is subject to any of Tenant's options
to extend set forth in Xxxxxxxxx 00, Xxxxxxxx shall not be entitled to cancel
and terminate this Lease if Tenant notifies Landlord in writing within thirty
(30) days after Tenant's receipt of Landlord's notice of intent to cancel that
Tenant desires to exercise such option to extend, in which event Tenant shall be
deemed to have exercised such option and the provisions of subparagraphs 11(a)
through (e) shall apply with respect to such damage or destruction.
12. Property Taxes.
--------------
(a) Payment. Except as otherwise provided to the contrary herein,
-------
Tenant shall pay to Landlord all Property Taxes (as defined below) applicable to
the Premises during the term of this Lease. Landlord shall deliver to Tenant
all tax or assessment statements, invoices, notices of valuation and any other
notices from the appropriate taxing or assessing authorities relating to the
Premises within fifteen (15) days after Landlord's receipt thereof and at least
thirty (30) days prior to the delinquent date of the particular tax or
assessment. Provided Tenant timely receives the invoices therefor, Tenant
shall pay the amount required to Landlord not less that fifteen (15) days prior
to the delinquency date of such payment, except that the amount of any
commercial rental tax shall be paid by Tenant to Landlord simultaneously with
the rental payment to which such tax is attributable. Within a reasonable time
following Tenant's written request therefor, Landlord shall furnish Tenant with
evidence satisfactory to Tenant that the Property Taxes have been paid. If any
Property Taxes due with respect to the Premises shall cover any period of time
prior to or after the expiration or earlier termination of this Lease, Tenant's
share of such Property Taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year during which this Lease shall be in
effect. If Landlord shall fail to pay any Property Taxes, Tenant shall have the
right, but not the obligation, to pay the same, in which case Tenant may deduct
such amount from the next Rent installment.
(b) Definition. As used herein, the term "Property Taxes" shall
----------
include any form of general or special assessment, license, fee, commercial
rental tax, levy, penalty,or tax (other than inheritance, estate taxes, or tax
computed on Landlord's income), imposed by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, lighting, drainage or other improvement district,
or any part or parts thereof, or against any legal or equitable interest of
Landlord in the Premises or any part thereof or against Landlord's right to Rent
or other income therefrom (but exclusive of taxes levied on or computed by
reference to Landlord's income as a whole), it being the intention of the
parties hereto that the Rent to be paid hereunder, except as otherwise provided
to the contrary herein, shall be paid to Landlord absolutely net, without
deduction of any nature whatsoever, foreseeable or unforeseeable.
-23-
(c) Separate Assessment. If the Premises are not separately assessed,
-------------------
Tenant'a liability shall be an equitable portion of the Property Taxes for all
of the land and improvements included within the tax parcel assessed, such
portion to be mutually determined by Landlord and Tenant from the respective
valuations assigned in the assessor's work sheet or such other information as
may be reasonably available.
(d) Personal Property. Tenant shall directly pay to the taxing or
-----------------
assessing authority prior to delinquency all taxes assessed against and levied
upon the Trade Fixtures and all other personal property of Tenant's to be
assessed and billed separately from the Premises.
(e) Declaration. To the extent permitted by law and the appropriate
-----------
taxing or assessing authority, Tenant alone shall have the duty of attending to,
making or filing any declaration, statement, or report which may be provided or
required by law as the basis of or in connection with the determination,
equalization, reduction or payment of any Property Taxes which are to be borne
or paid or which may become payable by Tenant under the provisions of this
Paragraph and Landlord shall provide Tenant with any and all information,
documents, reports and data necessary for Tenant to prepare and file any such
declaration, statement or report.
(f) Contest. Tenant, at Tenant's sole cost and expense, may contest
-------
the validity or amount of any Property Taxes, in which event Tenant may, to the
extent permitted by law, defer the payment thereof for such period as such
contest shall be actively prosecuted and shall be pending undetermined. Landlord
shall not have the right to initiate and/or pursue any such contest without the
prior written consent of Tenant. Landlord will cooperate with Tenant in each and
every such contest and real estate tax assessment protest, and Landlord will,
upon Tenant's written request and at Tenant's expense, join in the same and
sign any and all necessary documents in connection therewith. Any and all
refunds received as a result of any such contest or protest shall be applied
first towards the payment of all costs and expenses (including reasonable
attorney's fees) incurred in connection with such contest or protest and then
towards reimbursing Tenant for the excess Property Taxes paid by Tenant.
However, no provision of this Lease shall be construed to require Landlord to
allow any such items to be contested to remain unpaid for such length of time as
shall permit the Premises, or the lien thereon created by such item to be
contested, to be foreclosed or sold by the federal, county or municipal taxing
or assessing authority for the nonpayment thereof or for such length of time as
shall constitute a default under any bona fide mortgage encumbering the
Premises; provided, however, at Tenant's written request, Landlord shall give
whatever notices, post whatever bonds, and perform such other acts as may be
required under said mortgages in order to pursue such contests or protests, all
of which acts shall be done at Tenant's cost and expense. Furthermore, if
required by law, Tenant shall pay Property Taxes due hereunder even if Tenant's
protest or contest with respect to earlier assessments is then still pending.
(g) Lump-Sum Assessments. Tenant shall have the right to request that
--------------------
any lump-sum special assessment levied by any government authority against the
Premises before or during the term of this Lease be payable in annual
installments, in which event Landlord shall cooperate with Tenant and sign
documents as may be necessary in connection therewith.
-24-
13. Eminent Domain.
--------------
(a) Total Taking. If during the term of this Lease the whole of the
------------
Premises shall be taken or a perpetual easement shall be declared thereon under
the power of eminent domain (or a purchase in lieu thereof) by any public or
private authority having appropriate jurisdiction, then (i) this Lease and the
term hereof shall automatically cease and terminate as of the date of such
taking and Tenant shall have the right, at is sole election, to continue to
occupy the Premises subject to the provisions of this Lease for all or such
part, as Tenant may determine, of the period between the date of such taking and
the date when possession of the Premises shall actually be taken and possessed
by the taking authority; and (ii) any unearned Rent and other amounts paid in
advance shall be refunded to Tenant. If Tenant elects to continue its occupancy
as aforesaid, Tenant shall procure from the applicable governmental authority
all necessary consents and authorizations to continue to occupy the Premises
from and after the date of such taking.
(b) Partial Taking. If at any time during the term of this Lease, any
--------------
public or private authority with appropriate jurisdiction shall, under the power
of eminent domain, declare a perpetual easement on or make a taking (including a
purchase in lieu thereof) of less than the whole of the Premises, but such
taking (i) results in the reduction of the ground floor area of the Building by
more than ten percent (10%); (ii) results in the reduction of the area of the
Premises exclusive of the Building by more than ten percent (10%); or (iii)
results in such a nuisance or interference with pedestrian or vehicular ingress
or egress to or from the Premises or with parking that, in the reasonable
opinion of Tenant, the Premises are no longer reasonably suitable for the
conduct of Tenant's business; then and in any such event, Tenant may terminate
this Lease by giving Landlord written notice of termination prior to the taking
of possession of the Premises by the governmental authority. In the event of
termination by Tenant under the provisions of this subparagraph (b), (i) this
Lease and the term hereof shall cease and terminate as of the last day of the
calendar month in which such notice of termination is given, with the right of
Tenant, at its election, to continue to occupy the Premises subject to the
provisions of this Lease for all or such part, as Tenant may determine, of the
period between said last day and the date when possession of the Premises shall
actually be taken by the taking authority; and (ii) any unearned Rent and other
amounts paid in advance, shall be refunded to Tenant.
(c) Restoration. In the event that Tenant, having such right, shall
-----------
not elect to terminate this Lease pursuant to subparagraph (b) hereof, or any
public or private authority shall, under the power of eminent domain, declare a
perpetual easement on or make a taking of the Premises (including a purchase in
lieu thereof) which does not entitle Tenant to terminate this Lease under
subparagraphs 13(a) or (b): (i) this Lease and the term hereof shall continue in
full force and effect, (ii) Landlord shall, at its expense, forthwith restore
what may remain of the improvements or the rest of the Premises, as the case may
be, to the same condition they were in prior to such taking or damage, (iii) a
just proportion of the Rent and the other amounts payable by Tenant under this
Lease, according to the nature and extent of the injury to the Premises and
Tenant's use and possession thereof, shall be suspended or abated until what may
remain of the Premises shall be restored as aforesaid, and (iv) thereafter a
just proportion of the Rent and such other amounts according to the nature and
extent of the taking and resulting injury to the Premises and Tenant's use and
possession thereof, shall be permanently abated for the balance of the term of
this Lease.
-25-
(d) Awards. Landlord and Tenant shall be entitle to separately
------
claim, prove and receive in any eminent domain preceding (or purchase in
lieu thereof), whether affecting the whole or any part of the Premises, such
awards and damages as each may respectively legally be entitled to claim based
upon its respective interest or estate; provided, however, in the event the
tribunal hearing such eminent domain proceeding does not separately value and
allocate any awards between Landlord's fee interest in the Premises and Tenant's
leasehold interest in the Premises including the value of the unexpired portion
of the term hereof, together with any options to renew or rights of first
refusal to which Tenant would otherwise be entitled under the terms of this
Lease. Any dispute as to allocation of the award between Landlord and Tenant
shall be resolved as provided in Paragraph 29 of this Lease. Tenant shall also
be entitled to separately claim, prove and receive in any such eminent domain
proceding (or purchase in lieu thereof) such awards as may be allowed for
Tenant's personal property, Trade Fixtures, loss of business, loss of
"goodwill", moving expenses and depreciation or injury to and cost of removal of
stock in trade, and in no event shall Landlord be entitled to any portion
whatsoever of any such awards.
(e) Unsafe Premises. In the event the Premises are condemned as unsafe
---------------
at any time during the term of this Lease as a result of Landlord's negligence
in constructing the improvements, and as a consequence thereof, Tenant shall be
unable to occupy the same to operate its business therein, Landlord shall
promptly cause the same to be put in safe condition and the condemnation
removed. Rent and all other charges payable hereunder shall xxxxx during the
period that Tenant is unable to use the Premises for the conduct of its
business, and Landlord shall be responsible for Tenant's damage suffered on
account of such condemnation. It is expressly understood, however, that there
shall be no cessation or abatement of Rent or other charges as herein provided
if such condemnation has been occasioned by the negligence or fault of Tenant,
its agents or employees.
14. Utilities. Tenant shall directly contract for and directly pay for all
---------
water, gas, heat, light, power, telephone, garbage collection and other
utilities and service supplied to the Premises.
15. Assignment and Subletting.
-------------------------
(a) No Consent Required. Provided Tenant notifies Landlord in writing of
-------------------
such, Tenant shall have the right, at any time and from time to time during the
term of this Lease, to encumber, mortgage or pledge its interest in this Lease
and the Premises, to assign this Lease, in whole or in part, and to sublet (and
to grant occupancy rights and licenses of any kind with respect to) the whole or
any part of the Premises or of the term of this Lease, all without the consent
of Landlord. In the event Tenant assigns this Lease, Tenant shall remain liable
hereunder as a guarantor or surety; however, if the assignee has a net worth at
least equal to that of Tenant as of the date of assignment and has demonstrated
commercially reasonable ability to meet all of Tenant's obligations hereunder,
Tenant shall be released from all further liability under this Lease, provided
such assignee assumes in writing all of Tenant's obligations hereunder. The term
"Tenant" as used in this Lease shall be deemed to mean the then holder of the
leasehold estate created hereby.
-26-
(b) Notices. Simultaneously with the giving of any notice under this
-------
Lease to Tenant, Landlord shall send a copy of such notice to all leasehold
mortgagees, assignees and subtenants permitted hereunder. Any of such
mortgagees, assignees and/or subtenants shall have the same rights as Tenant to
cure any defaults under this Lease as may be specified in any such notices, and
Landlord shall accept performance by any of such mortgagees, assignees or
subtenants as if such performance were rendered by Tenant. However, Landlord
shall not be obligated to send notices to a particular mortgagee, assignee or
subtenant unless Tenant shall have notified Landlord in writing of the name and
address of such mortgagee, assignee or subtenant and Tenant shall have directed
Landlord, in writing, to send a copy of all notices to such mortgagee, assignee
or subtenant.
16. Conveyance by Landlord. Whenever Landlord conveys its interest in
----------------------
the Premises or assigns its interest in this Lease (other than an assignment for
security purposes), provided Landlord first provides Tenant with the assumption
agreement described in the following sentence, Landlord shall automatically be
released from the further performance of covenants on the part of Landlord
herein contained, and from any and all further liability, obligations, costs and
expenses, demands, causes of action, claims or judgments arising from or growing
out of or connected with this Lease after the effective date of said release and
Tenant shall thereafter attorn to the assignee of Landlord's interest in this
Lease. The effective date of said release shall be the date Tenant receives an
executed original of a legally enforceable assignment and assumption agreement,
signed by the assignee of Landlord's interest in this Lease, and pursuant to
which (a) Tenant is expressly made a third-party beneficiary thereof, and (b)
the assignee expressly agrees to assume and undertake all of Landlord's
obligations, duties, responsibilities and liabilities with respect to this
Lease, including without limitation, if applicable, Landlord's obligations to
construct the Improvements.
17. Access to Premises. Landlord shall have the right to enter upon the
------------------
Premises at all reasonable times for purposes of inspecting the Premises to
insure that Tenant is complying with its obligations hereunder, performing
Landlord's duties hereunder and, during the last nine (9) months of the then
current term of this Lease, showing the Premises to prospective tenants or
purchasers; subject however, to the following conditions:
(a) Prior Notice. Landlord shall give Tenant prior notice (and
------------
with respect to any entry for purposes of showing Premises to prospective
Tenants or Purchasers, three (3) days' prior notice) of Landlord's intent to
enter the Premises, specifying the purpose of such entry;
(b) Accompanied by Tenant. Landlord shall not enter and remain
---------------------
on the Premises unless accompanied by Tenant or Tenant's designated agent
therefor; and
(c) Secure Areas. Landlord shall not show to third parties or
------------
prospective tenants or purchasers those portions of the Premises designated by
Tenant as "secure areas" and shall take all reasonable precautions to insure
that such third parties or prospective tenants or purchasers do not view or have
access to such secure areas.
-27-
18. Options to Extend.
-----------------
(a) Grant of Options; Rent. If Tenant shall not then be in default under
----------------------
this Lease, Landlord hereby grants to Tenant the right and option to extend the
term of this Lease for two (2) successive periods of ten (10) years each on the
same terms and conditions as contained herein; provided, however, that the Rent
applicable during such option periods shall be adjusted as follows:
(i) Rent during the first option period:
(A) For the one hundred twenty fourth through one
hundred fifty ninth months following the
Commencement Date, Tenant's Rent shall be an amount
equal to SEVENTY-ONE THOUSAND SIX HUNDRED SEVENTY-
TWO and 48/100 DOLLARS ($71,672.48) per month,
which amount has been calculated based on $.422 per
square foot of the Building per month;
(B) For the one hundred sixtieth through one
hundred eighty-third months following the
Commencement Date, Tenant's Rent shall be an amount
equal to SEVENTY-SEVEN THOUSAND FOUR HUNDRED FORTY-
SEVEN and 04/100 DOLLARS ($77,447.04) per month,
which amount has been calculated based on $.456 per
square foot of the Building per month;
(C) For the one hundred eighty-fourth through two
hundred nineteenth months following the
Commencement Date, Tenant's Rent shall be EIGHTY-
ONE THOUSAND SIX HUNDRED NINETY-THREE and 04/100
DOLLARS ($81,693.04) per month, which amount has
been calculated based on $.481 per square foot of
the Building per month; and
(D) For the two hundred twentieth through two
hundred forty-third months following the
Commencement Date, Tenant's Rent shall be EIGHTY-
EIGHT THOUSAND ONE HUNDRED FORTY-SIX and 96/100
DOLLARS ($88,146.96) per month, which amount has
been calculated based on $.519 per square foot of
the Building per month.
(ii) Rent during the second option period:
(A) For the two hundred forty-fourth through
two hundred seventy-ninth months following the
Commencement Date. Tenant's Rent shall be an
amount equal to NINETY-THREE THOUSAND FOUR
HUNDRED TWELVE and 00/100 DOLLARS ($93,412.00)
per month, which amount
-16-
has been calculated based on $.550 per square foot of the
Building per month;
(B) For the two hundred eightieth through three hundred
three months following the Commencement Date, Tenant's Rent
shall be an amount equal to ONE HUNDRED TWO THOUSAND SEVENTY
THREE and 84/100 DOLLARS ($102,073.84) per month, which
amount has been calculated based on $.601 per square foot of
the Building per month;
(C) For the three hundred three through three hundred
thirty-ninth months following the Commencement Date,
Tenant's Rent shall be ONE HUNDRED EIGHT THOUSAND EIGHTEEN
and 24/100 DOLLARS ($108,018.24) per month, which amount
has been calculated based on $.636 per square foot of the
Building per month; and
(D) For the three hundred fortieth through three hundred
sixtieth third months following the Commencement Date,
Tenant's Rent shall be ONE HUNDRED EIGHTEEN THOUSAND THIRTY
EIGHT and 80/100 DOLLARS ($118,038.80) per month, which
amount has been calculated based on $.695 per square foot of
the Building per month.
(iii) The foregoing to the contrary notwithstanding, in the event
that during the original term of this Lease, Tenant's Rent is
calculated pursuant to the formula set forth in subparagraph
4(b) hereof, Tenant's Rent during the above-referenced option
periods shall be calculated utilizing such formula, with such
modifications as are necessary to (A) provide for
proportionately similar incremental margin increases during
each of the time periods specified above (i.e., the second
component of such formula), and (B) delete "B 1" from the
formula.
(b) Exercise. Between the twelfth (12th) and seventh (7th) months prior
--------
to the expiration of the initial term or first extension of this Lease, Landlord
shall give Tenant written notice reminding Tenant that Tenant must exercise its
next option to extend at least six (6) months prior to the expiration of such
current term (the "Reminder Notice"). Tenant shall exercise each option to
extend by giving Landlord written notice thereof at least six (6) months prior
to the expiration of the then current term; provided, however, that if Landlord
fails to timely give the Reminder Notice to Tenant, and if Tenant fails to
timely give Landlord written notice exercising the option to extend, then
Landlord shall give Tenant written notice that such option to extend has not be
exercised, and Tenant then shall have an additional thirty (30) days after
receiving Landlord's notice during which to exercise such option to extend by
giving Landlord written notice
-29-
thereof within said additional thirty (30)-day period.
(c) Amendments. Within thirty (30) days following each instance that
-----------
Tenant exercises any of the options to extend granted hereinabove, the parties
hereto shall execute and deliver an amendment to this Lease memorializing such
exercise by Tenant.
19. Parcel 2.
--------
(a) Inclusion of Parcel 2 in Lease. Landlord and Tenant acknowledge
------------------------------
and agree that Parcel 2 is included in this Lease and the Premises upon and
subject to the following terms and conditions:
(i) Unless Tenant has previously notified Landlord that Tenant
desires that Landlord construct the Parcel 2 Improvements
(as defined below) pursuant to the provisions of
subparagraph (b) hereinbelow and subject to the provisions
of (ii) hereinbelow, this Lease shall terminate with
respect to Parcel 2 on the fifth anniversary of the
Commencement Date.
(ii) The foregoing to the contrary notwithstanding, this Lease,
and all of the terms and provisions hereof, shall continue
in full force and effect with respect to Parcel 2 for so
long a period of time as Tenant pays to Landlord the Parcel
2 Monthly Carrying Charge (as hereinafter defined). For
purposes of this Paragraph 19, the "Parcel 2 Monthly
Carrying Charge" shall be payable in advance commencing on
the fifth anniversary of the Commencement Date and on the
same day of each and every month thereafter during the term
of the Lease (subject, however, to the provisions of
subparagraph (c) hereinbelow) and shall mean the actual
out-of-pocket monthly "carrying costs" directly
attributable to Parcel 2, determined as follows:
(A) At least sixty (60) days prior to the fifth
anniversary of the Commencement Date, Landlord and Tenant
shall, in good faith and using reasonable diligence,
determine the fair market value of Parcel 2 (the "Parcel 2
Fair Market Value"). In determining the Parcel 2 Fair
Market Value, Landlord and Tenant shall take into
consideration all relevant factors, including, without
limitation, the then existing value of like-land located
within the metropolitan area of Phoenix, Arizona, similar
in size, quality and location to Parcel 2. If Landlord and
Tenant cannot agree on the Parcel 2 Fair Market Value on or
before thirty (30) days prior to the fifth anniversary of
the Commencement Date, the
-30-
Parcel 2 Fair Market Value shall be determined pursuant to the
arbitration provisions of Paragraph 29 hereof; provided, however,
that each of the arbitrators to be appointed shall be persons
knowledgeable and qualified in the appraisal of real estate in
Maricopa County, Arizona.
(B) The Parcel 2 Monthly Carrying Charge shall be calculated
pursuant to the following formula:
(Parcel 2 Fair Market Value)(PR)
-------------------------------- = (Parcel 2 Monthly
Carrying Charge)
For the purposes of this subparagraph 19(a)(ii)(B), "PR" shall mean
the prime lending rate of The Valley National Bank of Arizona for its
most credit-worthy commercial customers, plus one and one-half (1-1/2)
percentage points. The PR shall be determined as of the fifteenth
(15th) day of each month the Parcel 2 Monthly Carrying Charge shall be
in effect and shall apply to the next succeeding month's Parcel 2
Monthly Carrying Charge. This Lease will terminate with respect to
Parcel 2 at such time as Tenant fails to pay the Parcel 2 Monthly
Carrying Charge, unless such failure is due to the fact that the
Parcel 2 Improvements have been Substantially Completed pursuant to
subparagraph (b) hereinbelow.
(b) Construction of Parcel 2 Improvements. Until such time as this Lease
-------------------------------------
is terminated with respect to Parcel 2, Tenant shall have the right to require
that certain improvements be constructed on Parcel 2, upon and subject to the
following terms and conditions:
(i) Upon receipt of Tenant's written demand therefor, Landlord shall
commence construction of certain improvements on Parcel 2 (the
"Parcel 2 Improvements") pursuant to preliminary and final plans and
specifications (the "Parcel 2 Plans") prepared by Tenant, or at
Tenant's direction, and approved by Landlord; which approval shall not
be withheld if the Parcel 2 Improvements are reasonably similar in
form, scope and function (but not size) to the Parcel 1 Improvements.
(ii) Upon Landlord's approval of the Parcel 2 Plans, Landlord shall
diligently proceed to construct the Parcel 2 Improvements in a good
and workmanlike manner, pursuant to the provisions of Paragraph 2
hereof; provided, however, that with respect to Landlord's
construction of the Parcel 2 Improvements, said Paragraph 2 shall be
deemed modified as follows:
-31-
(A) Where inconsistent with the provisions of Paragraph
2, the provisions of this Paragraph 19 shall prevail;
(B) Key Dates and Benchmark Dates shall be established by
the parties to reflect then applicable dates;
(C) The term "Commencement Date" shall refer to the date
the Parcel 2 Improvements are Substantially Completed and
Parcel 2 Rent (as hereinafter defined) begins to accrue;
(D) The term "Parcel 2" shall be deemed substituted for
every reference to "Parcel 1" and the term "Parcel 2
Plans" shall be deemed substituted for every reference to
the "Plans"); and
(E) Such other revisions are as necessary to reflect any
inherent or obvious differences between the Parcel 1
Improvements and the Parcel 2 Improvements.
In the event Landlord and Tenant disagree with respect to any aspect of the
construction of the Parcel 2 Improvements and/or the installation of the Process
Equipment, if any, to be placed in the Parcel 2 Improvements, or any other
provision set forth in this Paragraph 19, their dispute shall be resolved
pursuant to the arbitration provisions set forth in Paragraph 29 hereof.
(c) Rent. Effective as of the date the Parcel 2 Improvements have
----
been Substantially Completed, Tenant shall no longer be obligated to pay the
Parcel 2 Monthly Carrying Charge, but shall instead commence paying additional
Rent (the "Parcel 2 Rent"), to be determined as follows:
(i) Prior to commencing construction of the Parcel 2
Improvements, Landlord shall advise Tenant in writing of
Landlord's estimated costs of constructing the Parcel 2
Improvements, which estimated costs shall include, but are
not limited to actual costs of construction of the Parcel
2 Improvements, plus architectural, engineering, field and
office overhead costs, developer's fees not to exceed ten
percent (10%) of the actual cost of construction, the
financing costs, permit costs and fees.
(ii) If Tenant does not object to such estimated costs within
thirty (30) days after receipt of Landlord's notification
thereof, such estimated costs shall be deemed to be the
"Parcel 2 Construction Costs;" provided, however, that if
Tenant timely objects in writing to such estimated costs,
Landlord and Tenant shall solicit and obtain at least
three (3) bona fide bids from reputable licensed
-32-
contractors for the construction of the Parcel 2 Improvements,
and the lowest bid shall be deemed to be the "Parcel 2
Construction Costs." The bid form shall contain requirements
denoting any and all construction time frames and penalties
that are to be applicable to the Landlord.
(iii) Parcel 2 Rent shall be payable monthly, commencing on the next
successive date Rent (as defined pursuant to Paragraph 4
hereof) is due following the date the Parcel 2 Improvements are
Substantially Completed (with pro rata adjustments as
necessary), and shall be calculated as follows:
(Parcel 2 Construction Costs + Parcel 2 Land Costs)(CMR)
--------------------------------------------------------
12
= (Parcel 2 Rent)
For purposes of this subparagraph (c)(iii),
(A) "Parcel 2 Land Costs" shall mean the Parcel 2 Fair Market
Value; and
(B) "CMR" shall mean the then existing commercial lending rate
of The Valley National Bank of Arizona for its most
credit-worthy borrowers for purposes of financing real estate
acquisition, based upon a thirty (30)-year amortization;
provided, however, that any construction items that, when
affixed or added to the Parcel 2 improvements, increase the
value of the building to be constructed on Parcel 2 pursuant to
the Parcel 2 plans (the "Parcel 2 Building") to an amount equal
to or greater than one hundred ten percent (110%) of the value
of the Parcel 2 Building as valued without such construction
items, and which cannot be utilized by subsequent tenants or
users of Parcel 2, shall be subject to an amortization constant
not to exceed the greater of, (A) the life of such construction
items; or (B) ten (10) years.
(iv) The Parcel 2 Rent shall be subject to escalation in amounts and
during periods proportionately similar to those set forth in
subparagraph 4(a) hereof.
(v) In the event an IDB is obtained to finance the Parcel 2
Construction Costs, the Parcel 2 Rent shall be determined
pursuant to subparagraph 4(b), with appropriate adjustments to
reflect the difference between the Parcel 2 Construction
-33-
Costs and the cost of constructing the
Parcel 1 Improvements.
(vi) Any disputes between Landlord and Tenant with respect to
Parcel 2 Rent shall be resolved pursuant to the arbitration
provisions set forth in Paragraph 29 thereof.
(d) Part of Premises. The Parcel 2 Improvements shall constitute a
----------------
part of the Premises upon the date they are Substantially
Completed and all references in this Lease to the Parcel 1
Improvements shall also be deemed to refer to the Parcel 2
Improvements,unless the context otherwise requires.
(e) Lease Extension. Anything herein to the contrary notwithstanding,
---------------
in the event the Parcel 2 Improvements are not Substantially
Completed on or before that date which is five (5) years prior to
the expiration of the then current term of this Lease, the then
current term of this Lease shall be extended for an additional
period of time equal to: (i) five (5) years, less (ii) the amount
of time remaining until the expiration of the then current term
following the date that the Parcel 2 Improvements have been
Substantially Completed. In the event the then current term of
this Lease is extended pursuant to the provisions of this
subparagraph (e), all Rent payable with respect to Parcel 1 for
the period of time following the original expiration date of the
then current term until the extended expiration date of the then
current term shall be at the rate payable immediately prior to
such original expiration date, equitably adjusted to reflect
incremental increases proportionately similar to the incremental
rental increases as provided in this Lease.
(f) Amendment. Within thirty (30) days after the Parcel 2 Improvements
---------
are Substantially Completed, Landlord and Tenant shall execute an
amendment to this Lease memorializing the same.
20. Parcel 3.
--------
(a) Inclusion of Parcel 3 in Lease. Landlord and Tenant acknowledge
------------------------------
and agree that Parcel 3 is included in this Lease and the Premises
upon and subject to the following terms and conditions:
(1) Unless Tenant has previously notified Landlord that Tenant
desires that Landlord construct the Parcel 3 Improvements (as
defined below) pursuant to the provisions of subparagraph (b)
hereinbelow and subject to the provisions of (ii)
hereinbelow, this Lease shall terminate with respect to
Parcel 3 on the fifth anniversary of the Lease Commencement
Date.
(ii) The foregoing to the contrary notwithstanding, this Lease,
and all of the terms and provisions hereof, shall continue in
full force and effect with respect to Parcel 3 for so long a
period of time as Tenant pays to Landlord the Parcel 3
Monthly Carrying Charge (as hereinafter defined). For
purposes of this Paragraph 20, the
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"Parcel 3 Monthly Carrying Charge" shall be payable in advance
commencing on the fifth anniversary of the Lease Commencement
Date and on the same day of each and every month thereafter
during the term of the Lease (subject, however to the provisions
of subparagraph (c) hereinbelow) and shall mean the actual out-
of-pocket monthly "carrying costs" directly attributable to
Parcel 3, determined as follows:
(A) At least sixty (60) days prior to the fifth anniversary of
the Lease Commencement Date, Landlord and Tenant shall, in good
faith and using reasonable diligence, determine the fair market
value of Parcel 3 (the "Parcel 3 Fair Market Value"). In
determining the Parcel 3 Fair Market Value, Landlord and Tenant
shall take into consideration all relevant factors, including,
without limitation, the then existing value of like-land located
within the metropolitan area of Phoenix, Arizona, similar in
size, quality and location to Parcel 3. If Landlord and Tenant
cannot agree on the Parcel 3 Fair Market Value on or before
thirty (30) days prior to the fifth anniversary of the Lease
Commencement Date, the Parcel 3 Fair Market Value shall be
determined pursuant to the arbitration provisions of Paragraph
29 hereof; provided, however, that each of the arbitrators to be
appointed shall be persons knowledgeable and qualified in the
appraisal of real estate in Maricopa County, Arizona.
(B) The Parcel 3 Monthly Carrying Charge shall be calculated
pursuant to the following formula:
(Parcel 3 Fair Market Value)(PR)
-------------------------------- = (Parcel 3 Monthly
12 Carrying Charge)
For the purposes of this subparagraph 20(a)(ii)(B), "PR" shall mean the
prime lending rate of The Valley National Bank of Arizona for its most
credit-worthy commercial customers, plus one and one-half (1-1/2)
percentage points. The PR shall be determined as of the fifteenth (15th)
day of each month the Parcel 3 Monthly Carrying Charge shall be in effect
and shall apply to the next succeeding month's Parcel 3 Monthly Carrying
Charge. This Lease will terminate with respect to Parcel 3 at such time
as Tenant fails to pay the Parcel 3 Monthly Carrying Charge, unless such
failure is due to the fact that the Parcel 3 Improvements have been
Substantially Completed pursuant to subparagraph (b) hereinbelow.
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(b) Construction of Parcel 3 Improvements. Until such time as this
-------------------------------------
Lease is terminated with respect to Parcel 3, Tenant shall have the right to
require that certain improvements be constructed on Parcel 3, upon and subject
to the following terms and conditions:
(i) Upon receipt of Tenant's written demand therefor, Landlord
shall commence construction of certain improvements on
Parcel 3 (the "Parcel 3 Improvements") pursuant to
preliminary and final plans and specifications (the "Parcel
3 Plans") prepared by Tenant, or at Tenant's direction, and
approved by Landlord; which approval shall not be withheld
if the Parcel 3 Improvements are reasonably similar in
form, scope and function (but not size) to the Parcel 1
Improvements.
(ii) Upon Landlord's approval of the Parcel 3 Plans, Landlord
shall diligently proceed to construct the Parcel 3
Improvements in a good and workmanlike manner, pursuant to
the provisions of Paragraph 2 hereof; provided, however,
that with respect to Landlord's construction of the Parcel
3 Improvements, said Paragraph 2 shall be deemed modified
as follows:
(A) Where inconsistent with the provisions of Paragraph 2,
the provisions of this Paragraph 20 shall prevail;
(B) Key Dates and Benchmark Dates shall be established by
the parties to reflect then applicable dates;
(C) The term "Commencement Date" shall refer to the date
the Parcel 3 Improvements are Substantially Completed and
Parcel 3 Rent (as hereinafter defined) begins to accrue;
(D) The term "Parcel 3" shall be deemed substituted for
every reference to "Parcel 1" and the term "Parcel 3
Plans" shall be deemed substituted for every reference to
the Plans; and
(E) Such other revisions are as necessary to reflect any
inherent or obvious differences between the Parcel 1
Improvements and the Parcel 3 Improvements.
In the event Landlord and Tenant disagree with respect to any aspect of the
construction of the Parcel 3 Improvements and/or the installation of the Process
Equipment, if any, to be placed in the Parcel 3 Improvements, or any other
provision set forth in this Paragraph 20, their dispute shall be resolved
pursuant to the arbitration provisions set forth in Paragraph 29 hereof.
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(c) Rent. Effective as of the date the Parcel 3 Improvements have been
----
Substantially Completed, Tenant shall no longer be obligated to pay the Parcel 3
Monthly Carrying Charge, but shall instead commence paying additional Rent (the
"Parcel 3 Rent"), to be determined as follows:
(i) Prior to commencing construction of the Parcel 3 Improvements,
Landlord shall advise Tenant in writing of Landlord's estimated
costs of constructing the Parcel 3 Improvements, which
estimated costs shall include, but are not limited to actual
costs of construction of the Parcel 3 Improvements, plus
architectural, engineering, field and office overhead costs,
developer's fees not to exceed ten percent (10%) of the actual
cost of construction, financing costs, permit costs and fees.
(ii) If Tenant does not object to such estimated costs within thirty
(30) days after receipt of Landlord's notification thereof,
such estimated costs shall be deemed to be the "Parcel 3
Construction Costs;" provided, however, that if Tenant timely
objects in writing to such estimated costs, Landlord and Tenant
shall solicit and obtain at least three (3) bona fide bids from
reputable licensed contractors for the construction of the
Parcel 3 Improvements, and the lowest bid shall be deemed to be
the "Parcel 3 Construction Costs." The bid form shall contain
requirements denoting any and all construction time frames and
penalties that are to be applicable to the Landlord.
(iii) Parcel 3 Rent shall be payable monthly, commencing on the next
successive date Rent (as defined pursuant to Paragraph 4
hereof) is due following the date the Parcel 3 Improvements are
Substantially Completed (with pro rata adjustments as
necessary), and shall be calculated as follows:
(Parcel 3 Construction Costs + Parcel 3 Land Costs)(CMR)
--------------------------------------------------------
12
= (Parcel 3 Rent)
For purposes of this subparagraph (c)(iii),
(A) "Parcel 3 Land Costs" shall mean the Parcel 3 Fair Market
Value, and
(B) "CMR" shall mean the then existing commercial lending rate
of The Valley National Bank of Arizona for its most
credit-worthy
-37-
borrowers for purposes of financing real estate
acquisition, based upon a thirty (30)-year amortization;
provided, however, that any construction items that when
affixed or added to the Parcel 3 Improvements, increase
the value of the building to be constructed on Parcel 3
pursuant to the Parcel 3 Plans (the "Parcel 3 Building")
to an amount equal to or greater than one hundred ten
percent (110%) of the value of the Parcel 3 Building as
valued without such construction items, and which cannot
be utilized by subsequent Tenants or users of Parcel 3,
shall be subject to an amortization constant not to exceed
the greater of, (A) the life of such construction items,
or (B) ten (10) years.
(iv) The Parcel 3 Rent shall be subject to escalation in
amounts and during periods proportionately similar to
those set forth in subparagraph 4(a) hereof.
(v) In the event an IDB is obtained to finance the Parcel 3
Construction Costs, the Parcel 3 Rent shall be determined
pursuant to subparagraph 4(b), with appropriate
adjustments to reflect the difference between the Parcel 3
Construction Costs and the cost of constructing the Parcel
1 Improvements.
(vi) Any disputes between Landlord and Tenant with respect to
Parcel 3 Rent shall be resolved pursuant to the
arbitration provisions set forth in Paragraph 29 hereof.
(d) Part of Premises. The Parcel 3 Improvements shall constitute a
----------------
part of the Premises upon the date they are Substantially Completed and all
references in this Lease to the Parcel 1 Improvements shall also be deemed to
refer to the Parcel 3 Improvements, unless the context otherwise requires.
(e) Lease Extension. Anything herein to the contrary
---------------
notwithstanding, in the event the Parcel 3 Improvements are not Substantially
Completed on or before that date which is five (5) years prior to the expiration
of the then current term of this Lease and provided the Parcel 3 Improvements
are not capable of being operated independently from the Parcel 1 Improvements
and the Parcel 2 Improvements, the then current term of this Lease shall be
extended for an additional period of time equal to: (i) five (5) years, less
(ii) the amount of time remaining until the expiration of the then current term
following the date that the Parcel 3 Improvements have been Substantially
Completed. In the event the then current term of this Lease is extended pursuant
to the provisions of this subparagraph (e), all Rent payable with respect to
Parcel 1 for the period of time following the original expiration date of the
then current term until the extended expiration date of the then current term
shall be at the rate payable immediately prior to such original expiration date,
equitably adjusted to reflect incremental increases proportionately similar to
the incremental rental increases as provided in this Lease.
-38-
(f) Amendment. Within thirty (30) days after the Parcel 3
-----------
Improvements are Substantially Completed, Landlord and Tenant shall execute an
amendment to this Lease memorializing the same.
(g) Condition Precedent. Anything herein to the contrary
--------------------
notwithstanding, Tenant shall not be entitled to require Landlord to construct,
and Landlord shall not be obligated to construct, the Parcel 3 Improvements
unless Tenant has first required Landlord to construct the Parcel 2 Improvements
pursuant to Paragraph 19 hereof.
21. Tenant's Default; Remedies.
--------------------------
(a) Defaults. The occurrence of any one or more of the following
--------
events shall constitute a default and breach of this Lease by Tenant:
(i) The abandonment of the Premises by Tenant;
(ii) The failure by Tenant to make any payment of Rent or any
other payment required to be made by Tenant hereunder, as
and when due, and such failure shall constitute for a
period of ten (10) days after written notice thereof from
Landlord to Tenant; or
(iii) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be
observed or performed by Tenant, other than described in
subparagraph (ii) above, and such failure shall continue
for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that if
the nature of Tenant's default is such that more than
thirty (30) days are required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences
such cure within such thirty (30)-day period and thereafter
diligently prosecutes such cure to completion.
(b) Remedies.
--------
(i) In the event of any default and breach by Tenant of any of
its obligations under this Lease and notwithstanding the
abandonment of the Premises by Tenant, Landlord may, at
Landlord's option and without limiting Landlord in the
exercise of any other rights or remedies which it may have
by reason of such default and breach, exercise all of its
rights and remedies hereunder, including, without
limitation:
(A) Declare the term of this Lease ended and to re-enter
the Premises and take possession thereof and remove all
persons therefrom;
-39-
(B) Bring an action or actions without terminating
this Lease, to collect Rent and other charges
hereunder which are from time to time past due and
unpaid or in enforcement of any other provisions of
this Lease imposing obligations on Tenant; it being
understood that the bringing of any such action or
actions shall not terminate this Lease unless
written notice of termination is given.
(ii) Should Landlord terminate this Lease and thereafter
relet the Premises the proceeds of any such
reletting shall first be applied to the payment of
the costs and expenses of reletting the Premises,
including without limitation, reasonable alterations
and repairs which Landlord deems reasonably
necessary and advisable and to the payment of
reasonable attorneys' fee incurred by Landlord in
connection with the retaking of the Premises and
such reletting. When such costs and expenses of
reletting have been paid, Tenant shall be entitled
to a credit for the amount of rental receivable from
such reletting each month during the unexpired
balance of the Term. At Landlord's sole election;
(A) Tenant shall pay Landlord monthly on the first
day of each month as specified herein the difference
between the rental receivable from reletting and the
Rent specified herein for the same period; or (B) an
amount equal to the present value of the Rent for
the balance of the term and the rental receivable
from reletting for the same period.
(iii) All Trade Fixtures or other personal property of
Tenant remaining on the Premises at the time that
Landlord takes possession thereof may be removed by
Tenant within sixty (60) days of such possession. If
Tenant fails or refuses to remove its Trade
Fixtures, Landlord may, at Landlord's election,
store same at Tenant's expense for Tenant's account.
Unless Tenant gives written Notice to Landlord
abandoning same Landlord shall have no right or
power to sell the Trade Fixtures.
(iv) All rights, options, elections, powers and remedies
of Landlord under the provisions of this Lease are
cumulative of each other and of every other right,
option, election, power or remedy which Landlord may
otherwise have at law or in equity and all or any of
which Landlord is hereby authorized to exercise. The
exercise of one or more rights, options, elections,
powers or remedies shall not prejudice or impair the
concurrent
-40-
or subsequent exercise of other rights or
remedies Landlord may have upon a breach and
default under this Lease and shall not be deemed
to be a waiver of Landlord's rights or remedies
thereupon or to be a release of Tenant from
Tenant's obligations thereon unless such waiver
or release is expressed in writing and signed by
Landlord.
(v) Landlord may bring one or more actions to
collect amounts due under this Lease as follows:
(A) Without terminating this Lease, for
amounts due as they become due;
(B) After terminating this Lease; (i) for
monthly amounts due under Paragraph 21(b)(ii)(A)
as such become due; or (ii) a single suit for
the amount due under paragraph 21(b)(ii)(B)
which action may be commenced at any time after
termination of this Lease.
(c) Rental Late Charges and Interest. Tenant hereby
--------------------------------
acknowledges that Rent is due on the first of each month during the term of this
Lease and that late payment by Tenant to Landlord of Rent will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Accordingly, if any installment of Rent due
from Tenant shall not be received by Landlord within ten (10) days after such
amount shall be due, Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. In the event any installment of Rent
due from Tenant shall not be received within fifteen (15) days following the
above-referenced ten (10)-day period, interest on such overdue amount, and on
any late charges on such overdue amount, shall begin to accrue at a rate equal
to two (2) percentage points added to the prime lending rate of The Valley
National Bank of Arizona, as published from time to time, and shall be due and
payable when such overdue amount is paid.
22. Landlord's Default; Remedies. In the event Landlord shall fail,
----------------------------
within thirty (30) days after written notice from Tenant, to perform any
obligation by Landlord under this Lease, or to commence to cure within said
thirty (30)-day period and diligently proceed to cure any such obligation which
cannot reasonably be cured within said thirty (30)-day period, Tenant shall have
the right to perform such obligation and to deduct the costs thereof (including
reasonable attorneys' fees) from the next ensuing payments of Rent due
hereunder. Notwithstanding the foregoing, in the event of an emergency, danger
to person or property, or substantial interference with Tenant's business
conducted on the Premises, Tenant shall have the right to perform Landlord's
obligation and deduct the costs thereof without giving the foregoing described
notice to Landlord, and/or before the expiration of the foregoing described
period to cure, to the extent the exigencies of the particular situation require
a quicker remedy. The foregoing is in addition to, and not in lieu of, all other
rights and remedies available to Tenant at law or in equity or pursuant to the
terms of this Lease.
-41-
23. Subordination; Non-Disturbance. This Lease and all of the rights of
------------------------------
Tenant hereunder may be subject and subordinate to the lien of any deeds of
trust or mortgages previously, now or hereafter placed on the Premises or any
part thereof (except Tenant's personal property or the Trade Fixtures) by
Landlord, and to any renewals, modifications, consolidations, replacements,
extensions or substitutions of any such deeds or trust or mortgages; provided,
however, Tenant's rights under this Lease shall be subordinate only if the
holders of such deeds of trust or mortgages execute and deliver to Tenant for
recordation a legally enforceable non-disturbance agreement substantially in the
form attached hereto as Exhibit "H". The execution and delivery to Tenant of the
above-described agreement is a condition precedent to Tenant's responsibility or
obligation to pay Rent or other payments under this Lease.
24. Estoppel Certificates. Each party shall, without charge, at any time
---------------------
and from time to time, within fifteen (15) days after receipt of the written
request of the other party, deliver a written instrument to such other party or
to any other person, firm, or corporation specified by such party, duly executed
and acknowledged, certifying that (a) this Lease is unmodified and in full force
and effect (if such be the case) or, if there has been any modification, that
said Lease is in full force and effect as modified, and stating and describing
any and all such modifications; (b) neither party hereunder is in default (if
such be the case) or, if either party is in default, the nature of such default;
and (c) specifying the dates to which the rentals have been paid.
25. Notices. Whenever it is provided herein that notice, demand, request,
-------
or other communication shall or may be given to either of the parties by the
other, such notice, demand, request, or other communication shall be in writing
and, any law or statute to the contrary notwithstanding, shall not be effective
for any purpose unless it shall be served by hand-delivery or by mailing by
registered or certified mail, postage prepaid, return receipt requested, to the
address hereinafter set forth or to such other address as either party may from
time to time designate by notice given pursuant to the provisions of this
Paragraph 25. Any such notice, demand, request, or other communication shall be
deemed to have been given when such notice has been personally received, if
hand-delivered, or if mailed, seventy-two (72) hours after being deposited in
the United States Mail, postage prepaid, certified or registered, and addressed
as follows:
If from Tenant to Landlord:
R-K VENTURES UNIT I LIMITED PARTNERSHIP
c/o Xxxxxx X. Xxxx Company
00000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx; and
K-F-T LIMITED PARTNERSHIP
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Attn: X. X. Xxxx, Xx., President
-42-
If from Landlord to Tenant:
Xxxxxxxx Industries
0000 Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President,
with a copy to:
Xxxxxxx X. Xxx
Xxx, Shaw, Ahern, McCormley
Xxxxxxxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
26. Recordation. Concurrent with the execution of this Lease, the
-----------
parties shall execute and acknowledge a memorandum of this Lease in the form of
Exhibit "I" attached hereto and by this reference incorporated herein. Such
memorandum shall be recorded by the parties immediately after the execution of
this Lease in the public records of Maricopa County, Arizona, with the parties
to share equally the costs of such recordation. The foregoing to the contrary
notwithstanding, Tenant may, at Tenant's sole option, require that this Lease in
its entirety, in lieu of a memorandum thereof, be recorded in the public records
of Maricopa County, Arizona.
27. Title Policy. In the event Tenant has purchased or does purchase a
------------
policy of title insurance with respect to its leasehold interest granted herein
at any time prior to or during the term of this Lease, Landlord agrees to
execute any and all affidavits and indemnities requested by the insurer of such
policy of title insurance to eliminate any exception for (a) unfiled mechanic's
liens, unrecorded easements, rights of parties in possession, unrecorded leases,
and other matters not disclosed by the public records of Maricopa County,
Arizona, (b) any matters of record which are not Permitted Exceptions, and (c)
any of the matters covered by the representations and warranties of Landlord
contained in this Lease.
28. Dispute and Payment Under Protest. If at any time a dispute shall
---------------------------------
arise between the parties hereto as to any amount or sum of money to be paid by
one party to the other under the provisions of this Lease, then the party
against whom the obligation to pay is asserted shall have the right to make such
payment "under protest", whereupon such payment shall not be regarded as a
voluntary payment or an accord and satisfaction; rather there shall survive the
right on the part of the party making the payment in such manner to institute
arbitration proceeds hereunder for the recovery of such sum, and if it shall be
determined that there was no legal obligation on the part of said party to pay
such sum or any party thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease. If at any time a dispute shall arise between the parties hereto as a
to any work to be performed by either of them under the provisions of this
Lease, then the party against whom the obligation to perform the work is
asserted shall have the right to perform such work and pay the costs thereof
"under protest", whereupon the performance of such work shall not be regarded as
voluntary performance, or an accord and satisfaction; rather, there shall
survive the right on the part of the party performing the work in such manner to
institute arbitration proceedings
-43-
hereunder for the recovery of the costs of performing such work (including
overhead and administrative costs), and if it shall be determined that there
was no legal obligation on the part of said party to perform such work or any
part thereof, said party shall be entitled to recover the costs of such work
(including overhead and administrative costs), or the costs of so much thereof
as said party was not legally required to perform under the provisions of this
Lease. The foregoing provisions of this Paragraph 28 are not intended to waive
or modify any rights or remedies a party may otherwise have under this Lease
with respect to a payment made, or work performed, not "under protest"
hereunder.
29. Arbitration. Any and all disputes under this Lease shall be settled
-----------
by the parties hereto by arbitration pursuant to the Commercial Arbitration
rules and guidelines, then in effect, of the American Arbitration Association.
30. Force Majeure. Except as may be otherwise expressly provided to the
-------------
contrary in this Lease, it is understood and agreed that with respect to any
obligations to be performed by either party during the term of this Lease, the
party required to perform the same shall in no event be liable for failure to do
so when substantially impaired by any cause beyond the reasonable control of
such party, such as strike, lockout, breakdown, accident, order or regulation or
delay of or by any governmental authority, failure of supply, inability by the
exercise of reasonable diligence to obtain the supplies or parts or employees
necessary to comply with such obligations, war or other emergency, or breach or
act or neglect of the other party hereto or such other party's servants or
agents or employees or any assignee or sublessee or successor-in-interest to
such other party. The time within which such obligations shall be performed
shall be extended for a period of time equivalent to the delay from such cause.
Lack of funds shall not be deemed a cause beyond the control of either party.
31. Brokerage. Landlord and Tenant each warrant to the other that it,
---------
the warranting party, has not worked with or employed any real estate broker or
agent with respect to this Lease transaction other than Xxxxx & Xxxxx, whose
commission Landlord is obligated to pay pursuant to a separate agreement. Each
party agrees to indemnify and to hold harmless the other party from and against
any and all liability, damages and costs (including reasonable attorneys' fees)
suffered by such other party due to any breach, or a claim of breach, of the
foregoing warranty by the indemnifying party.
32. Miscellaneous.
-------------
(a) Headings; Construction; Partial Invalidity; Governing Law.
---------------------------------------------------------
Paragraph captions are solely for the convenience of the parties and shall not
be deemed to or be used to define, construe, or limit the terms hereof. As used
in this Lease, the masculine, feminine and neuter genders shall be deemed to
include the others; the terms "herein", "hereunder", "hereto", "hereof", and
similar words shall refer to this entire Lease; and the singular number shall be
deemed to include the plural, whenever the context so requires. The invalidity
of any provision of this Lease as determined by a court of competent
jurisdiction shall in no way affect the validity of any other provision hereof.
This Lease shall be governed by the laws of the state in which the Premises are
located.
-44-
(b) Interest on Past-Due Obligations. Except with respect to Rent,
--------------------------------
which is governed by the provisions of subparagraph 21(c) hereof, any amount
due to either party hereunder that is not paid when due shall bear interest at
the lesser of (i) ten percent (10%) per annum, or (ii) the maximum rate
permitted by law, from the date such amount becomes overdue until the date such
amount is paid. Payment of such interest shall be made when such amount is
paid. Payment of such interest shall not excuse or cure any default by Landlord
or Tenant under this Lease.
(c) Time of the Essence. Time is of the essence of this Lease and
--------------------
all of the covenants and obligations hereof.
(d) Counterparts. This Lease may be executed in two (2) or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(e) Incorporation of Prior Agreements; Amendments. This Lease
---------------------------------------------
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified or amended in writing only, signed by
the parties in interest at the time of the modification or amendment.
(f) Waivers. No waiver by either party hereto of any provision
-------
hereof shall be deemed a waiver of any other provision hereof or of any
subsequent breach by the other party of the same or any other provision. A
party's consent to or approval of any act shall not be deemed to render
unnecessary the obtaining of such party's consent to or approval of any
subsequent act by the other party.
(g) Holding Over. If Tenant remains in possession of the Premises
------------
or any part thereof after the expiration of the term of sooner termination of
this Lease without the express written consent of Landlord, such occupancy shall
be a tenancy from month-to-month at a rental equal to one hundred ten percent
(110%) of the last monthly Rent, plus any Rent escalation increases then
applicable, and upon all the terms hereof applicable to a month-to-month
tenancy.
(h) Covenants and Conditions. Each of Landlord's covenants set
------------------------
forth in this Lease, and Landlord's due performance thereof, shall be considered
and construed as a condition precedent to Tenant's payment of rent hereunder.
(i) Binding Effect. Subject to the provisions of Paragraphs 15 and
--------------
16 hereof, this Lease, and the terms, covenants and conditions hereof, shall be
binding upon and enforceable against the parties hereto and their personal
representatives, successors and assigns.
(j) Attorneys' Fees. If either party brings an action to enforce
---------------
the terms hereof or declare rights under this Lease, the prevailing party in the
final adjudication of any such action, on trial or appeal, shall be entitled to
its costs and expenses of suit, including, without limitation, its actual
attorneys' fees to be paid by the losing party as fixed by the Court.
-45-
(k) Signs. Landlord agrees to cooperate with Tenant, and appear at
-----
all public hearings or meetings as reasonably requested by Tenant in connection
therewith, in obtaining governmental approval of all of Tenant's signage
requirements for the Premises.
(l) Attornment. Tenant shall, provided Tenant has received
----------
appropriate agreements in the form required by Paragraph 23 hereof, in the event
any proceedings are brought for the foreclosure of, or in the event of exercise
of the power of sale under any mortgage or deed of trust made by the Landlord,
its successor or assigns, encumbering the Premises, or any part thereof, and if
so requested, attorney to the purchaser upon such foreclosure or sale or upon
any grant of a deed in lieu of foreclosure and shall recognize such purchaser as
the landlord under this Lease.
33. Effect of Modifications. It is acknowledged Lenders making loans to
-----------------------
Landlord for acquisition and construction of the Premises pursuant to this Lease
("Lenders") may require modifications to the terms of this Lease. Landlord and
Tenant shall execute modifications required by Lenders or re-execute a new lease
containing the modifications required by Lenders unless such modifications
materially adversely effect the rights or liabilities of such party under this
Lease.
IN WITNESS WHEREOF, the Parties hereto have executed this Lease as of the
day and year first above written.
"LANDLORD"
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited partnership
By /s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx, its general partner
By K-F-T LIMITED PARTNERSHIP,an
Arizona limited partnership, its general partner
By KITE FAMILY COMPANIES, INC., an
Arizona corporation, its general partner
By [SIGNATURE APPEARS HERE]
------------------------------------
Its PRESIDENT
----------------------------------
"TENANT"
WMF CONTAINER CORPORATION,
a Delaware corporation,
dba XXXXXXXX INDUSTRIES
By [SIGNATURE APPEARS HERE]
--------------------------------------
Its PRESIDENT
----------------------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary Public,
personally appeared XXXXXX X. XXXX who acknowledged himself to be the general
partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ X. X. Xxxxx
--------------------------------
Notary Public
My commission expires:
January 28, 1991
----------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary Public,
personally appeared Xxx X. Xxxx, who acknowledged himself to be the President of
KITE FAMILY COMPANIES, INC., an Arizona corporation, general partner of K-F-T
LIMITED PARTNERSHIP, an Arizona limited partnership, general partner of R-K
VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership, and
acknowledged that he, as such officer, being authorized so to do, executed the
foregoing instrument on behalf of the limited partnership for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ X. X. Xxxxx
--------------------------------
Notary Public
My commission expires:
January 28, 1991
----------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared, Xxx X. Xxxxxxxxx, who acknowledged himself to
----------------
be the President of WMF CONTAINER CORPORATION, a Delaware corporation,
---------
dba XXXXXXXX INDUSTRIES, and acknowledged that he, as such officer of the
corporation, being authorized so to do, executed the foregoing instrument on
behalf of the corporation for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ X. X. Xxxxx
-------------------------------
Notary Public
My commission expires:
January 28, 1991
----------------
When Recorded, Return to:
Xxxxxx X. Xxxxxx, Esq.
NYE, SHAW, AHERN, McCORMLEY,
XXXXXXXXX & XXXXX, P.C.
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
MEMORANDUM OF OPERATING LEASE
This Memorandum of Operating Lease is made as of the 20th day of August,
1987, by and between R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware
corporation,dba XXXXXXXX INDUSTRIES ("Tenant").
W I T N E S S E T H
- - - - - - - - - -
Landlord and Tenant have this date entered into that certain Operating
Lease (the "Lease"), pursuant to which, among other things, Landlord leased to
Tenant and Tenant leased from Landlord that certain parcel of real property
located in Maricopa County, Arizona, and described in more particularity in
Exhibit "A" attached hereto and by this reference made a part hereof.
The terms, covenants, agreements, conditions, provisions of the Lease are
set forth with more particularity therein and are hereby incorporated herein by
this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Operating Lease as of the day and year first above written.
WMF CONTAINER CORPORATION, R-K VENTURES UNIT I
a Delaware corporation, dba LIMITED PARTNERSHIP,
THOMSON INDUSTRIES an Arizona limited
partnership
By /s/ [SIGNATURE APPEARS HERE] By /s/ Xxxxxx X. Xxxx
---------------------------- -----------------------
Its President Xxxxxx X. Xxxx,
---------------------------
"Tenant" Its General Partner
By K-F-T LIMITED PARTNERSHIP,
an Arizona limited partnership,
its general partner
By Kite Family Companies, Inc.
an Arizona corporation, its
general partner
By /s/ [SIGNATURE APPEARS HERE]
----------------------------
Its President
---------------------------
"Landlord"
EXHIBIT "A"
TO MEMORANDUM OF OPERATING LEASE
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Xxx Xxx (0), Xxx Xxx (0), Xxx Xxxxx (0), Xxx Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres +/- Net
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page
4, Maricopa County Recorders Office, Maricopa County,Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6);except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as
measured along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres +/- Net
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
EXHIBIT "A-1"
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Xxx Xxx (0), Xxx Xxx (0), Xxx Xxxxx (0), Xxx Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
EXHIBIT "A-2"
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres = Net
EXHIBIT "A-3"
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
EXHIBIT "B"
PLANS AND SPECIFICATIONS
A1 SITE PLAN
A2 FLOOR PLAN AREA A
A3 FLOOR PLAN AREA B
A4 OFFICE AREA ENLARGED PLAN
A5 OFFICE AREA REFLECTED CEILING PLAN
A6 BUILDING ELEV
A7 BUILDING SECTION
A8 ROOF PLAN AND DETAILS
A9 WALL SECTION
A10 WALL SECTIONS
A11 DETAILS & SCHEDULES
A12 DETAILS
S1 GENERAL NOTES & DETAILS
S2 FOUNDATION PLAN
S3 FOUNDATION PLAN
S4 ROOF FRAMING PLAN
S5 ROOF FRAMING PLAN
S6 DETAILS
S7 DETAILS
S8 PANEL DETAILS
S9 PANEL DETAILS
S10 PANEL DETAILS
S11 PANEL DETAILS
S12 PANEL DETAILS
S13 FRAMING DETAILS
S14 FRAMING DETAILS
S15 SCREEN WALL PLAN & DETAILS
M1 HVAC PARTIAL PLAN AREA A
M2 HVAC OFFICE AREA
M3 HVAC DETAILS & SCHEDULES
M4 PLUMBING PARTIAL PLAN AREA A
M5 PLUMBING PARTIAL PLAN AREA B
M6 PLUMBING OFFICE AREA
M7 PLUMBING DETAILS & SCHEDULES
E1 SITE PLAN
E2 ELECTRICAL AREA A
E3 ELECTRICAL AREA B
E4 LIGHTING OFFICE AREA
E5 POWER SPECIAL SYSTEMS OFFICE AREA
E6 DETAILS
E7 SCHEDULES
E8 ONE LINE DIAGRAM
Page 1 of 2 pages
EXHIBIT "B" (cont.)
CIVIL
1-2 GRADE & DRAIN FOR
XXXXXXXX INDUSTRIES
2-2 GRADE & DRAIN FOR
XXXXXXXX INDUSTRIES
FIRE PROTECTION
1 SITE PLAN
2 FIRE PUMP & SPRINKLER
RISER DETAILS
3 SYS I, II, III PIPING
PLAN
4 SYS IV & V PIPING PLAN
5 OFFICE AREA
6 SECTIONS AND HANGER
DETAILS
Plans and Specifications designated with the letters "A," "M" and "E" are
dated March 27, 1987, and were prepared by Sverdrup Corporation.
Plans and Specifications designated with the letter "S" are dated May 20,
1987, and were prepared by Xxxxxx Xxxxxxx and Associates.
Plans and Specifications designated "Civil" are dated April 15, 1987, and
were prepared by Advanced Engineering, Inc.
Plans and Specifications designated "Fire Protection" are dated March 27,
1987, and were prepared by Alliance Fire Protection.
EXHIBIT "C"
DEVELOPMENT SCHEDULE
August 31, 1987 (BD) Erect Precast (BT)
September 9, 1987 (BD) Begin Rough Carpentry Work (BT)
September 21, 1987 (BD) Begin Girders/Joists/Deck (BT)
September 21, 1987 (BD) Installation of Fire
Protection Systems (BT)
September 21, 1987 (BD) Begin Roofing (BT)
September 28, 1987 (BD) Begin Aluminum Frame and
Glazing (BT)
October 5, 1987 (BD) Begin HVAC (BT)
October 12, 1987 (BD) Begin Metal Studs & Drywall (BT)
November 23, 1987 (BD) Completion of Fire Protection
Systems Testing (BT)
Definitions: "BD" = Benchmark Date
"BT" = Benchmark Task
EXHIBIT "D"
PROCESS EQUIPMENT PLANS
MP-1 PROCESS PIPING FLOW DIAGRAM
MP-2 PROCESS PIPING GENERAL EQUIPMENT AREA AND
EQUIPMENT SCHEDULES
MP-3 PROCESS PIPING SYMBOLS AND ABBREVIATIONS
MP-4 VALUE INSTRUCTION AND HANGER SCHEDULES
MP-5 STANDARDS DRAIN AND CONNECTION
MP-6 P AND ID
MP-7 P AND ID
MP-8 P AND ID
MP-9 PIPING LAYOUT UTILITY ROOM
MP-10 PIPING LAYOUT UTILITY ROOM
MP-11 PIPING LAYOUT UTILITY AREA
MP-12 PIPING LAYOUT MANUFACTURING AREA
MP-13 PIPING LAYOUT PACKAGING AREA
MP-14 PROCESS PIPING ISOMETRIC
MP-15 PROCESS PIPING ISOMETRIC
MP-16 PROCESS PIPING ISOMETRIC
MP-17 DETAILS
MP-18 DETAILS
MP-19 DETAILS (TI DRAWINGS)
MP-20 DETAILS (TI DRAWINGS)
MP-21 DETAILS (TI DRAWINGS)
EP-1 PROCESS ELECTRICAL LEGEND DRAWING LIST AND
GENERAL ARRANGEMENT
EP-2 PROCESS ELECTRICAL UTILITY ROOM
EP-3 PROCESS ELECTRICAL UTILITY ROOM
EP-4 PROCESS ELECTRICAL UTILITY AREA
EP-5 PROCESS ELECTRICAL MFG
EP-6 PROCESS ELECTRICAL PACKAGING
EP-7 PROCESS ELECTRICAL PACKAGING
EP-8 MFG LINE CONTROLS SCHEMATIC
EP-9 MFG LINE CONTROLS SCHEMATIC
EP-10 MFG LINE CONTROLS PANEL LAYOUT
EP-11 MFG LINE ELECTRICAL LAYOUT
EP-12 PACKAGE LINE ELECTRICAL LAYOUT
EP-13 PRINTING LINE ELECTRICAL LAYOUT
EP-14 DETAILS
XX-00 XXXXXXXXX
XX-00 ONE LINE DIAGRAM MCC-1
EP-17 ONE LINE DIAGRAM MCC-2
EP-18 ONE LINE DIAGRAM MCC-3
EXHIBIT "E"
LIST OF PROCESS EQUIPMENT
UTILITY SYSTEM PHASE 1A
-----------------------
BOILER 1
STAND BY FUEL OIL SYSTEM 1
DEAERATOR 1
WATER SOFTENERS 1
CHEM FEED SYSTEM 1
BLOW DOWN SYSTEM 1
STACK HEAT EXCHANGER 0
STACK 1
STEAM CONTROL VALVES 4
ASME SPOOL 1
GAS TRAIN, VALVES & PIPING 1
GAS METER 1
MAKE UP VALVES 1
TRAPS 16
GAGES 15
COMPRESSOR 300 HP 2
AFTER COOLER 1
AIR RECEIVER 1
JACKET PUMPS 2
TOWER PUMPS 2
COMPRESSOR TOWER 1
AIR VALVES
PROCESS VALVES
PCW TOWER 1
TOWER PUMPS 2
PROCESS PUMPS 2
ANTI SUCTION VALVE 1
VACUUM PUMP 4
MOISTURE SEPARATOR 1
PRE-EXPANSION PHASE IA
----------------------
MIXER 1
LOADER SYSTEM 1
DUAL EXPANDER 3
SCREENERS 8
FEEDERS 8
EXPANDER PANELS 3
BEAD BAGS 24
BAG FRAMES 44
RECYCLE FRAMES 4
DISTRIBUTION SYSTEM 1
EXHIBIT "E" (cont'd)
PRODUCTION EQUIPMENT PHASE 1A
-----------------------------
HEADERS 4
HEADER VALVES 96
MACHINE HOSES 96
CUP MACHINES 24
LONG CONVEYORS W/DIVIDERS 4
PRODUCT HANDLING EQUIPMENT
--------------------------
UNSCRAMBLERS 8
HORIZONTAL INSPECTORS 8
BAGGERS 8
UB CONVEYORS 8
BINS 8
TUBING 8
STATIC ELIMINATORS 8
EXHIBIT "F"
NONDISCLOSURE AGREEMENT
In connection with the construction and operation of a manufacturing
and warehouse facility on the real property located in Maricopa County, Arizona
and described in Exhibit "A" attached hereto and made a part hereof, the
undersigned will be made aware of certain mechanical, engineering, technical and
business information relating to the manufacture of foam styrene cups (the
"Information") to be produced by WMF Container Corporation, a Delaware
corporation, dba Xxxxxxxx Industries ("Xxxxxxxx"), at such manufacturing and
warehouse facility. The undersigned agrees to keep the information secret and
confidential and agrees not to make copies of any written Information or use or
disclose any Information to any third parties without the prior written consent
of Xxxxxxxx. The obligations of the undersigned set forth herein shall continue
until such time as the Information becomes legally available to the
public-at-large in written form.
DATED this ____ day of ________________, 1987.
-----------------------------------
-----------------------------------
By
---------------------------------
Its
-------------------------------
EXHIBIT "A" TO NON-DISCLOSURE AGREEMENT
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Xxx Xxx (0), Xxx Xxx (0), Xxx Xxxxx (0), Xxx Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres + Net
-
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book
312 of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
EXHIBIT "G"
1. Any charge upon said land by reason of its inclusion within the Salt
River Project.
2. 1987 taxes, a lien not yet due and payable.
3. Right of way for electric transmission lines as shown in resolution
recorded in Book 60 of Miscellaneous, page 26, and in Book 73 of Miscellaneous,
page 35, records of Maricopa County, Arizona.
4. An easement for electric transmission lines and rights incident thereto
as set forth in instrument recorded in Docket 1685, page 220, records of
Maricopa County, Arizona.
5. Reservation of the sole and exclusive right to take, withdraw and use
the groundwaters underlying the surface of the within planned, as reserved and
more fully set forth in Instrument No. 83-314328.
6. Right of way for railroad is shown on plat of said subdivision recorded
in Book 307 of Maps, page 6, records of Maricopa County, Arizona.
7. Easements, restrictions, conditions and covenants as shown on the
recorded plat of said subdivision, but admitting, if any, restrictions based
race, color, religion or national origin.
When recorded, return to:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
EXHIBIT "H"
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance and Attornment Agreement (the
"Agreement"), is made this __ day of __________, 1987, by and between
_____________, ("Lender"), and WMF CONTAINER CORPORATION, a Delaware
corporation, dba XXXXXXXX INDUSTRIES ("Tenant").
RECITALS
A. R-K Ventures Unit I Limited Partnership, an Arizona limited
partnership ("Landlord"), as landlord, and Tenant, as tenant, entered into that
certain Operating Lease, dated __________, 1987, (the "Lease"), for those
premises described on Exhibit "A" attached hereto and made a part hereof (the
"Premises").
B. Landlord, as trustor, _____________________________, as trustee, and
Lender, as beneficiary, entered into that certain Deed of Trust (the "Deed of
Trust"), dated __________, 1987, and recorded on __________, 1987, as Instrument
No. ____, in the records of Maricopa County, Arizona, which Deed of Trust
covers the Premises and secures certain obligations of Landlord to Lender as
more specifically described therein.
C. Lender desires that Tenant subordinate its interest in the Premises
and the Lease to the lien of the Deed of Trust and Tenant is willing to do so
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lender and Tenant agree as follows:
AGREEMENT
1. Upon and subject to the terms and conditions hereinafter set forth,
Tenant hereby subordinates all of its right, title and interest in and to the
Premises and the Lease to the lien of the Deed of Trust, it being the intent of
Tenant that henceforth all of Tenant's right, title and interest in and to the
Premises and the Lease shall be second in rank and subordinate to the Deed of
Trust.
2. So long as Tenant is not in default in the payment of rent or in
the performance of any of its obligations under the Lease, Tenant's possession
of the Premises and Tenant's rights and privileges under the Lease shall not be
diminished or interfered with by Lender nor will Lender instruct or allow the
trustee of the Deed of Trust to diminish or interfere with any of Tenant's
rights and privileges under the Lease.
3. In the event the Deed of Trust is foreclosed, or in the event the
power of sale thereunder is exercised for any reason, Tenant shall be bound to
the purchaser (whether or not such purchaser is the Lender) under all of the
terms of the Lease for the balance of the term or terms of the Lease remaining
with the same force and effect as if such purchaser were the landlord under the
Lease, and Tenant hereby agrees to attorn to such purchaser as its tenant, such
attornment to be effective and self-operative without the execution of any
further instrument on the part of either of the parties hereto, immediately upon
such purchaser succeeding to the interest of the landlord under the Lease. The
respective rights and obligations of Tenant and such purchaser upon such
attornment shall, to the extent of the then remaining balance of the term or
terms of the Lease, be the same as now set forth therein, it being the intention
of the parties hereto for this purpose to incorporate the Lease in this
Agreement by reference with the same force and effect as if set forth at length
herein.
4. In the event the Deed of Trust is foreclosed, or in the event the
power of sale thereunder is exercised for any reason, the purchaser (whether or
not such purchaser is the Lender) shall be bound to Tenant under all the terms
of the Lease, and the Tenant shall, from and after such event, have the same
remedies against such purchaser for the breach of any of the landlord's
obligations under the Lease that Tenant might have had under the Lease against
the prior landlord thereunder.
5. The laws of the State of Arizona shall govern the validity,
performance and enforcement of this Agreement.
6. The parties hereto shall record this Agreement with the County
Recorder of Maricopa County, Arizona, immediately after the execution hereof.
7. The covenants, terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors and
assigns.
-2-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
-------------------------------
-------------------------------
By
-----------------------------
Its
-------------------------
"LENDER"
WMF CONTAINER CORPORATION, a
Delaware corporation dba
XXXXXXXX INDUSTRIES
By
-----------------------------
Its
-------------------------
"TENANT"
-3-
STATE OF ARIZONA )
)ss.
County of Maricopa )
On this ___ day of March 1987, before me, the undersigned Notary Public,
personally appeared _________________ known to me to be the person whose name is
subscribed to be the ____ of __________________________ and that s/he as such
officer, being authorized to do so, acknowledged that s/he executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------
Notary Public
My commission expires:
--------------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this ___ day of March 1987, before me, the undersigned Notary Public,
personally appeared _________________________, known to me to be the person
whose name is subscibed to be the _________________ of WMF CONTAINER
CORPORATION, a Delaware cororation, dba XXXXXXXX INDUSTRIES, and that he as such
officer, being authorized to do so, acknowledged that he executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------
Notary Public
My commission expires:
---------------------------
-4-
EXHIBIT "A" TO SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Xxx Xxx (0), Xxx Xxx (0), Xxx Xxxxx (0), Xxx Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres + Net
-
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
-5-
When Recorded, Return to:
Xxxxxx X. Xxxxxx, Esq.
XXX, SHAW, AHERN, McCORMLEY
XXXXXXXXX & XXXXX, P.C.
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
EXHIBIT "T"
MEMORANDUM OF OPERATING LEASE
This Memorandum of Operating Lease is made as of the 20th day of August,
1987, by and between R-K VENTURES UNIT 1 LIMITED PARTNERSHIP, an Arizona
limited partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware
corporation, dba XXXXXXXX INDUSTRIES ("Tenant").
W I T N E S S E T H
- - - - - - - - - -
Landlord and Tenant have this date entered into that certain Operating Lease
(the "Lease"), pursuant to which, among other things, Landlord leased to Tenant
and Tenant leased from Landlord that certain parcel of real property located in
Maricopa County, Arizona, and described in more particularity in Exhibit "A"
attached hereto and by this reference made a part hereof.
The terms, covenants, agreements, conditions, provisions of the Lease are
set forth with more particularity therein and are hereby incorporated herein by
this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Operating Lease as of the day and year first above written.
WMF CONTAINER CORPORATION, R-K VENTURES UNIT 1
a Delaware corporation, dba LIMITED PARTNERSHIP,
XXXXXXXX INDUSTRIES an Arizona limited
partnership
By By
------------------------------- ----------------------------
Its Xxxxxx X. Xxxx,
----------------------------- Its General Partner
"Tenant"
By K-F-T LIMITED PARTNER-
SHIP, an Arizona limited
partnership, its general
partner
By Kite Family Companies, Inc.
an Arizona corporation, its
general partner
By
----------------------------
Its
--------------------------
"Landlord"
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared XXXXXX X. XXXX who acknowledged himself to be the
general partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------------
Notary Public
My commission expires:
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STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared _______________________, who acknowledged himself to
be the President of KITE FAMILY COMPANIES, INC., an Arizona corporation,
general partner of K-F-T LIMITED PARTNERSHIP, an Arizona limited partnership,
general partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such officer, being authorized so to
do, executed the foregoing instrument on behalf of the limited partnership for
the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
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STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared __________________________________, who acknowledged
himself to be the ____________________________ of WMF CONTAINER CORPORATION, a
Delaware corporation, dba XXXXXXXX INDUSTRIES, and acknowledged that he, as such
officer of the corporation, being authorized so to do, executed the foregoing
instrument on behalf of the corporation for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
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