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EXHIBIT 10.54
LEASE AGREEMENT
THIS LEASE AGREEMENT, made this 20th day of November, 1994,
by and between Xxxxxxx X. Van Heel (hereinafter referred to as "Lessor") and
Ultra Pac, Inc. (hereinafter referred to as the "Lessee"). In consideration of
the rents and covenants herein contained, Lessor hereby leases and lets to
Lessee, and Lessee hereby rents and takes from Lessor, the following premises
hereinafter described, upon the terms and conditions hereinafter set forth.
1. THE LEASE PROPERTY. Lessor hereby leases to Lessee for the
term hereinafter specified 64,900 square feet of space (hereinafter referred to
as the "Premises"), in an office and warehouse building located at 00000
Xxxxxxxxxx Xxxx., Xxxxxx, Xxxxxxxxx (hereinafter referred to as the "Property"),
more particularly described as follows:
(a) 3,800 square feet of office area;
(b) 61,100 square feet of warehouse space, said
space being measured from outside of the outside walls, to the center of the
partition walls, and governed by the floor plan and allowances attached hereto
as Exhibit A and made a part hereof.
2. TERM OF THE LEASE. The term of this Lease shall be for 15
years commencing on the 1st day of February, 1995.
3. RENT. Lessee shall pay to the Lessor as rent for the
Premises during the first (1) year of the term of this Lease the sum of Three
Hundred One Thousand One Hundred Thirty Six and No/100-Dollars ($301,136.00) per
(hereinafter referred to as the "Initial Annual Rent"), payable in twelve (12)
monthly installments of Twenty Five Thousand Ninety Four and 67/100-Dollars
($25,094.67) on the first day of each and every month, in advance, with
proration of the first and last month's rent in the event of commencement other
than the first day of the month. There shall be paid by the Lessee to the Lessor
upon signing of this Lease two (2) months rent, which sum shall represent the
first month's rent and a security deposit equal to one month's rent.
* Included in rental amount is $3.59 base rent, $.99 tax allowance, and
$.06 insurance allowance.
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4. OPTION TO RENEW. Lessee shall have the option to renew
this Lease for an additional three (3) years by giving Lessor at least ninety
(90) days written notice prior to the expiration of the original term of this
lease, Lessee shall notify Lessor of Lessee intention not to renew this lease,
provided, however, that if at the date of expiration of the original term of
this lease, Lessee is in default in the performance of any of the terms and
covenants of this lease, the Lessor may, at its option, terminate this lease.
5. COST OF LIVING INCREASE. Subject to Section 32 hereof,
beginning on February 1, 1996, the rent (not including the portion attribut able
to taxes and insurance) shall be adjusted annually on February 1st of each year
in proportion to the changes in the Consumer Price Index (CPI) published by the
Bureau of Labor Statistics, based upon changes in the CPI for over the past
calendar year (twelve months) between the date of initial occupancy (2-1-95) and
the years of the Lease as set forth above. At the end of the 1995 year of
occupancy thereafter, based upon the renewal options, if any contained herein, a
similar adjustment in the then current rent shall be made by comparing the CPI
at the beginning of each renewal year with the CPI at the beginning of the first
year of occupancy. Such adjusted rentals shall be payable in twelve (12) equal
monthly installments during the year hereof, and each renewal year thereafter.
The adjustment, if any, shall be calculated upon the basis of the U.S. Consumer
Price Index for urban consumers, St. Xxxx - Minneapolis area ("Index") issued by
the Bureau of Labor Statistics of the U.S. Department of Labor ("Bureau"), (1967
= 100). The Index for said subgroup published as of the month prior to the
commencement date shall be considered the "Base". The monthly Base Rental for
each year shall be adjusted by the percentage increase, if any, in the index, as
of the month prior to the month of commencement over the Base; provided,
however, that in no event shall the monthly Base Rental be less than the amount
specified in this Lease not withstanding the fact that the Index may, as of some
adjustment date, be less than the Base. When the monthly Base Rental for the
year is determined, Lessor shall give Lessee written notice to the effect
indicating how the new monthly Base Rental figure was computed. If at any rental
adjustment date, there shall not exist the Index in the same format as recited
in this Section, the parties shall substitute any official index published by
the Bureau of Labor Statistics, or successor or similar governmental agency, as
may then be in existence and shall be most nearly equivalent thereto. If the
parties shall be unable to agree upon a successor index, the parties shall refer
the choice of a successor index to arbitration in accordance with the rules of
the American Arbitration Association. The CPI increase shall commence on
February 1, 1996, and shall not exceed six (6) percent in any one year.
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6. USE. It is agreed that Lessee shall have the right to
occupy and use the Premises for plastic product manufacturing and warehousing
and related operations and other lawful purposes, subject to all Federal, State
or local regulations governing the use of said Premises. Any change or
alteration of the Premises caused by the Lessee's desired use (code compliance,
etc.) shall be made by Lessor at Lessee's expense.
7. REAL ESTATE TAXES AND INSURANCE PREMIUMS. As a part of the
Rent due under the Lease, Lessee shall pay, in addition to the base rental due
under Paragraph 3, its proportionate share of any increase in the real estate
taxes and insurance premiums (in excess of $.99 per foot for taxes and $.06 per
foot for insurance) on the property on the first day of each month. For the
purpose of this Paragraph, Lessee shall be deemed to occupy 100% of the
property. Lessee shall pay in monthly installments that 100% of the real estate
taxes and insurance premiums on the property. Lessor shall notify Lessee of the
amounts of said monthly real estate tax and insurance payments and shall make
any necessary adjustments to reflect the increase or decrease in the amount of
said real estate taxes or insurance premiums or any estimates thereof.
8. SECURITY DEPOSIT. On October 1, 1994, Lessee shall pay to
Lessor, the sum equivalent to one (1) monthly installment of the Initial Annual
Rent, as a security deposit. Upon the occurrence of any default by Lessee,
Lessor may, from time to time, without notice or prejudice to any other remedy,
use the said security deposit to the extent necessary to make good any arrears
of rent or any other damage, injury, expense or liability caused to Lessor by
such default or misuse. Any remaining balance of such security deposit shall be
returned to Lessee upon satisfactory compliance with the terms herein,
inspection and acceptance by Lessor for the vacated premises.
9. STRUCTURAL MAINTENANCE. The Lessor shall, at its own
expense, keep in good order, safe condition and repair, the structural parts of
the building in which the Premises are located, including the outer walls, roof,
floor, foundation, and interior support columns except that the Lessor shall not
be responsible for repairs that are caused by the fault or negligence of the
Lessee, its employees or invitees.
10. INTERIOR MAINTENANCE. Lessee shall be wholly responsible
for the interior maintenance and repair of the Premises, including
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entrance doors, overhead garage doors, heating, plumbing, electrical and
mechanical fixtures and equipment (except as such items may be covered by
manufacturer warranties), and to keep the Premises in as good of a condition as
when turned over to it, reasonable wear and tear and damage by fire and the
elements excepted; and will keep the premises in an orderly, clean and sanitary
condition; will neither do nor permit to be done therein anything which is in
violation of the terms of insurance policies on the Building or in violation of
the laws or ordinances applicable thereto; will neither commit nor suffer waste
on said Premises; and will pay for the replace ment of all glass broken and
expendables; and is responsible for snow removal from sidewalks and stairways
directly adjoining the leased Premises.
11. EXTERIOR MAINTENANCE AND SERVICES. The Lessor shall
contract for, and Lessee shall pay his prorata share of all electricity
(security lighting), city water, sewer, landscape care, snow removal, window
washing, parking lot maintenance, and all other exterior maintenance required
during the term of this lease or any extension thereof. Said amounts shall be
calculated as set forth in Paragraph 7 hereof and shall be considered additional
rent due hereunder payable on the first day of each month.
All services which are the responsibility of the Lessor shall
be provided as shall be reasonably necessary to the comfortable use and
occupancy of the Premises during business hours except Sundays and holidays,
upon the condition that Lessor shall not be liable for damages for failure to
provide services due to causes reasonably beyond its control.
12. UTILITIES. The Lessee shall pay for all utilities,
including gas, electricity, city water, telephone and any other utility service
used therein during the term of this lease.
13. PARKING. Parking areas shall be available to Lessee, its
employees and business invitees, as well as to other tenants and customers of
the Buildings. The use of such facilities shall be subject to the reasonable
rules and regulations as the Lessor may promulgate uniformly for all Lessor's
tenants in the Buildings. Lessee agrees that it will not cause more than one
hundred eighteen (118) parking spaces to be occupied at any one time, and will
not use or permit the use by its employees of the parking areas for the
overnight storage of automobiles or other vehicles.
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The Lessee agrees not to leave or store any materials or
trash on the grounds or parking areas, and not to litter the grounds and parking
areas.
14. INSURANCE. Lessor shall maintain fire, windstorm and
extended coverage insurance on the Buildings (Lessees' obligations to pay Lessor
for said insurance costs are contained in paragraph 7 above). Lessee, its agents
or employees shall not be liable to Lessor or any other person by right of
subrogation or otherwise for any damage to all or any part of the demised
Premises or all or any part of the Buildings of which the demised Premises are a
part, or any property therein, arising out of fire, windstorm or extended
coverage perils, unless such damage is due to the act of neglect of Lessee, its
agents or employees.
Lessor will require each of its other tenants in the
Buildings to carry adequate public liability insurance and insurance against
casualty loss to its own contents and property. Neither the Lessor nor the
Lessee shall be liable to the other for damages arising out of the damage to or
destruction of the other's contents, from causes covered by fire and extended
coverage insurance, whether or not such damage or destruction be the result of
their agents, servants or employees.
Lessee will maintain in full force and effect during the term
of this lease and any extension hereof, a policy of public liability insurance,
under which Lessor and Lessee are named as insureds, against claims for personal
injury, death or property damages arising on or about the Premises and arising
out of ownership, maintenance, use of occupancy thereof; said insurance is to
afford protection to the limit of not less than One Million Dollars
($1,000,000.00) for injury or death to any one person, Three Million Dollars
($3,000,000.00) for any one accident and One Million Dollars ($1,000,000.00) for
property damage. All policies of insurance shall provide that the proceeds
thereof be payable to Lessee and Lessor as their respective interests may
appear. Lessee agrees to deliver to Lessor, prior to occupancy, a Certificate of
Insurance, naming Lessor as additional insured; such policy shall require ten
(10) day's written notice to the Lessor before cancellation can be effected.
In the event Lessee's use of Premises or contents kept on the
Premises or refusal to follow directions from the Fire Inspection Bureau, or
general house keeping, cause the fire and extended coverage insurance premiums
for the Building to increase, then Lessee agrees to pay such additional premium
to the Lessor when same is due.
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15. IMPAIRMENT OF USE. In the event the Premises shall be
untenantable or unfit for occupancy in whole or in part by the total or partial
destruc tion of the Building by fire or other casualty, and the Lessor shall
fail or refuse within thirty (30) days thereafter to agree in writing to restore
the same within ninety (90) days, this Lease may be terminated by either Lessor
or Lessee by notice in writing; in the event this Lease shall be terminated by
either party hereto for said reason, Lessee's obligations to pay rent shall be
deemed to have ceased as of the date the Premises were rendered untenantable or
unfit for occupancy; and in the event the Lessor shall agree in writing to
restore the Premises within said time, or Lessee continues to occupy the
Premises in whole or in part, the rent to be paid hereunder shall be reduced
pending such restoration, and shall be abated in an amount equal to the
percentage of space loss suffered by Lessee by virtue of the impairment of said
Premises. The extent of abatement of rent due or percentage thereof shall be
determined by the actual space used, or local building occupancy officials.
16. ASSIGNMENT. The Lessee shall not assign this Lease, and
will not sublet any part of said Premises without the consent in writing of the
Lessor, which consent will not be unreasonably withheld, provided, however, that
such consent to assignment by Lessor shall not operate to release the assigning
party of any obligation or liability arising under the terms of this Lease,
unless Lessor shall specifically agree in writing that such proposed assignment
shall so release the Lessee. This Lease and the deposits hereunder shall be
assignable by Lessor, provided, however, that in such event the assignment shall
be disclosed to Lessee and the assignee shall assume all of Lessor's obligations
hereunder.
17. CLAIMS BY LESSEE. The Lessee shall make no claim against
Lessor for any loss of or damage to Lessee's Premises caused by theft, burglary,
water, gas or other means, provided that the Lessor has taken reasonable
precautions against such loss or damage.
18. FIXTURES AND EQUIENT. Whether owned by Lessor at the
commencement of the term of this Lease subsequently purchased by Lessor, or
purchased by Lessee, all fixtures and equipment considered necessary to the
general operation and maintenance of the Property shall be the property of the
Lessor, except that any leasehold improvements provided by Lessee at its own
expense shall remain the property of the Lessee and be removed by the Lessee
prior to the termination of this Lease. The Lessee does agree that no such
property shall be removed from said Premises without the consent in writing of
the Lessor while any installments of rent are past due, and during any other
default in the conditions hereof.
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19. DEFAULT AND REMEDIES. If at any time during the term of
this Lease: (a) Lessee shall vacate said Premises or shall default in the
payment of rent or in the observance or performance of any other covenants or
provisions of this Lease, and such default continues for ten (10) days after
notice of such default from Lessor (excepting, however, any such default which
cannot be cured within said ten (10) days in which lessee shall in good faith
and with due diligence be proceeding to cure); or (b) Lessee shall make an
assignment for the benefit of creditors; or (c) a voluntary or involuntary
petition is filed by or against Lessee for the purpose of adjudication of Lessee
in bankruptcy or for the extension of time payment, composi tion, arrangement,
adjustment, modification, settlement or satisfaction of the liabili ties of
Lessee, or for the reorganization of Lessee under the Bankruptcy Act or any
future law having the same general purpose; or a receiver is appointed for
Lessee, the occurrence of such events shall be a breach of this Lease.
Lessor, at its option, in addition to any of the other
remedies available to it, is authorized to re-enter said Premises to eject the
Lessee and to take full possession of said Premises, to terminate this Lease at
its option, and to lease said Premises as it shall deem best in an effort to
mitigate damages and costs to Lessor hereunder, to remove from said Premises all
personal property of the Lessee, and to store the same to the account and at the
expense and risk of the Lessee, and to sell said property or any part thereof,
and out of the proceeds, to pay all expenses of so removing, storing and selling
the same, and all sums which shall then be in arrears or past due for rent; and
that no such act or acts of the Lessor shall be construed as cancellation of
this lease or waiver of the right of the Lessor to collect rent hereunder (less
any rental received from any other party) for the remainder of said term except
said exercise of their option to terminate the same, and that in case the Lessor
shall determine that any action or proceeding at law or otherwise is necessary
to enforce the terms and conditions hereof, the Lessee agrees that a reasonable
attorney's fee and the necessary costs and disbursements thereof may be allowed
and taxed against it.
20. ALTERATIONS. The Lessee will not make any alterations to
the leased Premises without the written consent of the Lessor, such consent not
to be unreasonably withheld. If the Lessee shall desire to make any alterations,
an accurate description shall first be submitted to and approved by Lessor, and
shall be done by the Lessee, at its own expense. Lessee agrees that all such
work shall be done in good, workmanlike manner and in conformance with
applicable building codes, that the structural integrity of the Building shall
not be impaired, and that no
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liens shall attach to the Premises by reason thereof. Unless the Lessor shall
elect that all or any part of such alterations shall remain, the Premises shall
be restored to its original condition by the Lessee before the expiration of the
Lease at its own expense. Failure to remove fixtures and equipment owned by the
Lessee upon expiration of this Lease and surrender of the Premises shall
constitute abandonment to the Lessor who may remove said fixtures and equipment,
and restore the Premises at Lessee's expense.
Any such alterations shall become the property of the Lessor
as soon as they are affixed to the Premises and all right, title and interest
therein of the Lessee shall immediately cease unless otherwise agreed in
writing.
21. ATTACHMENTS. Lessee agrees that no spikes, hooks, nails,
screws or tacks will be driven into the walls or woodwork of the leased
Premises, and nothing will be attached to such walls or woodwork of the leased
Premises except by consent of the Lessee, provided, however, that the Lessee may
hang mirrors, pictures and decorations with discretion.
22. CONDEMNATION. In the event that the whole of the Premises
shall be condemned or taken in any manner, this Lease shall cease and terminate
as of the date of vesting of title. In the event that only a part of the
Premises shall be so condemned or taken, then effective as of the date of
vesting of title, the rent hereunder for such part shall be equitably abated to
the extent the Premises are affected by said taking and this Lease shall
continue as to the part not taken. If substantial structural alteration or
reconstruction of the Building, shall, in the opinion of the Lessor, be
necessary as a result of such condemnation or taking (whether or not the
Premises be affected), the Lessor may, at its option, terminate this Lease at
the time of such vesting of title by notifying the Lessee in writing of such
termination. If Lessor does not elect to terminate this Lease as aforesaid, this
Lease shall be and remain unaffected by such condemnation or taking, except that
the rent shall be abated to the extent, if any, as hereinbefore provided. Lessor
may, at its expense, restore with reasonable diligence the remaining structural
portions of the Premises as nearly as practicable to the same condition as they
were prior to such condemnation or taking.
23. SIGNS. The Lessee shall have the right, at its own risk
and expense, to place identifying signs on the exterior walls of the Building
next to any doors leading directly into the Premises, in a manner to conform
with the Lessor's building standards and all applicable zoning laws. Lessee
agrees to maintain its
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signs in good repair, to remove it at the end of the term or any extended term,
repairing any damages caused by such removal, and to hold Lessor harmless from
any loss, cost or damages resulting from the erection, existence, maintenance or
removal of Lessee's signs. The Lessor reserves the right to approve all signs
and to remove all unapproved signs at the expense of the Lessee.
24. ACCESS. No additional locks will be placed on any of the
doors in said Building unless Lessor receives an access key to such locks, and
that Lessor shall have the right to enter the Premises for purposes of repair or
emergency inspection.
25. DISPLAY. Lessor shall have the right to enter the
Premises during the three (3) months prior to the termination of this Lease to
display the space to prospective tenants, and to place on doors and windows
appropriate notice that the Premises are for rent.
26. MORTGAGES. It is mutually agreed that this Lease shall be
subordinate to any and all mortgages now and hereinafter placed on the Property
by the Lessor and Lessee hereby agrees to comply with all terms and conditions
of said Mortgage with respect to the use and occupancy of the Premises. Further,
Lessee agrees to attorn to and recognize Lessor's mortgagee or any purchaser or
transferee who acquires title to the property pursuant to foreclosure of a
mortgage or any proceeding in lieu thereof and the successors and assigns of
such purchaser as its Lessor for the unexpired balance of (any extensions, if
exercised) of the term of the Lease upon the same terms and conditions set forth
in the Lease.
27. NOTICES. All notices, consents, demands and requests
which may be or are required to be given by either party to the other shall be
in writing, and shall be sent by Registered or Certified Mail with return
receipt re quested, addressed as follows:
If to Lessor: Xxxxxxx X. Van Heel
00000 Xxxxxx Xxxx 00
Xxxxxx, XX 00000
If to Lessee: Ultra Pac, Inc.
00000 Xxxxxxxxxx Xxxx.
Xxxxxx, XX 00000
Telephone: (000) 000-0000
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The date shown on the return receipt is the date of which
said Registered or Certified Mail is received by the addressee shall be
conclusively deemed to be the date on which a notice, consent, demand or other
request is given or made. The above address of a party may be changed from time
to time by notice given by said party to the other party in the manner provided.
28. SEVERABILITY CLAUSE. Any provision of this Agreement
which may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
29. LATE PAYMENT. In the event of late payment of any rental
installment, the Lessee shall pay a late charge in an amount equal to four
percent (4%) of any installment received more than five (5) days after its due
date.
30. ACKNOWLEDGMENT OF NOTICE. Lessee has been notified and
hereby acknowledges receipt of one (1) copy of this Lease and has been given
proper notice as to the name and address of the owner and/or agent empowered "to
accept service of process and receive and give receipt for notices and demands".
31. ENTIRE AGREEMENT. This Agreement, together with the
exhibits attached hereto, constitute the entire Agreement between Lessor and
Lessee with respect to the subject matter hereof and there are no collateral
agreements, either oral or written. It is further agreed that no change or
modification of the terms of this Agreement shall be binding upon either party
hereto unless such change or modification be in writing and signed by the party
to be charged.
32. MISCELLANEOUS.
32.1 See Exhibit "A" - Building plan
32.2 See Exhibit "A-1" attached - To be identified as
Xxxxxx Plastic Center, Lot 2
32.3 See Exhibit "A-2" -- Easements -- Ingress and Egress
(Subject to change after construction)
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32.4 See Exhibit "A" -- Specifications and Allowances
32.5 See Addendum to Lease dated October 1, 1994, Item 32 -
Rent review; Item 33 - Completion of Premises; Item
34 Right - of First Refusal
32.6 Purchase Option
WITNESS: LESSOR:
Xxxxxxx X. Van Heel
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. XxxXxxx
--------------------------------- -------------------------------
Xxxxxx Xxxxx Xxxxxxx X. Van Heel
(notary seal)
LESSEE:
Ultra Pac, Inc.
By: /s/ Xxxx Xxxx
-------------------------------
Xxxx Xxxx
Its: Chief Financial Officer
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ADDENDUM TO LEASE
DATED OCTOBER 1, 1994
00000 XXXXXXXXXX XXXXXXXXX
XXXXXX, XX 00000
33. RENT REVIEW. For the rental year commencing February 1,
2002, the rent shall be the lesser of: (i) the rent as calculated with
appropriate CPI increases as set forth in Section 5 of the Lease; or (ii) the
Fair Market Rental for the Premises as herein defined; provided, however, that
such rent shall in no case be less than Two Hundred Sixty Eight Thousand Thirty
Seven and NO/100 Dollars ($268,037.00) per year plus $.99 per square foot for
taxes and $.06 per square foot for insurance.
Fair Market Rental for the Premises means the actual rent
paid in the marketplace for similar property for a five-year lease term in the
Rogers, Minnesota vicinity as determined by experts in the real estate industry.
The Fair Market Rental shall be determined by an expert appointed by, and at the
expense of, the Lessor and given to the Lessee on or before November 1, 2001. If
Lessee does not accept the Landlord's expert's estimation of the Fair Market
Rental, it shall, within thirty (30) days of receiving the figure from Lessor,
appoint, at its expense, an expert to determine Fair Market Rental. If the Fair
Market Rental as determined by Lessee's expert is equal or greater than the Fair
Market Rental determined by the Lessor's expert, the Fair Market Rental shall be
the value as determined by the Lessor's expert. If Lessee's expert determines
the Fair Market Rental to be less than the Lessor's expert, the Lessor and
Lessee shall negotiate the Fair Market Rental. If they are unable to agree by
January 1, 2002, the Lessor's expert and the Lessee's expert shall appoint a
third expert and the matter will be settled by arbitration in Minneapo lis,
Minnesota. The costs of arbitration (other than the cost of each of their respec
tive experts, for which they shall be solely responsible) will be split equally
by the Lessor and Lessee unless the arbitrators determine that one of the
parties acted unreasonably or should otherwise pay more than one-half the cost
of arbitration.
The rental for the eighth through fifteenth years of the
Lease term shall be adjusted by a CPI change pursuant to Section 5 of the Lease
from the rent established for the eighth year as determined above.
34. COMPLETION OF PREMISES. The construction of the
Premises will be substantially completed and available for Lessee's partial
occupancy
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on or before February 1, 1995. The Premises will be constructed in accordance
with the specifications set forth in Exhibit A attached hereto. The existing
building included in the Premises shall be watertight and fully remodeled in
accordance with Tenant's specifications.
35. RIGHT OF FIRST REFUSAL. If, at any time during the term
of the Lease, Lessor desires to sell or otherwise convey all or any part of the
Pre mises and receives a bona fide offer (the "Offer") which Lessor is willing
to accept from a person or entity ready, willing and able to purchase all or any
part of the Property, Lessor shall immediately give notice of the Offer to
Lessee (the "Notifica tion"), including the name and address of the offeror and
a copy of the agreement evidencing the Offer. Lessee shall have twenty (20) days
after receipt of the Notifi cation in which to exercise its right of first
refusal to purchase the portion of the Property stated in the Offer on the terms
specified in the Offer (the "Exercise Period"). Lessor may transfer the Property
to entities controlled and majority owned by him free of this first refusal
right; provided, however, that this right will survive any such transfer.
If Lessee does not exercise this right to purchase by giving
Lessor written notice thereof within the Exercise Period, Lessor may thereafter
accept the Offer and complete the sale to the offeror in accordance with the
Offer. If the terms of the Offer are thereafter materially changed or if the
sale to the offeror is not completed as specified in the Offer, then the right
of first refusal given hereby to Lessee shall be revived, the revised Offer
shall be again submitted to Lessee for the Exercise Period, and Lessee shall
again have the right to purchase such portion of the Premises on the terms of
the revised Offer.
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AMENDMENT TO LEASE
This Amendment is made and entered into as of November 2,
1994, by and between Xxxxxxx X. Van Heel ("Lessor") and Ultra Pac, Inc.,
("Lessee").
R E C I T A L S:
(R1) On November 2, 1994, Lessor and Lessee entered into a certain lease
(the "Lease") for 64,900 square feet of space in certain premises
commonly known as 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxx (the
"Premises"). The parties hereby desire to amend the terms of the
Lease.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, Lessor and Lessee agree as
follows:
1. PURCHASE OPTION. Lessee shall have the option to purchase
the Premises during years three (3) through fifteen (15) of the lease term (the
"Purchase Option"). The parties hereby agree that if Lessee exercises this
Purchase Option, the purchase price for the Premises shall be One Million Seven
Hundred Forty Five Thousand and no/100 ($1,745,000.00) Dollars payable in cash
or certified funds. To exercise the option, Lessee shall notify Lessor in
writing of its intent to exercise the option to purchase. The closing date must
occur prior to the end of the fifteenth (15th) year of the lease term. Lessor
shall convey the premises at closing to Lessee free and clear of all
encumbrances except those caused by Lessee and except any unpaid special
assessments for improvements after the date of this Amendment. Subject to
Section 34 of the Lease, this option does not prevent Lessor from selling or
exchanging the Premises with a third party provided, that Lessor's successors
shall be bound by the terms of this Purchase Option.
2. RATIFICATION. Except as specifically amended hereby, the
Lease is fully ratified and affirmed by Lessor and Lessee.
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the above date.
LESSOR:
/s/ Xxxxxxx X. Van Heel
----------------------------------
Xxxxxxx X. Van Heel
LESSEE:
Ultra Pac, Inc.
/s/ Xxxx Xxxx
----------------------------------
Its: Chief Financial Officer
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LEASE AGREEMENT
THIS LEASE AGREEMENT, made this 1st day of May, 1993, by and
between Xxxxxxx X. Van Heel (herein after referred to as "Lessor") and Ultra
Pac, Inc. (hereinafter referred to as the "Lessee"). In consideration of the
rents and covenants herein contained, Lessor hereby leases and lets to Lessee,
and Lessee hereby rents and takes from Lessor, the following premises
hereinafter described, upon the terms and conditions hereinafter set forth.
1. THE LEASE PROPERTY: Lessor hereby leases to Lessee for the
term hereinafter specified 58,480 square feet of space (hereinafter referred to
as the "Premises"), in an office and warehouse building located at 00000
Xxxxxxxxxx Xxxx., Xxxxxx, XX 00000 (hereinafter referred to as "Property"), more
particularly described as follows:
(a) 3,200 square feet of office area; and
(b) 55,280 square feet of warehouse space, said space
being measured from outside of the outside walls, to the center of the partition
walls, and governed by the floor plan and allowances attached hereto as Exhibit
A and made a part hereof.
2. TERM OF THE LEASE. The term of this Lease shall be for 8
years 7 months commencing on the 1st day of June, 1993.
3. RENT. Lessee shall pay to the Lessor as rent for the
Premises during the first 1 (one) years of the term of this Lease the sum of Two
Hundred Fifty Six Thousand One Hundred Thirty Seven and 76/100 Dollars
($256,137.76) per year (hereinafter referred to as the "Initial Annual Rent"),
payable in twelve (12) equal monthly installments of Twenty One Thousand Three
Hundred Forty Four and 81/100 Dollars ($21,344.81) on the first day of each and
every month, in advance.
4. OPTION TO RENEW. Lessee shall have the option to renew
this Lease for an additional three (3) years by giving Lessor at least ninety
(180) days' written notice prior to the expiration of the original term of this
lease, Lessee shall notify Lessor of Lessee intention not to renew this lease,
provided, however, that if at the date of expiration of the original term of
this lease, Lessee is in default
17
in the performance of any of the terms and covenants of this lease, the Lessor
may, at its option, terminate this lease.
5. COST OF LIVING INCREASE. Subject to Section 32 hereof
beginning on January 1, 1994 the Rent (not including the portion attributable to
taxes and insurance) shall be adjusted annually on January 1st of each year in
proportion to the changes in the Consumer Price Index (CPI) published by the
Bureau of Labor Statistics, based upon changes in the CPI for over the past
calendar year (twelve (12) months) between the date of initial occupancy
(2-1-92) and the years of the Lease as set forth above. At the end of the 1992
year of occupancy thereafter, based upon the renewal options, if any, contained
herein, a similar adjustment in the then current rent shall be made by comparing
the CPI at the beginning of each renewal year with the CPI at the beginning of
the first year of occupancy. Such adjusted rentals shall be payable in twelve
(12) equal monthly installments during the year hereof, and each renewal year
thereafter. The adjustment, if any, shall be calculated upon the basis of the
U.S. Consumer Price Index for urban consumers, St. Xxxx - Minneapolis area
("Index"), issued by the Bureau of Labor Statistics of the U.S. Department of
Labor ("Bureau"), (1967 = 100). The Index for said subgroup published as of the
month prior to the commencement date shall be considered the "Base". The monthly
Base Rental for the year shall be adjusted by the percentage increase, if any,
in the index as of the month prior to the month of commencement over the Base;
provided, however, that in no event shall the monthly Base Rental be less than
the amount specified in this Lease not withstanding the fact that the Index may,
as of some adjustment date, be less than the Base. When the monthly Base Rental
for the year is determined, Lessor shall give Lessee written notice to that
effect indicating how the new monthly Base Rental figure was computed. If at any
rental adjustment date, there shall not exist the Index in the same format as
recited in this Section, the parties shall substitute any official index
published by the Bureau of Labor Statistics, or successor or similar
governmental agency, as may then be in existence and shall be most nearly
equivalent thereto. If the parties shall be unable to agree upon a successsor
index, the parties shall refer the choice of a successor index to arbitration in
accordance with the rules of the American Arbitration Association. The CPI
increased shall commence on January 1, 1994 and shall not exceed six (6) percent
in any one year.
6. USE. It is agreed that Lessee shall have the right to
occupy and use the Premises for plastic product manufacturing and warehousing
and other lawful purposes, subject to all Federal, State or local regulations
governing the use of
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said Premises. Any change or alteration of the Premises caused by the Lessee's
desired use (code compliance, etc.) shall be made by Lessor at Lessee's expense.
7. REAL ESTATE TAXES AND INSURANCE PREMIUMS. As a part of the
Rent due under this Lease, Lessee shall pay, in addition to the rental due under
Paragraph 3, its proportionate share of any increase in the real estate taxes
and insurance premiums (in excess of $.75 per foot for taxes and $.09 per foot
for insurance) on the property on the first day of each month. For the purposes
of this Paragraph, Lessee shall be deemed to occupy 100% of the property. Lessee
shall pay in monthly installments that 100% of any increase in the real estate
taxes and insurance premiums on the property. Lessor shall notify Lessee of the
amounts of said monthly real estate tax and insurance payments and shall make
any necessary adjustments to reflect the increase or decrease in the amount of
said real estate taxes or insurance premiums or any estimates thereof.
8. SECURITY DEPOSIT. On December 1, 1991 Lessee paid to
Lessor, the sum equivalent to one (1) monthly installment of the Initial Annual
Rent, as a security deposit. Upon the occurrence of any default by Lessee,
Lessor may, from time to time, without notice or prejudice to any other remedy,
use the said security deposit to the extent necessary to make good any arrears
of rent or any other damage, injury, expense or liability caused to Lessor by
such default or misuse. Any remaining balance of such security deposit shall be
returned to Lessee upon satisfactory compliance with the terms herein,
inspection and acceptance by Lessor of the vacated Premises.
9. STRUCTURAL MAINTENANCE. The Lessor shall, at its own
expense, keep in good order, safe condition and repair, the structural parts of
the building in which the Premises are located, including the outer walls, roof,
floor, foundation, and interior support columns, except that the Lessor shall
not be responsible for repairs that are caused by the fault or negligence of
the Lessee, its employees or invitees.
10. INTERIOR MAINTENANCE. Lessee shall be wholly responsible
for the interior maintenance and repair of the Premises, including entrance
doors, overhead garage doors, heating, plumbing, electrical and mechanical
fixtures and equipment (except as such items may be covered by manufacturer
warranties), and to keep the Premises in as good of a condition as when turned
over to it, reasonable wear and tear and damage by fire and the elements
excepted; and will keep the premises in an orderly, clean and sanitary
condition; will neither do nor
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19
permit to be done therein anything which is in violation of the terms of
insurance policies on the building or in violation of the laws or ordinances
applicable thereto; will neither commit nor suffer waste on said Premises; and
will pay for the replacement of all glass broken and expendables; and is
responsible for snow removal from sidewalks and stairways directly adjoining the
leased Premises.
11. EXTERIOR MAINTENANCE AND SERVICES. the Lessor shall
contract for, and Lessee shall pay his pro rata share of all electricity
(security lighting), city water, sewer, landscape care, snow removal, window
washing, parking lot maintenance, and all other exterior maintenance required
during the term of this lease or any extension thereof. Said amounts shall be
calculated as set forth in Paragraph 7 hereof and shall be considered additional
rent due hereunder payable on the first day of each month.
All services which are the responsibility of the Lessor shall
be provided as shall be reasonably necessary to the comfortable use and
occupancy of the Premises during business hours except Sundays and holidays,
upon the condition that Lessor shall not be liable for damages for failure to
provide services due to causes reasonably beyond its control.
12. UTILITIES. The Lessee shall pay for all utilities,
including gas, electricity, city water, telephone and any other utility service
used therein during the term of this lease.
13. PARKING. Parking areas shall be available to Lessee, its
employees and business invitees, as well as to other tenants and customers of
the Buildings. The use of such facilities shall be subject to the reasonable
rules and regulations as the Lessor may promulgate uniformly for all Lessor's
tenants in the Buildings. Lessee agrees that it will not cause more than seventy
four (74) parking spaces to be occupied at any one time, and will not use or
permit the use by its employees of the parking spaces for the overnight storage
of automobiles or other vehicles.
The Lessee agrees not to leave or store any materials or
trash on the grounds or parking areas, and not to litter the grounds and parking
areas.
14. INSURANCE. Lessor shall maintain fire, windstorm and
extended coverage insurance on the Buildings. Lessee, its agents or employees
shall not be liable to Lessor or any other person by right of subrogation or
otherwise for
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20
any damage to all or any part of the demised Premises or all or any part of the
buildings of which the demised Premises are a part, or any property therein,
arising out of fire, windstorm or extended coverage perils, unless such damage
is due to the act of neglect of Lessee, its agents or employees.
Lessor will require each of its other tenants in the
Buildings to carry adequate public liability insurance and insurance against
casualty loss to its own contents and property. Neither the Lessor nor the
Lessee shall be liable to the other for damages arising out of the damage to or
destruction of the other's contents, from causes covered by fire and extended
coverage insurance, whether or not such damage or destruction be the result of
their agents, servants or employees.
Lessee will maintain in full force and effect during the term
of this lease and any extension hereof, a policy of public liability insurance,
under which Lessor and Lessee are named as insureds, against claims for personal
injury, death or property damages arising on or abut the Premises and arising
out of ownership, maintenance, use of occupancy thereof; said insurance is to
afford protection to the limit of not less than One Million Dollars
($1,000,000.00) for injury or death to any one person, Three Million Dollars
($3,000,000.00) for any one accident and One Million Dollars ($1,000,000.00) for
property damage. All policies of insurance shall provide that the proceeds
thereof be payable to Lessee and Lessor as their respective interests may
appear. Lessee agrees to deliver to Lessor, prior to occupancy, a Certificate of
Insurance, naming Lessor as additional insured; such policy shall require ten
(10) days' written notice to the Lessor before cancellation can be effected.
In the event Lessee's use of Premises or contents kept on the
Premises or refusal to follow directions from the Fire Inspection Bureau, or
general house keeping, cause the fire and extended coverage insurance premiums
for the Building to increase, then Lessee agrees to pay such additional premium
to the Lessor when same is due.
15. IMPAIRMENT OF USE. In the event the Premises shall be
untenantable or unfit for occupancy in whole or in part by the total or partial
destruction of the Building by fire or other casualty, and the Lessor shall
fair or refuse within thirty (30) days thereafter to agree in writing to restore
the same within ninety (90) days, this Lease may be terminated by either Lessor
or Lessee by notice in writing; in the event this Lease shall be terminated by
either party hereto for said reason, Lessee's obligation to pay rent shall be
deemed to have ceased as of the date the Premises were rendered untenantable or
unfit for occupancy; and in the event the
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21
Lessor shall agree in writing to restore the Premises within said time, or
Lessee continues to occupy the Premises in whole or in part, the rent to be paid
hereunder shall be reduced pending such restoration, and shall be abated in an
amount equal to the percentage of space loss suffered by Lessee by virtue of the
impairment of said Premises. The extent of abatement of rent due or percentage
thereof shall be determined by the actual space used, or local building
occupancy officials.
16. ASSIGNMENT. The Lessee shall not assign this Lease, and
will not sublet any part of said Premises without the consent in writing of the
Lessor, which consent will not be unreasonably withheld, provided, however, that
such consent to assignment by Lessor shall not operate to release the assigning
party of any obligation or liability arising under thee terms of this Lease,
unless Lessor shall specifically agree in writing that such proposed assignment
shall so release the Lessee. This Lease and the deposits hereunder shall be
assignable by Lessor, provided, however, that in such event the assignment shall
be disclosed to Lessee and the assignee shall assume all of Lessor's obligations
hereunder.
17. CLAIMS BY LESSEE. The Lessee shall make no claim against
Lessor for any loss of or damage to Lessee's Premises caused by theft, burglary,
water, gas or other mean.
18. FIXTURES AND EQUIPMENT. Whether owned by Lessor at the
commencement of the term of this Lease subsequently purchased by Lessor, or
purchased by Lessee, all fixtures and equipment considered necessary to the
general operation and maintenance of the Property shall be the property of the
Lessor, except that any leasehold improvements provided by Lessee at its own
expense shall remain the property of the Lessee and be removed by the Lessee
prior to the termination of this Lease.
19. DEFAULT AND REMEDIES. If at any time during the term of
this Lease: (a) Lessee shall vacate said Premises or shall default in the
payment of rent or in the observance or performance of any other covenants or
provisions of this Lease, and such default continues for ten (10) days after
notice of such default from Lessor (excepting, however, any such default which
cannot be cured within said (10) days in which Lessee shall in good faith and
with due diligence be proceeding to cure); or, (b) Lessee shall make an
assignment for the benefit of creditors; or (c) a voluntary or involuntary
petition is filed by or against Lessee for the purpose of adjudication of Lessee
in bankruptcy or for the extension of time payment, composition, arrangement,
adjustment, modification, settlement or satisfaction of the liabilities
6
22
of Lessee, or for the reorganization of Lessee under the Bankruptcy Act or any
future law having the same general purpose; or a receiver is appointed for
Lessee, the occurrence of such events shall be a breach of this Lease.
Lessor, at its option, in addition to any of the other
remedies available to it, is authorized to re-enter said Premises to eject the
Lessee and to take full possession of said Premises, as it shall deem best in an
effort to mitigate damages and costs to Lessor hereunder, to remove from said
Premises all personal property of the Lessee, and to store the same to the
account and at the expenses and risk of the Lessee, and to sell said property or
any part thereof, and out of the proceeds, to pay all expenses of so removing,
storing or selling the same, and all sums which shall then be in arrears or past
due for rent; and that no such act or acts of the Lessor shall be construed as
cancellation of this Lease or waiver of the right of the Lessor to collect rent
hereunder (less any rental received from any other party) for the remainder of
said term except said exercise of their option to terminate the same, and that
in case the Lessor shall determine that any action or proceeding at law or
otherwise is necessary to enforce the terms and conditions hereof, the Lessee
agrees that a reasonable attorney's fee and the necessary costs and
disbursements thereof may be allowed and taxed against it.
20. ALTERATIONS. The Lessee will not make any alterations to
the leased Premises without the written consent of the Lessor, such consent not
to be unreasonably withheld. If the Lessee shall desire to make any alterations,
an accurate description shall first be submitted to and approved by Lessor, and
shall be done by the Lessee, at its own expense. Lessee agrees that all such
work shall be done in a good, workmanlike manner and in conformance with
applicable building codes, that the structural integrity of the building shall
not be impaired, and that no liens shall attach to the Premises by reason
thereof. Unless the Lessor shall elect that all or any part of such alterations
shall remain, the Premises shall be restored to its original condition by the
Lessee before the expiration of the Lease at its own expense. Failure to remove
fixtures and equipment owned by the Lessee upon expiration of this Lease and
surrender of the Premises shall constitute abandonment to the Lessor who may
remove said fixtures and equipment, and restore the Premises at Lessee's
expense.
Any such alterations shall become the property of the Lessor
as soon as they are affixed to the Premises and all right, title and interest
therein of the Lessee shall immediately cease unless otherwise agreed in
writing.
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21. ATTACHMENTS. Lessee agrees that no spikes, hooks, nails,
screws or tacks will be driven into the walls or woodwork of the leased
Premises, and nothing will be attached to such walls or woodwork of the leased
Premises except by consent of the Lessor, provided, however, that the Lessee may
hang mirrors, pictures and decorations with discretion.
22. CONDEMNATION. In the event that the whole of the Premises
shall be condemned or taken in any manner, this Lease shall cease and terminate
as of the date of vesting of title. In the event that only a part of the
Premises shall be so condemned or taken, then effective as of the date of
vesting of title, the rent hereunder for such part shall be equitably abated to
the extent the Premises are affected by said taking and this lease shall
continue as to the part not taken. If substantial structural alteration or
reconstruction of the Building, shall, in the opinion of the Lessor, be
necessary as a result of such condemnation or taking (whether or not the
Premises be affected), the Lessor may, at its option, terminate this Lease at
the time of such vesting of title by notifying the Lessee in writing of such
termination. If Lessor does not elect to terminate this Lease as aforesaid, this
Lease shall be and remain unaffected by such condemnation or taking, except that
the rent shall be abated to the extent, if any, as hereinbefore provided. Lessor
may, at its expense, restore with reasonable diligence the remaining structural
portions of the Premises as nearly as practicable to the same condition as they
were prior to such condemnation or taking.
23. SIGNS. The Lessee shall have the right, at its own risk
and expense, to place identifying signs on the exterior walls of the Building
next to any doors leading directly into the Premises, in a manner to conform
with the Lessor's building standards and all applicable zoning laws. Lessee
agrees to maintain its signs in good repair, to remove it at the end of the term
or any extended term, repairing any damages caused by such removal, and to hold
Lessor harmless from any loss, cost or damages resulting from the erection,
existence, maintenance or removal of Lessee's signs. The Lessor reserves the
right to approve all signs and to remove all unapproved signs at the expense of
the Lessee.
24. ACCESS. No additional locks will be placed on any of the
doors in said Building unless Lessor receives an access key to such locks, and
that Lessor shall have the right to enter the Premises for purposes of repair or
emergency inspection.
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25. DISPLAY. Lessor shall have the right to enter the
Premises during the six (6) months prior to termination of this Lease to display
the space to prospective tenants, and to place on doors and windows appropriate
notice that the Premises are for rent.
26. MORTGAGES. It is mutually agreed that this Lease shall be
subordinate to any and all mortgages now and hereinafter placed on the Property
by the Lessor and Lessee hereby agrees to comply with all terms and conditions
of said Mortgage with respect to the use and occupancy of the Premises.
27. NOTICES. All notices, consents, demands and requests
which may be or are required to be given by either party to the other shall be
in writing, and shall be sent by Registered or Certified Mail with return
receipt requested, addressed as follows:
If to Lessor:
Xxxxxxx X. Van Heel
00000 Xxxxxxxxxx Xxxx.
Xxxxxx, XX 00000
If to Lessee:
Ultra Pac, Inc.
00000 Xxxxxxxxxx Xxxx.
Xxxxxx, XX 00000
The date shown on the return receipt as the date of which
said Registered or Certified Mail is received by the addressee shall be
conclusively deemed to be the date on which a notice, consent, demand or other
request is given or made. The above address of a party may be changed from time
to time by notice given by said party to the other party in the manner provided.
28. SEVERABILITY CLAUSE. Any provision of this Agreement
which may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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29. LATE PAYMENT. In the event of late payment of any rental
installment, the Lessee shall pay a late charge in an amount equal to four
percent (4%) of any installment received more than five (5) days after its due
date.
30. ACKNOWLEDGMENT OF NOTICE. Lessee has been notified and
hereby acknowledges receipt of one (1) copy of this Lease and has been given
proper notice as to the name and address of the owner and/or agent empowered "to
accept service of process and receive and give receipt for notices and demands".
31. ENTIRE AGREEMENT. This Agreement, together with the
exhibits attached hereto, constitute the entire agreement between Lessor and
Lessee with respect to the subject matter hereof and there are no collateral
agreements, either oral or written. It is further agreed that no change or
modification of the terms of this Agreement shall be binding upon either party
hereto unless such change or modification be in writing and signed by the party
to be charged.
32. MISCELLANEOUS.
32.1 See Exhibit "A" attached - Soon to be identified as
Xxxxxx Plastic Center, Lot 4
32.2 See Exhibit "A-1" - Property Layout
32.3 See Exhibit "A-2" - Easements - Ingress and Egress
32.4 See Exhibit "A" - Specifications and Allowances
32.5 See Addendum to Lease dated July 1, 1991 Item 32 -
Rent review
See Addendum to Lease dated July 1, 1991 Item 33 -
Completion of Premises See Addendum to Lease dated
July 1, 1991 Item 34 - Right of First Refusal
32.6 See Amendment to Lease dated July 23, 1991
32.6.1 See Amendment to Lease dated July 23, 1991 Revised
Purchased Option Price
$One Million Two Hundred Thirty Nine Thousand Five
Hundred Twenty Four no/100 Dollars ($1,239,524.00).
Option Price Acceptance:
Date Date
Xxx Xxxxx Xxxxxxx X. Van Heel
Ultra Pac, Inc. Van Heel Rentals
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26
IN WITNESS WHEREOF, the parties have caused these presents to
be signed by their proper owner/officers and warrant they have the authority to
bind same and caused their property corporate seal to be hereunto affixed this
28th day of May, 1993.
WITNESS: LESSOR:
Xxxxxxx X. Van Heel
By /s/ Xxxxxxx X. Van Heel
------------------------------- --------------------------------
Xxxxxxx X. Van Heel
Its Owner
-------------------------------
LESSEE:
Ultra Pac, Inc.
By /s/ Xxxxxxx Xxxx
--------------------------------
Xxxxxxx Xxxx
Its Chief Financial Officer
11
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ADDENDUM TO LEASE
DATED JULY 1, 1991
00000 XXXXXXXXXX XXXXXXXXX
XXXXXX, XX 00000
32. RENT REVIEW. For the rental year commencing January 1,
1997, the rent shall be the lesser of: (i) the rent as calculated with
appropriate CPI increases as set forth in Section 5 of the Lease; or (ii) the
Fair Market Rental for the Premises as herein defined; provided, however, that
such rent shall in no case be less than Two Hundred Fifty-Six Thousand One
Hundred Thirty-Eight Dollars ($256,138.00) per year (including $.75 per square
foot for taxes and $.09 per year per square foot for insurance).
Fair Market Rental for the Premises means the actual rent
paid in the marketplace for similar property for a five-year lease term in the
Rogers, Minnesota vicinity as determined by experts in the real estate industry.
The Fair Market Rental shall be determined by an expert appointed by, and at the
expense of, the Lessor and given to the Lessee on or before November 1, 1996. If
Lessee does not accept the Landlord's expert's estimation of the Fair Market
Rental, it shall, within thirty (30) days of receiving the figure from Lessor,
appoint, at its expense, an expert to determine Fair Market Rental. If the Fair
Market Rental as determined by Lessee's expert is equal or greater than the Fair
Market Rental determined by the Lessor's expert, the Fair Market Rental shall be
the value as determined by the Lessor's expert. If Lessee's expert determines
the Fair Market Rental to be less than the Lessor's expert, the Lessor and
Lessee shall negotiate the Fair Market Rental. If they are unable to agree by
January 1, 1997, the Lessor's expert and the Lessee's expert shall appoint a
third expert and the matter will be settled by arbitration in Minneapolis,
Minnesota. The costs of arbitration (other than the cost of each of their
respective experts, for which they shall be solely responsible) will be split
equally by the Lessor and Lessee unless the arbitrators determine that one of
the parties acted unreasonably or should otherwise pay more than one-half the
cost of arbitration.
The rental for the seventh through tenth years of the Lease
term shall be adjusted by a CPI change pursuant to Section 5 of the Lease from
the rent established for the sixth year as determined above.
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33. Completion of Premises. The construction of the Premises
will be substantially completed and available for Lessee's occupancy on or
before January 1, 1992. The Premises will be constructed in accordance with the
specifications set forth in Exhibit A attached hereto. The existing building
included in the Premises shall be watertight and fully remodeled in accordance
with Tenant's specifications.
34. Right of First Refusal. If, at any time during the term
of the Lease, Lessor desires to sell or otherwise convey all or any part of the
Premises and receives a bona fide offer (the "Offer") which Lessor is willing to
accept from a person or entity ready, willing and able to purchase all or any
part of the Property, Lessor shall immediately give notice of the Offer to
Lessee (the "Notification"), including the name and address of the offeror and a
copy of the agreement evidencing the Offer. Lessee shall have twenty (20) days
after receipt of the Notification in which to exercise its right of first
refusal to purchase the portion of the Property stated in the Offer on the terms
specified in the Offer (the "Exercise Period"). Lessor may transfer the Property
to entities controlled and majority owned by him free of this first refusal
right; provided, however, that this right will survive any such transfer.
If Lessee does not exercise this right to purchase by giving
Lessor written notice thereof within the Exercise Period, Lessor may thereafter
accept the Offer and complete the sale to the offeror in accordance with the
Offer. If the terms of the Offer are thereafter materially changed or if the
sale to the offeror is not completed as specified in the Offer, then the right
of first refusal given hereby to Lessee shall be revived, the revised Offer
shall be again submitted to Lessee for the Exercise Period, and Lessee shall
again have the right to purchase such portion of the Premises on the terms of
the revised Offer.
29
AMENDMENT TO LEASE
THIS AMENDMENT is made and entered into as of July 23, 1991,
by and between XXXXXXX X. VAN HEEL ("Lessor") and ULTRA PAC, INC. ("Lessee").
RECITALS
On July 1, 1991, Lessor and Lessee entered into a certain
Lease (the "Lease") for 62,000 square feet of space in
certain premises commonly known as 00000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxxxxxx (the "Premises"). The parties
hereby desire to amend the terms of the Lease.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements contained herein, Lessor and Lessee agree as
follows:
1. Purchase Option - Lessee shall have the option to purchase
the Premises during years two through nine of the lease term (the "Purchase
Option"). The Purchase Option shall be effective only if Lessee has, no less
than three years prior to the exercise of the Purchase Option, exercised and
closed a similar purchase option between the parties hereto for property located
at 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxx. The parties hereby agree that
if Lessee exercises the Purchase Option, the purchase price for the Premises
shall be One Million Two Hundred Thirty Nine Thousand Five Hundred Twenty Four
and No/100 ($1,239,524.00) cash.
2. Ratification - Except as specifically amended hereby, the
Lease is fully ratified and affirmed by Lessor and Lessee.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the above date.
LESSOR:
/s/ Xxxxxxx X. Van Heel
-----------------------------------
Xxxxxxx X. Van Heel
LESSEE:
ULTRA PAC, INC.
By /s/ X. Xxxxx
--------------------------------
Xxx Xxxxx
Its Chief Executive Officer
30
SECOND AMENDMENT TO LEASE
This Second Amendment is made and entered into as of November
2, 1994, by and between Xxxxxxx X. Van Heel ("Lessor") and Ultra Pac, Inc.
("Lessee").
R E C I T A L S :
(R1) On July 1, 1991, Lessor and Lessee entered into a
certain Lease (the "Lease") for 56,200 square feet
of space in certain premises commonly known as 00000
Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxx (the
"Premises"). The parties also executed an Amendment
to Lease dated July 23, 1991, which Amendment
contained a purchase option. The parties hereby
desire to amend the terms of the Lease and the
Amendment to Lease.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, Lessor and Lessee agree as
follows:
1. PURCHASE OPTION. Providing Lessee is not in default and
providing that the Lease of the Premises has not terminated, Lessee shall have
the option to purchase the Premises during years three (3) through fifteen (15)
of the lease term or any extension of the lease term (the "Purchase Option").
The exercise of this Purchase Option shall be effective only if Lessee has not,
less than three (3) years prior to the exercise of this Purchase Option,
exercised and closed a similar Purchase Option between the parties hereto for
properties located at 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxx. The parties
hereby agree that if Lessee exercises the Purchase Option, the purchase price
for the Premises shall be One Million Two Hundred Thirty Nine Thousand Five
Hundred Twenty Four and no/100 ($1,239,524.00) Dollars by cash or certified
funds. To exercise the option, Lessee shall notify Lessor in writing of its
intent to exercise the option to purchase. The closing date must occur prior to
the end of the fifteenth (15th) year of the lease term. Lessor shall convey the
premises at closing to Lessee free and clear of all encumbrances except those
caused by Lessee and except any unpaid special assessments for improvements
after the date of this Amendment. Subject to Section 34 of the Lease, this
option does not prevent Lessor from selling or exchanging the Premises with a
third party provided, that Lessor's successors shall be bound by the terms of
this Purchase Option.
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2. RATIFICATION. Except as specifically amended hereby, the
Lease is fully ratified and affirmed by Lessor and Lessee.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the above date.
LESSOR: LESSEE:
Ultra Pac, Inc.
/s/ Xxxxxxx X. Van Heel By: /s/ Xxxx Xxxx
----------------------------------- -------------------------------
Xxxxxxx X. Van Heel Its: Chief Financial Officer
-------------------------------
32
LEASE AGREEMENT
THIS LEASE AGREEMENT, made this 20th day of November 1994, by
and between Xxxxxxx X. Van Heel (hereinafter referred to as "Lessor") and Ultra
Pac, Inc (hereinafter referred to as the "Lessee"). In consideration of the
rents and covenants herein contained, Lessor hereby leases and lets to Lessee,
and Lessee hereby rents and takes from Lessor, the following premises
hereinafter described, upon the terms and conditions hereinafter set forth.
1. THE LEASE PROPERTY Lessor hereby leases to Lessee for the term
hereinafter specified 55,600 square feet of space (hereinafter referred to as
the "Premises"), in an office and warehouse building located at 00000 Xxxxxxxxxx
Xxxx, Xxxxxx, Xxxxxxxxx (hereinafter referred to as the "Property"), more
particularly described as follows:
(1) 1,350 square feet of office area
(2) 54,250 square feet of warehouse space, said space being
measured from outside of the outside walls, to the center of the partition
walls, and governed by the floor plan and allowances attached hereto as Exhibit
A and made a part hereof.
2. TERM OF THE LEASE The term of this Lease shall be for 15 years
commencing on the 1st day of February, 1995.
3. RENT Lessee shall pay to the Lessor as rent for the Premises during
the first (1) year of the term of this Lease the sum of Two Hundred Forty Six
Thousand Eight Hundred Sixty Four and No/100?Dollars ($246,864.00) per
(hereinafter referred to as the "Initial Annual Rent"), payable in twelve (12)
monthly installments of Twenty Thousand Five Hundred Seventy Two and
No/100?Dollars ($20,572.00) on the first day of each and every month, in
advance, with proration of the first and last month's rent in the event of
commencement other than the first day of the month. There shall be paid by the
Lessee to the Lessor upon signing of this Lease two (2) months rent, which sum
shall represent the first month's rent and a security deposit equal to one
month's rent.
*Included in rental amount is $3.39 base rent, $.99 tax allowance, and $.06
insurance allowance.
4. OPINION TO RENEW Lessee shall have the option to renew this Lease
for an additional Three (3) years by giving Lessor at least ninety (90) days
written notice prior to the expiration of the original term of this lease,
Lessee shall notify Lessor of Lessee
33
intention not to renew this lease, provided, however, that if at the date of
expiration of the original term of this lease, Lessee is in default in the
performance of any of the terms and covenants of this lease, the Lessor may, at
its option, terminate this lease.
5. COST OF LIVING INCREASE Subject to Section 32 hereof, beginning on
February 1, 1996, the rent (not including the portion attributable to taxes and
insurance) shall be adjusted annually on February 1st of each year in proportion
to the changes in the Consumer Price Index (CPI) published by the Bureau of
Labor Statistics, based upon changes in the CPI for over the past calendar year
(twelve months) between the date of initial occupancy (2-1-95) and the years of
the Lease as set forth above. At the end of the 1995 year of occupancy
thereafter, based upon the renewal options, if any contained herein, a similar
adjustment in the then current rent shall be made by comparing the CP1 at the
beginning of each renewal year with the CPI at the beginning of the first year
of occupancy. Such adjusted rentals shall be payable in twelve (12) equal
monthly installments during the year hereof, and each renewal year thereafter.
The adjustment, if any, shall be calculated upon the basis of the U.S. Consumer
Price Index for urban consumers, St. Xxxx - Minneapolis area, ("Index") issued
by the Bureau of Labor Statistics of the U.S. Department of Labor ("Bureau"),
(1967 = 100). The Index for said subgroup published as of the month prior to the
commencement date shall be considered the "Base". The monthly Base Rental for
each year shall be adjusted by the percentage increase, if any, in the index, as
of the month prior to the month of commencement over the Base; provided,
however, that in no event shall the monthly Base Rental be less than the amount
specified in this Lease not withstanding the fact that the Index may, as of some
adjustment date, be less than the Base. When the monthly Base Rental for the
year is determined, Lessor shall give Lessee written notice to the effect
indicating how the new monthly Base Rental figure was computed. If at any rental
adjustment date, there shall not exist the Index in the same format as recited
in this Section, the parties shall substitute any official index published by
the Bureau of Labor Statistics, or successor or similar governmental agency, as
may then be in existence and shall be most nearly equivalent thereto. If the
parties shall be unable to agree upon a successor index, the parties shall refer
the choice of a successor index to arbitration in accordance with the rules of
the American Arbitration Association. The CPI increase shall commence on
February 1, 1996, and shall not exceed six (6) percent in any one year.
6. USE It is agreed that Lessee shall have the right to occupy and use
the Premises for plastic product manufacturing and warehousing and related
operations and other lawful purposes, subject to all Federal, State or local
regulations governing the use of said Premises. Any change or alteration of the
Premises caused by the Lessee's desired use (code compliance, etc.) shall be
made by Lessor at Lessee's expense.
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34
7. REAL ESTATE TAXES AND INSURANCE PREMIUMS As a part of the Rent due
under this Lease, Lessee shall pay, in addition to the base rental due under
Paragraph 3, its proportionate share of any increase in the real estate taxes
and insurance premiums (in excess of $.99 per foot for taxes and $.06 per foot
for insurance) on the property on the first day of each month. For the purpose
of this Paragraph, Lessee shall be deemed to occupy 100% of the property. Lessee
shall pay in monthly installments that 100% of the real estate taxes and
insurance premiums on the property. Lessor shall notify Lessee of the amounts of
said monthly real estate tax and insurance payments and shall make any necessary
adjustments to reflect the increase or decrease in the amount of said real
estate taxes or insurance premiums or any estimates thereof.
8. SECURITY DEPOSIT On October 1, 1994, Lessee shall pay to Lessor, the
sum equivalent to one (1) monthly installment of the Initial Annual Rent, as a
security deposit. Upon the occurrence of any default by Lessee, Lessor may, from
time to time, without notice or prejudice to any other remedy, use the said
security deposit to the extent necessary to make good any arrears of rent or any
other damage, injury, expense or liability caused to Lessor by such default or
misuse, any remaining balance of such security deposit shall be returned to
Lessee upon satisfactory compliance with the terms herein, inspection and
acceptance by Lessor of the vacated premises.
9. STRUCTURAL MAINTENANCE The Lessor shall, at its own expense, keep in
good order, safe condition and repair, the structural parts of the building in
which the Premises are located, including the outer walls, roof, floor,
foundation, and interior support columns except that the Lessor shall not be
responsible for repairs that are caused by the fault or negligence of the
Lessee, its employees or invitees.
10. INTERIOR MAINTENANCE Lessee shall be wholly responsible for the
interior maintenance and repair of the Premises, including entrance doors,
overhead garage doors, heating, plumbing, electrical and mechanical fixtures and
equipment (except as such items may be covered by manufacturer warranties), and
to keep the Premises in as good of a condition as when turned over to it,
reasonable wear and tear and damage by fire and the elements excepted; and will
keep the premises in an orderly, clean and sanitary condition; will neither do
nor permit to be done therein anything which is in violation of the terms of
insurance policies on the Building or in violation of the laws or ordinances
applicable thereto; will neither commit nor suffer waste on said Premises; and
will pay for the replacement of all glass broken and expendables; and is
responsible for snow removal from sidewalks and stairways directly adjoining the
leased Premises
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11. EXTERIOR MAINTENANCE AND SERVICES The Lessor shall contract for,
and Lessee shall pay his prorata share of all electricity (security lighting),
city water, sewer, landscape care, snow removal, window washing, parking lot
maintenance, and all other exterior maintenance required during the term of this
lease or any extension thereof. Said amounts shall be calculated as set forth in
Paragraph 7 hereof and shall be considered additional rent due hereunder payable
on the first day of each month.
All services WHICH are the responsibility of the Lessor shall be
provided as shall be reasonably necessary to the comfortable use and occupancy
of the Premises during business hours except Sundays and holidays, upon the
condition that Lessor shall not be liable for damages for failure to provide
services due to causes reasonably beyond its control.
12. UTILITIES The Lessee shall pay for all utilities, including gas,
electricity, city water, telephone and any other utility service used therein
during the term of this lease.
13. PARKING Parking areas shall be available to Lessee, its employees
and business invitees, as well as to other tenants and customers of the
Buildings. The use of such facilities shall be subject to the reasonable rules
and regulations as the Lessor may promulgate uniformly for all Lessor's tenants
in the Buildings. Lessee agrees that it will not cause more than thirty three
(33) parking spaces to be occupied at any one time, and will not use or permit
the use by its employees of the parking areas for the overnight storage of
automobiles or other vehicles.
The Lessee agrees not to leave or store any materials or trash on the
grounds or parking areas, and not to liner the grounds and parking areas.
14. INSURANCE Lessor shall maintain fire, windstorm and extended
coverage insurance on the Buildings (Lessees obligations to pay Lessor for said
insurance costs are contained in paragraph 7 above). Lessee, its agents or
employees shall not be liable to Lessor or any other person by right of
subrogation or otherwise for any damage to all or any part of the demised
Premises or all or any part of the Buildings of which the demised Premises are a
part, or any property therein, arising out of fire, windstorm or extended
coverage perils, unless such damage is due to the act of neglect of Lessee, its
agents or employees.
Lessor will require each of its other tenants in the Buildings to carry
adequate public liability insurance and insurance against casualty loss to its
own contents and property. Neither the Lessor nor the Lessee shall be liable to
the other for damages arising out of the damage to or destruction of the other's
contents, from causes covered by fire and extended coverage insurance, whether
or not such damage or destruction be the result of their agents, servants or
employees.
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36
Lessee will maintain in full force and effect during the term of this
lease and any extension hereof, a policy of public liability insurance, under
which Lessor and Lessee are named as insureds, against claims for personal
injury, death or property damages arising on or about the Premises and arising
out of ownership, maintenance, use of occupancy thereof; said insurance is to
afford protection to the limit of not less than One Million Dollars
($1,000,000.00) for injury or death to any one person, Three Million Dollars
($3,000,000.00) for any one accident and One Million Dollars ($1,000,000.00) for
property damage. All policies of insurance shall provide that the proceeds
thereof be payable to Lessee and Lessor as their respective interests may
appear. Lessee agrees to deliver to Lessor, prior to occupancy, a Certificate of
Insurance, naming Lessor as additional insured; such policy shall require ten
(10) day's written notice to the Lessor before cancellation can be effected.
In the event Lessee's use of Premises or contents kept on the Premises
or refusal to follow directions from the Fire Inspection Bureau, or general
housekeeping, cause the fire and extended coverage insurance premiums for the
Building to increase, then Lessee agrees to pay such additional premium to the
Lessor when same is due.
15. IMPAIRMENT OF USE In the event the Premises shall be untenantable
or unfit for occupancy in whole or in part by the total or partial destruction
of the Building by fire or other casualty, and the Lessor shall fail or refuse
within thirty (30) days thereafter to agree in writing to restore the same
within ninety (90) days, this Lease may be terminated by either Lessor or Lessee
by notice in writing; in the event this Lease shall be terminated by either
party hereto for said reason, Lessee's obligation to pay rent shall be deemed to
have ceased as of the date the Premises were tendered untenantable or unfit for
occupancy; and in the event the Lessor shall agree in writing to restore the
Premises within said time, or Lessee continues to occupy the Premises in whole
or in part, the rent to be paid hereunder shall be reduced pending such
restoration, and shall be abated in an amount equal to the percentage of space
loss suffered by Lessee by virtue of the impairment of said Premises. The extent
of abatement of rent due or percentage thereof shall be determined by the actual
space used, or local building occupancy officials.
16. ASSIGNMENT Lessee shall not assign this Lease, and will not sublet
any part of said Premises without the consent in writing of the Lessor, which
consent will not be unreasonably withheld, provided, however, that such consent
to assignment by Lessor shall not operate to release the assigning party of any
obligation or liability arising under the terms of this Lease, unless Lessor
shall specifically agree in writing that such proposed assignment
5
37
shall so release the Lessee. This Lease and the deposits hereunder shall be
assignable by Lessor, provided, however, that in such event the assignment shall
be disclosed to Lessee and the assignee shall assume all of Lessor's obligations
hereunder.
17. CLAIMS BY LESSEE The Lessee shall make no claim against Lessor for
any loss of or damage to Lessee's Premises caused by theft, burglary, water, gas
or other means, provided that the Lessor has taken reasonable precautions
against such loss or damage.
18. FIXTURES AND EQUIPMENT Whether owned by Lessor at the commencement
of the term of this Lease subsequently purchased by Lessor, or purchased by
Lessee, all fixtures and equipment considered necessary to the general operation
and maintenance of the Property shall be the property of the Lessor, except that
any leasehold improvements provided by Lessee at its own expense shall remain
the property of the Lessee and be removed by the Lessee prior to the termination
of this Lease. The Lessee does agree that no such property shall be removed from
said Premises without the consent in writing of the Lessor while any
installments of rent are past due, and during any other default in the
conditions hereof.
19. DEFAULT AND REMEDIES If at any time during the term of this Lease:
(a) Lessee shall vacate said Premises or shall default in the payment of rent or
in the observance or performance of any other covenants or provisions of this
Lease, and such default continues for ten (10) days after notice of such default
from Lessor (excepting, however, any such default which cannot be cured within
said (10) days in which Lessee shall in good faith and with due diligence be
proceeding to cure); or, (b) Lessee shall make an assignment for the benefit of
creditors; or (c) a voluntary or involuntary petition is filed by or against
Lessee for the purpose of adjudication of Lessee in bankruptcy or for the
extension of time payment, composition, arrangement, adjustment, modification,
settlement or satisfaction of the liabilities of Lessee, or for the
reorganization of Lessee under the bankruptcy Act or any future law having the
same general purpose; or a receiver is appointed for Lessee, the occurrence of
such events shall be a breach of this Lease.
Lessor, at its option, in addition to any of the other remedies
available to it, is authorized to re-enter said Premises to eject the Lessee and
to take full possession of said Premises, to terminate this Lease at its option,
and to lease said Premises as it shall deem best in an effort to mitigate
damages and costs to Lessor hereunder, to remove from said Premises all personal
property of the Lessee, and to store the same to the account and at the expense
and risk of the Lessee, and to sell said property or any part thereof, and out
of the proceeds, to pay all expenses of so removing, storing and selling the
same, and all sums which shall
6
38
then be in arrears or past due for rent; and that no such act or acts of the
Lessor shall be construed as cancellation of this Lease or waiver of the right
of the Lessor to collect rent hereunder (less any rental received from any other
party) for the remainder of said term except said exercise of their option to
terminate the same, and that in case the Lessor shall determine that any action
or proceeding at law or otherwise is necessary to enforce the terms and
conditions hereof, the Lessee agrees that a reasonable attorney's fee and the
necessary costs and disbursements thereof may be allowed and taxed against it.
20. ALTERATIONS The Lessee will not make any alterations to the leased
Premises without the written consent of the Lessor, such consent not to be
unreasonably withheld. If the Lessee shall desire to make any alterations, an
accurate description shall first be submitted to and approved by Lessor, and
shall be done by the Lessee, at its own expense. Lessee agrees that all such
work shall be done in a good, workmanlike manner and in conformance with
applicable building codes, that the structural integrity of the Building shall
not be impaired, and that no liens shall attach to the Premises by reason
thereof. Unless the Lessor shall elect that all or any part of such alterations
shall remain, the Premises shall be restored to its original condition by the
Lessee before the expiration of the Lease at its own expense. Failure to remove
fixtures and equipment owned by the Lessee upon expiration of this Lease and
surrender of the Premises shall constitute abandonment to the Lessor who may
remove said fixtures and equipment, and restore the Premises at Lessee's
expense.
Any such alterations shall become the property of the Lessor as soon as
they are affixed to the Premises and all right, title and interest therein of
the Lessee shall immediately cease unless otherwise agreed in writing.
21. ATTACHMENTS Lessee agrees that no spikes, hooks, nails, screws or
tacks will be driven into the walls or woodwork of the leased Premises, and
nothing will be attached to such walls or woodwork of the leased Premises except
by consent of the Lessor, provided, however, that the Lessee may hang mirrors,
pictures and decorations with discretion.
22. CONDEMNATION In the event that the whole of the Premises shall be
condemned or taken in any manner, this Lease shall cease and terminate as of the
date of vesting of title. In the event that only a part of the Premises shall be
so condemned or taken, then effective as of the date of vesting of title, the
rent hereunder for such part shall be equitably abated to the extent the
Premises are affected by said taking and this Lease shall continue as to the
part not taken. If substantial structural alteration or reconstruction of the
Building, shall, in the opinion of the Lessor, be necessary as a result of such
condemnation or taking (whether or not the Premises be affected), the Lessor
may, at its option, terminate this Lease at the time of such vesting of title by
notifying the Lessee in writing of such
7
39
termination. If Lessor does not elect to terminate this Lease as aforesaid, this
Lease shall be and remain unaffected by such condemnation or taking, except that
the rent shall be abated to the extent, if any, as hereinbefore provided. Lessor
may, at its expense, restore with reasonable diligence the remaining structural
portions of the Premises as nearly as practicable to the same condition as they
were prior to such condemnation or taking.
23. SIGNS The Lessee shall have the right, at its own risk and expense,
to place identifying signs on the exterior walls of the Building next to any
doors leading directly into the Premises, in a manner to conform with the
Lessor's building standards and all applicable zoning laws. Lessee agrees to
maintain its signs in good repair, to remove it at the end of the term or any
extended term, repairing any damages caused by such removal, and to hold Lessor
harmless from any loss, cost or damages resulting from the erection, existence,
maintenance or removal of Lessee's signs. The Lessor reserves the right to
approve all signs and to remove all unapproved signs at the expense of the
Lessee.
24. ACCESS No additional locks will be placed on any of the doors in
said Building unless Lessor receives an access key to such locks, and that
Lessor shall have the right to enter the Premises for purposes of repair or
emergency inspection.
25. DISPLAY Lessor shall have the right to enter the Premises during
the three (3) months prior to termination of this Lease to display the space to
prospective tenants, and to place on doors and windows appropriate notice that
the Premises are for rent.
26. MORTGAGES It is mutually agreed that this Lease shall be
subordinate to any and all mortgages now and hereinafter placed on the Property
by the Lessor and Lessee hereby agrees to comply with all terms and conditions
of said Mortgage with respect to the use and occupancy of the Premises. Further,
Lessee agrees to attorn to and recognize Lessor's mortgagee or any purchaser or
transferee who acquires title to the property pursuant to foreclosure of a
mortgage or any proceeding in lieu thereof and the successors, and assigns of
such purchaser as its Lessor for the unexpired balance of (any extensions, if
exercised) the term of the Lease upon the same term and conditions set forth in
this Lease.
27. NOTICES All notices, consents, demands and requests which may be or
are required to be given by either party to the other shall be in writing, and
shall be sent by Registered or Certified Mail with return receipt requested,
addressed as follows:
If to Lessor Xxxxxxx X. Van Heel
00000 Xxxxxx Xxxx 00
Xxxxxx XX 00000
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40
If to Lessee Ultra Pic, Inc
00000 Xxxxxxxxxx Xxxx
Xxxxxx XX 00000
Tel: 612/000-0000
The date shown on the return receipt the date of which said Registered
or Certified Mail is received by the addressee shall be conclusively deemed to
be the date on which a notice, consent, demand or other request is given or
made. The above address of a party may be changed from time to time by notice
given by said party to the other party in the manner provided.
28. SEVERABILITY CLAUSE Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
29. LATE PAYMENT In the event of late payment of any rental
installment, the Lessee shall pay a late charge in an amount equal to four
percent (4%) of any installment received more than five (5) days after its due
date.
30. ACKNOWLEDGMENT OF NOTICE Lessee has been notified and hereby
acknowledges receipt of one (1) copy of this Lease and has been given proper
notice as to the name and address of the owner and/or agent empowered "to accept
service of process and receive and give receipt for notices and demands".
31. ENTIRE AGREEMENT This Agreement, together with the exhibits
attached hereto, constitute the entire Agreement between Lessor and Lessee with
respect to the subject matter hereof and there are no collateral agreements,
either oral or written. It is further agreed that no change or modification of
the terms of this agreement shall be binding upon either party hereto unless
such change or modification be in writing and signed by the party to be charged.
32. MISCELLANEOUS
32.1 See EXHIBIT "A" - Building plan
32.2 See EXHIBIT "A-1" attached - To be identified as Rogers
Plastic Center, Xxx 0
0
00
00.0 Xxx XXXXXXX "A-2" Easements - Ingress and Egress (Subj to
change after construction)
32.4 See Addendum to Lease Dated October 1, 1994, ITEM 32 - Rent
review;
ITEM 33 - Completion of Premises; ITEM 34 - Right of First
Refusal
32.5 Purchase Option
WITNESS:
LESSOR:
Xxxxxxx X. Van Heel
/s/ Xxxxxx Xxxxx By /s/ Xxxxxxx X. Van Heel
--------------------------------- ----------------------------
Xxxxxxx X. Van Heel
LESSEE:
Ultra Pac, Inc.
BY /s/ Xxxxx Xxxx
-----------------------------
Xxxx Xxxx
Its Chief Financial Officer
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42
ADDENDUM TO LEASE
DATED OCTOBER 1, 1994
00000 XXXXXXXXXX XXXXXXXXX
XXXXXX XX 00000
33. RENT REVIEW For the rental year commencing February 1, 2002, the
rent shall be the lesser of: (i) the rent as calculated with appropriate CPI
increases as set forth in Section 5 of the Lease; or (ii) the Fair Market Rental
for the Premises as herein defined; provided, however that such rent shall in no
case be less than Two Hundred Sixteen Thousand Eight Hundred Forty and NO/100
Dollars ($216,840.00) per year plus $.99 per square foot for taxes and $.06 per
square foot for insurance.
Fair Market Rental for the Premises means the actual rent paid in
the marketplace for similar property for a five-year lease term in the Rogers,
Minnesota vicinity as determined by experts in the real estate industry. The
Fair Market Rental shall be determined by an expert appointed by, and at the
expense of, the Lessor and given to the Lessee on or before November 1, 2001. If
Lessee does not accept the Landlord's expert's estimation of the Fair Market
Rental, it shall, within thirty (30) days of receiving the figure from Lessor,
appoint, at its expense, an expert to determine Fair Market Rental. If the Fair
Market Rental as determined by Lessee's expert is equal or greater than the Fair
Market Rental determined by the Lessor's expert, the Fair Market Rental shall be
the value as determined by the Lessor's expert. If Lessee's expert determines
the Fair Market Rental to be less than the Lessor's expert, the Lessor and
Lessee shall negotiate the Fair Market Rental. If they are unable to agree by
January 1, 2002, the Lessor's expert and the Lessee's expert shall appoint a
third expert and the matter will be settled by arbitration in Minneapolis,
Minnesota. The costs of arbitration (other than the cost of each of their
respective experts, for which they shall be solely responsible) will be split
equally by the Lessor and Lessee unless the arbitrators determine that one of
the parties acted unreasonably or should otherwise pay more than one-half the
cost of arbitration.
The rental for the eighth through fifteenth years of the Lease term
shall be adjusted by a CPI change pursuant to Section 5 of the Lease from the
rent established for the eighth year as determined above.
34. Completion of Premises. The construction of the Premises will be
substantially completed and available for Lessee's partial occupancy on or
before February 1, 1995. The Premises will be constructed in accordance with the
specifications set forth in Exhibit A attached hereto. The existing building
included in the Premises shall be watertight and fully remodeled in accordance
with Tenants's specifications.
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35. Right of First Refusal. If, at any time during the term of the
Lease, Lessor desires to sell or otherwise convey all or any part of the
Premises and receives a bona fide offer (the "Offer") which Lessor is willing to
accept from a person or entity ready, willing and able to purchase all or any
part of the Property, Lessor shall immediately give notice of the Offer to
Lessee (the "Notification"), including the name and address of the offeror and a
copy of the agreement evidencing the Offer. Lessee shall have twenty (20) days
after receipt of the Notification in which to exercise its right of first
refusal to purchase the portion of the Property stated in the Offer on the terms
specified in the Offer (the free of this first refusal right; provided, however,
that this right will survive any such transfer.
If Lessee does not exercise this right to purchase by giving Lessor
written notice thereof within the Exercise Period, Lessor may thereafter accept
the Offer and complete the sale to the offeror in accordance with the Offer. If
the terms of the Offer are thereafter materially changed or if the sale to the
offeror is not completed as specified in the Offer, then the right of first
refusal given hereby to Lessee shall be revived, the revised Offer shall be
again submitted to Lessee for the Exercise Period, and Lessee shall again have
the right to purchase such portion of the Premises on the terms of the revised
Offer.
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AMENDMENT TO LEASE
This Amendment is made and entered into as of November 2, 1994, by and
between Xxxxxxx X. Van Heel ("Lessor") and Ultra Pac, Inc., ("Lessee").
R E C I T A L S :
(R1) On the 20th day of November, 1994, Lessor and Lessee entered into a
certain lease (the "Lease") for 55,600 square feet of space in certain
premises commonly known as 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx,
Xxxxxxxxx (the "Premises"). The parties hereby desire to amend the
terms of the Lease.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, Lessor and Lessee agree as follows:
36. PURCHASE OPTION. Providing Lessee is not in default and providing
that the Lease of the Premises has not terminated, Lessee shall have the option
to purchase the Premises during years three (3) through fifteen (15) of the
lease term or any extended lease term (the "Purchase Option"). The exercise of
this Purchase Option shall be effective only if Lessee has no less than three
(3) years prior to the exercise of this Purchase Option, exercised and closed a
similar Purchase Option between the parties hereto for property located at 00000
Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxx. The parties hereby agree that if Lessee
exercises the Purchase Option, the purchase price for the Premises shall be One
Million Four Hundred Ninety Five Thousand and no/100 ($1,495,000.00) Dollars by
cash or certified funds. To exercise the option, Lessee shall notify Lessor in
writing of its intent to exercise the option to purchase. The closing date must
occur prior to the end of the fifteenth (15th) year of the lease term. Lessor
shall convey the premises at closing to Lessee free and clear of all
encumbrances except those caused by Lessee and except any unpaid special
assessments for improvements after the date of this Amendment. Subject to
Section 34 of the Lease, this option does not prevent Lessor from selling or
exchanging the Premises with a third party provided, that Lessor's successors
shall be bound by the terms of this Purchase Option.
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37. RATIFICATION. Except as specifically amended hereby, the Lease is
fully ratified and affirmed by Lessor and Lessee.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
above date.
LESSOR: LESSEE:
Ultra Pac, Inc.
/s/ Xxxxxxx X. Van Heel By: /s/ Xxxx Xxxx
----------------------------- ----------------------------------
Xxxxxxx X. Van Heel Its Chief Financial Officer
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