<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1997
REGISTRATION NO. 333-19495
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
RADNOR HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 6719 23-2674715
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
WINCUP HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3086 86-0699193
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
WINCUP HOLDINGS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 3086 23-2648231
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
SP ACQUISITION CO.
(Exact name of registrant as specified in its charter)
DELAWARE 6719 75-2524524
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
STYROCHEM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 3086 52-1592452
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
STYROCHEM INTERNATIONAL, LTD.
(Exact name of registrant as specified in its charter)
QUEBEC 3086 NONE
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
RADNOR MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 8741 23-2869197
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
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<PAGE>
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RADNOR HOLDINGS CORPORATION
THREE RADNOR CORPORATE CENTER, SUITE 300
100 MATSONFORD ROAD
RADNOR, PENNSYLVANIA 19087
(610) 995-9200
(Name, address, including zip code, and telephone number,
including area code, of registrants' principal executive offices)
------------
MICHAEL T. KENNEDY, PRESIDENT
RADNOR HOLDINGS CORPORATION
THREE RADNOR CORPORATE CENTER, SUITE 300
100 MATSONFORD ROAD
RADNOR, PENNSYLVANIA 19087
(610) 995-9200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
WITH A COPY TO:
THOMAS G. SPENCER, ESQ.
DUANE, MORRIS & HECKSCHER
ONE LIBERTY PLACE, 42ND FLOOR
PHILADELPHIA, PENNSYLVANIA 19103-7396
(215) 979-1000
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: [_]
----------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
*3.1 Restated Certificate of Incorporation of Radnor Holdings Corporation
*3.2 Bylaws of Radnor Holdings Corporation
*3.3 Certificate of Incorporation of WinCup Holdings, Inc.
*3.4 Bylaws of WinCup Holdings, Inc.
*3.5 Certificate of Incorporation of Radnor Management, Inc.
*3.6 Bylaws of Radnor Management, Inc.
*3.7 Certificate of Limited Partnership of WinCup Holdings, L.P.
*3.8 Amended and Restated Limited Partnership Agreement of WinCup Holdings,
L.P. by and between WinCup Holdings, Inc. and Radnor Holdings
Corporation, dated January 1, 1997
*3.9 Certificate of Incorporation of SP Acquisition Co.
*3.10 Bylaws of SP Acquisition Co.
*3.11 Articles of Incorporation of StyroChem International, Inc.
*3.12 Bylaws of StyroChem International, Inc.
*3.13 Certificate of Incorporation of StyroChem International, Ltd.
*3.14 Bylaws of StyroChem International, Ltd.
*4.1 Indenture, dated as of December 5, 1996, among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P., SP
Acquisition Co., StyroChem International, Inc., StyroChem
International, Ltd., Radnor Management, Inc., and First Union
National Bank, as amended by a First Supplemental Indenture dated as
of December 17, 1996, including form of Notes and Guarantees
*4.2 Exchange and Registration Rights Agreement, dated as of December 5,
1996, among Radnor Holdings Corporation, WinCup Holdings, Inc.,
WinCup Holdings, L.P., SP Acquisition Co., StyroChem International,
Inc., StyroChem International, Ltd., Alex. Brown & Sons Incorporated
and NatWest Capital Markets Limited
*4.3 Purchase Agreement, dated December 2, 1996, among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P., SP
Acquisition Co., StyroChem International, Inc., StyroChem
International, Ltd., Alex. Brown & Sons Incorporated and NatWest
Capital Markets Limited
*4.4 Form of Letter of Transmittal
*4.5 Form of Notice of Guaranteed Delivery
*4.6 Form of Letter to Noteholders
*4.7 Form of Letter to Record Holders
5.1 Opinion of Duane, Morris & Heckscher regarding the legality of the
securities registered
8.1 Opinion of Duane, Morris & Heckscher regarding certain tax matters
*10.1 Stock Purchase Agreement among Radnor Holdings Corporation, Richard
Davidovich, the Davidovich Charitable Trust, James River Paper
Company, Inc., Grupo Industrial Hermes, S.A. de C.V., and the
Rosenthal Group, dated October 30, 1996
10.2 Asset Purchase Agreement among Benchmark Holdings, Inc., WinCup
Holdings, Inc. and James River Paper Company, Inc., dated October 31,
1995
*10.3 JR Capital Contribution Agreement by and between James River Paper
Company, Inc. and WinCup Holdings, L.P., dated January 20, 1996
*10.4 WinCup Capital Contribution Agreement by and between WinCup Holdings,
Inc. and WinCup Holdings, L.P., dated January 20, 1996
*10.5 Working Capital Escrow Agreement, dated as of December 5, 1996, among
Radnor Holdings Corporation, Richard Davidovich and Duane, Morris &
Heckscher
*10.6 Environmental Escrow Agreement, dated as of December 5, 1996, among
Radnor Holdings Corporation, Richard Davidovich and Duane, Morris &
Heckscher
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
**10.7 Sales Agent Agreement, dated January 20, 1996, between James River
Paper Company, Inc. and WinCup Holdings, L.P., as amended by a Sales
Agent Extension and Modification Agreement dated December 5, 1996
**10.8 Equipment Use Agreement, dated January 20, 1996, as amended by an
Equipment Use Extension and Modification Agreement dated December 5,
1996
10.9 License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, L.P., as amended by a License Extension and Modification
Agreement dated December 5, 1996
10.10 Patent License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, L.P., as amended by an Amendment to Patent License
Agreement dated December 5, 1996
**10.11 Contract of Sale, dated as of December 5, 1996, among Chevron Chemical
Company, SP Acquisition Co., StyroChem International, Inc. and
StyroChem International, Ltd.
**10.12 Contract between ARCO Chemical Company (now Nova Chemicals, Inc.) and
WinCup Holdings, L.P., dated April 1, 1996, as amended on September ,
1996
**10.13 Product Sales Agreement by and between Huntsman Chemical Corporation
and WinCup Holdings, Inc., dated January 1, 1996
**10.14 Agreement between BASF Corporation and WinCup Holdings, L.P., dated
March 27, 1996, as supplemented by letter agreement dated April 25,
1996
**10.15 Sales Agreement between Fina Oil and Chemical Company and WinCup
Holdings, L.P., dated May 21, 1996
**10.16 Contract of Sale between Scott Polymers, Inc. (now StyroChem
International, Inc.) and WinCup Holdings, Inc., dated February 28,
1992, as amended on February 25, 1994, assigned to WinCup Holdings,
L.P. on January 20, 1996
**10.17 Supply Agreement by and between SP Acquisition Co. and James River
Canada, Inc., dated March, 1996
*10.18 Noncompetition Agreement by and between Radnor Holdings Corporation
and Richard Davidovich, dated December 5, 1996
*10.19 Consulting Agreement by and between Radnor Holdings Corporation and
Richard Davidovich, dated December 5, 1996
*10.20 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (240 Tamal Vista Boulevard,
Corte Madera, California)
*10.21 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (205 Tamal Vista Boulevard,
Corte Madera, California)
*10.22 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (201 Tamal Vista Boulevard,
Corte Madera, California)
*10.23 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (195 Tamal Vista Boulevard,
Corte Madera, California)
*10.24 Letter Agreement, dated December 5, 1996, between WinCup Holdings,
L.P. and James River Paper Company, Inc., regarding Corte Madera
subleases
10.25 Warehouse Lease, dated October 27, 1992, between Safeway Inc. and
James River Paper Company, Inc., as amended, assigned to WinCup
Holdings, L.P. on January 20, 1996
10.26 Amended Lease between Patricia M. Dunnell and James River Paper
Company, Inc., dated September 29, 1989, as amended in September,
1994, assigned to WinCup Holdings, L.P. on January 20, 1996
10.27 Warehouse Lease between Etzioni Partners and James River Corporation,
dated February 13, 1992, as amended on April 13, 1992 and on December
9, 1992, assigned to WinCup Holdings, L.P. on January 20, 1996
10.28 Lease between Stone Mountain Industrial Park, Inc. and W.M.F.
Container Corporation, dated October 15, 1984, as amended on
September 20, 1989 and on February 28, 1994, assigned to WinCup
Holdings, L.P. on January 20, 1996
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
10.29 Lease between Stone Mountain Industrial Park, Inc. and W.M.F.
Container Corporation dated June 16, 1977, as amended on August 7,
1984, and on October 15, 1984, and on February 25, 1994, assigned to
WinCup Holdings, L.P. on January 20, 1996
10.30 Lease between Stone Mountain Industrial Park, Inc. and Scott Container
Group, Inc., dated December 16, 1991, as amended on February 28,
1994, assigned to WinCup Holdings on January 20, 1996
10.31 Operating Lease by and between R-K Ventures Unit I Limited Partnership
and WMF Container Corporation, dated August 20, 1987, as amended on
November 30, 1990, assigned to WinCup Holdings, L.P. on January 20,
1996
10.32 Standard Form Multi-Tenancy Industrial Lease between WinCup Holdings,
Inc. and CK Airpark Associates, dated June 1, 1994, assigned to
WinCup Holdings, L.P. on January 20, 1996
10.33 Lease between James River Paper Company, Inc. and Central Ink Company,
dated February 17, 1993, as amended, assigned to WinCup Holdings,
L.P. on January 20, 1996
10.34 Radnor Corporate Center Office Lease by and between Radnor Center
Associates and WinCup Holdings, L.P., dated May 31, 1996
10.35 Standard Commercial Lease by and between Bradford Management Company
of Dallas, Inc. and Scott Polymers, Inc. (now StyroChem
International, Inc.), dated June 22, 1994, as amended on April 5,
1996, and as renewed on October 22, 1996
10.36 Sublease between Cargologan Inc. and StyroChem International, Ltd.,
dated August 2, 1996
*10.37 Employment Agreement by and between WinCup Holdings, L.P. and Michael
T. Kennedy, dated January 20, 1996
*10.38 Executive Employment Agreement by and between Benchmark Corporation of
Delaware and Richard Hunsinger, dated May 1, 1993, as amended in
October, 1995
10.39 Benchmark Corporation of Delaware Equity Incentive Plan, dated April
24, 1992, as amended on November 1, 1993
10.40 Benchmark Corporation of Delaware Management Equity Participation
Plan, dated March 10, 1993, as amended on November 1, 1993
10.41 Amended and Restated Revolving Credit and Security Agreement, dated
December 5, 1996, among The Bank of New York Commercial Corporation,
NationsBank, N.A., WinCup Holdings, L.P., Radnor Holdings
Corporation, WinCup Holdings, Inc., SP Acquisition Co., and StyroChem
International, Inc.
10.42 Amended and Restated Revolving Credit Note, dated December 5, 1996,
made by WinCup Holdings, L.P., Radnor Holdings Corporation, WinCup
Holdings, Inc., SP Acquisition Co., and StyroChem International, Inc.
in favor of The Bank of New York Commercial Corporation
10.43 Amended and Restated Revolving Credit Note, dated December 5, 1996,
made by WinCup Holdings, L.P., Radnor Holdings Corporation, WinCup
Holdings, Inc., SP Acquisition Co., and StyroChem International, Inc.
in favor of NationsBank, N.A.
10.44 Trademark Collateral Security Agreement, dated December 5, 1996,
between StyroChem International, Inc. and The Bank of New York
Commercial Corporation
10.45 Trademark Assignment of Security, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
10.46 Trademark Collateral Security Agreement, dated December 5, 1996,
between WinCup Holdings, Inc. and The Bank of New York Commercial
Corporation
10.47 Trademark Assignment of Security, dated December 5, 1996, between
WinCup Holdings, Inc. and The Bank of New York Commercial Corporation
10.48 Patent Collateral Security Agreement, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
10.49 Patent Assignment of Security, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
10.50 Collateral Assignment, dated as of December 5, 1996, among Radnor
Holdings Corporation and The Bank of New York Commercial Corporation
*10.51 Junior Subordinated Promissory Note, dated January 20, 1996, made by
WinCup Holdings, Inc. in favor of WinCup Holdings, L.P. ($1.1 million)
*10.52 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($300,000)
*10.53 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of Scott Paper Company ($2.7 million)
*10.54 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($5.7
million)
*10.55 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of Scott Paper Company ($300,000)
*10.56 Senior Subordinated Promissory Note, dated January 20, 1996, made by
WinCup Holdings, L.P. in favor of James River Paper Company, Inc.
($4.4 million)
*10.57 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of WinCup Holdings, Inc. ($1.8 million)
*10.58 Senior Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($7
million)
*10.59 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc.
*10.60 Partnership Interest Purchase Agreement, dated December 5, 1996, among
Radnor Holdings Corporation, WinCup Holdings, Inc., WinCup Holdings,
L.P. and James River Paper Company, Inc.
*10.61 Redemption and Release Agreement by and among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P. and
Kimberly-Clark Tissue Company, dated December 5, 1996
*10.62 Assumption and Modification Agreement, dated as of January 20, 1996,
among Scott Paper Company, WinCup Holdings, Inc. and WinCup Holdings,
L.P.
10.63 Agreement Respecting a Term Loan and Other Credit Facilities, dated
February 25, 1994, between Bank of Montreal and StyroChem
International, Ltd., as amended
*10.64 Letter of Undertaking, dated December 5, 1996, made by StyroChem
International, Ltd. and Radnor Holdings Corporation in favor of Bank
of Montreal
10.65 Guaranty, dated February 25, 1994, made by SP Acquisition Co. in favor
of Bank of Montreal
*10.66 Employment Agreement, dated April 5, 1996, between WinCup Holdings,
Inc. and R. Radcliffe Hastings
*12.1 Computation of ratios
*21.1 List of Subsidiaries of the Registrant
*23.1 Consent of Arthur Andersen LLP
*23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Duane, Morris & Heckscher (included in Exhibits 5.1 and 8.1
to this Registration Statement)
*24.1 Power of Attorney
*25.1 Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as a Trustee on Form
T-1 of First Union National Bank
*27.1 Financial Data Schedule (Radnor Holdings Corporation)
*27.2 Financial Data Schedule (J.R. Cup Foam Container Operations of James
River Paper Company, Inc.)
*27.3 Financial Data Schedule (SP Acquisition Co. and Subsidiaries)
</TABLE>
- --------
* Previously filed.
** Portions of this Exhibit have been deleted pursuant to the Company's Request
for Confidential Treatment pursuant to Rule 406 promulgated under the
Securities Act.
II-7
<PAGE>
No financial statement schedules are required as all material required
information is disclosed in the notes to the respective financial statements.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
(b) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, RADNOR HOLDINGS
CORPORATION HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
RADNOR, PENNSYLVANIA, ON JANUARY 15, 1997.
Radnor Holdings Corporation
By: /s/ Michael V. Valenza
---------------------------------
MICHAEL V. VALENZA
SENIOR VICE PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
*
- ------------------------------------ Chief Executive
MICHAEL T. KENNEDY Officer, President January 15, 1997
and Sole Director
(principal executive
officer)
/s/ Michael V. Valenza Senior Vice
- ------------------------------------- President-Finance January 15, 1997
MICHAEL V. VALENZA (principal
financial and
accounting officer)
/s/ Michael V. Valenza
*By: ________________________________
MICHAEL V. VALENZA
Attorney-in-Fact
II-9
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, WINCUP HOLDINGS,
INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN RADNOR,
PENNSYLVANIA, ON JANUARY 15, 1997.
WinCup Holdings, Inc.
By: /s/ Michael V. Valenza
----------------------------------
MICHAEL V. VALENZA SENIOR VICE
PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole
- ------------------------------------- Director (principal January 15, 1997
MICHAEL T. KENNEDY executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President--Finance
MICHAEL V. VALENZA (principal financial
and accounting
officer)
* By: /s/ Michael V. Valenza
--------------------------------
MICHAEL V. VALENZA
Attorney-in-Fact
</TABLE>
II-10
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, WINCUP HOLDINGS,
L.P. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN RADNOR,
PENNSYLVANIA, ON JANUARY 15, 1997.
WinCup Holdings, L.P. By: WinCup
Holdings, Inc., its general partner
By: /s/ Michael V. Valenza
-------------------------------
MICHAEL V. VALENZA SENIOR VICE-
PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole
- ------------------------------------- Director of General January 15, 1997
MICHAEL T. KENNEDY Partner (principal
executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President--Finance
MICHAEL V. VALENZA of General Partner
(principal
financial and
accounting officer)
*By: /s/ Michael V. Valenza
---------------------------------
MICHAEL V. VALENZA Attorney-in-Fact
</TABLE>
II-11
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SP ACQUISITION
CO. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN RADNOR,
PENNSYLVANIA, ON JANUARY 15, 1997.
SP Acquisition Co.
By: /s/ Michael V. Valenza
------------------------------
MICHAEL V. VALENZA SENIOR VICE
PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole January 15, 1997
- ------------------------------------- Director (principal
MICHAEL T. KENNEDY executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President-- Finance
MICHAEL V. VALENZA (principal
financial and
accounting officer)
*By: /s/ Michael V. Valenza
---------------------------------
MICHAEL V. VALENZA Attorney-in-Fact
</TABLE>
II-12
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, STYROCHEM
INTERNATIONAL, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN RADNOR, PENNSYLVANIA, ON JANUARY 15, 1997.
StyroChem International, Inc.
/s/ Michael V. Valenza
By: /s/ Michael V. Valenza
--------------------------------
MICHAEL V. VALENZA SENIOR VICE
PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole January 15, 1997
- ------------------------------------- Director (principal
MICHAEL T. KENNEDY executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President-- Finance
MICHAEL V. VALENZA (principal
financial and
accounting officer)
*By: /s/ Michael V. Valenza
---------------------------------
MICHAEL V. VALENZA Attorney-in-Fact
</TABLE>
II-13
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, STYROCHEM
INTERNATIONAL, LTD. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN RADNOR, PENNSYLVANIA, ON JANUARY 15, 1997.
StyroChem International, Ltd.
By: /s/ Michael V. Valenza
-------------------------------
MICHAEL V. VALENZA
SENIOR VICE PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole January 15, 1997
- ------------------------------------- Director (principal
MICHAEL T. KENNEDY executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President-- Finance
MICHAEL V. VALENZA (principal
financial and
accounting officer)
*By: /s/ Michael V. Valenza
---------------------------------
MICHAEL V. VALENZA
Attorney-in-Fact
</TABLE>
II-14
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, RADNOR
MANAGEMENT, INC. HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT
TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
RADNOR, PENNSYLVANIA, ON JANUARY 15, 1997.
Radnor Management, Inc.
By: /s/ Michael V. Valenza
----------------------------------
MICHAEL V. VALENZA
SENIOR VICE PRESIDENT--FINANCE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
* President and Sole January 15, 1997
- ------------------------------------- Director (principal
MICHAEL T. KENNEDY executive officer)
/s/ Michael V. Valenza Senior Vice January 15, 1997
- ------------------------------------- President--Finance
MICHAEL V. VALENZA (principal
financial and
accounting officer)
* By: /s/ Michael V. Valenza
--------------------------------
MICHAEL V. VALENZA
Attorney-in-Fact
</TABLE>
II-15
<PAGE>
EXHIBIT INDEX
(PURSUANT TO ITEM 601 OF REGULATION S-K)
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
*3.1 Restated Certificate of Incorporation of Radnor Holdings Corporation
*3.2 Bylaws of Radnor Holdings Corporation
*3.3 Certificate of Incorporation of WinCup Holdings, Inc.
*3.4 Bylaws of WinCup Holdings, Inc.
*3.5 Certificate of Incorporation of Radnor Management, Inc.
*3.6 Bylaws of Radnor Management, Inc.
*3.7 Certificate of Limited Partnership of WinCup Holdings, L.P.
*3.8 Amended and Restated Limited Partnership Agreement of WinCup Holdings,
L.P. by and between WinCup Holdings, Inc. and Radnor Holdings
Corporation, dated January 1, 1997
*3.9 Certificate of Incorporation of SP Acquisition Co.
*3.10 Bylaws of SP Acquisition Co.
*3.11 Articles of Incorporation of StyroChem International, Inc.
*3.12 Bylaws of StyroChem International, Inc.
*3.13 Certificate of Incorporation of StyroChem International, Ltd.
*3.14 Bylaws of StyroChem International, Ltd.
*4.1 Indenture, dated as of December 5, 1996, among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P., SP
Acquisition Co., StyroChem International, Inc., StyroChem
International, Ltd., Radnor Management, Inc., and First Union
National Bank, as amended by a First Supplemental Indenture dated as
of December 17, 1996, including form of Notes and Guarantees
*4.2 Exchange and Registration Rights Agreement, dated as of December 5,
1996, among Radnor Holdings Corporation, WinCup Holdings, Inc.,
WinCup Holdings, L.P., SP Acquisition Co., StyroChem International,
Inc., StyroChem International, Ltd., Alex. Brown & Sons Incorporated
and NatWest Capital Markets Limited
*4.3 Purchase Agreement, dated December 2, 1996, among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P., SP
Acquisition Co., StyroChem International, Inc., StyroChem
International, Ltd., Alex. Brown & Sons Incorporated and NatWest
Capital Markets Limited
*4.4 Form of Letter of Transmittal
*4.5 Form of Notice of Guaranteed Delivery
*4.6 Form of Letter to Noteholders
*4.7 Form of Letter to Record Holders
5.1 Opinion of Duane, Morris & Heckscher regarding the legality of the
securities registered
8.1 Opinion of Duane, Morris & Heckscher regarding certain tax matters
*10.1 Stock Purchase Agreement among Radnor Holdings Corporation, Richard
Davidovich, the Davidovich Charitable Trust, James River Paper
Company, Inc., Grupo Industrial Hermes, S.A. de C.V., and the
Rosenthal Group, dated October 30, 1996
10.2 Asset Purchase Agreement among Benchmark Holdings, Inc., WinCup
Holdings, Inc. and James River Paper Company, Inc., dated October 31,
1995
*10.3 JR Capital Contribution Agreement by and between James River Paper
Company, Inc. and WinCup Holdings, L.P., dated January 20, 1996
*10.4 WinCup Capital Contribution Agreement by and between WinCup Holdings,
Inc. and WinCup Holdings, L.P., dated January 20, 1996
*10.5 Working Capital Escrow Agreement, dated as of December 5, 1996, among
Radnor Holdings Corporation, Richard Davidovich and Duane, Morris &
Heckscher
*10.6 Environmental Escrow Agreement, dated as of December 5, 1996, among
Radnor Holdings Corporation, Richard Davidovich and Duane, Morris &
Heckscher
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
**10.7 Sales Agent Agreement, dated January 20, 1996, between James River
Paper Company, Inc. and WinCup Holdings, L.P., as amended by a Sales
Agent Extension and Modification Agreement dated December 5, 1996
**10.8 Equipment Use Agreement, dated January 20, 1996, as amended by an
Equipment Use Extension and Modification Agreement dated December 5,
1996
10.9 License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, L.P., as amended by a License Extension and Modification
Agreement dated December 5, 1996
10.10 Patent License Agreement, dated January 20, 1996, among James River
Corporation of Virginia, James River Paper Company, Inc., and WinCup
Holdings, L.P., as amended by an Amendment to Patent License
Agreement dated December 5, 1996
**10.11 Contract of Sale, dated as of December 5, 1996, among Chevron Chemical
Company, SP Acquisition Co., StyroChem International, Inc. and
StyroChem International, Ltd.
**10.12 Contract between ARCO Chemical Company (now Nova Chemicals, Inc.) and
WinCup Holdings, L.P., dated April 1, 1996, as amended on September ,
1996
**10.13 Product Sales Agreement by and between Huntsman Chemical Corporation
and WinCup Holdings, Inc., dated January 1, 1996
**10.14 Agreement between BASF Corporation and WinCup Holdings, L.P., dated
March 27, 1996, as supplemented by letter agreement dated April 25,
1996
**10.15 Sales Agreement between Fina Oil and Chemical Company and WinCup
Holdings, L.P., dated May 21, 1996
**10.16 Contract of Sale between Scott Polymers, Inc. (now StyroChem
International, Inc.) and WinCup Holdings, Inc., dated February 28,
1992, as amended on February 25, 1994, assigned to WinCup Holdings,
L.P. on January 20, 1996
**10.17 Supply Agreement by and between SP Acquisition Co. and James River
Canada, Inc., dated March, 1996
*10.18 Noncompetition Agreement by and between Radnor Holdings Corporation
and Richard Davidovich, dated December 5, 1996
*10.19 Consulting Agreement by and between Radnor Holdings Corporation and
Richard Davidovich, dated December 5, 1996
*10.20 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (240 Tamal Vista Boulevard,
Corte Madera, California)
*10.21 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (205 Tamal Vista Boulevard,
Corte Madera, California)
*10.22 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (201 Tamal Vista Boulevard,
Corte Madera, California)
*10.23 Sublease Agreement, dated January 20, 1996, between James River Paper
Company, Inc. and WinCup Holdings, L.P. (195 Tamal Vista Boulevard,
Corte Madera, California)
*10.24 Letter Agreement, dated December 5, 1996, between WinCup Holdings,
L.P. and James River Paper Company, Inc., regarding Corte Madera
subleases
10.25 Warehouse Lease, dated October 27, 1992, between Safeway Inc. and
James River Paper Company, Inc., as amended, assigned to WinCup
Holdings, L.P. on January 20, 1996
10.26 Amended Lease between Patricia M. Dunnell and James River Paper
Company, Inc., dated September 29, 1989, as amended in September,
1994, assigned to WinCup Holdings, L.P. on January 20, 1996
10.27 Warehouse Lease between Etzioni Partners and James River Corporation,
dated February 13, 1992, as amended on April 13, 1992 and on December
9, 1992, assigned to WinCup Holdings, L.P. on January 20, 1996
10.28 Lease between Stone Mountain Industrial Park, Inc. and W.M.F.
Container Corporation, dated October 15, 1984, as amended on
September 20, 1989 and on February 28, 1994, assigned to WinCup
Holdings, L.P. on January 20, 1996
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
10.29 Lease between Stone Mountain Industrial Park, Inc. and W.M.F.
Container Corporation dated June 16, 1977, as amended on August 7,
1984, and on October 15, 1984, and on February 25, 1994, assigned to
WinCup Holdings, L.P. on January 20, 1996
10.30 Lease between Stone Mountain Industrial Park, Inc. and Scott Container
Group, Inc., dated December 16, 1991, as amended on February 28,
1994, assigned to WinCup Holdings on January 20, 1996
10.31 Operating Lease by and between R-K Ventures Unit I Limited Partnership
and WMF Container Corporation, dated August 20, 1987, as amended on
November 30, 1990, assigned to WinCup Holdings, L.P. on January 20,
1996
10.32 Standard Form Multi-Tenancy Industrial Lease between WinCup Holdings,
Inc. and CK Airpark Associates, dated June 1, 1994, assigned to
WinCup Holdings, L.P. on January 20, 1996
10.33 Lease between James River Paper Company, Inc. and Central Ink Company,
dated February 17, 1993, as amended, assigned to WinCup Holdings,
L.P. on January 20, 1996
10.34 Radnor Corporate Center Office Lease by and between Radnor Center
Associates and WinCup Holdings, L.P., dated May 31, 1996
10.35 Standard Commercial Lease by and between Bradford Management Company
of Dallas, Inc. and Scott Polymers, Inc. (now StyroChem
International, Inc.), dated June 22, 1994, as amended on April 5,
1996, and as renewed on October 22, 1996
10.36 Sublease between Cargologan Inc. and StyroChem International, Ltd.,
dated August 2, 1996
*10.37 Employment Agreement by and between WinCup Holdings, L.P. and Michael
T. Kennedy, dated January 20, 1996
*10.38 Executive Employment Agreement by and between Benchmark Corporation of
Delaware and Richard Hunsinger, dated May 1, 1993, as amended in
October, 1995
10.39 Benchmark Corporation of Delaware Equity Incentive Plan, dated April
24, 1992, as amended on November 1, 1993
10.40 Benchmark Corporation of Delaware Management Equity Participation
Plan, dated March 10, 1993, as amended on November 1, 1993
10.41 Amended and Restated Revolving Credit and Security Agreement, dated
December 5, 1996, among The Bank of New York Commercial Corporation,
NationsBank, N.A., WinCup Holdings, L.P., Radnor Holdings
Corporation, WinCup Holdings, Inc., SP Acquisition Co., and StyroChem
International, Inc.
10.42 Amended and Restated Revolving Credit Note, dated December 5, 1996,
made by WinCup Holdings, L.P., Radnor Holdings Corporation, WinCup
Holdings, Inc., SP Acquisition Co., and StyroChem International, Inc.
in favor of The Bank of New York Commercial Corporation
10.43 Amended and Restated Revolving Credit Note, dated December 5, 1996,
made by WinCup Holdings, L.P., Radnor Holdings Corporation, WinCup
Holdings, Inc., SP Acquisition Co., and StyroChem International, Inc.
in favor of NationsBank, N.A.
10.44 Trademark Collateral Security Agreement, dated December 5, 1996,
between StyroChem International, Inc. and The Bank of New York
Commercial Corporation
10.45 Trademark Assignment of Security, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
10.46 Trademark Collateral Security Agreement, dated December 5, 1996,
between WinCup Holdings, Inc. and The Bank of New York Commercial
Corporation
10.47 Trademark Assignment of Security, dated December 5, 1996, between
WinCup Holdings, Inc. and The Bank of New York Commercial Corporation
10.48 Patent Collateral Security Agreement, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
10.49 Patent Assignment of Security, dated December 5, 1996, between
StyroChem International, Inc. and The Bank of New York Commercial
Corporation
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<C> <S>
10.50 Collateral Assignment, dated as of December 5, 1996, among Radnor
Holdings Corporation and The Bank of New York Commercial Corporation
*10.51 Junior Subordinated Promissory Note, dated January 20, 1996, made by
WinCup Holdings, Inc. in favor of WinCup Holdings, L.P. ($1.1 million)
*10.52 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($300,000)
*10.53 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of Scott Paper Company ($2.7 million)
*10.54 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($5.7
million)
*10.55 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of Scott Paper Company ($300,000)
*10.56 Senior Subordinated Promissory Note, dated January 20, 1996, made by
WinCup Holdings, L.P. in favor of James River Paper Company, Inc.
($4.4 million)
*10.57 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of WinCup Holdings, Inc. ($1.8 million)
*10.58 Senior Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc. ($7
million)
*10.59 Subordinated Promissory Note, dated January 20, 1996, made by WinCup
Holdings, L.P. in favor of James River Paper Company, Inc.
*10.60 Partnership Interest Purchase Agreement, dated December 5, 1996, among
Radnor Holdings Corporation, WinCup Holdings, Inc., WinCup Holdings,
L.P. and James River Paper Company, Inc.
*10.61 Redemption and Release Agreement by and among Radnor Holdings
Corporation, WinCup Holdings, Inc., WinCup Holdings, L.P. and
Kimberly-Clark Tissue Company, dated December 5, 1996
*10.62 Assumption and Modification Agreement, dated as of January 20, 1996,
among Scott Paper Company, WinCup Holdings, Inc. and WinCup Holdings,
L.P.
10.63 Agreement Respecting a Term Loan and Other Credit Facilities, dated
February 25, 1994, between Bank of Montreal and StyroChem
International, Ltd., as amended
*10.64 Letter of Undertaking, dated December 5, 1996, made by StyroChem
International, Ltd. and Radnor Holdings Corporation in favor of Bank
of Montreal
10.65 Guaranty, dated February 25, 1994, made by SP Acquisition Co. in favor
of Bank of Montreal
*10.66 Employment Agreement, dated April 5, 1996, between WinCup Holdings,
Inc. and R. Radcliffe Hastings
*12.1 Computation of ratios
*21.1 List of Subsidiaries of the Registrant
*23.1 Consent of Arthur Andersen LLP
*23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Duane, Morris & Heckscher (included in Exhibits 5.1 and 8.1
to this Registration Statement)
*24.1 Power of Attorney
*25.1 Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as a Trustee on Form
T-1 of First Union National Bank
*27.1 Financial Data Schedule (Radnor Holdings Corporation)
*27.2 Financial Data Schedule (J.R. Cup Foam Container Operations of James
River Paper Company, Inc.)
*27.3 Financial Data Schedule (SP Acquisition Co. and Subsidiaries)
</TABLE>
- --------
* Previously filed.
** Portions of this Exhibit have been deleted pursuant to the Company's Request
for Confidential Treatment pursuant to Rule 406 promulgated under the
Securities Act.
4
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF DUANE, MORRIS & HECKSCHER APPEARS HERE]
ATTORNEYS AT LAW
ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
(215) 979-1000
FAX
(215) 979-1020
DIRECT DIAL:(215) 979-1000
January 9, 1997
Radnor Holdings Corporation
WinCup Holdings, Inc.
WinCup Holdings, L.P.
SP Acquisition Co.
StyroChem International, Ltd.
StyroChem International, Inc.
Radnor Management, Inc.
Three Radnor Corporate Center, Suite 300
100 Matsonford Rd.
Radnor, PA 19087
Gentlemen:
We have acted as counsel to Radnor Holdings Corporation, a Delaware
corporation (the "Company"), and WinCup Holdings, Inc., a Delaware corporation,
WinCup Holdings, L.P., a Delaware limited partnership ("WinCup L.P."), SP
Acquisition Co., a Delaware corporation, StyroChem International, Ltd., a Quebec
company, StyroChem International, Inc., a Texas corporation, and Radnor
Management, Inc., a Delaware corporation, (the entities other than the Company,
collectively, the "Guarantors") in connection with the preparation and filing
with the Securities and Exchange Commission of the Company's Registration
Statement on Form S-4, File No. 333-19495 (as amended, the "Registration
Statement"), under the Securities Act of 1933, as amended, relating to
$100,000,000 principal amount of the Company's 10% Senior Notes due 2003 (the
"Notes") and the guarantees of the Guarantors relating to the Notes (the
"Guarantees").
As counsel to the Company and the Guarantors, we have examined such
documents and records as we have deemed appropriate, including the following:
the Registration Statement; the Indenture dated as of December 5, 1996 among the
Company, the Guarantors and First Union National Bank, as trustee (the
"Trustee") as supplemented by the First Supplemental Indenture dated December
17, 1996 (as supplemented, the "Indenture"), pursuant to which the Notes and the
Guarantees will be issued; and the form of the Notes and the form of the
Guarantees included as part of the Indenture. We have also reviewed all
corporate and partnership proceedings of the Company and the Guarantors in
connection with the issuance of the Notes and the Guarantees, including the
charter and bylaws, each as
<PAGE>
January 9, 1997
Page 2
amended to date, of the Company and each of the Guarantors other than WinCup
L.P.; the Certificate of Limited Partnership and Amended and Restated Agreement
of Limited Partnership of WinCup L.P.; written consents of the Board of
Directors of each of the Company, the general partner of WinCup L.P. and each
Guarantor other than WinCup L.P., as made available to us by officers of the
Company and the Guarantors; and other proceedings and records relating to the
Company, the Guarantors and the authorization and issuance of the Notes and the
Guarantees as we deemed appropriate. As to certain matters of fact material to
the opinions expressed herein, we have relied solely and exclusively upon
factual statements and representations of officers and employees of the Company
and the Guarantors. In the course of such examination, we have assumed the
genuineness of all signatures on original documents and all documents submitted
to us as certified copies of original documents and the conformity to original
and certified documents of all copies submitted to us as conformed or
photostatic copies.
Based on the foregoing, and subject to the qualifications stated herein, we
are of the opinion that the Notes and the Guarantees are duly authorized and,
when the Notes are duly executed on behalf of the Company, authenticated by the
Trustee and delivered in accordance with the terms of the Indenture and as
contemplated by the Registration Statement with the Guarantees endorsed thereon,
will be validly issued, fully paid and non-assessable and will constitute legal,
valid and binding obligations of the Company and each Guarantor, entitled to the
benefits of, and subject to the provisions of, the Indenture.
We express no opinion as to the laws of any jurisdiction other than the
laws of the State of New York, the laws of the Commonwealth of Pennsylvania, the
General Corporation Law of the State of Delaware, the Delaware Revised Uniform
Limited Partnership Act and the federal laws of the United States.
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent, except that
we hereby consent to the use of this opinion as an exhibit to the Registration
Statement. We further consent to the reference to our name under the caption
"Legal Matters" in the prospectus which is a part of the Registration Statement.
Sincerely,
/s/ Duane, Morris & Heckscher
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF DUANE, MORRIS & HECKSCHER APPEARS HERE]
ATTORNEYS AT LAW
ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
(215) 979-1000
FAX
(215) 979-1020
January 9, 1997
Radnor Holdings Corporation
Three Radnor Corporate Center
100 Matsonford Road
Suite 300
Radnor, PA 19087
Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of (i) the exchange pursuant to the offer (the "Exchange Offer") by
Radnor Holdings Corporation (the "Company") of its 10% Senior Notes due 2003
(the "New Notes") for its 10% Senior Notes due 2003 (the "Old Notes") and (ii)
the ownership, sale and redemption of the New Notes.
In formulating our opinion as to the matters certified, we have examined
such documents as we have deemed appropriate, including the Registration
Statement of the Company on Form S-4 (Registration No. 333-19495), filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended to the date hereof (such Registration Statement as so amended being
referred to hereinafter as the "Registration Statement"). Also, we have
obtained such additional information as we have deemed relevant and necessary
through consultation with various officers and representatives of the Company.
The terms of the Exchange Offer, of the Old Notes and of the New Notes,
in each case as set forth in the Registration Statement, are incorporated herein
by reference.
We express no opinion with respect to the calculation and accrual of
original issue discount, if any, on the New Notes. Subject to the foregoing,
and based upon the terms of the Exchange Offer and the terms of the Old Notes
and of the New Notes, as set forth in the Registration Statement, it is our
opinion that the legal discussion of the material federal income
<PAGE>
Radnor Holdings Corporation
January 9, 1997
Page 2
tax consequences of consummating the Exchange Offer and holding and disposing of
the New Notes, as set forth under the heading "Certain U.S. Federal Income Tax
Considerations" in the Registration Statement, is accurate in all material
respects.
The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated and
proposed thereunder, published pronouncements of the Internal Revenue Service,
and case law, any of which may be changed at any time with retroactive effect.
No opinion is expressed on any matters other than those specifically referred to
herein.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm therein.
Very truly yours,
/s/ Duane, Morris & Heckscher
<PAGE>
EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
AMONG
BENCHMARK HOLDINGS, INC.,
WINCUP HOLDINGS, INC.
AND
JAMES RIVER PAPER COMPANY, INC.
Dated as of October 31, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
ARTICLE II
PURCHASE AND SALE OF ASSETS
<S> <C>
2.1 PURCHASE AND SALE OF ASSETS........................... 10
2.2 EXCLUDED ASSETS....................................... 13
2.3 ASSUMED LIABILITIES................................... 14
2.4 PURCHASE PRICE........................................ 16
2.5 VALUATION OF CURRENT ASSETS........................... 16
ARTICLE III
RELATED AGREEMENTS
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
4.1 ORGANIZATION; QUALIFICATION; CAPITALIZATION OF
BENCHMARK SUB AND THE WINCUP SUB...................... 23
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT.................. 25
4.3 CONSENTS AND APPROVALS................................ 26
4.4 NON-CONTRAVENTION..................................... 26
4.5 COMPLIANCE WITH LAWS.................................. 27
4.6 ENVIRONMENTAL MATTERS................................. 28
4.7 LICENSES AND PERMITS.................................. 29
4.8 LITIGATION............................................ 30
4.9 FINANCIAL STATEMENTS.................................. 30
4.10 UNDISCLOSED LIABILITIES............................... 31
4.11 ABSENCE OF CHANGES.................................... 32
4.12 MEXICAN OPERATIONS.................................... 33
4.13 LEASES................................................ 34
4.14 INVENTORY............................................. 35
4.15 INTELLECTUAL PROPERTY................................. 35
4.16 MATERIAL CONTRACTS.................................... 36
4.17 MAINTENANCE OF THE EQUIPMENT.......................... 38
4.18 SUFFICIENCY OF PURCHASED ASSETS....................... 38
4.19 LABOR AND EMPLOYMENT MATTERS.......................... 38
4.20 EMPLOYEE BENEFIT PLANS................................ 39
4.21 INSIDER INTERESTS..................................... 41
4.22 CERTAIN PRACTICES..................................... 41
4.23 FINDERS............................................... 41
4.24 FULL DISCLOSURE....................................... 42
4.25 PERFORMANCE ALLOWANCES................................ 42
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
<S> <C>
5.1 ORGANIZATION; QUALIFICATION............................ 42
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT................... 43
5.3 CONSENTS AND APPROVALS................................. 44
5.4 NON-CONTRAVENTION...................................... 44
5.5 LITIGATION............................................. 44
5.6 FINDERS................................................ 45
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 CONDUCT OF BUSINESS OF THE WINKLER BUSINESSES.......... 45
6.2 FORBEARANCES BY SELLERS................................ 46
6.3 NEGOTIATIONS WITH OTHERS............................... 48
6.4 INVESTIGATION OF WINKLER BUSINESSES AND PROPERTIES..... 48
6.5 CONFIDENTIALITY........................................ 50
6.6 TAXES AND RECORDING FEES............................... 50
6.7 PRORATION OF RENT, UTILITY CHARGES AND OTHER
PAYMENTS............................................... 51
6.8 ALLOCATION OF PURCHASE PRICE........................... 51
6.9 ACCOUNTS RECEIVABLE.................................... 51
6.10 ACCOUNTS PAYABLE....................................... 52
6.11 BULK SALES LAWS........................................ 53
6.12 MAIL RECEIVED AFTER CLOSING............................ 53
6.13 RETENTION OF BOOKS AND RECORDS......................... 54
6.14 INTENTIONALLY DELETED.................................. 54
6.15 EXPENSES............................................... 54
6.16 PUBLIC ANNOUNCEMENTS................................... 54
6.17 SUBSEQUENT EVENTS...................................... 55
6.18 EFFORTS TO CONSUMMATE.................................. 55
6.19 ENVIRONMENTAL, HEALTH, SAFETY AND PRODUCT
COMPLIANCE MATTERS..................................... 56
6.20 FURTHER ASSURANCES..................................... 58
6.21 ADVICE TO OTHERS....................................... 58
6.22 MOVEMENT OF EQUIPMENT AND INVENTORY.................... 59
6.23 PERFORMANCE ALLOWANCES................................. 59
6.24 ESTABLISHMENT OF SUBSIDIARY............................ 59
6.25 SECTION 338(H)(10) ELECTION............................ 60
6.26 ALLOCATION OF TAXES.................................... 62
ARTICLE VII
EMPLOYEES AND EMPLOYEE MATTERS
7.1 TRANSFERRED EMPLOYEES.................................. 64
7.2 EMPLOYEE BENEFIT PLANS................................. 65
7.3 WORKER'S COMPENSATION.................................. 67
7.4 VACATION PAY........................................... 68
7.5 OTHER LIABILITIES RELATING TO EMPLOYEES................ 68
7.6 ADMINISTRATION......................................... 68
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF BUYER
<S> <C>
8.1 REPRESENTATIONS AND WARRANTIES......................... 69
8.2 PERFORMANCE OF THIS AGREEMENT.......................... 69
8.3 CORPORATE AUTHORIZATION................................ 70
8.4 CONSENTS AND APPROVALS................................. 70
8.5 INJUNCTION, LITIGATION, ETC............................ 70
8.6 LEGISLATION............................................ 71
8.7 ESTOPPEL CERTIFICATES, ETC............................. 71
8.8 OPINION OF COUNSEL FOR SELLERS......................... 71
8.9 ABSENCE OF CHANGES..................................... 71
8.10 CONTINUATION OF MEXICAN OPERATIONS..................... 71
8.11 ASSURANCES WITH RESPECT TO CLAIMS OF CREDITORS......... 72
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SELLERS
9.1 REPRESENTATIONS AND WARRANTIES......................... 73
9.2 PERFORMANCE OF THIS AGREEMENT.......................... 73
9.3 CORPORATE AUTHORIZATION................................ 73
9.4 CONSENTS AND APPROVALS................................. 74
9.5 INJUNCTION, LITIGATION, ETC............................ 74
9.6 LEGISLATION............................................ 74
9.7 OPINION OF COUNSEL FOR BUYER........................... 74
ARTICLE X
CLOSING
10.1 TIME AND PLACE OF CLOSING.............................. 74
10.2 DELIVERIES BY SELLERS.................................. 75
10.3 DELIVERIES BY BUYER.................................... 76
10.4 DELIVERIES BY SELLERS AND BUYER........................ 77
ARTICLE XI
INDEMNIFICATION
11.1 SEVERAL INDEMNIFICATION BY SELLERS..................... 78
11.2 INDEMNIFICATION BY BUYER............................... 79
11.3 THIRD PARTY CLAIMS..................................... 79
11.4 LIMITATIONS ON INDEMNIFICATION......................... 82
11.5 SURVIVAL; INVESTIGATION................................ 83
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
12.1 TERMINATION............................................ 84
12.2 EFFECT OF TERMINATION.................................. 85
12.3 AMENDMENT.............................................. 85
12.4 EXTENSION; WAIVER...................................... 85
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XIII
GENERAL PROVISIONS
<S> <C>
13.1 NOTICES................................................ 86
13.2 GOVERNING LAW.......................................... 87
13.3 HEADINGS............................................... 88
13.4 COUNTERPARTS........................................... 88
13.5 SELLERS' SEVERAL LIABILITY............................. 88
13.6 MISCELLANEOUS.......................................... 88
</TABLE>
(iv)
<PAGE>
Exhibits:
A - Prepaid Expenses and Deferred Charges which are a
Part of the Purchased Assets
B - Transition Services Agreement
C - Agreement not to Compete
D - Opinion of Counsel for Sellers
E - Opinion of Counsel for Buyer
F - Bill of Sale and Assignment
G - Instrument of Assumption of Liabilities
H - Benchmark Parent Guaranty
I - James River Parent Guaranty
Schedules:
1.1 Sellers' Senior Management for knowledge purposes
2.2 Excluded Assets
2.3(b) Certain Assumed Liabilities for Transferred Employees
4.3 Required Sellers Consents and Approvals
4.4 Non-Contravention
4.5 Noncompliance with Applicable Law, etc.
4.6 Environmental Noncompliance and Environmental Permits
4.7 Required Licenses and Permits; Missing Permits
4.8 Litigation
4.10 Undisclosed Liabilities
4.11 Changes Since July 31, 1995
4.12 Description of U.S. Facilities and Mexican Facilities
4.13 Leases; Required Lessor Consents
4.14 Certain Locations of Inventory
4.15 Intellectual Property
4.16 Material Contracts
4.19 Employment Agreements
4.20 Pension and Welfare Plans
4.20(a) Certain Unfunded Deferred Plans
4.21 Insider Competing Interests
4.25 Performance Allowances
5.3 Required Buyer Consents and Approvals
6.8 Allocation of Values
6.19 Remediation Statement
7.1 Retained Employees
(v)
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of October 31,
1995, is made among BENCHMARK HOLDINGS, INC., a Delaware corporation
("Benchmark"), WINCUP HOLDINGS, INC., a Delaware corporation ("Wincup"); and
JAMES RIVER PAPER COMPANY, INC., a Virginia corporation ("Buyer").
RECITALS
Wincup and Benchmark (each a "Seller" and collectively, the "Sellers")
desire to sell (a) all of the assets of Benchmark's cutlery business (the
"Cutlery Business"), (b) all of the issued and outstanding shares (the
"Benchmark Sub Shares") of Common Stock, with no par value per share, of
Benchmark Sub, as defined herein, (c) all of the issued and outstanding shares
(the "Wincup Sub Shares") of Common Stock, with no par value per share, of the
Wincup Sub, as defined herein, and (d) all of the assets of Wincup's thermoform
business (the "Thermoform Business"), including, without limitation, all of the
Sellers' assets related to the manufacture, production, distribution and sale of
plastic cutlery, plastic drinking straws, multilayer thermoform plastic cups and
plates, and complimentary products such as steak markers, sword picks and other
bar supplies. Buyer desires to purchase such assets, with the exception of
certain excluded assets hereinafter specified, for cash and the assumption of
certain liabilities subject to the terms and conditions of this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
The following terms, as used herein, have the following meanings:
"Accrual Rate" shall mean an overnight government repurchase agreement rate
from Signet Bank/Virginia.
"Affiliate" of a Person means a Person who, directly or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, such Person.
"Applicable Law" means, with respect to any Person, all laws, ordinances,
judgments, decrees, injunctions, writs, orders, rules, regulations,
determinations, licenses and permits of any federal, state, local or foreign
government, political subdivision, agency, board, court, regulatory body or
commission, applicable to or binding upon such Person or any of its property.
"Assumed Leases" has the meaning set forth in Section 2.3(b).
"Assumed Liabilities" has the meaning set forth in Section 2.3(b).
"Assumed Material Contracts" has the meaning set forth in Section 2.3(b).
"Benchmark Sub" has the meaning set forth in Section 6.24.
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<PAGE>
"Benchmark Sub and Wincup Sub Balance Sheets" has the meaning set forth in
Section 4.9.
"Benchmark Sub Shares" has the meaning set forth in the Recitals.
"Buyer's Auditors" means Coopers & Lybrand L.L.P.
"Closing" has the meaning set forth in Section 10.1.
"Closing Date" has the meaning set forth in Section 10.1.
"Confidentiality Agreement" shall mean the Confidentiality Agreement dated
March 31, 1994, between James River Corporation and Benchmark Corporation of
Delaware t/a Wincup.
"Consumables" has the meaning set forth in Section 2.1(iii).
"Current Assets" means the Inventory, the Consumables and the Prepaid
Expenses.
"Current Asset Amount" shall have the meaning set forth in Section 2.5(b).
"Cutlery Business" has the meaning set forth in the Recitals.
"Distribution Centers" mean the warehouses and distribution centers
historically used (in whole or part) in connection with the Cutlery Business or
the Thermoform Business and located in Phoenix, Arizona, Tinton Falls, New
Jersey and Des Plaines, Illinois.
"Encumbrances" means liens, mortgages, charges, security interests or other
defects in title generally considered to be encumbrances.
-3-
<PAGE>
"Environmental Audits" shall have the meaning set forth in Section 6.19.
"Environmental Laws" means federal statutes or regulations intended to
provide protection for public health and the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), the Clean Air Act, the Clean Water Act, the Solid Waste
Disposal Act (including the Resource Conservation and Recovery Act), the Toxic
Substances Control Act, their state and local statutory and regulatory
counterparts, and other substantially similar foreign statutes and regulations,
as the foregoing may be in effect from time to time.
"Environmental Permits" means all governmental licenses, permits, approvals
and authorizations required or issued under or with respect to any Environmental
Laws.
"Equipment" has the meaning set forth in Section 2.1(i).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Purchase Price" has the meaning set forth in Section 2.4.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Closing Statement" has the meaning set forth in Section 2.5(d).
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<PAGE>
"Handling Hazardous Substances" means the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
"Hazardous Emissions" means all emissions, releases, leaks, escapes,
dumping, discharges or threatened discharges of Hazardous Substances into the
air, surface water, ground water or the ocean or on or into the land.
"Hazardous Substances" means (i) those substances defined as hazardous by
Section 9601(14) of CERCLA, (ii) all fluids containing polychlorinated
biphenyls, (iii) asbestos and asbestos-containing materials, (iv) nuclear fuel
and waste, (v) petroleum and petroleum products, and (vi) all other substances
regulated under Environmental Laws.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Intellectual Property" has the meaning set forth in Section 2.1(vi).
"Interim Financial Statements" has the meaning set forth in Section 4.9.
"Inventory" has the meaning set forth in Section 2.1(ii).
"Leases" has the meaning set forth in Section 4.13.
"Legal Action" has the meaning set forth in Section 11.3.
"Licenses and Permits" has the meaning set forth in Section 2.1(v).
-5-
<PAGE>
"Material Contracts" has the meaning set forth in Section 4.16.
"Mexican Facilities" means the facilities for the packaging of the Winkler
Businesses' products located in Anahuac, Mexico, Imuris, Mexico and Ensenada,
Mexico, and described on Schedule 4.12, all of which are owned and operated by
-------------
third parties.
"NYSE" means the New York Stock Exchange.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plans" has the meaning set forth in Section 4.20.
"Permitted Exceptions" means (i) statutory liens for current taxes or
assessments not yet due or delinquent; (ii) mechanics', carriers', workers',
repairers' and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on the part of
a Seller, provided that the same shall be fully discharged of record before the
Closing; (iii) exceptions shown on the surveys furnished by the Sellers to Buyer
on or before the date hereof and agreed to by Buyer; and (iv) such other
Encumbrances which do not materially adversely affect the use or value of the
Winkler Facilities for the Winkler Businesses.
"Person" means an individual, a corporation, a partnership, an association,
a labor union, a trust or any other entity or organization, including a
government, a governmental body, a political subdivision or an agency or
instrumentality thereof.
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<PAGE>
"Post-Closing Operations" means all activities attributable to, or
conducted by, any of the Sellers, the Benchmark Sub or the Wincup Sub during any
period beginning after the Closing.
"Post-Closing Remediation Matters" has the meaning set forth in Section
6.19
"Pre-Closing Operations" means all activities attributable to, or conducted
by, any of the Sellers, the Benchmark Sub or the Wincup Sub during any period
ending on or before the Closing Date.
"Pre-Closing Remediation Matters" has the meaning set forth in Section
6.19.
"Preliminary Closing Statement" has the meaning set forth in Section
2.5(b).
"Prepaid Expenses" has the meaning set forth in Section 2.1(x).
"Purchase Price" has the meaning set forth in Section 2.4.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Related Agreements" has the meaning set forth in Article III.
"SEC" means the Securities and Exchange Commission.
"Section 338(h)(10) Election" means an election for federal income tax
purposes described in Section 338(h)(10) of the Internal Revenue Code with
respect to the stock purchase described in this Agreement, including any
elections under Section 338(g) of the Internal Revenue Code that are required to
-7-
<PAGE>
be made under applicable law when making the Section 338(h)(10) Election.
"Section 338 Forms" means all returns, documents, statements and other
forms that are required to be submitted to any federal, state, county or other
governmental authority in connection with the Section 338(h)(10) Election,
including (i) U.S. Internal Revenue Service Form 8023 (together with any
schedules or attachments thereto) that are required pursuant to Treasury
Regulations, including Section 1.338(h)(10)-1, and (ii) any comparable or
similar state, local or other governmental submissions.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Financial Statements" has the meaning set forth in Section 4.9.
"Sellers' Auditors" means Arthur Andersen & Co.
"Sellers Tax Liabilities" shall have the meaning set forth in Section 6.26.
"Shares" means the Benchmark Sub Shares and the Wincup Sub Shares
collectively.
"Subsidiary," with respect to any party to this Agreement, means any
corporation or other business entity, whether or not incorporated, of which at
least 50% of the securities or interests having, by their terms, ordinary voting
power to elect members of the Board of Directors, or other persons performing
-8-
<PAGE>
similar functions with respect to such entity, is held directly or indirectly by
such party.
"Tax" or "Taxes" means all federal, state, local, and foreign taxes or
assessments, including, without limitation, those relating to net income, gross
receipts, gross income, capital stock, franchise, profits, employees and
payroll, withholding, foreign withholding, social security, unemployment,
disability, real property, personal property, intangibles, stamp, excise, sales,
use, transfer, value added, customs, premium, windfall profits, alternative
minimum or estimated taxes, together with any interest, penalties or additions
to tax or additional amounts with respect to the foregoing, whether disputed or
not.
"to the knowledge of the Sellers" means the knowledge, after due
investigation, of those officers and employees of the Sellers listed in Schedule
--------
1.1.
- ---
"Thermoform Business" has the meaning set forth in the Recitals.
"Transferred Employees" has the meaning set forth in Section 7.1.
"U.S. Facilities" means the facilities for the production, fabrication and
packaging of the Winkler Businesses' products located in Stone Mountain,
Georgia, Houston, Texas, and Los Angeles, California, and described on Schedule
--------
4.12.
- ----
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<PAGE>
"U.S. Facilities Leases" means the leases for the buildings (and related
land, if any) in which the U. S. Facilities are located.
"Welfare Plans" has the meaning set forth in Section 4.20.
"Wincup Sub" has the meaning set forth in Section 6.24.
"Wincup Sub Shares" has the meaning set forth in the Recitals.
"Winkler Businesses" means the Cutlery Business, the Thermoform Business
and the business of the Benchmark Sub and the Wincup Sub.
"Winkler Facilities" shall mean the Mexican Facilities, the U. S.
Facilities, the Distribution Centers and such other facilities, buildings or
offices which are used for or in connection with the Winkler Businesses.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE OF ASSETS. At the Closing, the Sellers agree to
sell to Buyer, and Buyer agrees to purchase from the Sellers, the following
listed assets, properties or rights of the Sellers (or either of them), other
than Excluded Assets (the "Purchased Assets"), including, without limitation:
(i) the machinery, equipment, furniture, vehicles, silos, molds,
tools, spare parts, tibars, fixtures and other tangible personal property
(other than the Current Assets but including any construction in process)
which is ordinarily located on, or is in transit to, the Winkler
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<PAGE>
Facilities or is otherwise related principally to the business of the
Winkler Businesses. These items are hereinafter referred to collectively as
the "Equipment;"
(ii) the raw materials, work-in-process and finished goods which
are located at, or in transit to, the Winkler Facilities or are otherwise
related principally to the business of the Winkler Businesses. These items
are hereinafter referred to collectively as the "Inventory;"
(iii) the stores, supplies, fuel, packaging and finishing
materials and other consumable supplies which are located at, or are in
transit to, the Winkler Facilities or are otherwise related principally to
the business of the Winkler Businesses. These items are hereinafter
referred to collectively as the "Consumables".
(iv) the Environmental Permits which relate principally to the
business of the Winkler Businesses and are assignable;
(v) the Licenses and Permits which relate principally to the
business of the Winkler Businesses and are assignable. The term "Licenses
and Permits" means governmental licenses, permits, approvals and
authorizations, whether federal, state or local, foreign or domestic, other
than Environmental Permits;
(vi) the Intellectual Property. The term "Intellectual Property"
means the intangible assets of the Sellers used principally in the business
of the Winkler
-11-
<PAGE>
Businesses, including its rights and interests in all trade names,
trademarks and service marks, patents (including but not limited to the
spoon straw patents), patent rights, copyrights, whether domestic or
foreign (as well as applications, registrations or certificates for any of
the foregoing), inventions, trade secrets, proprietary processes and
formulae, software and other property rights that relate principally to the
business of the Winkler Businesses and are generally considered to be
Intellectual Property;
(vii) all rights and interests of the Sellers in, to and under
all Assumed Material Contracts and Assumed Leases;
(viii) all books and records (which term includes computerized
records and associated software and documentation) wherever located, which
are used exclusively in the business of the Winkler Businesses including,
without limitation, those relating to production, manufacturing, quality
control, sales or marketing, customers and employees of the Winkler
Businesses who will become Transferred Employees, and a co-ownership
interest in any of the Sellers' books and records which are used only in
part in the business of the Winkler Businesses, but only to the extent of
such use, provided, however, that the assets and properties referred to in
this Section 2.1(viii) other than those constituting indicia of title, may,
at the option of the Sellers, consist of copies thereof;
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<PAGE>
(ix) all purchase orders, forms, labels, stationery, shipping
materials, catalogues, brochures, art work, photographs and advertising
materials;
(x) the prepaid expenses and deferred charges which are listed
on Exhibit A (the "Prepaid Expenses");
---------
(xi) the Shares; and
(xii) all other tangible and intangible properties of either
Seller, wherever located, which have been used or held for use in
connection with the business of the Winkler Businesses.
2.2 EXCLUDED ASSETS. The following assets used by the Sellers, Benchmark
Sub or Wincup Sub (or any of them) in the Winkler Businesses (the "Excluded
Assets") are not included in the Purchased Assets:
(i) all cash and cash equivalents, including cash on hand or in
bank accounts, certificates of deposit, commercial paper and securities
belonging to either of the Sellers;
(ii) all accounts receivable and notes receivable related to the
business of the Winkler Businesses;
(iii) all prepaid expenses (including prepaid insurance premiums)
and deferred charges other than those listed in Exhibit A;
---------
(iv) all assets held in Pension Plans or Welfare Plans for the
benefit of employees of the Winkler Businesses;
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<PAGE>
(v) the leases for the Distribution Centers listed on Schedule
--------
2.2; and
---
(vi) all other assets listed in Schedule 2.2.
------------
2.3 ASSUMED LIABILITIES.
(a) Except to the extent set forth in paragraph (b) below, Buyer will
assume no liabilities or obligations of either Seller or the Benchmark Sub or
the Wincup Sub, and no liabilities of or related to the Purchased Assets, the
Winkler Businesses or their business or the Transferred Employees. Without
limiting the foregoing, Buyer will assume no liabilities for, related to,
arising out of or under or in respect of any of the following: (i) any taxes
incurred by the Sellers or the Benchmark Sub or the Wincup Sub in the conduct of
the business of the Winkler Businesses prior to the Closing; (ii) any actual or
alleged violation by the Sellers, the Benchmark Sub, the Wincup Sub or by any
previous owner of any of the Purchased Assets, of any Applicable Law; (iii) any
breach by the Sellers, the Benchmark Sub or the Wincup Sub before Closing of any
contract, agreement or commitment, including any Assumed Material Contract or
Assumed Lease; (iv) any litigation, pending or threatened, at the time of
Closing; (v) any contract or agreement, including any Assumed Material Contract
or Assumed Lease, if the rights of the Sellers, the Benchmark Sub or the Wincup
Sub are, for any reason, not transferred to, or the benefits thereunder are not
otherwise made available to, Buyer at the Closing; (vi) severance or separation
pay or employee benefits (under any Pension Plan, Welfare Plan or
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<PAGE>
otherwise) for present or former employees of the Sellers or for the Transferred
Employees or for any employees of the Mexican Facilities; (vii) any Hazardous
Substances existing as of the Closing Date on, in or about the Purchased Assets
or the leased premises on which the Purchased Assets are located or any
Hazardous Emissions or Handling Hazardous Substances prior to the Closing Date
at any location (including, without limitation, remote storage, treatment,
recycling or disposal sites); or (viii) the acts, omissions or other past
practices of the Sellers, the Benchmark Sub or the Wincup Sub prior to the
Closing Date with respect to the business of the Winkler Businesses or the
Purchased Assets.
(b) At Closing, Buyer will assume the following obligations (the
"Assumed Liabilities"):
(i) the obligations arising after the Closing Date under the
Assumed Leases and the Assumed Material Contracts; and
(ii) earned or accrued vacation pay, holiday pay and sick pay
for the Transferred Employees (if any of the foregoing are currently paid under
the Sellers' employment policies) for the current year but not any previous
years in the amounts set forth on Schedule 2.3(b). The "Assumed Leases" shall be
all of the Leases indicated on Schedule 4.13 as being "Assumed Leases" and all
-------------
other Leases listed on Schedule 4.13 which Buyer elects to assume as of Closing.
-------------
The "Assumed Material Contracts" shall be all of the Material Contracts
indicated on Schedule 4.16
-------------
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<PAGE>
as being "Assumed Material Contracts", all other Material Contracts listed on
Schedule 4.16 which Buyer elects to assume as of Closing, and all other
- -------------
contracts, agreements and commitments, other than Material Contracts, which
Buyer elects to assume as of Closing. If Buyer elects to assume any Leases or
contracts, agreements or commitments which are not indicated on Schedules 4.13
--------------
and 4.16 as being, respectively, Assumed Leases or Assumed Material Contracts,
- --------
then Buyer shall do so by providing a list of such Leases and contracts,
commitments and agreements at or before Closing.
2.4 PURCHASE PRICE. The consideration to be paid for the Purchased Assets
(the "Purchase Price"), shall be in cash and shall be equal to the sum of the
following: (i) $39,700,000 and (ii) the value of the Current Assets as
determined in accordance with Section 2.5. As of the date of this Agreement the
Purchase Price, based on information given Buyer by the Sellers, is expected to
be approximately $51,500,000. At the Closing, Buyer will pay the Sellers an
amount (the "Estimated Purchase Price") equal to $49,000,000 based on an
estimated value of $9,300,000 for the Current Assets. The Estimated Purchase
Price shall be paid in the manner hereinafter set forth in Article X.
2.5 VALUATION OF CURRENT ASSETS.
(a) For the purposes of determining the Purchase Price, the value of
the Current Assets shall equal the sum of the following: (i) the amount of the
Prepaid Expenses as of the Closing Date, to the extent such Prepaid Expenses
relate to
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<PAGE>
periods after the Closing Date, and (ii) the lesser of the Current Asset Amount
or $11,800,000.
(b) The Sellers shall cause the Sellers' Auditors to conduct a
physical inventory of the Inventory and Consumables on a Saturday and Sunday
commencing before the Closing and occurring within fifteen (15) days of the
Closing. The Sellers' Auditors may be assisted by the Sellers' employees.
Buyer or its representatives, which may be Buyer's Auditors, shall have the
right to observe the taking of the physical inventory. As promptly as
practical, but in any event not more than 30 days after the Closing, the Sellers
shall cause the Sellers' Auditors to prepare on the basis of such physical
inventory and deliver to Buyer a draft of a statement of the "Current Asset
Amount" as of the commencement of business on the date on which the Closing
takes place (the "Preliminary Closing Statement"). "Current Asset Amount" shall
mean the value of the Inventory and the Consumables on hand as of the Closing
Date calculated as set forth in this Section. Inventories on hand at the
Closing Date as determined by the physical inventory referred to above will
include items which have historically been carried on the books of the Sellers
with respect to the Winkler Businesses and are held for sale in the ordinary
course of business or are in the process of production for such sale.
Consumables on hand at the Closing Date as determined by the physical inventory
referred to above will include items which have historically been carried on the
books (capitalized or expensed) of the Sellers with respect
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<PAGE>
to the Winkler Businesses and are to be currently consumed in the production of
goods to be available for sale or are included in the general stores, supplies
and spare parts. Except for supplies, Inventory and Consumables will be valued
at the lower of cost or market determined on an item basis without regard to
materiality and in accordance with generally accepted accounting principles
applied on a consistent basis. Supplies and spare parts will be valued at the
lower of average cost determined on a specific identification basis or market,
determined on a last purchase price basis without regard to materiality.
Inventory will be reduced for obsolete, slow-moving or damaged inventory. "Slow-
moving inventory" shall mean finished goods as to which the most recent six-
month total of external customer sales are more than 200 and less than 1,800
cases, and that portion of the inventory in excess of the most recent six-month
total shall be valued at 50% of cost. "Obsolete inventory" shall mean all
finished goods as to which: (i) the most recent twelve-month total of external
customer sales are less than 200 cases; or (ii) the product has been
discontinued. Such obsolete inventory shall be valued at 0% of cost and shall be
excluded from the Purchased Assets. "Damaged inventory" shall mean (i) all
finished goods whose shipping container is ripped, torn, defaced, mislabeled,
crushed or soiled; and (ii) any container of work-in-process or finished goods
whose contents are crushed or otherwise damaged so that the goods have no market
value. Such damaged inventory
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<PAGE>
shall be valued at 0% of cost and shall be excluded from the Purchased Assets.
(c) During the 15 days following the receipt by Buyer of the draft of
the Preliminary Closing Statement and the report of the Sellers' Auditors with
respect thereto, Buyer's Auditors shall be permitted to review the working
papers of the Sellers' Auditors relating to the draft of the Preliminary Closing
Statement and shall have such access to the Sellers' personnel as may be
reasonably necessary to permit them to review in detail the manner in which the
draft was prepared. Before the end of such 15-day period, Buyer's Auditors
shall give any comments or objections they have with respect to the draft of the
Preliminary Closing Statement to the Sellers' Auditors. Such comments or
objections, insofar as they relate to the valuation of any assets, shall be
resolved without regard to any materiality standard, and the Final Closing
Statement delivered to Buyer pursuant to the provisions of the next paragraph
shall reflect such resolution.
(d) Within 15 days after the expiration of such 15-day period
described in the preceding paragraph, the Sellers shall deliver to Buyer a Final
Closing Statement (the "Final Closing Statement") accompanied by a definitive
report of the Sellers' Auditors with respect thereto. Within three (3) business
days after receipt of such Final Closing Statement and report, Buyer's Auditors
shall deliver a letter to the Sellers stating whether they concur with such
report and their exceptions thereto, if
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<PAGE>
any, together with the reasons therefor. If such objections cannot be resolved
between the Sellers' Auditors and Buyer's Auditors within five (5) business days
after delivery of such letter by Buyer's Auditors, the question or questions in
dispute shall then be submitted, as soon as practicable, to a mutually
acceptable firm of independent public accountants of nationally recognized
standing, the decision of which as to such question or questions in dispute
shall be final and binding upon the parties hereto.
(e) If the Final Closing Statement, after the resolution of all
disputes, indicates that the Estimated Purchase Price was less than the Purchase
Price calculated in accordance with Section 2.4, Buyer shall promptly pay to the
Sellers, in immediately available funds, the balance of the Purchase Price,
together with interest on such balance at the Accrual Rate for the period from
the 30th day after Closing until such balance is paid. If the Final Closing
Statement, after the resolution of all disputes, indicates that the Estimated
Purchase Price exceeded the Purchase Price as calculated in accordance with
Section 2.4, the Sellers shall promptly pay to Buyer, in immediately available
funds the amount of such excess, together with interest on such excess at the
Accrual Rate for the period from the 30th day after Closing until such excess is
paid.
(f) The fees of the Sellers' Auditors and Buyer's Auditors incurred
in connection with the preparation of the Preliminary and Final Closing
Statements shall be borne by the
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<PAGE>
Sellers and Buyer, respectively. The fees of any independent accounting firm
appointed pursuant to Section 2.5(d) shall be paid one-half by the Sellers and
one-half by Buyer.
ARTICLE III
RELATED AGREEMENTS
In connection with the sale and purchase of assets contemplated by this
Agreement the Sellers and Buyer will enter, or cause others to enter into, the
following listed agreements:
(i) A transition services agreement in substantially the form
attached hereto as Exhibit B pursuant to which the appropriate Seller will
---------
(A) grant a license to Buyer to use the Distribution Centers, (B) provide
to Buyer, all labor (including but not limited to wages and benefits)
necessary or appropriate for the use of the Distribution Centers by Buyer
and all utilities and other services necessary or appropriate for the
operation of the Distribution Centers, and (C) such other matters as set
forth in the Transition Services Agreement; and
(ii) Non-compete agreements in substantially the form attached
hereto as Exhibit C pursuant to which the Sellers and each of Michael
---------
Kennedy, Richard Hunsinger, Donald Walker, Don Rogalski and Michael Valenza
(the "Officers") agree not to compete with Buyer for a period of five (5)
years after the Closing Date as set forth therein, and pursuant to which
Buyer shall pay to such listed members of management in the aggregate the
sum of $3,500,000 in
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consideration for such non-compete agreements, allocated as follows: Hunsinger
- - $250,000; Valenza - $75,000; Walker -$90,000; Rogalski - $85,000; Kennedy -
the balance;
(iii) One or more trust agreements, pursuant to which one or more
liquidating trusts will be created to which each Seller shall assign at
Closing, free and clear of liens, all of its receivables related to the
Winkler Businesses and its rights in any deferred portion of the Purchase
Price payable to Sellers pursuant to Section 2.5(e), and which will assume
at Closing all of the Sellers' payables related to the Winkler Businesses
and any performance allowances as set forth on Schedule 4.25 which are not
paid at Closing. The receivables and the deferred portion of the Purchase
Price assigned to each such trust shall be sufficient to pay the payables
and performance allowances assumed by such trust and such payables shall be
substantially all of the payables that would, if not paid, subject Buyer or
the Purchased Assets to claims under applicable bulk sales or other similar
laws. A representative of Buyer and of Benchmark or Wincup, as the case
may be, shall be the trustees under each such trust, unless Buyer elects
not to appoint a representative as trustee. All amounts received by each
trust shall be used for payment of the Sellers' payables related to the
Winkler Businesses, and the trust agreements shall so provide. If Buyer
chooses not to appoint a representative as trustee, each trust shall not
pay any payables except in accordance
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with periodic schedules of payments approved by Buyer, which approval shall
not be unreasonably withheld or delayed. In the event a trust receives
insufficient funds to pay the payables, Benchmark Corporation of Delaware
shall promptly deliver to the trustees such additional funds as are
necessary to pay such unpaid amounts. The terms of the trust agreements
shall be deemed incorporated into this Agreement and shall constitute
covenants of the Sellers under this Agreement to the same extent as if
fully set forth in this Agreement.
The foregoing agreements are hereinafter referred to collectively as the
"Related Agreements."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers severally represent and warrant to Buyer the following:
4.1 ORGANIZATION; QUALIFICATION; CAPITALIZATION OF BENCHMARK SUB AND THE
WINCUP SUB. (a) Each Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has corporate
power and authority to own all of its properties and assets and carry on the
business of the Winkler Businesses as it is presently being conducted. Each
Seller is duly qualified and in good standing to do business in each
jurisdiction in which the business of the Winkler Businesses makes such
qualification necessary except where failure to so qualify has no material
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<PAGE>
adverse effect on such Seller's financial condition or the conduct of the
Winkler Businesses. Each Seller has heretofore delivered to Buyer complete and
correct copies of its respective Certificate of Incorporation and Bylaws, as
currently in effect.
(b) The Benchmark Sub and the Wincup Sub are corporations duly
organized, validly existing and in good standing under the laws of the State of
California and each have corporate power and authority to own all of their
respective properties and assets and to carry on their business as now being
conducted. Each of the Benchmark Sub and the Wincup Sub is duly qualified and
in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary except in those jurisdictions where the
failure to so qualify has no material adverse effect on the Benchmark Sub's or
the Wincup Sub's respective financial condition or operations. The Sellers have
heretofore delivered to Buyer complete and correct copies of the Articles of
Incorporation and Bylaws of the Benchmark Sub and the Wincup Sub, as currently
in effect.
(c) The Shares constitute all of the issued and outstanding capital
stock of the Benchmark Sub and the Wincup Sub. The Shares have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of any preemptive rights. Neither the Benchmark Sub nor the
Wincup Sub have any commitments to issue or sell any shares of its
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capital stock or any securities or obligations convertible into or exchangeable
for, or giving any person any right to acquire from the Benchmark Sub or the
Wincup Sub, any shares of its capital stock and no such securities or
obligations are outstanding. Upon delivery of the certificates evidencing the
Shares to Buyer pursuant to this Agreement, Buyer will have good title to the
Shares free and clear of all liens, charges, pledges, security interests or
other encumbrances.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each Seller has corporate power
and authority to execute and deliver this Agreement and the Related Agreements
to which it is a party and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by each Seller of this Agreement and the
Related Agreements to which it is a party, and the consummation by it and the
Benchmark Sub and Wincup Sub of the transactions contemplated hereby and
thereby, have been duly authorized by the Board of Directors of such Seller, the
Benchmark Sub and Wincup Sub and the holders of the requisite percentage of the
outstanding shares of its common stock, and no other corporate proceedings on
the part of either Seller, the Benchmark Sub and Wincup Sub are necessary with
respect thereto. This Agreement constitutes, and the Related Agreements when
executed and delivered by a Seller will constitute, valid and binding
obligations of each Seller, enforceable in accordance with their terms except as
the same may be limited by (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or
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similar law affecting creditors' rights generally or (ii) general principles of
equity, whether considered in a proceeding in equity or at law.
4.3 CONSENTS AND APPROVALS. Except as set forth in Schedule 4.3, there is
------------
no requirement applicable to a Seller, the Benchmark Sub or the Wincup Sub to
make any filing with, or to obtain any consent or approval of any Person as a
condition to the transfer of the Purchased Assets to Buyer or the consummation
of the transactions contemplated by this Agreement (other than as may be
required by the HSR Act and any applicable "bulk sales" law).
4.4 NON-CONTRAVENTION. Except as set forth in Schedule 4.4, the execution
------------
and delivery by each Seller of this Agreement and the Related Agreements to
which each Seller is a party does not, and subject to the requisite approval of
the shareholders of each Seller, the consummation of the transactions
contemplated hereby and thereby will not (i) violate or result in a breach of
any provision of the Certificate of Incorporation or Bylaws of a Seller, or the
Articles of Incorporation or Bylaws of the Benchmark Sub or the Wincup Sub, (ii)
result in a default, or give rise to any right of termination, modification or
acceleration, or the imposition of any Encumbrance (whether immediately before
or after the giving of notice or the passage of time) under the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
agreement, lease or other instrument or obligation to which a Seller, the
Benchmark Sub or
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the Wincup Sub is a party or by which a Seller, the Benchmark Sub, the Wincup
Sub, the Shares or any of the Purchased Assets may be bound, or (iii) violate
any law, regulation, judgment, order or decree applicable to a Seller, the
Benchmark Sub, the Wincup Sub, the Shares or any of the Purchased Assets or the
business of the Winkler Businesses.
4.5 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.5, and in
------------
addition to the representations and warranties contained in Section 4.6 relating
to environmental matters and in Section 4.7 relating to Licenses and Permits,
the Sellers have operated the Winkler Businesses, the Benchmark Sub and the
Wincup Sub, in compliance with all laws, regulations, judgments, orders or
decrees of any federal, state, local or foreign court or governmental body
applicable to the Sellers, the Benchmark Sub, the Wincup Sub, the Shares or any
of the Purchased Assets or the business of the Winkler Businesses including,
without limitation, those related to (i) antitrust and trade matters, (ii) civil
rights, (iii) zoning and building codes, (iv) public health and safety, (v)
worker health and safety, and (vi) labor, employment and discrimination in
employment. Except as is set forth in Schedule 4.5, no investigation or review
------------
is pending with respect to any alleged failure by a Seller, the Benchmark Sub or
the Wincup Sub to comply with any such law, regulation, order, judgment or
decree and no event has occurred or condition exists which, with the giving of
notice or the passage of time, can reasonably be expected to result in any such
allegation.
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<PAGE>
4.6 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Schedule 4.6 and the Environmental Audits,
------------
to the knowledge of the Sellers, the Sellers have operated the Winkler
Businesses, the Benchmark Sub and the Wincup Sub, in compliance with all
Environmental Laws.
(b) The Sellers have obtained all Environmental Permits which are
required to conduct the business of the Winkler Businesses as it is presently
being conducted, and the Benchmark Sub and the Wincup Sub have obtained all
Environmental Permits necessary to conduct its business, including, without
limitation, those which relate to Hazardous Emissions and Handling Hazardous
Substances. Schedule 4.6 contains a complete list of all such Environmental
------------
Permits, all of which are in full force and effect and, except as noted on
Schedule 4.6, all of which are assignable. Except as disclosed on Schedule 4.6,
- ------------ ------------
to the knowledge of the Sellers, the Sellers have operated the Winkler
Businesses, and the Benchmark Sub and the Wincup Sub have operated, in
compliance with all of the terms and conditions set forth in such Environmental
Permits.
(c) Except as disclosed in the Environmental Audits, to the knowledge
of the Sellers, there are no Hazardous Substances present on or in the Purchased
Assets, the U.S. Facilities or the Mexican Facilities. To the knowledge of the
Sellers, no Seller, the Benchmark Sub nor the Wincup Sub is obligated, by itself
or jointly with others, to clean up, remedy or otherwise restore to its former
condition any building,
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contaminated surface water, ground water, soil or any natural resources
associated therewith.
(d) To the knowledge of the Sellers, no investigation or review is
pending with respect to any alleged failure of a Seller, the Benchmark Sub or
the Wincup Sub to comply with any of the aforementioned laws or regulations or
the terms and conditions of any of its Environmental Permits, and to the
knowledge of the Sellers, no event has occurred or condition exists which, with
the giving of notice or the passage of time, can reasonably be expected to give
rise to such an allegation or cause a Seller, the Benchmark Sub or the Wincup
Sub to be obligated to take any action described in paragraph (c).
4.7 LICENSES AND PERMITS. Except as set forth in Schedule 4.7, the
------------
Sellers have all Licenses and Permits required to conduct the business of the
Winkler Businesses as it is presently being conducted and the Benchmark Sub and
the Wincup Sub have all Licenses and Permits required to conduct its business.
Schedule 4.7 contains a complete list of all such Licenses and Permits, all of
- ------------
which are in full force and effect and, except as noted on Schedule 4.7, all of
------------
which are assignable. Except as disclosed on Schedule 4.7, the Sellers have
------------
operated the business of the Winkler Businesses, in compliance with all of the
terms and conditions set forth in such Licenses and Permits. Except as set
forth in Schedule 4.7, no investigation or review is pending with respect to any
------------
alleged failure of a Seller, the Benchmark Sub or the Wincup Sub to comply with
the provisions of its Licenses and
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<PAGE>
Permits, and no event has occurred or condition exists which, with the
giving of notice or the passage of time, can reasonably be expected to result in
any such allegation.
4.8 LITIGATION. Except as set forth in Schedule 4.8, there are no
------------
actions, suits, claims, investigations or proceedings (legal, administrative or
arbitrative) pending or, to the knowledge of a Seller, the Benchmark Sub or the
Wincup Sub, threatened against a Seller, the Benchmark Sub or the Wincup Sub,
whether at law or in equity and whether civil or criminal in nature, before any
court, governmental body, commission, agency or arbitrator, domestic or foreign,
nor are there any judgments, orders or decrees of any such court, governmental
body, commission, agency or arbitrator outstanding against a Seller, the
Benchmark Sub or the Wincup Sub which have or can reasonably be expected to
have, directly or indirectly, an adverse effect on the Shares, Purchased Assets
or the earnings, financial condition, operations or prospects of the Winkler
Businesses, the Benchmark Sub or the Wincup Sub, or which seek specifically to
prevent, restrict or delay consummation of the transactions contemplated hereby
or fulfillment of any of the conditions of this Agreement.
4.9 FINANCIAL STATEMENTS. Each Seller has previously furnished Buyer with
true and complete copies of (i) the audited financial statements for the years
ending December 31, 1994 and December 31, 1993, including the notes thereto (the
"Prior Financial Statements") for the Winkler Businesses; (ii) unaudited
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<PAGE>
financial statements for the Winkler Businesses for the nine months ending
September 30, 1995 and September 30, 1994 (the "Interim Financial Statements")
and (iii) unaudited balance sheets for the Benchmark Sub and the Wincup Sub as
of the Closing Date (the "Benchmark Sub and Wincup Sub Balance Sheets"). Such
financial statements present fairly the financial position of each Seller, the
Winkler Businesses, the Benchmark Sub and the Wincup Sub, respectively, as of
such dates and the results of their operations and changes in their financial
position for such periods and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except that in the
case of the Interim Financial Statements, normal year-end adjustments, which in
the aggregate are not material, have not been made.
4.10 UNDISCLOSED LIABILITIES. Except as set forth in Schedule 4.10, no
-------------
Seller has, with respect to the Purchased Assets or the operations of the
Winkler Businesses, and the Benchmark Sub and the Wincup Sub do not have, any
liabilities (whether matured or unmatured, accrued, contingent or otherwise)
which are not reflected in the Interim Financial Statements or the Benchmark Sub
and Wincup Sub Balance Sheets other than those which were incurred subsequent to
the date of such financial statements in the ordinary course of business and
consistent with past practices and cannot reasonably be expected to materially
and adversely affect the Purchased Assets or the earnings,
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<PAGE>
financial condition, operations or prospects of the Winkler Businesses, the
Benchmark Sub or the Wincup Sub.
4.11 ABSENCE OF CHANGES. Except as set forth in Schedule 4.11, since
-------------
December 31, 1994, with respect to the Sellers, and since the date of
incorporation of the Benchmark Sub and the Wincup Sub with respect to the
Benchmark Sub and the Wincup Sub, there has not been:
(i) any change, or development involving a prospective change,
including, without limitation, any damage, destruction or loss (whether or
not covered by insurance) which adversely affects or, to the knowledge of a
Seller, can reasonably be expected to materially and adversely affect the
Purchased Assets or the earnings, financial condition, operations or
prospects of the Winkler Businesses, the Benchmark Sub or the Wincup Sub;
(ii) any obligation or liability involving more than $200,000
(whether matured or unmatured, accrued, contingent, or otherwise) incurred
in the aggregate by the Sellers with respect to the Purchased Assets or the
Winkler Businesses, the Benchmark Sub or the Wincup Sub;
(iii) any general uniform increase in the compensation of the
employees of the Winkler Businesses (including, without limitation, any
increase pursuant to any bonus, pension, profit sharing or other plan or
commitment);
(iv) any increase (other than normal increases consistent with
past practices and those required by law) in
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<PAGE>
the compensation payable to any employee (including officers) of the
Winkler Businesses;
(v) any amendment to any employment agreement to which any
employee of the Winkler Businesses is a party;
(vi) any sale of any of the Purchased Assets other than in the
ordinary course of business; or
(vii) any material deterioration of relations between the Winkler
Businesses, the Benchmark Sub or the Wincup Sub and their suppliers or
customers.
Since the date of the Interim Financial Statements and the Benchmark Sub and the
Wincup Sub Balance Sheets, the Winkler Businesses, the Benchmark Sub and the
Wincup Sub have been conducted only in the ordinary and usual course and in a
manner consistent with past practices. The Sellers, the Benchmark Sub and the
Wincup Sub have good title to all of the personal property, tangible and
intangible, which is a part of the Purchased Assets, free and clear of
Encumbrances.
4.12 MEXICAN OPERATIONS. None of the Mexican Facilities is owned or
operated by the Sellers and none of the employees thereof is employed by the
Sellers. To the best knowledge of Sellers, no event has occurred and no
circumstances exist which could reasonably be expected to permit state, local or
federal Mexican governmental authorities to seize, put a lien on, or otherwise
obtain control of any of the Purchased Assets located at the Mexican Facilities.
To the knowledge of Sellers, Sellers have taken no action which is reasonably
likely to materially and
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<PAGE>
adversely affect any of the Purchased Assets in the Mexican Facilities. The
Sellers have no reason to believe that the demand for products packaged at the
Mexican Facilities will not equal or exceed the minimum requirements of the
contracts under which the Mexican Facilities package Sellers' products.
4.13 LEASES. Schedule 4.13 sets forth a complete list of each lease into
-------------
which each Seller, the Benchmark Sub or the Wincup Sub has entered, whether as
lessor or lessee, on behalf of the Winkler Businesses, the Benchmark Sub or the
Wincup Sub which relates to either real or personal property, other than monthly
leases of personal property which may be cancelled upon not more than 60 days
notice and require the payment of not more than $100 per month. The leases
listed in Schedule 4.13 are referred to herein as "Leases." No Seller, the
-------------
Benchmark Sub or the Wincup Sub has breached any such Lease and, to the
knowledge of each Seller, the Benchmark Sub or the Wincup Sub, no other party to
any Lease has breached the Lease and no event has occurred or condition exists
which, with the giving of notice or the passage of time, can reasonably be
expected to result in a default under, or permit the termination, modification
or acceleration of any Lease by any party thereto. Each Seller, the Benchmark
Sub and the Wincup Sub has good and valid leasehold title to the real estate
covered by the U. S. Facilities Leases, free and clear of all Encumbrances other
than Permitted Exceptions. Complete copies of all of the Leases have been
delivered to Buyer. Except as disclosed on Schedule 4.13, the Leases can be
-------------
transferred to
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<PAGE>
Buyer without the consent of the lessors thereunder or any other Person.
4.14 INVENTORY. The Inventory (i) is usable or saleable in the ordinary
course of the business of the Winkler Businesses, (ii) is sufficient but not
excessive in kind or amount for the conduct of the business of the Winkler
Businesses as it is presently being conducted and (iii) is carried on the books
of the Sellers, the Benchmark Sub and the Wincup Sub and reflected on the
Interim Winkler Businesses Financial Statements and the Benchmark Sub and the
Wincup Sub Balance Sheets at an amount which reflects valuations not in excess
of the lower of cost or market determined in accordance with generally accepted
accounting principles applied on a consistent basis. Schedule 4.14 sets forth
-------------
the locations of Inventory not located on the U. S. Facilities, the Mexican
Facilities or a Distribution Center.
4.15 INTELLECTUAL PROPERTY. Schedule 4.15 sets forth (i) a list of all of
-------------
the Intellectual Property used or held for use in connection with the Winkler
Businesses which each Seller, the Benchmark Sub and the Wincup Sub owns and (ii)
a list of all of the Intellectual Property used or held for use in connection
with the Winkler Businesses which each Seller, the Benchmark Sub and the Wincup
Sub does not own but has the right to use. Except as is set forth in Schedule
--------
4.15, each Seller, the Benchmark Sub and the Wincup Sub has the right to use
- ----
such Intellectual Property free and clear of any restrictions and its right to
the Intellectual Property is assignable. No Seller nor the Benchmark
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<PAGE>
Sub and the Wincup Sub is infringing upon the rights of any Person and no Person
is infringing upon the rights of any Seller, the Benchmark Sub or the Wincup Sub
in the Intellectual Property. Sellers have transferred to Buyer pursuant to this
Agreement, all Intellectual Property used in the conduct of the Winkler
Business, the Benchmark Sub and the Wincup Sub as presently being conducted. All
letters patent, registrations and certificates issued by any governmental agency
relating to the Intellectual Property are valid and subsisting and have been
properly maintained. Complete copies of all documents pursuant to which a Seller
has acquired the right to use, or has licensed or otherwise permitted any other
person to use, any Intellectual Property have been delivered to Buyer.
4.16 MATERIAL CONTRACTS. Schedule 4.16 sets forth a complete and correct
-------------
list of each contract, agreement or commitment of the Sellers, the Benchmark Sub
or the Wincup Sub, other than Leases and bank credit agreements:
(i) upon which any part of the business of the Winkler
Businesses is dependent or which, if breached, could reasonably be expected
to materially and adversely affect the Purchased Assets or the earnings,
financial condition, operations or prospects of the business of the Winkler
Businesses;
(ii) which provides for aggregate future payments by or to the
Sellers for the Winkler Businesses, the Benchmark Sub or the Wincup Sub of
more than $50,000 in any
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year, except for purchase orders or sales orders arising in the ordinary
course of business, in which case they are listed only if any party thereto
may be obligated to make future payments aggregating more than $100,000 in
any year;
(iii) which relates to the Purchased Assets, the Benchmark Sub or
the Wincup Sub, extends more than one year from the date hereof and is not
cancelable by either party on 30 days' notice;
(iv) which provides for the sale or lease or other transfer,
after the date hereof and other than in the ordinary course of business, of
any of the Purchased Assets;
(v) which relates to the employment, retirement or termination
of the services of any employee, officer, former officer or consultant of a
Seller whose employment relates or was related to the business of the
Winkler Businesses; or
(vi) which contains covenants pursuant to which any person has
agreed not to compete with any business conducted by the Winkler
Businesses, the Benchmark Sub or the Wincup Sub or not disclose to others
information concerning the Purchased Assets, the business of the Winkler
Businesses.
Each of the foregoing is referred to in this Agreement as a "Material Contract."
Except as set forth in Schedule 4.16, all of the Material Contracts are in full
-------------
force and effect. No Material Contract has been breached and no event has
occurred or
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condition exists which, with the giving of notice or the passage of time, would
constitute a breach of any such contract by any party thereto. Complete copies
of all the Material Contracts have been delivered to Buyer.
4.17 MAINTENANCE OF THE EQUIPMENT. The Equipment which is a part of the
Purchased Assets has been maintained in good repair in accordance with the usual
practices in the United States of businesses similar to the business conducted
by the Winkler Businesses, the Benchmark Sub or the Wincup Sub, is in good
condition, ordinary wear and tear excepted, and is useable in the ordinary
course of the business of the Winkler Businesses as it is presently being
conducted.
4.18 SUFFICIENCY OF PURCHASED ASSETS. The Purchased Assets include all
properties and rights of the Sellers, the Benchmark Sub and the Wincup Sub that
are necessary for the conduct of the business of the Winkler Businesses and the
Company as it is presently being conducted.
4.19 LABOR AND EMPLOYMENT MATTERS. Except as set forth on Schedule 4.19,
-------------
there are no collective bargaining agreements or any other employment agreements
(other than agreements delivered to Buyer as required by Section 4.16) covering
employees of the Winkler Businesses to which a Seller is a party or by which it
is otherwise obligated. There are no controversies, claims or grievances
pending, or, to the knowledge of each Seller, threatened between a Seller and
any employees of the Winkler Businesses which affect, or can reasonably be
expected to have,
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directly or indirectly, an adverse effect on the Purchased Assets or the
earnings, financial condition, operations or prospects of the Winkler Businesses
or relate to any specific effort to prevent, restrict or delay consummation of
the transactions contemplated by this Agreement.
4.20 EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.20 lists all of the employee benefit plans and programs
-------------
(except the unfunded deferred compensation plans which are listed in Schedule
--------
4.20(a)), including without limitation all retirement, savings and other pension
- -------
plans within the meaning of Section 3(2) of ERISA ("Pension Plans"), all health,
severance, insurance, disability, vacation and other employee welfare plans
within the meaning of Section 3(1) of ERISA ("Welfare Plans") and all incentive
and other similar plans that are maintained by each Seller or any Affiliate with
respect to employees of the Winkler Businesses or to which a Seller or any
Affiliate has contributed or is now contributing on behalf of the employees of
the Winkler Businesses. No Seller is a party to any multi-employer plan as
defined in Section 3(37) of ERISA.
(b) Each Seller and its Affiliates has complied, in all material
respects, with all applicable laws and regulations in administering the Pension
Plans, including specifically the provisions of ERISA and the qualification
provisions of Section 401 of the Internal Revenue Code. No prohibited
transaction, as defined in Section 4975 of the Internal Revenue Code, has
occurred with respect to any of the Pension Plans and none of the
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Pension Plans is subject to the provisions of Title IV of ERISA or to the
provisions of Section 412 of the Internal Revenue Code. Each Pension Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code has
been amended to satisfy the requirements of the Tax Reform Act of 1986 and
subsequent legislation, and has heretofore been determined by the Internal
Revenue Service to so qualify, and each trust created thereunder has heretofore
been determined by the Internal Revenue Service to be exempt from tax under the
provisions of Section 501(a) of the Internal Revenue Code and, to the knowledge
of each Seller or any Affiliate, nothing has occurred since the date of the most
recent determination that would be reasonably likely to cause any such Pension
Plan or trust to fail to qualify under Section 401(a) or 501(a) of the Internal
Revenue Code.
(c) No Seller has terminated any Pension Plan or incurred any material
liability to the PBGC under Section 4001, et seq., of ERISA, and no condition
exists that could reasonably be expected to cause a Seller to incur any such
liability either singly or as a member of a group of businesses under common
control of, or affiliated with, the Sellers within the meaning of Section 414 of
the Internal Revenue Code.
(d) There are no actions, suits or claims pending, threatened or
anticipated (other than routine claims for benefits) with respect to any
employee benefit plan listed on Schedule 4.20.
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(e) The Sellers have made available to the Buyer full and complete
copies of all Pension Plans, including all amendments thereto and summary plan
descriptions as filed pursuant to ERISA with respect to the Pension Plans.
4.21 INSIDER INTERESTS. Except as set forth in Schedule 4.21, no officer,
-------------
director or holder of more than 5% of the common stock of a Seller, the
Benchmark Sub, the Wincup Sub or Affiliate of a Seller, the Benchmark Sub or the
Wincup Sub (i) competes with, is involved with or has any direct or indirect
interest in any business entity which competes with the business of the Winkler
Businesses, or (ii) has any interest, direct or indirect, in any property, real
or personal, tangible or intangible, including, without limitation, Intellectual
Property, used in or pertaining to the business of the Winkler Businesses, the
Benchmark Sub or the Wincup Sub, except as a stockholder or employee of the
Sellers.
4.22 CERTAIN PRACTICES. To the knowledge of each Seller, no shareholder,
director, officer, employee or agent of a Seller, the Benchmark Sub or the
Wincup Sub has, directly or indirectly, made, or agreed to make, any improper or
illegal payment, gift or political contribution to, or taken any other improper
or illegal action, for the benefit of any customer, supplier, governmental
employee or other person who is or may be in a position to assist or hinder the
business of the Winkler Businesses.
4.23 FINDERS. Except for Alex. Brown & Sons Incorporated, no broker,
finder or investment banker is entitled to any fee or
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commission from a Seller for services rendered on behalf of a Seller in
connection with the transactions contemplated by this Agreement. Notwithstanding
the provisions of Article XI, the Sellers are solely responsible for the fees
and expenses of Alex. Brown & Sons Incorporated.
4.24 FULL DISCLOSURE. Neither this Agreement, nor the financial statements
for the Sellers, the Benchmark Sub, the Wincup Sub and the Winkler Businesses
described in Section 4.9, contains an untrue statement of a material fact. To
the knowledge of each Seller, no event has occurred or condition exists which,
with the giving of notice or the passage of time, can reasonably be expected to
have a material adverse effect on the Purchased Assets or the earnings,
financial condition, operations or prospects of the business of the Winkler
Businesses.
4.25 PERFORMANCE ALLOWANCES. Schedule 4.25 contains a complete list of all
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performance allowances and volume incentive payments due from either Seller, the
Benchmark Sub or the Wincup Sub as of the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers the following:
5.1 ORGANIZATION; QUALIFICATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia and has corporate power and authority to own all of its properties and
assets and to carry on
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its business as it is presently being conducted. Buyer is duly qualified and in
good standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary except where failure to so qualify has no material
adverse effect on Buyer's financial condition. Buyer has heretofore delivered to
the Sellers complete and correct copies of its Articles of Incorporation and
Bylaws, as currently in effect.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has corporate power and
authority to execute and deliver this Agreement and the Related Agreements to
which it is to be a party and to consummate the transactions contemplated hereby
and thereby. No corporate proceedings on the part of Buyer are necessary with
respect to the execution and delivery of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and Related Agreements to which it is a
party, when executed and delivered by Buyer, will constitute valid and binding
obligations of Buyer, enforceable in accordance with their terms except as the
same may be limited by (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
or (ii) general principles of equity, whether considered in a proceeding in
equity or at law.
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5.3 CONSENTS AND APPROVALS. Except as set forth in Schedule 5.3, there is
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no requirement applicable to Buyer to make any filing with, or to obtain any
permit, authorization, consent or approval of any Person as a condition to the
consummation of the transactions contemplated by this Agreement or conducting
the business of the Winkler Businesses under new ownership (other than as may be
required by the HSR Act and any applicable "bulk sales" law).
5.4 NON-CONTRAVENTION. The execution and delivery by Buyer of this
Agreement with the Related Agreements to which it is a party does not, and the
consummation of the transactions contemplated hereby and thereby, will not (i)
violate or result in a breach of any provision of the Articles of Incorporation
or Bylaws of Buyer, (ii) result in a default, or give rise to any right of
termination, modification or acceleration, or the imposition of any Encumbrance
(whether immediately before or after the giving of notice or the passage of
time) under the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation to which
Buyer is a party or by which Buyer or the business conducted by it may be bound,
or (iii) violate any law, regulation, judgment, order or decree applicable to
Buyer or to the businesses conducted by it.
5.5 LITIGATION. There are no actions, suits, claims, investigations or
proceedings (legal, administrative or arbitrative) pending or, to the knowledge
of Buyer, threatened
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against Buyer, whether at law or in equity and whether civil or criminal in
nature, before any court, governmental body, commission, agency or arbitrator,
domestic or foreign, which seek specifically to prevent, restrict or delay
consummation of the transactions contemplated hereby or fulfillment of any of
the conditions of this Agreement.
5.6 FINDERS. No broker, finder or investment banker is entitled to any
fee or commission from Buyer in connection with the transactions contemplated by
this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 CONDUCT OF BUSINESS OF THE WINKLER BUSINESSES. From the date hereof
until the Closing, each Seller will and will cause the Benchmark Sub and the
Wincup Sub to (i) conduct the business of the Winkler Businesses only in the
ordinary and usual course and in a manner consistent with past practices, (ii)
maintain in good repair, at its expense, all of the Equipment; and (iii) use its
best efforts to preserve its relationships with licensors, suppliers, dealers,
customers and others having business relationships with the Winkler Businesses,
the Benchmark Sub and the Wincup Sub. Each Seller's management will meet with
Buyer on a regular and frequent basis to discuss the general status of the
ongoing operations of the Winkler Businesses, the Benchmark Sub and the Wincup
Sub and any problems relating to the conduct of its business. Each Seller will
notify Buyer (w) of any emergency or change in the normal conduct of the
business or
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operations of the Winkler Businesses, the Benchmark Sub and the Wincup Sub, (x)
of the threat or initiation of any litigation against a Seller, the Benchmark
Sub or the Wincup Sub which relates to the business or operations of the Winkler
Businesses, the Benchmark Sub or the Wincup Sub, (y) of the initiation of any
investigation of the Winkler Businesses, the Benchmark Sub or the Wincup Sub or
its business by any party, whether private or governmental, and (z) of any
budget revisions approved by the Board of Directors of a Seller, the Benchmark
Sub or the Wincup Sub involving any of the Purchased Assets, the Benchmark Sub,
the Wincup Sub, or the business of the Winkler Businesses and will keep Buyer
fully informed of developments with respect to such events and afford Buyer's
representatives access to all materials in its possession relating thereto.
6.2 FORBEARANCES BY SELLERS. Except as contemplated by this Agreement,
each Seller will not, and will not permit the Benchmark Sub or the Wincup Sub
to, from the date hereof until the Closing, without the written consent of
Buyer:
(i) sell, dispose of, transfer or encumber any of the Purchased
Assets except for Inventory in the ordinary course of business;
(ii) mortgage, pledge or otherwise encumber any of the Purchased
Assets;
(iii) amend, terminate, cancel or assign any Material Contract
or Lease;
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(iv) make any commitments for capital expenditures related to
the Winkler Businesses, the Benchmark Sub or the Wincup Sub except in the
normal course of business;
(v) increase in any manner the compensation of any Transferred
Employee, pay or agree to pay any pension or retirement benefit not
required by an existing plan or agreement to any Transferred Employee, or
enter into or amend any employment agreement or any incentive compensation,
profit sharing, savings, consulting, deferred compensation, retirement,
pension or other benefit plan or arrangement with or for the benefit of any
Transferred Employee or other person on behalf of the Winkler Businesses;
(vi) alter in any way the manner in which it has regularly and
customarily maintained the books of account and records of the Winkler
Businesses, the Benchmark Sub or the Wincup Sub;
(vii) enter into any contract which will require an expenditure
of more than $25,000 by the Winkler Businesses, the Benchmark Sub or the
Wincup Sub or cannot be cancelled by the Winkler Businesses, the Benchmark
Sub or the Wincup Sub within one year of the date it is executed;
(viii) declare, set aside or pay any dividend in cash or
property with respect to the capital stock of Benchmark Sub or the Wincup
Sub;
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(ix) split, combine or otherwise similarly change the capital
stock of Benchmark Sub or the Wincup Sub, or redeem any of the capital
stock of the Benchmark Sub or the Wincup Sub;
(x) authorize the creation or issuance of, or issue or sell any
shares of the capital stock of Benchmark Sub or the Wincup Sub or any
securities or obligations convertible into or exchangeable for, or giving
any person any right to acquire from it, any shares of the capital stock of
Benchmark Sub or the Wincup Sub;
(xi) enter into any agreement to do any of the things described
in clauses (i) through (x) above.
6.3 NEGOTIATIONS WITH OTHERS. From the date hereof until the Closing, no
Seller or its Affiliate will, directly or indirectly, without the written
consent of Buyer, initiate discussions or engage in negotiations with any
corporation, partnership, person or entity, other than Buyer, concerning any
proposal regarding the acquisition, other than in the ordinary course of
business, of part or all of the Purchased Assets.
6.4 INVESTIGATION OF WINKLER BUSINESSES AND PROPERTIES. From the date
hereof until the Closing, each Seller will and will cause the Benchmark Sub and
the Wincup Sub to, afford Buyer and its authorized representatives, including
its attorneys, accountants, financial advisors and engineers, such access,
during normal business hours, to its books and records, personnel, plants,
offices, warehouses and other facilities as
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Buyer may reasonably request to enable it to make a full investigation of the
Purchased Assets and the business of the Winkler Businesses. Each Seller will
also cause its employees and advisors, including, without limitation, its
accountants and financial advisors, to furnish to Buyer and its authorized
representatives such financial data and other information, as Buyer may
reasonably request to make such investigation. Such investigations shall be
conducted in such a manner as to minimize interference with the conduct of the
Sellers' operations. Without limiting the foregoing, the Sellers acknowledge
that, as part of Buyer's investigation of the Purchased Assets, the Benchmark
Sub, the Wincup Sub and the Winkler Businesses, Buyer intends to do the
following:
(a) conduct an engineering review of the Winkler Businesses'
facilities and equipment, including the condition of machinery and equipment,
the level of repair and the ability to be repaired of the machinery and
equipment, the infrastructure including the roofs and other general maintenance
requirements, technological capability, operating efficiency, and general
compliance with good manufacturing practices and regulatory requirements;
(b) conduct environmental, health and safety audits of the Winkler
Businesses' facilities and equipment and operations;
(c) conduct an investigation and evaluation of the status of
employment relations at the Winkler Businesses and assessment of the current
sales, marketing and operations
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management team in order to determine the need for and level of additional
support required from Buyer and its Affiliates;
(d) conduct an investigation of the Mexican operations and their
ongoing ability to contribute to the financial success of the Winkler
Businesses; and
(e) with the consent and participation of the Sellers, which consent
shall not be unreasonably withheld, conduct discussions with customers of the
Winkler Businesses regarding the transition from the Sellers' ownership to
Buyer's ownership.
6.5 CONFIDENTIALITY. The information which the authorized representatives
of the parties acquire from making their inspections of the facilities and the
books and records of the other parties, and the information they acquire from
meetings with the employees and advisors of the other parties pursuant to the
provisions of Section 6.4, shall be subject to the Confidentiality Agreement.
6.6 TAXES AND RECORDING FEES. All sales and transfer taxes and fees
(including filing fees, if any) incurred in connection with this Agreement and
the transactions contemplated hereby will be borne by the Sellers. Buyer will
file all necessary tax returns and other documents required to be filed with
respect to all such taxes and filing fees. The Sellers will cooperate with
Buyer to the extent necessary to enable it to make such filings and join in the
execution of any tax returns or other documents as may be necessary to enable
Buyer to comply with the provisions of this Section.
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6.7 PRORATION OF RENT, UTILITY CHARGES AND OTHER PAYMENTS. Any installment
of rent due on any Assumed Lease to which a Seller is a party and any utility or
similar charge payable with respect to the premises under such Assumed Lease for
the period in which the Closing occurs shall be prorated, based on the actual
number of days applicable to pre-Closing and post-Closing occupancy or use.
6.8 ALLOCATION OF PURCHASE PRICE. The values which shall be assigned to
the various assets which constitute the Purchased Assets shall be agreed upon
within 60 days after Closing. The Sellers and Buyer agree that (i) the gross
allocation of values shall be in accordance with Schedule 6.8, (ii) the specific
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allocation of the Purchase Price among the various Purchased Assets will be
separately established as a result of good faith bargaining, and (iii) in
reporting the transactions contemplated by this Agreement to the Internal
Revenue Service, as is required by Section 1060 of the Internal Revenue Code,
they will use such specific allocations and cooperate with each other in meeting
the requirements of the Internal Revenue Code and the regulations promulgated
thereunder.
6.9 ACCOUNTS RECEIVABLE. Buyer will afford each Seller access to such of
the records transferred to it as shall be necessary to allow such Seller to
collect any receivable arising prior to the Closing, but Buyer shall not
otherwise be responsible for collecting or seeking to collect any such
receivables. In collecting any such receivables arising prior to Closing, each
Seller shall only use its historical collection
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practices in seeking to collect such accounts and shall not bring any legal
proceedings to collect receivables from ongoing customers of the Winkler
Businesses without notice to and consultation with Buyer. If a debtor on any
such receivable, who is also a debtor to Buyer for debts incurred at or after
the Closing shall make any remittance on amounts due in respect of the business
of the Winkler Businesses, whether the debt was incurred prior to or subsequent
to the Closing, such remittance shall be deemed to be on account of the earliest
unpaid invoice unless the debtor specifically designates or otherwise indicates
to the contrary, in which case the payment shall be applied in accordance with
such designation. If payments on any such account are undesignated, then Buyer
shall be entitled to inquire of such customer as to which invoices such payment
should be applied. After the Closing the Sellers will promptly transfer and
deliver (properly endorsed, if necessary) to Buyer any checks or other payments
and deductions (including the cash equivalents of credits due from vendors,
suppliers or shippers) which it receives on account of goods sold or shipped by
Buyer and Buyer shall promptly transfer and deliver (properly endorsed, if
necessary) to the Sellers any checks or other payments (including the cash
equivalents of credits due from vendors, suppliers or shippers) which it
receives on account of goods sold or shipped by the Sellers.
6.10 ACCOUNTS PAYABLE. Receivables collected by the Sellers shall be
applied to Sellers' outstanding accounts payable. If,
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within ninety (90) days of Closing, the accounts payable of the Winkler
Businesses have not been paid in full, then Buyer shall have the right to pay
directly the amounts required for satisfaction of such accounts payable to those
Persons to whom payment is due. Sellers shall comply with all of the terms of
the Trust Agreement.
6.11 BULK SALES LAWS. Notwithstanding the provisions of Article XI, each
Seller will severally indemnify and hold harmless Buyer from any and all claims
made by creditors of that Seller relating to provisions of the "bulk sales laws"
of any state or other jurisdiction which may be applicable to the transactions
contemplated hereby and from all costs (including reasonable attorney's fees)
incurred in the defense of any claims made under such laws.
6.12 MAIL RECEIVED AFTER CLOSING. Following the Closing Buyer may open all
mail, telegrams and other communications and packages they receive which is
addressed to the Sellers, the Benchmark Sub or the Wincup Sub and deal with the
content thereof in their discretion to the extent that the content thereof
relates to the Purchased Assets or the Assumed Liabilities. Buyer agrees to
deliver to each Seller all other such material they receive which is addressed
to a Seller, the Benchmark Sub,
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the Wincup Sub, or Buyer and does not relate to such assets or liabilities. Each
Seller agrees to deliver to Buyer all material they receive which is addressed
to a Seller, the Benchmark Sub, the Wincup Sub or Buyer and relates to the
Purchased Assets or the Assumed Liabilities.
6.13 RETENTION OF BOOKS AND RECORDS. For a period of seven years after the
Closing, the parties shall retain their books or records relating to the
Purchase Assets or the Assumed Liabilities. After such seven-year period, any
party shall provide not less than 45 nor more than 90 days prior written notice
to the other parties of any proposed destruction or disposition of any such
books and records. If the recipient of such notice desires to obtain any of the
documents to be destroyed or disposed of, it may do so by notifying the sender
of such notice, in writing, at any time prior to the scheduled date for such
destruction or disposal. The notice must specify the documents which the
requesting party wishes to obtain. The parties shall then promptly arrange for
the delivery of such documents. All out-of-pocket costs associated with the
delivery of the requested documents shall be paid by the requesting party.
6.14 INTENTIONALLY DELETED.
6.15 EXPENSES. Except as otherwise provided in this Agreement, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and expenses.
6.16 PUBLIC ANNOUNCEMENTS. The parties will consult with one another
before issuing any press releases or otherwise making any public statements or
statements to customers, suppliers or others with respect to this Agreement and
the transactions
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contemplated hereby and will not issue any such press release or make any such
public statement without the consent of the others unless such action is
required by law or by the NYSE. Buyer shall have the right to approve the form
and substance of any such press release or public statement issued by the
Sellers, which consent shall not be unreasonably withheld or delayed.
6.17 SUBSEQUENT EVENTS. If any event shall occur prior to the Closing
which, had it occurred prior to the execution of this Agreement, should have
been disclosed by a party to this Agreement in a representation and warranty or
otherwise, then, upon the happening of such event, such party shall promptly
disclose the happening of such event to the other parties hereto.
6.18 EFFORTS TO CONSUMMATE. Subject to the terms and conditions herein
provided, each of the parties agrees to use its reasonable best efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate, as promptly as practicable, the
transactions contemplated hereby, including, but not limited to, the obtaining
of all necessary consents, approvals or waivers of third parties, whether
governmental or private, required of it to enable it to comply with the
conditions precedent to consummating the transactions contemplated by this
Agreement. Each party agrees to cooperate fully with the other parties in
assisting them to comply with the provisions of this Section and the Sellers
agree to take such steps as may be necessary to remove
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any Encumbrances (other than Permitted Exceptions) which affect the Purchased
Assets.
6.19 ENVIRONMENTAL, HEALTH, SAFETY AND PRODUCT COMPLIANCE MATTERS. Buyer
or its representatives have conducted environmental, occupational health, safety
and product compliance audits of the U.S. Facilities, the Mexican Facilities and
the Purchased Assets, as and to the extent Buyer deemed appropriate (the
"Environmental Audits"). Buyer has provided a copy of such Environmental Audits
to the Sellers after completion of same, together with a statement from Buyer
(the "Remediation Statement") indicating those matters set forth in such audits
and Schedule 4.6 that Buyer, in the exercise of its reasonable judgment, deems
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material. A copy of the Remediation Statement is attached hereto as Schedule
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6.19. Notwithstanding the foregoing, Issue 11 of the Remediation Statement
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relating to the sprinkler systems shall not be deemed material, and Sellers
shall not be required to perform any remediation or other action with respect to
such item. In addition, the Remediation Statement indicates which of such
matters, in the reasonable opinion of Buyer or its representatives, can be
practically remediated prior to Closing (the "Pre-Closing Remediation Matters").
Except for the matters indicated on the Remediation Statement as being "Post
Closing Remediation Matters" (as defined below), the Sellers, at their sole
cost, shall remedy all of the Pre-Closing Remediation Matters prior to Closing.
All such remediation performed by the Sellers shall be conducted in accordance
with applicable law and
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a plan and schedule prepared by the Sellers and approved by Buyer and shall be
completed in accordance with such approved plan and schedule. At such time as
the Sellers believe they have completed such remediation in accordance with the
approved plan therefor, they shall notify Buyer. If Buyer believes that such
remediation has not been completed in accordance with the approved plan therefor
or the requirements of applicable law, then Buyer shall object to such work in
writing within 30 days after such notice of completion from the Sellers. The
Sellers shall then correct or complete the incorrect or incomplete portion of
the remediation work specified in Buyer's objection notice within a reasonable
time after receipt of such objection notice. If Buyer fails to object to the
performance of such remediation within thirty (30) days after such notice from
the Sellers, then Buyer shall be deemed to have approved such remediation work.
Notwithstanding the foregoing, Sellers shall have the right and the obligation,
at Seller's sole expense, to complete remediation of those matters indicated on
the Remediation Statement as being Post-Closing Remediation Matters (the "Post-
Closing Remediation Matters"), as soon as reasonably possible after Closing and
in any event within 90 days after the Closing Date. If Sellers fail to complete
remediation of the Post-Closing Matters in accordance with the requirements of
the Remediation Statement and the terms of this Section within such period, then
Buyer shall have the right, at the cost and expense of Sellers, to remediate
such Post-Closing Remediation Matters.
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Buyer shall have the right, at the cost and expense of the Sellers, to remediate
any Pre-Closing Remediation Matters which Sellers fail to remediate prior to
Closing, and any Post-Closing Remediation Matters which Sellers fail to
remediate within the time periods specified above, and the Sellers shall
reimburse Buyer, within fifteen (15) days after demand therefor, for all costs
reasonably incurred by Buyer in completing such remediation, and all fines or
other expenses incurred by Buyer as a result of the Sellers failure to complete
such remediation. In addition, Buyer shall have the right to offset all such
reasonable costs and expenses from any amounts due from Buyer to the Sellers
under this Agreement. No provision contained in this Section 6.19, shall limit
Buyer's ability to make claims or seek indemnification as otherwise provided
pursuant to the terms of this Agreement.
6.20 FURTHER ASSURANCES. Each Seller will use reasonable efforts to
implement the provisions of this Agreement, and for such purpose, at the request
of Buyer will, at or after the Closing, without further consideration, promptly
execute and deliver such additional documents as Buyer may reasonably deem
necessary or desirable in order to consummate more effectively the transactions
contemplated hereby and to vest in Buyer title to the Purchased Assets free and
clear of any Encumbrances.
6.21 ADVICE TO OTHERS. The Sellers and Buyer will promptly advise each
other if they become aware of any information which
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is or may reasonably be expected to be inconsistent with the representations and
warranties made by the other herein.
6.22 MOVEMENT OF EQUIPMENT AND INVENTORY. Prior to Closing, at the
Sellers' expense, the Sellers will (a) move to and, if necessary, install at the
U. S. Facility designated by Buyer all Equipment located in the Distribution
Centers or other locations, (b) to the extent set forth in the Transition
Services Agreement, move certain Inventory located in the Distribution Centers
and elsewhere; and (c) within thirty (30) days after the Closing Date, remove
and dispose of "obsolete" and "damaged" inventory (as defined in Section 2.5)
from the following sites: Los Angeles, California, Houston, Texas, Stone
Mountain, Georgia, Nashville, Tennessee, the Mexican Facilities as listed on
Schedule 4.12 and Griffin, Georgia.
6.23 PERFORMANCE ALLOWANCES. On or before Closing, each Seller will
pay (on a pro-rata basis where appropriate) all performance allowances and
volume incentives associated with the Winkler Business and payable by it as of
the Closing Date.
6.24 ESTABLISHMENT OF SUBSIDIARY. Prior to Closing, Benchmark shall
establish a newly-formed wholly-owned subsidiary of Benchmark (the "Benchmark
Sub") and Wincup shall establish a newly-formed wholly-owned subsidiary of
Wincup (the "Wincup Sub"), pursuant to organizational documents approved by
Buyer, and shall contribute to the Benchmark Sub and Wincup shall contribute to
the Wincup Sub the tangible personal property owned by Benchmark and Wincup,
respectively, which is included in the
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Purchased Assets and located in the State of California (but no other property).
Such contribution shall be made pursuant to contribution agreements in form and
substance satisfactory to Buyer. In no event shall either Benchmark or Wincup
contribute to, or permit the Benchmark Sub or the Wincup Sub to assume, any
liabilities of Benchmark or Wincup. All Equipment, Inventory, Consumables,
Intellectual Property and other personal property contributed by the Sellers to
the Benchmark Sub and the Wincup Sub shall nevertheless be deemed included
within the definitions of "Equipment", "Inventory", "Consumables" and
"Intellectual Property" for the purposes of the representations made by the
Sellers hereunder, the determination of the Current Asset Amount, the provisions
of Article VI hereof, and any other relevant provisions of this Agreement.
6.25 SECTION 338(h)(10) ELECTION. (a) Buyer and Sellers agree to make
timely, effective and irrevocable Section 338(h)(10) Elections as set forth in
this Agreement, as well as any Section 338(h)(10) Elections (or corresponding or
similar elections) for state, local or foreign purposes, and to file such
elections in accordance with applicable regulations. The provisions of this
Agreement shall apply to any such elections that Buyer makes for state, local or
foreign tax purposes.
(b) Sellers represent that each of them will file a consolidated
federal income tax return with the Benchmark Sub and the Wincup Sub for the tax
year beginning on January 1, 1995 and ending on and including the Closing Date,
and that the Sellers
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are eligible to make an election under Section 338(h)(10) of the Internal
Revenue Code (and any comparable election under state, local or foreign tax law)
with respect to the Benchmark Sub and the Wincup Sub. Buyer and Sellers shall
make or cause to be made the Section 338(h)(10) Elections (and any comparable
election under state, local or foreign tax law) and shall take no position
contrary thereto unless required to do so pursuant to a final determination by
any taxing authority or judicial proceeding.
(c) Sellers shall pay and indemnify and hold Buyer and the
Benchmark Sub and the Wincup Sub harmless from any and all Sellers Tax
Liabilities as defined below in Section 6.26. The indemnification hereunder
shall be without limitation or restriction, notwithstanding any other provision
of this Agreement, including, but not limited to, the limitations set forth
under Section 11.4, and the survival provisions contained in Section 11.5.
(d) Sellers shall be responsible for preparing and filing all
Section 338 Forms in accordance with the terms of this Agreement. Sellers shall
furnish copies of the Section 338 Forms to Buyer for Buyer's approval at least
25 business days before the date such Section 338 Forms are required to be
filed. Buyer shall execute and deliver to Sellers such documents or forms as
Sellers reasonably request to complete the Section 338 Forms, properly and in a
timely fashion.
(e) Buyer and Sellers agree that the deemed sale price of the assets
determined in accordance with Treasury Regulation
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Section 1.338(h)(10)-1(f) will be determined within 60 days after Closing
pursuant to Section 6.8 and the parties will file the forms required under the
Internal Revenue Code and the regulations thereunder in a manner substantially
consistent with the allocation of values pursuant to such Section.
6.26 ALLOCATION OF TAXES. Sellers shall be responsible for and pay (i)
all Taxes resulting from Pre-Closing Operations; (ii) any liability imposed on
the Benchmark Sub or the Wincup Sub pursuant to Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law) for Taxes
incurred by any Person, other than the Benchmark Sub or the Wincup Sub, for any
taxable period ending after the Closing Date and which includes the Closing
Date, and Sellers agree to hold Buyer, the Benchmark Sub and the Wincup Sub
harmless from any liability for such Taxes or other charges (including
reasonable attorneys' and accountants' fees) arising therefrom; and (iii) any
Taxes resulting from the incorporation of Benchmark Sub or the Wincup Sub, the
transfer of assets thereto and/or the sale or exchange of the stock thereof,
including but not limited to any Taxes attributable to the Section 338(h)(10)
Election, or any similar provision of state, local or foreign law (collectively,
"Sellers Tax Liabilities").
For purposes of this Section 6.26, Sellers Tax Liabilities shall not
include any Taxes resulting from events, elections or transactions occurring at
the direction or under the control of Buyer on the Closing Date, including
sales, exchanges,
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liquidations, or dispositions. Notwithstanding the foregoing sentence, Sellers
Tax Liabilities shall include the following:
(i) All Taxes resulting from any Section 338(h)(10) Election and
all similar elections made under state, local or other law.
(ii) All Taxes relating to operation of the Sellers, the Benchmark
Sub or the Wincup Sub in the ordinary course of their business prior to
and including the Closing.
(iii) Any item of Tax, including the Tax effect of any income, gain,
recapture of deduction or credit, or any similar item with respect to the
Sellers, the Benchmark Sub or the Wincup Sub resulting from any adjustment
in any period ending on or before the Closing necessary to implement a
change of accounting made in any taxable period ending on or before the
Closing.
(iv) Any item of Tax, including the Tax effect of any income, gain,
recapture of deduction or credit, or any similar item with respect to the
Sellers, the Benchmark Sub or the Wincup Sub resulting from the
restoration of any deferred income or gain, the triggering of any credit
or recapture item, or any similar increase in Tax or inclusion in income
subject to tax under applicable law in any period ending on or before the
Closing, including without limitation the federal consolidated return
regulations and similar provisions of state, local, or foreign tax laws by
reason of any transaction contemplated in this Agreement.
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(v) Any item of Tax the liability for which properly accrues on or
before the Closing, regardless of when such tax is properly due and
payable, including without limitation real estate and tangible personal
property taxes.
ARTICLE VII
EMPLOYEES AND EMPLOYEE MATTERS
7.1 TRANSFERRED EMPLOYEES. The Sellers have previously delivered to Buyer
a list of all of the employees of the Sellers who are employed by the Winkler
Businesses as of the most recent date for which such information is available.
Each Seller has or will afford Buyer's representatives an opportunity, prior to
the Closing, to offer employment with Buyer, after the Closing, to all of such
employees, whether salaried or hourly employees and whether or not they are
covered by one or more of the employment agreement(s) listed in Schedule 4.19,
-------------
except for those employees that Seller desires to retain who are listed on
Schedule 7.1. Such employees who elect to become employees of Buyer are
- ------------
hereinafter referred to as "Transferred Employees" and shall be deemed to have
become employees of Buyer as of the time the Closing becomes effective.
Notwithstanding the foregoing, Buyer shall have no obligation to offer
employment to any particular employees employed by the Winkler Businesses or any
particular number of such employees. For clarification purposes, the employees
of the contractors who operate the Mexican Facilities are not employees of the
Sellers and Buyer will not offer
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employment to, or be liable for employment of, any of such employees.
7.2 EMPLOYEE BENEFIT PLANS.
(a) Except as provided in Section 7.2(b), Buyer will permit each
salaried employee and each hourly employee of the Winkler Businesses who becomes
a Transferred Employee to participate, to the extent appropriate, in the
employee benefit plans and programs regularly made available to the employees of
Buyer. Buyer will treat service by any Transferred Employee prior to the
Closing as service with Buyer for purposes of vesting and participating in (but
not for the purpose of the accrual of benefits under) such plans and programs.
The Transferred Employees' accrual of benefits under plans and programs covering
employees of Buyer shall be based solely on their service with Buyer after the
Closing.
(b) Until January 1, 1996, Buyer will continue the same health
insurance coverage as currently provided by Sellers for the Transferred
Employees who are hourly employees. As of January 1, 1996, Buyer will permit
each Transferred Employee who is an hourly employee to participate in the health
plan regularly made available to the employees of Buyer.
(c) Except as provided in Section 7.2(d), no assets or liabilities
with respect to Transferred Employees shall be transferred, as a result of this
Agreement, from any of the Sellers' employee benefit plans applicable to the
employees of the Winkler Businesses to any plan maintained or established by
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Buyer, and each Seller shall retain all obligations to fund or otherwise provide
benefits accrued by Transferred Employees under its benefit plans prior to the
Closing. Benefits under the plans retained by the Sellers shall be payable to
the Transferred Employees pursuant to the terms of such plans and shall
constitute the only benefits to which the Transferred Employees are entitled
with respect to their service with the Sellers prior to the Closing.
(d) Assets of the Benchmark Corporation of Delaware 401(k) Savings
and Profit Sharing Plan (the "Benchmark Plan") equal to the account balances of
the Transferred Employees under the Benchmark Plan shall be transferred to the
James River Corporation of Virginia StockPlus Investment Plan (the "StockPlus
Plan") as soon as practicable after the Closing Date. Unless made sooner, the
transfer shall be made as of the last business day of the first full calendar
quarter ending after the Closing Date. The transfer shall be made solely in
cash. Any outstanding balances of plan loans to Transferred Employees shall be
transferred with the underlying accounts. The account balances of the
Transferred Employees shall be valued as of the date on which the transfer is
made. The account balances of Transferred Employees in the Benchmark Plan shall
share in the earnings, gains and losses, appreciation and depreciation of the
investment funds in which the accounts are invested for the period between the
Closing Date and the date on which the transfer is made. With respect to the
account balances of
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Transferred Employees under the Benchmark Plan that are transferred to the
StockPlus Plan, the StockPlus Plan shall specifically preserve each "section
411(d)(6) protected benefit" that is provided under the Benchmark Plan as of the
date of which such account balances are transferred. The term "section 411(d)(6)
protected benefit" shall have the meaning provided under Section 411(d)(6) of
the Internal Revenue Code and applicable Treasury Department regulations.
Transferred Employees shall not accrue additional benefits after the Closing
Date under the Benchmark Plan.
(e) The account balances to be credited under the StockPlus Plan for
Transferred Employees as of the transfer date shall not be less than the account
balances of the Transferred Employees under the Benchmark Plan as of the date on
which the transfer is made. Effective on the date of the transfer of Benchmark
Plan assets, (i) the Buyer and the StockPlus Plan shall assume all liabilities
in connection with the account balances of Transferred Employees under the
Benchmark Plan, and (ii) the Sellers and the Benchmark Plan shall have no
further liability with respect to the account balances of Transferred Employees.
The Sellers and its Affiliates shall have no liability with respect to the
StockPlus Plan. The Buyer shall have no liability whatsoever with respect to the
Benchmark Plan.
7.3 WORKER'S COMPENSATION. Buyer will assume the responsibility for all
worker's compensation claims made by Transferred Employees and third parties
arising from events
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occurring after the Closing. Each Seller will retain the responsibility for all
worker's compensation claims made by its employees or former employees (whether
or not Transferred Employees) or third parties that arise from events that occur
before the Closing or events otherwise occurring while the employees are
employed by such Seller.
7.4 VACATION PAY. Buyer will not assume any liability for unpaid vacation
pay, sick pay or holiday pay accrued by Transferred Employees prior to the
Closing except as set forth in Section 2.3.
7.5 OTHER LIABILITIES RELATING TO EMPLOYEES. Except to the extent
specifically addressed in this Article VII, Buyer will not assume any
obligations or liabilities with respect to (i) any Pension Plan, Welfare Plan or
other employee benefit plan or program relating to any present, former or
retired employees of the Sellers or (ii) any severance or separation obligation
which may result from the consummation of the transactions contemplated by this
Agreement.
7.6 ADMINISTRATION. Buyer and each Seller will each make its appropriate
employees available to the other at such reasonable times as may be necessary
for the proper administration by the other of any and all matters relating to
employee benefits and worker's compensation claims affecting Transferred
Employees. If, as a result of the transactions contemplated by this Agreement,
reports are required to be filed
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with respect to any of a Seller's benefit plans, such Seller will file such
reports.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject, to the extent not waived, to the following
conditions.
8.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Sellers contained in Article IV of this Agreement with respect
to the Benchmark Sub and the Wincup Sub shall be true and correct in all
material respects as of the date of Closing. Each of the other representations
and warranties of the Sellers contained in Article IV of this Agreement, not
relevant to the Benchmark Sub and the Wincup Sub, shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing,
and each Seller shall have delivered to Buyer a certificate to that effect
signed by its Chairman or President.
8.2 PERFORMANCE OF THIS AGREEMENT. Each Seller shall have complied in all
material respects with all of its obligations under this Agreement (including,
without limitation, the completion of all remedial actions required to be taken
by the Sellers prior to Closing under the terms of Section 6.19) and shall have
delivered to Buyer a certificate to that effect signed by its Chairman or
President.
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8.3 CORPORATE AUTHORIZATION. All corporate action required to be taken by
each Seller, Benchmark Sub and Wincup Sub (including, if necessary, receiving
the approval of its shareholders) in connection with the transactions
contemplated by this Agreement shall have been taken, all documents incident
thereto shall be reasonably satisfactory in substance and form to Buyer and
Buyer shall have received such originals or copies of such documents as it may
reasonably request.
8.4 CONSENTS AND APPROVALS. The consents and approvals of all Persons
which (i) each Seller must obtain to transfer the Purchased Assets to Buyer free
and clear of Encumbrances, including, without limitation, the consent of all
parties to the Assumed Material Contracts and the Assumed Leases whose consent
to such transfer is necessary under the terms thereof, and (ii) Buyer must
obtain in order to be able to conduct the business of the Winkler Businesses in
the ordinary course of business and in accordance with the historical practice
of the Winkler Businesses, shall have been obtained and all waiting periods
specified by law with respect thereto have passed, including all waiting periods
under the HSR Act.
8.5 INJUNCTION, LITIGATION, ETC. No order of any court or governmental
agency shall be in effect which restrains or prohibits the consummation of the
transactions contemplated by this Agreement, or which would materially limit or
affect the ability of Buyer to own or control the Purchased Assets or to operate
the business of the Winkler Businesses, and there shall
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not have been threatened, nor shall there be pending, any action or proceeding
by or before any such court or governmental agency seeking to prohibit or delay
or challenging the validity of the transactions contemplated by this Agreement.
8.6 LEGISLATION. No statute, rule or regulation shall have been proposed
or enacted which prohibits or might prohibit, restrict or delay the consummation
of the transactions contemplated by this Agreement.
8.7 ESTOPPEL CERTIFICATES, ETC. The Sellers shall have obtained executed
estoppel certificates, satisfactory in form and substance to Buyer and such
other information with respect to the Assumed Leases as Buyer may reasonably
request.
8.8 OPINION OF COUNSEL FOR SELLERS. Buyer shall have received an opinion
from Duane, Morris & Heckscher, Counsel for the Sellers, in substantially the
form attached hereto as Exhibit D.
---------
8.9 ABSENCE OF CHANGES. Since the date of this Agreement, there shall
have been no material adverse change in the financial condition, results of
operations, liabilities or prospects of the Winkler Businesses, and each Seller
shall have delivered to Buyer a certificate, signed by the President or
Chairman, dated as of the Closing, to the foregoing effect.
8.10 CONTINUATION OF MEXICAN OPERATIONS. Buyer shall have obtained
agreements, satisfactory to Buyer in the exercise of its reasonable judgment,
assuring Buyer that it will be able to continue the Mexican operations of the
Winkler Businesses on
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substantially the same terms as such operations currently exist, and that any
agreements related to such Mexican operations shall be assignable to Buyer
without change in the terms thereof and shall remain in full force and effect,
notwithstanding such assignment, for the balance of the term of such agreements.
In addition, Buyer shall have obtained assurances reasonably satisfactory to it
that (i) it will not be liable for any employee-related liabilities for the
employees of the Mexican Facilities, upon their termination or otherwise, in
excess of $10,000 in the aggregate for all employees at each of the Mexican
Facilities, (ii) the Equipment and Inventory located in the Mexican Facilities
has been properly imported in accordance with Mexican custom laws and under a
current and valid Maquiladora program held by the importer of record, (iii) the
Equipment located in the Mexican Facilities is the object of an equipment use
agreement in the United States by and between Wincup Holdings, Inc., and Top
Performance Industries, Inc., and of a Commodatum Agreement in Mexico by and
between Top Performance Industries, Inc., and Mexam de Anahuac, S.A. de C.V.;
and (iv) the Mexican commodatum agreement has in fact been duly recorded in the
Public Registry of Property of the Domicile of the subcontractor in the State of
Tamaulipas, Mexico.
8.11 ASSURANCES WITH RESPECT TO CLAIMS OF CREDITORS. Buyer shall have
obtained agreements, satisfactory to Buyer in the exercise of its reasonable
judgment, that it will not be liable for debts of the Sellers, the Benchmark Sub
or the Wincup Sub
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(other than Assumed Liabilities) or subject to claims arising from such debts.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations of the Sellers to consummate the transactions contemplated
by this Agreement shall be subject, to the extent not waived, to the following
conditions.
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Buyer contained in Article V of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing, and
Buyer shall have delivered to the Sellers a certificate to that effect signed by
its Chairman or President.
9.2 PERFORMANCE OF THIS AGREEMENT. Buyer shall have complied in all
material respects with all of its obligations under this Agreement and shall
have delivered to the Sellers a certificate to that effect signed by its
respective Chairman or President.
9.3 CORPORATE AUTHORIZATION. All corporate action required to be taken by
Buyer in connection with the transactions contemplated by this Agreement shall
have been taken, all documents incident thereto shall be reasonably satisfactory
in substance and form to each Seller, and each Seller shall have received all
such originals or copies of such documents as it may reasonably request.
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9.4 CONSENTS AND APPROVALS. The consents and approvals of all Persons
which Buyer must obtain to consummate the transactions contemplated by this
Agreement shall have been obtained by Buyer and all waiting periods specified by
law with respect thereto shall have passed, including all waiting periods under
the HSR Act.
9.5 INJUNCTION, LITIGATION, ETC. No order of any court or governmental
agency shall be in effect which restrains or prohibits the consummation of the
transactions contemplated by this Agreement and there shall not have been
threatened, nor shall there be pending, any action or proceeding by or before
any such court or governmental agency seeking to prohibit or delay or
challenging the validity of the transactions contemplated by this Agreement.
9.6 LEGISLATION. No statute, rule or regulation shall have been proposed
or enacted which does or might prohibit, restrict or delay the consummation of
the transactions contemplated by this Agreement.
9.7 OPINION OF COUNSEL FOR BUYER. The Sellers shall have received an
opinion from McGuire, Woods, Battle & Boothe, LLP, counsel for Buyer, in
substantially the form attached hereto as Exhibit E.
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ARTICLE X
CLOSING
10.1 TIME AND PLACE OF CLOSING. The closing (the "Closing") shall take
place at the offices of McGuire, Woods, Battle &
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Boothe, LLP, in Richmond, Virginia, at 10:00 a.m. local time on November 6,
1995, or such other date as may be agreed upon by the parties (any of which
dates is referred to in this Agreement as the "Closing Date").
10.2 DELIVERIES BY SELLERS. At the Closing each Seller shall deliver to
Buyer the following:
(i) properly endorsed title certificates transferring the
motor vehicles which are a part of the Purchased Assets to Buyer;
(ii) a Bill of Sale and Assignment in substantially the form
attached hereto as Exhibit F and such other document or documents (in form
---------
satisfactory to Buyer and suitable for filing, registration or recording,
if applicable) as may be necessary to transfer to Buyer the remainder of
the Purchased Assets;
(iii) the Certificates required by Sections 8.1 and 8.2;
(iv) evidence that the corporate action described in Section
8.3 has been taken;
(v) copies of the consents required by Section 8.4;
(vi) the estoppel certificates required by Section 8.7;
(vii) a certificate from the Secretary of State of Delaware of
each Seller's good standing in the State of
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Delaware and other states if applicable as of the most recent date obtainable;
(viii) the Opinion of Counsel required by Section 8.8;
(ix) a guaranty from Benchmark Corporation of Delaware of the
Sellers' indemnification obligations hereunder, in substantially the form
of Exhibit H attached hereto (the "Benchmark Parent Guaranty");
---------
(x) certificates representing all of the Shares and any stock
transfer forms;
(xi) a letter from Arthur Anderson indicating that the Seller's
tax losses for the current year and tax loss carryforwards from previous
years will equal or exceed any taxes that would otherwise be payable by the
Sellers as a result of the contribution of assets to the Wincup Sub and
Benchmark Sub and the other transactions contemplated hereby; and
(xii) such additional documents as Buyer may reasonably request.
10.3 DELIVERIES BY BUYER. At the Closing Buyer shall deliver to the
Sellers or the other parties noted below, the following:
(i) $49,000,000, in immediately available funds;
(ii) $3,500,000, in immediately available funds, to the Persons
indicated in Section 3(ii);
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(iii) an instrument of assumption of liabilities in
substantially the form attached hereto as Exhibit G pursuant to which Buyer
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assumes the Assumed Liabilities as required by this Agreement;
(iv) the certificates required by Sections 9.1 and 9.2;
(v) evidence that the corporate action described in Section 9.3
has been taken;
(vi) copies of the consents required by Section 9.4.
(vii) a certificate from the State Corporation Commission of
Virginia as to the good standing of Buyer in the Commonwealth of Virginia
(and other applicable jurisdictions) as of the most recent date obtainable;
(viii) the Opinion of Counsel required by Section 9.7;
(ix) a guaranty from Buyer's parent, James River Corporation of
Virginia, of Buyer's indemnification obligations hereunder in substantially
the form of Exhibit I attached hereto (the "James River Parent Guaranty");
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and
(x) such additional documents as the Sellers may reasonably
request.
10.4 DELIVERIES BY SELLERS AND BUYER. At the Closing each Seller and Buyer
shall each execute and deliver to the appropriate parties copies of the Related
Agreements to which they are parties.
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ARTICLE XI
INDEMNIFICATION
11.1 SEVERAL INDEMNIFICATION BY SELLERS.
(a) Subject to the limitations contained in this Article XI, Wincup
will indemnify and hold Buyer harmless from any damage, loss, liability or
expense (including, without limitation, reasonable expenses of investigation and
litigation and reasonable attorneys', accountants' and other professional fees)
arising out of:
(i) a breach of any representation or warranty made by Wincup
in this Agreement;
(ii) a breach of any agreement of Wincup contained in this
Agreement (but not the Related Agreements, each one of which will stand on
its own); or
(iii) any liability or obligation of Wincup not assumed by Buyer
pursuant to this Agreement.
(b) Subject to the limitations contained in this Article XI,
Benchmark will indemnify and hold Buyer harmless from any damage, loss,
liability or expense (including, without limitation, reasonable expenses of
investigation and litigation and reasonable attorneys', accountants' and other
professional fees) arising out of:
(i) a breach of any representation or warranty made by Benchmark
in this Agreement;
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(ii) a breach of any agreement of Benchmark contained in this
Agreement (but not the Related Agreements, each one of which will stand on
its own); or
(iii) any liability or obligation of Benchmark not assumed by
Buyer pursuant to this Agreement.
11.2 INDEMNIFICATION BY BUYER. Subject to the limitations contained in
this Article XI, Buyer will indemnify and hold each Seller harmless from any
damage, loss, liability or expense (including, without limitation, reasonable
expenses of investigation and litigation and reasonable attorney's, accountants'
and other professional fees) arising out of:
(i) a breach of any representation or warranty made by Buyer in
this Agreement; and
(ii) a breach of any agreement of Buyer contained in this
Agreement (but not the Related Agreements, each one of which will stand on
its own); and
(iii) the Assumed Liabilities.
11.3 THIRD PARTY CLAIMS. The obligation of an indemnifying party to
indemnify another party to this Agreement under the provisions of this Article
XI with respect to claims resulting from the assertion of liability by those not
parties to this Agreement (including governmental claims for penalties, fines
and assessments) shall be subject to the following terms and conditions:
(i) The indemnified party shall give prompt written notice to the
indemnifying party of any assertion of
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liability by a third party which might give rise to a claim for
indemnification based on the foregoing provisions of this Article XI, which
notice shall state the nature and basis of the assertion and the amount
thereof, to the extent known, provided, however, that no delay on the part
of the indemnified party in giving notice shall relieve the indemnifying
party of any obligation to indemnify unless (and then solely to the extent
that) the indemnifying party is prejudiced by such delay;
(ii) If any action, suit or proceeding (a "Legal Action") is brought
against an indemnified party with respect to which the indemnifying party
may have liability under the foregoing provisions of this Article XI, the
Legal Action shall be defended (such defense to include all proceedings for
appeal or review which counsel for the indemnified party shall deem
appropriate) by the indemnifying party;
(iii) Notwithstanding the provisions of the previous subsection of
this Agreement, until the indemnifying party shall have assumed the defense
of any such Legal Action, the defense shall be handled by the indemnified
party. Furthermore, (w) if the indemnified party shall have reasonably
concluded that there are likely to be defenses available to the indemnified
party that are different from or in addition to those available to the
indemnifying party; (x) if the indemnifying party fails to provide the
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indemnified party with evidence reasonably acceptable to the indemnified
party that the indemnifying party has sufficient financial resources to
defend and fulfill its indemnification obligation with respect to the Legal
Action; (y) if the Legal Action involves other than money damages and seeks
injunctive or other equitable relief; or (z) if a judgment against the
indemnified party in the Legal Action will, in the good faith opinion of
the indemnified party, establish a custom or precedent which will be
materially adverse to the best interest of its continuing business, the
indemnifying party shall not be entitled to assume the defense of the Legal
Action and the defense shall be handled by the indemnified party. If the
defense of the Legal Action is handled by the indemnified party under the
provisions of this subsection, the indemnifying party shall pay all legal
and other expenses reasonably incurred by the indemnified party in
conducting such defense;
(iv) In any Legal Action initiated by a third party and defended by
the indemnifying party (w) the indemnified party shall have the right to be
represented by advisory counsel and accountants, at its own expense, (x)
the indemnifying party shall keep the indemnified party fully informed as
to the status of such Legal Action at all stages thereof, whether or not
the indemnified party is represented by its own counsel, (y) the
indemnifying party shall make available to the indemnified party, and its
attorneys,
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accountants and other representatives, all books and records of the
indemnifying party relating to such Legal Action and (z) the parties shall
render to each other such assistance as may be reasonably required in order
to ensure the proper and adequate defense of such Legal Action.
(v) In any Legal Action initiated by a third party and defended by
the indemnifying party, the indemnifying party shall not make any
settlement of any claim without the written consent of the indemnified
party, which consent shall not be unreasonably withheld. Without limiting
the generality of the foregoing, it shall not be deemed unreasonable to
withhold consent to a settlement involving injunctive or other equitable
relief against the indemnified party or its assets, employees or business,
or relief which the indemnified party reasonably believes could establish a
custom or precedent which will be materially adverse to the best interests
of its continuing business.
11.4 LIMITATIONS ON INDEMNIFICATION.
(a) Notwithstanding the foregoing provisions of this Article XI,
Benchmark and Wincup shall not be liable to Buyer under Section 11.1(a)(i) and
Section 11.1(b)(i), respectively, and Buyer shall not be liable to either of the
Sellers under Section 11.2(i), (i) with respect to any single claim, or series
of claims arising from a single occurrence, unless and to the extent the
liability under such claim or series of claims exceeds $50,000, and thereafter
the indemnified party shall be entitled
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to indemnification thereunder only for the aggregate amount of such liability in
excess of $50,000 or (ii) except as set forth in clause (i), unless and to the
extent the aggregate amount of liability under such Section (including any
amounts for which liability is determined under clause (i) above) exceeds
$250,000, and thereafter the indemnified party shall be entitled to
indemnification thereunder only for the aggregate amount of such liability in
excess of $250,000. For the purposes of determining whether the $50,000 and
$250,000 limitations set forth above have been reached (and for all other
purposes under this Section), the parties agree that claims against WinCup and
Benchmark shall be added together.
(b) All damages to which an indemnified party may be entitled
pursuant to the provisions of this Article XI shall be net of any insurance
coverage with respect thereto.
11.5 SURVIVAL; INVESTIGATION. The representations and warranties of the
parties contained in this Agreement shall survive any investigation by any party
and shall not terminate (i) until the fifth (5th) anniversary of the Closing
Date with respect to the representations and warranties set forth in Section 4.6
and (ii) until eighteen (18) months after the Closing Date with respect to all
other representations and warranties contained herein. Notwithstanding the
provisions of the preceding sentence, any representation or warranty in respect
of which indemnification may be sought under Sections 11.1(a)(i), 11.1(b)(i) or
11.2(i) shall survive the applicable termination
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date set forth in the preceding sentence if written notice, given in good faith,
of a specific breach thereof is given to the indemnifying party on or before
such termination date, whether or not liability has actually been incurred.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing;
(i) by mutual consent of the Boards of Directors or Executive
Committees of the Sellers and Buyer.
(ii) by the Sellers if there has been a material breach by Buyer
of a representation, warranty or agreement contained herein or if any of
the conditions set forth in Article IX are not satisfied.
(iii) by Buyer if there has been a material breach by the
Sellers of any representation, warranty or agreement contained herein or
any of the conditions set forth in Article VIII are not satisfied.
(iv) by Buyer if any change has occurred since the date of this
Agreement which has or can reasonably be expected to have a material and
adverse effect upon the Purchased Assets or the earnings, financial
condition, operations or prospects of the Winkler Businesses.
(v) by the Sellers or Buyer if (a) there shall have occurred any
general suspension of trading on the NYSE, (b) a banking moratorium shall
have been declared by the
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United States or (c) the United States shall have become involved in a war
or armed hostilities;
(vi) by Buyer or the Sellers if the Closing has not occurred by
11:59 p.m. Richmond, Virginia, time, November 15, 1995; or
(vii) by the Sellers if the Closing has not occurred by 11:59
p.m. Richmond, Virginia, time December 31, 1995.
12.2 EFFECT OF TERMINATION. If this Agreement is terminated as provided
in Section 12.1, it shall become wholly void and of no further force and effect
and there shall be no further liability or obligation on the part of any party
hereto except to pay such expenses as are required of it and to comply with the
confidentiality provisions of Section 6.5, but such termination shall not
constitute a waiver by any party of any claim it may have for damages caused by
reason of a willful and material breach of a representation, warranty or
agreement made by another party hereto.
12.3 AMENDMENT. This Agreement and the Exhibits and Schedules hereto may
be amended at any time prior to Closing; provided that any such amendment is
approved in writing by each of the parties hereto. All representations and
warranties which are true and correct as modified and approved shall be deemed
true and correct for the purposes of Sections 8.1 and 9.1.
12.4 EXTENSION; WAIVER. At any time prior to the Closing any party to
this Agreement which is entitled to the benefits
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thereof may (i) extend the time for the performance of any of the obligations of
another party hereto, (ii) waive a breach of a representation as warranty of
another party hereto, or (iii) waive compliance of another party hereto with any
of the Agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in a written instrument signed by the party giving
the extension or waiver.
ARTICLE XIII
GENERAL PROVISIONS
13.1 NOTICES. All notices and other communications given to the parties
hereunder shall be in writing. Notices shall be effective when delivered, if
delivered personally. Otherwise, they shall be effective, as follows, when sent
to the parties at the addresses or numbers listed below: (i) on the business
day delivered (or the next business day following delivery if not delivered on a
business day) if sent by a local or long distance courier, or by prepaid
telegram, telefax or other facsimile transmission, or (ii three days after
mailing if mailed by registered or certified U.S. mail, postage prepaid and
return receipt requested.
If to the Sellers to:
Benchmark Holdings, Inc. and
Wincup Holdings, Inc.
735 Chesterbrook Boulevard
Chesterbrook, PA 19087-5638
Attention: Michael T. Kennedy
Telefax No.: (610)640-2619
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with a copy to:
Duane, Morris & Heckscher
One Liberty Place, Suite 4200
Philadelphia, Pennsylvania 19103-7396
Attention: Vincent F. Garrity, Jr.
Telefax No.: (215)979-1020
If to Buyer to:
James River Corporation
P.O. Box 6000
800 Connecticut Avenue
Norwalk, Connecticut 06856-6000
Attention: Joe R. Neil
Telefax No: (203)852-0535
with a copy to:
James River Corporation
P.O. Box 2218
Tredegar Street
Richmond, Virginia 23217
Attention: General Counsel
Telefax No.: (804)629-4281
and a copy to:
McGuire, Woods, Battle & Boothe, LLP
One James Center
901 E. Cary Street
Richmond, Virginia 23219
Attention: Michael J. Schewel
Telefax No.: (804)775-1061
Any Person may change the address or number to which notices are to be delivered
to him, her or it by giving the other Persons named above notice in the manner
set forth above. Similarly, any individual may change the address or number to
which his or her copies of notices are to be delivered.
13.2 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Delaware without regard to its choice of law rules.
13.3 HEADINGS. The headings contained in this Agreement are
-87-
<PAGE>
for reference purposes only and shall not affect the meaning or interpretation
of the Agreement.
13.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.5 SELLERS' SEVERAL LIABILITY. All covenants, representations and
warranties made in this Agreement by, and all obligations binding hereunder
upon, each of the Sellers shall be deemed to have been made severally by Wincup
and Benchmark and to be severally binding upon them.
13.6 MISCELLANEOUS. This Agreement (i) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof; (ii) is not
intended to and shall not confer upon any other person or business entity, other
than the parties hereto, any rights or remedies with respect to the subject
matter hereof; and (iii) shall not be assigned by operation of law or otherwise
(except that Buyer may assign its rights hereunder to another of its
Subsidiaries);
-88-
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed and their corporate seals to be hereto affixed and attested by their
duly authorized officers.
WINCUP HOLDINGS, INC.
By [SIGNATURE APPEARS HERE]
-------------------------------
Title Chairman
Corporate Seal:
Attest:
[SIGNATURE APPEARS HERE]
- ------------------------
Ass't Secretary
BENCHMARK HOLDINGS, INC.
By [SIGNATURE APPEARS HERE]
-------------------------------
Title Chairman
Corporate Seal:
Attest:
[SIGNATURE APPEARS HERE]
- ------------------------
Secretary
JAMES RIVER PAPER COMPANY, INC.
By [SIGNATURE APPEARS HERE]
-------------------------------
Title Senior Vice President,
Treasurer
Corporate Seal:
Attest:
[SIGNATURE APPEARS HERE]
- ------------------------
Secretary
-89-
<PAGE>
(EXHIBITS AND SCHEDULES OMITTED)
-90-
<PAGE>
Confidential Treatment
EXHIBIT 10.7
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
SALES AGENT AGREEMENT
THIS SALES AGENT AGREEMENT is made as of January 20, 1996, between James
River Paper Company, Inc., a Virginia corporation ("JR"), and WinCup Holdings,
L.P, a Delaware Limited Partnership ("Partnership").
RECITALS
A. James River Paper Company ("James River") and WinCup Holdings, Inc.
have entered into a Limited Partnership Agreement dated as of January 20, 1996
(the "Partnership Agreement").
B. Because of JR's relationship with Sam's Club, a division of Wal-Mart
Stores, Inc. ("Sam's"), the Partnership has requested JR to act as the
Partnership's sales agent to Sam's.
C. Terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Partnership Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, and agreements herein contained, the parties hereto agree as
follows:
1. Term.
----
(a) The term of this Agreement shall be for one year commencing on the
date hereof and ending on the first anniversary of the date hereof unless sooner
terminated pursuant to any provision hereof.
<PAGE>
(b) Either party may terminate this Agreement upon notice to the other
if the other party fails to perform in any material respect any material
obligations hereunder and such failure continues for more than 30 days after the
defaulting party receives written notice of such failure, without any corrective
action taken by such defaulting party.
2. Appointment of JR.
-----------------
Subject to the terms and conditions hereinafter set forth, the Partnership
appoints JR as its exclusive agent in the United States for solicitation of
sales from Sam's and related service functions of the products set forth in
Exhibit A (the "Products").
3. Duties of JR.
------------
In consideration of the compensation provided in Paragraph 8 hereof, JR
shall maintain the same efforts to solicit sales of the Products, and in
connection therewith JR shall:
(a) Continue to maintain at its same standard and at its own expense a
place of business and business organization including its present sales agents
and employees as are necessary to perform its obligations with respect to the
continued sales and distribution of the Products.
(b) Continue to maintain its standards in actively soliciting the sales
of the Products to Sam's as it has in the past.
(c) Continue to provide the same standards for such sales service
functions as are presently provided in connection
2
<PAGE>
with the sale of Products to Sam's including order entry and invoicing; order
combinations with other products sold by JR, and credit collection and
adjustment, and continue to maintain its present standards of operations for
such purposes. JR shall invoice and collect in accordance with its present
practices for all Products shipped and remit such monies to the Partnership in
accordance with provisions of Paragraph 6 hereof.
4. Records and Reports.
-------------------
JR shall retain for a reasonable period of time in accordance with
record retention rules required by law, and permit the Partnership to inspect,
all orders, invoices, credit memos, freight invoices and inventory records
relating to the Products. With respect to such Products, JR shall also provide
reports as requested by the Partnership concerning the following:
(i) Analysis of sales by SKU products shipped and net dollar
sales for each JR fiscal period and totals for the JR fiscal year to the
date of such report;
(ii) Monthly distribution and warehouse handling cost reports;
(iii) Such other sales performance reports as may be made
available by JR.
5. Order Transmittal and Acceptance.
--------------------------------
Orders for Products shall be binding upon acceptance by JR. Such
acceptance shall include a description of the particular products, price,
estimated date of delivery, and all other terms
3
<PAGE>
and conditions of sale. JR will accept only those orders which comply with the
terms and conditions of sale including prevailing list prices and discounts,
which prevailing list prices and discounts are hereby authorized and recognized
by the Partnership as now effective, or which may become effective in the
future.
6. Collection of Receivables and Payment to the Partnership.
--------------------------------------------------------
JR shall continue to maintain its present standards in invoicing Sam's
for products shipped and continue to use the present procedure to collect the
accounts with respect to the Products. JR shall make an estimated payment based
on the formula in Exhibit C to the Partnership by the fifth working day
following the end of each JR fiscal period. The amount remitted to the
Partnership shall be the gross sales price less the following items:
(a) any performance allowances, Sam's spoils allowances and any New
Store Allowances (collectively, the "Allowances"); for the purposes of this
Section, New Stores Allowance shall be defined as a 10% discount on the first
three mixed truckloads of product ordered, the first order of a new item in a
club or the first mixed truckload of product ordered by a club that has
relocated to a new location; or
(b) any deductions, cash discounts, distribution and warehouse handling
charges and brokerage commission paid to JR (collectively, the "Deductions").
4
<PAGE>
JR will determine the actual amount due to or from the Partnership by the 15th
working day following the end of each JR fiscal period. If JR owes the
Partnership an amount in excess of the estimated amount, it will send a check
for the balance due to the Partnership by the 15th working day following the end
of each JR fiscal period accompanied by a detailed accounting of such invoice
represented in such payment showing the quantity of the Products sold, a
detailed accounting of Allowances and Deductions and net invoice value. If the
Partnership owes JR an amount in excess of the estimated amount, all balances
due to JR for such excess amounts will be deducted from the next scheduled
payment. JR fiscal year is based on a calendar year and is divided into twelve
(12) fiscal periods based on thirteen (13) calendar weeks per quarter. For
purposes of this Agreement, JR's reporting and payment obligations as recited
herein shall be on a fiscal period basis, and it is understood that any
reference herein shall be on a fiscal period basis, and it is understood that
any reference herein to "month" or "monthly" shall be to JR's fiscal period
system.
7. Warehouse, Handling and Customer Freight.
----------------------------------------
The Partnership shall deliver the Products, freight prepaid, to JR at
JR's warehouses and shall, as has been done in the past, maintain a quantity of
Products at such warehouses as shall be reasonably necessary to service the
requirements of Sam's customers. JR agrees to provide, as it has in the past,
adequate warehouse space to store such anticipated requirements,
5
<PAGE>
and to permit the Partnership to inspect and/or audit such inventories at
reasonable times.
JR shall deduct from the monthly payment to the Partnership monthly
warehouse handling costs at the rate of $0.37 per case with respect to such
Products. Distribution shall be deducted from the Partnership at the actual
costs for customer freight and where appropriate allocated to the Products based
upon the cube of shipment. JR shall submit to the Partnership monthly written
reports specifically detailing the amount of warehouse handling and
distribution.
JR shall continue to take inventory counts as in the past. An inventory
reconciliation report will be forwarded to the Partnership within forty-five
calendar days following the end of the applicable JR fiscal quarter. JR will
absorb the Partnership book value of cumulative fiscal year inventory losses in
excess of 0.2% of the cumulative fiscal year Partnership book value of total
customer Products shipments. Any net inventory gain for a JR fiscal year will be
excluded from any calculation for reimbursement. Any payments to the Partnership
for inventory losses will be made at the end of the applicable JR fiscal year.
Disputable Sam's reported inventory shortages will be handled as an
adjustment on the quarterly inventory reconciliation. Disputed Sam's reported
shortages are not considered to be a part of the 0.3% Sam's shipments allowed
for inventory losses. Adjustments for disputed shortages will show as a credit
memo on the sales recap.
6
<PAGE>
8. Rates and Charges.
-----------------
(a) The Partnership will pay JR a brokerage commission of [ ]% of the
selling price of the Products, net of Allowances and cash discounts. Brokerage
commissions shall be paid on every order procured, delivered or invoiced by JR,
for which a sale is actually consummated, except for in the case of returns and
allowances (applied proportionately against the respective invoices), the gross
sales amount for the period shall be adjusted. JR shall deduct returns and
allowances from payments due the Partnership in the periods in which such
returns and allowances are recognized and make corresponding adjustments in
commissions. For the purpose of calculating the amount of brokerage commission
on gross sales, "gross sales" shall be deemed to be the gross invoice price.
(b) JR shall send the Partnership a summary report in the form attached
as Exhibit C (the "Report") of Products sold monthly, including a statement of
total gross sales and statements supporting the deductions reflected in the
calculation of the brokerage commission due to JR for such month. Brokerage
commissions shall be settled monthly and shall be deducted by JR directly from
payments owed to the Partnership as a result of the monthly sales of the
Products. Upon request, JR shall provide such information as reasonably
necessary to enable the Partnership to verify the information contained in the
Report. If the Partnership disputes the amount of JR commission, the Partnership
shall notify JR of such dispute and the reasons
7
<PAGE>
therefor in writing within a reasonable period of time after receipt of JR's
statement.
9. Corrugate Containers.
--------------------
(a) According to the terms of the agreement known as the "Dixie License
Agreement" between JR and the Partnership dated as of the date hereof, the
Partnership shall have the nonexclusive, non transferable right to use certain
corrugated boxes and packaging material (as more fully described in the License
Agreement) to package drinking cups and lids manufactured by the Partnership and
distributed by JR to Sam's.
(b) The wording used on the licensed corrugated boxes and packaging
material used in the shipment of Sam's products shall be changed to read as
"Distributed by James River" instead of "Manufactured by James River".
10. Specifications and Standards.
----------------------------
The Partnership shall maintain the same specifications, attached hereto
as Exhibit B, for the Products as are presently provided by JR. If JR, in its
reasonable opinion, determines that the Partnership is not meeting such
standards, it shall have the right to terminate this Agreement pursuant to
Section 1(b).
11. Warranties and Liabilities.
--------------------------
After the effective date, as hereunder defined, the Partnership will
retain title to all Products stored in any JR warehouse or facility and the
Partnership will be responsible for insuring such Products against fire and such
other losses which are customarily covered by fire and extended coverage
insurance.
8
<PAGE>
JR shall hold the Partnership harmless from any and all liability or losses
arising from the negligent storage and handling of the Product by JR.
The Partnership will indemnify and hold JR harmless from any and all
claims for product liability for the Products sold by JR. The Partnership shall
procure and maintain product liability insurance for such Products in an amount
sufficient to protect the interest of the Partnership and JR. In the event the
Partnership determines that part or all of Products fail to meet acceptable
quality standards, JR shall cooperate with the Partnership in effecting a recall
of such Products.
The Partnership warrants that all Products will comply with applicable
federal, state and local consumer protection laws and regulations, and the
Partnership and JR warrant to each other that all trade and sales practices will
comply with all laws and regulations governing such practices.
The Partnership shall pay all personal property taxes on any Products
stored in JR's warehouses or facilities assessed and payable after the effective
date.
12. Prices.
------
JR will inform the Partnership of the market climate for pricing of
Products from time to time. However, the Partnership shall be responsible for
formulating the current prices for the Products and will inform JR of the
current prices at which JR shall offer the Products for sale from time to time.
9
<PAGE>
13. Systems.
-------
The Partnership agrees to maintain JR's systems, including SCOOP and
SAP hookups at each location from which the Products are manufactured and
shipped for Sam's. Equipment supplied by JR listed in Exhibit D will be returned
to JR at the termination of this Agreement.
14. Compliance with Laws, Ordinances, Rules and Regulations.
-------------------------------------------------------
The parties shall comply with all laws, ordinances, rules and
regulations of federal, state, municipal and other governmental authorities and
the like relating to this Agreement.
15. Assignment.
----------
No assignment by any party of its interest in this Agreement shall be
effective unless made with the prior written consent of the other party;
provided, however, that JR may assign its interest to any of its affiliates.
16. Coordination.
------------
JR and the Partnership shall cooperate in carrying out the terms and
provisions of this Agreement.
17. Notices.
-------
All notices and other communications required or permitted hereunder
shall be in writing (including telex, telefax or similar writing) and shall be
given:
10
<PAGE>
(a) If to JR to:
James River Paper Company, Inc.
800 Connecticut Avenue
Norwalk, Connecticut 06856
Attention: Paul J. Bova
Telefax: (203)854-2215
with copies to:
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
901 E. Cary Street
Richmond, Virginia 23219
Attention: Michael J. Schewel, Esq.
Telefax: (804) 775-1061
(b) If to the Partnership to:
Wincup Holdings, L.P.
735 Chesterbrook Boulevard
Wayne, PA 19087-5638
Attention: Michael Kennedy
Telefax No.: (610) 640-2619
with a copy to:
Duane, Morris & Heckscher
One Liberty Place, Suite 4200
Philadelphia, PA 19103-7396
Attention: Vincent F. Garrity, Jr., Esq.
Telecopy No.: (215) 979-1020
or to such other person or to such other address or telefax number as the party
to whom notice is to be given may have furnished the other parties in writing by
like notice. If mailed, any such communication shall be deemed to have been
given on the third business day following the date on which the communication is
posted by registered or certified mail (return receipt requested). If given by
any other means it shall be deemed to have been given when delivered to the
address specified in this Section.
11
<PAGE>
18. Force Majeure.
-------------
(a) Either party may suspend or reduce, in whole or in part, the
performance or supply of any or all of the sales services or any of its
obligations hereunder, to the extent such party is materially impeded in its
ability to provide such sales services as a result of an act of God, labor
dispute, war, fire or other casualty, riot, and act of any governmental body, or
other cause or condition beyond such party's reasonable control. Such party
shall use its reasonable best efforts to restore the suspended or reduced sales
services. Any sales services not provided by reason of this Section shall be
promptly resumed upon the elimination of the force majeure event. Such party
agrees to use all reasonable efforts to restore such reduced or suspended sales
services.
(b) During any period in which any sales services to a party are
reduced or suspended by the other pursuant to Section 19(a), such party shall
not be obligated to make payment or shall be entitled to a refund of any
payments made in advance with respect to the reduced, suspended or terminated
portion of such sales services.
19. Entire Agreement.
----------------
This Agreement constitutes the entire understanding between JR and the
Partnership, and no working arrangement, instructions or operating manuals
intended to facility the effective carrying out of this Agreement shall in any
way affect the liabilities of either party as set forth herein.
12
<PAGE>
20. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its conflicts of law or
choice of law rules.
21. Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and year first above written.
WINCUP HOLDINGS, L.P.
By: [SIGNATURE APPEARS HERE]
-------------------------------------
Title: Chairman
----------------------------------
Date: January 20, 1996
-----------------------------------
JAMES RIVER PAPER COMPANY, INC.
By: /s/ Stephen E. Hare
-------------------------------------
Title: Senior V.P., Treasurer
----------------------------------
Date: January 20, 1996
-----------------------------------
14
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
PACK
SKU DESCRIPTION COUNT
<S> <C> <C> <C>
Foam Cups
C6S 6 Ounce 1000
C8S 8 Ounce 1000
C12SC 12 Ounce 1000
C16SC 16 Ounce 500
C20S 20 Ounce 500
C32S 32 Ounce 500
RS9300PKS 8 Ounce 45/300
Lids for Foam Cups
L6SS For 6 Ounce Cup 500
DT8S For 8 Ounce Cup 500
DT12S For 12 Ounce Cup 500
DT16S For 16/20 Ounce Cup 500
L32SS For 32 Ounce Cup 500
</TABLE>
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
SAM'S CLUB CUP WEIGHTS
=====================
BASED ON AGED WT.
====================================================================
CUP FRESH AGED LOW HIGH TOL.
SIZE WEIGHTS WT. TOL.
(3%) WT - 5% WT + 5%
====================================================================
<S> <C> <C> <C> <C>
6C6 1.48 1.44 1.36 1.51
- --------------------------------------------------------------------
8C8 1.81 1.78 1.67 1.84
- --------------------------------------------------------------------
C1213 3.93 3.81 3.62 4.00
- --------------------------------------------------------------------
C1618 4.58 4.44 4.22 4.66
- --------------------------------------------------------------------
C2022 5.68 5.51 5.23 5.79
- --------------------------------------------------------------------
C3234 7.45 7.23 6.87 7.59
- --------------------------------------------------------------------
</TABLE>
FULL MATRIX WITH TOLERANCES AS NOTATIONS
<TABLE>
<CAPTION>
==============================================================================
CUP BRIM CAP. CUP WT. RIM DIA. O.A. HT. WALL TH.
SIZE FL. OZ. GRAMS INCHES INCHES INCHES
(+/- 1%) (=/- 5%) (+/- 0.5%)(+/- 0.5%) (+/- 1%)
==============================================================================
<S> <C> <C> <C> <C> <C>
6C6 6.08 1.44 2.925 3.041 0.078
- ------------------------------------------------------------------------------
8C8 8.04 1.76 3.146 3.702 0.081
- ------------------------------------------------------------------------------
C1213 13.10 3.81 3.462 4.520 0.074
- ------------------------------------------------------------------------------
C1618 18.03 4.44 3.665 5.465 0.090
- ------------------------------------------------------------------------------
C2022 22.01 5.51 3.665 6.328 0.092
- ------------------------------------------------------------------------------
C3234 33.97 7.23 4.543 6.445 0.115
==============================================================================
</TABLE>
<PAGE>
EXHIBIT C
Monthly Summary Report
<TABLE>
<CAPTION>
<S> <C>
Gross Sales to Sam's $____________
Less:
Performance Allowances (2.5% & 2.0) ($____________)
Sam's Spoils Allowance (0.3%) ($____________)
New Store Allowance (10%) ($____________)
Returns & Allowances ($____________)
Cash Discounts ($____________)
Sales Base for Brokerage Commission $____________
Less:
Brokerage Commission (2.5% X Sales Base for Commission)
($____________)
Distribution & Warehouse Handling ($____________)
Total Payment to WinCup $____________
</TABLE>
<PAGE>
EXHIBIT D
Schedule of Computer Equipment
<TABLE>
<CAPTION>
Serial
Model Number Description
----- ------ -----------
<S> <C> <C>
IBM VP CPU 23LPNCM6571 Desktop Personal Computer
IBM Monitor 235102G Monitor for Personal Computer
n/a n/a Keyboard, Mouse and Modem
n/a n/a Microsoft Office
n/a n/a Microsoft Windows for Workgroups
n/a n/a FTC (TCP/P)
n/a n/a SAP
n/a n/a SHIVA (Telephone Dial
Capability
Software for the Modem)
</TABLE>
<PAGE>
SALES AGENT EXTENSION AND MODIFICATION AGREEMENT
This SALES AGENT EXTENSION AND MODIFICATION AGREEMENT ("Agreement") is made
as of December 5, 1996 by and between WINCUP HOLDINGS, L.P., a Delaware limited
partnership (the "Partnership") and JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation ("JR").
BACKGROUND
----------
a. The Partnership, WinCup Holdings, Inc. ("WinCup"), Radnor
Holdings Corporation ("Radnor") and JR intend to enter into a
Partnership Interest Purchase Agreement pursuant to which Radnor shall
purchase the entire limited partnership interest of JR in the
Partnership, as such interest is described in the Limited Partnership
Agreement between WinCup and JR dated as of January 20, 1996.
b. The Partnership and JR are parties to that certain Sales Agent
Agreement, dated as of January 20, 1996 (the "Agent Agreement"), which
such agreement appoints JR to serve as sales agent of the Partnership
to Sam's Club, a division of Wal-Mart Stores, Inc. ("Sam's Club") and
permits the Partnership to use certain packaging materials carrying
JR's trademarks in connection with the products manufactured by the
Partnership and sold to Sam's Club.
c. JR and James River Corporation of Virginia (collectively, the
"Licensor") and the Partnership are parties to that certain License
Agreement dated as of January 20, 1996 (the "License Agreement"), as
amended by that certain License Extension and Modification Agreement
made by and between the Partnership and JR, dated the date hereof.
d. The Partnership and JR have determined that it would be in each
of their best interests to enter into an extension and modification of
the Agent Agreement, in order to extend the term of the Agent
Agreement.
e. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agent Agreement.
NOW THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
<PAGE>
i. Extension Period. Section 1 (a) of the Agent Agreement is deleted
----------------
in its entirety and is replaced with:
"The Term of this Agreement shall expire on January 20, 2002."
ii. Sales Agent. Pursuant and subject to the terms and conditions of
-----------
the Agent Agreement, JR shall act as sales agent for WinCup in
connection with Sam's Club during the Term, as extended by this
Agreement.
iii. Collection of Receivables and Payment to the Partnership.
--------------------------------------------------------
(1) The following is inserted as the third sentence of the first
paragraph of Section 6 of the Agent Agreement:
"All such JR payments shall be made by electronic funds transfer to the
Partnership, in accordance with the instructions attached hereto as Exhibit
E. Interest at the annual rate of twelve percent (12%) on such amounts due
to the Partnership shall accrue, and shall be payable by JR, commencing on
the sixth working day following the end of each JR fiscal period."
(2) Exhibit E to the Agent Agreement, containing the Partnership
wiring instructions, is attached hereto as Exhibit E.
iv. Assignment of Agent Agreement. The Partnership shall have the
-----------------------------
right to assign the Agent Agreement to any Affiliate of the
Partnership without the consent of James River, provided that such
assignee assumes all of the Partnership's rights, obligations and
liabilities in connection with the Agent Agreement and this Agreement
in writing and the Partnership shall remain primarily obligated for
the performance by such assignee of all of its rights, obligations and
liabilities under the Agent Agreement and this Agreement. For purposes
of this Paragraph 3, "Affiliate" shall mean any person, corporation,
partnership, association, joint stock company, trust or unincorporated
organization which, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control
with the Partnership.
v. Effect of Amendment. Except as hereby expressly extended,
-------------------
amended and modified, all of the terms, conditions, provisions and
covenants of the Agent Agreement shall continue in full force and
effect.
Sales Agent Extension Agreement - 2
<PAGE>
vi. Successors and Assigns. This Agreement shall bind and enure to
----------------------
the benefit of the parties to the Agent Agreement and their
respective successors and assigns.
vii. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws or choice of law rules.
viii. Counterparts. This Agreement may be executed in as many
------------
counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed an original, but all of which such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
JAMES RIVER PAPER COMPANY, INC.
By: [SIGNATURE APPEARS HERE]
--------------------------------
Name:
Title:
WINCUP HOLDINGS, L.P.
By: WinCup Holdings, Inc., its general partner
By: [SIGNATURE APPEARS HERE]
---------------------------
Name:
Title:
Sales Agent Extension Agreement - 3
<PAGE>
EXHIBIT E
WIRING INSTRUCTIONS OF WINCUP HOLDINGS, L.P.
Account Name: WinCup Holdings, L.P.
Account Number: 3750081282
Bank: Nations Bank
Dallas, Texas
ABA#: 11100012
<PAGE>
Confidential Treatment
EXHIBIT 10.8
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
EQUIPMENT USE AGREEMENT
-----------------------
This Equipment Use Agreement (the "Equipment Agreement") dated as of
January 20, 1996, is made among WINCUP HOLDINGS, L.P., a Delaware limited
partnership (the "Partnership") and JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation ("JR").
RECITALS
a. JR and WINCUP HOLDINGS, INC., a Delaware corporation ("Wincup"),
have entered into a certain Limited Partnership Agreement dated as of
the date hereof (the "Partnership Agreement"), whereby each of JR and
Wincup have agreed to execute a Capital Contribution Agreement and to
contribute designated assets to the Partnership which shall engage in
the Foam Business.
b. In addition to the respective obligations of the parties to the
Partnership Agreement to consummate the Closing, the parties have
agreed to the execution and delivery of this Equipment Agreement
pursuant to which the Partnership shall have the right to use certain
equipment owned by JR.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto agree as follows:
i. Definitions.
<PAGE>
Terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Partnership Agreement and the Related Agreements
attached thereto. In addition, the following terms, as used herein, have the
following meanings:
"Equipment" shall mean collectively the Extruder Equipment and the Former
Equipment, as they are defined below.
"Extruder Equipment" means the JR extruder used to produce Lids and more
particularly described on Schedule A attached hereto, located at the West
Chicago Facility as defined below.
"Former Equipment" means the JR thermoformer, trim press, molds, moldbeds
and other tooling used to produce Lids and more particularly described on
Schedule A attached hereto, located at the West Chicago Facility as defined
below.
"Lids" means polystyrene lids for paper drinking cups used for hot and cold
drinks, conforming to and meeting the specifications of the lids currently
produced at the West Chicago Facility, and more particularly described on
Schedule B.
"Related Agreements" means the Wincup Capital Contribution Agreement, the
James River Capital Contribution Agreement, the Confidentiality Agreement, the
Patent License Agreement, and the License Agreement with respect to the Dixie
trademark executed and delivered by the parties at Closing pursuant to the
Partnership Agreement.
"Variable Product Cost" means the Partnership's variable cost to be
determined in accordance with Schedule B.
2
<PAGE>
"West Chicago Facility" means the Handi-Kup plant located at 1425 Hawthorne
Lane, West Chicago, Illinois 60185.
ii. Term of Agreement.
This Equipment Agreement shall be effective for a term beginning on the
Closing Date and continuing until terminated, provided, however, that this
Equipment Agreement, as it relates to the Extruder Equipment, shall be effective
for at least one (1) year after the Closing Date (the "Term").
iii. Termination.
JR may, at its option, at any time, move the Former Equipment from the West
Chicago Facility at its own expense by providing the Partnership with sixty (60)
days' written notice. JR must provide the Partnership with ninety (90) days'
notice to remove the Extruder Equipment from the West Chicago Facility at its
own expense. JR shall provide such written notice to the Partnership with
respect to the Extruder Equipment no earlier than October 1, 1996. Once JR
removes either of the Extruder Equipment or the Former Equipment, this Equipment
Agreement shall terminate and none of the parties shall have any further
liability to the other under this Equipment Agreement as to such Extruder
Equipment or Former Equipment, as the case may be.
iv. Equipment Use.
During the Term, the Partnership: (i) may operate the Equipment for use in
the Partnership's Foam Business in the usual, regular and ordinary manner in
which the Equipment has been operated by JR consistent with JR's past practice;
and (ii)
3
<PAGE>
shall sell to JR Lids at the Partnership's Variable Product Cost. The quantity
of Lids sold to JR shall not exceed 12,000 stat cases per week, the price of
such lids shall be F.O.B. the West Chicago Facility, and the payment terms shall
be net thirty (30) days from date of invoice. JR shall have no obligation to
pay for Lids which are not comparable in quality to Lids manufactured by JR as
of the effective date of this Equipment Agreement, and do not meet product
specifications.
v. Maintenance of Equipment; Storage and Security.
(a) During the Term hereof, the Partnership or its designee, at the
Partnership's sole expense, shall perform routine inspection and maintenance
and/or repair.
(b) During the term hereof, the Partnership shall provide, at no cost to
JR, such space and secure storage as is necessary to store the Equipment or any
component thereof. During the Term hereof, the Partnership shall be responsible
for providing such level of security with respect to the Equipment as the
Partnership would provide for its own equipment in a similar situation.
vi. Loss or Damage; Insurance until Removal.
(a) During the Term of this Equipment Agreement, the Partnership shall
use reasonable care to protect the Equipment from physical damage; provided,
that the Partnership shall not be responsible for any loss, damage, liability or
expense for failure to protect the Equipment, unless such failure results
4
<PAGE>
from the Partnership's negligence or willful misconduct. In connection with the
foregoing, during the Term hereof, the Partnership shall post a notice
indicating that unauthorized personnel are not permitted near the Equipment;
provided, that the Partnership shall not incur any liability to JR for failure
to post such notice or the manner in which it posts such notice, unless such
failure results from the Partnership's negligence or willful misconduct.
(b) During the Term hereof, the Partnership shall provide, maintain and
pay for all risk insurance providing coverage for the Equipment for its full
insurable value with loss payable to JR, irrespective of whether such loss is
caused by the Partnership's negligence or willful misconduct. In addition, the
Partnership shall provide, maintain and pay for commercial general liability and
property damage insurance, with JR named as an additional insured, protecting
against liability for damages for personal injury or death and property damage
caused by the Equipment in a face value of not less than $1,000,000 per
occurrence for both personal injury, death and property damage. The commercial
general liability limits required in this Section will be dedicated for JR use
only. All such insurance shall be (i) primary as to any other applicable
insurance that JR may carry and (ii) reasonably satisfactory to JR as to form,
amount and insurer. The Partnership will be responsible for all deductibles, co-
insurance, retentions or payments due including but not limited to retrospective
adjustments and deductible
5
<PAGE>
program billings. In addition, all such insurance shall contain the insurer's
agreement to give 30 days' written notice to JR before cancellation of, or
material changes to, any insurance policy required hereunder. Upon JR's
request, the Partnership shall deliver the insurance policies or copies thereof
required by this Section 6(b) for review by JR and certificates of insurance
evidencing coverage as requested to JR.
vii. Removal.
(a) At the end of the Term hereof, JR, shall use its good faith efforts
to remove, at its sole expense, or to contract with a third party to remove, the
Equipment. Upon such removal, JR shall leave, or cause its designee to leave,
the machine rooms and/or buildings in which the Equipment or any component
thereof is located in broom clean condition. JR shall reimburse the Partnership
for any damages caused to the Partnership property during the course of the
removal of the Equipment.
(b) The Partnership shall cooperate with JR or its designee in the
removal of the Equipment, and shall allow JR, its agents or its designees
reasonable access to the Equipment for such purpose during normal working hours,
and, to the extent the Partnership is specifically requested by JR, the
Partnership shall supply, at no cost to JR, such electricity, water, plumbing
facilities, compressed air and other services as are reasonably necessary for JR
or its contractors to perform the removal of the Equipment in a workmanlike
manner; provided, that the Partnership shall not be required to supply any
service that is not available
6
<PAGE>
to the areas in which the Equipment is located at the time of such removal. If
JR desires to install a new or increased service to facilitate the removal of
the Equipment, the Partnership shall cooperate with such installation and shall
apply in its own name for any necessary permits, all at the sole cost of JR.
(c) JR shall be responsible for the payment of any contractors or
Partnership employees employed by JR or its designee in connection with the
removal or disposal of the Equipment.
viii. Indemnification.
Each party shall indemnify and hold the other harmless from any third party
claim, liability, action, suit, judgment, damage, expense or cost (including
reasonable attorney's fees and court costs) arising out of such party's
respective activities under this Equipment Agreement.
ix. Force Majeure.
JR, may suspend or reduce, in whole or in part, the use of any or all
of the Equipment to the extent JR is materially impeded in its ability to
provide the use of such Equipment as a result of an act of God, labor dispute,
war, riot, fire or other casualty, acts of any governmental body, or other cause
or conditions beyond its reasonable control ("Force Majeure Event"). JR shall
use its reasonable best efforts to restore the Partnership's use of the
Equipment as promptly as reasonably practicable after the elimination of the
Force Majeure Event.
7
<PAGE>
Likewise, the Partnership may suspend or reduce, in whole or in part, the
supply of Lids described in Paragraph 3 to the extent the Partnership is
materially impeded in its ability to provide such Lids as a result of a Force
Majeure Event. The Partnership shall use its reasonable best efforts to restore
the suspended or reduced supply of Lids as promptly as reasonably practicable
after the elimination of the Force Majeure Event.
x. Notices.
All notices and other communications required or permitted hereunder shall
be in writing (including telex, telefax or similar writing) and shall be given:
(a) If to JR to:
James River Corporation
P. O. Box 6000
800 Connecticut Avenue
Norwalk, Connecticut 06856-6000
Attention: Joe R. Neil
Telefax No.: (203) 852-0535
with a copy to:
James River Paper Company, Inc.
P. O. Box 2218
Tredegar Street
Richmond, VA 23217
Attention: General Counsel
Telefax No.: (804) 343-4609
(b) If to Wincup or to the Partnership to:
Wincup Holdings, Inc.
Wincup Holdings, L.P.
735 Chesterbrook Boulevard
Wayne, PA 19087-5638
Attention: Michael Kennedy
Telefax No.: (610) 640-2619
8
<PAGE>
with a copy to:
Duane, Morris & Heckscher
One Liberty Place, Suite 4200
Philadelphia, Pennsylvania 19103-7396
Attention: Vincent F. Garrity, Jr.
Telefax No.: (215) 979-1020
or to such other person or to such other address or telefax number as the party
to whom such notice is to be given may have furnished the other parties in
writing by like notice. If mailed, any such communication shall be deemed to
have been given on the third business day following the day on which the
communication is posted by registered or certified mail (return receipt
requested). If given by any other means it shall be deemed to have been given
when received.
xi. Interpretation.
The headings contained in this Equipment Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Equipment Agreement.
xii. Miscellaneous.
This Equipment Agreement (i) together with the Partnership Agreement and
the Related Agreements, constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and in the event of a conflict
between this Equipment Agreement and the Partnership Agreement, the terms of
this Equipment Agreement shall control; (ii) is an independent agreement, the
rights and obligations of the parties to which shall not be affected by any
provision of,
9
<PAGE>
or remedy arising under or with respect to, the Partnership Agreement or any
other agreement between the parties, except to the extent expressly provided in
any such agreement; (iii) is not intended to and shall not confer upon any other
person or business entity, other than the parties hereto or any permitted
assignees, any rights or remedies with respect to the subject matter hereof;
(iv) shall not be assigned by operation of law or otherwise; (v) shall be
governed by and construed in accordance with the laws of the state of Delaware
without regard to its conflicts of law or choice of law rules.
xiii. Counterparts.
This Equipment Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF the parties have caused this Equipment Agreement to be
executed by their duly authorized officers.
JAMES RIVER PAPER COMPANY, INC.
By:[SIGNATURE APPEARS HERE]
---------------------------
Name:
-------------------------
Title:
------------------------
WINCUP HOLDINGS, L.P.
By:[SIGNATURE APPEARS HERE]
---------------------------
Name:
-------------------------
Title:
------------------------
10
<PAGE>
Schedule A
Equipment
<TABLE>
<CAPTION>
Serial
Model Number Description
- ----- ------- ------------
<S> <C> <C>
Davis Standard 60-T E2316 Extruder
Brown MC-4240 7697 Thermoformer
Brown T300 03-8214 Trim Press
Molds, moldbeds and other
tooling required to
manufacture products
(SKU's) listed on
Schedule B of the
Equipment Use Agreement
</TABLE>
<PAGE>
Schedule B
Variable Product Costs
The Partnership's Variable Product Costs will be based on the following formula.
For each lid produced on James River's equipment, the Variable Product Costs
will be the estimated standard costs listed below. Resin and carton costs
listed below will be revised monthly based on the Partnership's current contract
price net of rebates and discounts over the term of the Equipment Use Agreement.
All other variable costs will remain over the term of the Equipment Use
Agreement at the cost listed below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SKU [ ] [ ] [ ] [ ] [ ]
Case Count [ ] [ ] [ ] [ ] [ ] lids
lids lids lids lids
<CAPTION>
Costs Per 1000 Lids
<S> <C> <C> <C> <C> <C>
Resin $ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
Carton [ ] [ ] [ ] [ ] [ ]
Bag [ ] [ ] [ ] [ ] [ ]
Direct Labor [ ] [ ] [ ] [ ] [ ]
Var. Operating Supplies [ ] [ ] [ ] [ ] [ ]
Utilities [ ] [ ] [ ] [ ] [ ]
Repair Labor & Material [ ] [ ] [ ] [ ] [ ]
-------- -------- -------- -------- --------
Variable Product Cost $ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
======== ======== ======== ======== ========
Cost Per Case $ [ ] $ [ ] $ [ ] $ [ ] $ [ ]
======== ======== ======== ======== ========
</TABLE>
<PAGE>
EQUIPMENT USE EXTENSION AND MODIFICATION AGREEMENT
This EQUIPMENT USE EXTENSION AND MODIFICATION AGREEMENT ("Agreement") is
made as of December 5, 1996 by and between WINCUP HOLDINGS, L.P., a Delaware
limited partnership (the "Partnership") and JAMES RIVER PAPER COMPANY, INC., a
Virginia corporation ("JR").
BACKGROUND
----------
a. The Partnership, WinCup Holdings, Inc., ("WinCup"), Radnor
Holdings Corporation ("Radnor") and JR intend to enter into a
Partnership Interest Purchase Agreement pursuant to which Radnor
shall purchase the entire limited partnership interest of JR in the
Partnership, as such interest is described in the Limited
Partnership Agreement between WinCup and JR, dated as of January 20,
1996 (the "Purchase Transaction").
b. The Partnership and JR are parties to that certain Equipment Use
Agreement, dated as of January 20, 1996 (the "Equipment Agreement"),
which such agreement terminates upon JR's removal of certain of its
equipment from the Partnership's West Chicago, Illinois facility (the
"Facility").
c. The Partnership and JR have determined that it would be in each
of their best interests to enter into a modification of the Equipment
Agreement in order to extend the term of the Equipment Agreement.
d. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Equipment Agreement.
NOW THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
i. Extension Period. Pursuant and subject to the terms and
----------------
conditions of the Equipment Agreement, the Partnership and JR
agree to enter into an extension of the Equipment Agreement.
(1) Paragraph 2 (Term of Agreement) of the Equipment
Agreement is deleted in its entirety and is replaced with:
<PAGE>
"This Equipment Agreement shall be effective for a Term commencing on the date
of closing of the Purchase Transaction and ending on January 20, 2002
(the"Termination Date").
(2) Paragraph 3 (Termination) of the Equipment Agreement is deleted
in its entirety and is replaced with:
"JR may not remove the Former Equipment or the Extruder Equipment prior to the
Termination Date."
(3) Schedule B to the Equipment Agreement is hereby deleted in its
entirety and replaced with the attached Schedule B.
ii. Effect of Modification. Except as hereby expressly extended, amended
----------------------
and modified, all of the terms, conditions, provisions and covenants of the
Equipment Agreement shall continue in full force and effect.
iii. Assignment of Equipment Agreement. The Partnership shall have the
right to assign the Equipment Agreement to any Affiliate of the Partnership
without the consent of James River, provided that such assignee assumes all
of the Partnership's rights, obligations and liabilities in connection with
the Equipment Agreement and this Agreement in writing and the Partnership
shall remain primarily obligated for the performance by such assignee of
all of its rights, obligations and liabilities under the Equipment
Agreement and this Agreement. For purposes of this Paragraph 3, "Affiliate"
shall mean any person, corporation, partnership, association, joint stock
company, trust or unincorporated organization which, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with the Partnership.
iv. Successors and Assigns. This Agreement shall bind and enure to the
----------------------
benefit of the parties to the Equipment Agreement and their respective
successors and assigns.
v. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware, without regard to its
conflict of laws or choice of law rules.
vi. Counterparts. This Agreement may be executed in as many counterparts
------------
as may be deemed necessary or convenient, and by the different parties
hereto on separate counterparts, each of which, when so
<PAGE>
executed, shall be deemed an original, but all of which such counterparts
shall constitute but one and the same instrument.
Equipment Use Extension Agreement-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
JAMES RIVER PAPER COMPANY,
INC.
By: [SIGNATURE APPEARS HERE]
------------------------------------
Name:
Title:
WINCUP HOLDINGS, L.P.
By: WinCup Holdings, Inc., its general
partner
By: [SIGNATURE APPEARS HERE]
-------------------------------
Name:
Title:
Equipment Use Extension Agreement-4
<PAGE>
Schedule B
Variable Product Costs
The Partnership's Variable Product Costs will be based on the following formula.
For each lid produced on James River's equipment, the Variable Product Costs
will be the estimated standard costs listed below. Resin and carton costs
listed below will be revised monthly based on the Partnership's current contract
net of rebates and discounts over the term of the Equipment Use Agreement. All
other variable costs will remain over the term of the Equipment Use Agreement at
the cost listed below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SKU [ ] [ ] [ ] [ ] [ ]
Case Count [ ] lids [ ] lids [ ] lids [ ] lids [ ] lids
<CAPTION>
Costs Per 1000 lids
<S> <C> <C> <C> <C> <C>
Resin $ [ ] $ [ ] $[ ] $[ ] $[ ]
Carton [ ] [ ] [ ] [ ] [ ]
Bag [ ] [ ] [ ] [ ] [ ]
Direct Labor [ ] [ ] [ ] [ ] [ ]
Var. Operating Supplies [ ] [ ] [ ] [ ] [ ]
Utilities [ ] [ ] [ ] [ ] [ ]
Repair Labor & Material [ ] [ ] [ ] [ ] [ ]
-------- --------- ------ ------ ------
Variable Product Cost $ [ ] $ [ ] $[ ] $[ ] $[ ]
-------- --------- ------ ------ ------
Cost Per Case $ [ ] $ [ ] $[ ] $[ ] $[ ]
======== ========= ====== ====== ======
</TABLE>
Additional Products
The parties hereby agree to the addition of the following products, at such
prices to be mutually agreed upon by the parties within five (5) business days
of the closing of the Purchase Transaction :
<TABLE>
<CAPTION>
SKU Description PK Size
- ----------- --------------- -------
<S> <C> <C>
[ ] [ ] [ ]
</TABLE>
Equipment Use Extension Agreement - 5
<PAGE>
<TABLE>
<S> <C> <C>
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
</TABLE>
The parties hereby acknowledge and agree that JR may require lids in
addition to those described on this Schedule B, and the Partnership agrees to
produce such lids for James River on such pricing as the parties shall mutually
agree.
Equipment Use Extension Agreement-6
<PAGE>
EXHIBIT 10.9
LICENSE AGREEMENT
This License Agreement, effective as of January 20, 1996, among JAMES RIVER
CORPORATION OF VIRGINIA and its wholly owned subsidiary, JAMES RIVER PAPER
COMPANY, INC., both corporations of the Commonwealth of Virginia, hereinafter
collectively referred to as "LICENSOR"; and WINCUP HOLDINGS, L.P., hereinafter
referred to as "LICENSEE," a State of Delaware limited partnership comprised of
WINCUP HOLDINGS, INC., a Delaware corporation, and JAMES RIVER PAPER COMPANY,
INC. wherein WINCUP HOLDINGS, INC. is the general partner and JAMES RIVER PAPER
COMPANY, INC. is a limited partner.
WHEREAS, LICENSOR is the owner of all rights in certain United States
trademarks, as more fully detailed herein in Section 1.1.
WHEREAS, LICENSEE desires to use molds provided by LICENSOR, on which
certain of LICENSOR'S trademarks are engraved, to manufacture plastic drinking
cups and lids and to use corrugated boxes and related packaging material on
which certain of LICENSOR'S trademarks are printed.
WHEREAS, LICENSEE is currently manufacturing plastic drinking cups and lids
and does not desire to interrupt its production of the plastic drinking cups and
lids prior to commencing production using LICENSOR'S molds and, therefore will
not be able to remove LICENSOR'S trademarks from each individual mold
simultaneously with the commencement of production by LICENSEE.
WHEREAS, LICENSEE desires to obtain from LICENSOR and LICENSOR desires to
grant LICENSEE certain rights in respect of such United States trademarks.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1 -- DEFINITIONS
------------------------
For the purpose hereof, the following terms shall have the meaning set
forth hereinbelow:
1.1 The term "Trademark Rights" shall mean the following U.S. Trademark
registrations owned by LICENSOR:
A. The registration for JAMES RIVER in word format for plastic cups,
lids, cartons and packaging containers under Registration No. 1,694,326;
and
<PAGE>
B. The registration for JR in word and design format for plastic
cups, lids, cartons and packaging containers under Registration No.
1,691,477; and
C. The registration for DIXIE in word and/or design formats for
plastic cups, lids, cartons and packaging containers under Registration
Nos. 646,956; 1,112,247 and 120,264.
1.2 The term "Licensed Plastic Drinking Cups and Lids" shall mean all
plastic drinking cups and lids including expanded polystyrene foam drinking cups
manufactured by LICENSEE using LICENSOR'S molds on which appear any of
LICENSOR'S Trademark Rights.
1.3 The term "Licensed Corrugated Boxes and Packaging Material" shall mean
all corrugated boxes and packaging material provided by LICENSOR and used by
LICENSEE on which appear any of LICENSOR'S Trademark Rights.
ARTICLE II -- LICENSE GRANTS AND BUSINESS ARRANGEMENT
-----------------------------------------------------
2.1 Subject to the terms and conditions of this License Agreement, LICENSEE is
hereby granted by LICENSOR the non-exclusive, non-transferable and royalty free,
license, privilege and permission to use Trademark Rights in the United States
in connection with each individual mold supplied by LICENSOR (i) until LICENSEE
permanently takes the molds out of service, or (ii) until the expiration of the
license grant for each of the trademarks comprising Trademark Rights set forth
in Paragraph 4.1, whichever comes first.
2.2 Subject to the terms and conditions of this License Agreement,
LICENSEE shall have the royalty-free, non-exclusive, non-transferable right to
use each individual mold provided by LICENSOR to manufacture Licensed Plastic
Drinking Cups and Lids in the United States and to sell the Licensed Plastic
Drinking Cups and Lids.
2.3 Subject to the terms and conditions of this License Agreement, at no
cost to LICENSEE, LICENSEE shall have the non-exclusive, non-transferable right
to use the supply existing on the date hereof of the Licensed Corrugated Boxes
and Packaging Material to package Licensed Plastic Drinking Cups and Lids. This
license to use packaging materials shall terminate upon the exhaustion of the
supply of the Licensed Corrugated Boxes and Packaging Material existing on the
date hereof.
2.4 Notwithstanding anything to the contrary in Section 2.3, subject to
the terms and conditions of this License Agreement and Section 9 of the Sales
Agent Agreement between
2
<PAGE>
LICENSOR and LICENSEE (the "Sales Agent Agreement"), LICENSEE shall have the
non-exclusive, non-transferable right to use Licensed Corrugated Boxes and
Packaging Material to package Licensed Plastic Drinking Cups and Lids
manufactured by LICENSEE and distributed by LICENSOR to Walmart Corporation's
wholly owned warehouse club division designated "Sam's Club." This License
shall terminate upon termination of the Sales Agent Agreement between LICENSOR
and LICENSEE.
2.5 In consideration of the non-exclusive license granted under Paragraphs
2.1 and 2.2 above, LICENSEE agrees to remove the trademarks included in
Trademark Rights from the molds used in the manufacture of Licensed Plastic
Drinking Cups and Lids (i) at the first opportunity when said mold is
permanently taken out of service, or (ii) at the termination of the license
relating to a specific mark as set forth in Paragraph 4.1, whichever comes
first.
2.6 In consideration of LICENSOR'S grants in Paragraphs 2.1 and 2.2
hereof, LICENSEE shall not use Trademark Rights on or in connection with Plastic
Drinking Cups and Lids not comparable in quality to plastic drinking cups and
lids manufactured by LICENSOR as of the effective date of this Agreement and
identified by LICENSOR'S Trademark Rights.
2.7 In the event LICENSOR has concerns about LICENSEE'S compliance with
the quality requirements in Paragraph 2.6 above, LICENSOR shall give LICENSEE
written notice of its concerns and LICENSEE shall have thirty (30) days to
address those concerns. If thereafter, in LICENSOR'S reasonable judgment, the
Licensed Plastic Drinking Cups and Lids produced by LICENSEE still do not meet
the above stated quality standards, at LICENSOR'S written request, LICENSEE
shall stop immediately production of such Licensed Plastic Drinking Cups and
Lids, destroy existing inferior quality stock of Licensed Plastic Drinking Cups
and Lids, and remove LICENSOR'S Trademark Rights from the relevant molds prior
to resuming production. Upon completion of the removal of the trademarks
included in Trademark Rights from the molds, the licenses granted pursuant to
Paragraphs 2.1 and 2.2 hereof shall terminate.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES
----------------------------------------------
3.1 LICENSOR represents and warrants that it is the owner of Trademark Rights
and has the right to grant the non-exclusive license to LICENSEE to use the
Trademark Rights in connection with the manufacture and sale of Licensed Plastic
Drinking Cups and Lids and to use the Licensed Corrugated Boxes and Packaging
Material. LICENSOR MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE
SUBJECT MATTER OF THIS LICENSE AGREEMENT.
3
<PAGE>
3.2 LICENSOR makes no warranty with respect to the validity of any of
Trademark Rights. LICENSEE agrees that LICENSOR shall not be liable for any
loss or damage resulting from any claim that LICENSEE'S or its customer's use of
the Trademark Rights infringe any trademark or other property rights of any
third party, and LICENSEE agrees to defend and hold harmless LICENSOR therefrom.
LICENSEE acknowledges that the trademarks which are the subject of the Trademark
Rights are not registered, and/or have not previously been used, in every
country throughout the world; the license granted in Article II extends only to
U.S. trademark registrations and common law rights.
3.3 Except for breaches of Section 3.1 hereof, LICENSOR, its affiliates,
and their respective officers, agents, servants or employees, shall not be
liable for any loss, damage, injury or other casualty of whatsoever kind, or by
whomsoever caused (irrespective of negligence or fault, whether sole,
concurrent, active, passive, comparative, strict, contractual or vicarious of
LICENSOR, except for gross negligence or willful misconduct of LICENSOR, to the
person or property of anyone, including LICENSEE or any of its customers,
arising out of or resulting from LICENSEE's or its customer's manufacture, use
or sale of Licensed Plastic Drinking Cups and Lids; LICENSEE agrees for itself,
its customers, its successors and assigns, to indemnify and hold harmless
LICENSOR, its affiliates, and their respective officers, agents, servants and
employees, from and against all claims, counterclaims, demands, liabilities,
suits, actions, losses, costs and expenses (including all reasonable expenses
and attorney's fees incurred or imposed on LICENSOR, its affiliates, and their
respective officers, agents, servants or employees, in connection therewith) for
such loss, damage, injury or other casualty, except where such loss, damage,
injury or other casualty is a result of LICENSOR'S breach of the warranty set
forth in Section 3.1 or of LICENSOR'S gross negligence or willful misconduct.
ARTICLE IV -- TERMINATION
-------------------------
4.1 This License Agreement shall terminate when the last of the licenses
granted pursuant to Paragraphs 2.1;2.2;2.3 and 2.4 has terminated; provided,
however, that (i) the license with respect to the trademark DIXIE shall
terminate upon the termination of the License Agreement or six (6) months after
the date hereof, whichever occurs first, except with respect to Sam's Club,
which shall terminate when the Sales Agent Agreement is terminated; and (ii)
that the license with respect to JR and JAMES RIVER shall terminate upon
termination of this License Agreement or twelve (12) months after the date
hereof, whichever occurs first, except with respect to Sam's Club, which shall
terminate when the Sales Agent Agreement is terminated.
4
<PAGE>
4.2 After termination of this License Agreement, or termination of the
trademark license with respect to a particular mark included within Trademark
Rights, LICENSEE shall have no rights with respect to such trademark.
4.3 After termination of the License Agreement, LICENSEE shall have no
rights hereunder or in the Trademark Rights.
ARTICLE V -- ADDRESSES
----------------------
Unless otherwise specified in writing, the mailing addresses of the parties
hereto are as follows:
LICENSOR: James River Corporation of Virginia and
James River Paper Company, Inc.
1915 Marathon Avenue
P.O. Box 899
Neenah, WI 54957-0899
Fax 414-729-8166
Attention: Robert S. Alexander, Chief Patent Counsel
LICENSEE: WinCup Holdings, L.P.
735 Chesterbrook Boulevard
Wayne, PA 19087-5638
Attention: Michael T. Kennedy, Chairman
Notices hereunder shall be deemed to have been duly given and served five
(5) days after the mailing thereof by Registered or Certified Mail, postpaid, to
the party entitled thereto at its above address, or at such other address as it
may from time to time designate in writing to the other party.
ARTICLE VI -- MISCELLANEOUS
---------------------------
6.1 The making, execution and delivery of this License Agreement by LICENSOR
and LICENSEE have been induced by no representations, statements, warranties or
agreements other than those expressed herein. This License Agreement and the
Sales Agent Agreement embody the entire understanding of the parties with
respect to the subject matter hereof and there are no further or other
agreements or understandings, written or oral, in effect between the parties
relating to the subject matter hereof.
6.2 Waiver of a breach of this License Agreement or the failure of
LICENSOR to exercise any right under this License Agreement shall in no event
constitute a waiver as to any future breach, whether similar or dissimilar in
nature, or as to the exercise of any future right under this License Agreement.
5
<PAGE>
6.3 This License Agreement may be amended or modified only by an
instrument signed by the duly authorized representative of each of the
respective parties hereto and expressly stating that it is the intent of that
document to amend or modify the terms hereof.
6.4 LICENSEE shall not, without the prior written consent of LICENSOR,
assign, transfer or sublicense its rights or obligations hereunder to a third
party; provided, however, LICENSEE may assign its rights hereunder to a
successor to substantially the whole of its business and assets relating to the
subject matter of this License Agreement who agrees to be bound by the terms
hereof.
6.5 The titles of each Article in this License Agreement are for the
convenience of the parties and are not intended to modify the terms and
conditions contained herein.
6.6 If any provision of this License Agreement, or the application
thereof, shall for any reason and to any extent be invalid or unenforceable, the
remainder of this License Agreement and application of such provision to other
persons or circumstances shall be interpreted so as not to invalidate the
remaining provisions of this License Agreement and so as best to reasonably
effect the intent of the parties.
6.7 Nothing contained in this License Agreement shall be construed to
grant LICENSEE any rights or licenses other than those expressly stated therein.
6.8 This License Agreement shall be construed and the legal relations
between the parties determined in accordance with the laws of the State of
Delaware, excluding any choice of law rules which may direct the application of
the laws of any other jurisdiction.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this License Agreement
to be duly executed in their respective corporate names by their duly authorized
representatives as of the date and year first written above.
JAMES RIVER CORPORATION OF WINCUP HOLDINGS, L.P.,
VIRGINIA By: Wincup Holdings, Inc.,
its General Partner
By: [SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
------------------------- -------------------------
Title: Title:
----------------------- -----------------------
Date: Date:
----------------------- -----------------------
JAMES RIVER PAPER COMPANY, INC.
By: [SIGNATURE APPEARS HERE]
-------------------------
Title:
-----------------------
Date:
-----------------------
7
<PAGE>
LICENSE EXTENSION AND MODIFICATION AGREEMENT
This LICENSE EXTENSION AND MODIFICATION AGREEMENT ("Agreement") is made as
of December 5, 1996 by and between WINCUP HOLDINGS, L.P., a Delaware limited
partnership (the "Partnership"), JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation ("JR") and JAMES RIVER CORPORATION OF VIRGINIA ("James River").
BACKGROUND
----------
a. The Partnership, WinCup Holdings, Inc. ("WinCup"), Radnor
Holdings Corporation ("Radnor") and JR intend to enter into a
Partnership Interest Purchase Agreement ("Purchase Agreement")
pursuant to which Radnor shall purchase the entire limited partnership
interest of JR in the Partnership, as such interest is described in
the Limited Partnership Agreement between WinCup and JR, dated as of
January 20, 1996.
b. JR and James River (collectively, the "Licensor") and the
Partnership are parties to that certain License Agreement, dated as of
January 20, 1996 (the "License Agreement"), which such agreement
permits the Partnership to use certain of JR's trademark rights, molds
and packaging materials for the production and distribution of plastic
drinking cups and lids.
c. The Partnership and JR are parties to that certain Sales Agent
Agreement dated as of January 20, 1996, (the "Sales Agent Agreement"),
as amended by that certain Sales Agent Extension and Modification
Agreement made by and between the Partnership and JR, dated the date
hereof.
d. The Partnership and Licensor have determined that it would be in
each of their best interests to enter into a modification of the
License Agreement in order to extend the term of the License
Agreement.
e. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the License Agreement.
NOW THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
<PAGE>
i. Extension Period. Pursuant and subject to the terms and
----------------
conditions of the License Agreement, the Partnership and Licensor
agree to enter into an extension of the License Agreement.
(1) Section 4.1 of the License Agreement is deleted in its
entirety and is replaced with:
"a. This License Agreement shall be effective for a term commencing on
the date of closing of the purchase transaction as set forth in the
Purchase Agreement (the "Closing") and ending on January 20, 2002
(the "Termination Date"), as to the licenses granted in Sections 2.1
and 2.2 hereof, provided that WinCup may not use the DIXIE trademark
described in Section 1.1(c) except in connection with the production
of Licensed Plastic Drinking Cups and Lids and the use of Licensed
Corrugated Boxes and Packaging Materials for Sam's Club. The right to
use the DIXIE trademark in connection with Sam's Club shall expire on
the date the Sales Agent Agreement expires.
"b. The license granted under Section 2.3 hereof shall expire upon
exhaustion of the supply of Licensed Corrugated Boxes and Packaging
Material in existence as of the date of the Closing, except in
connection with Sam's Club which shall terminate as set forth in
Section 2.4.
"c. The license granted under Section 2.4 hereof shall expire upon the
expiration of the Sales Agent Agreement."
ii. Licenses Granted.
----------------
a. Section 2.1(ii) is deleted in its entirety and is replaced with "(ii)
until the Termination Date hereof, which ever occurs first."
b. Section 2.5(ii) is deleted in its entirety and is replaced with "(ii)
upon the Termination Date hereof, whichever occurs first."
c. The last sentence of Section 2.7 is deleted in its entirety and is
replaced with "Upon completion of the removal of the trademarks included in
Trademark Rights from the molds, the licenses granted pursuant to Sections 2.1
and 2.2 hereof shall terminate on the Termination Date hereof."
iii. Licensed Corrugated Boxes and Packaging Material.
------------------------------------------------
(1) Section 1.3 is hereby deleted in its entirety and is
replaced with:
License Extension Agreement - 2
<PAGE>
"1.3 The term "Licensed Corrugated Boxes and Packaging Material"
shall mean all corrugated boxes and packaging material used by
Licensee on which appear any of LICENSOR's Trademark Rights."
iv. Assignment of License Agreement. The Partnership shall have
-------------------------------
the right to assign the License Agreement to any Affiliate of the
Partnership without the consent of James River; provided that such
assignee assumes all of the Partnership's rights, obligations and
liabilities in connection with the License Agreement and this
Agreement in writing and the Partnership shall remain primarily
obligated for the performance by such assignee of all of its
rights, obligations and liabilities under the License Agreement and
this Agreement. For purposes of this Paragraph 4, "Affiliate" shall
mean any person, corporation, partnership, association, joint stock
company, trust or unincorporated organization which directly or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the Partnership.
v. Effect of Modification. Except as hereby expressly extended,
----------------------
amended and modified, all of the terms, conditions, provisions and
covenants of the License Agreement shall continue in full force and
effect.
vi. Successors and Assigns. This Agreement shall bind and enure
----------------------
to the benefit of the parties to the License Agreement and their
respective successors and assigns.
vii. Governing Law. This Agreement shall be construed and the
-------------
legal relations between the paries determined in accordance with
the laws of the State of Delaware, excluding any choice of law
rules which may direct the application of the laws of any other
jurisdiction.
viii. Counterparts. This Agreement may be executed in as many
------------
counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed an original, but all of which
such counterparts shall constitute but one and the same instrument.
License Extension Agreement - 3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
JAMES RIVER PAPER COMPANY,
INC.
By: [SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
JAMES RIVER CORPORATION OF
VIRGINIA
By: [SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
WINCUP HOLDINGS, L.P.
By: WinCup Holdings, Inc., its general
partner
By: [SIGNATURE APPEARS HERE]
-------------------------
Name:
Title:
License Extension Agreement - 4
<PAGE>
EXHIBIT 10.10
PATENT LICENSE AGREEMENT
This Patent License Agreement ("Agreement"), effective as of January 20,
1996, between JAMES RIVER CORPORATION OF VIRGINIA and its wholly owned
subsidiary, JAMES RIVER PAPER COMPANY, INC., both corporations of the
Commonwealth of Virginia, hereinafter collectively referred to as "LICENSOR";
and WINCUP HOLDINGS, L.P., hereinafter referred to as "LICENSEE," a State of
Delaware limited partnership comprised of WINCUP HOLDINGS, INC. and JAMES RIVER
PAPER COMPANY, INC. wherein WINCUP HOLDINGS, INC. is the general partner and
JAMES RIVER PAPER COMPANY, INC. is a limited partner.
WHEREAS, LICENSOR owns and has right to license certain technical
information and patent rights relating to lift tabs with accordion hinges for
use in beverage containers.
WHEREAS, LICENSEE desires to obtain from LICENSOR a license under
LICENSOR's technical information and patent rights relating to Licensed Products
(as defined below).
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
ARTICLE
-------
1 -- DEFINITIONS
- ----------------
For the purposes of this Agreement and its attachments, the following terms
shall have the meanings ascribed to them below unless otherwise specifically
defined within the context of individual articles:
1.1 Affiliate as used in this Agreement in connection with a designated
---------
company shall mean any company of which the designated company now or hereafter
owns, manages, or controls, directly or indirectly, 50% or more of all the
voting power of the shares (or other securities or rights) entitled to vote for
the election of directors or other governing authority thereof.
1.2 Patent Rights means the patent listed in the attached Exhibit A which
-------------
relates to a beverage container lift tab lid with accordion hinge, and any
patent applications, registered designs and design applications, and any patents
or registered designs which may issue on such applications, and any reissues,
reexaminations, continuations, divisionals, extensions or renewals thereof.
1.3 Technical Information means any information, know-how, ideas, methods
---------------------
and procedures proprietary to LICENSOR which are
<PAGE>
useful in the design, development, production and use of a Licensed Product and
which may not be covered under the Patent Rights.
1.4 Intellectual Property Rights means any Patent Rights, rights in
----------------------------
Confidential Information, rights in Technical Information and all other
intellectual property rights, and any modifications, changes, improvements,
variations, enhancements or refinements made thereto, which LICENSOR owns or
otherwise has the right to license or disclose to LICENSEE pursuant to the
provisions of this Agreement.
1.5 Confidential Information means the trade secrets, confidential
------------------------
information, confidential know-how that either party owns or has the right to
disclose to the other Party, relating to the Intellectual Property Rights.
1.6 Licensed Product(s) means a container for beverage with a lift tab
-------------------
with an accordion hinge as set forth in the Patent Rights.
ARTICLE 2 -- BUSINESS ARRANGEMENT AND LICENSE GRANTS
-----------------------------------------------------
2.1 Scope. This Agreement concerns the protection of the LICENSOR's
-----
Intellectual Property Rights, and the licensing to LICENSEE under certain of
such rights, all as more fully set forth below.
2.2 Grant. Subject to the terms and conditions of this Agreement,
-----
LICENSOR hereby grants LICENSEE a nonexclusive, nontransferable royalty free
license (without right to sublicense) under the Intellectual Property Rights:
2.2.1 to make, have made, use, sell, distribute or otherwise dispose
of the Licensed Product; and
2.2.2 to use Licensor's Confidential Information solely in connection
with the terms set forth in Article 2.2.1 and not for any other purpose,
except as permitted in writing by Licensor.
2.3 Indemnification. LICENSEE agrees for itself, its Affiliates, its
---------------
customers, its successors and assigns, to indemnify, defend and hold harmless
LICENSOR, its Affiliates, and all officers, directors, shareholders, employees,
servants or agents, of and from any and all liabilities, loss, cost and expense
of any kind (including without limitation attorneys fees and expert witness
fees) arising out of or relating to LICENSEE'S or its Affiliates' use, sale or
other disposition of any Licensed Product or beverage container covered by
LICENSOR'S Intellectual Property Rights, and:
-2-
<PAGE>
2.3.1 any termination of this Agreement pursuant to Article 4.3;
2.3.2 any termination of any agreements between LICENSOR and
LICENSEE, which arises out of or relate to either (i) a termination of this
Agreement pursuant to Article 4.3 or (ii) (regardless of whether, or by
whom, this Agreement has been terminated) circumstances which would give
LICENSOR a right to terminate this Agreement pursuant to Article 4.3; or
2.3.3 this Agreement and its attachments.
2.4 No consequential damages. EXCEPT AS EXPRESSLY PROVIDED IN THIS
------------------------
AGREEMENT, NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER PARTY UNDER
THIS AGREEMENT OR UNDER ANY CONTRACT BETWEEN THE PARTIES CONCLUDED PURSUANT TO
THIS AGREEMENT FOR LOSS OF PRODUCTION, LOSS OF USE, LOSS OF BUSINESS, LOSS OF
REVENUE OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER OR NOT THE POSSIBILITY OF SUCH DAMAGES COULD HAVE BEEN REASONABLY
FORESEEN.
ARTICLE 3 -- REPRESENTATIONS AND WARRANTIES
-------------------------------------------
3.1 Title. LICENSOR represents and warrants that it is the owner of
-----
Patent Rights and Intellectual Property Rights and has the right to license the
Intellectual Property Rights.
3.2 Disclaimer. LICENSOR MAKES NO EXPRESS WARRANTY OR REPRESENTATION, AND
----------
NO WARRANTY SHALL BE IMPLIED, AS TO:
3.2.1 THE ADEQUACY, INTERPRETATION, USEFULNESS, MERCHANTABILITY,
OR FITNESS FOR A PARTICULAR PURPOSE OF INVENTIONS OR DESIGNS
COVERED BY LICENSOR'S PATENT RIGHTS OR ANY SUCH TECHNOLOGY;
3.2.2 THE FREEDOM FROM INFRINGEMENT OF THIRD PARTY PATENTS,
DESIGNS, COPYRIGHTS OR ANY INTELLECTUAL PROPERTY RIGHTS BY
USE OF LICENSOR'S TECHNICAL INFORMATION OF CONFIDENTIAL
INFORMATION FURNISHED HEREUNDER OR UNDER CONTRACTS BETWEEN
THE PARTIES CONCLUDED PURSUANT HERETO OR BY USE OF
INVENTIONS OR DESIGNS COVERED BY LICENSOR'S PATENT RIGHTS OR
ANY SUCH TECHNOLOGY, PROVIDED THAT IN THE EVENT OF A
CONFLICT BETWEEN THE TERMS OF THIS SECTION 3.2.2 AND SECTION
2.1(o) OF THE JR CAPITAL CONTRIBUTION AGREEMENT, SECTION
2.1(o) OF THE JR CAPITAL CONTRIBUTION AGREEMENT SHALL
CONTROL; OR
-3-
<PAGE>
3.2.3 THE VALIDITY OF ANY PATENT, DESIGN, OR PATENT OR DESIGN
CLAIM INCLUDED IN LICENSOR'S PATENT RIGHTS OR OTHER
INTELLECTUAL PROPERTY RIGHTS.
LICENSEE agrees to hold LICENSOR harmless from and indemnify LICENSOR
against any and all liabilities, demands, expenses or damages arising out of or
resulting from any claims in connection with the infringement of any third
party's intellectual property rights by or as a result of LICENSEE's or its
Affiliates' manufacture, use, sale or other disposition of any Licensed Product
or beverage container covered by LICENSOR's Intellectual Property Rights.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that LICENSEE is fully and solely responsible for the
Licensed Product and that LICENSOR does not take any responsibilities whatsoever
for, and shall not be liable, either directly or as an indemnitor for any
liabilities, demands, expenses, costs or damages, including special and
consequential damages, regardless of the fault or concurrent negligence of
direct or indirect parties arising from the Licensed Product, its use or
performance.
3.3 Infringements.
-------------
3.3.1 With respect to any Patent Rights now or hereafter licensed by
LICENSOR to LICENSEE under the provisions of this Agreement or under contracts
between the parties concluded pursuant to this Agreement, if LICENSEE becomes
aware of any product or activity of any third party that involves infringement
or violation of LICENSOR's Patent Rights, then LICENSEE shall promptly notify
LICENSOR in writing of such infringement or violation. LICENSOR may in its
discretion take or not take whatever action it reasonably believes is
appropriate; if LICENSOR elects to take action, LICENSEE will fully cooperate
therewith at LICENSOR's expense. LICENSOR shall have the sole right to control
or compromise any such actions.
3.3.2 Provided that the LICENSOR'S use of the License is in
compliance herewith, in the event that any action, proceeding or claim of any
kind or nature is instituted against the LICENSEE relating to the LICENSEE'S
operations or conduct under the license granted herein regarding the use or sale
of the Licensed Products, then LICENSEE agrees to take timely steps to defend
same and to promptly notify LICENSOR in writing with reasonable detail of the
date and nature of such action, proceeding or claim and, from time to time, of
the progress thereof. The LICENSEE shall permit (to the extent permissible by
the laws of the relevant jurisdiction) LICENSOR at LICENSOR'S sole option to
intervene or otherwise appear in such action, proceeding, or claim, but at
LICENSOR'S own expense.
-4-
<PAGE>
ARTICLE 4 -- TERM; TERMINATION
------------------------------
4.1 Effective Date. This Agreement shall automatically become effective
--------------
as of its execution and delivery by the parties hereto.
4.2 Term. Once effective, this Agreement shall continue in effect until
----
the expiration of the latest patent or patent to be granted on the patent
applications within the definition of the Patent Rights ("expiration of the
patents").
4.3 Termination. In addition to any other remedies it may have, LICENSOR
-----------
may terminate this Agreement at any time without penalty of any kind, upon
written notice to LICENSEE of its breach of any of its obligations, which breach
is not corrected within fifteen (15) days following notice of such breach from
LICENSOR, or if LICENSEE should at any time challenge the validity of any of the
Patent Rights.
4.4 Discharge of obligations. After termination of this Agreement,
------------------------
LICENSEE shall have no rights hereunder or in the Patent Rights, and neither
party shall have any obligations hereunder, except as set forth below:
4.4.1 Upon the termination of this Agreement, the LICENSEE shall:
4.4.1.1 subject to the provision of Article 4.5 immediately
cease and refrain from the distribution, sale and use of the Licensed
Product until the expiration of the patents;
4.4.1.2 immediately cease the use of the Technical Information,
LICENSOR Confidential Information and any Intellectual Property
Rights licensed hereunder, and provide all modifications,
improvements to such Technical Information, LICENSOR Confidential
Information and Intellectual Property Rights to LICENSOR all of which
shall inure to benefit of LICENSOR;
4.4.1.3 return to LICENSOR or destroy (at the option of the
LICENSOR) any material or documents provided by LICENSOR in
connection with this Agreement.
4.5 On termination of this Agreement and provided such termination is
not the result of a breach of this Agreement, the LICENSEE shall have ninety
(90) days in which to sell inventory of Licensed Product.
4.6 Articles 2.3, 2.4, 3.2, 3.3, 6.9, 6.10 and 6.11 shall survive any
expiration or termination of this Agreement.
-5-
<PAGE>
ARTICLE 5 -- NOTICE
-------------------
Unless otherwise specified in writing, the mailing addresses of the parties
hereto are as follows:
LICENSOR: James River Corporation of Virginia and
James River Paper Company, Inc.
1915 Marathon Avenue
P.O. Box 899
Neenah, WI 54957-0899
Fax 414-729-8166
Attention: Robert S. Alexander, Chief Patent Counsel
LICENSEE: WinCup Holdings, L.P.
735 Chesterbrook Boulevard
Wayne, PA 19087-5638
Attention: Michael T. Kennedy, Chairman
Notices hereunder shall be deemed to have been duly given and served five
(5) days after the mailing thereof by Registered or Certified Mail, postpaid, to
the party entitled thereto at its above address, or at such other address as it
may from time to time designate in writing to the other party.
ARTICLE 6 -- MISCELLANEOUS
--------------------------
6.1 Entire agreement. The making, execution and delivery of this Agreement by
----------------
LICENSOR and LICENSEE have been induced by no representations, statements,
warranties or agreements other than those expressed herein. This Agreement
embodies the entire understanding of the parties and there are no further or
other agreements or understandings, written or oral, in effect between the
parties relating to the subject matter hereof.
6.2 Waiver. Waiver of a breach of this Agreement or the failure of
------
LICENSOR to exercise any right under this Agreement shall in no event constitute
a waiver as to any future breach, whether similar or dissimilar in nature, or as
to the exercise of any future right under this Agreement.
6.3 Amendment, modification. This Agreement may be amended or
-----------------------
modified only by an instrument signed by the duly authorized representative of
each of the respective parties hereto and expressly stating that it is the
intent of that document to amend or modify the terms hereof.
6.4 Assignment. LICENSEE shall not, without the prior written
----------
consent of LICENSOR, assign, transfer or sublicense its
-6-
<PAGE>
rights or obligations hereunder to a third party. LICENSOR shall however be
entitled to transfer or assign the Agreement to its parent company or any
Affiliate of its parent company.
6.5 Titles. The titles of each Article in this Agreement are for the
------
convenience of the parties and are not intended to modify the terms and
conditions contained herein.
6.6 Severability. If any provision of this Agreement, or the
------------
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall be interpreted so as not to invalidate
the remaining provisions of this Agreement and so as best to reasonably effect
the intent of the parties.
6.7 No further grants. Nothing contained in this Agreement shall be
-----------------
construed to grant LICENSEE any rights or licenses other than those expressly
stated therein.
6.8 Applicable law. This Agreement shall be construed and the legal
--------------
relations between the parties determined in accordance with the laws of the
State of Delaware, excluding any choice of law rules which may direct the
application of the laws of any other jurisdiction.
6.9 Limitation of actions. No action, regardless of form, arising
---------------------
out of any alleged breach of this Agreement or obligations under this Agreement
may be brought by either party more than two (2) years after the cause of action
has occurred unless this Agreement has been terminated pursuant to Article 4 and
LICENSEE has not ceased or refrained from making, using, selling or otherwise
disposing of the Licensed Product as set forth in Articles 4.4 and 4.5, then
LICENSOR shall have the right to any remedy including, but not limited to,
instituting any action which it deems to be appropriate.
6.10 Ownership. Any invention, discovery, improvement, design,
---------
machine, device, component, process or know-how which relates to the
Intellectual Property Rights regardless of whether it is conceived solely by
LICENSOR or LICENSEE, or jointly by LICENSOR and LICENSEE, or jointly with
anyone working in cooperation with LICENSOR or LICENSEE with respect to the
Intellectual Property Rights (hereinafter collectively referred to as
"Inventions"), shall be the sole and exclusive property of LICENSOR whether
patented or not. LICENSEE agrees to assist LICENSOR, both during and subsequent
to this Agreement, in perfecting and securing LICENSOR's rights in the
Inventions, and LICENSEE will execute, acknowledge and deliver any and all
documents and instruments requested by LICENSOR for such purpose including, but
not limited to, assignments for vesting title in LICENSOR.
-7-
<PAGE>
6.11 Confidentiality.
---------------
6.11.1 The Confidentiality Agreement dated as of the date
hereof between James River Paper Company, Inc., LICENSEE and WinCup
Holdings, Inc. (the "Confidentiality Agreement") is incorporated
herein by reference.
6.11.2 The parties agree that the existence of this Agreement
is not confidential, but the terms of this Agreement are confidential
and shall not be disclosed by one party without the written consent of
the other party.
6.11.3 The LICENSEE further agrees that any information
provided to the LICENSEE during the term of this Agreement and the
Confidentiality Agreement (collectively referred to as "Agreements"),
including any Confidential Information and any INVENTIONS, is
confidential proprietary information belonging to the LICENSOR, and
without the LICENSOR's prior written consent, it shall not be
disclosed to any third party during the terms of the Agreements and
thereafter or used by LICENSEE outside the scope of the rights granted
by the Agreements.
6.11.4 The LICENSEE further agrees that it will not make or
permit any third party to make any public announcements or issue or
permit any third party to issue any press release relating to the
Agreements and the subject matter hereof, or otherwise provide details
of the Agreements, the Licensed Product, Licensor Confidential
Information, Inventions on Intellectual Property Rights to any person
or entity without prior written agreement of the LICENSOR.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in their respective corporate names by their duly authorized
representatives as of the date and year first written above.
JAMES RIVER CORPORATION OF WINCUP HOLDINGS, L.P.
VIRGINIA By its general partner,
WINCUP HOLDINGS, INC.
By: /s/ Stephen E. Hare By: [SIGNATURE APPEARS HERE]
--------------------------- ----------------------------
Title: Senior V.P., CFO Title: Chairman
------------------------ -------------------------
Date: January 20, 1996 Date: January 20, 1996
------------------------- --------------------------
JAMES RIVER PAPER COMPANY, INC.
By: /s/ Stephen E. Hare
---------------------------
Title: Senior V.P., Treasurer
------------------------
Date: January 20, 1996
-------------------------
-9-
<PAGE>
EXHIBIT A
PATENT RIGHTS
-------------
1. U. S. Patent Number 4,760,934
Issue Date: August 2, 1988
Title: LIFT TAB LID WITH ACCORDION HINGE
-10-
<PAGE>
AMENDMENT TO PATENT LICENSE AGREEMENT
This AMENDMENT TO PATENT LICENSE AGREEMENT ("Agreement") is made as of
December 5, 1996 by and between WINCUP HOLDINGS, L.P., a Delaware limited
partnership (the "Licensee"), JAMES RIVER CORPORATION OF VIRGINIA, a Virginia
corporation ("James River") and JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation ("JR").
BACKGROUND
----------
A. The Licensee, WinCup Holdings, Inc., ("WinCup"), Radnor Holdings
Corporation ("Radnor") and JR intend to enter into a Partnership Interest
Purchase Agreement pursuant to which Radnor shall purchase the entire limited
partnership interest of JR in the Licensee, as such interest is described in the
Limited Partnership Agreement between WinCup and JR, dated as of January 20,
1996.
B. James River and JR (collectively, "Licensor") and the Licensee are
parties to that certain Patent License Agreement, dated as of January 20, 1996
(the "Patent Agreement"), pursuant to which such agreement the Licensor granted
the Licensee, under the Intellectual Property Rights, a license to make, have
made, use, sell, distribute or otherwise dispose of the Licensed Product; which
such right terminates upon the expiration of the last-to-expire patent within
the Patent Rights.
C. The Licensee and the Licensor have determined that it would be in each
of their best interests to enter into an amendment of the Patent Agreement.
D. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Patent Agreement.
NOW THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Assignment of Patent Agreement. The following is added as the second
------------------------------
and third sentences of Article 6.4 of the Patent Agreement:
"Notwithstanding the foregoing sentence, Licensee shall have the right to
assign the Patent Agreement to any Affiliate of the Licensee without the
consent of James River, but after having provided James River with prior
written notice thereof; provided that such assignee assumes all of
Licensee's rights, obligations and liabilities in connection
<PAGE>
with the Patent Agreement and this Agreement in writing and the Licensee
shall remain primarily obligated for the performance by such assignee of
all of its rights, obligations and liabilities under the Patent Agreement
and this Agreement and any amendments or modifications hereof; provided,
further that in the event the assignee no longer qualifies as an affiliate
it shall reassign the Patent Agreement to WinCup Holdings, L.P. or one of
WinCup Holdings, L.P.'s other Affiliates pursuant to the terms set forth
above.
2. Effect of Amendment. Except as hereby expressly amended, all of the
-------------------
terms, conditions, provisions and covenants of the Patent Agreement shall
continue in full force and effect.
3. Successors and Assigns. This Agreement shall bind and enure to the
----------------------
benefit of the parties to the Patent Agreement and their respective successors
and assigns.
4. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware, excluding any choice of law
rules which may direct the application of the laws of any other jurisdiction.
5. Counterparts. This Agreement may be executed in as many counterparts
------------
as may be deemed necessary or convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all of which such counterparts shall constitute but one and the
same instrument.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
JAMES RIVER PAPER COMPANY,
INC.
By: [SIGNATURE APPEARS HERE]
---------------------------
Name:
Title:
JAMES RIVER CORPORATION
OF VIRGINIA
By: [SIGNATURE APPEARS HERE]
---------------------------
Name:
Title:
WINCUP HOLDINGS, L.P.
By: WinCup Holdings, Inc., its general
partner
By: [SIGNATURE APPEARS HERE]
------------------------
Name:
Title:
3
<PAGE>
Confidential Treatment
Exhibit 10.11
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
CONTRACT OF SALE
This Contract of Sale is entered into as of December 5, 1996, by and
between Chevron Chemical Company ("Chevron"), a Delaware corporation, and SP
Acquisition Co. ("SPAC"), a Delaware corporation, StyroChem International Inc.
("SPI"), a Texas corporation, and StyroChem International Ltd. ("SPL"), a Quebec
corporation ("SPAC", "SPI" and "SPL" are collectively referred to as
"Purchaser").
Chevron agrees to sell and deliver and Purchaser agrees to purchase and
accept delivery of Product described below, in the quantities and during the
period set forth in this Contract of Sale.
1. The Product to be sold and delivered shall be Styrene Monomer meeting the
specifications set forth in Exhibit A.
2. (a) The quantity of Product to be sold and delivered hereunder shall be a
minimum of 120,000,000 pounds and a maximum of 150,000,000 pounds per calendar
year, the exact quantity within said range at Purchaser's option. The foregoing
Product quantities shall be prorated for part calendar years, if any, during the
term of this Agreement. Purchaser shall nominate the quantity of Product within
said range for the calendar year in question by providing Chevron written notice
prior to [ ] of the preceding calendar year.
In no event shall the annual nominated quantity under Section 2.(a) for the
calendar year in question be less than the lower of (i) the Product quantity
nominated by Purchaser under Section 2.(a) for the preceding calendar year, plus
the Excess Quantity, if any, which Chevron agrees to supply under Section 2.(b)
below for the preceding calendar year; or (ii) Purchaser's Product requirements
for the calendar year in question; provided, however, that Chevron shall have
the option of declining to supply Purchaser's nominated quantities in excess of
150,000,000 pounds. Chevron shall notify Purchaser in writing concerning whether
or not it shall supply Purchaser with quantities in excess of 150,000,000
pounds within thirty (30) days of receipt of Purchaser's nomination.
(b) Chevron shall have the option of supplying all of Purchaser's annual
Product requirements in excess of 150,000,000 pounds ("Excess Quantity").
Purchaser shall nominate the Excess Quantity, if any, by giving Chevron written
notice prior to [ ] of the calendar year preceding the calendar year in
question. Within thirty (30) days of receipt of said notice, Chevron shall
notify Purchaser in writing concerning whether or not it shall supply Purchaser
with said "Excess Quantity".
3. The Product shall be delivered to Purchaser FOB (as defined in the Texas
Uniform Commercial Code) St. James, Louisiana. Delivery as used herein shall be
defined to occur when the Product passes from Chevron's delivery line at St.
James into the tankage of Purchaser's carrier.
4. Chevron shall be responsible for arranging for the shipment of Product from
St. James, Louisiana to Purchaser's facilities in Fort Worth, Texas and
Montreal, Quebec, as designated by Purchaser, and Purchaser shall be responsible
for the cost of such shipment. The parties agree that if the aggregate actual
cost of shipment incurred by Purchaser in any month ("Actual Shipping Cost")
exceeds the "Freight Allowance" (as defined below) for shipment of Product to
Purchaser's facilities at
1
<PAGE>
Fort Worth, Texas and Montreal Quebec, then Chevron shall promptly reimburse
Purchaser for the total amount of such excess. For purposes of this Agreement,
the "Freight Allowance" for shipments of Product from St. James, Louisiana to
Purchaser's facilities in Fort Worth, Texas shall be [ ] U.S. cents per pound
("cpp") of Product, and the "Freight Allowance' for shipments to Purchaser's
facility in Montreal, Quebec shall be [ ] Canadian cents per pound. These
Freight Allowances shall be readjusted on [ ], 1997 and each anniversary
thereafter in accordance with the Rail Cost Adjustment Factor (RCAF), Unadjusted
Increase Scale, as published by the American Association of Railroads. If,
however, during the term hereof there shall cease to be any merchant marketers
of Product manufactured in Sarnia, Ontario, the "Freight Allowance" with respect
to shipments to Purchaser's facility in Montreal, Quebec shall be changed to an
amount equal to the lowest rail shipping cost available to Purchaser from the
closest merchant marketer of Product, and subsequently adjusted in accordance
with the immediately preceding sentence.
5. (a) Chevron shall invoice Purchaser for all shipments of Product made
during a given month at the end of each month.
(b) During the first [ ] months of this Agreement, payment shall be due
for invoiced Product and Purchaser shall pay Chevron therefor in immediately
available U.S. dollars in accordance with following schedule:
Period Payment Terms
------ -------------
Months [ ] [ ] days from date of invoice
Months [ ] [ ] days from date of invoice
Months [ ] [ ] days from date of invoice
Months [ ] [ ] days from date of invoice
Commencing with the [ ] month of this Agreement, payment shall be due on or
before [ ] days from the date of invoice in immediately available U.S. dollars.
Purchaser shall make payment hereunder by wire transfer for SPL, and by check
for SPI.
(c) In the event Purchaser is unable to make payments when due or becomes
insolvent, Chevron may, in its discretion, require payment to be made on a
C.O.D. basis.
6. (a) Purchaser shall place firm orders for Product to be shipped by Chevron
at least forty-five (45) days prior to the date of a requested shipment. Chevron
will accept reasonable changes in said quantities if advised thereof within
fifteen (15) days after the date of initial order placement. Chevron will exert
reasonable efforts to accommodate changes requested by Purchaser within
twenty-one (21) days of the initial order placement unless said order has been
shipped. Chevron shall advise Purchaser of its inability to fill any order
within five (5) business days of placement; otherwise Chevron shall be deemed to
have accepted the order. For those purchase orders where Chevron does not
satisfy the conditions thereof for any reason, Purchaser will have the right to
place such orders with a third party. With respect to such orders placed by
Purchaser with a third party (other than orders Chevron does not satisfy because
(i) such order was materially changed by Purchaser more than fifteen (15) days
after the initial placement of such order; (ii) such order is in excess of the
"Minimum Reserved Capacity" as specified in Section 6.(b) below; or (iii)
Chevron is unable to satisfy such order due to the
2
<PAGE>
occurrence of an event described in Section 16.(a) below), Chevron will pay to
Purchaser an amount, if any, that Purchaser paid to such third party for such
order in excess of the price that would have been paid to Chevron for such order
pursuant hereto if Chevron had satisfied such order, such orders placed by
Purchaser with a third party shall be deemed placed with Chevron for purposes of
Section 10 below.
(b) During each month of each calendar year of this Agreement, Chevron
will reserve a portion of its manufacturing capacity for purchases of Product by
Purchaser in an amount equal to 1/11th of the quantity to be sold and delivered
for said calendar year as determined under Section 2 above ("Minimum Reserved
Capacity"). Should Purchaser desire to place orders in any month for Product
that in the aggregate exceed the Minimum Reserved Capacity for such month,
Chevron will attempt to satisfy the excess requirement to Purchaser's
satisfaction if in Chevron's reasonable judgment such can be done without
disrupting its manufacturing process and/or create the inability to fulfill
commitments to its other customers.
(c) Purchaser and Chevron may agree from time to time to discuss possible
revisions to the Minimum Reserved Capacity; provided, however, neither Chevron
nor Purchaser will be obligated to agree to any revisions to the Minimum
Reserved Capacity.
7. Performance under this Agreement shall commence on the date first written
above for an initial term of seven (7) years and continue for successive annual
terms thereafter unless terminated by either party giving the other at least
twelve (12) months prior written notice, which termination shall be effective at
the end of the initial term or any annual extension thereof.
8. Title to the Product and risk of loss therefor shall pass from Chevron to
Purchaser upon tender of delivery of the Product to Purchaser at St. James,
Louisiana.
9. The purchase price to be paid for each pound of Product purchased by
Purchaser hereunder shall be the "Market Price", less a "Discount".
(a) For purposes of this Agreement, the "Market Price" shall be calculated
as follows:
Market Price = ([ ] x Styrene Contract) + ([ ] x [Styrene Spot +
[ ] cpp]), where
"Styrene Contract" shall be the U.S. Styrene Market contract
price in cpp for the month of delivery as published in CMAI's
month-end Monomers Market Report, and shall be the low-end of the
----------------------
values if a range is published; and
"Styrene Spot" shall be U.S. Styrene Market spot price in cpp for
the month of delivery as published in CMAI's month-end Monomers
--------
Market Report, and shall be the average of the values if a range
-------------
is published.
In no event, however, shall the Market Price for the month of delivery
exceed the value of "Styrene Contract" for said month as determined above.
(b) For purposes of this Agreement, the "Discount" shall be calculated as
follows:
3
<PAGE>
(i) When the Market Price is [ ] cpp or above:
Discount = [ ] cpp + [ ] (Market Price -[ ] cpp),
but in no event shall the Discount exceed the greater of:
(aa) [ ] cpp; or
(bb) Market Price - ([{Bz x [ ]}+{Eth x [ ]}]+
[ ]), where
"Bz" is the U.S. Gulf Coast (FOB) Benzene contract
price in cents per gallon (before any discounts),
plus a freight allowance of [ ] cents per gallon,
plus superfund, if any, for the month of delivery.
The U.S. Gulf Coast (FOB) Benzene contract price,
before freight allowances and superfund, shall be
deemed equal to the U.S. Benzene contract price
published for the month in question in CMAI's month-
end Monomers Market Report, and shall be the low-end
----------------------
of the values if a range is published; and
"Eth" is the U.S. Gulf Coast Ethylene contract price
in cpp (before any discounts, plus a [ ] cpp
delivery charge, plus superfund, if any, for the
month of delivery. The U.S. Gulf Coast Ethylene
contract price, before delivery charges and
superfund, shall be deemed equal to the U.S. Ethylene
contract price published for the month in question in
CMAI's month-end Monomers Market Report, and shall be
----------------------
the low-end of the values if a range is published.
(ii) When Market Price is greater than [ ] cpp but less than
[ ] cpp:
Discount = [ ] cpp
(iii) When Market Price is less than or equal to [ ] cpp:
Discount = [ ] cpp - [ ]([ ]cpp - Market Price), but
in no event shall the Discount be less than [ ] cpp or
more than [ ] cpp.
(c) The purchase price shall be adjusted each month during the term of
this Agreement based upon the changes in the Market Price and the factors used
in determining the Discount.
10. Upon the purchase of a minimum of 120,000,000 pounds of Product during any
calendar year, and provided Purchaser has complied with its obligations
hereunder, including, but not limited to, making payments when due pursuant to
Section 5 above, Purchaser shall be eligible for a rebate on all pounds
purchased during said calendar year in accordance with the following Schedule A:
4
<PAGE>
Schedule A
----------
<TABLE>
<CAPTION>
Quantity (lbs) Rebate (cpp)
-------------- ------------
<S> <C>
[ ] to [ ] [ ]
[ ] to [ ] [ ]
[ ] to [ ] [ ]
[ ] and above [ ]
</TABLE>
Rebates according to Schedule A are not cumulative and Purchaser shall be
entitled to a rebate for the entire quantity of Product purchased during said
calendar year at only one rebate rate.
A provisional rebate, which rebate shall be based upon the Product quantity
("Quantity") to be sold and delivered for the calendar year in question pursuant
to Section 2 above, may be extended to Purchaser in the form of a credit issued
at the end of any calendar quarter in which Purchaser meets the minimum
year-to-date ("Y/D") purchase requirements for said quarter in accordance with
the following Schedule B:
Schedule B
----------
<TABLE>
<CAPTION>
Calendar Quarter (Q) Minimum Y/D Requirements
-------------------- ------------------------
<S> <C>
1st Q [ ]% of Quantity
2nd Q [ ]% of Quantity
3rd Q [ ]% of Quantity
4th Q [ ]% of Quantity
</TABLE>
If Purchaser fails to meet the minimum Y/D purchase requirements for any
calendar quarter(s), Purchaser shall not receive the provisional rebate at the
end of said quarter(s). Thereafter if Purchaser meets the minimum Y/D purchase
requirements for a succeeding calendar quarter, Purchaser shall receive the
provisional rebate at the end of the quarter in question for (a) Product
purchases during said quarter; and (b) Product purchases during the previous
quarter(s) which were not eligible for the provisional rebate according to
Schedule B.
The balance of the rebate, if any, for which Purchaser qualifies for according
to Schedule A shall be paid in the form of a credit issued at the end of the
calendar year in question when final quantities are determined. In the event
Purchaser fails to purchase the requisite Quantity upon which the provisional
rebate is based, Chevron shall adjust Purchaser's account for the provisionally
extended rebate which Purchaser received but failed to qualify for. See Exhibit
B.
11. Purchaser shall provide and license Purchaser's EPS technology to Chevron
for the manufacture, use and sale of EPS within the Asia/Pacific Region
(Australia, China, Hong Kong, India, Indonesia, Japan, Korea (South), Malaysia,
New Zealand, Pakistan, Philippines, Singapore, Taiwan, and Thailand) on a
nonexclusive, royalty-free basis. Pursuant to the terms of such license,
Purchaser shall grant to Chevron an immunity from suit for infringement of
Purchaser's patent rights pertaining to said EPS technology and said immunity
shall be extended to Chevron's EPS customers and affiliates.
5
<PAGE>
If Chevron requests detailed engineering and design assistance from Purchaser
with respect to said technology, Purchaser shall furnish same and be reimbursed
for its reasonable costs in doing so.
12. In addition to the price provided herein, Purchaser shall pay Chevron an
amount equal to any tax, duty (including dumping duty), or other charge
(including Superfund levies or the like), unless measured by net income,
assessed on Chevron and related to sales made pursuant to this Agreement or to
the transportation, production, or use of the Product or source materials
thereof. Any personal property taxes assessed upon the value of the Product
shall be paid by the party having title thereto at the time such taxes are
assessed.
13. (a) Chevron warrants that, at the time of delivery, the Product will meet
the specifications in Exhibit A in all material respects.
(b) EXCEPT AS SET FORTH IN SECTION 13.(a) ABOVE, CHEVRON DOES NOT MAKE,
AND EXPRESSLY DISCLAIMS, AND PURCHASER EXPRESSLY WAIVES ANY OTHER WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
REGARDLESS OF WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ALLEGEDLY ARISING
FROM ANY USAGE OF ANY TRADE OR FROM ANY COURSE OF DEALING.
(c) PURCHASER'S SOLE AND EXCLUSIVE REMEDIES FOR LOSS, DAMAGE OR EXPENSE
INCURRED BY PURCHASER (EITHER DIRECTLY OR AS RESULT OF ANY CLAIMS OR ACTIONS
AGAINST PURCHASER BY ANY THIRD PARTY) BASED ON OR DUE TO BREACH OF CHEVRON'S
WARRANTY HEREUNDER ARE AS FOLLOWS:
(i) With respect to any and all claims, damages, liabilities, costs
and expense, including court costs and attorneys fees, incurred by Purchaser
based upon, arising out of or otherwise in respect of any breach of warranty
made by Chevron in Section 13.(a) above, CHEVRON, AT PURCHASER'S OPTION, WILL
REPLACE THE NONCONFORMING PRODUCT OR REFUND THE PURCHASE PRICE FOR SUCH PRODUCT,
AND REIMBURSE PURCHASER FOR ITS OUT OF POCKET COSTS AND EXPENSES RELATED TO SUCH
BREACH OF WARRANTY, INCLUDING LABOR, MATERIAL AND OTHER OUT OF POCKET COSTS
INCURRED BY PURCHASER IN CONNECTION WITH THE REPLACEMENT OF EPS PRODUCT
MANUFACTURED BY PURCHASER USING NONCONFORMING PRODUCT. In no event shall
Chevron's total liability hereunder with respect to damages incurred directly by
Purchaser exceed the foregoing.
(ii) With respect to any and all claims or actions of third parties
against Purchaser based upon, arising out of or otherwise in respect of any
breach of any warranty made by Chevron in Section 13.(a) above, Chevron agrees
to indemnify Purchaser pursuant to Section 14 below.
14. CHEVRON AGREES TO INDEMNIFY AND HOLD PURCHASER HARMLESS FROM AND AGAINST
ANY CLAIM, SUIT, JUDGMENT, DAMAGE, COST OR EXPENSE, INCLUDING REASONABLE
ATTORNEYS' FEES, ASSERTED BY A "THIRD PARTY" (AS DEFINED BELOW) AGAINST
PURCHASER TO THE EXTENT SUCH ARISES OUT OF "CHEVRON'S RESPONSIBILITY" (AS
DEFINED BELOW). PURCHASER AGREES TO INDEMNIFY AND HOLD CHEVRON HARMLESS FROM AND
AGAINST ANY CLAIM, SUIT, JUDGMENT, DAMAGE, COST OR EXPENSE, INCLUDING REASONABLE
ATTORNEYS' FEES, ASSERTED BY ANY THIRD PARTY AGAINST CHEVRON TO THE EXTENT SUCH
ARISES OUT OF "PURCHASER'S RESPONSIBILITY" (AS DEFINED BELOW). As used herein,
the term "Third Party" with respect to any party shall include employees,
contractors and agents
6
<PAGE>
of such party, but shall not include any parent, subsidiary or affiliated
company of such party that is more than fifty percent (50%) owned (directly or
indirectly) by such party or such party's ultimate parent company. As used
herein, the term "Chevron's Responsibility" shall mean (a) any failure of
Product to conform to the specifications provided in Exhibit A when delivered to
Purchaser and (b) all risk with respect to the handling and use of Product prior
to delivery to Purchaser. As used herein, the term "Purchaser's Responsibility"
shall mean all risk with respect to the handling and use of Product after
delivery to Purchaser other than any risk arising from Chevron's Responsibility.
15. (a) Product may be or become hazardous. Purchaser acknowledges that it is
familiar with, and shall take all steps necessary to inform, warn, and
familiarize its employees, agents, customers, and contractors who may handle the
Product, of all hazards pertaining to and proper procedures for safe use of the
Product and of the containers or equipment in which the Product may be handled,
shipped, or stored. Purchaser also undertakes to label as appropriate any
materials which it makes or resells that include Product.
(b) PURCHASER SHALL INDEMNIFY, DEFEND, AND HOLD CHEVRON HARMLESS FROM AND
AGAINST ANY CLAIM, LIABILITY, OR EXPENSE, INCLUDING, BUT NOT LIMITED TO, INJURY
OR DEATH OF PURCHASER'S EMPLOYEES, DIRECTLY OR INDIRECTLY ARISING FROM
PURCHASER'S FAILURE TO SO INFORM, WARN, AND FAMILIARIZE ITS EMPLOYEES, AGENTS,
CUSTOMERS, AND CONTRACTORS, EXCEPT TO THE EXTENT THAT THE CLAIM, LIABILITY, OR
EXPENSE IS CAUSED BY THE FAILURE OF THE PRODUCT TO MEET THE SPECIFICATIONS IN
EXHIBIT A WHEN DELIVERED TO PURCHASER; AND THESE UNDERTAKINGS APPLY IN FULL
MEASURE WHETHER OR NOT IS ALLEGED OR PROVED THAT CHEVRON WAS ACTIVELY OR
PASSIVELY NEGLIGENT OR AT FAULT OR LIABILITY WITHOUT FAULT IS SOUGHT TO BE
IMPOSED ON CHEVRON EXPENSES AS USED HEREIN SHALL INCLUDE REASONABLE ATTORNEYS'
FEES.
16. (a) Neither party shall be in breach of its obligations hereunder to the
extent that performance is prevented or delayed by (i) any cause beyond the
reasonable control of the party concerned, including, but not limited to,
shortage in raw material, transportation, power, manufacturing capacity, etc.,
or the Product itself from Chevron's then-contemplated source of supply; (ii)
labor disturbance, whether or not involving the employees of the party concerned
or otherwise, and whether or not the disturbance could be settled by acceding to
the demands of a labor group; or (iii) compliance with a request or order of a
person purporting to act on behalf of any government or governmental department
or agency (including but not limited to EPA and OSHA).
(b) Whenever performance is so affected by such a contingency, Chevron may
reduce deliveries in a manner that fairly apportions the consequences of the
contingency among all Chevron's customers (including affiliates or internal
needs). Chevron shall not be required to purchase Product from third parties in
order to comply with this Section but Chevron may do so in its sole discretion.
(c) Performance will be excused as provided above even though the
occurrence of the contingency in question may have been foreseen or foreseeable
at the time of contracting or may subsequently become foreseeable.
(d) Quantities not purchased or sold due to the provisions of the Section
need not be made up later.
7
<PAGE>
(e) If any law, regulation, or other governmental action requires Chevron
to reduce any price in effect under this Agreement or prevents Chevron from
increasing the price pursuant to Section 9 above, Chevron may cancel from this
Agreement the quantities of Product so affected.
(f) Nothing in this Section shall excuse Purchaser from its obligations to
make payments when due.
17. This Agreement, together with Exhibits A, B and C attached hereto,
supersedes all prior understanding, drafts, discussions, or statements, whether
oral or in writing, express or implied, dealing with the same subject matter. It
constitutes a final written expression of all of the terms of this Agreement and
is a complete and exclusive statement of those terms. It may not be amended or
modified in any manner except by a written agreement signed by both parties that
expressly amends this Agreement. The terms and conditions of any purchase orders
used in placing orders for Product in conflict with the terms of this Agreement
shall be of no force or effect. No delay on the party of a party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of either party of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
18. No rights or obligations under this Agreement may be assigned without the
prior written consent of the other party.
19. Any questions concerning the interpretation and enforcement of this
Agreement shall be governed by the domestic law of the State of Texas, without
regard to the principles of the conflicts of laws.
20. Neither party shall give any director, employee, or representative of the
other party any commission, fee, rebate, gift, or entertainment of significant
cost or value in connection with this Agreement or enter into any other business
arrangement with any director, employee, or representative of the other, without
prior written notification to the other party. Any representative(s) authorized
by either party may cause an audit of any and all records of the other party as
necessary and proper to verify that there has been compliance with this Section.
21. All notices, requests, demands, and other communications required or
permitted to be given or made hereunder by any party hereto shall be in writing
and shall be deemed to have been duly given if delivered personally or
transmitted by first class registered or certified mail, postage prepaid, return
receipt requested, or sent by prepaid overnight delivery service, or sent by
cable, telegram, or facsimile to the parties at the following addresses (or at
such other addresses as shall be specified by the parties by like notice):
If to Chevron: If to Purchaser:
1301 McKinney Street c/o Wincup
Houston, Texas 77010 7980 West Buckey Road
Attention: Andrew Singer Phoenix Arizona 85043
Facsimile: (713) 754-2016 Attention: Don Rogalski
Facsimile: (602) 936-4376
8
<PAGE>
22. The Option Agreement dated as of February 25, 1994 by and among Chevron
Chemical Company and Richard Davidovich and SP Acquisition Company shall
terminate in accordance with that certain Termination of Option, effective as of
December, 1996, a copy of which is attached hereto as Exhibit C.
23. Purchaser shall provide Chevron with monthly and quarterly financial
statements including income, balance sheet and cash flow analysis. Purchaser
shall provide Chevron with audited financial statements annually.
In WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its representatives thereunto duly authorized, all as of the
date set forth above.
SP ACQUISITION CO. CHEVRON CHEMICAL COMPANY
By:[SIGNATURE APPEARS HERE] By: /s/ William E. Schultz
______________________ ----------------------
Title: President Title: General Manager, BTX/Styrene
------------------- -------------------
Date: December 5, 1996 Date: December 4, 1996
-------------------- --------------------
STYROCHEM INTERNATIONAL INC. STYROCHEM INTERNATIONAL LTD.
By:[SIGNATURE APPEARS HERE] By:[SIGNATURE APPEARS HERE]
---------------------- ----------------------
Title: President Title: President
------------------- -------------------
Date: December 5, 1996 Date: December 5, 1996
-------------------- --------------------
9
<PAGE>
EXHIBIT A
[LOGO OF CHEVRON U.S. CHEMICALS APPEARS HERE]
P.O. Box 3766
Huston, TX 77253
TECHNICAL DATA SHEET
CHEVRON STYRENE MONOMER
<TABLE>
<CAPTION>
SALES SPECIFICATION*
--------------------- TYPICAL
SPECIFICATION PROPERTIES TEST METHOD MINIMUM MAXIMUM VALUES*
- ------------------------ ----------- ------- ------- ------
<S> <C> <C> <C> <C>
Purity, Wt. % ASTM D-5135 99.90 -- 99.93
Ethylbenzene, ppm ASTM D-5135 -- 85 45
Color ASTM D-1209 -- 10 8
Polymer Content, ppm ASTM D-2121 -- 10 1
Inhibitor (t-Butyl Catechol):
ppm a ASTM D-4590 10 15 13
Aldehydes
(as Benzaldehyde), ppm ASTM D-2119 -- 200 20
Peroxides (as H/2/O/2/), ppm ASTM D-2340 -- 100 5
Benzene, ppm ASTM D-3962M -- 1 less than 1
Typical Properties
- ------------------
Chlorides, ppm Chevron SM-350-16 -- -- less than 1
Sulfur, ppm Chevron SM-350-16 -- -- less than 1
Flash, TCC, degrees C, ASTM D-56 -- -- 31
(degrees F) (88)
</TABLE>
a - Applies to all methods of shipments unless additional inhibitor is
specified.
b - Subject to change without notice.
<PAGE>
EXHIBIT B
Example: Assume for calendar year 1997, Purchaser nominates [ ] pounds
pursuant to Section 2.(a) above; and an additional [ ] pounds pursuant to
Section 2.(b) above, which "Excess Quantity" Chevron agrees to deliver,
totaling [ ] pounds of Product. In accordance with Schedule A under
Section 10 above, Purchaser's provisional rebate, if any, shall be [ ] cpp.
Scenario A
----------
<TABLE>
<CAPTION>
Minimum Y/D Requirements Actual Y/D Purchases Provisional Rebate Credited
------------------------ -------------------- ---------------------------
<S> <C> <C> <C>
1st Q [ ] lbs. [ ] lbs. [ ]
2nd Q [ ] lbs. [ ] lbs. [ ]
3rd Q [ ] lbs. [ ] lbs. [ ]
4th Q [ ] lbs. [ ] lbs. [ ]
</TABLE>
Scenario B
----------
<TABLE>
<CAPTION>
Minimum Y/D Requirements Actual Y/D Purchases Provisional Rebate Credited
------------------------ -------------------- ---------------------------
<S> <C> <C> <C>
1st Q [ ] lbs. [ ] lbs. [ ]
2nd Q [ ] lbs. [ ] lbs. [ ]
3rd Q [ ] lbs. [ ] lbs. [ ]
4th Q [ ] lbs. [ ] lbs. [ ]
</TABLE>
Under Scenario B, since Purchaser purchased only [ ] pounds of Product during
calendar year 1997, Purchaser qualified for a rebate in the amount of [ ] cpp
under Section 10's Schedule A, not the provisional rebate of [ ] cpp.
Accordingly, Purchaser's account shall be debited at the end of calendar year
1997 in the amount of [ ] which represents the difference between the rebate
provisionally extended Purchaser and the rebate which Purchaser qualified for
based upon actual purchases for said year.
Scenario C
----------
<TABLE>
<CAPTION>
Minimum Y/D Requirements Actual Y/D Purchases Provisional Rebate Credited
------------------------ -------------------- ---------------------------
<S> <C> <C> <C>
1st Q [ ] lbs. [ ] lbs. [ ]
2nd Q [ ] lbs. [ ] lbs. [ ]
3rd Q [ ] lbs. [ ] lbs. [ ]
4th Q [ ] lbs. [ ] lbs. [ ]
</TABLE>
Under Scenario C, since Purchaser purchased only [ ] pounds of Product
during calendar year 1997, Purchaser qualified for a rebate in the amount of
[ ] cpp, not the provisional rebate of [ ] cpp. Accordingly, Purchaser's
account shall be credited at the end of calendar year 1997 in the amount of
[ ] which represents the balance of the rebate which Purchaser qualified
for based upon actual purchases for said year.
<PAGE>
EXHIBIT C
TERMINATION OF OPTION
Reference is hereby made for all purposes to that certain Option Agreement
dated as of February 25, 1994 (the "Option"), by and among Richard Davidovich
("Davidovich"), Chevron Chemical Company ("Chevron") and SP Acquisition Co.
("SPAC"). For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and subject to the condition that (a) the sale of
the stock of SPAC as contemplated by that certain Stock Purchase Agreement dated
as of October 30, 1996 (the "Agreement") by and among Benchmark Corporation of
----------
Delaware, Davidovich, James River Paper Company, Grupo Industrial Hermes, S.A.
de C.V., and certain individuals and entities referred to in the Agreement as
the "Rosenthal Group" has been consummated, and (b) Chevron shall have entered
into a new contract of sale for the sale of styrene by Chevron to SPAC on terms
and conditions acceptable to Chevron (such sale of stock and execution of a new
contract of sale, collectively, the "Closing"), the parties hereto hereby agree
that the Option is terminated and shall have no further force and effect
effective as of the Closing. If the Closing has not occurred on or before
December 31, 1996, this Termination of Option shall terminate and have no
further force or effect, and the Option shall be reinstated in all respects.
IN WITNESSETH WHEREOF, the parties have executed this Termination of
Option effective as of December, 1996.
--------
Chevron Chemical Company
By: [SIGNATURE APPEARS HERE]
--------------------------
SP Acquisition Co.
By: [SIGNATURE APPEARS HERE]
--------------------------
/s/ Richard Davidovich
-----------------------------
Richard Davidovich
<PAGE>
EXHIBIT 10.12
CONFIDENTIAL TREATMENT
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
CONTRACT
Contract dated April 1, 1996 between ARCO Chemical Company, a Delaware
corporation, having a place of business at 3801 West Chester Pike, Newtown
Square, Pennsylvania 19073-2387 ("Seller") and WinCup Holdings, L.P., having a
place of business at 7980 West Buckeye Road, Phoenix, Arizona 85043 ("Buyer").
WITNESSETH:
Subject to the terms and conditions provided for in this Contract, the
parties agree as follows:
1. Sale and Purchase of Product - Specifications:
Seller shall sell, and Buyer shall purchase, the following product or
products meeting the specifications set forth in Exhibit A hereto: Dylite(R)
F271T
Such product or products are hereinafter referred to individually or
collectively as "Product".
2. Quantity:
16 MM lbs. The quantity shall be taken ratably over the contract term.
3. Term:
The term of this Contract, and its effective period, is April 1, 1996 through
September 30, 1996. The Contract is renewable upon mutual written agreement of
Seller and Buyer for an additional three (3) period (i.e. for the period October
1, 1996 through December 31, 1996).
4. Price: The price of Product shall have two components:
Styrene Monomer Price (c/lb.) & Contract Delta (c/lb.)
The Styrene Monomer Price shall be the low contract styrene benchmark price
as published in the CMAI Monomers Market Report ("CMAI Report"). The Styrene
Monomer Price hereunder shall be adjusted, as appropriate, effective the first
Monday following publication of the CMAI Report.
If the CMAI Report is not available or is discontinued, then the parties
shall negotiate in good faith to find a mechanism to establish a fair Styrene
Monomer Price.
The Contract Delta shall be[ ]/lb. Seller may change the Contract Delta
by giving Buyer not less than sixty (60) days' written notice. If Buyer does not
serve Seller with a written objection to such change within ten (10) days after
the date such written notice from Buyer to Seller is mailed, Buyer shall be
deemed to have accepted such change. Should Buyer serve Seller with such written
notice of objection to any proposed change to the Contract Delta and should
Buyer and Seller be unable to agree upon such proposed change prior to the
expiration of such sixty (60) day period, then this Contract shall terminate at
the expiration of such sixty (60) day period unless Seller retracts such change
on or before such effective date, without prejudice to the rights of either
party with respect to Product delivered hereunder prior to the termination date.
5. Transportation Terms: For all shipment destinations other than Corte Madera,
CA, F.O.B. Seller's plant, freight collect to be paid by Buyer. For shipments to
Corte Madera, CA, F.O.B. Seller's plant, freight prepaid by Seller and freight
charge of $[ ] added to invoice for Buyer's account.
<PAGE>
6. Shipment Destinations: All Buyer locations.
7. Mode of Shipment: Truck
8. Packages: 1,000 lb. box
9. Governmental Action Affecting Price:
In the event of any governmental action substantially affecting Seller's
right to maintain or change the price or terms of payment, then at any time such
governmental action is in effect, Seller may, at its option, either
(i) terminate this Contract upon thirty days' notice or (ii) postpone, by
notice to Buyer, the effective date of any price change or change or other
terms to the extent so prevented until such date or dates as it is not so
prevented. By its election to postpone rather than terminate, Seller does not
waive its right to terminate thereafter.
10. Payment; Credit:
Buyer shall pay Seller for Product purchased under this Contract in
accordance with the following terms: Net [ ] days from date of invoice. If Buyer
fails to pay Seller in accordance with the above terms, then Seller, at its
option and without prejudice to its other rights and remedies, may (i) terminate
this Contract forthwith and without notice, (ii) suspend deliveries until all
indebtedness is paid in full and/or (iii) place Buyer on a cash-on-delivery
basis. In the event of default in payment, Buyer shall pay Seller's costs of
collection, including, but not limited to, reasonable attorneys' fees. If in the
sole opinion of Seller the financial responsibility of Buyer is impaired or
unsatisfactory, deliveries may be suspended or Buyer may be placed on cash-on-
delivery status until arrangements are made for security satisfactory to Seller
or, at Seller's option, until all indebtedness to Seller is paid in full. All
payments under this Contract shall be made at the full invoiced amount; no
prompt payment or other type of discount shall apply.
11. Shipments:
Buyer shall give Seller shipping instructions sufficiently in advance so as
to allow for timely delivery, taking into account the method of shipment
desired. Such instructions shall include all pertinent information, including
but not limited to, desired date of delivery or loading, type of equipment and
special handling instructions.
Buyer shall promptly receive and unload shipments, return as instructed
the transportation facilities employed and pay all demurrage, rental, and other
charges or damages resulting from Buyer's delay in receiving, unloading, or
returning such transportation facilities or from damage thereto caused by Buyer.
Shipments shall not be diverted, reconsigned, or returned by Buyer without
the prior written consent of Seller.
12. Taxes:
Seller shall pay all taxes (except for property taxes, which shall be
governed by the state law applicable thereto), fees, or other charges (with the
exception of the product excise taxes noted below) imposed or assessed by any
governmental authority with respect to Product delivered hereunder the taxable
incident of which occurs before the transfer of title to Product to Buyer.
Buyer shall pay all taxes (except for property taxes, which shall be
governed by the state law applicable thereto) fees, or other charges imposed or
assessed by any governmental authority withy respect to Product delivered
hereunder the taxable
-2-
<PAGE>
incident of which occurs after transfer of title to Product to Buyer.
All taxes, including any Superfund excise tax, or other charges imposed or
assessed by any governmental authority the taxable incident of which is the
transfer of title or the delivery of Product hereunder, or the receipt of
payment therefor, regardless of the character, method of calculation, or measure
of the levy or assessment, shall be paid by the party upon whom the tax, fee, or
charge is imposed by law, except that Buyer shall reimburse Seller for all
federal, state, and local sales, use, gross receipts, and other excise taxes,
fees or charges that are imposed by law on Seller as a result of the sale of
Product to Buyer.
Any new, or increase in any, tax or license, inspection, or other fee
levied after the date of this Contract by any governmental authority upon, or
that is measured by, or is incident to, or is a result of, any transaction
herein provided for shall be borne by Buyer, whether paid directly to the
governmental authority or as a reimbusement of Seller. Buyer may after receipt
of notice of such new or increased tax or fee give written notice to Seller of
its election to terminate this Contract unless Seller notifies Buyer within ten
days after receipt of said notice that Seller will bear such new or increased
tax or fee.
13. Title and Risk of Loss:
Title and risk of loss shall pass from Seller to Buyer at Seller's point of
shipment as Product is delivered to transportation facilities.
14. Conditions Affecting Performance:
When either party's ability to manufacture or deliver or receive or consume
Product or to otherwise perform under this Contract (other than Buyer's
obligation or ability to make payment for Product delivered under this Contract)
is impeded, restricted, or affected (A) by any cause such as, but not limited
to, (i) fire, explosion, flood, storm, earthquakes, tidal wave, war, military
operation, national emergency, civil commotion, or other event of the type of
the foregoing, (ii) any strike or other difference with workers or unions
(without regard to the reasonableness of acceding to the demands of such workers
or unions), (iii) any governmental law, regulation, decree, order, or similar
act, or (iv) any shortage in supplies of, or impairment in the facilities of
production, manufacture, transportation, or distribution of, either party
attributable to (a) mechanical or other breakdown or failure, (b) the order,
requisition, request, or recommendation of any governmental agency or acting
governmental authority, or either party's compliance therewith, (c) governmental
proration, regulation, or priority, or (d) the inability of Seller to obtain, on
terms deemed by Seller to be practicable, any feedstock or other raw material
(including energy) or (B) by any cause beyond such party's control, whether
similar of dissimilar to any aforementioned cause, then the party whose ability
is so impeded, restricted, or affected shall have the right in its sole
discretion, by notice to the other party, to reduce, in part or in full,
deliveries or receipt of Product hereunder; and any deliveries so reduced shall
be permanently cancelled rather than merely suspended. For the purpose of the
application and interpretation of the provisions of this Paragraph 14, it is
expressly deemed that all Product is to be produced at one or more facilities
owned or operated by Seller. If Seller's ability to supply Buyer with Product
from Seller's facilities is impeded, restricted, or affected by one or more of
the aforementioned causes, then Seller shall not be obligated to purchase or
obtain Product for Buyer on the open market or from other producers or suppliers
of Product. However, in the event that Seller should, nevertheless, determine,
in its sole discretion, to purchase or obtain Product on the open market or from
other
-3-
<PAGE>
producers or suppliers of Product, then any such purchase or obtaining of
Product shall not constitute a waiver or estoppel of Seller's rights, or
otherwise preclude Seller from asserting its rights, under this Contract not to
purchase or obtain, or continue to purchase or obtain, Product for Buyer.
Seller's obligation to sell Product is subject to modification and reduction in
accordance with any present or future allocation program of Seller or of any
governmental authority.
15. Claims:
All claims of Buyer with respect to the quality or quantity of Products
sold and delivered pursuant to this Contract shall be deemed waived and forever
barred unless Buyer notifies Seller of the nature and details of the claim in
writing within sixty (60) days after receipt of the shipment by Buyer. Any such
claim that is not asserted as a claim, counterclaim, defense, or set-off in a
judicial proceeding instituted within one year after Seller's denial thereof
shall be forever waived, barred and released.
Buyer shall provide to Seller all materials and documentation necessary for
the investigation or resolution of any claims, including, but not limited to,
product samples, weight tickets, and shipping documents.
Buyer assumes all risk and responsibility for the handling of any Product,
for the results obtained by the use of any Product in manufacturing processes or
otherwise, or for the results obtained by the use of any Product in combination
with other substances, irrespective of the fact that such use or any handling of
such Product may be in accordance with any description, advice, or suggestion of
Seller. If any description, advice, or suggestion is given, it is given and
accepted at Buyer's risk, and Seller shall not be responsible or liable therefor
or for the results thereof.
16. Product Hazards:
Buyer acknowledges receipt of Seller's Material Safety Data Sheets for
Product and is aware of the hazards or risks in handling or using Product. Buyer
shall fully inform its employees, agents, contractors, and customers who handle,
use, buy, or may be exposed to any Product of such Product's hazards or risks.
Buyer shall provide copies of Seller's Material Safety Data Sheets, and any
updates furnished by Seller, to all such employees, agents, contractors, and
customers; and Buyer shall make the Material Safety Data Sheets available
throughout the area of Buyer's plants or premises where exposure to any Product
may occur, all in accordance with applicable law.
17. Warranties:
Seller warrants that all Product shall meet the specifications established
in this Contract.
Seller warrants that all Product delivered under this Contract will have
been produced in compliance with the requirements of the Fair Labor Standards
Act of 1938, as amended.
Seller warrants that all Product shall be delivered free of the rightful
claim by anyone of infringement of any United States patent.
SELLER MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY, STATUTORY OR
OTHERWISE, CONCERNING ANY PRODUCT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTY OF MERCHANTABILITY, OR ANY
WARRANTY AS TO QUALITY OR CORRESPONDENCE WITH ANY DESCRIPTION OR SAMPLE. SELLER
DOES NOT WARRANT AGAINST ANY CLAIM OF INFRINGEMENT OF ANY PATENT
-4-
<PAGE>
BASED ON (1) ANY COMBINATION OF ANY PRODUCT WITH ANY OTHER MATERIAL OR (2) THE
USE OF ANY PRODUCT IN THE OPERATION OF ANY PROCESS.
18. Limitation of Damages:
BUYER'S EXCLUSIVE REMEDY FOR ANY AND ALL LOSSES OR DAMAGES RESULTING
FROM THE SALE OF PRODUCT UNDER THIS CONTRACT, INCLUDING, BUT NOT LIMITED TO, ANY
BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, OR STRICT LIABILITY, OR ANY
ALLEGATION THEREOF, SHALL BE LIMITED, AT SELLER'S OPTION, TO EITHER THE RETURN
OF THE PURCHASE PRICE OR THE REPLACEMENT OF THE PARTICULAR PRODUCT FOR WHICH A
CLAIM IS MADE AND PROVED.
19. Further Limitation of Damages:
IN NO EVENT SHALL SELLER BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, OR INDIRECT LOSSES OR DAMAGES ATTRIBUTABLE TO THE SALE OF PRODUCT
UNDER THIS CONTRACT OR TO ANY OTHER MATTER ARISING OUT OF OR IN CONNECTION WITH
THIS CONTRACT.
20. Default:
Except as otherwise specifically provided in this Contract, if either
party fails to perform any of the terms of this Contract, the other party may
defer shipments or receipt of deliveries until such default is cured by the
defaulting party or, at its option, may treat such default as a breach of the
entire Contract and, if such default is not cured within thirty days of the
giving of notice thereof to the defaulting party, immediately terminate this
Contract; provided, however, that such termination shall not relieve Buyer from
payment for all Product delivered prior to such termination and provided,
further, that if Buyer is terminating, before exercising the option, it shall
first make payment for all Product therefore delivered.
21. General:
This Contract shall be binding upon and inure to the benefit of the
personal representatives, heirs, and successors of Buyer and the successors and
assigns of Seller, but shall not be assigned by Buyer without the prior written
consent of Seller.
This Contract is to be construed under the laws of the Commonwealth of
Pennsylvania, without giving effect to its conflict or choice of law rules.
Failure of either party to require performance of any provision of this
Contract shall not affect either party's right to require full performance
thereof at any time thereafter; and the waiver by either party of a breach of
any provision hereof shall not nullify the effectiveness of such provision or
constitute a waiver of a similar breach in the future or of any other breach.
This Contract and any exhibits hereinafter set forth contain the entire
agreement between the parties hereto on the subject matter hereof; and there are
no prior or concurrent oral representations, stipulations, warranties,
agreements, or understandings with respect to such subject matter that are not
fully expressed herein. Neither this Contract nor its execution has been induced
by any representation, stipulation, warranty, agreement, or understanding of any
kind other than those herein expressed.
No amendment, addition to, modification, or waiver of all or any part of
this Contract shall be of any force or effect unless in
-5-
<PAGE>
writing and signed by Seller and Buyer. If the provisions of this Contract and
the provisions of any purchase order or order acknowledgement written in
connection with this Contract conflict, then the provisions of this Contract
shall prevail.
Any notices given under this Contract shall be in writing and addressed to
the other party at the address specified in the first paragraph of the Contract
or at such other addresses as which the receiving party may have duly notified
the sending party. Any such notice shall be sent by prepaid first class mail, by
facsimile transmitter, private courier service, or any other manner reasonably
calculated to assure a safe and timely arrival. The date upon which a notice is
sent shall be treated as the date of service.
In Witness Whereof, Seller and Buyer have executed this Contract in
counterparts as of the date first above written.
ARCO Chemical Company WinCup Holdings, L.P.
By: [SIGNATURE APPEARS HERE] By: /s/ Thomas L. Springer
-------------------------------- -------------------------------------
Title: Vice President, Plastics Title: Director Purchasing
----------------------------- ----------------------------------
-6-
<PAGE>
CONTRACT DATED APRIL 1, 1996
BETWEEN
ARCO CHEMICAL COMPANY
AND
WINCUP HOLDINGS, L.P.
EXHIBIT A
---------
DYLITE F271T
SPECIFICATIONS
PRODUCT SPECIFICATION TEST METHOD
- ------- ------------- -----------
Bead Characteristics: Cup Grade
Total Volatile Content, 6.0-6.5 520
wt%
Screen Analysis Maximum 102
wt%
On No. 30 0.0
On No. 35 5.0
On No. 40 40.0
On No. 45 No. Max.
On No. 50 22.0
Through No. 50 2.5
Bead Flow Characteristics: Pass 454
Unimpregnated Beads: None 520
Visual Observation
Bead Shape: 0 Non-spherical 102
Contamination: 9 slivers/lb. 628
Surface Additive, ppm:
Silicone 175-275 649
-7-
<PAGE>
CONTRACT EXTENSION AGREEMENT
DATED SEPTEMBER ___, 1996
BETWEEN
ARCO CHEMICAL COMPANY
AND
WINCUP HOLDINGS, L.P.
WHEREAS, ARCO Chemical Company ("ACC") and WinCup Holdings, L.P. ("WinCup")
entered into a contract ("Contract") dated April 1, 1996 whereby ACC agreed to
sell Dylite(R) F271T ("Product") to WinCup;
WHEREAS, the term of the Contract, and its effective period, is April 1, 1996
through September 30, 1996, renewable upon mutual agreement of ACC and WinCup
for an additional three (3) month period (i.e., for the period October 1, 1996
through December 31, 1996); and
WHEREAS, ACC and WinCup ("the Parties") now wish to enter into an agreement to
extend the Contract and to be bound by the terms of the Contract as extended
hereby;
NOW THEREFORE, the Parties hereby agree, effective as of October 1, 1996, as
follows:
1. Section 3 (Term) is deleted in its entirety and replaced with the
following:
"The term of this Contract, and its effective period, is October 1, 1996
through March 31, 1997."
2. All other terms and conditions of the Contract shall remain in full force
and effect.
In Witness Whereof, the Parties have executed this Contract Extension Agreement
as of the date first above written:
ARCO Chemical Company WinCup Holdings, L.P.
By: [SIGNATURE APPEARS HERE] By: /s/ Thomas L. Springer
-------------------------- ---------------------------
Title: VP Plastics Title: Director Purchasing
----------------------- ------------------------
<PAGE>
Confidential Treatment
EXHIBIT 10.13
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
--------
HUNTSMAN
--------
PRODUCT SALES AGREEMENT
THIS AGREEMENT, is made and entered into as of the 1st day of January, 1996,
by and between HUNTSMAN CHEMICAL CORPORATION, a Utah corporation having a
mailing address at 500 Huntsman Way, Salt Lake City, Utah 84108 (hereinafter
"Seller"), and WinCup, having a mailing address at 7980 W. Buckeye Road,
Phoenix, AZ 85043 (hereinafter "Buyer").
1. PRODUCTS. Seller agrees to sell to Buyer, and Buyer agrees to purchase
from Seller, on the terms and conditions herein contained, the following
Product(s):
<TABLE>
<CAPTION>
MINIMUM INITIAL
ANNUAL SHIPMENT PRICE
PRODUCTS QUANTITY F.O.B. POINT QUANTITY (PER UNIT)
<S> <C> <C> <C> <C>
730-J1N-9100 8,000,000 pounds Seller's Shipping Point 45,000 pounds Market Price at Time of
I300-J1N-9100 Freight Prepaid Shipment
</TABLE>
2. QUANTITY LIMITATION. During each year of this Agreement, Buyer will
purchase the specified Annual Quantity of Products(s) or, if Buyer's
requirements are reduced, an annual quantity that bears the same ratio to
Buyer's reduced requirements as the specified Annual Quantity bore to Buyer's
estimated total requirements as of the date hereof. Seller may, at its option,
limit the quantity of any product to be supplied hereunder in any calendar
month to the lesser of one-twelfth (1/12) of the specified Annual Quantity or,
after the initial three (3) months of each contract year, the average of the
monthly quantities delivered during the expired months of that contract year.
3. TERM. The term of this Agreement shall be for a period commencing on
January 1, 1996, and ending on December 31, 1996. The term "contract year" shall
mean each respective twelve month period beginning with the commencement of the
term hereof.
4. PRICE. The price of Product(s) hereunder is subject to change by Seller
from time to time on at least thirty (30) days notice to Buyer. In the event of
any government action substantially affecting Seller's right to maintain or
change the price of any Product or terms of payment and at any time such
governmental action is in effect, Seller shall have the right, at its option,
to (i) terminate this Agreement on thirty (30) days notice to Buyer, or (ii)
postpone, by notice to Buyer, the effective date of any price change or change
of other terms to the extent so prevented until such date or dates as it is not
so prevented. By its election to postpone rather than terminate, Seller shall
not waive its right to terminate thereafter. Seller's grant or withdrawal of
Seller's Temporary Voluntary Allowance (TVA) will not be considered a price
change under this contract.
5. COMPETITIVE PRICES. If Buyer provides satisfactory evidence that it can
purchase a product of like quantity and quality, produced in the United States
(including its territories or possessions), at a lower price and on terms and
conditions substantially the same as those contained herein and if Seller elects
not to meet such lower price, then all quantities thereof actually purchased by
buyer at a lower price will be deducted from the applicable remaining quantity
obligation for such like Product hereunder. If Seller elects to meet such lower
price, then Seller may withdraw its lower price at any time on at least thirty
(30) days notice thereof to Buyer or immediately upon termination of the
competitive lower price.
6. PAYMENT TERMS. Buyer shall pay Seller for all Product(s) purchased
hereunder in accordance with the following terms: Net [ ] days from date
of Invoice. If Buyer shall fail to pay Seller in accordance with said terms,
Seller shall have the right, at its option and in addition to all other remedies
available under applicable law, to either (i) terminate this Agreement (other
than Buyer's obligation to pay for Product(s) delivered hereunder) immediately
upon notice to Buyer, or (ii) suspend deliveries until all Indebtedness is paid
in full, or (iii) place Buyer on a cash-on-delivery basis. If in the sole
opinion of Seller the financial responsibility of Buyer is impaired or
unsatisfactory to Seller, deliveries may be suspended or Buyer may be placed on
a cash-on-delivery basis until arrangements are made for security satisfactory
to Seller.
<PAGE>
7. CREDIT LIMIT. Seller may establish a credit limit for Buyer's account.
Seller reserves the right to refuse to make shipments to Buyer if such shipments
would cause Buyer to exceed such credit limit. Seller may increase or decrease
such credit limit from time to time, in its sole discretion. Seller's failure
to enforce the credit limit in any instance shall not constitute a waiver of
Seller's right to subsequently enforce the credit limit. Seller shall be under
no obligation to store Products for Buyer beyond the scheduled shipment date if,
on such date, Buyer's account would exceed the established credit limit if
shipments were made. Products so affected may, at Seller's option and after ten
(10) days notice to Buyer, be shipped to another customer, or treated by Seller
as cancelled, subject to cancellation charges to cover Seller's costs in
relation to such cancellation. In lieu of extending credit, Seller is entitled
to request from the Buyer a cash-in-advance deposit or a letter of credit prior
to the supply of the Products.
8. TAXES. Any tax (other than an income tax), duty or other governmental
charge now or hereafter imposed on any Product or an any raw material used in
manufacturing any Product (or on Seller, or required to be paid or collected by
Seller, by reason of the manufacture, transportation, sale, or use of such
Product or raw material) shall be paid by Buyer in addition to the price of the
Product.
9. DELIVERIES. Seller will select the origin of shipment and the carrier.
The quantity of all bulk rail and truck deliveries will be determined by Seller
by outage tables with corrections for temperature or by weightmaster's
certificate, as appropriate, and Seller's quantity determination shall govern.
Buyer will promptly unload each delivery at its own risk and expense, including
any demurrage or detention charges.
10. EXCUSES FOR NONPERFORMANCE. Neither party shall be responsible for any loss
or damage resulting from any delay in performing or failure to perform any
provisions of this Agreement (other than Buyer's obligation to make payments for
any Products delivered hereunder), so long as any such failure or delay arises
from fires, explosions, plant shutdowns, floods, storms, earthquakes, tidal
waves, wars, military operations, national emergencies, civil commotions,
strikes or other differences with workers or unions or from any delay or failure
in delivery when the supplies of either party or the facilities of production,
manufacture, transportation or distribution which otherwise would be available
to either party are impaired by mechanical breakdowns or causes beyond its
control or by the order, requisition, request, or recommendation of any
governmental agency or acting governmental authority, or either party's
compliance therewith, or from governmental protection, regulation, or priority,
or from the inability of Seller to obtain from its usual sources, at prices and
on terms deemed by Seller to be practicable, any feedstock or other raw material
(including energy sources) necessary for manufacturing any Product, or from any
other delay or failure due to any cause beyond either party's reasonable
control, similar or dissimilar to any such causes. Seller's obligation to sell
Product(s) hereunder is subject to modification and reduction in accordance with
any present or future allocation program of Seller or any governmental
authority.
11. PRODUCT HAZARDS. Buyer assumes all risk and responsibility for handling the
Product(s), for results obtained by use of the Product(s) in manufacturing
processes or otherwise, and for results obtained by use of the Product(s) in
combination with other substances, irrespective of the fact that such use or any
handling of the Product(s) is in accordance with any description, advice, or
suggestion of Seller. If any description, advice, or suggestion is given by
Seller, it is given and accepted at Buyer's risk, and Seller shall not be
responsible or liable therefor or for the results thereof. Buyer will indemnify
Seller against all claims, loss, liability and expense on account of any injury
or death of persons (including Buyer's property) arising out of Buyer's
unloading, storage, handling or use of the Product(s) (except to the extent
caused by Seller's negligence), and such indemnity obligation of Buyer shall
survive termination of this Agreement.
12. WARRANTIES. Seller warrants that each Product will meet specifications
designated as such in this Agreement or in Seller's current applicable
publications and that each Product will be delivered free of the rightful claim
of any third person by way of United States patent infringement. EXCEPT AS
STATED IN THIS AGREEMENT, SELLER MAKES NO EXPRESS WARRANTIES CONCERNING ANY
PRODUCT. NO WARRANTIES OF MERCHANTABILITY, OR WARRANTIES AS TO QUALITY OR
CORRESPONDENCE WITH DESCRIPTION OR SAMPLE, SHALL BE IMPLIED. SELLER DOES NOT
WARRANT AGAINST UNITED STATES PATENT INFRINGEMENT BY WAY OF THE USE OF ANY
PRODUCT IN COMBINATION WITH OTHER MATERIALS OR IN THE OPERATION OF ANY PROCESS.
13. CLAIMS. Any claim of Buyer with respect to the quality or quantity of
Product(s) sold and delivered hereunder shall be deemed waived and forever
barred unless Buyer notifies Seller in writing of the nature and details of the
claim within sixty (60) days after receipt of the shipment by Buyer. Any such
claim of which Seller is notified but which is not asserted as a claim,
counterclaim, defense, or set-off in a judicial proceeding instituted within one
(1) year after Seller's denial thereof shall be forever waived, barred and
released.
14. PRODUCT CONTAINER REUSE OR RESALE. Buyer agrees that any reuse by Buyer of
product containers bearing Seller's logo and name will occur only after such
logo and name have been removed or obliterated from and are no longer visible on
the containers. Buyer further agrees that any resale of Seller's product
containers will occur only after relabeling or otherwise removing or
obliterating Seller's logo therefrom.
15. DEFAULT. Except as otherwise specifically provided herein, if either party
fails to perform any of the terms of this Agreement, then the other party may
treat such default as a breach of this Agreement and, if such default is not
cured within thirty (30) days after written notice thereof to the defaulting
party, may immediately terminate this Agreement by giving written notice thereof
to the defaulting party, provided, however, that (i) such termination shall not
relieve Buyer from the obligation to pay for all Product(s) delivered prior to
such termination and (ii) if Buyer is terminating, before exercising such
option, Buyer must first make payment for all Product(s) theretofore delivered.
16. DAMAGES LIMITED. BUYER'S EXCLUSIVE REMEDY FOR ANY AND ALL LOSSES OR DAMAGES
RESULTING FROM THE SALE OF PRODUCT(S) UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION ANY CLAIM OF BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, OR
STRICT LIABILITY, SHALL BE LIMITED TO, AT SELLER'S OPTION, EITHER (i) RETURN OF
THE PURCHASE PRICE OR (ii) REPLACEMENT OF THE PARTICULAR PRODUCT(S) FOR WHICH A
CLAIM IS MADE AND PROVED. IN NO EVENT SHALL SELLER BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES FOR THE SALE OF
PRODUCT(S) UNDER THIS AGREEMENT.
2
<PAGE>
17. NOTICE. Any notice under this Agreement shall be in writing and shall be
deemed to have been given and received and shall be effective when personally
delivered or when deposited in the U.S. mail (certified or registered mail,
return receipt requested) or with the telegraph company, postage or telegraph
charges prepaid, and addressed to the respective party at the address set forth
in the first paragraph of this Agreement or at such other address as such party
may hereafter designate by notice to the other party.
18. ASSIGNMENT. Neither the Buyer nor the Seller shall have the right to assign
or transfer this Agreement or any rights hereunder (other than the right to
receive payment for Products delivered) without the prior written consent of the
other party.
19. GENERAL PROVISIONS. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah. This Agreement, including any
addenda identified herein, contains the entire agreement between the parties
hereto, and there are no other oral representations, stipulations, warranties,
agreements or understandings between the parties with respect to the subject
matter hereof. Any prior negotiations, correspondence, understandings or
agreements with respect to the subject matter hereof shall be deemed to be
merged into and shall be superseded by this Agreement and shall be of no further
force and effect. Neither this Agreement nor any addition to, amendment,
modification, alteration or waiver of all or any part hereof shall be binding
or effective unless and until signed by both Buyer and Seller, and performance
prior to such execution shall not constitute a waiver of this requirement. If
the provisions of this Agreement and the provisions of any purchase order or
order acknowledgment written in connection herewith conflict, then the
provisions of this Agreement shall prevail. Failure of either party to require
performance of any provision of this Agreement shall not affect either party's
right to require full performance thereof at any time thereafter, and waiver by
either party of a breach of any provision hereof shall not constitute a waiver
of a similar breach in the future or of any other breach or nullify the
effectiveness of such provision.
20. OTHER PROVISIONS. (Identify and attach additional pages or addenda as
necessary)
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as
of the day and year first above written.
SELLER:
HUNTSMAN CHEMICAL CORPORATION,
a Utah Corporation
By: /s/ Pete Fantozzi
-----------------------------------------------
Pete Fantozzi
Title: Vice President, Sales & Marketing
--------------------------------------------
BUYER:
WINCUP
a Delaware Corporation
By: /s/ Thomas L. Springer
-----------------------------------------------
Title: Director, Purchasing
--------------------------------------------
3
<PAGE>
20.1 Pricing: In addition to the thirty (30) day notification, Buyer's price
will not increase until thirty (30) days after the announced date.
21.1 Performance Incentive:
A volume incentive of $[ ] per pound will be issued at the end of each
calendar quarter for all pounds purchased during the quarter.
If Buyer purchases a minimum of [ ] pounds during the contract
period an additional $[ ] per pound incentive will be issued on all
pounds purchased.
21.2 MINIMUM SHIPMENT AND INITIAL PRICE
----------------------------------
Minimum shipment quantity shall not be limited to any amount, but will
be subject to the differential in 20.2.
Initial price described in Article 1. Products is for Hopper Car
deliveries. All other deliveries are subject to the following
differentials:
Truckload Deliveries (40,000 pound shipments)
---------------------------------------------
Delivery Mode Differential(CPP)
------------- -----------------
Hopper Truck to California Plant +[ ]
Truckload Bags +[ ]
Truckload Boxes +[ ]
There will be no upcharge for deliveries to the California plant for the
additional freight incurred by the Seller for a maximum amount of
2,000,000 pounds per year. On any shipments about this above, Seller
will invoice Buyer for the additional freight incurred over and above
the freight average to the Buyer's plants in Ohio and Illinois.
Less Than Truckload Deliveries (add to 40,000 pound Truckload Bag Price)
------------------------------------------------------------------------
Quantity (Pounds) Differential(CPP)
----------------- -----------------
[ ] +[ ]
[ ] +[ ]
[ ] +[ ]
[ ] +[ ]
4
<PAGE>
Confidential Treatment
EXHIBIT 10.14
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
BASF Corporation
BASF
March 27, 1996
Polystyrene
Thomas Springer
Wincup Holdings LP
7980 West Buckeye Road
Phoenix, Arizona 85013
Dear Mr. Springer:
The following agreement pertains to the sale of BASF polystyrene to Wincup
Holdings LP ("Buyer"). All prior agreements between the parties are terminated
as of December 31, 1995.
Agreement Period
- ----------------
January 1, 1996 through December 31, 1996, subject to extension as may be
mutually agreed upon by the parties. This agreement may be cancelled by either
party should the other party materially default in its performance and fail to
cure such default within 30 days following its receipt of a notice describing
such default. In addition, either party may terminate this agreement without
cause upon at least 90 days prior written notice to the other party.
BASF Products
- -------------
. PS 4600
. PS 5600 or equivalent super high impact polystyrene
. Other BASF polystyrene resins, subject to mutual agreement
BASF represents and warrants that such Products shall meet BASF's published
specifications, and that BASF shall have the right to transfer good title to the
Products, free from any encumbrances. BASF makes no other warranty of any kind,
either express or implied, including any warranty of fitness for a particular
purpose or of merchantability except as expressly stated herein.
Page 1
<PAGE>
BASF's liability and buyer's exclusive remedy for any cause of action arising
out of this agreement is expressly limited to replacement of non-conforming
products or payment in an amount not to exceed the purchase price of the
specific products for which damages are claimed, at BASF's option. In no event
shall BASF be liable for any other damages, including incidental, special or
consequential damages.
Buyer shall inspect Products supplied hereunder immediately after delivery.
Buyer's failure to give notice to BASF of any claim within ninety (90) days
after the date of delivery shall constitute unqualified acceptance of such
Products and a waiver by Buyer of all claims with respect thereto.
Estimated Annual Volumes
- ------------------------
The total volume estimate for the term is between 1,500,000 and 2,500,000 lbs.
The estimated purchase levels have been established as target levels only; it is
understood and agreed that Buyer is not obligated to purchase a minimum quantity
on a take or pay basis. BASF will not be obligated to deliver in any month in
excess of 1/12 of the estimated maximum volume specified above.
Method of Delivery
- ------------------
. Truck load box delivered (42,000 Lbs. 1,000Lb. cartons)
. Bulk hopper truck (40,000 lbs minimum)
If BASF requests that Buyer accept a shipment in a form and/or quantity
different than ordered, the parties will negotiate the amount of the upcharge
that will apply to that particular shipment.
. Buyer will provide to BASF, on a monthly basis, a 60 day rolling forecast
of anticipated deliveries.
FOB Terms
- ---------
Delivery shall be FOB shipping point, freight prepaid to, Corte Madera by
carrier of BASF's choice. Requests for deliveries to other Buyer locations
within the continental U.S. will be subject to negotiation of appropriate
incremental freight charges.
Page 2
<PAGE>
Pricing
- -------
BASF reserves the right to increase prices on any or all Products, upon Thirty
(30) days notice to Buyer prior to the effective date of any price increase.
The purchase price does not include any government taxes or similar charges that
BASF may be required to pay with respect to the transportation, delivery or sale
of Products delivered hereunder, and Buyer shall pay such taxes or charges upon
request, or provide BASF with properly completed exemption certificates for any
taxes or charges from which Buyer claims exemption.
Payment Terms
- -------------
Net [ ] days from date of invoice.
Each delivery of Products hereunder shall constitute a separate sale. If Buyer
shall fail to pay for a particular shipment or otherwise by in default of any of
the terms and conditions of this agreement, BASF may defer further shipments
until such defaults are remedied.
If at any time the financial responsibility of Buyer shall, in the reasonable
judgment of BASF, become unsatisfactory, BASF may require cash or satisfactory
security upon subsequent shipments or deliveries.
Confidentiality
- ---------------
BASF and Buyer hereby agree that the existence and terms of this Agreement are
confidential and shall not be disclosed to any third party (exclusive of
affiliates) without the written consent of both BASF and Buyer.
Force Majeure: Allocation
- -------------------------
Failure of BASF to make, or Buyer to take, any one or more deliveries of
Products when due, if caused by fire, storms, floods, strikes, lockouts,
accidents, war, riots or civil commotions, inability to access transportation or
obtain raw materials on reasonable commercial terms (including unexpectedly
large price increases), embargoes, any State or Federal regulation, law or
restriction, governmental seizure or requisition, or any other cause or
contingency beyond the reasonable control of such party (whether or not of the
same kind or nature as the causes or contingencies above listed) shall not
subject the party so failing to any liability to the other.
Page 3
<PAGE>
In the event of BASF's inability, for any reason, to supply the quantities of
Products specified herein, BASF may allocate its available supply among its
purchasers, including departments, divisions and affiliates of BASF, on such
basis as BASF may deem fair and practical.
Assignment
- ----------
This agreement may not be assigned without the prior written consent of the
non-assigning party.
Exclusive Terms
- ---------------
This letter contains the entire agreement between the parties regarding the sale
and purchase of Products. Any provisions or conditions (including those
contained in any purchase order or acknowledgement) which are in any way
inconsistent with or in addition to the terms set forth in this letter (except
additional shipping instructions specifying quantity and character of the items
ordered) shall not be binding on either party. No waiver, alteration, or
modification of the foregoing conditions shall be valid unless made in writing
and signed by an authorized representative of each party.
Please sign both copies, and return them to my attention. I will have the copies
signed by BASF and one fully executed copy will be returned to you for your
file. If I do not receive a signed copy by April 15, 1996 subject to extension
by mutual agreement, I will assume that you have decided not to accept our
proposal and this letter shall be null and void. Thank you for the opportunity
to of service.
Very truly yours,
/s/ Frank Flaschentrager
Frank Flaschentrager
Senior Sales Representative
Page 4
<PAGE>
TERMS OF THIS AGREEMENT ARE UNDERSTOOD AND AGREED TO:
WINCUP LP , BASF CORPORATION,
- -------------
BUYER SELLER
By: [SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
--------------------------------- --------------------------------
Title: Director, Purchasing Title: DIR. SALES & MKT.
------------------------------ -----------------------------
Date: April 30th, 1996 Date: 5-20-96
------------------------------- ------------------------------
Page 5
<PAGE>
[LETTERHEAD OF BASF CORPORATION APPEARS HERE]
April 25, 1996 Polystyrene
Thomas Springer
WINCUP
7980 W. Buckeye Road
Phoenix, Az 85043
Dear Thomas,
This document will serve as clarification of the agreement between BASF
Corporation and WINCUP Holdings, Inc. to supply 100% of the Polystyrene needs
for the Corte Madera, California manufacturing location. BASF Corporation will
supply Hopper Truck (40,000 LB Minimum) of PS 4600, as well as Truck Load
(42,000 LB Minimum) Boxes of PS 5600 until a suitable replacement can be found.
In response to industry competitive volume allowances or rebates please
deduct [ ] cents per pound from the invoice price, subject to change at the
sole discretion of BASF. These invoices will reflect a [ ] day delay
in the implementation of all market price changes and are to be paid by WINCUP
within [ ] days.
The current invoice price for material delivered in April, 1996 is [ ]
cents per pound for PS 4600 and [ ] cents per pound for PS 5600. These
prices are subject to market conditions and should be held confidential to
WINCUP Holdings, Inc. and BASF Corporation employees.
I hope that this shows our commitment to further this relationship and work
towards a multi-year formal agreement to be put in place by January 1, 1997.
Sincerely,
/s/ Frank Flaschentrager
Frank Flaschentrager
Senior Sales Representative
CC: Dave Mattair
Steve Yakimec
Brenda Cornelison
Janice Martz
<PAGE>
Confidential Treatment
EXHIBIT 10.15
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
SALES AGREEMENT
Contract Number PS96017 - A
Between
Fina Oil and Chemical Company (Seller)
and
Wincup Corporation, LP (Buyer)
Buyer agrees to purchase from Seller, and Seller agrees to sell to Buyer, upon
the following terms and conditions recited herein and in Addendum A, attached:
TERM: January 1, 1996 through December 31, 1996
PRODUCTS: 740, 825E, 825EX or other mutually agreeable FINA Polystyrene
products.
QUALITY: Per attached data sheets.
QUANTITY:
Minimum Pounds - 5,000,000 lbs. per year
Maximum Pounds - 10,000,000 lbs. per year
Buyer agrees to provide reasonable notice on shipment dates.
Seller will not be required to deliver to Buyer in any month a
volume exceeding one twelfth (1/12) of the annual contract
maximum.
PRICE: Seller's Market Price at the time of shipment as specified in
price announcements to Buyer, FOB origin, minimum freight
prepaid, for use in Buyer's facilities at West Chicago, IL;
Corte Madera, CA.; Stone Mountain, GA; or other mutually agreed
to site(s). The current price to Buyer as of 2/1/96 is [ ] per
pound for hopper cars or bulk trucks of 740, 825E, or 825EX to
West Chicago, IL or hopper cars to Stone Mountain, GA. West
Coast shipments will receive an upcharge of $[ ] per pound for
bulk trucks.
The above price is for delivery in hopper cars of approximately
190,000 pounds each and bulk trucks of approximately 47,000
pounds each.
During the term of this Agreement, if the cumulative increase of
Gulf Coast producer's contract price for Styrene Monomer exceeds
the cumulative increase of Seller's Polystyrene price during any
period of sixty (60) days, Seller reserves the right to
renegotiate any and all of the terms and conditions of this
Agreement.
PRICE
PROTECTION: In the event of a Polystyrene market increase, Seller will allow
a [ ] day price protection period, or a [ ] day pre-buy period
at Seller's option, from the effective date of the increase for
a volume not to exceed 1/12 of the Buyer's previous twelve (12)
months purchases.
<PAGE>
PAYMENT
TERMS: Net [ ] days from SHIPPING/INVOICE DATE. All payments
are due and payable at Seller's offices, 8350 North Central
Expressway, Dallas, Dallas County, Texas 75206 or as
otherwise directed by Seller. Any invoices not paid within
seven (7) days of contract terms will exclude the pounds
covered by that invoice from calculating any competitive
volume incentive. The parties agree that all payments still
owing ten (10) days after the due date of invoice will bear
interest at the rate of one (1.0) percent per month, but in
no event shall interest in excess of the amount allowed by
law be charged.
COMPETITIVE
OFFERS: If, during the term of this Agreement, Buyer receives a bona
fide offer allowing Buyer to purchase materials of similar
quantity and quality, and at similar terms and conditions
for the same time period, at a lower net price, upon
submission of a letter from Buyer to Seller stating the
competitor offered price, quantity, quality, and terms and
conditions of purchase, Seller will, at its option, (i) meet
the lower price or (ii) permit the Buyer to purchase from
the competition and exclude the pounds purchased from the
contract quantity.
COMPETITIVE
INCENTIVE: Because of the competitive situation that exists in Buyer's
market, the following incentives will apply as indicated,
provided Buyer's annualized purchases meet or exceed the
minimum annual quantities specified in this Agreement.
Level 1, "Off-Invoice Incentive": Fina will deduct an "off-
-------------------------------
invoice incentive" of $[ ] per pound on the invoice on all
prime pounds of FINA Polystyrene purchased during the
contract period.
Level 2, "Quarterly Incentive": At the end of each calendar
-----------------------------
quarter, FINA will pay an incentive to Wincup of $[ ] per
pound for all pounds of prime FINA Polystyrene purchased by
Buyer during the quarter. FINA will pay this rebate within
thirty (30) days after all invoices for the quarter have
been paid.
Level 3, "Annual Incentive": At the termination of this
--------------------------
Agreement, FINA will pay a rebate to Wincup of $[ ] per
pound for all prime pounds of FINA Polystyrene purchased by
Wincup during the contract term, provided that a minimum of
5,000,000 pounds of prime FINA Polystyrene is purchased
during the term of the Agreement. FINA will pay this
incentive within thirty (30) days after all invoices for the
contract year have been paid.
ADDENDUM: Addendum "A" is attached hereto and incorporated herein.
This Agreement not valid unless signed by an authorized
representative of both Buyer and Seller.
Buyer's Acceptance: Seller's Acceptance:
By: /s/ Thomas L. Springer By: /s/ Gary C. Reed
-------------------------- ---------------------------
Title: Director Purchasing Title: General Manager, Styrenics
----------------------- ------------------------
Date: 5/15/96 Date: 5/21/96
------------------------ -------------------------
This offer expires if not signed by Buyer and returned to Seller by March 31,
1996.
<PAGE>
ADDENDUM "A"
1. SAFETY AND HEALTH COMMUNICATIONS
--------------------------------
A. SELLER will furnish to BUYER Material Safety Data Sheets which contain
health, safety and other hazard communication information on the
Materials consistent with the Occupational Safety and Health
Administration's Hazard Communications Standard. SELLER will also
furnish other health or safety information as available. BUYER will
disseminate appropriate health and safety information to all persons
that may be exposed to the Materials supplied hereunder (including
without limitation, BUYER'S employees, contractors or customers),
whether such Material is in its present state or subsequently processed,
mixed or incorporated into another Material.
B. BUYER agrees to instruct its employees and agents in the proper and safe
handling and disposal of the Materials.
2. LIABILITY AND INDEMNITY
-----------------------
A. Risk of loss and title passes from SELLER to BUYER when shipment is
delivered to carrier. BUYER assumes all responsibility and liability of
SELLER for injury, loss or damage resulting from handling, resale, use
or misuse of the Materials after delivery to carrier. SELLER'S liability
and BUYER'S exclusive remedy for any claims arising out of this
Agreement are expressly limited at BUYER'S option to replacement of
nonconforming goods or payment not to exceed the purchase price plus
transportation charges thereon with respect to any Materials for which
damages are claimed. Claims on the gross weight of bulk shipments will
not be allowed.
B. BUYER agrees to hold harmless and indemnify SELLER from all persons
against any claims on any theory of legal liability (whether strict or
otherwise), including negligence, for any claim, loss or expense on
account of any injury, disease or death of persons (including BUYER'S
employees), loss or damage to property (including BUYER'S) arising out
of failure by BUYER to properly handle, sell or use the Material or to
disseminate safety and health information as provided in paragraph 1.
C. SELLER agrees to defend at its expense and to hold BUYER harmless
against any suit founded on a claim that the Materials delivered
hereunder infringe any U.S. Letters Patent, and SELLER agrees to
indemnify BUYER from any such judgments and costs resulting from any
such suit. SELLER does not agree to defend or to hold BUYER harmless
against suit founded on a claim of infringement of any U.S. Letters
Patent covering the use of the Materials delivered hereunder in
combinations with another material or in the practice of any process.
D. EXCEPT FOR OBLIGATIONS COVERED BY PARAGRAPH 2.C, SELLER'S ENTIRE
LIABILITY FOR DAMAGES FOR ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM
OF ACTION, SHALL BE LIMITED TO BUYER'S ACTUAL DIRECT DAMAGES NOT TO
EXCEED THE AMOUNT PAID TO SELLER HEREUNDER FOR THE MATERIAL RELATED TO
THE CAUSE OF ACTION. IN NO EVENT SHALL SELLER, ITS OFFICERS, AGENTS OR
EMPLOYEES BE LIABLE UNDER OR IN CONNECTION WITH THIS AGREEMENT UNDER ANY
LEGAL OR EQUITABLE THEORY, INCLUDING WHETHER BASED UPON NEGLIGENCE OR
STRICT LIABILITY, FOR LOST PROFITS, SPECIAL, INCIDENTAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES.
3. WARRANTY
--------
SELLER makes no warranty, express or implied, concerning the Materials
furnished hereunder other than that they shall be of the quality and
specifications stated herein. SELLER MAKES NO OTHER WARRANTIES OF ANY KIND,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. Any recommendations made by SELLER concerning uses or
applications of said Materials are believed reliable but SELLER makes no
warranty of results to be obtained. BUYER ASSUMES ALL RESPONSIBILITY AND
LIABILITY FOR INJURY, LOSS OR DAMAGE RESULTING AFTER DELIVERY OF MATERIAL.
4. FORCE MAJEURE
-------------
Except as to payments hereunder, a party shall be relieved from liability
for delay in performance or nonperformance caused by circumstances beyond
its control, including without limitation, strike, fire, riot, war, acts of
God, governmental laws, regulations or requests, failure or shortage of or
inability to obtain materials, equipment or transportation normally
available from the source of supply. The affected party may omit purchases
or deliveries during the period of continuance of such circumstances and the
contract quantities shall be reduced by the quantities so omitted. In no
event shall SELLER be required to purchase products or materials from others
in order to deliver Material to BUYER.
5. OTHER
-----
This instrument constitutes the entire Agreement between the parties and
supersedes any prior or contemporanous Agreements and understandings,
whether oral or written. This Agreement may not be amended except by written
instrument executed by each of the parties hereto. Waiver by either party of
any breach or failure to enforce any of the provisions of this Agreement at
any time shall not in any way affect, limit or waive the right of the party
thereafter to enforce the Agreement and compel strict compliance with each
and every provision. Any action against SELLER under this Agreement or
related to its subject matter must be brought within one (1) year after the
cause of action accrues. This Agreement may not be transferred or assigned
without SELLER'S written consent. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Texas,
including the Texas Business and Commerce Code, Uniform Commercial Code.
<PAGE>
Confidential Treatment
EXHIBIT 10.16
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
CONTRACT OF SALE
----------------
This Contract of Sale is entered as of February 28th, 1992 between Scott
----
Polymers, Inc. a Texas corporation ("Seller") and Wincup Holdings, Inc., a
Delaware corporation ("Buyer").
Subject to the terms and conditions hereinafter provided, and intending to
be legally bound, the parties hereto agree as follows:
1. Product.
-------
Seller shall sell and Buyer shall purchase expanded polystyrene T-grade
beads conforming to the specifications set forth in Exhibit A (referred to
herein as "Product").
2. Quantity; Orders.
----------------
Seller shall sell and Buyer shall purchase (1) all of its requirements up
to 40 million lbs. annually; and (2) no less than 75% of its requirements in
excess of 40 million lbs. annually, for the Product solely for use in the
manufacture of foam cups and containers by Buyer. Upon execution hereof, Buyer
shall provide Seller with a forecast of its anticipated requirements for the
next twelve month period and at the same time Buyer shall place a firm order
with Seller for its requirements for the first month of the Contract year. The
first Contract year shall be the twelve calendar months beginning after
execution hereof. Buyer shall thereafter continue to place its orders for its
monthly requirements thirty days prior to the beginning of the order period and
Buyer shall provide Seller with updated forecasts on a quarterly basis
projecting Buyer's requirements for Product for the twelve month period
beginning ninety days from the date of
<PAGE>
the delivery of a forecast. Buyer's monthly order shall be for a quantity which
is equal to 1/12 of its most recent twelve month forecast plus or minus ten
percent.
3. Price.
-----
The price for the Product shall be the average of the two Gulf Coast
Contract prices per pound for styrene monomer as shown in the most recent
edition published prior to shipment of the DeWitt Benzene and Derivatives
Newsletter, plus (i) [ ]/lb (the non-monomer element of price) for sales during
Year 1 of this Agreement; (ii) [ ]/lb for sales during Year 2 of this
Agreement; and (iii) [ ]/lb. for sales during Year 3 and [ ]/lb. for Years 4
and 5. The price shall be F.O.B. Fort Worth, Texas loaded on trucks by Seller.
The non-monomer element of the price shall be subject to adjustment (rounded to
the nearest one hundredth of a cent) up or down on each Contract Anniversary
Date beginning two years after the date of this Agreement. The first such
adjustment shall be proportional to the change in the Producers Price Index for
Finished Goods since the date of this Agreement; subsequent adjustments shall
be proportional to the change in the aforesaid Index since the previous
Contract Anniversary Date. Payment terms shall be net [ ] days from date of
invoice during the first [ ] years of the Contract, [ ] days for the next
[ ] years and [ ] days thereafter. Availability of these extended terms is
conditioned upon Buyer's prompt remittances in accordance therewith, however up
to five days grace shall be permitted on not more than ten invoices in any
twelve calendar month period.
2
<PAGE>
4. Return of Gaylords.
------------------
Buyer acknowledges that the price for Product does not include the cost of
gaylords. Buyer agrees, at its own cost and expense to return all empty gaylords
to Seller's facility at Fort Worth. Failure of Buyer to observe this provision
shall entitle Seller to liquidated damages of $10.00/gaylord, but shall not
entitle Seller to any additional remedies hereunder. The cost of gaylords which
are irreparably damaged in transit shall be shared equally between the parties.
Seller shall invoice Buyer for its share of the cost of such gaylords.
5. Term.
----
The term of this Contract shall begin on February 28th, 1992 ("Contract
----
Anniversary Date") and continue for an initial period of five years and from
year to year thereafter unless or until terminated by either party giving the
other party at least ninety days prior written notice of its intention to
terminate on a Contract Anniversary Date.
6. Taxes.
-----
Buyer shall pay Seller, in addition to the price provided herein, an amount
equal to any tax or other charge (unless measured by net income) assessed on
Seller related to sales made pursuant to this Contract. Any personal property
taxes assessed upon the value of the Product shall be paid by the party having
title thereto at the time such taxes are assessed.
7. Title and Risk of Loss.
----------------------
Title to and risk of loss shall pass from Seller to Buyer at Seller's
point of shipment as Product is delivered to the carrier.
3
<PAGE>
8. Limited Warranties.
------------------
(a) Seller warrants that at the time of delivery, the Product will
meet the specifications set forth in Exhibit A.
(b) SELLER DOES NOT MAKE AND EXPRESSLY DISCLAIMS AND BUYER EXPRESSLY
----------------------------------------------------------------
WAIVES ANY OTHER WARRANTIES WHATSOEVER INCLUDING (WITHOUT LIMITATION) ANY
- -------------------------------------------------------------------------
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, REGARDLESS
- -----------------------------------------------------------------------------
WHETHER ORAL OR WRITTEN, EXPRESSED OR IMPLIED OR ALLEGEDLY ARISING FROM ANY
- ---------------------------------------------------------------------------
USAGE OF ANY TRADE OR COURSE OF DEALING.
- ---------------------------------------
9. Product Inspection and Claims.
-----------------------------
(a) Buyer shall examine the Product promptly upon receipt of each
shipment and notify Seller of any off-specification Product, shortfall in
delivery of Product. Seller will not be responsible for any variation in quality
or quantity unless Buyer gives Seller written notice within thirty days of
receipt. Buyer's failure to give such notice of any nonconformity shall
constitute an unqualified acceptance of the Product and a waiver by Buyer of
all claims with respect thereto.
(b) Seller's total liability for any claim of any nature shall not
exceed the purchase price of the delivery lot of the Product in respect of which
such claim is made, and the costs of freight incurred by Buyer. At Seller's
request, Buyer shall return any delivery lot to Seller which Buyer claims is
defective or not meeting the quantity requirement. Seller shall reimburse Buyer
for cost of freight to return such Product to Seller. In no event shall
4
<PAGE>
Seller be liable for any lost profits or any indirect, consequential,
special, incidental, contingent or punitive damages incurred by Buyer.
10. Contingencies.
-------------
(a) Neither party shall be in breach of its obligations hereunder to
the extent that performance is prevented or delayed as a result of any of
the following contingencies:
(i) any cause beyond the reasonable control of the party
concerned;
(ii) labor disturbance, whether involving the employees of the
party concerned or otherwise, and whether or not the disturbance could
be settled by acceding to the demands of a labor group;
(iii) compliance with a request or order of any government or
governmental department or agency (including but not limited to EPA,
OSHA, etc.); or
(iv) shortage in raw material, transportation, power
(b) In the event that Seller experiences an unanticipated disruption
in production which temporarily reduces Seller's manufacturing capacity, Seller
shall use all reasonable efforts to minimize any disruption or inconvenience to
Buyer's business. In the event that Seller's reduced capacity results in a
shortage in Seller's supply of Product, Seller shall allocate all remaining
quantities of Product in proportion to the Buyer's purchase during the previous
year.
5
<PAGE>
(c) Quantities not purchased or sold due to the provisions of this
Section may be purchased or sold elsewhere or made up later if reasonably
possible and by agreement of the parties.
(d) Nothing in this Section shall excuse Buyer from its obligations
to make payments when due.
11. Product Hazards.
---------------
Buyer acknowledges receipt of Seller's Material Safety Data Sheets for
Product and is aware of the hazards or risks in handling or using Product. Buyer
shall fully inform its employees, agents, contractors and customers who handle,
use, buy or may be exposed to any Product of such Product's hazards or risks.
Buyer shall provide copies of Seller's Material Safety Data Sheets and any
updates furnished by Seller to all such employees, agents, contractors and
customers; and Buyers shall conspicuously post the Material Safety Data Sheets
throughout the area of Buyer's plants where exposure to any Product may occur,
provided however, that Seller's sole remedy for Buyer's failure to perform its
obligations hereunder shall be recovery of any costs, losses, expenses or
damages suffered by Seller. Under no circumstances will Seller be permitted to
withhold or terminate shipments of Product solely because of Buyer's breach of
this paragraph.
12. Default.
-------
Except as otherwise specifically provided in this Contract, if either party
fails to perform any of the terms of this Contract, the other party may defer
shipments or receipt of deliveries until such default is cured by the defaulting
party
6
<PAGE>
or, at its option, may treat such default as a breach of the entire Contract
and, if such default is not cured within thirty days of the giving of notice
thereof to the defaulting party, immediately terminate this Contract, provided,
however, that such termination shall not relieve Buyer from payment for all
acceptable Product delivered prior to such termination and provided, further,
that if Buyer is terminating, before exercising the option, it shall first make
payment for all acceptable Product theretofore delivered.
13. Notices.
-------
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been fully
given if delivered by hand or mailed, certified or registered mail with postage
prepaid:
(a) If to Seller:
Scott Paper Company
Scott Plaza
Philadelphia, Pennsylvania 19113
Attention: Ashok N. Bakhru
Senior Vice President
with copies to:
Ellis A. Horwitz, Esquire
Vice President and
General Counsel
(b) If to Purchaser:
Wincup Holdings, Inc.
Chesterbrook Corporate Center
735 Chesterbrook Boulevard, Suite 305
Wayne, Pennsylvania 19087
Attention: Mr. Michael T. Kennedy
President
7
<PAGE>
with copies to:
Duane Morris & Heckscher
4200 One Liberty Place
Philadelphia, Pennsylvania 19103
Attention: Vincent F. Garrity, Jr., Esquire
or to such other Person or address as the Seller or Purchaser
shall furnish in writing.
14. General.
-------
(a) This Contract shall be binding upon and inure to the benefit of
the successors and assigns of Buyer and the successors and assigns of Seller,
but shall not be assigned by either party without the prior written consent of
the other party which consent shall not be unreasonably withheld, provided, that
--------
this Contract shall be assignable to any party which purchases or succeeds to
substantially all of the business or assets of the Assignor.
(b) This Contract is to be construed under the laws of the State of
Pennsylvania, without giving effect to its conflict or choice of law rules.
(c) Failure of either party to require performance of any provisions
of this Contract shall not affect either party's right to require full
performance thereof at any time thereafter, and the waiver by either party of a
breach of any provision hereof shall not constitute a waiver of a similar breach
in the future or of any other breach or nullify the effectiveness of such
provision.
(d) This Contract and any exhibits hereinafter set forth contain the
entire agreement between the parties hereto on the subject matter hereof, and
there are no oral
8
<PAGE>
representations, stipulations, warranties, agreements, or understandings
with respect to such subject matter that are not fully expressed herein.
Neither this Contract nor its execution has been induced by any
representation, stipulation, warranty, agreement, or understanding of any
kind other than those herein expressed. No amendment, addition to,
modification, or waiver of all or any part of this Contract shall be of any
force or effect unless in writing and signed by Seller and Buyer.
(e) If the provisions of this Contract and the provisions of any
purchase order or order acknowledgement written in connection with this
Contract conflict, then the provisions of this Contract shall prevail.
IN WITNESS WHEREOF, Seller and Buyer have executed this Contract as of the
date first written above.
SCOTT POLYMERS, INC. WINCUP HOLDINGS, INC.
By: /s/ Steven D. McLamb By: [SIGNATURE APPEARS HERE]
--------------------------- ---------------------------
Steven D. McLamb
Title: Vice President Title: President
--------------------------- ---------------------------
9
<PAGE>
EXHIBIT A
---------
<TABLE>
<CAPTION>
Nominal Max/Min
------- -------
<S> <C> <C>
Hydrocarbon 5.65% 5.95/5.30
Residual Volatiles 750 PPM 2200 Max
Mol. Wt. 305,000 350,000/290,000
Lumping 1% 1% Max
Pitting @40 PSI 1.5% 2.5 Max
Solution Test (Average) 6.0 Minutes 10/3.0 Minutes
Gloss 38 30 Min
Brittleness @38 PSI 1.0 2.0 Max
</TABLE>
Seive Analysis
<TABLE>
On 35 On 40 On 45 On 50 Pan
----- ----- ----- ----- ---
<S> <C> <C> <C> <C> <C>
Nominal Range 0.1% -2% 45% max 55% max 25% max 0.1-3
</TABLE>
Notes: No more than 2% on 35 mesh.
No more than 5% on Pan.
At least 97% of all beads to be smaller than 35 mesh.
Minimum of 66% on 40 and 45 mesh.
Up to 5% of Product by weight shipped to Buyer in any one calendar
quarter may have over 25.0% and up to 29.0%/1/ of beads on the 50
mesh.
Quality testing to be conducted per Scott Polymers Internal Product Quality
Control Specifications an Standard Test Methods, as such may be changed from
time to time.
10
<PAGE>
AMENDMENT
WHEREAS, Scott Polymers, Inc., a Texas corporation ("Seller") and Wincup
Holdings, Inc., a Delaware corporation ("Buyer") entered into a certain Contract
of Sale, dated February 28, 1992, pursuant to which Seller agreed to sell and
Buyer agreed to buy certain quantities of expanded polystyrene T-grade beads
(hereinafter "Contract");
AND WHEREAS the parties, in consideration of good and valuable
consideration, the receipt of which is hereby acknowledged, wish to amend the
Contract;
NOW THEREFORE, the parties agree as follows:
1. The phrase "five years" contained in Paragraph 5 of the Contract is
hereby deleted, and the phrase "eight years" is hereby inserted.
2. Item (iii) of Paragraph 3 of the Contract is deleted, and the
following provision is inserted in its stead:
(iii) [ ]/lb for sales during Year 3;
(iv) [ ]/lb for sales during Year 4; and
(v) [ ]/lb, adjusted as described below for
sales during Years 5, 6, 7 and 8.
3. The remainder of Paragraph 3 following Item (iii) is hereby deleted,
and the following provisions are inserted in their stead:
The price shall be F.O.B. Fort Worth, Texas, loaded on trucks by Seller.
The non-monomer element of the price shall be subject to adjustment
(rounded to the nearest one hundreth of a cent) up or down on each Contract
Anniversary Date beginning with sales made in Year 5 of this Agreement. The
first such adjustment shall be proportional to the changes in the
Producers' Price Index for Finished Goods since February 28, 1994.
During Years [ ], payment terms shall be net [ ] days from the date
of invoice.
During Year [ ], payment terms shall initially be net [ ] days from the
date of invoice, provided however, that on the first day of May, July,
September, November, [ ] and January, [ ], following the commencement of
Year [ ], the payment term shall be reduced by [ ] days.
<PAGE>
During Year [ ], payment terms shall be net [ ] days from the date of
invoice.
During Year [ ], payment terms shall be net [ ] days from the date of
invoice.
During Year [ ] and thereafter, the payment terms shall be determined by
prevailing terms in the industry, but in no event shall payment terms
exceed [ ] days.
Availability of these extended terms is conditioned upon Buyer's prompt
remittances in accordance therewith, however, up to five days grace shall
be permitted on not more than ten invoices in any twelve calendar month
period.
4. The following paragraph shall be added at the end of paragraph 3 of the
Contract:
As used in this Agreement, the following terms refer to the time periods
indicated:
"Year 1" shall mean the period from March 1, 1992 up to and
including February 28, 1993;
"Year 2" shall mean the period from March 1, 1993 up to and
including February 28, 1994;
"Year 3" shall mean the period from March 1, 1994 up to and
including February 28, 1995;
"Year 4" shall mean the period from March 1, 1995 up to and
including February 29, 1996.
"Year 5" shall mean the period from March 1, 1996 up to and
including February 28, 1997.
"Year 6" shall mean the period from March 1, 1997 up to and
including February 28, 1998.
"Year 7" shall mean the period from March 1, 1998 up to and
including February 28, 1999.
"Year 8" shall mean the period from March 1, 1999 up to and
including February 28, 2000.
5. The following provision is hereby added as Subpart (f) of Paragraph 14:
(f) During the term of this Agreement and any extensions hereof, it is
contemplated that each party hereto may obtain from the other party, or
have access to, certain information that the other party regards as
proprietary and confidential (such information, as more particularly
defined below, "Confidential Information"). Each party
2
<PAGE>
hereto agrees that, during the term of this Agreement and any
extensions hereof, and for a period of five years thereafter, it
shall keep the Confidential Information of the other party that
it obtains or has access to confidential, and shall not disclose
any such Confidential Information to any third party except to
such of its directors, officers, employees and legal, accounting
and financial advisors that may require access to the
Confidential Information for purpose of performing the
obligations of such party under this Agreement and otherwise
operating such other party's business.
As used in this Agreement, the term "Confidential Information"
shall mean any and all pricing, terms, quantities and other
provisions of this Agreement, as well as all financial,
technical, commercial, engineering or other information
concerning the business affairs of any party hereto (the
"Disclosing Party") that may be provided to or obtained by the
other party (the "Receiving Party") hereto. The term
"Confidential Information" with respect to any Disclosing Party
does not include information that: (a) was or is made available
to the public without restriction by Disclosing Party or is
otherwise generally available to the public through no fault of
the Receiving Party; (b) was previously known to or independently
developed or derived by the Receiving Party; or (c) is disclosed
to the Receiving Party a non-confidential basis by a third party
who has the right to disclose such information.
The parties acknowledge that money damages may be an inadequate
remedy for breach of this provision and agree that this provision
may be enforced at law or in equity as the proprietor of such
Confidential Information elects.
6. Payments for all purchases made hereunder or which are due and owing as
of the date hereof shall be made in accordance with a payment Schedule, included
here as Exhibit A. Buyer shall not be deemed to be in default in performance of
its obligations under Section 3 of the Contract so long as payments are made in
accordance with Exhibit A.
7. This Amendment shall be effective on February 28, 1994 and is
specifically conditioned upon the following:
i) the approval of Continental Bank, pursuant to its rights under the
Attornment Agreement executed with Scott Paper Company on February 28,
1992;
ii) Wincup's receipt of One Million, Five Hundred Thousand Dollars
($1,500,000) from Continental Bank in the form of a line of credit, and
Benchmark Holdings, Inc.'s receipt of One Million, One Hundred Seventy-Four
Thousand Dollars
3
<PAGE>
($1,174,000) of additional availability under a Letter of Credit;
iii) execution of a Guaranty Agreement by Benchmark Corporation of
Delaware guaranteeing performance of the Contract in the form attached
hereto as Exhibit B;
iv) certain adjustments in a Secured Note held by Scott Paper
Company, in the form contained in Exhibit C; and
v) the grant of certain warrants for the shares of Benchmark
Corporation of Delaware in the form contained on Exhibit D.
vi) the Closing of the sale of Scott Polymers, Inc. and Scott
Polymers, Ltd. by March 1, 1994, unless this condition is waived in writing
by Seller.
8. Unless specifically changed by this Amendment, all other terms and
conditions of the Contract shall remain unchanged.
SCOTT POLYMERS, INC.
By: [SIGNATURE APPEARS HERE]
-------------------------------
Title: Vice President
----------------------------
Date: 2/25/94
-----------------------------
WINCUP HOLDINGS, INC.
By: [SIGNATURE APPEARS HERE]
-------------------------------
Title: President
----------------------------
Date: 2/25/94
-----------------------------
4
<PAGE>
Exhibit A
SCOTT POLYMERS INC.
3607 N SYLVANIA AVE
FORT WORTH, TX.
76111
<TABLE>
<CAPTION>
VOUCHER VENDOR'S P.O. INVOICE FED EX VOUCHER TOTAL DAYS
NUMBER INVOICE# NUMBER DATE DATE AMOUNT PAYMENT 0/S
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
910797 910797 106605 10/18/93 2/16/94 (9,045.00) 121
388096 910816 167435 10/18/93 2/16/94 21,105.00 121
388665 910822 167437 10/21/93 2/16/94 20,370.00 118
388640 910829 610201 10/21/93 2/16/94 20,370.00 118
388270 910832 1508994 10/21/93 2/16/94 15,520.00 118
389587 910833 219770 10/21/93 2/16/94 20,370.00 118
389503 910834 106609 10/21/93 2/16/94 15,520.00 118
388269 910840 1508905 10/21/93 2/16/94 15,520.00 118
388638 910841 53918 10/21/93 2/16/94 20,370.00 118
389588 910843 219769 10/21/93 2/16/94 20,370.00 160,470.00 118
388431 910845 53918 10/22/93 2/18/94 21,105.00 119
388416 910846 1508995 10/22/93 2/18/94 15,520.00 119
388436 910847 167438 10/22/93 2/18/94 20,370.00 119
388633 910855 220133 10/26/93 2/18/94 20,370.00 115
388634 910857 53918 10/26/93 2/18/94 20,370.00 115
388636 910859 167533 10/26/93 2/18/94 20,370.00 115
388635 910860 106614 10/26/93 2/18/94 15,520.00 115
388783 910870 167534 10/27/93 2/18/94 20,370.00 153,995.00 114
389580 910871 220135 10/27/93 2/22/94 20,370.00 118
388780 910872 610224 10/27/93 2/22/94 20,370.00 118
388779 910876 53916 10/27/93 2/22/94 20,370.00 118
388778 910877 106614 10/27/93 2/22/94 15,520.00 118
388750 910879 220134 10/27/93 2/22/94 20,370.00 118
389021 910683 610254 10/28/93 2/22/94 20,370.00 117
389581 910887 220136 10/28/93 2/22/94 20,370.00 117
389502 910891 106615 10/29/93 2/22/94 15,520.00 116
389367 910892 1508996 10/29/93 2/22/94 21,340.00 174,600.00 116
389337 910893 220137 10/29/93 2/25/94 20,370.00 119
389486 910895 167535 10/29/93 2/25/94 20,370.00 119
389493 910896 53918 10/29/93 2/25/94 20,370.00 119
389338 910897 220138 10/29/93 2/25/94 20,370.00 119
389578 910898 220139 10/29/93 2/25/94 20,370.00 119
389501 910899 106615 10/29/93 2/25/94 15,520.00 119
389485 910906 167536 10/29/93 2/25/94 20,370.00 119
389271 910911 53918 11/2/93 2/25/94 20,370.00 115
389270 910912 220140 11/2/93 2/25/94 20,370.00 178,480.00 115
389482 910922 167539 11/3/93 3/1/94 20,321.50 118
389483 910923 167537 11/3/93 3/1/94 20,273.00 118
389506 910925 610255 11/3/93 3/1/94 20,370.00 118
389715 910938 1508997 11/5/93 3/1/94 21,340.00 116
389597 910939 167538 11/5/93 3/1/94 20,370.00 116
389596 910940 610256 11/5/93 3/1/94 20,370.00 116
</TABLE>
Page 1
<PAGE>
SCOTT POLYMERS INC.
3607 N SYLVANIA AVE
FORT WORTH, TX.
76111
<TABLE>
<CAPTION>
VOUCHER VENDOR'S P.O. INVOICE FED EX VOUCHER TOTAL DAYS
NUMBER INVOICE # NUMBER DATE DATE AMOUNT PAYMENT O/S
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
389595 910943 106622 11/5/93 3/1/94 15,520.00 116
389594 910944 106625 11/5/93 3/1/94 15,520.00 116
389979 910947 1508998 11/8/93 3/1/94 21,291.50 113
389963 910950 220143 11/8/93 3/1/94 20,370.00 113
389978 910951 53918 11/8/93 3/1/94 20,370.00 113
389964 910959 220144 11/9/93 3/1/94 20,370.00 236,486.00 112
389977 910961 167579 11/9/93 3/4/94 20,370.00 115
389980 910966 105630 11/9/93 3/4/94 15,520.00 115
389965 910969 220145 11/9/93 3/4/94 20,370.00 115
390394 910970 53918 11/9/93 3/4/94 20,370.00 115
390426 910974 220146 11/10/93 3/4/94 20,370.00 114
389962 910975 220147 11/10/93 3/4/94 20,370.00 114
390175 910979 1508999 11/11/93 3/4/94 15,520.00 113
390144 910980 106636 11/11/93 3/4/94 15,520.00 113
390173 910981 610303 11/11/93 3/4/94 20,370.00 113
390232 910989 610304 11/12/93 3/4/94 20,370.00 112
390274 910990 106637 11/12/93 3/4/94 15,495.75 112
390273 910991 1509000 11/12/93 3/4/94 21,340.00 112
390233 910992 53918 11/12/93 3/4/94 20,370.00 246,355.75 112
390234 910993 106637 11/12/93 3/8/94 15,520.00 116
390288 910995 220148 11/15/93 3/8/94 20,370.00 113
390287 910998 220149 11/15/93 3/8/94 20,370.00 113
390285 911001 167581 11/15/93 3/8/94 20,370.00 113
390563 911009 610340 11/17/93 3/8/94 20,370.00 111
390579 911013 167582 11/17/93 3/8/94 20,370.00 111
390714 911015 220151 11/17/93 3/8/94 20,370.00 111
390715 911016 220150 11/17/93 3/8/94 20,370.00 111
390549 911019 1509001 11/17/93 3/8/94 21,340.00 111
392206 911026 54020 11/18/93 3/8/94 20,370.00 110
390547 911029 1509004 11/18/93 3/8/94 21,340.00 110
390581 911031 167583 11/18/93 3/8/94 20,370.00 110
390582 911032 167626 11/18/93 3/8/94 20,370.00 261,900.00 110
390548 911033 1509002 11/18/93 3/11/94 15,520.00 113
391006 911036 1509003 11/19/93 3/11/94 15,520.00 112
391131 911037 167580 11/19/93 3/11/94 20,370.00 112
391041 911038 219889 11/19/93 3/11/94 20,370.00 112
391049 911048 219890 11/22/93 3/11/94 20,370.00 109
391107 911050 610341 11/22/93 3/11/94 20,370.00 109
391050 911060 219891 11/22/93 3/11/94 20,321.50 109
391387 911064 219892 11/23/93 3/11/94 20,370.00 108
391461 911065 54020 11/23/93 3/11/94 20,370.00 108
391509 911067 106645 11/23/93 3/11/94 15,520.00 108
</TABLE>
Page 2
<PAGE>
SCOTT POLYMERS INC.
3607 N SYLVANIA AVE
FORT WORTH, TX.
76111
<TABLE>
<CAPTION>
VOUCHER VENDOR'S P.O. INVOICE FED EX VOUCHER TOTAL DAYS
NUMBER INVOICE # NUMBER DATE DATE AMOUNT PAYMENT O/S
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
391481 911072 219893 11/24/93 3/11/94 20,370.00 107
391510 911073 106649 11/24/93 3/11/94 15,520.00 107
391436 911074 1509005 11/24/93 3/11/94 21,340.00 107
391538 911076 167627 11/24/93 3/11/94 20,370.00 266,701.50 107
391475 911077 610347 11/24/93 3/15/94 20,370.00 111
391463 911079 54020 11/24/93 3/15/94 20,370.00 111
391765 911080 220400 11/24/93 3/15/94 20,370.00 111
391766 911081 220401 11/24/93 3/15/94 20,370.00 111
391474 911082 610348 11/24/93 3/15/94 20,370.00 111
392214 911153 610399 11/28/93 3/15/94 20,370.00 107
391552 911093 1509006 11/30/93 3/15/94 21,340.00 105
391517 911094 167628 11/30/93 3/15/94 20,370.00 105
391521 911095 54020 11/30/93 3/15/94 20,370.00 105
391764 911096 220402 11/30/93 3/15/94 20,370.00 105
391794 911100 610363 12/2/93 3/15/94 20,370.00 103
391797 911103 106652 12/2/93 3/15/94 15,520.00 103
391757 911108 220404 12/2/93 3/15/94 20,370.00 103
391756 911109 220403 12/2/93 3/15/94 20,370.00 281,300.00 103
391799 911113 167630 12/2/93 3/18/94 20,370.00 106
391976 911117 106660 12/3/93 3/18/94 15,520.00 105
391977 911119 1509007 12/3/93 3/18/94 21,340.00 105
391970 911121 167629 12/3/93 3/18/94 20,370.00 105
392047 91130 54020 12/7/93 3/18/94 20,370.00 101
392050 911124 106661 12/7/93 3/18/94 15,520.00 101
392072 911125 1509008 12/7/93 3/18/94 21,340.00 101
392051 911127 167632 12/7/93 3/18/94 20,370.00 101
392043 911134 220431 12/7/93 3/18/94 20,370.00 101
392052 911136 167631 12/7/93 3/18/94 20,370.00 101
392049 911137 106662 12/7/93 3/18/94 15,520.00 101
392048 911141 54020 12/7/93 3/18/94 20,370.00 101
392045 911145 220429 12/7/93 3/18/94 20,370.00 101
392044 911146 220430 12/7/93 3/18/94 20,370.00 101
392046 911148 610364 12/7/93 3/18/94 20,370.00 292,940.00 101
392042 911150 220428 12/7/93 3/22/94 20,370.00 105
392362 911158 220432 12/8/93 3/22/94 20,370.00 104
392731 911159 106668 12/10/93 3/22/94 15,520.00 102
392742 911160 167633 12/10/93 3/22/94 20,370.00 102
392939 911162 220433 12/10/93 3/22/94 20,370.00 102
392782 911164 1509009 12/10/93 3/22/94 21,340.00 102
392781 911165 1509010 12/10/93 3/22/94 15,520.00 102
393100 911173 610400 12/13/93 3/22/94 20,370.00 99
393057 911177 220434 12/13/93 3/22/94 20,370.00 99
</TABLE>
Page 3
<PAGE>
SCOTT POLYMERS INC.
3607 N SYLVANIA AVE
FORT WORTH, TX.
76111
<TABLE>
<CAPTION>
VOUCHER VENDOR'S P.O. INVOICE FED EX VOUCHER TOTAL DAYS
NUMBER INVOICE# NUMBER DATE DATE AMOUNT PAYMENT O/S
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
393041 911178 167717 12/13/93 3/22/94 20,370.00 99
393077 911179 54020 12/13/93 3/22/94 20,370.00 99
393056 911182 220435 12/13/93 3/22/94 20,370.00 99
393129 911183 1509011 12/13/93 3/22/94 15,520.00 99
393040 911184 167716 12/13/93 3/22/94 20,370.00 99
393103 911188 106673 12/14/93 3/22/94 15,520.00 98
393055 911189 220436 12/14/93 3/22/94 20,370.00 307,490.00 98
393081 911191 54020 12/14/93 3/25/94 20,370.00 101
393043 911193 167718 12/14/93 3/25/94 20,370.00 101
393102 911201 106677 12/15/93 3/25/94 15,520.00 100
393101 911205 610431 12/15/93 3/25/94 20,370.00 100
393042 911206 167719 12/15/93 3/25/94 20,370.00 100
393059 911207 220437 12/15/93 3/25/94 20,370.00 100
393281 911211 1509157 12/16/93 3/25/94 21,340.00 99
393231 911213 220495 12/16/93 3/25/94 20,370.00 99
393299 911215 167720 12/16/93 3/25/94 20,370.00 99
394056 911219 610432 12/17/93 3/25/94 20,370.00 98
394044 911221 220496 12/17/93 3/25/94 20,370.00 98
394043 911222 220497 12/17/93 3/25/94 20,370.00 98
394711 911228 220498 12/20/93 3/25/94 20,370.00 95
393421 911229 106684 12/20/93 3/25/94 15,520.00 95
393423 911232 167721 12/20/93 3/25/94 20,370.00 95
394712 911233 220499 12/20/93 3/25/94 20,370.00 317,190.00 95
393422 911236 167764 12/20/93 3/29/94 20,370.00 99
394710 911241 220500 12/21/93 3/29/94 20,370.00 98
394381 911242 167722 12/21/93 3/29/94 20,370.00 98
393506 911244 54020 12/21/93 3/29/94 20,370.00 98
394057 911251 610433 12/21/93 3/29/94 20,370.00 98
393952 911253 220501 12/21/93 3/29/94 20,370.00 98
393951 911254 220502 12/21/93 3/29/94 20,370.00 98
393953 911255 220503 12/21/93 3/29/94 20,370.00 98
393756 911257 1509012 12/21/93 3/29/94 15,520.00 98
394074 911259 106687 12/21/93 3/29/94 15,520.00 98
394709 911256 220504 12/22/93 3/29/94 20,370.00 97
394047 911258 54083 12/22/93 3/29/94 20,370.00 97
394075 911262 106689 12/22/93 3/29/94 15,520.00 97
393757 911263 1509158 12/22/93 3/29/94 21,370.00 97
394638 911267 167765 12/28/93 3/29/94 20,370.00 91
394626 911269 106693 12/28/93 3/29/94 15,520.00 307,490.00 91
394585 911270 220505 12/28/93 4/1/94 20,370.00 94
394632 911280 167774 12/28/93 4/1/94 20,370.00 94
394630 911282 1509159 12/28/93 4/1/94 21,340.00 94
</TABLE>
Page 4
<PAGE>
SCOTT POLYMERS INC.
3607 N SYLVANIA AVE
FORT WORTH, TX.
76111
<TABLE>
<CAPTION>
VOUCHER VENDOR'S P.O INVOICE FED EX VOUCHER TOTAL DAYS
NUMBER INVOICE # NUMBER DATE DATE AMOUNT PAYMENT O/S
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
394634 911277 167768 12/29/93 4/1/94 20,370.00 93
394602 911281 610473 12/29/93 4/1/94 20,370.00 93
395028 911283 54094 12/29/93 4/1/94 20,370.00 93
395045 911284 106698 12/29/93 4/1/94 15,520.00 93
394684 911288 610474 1/3/94 4/1/94 20,370.00 88
394685 911292 1509160 1/3/94 4/1/94 21,340.00 88
394683 911296 54083 1/3/94 4/1/94 20,370.00 88
394787 911300 167769 1/4/94 4/1/94 20,370.00 87
394798 911301 220610 1/4/94 4/1/94 20,370.00 87
394962 911302 54083 1/4/94 4/1/94 20,370.00 87
394771 911303 610475 1/4/94 4/1/94 20,370.00 87
394797 911306 220609 1/4/94 4/1/94 20,370.00 302,640.00 87
--------------------------
3,488,038.25 3,488,038.25
==========================
</TABLE>
Page 5
<PAGE>
Exhibit B
PAYMENTS HEREUNDER ARE SUBORDINATED TO THE CLAIMS OF CONTINENTAL BANK N.A., A
NATIONAL BANKING ASSOCIATION WITH A PLACE OF BUSINESS AT 231 SOUTH LASALLE
STREET, CHICAGO, ILLINOIS, PURSUANT TO THE TERMS OF AN INTERCREDITOR AGREEMENT
ENTERED INTO BETWEEN SCOTT PAPER COMPANY, CONTINENTAL BANK AND WINCUP HOLDINGS,
INC. ON FEBRUARY 28, 1992.
GUARANTY
This Guaranty ("Guaranty") is made as of this 28th day of February 1994, by
and between Scott Polymers, Inc., a Texas corporation ("Polymers") and Benchmark
Corporation of Delaware, a Delaware corporation ("Guarantor").
WHEREAS, Wincup Holdings, Inc., a Delaware corporation ("Wincup") and
Guarantor's subsidiary, has entered into a Supply Contract dated as of February
28, 1992 with Polymers for the purchase by Wincup of expanded polystyrene
T-grade beads from Polymers; and
WHEREAS, Polymers and Wincup have agreed to enter into an Amendment to
Supply Contract as of February 28, 1994; and
WHEREAS, as a condition of the Amendment to Supply Contract, Polymers has
required that Guarantor execute and deliver this Guaranty;
NOW, THEREFORE, in consideration of the mutual promises set forth herein
the parties hereto agree as follows:
1. In the Event that Wincup shall be in default of any material
obligation which is has undertaken ("Default") under the Supply Contract, as
amended, and such Default shall remain
<PAGE>
uncured for a period of five days after notice thereof by Polymers to Guarantor,
Guarantor shall unconditionally guarantee and become surety for the performance
by Wincup of its obligations thereunder.
2. In the event Guarantor is required to perform under this Guaranty, the
substantive provisions of the Supply Contract, as amended, shall be applicable
and Guarantor shall be entitled to the benefit of any defenses which would have
been available to Wincup under the Supply Contract, as amended.
3. This Guaranty shall remain in effect for the entire term of the Supply
Contract, as amended.
4. (a) This Guaranty shall be binding upon and inure to the benefit of
the successors and assigns of Guarantor and Polymers, but shall not be assigned
by either party without the prior written consent of the other party, provided,
--------
that this Guaranty shall be assignable to any party which purchases or succeeds
to substantially all of the business or assets of the assignor.
(b) This Guaranty is to be construed under the laws of the State of
Pennsylvania, without giving effect to its conflict or choice of law rules.
(c) Failure of either party to require performance of any provisions
of this Guaranty shall not affect either party's right to require full
performance thereof at any time thereafter, and the waiver by either party of a
breach of any provision hereof shall not constitute a waiver of a similar breach
in the
-2-
<PAGE>
future or of any other breach or nullify the effectiveness of such provision.
(d) This Guaranty contains the entire agreement between the
parties hereto on the subject matter hereof, and there are no oral
representations, stipulations, warranties, agreements, or understandings with
respect to such subject matter that are not fully expressed herein. Neither this
Guaranty nor its execution has been induced by any representation, stipulation,
warranty, agreement, nor understanding of any kind other than those herein
expressed.
IN WITNESS WHEREOF, this Guaranty has been executed by the parties hereto,
all of as of the date first above written.
SCOTT POLYMERS, INC.
By: [SIGNATURE APPEARS HERE]
-------------------------------
Title: Vice President
----------------------------
Dated: 2/25/94
----------------------------
BENCHMARK CORPORATION OF DELAWARE
By: [SIGNATURE APPEARS HERE]
-------------------------------
Title: President
----------------------------
Dated:
----------------------------
- 3 -
<PAGE>
EXHIBIT C
The assertion of certain rights under this Note, and the transfer of the
Note of which this amendment is a part, are subject to the terms of an
Intercreditor Agreement entered into between Scott Paper Company, Continental
Bank and Wincup Holdings, Inc., on February 28, 1992.
First Amendment to Negotiable Secured Note
WHEREAS, on February 24, 1992, Scott Container Products Group, Inc., a
Delaware corporation ("SCPG"), executed a negotiable, secured note in the amount
of Five Million Dollars ($5,000,000) for the benefit of Scott Paper Company
(hereinafter "Secured Note");
AND WHEREAS, the aforementioned Secured Note provided for 18 payments of
principal and interest and a final payment to be made on February 28, 1997;
AND WHEREAS, Wincup Holdings, Inc., a Delaware corporation ("Holdings"),
purchased all of the shares of SCPG and thereafter merged SCPG into Holdings so
that Holdings is obligated under the Secured Note;
AND WHEREAS, the undersigned, in exchange for good and valuable
consideration, the receipt of which is hereby acknowledged, wish to amend
certain provisions of the Secured Note:
NOW THEREFORE, the parties hereby agree as follows:
<PAGE>
The second and third sentences of Paragraph 1 of the Secured Note are
hereby deleted in their entirety, and the following provision is hereby
substituted:
Effective as of November 30, 1993, the interest rate
applicable on the Secured Note shall be reduced from twelve
percent (12%) per annum to six percent (6%) per annum.
Commencing with the payment due on February 28, 1994, Maker
shall be under no obligation to amortize principal but instead
shall repay the total principal, together with accrued interest,
with the final payment due on February 28, 1997. In addition,
Maker shall, at its option, have the right to defer payment of
interest until the final payment to be made on February 28,1997,
provided however, that during such time as the interest is
deferred, interest shall continue to accrue. In the event that
the Maker does not elect to defer the interest payment as
provided above, then commencing on February 28, 1994, and
continuing on each February 28, May 30, August 30 and November 30
thereafter, Maker shall make quarterly interest payments at the
annual rate of six percent (6%) on the unpaid principal balance.
<PAGE>
All other provisions of the Secured Note shall remain unchanged and in full
force.
WINCUP HOLDINGS, INC. SCOTT PAPER COMPANY
[SIGNATURE APPEARS HERE] /s/ John J. Butler
- ------------------------ ----------------------------------
John J. Butler
Senior Vice President
& Chief Administrative Officer
<PAGE>
Exhibit D
No. BCD-3 February 28, 1994
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER ARE
RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY SALE, TRANSFER, PLEDGE OR OTHER
DISPOSITION HEREOF OR THEREOF MAY BE MADE ONLY IN ACCORDANCE WITH THE
PROVISIONS OF SUCH RULE OR OTHER APPLICABLE FEDERAL LAW AND IN ACCORDANCE
WITH ANY APPLICABLE STATE SECURITIES LAW.
VOID AFTER 5:00 P.M. PHILADELPHIA, PENNSYLVANIA TIME
ON FEBRUARY 28, 1999
WARRANT TO PURCHASE 150 SHARES OF NONVOTING COMMON
STOCK OF BENCHMARK CORPORATION OF DELAWARE
THIS CERTIFIES THAT, for value received, Scott Paper Company (the "Holder")
is entitled, subject to the terms and conditions set forth herein, to purchase,
during the period from the date hereto through 5:00 pm. Philadelphia,
Pennsylvania time on February 28, 1999 (the "Expiration Date"), from Benchmark
Corporation of Delaware (the "Company"), a Delaware corporation, up to 150 fully
paid and non-assessable shares, subject to adjustment as set forth in Section 3
hereof, (the "Warrant Shares") of the Company's Nonvoting Common Stock, par
value $.10 per share (the "Nonvoting Common Stock").
The Holder is entitled to purchase the Warrant Shares at a price per
Warrant Share (such price, as adjusted from time to time hereunder being
referred to as the "Exercise Price") of One Thousand Five Hundred Dollars
($1,500.00), subject to adjustment as provided in Sections 3 hereof, through the
Expiration Date.
The Exercise Price then in effect multiplied by the number of Warrant
Shares for which this Warrant is exercised at any time is hereinafter referred
to as the "Purchase Price."
-1-
<PAGE>
1. Exercise of Warrant.
-------------------
(a) This Warrant may be exercised, in whole or in part, at any time after
the date hereof and on or prior to the Expiration Date, by delivering to the
Secretary of the Company (i) a written notice, in substantially the form of
Exhibit A attached hereto, from the Holder specifying the number of Warrant
Shares the Holder then desires to purchase and the name and address of a
location in Philadelphia, Pennsylvania to which certificates representing such
Warrant Shares shall be delivered against payment of the Purchase Price and (ii)
a written statement to the effect that the Holder is not acquiring such Warrant
Shares with a view to the resale thereof and that the Holder is aware of the
restrictions regarding disposition of any Warrant Shares imposed by the
Securities Act of 1933, as amended (the "Act"), and any applicable state
securities law. This Warrant shall be deemed to have been exercised at the close
of business 30 days after the receipt by the Company of such notice (the
"Exercise Date") and the Holder shall be treated for all purposes as the record
holder of such Warrant Shares at that time.
(b) Within ten business days after the Exercise Date, the Company will
cause certificates representing the number of Warrant Shares specified in such
notice to be issued and will deliver such certificates to the Holder at the
location designated in such notice against payment therefor.
(c) The Company shall at all times reserve and keep available, free of
preemptive rights, out of its authorized and unissued shares of Nonvoting Common
Stock, for the purpose of effecting the exercise of this Warrant, the number of
shares of Nonvoting Common Stock purchasable hereunder.
(d) If the Holder shall exercise this Warrant for fewer than all of the
Warrant Shares, the Company shall issue to the Holder a new Warrant exercisable
for the purchase of the remaining Warrant Shares.
2. Transfer of Warrant. Subject to compliance with the Act and any
-------------------
applicable state securities law, this Warrant shall be transferable by the
Holder only on one occasion and only then to a purchaser of all of the issued
and outstanding voting securities of Scott Polymers, Inc., or to such
purchaser's "affiliate" as that term is defined in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1933. For the protection of the
Company under such federal and state laws, the certificates representing the
Warrant Shares shall bear an appropriate restrictive legend. The Company shall
not be obligated to deliver any certificates representing any Warrant Shares for
such period as may be required for the
-2-
<PAGE>
Company, with reasonable diligence, to comply with any such federal or state
laws.
3. Adjustment of Number of Purchasable Shares. If at any time prior
------------------------------------------
to the exercise of this Warrant, the Company shall declare a dividend payable in
shares of Nonvoting Common Stock or in shares of the Company's Voting Common
Stock, par value $.10 (collectively, the "Common Stock") or shall split, combine
or otherwise reorganize or reclassify its Common Stock, then the number of
shares purchasable hereunder shall be increased or decreased, as the case may
require, such that the Purchase Price as in effect immediately prior to such
adjustment shall remain unchanged.
4. Fractional Interests. The Company shall not be required to issue
--------------------
fractions of a share of Nonvoting Common Stock upon the exercise of this
Warrant. If any fraction of a share of Nonvoting Common Stock would, except for
the provisions of this Section 4, be issuable upon the exercise of this Warrant,
the Company will:
(i) if the fraction of a share otherwise issuable is equal to or
less than one-half, round down and issue to the Holder only the largest whole
number of shares of Nonvoting Common Stock to which the Holder is otherwise
entitled; or
(ii) if the fraction of a share otherwise issuable is greater
than one-half, round up and issue to the Holder one additional share of
Nonvoting Common Stock in addition to the largest whole number of shares of
Nonvoting Common Stock to which the Holder is otherwise entitled.
5. Rights of the Holder as a Stockholder. Prior to the Exercise
-------------------------------------
Date, the Holder shall not be entitled to any of the rights of a stockholder of
the Company with respect to the Warrant Shares, including, without limitation,
the right to vote or to receive dividends or other distributions thereon, and
shall not be entitled to receive any notice of any proceedings of the Company.
6. Notice. Any notice required or permitted to be given hereunder
------
shall be given in writing and sent by certified mail, return receipt requested,
addressed to the Company, or the Holder, as the case may be, at the last known
address of the person to whom such notice is to be given.
-3-
<PAGE>
IN WITNESS WHEREOF, Benchmark Corporation of Delaware has caused this
Warrant to be executed as of the day and year first above written.
BENCHMARK CORPORATION OF DELAWARE
By: /s/ Michael T. Kennedy
---------------------------------
Michael T. Kennedy
President
-4-
<PAGE>
EXHIBIT A
---------
TO: BENCHMARK CORPORATION OF DELAWARE
The undersigned, the holder of Warrant No. BCD-3, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder, ___________ shares of Nonvoting Common Stock of Benchmark Holdings,
Inc. and herewith makes payment of $___________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
______________________________ whose address is ________________________________
_____________________________________.
Date:____________________
Name:__________________________________
(Print)
By:____________________________________
(Signature)
Address:_______________________________
-5-
<PAGE>
Confidential Treatment
EXHIBIT 10.17
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT'S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.
SUPPLY AGREEMENT
This Supply Agreement (this "Agreement"), executed as of March ___, 1996,
by and between SP Acquisition Co., a Delaware corporation ("Seller"), and James
River Canada, Inc., a Canadian corporation ("Purchaser");
W I T N E S S E T H:
WHEREAS, Purchaser and Seller are executing this Agreement pursuant to
which Seller will sell to Purchaser, and Purchaser will purchase from Seller,
expandable polystyrene as described in Exhibit A hereto for use in foam cup
manufacturing ("EPS"), all in accordance with the terms, conditions and
provisions set forth in this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, Seller and Purchaser agree as follows:
I. SALE AND PURCHASE
1.1 Effective Date. This Agreement shall be effective as of February 1,
--------------
1996.
1.2 Sale and Purchase. Subject to certain limitations of Seller's
-----------------
manufacturing capacity hereinafter described, during each twelve-month period of
this Agreement Seller will sell to Purchaser, and Purchaser will purchase from
Seller, for the "Purchase Price" (as determined pursuant to Sections 2.1) one
hundred percent (100%) of Purchaser's overall requirements for EPS.
Notwithstanding the forgoing, Purchaser shall not be restricted from purchasing
EPS from other sources for the purpose of testing, research, or experimentation,
or in any circumstance in which Seller is unable or unwilling to supply
Purchaser with EPS in accordance with the terms of this Agreement.
The current 100% requirement for EPS of Purchaser is approximately 9 million
pounds annually. If, during the term of this Agreement, Purchaser shall acquire
additional manufacturing capacity and therefore require EPS in excess of 9
million pounds annually, the parties will in good faith discuss increasing the
volume of EPS to accommodate such additional capacity.
If, during the term of this Agreement, Purchaser shall acquire another
manufacturer, or the assets of another manufacturer at another location, such
additional volume of EPS shall not be included in Purchaser's requirements
unless 1) there is no
1
<PAGE>
existing EPS supply agreement which binds the acquired manufacturer or assets,
and 2) the parties hereto mutually agree to include such additional EPS volume
in this Agreement.
Nothing in this Agreement shall be construed to require Purchaser to take any
quantity of EPS during any year, to continue to operate its manufacturing
facilities at any location, to replace damaged or nonfunctional equipment, to
continue in the foam container business, to maintain ownership of any location
subject to this Agreement, or to maintain any certain mix of products or
materials. Purchaser shall, to the contrary, be free to operate its business in
any manner it sees fit, to produce such products and quantities thereof as it
deems appropriate, and to add or reduce capacity in its sole discretion without
being in breach hereof.
1.3 Order Placement. Purchaser shall supply Seller annually with an
---------------
estimate of the quantity of EPS required at each of Purchaser's foam cup
manufacturing facilities. Monthly, each such facility will provide Seller with
a firm order for deliveries required during the next calendar month and a
forecast of requirements for the second and third subsequent months. The first
month's orders will be firm, and the second and third month estimates are not
firm. The ordering location shall communicate orders to Seller's Ft. Worth
manufacturing plant on or before the 20th day of each month, and no less than 10
days prior to the first required delivery. Seller will accept reasonable changes
to a purchase order if advised of any such changes within seven (7) days of the
date the purchase order was placed. Seller will use its best efforts to
accommodate changes requested after seven (7) days from date of order placement
provided the subject order has not progressed to the point of shipment. Within
two (2) business days of Seller's receipt of a purchase order, Seller will
advise Purchaser of its inability to satisfy the conditions of the purchase
order. For those purchase orders where Seller cannot satisfy the conditions
thereof and Purchaser places an order with a third party, the Purchaser shall
not be in breach of this Agreement, and Seller shall be liable for any
additional costs incurred by Purchaser, including but not limited to price
differentials and extra freight charges, to obtain such replacement EPS.
1.4 Point of Manufacture; Shipping. Seller will have the option to
------------------------------
manufacture the EPS to fill any particular order at either the Fort Worth, Texas
or Baie D'Urfe, Quebec facilities. Freight will be paid by Purchaser, with rates
equalized to Seller's Baie D'Urfe facility, for all shipments to Purchaser's
Edmonton and Brampton facilities. EPS will be shipped by Seller to Purchaser
F.O.B. Seller's manufacturing facility freight not allowed. Seller acknowledged
that Purchaser's facilities utilize load control receiving and shipping
practices, and therefore cannot accept shipments early or late. Any excess
freight costs
2
<PAGE>
experienced by Purchaser as a result of Seller not dispatching deliveries as
requested will be charged back to Seller. Seller will ship EPS in clean,
watertight trailers in sealed containers and will not ship EPS to Purchaser in
the same containers or trucks together with any products or materials other
than EPS. The parties recognize that the EPS to be shipped by Seller is
considered hazardous material under transportation regulations. Seller shall be
responsible for losses caused by leakage or contamination in transit from any
causes. Other than Seller's responsibilities set forth herein, Purchaser
shall bear the risk of loss for products after the load is moved from Seller's
facility, and shall pursue freight claims in its own name.
1.5 Reporting Requirements. So that Purchaser is kept fully aware of the
----------------------
volume in pounds of EPS purchased by it hereunder by the various manufacturing
facilities, Seller will provide to James River Canada headquarters in Toronto,
Ontario, with a copy to Norwalk, Connecticut, a report at the end of each month,
in writing, indicating the EPS purchases during the previous month, and year-to-
date, by location, and will furnish each ordering location, with a report at the
same time indicating the total purchases during the previous month by that
location and year-to-date.
II. PURCHASE PRICE
2.1 Purchase Price. The purchase price for each pound of conforming
--------------
EPS purchased during the first Annual Period under this Agreement shall be the
lower of:
a) the most recent price paid during the last 60 days by any
other North American customer of Seller purchasing EPS of equivalent quality in
volumes of 25 million pounds per year or greater; or
b) the beginning low price per pound for contract styrene
monomer as reported in the first issue of the DeWitt Benzene Newsletter in the
immediately preceding month plus [ ] per pound in U.S. Dollars.
2.2. Second and Third Year Pricing. No more than 90 nor less than 30
-----------------------------
days prior to the end of the first Annual Period of this Agreement, the parties
shall meet to discuss in good faith the price to be paid by Purchaser for EPS
during the Second and third Annual Periods. If the parties agree upon such a
price, it shall remain firm for the second and third Annual Periods. If the
parties are unable to agree upon such revised pricing, the price during the
second and third Annual Periods of the Agreement shall be established in
accordance with the procedure described in Paragraphs 2.1, and the Agreement
shall terminate after the third Annual Period.
3
<PAGE>
2.3 Billing; Terms of Payment. Seller will invoice Purchaser at
-------------------------
James River Canada Inc., 137 Bentworth Avenue, Toronto, Ontario, Canada M6A 1P6,
Attention Elvi Molinaro, on a bi-monthly basis for EPS purchased by each
manufacturing facility. Purchaser will pay Seller the Purchase price for such
EPS within [ ] days after the date of shipment. Past due payments will
bear interest accruing from the due date until payment at an annual rate equal
to the lesser of the average Prime Rate as reported in The Wall Street Journal
from time to time plus two (2) points or the maximum rate permitted by
applicable law.
III. MISCELLANEOUS PROVISIONS
3.1 Term; Annual Periods. The "Term" of this Agreement will be the
--------------------
three (3) consecutive twelve-month periods commencing on February 1, 1996. An
"Annual Period" is each of the three periods of twelve (12) consecutive calendar
months during the Term.
3.2 Research and Development Activities; Improvements. It is
-------------------------------------------------
contemplated that during the Term Seller will engage in research and development
activities for the purpose of improving its EPS product and/or facilities,
equipment or manufacturing methods or procedures related to producing such
product (collectively, and "Improvements"). In connection with the forgoing,
the parties agree as follows:
(a) During the Term Seller will, at its sole cost and expense,
employ the equivalent of at least one employee to engage in such research and
development activities related to possible Improvements.
(b) Subject to the conditions set forth in Section 3.2(c) below, if
as a result of Seller's research and development activities Seller and Purchaser
agree to implement any Improvements relative to the EPS sold to Purchaser
hereunder, then during the six month period immediately following the agreement
of Purchaser and Seller to implement such Improvements for Purchaser's benefit,
Seller agrees not to sell any EPS manufactured using such improvements to any
third party; provided, however, if any such Improvements are a result of the
joint research and development activities of Purchaser and Seller, the period
during which Seller agrees not to sell to third parties EPS manufactured using
such Improvement shall be eighteen (18) months after the agreement of Seller and
Purchaser to implement such Improvements.
(c) The restrictions set forth in Section 3.2(b) on Seller's right
to sell EPS to third parties shall only apply to EPS manufactured using
Improvements that (i) are based solely on a change in the formula or composition
of EPS, (ii) do not
4
<PAGE>
require any material modification in or additions to Seller's facilities, plant
or equipment (iii) do not limit, increase the cost of, or otherwise adversely
affect Sellers' ability to manufacture EPS without using such Improvements, and
(iv) are not incorporated (or similar Improvements are not incorporated) in EPS
offered for sale by any company in competition with Seller.
(d) If Purchaser, independent from any research and development activities
conducted with or by Seller, develops Improvements that Seller wishes to
utilize, the parties agree to negotiate the terms of a mutually acceptable
license agreement for Seller's use of such Improvements.
(e) Nothing in this Section 3.2 shall limit or otherwise apply to any
research and development activities of Seller conducted together with or for any
of its other customers or suppliers, or to Seller's right to implement or use
any Improvement resulting from such activities.
3.3 Insurance. During the Term Seller shall maintain at least the
---------
insurance coverage described in Exhibit B hereto. Seller will include Purchaser
as an additional insured with respect to such insurance, and will provide that
written notice of cancellation or material reduction in any coverage thereunder
will be given to Purchaser at least thirty (30) days prior to any such
cancellation or reduction.
3.4 Inspection and Acceptance. Seller shall inspect each shipment of EPS
-------------------------
before it is shipped from Seller's manufacturing facilities. Seller shall
cooperate with the Purchaser to develop mutually acceptable statistical quality
assurance measurements. Notwithstanding the foregoing, Purchaser may inspect
all EPS upon receipt. Purchaser's sole and exclusive remedy in the event of
any rejection, revocation of acceptance or non-conformance of any EPS shall be
replacement of the non-conforming EPS, FOB Purchaser's affected location, plus
any direct costs of storage and/or disposal of the non-conforming product. The
Purchaser shall provide notice of short-shipments to Seller within 30 days of
receipt, or such claims are deemed waived.
3.5 Warranty. Seller warrants that EPS manufactured by Seller will conform
--------
to the specifications set forth on Exhibit A hereto and with the express
warranties set forth in sections 3.8 and 3.9. Purchaser's sole and exclusive
remedy in the event of any breach of these warranties shall be as specified in
Section 3.6. This warranty shall apply only if (a) Purchaser notifies Seller of
the alleged defect within thirty (30) days of discovery; and (b) Seller received
from Purchaser written notice of the alleged defect within 180 days of the date
of delivery. Seller's warranty does not apply to EPS which has been
(i) improperly stored, handled or used by any other party; (ii) in any way
tampered with or altered by anyone other than Seller;
5
<PAGE>
(iii) misused, abused or subjected to conditions in excess of those for which
such EPS was designed; or (iv) damaged in shipment or otherwise without fault
of Seller. SELLER MAKES NO WARRANTY, EXPRESSED OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
OTHER THAN THE EXPRESS WARRANTIES STATED IN THIS SECTION 3.5 OR IN SECTIONS 3.8
AND 3.9 BELOW.
3.6 Exclusive Remedies. Purchaser's sole and exclusive remedy for
------------------
any breach of warranty hereunder for any nonconforming EPS is to require Seller
to replace the non-conforming EPS FOB Purchaser's affected location, plus direct
storage and/or disposal costs. Purchaser's remedy against Seller for breach of
warranty, as provided and limited herein, is exclusive of all other remedies
provided by law for such breaches, but this limitation shall not limit Seller's
obligations under Section 3.10. EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN
SECTION 3.10 BELOW, SELLER SHALL HAVE NO LIABILITY FOR DAMAGES TO PURCHASER OR
ANY PERSON OR ENTITY FOR DAMAGES OF ANY TYPE, INCLUDING BUT NOT LIMITED TO
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER DIRECT OR INDIRECT), LOSS
OF PROFITS OR OTHER COMMERCIAL LOSS, OR ANY OTHER LOSS, DAMAGE OR EXPENSE
ARISING OUT OF OR IN CONNECTION WITH THE USE, LOSS OF USE, NONPERFORMANCE OR
REPLACEMENT OF ANY EPS, WHETHER ARISING OUT OF SELLER'S BREACH OF WARRANTY,
NEGLIGENCE OR OTHER TORT LIABILITY OF SELLER, SELLER'S STRICT LIABILITY OR ANY
OTHER LEGAL THEORY.
3.7 Force Majeure. Seller or Purchaser shall not be liable for any
-------------
default or for delays in deliveries hereunder due to strikes, fires, floods,
wars, accidents, delays of carriers, shortages of supplies or materials, delays
or default of a supplier or a contractor, government regulation, disruption
due to failure of production facilities, disruption due to failure of
transportation facilities or any other causes beyond Sellers' or Purchaser's
reasonable control. If delivery of any EPS is delayed for any period of time
because of any circumstances described above and such force majeure continues
for more than fifteen (15) days, Purchaser may buy elsewhere without liability
until the force majeure is relieved. If delivery of any EPS is delayed for an
unreasonable period of time because of any circumstances described above, either
Purchaser or Seller, upon 180 days written notice to the other, may cancel the
undelivered or unperformed portion of this Agreement.
3.8 FDA Compliance Statement. Seller warrants to Purchasers the EPS sold
------------------------
by Seller to Purchaser hereunder in natural, uncolored bead form, is composed
exclusively of (a) polystyrene that complies with all of the U.S. Food and Drug
Administration's (the "FDA") requirements of 21 CFR, Part 177, Subpart B,
Section 177.1640, entitled "Polystyrene and Rubber Modified Polystyrene" and
(b) a pentane blowing agent that complies with the FDA requirements of Subpart
D, Section
6
<PAGE>
178.3010, entitled "Adjuvant Substances Used in the Manufacture of Foamed
Polystyrene". Therefore, EPS, if fabricated unmodified, unadulterated, and in
accordance with good manufacturing practices, may be safely used as articles or
components of articles intended for use in contact with food. Additionally,
since EPS complies with the above referenced FDA regulations, EPS also complies
with the U.S. Department of Agriculture's regulations for packaging meat and
poultry and meat and poultry food products under the Federal Inspection Program.
3.9 Acknowledgement by Seller. Seller warrants to Purchaser that it has no
--------------------------
present knowledge that EPS to be sold under this Agreement, when used in the
foreseeable manner to mold polystyrene food service items, involves a serious
concealed danger or a serious exposure to individuals, as those terms are used
in Section 387 of the California Penal Code, and will notify Purchaser if such a
danger or exposure become known to Seller.
3.10 Indemnity. Notwithstanding anything contained herein to the contrary,
----------
Seller shall indemnity, defend and hold Purchaser and its customers harmless for
any claims, losses, liabilities, suits, fines or penalties Purchaser or its
customers may suffer as the result of third party actions arising directly or
indirectly from Seller's manufacture or sale of EPS, including product liability
claims and/or product recalls ordered by governmental authorities; provided,
however, that such claims, loss or liability is (a) a result of a breach by
Seller of any of the warranties of Seller set forth in Sections 3.5, 3.8, or 3.9
above, and (b) not due in whole or in part to the acts or omissions of Purchaser
or the customer claiming indemnity and Purchaser or its customer advised Seller
of such claim promptly upon discovery.
3.11 Notices. All notices, requests, demands, and other communications
--------
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given if delivered personally
or transmitted by first class registered or certified mail, postage prepaid,
return receipt requested, or sent by prepaid overnight delivery service, or sent
by cable, telegram, or telefax, to the parties at the following addresses (or at
such other addresses as shall be specified by the parties by like notice):
If to Purchaser: James River Paper Canada Inc.
137 Bentworth Avenue
Toronto, Ontario
Canada M6A 1P6
Attention: Elvi Molinaro
Telefax: (416) 789-3590
7
<PAGE>
With a copy to: James River Corporation
800 Connecticut Avenue
Norwalk, Connecticut
Attention: Gayle Blinsmon
Telefax: (203) 854-6984
If to Seller: 3607 No. Sylvania
Fort Worth, Texas 76111
Attn: Richard Davidovich
Telefax: 817-831-0206
3.12 Entire Agreement. This Agreement, including the Exhibits referred to
----------------
herein, constitutes the entire agreement between the parties hereto with respect
to the sale and purchase of EPS and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
sale and purchase of EPS. The parties acknowledge that there exist other
agreements between them, including the so-called Shareholder's Agreement. It is
agreed by both parties that a breach by either party of the Shareholder's
Agreement may be considered as a breach of this Supply Agreement by the other
party, and that a breach of this Supply Agreement may be considered by the other
party as a breach of the Shareholder's Agreement.
3.13 Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that neither this Agreement nor any of the rights,
interest, or obligations hereunder shall be assigned by any party hereto (by
operation of law or otherwise) without the prior written consent of the other
party, except that Seller shall have the right from time to time to designate
any of its affiliates to be responsible for all or any part of its duties,
liabilities or obligations under this Agreement, provided that no such
designation shall relieve Seller of any of its duties, liabilities or
obligations hereunder. Purchaser agrees that, as a condition to any sale,
transfer or other disposition of by Purchaser of its foam cup business
(regardless of whether such transaction is effected by merger, sale of stock,
sale of assets or otherwise), the person or entity acquiring such business will
assume the obligations and liabilities of Purchaser under this Agreement,
subject to the consent of Seller as provided above.
3.14 Amendment and Waiver. This Agreement may be amended, superseded,
--------------------
canceled, renewed or extended, and the terms hereof may be waived, only by
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of either party of any such right, power
8
<PAGE>
or privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
3.15. Severability. If any provision of this Agreement is held to be
------------
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.
3.16 Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the Commonwealth of Virginia,
without regard to the principals of conflicts of laws thereof.
3.17 Descriptive Headings. The descriptive headings herein are inserted
--------------------
for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this
Agreement.
3.18 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.
3.19 Contingency. This Agreement shall not be binding upon the parties
-----------
if the Shareholder Agreement is voided, terminated or breached by either party.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representative thereunto duly authorized, all as
of the date set forth above.
JAMES RIVER CANADA INC.
By: [SIGNATURE APPEARS HERE]
--------------------------------------
Title: Director Dixie Canadian Operations
-----------------------------------
SP ACQUISITION CO.
By: [SIGNATURE APPEARS HERE]
--------------------------------------
Title:
-----------------------------------
9
<PAGE>
EXHIBIT A
---------
- --------------------------------------------------------------------------------
Screen Analysis
---------------
on #35 Max. 4.0% +++
+ Should not be
+ less than 76.4%
on #45 Balance +++
on #50 Max 24% +++
+ Should be
on #60 Max 2.5% + less than
+ 26.7%
Through #60 Max. 0.1% +++
Total Volatiles should be 5.3% + 0.15% by weight
-
- ----------------------------------------
Original Dated: Nov. '93
Revised: Mar. '96
(Pentane content weight 5.6% + 0.1% changed to
-
Total Volatiles should be 5.3% + 0.15% by weight)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT B
---------
1. Commercial General Liability Insurance
$2 million per occurrence
$4 million annual aggregate per location
Deductible not to exceed $10,000 per occurrence
Including:
Contractual Coverage
Products
U.S. and Canadian coverage
Vendors Endorsement
2. Fire and Allied Perils
Coverage: Full Repair and Replacement of Physical
Damage
Actual Business Interruption
3. Statutory Worker's Compensation or Equivalent, U.S. and Canada
<PAGE>
EXHIBIT 10.25
THIRD WAREHOUSE LEASE MODIFICATION AGREEMENT
THIS THIRD WAREHOUSE LEASE MODIFICATION AGREEMENT (this "Agreement") is
made and entered into as of the 1st day of November, 1996, by and between
SAFEWAY INC., a Delaware corporation ("Landlord"), and WINCUP HOLDINGS, L.P., a
Delaware limited partnership ("Tenant").
R E C I T A L S
This Agreement is made with reference to the following facts and
objectives:
A. On or about October 27, 1992, Landlord and the predecessor in interest
to Tenant entered into a Warehouse Lease for those certain premises (the
"Premises") situated in the City of Richmond, County of Contra Costa, State of
California, which Premises are more particularly described in said Warehouse
Lease. Said Warehouse Lease was modified by a First Warehouse Lease Modification
Agreement dated as of January 1, 1993, and by a Second Warehouse Lease
Modification Agreement dated February 17, 1995. Said Warehouse Lease, as
modified, is hereinafter referred to as the "Lease".
B. Landlord and Tenant have agreed to certain modifications of the Lease
as set forth below.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Landlord and Tenant agree as follows:
1. CHANGE IN PREAMBLE.
The name and address set forth in the preamble for Tenant are deleted and
the following language substituted in lieu thereof:
"WINCUP HOLDINGS, L.P.
a Delaware limited partnership
Attn: Donald C. Rogalski, Sr. Vice President
7980 West Buckeye Road
Phoenix, Arizona 85043
Telephone: 602/936-1791
Facsimile: 602/936-4376"
2. DEMISE OF PREMISES.
Paragraph 1(a) of the Lease is deleted and the following language is
--------------
substituted in lieu thereof:
"(a) Tenant leases from Landlord and Landlord leases to Tenant the
following described property, hereinafter referred to as the "Premises":
"Approximately 106,151 square feet of warehouse space located in Building E
(the "Building") with an address of 900 Marina Bay Parkway, Suite 1,
Richmond, California 94804, which real property is more particularly
described on Exhibit A, attached hereto and incorporated herein by
---------
reference. The Premises are shown as single-hatched on Exhibit A-1 attached
-----------
hereto and incorporated herein by reference."
3. TERM.
Lines 3, 4 and 5 of Paragraph 2(a) of the Lease are deleted and the
--------------
following language is substituted in lieu thereof:
<PAGE>
"...original term commencing on November 1, 1992 (the "Lease Term
Commencement Date") and expiring June 30, 1998. On the Lease..."
Additionally, Paragraphs 2(b) and 2(c) are deleted from the Lease and are
------------------------
of no further force or effect.
4. RENT
Paragraph 3(a) is deleted and the following language substituted in lieu
--------------
thereof.
"(a)" Minimum Rent. Tenant shall pay a minimum rent which shall be paid
------------
monthly in advance commencing on January 1, 1993 and thereafter on the first day
of each calender month during the Lease Term in the following amounts:
<TABLE>
<CAPTION>
---------------------------------------------------
Minimum
Period Monthly Rent
---------------------------------------------------
<S> <C>
1/1/1993 through 10/31/1996 $23,690.00
---------------------------------------------------
11/1/1996 through 6/30/1998 $26,007.00"
---------------------------------------------------
</TABLE>
Additionally, Paragraph 3(c) is deleted and of no further force or effect.
--------------
5. NOTICE.
The last sentence of Paragraph 17, is deleted and of no further force or
------------
effect.
6. RATIFICATION.
Except as otherwise provided herein, the Lease is hereby ratified and
affirmed and remains in full force and effect.
7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto, their successors, transferees, heirs, personal representatives
and assigns.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
respective dates set opposite their signatures below, but this Agreement on
behalf of such party shall be deemed to have been dated as of the date first
above written.
LANDLORD:
SAFEWAY INC.,
a Delaware corporation
Date: 12/18 , 1996 By [SIGNATURE APPEARS HERE]
-------------- -------------------------------
-------------------------------
(type or printed name)
Its Asst. V.P.
--------------------------
Date: 12/18 , 1996 By [SIGNATURE APPEARS HERE]
---------------- -----------------------------
-----------------------------
(type or printed name)
Its Asst. Secretary
--------------------------
TENANT:
WINCUP HOLDINGS, L.P.,
a Delaware Limited partnership
DATE: DEC 12 , 1996 By /s/ Donald Rogalski
----------------- -----------------------------
DONALD ROGALSKI
-----------------------------
(type or printed name)
Its SR. VP. ADMIN.
-----------------------------
<PAGE>
SECOND WAREHOUSE LEASE MODIFICATION AGREEMENT
THIS SECOND WAREHOUSE LEASE MODIFICATION AGREEMENT (this "Agreement") is
made and entered into this ______ day of _________________, 1995, by and between
SAFEWAY INC., a Delaware corporation ("Landlord"), and JAMES RIVER PAPER
COMPANY, INC., a Virginia corporation ("Tenant").
R E C I T A L S
This Agreement is made with reference to the following facts and
objectives:
A. On or about October 27, 1992, Landlord and Tenant entered into a
warehouse lease for those certain premises (the "Premises") situated in the City
of Richmond, County of Contra Costa, State of California, which Premises are
more particularly described in the Warehouse Lease. The warehouse lease was
modified by a First Warehouse Lease Modification Agreement dated as of January
1, 1993. The warehouse lease, as modified, is hereinafter referred to as the
"Lease".
B. Landlord and Tenant have agreed to certain modifications of the Lease
as set forth below.
NOW, THEREFORE, in consideration of the foregoing facts and for good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby amend and modify the Lease as follows:
1. DEMISE OF PREMISES. Subparagraph (d) to Paragraph 1 of the Lease is
------------------ ---------------- -----------
hereby deleted in its entirety and the following substituted in lieu thereof:
"(d) Expansion Premises. In addition to the Premises, Tenant leases
------------------
from Landlord and Landlord leases to Tenant the following described
property, hereinafter referred to as the "Expansion Premises":
"Approximately 7,500 square feet of warehouse space located in the
western side of the Building."
The Expansion Premises are shown as single-hatched on Exhibit A-2,
-----------
attached to this Agreement and incorporated into the Lease by this
reference.
2. RENT. Subparagraph (e) of Paragraph 3 of the Lease is hereby deleted
---- ---------------- -----------
in its entirety and the following substituted in lieu thereof:
"(e) Minimum Rent for the Expansion Premises. Tenant shall pay a
---------------------------------------
minimum rent for the Expansion Premises which shall be paid monthly in
advance commencing on February 1, 1995 and thereafter on the first (1st)
day of each calender month during the month-to-month tenancy in the amount
of One Thousand Seven Hundred Twenty-Five Dollars ($1,725)."
3. EFFECTIVE DATE. The provisions of this Agreement shall be effective
--------------
as of February 1, 1995, and the terms and conditions hereof shall only apply
prospectively from such date.
4. RATIFICATION. Except as herein modified the Lease shall remain in
------------
full force and effect and is hereby ratified and affirmed.
5. SUCCESSORS AND ASSIGNS. Each and all of the covenants, terms,
----------------------
agreements and obligations of this Agreement
<PAGE>
shall extend to and bind and inure to the benefit of the successors and/or
assigns of said parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
respective dates set opposite their signatures below, but this Agreement on
behalf of such party shall be deemed to have been dated as of the date first
above written.
LANDLORD:
SAFEWAY INC.,
a Delaware corporation
Date: __________, 1995 By________________________________
________________________________
(typed or printed name)
Its_____________________________
Date: __________, 1995 By________________________________
________________________________
(typed or printed name)
Its_____________________________
TENANT:
JAMES RIVER PAPER COMPANY, INC.
a Virginia corporation
Date: __________, 1995 By /s/ Richard C. Erickson
--------------------------------
Richard C. Erickson
--------------------------------
(typed or printed name)
Its Vice President Real Estate &
-----------------------------
Corporate Facilities
-----------------------------
<PAGE>
EXHIBIT A-2
[MAP APPEARS HERE]
<PAGE>
FIRST WAREHOUSE LEASE MODIFICATION AGREEMENT
THIS FIRST WAREHOUSE LEASE MODIFICATION AGREEMENT (the "Agreement") is made
as of the 1st day of January, 1993, by and between SAFEWAY INC., a Delaware
corporation ("Landlord"), and JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation ("Tenant").
P R E L I M I N A R Y
A. On October 27, 1992, Landlord and Tenant entered into a Warehouse
Lease of certain real property situate in the City of Richmond, County of Contra
Costa, State of California, which real property is more particularly described
in the Warehouse Lease (the "Premises"). Said Warehouse Lease is hereinafter
referred to as the "Lease."
B. Landlord and Tenant desire hereby to amend the Lease to provide for
the modification of the provision set forth in Paragraph 1 thereof and as
otherwise set forth hereinbelow.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreement of the parties hereto to the terms and conditions hereinafter
contained, the parties agree as follows:
1. Effective Date. This Agreement shall be effective as of January 1,
--------------
1993.
2. Demise of Premises. The following language shall be added as a new
------------------
Subparagraph (d) to Paragraph 1 of the Lease:
- ---------------- -----------
"(d) Expansion Premises. In addition to the Premises, Tenant leases
------------------
from Landlord and Landlord leases to Tenant the following described
property, hereinafter referred to as the "Expansion Premises":
Approximately 7,500 square feet of warehouse space located in the
western side of the Building and approximately 9,760 square feet of
warehouse space located in the eastern portion of the Building. Said
Expansion Premises are shown as single-hatched on Exhibit A-1,
-----------
attached hereto and incorporated herein by reference."
3. Term. The following language shall be added as new Subparagraph (d) to
---- ----------------
Paragraph 2 of the Lease:
- -----------
"(d) Occupancy of Expansion Premises. Tenant's occupancy of the
-------------------------------
Expansion Premises pursuant hereto shall be on a month to month basis
terminable on thirty (30) days prior written notice given at any time by
either Landlord or Tenant. All provisions of this Lease, except for those
specifying the lease term, options to extend and minimum monthly rent shall
apply to month-to-month tenancy of the Expansion Premises."
4. Rent. The following language shall be added as a new Subparagraph (e)
---- ----------------
to Paragraph 3 of the Lease:
-----------
"(e) Minimum Rent for the Expansion Premises. Tenant shall pay a
---------------------------------------
minimum rent for the Expansion Premises which shall be paid monthly in
advance commencing on January 1, 1993 and thereafter on the first (1st) day
of each calendar month during the month-to-month tenancy in the amount of
Three Thousand Nine Hundred Sixty-Nine and 80/100 Dollars ($3,969.80)."
<PAGE>
5. Ratification of Lease. Except as otherwise provided herein, the Lease
---------------------
is hereby ratified and affirmed and remains in full force and effect.
6. Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto, their successors, transferees,
heirs, personal representatives and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
respective dates set opposite their signatures below, but this Agreement, on
behalf of such parties, shall be deemed to have been dated as of the date first
above written.
LANDLORD:
SAFEWAY INC.,
a Delaware corporation
Date: Feb. 15 1993 By [SIGNATURE APPEARS HERE]
--------------, -------------------------------------
Byrne
-------------------------------------
(typed or printed name)
Its Asst. V.P.
--------------------------------
Date: ______________, 1993 By [SIGNATURE APPEARS HERE]
-------------------------------------
-------------------------------------
(typed or printed name)
Its Assist. Secretary
---------------------------------
TENANT:
JAMES RIVER PAPER COMPANY INC.,
a Virginia corporation
Date: ______________, 1993 By /s/ Melvin A. Ries
-------------------------------------
Melvin A. Ries
-------------------------------------
(typed or printed name)
Date: ______________, 1993 Its DIR. REAL ESTATE
---------------------------------
By _____________________________________
_____________________________________
(typed or printed name)
Its _________________________________
<PAGE>
EXHIBIT.
[MAP APPEARS HERE]
<PAGE>
WAREHOUSE LEASE
---------------
(the "Lease")
DATE: October 27, 1992
----------
BETWEEN: SAFEWAY INC., a Delaware corporation ("Landlord")
c/o PROPERTY DEVELOPMENT ASSOCIATES,
a California general partnership
Attn: General Counsel
Re: Facility No. 98-5387-01
15115 S.W. Sequoia Pkwy., Suite #200
Portland, Oregon 97224
Telephone: 503/624-6300
Facsimile: 503/624-7755
AND: JAMES RIVER PAPER COMPANY, INC., ("Tenant")
a Virginia corporation
Attn: Real Estate Department
120 Tredegar Street
Richmond, Virginia 23219
Telephone: 804/343-8550
Facsimile: 804/343-4500
In consideration of the mutual agreements herein contained, Landlord and Tenant
hereby agree as follows:
1. Demise of Premises.
------------------
(a) Tenant leases from Landlord and Landlord leases to Tenant the
following described property, hereinafter referred to as the "Premises":
Approximately 103,000 square feet of warehouse space located in Building E
(the "Building") with an address of 900 Marina Bay Parkway, Suite 1,
Richmond, California 94804, which real property is more particularly
described on Exhibit A, attached hereto and incorporated herein by
---------
reference.
Exclude from the Premises are the following areas which are shown as shaded
on Exhibit A: (i) an aisle approximately twenty-five (25) feet wide by
---------
approximately three hundred (300) feet long on the west side of the
Premises; (ii) an area containing lockers, offices and restrooms, on the
mezzanine on the east side of the Building containing approximately twenty-
four thousand (24,000) square feet; and (iii) meat lockers located on the
east side of the Premises containing approximately twenty-seven hundred
(2,700) square feet (the "Locker Area").
(b) Delivery of Possession. Landlord shall deliver possession of the
----------------------
Premises to Tenant on or before November 1, 1992. In the event that Landlord is
unable to deliver possession of the Premises to Tenant because of strikes, acts
of God, or any other cause beyond Landlord's reasonable control, then Tenant
shall take possession of the Premises when Landlord notifies Tenant that the
Premises are ready for such possession, and the term of this Lease shall
commence on the first day of the month following the date of such occupancy and
continue for the remainder of the Lease Term, notwithstanding the Lease Term
Commencement Date stated in Paragraph 2 below. In no event shall Tenant be
-----------
obligated to pay monthly rent until Landlord has notified Tenant that the
Premises are ready for possession. Landlord shall have no liability for any
delay in delivery of possession of the Premises to Tenant and neither party
shall have the right to terminate this Lease except that
<PAGE>
Landlord may cancel this Lease without liability if permission to construct, use
or furnish necessary utilities to the Premises is denied or revoked by any
governmental agency or public utility with authority thereover.
(c) Option to Expand Premises: Tenant at any time during the Term of
-------------------------
the Lease, may elect to utilize the Locker Area by providing Landlord with
thirty (30) days prior written notice of such election. In the event of such
election, Landlord and Tenant shall enter into an amendment to this Lease
reflecting the increase in the Premises and reflecting an increase of Five
Thousand Five Hundred Twenty Dollars ($5,520.00) per month in minimum rent.
Notwithstanding the foregoing, Tenant's option to expand the Premises shall
terminate and be of no further force or effect in the event that prior to
Tenant's delivery of notice to Landlord of its election to utilize such Locker
Area, Landlord delivers notice to Tenant of its intent to lease said Locker Area
to another party.
2. Term.
----
(a) This Warehouse Lease (the "Lease"), and Tenant's occupancy of the
Premises pursuant hereto shall be for an original term of three (3) years and
eight (8) months (the "Original Term") commencing on November 1, 1992 (the
"Lease Term Commencement Date") and expiring June 30, 1996. On the Lease Term
Commencement Date, this Lease, and each and every provision hereof shall be
effective, including the payment of monthly rent in accordance with Paragraph 3
-----------
hereinbelow. The "Lease Term" shall mean the original Term any Extended Term.
The parties shall execute a supplemental memorandum identifying the Lease Term
Commencement Date.
(b) Option to Extend the Term. Provided Tenant is not in default
-------------------------
hereunder, Tenant is hereby given the option to extend the Original Term, on all
the terms and provisions contained in this Lease, for one (1) two (2)-year
period (the "Extended Term"), by giving notice of exercise of such option
("Option Notice") to Landlord at least ninety (90) days but not more than one
(1) year before the date the Original Term would otherwise expire. The minimum
monthly rent payable by Tenant during the Extended Term shall be as set forth in
Paragraph 3 (b) hereinbelow.
- ---------------
(c) Option to Terminate. Notwithstanding anything to the contrary
-------------------
contained herein, Tenant may elect to terminate this Lease at any time after the
twenty-fourth (24th) month of the Term by delivering to Landlord one hundred
eighty (180) days prior written notice of such election specifying the date of
termination which date shall be no less than on hundred eighty (180) days after
receipt of such notice by Landlord (the "Termination Date"). In the event Tenant
elects to terminate this Lease by written notice after the thirtieth (30th)
month of the Term, Tenant shall deliver with such notice certified funds equal
to one (1) month's rent and shall thereafter fully perform the terms hereof
until the Termination Date. Except for obligations then accrued but unperformed
hereunder, this Lease shall terminate on the Termination Date, shall thereafter
be null, void and of no further force or effect and Landlord and Tenant shall be
released from any further performance hereof.
3. Rent. Tenant shall pay the following rents, without demand,
----
deduction or offset, by checks or drafts payable to Property Development
Associates and mailed to Property Development Associates, Attn: Accounting
#53870101, 15115 S.W. Sequoia Pkwy., Suite 200, Portland, Oregon 97224-7131, or
as otherwise may be designated in writing by Landlord:
<PAGE>
(a) Minimum Rent. Tenant shall pay a minimum rent which shall be
------------
paid monthly in advance commencing on January 1, 1993 and thereafter on the
first day of each calendar month during the Lease Term, in the following
amounts:
<TABLE>
<CAPTION>
MONTH MONTHLY
OF TERM RENT
------- -------
<S> <C>
3 - 30 $23,690.00
32 - 36 $23,690.00
38 - 44 $23,690.00
</TABLE>
(b) Free Rent. Notwithstanding anything to the contrary contained
---------
herein, so long as Tenant has performed each and every obligation of the tenant
hereunder, Tenant shall not be required to pay minimum rent for the first (1st),
second (2nd), thirty-first (31st) and thirty-seventh (37th) months of the Term
hereof.
(c) Minimum Rent During Extended Term. If Tenant has duly exercised
---------------------------------
its option to extend the term hereof for the Extended Term, the minimum rent for
the Extended Term shall be an amount established as follows:
(i) No later than one hundred eighty (180) days prior to the
expiration of the Original Term hereunder, Tenant shall give written notice to
Landlord setting forth a proposed monthly rent for the Extended Term. Said
proposed rent shall be equal to eighty-five percent (85%) of Tenant's
reasonable, best estimate of the then fair market rent for the Premises. The
parties shall have ninety (90) days after receipt of such notice by Landlord in
which to agree on the new minimum rent. If the parties reach such agreement
during that period, they shall immediately execute an amendment to this Lease
setting forth the new minimum rent.
(ii) If the parties are unable to agree on the new minimum rent
within said ninety (90)-day period, then within fifteen (15) days after the
expiration of said ninety (90)-day period, each party, at its sole cost, shall
retain a real estate appraiser with at least five (5) years full time commercial
appraisal experience in Contra Costa County, California to appraise and
establish the minimum rent for said Extended Term. Each party shall provide the
other party with written notice of the name and address of the appraiser
selected by such party. In the event either party fails to appoint an appraiser
within ten (10) days after the other party has given written notice of the name
of its appraiser, the single appraiser shall be appointed the sole appraiser and
shall set the new minimum rent. If the two (2) appraisers are appointed by the
parties as set forth herein, they shall meet promptly and attempt to set the new
minimum rent. If they are unable to agree within thirty (30) days after the
appointment of the second (2nd) appraiser, the appraisers shall attempt to
select a third (3rd) appraiser meeting the qualifications set forth herein
(which third appraiser has not previously acted in any capacity for either
Landlord or Tenant) within ten (10) days after the last day of said thirty (30)-
day period. Within thirty (30) days after the selection of the third (3rd)
appraiser, the majority of the appraisers shall establish the new minimum rent.
If the appraisers are unable to agree on a third (3rd) appraiser within said ten
(10)-day period, either Landlord or Tenant, by giving ten (10) days written
notice to the other, may apply to the American Arbitration Association for the
purpose of having the new minimum rent for said Extended Term determined. Tenant
and Landlord shall each bear one-half (1/2) of the cost of appointing the third
(3rd) appraiser and of paying the third
<PAGE>
(3rd) appraiser's fee (or one-half [1/2] of the fees and other expenses charged
by the American Arbitration Association).
(iii) In deciding the minimum rent for the Extended Term, the
appraisers shall value the Premises based on the highest and best use of the
Premises allowable under the existing zoning. In no event shall the minimum rent
be less than the minimum rent on the last day of the Term then in effect. The
determination of the new minimum rent by the appraisers shall be calculated
based upon the appraisers' determination of eighty-five percent (85%) of the
fair market rental value of the Premises.
(iv) If the majority of the appraisers are unable to establish
the new minimum rent within said thirty (30)-day period, the three appraisals
shall be added together and the total divided by three (3) and the resulting
quotient shall be the new minimum rent for said Extended Term; provided,
however, that if the low appraisal and/or the high appraisal are/is more than
ten percent (10%) lower and/or higher than the middle appraisal, the low
appraisal and/or the high appraisal shall be disregarded. If only one (1)
appraisal is disregarded, the remaining two (2) appraisals shall be added
together and their total divided by two (2) and the resulting quotient shall be
the new minimum rent for said Extended Term. If both the low appraisal and the
high appraisal are disregarded, the middle appraisal shall be the new minimum
rent. After the new minimum rent has been established, the appraisers shall
immediately notify the parties of such amount.
(v) Regardless of whether the new minimum rent for said Extended
Term is established by one (1) or more appraisers (or by the American
Arbitration Association) as provided hereinabove, the determination made by such
appraisers (or the American Arbitration Association) shall be final, binding and
conclusive upon Landlord and Tenant.
(d) Proration. Minimum rent for any partial calendar month
---------
immediately following the Lease Term Commencement Date and/or prior to the
expiration (or sooner termination) of the Lease Term and immediately prior to
and following any change in minimum rent shall be prorated based on a thirty
(30)-day month.
4. Use.
---
(a) Permitted Use. Tenant may use the Premises for conducting the
-------------
following business and for no other purpose whatsoever without the prior written
consent of Landlord (which Landlord may give or deny in its sole and absolute
discretion): storage and distribution of Tenant's products. Tenant shall use the
Premises in such a way as not to annoy any other tenants of the Building or
create a nuisance or cause the cancellation of any insurance policy covering the
Premises. Tenant shall create no nuisance or allow any objectionable liquid,
odor, or noise to be emitted from the Premises and shall not overload the floors
or electrical circuits of the Premises. Landlord shall have the right to approve
the installation of any power driven machinery by Tenant and may select a
qualified electrician whose opinion will control regarding electrical circuits
and a qualified engineer or architect whose opinion will control regarding floor
loads. Maximum allowable ground floor loads shall be no more than 300 pounds per
square foot.
(b) Parking and General Use. Tenant, its employers and customers
-----------------------
shall have the exclusive right to use any private parking spaces immediately
adjacent to the Premises and as designated by Landlord at the commencement
hereof. Tenant shall control the use of such parking spaces so that there will
be no unreasonable interference with the normal traffic flow around,
<PAGE>
to and from the Building and shall permit no parking on any landscaped or
unpaved surface in or about the Building. Tenant shall have the right of ingress
and egress to the Premises over the adjacent roadways and may use the area shown
as single-hatched on Exhibit B as a truck staging area (the "Staging Area").
---------
Under no circumstances shall trucks servicing the Premises be permitted to block
access to adjacent buildings. Additionally, Tenant shall not store any
materials, supplies or equipment outside the Building in any unapproved or
unscreened area. Tenant shall not erect any visual barrier for storage area
without having first obtained the prior written consent of Landlord, which
Landlord may grant or withhold in its sole discretion. Tenant shall keep all
trash in proper garbage receptacles and shall keep any such receptacle used by
Tenant covered at all times.
5. Condition of Premises.
---------------------
(a) As Is. Tenant hereby affirms that, other than as set forth in
-----
Paragraph 5(b) below, Tenant has inspected the Premises and agrees to accept the
- --------------
same "AS IS" and in its present condition and without any representation or
warranty by or from Landlord as to the condition of the Premises, the
habitability of the Premises, the fitness of the Premises for Tenant's use or
the zoning of the Premises and Tenant hereby releases Landlord from any and all
liability resulting from any defect in or other condition of the Premises.
(b) Landlord's Work. Landlord shall use its reasonable best efforts
---------------
and due diligence to complete the work described in Exhibit C, attached hereto
---------
and incorporated herein by reference ("Landlord's Work") on or before the Lease
Term Commencement Date.
6. Maintenance and Repair of Premises.
----------------------------------
(a) By Landlord. Landlord shall repair and maintain the Building's
-----------
roof, gutters, downspouts, exterior walls, structure, foundation, paved areas
and curbs and existing heating, ventilating, air conditioning and refrigeration
units in good condition. Landlord shall have no obligation to make any repairs
or replacements hereunder until the expiration of twenty (20) days following
written notice from Tenant to Landlord of the need therefore. Tenant waives any
right now or hereafter granted by law to make any repairs under this paragraph
upon Landlord's failure to do so hereunder or otherwise.
(b) By Tenant. Tenant, at Tenant's sole cost and expense shall at
---------
all times keep all portions of the Premises that are not the responsibility of
Landlord under this Paragraph 5 in good condition and repair (including, if
-----------
necessary, the replacement thereof). Tenant's responsibility shall include but
not be limited to maintenance and repair of the internal electrical system,
plumbing system, overhead and personnel doors, and the replacement of all broken
or cracked glass with glass of the same quality. Tenant shall also be
responsible for the repair of any and all damage caused to the Premises and/or
the Building by any act or omission of Tenant or its employees, agents,
licensees or contractors. Tenants shall refrain from any discharge that will
damage the septic tank or sewers serving the Premises. Additionally, if the
Premises have a separate entrance, Tenant shall keep all outside areas within
ten (10) feet of the Premises and the Staging Area free and clear of debris and
obstruction of every kind.
<PAGE>
(c) Ventilation. Landlord shall deliver the Premises to Tenant with
-----------
a ventilation system standard to a warehouse operation and based on
specifications provided Landlord by Marin Air Conditioning Company. Landlord
acknowledges that the maintenance of the ventilation system is material and
crucial to Tenant's use of the Premises.
7. Alterations. Tenant shall make no alterations, additions or
-----------
improvements to the Premises or change the color of the exterior thereof without
Landlord's prior written consent which Landlord may withhold or grant in
Landlord's sole and absolute discretion. Upon termination of this Lease, any
such alteration, addition or improvement (including without limitation, all
electrical, lighting, plumbing, heating and air conditioning equipment, doors,
windows, partitions, drapery, carpeting, shelving, counters, and physically
attached fixtures) shall at once become part of the Premises and belong to
Landlord unless the terms of the applicable consent provide otherwise, or
Landlord requests that part or all of such additions, alterations or
improvements be removed. In such event, Tenant shall, at its sole cost and
expense promptly remove such additions, alterations or improvements and repair
and restore the Premises to its original condition. In the event Tenant fails to
do so, Landlord may remove such additions, alterations or improvements and
repair and restore the Premises to its original condition and Tenant shall
reimburse Landlord for the cost thereof within ten (10) days after receipt of
demand therefor from Landlord.
8. Surrender of Premises. At the expiration or sooner termination of the
---------------------
Lease Term, Tenant shall deliver all keys to Landlord, have final utility
readings made on the date of the move-out, and surrender the Premises to
Landlord broom clean and free of debris, inside and outside, with all
mechanical, electrical and plumbing systems in good operating condition, all
signs removed and defacement corrected, and all repairs called for under this
Lease completed. The Premises shall be delivered to Landlord in the same
condition as at the commencement of the term, subject to only depreciation and
wear from ordinary use. In the event Tenant fails to remove its furnishings and
other personal property within ten (10) days of the expiration of the term or
early termination of this Lease, Tenant shall be deemed to have abandoned the
same and Landlord may dispose of any such furnishings and personal property
fixtures in any manner it deems fit without liability to Tenant or any other
party.
9. Signs. Tenant shall not erect or install in, upon or about the
-----
Premises, any exterior on interior signs or advertising media, or window or door
lettering or plaques, without Landlord's consent which may be withheld in
Landlord's sole discretion. Notwithstanding the foregoing, Tenant may erect one
(1) sign stating its name, business and products and truck door numbers so long
as Landlord has approved the size, color, design, wording and location thereof
and so long as Tenant has obtained all necessary governmental approvals
therefor. No signs shall be painted on the Building or exceed the height of the
Building. All signs installed by Tenant shall comply with all applicable laws,
ordinances, rules and regulations and Tenant shall remove such signs upon the
termination of this Lease with all sign locations restored to their condition as
of the commencement of this Lease.
10. Mechanics Lien. Tenant shall not permit any mechanics', materialmens'
--------------
or other liens to stand against the Premises for work or materials furnished in
connection with any maintenance, repairs or alterations undertaken on the
Premises.
<PAGE>
11. Utilities. Landlord shall pay all charges for electricity, natural
---------
gas, water, garbage collection, janitorial service, sewer and all other
utilities of any kind whatsoever furnished to the Premises during the Lease
Term. Landlord shall have no liability for damages or otherwise for any failure
or interruption of any utility service being furnished to the Premises unless
caused by the sole, active negligence of Landlord or its agents or employees.
12. Property and Other Insurance: Releases and Subrogation Waivers.
--------------------------------------------------------------
(a) Landlord's Insurance.
--------------------
(i) Types of Coverage. During the Lease Term, Landlord
-----------------
shall maintain in full force and effect a policy or policies of "difference in
conditions" insurance covering the Building. All insurance proceeds payable
under Landlord's casualty insurance carried hereunder shall be payable solely to
Landlord and Tenant shall have no interest therein.
(ii) Reimbursement by Tenant. Tenant shall pay to
-----------------------
Landlord, as additional rent, an amount equal to Tenant's Proportionate Share of
any increase in premiums paid by Landlord for all insurance described in
Paragraph 12(a)(i) in excess of the premiums paid by Landlord for such insurance
- ------------------
during Landlord's fiscal year 1993. If Tenant's use of the Premises increases
the premium for any insurance carried by Landlord over that charged for normal
warehouse uses, then Tenant shall pay to Landlord, as additional rent, the full
amount of such increase in premium.
(b) Tenant's Insurance. During the Lease Term, at its sole cost and
------------------
expense, Tenant shall maintain in full force and effect the following types of
insurance:
(i) Liability and Workers' Compensation.
-----------------------------------
General Liability Insurance applying to the use and occupancy of the Premises
and the business operated by Tenant on the Premises. Such insurance shall
include Broad Form Contractual liability insurance coverage insuring all of
Tenant's indemnity obligations under this Lease; shall have a minimum combined
single limit of liability of at least Two Million Dollars ($2,000,000) and a
general aggregate limit of Three Million Dollars ($3,000,000); shall be written
to apply to all bodily injury, property damage, personal injury and other
covered loss, however occasioned, occurring during the policy term; shall be
endorsed to add Landlord as an additional insured; shall provide that such
coverage shall be primary and that any insurance maintained by Landlord shall be
excess insurance only; shall provide that an act or omission of one of the named
or additional insureds shall not reduce or avoid coverage to the other named or
additional insureds and shall be endorsed to provide Landlord with thirty (30)
days notice of cancellation or change in terms. Tenant shall also maintain
Worker's Compensation insurance in accordance with the law of the state in which
the Premises are located, and employer's liability insurance.
All insurance policies required to be carried by Tenant under this
Lease shall: (i) be written by companies rated A-/IX or better in the most
recent edition of "Best's Insurance Guide" and authorized to do business in the
state in which the Premises are located. Tenant shall deliver to Landlord on or
before the Lease Term commencement Date, and thereafter at least thirty (30)
days before the expiration dates of expiring policies, certified copies of its
insurance policies, or a certificate evidencing the same issued by the insurer
thereunder which shall name Landlord as an additional insured.
<PAGE>
(c) Releases and Waivers of Subrogation. Notwithstanding any other
-----------------------------------
provision of this Lease, each party hereby releases and waives any and all right
to recover from or proceed against the other party, and its officers, directors,
employees, agents and representatives, for loss or damage to any property of the
releasing party or any person claiming through the releasing party arising from
any cause required to be insured against by the releasing party under this
Paragraph 12(c), but only so long as the foregoing release and waiver does not
- ---------------
adversely affect any insurance carried by such releasing party. The parties
shall cause their insurance policies to contain a waiver of subrogation
consistent with the foregoing.
13. Damage by Casualty.
------------------
(a) Restoration of Damage. If fire or other casualty causes damage
---------------------
to the Building in an amount exceeding thirty percent (30%) of its full
construction-replacement cost, or if a casualty causes any damage during the
last year of the Lease, then in either event, Landlord may elect to terminate
this Lease by giving written notice of such termination to Tenant within thirty
(30) days following the date of damage. Otherwise, the Lease shall remain in
full force and effect and Landlord shall proceed to restore the Building to a
condition comparable in function and value to that existing prior to the damage.
The minimum base rent shall be abated until repair or restoration of the
Premises is substantially complete to the extent the Premises are not reasonably
usable for Tenant's use. Tenant shall cooperate with Landlord during the period
of repair and vacate all or any part of the Premises to the extent necessary for
the performance of the required work.
(b) Waivers. Tenant hereby waives the provisions of any law
-------
providing that a lease or sublease shall terminate on the destruction or partial
destruction of the leased premises, or affording Tenant any right or benefit
which is not expressly set forth in this Paragraph 13, including California
------------
Civil Code Sections 1932(2) and 1933(4), if the Premises are located in
California.
14. Condemnation. If a condemning authority takes the entire Premises or
------------
a portion thereof sufficient to render the remainder unsuitable for Tenant's
use, then either Landlord or Tenant may elect to terminate this Lease by giving
written notice to the other within twenty (20) days after title to the real
property passes to the condemning authority. If the Lease is not so terminated,
Landlord shall repair and restore the Building as practicable (but shall not be
required to expend more than the amount of the award received by Landlord for
such purpose, and this Lease shall continue and rent shall be reduced for the
remainder of the term in an amount equal to the reduction in rental value of the
Premises caused by the taking.
(b) Award. Any and all awards payable by the condemning authority or
-----
other governmental agency in connection with a taking under the right of eminent
domain shall be the sole property of Landlord. Landlord and Tenant each hereby
waive the provisions of any law including, without limitation, California Code
of Civil Procedure Section 1265.130 (if the Premises are located in California),
allowing either party to petition a court to terminate this Lease, or otherwise
to terminate this Lease, in the event of a condemnation of the Building.
<PAGE>
15. Tenant's Default.
----------------
(a) Events of Default. Tenant shall be in default in the event of
-----------------
any of the following: (i) If Tenant fails to make any payment of rent,
additional rent or any other sum or amount payable hereunder within twelve (12)
days after it is due; (ii) if Tenant fails to perform any other obligation to
be performed by Tenant hereunder and such failure shall continue for twenty (20)
days (or such other time as specifically set forth in this Lease) after written
notice by Landlord; (iii) if Tenant abandons and vacates the Premises; (iv) if
Tenant files any petition or institutes any proceedings under the Bankruptcy
Code, or if any such petition or proceeding of the same or similar kind or
character be filed against Tenant.
(b) Remedies. Upon the occurrence of any of the events of default
--------
described in Paragraph 15(a), then Landlord, at its option, may: (i) cure such
---------------
default on behalf of Tenant; (ii) cancel and terminate this Lease upon written
notice to Tenant, thereby terminating Tenant's right to possession; or (iii)
re-enter upon the Premises, either with or without process of law, and without
demand for possession thereof. If Landlord elects to cure a default of Tenant,
then Tenant shall reimburse to Landlord all expenses incurred by Landlord in
curing such default, together with a surcharge of fifteen percent (15%) of all
such amounts to cover Landlord's administrative costs and overhead, within ten
(10) days after receipt of a billing therefor from Landlord. Should Landlord
re-enter the Premises, it may either terminate this Lease or it may, without
terminating this Lease, relet the Premises.
(c) Damages Upon Termination.
------------------------
(i) Unpaid Rent. Whether or not Landlord retakes
-----------
possession or relets the Premises, Landlord may recover all damages caused by
Tenant's defaults, including, but not limited to unpaid rent and other charges
hereunder, attorney's fees and costs of reletting the Premises. If Landlord
terminates this Lease pursuant to Paragraph 13(b), then Landlord may exercise
---------------
all rights and remedies available to a landlord at law or in equity, including
the right to recover from Tenant: (i) the worth at the time of award of the
unpaid rent and other amounts payable by Tenant hereunder which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent and such other amounts which would have been earned after
termination until the time of the award exceeds the amount of loss of rent and
such other amounts that Tenant proves could have been reasonably avoided; (iii)
the worth at the time of award of the amount by which the unpaid rent and such
other amounts for the balance of the Term after the time of such award exceeds
the amount of loss of rent and such other amounts that Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which, in the ordinary course of things, would
be likely to result therefrom. The "worth at the time of award" of the amounts
referred to in clauses (i) and (ii) shall be computed with interest at the
highest rate allowed by law. The "worth at the time of award" of the amount
referred to in clause (iii) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco, California, plus one
percent (1%). As used herein, "time of award" shall mean either the date upon
which Tenant pays to Landlord the amount recoverable by Landlord as hereinabove
set forth, or the date of entry of any determination, order or judgment, of any
court or other legally constituted body determining the amount recoverable,
whichever first occurs.
<PAGE>
(d) Lease Provisions Determine Landlord's Right to Terminate. The
--------------------------------------------------------
rights of Landlord to terminate this Lease on account of Tenant's default shall
be governed by the provisions of this Paragraph 15 rather than the provisions of
------------
any applicable state or federal law.
16. Exculpation of Landlord; Tenant's Indemnification of Landlord.
-------------------------------------------------------------
(a) Release. Landlord shall not be liable to Tenant for any injury
-------
or damage to Tenant or to the agents, employees or property of Tenant, its
permitted assignees, sublessees, concessionaires or licensees, arising out of
the occupancy or use of the Premises except to the extent such injury or damage
is caused by the sole, active negligence of Landlord, or breach of its
obligations hereunder.
(b) Indemnification. Tenant shall indemnify, defend, protect and
---------------
hold Landlord harmless from and against any and all liability, damage, loss,
expense (including the reasonable attorney's fees of counsel chosen by
Landlord), causes of action, suits, claims or judgments resulting from injury
or death to person, or damage, deterioration or loss to property, occurring on
the Premises or on the adjacent sidewalks and streets if caused by the act or
omission of Tenant, or its employees, invitees or guests.
17. Notices. Any notice permitted or required to be given hereunder shall
-------
be in writing and shall be given by personal delivery, certified United States
mail, or overnight air courier, in each case postage or equivalent fees prepaid
and addressed to the address shown for each party at the beginning of this Lease
or such other address as may be designated by written notice. If any notice is
given by mail, it will be effective upon seventy-two (72) hours after deposit in
the U.S. Mail and, if given by personal delivery or by overnight air courier,
when delivered. Copies of any such notice shall be mailed by first class mail,
postage prepaid to Kaydon Shaver, James River Corporation, 240 Tamel Vista
Blvd., Suite 240, Corte Madera, California 94925, and to James River Paper
Company, Inc., Attention: General Counsel, 120 Tredegar Street, Richmond,
Virginia 23219.
18. Transfers by Tenant.
-------------------
(a) Prohibition of Transfer. Tenant shall not assign, mortgage,
-----------------------
pledge, hypothecate or encumber the Premises or Tenant's Leasehold estate, or
sublet any portion of the Premises or license the use of any portion of the
Premises, or otherwise transfer any interest in the Premises (whether voluntary,
involuntary, by operation of law or otherwise), without the prior written
consent of Landlord. Any attempted transfer without consent shall be null and
void and, at the option of Landlord, will cause termination of this Lease.
Notwithstanding the foregoing, in the event Landlord consents to an
assignment or subletting pursuant hereto, then, effective as of the effective
date of such assignment or subletting transaction, the amount of minimum rent
payable hereunder shall be increased monthly by the product obtained when the
monthly minimum rent for the Premises prior to such effective date is multiplied
by one hundred fifteen percent (115%).
(b) Exempt Transfers. Tenant shall have the right to assign its
----------------
interest under this Lease, or sublet the Premises or any portion thereof,
without the consent of Landlord, to any corporation: (i) with which it may merge
or consolidate; (ii) which acquired all or substantially all shares of stock or
<PAGE>
assets of Tenant; (iii) which is a parent or subsidiary of Tenant; or (iv) which
is the successor corporation to Tenant in the event of a corporate
reorganization. In the event of any of the transfers described above, Tenant
shall give Landlord ninety (90) days prior written notice of such proposed
transfer, and shall provide Landlord with all documentation reasonably required
by Landlord in order to verify that the proposed transfer falls within this
Paragraph 18(b).
- ---------------
(c) Obligations After Transfer. If Tenant is permitted to make any
--------------------------
transfer of its interest in this Lease, Tenant and any guarantor(s) of this
Lease shall not be relieved of their respective obligations, but shall remain
primarily liable to Landlord for the performance of all such obligations.
19. Compliance With Laws.
--------------------
(a) Laws Generally. Tenant, at its sole cost and expense, shall
--------------
comply with all laws, ordinances, orders, rules, regulations and requirements of
all governmental and quasi-governmental authorities (specifically including the
Americans with Disabilities Act) having jurisdiction of the Premises, and shall
perform all work required to comply therewith. If any such work would involve
changes to the structure or the mechanical, electrical or plumbing systems of
the Building, then such work shall be performed by Landlord, and Tenant shall
reimburse to Landlord the cost thereof.
(b) Compliance With Environmental Laws. Tenant shall comply fully
----------------------------------
with all laws pertaining to the protection of human health and the environment
including, but not limited to, employee and community right-to-know laws and all
laws regarding the use, generation, storage, transportation, treatment, disposal
or other handling of hazardous substances. Tenant shall not use, generate,
manufacture, store, or otherwise handle any hazardous substances on or in the
Premises. The term "hazardous substances" is used in its very broadest sense,
and refers to materials which because of their quantity, concentration, or
physical, chemical, or infectious characteristics may cause or pose a present or
potential hazard to human health or the environment when improperly handled,
treated, stored, transported, disposed of, or otherwise managed. The term shall
include, but not be limited to, all hazardous substances, hazardous materials
and hazardous wastes listed by any applicable federal, state or local law,
ordinance, statute, rule or regulation. If at any time during or after the Lease
Term, any hazardous substances are found to exist in or on the Premises
(including the soils and underground water) or to have contaminated the soils,
air or underground water of the Premises, then: (i) Lessor shall defend, hold
harmless and indemnify Lessee against any loss or damage Lessee may suffer
arising directly or indirectly from the presence or release of any Hazardous
Substance which Lessee proves (A) has been deposited or discharged onto the
Premises prior to Lessee's tenancy, including but not limited to the areas of
concern set forth in Table 5-1 of that certain Environmental Report dated March
29, 1991, prepared by ERM-West, Inc. for Safeway Inc., or (B) was spilled,
discharged, emitted or deposited on the Premises by Lessor during Lessee's
tenancy; and (ii) Lessee shall defend, hold harmless and indemnify Lessor
against any loss or damage Lessor may suffer arising directly or indirectly from
the presence or release of any Hazardous Substance which Lessor proves was
spilled, discharged, emitted or deposited on the Premises by Lessee.
20. Remedies Cumulative. No remedy herein conferred upon or reserved to
-------------------
Landlord is intended to be exclusive of any other remedy herein or by law
provided, but each shall be cumulative
<PAGE>
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
21. Holding Over. If Tenant, with Landlord's consent, remains in
------------
possession of the Premises after the expiration or sooner termination of the
Lease Term, such possession by Tenant shall be deemed to be a month-to-month
tenancy terminable on thirty (30) days' prior written notice given at any time
by either party. All provisions of this Lease, except those specifying the Lease
Term, any options to extend, and for minimum monthly rent, which shall be one
hundred ten percent (110%) of the minimum monthly rent paid in month immediately
preceding the month-to-month tenancy, shall apply to the month-to-month tenancy.
22. Taxes and Operating Expenses.
----------------------------
(a) Taxes on Personal Property. Tenant shall pay, prior to
--------------------------
delinquency, any and all taxes and assessments that may be assessed or levied on
or against any of Tenant's personal property, fixtures or equipment placed on or
in the Premises. Landlord shall pay all real property taxes and assessments
levied against the Premises that are required to be paid by Landlord by law and
all operating expenses, as hereinbelow defined. Tenant shall reimburse Landlord
for such real property taxes and operating expenses as set forth below.
(b) Real Property Taxes; Tenant's Proportionate Share. Landlord
-------------------------------------------------
shall pay, prior to delinquency, any and all real property taxes and assessments
levied against the Premises that are required to be paid by Landlord by law.
Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share
of any increase in such real property taxes or assessments which is imposed by
such authority after 1993 tax year. Tenant's Proportionate Share of real
property taxes shall be defined as that percentage of the total assessment
affecting the Premises which is the same as the percentage which the rentable
area of the Premises bears to the total rentable area of all buildings covered
by the tax statement. If in Landlord's reasonable judgement, this method of
allocation results in an inappropriate allocation to Tenant, Landlord may select
some other reasonable method of determining Tenant's Proportionate Share
thereof.
(d) Taxes Defined. Real property taxes and assessments charged to
-------------
Tenant hereunder shall include any increase imposed after 1993 in all general
real property taxes assessed against the Building or payable during the Lease
Term, installment payments on special assessments, in any rent tax, tax on
Landlord's interest under this Lease, or other tax in lieu of the foregoing,
whether or not such tax is now in effect. Tenant shall not, however, be
obligated to pay any tax based upon Landlord's net income.
23. Late Charge. Tenant hereby acknowledges that late payment by Tenant to
-----------
Landlord of rent and other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Accordingly, rent not paid within twelve (12) days of
when due shall bear interest from the date due until paid at the greatest rate
allowable by law. In addition to interest and other remedies available for
default, Landlord may, at its option, impose a late charge or ten percent (10%)
of each amount not paid within twelve (12) days of the date said amount is due.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event
<PAGE>
constitute a waiver of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies available
to Landlord.
24. Quiet Enjoyment. So long as Tenant is not in default hereunder, Tenant
---------------
shall have quiet and peaceful possession of the Premises. Landlord shall include
this covenant in any transfer or assignment of its interest in this Lease or in
the Premises.
25. Right of Entry. Landlord and its authorized representatives, shall
--------------
have the right to enter the Premises at all reasonable times upon reasonable
notice so long as such entry does not unreasonably interfere with Tenant's
activities therein.
26. Waivers. No delay or omission in the exercise of any right or remedy
-------
of Landlord with respect to any default by Tenant shall impair such right or
remedy or be construed as a waiver. The receipt and acceptance by Landlord of
delinquent rent or other payments due hereunder shall not constitute a waiver of
any other default. Landlord's consent or approval shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval or any subsequent
act by Tenant, whether or not similar to the act so consented to or approved.
27. Transfer of Landlord's Interest. If Landlord conveys in a sale,
-------------------------------
exchange or otherwise all of its interest in the Premises, then Landlord, on
consummation of the conveyance, shall thereupon automatically be released from
any obligation or liability thereafter accruing under this Lease.
28. Time of Essence. Time is of the essence with respect to the
---------------
performance of every provision of this Lease in which time of performance is
specified.
29. Right to Estoppel Certificates. Either party shall, within twenty (20)
------------------------------
days after notice from the other party, execute and deliver to such other party
a written statement certifying the Lease is unmodified and in full force and
effect (or specifying any such modifications), the date to which rent has been
paid and such other matters as may be reasonably requested by such party.
Failure to deliver such certificate within the specified time shall be
conclusive upon the party of whom the certificate was requested that the Lease
is in full force and effect and has not been modified except as may be
represented by the party requesting such certificate.
30. Attorneys' Fees. If either party hereto brings an action at law or in
---------------
equity to enforce, interpret or seek redress for the breach of this Lease, then
the prevailing party in such action shall be entitled to recover all court
costs, witness fees and reasonable attorneys fees, at trial or on appeal in
addition to all other appropriate relief.
31. Severability. The unenforceability, invalidity or illegality of any
------------
provision of this Lease shall not render the other provisions unenforceable,
invalid or illegal.
32. Governing Law. This Lease shall be construed and interpreted in
-------------
accordance with the laws of the State of California.
33. Successors and Assigns. Subject to the provisions of Paragraph 18, all
---------------------- ------------
of the provisions, terms, covenants and conditions of this Lease shall be
binding upon and inure to the
<PAGE>
benefit of the parties and their respective heirs, executors, administrators,
successors and assigns.
34. Integrated Agreement; Modification. This Lease contains all of the
----------------------------------
representations, understandings and agreements of the parties with respect to
the demise of the Premises and may not be amended or modified except by a
written agreement signed by both parties.
35. Subordination and Attornment.
----------------------------
(a) Subordination. This Lease, and all of Tenant's rights and
-------------
interest in the leasehold estate hereunder, shall be subject and subordinate to
any mortgages or deeds of trust that now encumber or may hereafter be placed
upon, the Premises, and to the rights of the mortgagees or beneficiaries
thereunder, any and all advances made or to be made thereunder, the interest
thereon, and all modifications, renewals, replacements and extensions thereof.
If any such mortgagee or beneficiary so elects in writing, then this Lease shall
be superior to the lien of the mortgage or deed of trust held by such mortgagee
or beneficiary, whether this Lease is dated or recorded before or after such
mortgage or trust deed. Upon request, Tenant shall promptly execute and deliver
to Landlord, or any such mortgagee or beneficiary, any documents or instruments
required by any of them to evidence subordination of this Lease hereunder or to
make this Lease prior to the lien of any mortgage or deed of trust as herein
specified. If Tenant fails or refuses to do so within ten (10) days after
written request therefor by Landlord or such mortgagee or beneficiary, such
failure or refusal shall constitute an event of default hereunder by Tenant, but
shall in no way affect the validity or enforceability of the subordination to or
by the mortgage or deed of trust held by such mortgagee or beneficiary.
(b) Attornment by Tenant. Upon enforcement of any rights or remedies
--------------------
under any mortgage or deed of trust to which this Lease is subordinated, Tenant
shall, at the election of the purchaser or transferee under such right or
remedy, attorn to and recognize such purchaser or transferee as Tenant's
landlord under this Lease. Tenant shall execute and deliver any document or
instrument required by such purchaser or transferee confirming the attornment
hereunder.
36. Relationship. Nothing contained in this Lease shall be deemed or
------------
construed by the parties or by any third person to create the relationship of
principal and agent, or of partnership, or of joint venture, or of any
association between Landlord and Tenant.
37. No Recourse. Notwithstanding anything to the contrary in this Lease,
-----------
Tenant shall look solely to Landlord's' assets for satisfaction of any liability
of Landlord in respect hereof and will not seek recourse against the partners of
Landlord or any of them, or their respective officers, directors, shareholders,
employees, agents, or any of them, or any of their personal assets, for such
satisfaction.
<PAGE>
38. Exhibits. The following exhibits are attached hereto and incorporated
--------
herein by this reference:
Exhibit A - Legal Description
Exhibit B - Site Plan with Premises
cross-hatched thereon.
Exhibit C - Landlord's Work
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
respective dates set opposite their signatures below, but this Lease, on behalf
of such parties, shall be deemed to have been dated as of the date first above
written.
LANDLORD:
SAFEWAY INC.,
a Delaware corporation
Date: 10/27 , 1992 By /s/ Gary D. Scott
------------- ---------------------------------
Gary D. Scott
---------------------------------
(type or printed name)
Its Vice President
------------------------------
Date: , 1992
------------- By
-------------------------------
-------------------------------
(type or printed name)
FORM APPROVED [INITIALS] Its
---------- ------------------------------
TENANT:
JAMES RIVER PAPER COMPANY, INC.,
a Virginia corporation
Date: , 1992 By
------------ -------------------------------
-------------------------------
(type or printed name)
Its
------------------------------
Date: 10/19 , 1992 By [SIGNATURE APPEARS HERE]
------------ -------------------------------
-------------------------------
(type or printed name)
Its
------------------------------
<PAGE>
PARCEL ONE:
A portion of the J.C. Owens Addition to the City of Richmond, filed February 6,
1912, in Book 6 of Maps, page 138, in the office of the County Recorder of
Contra Costa County; a portion of the Robert Seaver Addition to the City of
Richmond, filed May 3, 1909, in Book 2 of Maps, Page 32, in the office of the
County Recorder of Contra Costa County; a portion of Syndicate Business Blocks,
filed May 15, 1911, in Book 5 of Maps, page 107, in the office of the County
Recorder of Contra Costa County; a portion of Syndicate Tract, filed March 18,
1912, in Book 6 of Maps, page 143 in the office of the County Recorder of Contra
County; and a portion of Inner Harbor Business Blocks, filed November 18, 1912,
in Book 8 of Maps, page 196, in the office of the County Recorder of Contra
Costa County; more particularly described as follows:
Beginning at a point on the westerly extension of the south line of Block 11 of
said J.C. Owens Addition, distant thereon 4.07 feet west from the southwest
corner of said Block; thence south 89 degrees 36' 37" east, along the south
lines of Blocks 11, 8 and 2 of said J.C. Owens Addition and Blocks 11, 8, 5, and
2, of said Robert Seaver Addition 1501.60 feet to a point on the east boundary
of said Robert Seaver Addition, said point also being the southeast corner of
said Block 2 and a point on the north line of Seaver Avenue as shown on the Map
of said Robert Seaver Addition; thence north 88 degrees 38' 63" east, along the
south line of Blocks R, P and O of said Inner Harbor Business Blocks 599.60 feet
to the southeast corner of said Block O, said corner also being the intersection
of the north line of Seaver Avenue and the west line of 34th Street [formerly
Santa Rosa Avenue], as shown on the map of said Inner Harbour Business Blocks;
thence north 0 degrees 11' 47" west, along the east lines of said Block O of
Inner Harbour Business Blocks and of Block O of Syndicate Tract and the
northerly extension of said east line 510.10 fee to the southeast corner of
Block C of said Syndicate Tract, also being the intersection of the north line
of Meeker Avenue and said west line of 34th Street, as shown on the map of said
Syndicate Tract; thence north 0 degrees 12' 17" west, continuing along the
western line of 34th Street, being the eastern line of Block C of the Syndicate
Tract and the eastern line of Block C of the Syndicate Business Blocks, 624.18
feet to the northeastern corner of said Block C of the Syndicate Business
Blocks, said corner also being the intersection of the southern line of Hoffman
Boulevard [formerly Potreso Avenue] and said western line of 34th Street, as
shown on said map of said Syndicate Business Blocks; thence north 87 degree 12'
17" west, along the north line of Block C, B and A of said Syndicate Business
Blocks, the north line of Blocks 1, 6, 7 and 12 of said Robert Seaver Addition
and the north line of Blocks 1, 9, 10, 17, and the westerly extention of said
north line of said Block 17 of said J.C. Owens addition, 2401.80 feet to a point
on the northerly extension of the east line of Block 18 of said J.C. Owens
Addition; thence south 0 degres 16' 27" east, along said northerly extension
4.53 feet to the northeast corner of said Block 18; thence north 46 degrees 0'
27" west, 83.41 feet along the northeastern line of said Block 18, thence north
57 degrees 02' 19" west, 43.62 feet to the west line of said J.C. Owens
Addition; thence south 0 degrees 03' 37" east, along said last mentioned western
line 1173.24 feet; thence south 74 degrees 56' 18" east, 244.90 feet to a point
on a tangent curve concave to the southwest and having a radius of 280 feet;
thence southeasterly along said tangent curve 170.92 feet to an intersection
with the north line of Seaver Avenue [60 feet wide] as shown on said map of J.C.
Owens Addition; thence south 89 degrees 36' 37" east, along said north line of
Seaver Avenue 23.35 feet to the point of beginning.
EXCEPTING THEREFROM: Those portions thereof conveyed to the City of Richmond by
Deed recorded in Book 3102, page 200 and 3113, page 316 of Official Records,
described as follows:
PARCEL A:
Portion of Lots 24, 25, 26, 27, 28, 29, 30 and 31, in Block 18, as shown on the
map of J.C. Owens Addition to the City of Richmond, filed February 6, 1912, in
Book 6 of Maps, page 138, in the office of the County Recorder of Contra Costa
County, described as follows:
Beginning at the southwest corner of said Block 18, being on the north line of
Meeker Avenue, as designated on said Map; thence from the point of beginning,
north 0 degrees 03' 37" west, along the west line of said block 18, 194.45 feet;
thence south 11 degrees 55' 01" east, 154.03 feet; thence southeasterly, along
the arc of a curve to the left with a radius of 360 feet tangent to the last
course, an arc distance of 45.76 feet to the south line of said Block 18, being
the north line of Meeker Avenue, as designated on said Map; thence north 89
degrees 37' 12" west, along said south line, 43.92 feet, to the point of
beginning.
PARCEL B:
Portion of Lots 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 in Block 16, portion of
Lots 21, 22, 23, 24 and 25 in Block 16, portion of Lots 1, 2, 3, 4, 5, 6,
7, 8, and 9, in Block 18, portion of Meeker Avenue and portion of Twenty-Sixth
Street, formarly Twenty-Fifth Street, as shown on the map of J.C. Owens Addition
to the City of Richmond, filed February 6, 1912, in Book 6 of Maps, page 138, in
the office of the County Recorder of Contra Costa County, described as follows:
Page 1 of 3 EXHIBIT A
<PAGE>
Beginning at the southwest corner of Block 18, as shown on said Map [8 W 138],
being on the north side of Meeker Avenue, as shown on said map; thence from said
point of beginning south 89 degrees 37' 12" east, along the south line of said
Block 18, 43.92 feet; thence southeasterly, along the arc of a curve to the left
with a radius of 380 feet; the center of which bears north 70 degrees 47' 03"
east. through an angle of 12 degrees 56' 03", an arc distance of 81.27 feet to a
point of which the center of the said curve bears north 57" 51' east; thence
south 32" 09' east, tangent to said curve, 459.36 feet to the south line of the
parcel of land described in the deed from City of Richmond to Safeway Stores,
Incorporated, recorded June 18, 1956 in Book 2789 of Official Records, page 437;
thence along said south line, northwesterly, along the arc of a curve to the
left with a radius of 280 feet, through an angle of 19 degrees 38' 27", an arc
distance of 95.97 feet and north 74 degrees 56' 18" west, tangent to the last
mentioned curve, 41.25 feet; thence north 32" 09' west, 348.96 feet; thence
northwesterly along the arc of a curve to the right with a radius of 440 feet,
tangent to the last mentioned course, an arc distance of 21.99 feet to the west
line of said Block 19; thence 0 degrees 03' 37" west along said west line, 97.04
feet to the point of beginning.
EXCEPTING THEREFROM: That portion thereof in the Deed from Safeway, Inc. to the
State of California by Deed dated May 27, 1992 and recorded ____________________
_________________________.
53' 35" west, 87.90 feet to the northerly line of said Lot 14; thence along said
northerly lot line, north 88 degrees 39' 56" east, 31.06 feet to the point of
commencement.
ALSO EXCEPTING THEREFROM: That portion thereof in the Deed from Safeway, Inc.
to the State of California by Deed dated May 27, 1992 and recorded _____________
___________________________.
PARCEL THREE:
Lots 4 through 19, inclusive, in Block 3, as shown on the map of Harbor Business
Blocks, filed March 10, 1913 in Book 9 of Maps, page 213, Contra Costa County
Records.
EXCEPTING THEREFROM:
1) That portion of said Lots 15, 16, 7, 18 and 19, conveyed to the City of
Richmond, a municipal corporation, "for the purposes of a public street", by
deed recorded February 3, 1958, in Book 3112, page 584, Official Records, Contra
Costa County.
2) That portion thereof in the Deed from Safeway, Inc. to the State of
California by Deed dated May 27, 1992 and recorded ____________________________.
PARCEL FOUR:
Commencing at a point on the westerly line of said State parcel [13003 OR 380]
distant thereon N 0 degrees 51' 27" E, 235.05 feet from the southwesterly corner
of said State parcel; thence N 89 degrees 08" 33 W, 50.00 feet to the
westerly line of said South 34th Street; thence along last said line N 0 degrees
51' 27" E, 273.97 feet to the northerly line of said Meeker Avenue; thence along
last said line N 89 degrees 46' 16" E, 595.89 feet to the general westerly
right of way line of State Highway 04-CC-580; thence along last said line from a
tangent that bears S 28 degrees 43' 24" E, along a curve to the left with a
radius of 256.00 feet, through an angle of 45 degrees 36' 16", an arc length of
211.72 feet, S 74 degrees 18' 40" E, 84.56 feet; S 5 degrees 16' 12" W, 91.69
feet, S 37 degrees 23' 14" W, 68.03 feet, along a tangent curve to the left with
a radius of 280.00 feet, through an angle of 27 degrees 12' 23", an arc length
of 132.90 feet, S 10 degrees 10' 51" W, 12.46 feet, from a tangent that bears S
60 degrees 44' 59" W, along a curve to the right with a radius of 545.14 feet,
through an angle of 29 degrees 00' 17", an arc length of 275.95 feet and S 89
degrees 45' 18" W, 45.50 feet; thence S 69 degrees 45' 16" W, 12.42 feet; thence
N 0 degrees 14' 44" W, 223.34 feet; thence S 89 degrees 45' 18" W, 364.87 feet
to the point of commencement.
PARCEL FIVE:
Commencing at the northeasterly corner of said State Parcel 43862; thence along
the easterly line of said State Parcel 43862, S 1 degrees 01' 25' W, 205.54 feet
to the easterly line of said State Parcel 50010; thence along last said line S
10 degrees 50' 50" E, 154.02 feet and along a tangent curve to the left with a
radius of 359.98 feet, through an angle of 7 degrees 17' 21", an arc length of
45.80 feet to the easterly line of said vacated area on Meeker Avenue; thence
along last said line from a tangent that bears S 18 degrees 08' 11" E, along a
curve to the left with a radius of 359.98 feet, through an angle of 11 degrees
4' 59, an arc length of 69.63 feet to the northeasterly line of said State
Parcel 50011; thence along last said line from a tangent that bears S 29 degrees
13' 10" E, along a curve to the left with a radius of 359.98 feet, through an
angle of 1 degrees 5' 03" an arc
Page 2 of 3
<PAGE>
length of 11.63 feet, S 31 degrees 04' 13" E, 459.34 feet and from a tangent
that bears S 54 degrees 13' 00" E, along a curve to the right with a radius of
279.98 feet, through an angle of 15 degrees 18' 47", an arc length of 74.83 feet
to the southerly line of said State Parcel 50011; thence along last said line N
88 degrees 28' 22" W, 118.50 feet to the general easterly line of said State
Parcel 47736; thence along last said line S 31 degrees 04' 13" E, 25.77 feet to
the southerly line of said State Parcel 47736; thence along last said line N 88
degrees 28' 22" W, 54.40 feet; thence from a tangent that bears N 25 degrees 59'
21" W, along a curve to the left with a radius of 795.00 feet, through an angle
of 12 degrees 05' 24", an arc length of 167.75 feet to the southwesterly line of
that parcel of land described as Parcel 1 in the deed to United Steel and
Carnegie Pension Fund, recorded October 5, 1859 in Book 3467, page 177, Official
Records of Contra Costa County; thence along last said line S 73 degrees 51' 31"
E, 71.61 feet to the southwesterly line of said State Parcel 60011; thence along
last said line N 31 degrees 04' 13" W, 348.93 feet and along a tangent curve to
the right with a radius of 439.97 feet through an angle of 2 degrees 52' 03" an
arc length of 22.02 feet to the general easterly line of said State Parcel
47738; thence along last said line S 1 degrees 01' 25" W, 189.73 feet; thence N
48 degrees 22' 06" W, 316.69 feet to the westerly line of said vacated portion
on Meeker Avenue; thence along last said line N 38 degrees 00' 11" W, 81.38 feet
to the general southerly right of way line of State Highway 04-CC-5?0; thence
along last said line N 38 degrees 00' 11" W, 36.91 with a radius of 200.00 feet,
through an angle of 21 degrees 48' 18", an arc length of 75.11 feet, N 17
degrees 58' 17" W, 33.00 feet, from a tangent that bears N 35 degrees 00' 54" W,
along a curve to the right with a radius of 942.50 feet, through an angle of 10
degrees 23' 19", an arc length of 170.55 feet, from a tangent that bears N 18
degrees 15' 17" W, along a curve to the right with a radius of 850.00 feet,
through an angle of 15 degrees 25' 00", an arc length of 174.90 feet to a point
of compound curvature, along a tangent curve to the right with a radius of
200.00 feet, through an angle of 21 degrees 48' 18", an arc length of 78.11
feet, N 53 degrees 21' 09" E, 138.54 feet and N 87 degrees 29' 02" E, 244.65
feet to the easterly line of said South 25th Street; thence along last said line
S 2 degrees 02' 16" W, 47.63 feet to the easterly line of said State Parcel
50010; thence along last said line S 24 degrees 22' 45" E, 50.43 feet and along
a tangent curve to the right with a radius of 439.97 feet, through an angle of 8
degrees 28' 17", an arc length of 65.05 feet to the northerly line of said State
Parcel 43852; thence along last said line S 88 degrees 28' 22" E, 46.04 feet to
the point of commencement.
<PAGE>
[MAP APPEARS HERE]
NOTE: NOTHING SET FORTH OR SHOWN ON THIS EXHIBIT CREATES ANY RIGHT OR
- ---- OBLIGATION AS BETWEEN (SUB)LESSOR AND (SUB)LESSEE UNLESS SUCH RIGHT OR
OBLIGATION IS EXPRESSLY REFERRED TO IN THE LEASE OR SUBLEASE TO WHICH
THIS EXHIBIT IS ATTACHED.
EXHIBIT B
<PAGE>
EXHIBIT C
Landlord's Work
1. Remove hanging partitions or wind screens near the front loading dock.
2. Cut off all of the rack bolts and grind down level with the floor.
3. Remove chain link fencing inside the Premises.
4. Repair all of the vent and pipe openings in the roof.
5. Seal and secure the rear dock door.
6. Clean and seal the floors of the restrooms, locker area, offices and
warehouse.
7. Repair the outside facade overhang on the north side of the Premises.
8. Install three (3) new deck doors with a minimum height of 105 inches.
9. Remove asphalt tile from floor of offices.
10. Install four 2 1/2 horsepower exhaust fans strategically located on the
south wall of the Premises.
EXHIBIT C
<PAGE>
EXHIBIT 10.26
AMENDED LEASE
THIS AGREEMENT made as of September 28, 1989, between Patricia M.
Dunnell, 144 Asharoken Avenue, Northport, New York 11768, as Landlord and James
River Paper Company, Inc., c/o Handi-Kup Division, 240 Tamal Vista, Corte
Madera, California 94925, as Tenant.
WHEREAS Landlord leases to Tenant a certain premises located at 5355
Shawland Road, Jacksonville, Florida, 32205, under the terms of a certain Lease
effective October 31, 1988; and
WHEREAS Tenant is in need of warehousing near or adjacent to the
premises described above; and
WHEREAS Landlord is desirous of constructing a warehouse that will meet
Tenant's needs and leasing the same to Tenant, and Tenant is willing to lease
both the existing premises and the warehouse to be constructed if Landlord
successfully completes construction of a suitable warehouse;
WITNESSETH; Provided that Landlord constructs a suitable warehouse on
the site comprising approximately 80,000 sq.ft., and providing further that such
warehouse may be legally occupied by the Tenant (both of which conditions shall
be considered conditions precedent to the effectiveness of this Amended Lease),
the Landlord hereby leases to the Tenant the following premises in Duval County,
Florida (the "Building"):
5355 Shawland Road
Jacksonville, FL 32205
The Legal description is attached
hereto as Exhibit "A".
for a term of Ten (10) years, to commence on the first day of the month
following the day the Tenant occupies the new space or the issuance of a
certificate of occupancy, whichever comes first and to end ten (10) years
thereafter to be used and occupied only for the sale, manufacture and
distribution of paper and plastic products upon the conditions and covenants
following. If either of the conditions precedent are not fulfilled as
anticipated by the parties, the existing Lease effective October 31, 1988 shall
remain in full force and effect. The parties agree as follows:
1. That the Tenant shall pay the annual rent as herein set forth said
rent to be paid in equal monthly payments in advance on the first (1st) day of
each and every month during the term aforesaid, as herein set forth.
2. That the Tenant shall take good care of the premises and shall, at
the Tenant's own cost and expense make all repairs and at the end or other
expiration of the term, shall deliver up the demised premises in good order or
condition, ordinary wear and tear and damages by the elements excepted.
Landlord shall repair or replace any element of the systems (structural or
mechanical) of the new warehouse that is defective or which fails to perform
within two (2) years of the commencement date, unless the manufacturer's or
supplier's warranty shall continue for a longer period of time, or unless such
failure is due to Tenant's misuse or negligence.
3. That the Tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the Federal, State
and Local Governments and of any and all their Departments and Bureaus
applicable to said premises, for the correction, prevention, and abatement of
nuisances or other grievances, in, upon, or connected with Tenant's use or
occupation of the premises during said term; and shall also promptly comply with
and execute all rules, orders and regulations of the New York Board of Fire
Underwriters, or any other similar body as the same may apply to the premises at
the Tenant's own cost and expense.
<PAGE>
4. That the Tenant, its successors or assigns, shall not assign this
agreement, or underlet or underlease the premises, or any part thereof, unless
to a related or subsidiary corporation owned by James River Corporation, or make
any alterations on the premises, without the Landlord's consent in writing; or
occupy; or permit or suffer the same to be occupied for any business or purpose
deemed disreputable or extra-hazardous on account of fire, under the penalty of
damages and forfeiture, and in the event of a breach thereof, the term herein
shall immediately cease and determine at the option of the Landlord as if it
were the expiration of the original term.
5. (a) Tenant must give landlord prompt notice of fire, accident,
damage or dangerous or defective condition. If the Premises cannot be used
because of fire or other casualty, Tenant is not required to pay rent for the
time the Premises are unusable. If part of the Premises cannot be used, Tenant
must pay rent for the usable part. Landlord shall have the right to decide
which part of the Premises is usable. Landlord need only repair the damaged or
defective structural parts of the Premises. Landlord is not required to repair
or replace any equipment, fixtures, furnishings or decorations unless originally
installed by Landlord. Landlord is not responsible for delays due to settling
insurance claims, obtaining estimates, labor and supply problems or any other
cause not fully under Landlord's control.
(b) If the fire or other casualty is caused by an act or neglect of
Tenant, Tenant's employees or invitees, then all repairs will be made at
Tenant's expense and Tenant must pay the full rent with no adjustment. The cost
of the repairs will be added rent.
(c) Landlord has the right to demolish or rebuild the Building if
there is substantial damage by fire or other casualty. Landlord may cancel this
Lease within 30 days after the substantial fire or casualty by giving Tenant
notice of landlord's intention to demolish. The Lease will end 30 days after
Landlord's cancellation notice to Tenant. Tenant must deliver the Premises to
Landlord on or before the cancellation date in the notice and pay all rent due
to the date of the fire or casualty. If the Lease is cancelled Landlord is not
required to repair the Premises or Building. The cancellation does not release
Tenant of liability in connection with the fire or casualty.
6. If the said premises, or any part thereof shall be deserted or
become permanently abandoned during said term, or if any default be made in the
payment of the said rent or any part thereof, or if any material default be made
in the performance of any of the covenants herein contained (and such default
remain uncured for 30 days after written notice thereof), the Landlord or
representatives may re-enter the premises, summary proceedings or otherwise, and
remove all persons therefrom, without being liable to prosecution therefor, and
the Tenant shall pay at the same time as the rent becomes payable under the
terms hereof a sum equivalent to the rent reserved herein, and the Landlord may
rent the premises on behalf of the Tenant, reserving the right to rent the
premises for a longer period of time than fixed in the original lease without
releasing the original Tenant from any liability, applying any moneys collected,
first to the expense of resuming or obtaining possession, second to restoring
the premises to a rentable condition, and then to the payment of the rent and
all other charges due and to grow due to the Landlord, any surplus to be paid to
the Tenant, who shall remain liable for any deficiency.
7. Tenant shall replace, at its own expense any and all broken glass in
and about the demised premises. Tenant may insure, at its option all plate
glass in the demised premises for and in the name of both Tenant and Landlord.
8. That the Tenant shall neither encumber nor obstruct the sidewalk in
front of, entrance to, or halls and stairs of said premises, nor allow the same
to be obstructed or encumbered in any manner.
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<PAGE>
9. The Tenant shall neither place, or cause or allow to be placed, any
sign or signs of any kind whatsoever at, in or about the entrance to said
premises or any other part of same, except in or at such place or places as may
be indicated by the Landlord in writing. Such consent shall not be unreasonably
withheld or delayed. And in case the Landlord or the Landlord's representatives
shall deem it necessary to remove any such sign or signs in order to paint the
premises or building wherein same is situated or make any other repairs,
alterations or improvements in or upon said premises or building or any part
thereof, the Landlord shall have the right to do so, providing the same be
removed and replaced at the Landlord's expense, whenever the repairs,
alterations or improvements shall be completed.
10. That the Landlord is exempt from any and all liability for any
damage or injury to person or property caused by or resulting from steam,
electricity, gas, water, rain, ice or snow, or any leak or flow from or into any
part of said building or from any damage or injury resulting or arising from any
other cause or happening whatsoever unless said damage or injury be caused by or
be due to the negligence of the Landlord or breach of its obligations hereunder.
11. If material default be made in any of the covenants herein contained
(and such default remain uncured for 30 days after written notice herein), then
it shall be lawful for the Landlord to reenter the premises and the same to have
again, repossess and enjoy, and terminate this Lease.
12. That this instrument shall not be a lien against said premises in
respect to any mortgages that are now on or that hereafter may be placed against
said premises, and that the recording of such mortgage or mortgages shall have
preference and precedence and be superior and prior in lien of this lease,
provided that if Tenant is not in default Landlord agrees to include in such
that if Tenant is not in default Landlord agrees to include in such mortgage a
covenant by which such mortgagee, in the event of foreclosure, shall honor and
abide by the terms hereof and recognize the rights of Tenant hereunder, and the
Tenant agrees to execute without cost, any such instrument reasonably necessary
or desirable to further effect the subordination of this lease to any such
mortgage or mortgages, and a refusal to execute such instrument shall entitle
the Landlord, or the Landlord's assigns and legal representative to the option
of cancelling this lease without incurring any expense or damage and the term
hereby granted is expressly limited accordingly.
13. The Tenant has this day deposited with the Landlord the sum of
$10,000.00, transferred from prior lease dated October 13, 1988, as security for
the full and faithful performance by the Tenant of all the terms, covenants
and conditions of this lease upon the Tenant's part to be performed, which said
sum shall be returned to the Tenant after the time fixed as the expiration of
the term herein, provided the Tenant has fully and faithfully carried out all of
said terms, covenants and conditions on Tenant's part to be performed. In the
event of a bona fide sale, subject to this lease, provided the Landlord shall
have transferred the security to the vendee for the benefit of the Tenant and
such transferee acknowledged to Tenant the transfer in writing, the Landlord
shall be considered released by the Tenant from all liability for the return of
such security; and the Tenant agrees to look to the new Landlord solely for the
return of the security, and it is agreed that this shall apply to every transfer
or assignment made of the security to a new landlord.
14. That the security deposited under this lease shall not be mortgaged,
assigned or encumbered by the Tenant without the written consent of the
Landlord.
15. It is expressly understood and agreed that in case the demised
premises shall be permanently abandoned, or if default be made in the payment of
the rent or any other part thereof as herein specified (and such default remain
uncured for 30 days after written
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<PAGE>
notice thereof), or if, unless permitted hereunder, without the consent of the
Landlord, the Tenant shall sell, assign, or mortgage this lease or if material
default be made in the performance of any of the covenants and agreements in
this lease contained on the part of the Tenant to be kept and performed, or if
the Tenant shall fail to comply with timely contest through legal process any of
the statutes, ordinances, rules, orders, regulation and requirements of the
Federal, State and Local Governments or of any and all their Departments and
Bureaus, applicable to said premises, or if the Tenant shall file or there be
filed against Tenant a petition in bankruptcy or arrangement, or Tenant be
adjudicated a bankrupt or make an assignment for the benefit of creditors or
take advantage of any insolvency act, the Landlord may, if the Landlord so
elects, at any time thereafter terminate this lease and the term hereof, on
giving to the Tenant thirty days notice in writing of the Landlord's intention
so to do, and this lease and the term hereof, shall expire and come to an end on
the date fixed in such notice as if the date were the date originally fixed in
this lease for the expiration hereof unless Tenant shall cure or, in good
faith begin to undertake to cure such default. Such notice may be given by
mail to the Tenant addressed to the demised premises.
16. Tenant will modify the existing sprinkler system to provide
protection for the existing office area and will make any other modification or
additions to the sprinkler system as may be required by the proper governmental
agencies. Tenant will provide routine sprinkler inspections at its expense as
required by governmental agencies or insurance programs.
17. That the Tenant will not nor will the Tenant permit undertenants or
other persons to do anything in said premises, nor bring anything into said
premises, or permit anything to be brought into said premises or to be kept
therein, which will in any way increase the rate of fire insurance on said
demised premises, nor use the demised premises or any part thereof, nor suffer
or permit their use for any business or purpose which would cause an increase
in the rate of fire insurance on said building, and the Tenant agrees to pay on
demand any such increase.
18. The failure of the Landlord to insist upon a strict performance of
any of the terms, conditions and covenants herein, shall not be deemed a waiver
of any rights or remedies that the Landlord may have, and shall not be deemed a
waiver of any subsequent breach or default in the terms, conditions and
covenants herein contained. This instrument may not be changed, modified,
discharged or terminated orally.
19. If the whole or any part of the demised premises shall be acquired
or condemned by Eminent Domain for any public or quasi public use or purpose,
then and in that event, the term of this lease shall cease and terminate from
the date of title vesting in such proceeding and Tenant shall have no claim
against Landlord for the value of any unexpired term of said lease. Tenant
shall be entitled to bring an action for loss of its Leasehold interest and
expense in its own name and at its own cost.
20. If after termination of this lease, or upon the expiration of this
lease, the Tenant moves out or is dispossessed and fails to remove any trade
fixtures or other property prior to such expiration or termination of lease or
within a reasonable time thereafter, then and in that event, the fixtures and
property shall be deemed abandoned by the Tenant and shall become the property
of the Landlord.
21. DELETED
22. DELETED
23. This lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in nowise be
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affected, impaired or excused because Landlord is unable to supply or is delayed
in supplying any service expressly or impliedly to be supplied or is unable to
make, or is delayed in making any repairs, additions, alterations or decorations
or is unable to supply or is delayed in supplying any equipment or fixtures if
Landlord is prevented or delayed from so doing by reason of governmental
preemption in connection with a National Emergency or in connection with any
rule, order or regulation of any department or subdivision thereof of any
governmental agency or by reason of the condition of supply and demand which
have been or are affected by war or other emergency.
24. Subject to Paragraph 19, no diminution or abatement of rent, or other
compensation, shall be claimed or allowed for inconvenience or discomfort
arising from the making of repairs or improvements to the building or to its
appliances, nor for any space taken to comply with any law, ordinance or order
of a governmental authority. In respect to the various "services", if any,
herein expressly or impliedly agreed to be furnished by the Landlord to the
Tenant, it is agreed that there shall be no diminution or abatement of the rent,
or any other compensation, of interruption or curtailment of such "service" when
such interruption or curtailment shall be due to accident, alterations or
repairs desirable or necessary to be made or to inability or difficulty in
securing supplies or labor for the maintenance of such "service" or to some
other cause, nor gross negligence on the part of the Landlord. No such
interruption or curtailment of any such "service" shall be deemed constructive
eviction. The Landlord shall not be required to furnish, and the Tenant shall
not be entitled to receive, any of such "services" during any period wherein the
Tenant shall be in default in respect to the payment of rent. Neither shall
there be any abatement or diminution of rent because of making of repairs,
improvements or decorations to the demised premises after the date above fixed
for the commencement of the term, it being understood that rent shall, in any
event, commence to run at such date so above fixed.
25. Landlord shall not be liable for failure to give possession of the
premises upon commencement date by reason of the fact that premises are not
ready for occupancy or because a prior Tenant or any other person is wrongfully
holding over or is in wrongful possession, or for any other reason. The rent
and the time periods for "years" as described below shall be measured from first
legal occupancy and shall not commence until possession is given or is
available, but the term herein shall not be extended. Upon occupancy, the
parties shall execute a letter setting forth the agreed commencement date.
26. RENT.
(a)
<TABLE>
Annual Rent Monthly Rent Year
<S> <C> <C>
$345,600.00 $28,800.00 1
$355,968.00 $29,664.00 2
$366,648.00 $30,554.00 3
$377,652.00 $31,471.00 4
$388,980.00 $32,415.00 5
$400,644.00 $33,387.00 6
$412,668.00 $34,389.00 7
$425,040.00 $35,420.00 8
$437,796.00 $36,483.00 9
$450,924.00 $37,577.00 10
</TABLE>
(b) The foregoing rent schedule anticipates a yearly increase of 3%.
However, if the Consumer Price Index (CPI), exceeds 8% during any particular
lease year, the rent for the following lease year shall be increased by 4%
rather than 3%. Similarly if the CPI described above increases to less than 4%
during any particular lease year, the rent for the following lease year shall be
increased by 2% rather than 3%.
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<PAGE>
(c) A lease year is a 12 month period, beginning on the first day of
the month this Amended Lease begins.
27. UTILITIES, HEATING AND AIR CONDITIONING. Tenant shall supply and pay
for the following items used in, on or about the premises or in connection with
Tenant's Business: removal of waste materials, heat, hot and cold water,
including meters therefor and sewer charges and electricity for light and power.
28. INSURANCE. Throughout the term of this Lease from the commencement
date or earlier commencement date hereof, the Tenant, at its own cost and
expense, shall provide and keep in force, for the benefit of the Landlord:
(a) General liability policies issued by an insurance company or
companies licensed to do business in the State of Florida, indemnifying the
Landlord against any and all liability in the amount of not less than
$500,000.00 in respect of any one accident or disaster for property damage, and
in the amount of not less than $1,000,000.00 in respect of any injuries to any
one person, and in the amount of not less than $3,000,000.00 in respect of
injuries to more than one person, and such a policy shall cover the demised
premises as well as the sidewalk in front of the premises and all operations and
activities of the Tenant, including, but not limited to, the conduct of its
business and making alterations and repairs; not including liabilities caused by
a breach of Landlord's obligations hereunder;
(b) Throughout the term of this Lease, Tenant, at its own cost and
expense shall keep the building insured for the mutual benefit of Landlord and
Tenant in an amount equal to the full replacement value, insuring against: (i)
loss or damage by fire and such other risks as may be included in the standard
form of an extended coverage insurance policy, (ii) accidental loss or damage
from leakage of sprinkler systems now or hereafter installed in the building,
(iii) any sudden and accidental breakdown resulting in physical damage to high
pressure steam boilers, air conditioning equipment pressure vessels, motors or
similar apparatus, now or hereafter installed in the building.
(c) The policies and/or a certificate of insurance shall be delivered
to the Landlord on the execution of this Lease;
(d) Within twenty (20) days prior to the expiration of any such
policy of insurance, the Tenant shall deliver to the Landlord an original policy
and/or a certificate evidencing renewing such policy of insurance, together with
a receipt evidencing the payment of the premium therefor;
(e) In the event any such policy of insurance shall be cancelled and
a new policy of insurance shall not have been delivered to the Landlord (with
proof of payment of the premium for such new policy) prior to the effective date
of cancellation and/or should the Tenant fail to deliver a renewal certificate
of insurance with respect to a policy of insurance about to expire, together
with proof of payment of the premium thereof as hereinafter provided, the
Landlord may procure such policy of insurance and pay the premium therefor. The
amount so paid by the Landlord shall become due and payable by the Tenant as
additional rent with the next or any subsequent installment of rent.
(f) As long as their respective insurers so permit, Landlord and
Tenant hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer to
evidence compliance with the aforementioned waiver. Further, the parties agree
that the foregoing waiver will apply to any deductibles or self insured losses.
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<PAGE>
29. TAXES. The Tenant covenants and agrees to pay all real estate taxes
assessed and levied against the land, building and improvements, pro-rated for
the period that this lease is in effect and all State or Municipal Sales and Use
Taxes. Such amounts shall be deemed additional rent over and above the fixed
annual rent and shall be due and payable within thirty (30) days after the
Landlord submits proof of payment by delivering to the Tenant a photocopy
of the receipted tax bill, except that Sales and Use taxes shall be paid by the
Tenant monthly.
30. FIXTURES. All furniture, furnishings, trade fixtures, sales
equipment, erections, installations, alterations, improvements, which were a
part of the demised premises at the time the lease was entered into, shall
remain the property of the Landlord.
31. NOTICE. Except as otherwise provided in this lease, all notices,
demands, requests, consents, approvals or other communications (collectively
herein called "notices") required or permitted to be given hereunder or which
are given with respect to this Agreement, shall be in writing and shall be sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
Notices to Landlord: 144 Asharoken Avenue
Northport, New York 11768
Notices to Tenant: 240 Tamal Vista
Corte Madera, California 94925
32. TENANT'S CORPORATE AUTHORITY. Tenant represents that all necessary
corporate action has been taken to authorize the execution, delivery and
performance by Tenant of this lease, and that this lease, is a valid and binding
obligation of Tenant enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency and other laws affecting
the rights of creditors generally and by equitable principals that may limit the
availability of specific performance under certain circumstances. Tenant agrees
to give Landlord written notice of any proposed change in the ownership for the
majority of the outstanding capital stock of Tenant or any change in the
ownership of the majority of the assets of Tenant.
33. LEASE CERTIFICATION BY TENANT. Tenant shall without charge at any
time, within twenty (20) days after request by Landlord, certify by written
instrument, duly executed and delivered, to any mortgage, assignee of any
mortgagee or purchaser, or any proposed mortgagee, specified by Landlord:
(a) That this Lease is unmodified and in full force and effect (or,
if there has been modification, that the same is in full force and effect as
modified and stating the modifications);
(b) Whether or not there are then existing any setoffs or defenses
against the enforcement of any of the agreements, terms, covenants or conditions
hereof upon the part of Tenant to be performed or complied with (and, if so,
specifying the same); and
(c) The dates, if any, to which the rental and other charges
hereunder have been paid in advance and/or to which Landlord may have consented,
released or relieved Tenant from Tenant's obligations fully to perform all of
the terms, covenants and conditions of the Lease on Tenant's part to be
performed.
34. HOLDOVER. If the Tenant remains in possession of the demised
premises, or any part thereof, after the termination of the term by lapse of
time or otherwise, such holding over shall, at the election of the Landlord,
constitute an extension of this Lease on a month-to-month basis at 110% the
monthly rental set forth herein.
35. NONPAYMENT OF ADDITIONAL RENT. All costs, charges, adjustments and
expenses which Tenant assumes or agrees to pay
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<PAGE>
pursuant to this Lease shall at Landlord's election be treated as additional
rent and, in the event of nonpayment, Landlord shall have the rights and
remedies herein provided for in the case of nonpayment of rent or breach of
conditions. If Tenant shall default in making any payment required to be made
by Tenant (other than the payment of rent required pursuant to this Lease) or
shall default in performing any term, covenant or condition of this Lease on the
part of Tenant to be performed hereunder, Landlord at Landlord's option, may
(but shall not be obligated to) at any time thereafter on ten (10) days notice
make such payment or, on behalf of Tenant, cause the same to be performed for
the account of Tenant and expend such sum as may be necessary to perform and
fulfill such term, covenant or condition, and any and all sums so expended by
Landlord, and interest in accordance with Paragraph 44 shall be deemed to be
additional rent, in addition to the fixed rent, and shall be repaid by Tenant to
Landlord on demand, but no such payment or expenditure by Landlord shall be
deemed a waiver of Tenant's default nor shall its affect any other remedy of
Landlord by reason of such default. Tenant's obligation to pay additional rent
shall survive any termination of this lease. Tenant acknowledges and agrees
that its obligation to pay additional rent shall include interest in accordance
with Paragraph 44 on all retroactive charges owed by Tenant from the respective
retroactive date that each item of additional rent shall first become due and
payable.
In addition thereto, in the event Landlord is required to institute suit
against Tenant by reason of Tenant's default or to recover possession of
premises, then Tenant shall pay Landlord's reasonable attorney's fees, expenses
and costs.
36. MECHANIC'S LIEN. If, because of any act or omission of Tenant or
anyone claiming through or under Tenant, any mechanic's or other lien or order
for the payment of money shall be filed against the demised premises or the
building, or against Landlord (whether or not such lien or order is valid or
enforceable as such) Tenant shall, at Tenant's own cost and expense, cause the
same to be cancelled and discharged of record within fifteen (15) days after the
date of filing thereof, and shall also indemnify and save harmless Landlord from
and against any and all costs, expenses, claims, losses or damages, including
reasonable counsel fees, resulting therefrom or by reason thereof.
37. LANDLORD'S RIGHTS. Without abatement or diminution in rent, Landlord
reserves and shall have the following additional rights:
(a) To enter the demised premises at all reasonable time (1) for the
making of inspections, decorations, alterations, improvements and repairs, as
Landlord may deem necessary or desirable, (2) to exhibit the premises to
prospective purchasers or leasees of the building at any time and to others
during the last nine (9) months of the term of this Lease, (3) for any purpose
whatsoever relating thereto or to the safety, protection or preservation of the
demised premises or of the building or of Landlord's interest, (4) to take
material into and upon said premises in connection therewith and to place
notices on the front of the premises or any part thereof, offering the premises
"For Rent" or "For Sale".
(b) At any time or times, Landlord, either voluntarily or pursuant to
governmental requirement, may, at Landlord's own expense, make repairs,
alterations or improvements in or to the building or any part thereof and during
alterations, may close entrance, doors, windows, corridors, elevators or other
facilities, provided that such acts shall not unreasonably interfere with
Tenant's use and occupancy of the premises as a whole.
(c) To erect, use and maintain pipes and conduits in and through the
demised premises.
(d) To charge to Tenant any expense including overtime cost incurred
by Landlord in the event that repairs, alterations,
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<PAGE>
decorating or other work in the premises are made or done after ordinary
business hours at Tenant's request.
(e) If during the last six (6) months of the term or of a
renewal term Tenant shall have removed all or substantially all of Tenant's
property therefrom, Landlord may immediately enter and alter, renovate and
redecorate the premises without reduction or abatement of rent or incurring any
liability to Tenant for compensation.
(f) Landlord may exercise any or all of the foregoing rights
hereby reserved to Landlord without being deemed guilty of an eviction, actual
or constructive, or disturbance or interruption of Tenant's use or possession
and without being liable in any manner toward Tenant and without limitation or
abatement of rent or other compensation, and such acts shall have no effect on
this Lease.
38. LANDLORD'S LIABILITY.
(a) As used in this Lease, the term "Landlord" shall mean only the
owner or the mortgagee in possession for the time being of the building in which
the demised premises is located or the holder of a Lease on both said building
and the land thereunder so that in the event of any sale of said building or any
assignment of this Lease or any underlying lease or a demise of both said
building and land, Landlord shall be and hereby is entirely released and
discharged from any and all liability and obligations of Landlord hereunder,
except any that may have theretofore accrued.
(b) Notwithstanding anything to the contrary provided in this
lease, it is specifically understood and agreed, such agreement being a primary
consideration of this Lease by Landlord, that there shall be absolutely no
personal liability on the part of Landlord, its successors or assigns or any
mortgagee in possession (for the purpose of this paragraph collectively referred
to as "Landlord"), with respect to any of the terms, covenants and conditions of
this Lease, and that Tenant shall look solely to the equity of Landlord in the
demised premises for the satisfaction of each and every remedy of Tenant in the
event of any breach by Landlord of any the terms, covenants and conditions of
this Lease to be performed by Landlord, such exculpation of liability to be
absolute and without any exceptions whatsoever. In consideration of the covenant
herein expressed, Landlord agrees to maintain at least $350,000 in equity during
the term hereof.
39. THIRD PARTIES.
(a) At the option of the Landlord or any successor landlord or the
holder of any mortgage affecting the premises Tenant agrees that neither the
cancellation nor termination of any ground or underlying lease to which this
Lease is subject and subordinate, nor any foreclosure of a mortgage affecting
the premises, nor the institution of any suit, action, summary or other
proceeding against the Landlord herein or any successor landlord, or any
foreclosure proceeding brought by the holder of any such mortgage to recover
possession of such property, shall by operation of law or otherwise result in
cancellation or termination of this Lease or the rights and obligations of the
Tenant thereunder and upon the request of any such Landlord or mortgagee, Tenant
covenants and agrees to execute an instrument in writing satisfactory to such
successor landlord or to any successor to the Landlord's interest in the
premises, or to the holder of such mortgage or to the purchaser of the mortgaged
premises in foreclosure whereby Tenant attorns to such successor in interest.
Such instrument shall be countersigned by Landlord's successor or mortgagee and
contain a Covenant of Quiet Enjoyment in favor of the Tenant, provided Tenant is
not in default at the time.
(b) In the event of any such act or omission by the Landlord which
would give the Tenant the right to terminate this Lease or to claim a partial or
total eviction, pursuant to the terms of this Lease, if any, the Tenant will not
exercise any such right until:
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<PAGE>
(i) it has given written notice of such act or omission to the
holder of any mortgage and to the landlord of any ground or underlying lease,
whose names and addresses shall previously have been furnished to Tenant, by
delivering such notice of such act or omission addressed to such holders at the
last addresses so furnished, and
(ii) a reasonable period for remedying such act or omission
shall have elapsed following such giving of notice during which such parties, or
any of them, with reasonable diligence, following the giving of such notice, has
not commenced and continued to remedy such act or omission or to cause the same
to be remedied.
(c) If, in connection with obtaining financing for the land and/or
building, or of any ground or underlying lease, a banking, insurance or other
recognized institutional lender shall request reasonable modification in this
Lease as a condition to such financing, Tenant will not unreasonably withhold,
delay or defer its consent thereto, provided that such modifications do not
increase the obligations of Tenant hereunder or materially adversely affect the
leasehold interest hereby created or Tenant's use and Quiet Enjoyment of the
premises.
40. LANDLORD'S CONSENT.
(a) With respect to any provision of this Lease which provides, in
effect, that Landlord shall not unreasonably withhold or unreasonably delay any
consent or any approval, Tenant, in no event, shall be entitled to make, nor
shall Tenant make, any claim for, and Tenant hereby waives any claim for money
damages nor shall Tenant claim any money damages by way of setoff, counterclaim
or defense, based upon any claim or assertion by Tenant that Landlord has
unreasonably withheld or unreasonably delayed any consent or approval; but
Tenant's sole remedy shall be an action or proceeding to enforce any such
provision, or for specific performance, injunction or declaratory judgment.
(b) In all provisions in this lease where Landlord's consent is
required, such consent shall not be unreasonably withheld or delayed.
41. NOTICE TO LANDLORD. Landlord shall in no event be charged with
default in the performance of its obligations hereunder unless and until
Landlord shall have failed to preform obligations within thirty (30) days (or
such additional time as is reasonably required to correct any such default or
such shorter time as may be required in the case of emergencies) after written
notice by Tenant to Landlord properly specifying wherein Landlord has failed to
perform any such obligations. Notwithstanding anything in the Lease herein to
the contrary, Landlord shall in no event be charged with or liable for any
consequential damages suffered by Tenant as a result of Landlord's failure to
preform any of its obligations under this Lease, unless such failure shall be
willful.
42. ATTORNEY'S FEES. In the event that either party shall bring any
proceeding for recovery of damages, or for possession of the demised premises by
reason of non-payment or non-performance of any of the acts, promises,
conditions or covenants herein contained, or for breach of this Lease, and such
moving party shall incur any obligation for the payment of money in connection
therewith including, but not limited to, reasonable legal fees, in instituting
or prosecuting any action or proceeding, such charges including legal fees,
shall be reimbursed by the losing party. In the event that Landlord shall
institute an action for summary proceedings for non-payment of rent or
additional rent, a reasonable legal fee therefor shall be included in the
petition and shall be deemed additional rent.
43. LATE CHARGES. If the payment of fixed minium and/or additional
rent payable pursuant to the terms of this Lease shall not be made within ten
(10) days after the date on which same is due
-10-
<PAGE>
and payable, a late charge of one and one-half (1 1/2%) percent per month of the
amount so overdue shall be payable as damages for Tenant's failure to make
prompt payment. Late charges that accrue during any month shall be payable, as
additional rent, on the first day of the following month. No failure by Landlord
to insist upon the strict performance by Tenant of Tenant's obligation to pay
late charges shall constitute a waiver by Landlord of its rights to enforce the
provisions of this paragraph in any instance thereafter occuring. Acceptance of
late charges by Landlord shall not be deemed to extend the time of payment of
fixed minium rent or additional rent pursuant to this Lease, and the provisions
of this paragraph shall be in addition to all other remedies available to
landlord pursuant to this Lease in the event of the failure of Tenant to pay the
fixed minium rent and additional rent when due.
44. SECURITY.
(a) Security shall be deposited in a non-interest bearing account.
In the event that Landlord lawfully applies any portion of the security during
the term, Tenant shall, within five (5) business days after notice, replenish
the security account to its original sum. Failure to so replenish the security
account shall be deemed a material breach of this Lease.
(b) Tenant hereby agrees not to look to the mortgagee, mortgagee in
possession, or successor in title to the property, for accountability for any
security deposit required by the Landlord hereunder, unless said sums have
actually been received by said mortgagee as security for the Tenant's
performance of this Lease. Such successor or mortgagee shall acknowledge receipt
of such security to Tenant in writing upon request.
45. OPTION TO EXTEND LEASE.
(a) Provided this Lease is in full force and effect, Tenant shall
have the right to extend the term of this Lease for the Demised Premises at the
end of the initial 10 year term, for a renewal term of five years, provided
Tenant shall notify Landlord in writing not less than eight (8) months prior to
the expiration of the initial term that Tenant desires such extension and
provided further that such extension shall be upon the same terms, provisions,
covenants, and conditions as are contained in this Lease, except as to the
duration of the term hereof, the rental rate and such provisions in this Lease
which by its terms are only applicable to the initial term.
(b) The rent during the renewal term will increase each year at a
3% rate.
(c) Tenant agrees to accept the Demised Premises in the condition
then existing as of the commencement of the renewal term of this lease, and
Landlord shall not be responsible for performing any work or furnishing any
materials to the Demised Premises. The failure or omission by Tenant to give
notice required under the provisions of Section (a) of this paragraph exercising
Tenant's option to renew within the time and manner provided shall be deemed,
without further notice and without further agreement between the parties, that
Tenant elected not to exercise said option, unless Landlord shall otherwise
agree.
46. And the said Landlord and its successors and assigns doth covenant
that the said Tenant on paying the said yearly rent, and performing the
covenants aforesaid, shall and may peacefully and quietly have, hold and enjoy
the said demised premises for the term aforesaid, provided however, that this
covenant shall be conditioned upon the retention of title to the premises by
the landlord, or the execution of instruments as called for herein by any
successor, transferee, or purchaser at foreclosure.
47. INDEPENDENT PARAGRAPHS. If any term or provision of this Lease
shall, to any extent, be invalid or unenforceable, the
-11-
<PAGE>
remainder of this Lease shall not be affected thereby and the balance of the
terms and provisions of this Lease shall be valid and enforceable to the
fullest extent either hereunder or as permitted by law.
And it is mutually understood and agreed that the covenants and
agreements contained in the within lease shall be binding upon the parties
hereto and upon their respective successors, heirs, executors and
administrators.
IN WITNESS WHEREOF, the parties have interchangeably set their hands
and seals (or caused these presents to be signed by their proper corporate
officers and caused their proper corporate seal to be hereto affixed) the
day and year first above written.
Signed, sealed and delivered
in the presence of:
[SIGNATURE APPEARS HERE] /s/ Patricia M. Dunnell L.S.
- -------------------------------- ----------------------------------
[SIGNATURE APPEARS HERE] Patricia M. Dunnell
- --------------------------------
JAMES RIVER PAPER COMPANY, INC.
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- -------------------------------- --------------------------------
[SIGNATURE APPEARS HERE]
- --------------------------------
(CORPORATE SEAL)
-12-
<PAGE>
EXHIBIT "A"
A part of Section 7, Township 2 South, Range 26 East, Duval County, Florida,
being more particularly described as follows: For a point of reference commence
at the intersection on the easterly right of way line of Ellis Road (County Road
No. 590) with the northerly right of way line of Shawland Road (a 60 foot right
of way); thence north 87(degrees)44'10" east along said notherly right of
way line of Shawland road, a distance of 900.00 feet to the point of beginning;
thence continue north 87(degrees)44'10" east, and along said right of way line,
a distance of 884.07 feet to the centerline of a 60 foot unrecorded agreement
for drainage, dated January 25, 1960 between the City of Jacksonville and
Seaboard Coastline Railroad Company; thence north 29(degrees)14'45" east along
said centerline, a distance of 272.04 feet; thence south 87(degrees)42'02" west,
a distance of 1019.34 feet; thence south 00(degrees)33'20" east, a distance of
231.40 feet to the point of beginning. The above described lands being the same
as those described in Official Records Volume 2960, page 532 together with those
described in Official Records Volume 5812, page 1851 of the current public
records of Duval County, Florida.
<PAGE>
LEASE AMENDMENT
This Amendment, dated this day of September, 1994, is intended to amend
a certain lease agreement dated September 28, 1989 by and between Patricia M.
Dunnell, 144 Asharoken Avenue, Northport, New York 11768 and James River Paper
Company, Inc., Handi-Kup Division, 240 Tamal Vista, Corte Madera, California
94925 regarding a certain premises located at 5355 Shawland Road, Jacksonville,
Florida 32205 (the "Amended Lease"),.
WHEREAS, the Amended Lease between the Parties remains in full force and effect;
and
WHEREAS, the Parties mutually intend to modify the terms of the Amended Lease
in certain respects, and in those respects only;
NOW, THEREFORE, the Parties hereby agree as follows:
1. Deletions from the Amended Lease. Paragraphs 13, 14, and 44 of the
--------------------------------
Amended Lease are hereby deleted in their entirety from the Amended Lease,
effective with the execution of this Amendment.
2. Repayment of the Security Deposit. Landlord has simultaneously with the
---------------------------------
execution of this Amendment repaid to the Tenant the sum of $10,000.00 (ten
thousand dollars), the receipt and sufficiency of which are hereby acknowledged,
which represents the entire amount of the Security Deposit paid to Landlord
pursuant to the terms of a prior lease dated October 13, 1988 and transferred to
the Amended Lease pursuant to paragraph 13 thereof.
3. Release. In consideration of the repayment of the Security Deposit and other
-------
good and valuable consideration, Tenant and Landlord do hereby release each
other and their respective successors, employees, owners and assigns, fully and
finally from any claims each may now have or may in the future have for and
concerning the said Security Deposit or its handling.
4. Notices. Notices addressed to the Landlord in the future should be
-------
addressed to Patricia M. Dunnell, 15227 Cape Drive North, Jacksonville, Florida
32226.
5. No Other Changes. The parties hereto do not intend to amend, modify, or
----------------
revoke any term of the Amended Lease not expressly affected by this
<PAGE>
Amendment, and intend that the Amended Lease shall remain in full force and
effect in any and all other respects.
IN WITNESS WHEREOF, the Parties have hereunto set their hands and
applied their seals through their duly authorized officers on the date above
first written.
Signed, sealed and delivered
in the presence of:
[SIGNATURE APPEARS HERE] /s/ Patricia M. Dunnell
- ------------------------ ------------------------------
Patricia M. Dunnell L.S.
[SIGNATURE APPEARS HERE]
- ------------------------
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
- ------------------------ ------------------------------
James River Paper Company, Inc.
[SIGNATURE APPEARS HERE]
- ------------------------
[CORPORATE SEAL APPEARS HERE]
<PAGE>
This Agreement BETWEEN
PATRICIA M. DUNNELL
144 Asharoken Avenue
Northport, New York 11768 as Landlord
and
JAMES RIVER-NORWALK, INC.
c/o JAMES RIVER CORPORATION
240 Tamal Vista
Corte Madera, CA 94925 as Tenant
Witnesseth: The Landlord hereby leases to the Tenant the following premises:
5355 Shawland Road
Jacksonville, FL 32205
for the term of FIVE (5) years
to commence from the 1st day of November 1988 and to end on the 31st day of
October 1993 to be used and occupied only for the sale, manufacture and
distribution of cups and related items.
upon the conditions and covenants
following 1st. That the Tenant shall pay the annual rent as herein set forth
said rent to be paid is equal monthly payments in advance on the 1st day of
each month during the term aforesaid, as herein set forth
2nd. That the Tenant shall take good care of the premises and shall, at the
Tenant's own cost and expense make all repair.
ordinary wear and tear and
and at the end or other expiration of the term, shall deliver up the demised
premises in good order or condition, damages by the elements excepted.
3rd. That the Tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the Federal, State
and Local Governments and of any and all their Departments and Bureau applicable
to said premises, for the correction, prevention, and abatement of nuisances or
other grievances, in, upon, or connected with said premises during said term;
and shall also promptly comply with and execute all rules, orders and
regulations of the New York Board of Fire Underwriters, or any other similar
body, at the Tenant's own cost and expense.
4th. That the Tenant, successors, heirs, executors or administrators shall not
assign this agreement, or underlet or underlease the premises, or any part
thereof unless to a related or subsidiary corporation owned by James River
Corporation, or make any alterations on the premises, without the Landlord's
consent in writing; or occupy, or permit or suffer the same to be occupied for
any business or purpose deemed disreputable or extra-hazardous on account of
fire, under the penalty of damages and forfeiture, and in the event of a breach
thereof, the term herein shall immediately cease and determine at the option of
the Landlord as if it were the expiration of the original term.
5th. Tenant must give Landlord prompt notice of fire, accident, damage, or
dangerous or defective condition. If the Premises can not be used because of
fire or other casualty, Tenant is not required to pay rent for the time the
Premises are unusable. If part of the premises can not be used, Tenant must pay
rent for the usable part. Landlord shall have the right to decide which part of
the Premises is usable, Landlord need only repair the damaged structural parts
of the Premises. Landlord is not required to repair or replace any equipment,
fixtures, furnishings or decorations unless originally installed by Landlord.
Landlord is not responsible for delays due to settling insurance claims,
obtaining estimates, labor and supply problems or any other cause not fully
under Landlord's control.
If the fire or other casualty is caused by an act or neglect of Tenant,
Tenant's employees or invitees, or at the time of the fire or casualty Tenant is
in default in any term of this Lease, then all repairs will be made at Tenant's
expense and Tenant must pay the full rent with no adjustment. The cost of the
repairs will be added rent.
Landlord has the right to demolish or rebuild the Building if there is
substantial damage by fire or other casualty. Landlord may cancel this Lease
within 30 days after the substantial fire or casualty by giving Tenant notice of
Landlord's intention to demolish or rebuild. The Lease will end 30 days after
Landlord's cancellation notice to Tenant. Tenant must deliver the Premises to
Landlord on or before the cancellation date in the notice and pay all rent due
to the date of the fire or casualty. If the Lease is cancelled Landlord is not
required to repair the Premises or Building. The cancellation does not release
Tenant of liability in connection with the fire of casualty. This Section is
intended to replace the terms of New York Real Property Law Section 227.
<PAGE>
6th. The said Tenant agrees that the said Landlord and the Landlord's agents
and other representatives shall have the signature to enter into and upon said
premises, or any part thereof, at all reasonable hours for the purpose of
examining the same, making such repairs or alterations therein as may be
necessary for the safety and preservation thereof.
7th. The Tenant also agrees to permit the Landlord or the Landlord's agents to
show the premises to persons wishing to hire or purchase the same; and the
Tenant further agrees that on and after the sixth month, next preceding the
expiration of the term hereby granted, the Landlord or the Landlord's agents
shall have the right to place notices on the front of said premises, or any part
thereof, offering the premises "To Let" or "For Sale", and the Tenant hereby
agrees to permit the same to remain thereon without hindrance of molestation.
8th. That if the said premises, or any part thereof shall be deserted or become
vacant during said term, or if any default be made in the payment of the said
rent or any part thereof, or if any default be made in the performance of any of
the covenants herein contained, the Landlord or representatives may re-enter the
said premises by force, summary proceedings or otherwise, and remove all
persons therefrom, without being liable to prosecution therefor, and the Tenant
hereby expressly waives the service of any notice in writing of intention to
re-enter, and the Tenant shall pay at the same time as the rent becomes payable
under the terms hereof a sum equivalent to the rent reserved herein, and the
Landlord may rent the premise on behalf of the Tenant, reserving the right to
rent the premises for a longer period of time than fixed in the original lease
without releasing the original Tenant from any liability, appyling any moneys
collected, first to the expense of resuming or obtaining possession, second to
restoring the premises to a rentable condition, and then to the payment of the
rent and any other charges due and to grow due to the Landlord, any surplus
to be paid to the Tenant, who shall remain liable for any deficiency.
9th. Landlord may replace, at the expense of Tenant, any and all broken glass
in and about the demised premises. Landlord may insure, and keep insured, all
plate glass in the demised premises for and in the name of Landlord. Bills, for
the premium therefor shall be rendered by Landlord to Tenant at such times as
Landlord may elect, and shall be due from, and payable by Tenant when rendered,
and the amount thereof shall be deemed to be, and be paid as, additional rental.
Damage and injury to the said premises, caused by the carelessness, negligence
or improper conduct on the part of the said Tenant or the Tenant's agents or
employees shall be repaired as speedily as possible by the Tenant at the
Tenant's own cost and expense.
10th. That the Tenant shall neither encumber nor obstruct the sidewalk in front
of, entrance to, or halls and stairs of said premises, nor allow the same to be
obstructed or encumbered in any manner.
11th. The Tenant shall neither place, or cause or allow to be placed, any sign
or signs of any kind whatsoever at, in or about the entrance to said premises or
any other part of same, except in or at such place or places as may be indicated
by the Landlord and consented to by the Landlord in writing. And in case the
Landlord or the Landlord's representatives shall deem it necessary to remove any
such sign or signs in order to paint the said premises or the building wherein
same is situated or make any other repairs, alterations or improvements in or
upon said premises or building or any part thereof, the Landlord shall have the
right to do so, providing the same be removed and replaced at the Landlord's
expense, whenever the said repairs, alterations or improvements shall be
completed.
12th. That the Landlord is exempt from any and all liability for any damage or
injury to person or property caused by or resulting from steam, electricity,
gas, water, rain, ice or snow, or any leak or flow from or into any part of said
building or from any damage or injury resulting or arising from any other
cause or happening whatsoever unless said damage or injury be caused by or be
due to the negligence of the Landlord, or breach of its obligations hereunder.
13th. That if default be made in any part of the covenants herein contained,
then it shall be lawful for the said Landlord to re-enter the said premises, and
the same to have again, re-possess and enjoy.
14th. That this instrument shall not be a lien against said premises in respect
to any mortgages that are now on or that hereafter may be placed against said
premises, and that the recording of such mortgage or mortgages shall have
preference and precedence and be superior and prior in lien of this lease,
irrespective of the date of recording and the Tenant agrees to execute without
cost, any such instrument which may be deemed necessary or desirable to further
effect the subordination of this lease to any such mortgage or mortgages, and a
refusal to execute such instrument shall entitle the Landlord, or the Landlord's
assigns and legal representatives to the option of cancelling this lease without
incurring any expense or damage and the term hereby granted is expressly limited
accordingly.
15th. The Tenant has this day deposited with the Landlord the sum of $10,000.00
transferred from prior lease dated October 31, 1983 as security for the full and
faithful performance by the Tenant of all the terms, covenants and conditions of
this lease upon the Tenant's part to be performed, which said sum shall be
returned to the Tenant after the time fixed as the expiration of the term
herein, provided the Tenant has fully and faithfully carried out all of said
terms, covenants and conditions on Tenant's part to be performed. In the event
of a bona fide sale, subject to this lease, provided the Landlord shall have
transferred the security to the verdee for the benefit of the Tenant, the
Landlord shall be considered released by the Tenant from all liability for the
return of such security; and the Tenant agrees to look to the new Landlord
solely for the return of the said security, and it is agreed that this shall
apply to every transfer or assignment made of the security to a new Landlord.
16th. That the security deposited under this lease shall not be mortgaged,
assigned or encumbered by the Tenant without the written consent of the
Landlord.
17th. It is expressly understood and agreed that in case the demised premises
shall be deserted or vacated, or if default be made in the payment of the rent
or any part thereof as herein specified, or if, unless permitted hereunder
without the consent of the Landlord, the Tenant shall sell, assign, or mortgage
this lease or if default be made in the performance of any of the covenants and
agreements in this lease contained on the part of the Tenant to be kept and
performed, or if the Tenant shall fail to comply with any of the statues,
ordinances, rules, orders, regulations and requirements of the Federal, State
and Local Governments or of any and all their Departments and Bureaus,
applicable to said premises, or if the Tenant shall file or there be filed
against Tenant a petition in bankruptcy or arrangement, or Tenant be adjudicated
a bankrupt or make an assignment for the benefit of creditors or take advantage
of any insolvency act, the Landlord may, if the Landlord so elects, at any time
thereafter terminate this lease and the term hereof, on giving to the Tenant
thirty days' notice in writing of the Landlord's intention so to do, and this
lease and the term hereof shall expire and come to an end on the date fixed in
such notice as if the said date were the date originally fixed in this lease for
the expiration hereof. Such notice may be given by mail to the Tenant addressed
to the demised premises.
18th. Tenant shall pay to Landlord the rent or charge, which may, during the
demised term, be assessed or imposed for the water used or consumed in or on the
said premises, whether determined by meter or otherwise, as soon as and when the
same may be assessed or imposed, and will also pay the expenses for the setting
of a water meter in the said premises should the latter be required. Tenant
shall pay Tenant's proportionate part of the sewer rent or charge imposed upon
the building. All such rents or charges or expenses shall be paid as additional
rent and shall be added to the next month's rent thereafter to become due.
19th. That the Tenant will not nor will the Tenant permit undertenants or other
persons to do anything in said premises, or bring anything into said premises,
or permit anything to be brought into said premises or to be kept therein, which
will in any way increase the rate of fire insurance on said demised premises,
nor use the demised premises or any part thereof, nor suffer or permit their use
for any business or purpose which would cause an increase in the rate of fire
insurance on said building, and the Tenant agrees to pay on demand any such
increase.
20th. The failure of the Landlord to insist upon a strict performance of any of
the terms, conditions and covenants herein, shall not be deemed a waiver of any
rights or remedies that the Landlord may have, and shall not be deemed a waiver
of any subsequent breach or default in the terms, conditions and covenants
herein contained. This instrument may not be changed, modified, discharged or
terminated orally.
21st. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim against
Landlord for the value of any unexpired term of said Lease. No part of any award
shall belong to the Tenant. Lease dated October 31, 1983 shall remain in effect
until October 31, 1988.
<PAGE>
22nd. If after default in payment of rent or violation of any other provision
of this lease, or upon the expiration of lease, the Tenant moves out or is
dispossessed and fails to remove any trade fixtures or other property prior to
such default, removal, expiration of lease, or prior to the issuance of the
final order or execution of the warrant, then and in the event, the said
fixtures and property shall be deemed abandoned by the said Tenant and shall
become the property of Landlord.
23rd. In the event that the relation of the Landlord and Tenant may cease or
terminate by reason of the re-entry of the Landlord under the terms and
covenants contained in this lease or by the ejectment of the Tenant by summary
proceeding or otherwise, or after the abandonment of the premises by the Tenant,
it is hereby agreed that the Tenant shall remain liable and shall pay in monthly
payments the rent which accrues subsequent to the re-entry by the Landlord, and
the Tenant expressly agrees to pay as damages for the breach of the covenants
herein contained, the difference between the rent reserved and the rent
collected and received, if any, by the Landlord during the remainder of the
unexpired term, such difference or deficiency between the rent herein reserved
and the rent collected if any, shall become due and payable in monthly payments
during the remainder of the unexpired term, as the amounts of such difference or
deficiency shall from time to time be ascertained; it is mutually agreed between
Landlord and Tenant that the respective parties hereto shall and hereby do waive
trial by in any action, proceeding or counterclaim brought by either of the
parties against the other on any matters whatsoever arising out of or in any way
connected with this lease, the Tenant's use or occupancy of said premises,
and/or any claim of injury or damage.
24th. The Tenant waives all rights to redeem under any law of the State of New
York.
25th. This lease and the obligation of Tenant to pay rent hereunder and perform
all of the other covenants and adjustments hereunder on part of Tenant to be
performed shall in nowise be affected, impaired or excused because Landlord is
unable to supply or is delayed in supplying any service expressly or impliedly
to be supplied at is unable to make, or is delayed in making any repairs,
additions, alterations or decorations or is unable to supply or is delayed in
supplying equipment or fixtures if Landlord is prevented or delayed from so
doing by reason of governmental preemption in connection with a National
Emergency or in connection with any rule, order or regulation of any department
or subdivision the of any governmental agency or by reason of the condition of
supply and demand which have been or are affected by war or other emergency.
26th. No diminution or abatement of rent, or other compensation, shall be
claimed or allowed for inconvenience or discomfort arising from the making of
repairs or improvements to the building or to its appliances, nor for any space
taken to comply with any law, ordinance or order of a governmental authority. In
respect to the various "services," if any, herein expressly or impliedly agreed
to be furnished be the Landlord to the Tenant, it is agreed that these shall be
no diminution or abatement of the rent, or any other compensation, for
interruption or curtailment of such "service" when such interruption or
curtailment shall be due to accident, alterations or repairs desirable or
necessary to be made or to inability or difficulty in securing supplies or labor
for the maintenance of such "service" or to some other cause, not gross
negligence on the part of the Landlord such interruption or curtailment of any
such "service" shall be deemed a constructive eviction. The Landlord shall be
required to furnish, and the Tenant shall not be entitled to receive, any of
such "services" during any period wherein Tenant shall be in default in respect
to the payment of rent. Neither shall there be any settlement or diminution of
rent because of making of repairs, improvements or decorations to the demised
premises after the date above fixed for the commencement of the term, it being
understood that rent shall, in any event, commence to run at such date so above
fixed.
27th. Landlord shall not be liable for failure to give possession of the
premises upon commencement date by reason of fact that premises are not ready
for occupancy or because a prior Tenant or any other person is wrongfully
holding owed is in wrongful possession, or for any other reason. The rent shall
not commence until possession is given or is available, the term herein shall
not be extended.
And the said Landlord doth covenant that the said Tenant as paying the said
yearly rent, and performing the covenant aforesaid, shall and may peacefully and
quietly have, hold and enjoy the said demised premises for the term aforesaid
provided however, that this covenant shall be conditioned upon the retention of
title to the premises by the Landlord.
And it is mutually understood and agreed that the covenants and agreements
contained in the within shall be binding upon the parties hereto and upon their
respective successors, heirs, executors and administrators.
In Witness Whereof, the parties have interchangeably set their heads and
seals (or caused these presents signed by their proper corporate officers and
caused their proper corporate seal to be hereto affixed) this 13th day of
October 1988.
Signed, sealed and delivered PATRICIA M. DUNNELL
in the presence of /s/ Patricia M. Dunnell
--------------------------------------
JAMES RIVER-NORWALK, INC.
BY: /s/ [SIGNATURE APPEARS HERE] 10/13/88
--------------------------------------
--------------------------------------
<PAGE>
)))
State of New York. )
)) SS:
County of )
)))
On the day of 19 , before me personally came
to me known and known to me to be the individual described in, and who
executed, the foregoing instrument, and acknowledged to me that
he executed the same.
)))
State of New York. )
)) SS:
County of )
)))
On the day of 19 , before me personally came
to me known, who, being by me duly sworn, did depose and say that he resides
at No.
that he is the of
the corporation mentioned in, and which executed, the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the Board
of of said corporation; and that
he signed his name thereto by like order.
======================================
======================================
Lease
======================================
Dated, __________________________19
In Consideration of the letting of the premises within mentioned to the
within named Tenant and the sum of $1.00 paid to the undersigned by the within
named Landlord, the undersigned do hereby covenant and agree, to and
with the Landlord and the Landlord's legal representatives, that if default
shall at any time be made by the said Tenant in the payment of the rent and the
performance of the covenants contained in the within lease, on the Tenant's,
part to be paid and performed, that the undersigned will well and truly pay the
said rent, or any arrears thereof, that may remain due unto the said Landlord,
and also pay all damages that may arise in consequence of the non-performance of
said converants, or either of them, without requiring notice of any such default
from the said Landlord. The undersigned hereby waives all rights to trial by
jury in any action or proceeding hereinafter instituted by the Landlord, to
which the undersigned may be a party.
In Witness Whereof, the undersigned his hand and seal this
day of , 19
WITNESS ________________________________________
<PAGE>
RIDER TO LEASE DATED October 13 1988, BETWEEN
PATRICIA M. DUNNELL LANDLORD,
AND JAMES RIVER-NORWALK, INC., TENANT
-------------------------------------
28. LEASE RIDER. In the event of a conflict between the terms, covenants,
conditions and provisions of this Rider with those of the Standard Form of Loft
Lease or any of the Exhibits or Schedules attached hereto, the terms, covenants,
conditions and provisions of this Rider shall govern and control the rights and
obligations of the parties hereto.
29. BASIC RENT.
Annual Rent Monthly Rent Year
$117,600.00 $9,800.00 1988
$120,540.00 $10,045.00 1989
$123,540.50 $10,296.00 1990
$126,642.00 $10,554.00 1991
$129,808.05 $10,817.00 1992
30. UTILITIES, HEATING AND AIR CONDITIONING. Tenant shall supply and pay for
the following items used in, on or about the premises or in connection with
tenant's business: removal of waste materials, heat, hot and cold water and
electricity for light and power.
31. INSURANCE. Throughout the term of this Lease from the commencement date
or earlier commencement date hereof, the Tenant, at its own cost and expense,
shall provide and keep in force, for the benefit of the Landlord:
(a) General liability policies issued by an insurance company or companies
licensed to do business in the State of New York, indemnifying the Landlord
against any and all liability in the amount of not less than $500,000.00 in
respect of any one accident or disaster for property damage, and in the amount
of not less than $1,000,000.00 in respect of any injuries to any one person, and
in the amount of not less than $3,000,000.00 in respect of injuries to more than
one person, and such a policy shall cover the demised premises as well as the
sidewalk in front of the premises and all operations and activities of the
Tenant, including, but not limited to, the conduct of its business and making
alterations and repairs; not including liabilities caused by an overt breach of
Landlord's obligations hereunder;
(b) Throughout the term of this Lease, Tenant, at its own cost and expense
shall keep the building insured for the mutual benefit of Landlord and Tenant
against: (i) loss or damage by fire and such other risks as may be included in
the standard form of extended coverage insurance from time to time available, in
amounts sufficient to prevent Landlord or Tenant from becoming a co-insurer
within the terms of the applicable
<PAGE>
policies, and, in any event, in an amount not less than eighty percent of the
then "full insurable value" thereof, which amount is presently deemed to be not
less than $960,000.00. "Full insurable value" shall mean the actual replacement
cost of the Building, excluding the cost of excavation, foundations and footings
below the lowest basement floor. Such full insurable value shall be determined
from time to time at the request of Landlord by mutual agreement of Landlord and
Tenant or failing same, by an architect, engineer or appraiser, reasonably
acceptable to Landlord, selected and paid by Tenant, but such determination
shall not be required to be made more frequently than once in any three years;
(ii) loss or damage from leakage of sprinkler systems not or hereinafter
installed in the Building, in such amount as Landlord may reasonably require;
(iii) loss or damage by explosion of high pressure steam boiler, air
conditioning equipment pressure vessels, motors or similar apparatus, now or
hereafter installed in the Building, in such amounts as Lessor may reasonably
require; and (iv) loss or damage from such other hazards and in such amounts as
Landlord may reasonable require provided that such insurance is then customarily
maintained in buildings or similar construction, age and use in the City of
Jacksonville.
(c) The policies and/or certificate of insurance shall be delivered to the
Landlord on the execution of this Lease;
(d) Within twenty (20) days prior to the expiration of any such policy of
insurance, the Tenant shall deliver to the Landlord an original policy and/or
a certificate evidencing renewing such policy of insurance, together with a
receipt evidencing the payment of the premium therefor;
(e) In the event any such policy of insurance shall be canceled and a new
policy of insurance shall not have been delivered to the Landlord (with proof of
payment of the premium for such new policy) prior to the effective date of
cancellation and/or should the Tenant fail to deliver a renewal policy and/or a
renewal certificate of insurance with respect to a policy of insurance about to
expire, together with proof of payment of the premium therefor as hereinafter
provided, the Landlord may procure such policy of insurance and pay the premium
therefor. The amount so paid by the Landlord, together with interest at the rate
of twenty (20%) per cent annum from the time of payment, shall become due and
payable by the Tenant as additional rent with the next or any subsequent
installment of rent.
32. TAXES. The Tenant covenants and agrees to pay all real estate taxes
assessed and levied against the land, building and improvements, pro-rated for
the period that this lease is in effect and all State or Municipal Sales and Use
Taxes. Such amounts shall be deemed additional rent over and above the fixed
annual rent and shall be due and payable within thirty
2
<PAGE>
(30) days after the Landlord submits proof of payment by delivering to the
Tenant a photocopy of the receipted tax bill, except that Sales and Use taxes
shall be paid by the tenant monthly.
33. FIXTURES. All furniture, furnishings, trade fixtures, sales equipment,
erections, installations, alterations, improvements, which were a part of the
demised premises at the time the lease was entered into, shall remain the
property of the Landlord.
34. NOTICE. Except as otherwise provided in this lease, all notices, demands,
requests, consents, approvals or other communications (collectively herein
called "notices) required or permitted to be given hereunder or which are given
with respect to this Agreement, shall be in writing and shall be sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
Notices to Landlord: 144 Asharoken Avenue, Northport, NY 11768
Notices to Tenant: 240 Tamal Vista, Corte Madera, CA 94925
35. TENANT'S CORPORATE AUTHORITY. Tenant represents that all necessary
corporate action has been taken to authorize the execution, delivery and
performance by Tenant of this lease, and that this lease, is a valid and binding
obligation of Tenant enforceable in accordance with its term except as
enforcement may be limited by bankruptcy, insolvency and other laws affecting
the rights of creditors generally and by equitable principals that may limit the
availability of specific performance under certain circumstances. Tenant agrees
to give Landlord written notice of any proposed change in the ownership of the
majority of the outstanding capital stock of Tenant or any change in the
ownership of the majority of the assets of Tenant. Failure of Tenant to give
notice provided for in the preceding sentence shall be deemed a non-curable
default by Tenant pursuant to this Lease (that is, a default which has already
extended beyond the applicable grace period, if any, following notice from
Landlord), giving Landlord the right, at its option, to cancel and terminate
this Lease or to exercise any and all other remedies available to Landlord
hereunder or as shall exist at law or in equity.
36. LEASE CERTIFICATION BY TENANT. Tenant shall, without charge at any time and
from time to time, within twenty (20) days after request BY TENANT by Landlord,
certify by written instrument, duly executed, acknowledged and delivered, to any
mortgagee, assignee of any mortgage or purchaser, or any proposed mortgagee,
assignee of any mortgage or purchaser, or any other person, firm or corporation
specified by Landlord:
3
<PAGE>
(a) That this Lease is unmodified and in full force and effect (or, if there
has been modifications, that the same is in full force and effect as modified
and stating the modifications);
(b) Whether or not there are then existing any set-offs or defenses against
the enforcement of any of the agreements, terms, covenants or conditions hereof
upon the part of Tenant to be performed or complied with (and, if so, specifying
the same); and
(c) The dates, if any, to which the rental and other charges hereunder have
been paid in advance and/or to which Landlord may have consented, released or
relieved Tenant from Tenant's obligations fully to perform all of the terms,
covenants and conditions of the Lease on Tenant's part to be performed.
37. HOLDOVER. If the Tenant remains in possession of the demised premises,
or any part thereof, after the termination of the term by lapse of time or
otherwise, such holding over shall, at election of the Landlord, constitute an
extension of this Lease on a month-to-month basis at double the monthly rental
set forth herein. The provisions of this paragraph do not exclude the Landlord's
right of re-entry or any other right hereunder.
38. NONPAYMENT OF ADDITIONAL RENT. All costs, charges adjustments and
expenses which Tenant assumes or agrees to pay pursuant to this Lease shall at
Landlord's election be treated as additional rent and, in the event of
nonpayment, Landlord shall have the rights and remedies herein provided for in
the case of nonpayment of rent or breach of condition. If Tenant shall default
in making any payment required to be made by Tenant (other than the payment of
rent required pursuant to this Lease) or shall default in performing any term,
covenant or condition of this Lease on the part of Tenant to be performed
hereunder, Landlord, at Landlord's option, may (but shall not be obligated to)
immediately or at any time thereafter on ten (10) days notice make such payment
or, on behalf of Tenant, cause the same to be performed for the account of
Tenant and expend such sum as may be necessary to perform and fulfill such term,
covenant or condition, and any and all sums so expended by Landlord, with
interest thereon at the highest legal rate per annum from the date of such
expenditure, shall be and be deemed to be additional rent, in addition to the
fixed rent, and shall be repaid to Tenant to Landlord on demand, but no such
payment or expenditure by Landlord shall be deemed a waiver of Tenant's default
nor shall it affect any other remedy of Landlord by reason of such default.
Tenant's obligation to pay additional rent shall survive any termination of this
Lease. Tenant acknowledges and agrees that its obligation to pay additional rent
shall include
4
<PAGE>
interest at the rate of the lesser of twenty (20%) per annum or the highest rate
permitted by law on all retroactive charges owed by Tenant from the respective
retroactive date that each item of additional rent shall first become due and
payable.
In addition thereto, in the event Landlord is required to institute suit
against Tenant by reason of Tenant's default or to recover possession of
premises, then Tenant shall pay Landlord's reasonable attorney's fees, expenses
and costs.
39. MECHANIC'S LIEN. If, because of any act or omission of Tenant or anyone
claiming through or under tenant, any mechanics' or other lien or order for the
payment of money shall be filed against the demised premises or the building, or
against Landlord (whether or not such lien or order is valid or enforceable as
such) Tenant shall, at Tenant's own cost and expense, cause the same to be
canceled and discharged of record within fifteen (15) days after the date of
filing thereof, and shall also indemnify and save harmless Landlord from and
against any and all costs, expenses, claims, losses or damages, including
reasonable counsel fees, resulting therefrom or by reason thereof.
40. LANDLORD'S RIGHTS. Without abatement or diminution in rent, Landlord
reserves and shall have the following additional rights:
(a) To enter the demised premises at all reasonable times (1) for the making
of inspections, decorations, alterations, improvements and repairs, as Landlord
may deem necessary or desirable, (2) to exhibit the premises to prospective
purchasers or leasees of the building at any time and to others during the last
nine (9) months of the term of this Lease, (3) for any purpose whatsoever
relating thereto or to the safety, protection or preservation of the demised
premises or of the building or of Landlord's interest, and (4) to take material
into and upon said premises in connection therewith.
(b) At any time or times, Landlord, either voluntarily or pursuant to
governmental requirement, may, at Landlord's own expense, make repairs,
alterations or improvements in or to the building or any part thereof and during
alterations, may close entrance, doors, windows, corridors, elevators or other
facilities, provided that such acts shall not unreasonably interfere with
Tenant's use and occupancy of the premises as a whole.
(c) To erect, use and maintain pipes and conduits in and through the demised
premises.
(d) To charge to Tenant any expense including overtime cost incurred by the
Landlord in the event that repairs, alterations,
5
<PAGE>
decorating or other work in the premises are made or done after ordinary
business hours at Tenant's request.
(e) If during the last six (6) months of the term or of a renewal term Tenant
shall have removed all or substantially all of Tenant's property therefrom,
Landlord may immediately enter and alter, renovate and redecorate the premises
without reduction or abatement of rent or incurring any liability to Tenant for
compensation.
(f) Landlord may exercise any or all of the foregoing rights hereby reserved to
Landlord without being deemed guilty of an eviction, actual or constructive, or
disturbance or interruption of Tenant's use or possession and without being
liable in any manner toward Tenant and without limitation or abatement of rent
or other compensation, and such acts shall have no effect on this Lease.
41. LANDLORD'S LIABILITY. (a) As used in this Lease, the term "Landlord"
shall mean only the owner or the mortgagee in possession for the time being of
the building in which the demised premises is located or the holder of a Lease
on both said building and the land thereunder so that in the event of any sale
of said building or any assignment of this Lease or any underlying lease or a
demise of both said building and land, Landlord shall be and hereby is entirely
released and discharged from any and all further liability and obligations of
Landlord hereunder, except any that may have theretofore accrued.
(b) Notwithstanding anything to the contrary provided in this lease, it is
specifically understood and agreed, such agreement being a primary consideration
of this Lease by Landlord, that there shall be absolutely no personal liability
on the part of Landlord, its successors, assigns or any mortgagee in possession
(for the purpose of this paragraph collectively referred to as "Landlord"), with
respect to any of the terms, covenants and conditions of this Lease, and that
Tenant shall look solely to the equity of Landlord in the demised premises for
the satisfaction of each and every remedy of Tenant in the event of any breach
by Landlord of any of the terms, covenants and conditions of this Lease to be
performed by Landlord, such exculpation of liability to be absolute and without
any exceptions whatsoever.
(c) If Landlord is comprised of multiple persons or entities, the liability of
Landlord hereunder shall be joint and not several, and shall be limited to
Landlord's interest in the premises leased hereunder. In no event shall
Landlord have any personal liability of any nature whatsoever under this Lease
beyond the value of such premises.
<PAGE>
42. THIRD PARTIES. At the option of the Landlord or any successor landlord or
the holder of any mortgage affecting the premises Tenant agrees that neither the
cancellation nor termination of any ground or underlying lease to which this
Lease is subject and subordinate, nor any foreclosure of a mortgage affecting
the premises, nor the institution of any suit, action, summary or other
proceeding against the Landlord herein or any successor landlord, or any
foreclosure proceeding brought by the holder of any such mortgage to recover
possession of such property, shall by operation of law or otherwise result in
cancellation or termination of this Lease or the obligations of the Tenant
thereunder and upon the request of any such landlord, mortgage, Tenant covenants
and agrees to execute an instrument in writing satisfactory to such successor
landlord or to any successor to the Landlord's interest in the premises, or to
the holder of such mortgage or to the purchaser of the mortgaged premises in
foreclosure whereby Tenant attorns to such successor in interest.
In the event of any act or omission by the Landlord which would give the
Tenant the right to terminate this Lease or to claim a partial or total
eviction, pursuant to the terms of this lease, if any, the Tenant will not
exercise any such right until:
(i) it has given written notice of such act or omission to the
holder of any mortgage and to the landlord of any ground or underlying lease,
who names and addresses shall previously have been furnished to Tenant, by
delivering such notice of such act or omission addressed to such holders at the
last addresses so furnished, and
(ii) a reasonable period for remedying such act or omission shall
have elapsed following such giving of notice during which such parties, or any
of them, with reasonable diligence, following the giving of such notice, has not
commenced and continued to remedy such act or omission or to cause the same to
be remedied.
If, in connection with obtaining financing for the land and/or building, or
of any ground or underlying lease, a banking, insurance or other recognized
institutional lender shall request reasonable modifications in this Lease as a
condition to such financing, Tenant will not unreasonably withhold, delay or
defer its consent thereto, provided that such modifications do not increase the
obligations of Tenant hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's use and enjoyment of the premises.
43. LANDLORD'S CONSENT. With respect to any provision of this Lease which
provides, in effect, that Landlord shall not unreasonably withhold or
unreasonably delay any consent or any
<PAGE>
approval, Tenant, in no event, shall be entitled to make, nor shall Tenant make,
any claim for, and Tenant hereby waives any claim for money damages nor shall
Tenant claim any money damages by way of setoff, counterclaim or defense, based
upon any claim or assertion by Tenant that Landlord has unreasonably withheld or
unreasonably delayed any consent or approval; but Tenant's sole remedy shall be
an action or proceeding to enforce any such provision, or for specific
performance, injunction or declaratory judgement.
In all provisions in this lease where Landlord's consent is required,
such consent shall not be unreasonably withheld.
44. NOTICE TO LANDLORD. Landlord shall in no event be charged with default in
the performance of its obligations hereunder unless and until Landlord shall
have failed to perform any obligations within thirty (30) days (or such
additional time as is reasonably required to correct any such default or such
shorter time as may be required in the case of emergencies) after written notice
by Tenant to Landlord properly specifying wherein Landlord has failed to perform
any such obligations. Notwithstanding anything in the Lease herein to the
contrary, Landlord shall in no event be charged with or liable for any
consequential damages suffered by Tenant as a result of Landlord's failure to
perform any of its obligations under this Lease, unless such failure shall be
willful.
45. ATTORNEY'S FEES. In the event that Landlord shall bring any proceeding
against the Tenant for recovery of damages, or for possession of the demised
premises by reason of non-payment or non-performance of any of the acts,
promises, conditions or covenants herein contained, or for breach of this Lease,
and Landlord shall incur any obligation for the payment of money in connection
therewith including, but not limited to, reasonable legal fees, in instituting
or prosecuting any action or proceeding, such charges including legal fees,
shall be due and payable upon the incurment of same. In the event that Landlord
shall institute an action for summary proceedings for non-payment of rent or
additional rent, a reasonable legal fee therefor shall be included in the
petition and shall be deemed additional rent.
46. INDEPENDENT PARAGRAPHS. If any term or provision of this Lease shall, to
any extent, be invalid or unenforceable, the remainder of this Lease shall not
be affected thereby and the balance of the terms and provisions of this Lease
shall be valid and enforceable to the fullest extent either hereunder or as
permitted by law.
47. LATE CHARGES. If the payment of fixed minimum and/or additional rent
payable pursuant to the terms of this Lease
<PAGE>
shall not be made within ten (10) days after the date on which same is due and
payable, a late charge of one and one-half (1-1/2%)percent per month of the
amount so overdue shall be payable as damages for Tenant's failure to make
prompt payment. Late charges that accrue during any month shall be payable, as
additional rent, on the first day of the following month. No failure by Landlord
to insist upon the strict performance by Tenant of Tenant's obligation to pay
late charges shall constitute a waiver by Landlord of its rights to enforce the
provisions of this paragraph in any instance thereafter occurring. Acceptance of
late charges by Landlord shall not be deemed to extend the time of payment of
fixed minimum rent or additional rent pursuant to this Lease, and the provisions
of this paragraph shall be in addition to all other remedies available to
Landlord pursuant to this Lease in the event of the failure of Tenant to pay the
fixed minimum rent and additional rent when due.
48. SECURITY (a) Security shall be deposited in a non-interest bearing
account. In the event that Landlord lawfully applies any portion of the
security during the term, Tenant shall, within five (5) business days after
notice, replenish the security account to its original sum. Failure to so
replenish the security account shall be deemed a material breach of this Lease.
(b) Tenant hereby agrees not to look to the mortgagee, mortgagee in
possession, or successor in title to the property, for accountability for any
security deposit required by the Landlord hereunder, unless said sums have
actually been received by said mortgagee as security for the Tenant's
performance of this Lease.
49. OPTION TO EXTEND LEASE (a) Provided this lease is in full force and
effect, Tenant shall have the right to extend the term of this Lease for the
Demised Premises at the end of the initial 5 year term, for a renewal term of
five years, provided Tenant shall notify Landlord in writing not less than six
(6) months prior to the expiration of the initial term that Tenant desires such
extension and provided further that such extension shall be upon the same terms,
provisions, covenants, and conditions as are contained in this Lease, except as
to the duration of the term hereof, the rental rate and such provisions in this
Lease which by its terms are only applicable to the initial term.
(b) The rent during the renewal term shall be as follows:
Annual Rent Monthly Rent Year
$133,053.25 $11,088.00 1993
$136,379.58 $11.365.00 1994
$139,379.07 $11,649.00 1995
$143,283.78 $11,940.00 1996
$146,866.28 $12,239.00 1997
<PAGE>
(c) Tenant agrees to accept the Demised Premises in the condition then
existing as of the commencement of the renewal term of this lease, and Landlord
shall not be responsible for performing any work or furnishing any materials to
the Demises Premises. The failure or omission by Tenant to give notice required
under the provisions of Section (a) of this paragraph exercising Tenant's option
to renew within the time and manner provided shall be deemed, without further
notice and without further agreement between the parties, that Tenant elected
not to exercise said option.
/s/ Patricia M. Dunnell
--------------------------------------
Patricia M. Dunnell
JAMES RIVER--NORWALK, INC.
By: [SIGNATURE APPEARS HERE] 10/13/88
----------------------------------
10
<PAGE>
================================================================================
LEASE OF WAREHOUSE PREMISES
ETZIONI PARTNERS
----------------------------
LANDLORD
AND
JAMES RIVER CORPORATION
----------------------------
TENANT
PREMISES:
64 Brunswick Avenue
Edison, New Jersey
================================================================================
PREPARED BY:
VERDE, STEINBERG & PONTELL
2200 Fletcher Avenue
Fort Lee, New Jersey 07024
<PAGE>
INDEX
<TABLE>
<S> <C>
ARTICLE 1 - DEFINITIONS.......................................... 2
ARTICLE 2 - DEMISE AND TERM...................................... 6
ARTICLE 3 - RENT................................................. 6
ARTICLE 4 - USE OF DEMISED PREMISES.............................. 7
ARTICLE 5 - PREPARATION OF DEMISED PREMISES...................... 8
ARTICLE 6 - TAX AND OPERATING EXPENSE PAYMENTS................... 9
ARTICLE 7 - INTENTIONALLY OMITTED............................... 10
ARTICLE 8 - INTENTIONALLY OMITTED............................... 10
ARTICLE 9 - SUBORDINATION....................................... 10
ARTICLE 10 - QUIET ENJOYMENT.................................... 12
ARTICLE 11 - ASSIGNMENT, SUBLETTING AND MORTGAGING.............. 12
ARTICLE 12 - COMPLIANCE WITH LAWS............................... 15
ARTICLE 13 - INSURANCE AND INDEMNITY............................ 16
ARTICLE 14 - RULES AND REGULATIONS.............................. 18
ARTICLE 15 - ALTERATIONS AND SIGNS.............................. 18
ARTICLE 16 - LANDLORD'S AND TENANT'S PROPERTY................... 20
ARTICLE 17 - REPAIRS AND MAINTENANCE............................ 21
ARTICLE 18 - ELECTRIC ENERGY; HVAC.............................. 23
ARTICLE 19 - ACCESS, CHANGES AND NAME........................... 23
ARTICLE 20 - MECHANICS' LIENS AND OTHER LIENS................... 24
ARTICLE 21 - NON-LIABILITY...................................... 24
ARTICLE 22 - DAMAGE OR DESTRUCTION.............................. 25
ARTICLE 23 - EMINENT DOMAIN..................................... 27
ARTICLE 24 - SURRENDER.......................................... 29
ARTICLE 25 - CONDITIONS OF LIMITATION........................... 30
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE 26 - RE-ENTRY BY LANDLORD................................. 31
ARTICLE 27 - DAMAGES.............................................. 32
ARTICLE 28 - AFFIRMATIVE WAIVERS.................................. 34
ARTICLE 29 - NO WAIVERS........................................... 35
ARTICLE 30 - CURING TENANT'S DEFAULTS............................. 35
ARTICLE 31 - BROKER............................................... 36
ARTICLE 32 - NOTICES.............................................. 36
ARTICLE 33 - ESTOPPEL CERTIFICATES................................ 37
ARTICLE 34 - ARBITRATION.......................................... 37
ARTICLE 35 - MEMORANDUM OF LEASE.................................. 38
ARTICLE 36 - ENVIRONMENTAL COMPLIANCE............................. 38
ARTICLE 37 - MISCELLANEOUS........................................ 39
ARTICLE 38 - EXTENSION OF TERM.................................... 42
EXHIBITS
EXHIBIT A - DESCRIPTION OF LAND
EXHIBIT B - SITE PLAN
EXHIBIT C - LANDLORD'S WORK
EXHIBIT D - RULES AND REGULATIONS
EXHIBIT E - LANDLORD STANDARD BUILDING CRITERIA
</TABLE>
<PAGE>
WAREHOUSE LEASE
LEASE, dated February 13, 1992, between ETZIONI PARTNERS, having an
office at C/O MGS DEVELOPMENT, 52 Forest Avenue, Paramus, New Jersey 07653-1549
("Landlord") and JAMES RIVER CORPORATION, a Virginia corporation, having an
address of P.O. Box 2218, Richmond, Virginia 23217. ("Tenant").
ARTICLE 1 - DEFINITIONS
1.01. As used in this Lease (including in all Exhibits and any Riders
attached hereto, all of which shall be deemed to be part of this Lease) the
following words and phrases shall have the meanings indicated:
A. Advance Rent: One (1) month Fixed Rent.
B. Additional Charges: All amounts that become payable by Tenant to
Landlord hereunder other than the Fixed Rent.
C. Architect: As determined by Landlord.
D. Broker: The Blau and Berg Company.
E. Building: The one (1) story warehouse building containing
approximately 94,400 square feet of Floor Space outlined in Exhibit A, attached
hereto and located on the Land in Edision, New Jersey and known as 64 Brunswick
Avenue.
F. Intentionally Omitted.
G. Intentionally Omitted.
H. Calendar Year: Any twelve month period commencing on a January 1.
I. Commencement Date: The earlier of (a) the date on which both: (i)
the Demised Premises shall be Ready for Occupancy, and (ii) actual possession of
the Demised Premises shall have been delivered to Tenant by notice to Tenant,
but in no event prior to May 1, 1992; or (b) the date Tenant, or anyone claiming
under or through Tenant, first occupies the Demised Premises or any part thereof
for any purpose. Tenant shall have access to the Demised Premises on and after
May 11, 1992 for the purpose of staging inventory. Upon the taking of possession
by Tenant all terms and conditions of the Lease shall take effect except for
Tenant's obligation to pay Fixed Rent which shall commence on June 1, 1992.
2
<PAGE>
J. Intentionally Omitted.
K. Demised Premises: The entire Land and Building as is outlined in
yellow on the site plan(s) attached hereto as Exhibit B. The Demised Premises
contains or will contain approximately 94,400 square feet of Floor Space.
L. Expiration Date: The date that is the day before the five (5)
year anniversary of the Commencement Date if the Commencement Date is the first
day of a month, or a five (5) year anniversary of the last day of the month in
which the Commencement Date occurs if the Commencement Date is not the first day
of a month. However, if the Term is extended by Tenant's effective exercise
of Tenant's right, if any, to extend the Term, the "Expiration Date" shall be
changed to the last day of the Latest Extended Period as to which Tenant shall
have effectively exercised its right to extend the Term. For the purposes of
this definition, the earlier termination of this Lease shall not affect the
"Expiration Date."
M. Fixed Rent: An amount at the annual rate of $2.75 multiplied by
the Floor Space of the Demised Premises for the first thirty (30) months of the
term and an amount at the annual rate of $2.90 multiplied by the Floor Space for
months 31 through 60 of the term. It is intended that the Fixed Rent shall be an
absolutely net return to Landlord throughout the Term, free of any expense,
charge or other deduction whatsoever with respect to the Demised Premises, the
Building, the Land and/or the ownership, leasing, operation, management,
maintenance, repair, rebuilding, use or occupation thereof, or any portion
thereof, with respect to any interest of Landlord therein.
N. Floor Space: As to the Demised Premises, the sum of the floor
area stated in square feet bounded by the exterior faces of the exterior walls.
Any reference to the Floor Space is intended to refer to the Floor Space of the
entire area in question irrespective of the Person(s) who may be the owner(s) of
all or any part thereof.
O. Guarantor: None.
P. Insurance Requirements: Rules, regulations, orders and other
requirements of the applicable board of underwriters and/or the applicable fire
insurance rating organization and/or any other similar body performing the same
or similar functions and having jurisdiction of cognizance over the Land and
Building, whether now or hereafter in force.
3
<PAGE>
Q. Land: The land described on Exhibit A, upon which the Building is
located.
R. Landlord's Work: The materials and work to be furnished ,
installed and performed by Landlord at its expense in accordance with the
provisions of Exhibit C, attached hereto and made a part hereof.
S. Legal Requirements: Laws and ordinances of all federal, state,
county, and municipal governments, and rules, regulations, orders and directives
of all departments, subdivisions, bureaus, agencies or offices thereof, and of
any other governmental, public or quasi-public authorities having jurisdiction
over the Land and Building, whether now or hereafter in force, including, but
not limited to, those pertaining to environmental matters.
T. Mortgage: A mortgage and/or a deed of trust.
U. Mortgagee: A holder of a mortgage or a beneficiary of a deed of
trust.
V. Intentionally Omitted.
W. Permitted Uses: Warehousing and distribution of styrofoam cups
and associated offices and no other use.
X. Person: A natural person or persons, a partnership, a
corporation, or any other form of business or legal association or entity.
Y. Ready for Occupancy: The condition of the Demised Premises when
for the first time the Landlord's Work shall have been substantially completed
and a temporary or permanent Certificate of Occupancy shall have been issued
permitting use of the Demised Premises for the Permitted Uses. The Landlord's
Work shall be deemed substantially completed notwithstanding the fact that minor
or insubstantial details of construction, mechanical adjustment or decoration
remain to be performed, the noncompletion of which does not materially interfere
with Tenant's use of the Demised Premises.
Z. Real Estate Taxes: The real estate taxes, assessments and special
assessments, sewer rents, water charges and all other similar charges and
impositions imposed upon the Building and Land by any federal, state, municipal
or other governments or governmental bodies or authorities, and any expenses
incurred by Landlord in contesting such taxes or assessments and/or the
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assessed value of the Building and Land, which expenses shall be allocated to
the period of time to which such expenses relate. If at any time during the Term
the methods of taxation prevailing on the date hereof shall be altered so that
in lieu of, or as an addition to or as a substitute for, the whole or any part
of such real estate taxes, assessments and special assessments now imposed on
real estate there shall be levied, assessed or imposed (a) a tax, assessment,
levy, imposition, license fee or charge wholly or partially as a capital levy or
otherwise on the rents received therefrom, or (b) any other such additional or
substitute tax, assessment, levy, imposition or charge, then all such taxes,
assessments, levies, impositions, fees or charges or the part thereof so
measured or based shall be deemed to be included within the term "Real Estate
Taxes" for the purposes hereof.
AA. Rent: The Fixed Rent and the Additional Charges.
BB. Rules and Regulations: The reasonable rules and regulations that
may be promulgated by Landlord from time to time, which may be reasonably
changed by Landlord from time to time. The Rules and Regulations now in effect
are attached hereto and made a part hereof as Exhibit D.
CC. Security Deposit: None
DD. Successor Landlord: As defined in Section 9.03.
EE. Superior Lease: Any lease to which this Lease is, at the time
referred to, subject and subordinate.
FF. Superior Lessor: The lessor of a Superior Lease or its successor
in interest, at the time referred to.
GG. Superior Mortgage: Any Mortgage to which this Lease is, at the
time referred to, subject and subordinate.
HH. Superior Mortgagee: The Mortgagee of a Superior Mortgage at the
time referred to.
II. Intentionally Omitted.
JJ. Tenant's Property: As defined in Section 16.02.
KK. Tenant's Work: The facilities, materials and work which may be
undertaken by or for the account of Tenant (other than the Landlord's Work) to
equip, decorate and furnish the Demised Premises for Tenant's occupancy.
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LL. Term: The period commencing on the Commencement Date and ending at
11:59 p.m. of the Expiration Date, but in any event the Term shall end on the
date when this Lease is earlier terminated.
MM. Unavoidable Delays: A delay arising from or as a result of a
strike, lockout, or labor difficulty, explosion, sabotage, accident, riot or
civil commotion, act of war, fire or other catastrophe, Legal Requirement, the
time period required to adjust an insurance claim, or an act of the other party
and any cause beyond the reasonable control of that party, provided that the
party asserting such Unavoidable Delay has exercised its best efforts to
minimize such delay.
ARTICLE 2 - DEMISE AND TERM
2.01. Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, the Demised Premises, for the Term. This Lease is subject to (a) any
and all existing encumbrances, conditions, rights, covenants, easements,
restrictions and rights of way, of record, and other matters of record
applicable zoning and building laws, regulations and codes, and such matters as
may be disclosed by an inspection or survey, and (b) easements now or hereafter
created by Landlord in, under, over, across and upon a strip of land twenty feet
(20') in width running along all lot lines of the Building for sewer, water,
electric, gas and other utility lines and services now or hereafter installed;
provided, however, Landlord represents, covenants and warrants to Tenant that
the Demised Premises may be used and occupied for the purposes set forth herein;
and that the foregoing shall in no manner materially interfere with Tenant's use
and quiet enjoyment of the Premises. Promptly following the Commencement Date,
the parties hereto shall enter into an agreement in form and substance
satisfactory to Landlord setting forth the Commencement Date and confirming the
Fixed Rent payable.
ARTICLE 3 - RENT
3.01. Tenant shall pay the Fixed Rent in equal monthly installments in
advance on the first day of each and every calendar month during the Term
(except that Tenant shall pay, upon the execution and delivery of this Lease by
Tenant, the Advance Rent, to be applied against the first installment or
installments of Fixed Rent becoming due under this Lease). If the Commencement
Date occurs on a day other than the first day of a calendar month, the Fixed
Rent for the partial calendar month at the commencement of the Term shall be
prorated.
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3.02. The Rent shall be paid in lawful money of the United States to
Landlord at its office, or such other place, or to Landlord's agent, as Landlord
shall designate by notice to Tenant. Tenant shall pay the Rent promptly when due
without notice or demand therefor and without any abatement, deduction or setoff
for any reason whatsoever, except as may be expressly provided in this Lease. If
Tenant makes any payment to Landlord by check, same shall be by check of Tenant
and Landlord shall not be required to accept the check of any other Person, and
any check received by Landlord shall be deemed received subject to collection.
3.03. No payment by Tenant or receipt or acceptance by Landlord of a lesser
amount than the correct Rent shall be deemed to be other than a payment on
account, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other remedy in this Lease or at law
provided.
3.04. If Tenant is in arrears in payment of Rent, Tenant waives Tenant's
right, if any, to designate the items to which any payments made by Tenant are
to be credited, and Landlord may apply any payments made by Tenant to such items
as Landlord sees fit, irrespective of and notwithstanding any designation or
request by Tenant as to the items to which any such payments shall be credited.
3.05. Any Payment due Landlord under this Lease which is not paid on or
before five (5) days after the same is due (a "Late Payment"), shall, from the
due date, until such payment is received by Landlord, bear interest at the prime
rate of Chemical Bank of New York (the "Late Payment Rate"). In addition, Tenant
shall pay to Landlord an amount equal to five (5%) percent of any such late
payment to cover Landlord's cost of collecting and handling such late payment.
Notwithstanding the foregoing, Tenant shall not be charged a late charge for its
first late payment during the Term.
ARTICLE 4 - USE OF DEMISED PREMISES
4.01. Tenant shall use and occupy the Demised Premises for the Permitted
Uses, and Tenant shall not use or permit or suffer the use of the Demised
Premises or any part thereof for any other purpose.
4.02. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business in the Demised Premises or any
part thereof, Tenant shall duly procure and thereafter maintain such license or
permit and submit the same to
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Landlord for inspection. Tenant shall at all times comply with the terms and
conditions of each such license or permit. Tenant shall not at any time use or
occupy, or suffer or permit anyone to use or occupy the Demised Premises, or do
or permit anything to be done in the Demised Premises, in any manner which (a)
violates the Certificate of Occupancy for the Demised Premises or for the
Building; (b) causes or is liable to cause injury to the Building or any
equipment, facilities or systems therein; (c) constitutes a violation of the
Legal Requirements or Insurance Requirements; (d) impairs or tends to impair
the character, reputation or appearance of the Building; (e) impairs or tends
to impair the proper and economic maintenance, operation and repair of the
Building and/or its equipment, facilities or systems; or (f) annoys or
inconveniences or tends to annoy or inconvenience other tenants or occupants of
the Building.
ARTICLE 5 - PREPARATION OF DEMISED PREMISES
5.01 The Demised Premises shall be completed and prepared for Tenant's
occupancy in the manner described in, and subject to the provisions of, Exhibit
C and Exhibit E. Tenant shall occupy the Demised Premises promptly after the
same are Ready for Occupancy and possession thereof is delivered to Tenant by
Landlord giving to Tenant a notice of such effect. Except as expressly provided
to the contrary in this Lease, the taking of possession by Tenant of the Demised
Premises shall be conclusive evidence as against Tenant the Demised Premises
and the Building were in good and satisfactory condition at the time such
possession was taken. Except as expressly provided to the contrary in this
Lease, Tenant is leasing the Demised Premises "as is" on the date hereof,
subject to reasonable wear and tear and the rights of the present occupant(s) of
the Demised Premises to remove its or their trade fixtures and other property
from the Demised Premises.
5.02 If the substantial completion of the Landlord's Work shall be delayed
due to (a) any act or omission of Tenant or any of its employees, agents or
contractors (including, without limitation, [i] any delays due to changes in or
additions to the Landlord's Work, or [ii] any delays by Tenant in the submission
of plans, drawings, specifications or other information or in approving any
working drawings or estimates or in giving any authorizations or approvals), or
(b) any additional time needed for the completion of the Landlord's Work by the
inclusion in the Landlord's Work of any long lead time items, then the Demised
Premises shall be deemed Ready for Occupancy on the date when they would have
been ready but for such delay(s). The Demised Premises shall be conclusively
presumed to be in satisfactory condition on the Commencement Date except for the
minor or insubstantial details
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of which Tenant gives Landlord notice within thirty (30) days after the
Commencement Date specifying such details with reasonable particularity.
5.03. If Landlord is unable to give possession of the Demised Premises on
the Commencement Date because of the holding-over or retention of possession by
any tenant, undertenant or occupant, Landlord shall not be subject to any
liability for failure to give possession, the validity of this Lease shall not
be impaired under such circumstances, and the Term shall not be extended, but
the Rent shall be abated if Tenant is not responsible for the inability to
obtain possession.
5.04. Landlord reserves the right, at any time and from time to time, to
increase, reduce or change the number, type, size, location, elevation, nature
and use of any of the Common Areas and the Building, including, without
limitation, the right to move and/or remove same, provided same shall not
unreasonably block or interfere with Tenant's means of ingress or egress to and
from the Demised Premises.
ARTICLE 6 - TAX AND OPERATING EXPENSE PAYMENTS
6.01. Tenant shall pay the Real Estate Taxes in respect of the Land and
Building for the period in question prior to the due date of such Real Estate
Taxes, and shall send Landlord a copy of the paid receipt promptly upon Tenant's
receipt thereof. Any Real Estate Taxes for a real estate fiscal tax year, a part
of which is included within the term and a part of which is not, shall be
apportioned on the basis of the number of days in the real estate fiscal tax
year included in the Term, and the real estate fiscal tax year for any
improvement assessment will be deemed to be the one-year period commencing on
the date when such assessment is due, except that if any improvement assessment
is payable in installments, the real estate fiscal tax year for each installment
will be deemed to be the one-year period commencing on the date when such
installment is due. Upon request by a Superior Mortgagee, or upon request by
Landlord (which request by Landlord may be made only in the event of Tenant's
default under the terms of this Lease), Tenant shall pay to Landlord or to the
Superior Mortgagee, monthly, one-twelfth (1/12) of the amount which will be
sufficient to pay such Real Estate Taxes, as determined by Landlord.
6.02. Each such statement or invoice given by Landlord pursuant to Section
6.01 shall be conclusive and binding upon Tenant unless within thirty (30) days
after the receipt of such statement Tenant shall notify Landlord that it
disputes the
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correctness of the statement, specifying the particular respects in which the
statement is claimed to be incorrect. If such dispute is not settled by
agreement, either party may submit the dispute to arbitration as provided in
Article 34. Pending the determination of such dispute by agreement or
arbitration as aforesaid, Tenant shall, within ten (10) days after receipt of
such statement, pay the Additional Charges in accordance with Landlord's
statement, without prejudice to Tenant's position. If the dispute shall be
determined in Tenant's favor, Landlord shall forthwith pay to Tenant the amount
of Tenant's overpayment resulting from compliance with Landlord's statement.
6.03. Tenant shall be responsible for and shall promptly pay for all
expenses of operating the Building.
ARTICLE 7 - INTENTIONALLY OMITTED
ARTICLE 8 - INTENTIONALLY OMITTED
ARTICLE 9 - SUBORDINATION
9.01. This Lease, and all rights of Tenant hereunder, are and shall be
subject and subordinate to all ground leases and underlying leases of the Land
and/or the Building now or hereafter existing and to all Mortgages which may now
or hereafter affect the Land and/or building and/or any of such leases, whether
or not such Mortgages or leases shall also cover other lands and/or buildings,
to each and every advance made or hereafter to be made under such Mortgages, and
to all renewals, modifications, replacements and extensions of such leases and
such Mortgages and spreaders and consolidations of such Mortgages. The
provisions of this Section 9.01 shall be self-operative and no further
instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, the lessor under any such lease or the Mortgagee of
any such Mortgage or any of their respective successors in interest may
reasonably request to evidence such subordination; and if Tenant fails to
execute, acknowledge or deliver any such instruments within ten (10) days after
request therefor, Tenant hereby irrevocably constitutes and appoints Landlord as
Tenant's attorney-in-fact, coupled with an interest, to execute and deliver any
such instruments for and on behalf of Tenant.
9.02. If any act or omission of Landlord would give Tenant the right,
immediately or after lapse of a period of time, to cancel or terminate this
Lease, or to claim a partial or total eviction, Tenant shall not exercise such
right (a) until it has given written
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notice of such act or omission to Landlord and each Superior Mortgagee and each
Superior Lessor whose name and address shall previously have been furnished to
Tenant, and (b) until a reasonable period for remedying such act or omission
shall have elapsed following the giving of such notice and following the time
when such Superior Mortgagee of Superior Lessor shall have become entitled under
such Superior Mortgage or Superior Lease, as the case may be, to remedy the same
(which reasonable period shall in no event be less than the period to which
Landlord would be entitled under this Lease or otherwise, after similar notice,
to effect such remedy), provided such Superior Mortgagee or Superior Lessor
shall with due diligence give Tenant notice of intention to, and commence
and continue to, remedy such act or omission.
9.03. If any Superior Lessor or Superior Mortgagee shall succeed to the
rights of Landlord under this Lease, whether through possession or foreclosure
action or delivery of a new lease or deed, then at the request of such party so
succeeding to Landlord's rights ("Successor Landlord") and upon such Successor
Landlord's written agreement to accept Tenant's attornment, Tenant shall attorn
to and recognize such Successor Landlord as Tenant's landlord under this Lease
and shall promptly execute and deliver any instrument that such Successor
Landlord may reasonably request to evidence such attornment. Upon such
attornment this Lease shall continue in full force and effect as a direct lease
between the Successor Landlord and Tenant upon all of the terms, conditions and
covenants as are set forth in this Lease except that the Successor Landlord
shall not (a) be liable for any previous act or omission of Landlord under this
Lease; (b) be subject to any offset, not expressly provided for in this Lease,
which therefore shall have accrued to Tenant against Landlord; or (c) be bound
by any previous modification of this Lease or by any previous prepayment of more
than one month's Fixed Rent or Additional Charges, unless such modification or
prepayment shall have been expressly approved in writing by the Superior Lessor
of the Superior Lease or the Mortgagee of the Superior Mortgage through or by
reason of which the Successor Landlord shall have succeeded to the rights of
Landlord under this Lease.
9.04. If any then present or prospective Superior Mortgagee shall
require any modification(s) of this Lease, Tenant shall promptly execute and
deliver to Landlord such instruments effecting such modification(s) as Landlord
shall request, provided that such modification(s) do not adversely affect in any
material respect any of Tenant's rights under this Lease.
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ARTICLE 10 - QUIET ENJOYMENT
So long as Tenant pays all of the Rent and performs all of Tenant's other
obligations hereunder, Tenant shall peaceably and quietly have, hold and enjoy
the Demised Premises without hindrance, ejection or molestation by Landlord or
any person lawfully claiming through or under Landlord, subject, nevertheless,
to the provisions of this Lease and to Superior Leases and Superior Mortgages.
ARTICLE 11 - ASSIGNMENT, SUBLETTING AND MORTGAGING
11.01. Tenant shall not, whether voluntarily, involuntarily, or by
operation of law or otherwise, (a) assign or otherwise transfer this Lease, or
offer or advertise to do so, (b) sublet the Demised Premises or any part
thereof, or offer or advertise to do so, or allow the same to be used, occupied
or utilized by anyone other than Tenant, or (c) mortgage, pledge, encumber or
otherwise hypothecate this Lease in any manner whatsoever, without in each
instance obtaining the prior written consent of Landlord, which consent shall
not be unreasonably withheld. Consent by Landlord shall not be required if a
corporate tenant assigns this Lease to its parent corporation or to its wholly
owned subsidiary, subject, however, to the further provisions of this Article II
and prior notice to Landlord.
11.02. If at any time (a) the original Tenant named herein, (b) the then
Tenant, (c) any Guarantor, or (d) any Person owning a majority of the voting
stock of, or directly or indirectly controlling the then Tenant shall be a
corporation or partnership, any transfer of voting stock or partnership interest
resulting in the person(s) who shall have owned a majority of such corporation's
shares of voting stock or the general partners' interest in such partnership, as
the case may be, immediately before such transfer, ceasing to own a majority of
such shares of voting stock or general partner's interest, as the case may be,
except as the result of transfers by inheritance, shall be deemed to be an
assignment of this Lease as to which Landlord's consent shall have been
required, and in any such event Tenant shall notify Landlord. The provisions of
this Section 11.02 shall not be applicable to any corporation all the
outstanding voting stock of which is listed on a national securities exchange
(as defined in the Securities Exchange Act of 1934, as amended) or is traded in
the over-the-counter market with quotations reported by the National Association
of Securities Dealers through its automated system for reporting quotations and
shall not apply to transactions with a corporation into or which the then Tenant
is merged or consolidated or to which substantially
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all of the then Tenant's assets are transferred or to any corporation which
controls or is controlled by the then Tenant or is under common control with the
then Tenant, provided that in any of such events (i) the successor to Tenant has
a net worth computed in accordance with generally accepted accounting principles
at least equal to the greater of (1) the net worth of Tenant immediately prior
to such merger, consolidation or transfer, or (2) the net worth of the original
Tenant on the date of this Lease, and (ii) proof satisfactory to Landlord of
such net worth shall have been delivered to Landlord at least ten (10) days
prior to the effective date of any such transaction. For the purposes of this
Section, the words "voting stock" shall refer to shares of stock regularly
entitled to vote for the election of directors of the corporation. Landlord
shall have the right at any time and from time to time during the Term to
inspect the stock record books of the corporation to which the provisions of
this Section 11.02 apply, and Tenant will produce the same on request of
Landlord.
11.03 If this Lease is assigned, whether or not in violation of this
Lease, Landlord may collect rent from the assignee. If the Demised Premises or
any part thereof are sublet or used or occupied by anybody other then Tenant,
whether or not in violation of this Lease, Landlord may, after default by
Tenant, and expiration of Tenant's time to cure such default, collect rent from
the subtenant or occupant. In either event, Landlord may apply the net amount
collected to the Rent, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of any of any of the provisions of Section
11.01 or Section 11.02, or the acceptance of the assignee, subtenant or occupant
as tenant, or a release of Tenant from the performance by Tenant of Tenant's
obligations under this Lease. The consent by Landlord to any assignment,
mortgaging, subletting or use or occupancy by others shall not in any way be
considered to relieve Tenant from obtaining the express written consent of
Landlord to any other or further assignment, mortgaging or subletting or use or
occupancy by others not expressly permitted by this Article 11. References in
this Lease to use or occupancy by others (that is, anyone other than Tenant)
shall not be construed as limited to subtenants and those claiming under or
through subtenants but shall be construed as including also licensees and others
claiming under or through Tenant, immediately or remotely.
11.04. Any permitted assignment or transfer, whether made with Landlord's
consent pursuant to Section 11.01 or without Landlord's consent if permitted by
Section 11.02, shall be made only if, and shall not be effective until, the
assignee shall execute, acknowledge and deliver to Landlord an agreement in
form and substance satisfactory to Landlord whereby the assignee shall
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assume Tenant's obligations under this Lease and whereby the assignee shall
agree that all of the provisions in this Article 11 shall, notwithstanding such
assignment or transfer, continue to be binding upon it in respect to all future
assignments and transfers. Notwithstanding any assignment or transfer, whether
or not in violation of the provisions of this Lease, and notwithstanding the
acceptance of Rent by Landlord from an assignee, transferee, or any other party,
the original Tenant and any other person(s) who at any time was or were Tenant
shall remain fully liable for the payment of the Rent and for Tenant's other
obligations under this Lease.
11.05. The liability of the original Tenant and any other Person who was
responsible for Tenant's obligations under this Lease shall not be discharged,
by any agreement made by Landlord extending the time of performance of, or any
waiver or failure of Landlord to enforce, any of this Lease.
11.06. The listing of any name other than that of Tenant, whether on the
doors of the Demised Premises or the Building directory, or otherwise, shall not
operate to vest any right or interest in this Lease or in the Demised Premises,
nor shall it be deemed to be the consent of Landlord to any assignment or
transfer of this Lease or to any sublease of the Demised Premises or to the use
or occupancy thereof by others.
11.07. Without limiting any of the provisions of Article 25, if pursuant
to the Federal Bankruptcy Code (or any similar law hereafter enacted having the
same general purpose), Tenant is permitted to assign this Lease notwithstanding
the restrictions contained in this Lease, adequate assurance of future
performance by an assignee expressly permitted under such Code shall be deemed
to mean the deposit of cash security in an amount equal to the sum of one (1)
year's Fixed Rent plus an amount equal to the Additional Charges for the
Calendar Year preceding the year in which such assignment is intended to become
effective, which deposit shall be held by Landlord for the balance of the Term,
without interest, as security for the full performance of all of Tenant's
obligations under this Lease, to be held and applied in the manner specified for
security in Section 8.01.
11.08. In the event of any permitted assignment or sublet, Tenant and
any assignee shall promptly pay to Landlord one-half (1/2) of any net
consideration received for any assignment or one-half (1/2) of the net rent
(Fixed Rent and Additional Charges) as and when received, in excess of the Fixed
Rent and Additional Charges required to be paid by Tenant for the period
affected by said assignment or sublease for the area sublet, computed on the
basis of an average square foot rent for the gross square footage
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Tenant has leased. As used herein net consideration and/or net rent shall mean
gross rent (Fixed Rent and Additional Charges) less any reasonable brokerage or
tenant work paid by Tenant or in connection with the assignment or sublet, said
Tenant or brokerage work to be amortized over the term of the assignment or
sublet.
ARTICLE 12 - COMPLIANCE WITH LAWS
12.01. Tenant shall comply with all Legal Requirements which shall, in
respect of the Demised Premises or the use and occupation thereof, or in respect
of the abatement of any nuisance in, on or about the Demised Premises, impose
any violation, order or duty on Landlord or Tenant; and Tenant shall pay all the
cost, expenses, fines, penalties and damages which may be imposed upon Landlord
or any Superior Lessor by reason of or arising out of Tenant's failure to fully
and promptly comply with and observe the provisions of this Section 12.01.
However, Tenant need not comply with any such law or requirement of any public
authority so long as Tenant shall be contesting the validity thereof, or the
applicability thereof to the Demised Premises, in accordance with Section 12.02.
12.02. Tenant may contest, by appropriate proceedings prosecuted
diligently and in good faith, the validity, or applicability to the Demised
Premises, of any Legal Requirement, provided that (a) Landlord shall not be
subject to criminal penalty or to prosecution for a crime, and neither the
Demised Premises nor any part thereof shall be subject to being condemned or
vacated, by reason of non-compliance or otherwise by reason of such contest; (b)
before the commencement of such contest, Tenant shall furnish to Landlord either
(i) the bond of a surety company satisfactory to Landlord, which bond shall be,
as to its provisions and form, satisfactory to Landlord, and shall be in an
amount at least equal to 125% of the cost of such compliance (as estimated by a
reputable contractor designated by Landlord) and shall indemnify Landlord
against the cost thereof and against all liability for damages, interest,
penalties and expenses (including reasonable attorneys' fees and expenses),
resulting from or incurred in connection with such contest or non-compliance, or
(ii) other security in place of such bond satisfactory to Landlord; (c) such
non-compliance or contest shall not constitute or result in any violation of any
Superior Lease or Superior Mortgage, or if any such Superior Lease and/or
Superior Mortgage shall permit such non-compliance or contest on condition of
the taking of action or furnishing of security by Landlord, such action shall be
taken and Tenant shall keep Landlord advised as to the status of such
proceedings. Without limiting the application of the above, Landlord shall be
deemed subject to prosecution for a crime if Landlord, or its managing
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agent, or any officer, director, partner, shareholder or employee of Landlord or
its managing agent, as an individual, is charged with a crime of any kind or
degree whatsoever, whether by service of a summons or otherwise, unless such
charge is withdrawn before Landlord or its managing agent, or such officer,
director, partner, shareholder or employee of Landlord or its managing agent (as
the case may be) is required to plead or answer thereto.
ARTICLE 13 - INSURANCE AND INDEMNITY
13.01. Tenant shall maintain or cause to be maintained All Risk
insurance in respect of the Land and Building and other improvements on the Land
normally covered by such insurance for the benefit of Landlord, any Superior
Lessors, any Superior Mortgagees and any other parties Landlord may at any time
and from time to time designate, as their interests may appear. The All Risk
insurance will be in the amounts required by any Superior Lessor or any Superior
Mortgagee but not less than the amount sufficient to avoid the effect of the
co-insurance provisions of the applicable policy or policies. Landlord reserves
the right to require Tenant to increase the amount of casualty insurance
required to be maintained hereunder. Landlord may also maintain any other forms
and types of Insurance which Landlord shall deem reasonable in respect to the
Building and Land.
13.02 Tenant shall also maintain the following insurance: (a)
comprehensive general public liability insurance in respect of the Demised
Premises and the conduct and operation of business therein, with Landlord as an
additional named insured, and at Landlord's request with any Superior Lessors as
additional named insured(s), with limits of not less than $3,000,000 for bodily
injury or death to any one person and $5,000,000 for bodily injury or death to
any number of persons in any one occurrence, and $1,000,000 for property damage,
including water damage and sprinkler leakage legal liability, (b) All Risk
insurance in respect of Tenant's stock in trade, fixtures, furniture,
furnishings, removable floor coverings, equipment, signs and all other property
of Tenant in the Demised Premises in any amounts required by any Superior Lessor
or any Superior Mortgagee but not less than 80% of the full insurable value of
the property covered and not less than the amount sufficient to avoid the effect
of the co-insurance provisions of the applicable policy or policies, (c) rental
income insurance for the benefit of Landlord, insuring the Landlord against the
loss of Fixed Rent and Additional Charges, as in the Lease provided from the
perils of fire and extended coverage for a period of not less than one (1) year,
and (d) any other insurance required for compliance with the Insurance
Requirements. Landlord may at any time and from time to time require that the
limits for the
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comprehensive general public liability insurance to be maintained by Tenant be
increased to the limits that new Tenants in the Building are required by
Landlord to maintain. Tenant shall deliver to Landlord and any additional named
insured(s) certificates for such fully paid-for policies at least 10 days
before the Commencement Date. Tenant shall procure and pay for renewals of such
insurance from time to time before the expiration thereof, and Tenant shall
deliver to Landlord and any additional insured(s) certificates therefor at least
thirty (30) days before the expiration of any existing policy. All such policies
shall be issued by companies of recognized responsibility licensed to do
business in New Jersey, and all such policies shall contain a provision whereby
the same cannot be cancelled unless Landlord and any additional insured(s) are
given at least twenty (20) days' prior written notice of such cancellation.
13.03. Tenant shall not do, permit or suffer to be done any act, matter,
thing or failure to act in respect of the Demised Premises or use or occupy the
Demised Premises or conduct or operate Tenant's business in any manner
objectionable to any insurance company or companies whereby the fire insurance
or any other insurance then in effect in respect to the Land and Building or any
part thereof shall become void or suspended or whereby any premiums in respect
of insurance maintained by Landlord shall be higher than those which would
normally have been in effect for the occupancy contemplated under the Permitted
Uses. In case of a breach of the provisions of this Section 13.03, in addition
to all other rights and remedies of Landlord hereunder, Tenant shall (a)
indemnify Landlord and the Superior Lessors and hold Landlord and the Superior
Lessors harmless from and against any loss which would have been covered by
insurance which shall have become void or suspended because of such breach by
Tenant and (b) pay to Landlord any and all increases of premiums on any
insurance, including, without limitation, rent insurance, resulting from any
such breach.
13.04. Tenant shall indemnify and hold harmless Landlord and all
Superior Lessors and its and their respective partners, joint venturers,
directors, officers, agents, servants and employees from and against any and all
claims arising from or in connection with (a) the conduct or management of the
Demised Premises or of any business therein, or any work or thing whatsoever
done, or any condition created (other than by Landlord) in the Demised Premises
during the Term or during the period of time, if any, prior to the Commencement
Date that Tenant may have been given access to the Demised Premises; (b) any
act, omission or negligence of Tenant or any of its subtenants or licencees or
its or their partners, joint ventures, directors, officers, agents, employees or
contractors; (c) any accident, injury or damage whatever (unless caused solely
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by Landlord's gross negligence or intentional act) occurring in the Demised
Premises; and (d) any breach or default by Tenant in the full and prompt payment
and performance of Tenant's obligations under this Lease; together with all
costs, expenses and liabilities incurred in or in connection with each such
claim or action or proceeding brought thereon, including, without limitation,
all attorneys' fees and expenses. In case any action or proceeding is brought
against Landlord and/or any Superior Lessor and/or its or their partners, joint
venturers, directors, officers, agents and/or employees by reason of any such
claim, Tenant, upon notice from Landlord or such Superior Lessor, shall resist
and defend such action or proceeding by counsel reasonably satisfactory to
Landlord.
13.05. Neither Landlord nor any Superior Lessor shall be liable or
responsible for, and Tenant hereby releases Landlord and each Superior Lessor
from, all liability and responsibility to Tenant and any person claiming by,
through or under Tenant, by way of subrogation or otherwise, for any injury,
loss or damage to any person or property in or around the Demised Premises or to
Tenant's business irrespective of the cause of such injury, loss or damage, and
Tenant shall require its insurers to include in all of Tenant's insurance
policies which could give rise to a right of subrogation against Landlord or any
Superior Lessor a clause or endorsement whereby the insurer waives any rights of
subrogation against Landlord and such Superior Lessors or permits the insured,
prior to any loss, to agree with a third party to waive any claim it may have
against said third party without invalidating the coverage under the insurance
policy.
ARTICLE 14 - RULES AND REGULATIONS
Tenant and its employees and agents shall faithfully observe and comply
with the Rules and Regulations and such reasonable changes therein (whether by
modification, elimination or addition) as Landlord at any time or times
hereafter may make and communicate to Tenant, which in Landlord's judgment,
shall be necessary for the reputation, safety, care or appearance of the Land
and Building, or the preservation of good order therein, or the operation or
maintenance or the Building or its equipment and fixtures and which do not
unreasonably affect the conduct of Tenant's business in the Demised Premises;
provided, however, that in case of any conflict or inconsistency between the
provisions of this Lease and any of the Rules and Regulations, the provisions of
this Lease shall control.
ARTICLE 15 - ALTERATIONS AND SIGNS
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15.01. Tenant shall not make any alterations or additions to the Demised
Premises, or make any holes or cuts in the walls, ceilings, roofs, or floors
thereof, or change the exterior color or architectural treatment of the Demised
Premises, without on each occasion first obtaining the consent of Landlord.
Tenant shall submit to Landlord plans and specifications for such work at the
time Landlord's consent is sought. Tenant shall pay to Landlord upon demand the
reasonable cost and expense of Landlord in (a) reviewing said plans and
specifications and (b) inspecting the alterations to determine whether the same
are being performed in accordance with the approved plans and specifications and
all Legal Requirements and Insurance Requirements, including, without
limitation, the fees of any architect or engineer employed by Landlord for such
purpose. Before proceeding with any permitted alteration which will cost more
than Fifty Thousand and 00/100 Dollars ($50,000.00) (exclusive of the costs of
decorating work and items constituting Tenant's Property), as estimated by a
reputable contractor designated by Landlord, Tenant shall obtain and deliver to
Landlord either (i) a performance bond and a labor and materials payment bond
(issued by a corporate surety licensed to do business in New Jersey), each in an
amount equal to 125% of such estimated cost and in form satisfactory to
Landlord, or (ii) such other security as shall be satisfactory to Landlord.
Tenant shall fully and promptly comply with and observe the Rules and
Regulations then in force in respect of the making of alterations. Any review or
approval by Landlord of any plans and/or specifications with respect to any
alterations is solely for Landlord's benefit, and without any representation or
warranty whatsoever to Tenant in respect to the adequacy, correctness or
efficiency thereof or otherwise.
15.02. Tenant shall obtain all necessary governmental permits and
certificates for the commencement and prosecution of permitted alterations and
for final approval thereof upon completion, and shall cause alterations to be
performed in compliance therewith and with all applicable Legal Requirements and
Insurance Requirements. Alterations shall be diligently performed in a good and
workmanlike manner, using new materials and equipment at least equal in quality
and class to the better of (a) the original installations of the Building, or
(b) the then standards for the Building established by Landlord. Alterations
shall be performed by contractors first approved by Landlord; provided, however,
that any alterations in or to the mechanical, electrical, sanitary, heating,
ventilating, air conditioning or other systems of the Building shall be
performed only by the contractor(s) designated by Landlord. Alterations shall be
made in such manner as not to unreasonably interfere with or delay and as not to
impose any additional expense upon Landlord in the construction, maintenance,
repair or operation
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of the Building; and if any such additional expense shall be incurred by
Landlord as a result of Tenant's making of any alterations, Tenant shall pay any
such additional expense upon demand. Throughout the making of alterations,
Tenant shall carry, or cause to be carried, workmen's compensation insurance in
statutory limits and general liability insurance, with completed operation
endorsement, for any occurrence in or about the Building, under which Landlord
and its managing agent and any Superior Lessor whose name and address shall
previously have been furnished to Tenant shall be named as parties insured, in
such limits as Landlord may reasonably require, with insurers reasonably
satisfactory to Landlord. Tenant shall furnish Landlord with reasonably
satisfactory evidence that such insurance is in effect at or before the
commencement of alterations and, on request, at reasonable intervals thereafter
during the making of alterations.
15.03. Tenant shall not place any signs on the roof, exterior walls or
grounds of the Demised Premises without first obtaining Landlord's written
consent thereto. In placing any signs on or about the Demised Premises, Tenant
shall comply with the Legal Requirements and obtain all required permits and/or
licenses at its expense.
ARTICLE 16 - LANDLORD'S AND TENANT'S PROPERTY
16.01 All fixtures, equipment, improvements and appurtenances attached
to or built into the Demised Premises at the commencement of or during the Term,
whether or not by or at the expense of Tenant, shall be and remain a part of the
Demised Premises, shall be deemed to be the property of Landlord and shall not
be removed by Tenant, except as provided in Section 16.02. Further, any
carpeting or other personal property in the Demised Premises on the Commencement
Date, unless installed and paid for by Tenant, shall be and shall remain
Landlord's property and shall not be removed by Tenant.
16.02. All movable partitions, business and trade fixtures, machinery
and equipment, communications equipment and office equipment, whether or not
attached to or built into the Demised Premises, which are installed in the
Demised Premises by or for the account of Tenant without expense to Landlord and
can be removed without structural damage to the Building and all furniture,
furnishings, and other movable personal property owned by Tenant and located in
the Demised Premises (collectively, "Tenant's Property") shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of the Tenant's Property is removed, Tenant shall
repair or pay the cost of repairing any damage to the Demised Premises or the
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Building resulting from the installation and/or removal thereof. Any equipment
or other property for which Landlord shall have granted any allowance or credit
to Tenant shall not be deemed to have been installed by or for the account of
Tenant without expense to Landlord, shall not be considered as the Tenant's
Property and shall be deemed the property of Landlord.
16.03. At or before the Expiration Date or the date of any earlier
termination of this Lease, or within fifteen (15) days after such an earlier
termination date, Tenant shall remove from the Demised Premises all of the
Tenant's Property (except such items thereof as Landlord shall have expressly
permitted to remain, which property shall become the property of Landlord if not
removed), and Tenant shall repair any damage to the Demised Premises, and the
Building resulting from any installation and/or removal of the Tenant's
Property. Any items of the Tenant's Property which shall remain in the Demised
Premises after the Expiration Date or after a period of fifteen (15) days
following an earlier termination date, may, at the option of Landlord, be deemed
to have been abandoned, and in such case such items may be retained by Landlord
as its property or disposed of by Landlord, without accountability, in such
manner as Landlord shall determine at Tenant's Expense.
ARTICLE 17 - REPAIRS AND MAINTENANCE
17.01. Upon substantial completion of Landlord's Work, Tenant and Landlord
shall have a "walk through" of the Demised Premises to confirm that Landlord's
Work has been substantially completed in accordance with Exhibit C. Tenant
shall, throughout the Term, take good care of the Demised Premises, the fixtures
and appurtenances therein, and shall not do, suffer, or permit any waste with
respect thereto. Except as provided for in Paragraph 17.02, Tenant shall be
responsible for all repairs, interior and exterior, structural and
nonstructural, ordinary and extraordinary, in and to the Demised Premises, the
Building and the Land (including the facilities and systems thereof). In
addition, Tenant shall keep and maintain all interior portions of the Demised
Premises including, without limitation, all building equipment, windows, doors,
loading bay doors and shelters, plumbing and electrical systems, heating,
ventilating and air conditioning ("HVAC") systems in a clean and orderly
condition. The phrase "keep and maintain" as used herein includes repairs,
replacement and/or restoration as appropriate. Tenant shall paint the exterior
of the Building during the first year of each Extended Period (as hereinafter
defined). Tenant shall also remove all debris from the roof and gutters two
(2) times per year during the months of November and March. Provided Tenant
complies with such obligation,
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all repairs to the roof shall be Landlord's responsibility. Should any roof
failure not be corrected by Landlord within ten (10) business days of receipt of
written notice from Tenant, notifying Landlord of such failure, Tenant shall
have the right to undertake such repairs, at Landlord's expense, provided such
repair work is undertaking in compliance with any applicable guaranties. Tenant
shall not permit or suffer the over-loading of the floors of the Premises beyond
Two Hundred Fifty (250) pounds per square foot. Tenant shall promptly replace
all scratched, damaged or broken doors and glass in and about the Demised
Premises and shall be responsible for all repairs, maintenance and replacement
of wall and floor coverings in the Demised Premises and for the repair and
maintenance of all sanitary and electrical fixtures and equipment therein.
Tenant shall promptly make all repairs in or to the Demised Premises for which
Tenant is responsible, and any repairs required to be made by Tenant to the
mechanical, electrical, sanitary, heating, ventilating, air-conditioning or
other systems of the Building shall be performed by contractor(s) designated by
Landlord or by Tenant's own duly qualified technicians. All work shall be
completed in a good and workmanlike manner in compliance with all Legal
Requirements. Any other repairs in or to the Building and the facilities and
systems thereof for which Tenant is responsible shall be performed by Landlord
at Tenant's expense; but Landlord may, at its option, before commencing any such
work or at any time thereafter, require Tenant to furnish to Landlord such
security, in form (including, without limitation, a bond issued by a corporate
surety licensed to do business in New Jersey) and amount, as Landlord shall deem
necessary to assure the payment for such work by Tenant.
17.02. Landlord shall only be responsible for repairs to the structural
integrity of the Building to include walls, floors, roof, beams and supports.
Additionally, Landlord shall repair the parking area and guarantees such work
for the initial term of the Lease. Thereafter, all repairs to the parking area,
excluding any resurfacing, shall be Tenant's responsibility. Tenant shall also
be responsible for any repair required as a result of the negligent actions of
Tenant or its agents, employees, guests and invitees.
17.03. Except as otherwise expressly provided in this Lease, Landlord
shall have no liability to Tenant, nor shall Tenant's covenants and obligations
under this Lease be reduced or abated in any manner whatsoever, by reason of any
reasonable inconvenience, annoyance, interruption or injury to business arising
from Landlord's doing any repairs, maintenance or changes which Landlord is
required or permitted by this Lease, or required by Law, to make in or to any
portion of the Building.
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ARTICLE 18 - ELECTRIC ENERGY; HVAC
18.01. Tenant shall purchase the electric energy required by it in the
Demised Premises at its own expense on a direct metered basis from the public
utility servicing the Demised Premises. Tenant expressly agrees that Landlord
shall not be liable for any failure, inadequacy or defect in the character or
supply of electric current furnished to the Demised Premises.
18.02. Tenant's use of electric energy in the Demised Premises shall not
at any time exceed the capacity of any of the electrical conductors and
equipment in or otherwise serving the Demised Premises. In order to insure that
such capacity is not exceeded and to avert possible adverse effect upon the
Building's electric service, Tenant shall not, without Landlord's prior consent
in each instance (which shall not be unreasonably withheld), connect any
fixtures, appliances or equipment to the Building's electric distribution
system or make any alteration or addition to the electric system of the Demised
Premises existing on the Commencement Date. Should Landlord grant such consent,
all additional risers or other equipment required therefor shall be provided by
Landlord and the cost thereof shall be paid by Tenant to Landlord on demand.
18.03. Tenant shall maintain and operate the heating, ventilation and
air-conditioning systems ("HVAC") servicing the Building and shall furnish its
own water and any other utilities required for operation of the Demised
Premises. The temperature maintained in the Building shall at all times be
within the limits prescribed in the Legal Requirements.
ARTICLE 19 - ACCESS, CHANGES AND NAME
19.01. Landlord and its agents shall have the right to enter and/or pass
through the Demised Premises at any time or times (a) to examine the Demised
Premises and to show them to actual and prospective Superior Lessors, Superior
Mortgagees, or prospective purchasers of the Building, and (b) to make such
repairs, alterations, additions and improvements in or to the Demised Premises
and/or in or to the Building or its facilities and equipment as Landlord is
required or desires to make. Landlord shall be allowed to take all materials
into and upon the Demised Premises that may be required in connection therewith,
without any liability to Tenant and without any reduction of Tenant's
obligations hereunder. During the period of eighteen (18) months prior to the
Expiration Date, Landlord and its agents may exhibit the Demised Premises to
prospective tenants.
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19.02. If at any time any windows of the Demised Premises are temporarily
darkened or obstructed by reason of any repairs, improvements, maintenance
and/or cleaning in or about the Building, or if any part of the Building or the
Common Areas, other than the Demised Premises, is temporarily or permanently
closed or inoperable, the same shall not be deemed a constructive eviction and
shall not result in any reduction or diminution of Tenant's obligations under
this Lease.
19.03. If, during the last month of the Term, Tenant has removed all or
substantially all of the Tenant's Property from the Demised Premises, Landlord
may, without notice to Tenant, immediately enter the Demised Premises and later,
renovate and decorate the same, without liability to Tenant and without
reducing or otherwise affecting Tenant's obligations hereunder.
19.04. Landlord reserves the right, at any time and from time to time, to
make such changes, alterations, additions and improvements in or to the Building
and the fixtures and equipment thereof as Landlord shall deem necessary or
desirable.
19.05. Landlord may adopt any name for the Building. Landlord reserves the
right to change the name and/or address of the Building at any time.
ARTICLE 20 - MECHANICS' LIENS AND OTHER LIENS
Nothing contained in this Lease shall be deemed, construed or interpreted
to imply any consent or agreement on the part of Landlord to subject Landlord's
interest or estate to any liability under any mechanic's or other lien law. If
any mechanic's or other lien or any notice of intention to file a lien is filed
against the Land, or any part thereof, or the Demised Premises, or any part
thereof, for any work, labor, service or materials claimed to have been
performed or furnished for or on behalf of Tenant or anyone holding any part of
the Demised Premises through or under Tenant, Tenant shall cause the same to be
cancelled and discharged of record by payment, bond or order of a court of
competent jurisdiction within fifteen (15) days after notice by Landlord to
Tenant.
ARTICLE 21 - NON-LIABILITY
21.01. Neither Landlord nor any partner, joint venturer, director,
officer, agent, servant or employee of Landlord shall be liable to Tenant for
any loss, injury or damage to Tenant or to any other Person, or to its or their
property, irrespective of the
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cause of such injury, damage or loss, unless caused by or resulting from the
negligence of Landlord, its agents, servants or employees in the operation or
maintenance of the Land or Building without contributory negligence on the part
of Tenant or any of its subtenants or licensees or its or their employees,
agents or contractors. Further, neither Landlord nor any partner, joint
venturer, director, officer, agent, servant or employee of Landlord shall be
liable (a) for any such damage caused by other tenants or Persons in, upon or
about the Land or Building, or caused by operations in construction of any
private, public or quasi-public work; or (b) even if negligent, for
consequential damages arising out of any loss of use of the Demised Premises or
any equipment or facilities therein by Tenant or any Person claiming through or
under Tenant.
21.02. Notwithstanding any provision to the contrary, Tenant shall look
solely to the estate and property of Landlord in and to the Land and Building
(or the proceeds received by Landlord on a sale of such estate and property but
not the proceeds of any financing or refinancing thereof) in the event of any
claim against Landlord arising out of or in connection with this Lease, the
relationship of Landlord and Tenant or Tenant's use of the Demised Premises or
the Common Areas, and Tenant agrees that the liability of Landlord arising out
of or in connection with this Lease, the relationship of Landlord and Tenant or
Tenant's use of the Demised Premises or the Common Areas shall be limited to
such estate and property of Landlord (or sale proceeds). No other properties or
assets of Landlord or any partner, joint venturer, director, officer, agent,
servant or employee of Landlord shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgement (or other judicial
process) or for the satisfaction of any other remedy of Tenant arising out of,
or in connection with, this Lease, the relationship of Landlord and Tenant or
Tenant's use of the Demised Premises or the Common Areas and if Tenant shall
acquire a lien on or interest in any other properties or assets by judgment or
otherwise, Tenant shall promptly release such lien on or interest in such other
properties and assets by executing, acknowledging and delivering to Landlord an
instrument to that effect prepared by Landlord's attorneys. Tenant hereby waives
the right of specific performance and any other remedy allowed in equity if
specific performance or such other remedy could result in any liability of
Landlord for the payment of money to Tenant, or to any court or governmental
authority (by way of fines or otherwise) for Landlord's failure or refusal to
observe a judicial decree or determination, or to any third party.
ARTICLE 22 - DAMAGE OR DESTRUCTION
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22.01. If the Building or the Demised Premises shall be partially or
totally damaged or destroyed by fire or other casualty (and if this Lease shall
not be terminated as in this Article 22 hereinafter provided), Landlord shall
repair the damage and restore and rebuild the Building and/or the Demised
Premises (except for the Tenant's Property) with reasonable dispatch after
notice to it of the damage or destruction and the collection of the insurance
proceeds attributable to such damage.
22.02. Subject to the provisions of Section 22.05, if all or part of the
Demised Premises shall be damaged or destroyed or rendered completely or
partially untenantable on account of fire or other casualty, the Rent shall be
abated or reduced, as the case may be, in the proportion that the untenantable
area of the Demised Premises bears to the total area of the Demised Premises,
for the period from the date of the damage or destruction to (a) the date the
damage to the Demised Premises shall be substantially repaired, or (b) if the
Building and not the Demised Premises is so damaged or destroyed, the date on
which the Demised Premises shall be made tenantable; provided, however, should
Tenant reoccupy a portion of the Demised Premises during the period the repair
or restoration work is taking place and prior to the date that the Demised
Premises are substantially repaired or made tenantable the Rent allocable to
such reoccupied portion, based upon the proportion which the area of the
reoccupied portion of the Demised Premises bears to the total area of the
Demised Premises, shall be payable by Tenant from the date of such occupancy.
22.03. If (a) the Building or the Demised Premises shall be totally damaged
or destroyed by fire or other casualty, or (b) the Building shall be so damaged
or destroyed by fire or other casualty (whether or not the Demised Premises are
damaged or destroyed) that its repair or restoration requires the expenditure,
as estimated by a reputable contractor or architect designated by Landlord, of
more than twenty percent (20%) (or ten percent [10%] if such casualty occurs
during the last two [2] years of the Term) of the full insurable value of the
Building immediately prior to the casualty, or (c) the Building shall be damaged
or destroyed by fire or other casualty (whether or not the Demised Premises are
damaged or destroyed) and either the loss shall not be covered by Landlord's
insurance or the net insurance proceeds (after deducting all expenses in
connection with obtaining such proceeds) shall, in the estimation of a reputable
contractor or architect designated by Landlord be insufficient to pay for the
repair or restoration work, then in either such case Landlord may terminate this
Lease by giving Tenant notice to such effect within ninety (90) days after the
date of the fire or other casualty.
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22.04. Tenant shall not be entitled to terminate this Lease and no
damages, compensation or claim shall be payable by Landlord for inconvenience,
loss of business or annoyance arising from any repair or restoration of any
portion of the Demised Premises or of the Building pursuant to this Article 22.
Landlord shall use its best efforts to make such repair or restoration promptly
and in such manner as to not unreasonably interfere with Tenant's use and
occupancy of the Demised Premises, but Landlord shall not be required to do
such repair or restoration work except during Business Hours on Business Days.
22.05. Notwithstanding any of the foregoing provisions of this Article 24,
if by reason of some act or omission on the part of Tenant or any of its
subtenants or its or their partners, directors, officers, servants, employees,
agents or contractors, either (a) Landlord or any Superior Lessor or any
Superior Mortgagee shall be unable to collect all of the insurance proceeds
(including, without limitation, rent insurance proceeds) applicable to damage
or destruction of the Demised Premises or the Building by fire or other
casualty, or (b) the Demised Premises or the Building shall be damaged or
destroyed or rendered completely or partially untenantable on account of fire or
other casualty, then, without prejudice to any other remedies which may be
available against Tenant, there shall be no abatement or reduction of the Rent.
Further, nothing contained in this Article 22 shall relieve Tenant from any
liability that may exist as a result of any damage or destruction by fire or
other casualty.
22.06. Landlord will not carry insurance of any kind on the Tenant's
Property, and, except as provided by law or by reason of Landlord's breach of
any of its obligations hereunder, shall not be obligated to repair any damage to
or replace the Tenant's Property.
22.07. The provisions of this Article 22 shall be deemed an express
agreement governing any case of damage or destruction of the Demised Premises
and/or Building by fire or other casualty, and any law providing for such a
contingency in the absence of and express agreement, now or hereafter in force,
shall have no application in such case.
ARTICLE 23 - EMINENT DOMAIN
23.01 If the whole of the Demised Premises shall be taken by any public or
quasi-public authority under the power of condemnation, eminent domain or
expropriation, or in the event of conveyance of the whole of the Demised
Premises in lieu thereof,
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this Lease shall terminate as of the day possession shall be taken by such
authority. If 25% or less of the Floor Space of the Demised Premises shall be so
taken or conveyed, this Lease shall terminate only in respect of the part so
taken or conveyed as of the day possession shall be taken by such authority. If
more than 25% of the Floor Space of the Demised Premises shall be so taken or
conveyed, this Lease shall terminate only in respect of the part so taken or
conveyed as of the day possession shall be taken by such authority, but either
party shall have the right to terminate this Lease upon notice given to the
other party within 30 days after such taking possession. If more than 25% of
the Floor Space of the Building shall be so taken or conveyed, Landlord may,
by notice to Tenant, terminate this Lease as of the day possession shall be
taken. If so much of the parking facilities shall be so taken or conveyed that
the number of parking spaces necessary, in Landlord's judgment, for the
continued operation of the Building or the Entire Premises shall not be
available, Landlord shall, by notice to Tenant, terminate this Lease as of the
day possession shall be taken. If this Lease shall continue in effect as to any
portion of the Demised Premises not so taken or conveyed, the Rent shall be
computed as of the day possession shall be taken on the basis of the remaining
Floor Space of the Demised Premises. Except as specifically provided herein, in
the event of any such taking or conveyance there shall be no reduction in Rent.
If this Lease shall continue in effect, Landlord shall, at its expense, but
shall be obligated only to the extent of the net award or other compensation
(after deducting all expenses in connection with obtaining same) available to
Landlord for the improvements taken or conveyed (excluding any award or other
compensation for land or for the unexpired portion of the term of any Superior
Lease), make all necessary alterations so as to constitute the remaining
Building a complete architectural and tenantable unit, except for the Tenant's
property, and Tenant shall make all alterations or replacements to the Tenant's
property and decorations in the Demised Premises. All awards and compensation
for any taking or conveyance, whether for the whole or a part of the Land or
Building, the Demised Premised or otherwise, shall be property of Landlord,
and Tenant hereby assigns to Landlord all of Tenant's right, title and interest
in and to any and all such awards and compensation, including, without
limitation, any award or compensation for the value of the unexpired portion of
the Term. Tenant shall be entitled to claim, prove and receive in the
condemnation proceeding such award or compensation as may be allowed for the
Tenant's property and for loss of business, good will, and depreciation or
injury to and cost of removal of the Tenant's property, but only if such award
or compensation shall be made by the condemning authority in addition to, and
shall not result in a reduction of, the award or compensation made by it to
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Landlord.
23.02. If the temporary use or occupancy of all or any part of the Demised
Premises shall be taken during the Term, Tenant shall be entitled, except as
hereinafter set forth, to receive that portion of the award or payment for such
taking which represents compensation for the use and occupancy of the Demised
Premises, for the taking of the Tenant's Property and for moving expenses, and
Landlord shall be entitled to receive that portion which represents
reimbursement for the cost of restoration of the Demised Premises. This Lease
shall be and remain unaffected by such taking and Tenant shall continue
responsible for all of its obligations hereunder insofar as such obligations are
not affected by such taking and shall continue to pay the Rent in full when due.
If the period of temporary use or occupancy shall extend beyond the Expiration
Date, that part of the award or payment which represents compensation for the
use and occupancy of the Demised Premises (or a part thereof) shall be divided
between Landlord and Tenant so that Tenant shall receive (except as otherwise
provided below) so much thereof as represents compensation for the period up to
and including the Expiration Date and Landlord shall receive so much thereof as
represents compensation for the period after the Expiration Date. All monies to
be paid to Tenant as, or as part of, an award or payment for temporary use and
occupancy for a period beyond the date to which the Rent has been paid shall be
received, held and applied by the first Superior Mortgagee (or if there is no
Superior Mortgagee, by Landlord as a trust fund) for payment of the Rent
becoming due hereunder.
ARTICLE 24 - SURRENDER
24.01. On the Expiration Date, or upon any earlier termination of this
Lease, or upon any re-entry by Landlord upon the Demised Premises, Tenant shall
quit and surrender the Demised Premises to Landlord "broom-clean" and in good
order, condition and repair, except for ordinary wear and tear and such damage
or destruction as Landlord is required to repair or restore under this Lease,
and Tenant shall remove all of Tenant's property therefrom except as otherwise
expressly provided in this Lease.
24.02. If Tenant remains in possession of the Demised Premises after the
expiration of the Term, Tenant shall be deemed to be occupying the Demised
Premises as a tenant from month to month at the sufferance of Landlord subject
to all of the provisions of this Lease, except that the monthly Fixed Rent shall
be twice the Fixed Rent in effect during the last month of the Term.
24.03. No act or thing done by Landlord or its agents shall
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be deemed an acceptance of a surrender of the Demised Premises, and no agreement
to accept such surrender shall be valid unless in writing and signed by
Landlord.
ARTICLE 25 - CONDITIONS OF LIMITATION
25.01. This Lease is subject to the limitation that whenever Tenant or any
Guarantor (a) shall make an assignment for the benefit of creditors, or (b)
shall commence a voluntary case or have entered against it an order for relief
under any chapter of the Federal Bankruptcy Code (Title 11 of the United States
Code) or any similar order or decree under any federal or state law, now in
existence, or hereafter enacted having the same general purpose, and such order
or decree shall have not been stayed or vacated within thirty (30) days after
entry, or (c) shall cause, suffer, permit or consent to the appointment of a
receiver, trustee, administrator, conservator, sequestrator, liquidator or
similar official in any federal, state or foreign judicial or nonjudicial
proceeding, to hold, administer and/or liquidate all or substantially all of its
assets, and such appointment shall not have been revoked, terminated, stayed or
vacated and such official discharged of his duties within thirty (30) days of
his appointment then Landlord, at any time after the occurrence of any such
event, may give Tenant a notice of intention to end the Term at the expiration
of five (5) days from the date of service of such notice of intention, and upon
the expiration of said five (5) day period, whether or not the Term shall
theretofore have commenced, this Lease shall terminate with the same effect as
if that day were the expiration date of this Lease, but Tenant shall remain
liable for damages as provided in Article 27.
25.02. This Lease is subject to the further limitations that: (a) if
Tenant shall default in the payment of any Rent, and such default shall continue
for five (5) days after notice or (b) if Tenant shall, whether by action or
inaction, be in default of any of its obligations under this Lease (other than a
default in the payment of Rent) and such default shall continue and not be
remedied within fifteen (15) days after Landlord shall have given to Tenant a
notice specifying the same, or, in the case of a default which cannot with due
diligence be cured within a period of fifteen (15) days and the continuance of
which for the period required for cure will not subject Landlord or any Superior
Lessor for prosecution for a crime (as more particularly described in the last
sentence of Section 12.02) or termination of any Superior Lease or foreclosure
of any Superior Mortgage, if Tenant shall not, (i) within said fifteen (15) day
period advise Landlord of Tenant's intention to take all steps necessary to
remedy such default, (ii) duly commence within said fifteen (15) day period, and
thereafter
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diligently prosecute to completion all steps necessary to remedy the default,
and (iii) complete such remedy within a reasonable time after the date of said
notice by Landlord, or (c) if any event shall occur or any contingency shall
arise whereby this Lease would, by operation of law or otherwise, devolve upon
or pass to any person, firm or corporation other than Tenant, except as
expressly permitted by Article 11, or (d) if Tenant shall vacate or abandon the
Demised Premises, or (e) if there shall be any default by Tenant (or any person
which, directly or indirectly, controls, is controlled by, or is under common
control with Tenant) under any other lease with Landlord (or any person which,
directly or indirectly, controls is controlled by, or is under common control
with Landlord) which shall not be remedied within the applicable grace period,
if any, provided therefor under such other lease, then in any of said cases
Landlord may give to Tenant a notice of intention to end the Term at the
expiration of five (5) days from the date of the service of such notice of
intention, and upon the expiration of said five (5) days, whether or not the
Term shall theretofore have commenced, this Lease shall terminate with the same
effect as if that day were the expiration date of this Lease, but Tenant shall
remain liable for damages as provided in Article 27.
ARTICLE 26 - RE-ENTRY BY LANDLORD
26.01. If Tenant shall default in the payment of any Rent, and such
default shall continue for five (5) days after notice, or if this Lease shall
terminate as provided in Article 25, Landlord or Landlord's agents and employees
may immediately or at any time thereafter re-enter the Demised Premises, or any
part thereof, either by summary dispossess proceedings or by any suitable action
or proceeding at law without being liable to indictment, prosecution or damages
therefor, and may repossess the same, and may remove any person therefrom, to
the end that Landlord may have, hold and enjoy the Demised Premises. The word
"re-enter," as used herein, is not restricted to its technical legal meaning. If
this Lease is terminated under the provisions of Article 25, or if Landlord
shall re-enter the Demised Premises under the provisions of this Article 26, or
in the event of the termination of this Lease, or of re-entry, by or under any
summary dispossess or other proceedings or action or any provision of law by
reason of default hereunder on the part of Tenant, Tenant shall thereupon pay to
Landlord the Rent payable up to the time of such termination of this Lease, or
of such recovery of possession of the Demised Premises by Landlord, as the case
may be, and shall also pay to Landlord damages as provided in Article 27.
26.02. In the event of a breach or threatened breach by Tenant
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of any of its obligations under this Lease, Landlord shall also have the right
or injunction. The special remedies to which Landlord may resort hereunder are
cumulative and are not intended to be exclusive of any other remedies to which
Landlord may lawfully be entitled at any time and Landlord may invoke any remedy
allowed at law or in equity as if specific remedies were not provided for
herein.
26.03. If this Lease shall terminate under the provisions of Article 25,
or if Landlord shall re-enter the Demised Premises under the provisions of this
Article 26, or in the event of the termination of this Lease, or of re-entry, by
or under any summary dispossess or other proceeding or action or any provision
of law by reason of default hereunder on the part of Tenant, Landlord shall be
entitled to retain all monies, if any, paid by Tenant to Landlord, whether as
Advance Rent, security or otherwise, but such monies shall be credited by
Landlord against any Rent due from Tenant at the time of such termination or re-
entry or, at Landlord's option, against any damages payable by Tenant under
Article 27 or pursuant to law.
ARTICLE 27 - DAMAGES
27.01. If this Lease is terminated under the provisions of Article 25, or
if Landlord shall re-enter the Demised Premises under the provisions of Article
26, or in the event of the termination of this Lease, or of re-entry, by or
under any summary dispossess or other proceeding or action or any provision of
law by reason of default hereunder on the part of Tenant, Tenant shall pay as
Additional Charges to Landlord as a condition precedent to the dismissal of any
summary dispossess or other proceeding or action as damages, at the election of
Landlord, either:
(a) a sum which at the time of such termination of this Lease or at
the time of any such re-entry by Landlord, as the case may be,
represents the then value of the excess, if any, of (i) the aggregate
amount of the Rent which would have been payable by Tenant
(conclusively presuming the average monthly Additional Charges to be
the same as were the average monthly Additional Charges payable for
the year, or if less than 365 days have then elapsed since the
Commencement Date, the partial year, immediately preceding such
termination or re-entry) for the period commencing with such earlier
termination of this Lease or the date of any such re-entry, as the
case may be, and ending with the Expiration Date, over (ii) the
aggregate rental value of the Demised Premises for the same period; or
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(b) sums equal to the Fixed Rent and the Additional Charges which
would have been payable by Tenant has this Lease not so terminated, or
had Landlord not so re-entered the Demised Premises, payable upon the
due dates therefor specified herein following such termination or such
re-entry and until the Expiration Date, provided, however, that if
Landlord shall relet the Demised Premises during said period, Landlord
shall credit Tenant with the net rents received by Landlord from such
reletting, such net rents to be determined by first deducting from the
gross rents as and when received by Landlord from such reletting the
expenses incurred or paid by Landlord in terminating this Lease or in
re-entering the Demised Premises and in securing possession thereof,
as well as the expenses of reletting, including, without limitation,
altering and preparing the Demised Premises for new tenants, rent
concessions, brokers' commissions, legal fees, and all other expenses
properly chargeable against the Demised Premises and the rental
therefrom, it being understood that any such reletting may be for a
period shorter or longer than the period ending on the Expiration
Date; but in no event shall Tenant be entitled to receive any excess
of such net rents over the sums payable by Tenant to Landlord
hereunder, nor shall Tenant be entitled in any suit for the collection
of damages pursuant to this subdivision (b) to a credit in respect of
any rents from a reletting, except to the extent that such net rents
are actually received by Landlord. If the Demised Premises or any part
thereof should be relet in combination with other space, then proper
apportionment on a square foot basis shall be made of the rent
received from such reletting and of the expenses of reletting.
If the Demised Premises or any part thereof be relet by Landlord before
presentation of proof of such damages to any court, commission or tribunal, the
amount of rent reserved upon such reletting shall, prima facie, be the fair and
reasonable rental value for the Demised Premises, or part thereof, so relet
during the term of the reletting. Landlord shall not be liable in any way
whatsoever for its failure or refusal to relet the Demised Premises or any part
thereof, or if the Demised Premises or any part thereof are relet, for its
failure to collect the rent under such reletting, and no such refusal or failure
to relet or failure to collect rent shall release or affect Tenant's liability
for damages or otherwise under this Lease.
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27.02. Suit or suits for the recovery of such damages or, any installments
thereof, may be brought by Landlord at any time and from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the Term would have expired if it had not been
so terminated under the provisions of Article 25, or under any provision of law,
or had Landlord not re-entered the Demised Premises. Nothing herein contained
shall be construed to limit or preclude recovery by Landlord against Tenant of
any sums or damages to which, in addition to the damages particularly provided
above, Landlord may lawfully be entitled by reason of any default hereunder on
the part of Tenant. Nothing herein contained shall be construed to limit or
prejudice the right of Landlord to prove for and obtain as damages by reason of
the termination of this Lease or re-entry of the Demised Premises for the
default of Tenant under this Lease, an amount equal to the maximum allowed by
any statute or rule of law in effect at the time, whether or not such amount be
greater than, equal to, or less than any of the sums referred to in Section
27.01.
27.03. In addition, if this Lease is terminated under the provisions of
Article 25, or if Landlord shall re-enter the Demised Premises under the
provisions of Article 26, Tenant covenants that: (a) the Demised Premises then
shall be in the same condition as that in which Tenant has agreed to surrender
the same to Landlord at the Expiration Date; (b) Tenant shall have performed
prior to any such termination any obligation of Tenant contained in this Lease
for the making of any alteration or for restoring or rebuilding the Demised
Premises or the Building, or any part thereof; (c) Tenant shall comply with its
obligations pursuant to Article 37 hereof (Environmental Compliance) and (d) for
the breach of any covenant of Tenant set forth above in this Section 27.03,
Landlord shall be entitled immediately, without notice or other action by
Landlord, to recover, and Tenant shall pay, as and for liquidated damages
therefor, the cost of performing such covenant (as estimated by an independent
contractor selected by Landlord).
27.04 In addition to any other remedies Landlord may have under this Lease,
and without reducing or adversely affecting any of Landlord's rights and
remedies under this Article 27, if any Rent or damages payable hereunder by
Tenant to Landlord are not paid within five (5) days after demand therefor, the
same shall bear interest at the Late Payment Rate or the maximum rate permitted
by law, whichever is less, from the due date thereof until paid, and the amounts
of such interest shall be Additional Charges hereunder.
ARTICLE 28 - AFFIRMATIVE WAIVERS
28.01. Tenant, on behalf of itself and any and all persons
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claiming through or under Tenant, does hereby waive and surrender all right and
privilege which it, they or any of them might have under or by reason of any
present or future law, to redeem the Demised Premises or to have a continuance
of this Lease after being dispossessed or ejected from the Demised Premises by
process of law or under the terms of this Lease or after the termination of this
Lease as provided in this Lease.
28.02. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either against the other on any matter
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, and Tenant's use or occupancy of the
Demised Premises and use of the Common Area, including, without limitation, any
claim for injury or damage, and any emergency and other statutory remedy with
respect thereto. Tenant shall not interpose any counterclaim of any kind in any
action or proceeding commenced by Landlord to recover possession of the Demised
Premises.
ARTICLE 29 - NO WAIVERS
The failure of either party to insist in any one or more instances upon the
strict performance of any one or more of the obligations of this Lease, or to
exercise any election herein contained, shall not be construed as a waiver or
relinquishment for the future of the performance of such one or more obligations
of this Lease or of the right to exercise such election, but the same shall
continue and remain in full force and effect with respect to any subsequent
breach, act or omission. The receipt by Landlord of Fixed Rent or Additional
Charges with knowledge of breach by Tenant of any obligation of this Lease shall
not be deemed a waiver of such breach.
ARTICLE 30 - CURING TENANT'S DEFAULTS
If Tenant shall default in the performance of any of Tenant's obligations
under this Lease, Landlord, without thereby waiving such default, may (but shall
not be obligated to) perform the same for the account and at the expense of
Tenant, without notice in a case of emergency, and in any other case only if
such default continues after the expiration of fifteen (15) days from the date
Landlord gives Tenant notice of the default. Bills for any expenses incurred by
Landlord in connection with any such performance by it for the account of
Tenant, and bills for all costs, expenses and disbursements of every kind and
nature whatsoever, including reasonable attorneys' fees and expenses, involved
in collecting or endeavoring to collect the Rent or any part thereof or
enforcing or endeavoring to enforce any rights against Tenant or Tenant's
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obligations hereunder, under or in connection with this Lease or pursuant to
law, including any such cost, expense and disbursement involved in instituting
and prosecuting summary proceedings or in recovering possession of the Demised
Premises after default by Tenant or upon the expiration of the Term or sooner
termination of this Lease, and interest on all sums advanced by Landlord under
this Article at the rate of 4% percent per month or the maximum rate permitted
by law, whichever is less, may be sent by Landlord to Tenant monthly, or
immediately, at Landlord's option, and such amounts shall be due and payable in
accordance with the terms of such bills.
ARTICLE 31 - BROKER
Tenant represents that no broker except the Broker was instrumental in
bringing about or consummating this Lease and that Tenant had no conversations
or negotiations with any broker except the Broker concerning the leasing of the
Demised Premises. Tenant agrees to indemnify and hold harmless Landlord against
and from any claims for any brokerage commissions and all costs, expenses and
liabilities in connection therewith, including, without limitation, attorneys'
fees and expenses, arising out of any conversations or negotiations had by
Tenant with any broker other than the Broker. Landlord shall pay any brokerage
commissions due the Broker pursuant to a separate agreement between Landlord and
the Broker.
ARTICLE 32 - NOTICES
Any notice, statement, demand, consent, approval or other communication
required or permitted to be given, rendered or made by either party to the
other, pursuant to this Lease or pursuant to any applicable Legal Requirement,
shall be in writing and shall be deemed to have been properly given, rendered or
made only if hand delivered or sent by United States registered or certified
mail, return receipt requested, addressed to the other party at the address
hereinabove set forth (except that after the Commencement Date, Tenant's
address, unless Tenant shall give notice to the contrary, shall be James River
Corporation, Attention: Real Estate Department, P.O. Box 2218, Richmond,
Virginia 23217 with a copy to Cliff Cutchins, Legal Counsel, C/O James River
Corporation, P.O. Box 2218, Richmond, Virginia 23217 with a copy to Tenant, at
190 Forrest Street, Metuchen, New Jersey 08840.) as to Landlord, to the
attention of Nathan Lindenbaum, with a concurrent Notice to Landlord's
attorneys, Verde, Steinberg & Pontell (attention: Merrick D. Steinberg, Esq.),
2200 Fletcher Avenue, Fort Lee, New Jersey 07024, and shall be deemed to have
been given, rendered or made on the second day after the day so mailed, unless
mailed outside the State of New Jersey, in which case it shall be deemed
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to have been given, rendered or made on the third business day after the day so
mailed. Either party may, by notice as aforesaid, designate a different address
or addresses for notices, statements, demands, consents, approvals or other
communications intended for it.
ARTICLE 33 - ESTOPPEL CERTIFICATES
33.01. Each party shall, at any time and from time to time, as requested
by the other party, upon not less than ten (10) days' prior notice, execute and
deliver to the requesting party a statement certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), certifying the dates to which the Fixed Rent and Additional
Charges have been paid, stating whether or not, to the best knowledge of the
party giving the statement, the requesting party is in default in performance of
any of its obligations under this Lease, and, if so, specifying each such
default of which the party giving the statement shall have knowledge, and
stating whether or not, to the best knowledge of the party giving the statement,
any event has occurred which with the giving of notice or passage of time, or
both, would constitute such a default of the requesting party, and, if so,
specifying each such event; any such statement delivered pursuant hereto shall
be deemed a representation and warranty to be relied upon by the party
requesting the certificate and by others with whom such party may be dealing,
regardless of independent investigation. Tenant also shall include in any such
statement such other information concerning this Lease as Landlord may
reasonably request.
ARTICLE 34 - ARBITRATION
34.01. Landlord may at any time request arbitration, and Tenant may at any
time when not in default in the payment of any Rent request arbitration, of any
matter in dispute but only where arbitration is expressly provided for in this
Lease. The party requesting arbitration shall do so by giving notice to that
effect to the other party, specifying in said notice the nature of the dispute,
and said dispute shall be determined in Newark, New Jersey, by a single
arbitrator, in accordance with the rules then obtaining of the American
Arbitration Association (or any organization which is the successor thereto).
The award in such arbitration may be enforced on the application of either party
by the order or judgment of a court of competent jurisdiction. The fees and
expenses of any arbitration shall be borne by the parties equally, but each
party shall bear the expense of its own attorneys and experts and the additional
expenses of presenting its own
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proof. If Tenant gives notice requesting arbitration as provided in this
Article, Tenant shall simultaneously serve a duplicate of the notice on each
Superior Mortgagee and Superior Lessor whose name and address shall previously
have been furnished to Tenant, and such Superior Mortgagees and Superior Lessee
shall have the right to participate in such arbitration.
ARTICLE 35 - MEMORANDUM OF LEASE
35.01. Tenant shall not record this Lease. However, at the request of
Landlord, Tenant shall promptly execute, acknowledge and deliver to Landlord a
memorandum of lease in respect of this Lease sufficient for recording. Such
memorandum shall not be deemed to change or otherwise affect any of the
obligations or provisions of this Lease. Whichever party records such memorandum
of Lease shall pay all recording costs and expenses, including any taxes that
are due upon such recording.
ARTICLE 36 - ENVIRONMENTAL COMPLIANCE
36.01. Tenant shall provide for the proper disposal of all chemical
solvents, wastes, and other products used and produced in the operation of
Tenant's business. Tenant shall not spill or discharge any "Hazardous
Substances", "Hazardous Wastes" or other pollutants as defined in the
Environmental Cleanup Responsibility Act N.J.S.A. 13:1K-6 et seq. and other
-- ---
State, Federal and local environmental laws or regulations (collectively
"ECRA"), on or about the Demised Premises or to any sewer, septic system or
waste treatment facility or system serving the Building. In the event Tenant
receives any notice, whether written or oral, concerning the occurrence of any
spill, discharge or cleanup of any "Hazardous Substances", "Hazardous Wastes" or
other pollutants on or about the Demised Premises or into any sewer, septic
system or waste treatment facility or system serving the Building, from the New
Jersey Department of Environmental Protection ("DEP") or other state, federal or
local environmental agency ("Hazardous Discharge"), or any complaint, order,
citation or notice with regard to air emissions, water discharge, noise
emissions or any other environmental, health or safety matter affecting Tenant
or the operations of Tenant at the Demised Premises ("Environmental Complaint")
from any person, entity, or governmental agency, then Tenant shall give
immediate oral notice of same to Landlord, and written notice within twenty-four
(24) hours to Landlord which notice shall set forth specifically all relevant
facts and circumstances with respect thereto. Failure to give such notice shall
be a default under this Lease.
36.02. Landlord shall have the right, but not the obligation
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to enter onto the Demised Premises and/or take any action as it shall deem
necessary or advisable, to remove, cleanup, minimize the impact of, or otherwise
deal with, any Hazardous Discharge or any Environmental Complaint pertaining to
the Demised Premises, and all costs and expenses incurred by Landlord in the
exercise of such rights shall be deemed an "Additional Charge" and shall be
immediately due and payable by Tenant to Landlord. Landlord's right, as set
forth in the preceding sentence, shall be exercised only in the event that
Landlord determines in Landlord's sole judgment, that Tenant is not taking, in a
timely manner, all actions necessary to remove, cleanup, minimize the impact of,
or otherwise deal with, such Hazardous Discharges or Environmental Complaint.
36.03. In the event Tenant's operations at the Demised Premises now or
hereafter constitute an "Industrial Establishment" within the meaning of ECRA,
or in the event any other action is required to be taken by Tenant under ECRA,
then, upon the expiration or earlier termination of this Lease and upon any and
every event which shall constitute a closing, termination or transfer of
operations within the meaning of ECRA, or whenever other action is required to
be taken by Tenant in compliance with ECRA, Tenant shall comply with all
requirements of ECRA, at Tenant's sole cost and expense, to the satisfaction of
DEP or other environmental agency having jurisdiction, and Landlord. Tenant
shall immediately provide the Landlord copies of all correspondence, reports,
notices, orders, findings, declarations and other material pertinent to Tenant's
compliance with the provisions of ECRA immediately upon receipt of the same as
issued or received by Tenant from time to time. Tenant agrees to indemnify
Landlord from any and all liabilities that may result from an environmental
condition or an Environmental Complaint arising on or existing with respect to
the Demised Premises. This indemnity contained in this Paragraph 36.03 shall
survive the termination of this Lease.
36.04. In the event Tenant's operations at the Demised Premises shall not
subject it to the provisions of ECRA, then upon the expiration or earlier
termination of this Lease and upon any and every event which shall constitute a
closing, termination or transfer of operations within the meaning of ECRA,
Tenant shall obtain and deliver to Landlord, prior to any such termination, a
Letter of Non-Applicability confirming that the provisions of ECRA do not apply
to such closing or termination.
ARTICLE 37 - MISCELLANEOUS
37.01. Tenant expressly acknowledges and agrees that Landlord
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has not made and it not making, and Tenant, in executing and delivering this
Lease, is not relying upon, any warranties, representations, promises or
statements, except to the extent that the same are expressly set forth in this
Lease or in any other written agreement(s) which may be made between the parties
concurrently with the execution and delivery of this Lease. All understandings
and agreements heretofore had between the parties are merged in this Lease and
any other written agreement(s) made concurrently herewith, which alone fully and
completely express the agreement of the parties and which-are entered into after
full investigation. Neither party has relied upon any statement or
representation not embodied in this Lease or in any other written agreement(s)
made concurrently herewith.
37.02. No agreement shall be effective to change, modify, waive, release,
discharge, terminate or effect an abandonment of this Lease, in whole or in
part, unless such agreement is in writing, refers expressly to this Lease and is
signed by the party against whom enforcement of the change, modification,
waiver, release, discharge, termination or effectuation of abandonment is
sought.
37.03. If Tenant shall at any time request Landlord to sublet or let the
Demised Premises for Tenant's account, Landlord or its agent is authorized to
receive keys for such purposes without releasing Tenant from any of its
obligations under this Lease, and Tenant hereby releases Landlord of any
liability for loss or damage to any of the Tenant's Property in connection with
such subletting or letting.
37.04. Except as otherwise expressly provided in this Lease, the
obligations under this Lease shall bind and benefit the successors and assigns
of the parties hereto with the same effect as if mentioned in each instance
where a party is named or referred to; provided, however, that (a) no violation
of the provisions of Article 11 shall operate to vest any rights in any
successor or assignee of Tenant and (b) the provisions of this Section 37.04
shall not be construed as modifying the conditions of limitation contained in
Article 25.
37.05. Except for Tenant's obligations to pay Rent, the time for Landlord
or Tenant, as the case may be, to perform any of its respective obligations
hereunder shall be extended if and to the extent that the performance hereof
shall be prevented due to any Unavoidable Delays.
37.06. Any liability for payments hereunder (including, without
limitation, Additional Charges) shall survive the
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expiration of the Term or earlier termination of this Lease.
37.07. If Tenant shall request Landlord's consent and Landlord shall fail
or refuse to give such consent, Tenant shall not be entitled to any damages for
any withholding by Landlord of its consent; Tenant's sole remedy shall be an
action for specific performance or injunction, and such remedy shall be
available only in those cases where Landlord has expressly agreed in writing not
to unreasonably withhold or delay its consent or where as a matter of law
Landlord may not unreasonably withhold its consent.
37.08. Tenant shall not exercise its rights under Article 15 or any other
provision of this Lease in a manner which would violate Landlord's union
contracts or create any work stoppage, picketing labor disruption or dispute or
any interference with the business of Landlord or any tenant or occupant of the
Building.
37.09. Tenant shall give prompt notice to Landlord of (a) any occurrence in
or about the Demised Premises for which Landlord might be liable, (b) any fire
or other casualty in the Demised Premises, (c) any damage to or defect in the
Demised Premises, including the fixtures and equipment thereof, for the repair
of which Landlord might be responsible, and (d) any damage to or defect in any
part of the Building's sanitary, electrical, heating, ventilating, air-
conditioning, elevator or other systems located in passing through the Demised
Premises or any part thereof.
37.10. This Lease shall be governed by and construed in accordance with the
laws of the State of New Jersey. If any provision of this Lease shall be invalid
or unenforceable, the remainder of this Lease shall not be affected and shall
be enforced to the extent permitted by law. The table of contents, captions,
headings and titles in this Lease are solely for convenience of reference and
shall not affect its interpretation. This Lease shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Lease to be drafted. If any words or phrases in this Lease shall
have been stricken out or otherwise eliminated, whether or not any other words
or phrases have been added, this Lease shall be construed as if the words or
phrases so stricken out or otherwise eliminated were never included in this
Lease and no implication or interference shall be drawn from the fact that said
words or phrases were so stricken out or otherwise eliminated. Each covenant,
agreement, obligation or other provision of this Lease on Tenant's part to be
performed, shall be deemed and construed as a separate and independent covenant
of Tenant, not dependent on any other provision of this Lease. All terms and
words used in this Lease, regardless of the number or gender in which they are
used, shall
41
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be deemed to include any other number and any other gender as the context may
require.
37.11. Within thirty (30) days of each anniversary date of this Lease,
Tenant shall annually furnish to Landlord a copy of its then current audited
financial statement which shall be employed by Landlord for purposes of
financing the Premises and not distributed otherwise without prior
authorization of Tenant. In the event Tenant shall not furnish such financial
statement as set forth above, Tenant shall pay to Landlord a late charge equal
to one (1) month's Fixed Rent for each thirty (30) day period or part thereof
which expires from the due date to the date of actual receipt by Landlord of
such statement. Any material adverse change of Tenant's financial condition
shall be furnished to Landlord in writing forthwith and without request by
Landlord for same.
ARTICLE 38 - EXTENSION OF TERM
38.01. Provided Tenant is not in default of any of the terms and
conditions of this Lease, Tenant shall have two (2) option (s) (the "First
Option" and the "Second Option", respectively) to extend the term of this Lease
for two additional periods of five (5) years each (the "First Extended Period"
and "Second Extended Period", respectively, or collectively, the "Extended
Periods"). The First Extended Period shall commence upon the day following the
date upon which the Lease would otherwise expire and the Second Extended Period
shall commence upon the day following the date upon which the First Extended
Period would otherwise expire.
38.02. If Tenant elects to exercise the First Option, it shall do so by
giving notice of such election to Landlord in writing not more than fifteen (15)
months and not less than twelve (12) months before the Expiration Date. If
Tenant elects to exercise the Second Option, it shall do so by giving notice of
such election to Landlord in writing not more than fifteen (15) months and not
less than twelve (12) months before the last day of the First Extended Period.
38.03. Tenant agrees that it shall have forever waived its right to
exercise either option if it shall fail for any reason whatsoever to give such
notice to Landlord by the time provided for the giving of such notice, whether
such failure is inadvertent or intentional, time being of the essence as to the
exercise of such Option.
38.04. If Tenant elects to exercise either Option, the Term shall be
automatically extended for the applicable Extended Period covered by the Option
so exercised without execution of an
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extension or renewal lease. Within ten (10) days after request of either party
after the effective exercise of any such Option, Landlord and Tenant shall
execute, acknowledge and deliver to each other duplicate originals of an
instrument in recordable form confirming that such Option was effectively
exercised.
38.05. The Extended Periods shall be upon the same terms and conditions as
are in effect immediately preceding the commencement of such Extended Period,
except that (a) Tenant shall have no right or option to extend the term for any
period of time beyond the expiration of the Second Extended Period, (b) in the
Extended Period the Fixed Rent shall be adjusted as provided in Paragraph 38.06
hereof and (c) Tenant shall accept the Premises in its "AS IS" condition and
Landlord shall have no obligation to perform any work to the Premises. Any
termination, expiration, cancellation, surrender, assignment or sublet of this
Lease shall terminate any right or option for the Extended Periods not yet
exercised. Landlord shall have the right, for thirty (30) days after receipt of
notice of Tenant's election to exercise any option to extend the Term, to reject
Tenant's election if Tenant gave such notice during the continuance of an event
of default beyond any applicable grace period and such rejection shall
automatically render Tenant's election to exercise such Option null and void and
of no effect. The Options to extend the Term may not be severed from this Lease
or separately sold, assigned or otherwise transferred.
38.06. The Fixed Rent for the Extended Periods shall be at ninety (90%)
percent of Fair Market Value. Fair Market Value shall be determined by mutual
agreement of the parties within a reasonable time following Tenant's exercise of
its option to extend the term of the Lease. If the parties are unable to agree
on the Fair Market Value, the parties shall choose a licensed Real Estate
Appraiser who shall determine the Fair Market Value. The cost of said Real
Estate Appraiser shall be borne equally by the parties. If the parties are
unable to agree on a licensed Real Estate Appraiser, each party shall select one
licensed Real Estate Appraiser to appraise the Fair Market Value. If the
difference between the two appraisals is 20% or less of the lower appraisal then
the Fair Market Value shall be the average of the two appraisals. If the
difference between the two appraisals is greater than twenty (20%) percent of
the lower appraisal, the two
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appraisers shall select a third licensed Real Estate Appraiser to appraise the
Fair Market Value. The cost of the third appraisal shall in such case be borne
equally by the parties.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of
the day and year first above written.
WITNESS: LANDLORD:
ETZIONI PARTNERS
[SIGNATURE APPEARS HERE] By: /s/ Nathan Lindenbaum
- ---------------------------- -------------------------
Nathan Lindenbaum,
Manager and General Partner
ATTEST: TENANT:
JAMES RIVER CORPORATION
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ---------------------------- -------------------------
44
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EXHIBIT A
---------
ALL that certain lot, tract or parcel of land and premises, with the
buildings and improvements thereon erected, situate, lying and being in the
Township of Edison, in the County of Middlesex and State of New Jersey.
BEGINNING at a point in the northwesterly side line of Brunswick Avenue, as
said Brunswick Avenue is delineated 60.00 feet wide on a map entitled "Map of
Brunswick Avenue & Taylor Road Right of Way", situated in the Township of
Edison, Middlesex County, N.J. and filed in the Clerk's Office of Middlesex
County October 26, 1966 as Map #3029, File #954, said point being the
southeasterly corner of land now or formerly of Forner & Bodses; said beginning
point being also described along the following two courses from the intersection
of the northwesterly side line of a 100.00 foot Railroad Right of Way, formerly
lands of the United States of America, now or formerly of the Township of
Edison, with the southwesterly side line of Talmadge Road 60.00 feet wide: (1)
South 29 degrees 18 minutes west a distance of 224.49 feet along the aforesaid
northwesterly line of the 100.00 foot wide Railroad Right of Way: (2) South 72
degrees 18 minutes West along the prolongation of the aforementioned
northwesterly line of Brunswick Avenue extended northeasterly and to and along
the aforesaid northwesterly line of Brunswick Avenue, a distance of 290.91 feet
to the place of Beginning, and from said beginning point running thence (1) 72
degrees 18 minutes west along the aforesaid northwesterly line of Brunswick
Avenue a distance of 357.00 feet to a point: thence (2) north 13 degrees 38
minutes 09 seconds West, parallel with the southwesterly line of land now or
formerly of Forner & Bodses, a distance of 696.73 feet to a point: thence
(3) north 76 degrees 21 minutes 51 seconds east at right angles to the second
course of this description a distance of 364.73 feet to a point in the
northeasterly line of land now or formerly of Forner & Bodses: thence (4) along
the same, South 12 degrees 54 minutes East a distance of 671.48 feet to a point,
the aforementioned northwesterly line of Brunswick Avenue and place of
BEGINNING.
<PAGE>
EXHIBIT B
[MAP APPEARS HERE]
<PAGE>
EXHIBIT C - LANDLORD'S WORK
---------------------------
Exterior
- --------
1. The rear parking lot shall be completely repaved, including preparation of
a new base and the entire area enclosed with an eight (8) foot high cyclone
fence with angled barbed wire on top with gate as shown in red on Exhibit
B. The side parking lot shall be resurfaced.
2. A new roof shall be applied to the building.
3. The exterior non-brick of the building shall be re-painted.
4. Front yard landscaping shall be cleaned up.
5. Existing parking lot lighting shall be repaired.
6. Provided eight (8) 110 outlets for tractor engine heaters on the exterior
of the north wall (rear parking area). Space at twelve foot spacing from
west to east.
Docks
- -----
1. Three additional loading docks shall be installed.
2. Drainage will be provided at the loading docks to prevent standing water.
3. New shelters will be installed at all docks which do not have them.
4. Edge of door dock plates shall be installed on all loading docks.
5. Trailer lighting units shall be supplemented so that each door has one.
6. An unheated "air curtain" blower shall be installed up over each loading
dock.
Interior - General
- ------------------
1. 1 1/2 to 2 air changes per hour guaranteed.
2. New halogen or sodium lighting shall be installed.
3. A new overhead gas heating system shall be installed.
4. The interior of the building shall be painted.
5. The existing alarm system shall be delivered intact.
6. A 110 volt outlet shall be provided at each loading dock for tractor engine
heaters.
7. All sprinkler heads in front warehouse shall be changed to 286 degrees F
1/2" heads.
8. All sprinkler heads in rear warehouse shall be changed to 286 degrees F
17/32" heads.
Interior - Office
- -----------------
1. New exterior door shall be installed between the front parking area, and
the new office area to be built.
2. A three room office area consisting of approximately 600 sq. ft. shall be
built in accordance with Exhibit 'E', Landlord's Standard Building
Criteria.
3. One of the existing shipping offices shall be renovated.
4. All office areas shall be provided with heat and air conditioning.
5. Demolish all existing mezzanine space.
<PAGE>
EXHIBIT D
---------
Rules and Regulations
---------------------
1. The rights of each tenant in the entrances, and corridors servicing
the Building (other than the loading docks) are limited to ingress and egress
from such tenant's premises for the tenant and its employees, licensees and
invitees, and no tenant shall use, or permit the use of, the entrances or
corridors, for any other purpose. Fire exits and stairways are for emergency use
only, and they shall not be used for any other purpose by the tenants, their
employees, licensees or invitees. No tenant shall encumber or obstruct, or
permit the encumbrance or obstruction of, any of the side walks, plazas,
entrances, corridors, fire exits or stairways of the Building. Subject to the
term of the lease between landlord and Tenant (the "Lease"), Landlord reserves
the right to control and operate the public portions of the Building and the
public facilities, as well as facilities furnished for the common use of the
tenants, in such manner as it deems best for the benefit of the tenants
generally.
2. Any person whose presence in the Building at any time shall, in the
judgement of Landlord, be prejudicial to the safety, character or reputation of
the Building or of its tenants may be denied access to the Building or may be
ejected therefrom. During any invasion, riot, public excitement or other
commotion, Landlord may prevent all access to the Building by closing the doors
or otherwise for the safety of the tenants and protection of property in the
Building.
3. No awnings or other projections shall be attached to the outside walls
of the Building.
4. No showcase or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the halls, corridors or
vestibules.
5. No animals, fish or birds of any kind shall be brought into or kept
in or about the premises of any tenant of the Building, except fish kept for
decorative or recreational purposes, confined to the office space.
6. No noise, including, but not limited to, music or the playing of
musical instruments, recordings, radio or television, which, in the judgement
of Landlord, might disturb other tenants in the building, shall be made or
permitted by any tenant. Subject to the terms of the Lease, nothing shall be
done or permitted in the premises of any tenant which would impair or interfere
with the use or enjoyment by any other tenant of any other space in the
Building.
<PAGE>
7. No tenant, nor any tenant's contractors, employees, agents, visitors
or licensees, shall at any time bring into or keep upon the premises or the
Building any inflammable, combustible, explosive or otherwise dangerous fluid,
chemical or substance. Contrary to this article, Tenant shall operate motor lift
trucks, operated by electric, propane, or petroleum fuels.
8. Additional locks or bolts of any kind which shall not be operable by
the grand master key for the Building shall not be placed upon any of the doors
or windows by any tenant, nor shall any changes be made in locks or the
mechanism thereof which shall make such locks inoperable by said grand master
key. Each tenant shall, upon the termination of its tenancy, turn over to
Landlord all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys
furnished by landlord such tenant shall pay to Landlord the cost thereof.
9. Landlord shall in no way be liable to any tenant for damages or loss
arising from the admission, exclusion or ejection of any person to or from the
premises or the Building under the provisions of this Rule or Rule 2 hereof.
10. No tenant shall occupy or permit any portion of its premises to be
occupied as an office for a public stenographer or public typist, or for the
possession, storage, manufacture, or sale of liquor, narcotics, dope, tobacco in
any form, or as a barber, beauty or manicure shop, or as a school.
11. Landlord, its contractors, and their respective employees, shall have
the right to use, without charge therefore all lights, power and water in the
premises of any tenant while cleaning or making repairs or alterations in the
premises of such tenant.
12. No premises of any tenant shall be used for lodging or sleeping or for
any immoral or illegal purposes.
13. Employees of Landlord shall not perform any work or do anything
outside of their regular duties, unless under special instructions from
Landlord.
14. Canvassing, soliciting and peddling in the Building are prohibited and
each tenant shall cooperate to prevent the same.
15. No tenant shall cause or permit any unusual objectionable odors to
emanate from its premises which would annoy other tenants or create a public or
private nuisance. No cooking shall be done in the premises of any tenant except
as is expressly permitted in such tenant's Lease.
<PAGE>
16. No acids, vapors or other materials shall be discharged or permitted
to be discharged into the waste lines, vents or flues of the Building which may
damage them. The water and wash closets and other plumbing fixtures in or
servicing any tenant's premises shall not be used for any purpose other than the
purposes for which they were designed or constructed, and no sweepings, rubbish,
rags, acids or other foreign substances shall be deposited therein. All damages
resulting from any misuse of the fixtures shall be borne by the tenants who, or
whose servants, employees, agents, visitors or licensees shall have caused the
same. Any cuspidors or containers or receptacles used as such in the premises or
any tenant or for garbage or similar refuse, shall be emptied, cared for and
cleaned by, and at the expense of such tenant.
17. All entrance doors in each tenant's premises shall be left locked and
all windows shall be closed by the tenant when the tenant's premises are not
in use.
18. Hand trucks not equipped with rubber tires and slide guards shall not
be used within the Building.
19. Subject to Section 14.01 of the Lease, landlord reserves the right to
rescind, alter or waive any rule or regulation of any prescribed for the
Building when, in its reasonable judgement, it deems it necessary, desirable or
proper for its best interest and for the best interest of the tenants, and no
alteration or waiver of any rule or regulation in favor of one tenant shall
operate as an alteration or waiver in favor of any other tenant.
<PAGE>
EXHIBIT E
---------
Landlord Standard Building Criteria
-----------------------------------
I. INTERIOR PARTITIONS
-------------------
1.1 Interior standard partitions shall be constructed of steel studs faced on
each side with one layer of gypsum board. Studs shall be spaced 24" o.c.
and partitions shall extend to underside of suspended ceiling.
1.2 Demising walls shall be constructed as above except with batt sound
deadening insulation with openings as required to accommodate ductwork,
pipes and beams above suspended ceiling.
1.3 Partition allowance is 55 linear feet for each 1,000 sq. ft. of rentable
office space.
1.4 Curved, angular partitions, and interior windows are excluded. Partitions
terminating at exterior perimeter of building shall adjoin a window mullion
or column.
II. DOORS AND FRAMES
----------------
2.1 Doors shall be 3'0" x 6'8" x 1-3/4" flush solid core paint grade wood
single swing in steel frames. Typical frames shall be steel knockdown type
with factory prime finish.
2.2 Fire-rate doors, where required, shall be flush hollow metal 3'0" x 6'8" x
1-3/4" with door, frames and hardware conforming to requirements of
Underwriters' Laboratories.
2.3 Sliding or bi-fold door units shall be 6'8" high x 1-3/4" thick, width as
required, flush hollow core paint grade wood. Openings up to 6'-0" wide
shall count as one door unit.
2.4 Door allowance is three doors per 1,000 sq. ft. of rentable office space.
2.5 One single glass entry at exterior entrance.
<PAGE>
III. HARDWARE
--------
3.1 Building standard hardware shall be Sargent 6 line equal US 26D brushed
chrome or US 10 Satin Bronze as selected by Tenant. Knobs shall be either
Orbit or Tulip design.
3.2 Typical interior doors shall have 1-1/2 pair of 4 1/2" x 4 1/2" butts,
lockset or latch set and door stop.
3.3 All locks shall be keyed to master key system.
IV. CEILINGS
--------
4.1 Materials and Installation
A. Ceiling suspension materials
1. Ceilings throughout shall be manufacturer's standard exposed
runners, cross-runners and accessories mechanically suspended on
a 2' x 4' metal grid to receive acoustical ceiling boards.
2. Ceiling members shall have uniform factory-applied finish on
exposed surfaces of ceiling suspension system, including molding,
trim and accessories. Finish shall be manufacturer's standard
white baked enamel.
B. Acoustical panels
1. Acoustical ceiling boards shall be 2' x 4' x 5/8" Celotex mosaic
pattern or equal lay-in fissured mineral acoustical boards with an NRC
of 50-65.
4.2 Ceiling height to be 8'-0" minimum, except where required to accommodate
mechanical installations.
V. FLOORING
--------
5.1 Materials and installation
A. Carpet
1. Carpeting in office areas shall be building standard wall-to-wall
glue down installation, color selected by Tenant from Landlord's
sample board.
2. Flame spread Rating: Provide only carpet which has been tested
and passed ASTM E84 (Tunnel Test) for Class "B" carpet.
<PAGE>
B. Vinyl tile
1. Vinyl tile shall be 12" x 12" x 3/16".
2. Adhesives (Cements): Waterproof, stabilized type as recommended
by flooring manufacturer to suit material and substrate
conditions.
C. Resilient Base
1. Resilient base shall be building standard 4" high vinyl or rubber,
straight or cove continuous runs with premolded corners, color as
selected by Tenant.
VI. ELECTRICAL
----------
6.1 The work to be installed shall consist of the furnishing of all electrical
work in accordance with all rules and regulations of the municipality and
all other authorities having jurisdiction including National Electric Code.
6.2 Fixtures shall be mounted individually or continuous as indicated and shall
be suitable for type of mounting shown. Only fluorescent fixtures are
included.
6.3 Lighting shall consist of recessed 2' x 4' florescent lighting fixtures
with four (4) 40 watt lamps and acrylic lenses. Lighting fixtures shall be
installed at a rate of one (1) fixture for every 80 square feet of net
floor area.
6.4 Landlord shall initially install lamps at Landlord's expense. Lamps shall
be as manufactured by Westinghouse, G.E. or Sylvania. All fluorescent lamps
shall be Cool White, unless otherwise noted.
6.5 Each private office shall receive one (1) single pole switch. Open office
areas shall be switched in an adequate number to meet code requirements.
All switches shall be located in either columns or gypsum board partitions.
6.6 One (1) 110 volt duplex receptacle shall be installed for each 100 SF of
floor area.
6.7 The Landlord shall make available telephone service. The Tenant shall be
responsible for all telephone service throughout his demised premises.
VII. HVAC
----
7.1 Building office standard air conditioning system is based on an average
electrical load of 3-1/2 watts per square foot and one (1) person per 200
square feet of useable area in accordance with the following design
conditions.
<PAGE>
7.2 DESIGN CONDITIONS:
------------------
Summer Outside 90 degrees F.D.B. 75 degrees F.W.B
Summer Inside 78 degrees F.D.B.+2 degrees F.
Winter Outside 13 degrees F. 15 Mile/Hr. Wind
Winter Inside 70 degrees F.D.B.
7.3 The air conditioning, heating and ventilating system will be designed and
installed to conform to local codes, ordinances, as well as the BOCA Code.
VIII.PAINTING AND DECORATING
-----------------------
8.1 The building standard shall include two (2) coats of latex flat paint. All
metal and wood doors and frames shall receive two (2) coats of semi-gloss
enamel.
8.2 Minimum Coating Thickness: Apply material at not less than manufacturer's
recommended spreading rate to establish a total dry film thickness as
indicated or if not indicated, as recommended by coating manufacturer.
8.3 Tenant may select colors from building standard color chart but in no event
shall colors exceed one (1) color per room or four (4) colors total.
8.4 All vinyl or paper wallcovering shall be furnished and installed at the
expense of the Tenant.
<PAGE>
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT, made this 13th day of April, 1992, between
----
Etzioni Partners, having an office c/o MGS Development, 52 Forest Avenue,
Paramus, New Jersey 07653-1549 ("Landlord") and James River Paper Company,
Inc., a Virginia corporation with offices at 120 Tredegar Street, Richmond,
Virginia 23219 ("Tenant"), hereby amends a Warehouse Lease dated February 13,
1992 between Landlord and Tenant ("Lease") for approximately 94,400 square feet
of warehouse space located at 64 Brunswick Avenue, Edison, New Jersey.
NOW, THEREFORE, in consideration of the rents and covenants herein
specified to be paid by Tenant and the obligations and covenants herein
undertaken by the Landlord, Landlord and Tenant agree as follows:
1. Unless specifically amended by the terms hereof, the Lease shall
in all respects remain unmodified.
2. Paragraph 36.03 is deleted in its entirety and the following
substituted in its place: "In the event Tenant's operations at the Demised
Premises now or hereafter constitute an "Industrial Establishment" within the
meaning of ECRA, or in the event any other action is required to be taken by
Tenant under ECRA, then, upon the expiration or earlier termination of this
1
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Lease and upon any and every event which shall constitute a closing, termination
or transfer of operations within the meaning of ECRA, or whenever other action
is required to be taken by Tenant in compliance with ECRA, Tenant shall comply
with all requirements of ECRA, at Tenant's sole cost and expense, to the
satisfaction of DEP or other environmental agency having jurisdiction, and
Landlord. Tenant shall immediately provide the Landlord copies of all
correspondence, reports, notices, orders, findings, declarations and other
material pertinent to Tenant's compliance with the provisions of ECRA
immediately upon receipt of the same as issued or received by Tenant from time
to time. Tenant agrees to indemnify Landlord from any and all liabilities that
may result from an environmental condition, Hazardous Wastes, Hazardous
Substances, Hazardous Discharge (collectively "Hazardous Substances") or an
Environmental Complaint caused by the operation of Tenant's business on the
Demised Premises after the Commencement Date and during Tenant's occupancy of
the Demised Premises. Tenant, at its expense, has hired an environmental testing
firm which has performed a non-invasive baseline site assessment on the Demised
Premises to learn of any preexisting or potential environmental condition. Such
testing did not reveal the existence of any Hazardous Substance at, in or upon
the Demised Premises except for the possible existence of asbestos containing
materials ("ACM") in the roofing and the existence of an underground storage
2
<PAGE>
tank (the "Tank"). In the event any Environmental Requirement (as hereinafter
defined) requires removal or encapsulation of any ACM from the Demised Premises,
such removal or encapsulation shall be undertaken by Landlord at its cost and
expense. Additionally, Landlord shall use reasonable efforts to remove the Tank
on or before June 1, 1992, such removal to be in accordance with any Legal
Requirements. In the event the Tank is not removed prior to Tenant's occupancy
of the Demised Premises, Landlord's removal during Tenant's occupancy shall not
materially interfere with Tenant's use of the Demised Premises. Any reports,
letters, communication or any other documentation, written or oral, shall remain
confidential and shall not be disclosed to any person or entity (other than
those employees, agents and consultants of Landlord or Tenant with an actual
need to be aware of this information). Notwithstanding the foregoing, in no
event shall Tenant be or become liable for any preexisting environmental
condition, Hazardous Substances, or any Environmental Complaint arising from the
use or occupancy of the Demised Premises before the Commencement Date of the
Lease. Landlord shall indemnify Tenant from any and all liability arising from
the presence of Hazardous Substances upon, about or beneath the Demised
Premises, or having migrated from the Demised Premises, or arising in any manner
whatsoever out of the violation of any Environmental Requirement pertaining to
the Demised Premises, and the activities
3
<PAGE>
thereon, provided such environmental condition existed at or prior to the
Commencement Date. The term "Environmental Requirement" means any laws,
ordinances, statutes, codes, rules, regulations (including zoning or subdivision
regulations), order, directives, permits or licenses addressing environmental,
health, or safety issues or requirement of or by any Federal, state, local or
other political subdivision exercising jurisdiction over the property, including
but not limited to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. (S) 9601 et. seq.), the Hazardous Materials
Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.A. (S) 6901 et. seq.), the Toxic Substances Control Act (15
U.S.C. (S) 2601 et. seq.)., the Clean Air Act (942 U.S.C. (S) 7401 et. seq.),
the Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et. seq.), and the
Safe Drinking Water Act (42 U.S.C. (S) 300f et. seq.), all as presently in
effect and as the same may hereafter be amended from time to time, and any
regulation pursuant thereto. Landlord shall indemnify Tenant from any and all
liability arising from the presence of Hazardous Substances upon, about or
beneath the Demised Premise, or migrating to or from the Demised Premises,
caused by Landlord during the term of this Lease. Tenant shall indemnify
Landlord from any and all liability arising from the presence of Hazardous
Substances upon, about or beneath the Demised Premises, or migrating to or from
the Demised Premises,
4
<PAGE>
caused by Tenant. The obligation of the indemnifying party shall include, but
shall not be limited to, the burden and expense of defending all claims, suits,
and administrative proceedings, even if such claims, suits or proceedings are
groundless, false or fraudulent, and conducting all negotiations of any
description, and paying and discharging, when as the same become due, any and
all judgments, penalties or other sums due against such indemnified persons. The
obligations of the indemnifying party shall survive, without limitation, the
expiration or earlier termination of the Lease.
Within thirty (30) days of Tenant vacating the Demised Premises and prior
to any new Tenant taking occupancy of the Demised Premises, Landlord, at its
option, may hire an environmental testing firm to conduct a closeout site
assessment of the Demised Premises to determine compliance by Tenant with ECRA
and any Environmental Requirement. The expense of the closeout site assessment
shall be borne by Landlord, provided, however, in the event it is determined
that Tenant has violated ECRA or any Environmental Requirement requiring any
clean up or remediation, Tenant shall reimburse Landlord for the cost of such
environmental testing. Any reports, letters, communication or other
documentation, written or oral, shall remain confidential and shall not be
disclosed to any person or entity (other than those employees, agents and
consultants of Landlord or Tenant with an
5
<PAGE>
actual need to be aware of this information) except in the event Landlord
determines that any such factual data generated in connection with the closeout
site assessment creates an obligation of Tenant or Landlord, under any
applicable law, to notify any government or private entity or individual of the
data, in which event Landlord shall provide prior written notification to
Tenant. In the event that Landlord chooses not to perform the closeout site
assessment, or, in the event that the closeout site assessment, if performed,
does not reveal the presence of Hazardous Substances upon, about or beneath the
Demised Premises, or migrating to or from the Demised Premises, caused by
Tenant, in an amount which is in violation of any ECRA or any Environmental
Requirement, Landlord shall indemnify Tenant from and against any and all
liability as between Landlord and Tenant relating to the presence of any
Hazardous Substances at, in, or upon the Demised Premises, provided, however,
that Landlord does not notify Tenant, in writing, within one year of Tenant
vacating the Demised Premises, that Landlord has discovered any Hazardous
Substances at, in or upon the Demised Premises which Landlord reasonably
believes to have been caused by Tenant. Landlord shall have the burden of
establishing that the presence of any such Hazardous Substances at, in or upon
the Demised Premises was caused by Tenant. To the extent that the closeout site
assessment report or any subsequent inspections (subject to the Landlord's one
year notice requirement)
6
<PAGE>
reveals environmental violations and/or the deposit at the Demised Premises of
Hazardous Substances caused by Tenant, Tenant shall commence removal of the same
within 30 days of written notice from Landlord and shall thereafter diligently
pursue such removal, in compliance with ECRA and any Environmental Requirement.
The responsibility of the Tenant to remove any Hazardous Substances caused by
Tenant during the term hereof shall survive the expiration or earlier
termination of this Lease. Notwithstanding the foregoing, in no event shall
Tenant be or become liable for any environmental condition, Hazardous
Substances, or any Environmental Complaint not caused by Tenant and arising from
the use or occupancy of the Demised Premises after the expiration or earlier
termination of this Lease.
3. The Lease is modified to provide that the correct name of the Tenant
is James River Paper Company, Inc. By executing below, Tenant ratifies and
confirms its execution of the Lease and warrants and represents that the
individual signing on behalf of Tenant was a corporate officer duly authorized
to bind the Corporation and that the execution and delivery of the Lease and
this Modification has been approved as required by the Tenant's Certificate of
Incorporation and By-Laws.
4. Paragraphs 1.01E and 1.01K are modified to provide that the Building
and the Demised Premises contain approximately 94,940 square feet of Floor
Space. Prior to the Commencement Date,
7
<PAGE>
Landlord shall forward to Tenant a certification form Landlord's architect
verifying the Floor Space of the Demised Premises. Tenant, at its option, may,
within thirty (30) business days of receipt of Landlord's certification, measure
the Demised Premises and certify to Landlord its calculation of the Floor Space
of the Demised Premises. In the event Landlord and Tenant are unable to agree
upon the Floor Space of the Demised Premises, the matter shall be submitted to
arbitration pursuant to Paragraph 34.01 of the Lease.
5. Tenant acknowledges that it is aware that Landlord, in reliance on
Tenant's execution of the Lease, will release its current Tenant from its
obligations under its lease (the "Prior Lease") with respect to the Demised
Premises. Accordingly, in the event Tenant defaults under the Lease, Tenant,
shall be responsible for any damages Landlord has suffered as a result of
terminating the Prior Lease, in addition to any other damages Landlord may be
entitled to pursuant to any applicable default provisions in the Lease.
6. In the fifth line of Paragraph 1.01I "May" is changed to "June".
7. In the seventh and eighth lines of Paragraph 37.11 "equal to one (1)
month's Fixed Rent" is deleted and the following substituted in its place: "in
the amount of Two Thousand Five Hundred and 00/100 ($2,500.00) Dollars.
8
<PAGE>
8. Tenant is currently a tenant in premises located at 9 Taylor
Road, Edison, New Jersey, pursuant to a written lease agreement (the "Tenant
Lease") dated May 9, 1989, executed by LMP Joint Venture, as Landlord, and
Tenant. Tenant has represented to Landlord that pursuant to the Tenant Lease,
Tenant will be deemed a holdover tenant as of May 1, 1992 and, accordingly, be
required to pay rent at a holdover rate equal to one and on-half times the rent
payable under the Tenant Lease (the "Holdover Rent"). Landlord has agreed to
reimburse Tenant for fifty (50%) percent of the difference between the Holdover
Rent and the basic monthly rent payable under the Lease for the month of May,
1992 (the "Holdover Reimbursement"), provided, however, that Landlord's
obligation under this paragraph shall not exceed Seven Thousand Five Hundred and
00/100 ($7,500.00) Dollars. Such reimbursement shall be effected by granting to
Tenant an offset to its first monthly payment of Fixed Rent payable under the
Lease in the amount of the Holdover Reimbursement. Prior to such reimbursement,
Tenant shall furnish Landlord with a certified statement setting forth the
amount of the Holdover Rent, which statement shall have annexed thereto
certified true copies of the applicable provisions of the Tenant Lease
confirming the amount of the Holdover Rent. Tenant shall use its best efforts to
negotiate with the Landlord under the Tenant Lease in order to obtain a
reduction in the amount of the Holdover Rent payable to said Landlord. In the
event of any such
9
<PAGE>
reduction, the Holdover Reimbursement shall be recalculated so that Landlord
shall reimburse Tenant for fifty (50%) percent of the difference between the
reduced Holdover Rent and the basic monthly rent payable under the Lease for the
month of May, 1992, subject to the $7,500.00 cap provided for above.
IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands and
seals the date and year first above written, and acknowledge, the one to the
other, that they possess the requisite authority to enter into this transaction
and to sign this Agreement.
WITNESS: ETZIONI PARTNERS, Landlord
[SIGNATURE APPEARS HERE] By: /s/ Nathan Lindenbaum
- ------------------------------ ------------------------------------
Nathan Lindenbaum
Manager and General Partner
ATTEST: JAMES RIVER PAPER COMPANY, INC.,
Tenant
[SIGNATURE APPEARS HERE] By: /s/ Stephen E. Hare
- ------------------------------ -----------------------------------
PRINT NAME: Stephen E. Hare
-----------------------------
TITLE: VP, Corporate Finance & Treasurer
---------------------------------
10
<PAGE>
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT, made this 9th day of December, 1992, between ETZIONI
---
PARTNERS, having an office c/o MGS Development, 52 Forest Avenue, Paramus, New
Jersey 07653-1549 ("Landlord") and JAMES RIVER PAPER COMPANY, INC., a Virginia
Corporation with offices at 120 Tredegar Street, Richmond, Virginia 23219
("Tenant"), hereby amends a Warehouse Lease dated February 13, 1992 (which
Warehouse Lease was amended pursuant to a First Amendment dated April 13, 1992)
between Landlord and Tenant (the "Lease") for approximately 94,400 square feet
of warehouse space located at 64 Brunswick Avenue, Edison, New Jersey.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions hereinafter contained, and for good and valuable
consideration the receipt of which is hereby acknowledged, Landlord and Tenant
agrees as follows:
1. Unless specifically amended by the terms hereof, the Lease shall in
all respects remain unmodified.
2. Paragraph 13.02(c) is deleted in its entirety.
3. A new Paragraph 13.06 is added as follows:
13.06 Landlord shall maintain, at Tenant's expense, rental income
insurance for the benefit of Landlord, insuring the Landlord against the loss of
Fixed Rent and Additional Charges, as in the Lease provided from the perils of
fire and extended coverage for a period of not less than one (1) year. Tenant
shall reimburse Landlord for the cost of such insurance within ten (10) days of
receipt of an invoice for same from Landlord and such reimbursement
<PAGE>
shall be deemed an Additional Charge for purposes of this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands and
seals the date and year first above written, and acknowledge, the one to the
other, that they possess the requisite authority to enter into this transaction
and to sign this Agreement.
WITNESS: ETZIONI PARTNERS, Landlord
[SIGNATURE APPEARS HERE] By: /s/ Nathan Lindenbaum
- ------------------------------ ------------------------------------
Manager and General Partner
WITNESS: JAMES RIVER PAPER COMPANY, INC.,
Tenant
[SIGNATURE APPEARS HERE] By: /s/ Matthew J. Hiles
- ------------------------------ ------------------------------------
Matthew J. Hiles
------------------------------------
(Print Name)
Lease and Property Administrator
----------------------------------------
(Title)
<PAGE>
EXHIBIT 10.28
FIRST ADDENDUM TO LEASE
-----------------------
THIS ADDENDUM TO LEASE made this ____ day of ___________, 1989, by and
between STONE MOUNTAIN INDUSTRIAL PARK, INC., First Party, hereinafter referred
to as "Lessor", and SCOTT CONTAINER PRODUCTS GROUP, INC., formerly WMF Container
corporation, hereinafter referred to as "Lessee":
WITNESSETH
----------
WHEREAS, Lessor and Lessee have previously entered into a Lease
(hereinafter referred to as "the Lease"), dated October 15, 1984 including an
82,625 square foot building located at 4610 Lewis Road, Stone Mountain, Georgia,
the term of said Lease expiring October 31, 1994, said Lease being incorporated
herein as part of the First Addendum by reference, and
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein, acknowledged by both parties to be adequate and sufficient, the parties
hereto agree as follows:
1. Lessor agrees, at Lessor's expense, to purchase, along with existing
improvements, the approximate one acre of land highlighted in yellow as shown on
the attached plan, marked as Exhibit "A"; and incorporate this property with the
premises described in the Lease. The existing improvements on this property
will be removed at Lessee's expense by Lessor and Lessee shall have no further
liability or obligation to replace said improvements upon expiration of this
lease or any renewal thereof.
2. Lessee shall pay to Lessor, promptly on the first day of each month in
----- ---
advance without demand, the additional monthly rental of Three Thousand Five
Hundred and No/100 $3,500 Dollars from August 1, 1989 through October 31, 1994.
3. In the event Lessor has not acquired title to this property and made if
available for Lessee's use by August 1, 1989, Lessee shall only be responsible
for such additional rental payments on a prorated basis for any partial month of
use. In the event the property is available for use by Lessee prior to August
1, 1989, Lessee may use the property at such time and pay such additional rental
on a prorated basis for any partial month of use.
4. It is understood that Lessor has initiated negotiations for purchase of
this property and this Addendum is completely subject to satisfactory results
from those negotiations.
<PAGE>
Effective 3/1/94 this paragraph null and void.
5. Paragraph 30 of the lease shall be revised to read as follows:
30. At the expiration of the initial term, Lessee shall have the
option to extend this lease for a further term of ten (10) years, upon the same
terms and conditions herein set forth, except that the monthly rental shall be
adjusted to reflect such sum of money as is equivalent at the time of
commencement of the further term to the purchasing power of $20,750.00 at the
commencement of the original lease term provided that Lessee shall have
fulfilled completely and in a timely manner all of the terms and conditions of
the Lease. This equivalent purchasing power shall be measured by the index
number of the "Consumer Price Index For All Urban Consumer - All items
(1982-1984 equals 100)" as prepared by the Bureau of Labor Statistics of the
United States Department of Labor for the month immediately preceding the
termination of the initial term of this Lease as same compares with said index
number as it existed for the month of the commencement of this Lease. As an
example of how the new rental rate will be determined, if the said index number
for the commencement month of the original Lease term is 150.00 and if the index
number for the month immediately preceding the termination of the initial term
of this Lease is 210.00, the percentage difference used to adjust the original
rent as of the new term would be 40% (calculated as follows: 210.00 minus
150.00 equals 60.00 which divided by 150.00 equals 40%). Thus, the rental for
the renewal term in this example would be $29,050.00 which is $20,750.00
(original rent) x 40% = $8,300.00 plus $20,750.00 (original rent)]. In the
event the Consumer Price Index referenced herein is discontinued, the parties
shall accept comparable statistics on the purchasing power of the consumers'
dollars as published at the time of said discontinuation by a responsible
periodical of recognized authority to be mutually chosen by the parties. Lessee
shall notify Lessor in writing at least one hundred eighty (180) days prior to
the expiration date of the original term as to whether it intends to exercise
said option. Notwithstanding anything contained herein to the contrary, the
minimum rental under this option shall be $20,750.00 per month.
6. Except as expressly amended herein, the Lease and the First Addendum
are in all respects ratified and confirmed and all the covenants, agreements,
terms, provisions, and conditions thereof shall be and remain in full force and
effect.
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this First
Addendum to Lease as of the day and year first above written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
(CORP. SEAL)
By: /s/ Jerry L. Silvio
-------------------------------------
Jerry L. Silvio, Vice President
LESSOR
[SIGNATURE APPEARS HERE]
- ---------------------------------
Witness
SCOTT CONTAINER PRODUCTS GROUP, INC.
(CORP. SEAL)
By: /s/ [SIGNATURE ILLEGIBLE]
-------------------------------------
VP and Controller
LESSEE
/s/ Ken Scott
- ---------------------------------- [NOTARY STAMP APPEARS HERE]
(2)
Witness
<PAGE>
STATE OF GEORGIA
COUNTY OF DEKALB
THIS LEASE, made this the 15 day of October 1984 by and between STONE
MOUNTAIN INDUSTRIAL PARK, INC. First Party, hereinafter referred to as "Lessor";
and W. M. F. CONTAINER CORPORATION, Second Party, hereinafter referred to as
"Lessee";
WITNESSETH:
Premises
1. The Lessor, for and in consideration of the rent, covenant, agreement
and stipulation hereinafter mentioned, reserved, and contained, to be paid, kept
and performed by the Lessee, has leased and rented, and by these premises does
lease and rent, also the said Lessee, and said Lessee hereby agrees to lease and
take upon the terms and conditions which hereinafter appear, the following
described property (hereinafter called "Premises") below:
All that tract or parcel of land lying and being in Land Lot 170 of the 18th
District of DeKalb County, Georgia, and more particularly described as follows:
Beginning at the northwest corner of the right-of-way lines formed by the
intersection of Mountain Industrial Boulevard and Lewis Road; thence in a
westerly direction along the north right-of-way line of Lewis Road 556.9 feet to
a point called the point of beginning; thence in a northerly direction
approximately 349.05 feet to a point on the south right-of-way-line of the
Georgia Railroad lead track; thence along the south right-of-way line of the
Georgia Railroad lead track in a westerly direction 403.00 feet to a point;
thence in a southerly direction 349.05 feet to a point on the north right-of-way
line of Lewis Road; thence in an easterly direction along the north right-of-way
line of Lewis Road 403.00 feet to the point of beginning.
Included in this lease is the existing 82,625 square foot building known as 4610
Lewis Road, Stone Mountain, GA 30083. Premises to be taken as is and subject to
availability.
Term
2. To have and to hold for a term of ten (10) years with said term to begin
on the 1st day of November 1984.
Rental
3. Lessee shall pay to lessor, promptly on the first day of each month in
advance without demand during the term of this lease, a monthly rental of
Seventeen Thousand Two Hundred Fifty and No/100 ($17,250.00) Dollars for one
hundred twenty (120) consecutive months.
(1)
<PAGE>
Utility Bills
4. Lessee shall pay all utility bills of all types, including but not
limited to water and sewer, natural gas, electricity and sanitary pick up bills
for the leased premises, or used by Lessee in connection therewith. If Lessor
does not pay same, Lessor may pay the same and such payment shall be added to
the rental of the premises.
Mortgagee's Rights
5. Lessee's rights shall be subject to any bona fide mortgage or deed to
secure debt which is now, or may hereafter be, placed upon the premises by
Lessor, and Lessee agrees to execute and deliver such documentation as may be
required by any such mortgagee to effect any subordination.
Maintenance and Repairs by Lessee
6. Lessee shall not allow the premises to fall out of repair or
deteriorate, and, at Lessee's own expense Lessee shall keep and maintain said
premises, including lawn maintenance and landscaping, in good order and repair,
except portions of the premises to be repaired by Lessor under terms of
Paragraph 7 hereinafter set out. Lessee also agrees to keep all systems
pertaining to water, sewer, electrical, heating, ventilation, air conditioning
and lighting in good order and repair.
Repairs by Lessor
7. Lessor agrees to keep in good repair the roof and exterior walls,
exclusive of all glass and exclusive of all exterior doors. Lessor gives to
Lessee exclusive control of premises and shall be under no obligation to inspect
said premises.
Modifications and Alterations to the Premises
8. No modifications or alterations to the building or openings cut through
the roof are allowed without prior written consent of Lessor.
Return of Premises
9. Lessee agrees to return the premises to Lessor at the expiration, or
prior termination, of this lease in as good condition and repair as when first
received, natural wear and tear, damage by storm, fire, lightning, earthquake or
other casualty alone excepted.
Destruction of or Damage to Premises
10. If premises are totally destroyed by storm, fire, lightning, earthquake
or other casualty, this lease shall terminate as of the date of such
destruction, and rental shall be accounted for as between Lessor and Lessee as
of that date. If premises are damaged, but not wholly destroyed by any of such
casualties, rental shall abate in such proportion as use of premises has been
destroyed, and Lessor shall restore premises to substantially the same
conditions as before damage as speedily as practicable, whereupon full rental
shall recommence, provided further, however, that if the damage shall be so
extensive that the same cannot be reasonably repaired and restored within six
(6) months' time from date of the casualty, then either Lessor or Lessee may
cancel this lease by giving written notice to the other party within thirty
(30) days from the date of such casualty. And, in such event, rental shall be
apportioned and paid up to the date of such casualty.
Indemnity
11. Lessee agrees to indemnify and save harmless the Lessor against all
claims for injuries to persons or damages to property by reason of the use or
occupancy of the leased premises, and all expenses incurred by Lessor because
thereof, including attorneys' fees and court costs, but Lessee shall not be
liable for the acts of any other tenants of said property.
Governmental Orders
12. Lessee agrees, at its own expense, to promptly comply with all
requirements of any legally constituted public authority made necessary by
reason of Lessee's occupancy of said premises. Lessor agrees to promptly comply
with any such requirements if not made necessary by reason of Lessee's
occupancy. It is mutually agreed, however, between Lessor and Lessee, that if
in order to comply with such requirements, the cost to Lessor or Lessee, as the
case may be, shall exceed a sum equal to one year's rent, then Lessor or Lessee
who is obligated to comply with such requirements is privileged to terminate
this lease by giving written notice of termination to the other party by
certified mail, which termination shall become effective sixty (60) days after
receipt of such notice, and which notice shall eliminate necessity of compliance
with such requirement by party giving notice unless party receiving such notice
of termination shall, before termination becomes effective, pay to party
giving notice all cost of compliance in excess of one year's rent, or secure
payment of such sum in manner satisfactory to party giving notice.
Condemnation
13. If the whole of the leased premises, or such portion thereof as will
make premises unusable for the purpose herein leased, be condemned by any
legally constituted authority for any public use or purpose, then in either of
said events the term hereby granted shall cease from the time when possession
thereof is taken by public authorities, and rental shall be accounted for as
between Lessor and Lessee as of that date. Such termination, however, shall be
without prejudice to the rights of either Lessor or Lessee to recover
compensation and damage caused by condemnation from the condemnor. It is
further understood and agreed that neither the Lessee, nor Lessor, shall
have any rights in any award made to the other by any condemnation.
Assignment
14. Lessee may not assign this lease, or any interest thereunder, or sublet
the premises in whole or in part without the prior express written consent of
Lessor, and without giving prior written notice to Lessor of intent to assign or
sublease. Subtenants or assignees shall become liable directly to Lessor for
all obligations of Lessee hereunder, without relieving Lessee's liability.
Lessee agrees not to assign or sublease premises to any one who will create a
nuisance or trespass, not use the premises for any illegal purpose; nor in
violation of any valid regulations of any governmental body; nor in any manner
to vitiate the insurance. Lessee agrees that any increase in Lessor's insurance
premium caused by occupancy of any sub-tenant will be paid by Lessee. Lessee
further agrees that if such sub-tenant or assignee is required to pay a rental
amount greater than the rental amount required to be paid by Lessee hereunder,
then Lessor shall be entitled to receive and shall be paid such increased
amount.
(2)
<PAGE>
Removal of Fixtures
15. Lessee may (if not in default hereunder) prior to the expiration of
this lease, or any extension thereof, remove all fixtures and equipment which
Lessee has placed in premises, provided Lessee repairs all damages to premises
caused by such removal. Provided, however, Lessee shall not remove, under any
circumstances, the following: heating, ventilating, air conditioning and
lighting systems and fixtures.
Cancellation of Lease
16. It is mutually agreed that in the event: (A) the rent herein reserved
is not paid at the time and place when and where due and Lessee fails to pay
said rent within ten (10) days after written demand from Lessor; (B) the leased
premises shall be deserted or vacated; (C) the Lessee shall fail to comply with
any term, provision, condition, or covenant of this lease, other than the
payment of rent, and shall not cure such failure within twenty (20) days after
notice to the Lessee of such failure to comply; (D) Lessee causes any lien to be
placed against the leased premises and does not cure same within twenty (20)
days after notice from Lessor to Lessee demanding cure, in any of such events,
Lessor shall have the option at once, or during continuance of such default or
condition to do any of the following, in addition to, and not in limitation of
any other remedy permitted by law or by this lease:
(1) Terminate this lease, in which event the Lessee shall immediately
surrender the premises to the Lessor. Lessee agrees to indemnify Lessor for all
loss and damage which Lessor may suffer by reason of such termination; whether
through inability to relet the premises, or through decrease in rent, or
otherwise;
(2) Lessor, as Lessee's agent, without terminating this lease, may
terminate Lessee's right of possession, and, at Lessor's option enter upon and
rent premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Lessor deems proper.
Lessee shall be liable to Lessor for the deficiency, if any, between Lessee's
rent hereunder and the price obtained by Lessor on reletting.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by law.
Any notice in this provision may be given by Lessor or his attorney.
Entry for Carding, etc.
17. Lessor may card premises "For Rent" or "For Sale" ninety (90) days
before the termination of this lease. Lessor may enter the premises at
reasonable hours during the term of this lease to exhibit same to prospective
purchasers or tenants and to make repairs required of Lessor under the terms
hereof, or to make repairs to Lessor's adjoining property, if any.
Effects of Termination of Lease
18. No termination of this lease prior to the normal ending thereof, by
lapse of time or otherwise, shall affect Lessor's right to collect rent for the
period prior to termination thereof.
No Estate in Land
19. This contract shall create the relationship of landlord and tenant
between Lessor and Lessee; no estate shall pass out of Lessor; Lessee has only a
usufruct, not subject to levy and sale, and not assignable by Lessee except by
Lessor's consent.
Holding Over
20. If Lessee remains in possession of premises after expiration of the
term hereof, with Lessor's acquiescence and without any express agreement of
parties, Lessee shall be a tenant at will at rental rate in effect at end of
lease; and there shall be no renewal of this lease by operation of law.
Rights Cumulative
21. All rights, powers and privileges conferred hereunder upon parties
hereto shall be cumulative but not restrictive to those given by law.
Notices
22. Any notice given pursuant to this lease shall be in writing and sent by
certified mail to:
(a) Lessor in care of Stone Mountain Industrial Park, Inc., P.O. Box 67
-------------------------------------------------
Tucker, GA 30085, or such other address as Lessor may hereafter designate
----------------
in writing to Lessee.
(b) Lessee in care of Thompson Industries, Inc., 4680 Lewis Road, Stone
-------------------------------------------------
Mountain, GA 30083, or such other address as Lessee may hereafter designate
------------------
in writing to Lessor:
Waiver of Rights
23. No failure of Lessor to exercise any power given Lessor hereunder, or
to insist upon strict compliance by Lessee with its obligations hereunder, and
no custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of Lessor's right to demand exact compliance with the terms
hereof.
Time of Emerace
24. Time is of the essence of this Agreement.
Definitions
25. "Lessor" as used in this lease shall include first party its heirs,
representatives, assigns, and successors in title to the premises. "Lessee"
shall include second party, its heirs and representatives, assigns and
successors, and if this lease is all be validly assigned, or sublet, shall
include also Lessee's assignees or sub-lessees, as to premises covered by such
assignees or sub-lease. "Lessor" and "Lessee" include male and female, singular
and plural, corporation, partnership or individuals as may fit the particular
parties.
(3)
<PAGE>
Exterior 26. Lessee shall have the right to erect at Lessee's sole
Signs expense a sign on an exterior wall of the building on the premises.
This sign shall be securely attached and parallel to said wall, and
shall not be other than a customary trade sign identifying the
business of Lessee. Lessee shall not erect the sign over the roof
line or on the roof, nor shall it paint or otherwise deface the
exterior walls of the building. The erection of this sign by Lessee
shall be subject to and in conformity with all applicable laws,
zoning ordinances and building restrictions or covenants of record.
On or before termination of this lease Lessee shall remove the sign
thus erected, and shall repair any damage of disfigurement, and
close any holes, caused by such removal.
Ad Valorem 27. Lessee shall pay as additional rent all ad valorem real
Taxes estate taxes assessed and levied against the premises for full
fiscal years within the lease term and shall pay a per diem
apportionment thereof for the fiscal years in which the lease
commences and terminates.
Use of 28. Premises shall be used for offices, warehouse and storage
Premises of plastic cups and related purposes. Premises shall not be used
and for any illegal purposes, nor in any manner to create any nuisance
Insurance or trespass; nor in any manner to vitiate the insurance, based on
the above purposes for which the premises are leased.
Lessee will carry at Lessee's sale cost and expense, "All Risk"
Insurance Coverage on the demised premises in an amount not less
than $1,300,000.00 or the full insurable value, whichever is
greater. The term "full insurable value" shall mean the actual
replacement cost, excluding foundation and evacuation costs, as
determined by Lessor. Such policies shall name the Lessor as an
additional named insured.
All insurance provided for in this lease shall be affected
under enforceable policies issued by insurers of recognized
responsibility licensed to do business in this state. At least 15
days prior to the expiration date of any policy, the original
renewal policy for such insurance shall be delivered by the Lessee
to the Lessor. Within 15 days after the premium on any policy shall
become due and payable, the Lessor shall be furnished with
satisfactory evidence of its payment.
If the Lessee provides any insurance required by this lease in
the form of a blanket policy, the Lessee shall furnish satisfactory
proof that such blanket policy complies in all respects with the
provisions of this lease, and that the coverage thereunder is at
least equal to the coverage which would be provided under a separate
policy covering only the leased property.
If the Lessor so requires, the policies of insurance provided
for shall be payable to the holder of any mortgage, as the interest
of such holder may appear, pursuant to a standard mortgage clause.
All such policies shall, to the extent obtainable provide that any
loss shall be payable to the Lessor or to the holder of any mortgage
notwithstanding any act or negligence of the Lessee which might
otherwise result in forfeiture of such insurance. All such policies
shall, to the extent obtainable, contain an agreement by the
insurers that such policies shall not be cancelled without at least
thirty days prior written notice to the Lessor and to the holder of
any mortgage to whom loss hereunder may be payable.
Lessee will carry at Lessee's own expense insurance coverage on
all equipment, fixtures and appliances.
*29. and 30. See page (5) attached.
THIS LEASE contains the entire agreement of the parties hereto,
and no representations, inducements, promises or agreements, oral
or otherwise, between the parties, not embodied herein, shall be of
any force or effect.
If any term, covenant or condition of this lease or the
application thereof to any person, entity or circumstance shall to
any extent, be invalid or unenforceable, the remainder of this
lease, or the application of such term, covenant, or condition to
persons, entities or circumstances other than those which or to
which sued may be held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition of this lease
shall be valid and enforceable to the fullest extent permitted by
law.
IN WITNESS WHEREOF, the parties herein have hereunto set their
hands and seals, the day and year first above written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
(CORPORATE SEAL)
By: Jerry L. Silvio
-----------------------------------
Title: Jerry L. Silvio, Vice Pres.
Signed, sealed and delivered in the LESSOR
presence of:
[SIGNATURE APPEARS HERE]
-----------------------------------
Witness
[SIGNATURE APPEARS HERE]
-----------------------------------
Notary Public
[NOTARIAL STAMP APPEARS HERE]
W. M. F. CONTAINER CORPORATION
(CORPORATE SEAL)
By: James G. DeLong
-----------------------------------
Title: James G. DeLong
Asst. Sec./Treas.
Signed, sealed and delivered in the LESSEE
presence of:
[SIGNATURE APPEARS HERE]
-----------------------------------
Witness
[SEAL APPEARS HERE]
[SIGNATURE APPEARS HERE]
-----------------------------------
Notary Public
[NOTARIAL STAMP APPEARS HERE]
(4)
<PAGE>
29. During the first twelve (12) months of this Lease, if Lessee is advised
by its insurance underwriter, I.R.I., that the sprinkler system must be upgraded
or face the penalty of being classified as a non-standard risk, then Lessor
agrees to upgrade the system to meet the underwriter's requirements at cost and
invoice Lessee for the work upon completion. Lessee shall have the option of
capitalizing the cost upon completion of the work by giving written notice to
Lessor its desire to amortize the improvements rather than make a lump sum
payment. Lessee's written notification shall be provided to Lessor within ten
(10) days after receipt of Lessor's written estimated cost for the work. The
capitalized monthly amount shall be calculated by using the cost of the work,
the number of monthly periods remaining in the lease upon completion of the
work, and an interest rate of 1.333% per month. As an example, if the cost of
the work were $50,000.00, the number of monthly periods remaining were 110, and
the interest rate is 1.333% per month, then the capitalized monthly cost would
be $869.00. The monthly capitalized cost shall be paid by Lessee to Lessor
promptly and without demand at the beginning of each month along with its
monthly rent.
30. At the expiration of the initial term, Lessee shall have the option to
extend this lease for a further term of ten (10) years, upon the same terms and
conditions herein set forth, except that the monthly rental shall be adjusted to
reflect such sum of money as is equivalent at the time of commencement of the
further term to the purchasing power of $17,250.00 at the commencement of the
original lease term provided that Lessee shall have fully fulfilled completely
and in a timely manner all of the terms and conditions of this Lease. This
equivalent purchasing power shall be measured by the index number of the
"Consumer Price Index For All Urban Consumers - All Items (1967 equals 100)" as
prepared by the Bureau of Labor Statistics of the United States Department of
Labor for the month immediately preceding the termination of the initial term of
this Lease as same compares with said index number as it existed for the month
of the commencement of this lease. As an example of how the new rental rate will
be determined, if the said index number for the commencement month of the
original Lease term is 150.00 and if the said index number for the month
immediately preceding the termination of the initial term of this Lease is
210.00, the percentage difference used to adjust the original rent as of the new
term would be 40% (calculated as follows: 210.00 minus 150.00 equals 60.00,
which divided by 150.00 equals 40%). Thus, the rental for the renewal term in
this example would be $24,750.00 [which is $17,250.00 (original rent) x 40% =
$6,900.00 plus $17,250.00 (original rent)]. In the event the Consumer Price
Index referenced herein is discontinued, the parties shall accept comparable
statistics on the purchasing power of the consumers' dollars as published at the
time of said discontinuation by a responsible periodical of recognized authority
to be chosen by the parties. Lessee shall notify Lessor in writing at least one
hundred eighty (180) days prior to the expiration date of the original term as
to whether it intends to exercise said option. Notwithstanding anything
contained herein to the contrary, the minimum rental under this option shall be
$17,250.00 per month.
(5)
<PAGE>
EXHIBIT 10.29
THIRD AMENDMENT TO LEASE
------------------------
THIS FIRST AMENDMENT TO LEASE made this 25th day of February, 1994, by
----
and between STONE MOUNTAIN INDUSTRIAL PARK, INC., First Party, hereinafter
referred to as "Lessor", and WINCUP HOLDINGS, INC., Second Party, hereinafter
referred to as "Lessee":
WITNESSETH
----------
WHEREAS, Lessor and Dart Industries have previously entered into a lease
dated June 16, 1977, covering the 87,750 square foot building located at 4680
Lewis Road, Stone Mountain, Georgia 30083, the term of said Lease having
commenced on September 1, 1977, and set to expire on August 31, 1984, and
WHEREAS, Lessee assigned said Lease to Thompson Industries, a
wholly-owned subsidiary of Lessee, on September 27, 1982, said assignment
consented to by Lessor dated October 12, 1982, and
WHEREAS, all of the capital stock of Thompson Industries, Inc. was
subsequently acquired by W.M.F. Container Corporation and W.M.F. Container
Corporation assumed Thompson's rights and obligations under the above referenced
lease, and
WHEREAS, by First Addendum to Lease dated August 7, 1984, the term of
the Lease was extended for an additional five (5) year term from September 1,
1984 through August 31, 1989, and
WHEREAS, by Second Addendum to Lease dated October 15, 1984, the term of
the Lease was extended an additional five (5) years and two (2) months past the
expiration date to October 31, 1994, and
WHEREAS, W.M.F. Container Corporation was subsequently acquired by Scott
Container Group, Inc., and Scott Container Group, Inc., was subsequently
acquired by WINCUP HOLDINGS GROUP, INC., now known as Lessee, and
WHEREAS, Lessor and Lessee are desirous of making certain changes to
said Lease;
NOW THEREFORE, in consideration of the mutual covenants and conditions
herein, acknowledged by both parties to be adequate and sufficient, the parties
hereto agree as follows:
<PAGE>
1. The term of the Lease shall be amended to run for a five (5) year term
beginning March 1, 1994 and ending February 28, 1999.
2. Lessee shall pay to Lessor as rental promptly on the first day of each
month in advance without demand during the term of this lease a monthly rental
as follows:
March 1, 1994 through February 28, 1995 $14,918/month
March 1, 1995 through February 28, 1996 $16,050/month
March 1, 1996 through February 29, 1997 $17,148/month
March 1, 1997 through February 28, 1998 $18,245/month
March 1, 1998 through February 28, 1999 $19,342/month
3. In any month that the rental payment is not received by Lessor by the
10th day of the month, Lessor will assess and Lessee agrees to pay five (5%)
percent additional rent in the month in which the rent was not paid by the 10th.
4. Paragraph 4 of the Second Addendum to Lease dated October 15, 1984, is
null and void.
5. Except as expressly amended herein, the Lease shall remain in full
force and effect as set forth in the June 16, 1977 Lease as heretofore
referenced.
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Amendment to
Lease as of the day and year first above written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
A GEORGIA CORPORATION (CORP. SEAL)
By: /s/ John O. Cullifer
-----------------------------------
John O. Cullifer, Vice President
Signed, sealed, and delivered LESSOR
in the presence of:
[SIGNATURE APPEARS HERE]
- -------------------------------------
Witness
WINCUP HOLDINGS GROUP, INC.
A DELAWARE CORPORATION (CORP. SEAL)
By: [SIGNATURE APPEARS HERE]
-----------------------------------
Title: SR. VICE PRESIDENT-
ADMINISTRATION
Signed, sealed, and delivered LESSEE
in the presence of:
[SIGNATURE APPEARS HERE]
- -------------------------------------
Witness
2
<PAGE>
SECOND ADDENDUM TO LEASE
THIS ADDENDUM TO LEASE made this 15th day of October, 1984, by and between
---- -------
STONE MOUNTAIN INDUSTRIAL PARK, INC., First Party, hereinafter referred to as
"Lessor", and W.M.F. CONTAINER CORPORATION, Second Party, hereinafter referred
to as "Lessee";
WITNESSETH
WHEREAS, Lessor and Dart Industries, Inc. have previously entered into a
Lease dated June 16, 1977, covering the 87,750 square foot building located at
4680 Lewis Road, Stone Mountain, Georgia 30083, the term of said Lease having
- ---------------
commenced on September 1, 1977, and
WHEREAS, Lessee assigned said Lease to Thompson Industries, a wholly-owned
subsidiary of Lessee, on September 27, 1982, said assignment consented to by
Lessor dated October 12, 1982, and
WHEREAS, all of the capital stock of Thompson Industries, Inc. was
subsequently acquired by W.M.F. Container Corporation and W.M.F. Container
Corporation has assumed Thompson's rights and obligations under the above
referenced Lease, and
WHEREAS, both parties extended the term of said Lease for an additional five
(5) years past said expiration date of August 31, 1984 to August 31, 1989, by
First Addendum to Lease dated August 7, 1984, and
WHEREAS, both parties are desirous of extending the term of said Lease for
an additional five (5) years and two (2) months past the expiration date of
August 31, 1989 to October 31, 1994.
----------------
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein, acknowledged by both parties to be adequate and sufficient, the parties
hereto agree as follows:
1. The term of the Lease shall be extended to run for an additional five
(5) years and two (2) months from September 1, 1989 to October 31, 1994.
2. Lessor has determined that there are utilities at the property line
adequate to provide for the following additional utility requirements by Lessee
for its expanded operation;
A) Electrical Requirements - 3000 Amp 480/277 volt main service with 2500
XVA transformer.
B) Natural Gas Requirements - 30,000 ft./3/ 3/hr. @ 5 psig delivery
pressure inside building.
C) Water Requirements - 60 gal/min delivered at minimum 40 psig.
(1)
<PAGE>
3. W.M.F. Container Corporation shall pay to Lessor as rental for this five
(5) year two (2) month extension, promptly on the first day of each month in
advance without demand during the term of this Lease, a monthly rental of
Sixteen Thousand Four Hundred Fifty ($16,450.00) Dollars.
------------
4. At the expiration of the lease at October 31, 1994, Lessee shall have
the option to extend this lease for a further term of ten (10) years, upon the
same terms and conditions herein set forth, except that the monthly rental rate
shall be adjusted as follows:
The monthly rental shall be adjusted to reflect such sum of money as is
equivalent at the time of commencement of the further term to the
purchasing power of $16,450.00 at the commencement of the First Addendum to
Lease provided that Lessee shall have fulfilled completely and in a timely
manner all of the terms and conditions of the Lease. This equivalent
purchasing power shall be measured by the index number of the "Consumer
Price Index For All Urban Consumers - All Items (1967 - equals 100)" as
prepared by the Bureau of Labor Statistics of the United States Department
of Labor for the month immediately preceding the termination of the term of
the First Addendum to the Lease as same compares with said index number as
it existed for the month of commencement of the First Addendum. As an
example how the new rental rate will be determined, if the said index
number for the commencement month of the First Addendum is 150.00 and if
the said index number for the month immediately preceding the termination
of the First Addendum to Lease is 210.00, the percentage difference used to
adjust the rent as of the commencement date of the Second Addendum would be
40% (calculated as follows: 210.00 minus 150.00 equals 60.00, which divided
by 150.00 equals 40%). Thus, the rental for the renewal term in this
example would be $23,030.00 [which is $16,450 (rent per First Addendum X
40% - $6,580.00 plus $16,450.00 (rent per First Addendum)]. In the event
the Consumer Price Index referenced herein is discontinued, the parties
shall accept comparable statistics on the purchasing power of the
consumers' dollars as published at the time of said discontinuation by a
responsible periodical of recognized authority to be chosen by the parties.
Lessee shall notify Lessor in writing at least one hundred eighty (180)
days prior to the expiration date of the First Addendum to Lease as to
whether it intends to exercise said option. Notwithstanding anything
contained herein to the contrary, the minimum rental under this option
shall be $16,450.00 per month.
5. Except as expressly amended herein, the Lease is in all respects
ratified and confirmed and all the covenants, agreements, terms, provisions, and
conditions thereof shall be and remain in full force and effect.
(2)
<PAGE>
IN WITNESS WHEREOF, Lessor and W.M.F. Container Corporation have duly
executed this Second Addendum to Lease as of the day and year first above
written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
(CORPORATE SEAL)
By /s/ Jerry L. Silvio
----------------------------
Jerry L. Silvio, Vice Pres.
Signed, sealed and delivered in
the presence of:
/s/ Carolyn H. McMahon
- ----------------------
Witness
/s/ Penny Tyler
- ----------------------
Notary Public
Notary Public, Georgia State at Large
My Commission Expires Sept. 17, 1988.
W.M.F. CONTAINER CORPORATION (CORPORATE
SEAL)
BY: /s/ James G. DeLong
---------------------------------
James G. DeLong, Asst. Sec./Treas.
Signed, sealed and delivered in
the presence of:
/s/ Gerard E. Fellatier
- -----------------------
Witness
/s/ Joyce VanLaw AKA Joyce Murphy
- ---------------------------------
Notary Public
My commission expires 2/2/86
(3)
<PAGE>
SECOND AMENDMENT TO LEASE
-------------------------
THE FIRST AMENDMENT TO LEASE made this 28TH day of February, 1994, by
and between STONE MOUNTAIN INDUSTRIAL PARK, INC., First Party, hereinafter
referred to as "Lessor", and WINCUP HOLDINGS, INC., Second Party, hereinafter
referred to as "Lessee";
WITNESSETH
----------
WHEREAS, Lessor and W.M.F. Container Corporation have previously entered
into a lease dated October 15, 1984, whereby Lessor leased to W.M.F. Container
Corporation 82,625 square feet known as 4640 Lewis Road, Stone Mountain,
Georgia, reference being specifically made to said lease for further
description, and
WHEREAS, W.M.F. Container Corporation was acquired by Scott
Container Group, and Lessor and Scott Container Group, Inc., entered into a
First Addendum to Lease dated September 20, 1989, whereby Lessor leased to Scott
Container Group, Inc., an approximate 1.0 acre site at 4616 Lewis Road for a
term of five (5) years from August 1, 1989 through October 31, 1994, and
WHEREAS, Scott Container Group, Inc., was acquired by WINCUP HOLDINGS,
INC., now known as Lessee, and
WHEREAS, the Lessor and Lessee are desirous of making certain changes to
the Lease;
NOW THEREFORE, in consideration of the mutual covenants and conditions
herein, acknowledged by both parties to be adequate and sufficient, the parties
hereto agree as follows:
1. The term of the Lease shall be amended to run for a five (5) year
term beginning March 1, 1994 and ending February 28, 1999.
2. Lessee shall pay to Lessor as rental promptly on the first day of
each month in advance without demand during the term of this lease a monthly
rental as follows:
March 1, 1994 through February 28, 1995 $17,336/month*
March 1, 1995 through February 29, 1996 $18,335/month*
March 1, 1996 through February 28, 1997 $19,368/month*
March 1, 1997 through February 28, 1999 $20,745/month*
*Includes $1,500/month rent on 1.0 acre of land
1
<PAGE>
3. In any month that the rental payment is not received by Lessor by the
10th day of the month, Lessor will assess and Lessee agrees to pay five (5%)
percent additional rent in the month in which the rent was not paid by the
10th.
4. Paragraph 30 of the Lease dated October 15, 1984, is null and void.
5. Paragraph 5 of the First Amendment to Lease dated September 20, 1989,
is null and void.
6. Except as expressly amended herein, the Lease shall remain in full force
and effect as set forth in the October 15, 1984 Lease as heretofore referenced.
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Amendment to
Lease as of the day and year first above written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
A GEORGIA CORPORATION (CORP. SEAL)
By: /s/ John O. Cullifer
-------------------------------------
John O. Cullifer, Vice President
Signed, sealed, and delivered LESSOR
in the presence of:
[SIGNATURE APPEARS HERE]
- -------------------------------
Witness
WINCUP HOLDINGS GROUP, INC.
AN DELAWARE CORPORATION (CORP SEAL)
By: [SIGNATURE APPEARS HERE]
-------------------------------------
Title: SR. VICE PRESIDENT-ADMINISTRATION
Signed, sealed, and delivered LESSEE
in the presence of:
[SIGNATURE APPEARS HERE]
- --------------------------------
Witness
<PAGE>
EXHIBIT 10.30
STATE OF GEORGIA
COUNTY OF DEKALB
THIS LEASE, made this the 16 day of December, 1991 , by and between STONE
MOUNTAIN INDUSTRIAL PARK, INC., A GEORGIA CORPORATION First Party, hereinafter
referred to as "Lessor"; and SCOTT CONTAINER GROUP, INC., A CORPORATION, Second
Party, hereinafter referred to as "Lessee";
WITNESSETH:
1 The Lessor, for and in consideration of the rents, covenants,
agreements, and stipulations hereinafter mentioned, received, and contained, to
be paid, kept and performed by the Lessee, has leased and rented, and by these
presents does lease and rent, unto the said Lessee, and said Lessee hereby
agrees to lease and take upon the terms and conditions which hereinafter appear,
the following described property (hereinafter called "Premises") to wit.
All that tract or parcel of land lying in and being in Land Lot 138 of the 18th
District of DeKalb County, Georgia, and being more particularly described as
follows:
Beginning at a point on the west right-of-way line of Stone Ridge Drive 318.9
feet south of the southwest intersection of the right-of-way lines of Lewis Road
and Stone Ridge Drive; thence turning and running south along the said right-of-
way line of Stone Ridge Drive a distance of 300 ft. to a point; thence turning
and running in a westerly direction a distance of 866 ft. to a point; thence
turning and running in a northerly direction along the right-of-way line of
Litton Drive a distance of 300 ft. to a point; thence turning and running in an
easterly direction along the south right-of-way line of the Georgia Railroad a
distance of 870.9 ft. to the point of beginning, and being described by James
William Dixon dated December 31, 1965, and any and all appurtenances,
improvements, structures or buildings now or hereafter located upon the above
described parcel of land.
Included in this Lease is the existing 145,000 sq. ft. building and premises
known as 1625 Litton Dr. Stone Mountain, Georgia 30084.
Approval of this Lease by both parties shall auto terminate the Lease for the
building and premises located at 5682 E. Ponce de Leon Avenue effective January
31, 1992, without penalty or overlap of rental.
2 To have and to hold for a term of two (2) years; ten (10) months said
term to begin on the 1st day of February, 1992
3 Lessee shall pay to Lessor promptly on the first day of each month in
advance without demand during the term of this Lease, a monthly rental of
Twenty-Six Thousand and No/100 ($26,000.00) Dollars for thirty-four (34)
consecutive months.
(1)
<PAGE>
UTILITY 4. Lessee shall pay all utility bills of all types,
BILLS including but not limited to water and sewer, natural gas,
electricity and sanitary pick up bills for the leased premises,
or used by Lessee in connection therewith. If Lessee does not pay
same, Lessor may pay the same and such payment shall be added to
the rental of the premises.
MORTGAGEE'S 5. Lessee's rights shall be subject to any bona fide
RIGHTS mortgage or deed insecure debt which is now, or may hereafter be,
placed upon the premises by Lessor, and Lessee agrees to execute
and deliver such documentation as may be required by any such
mortgagee to effect any subordination.
MAINTENANCE AND 6. Lessee shall not allow the premises to fall out of
REPAIRS BY repairs or deteriorate, and at Lessee's own expense, Lessee shall
LESSEE keep and maintain said premises, including lawn maintenance and
landscaping, in good order and repair, except portions of the
premises to be repaired by Lessor under terms of Paragraph 7
hereinafter set out. Lessee also agrees to keep all systems
pertaining to water, sewer, electrical, heating ventilation, air
conditioning and lighting in good order and repairs.
REPAIRS BY 7. Lessor agrees to keep in good repair the roof and
LESSOR exterior walls, exclusive of all glass and exclusive of all
exterior doors. Lessor gives to Lessee exclusive control of
premises and shall be under no obligation to inspect said
premises.
MODIFICATIONS 8. No modifications or alterations to the building or
AND openings cut through the roof are allowed without prior written
ALTERATIONS consent of Lessor.
TO THE
PREMISES
RETURN OF 9. Lessee agrees to return the premises to Lessor at the
PREMISES expiration, or prior termination, of this lease in as good
condition and repair as when first received, natural wear and
tear, damage by storm, fire, lighting, earthquake or other
casualty alone excepted.
DESTRUCTION 10. If premises are totally destroyed by strom, fire,
OF OR DAMAGE lighting, earthquake or other casualty, this lease shall
TO PREMISES terminate as of the date of such destruction, and rental shall be
accounted for as between Lessor and Lessee as of the date. If
premises are damaged, but not wholly destroyed by any of such
casualties, rental shall abate in such proportion as use of
premises has been destroyed, and Lessor shall resume premises in
substantially the same conditions as before damage as speedily as
practicable whereupon full rental shall recommence, provided
further, however, that if the damage shall be so extensive that
the same cannot be reasonably repaired and restored within six
(6) months' time from date of the casualty, then either Lessor or
Lessee may cancel this lease by giving written notice to the
other party within thirty (30) days from the date of such
casualty. And, in such event, rental shall be apportioned and
paid up to the date of such casualty.
INDEMNITY 11. Lessee agrees to Indemnify and save harmless the Lessor
against all claims for injuries to persons or damages to property
by reason of the use or occupancy of the leased premises, and all
expenses incurred by Lessor because thereof, including attorneys'
fees and court costs, but Lessee shall not be liable for the acts
of any other tenants of said property.
GOVERNMENTAL 12. Lessee agrees, at its own expense, to promptly comply
ORDERS with all requirements of any legally constituted public authority
made necessary by reason of Lessee's occupancy of said premises.
Lessor agrees to promptly comply with any such requirements if
not made necessary by reason of Lessee's occupancy. It is
mutually agreed, however, between Lessor and Lessee, that if in
order in comply with such requirements, the cost to Lessor or
Lessee, as the case may be, shall exceed a sum equal to one
year's rent, then Lessor or Lessee who is obligated to comply
with such requirements is privileged to terminate this lease by
giving written notice of termination to the other party by
certified mail, which termination shall become effective sixty
(60) days after receipt of such notice, and which notice shall
eliminate necessity of compliance with such requirement by party
giving notice unless party receiving such notice of termination
shall, before termination becomes effective, pay to party giving
notice all cost of compliance in excess of one year's rent, or
secure payment of such sum in manner satisfactory to party giving
notice.
CONDEMNATION 13. If the whole of the leased premises, or such portion
thereof as will make premises unusable for the purpose herein
leased, be condemned by any legally constituted authority for any
public use or purpose, then in either of said events the term
hereby granted shall cease from the time when possession thereof
is taken by public authorities, and rental shall be accounted for
or between Lessor and Lessee as of that date. Such termination,
however, shall be without prejudice to the right of either Lessor
or Lessee to recover compensation and damage caused by
condemnation from the condemnor. It is further understood and
agreed that neither the Lessee, nor Lessor, shall have any
rights to any award made to the other by any condemnation.
ASSIGNMENT 14. Lessee may not assign this lease, or any interest
thereunder, or sublet the premises in whole or in part without
the prior express written consent of Lessor, and without giving
prior written notice to Lessee of intent to assign or sublease.
Subtenants or assignees shall become liable directly in Lessor
for all obligations of Lessee hereunder, without relieving
Lessee's liability. Lessee agrees not to assign or sublease
premises to any one who will create a nuisance or trespass, nor
use the premises in any illegal purpose, nor in violation of any
valid regulations of any governmental body; nor in any manner to
violate the insurance. Lessee agrees that any increase in
Lessor's insurance premium caused by occupancy of any subtenant
will be paid by Lessee, Lessee further agrees that if such
subtenant or assignee is required to pay a rental amount greater
than the rental amount required to be paid by Lessee hereunder,
then Lessor shall be entitled to receive and shall be paid such
increased amount.
(2)
<PAGE>
REMOVAL OF 15. Lessee may (if not in default hereunder) prior to the
FIXTURES expiration of this lease, or any extension thereof, remove all
fixtures and equipment which Lessee has placed in premises,
provided Lessee repairs all damages to premises caused by such
removal. Provided, however, Lessee shall not remove, under any
circumstances, the following: heating, ventilating, air
conditioning and lighting systems and fixtures.
CANCELLATION 16. It is mutually agreed that in the event: (A) the rent
OF LEASE herein reserved is not paid at the time and place when and where
due and Lessee fails to pay said rent within ten (10) days after
written demand from Lessor; (B) the leased premises shall be
deserted or vacated; (C) the Lessee shall fail to comply with any
term, provision, condition, or covenant of this lease, other than
the payment of rent, and shall not cure such failure within
twenty (20) days after notice to the Leasee of such failure to
comply; (D) Lessee causes any lien to be placed against the
leased premises and does not cure same within twenty (20) days
after notice from Lessor to Lessee demanding cure, in any of such
events, Lessor shall have the option at once, or during
continuance of such default or condition to do any of the
following, in addition to, and not in limitation of any other
remedy permitted by law or by this lease:
(1) Terminate this lease, in which event the Lessee
shall immediately surrender the premises to the Lessor. Lessee
agrees to indemnify Lessor for all loss and damage which Lessor
may suffer by reason of such termination; whether through
inability to relet the premises, or through decrease in rent, or
otherwise;
(2) Lessor, as Lessee's agent, without terminating
this lease, may terminate Lessee's right of possession, and, at
Lessor's option enter upon and rent premises at the best price
obtainable by reasonable effort, without advertisement and by
private negotiations and for any term Lessor deems proper. Lessee
shall be liable to Lessor for the deficiency, if any, between
Lessee's rent hereunder and the price obtained by Lessor on
reletting.
Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any other
remedies provided by law. Any notice in this provision may be
given by Lessor or his attorney.
ENTRY FOR 17. Lessor may card premises "For Rent" or "For Sale"
CARDING, ETC. ninety (90) days before the termination of this lease. Lessor may
enter the premises at reasonable hours during the term of this
lease to exhibit same to prospective purchasers or tenants and to
make repairs required of Lessor under the terms hereof, or to
make repairs to Lessor's adjoining property, if any.
EFFECTS OF 18. No termination of this lease prior to the normal ending
TERMINATION thereof, by lapse of time or otherwise, shall effect Lessor's
OF LEASE right to collect rent for the period prior to termination
thereof.
NO ESTATE 19. This contract shall create the relationship of landlord
IN LAND and tenant between Lessor and Lessee; no estate shall pass out of
Lessor; Lessee has only a usufruct, not subject to levy and sale,
and not assignable by Lessee except by Lessor's consent.
HOLDING 20. If Lessee remains in possession of premises after
OVER expiration of the term hereof, with Lessor's acquiescence and
without any express agreement of parties, Lessee shall be a
tenant at will at rental rate in effect at end of lease: and
there shall be no renewal of this lease by operation of law.
RIGHTS 21. All rights, powers and privileges conferred hereunder
CUMULATIVE upon parties hereto shall be cumulative but not restrictive to
those given by law.
NOTICES 22. Any notice given pursuant to this lease shall be in
wwriting and sent by certified mail to:
(a) Lessor in care of Stone Mountain Industrial Park,
-------------------------------
Inc., P.O. Box 67, Tucker, Georgia 30085-0067 or such other
--------------------------------------------
address as Lessor may hereafter designate in writing to Lessee.
(b) Lessee in care of Scott Container Group, Inc., 1625
---------------------------------
Litton Drive, Stone Mountain, Georgia 30083 or such other address
-------------------------------------------
as Lessee may hereafter designate in writing to Lessor.
WAIVER OF 23. No failure of Lessor to exercise any power given Lessor
RIGHTS hereunder, or to insist upon strict compliance by Lessee with its
obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of
Lessor's rights to demand exact compliance with the terms hereof.
TIME OF ESSENCE 24. Time is of the essence of this Agreement.
DEFINITIONS 25. "Lessor" as used in this lease shall include first
party, its heirs, representatives, assigns and successors in
title to the premises. "Lessee" shall include second party, its
heirs and representatives, assigns and successors, and if this
lease shall be validly assigned, or sublet shall include also
Lessee's assignees or sub-lessees as to premises covered by such
assignment or sub-lease, "Lessor" and "Lessee" include male and
female, singular and plural, corporation, partnership or
individual, as may fit the particular parties.
(3)
<PAGE>
EXTERIOR 26. Lessee shall have the right to erect at Lessee's sole
SIGNS expense a sign on an exterior wall of the building on the
premises. This sign shall be securely attached and parallel to
said wall, and shall not be other than a customary trade sign
identifying the business of Lessee. Lessee shall not erect this
sign over the roof line or on the roof, nor shall it paint or
otherwise deface the exterior walls of the building. The
erection of this sign by Lessee shall be subject to and in
conformity with all applicable laws, zoning ordinances and
building restrictions or covenants of record. On or before
termination of this lease Lessee shall remove the sign thus
erected, and shall repair any damage of disfigurement, and close
any holes, caused by such removal.
AD VALOREM 27. Lessee shall pay as additional rent all ad valorem
TAXES real estate taxes assessed and levied against the premises for
full fiscal years within the lease term and shall pay a per diem
apportionment thereof for the fiscal years in which the lease
commences and terminates.
USE OF 28. Premises shall be used for office, warehouse and
PREMISES AND ---------------------
INSURANCE distribution of plastic products and other related purposes.
--------------------------------------------------
Premises shall not be used for any illegal purposes, nor in any
manner to create any nuisance or trespass; nor in any manner to
vitiate the insurance, based on the above purposes for which the
premises are leased.
Lessee will carry, at Lessee's sole cost and expense, "All
Risk" Insurance Coverage on the demised premises in an amount not
less than $ 3,000,000 or the full insurable value, whichever is
---------
greater. The term "full insurable value" shall mean the actual
replacement cost, excluding foundation and excavation costs, as
determined by Lessor. Such policies shall name the Lessor as an
additional named insured.
All insurance provided for in this lease shall be affected
under enforceable policies issued by insurers of recognized
responsibility licensed to do business in this state. At least 15
days prior to the expiration date of any policy, the original
renewal policy for such insurance shall be delivered by the
Lessee to the Lessor. Within 15 days after the premium on any
policy shall become due and payable, the Lessor shall be
furnished with satisfactory evidence of its payment.
If the Lessee provides any insurance required by this lease
in the form of a blanket policy, the Lessee shall furnish
satisfactory proof that such blanket policy complies in all
respects with the provisions of this lease, and that the coverage
thereunder is at least equal to the coverage which would be
provided under a separate policy covering only the leased
property.
If the Lessor so requires, the policies of insurance
provided for shall be payable to the holder of any mortgage, as
the interest of such holder may appear, pursuant to a standard
mortgagee clause. All such policies shall, to the extent
obtainable provide that any loss shall be payable to the Lessor
or to the holder of any mortgage notwithstanding any act or
negligence of the Lessee which might otherwise result in
forfeiture of such insurance. All such policies shall, to the
extent obtainable, contain an agreement by the insurers that
such policies shall not be cancelled without at least thirty days
prior written notice to the Lessor and in the holder of any
mortgage to whom loss hereunder may be payable.
Lessee will carry at Lessee's own expense insurance coverage
on all equipment, fixtures and appliances.
THIS LEASE contains the entire agreement of the parties
hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied
herein, shall be of any force or effect.
If any term, covenant or condition of this lease or the
application thereof to any person, entity or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this
lease, or the application of such term, covenant, or condition to
persons, entities or circumstances other than those which or to
which sued may be held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition of this
lease shall be valid and enforceable to the fullest extent
permitted by law.
IN WITNESS WHEREOF, the parties herein have hereunto set
their hands and seals, the day and year first above written.
STONE MOUNTAIN INDUSTRIAL
PARK, INC.,
A GEORGIA CORPORATION
(CORP. SEAL)
By: /s/ Jerry L. Silvio
--------------------------------
Title: Jerry L. Silvio,
Vice President
LESSOR
Signed, sealed and
delivered in the
presence of:
/s/ Carolyn H. McMahon
-------------------------
Witness
-------------------------
Notary Public SCOTT CONTAINER GROUP, INC.
(CORP. SEAL)
By: [SIGNATURE APPEARS HERE]
----------------------------
Title: V.P. Finance
Signed, sealed and LESSEE
delivered in the
presence of
/s/ Angela S. Riddle
----------------------
Witness
/s/ Vicki Oatis
----------------------
Notary Public
My Commission expires: 08-18 92
(4)
<PAGE>
FIRST AMENDMENT TO LEASE
------------------------
THIS FIRST AMENDMENT TO LEASE made this 28TH day of February, 1994, by and
between STONE MOUNTAIN INDUSTRIAL PARK, INC., First Party, hereinafter referred
to as "Lessor", and WINCUP HOLDINGS, INC., Second Party, hereinafter referred to
as "Lessee";
WITNESSETH
----------
WHEREAS, Lessor and Scott Container Group, Inc., have previously entered
into a lease dated December 16, 1991, whereby Lessor leased to Scott Container
Group, Inc., 145,000 square feet known as 1625 Litton Drive, Stone Mountain,
Georgia, reference being specifically made to said lease for further
description, and
WHEREAS, the term of the Lease began February 1, 1992 and is set to expire
October 31, 1994, and
WHEREAS, Scott Container Group, Inc., was acquired by WINCUP HOLDINGS,
INC., now known as Lessee, and
WHEREAS, the Lessor and Lessee are desirous of making certain changes in
the Lease;
NOW THEREFORE, in consideration of the mutual covenants and conditions
herein, acknowledged by both parties to be adequate and sufficient, the parties
hereto agree as follows:
1. The term of the Lease shall be amended to run for a five(5) year term
beginning March 1, 1994 and ending February 28, 1999.
2. Lessee shall pay to Lessor as rental promptly on the first day of each
month in advance without demand during the term of this lease a monthly rental
of Twenty-Six Thousand Four Hundred Sixty-Two and No/100 ($26,462.00) Dollars.
3. In any month that the rental payment is not received by Lessor by the
10th day of the month, Lessor will assess and Lessee agrees to pay five (5%)
percent additional rent in the month in which the rent was not paid by the 10th.
4. Except as expressly amended herein, the Lease shall remain in full
force and effect as set forth in the March 30, 1992 Lease as heretofore
referenced.
1
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have duly executed this Amendment to
Lease as of the day and year first above written.
STONE MOUNTAIN INDUSTRIAL PARK, INC.
A GEORGIA CORPORATION (CORP.SEAL)
By: /s/ John O. Cullifer
---------------------------------
John O. Cullifer, Vice President
Signed, sealed, and delivered LESSOR
in the presence of:
[SIGNATURE APPEARS HERE]
- -------------------------------
Witness
WINCUP HOLDINGS, INC. A DELAWARE
CORPORATION (CORP. SEAL)
By:/s/ Donald Rogalski
-------------------------------
Title: SR. VICE PRESIDENT
ADMINISTRATION
Signed, sealed, and delivered LESSEE
in the presence of:
/s/ Angela S. Riddle
- ------------------------------
Witness
2
<PAGE>
EXHIBIT 10.31
FIRST AMENDMENT TO OPERATING LEASE
THIS FIRST AMENDMENT TO OPERATING LEASE is entered into as of the 30th
day of November, 1990 between R/K VENTURES UNIT I LIMITED PARTNERSHIP, an
Arizona limited partnership ("Landlord"), and SCOTT CONTAINER PRODUCTS GROUP,
INC. (formerly named WMF Container Corporation d/b/a Thompson Industries), a
Delaware corporation ("Tenant").
RECITALS
--------
A. Landlord and Tenant are parties to an Operating Lease dated as of
August 20, 1987 (the "Original Lease") relating to the lease by Landlord to
Tenant of certain premises located in Maricopa County, Arizona, more
particularly described therein.
B. As contemplated by the Original Lease, the IDB was issued. On
October 27, 1988, Scott Paper Company, a Pennsylvania corporation, acquired all
the outstanding capital stock of the Tenant, and thereafter the name of Tenant
was changed to its present name. As a consequence of such acquisition, it became
necessary to prepay the IDB in order to avoid loss of its tax-exempt status.
Landlord obtained replacement financing on or about April 19, 1989, and Landlord
and Tenant adjusted the Rent.
C. To confirm the Rent payable by Tenant and certain other matters,
Landlord and Tenant desire to amend the Original Lease as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
AGREEMENT
---------
1. Definitions. All capitalized terms used herein and not defined
-----------
herein have the meanings set forth in the Original Lease.
2. Commencement Date. Landlord and Tenant agree that the
-----------------
Commencement Date was June 1, 1988 and that the term shall expire August 31,
1998.
3. Rent. Landlord and Tenant confirm that paragraph 4(a) of the
----
Original Lease is and has been inapplicable, and it is hereby is deleted. The
following Rent provisions shall apply in lieu of the provisions contained in
paragraph 4(b) of the Original Lease:
<PAGE>
(a) For the first through eleventh months following the
Commencement Date (i.e. through April 30, 1989), Tenant's Rent was as set forth
in paragraph 4(b)(i) of the Original Lease plus an adjustment in April 1989 to
take account of the Landlord's financing accomplished in that month. Landlord
confirms that all such Rent has heretofore been paid and received by Landlord.
(b)(i) For the twelfth through the thirtieth months following
the Commencement Date (i.e., through November 30, 1990), Tenant's Rent was
calculated as follows:
($.2797) (R) + ($.0385) + (BC 1) = AMR
- ------------ --------------
(.0954) (169,840) (12)
Landlord confirms that all such Rent has heretofore been paid and
received by Landlord.
(ii) For the thirty-first through the thirty-ninth months
following the Commencement Date, Tenant's Rent will be calculated as follows:
($.2797) (R) + ($.0385) + $ (BC 1) = AMR
- ------------ --------------
(.0954) (169,840) (12)
(iii) For the fortieth through sixty-third months following
the Commencement Date, Tenant's Rent will be calculated as follows:
($.2810) (R) + ($.0705) + $ (BC 1) = AMR
- ------------ --------------
(.0954) (169,840) (12)
(iv) For the sixty-fourth through ninety-ninth months
following the Commencement Date, Tenant's Rent will be calculated as follows:
($.2819) (R) + ($.0935) + $ (BC 1) = AMR
- ------------ -------------
(.0954) (169,840) (12)
(v) For the one hundredth through one hundred twenty-third
months following the Commencement Date, Tenant's Rent will be calculated as
follows:
($.2835) (R) + ($.1315) + $ (BC 1) = AMR
- ------------ --------------
(.0954) (169,840) (12)
(c) Tenant acknowledges that additional Rent may become payable
pursuant to the Indemnification Agreement Regarding Determination of Taxability
between the parties dated April 21, 1989.
-2-
<PAGE>
(d) If Tenant exercises the options to extend the term as
provided in Section 18(a) of Original Lease, the Rent during the first option
period and the second option period shall be as follows in lieu of the Rent
described in Section 18(a)(i), (ii), and (iii) of the Original Lease:
(i) Rent during the first option period:
(A) For the one hundred twenty-fourth through one
hundred fifty-ninth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2844) (R) + ($.1513) = AMR
-------------
(.0954)
(B) For the one hundred sixtieth through one hundred
eighty-third months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2857) (R) + ($.1850) = AMR
-------------
(.0954)
(C) For the one hundred eighty-fourth through two
hundred nineteenth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2866) (R) + ($.2100) = AMR
-------------
(.0954)
(D) For the two hundred twentieth through two
hundred forty-third months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2883) (R) + ($.2475) = AMR
-------------
(.0954)
(ii) Rent during the second option period:
(A) For the two hundred forty-fourth through two
hundred seventy-ninth months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2892) (R) + ($.2786) = AMR
-------------
(.0954)
(B) For the two hundred eightieth through three
hundred third months following
-3-
<PAGE>
the Commencement Date, Tenant's Rent will be
calculated as follows:
($.2905) (R) + ($.3299) = AMR
------------
(.0954)
(C) For the three hundred fourth through three
hundred thirty months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2915) (R) + ($.3651) = AMR
-------------
(.0954)
(D) For the three hundred Fortieth through
three hundred sixty-third months following the
Commencement Date, Tenant's Rent will be calculated
as follows:
($.2931) (R) + ($.4244) = AMR
-------------
(.0954)
Definitions:
"R" is the rate of interest announced by First Interstate Bank of
Arizona, N.A. from time to time as its "prime rate" plus 1%, adjusted to reflect
a thirty (30) year amortization constant. For purposes of calculation of Rent
payable in any month, the prime rate shall be determined as of the first day of
each and every month in which Rent is payable. In the event that the prime rate
changes in the middle of a month, such change shall effect an adjustment of the
Rent payable as of the effective date of the change in the prime rate, and shall
be effected by an appropriate adjustment, upwards or downwards, in the Rent
payable for the following month. In the case of a change in the last month of
the term, any additional payment by Tenant or refund by Landlord, as
appropriate, shall be made within 15 days after the last day of the term.
"BC 1" is the monthly amortization amount of the acquisition costs
(i.e., attorneys' fees, trustee's fees, organization fees, etc.) in obtaining
the IDB, based on a level amortization over ten (10) years, and interest on the
unamortized portion at R. Such acquisition costs were originally $127,870.44,
and the unamortized portion at November 1, 1990 was $92,705.97.
"AMR" is the per square foot monthly Rent payable during the
designated periods.
4. Refinancing. Landlord agree if requested by Tenant to cooperate
-----------
with Tenant at any time or from time to time
-4-
<PAGE>
in order to obtain refinancing at a rate of interest lower than R and that, in
the event any such refinancing is completed, Tenant's Rent will be reduced by an
amount equal to such lower interest cost; provided, however, that Tenant shall
--------- --------
pay all costs incurred by Landlord in connection with such refinancing. The
parties shall execute an amendment to the Lease upon the completion of the
refinancing to reflect the adjustment to Tenant's Rent as a result thereof for
the balance of the term of the Lease or, if short, for and during the term of
the financing.
5. Delay Damages. Tenant confirms that no claims against Landlord for
-------------
Delay Damages under Section 2(b)(vi) of the Original Lease exist in connection
with the construction of the Parcel 1 Improvements.
6. Process Equipment. Tenant elected to have Landlord install the
-----------------
Process Equipment pursuant to Section 2(d)(iv) of the Original Lease. Landlord
confirms that it has received full payment in respect of the Process Equipment,
and no Rent or other payments are due from Tenant in respect thereof. The
Process Equipment shall be the property of Tenant and subject to the provisions
of Section 7(c) of the Original Lease.
7. Notices. The addresses for notices contained in Section 25 of the
-------
Original Lease shall be changed to the following addresses, subject to the right
of either party to modify its address in the manner specified in Section 25.
If from Tenant to Landlord:
R-K Ventures Unit I Limited Partnership
c/o Ronald G. Roth Company
4515 South McClintock Drive
Suite 220
Tempe, AZ 85282
Attention: Ronald G. Roth
If from Landlord to Tenant:
Scott Container Products Group, Inc.
2501 East Magnolia
Phoenix, AZ 85034
Attention: President
with a copy to the Controller at the above address.
8. Confirmation. The parties hereto hereby confirm that the foregoing
------------
constitutes an amendment to the Original Lease
-5-
<PAGE>
and that the Original Lease, as so amended, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Operating Lease as of the day and year first above written.
"LANDLORD"
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited
partnership
By /s/ Ronald G. Roth
-----------------------------------
Ronald G. Roth, its general partner
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC. an
Arizona corporation, its general partner
By /s/ Robert G. Kite
-----------------------------------
Its President
-------------------------------
"TENANT"
SCOTT CONTAINER PRODUCTS GROUP, INC.
a Delaware corporation
By /s/ T. C. Deas Jr.
-----------------------------------
Its Treasurer
-------------------------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 1st day of March 1991, before me, the undersigned Notary Public,
personally appeared RONALD G. ROTH, who acknowledged himself to be the general
partner of R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Donna K. Koester
March 22, 1993 ---------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 6th day of March, before me, the undersigned Notary Public,
personally appeared Robert H. Kite, who acknowledged himself to be the President
of KITE FAMILY COMPANIES, INC., an Arizona corporation, general partner of R/K
VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership, and
acknowledged that he, as such officer, being authorized so to do, executed the
foregoing instrument on behalf of the limited partnership for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Donna K. Koester
March 22, 1993 ---------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
<PAGE>
STATE OF PENNSYLVANIA )
)ss.
County of Delaware )
On this 14th day of March, 1991, before me, the undersigned Notary Public,
personally appeared Thomas C. Deas, who acknowledged himself to be the
Treasurer of SCOTT CONTAINER PRODUCTS GROUP, INC., a Delaware corporation, and
acknowledged that he, as such officer of the corporation, being authorized so to
do, executed the foregoing instrument on behalf of the corporation for the
purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires: /s/ Rosemary P. McGrory
---------------------------
Notary Public
[SEAL OF NOTARY PUBLIC APPEARS HERE]
<PAGE>
RELEASE AND NOVATION
This Agreement is made as of this 6th day of December, 1991, by and
between R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited Partnership
("Ventures"), and SCOTT PAPER COMPANY, a Pennsylvania corporation ("Scott") for
the benefit of its wholly owned subsidiary, SCOTT CONTAINER PRODUCTS GROUP,
INC., a Delaware corporation ("SCPG").
WHEREAS SCPG has entered into an INDEMNIFICATION AGREEMENT REGARDING
DETERMINATION OF TAXABILITY ("Agreement") for the benefit of Ventures, a copy of
which is attached as Attachment A hereto;
AND WHEREAS Scott is in the process of selling all of its shares in SCPG to
a third party, and is desirous of securing the release of SCPG's obligations
under the Agreement;
AND WHEREAS Ventures is desirous of securing an indemnity from a
financially secure party;
NOW THEREFORE, the parties hereby agree as follows:
1. Ventures, for itself, its successors and assigns, hereby releases
and forever discharges SCPG, its successors and assigns, from any and all
obligations, liabilities, claims or damages, based upon or arising under the
Agreement.
2. In consideration of Ventures' release of SCPG, Scott, for itself,
its successors and assigns, hereby agrees to assume responsibility for all
obligations, liabilities, claims or damages, based upon or arising under the
Agreement, to the same extent as if Scott were the original party to the
Agreement.
<PAGE>
3. The parties acknowledge that SCPG is a third party beneficiary of this
Release and Novation, and that said Release and Novation may be enforced
directly by SCPG.
IN WITNESS WHEREOF, the parties have executed the said Release and Novation
with the intent of being legally bound.
ACCEPTED: ACCEPTED:
R/K Ventures Scott Paper Company
Unit I Limited Partnership
By: /s/ Ronald G. Roth By: /s/ Thomas C. Deas, Jr.
---------------------------- -------------------------------
Ronald G. Roth
Title: General Partner Title: Thomas C. Deas, Jr.
------------------------- ----------------------------
Assistant Treasurer
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC., an
Arizona corporation, its general partner
By /s/ Robert H. Kite
----------------------------
Robert H. Kite
Title: President
-------------------------
2
<PAGE>
ATTACHMENT A
------------
INDEMNIFICATION AGREEMENT REGARDING DETERMINATION OF TAXABILITY
- ---------------------------------------------------------------
THIS INDEMNIFICATION AGREEMENT REGARDING DETERMINATION OF TAXABILITY
("Indemnity Agreement") is made this 21st day of April, 1989, by SCOTT CONTAINER
PRODUCTS GROUP, INC., a Delaware corporation ("Scott container"), in favor of
R/K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership
("Ventures").
I. RECITALS:
--------
1.1 Pursuant to a resolution of the Industrial Development Authority of
the City of Tolleson, Arizona (the "IDA") adopted on October 1, 1987, between
the IDA and First Interstate Bank of Arizona, N.A., ("First Interstate") as
Trustee, the IDA issued its $5,800,000.00 Industrial Development Revenue Bonds,
Series 1987(R/K Ventures Unit I Limited Partnership Project) dated October 1,
1987 (the "Bonds").
1.2 The Bonds were issued as one fully registered bond in the principal
amount of $5,800,000.00 and were sold to First Interstate as Purchaser
("Purchaser") pursuant to a Bond Purchase Contract dated December 11, 1987,
between the IDA, Ventures and Purchaser. Simultaneously with the issuance of the
Bonds, an opinion of the law firm of O'Connor, Cavanagh, Anderson, Westover,
Killingsworth & Beshears ("Bond Counsel") was delivered to Purchaser to the
effect that, with certain exceptions, the interest received on the Bonds is not
includable in the gross income of registered owners of the Bonds for purposes of
federal and State of Arizona income taxation. The delivery of such opinion and
the continued status of the Bonds as "tax exempt" was a material inducement for
the Purchaser's actual purchase of the Bonds.
1.3 The proceeds from the sale of the Bonds were loaned by the IDA to
Ventures (the "Loan") pursuant to a Loan Agreement (the "Loan Agreement") dated
as of October 1, 1987, between the IDA and Ventures. The purpose of the Loan was
to finance all or a portion of the cost of the acquisition, construction and
equipping of a manufacturing facility (the "Project") located within the
boundaries of the City of Tolleson, Arizona, to be owned by Ventures.
<PAGE>
1.4 The Loan is evidenced by a Promissory Note (the "Note") dated
December 11, 1987, made by Ventures, payable to the order of the IDA in the
principal amount of $5,800,000.00 and is secured by a Construction Deed of
Trust and Assignment of Rents (the "Deed of Trust") dated as of December 11,
1987, executed by Ventures, as trustor, for the use and benefit of the IDA, as
beneficiary, recorded December 11, 1987, at Recorder's No. 87-736740, re-
recorded December 14, 1987, at Recorder's No. 87-739244, records of Maricopa
County, Arizona, and encumbering the Project.
1.5 To secure the payment to Purchaser of the principal of and interest on
the Bonds, the IDA assigned its interest in the Loan Agreement, the Note and the
Deed of Trust to Purchaser pursuant to an Assignment of Deed of Trust and
Request for Special Notice dated December 11, 1987, and recorded December 11,
1987, at Recorder's No. 87-736740, re-recorded December 14, 1987, at Recorder's
No. 87-739244, records of Maricopa County, Arizona.
1.6 The Project was leased to WMF Container Corporation, a Delaware
corporation, d/b/a Thompson Industries ("WMF"), by an Operating Lease (the
"Lease") dated August 20, 1987, between Ventures and WMF.
1.7 Scott Container has advised Ventures that Scott Paper Company, a
Pennsylvania corporation ("Scott"), acquired all of the stock of WMF, on
October 27, 1988, and that the name of WMF was changed to "Scott Container
Products Group, Inc." Scott Container has further informed Ventures that as a
result of the stock sale to Scott the $40 million limit provided in the Internal
Revenue Code applicable to small issue industrial development bonds would be
exceeded.
1.8 Pursuant to the provisions of certain documents executed in connection
with the Bonds, including Section 3.2(b) of the Loan Agreement, Ventures agreed,
in the event of a Determination of Taxability (as defined in the Loan
Agreement), to pay interest on the Loan at a higher rate of interest and to pay
any Additions to Tax (as defined in the Loan Agreement) paid or incurred by any
holder of the Bonds. Such obligation survives the termination of the Loan
Agreement, the payment of the Bonds, and the payment of the Note. Consequently,
Ventures would like to prepay the Loan and effect a redemption of the Bonds, and
has requested that First Interstate make a loan to Ventures sufficient in amount
to do so. As an accommodation to Ventures, First Interstate has agreed to and is
contemporaneously herewith making a loan (the "New Loan") to Ventures to pay the
Loan.
-2-
<PAGE>
1.9 Ventures has requested the New Loan in an effort to avoid any
Determination of Taxability of the Bonds with the concurrence of Scott
Container.
II. AGREEMENT:
---------
NOW, THEREFORE, in consideration of Ventures' agreement to seek the New
Loan, Scott Container agrees as follows:
2.1 Notwithstanding the redemption of the Bonds, Scott Container agrees
that its undertaking contained in Section 4(b) of the Lease pertaining to loss
of tax-exempt status shall remain in effect and shall include loss of tax-exempt
status arising from the purchase of the stock of Scott Container (then WMF) by
Scott.
2.2 For purposes of this Agreement and the Lease, "loss of tax-exempt
status" shall mean a "Determination of Taxability" as defined in the Loan
Agreement. The increased Rent referred to in Section 4(b) of the Lease shall be
equal to (a) any additional interest payable retroactively by Ventures to the
Purchaser under Section 3.2(b) of the Loan Agreement, such interest being
payable from the date interest on the Bonds became subject to federal income
taxation at a rate equal to the Prime Rate (as defined in the Loan Agreement)
plus 1% plus (b) any Additions to Tax (as defined in the Loan Agreement) payable
by Ventures to the Purchaser under Section 3.2 of the Loan Agreement. Such
increased Rent shall be payable at such time as such amounts are payable by
Ventures to the Purchaser. Ventures shall promptly notify Scott Container of any
demand by Purchaser for payment of additional amounts by reason of a
Determination of Taxability. In the event that Scott Container fails to pay
amount due hereunder to Ventures, and, as a result thereof, Ventures is required
to pay additional amounts to Purchaser pursuant to Section 10.5 of the Loan
Agreement, Scott Container shall reimburse Ventures for such additional amounts.
2.3 This Indemnity Agreement and the Lease set forth the entire
agreement of Scott Container and Ventures with respect to the subject matter
hereof. No modification or waiver of any provision of this Indemnity Agreement
or any right of Ventures hereunder and no release of Scott Container hereunder
shall be effective unless in a writing executed by an authorized representative
of Ventures. The indemnification provided to Ventures hereby is in addition to
the indemnifications or other agreements that currently exist and are provided
under the Lease.
-3-
<PAGE>
2.4 This Indemnity Agreement shall be binding upon all successors and
assigns of Scott Container and shall inure to the benefit of all successors and
assigns of Ventures.
2.5 This Indemnity Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona.
SCOTT CONTAINER PRODUCTS GROUP, INC.
a Delaware Corporation
By: /s/ Thomas C. Deas, Jr.
--------------------------
Its: Treasurer
--------------------
Accepted:
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited
partnership
By /s/ Ronald G. Roth
---------------------------------------
Ronald G. Roth, its general partner
By K-F-T LIMITED PARTNERSHIP, an
Arizona limited partnership, its
general partner
By KITE FAMILY COMPANIES, INC. an
Arizona corporation, its general partner
By /s/ Robert H. Kite
---------------------------------------
Its President
-------------------------------
-4-
<PAGE>
OPERATING LEASE
between
R-K VENTURES UNIT I LIMITED PARTNERSHIP,
an Arizona Limited Partnership,
as Landlord
and
WMF CONTAINER CORPORATION,
a Delaware corporation dba
THOMPSON INDUSTRIES,
as Tenant
August 20, 1987
City of Tolleson, County of Maricopa, State of Arizona
<PAGE>
TABLE OF CONTENTS OF OPERATING LEASE
<TABLE>
<CAPTION>
PARAGRAPH PAGE
- --------- ----
<S> <C>
1. Lease of Premises.............................................. 1
2. Construction of Parcel 1 Improvements.......................... 1
(a) Plans.................................................... 1
(b) Development Schedule..................................... 3
(c) Excusable Delay.......................................... 5
(d) Process Equipment........................................ 6
(e) Completion of Construction............................... 7
(f) Possession............................................... 7
(g) Discharge of Liens....................................... 9
(h) Changes to Plans......................................... 9
(i) Surety Bonds............................................. 10
(j) Inspection Reports....................................... 10
(k) Early Entry.............................................. 10
(l) Quality of Construction.................................. 10
(m) Punch-List............................................... 10
(n) Nondisclosure of Process Equipment....................... 11
(o) Contractor............................................... 11
(p) Fire Protection Systems.................................. 11
3. Term........................................................... 12
4. Rent........................................................... 12
(a) Payment.................................................. 12
(b) Industrial Development Bonds............................. 13
(c) Warehouse Rent........................................... 14
(d) Due and Payable.......................................... 14
(e) Pro Rata Rent............................................ 14
5. Use............................................................ 15
(a) General.................................................. 15
(b) Compliance with Law...................................... 15
6. Permitted Exceptions; Landlord's Warranties
and Representations; Quiet Enjoyment........................... 15
(a) Permitted Exceptions..................................... 15
(b) Landlord's Warranties and Representations................ 15
(c) Quiet Enjoyment.......................................... 16
7. Maintenance and Repairs; Surrender; Trade Fixtures............. 17
(a) Tenant's Maintenance..................................... 17
(b) Landlord's Obligations................................... 17
(c) Surrender; Removal of Trade Fixtures..................... 17
(d) Depreciation; Repair of Damages.......................... 17
(e) Insurance................................................ 18
(f) Right of Entry........................................... 18
8. Alterations and Additions...................................... 18
</TABLE>
<PAGE>
PARAGRAPH PAGE
- --------- ----
9. Insurance ........................................................... 18
(a) General Liability .............................................. 18
(b) Extended Coverage .............................................. 18
(c) Landlord's Insurance ........................................... 19
(d) Form ........................................................... 19
(e) Evidence ....................................................... 19
(f) Waiver of Subrogation .......................................... 19
(g) Proceeds ....................................................... 19
(h) Compliance ..................................................... 20
(i) Tenant's Contents .............................................. 20
(j) Worker's Compensation .......................................... 20
(k) Blanket-Policy ................................................. 20
(l) Rent Abatement Insurance ....................................... 20
10. Indemnification ..................................................... 20
(a) Tenant ......................................................... 20
(b) Landlord ....................................................... 21
11. Damage or Destruction ............................................... 21
(a) Landlord's Repair .............................................. 21
(b) Abatement ...................................................... 21
(c) Time for Completion ............................................ 22
(d) Major Damage ................................................... 22
(e) Escrow of Proceeds ............................................. 22
(f) Damage Near End of Term ........................................ 23
12. Property Taxes ...................................................... 23
(a) Payment ........................................................ 23
(b) Definition ..................................................... 23
(c) Separate Assessment ............................................ 24
(d) Personal Property .............................................. 24
(e) Declaration .................................................... 24
(f) Contest ........................................................ 24
(g) Lump-Sum Assessments ........................................... 24
13. Eminent Domain ...................................................... 25
(a) Total Taking ................................................... 25
(b) Partial Taking ................................................. 25
(c) Restoration .................................................... 25
(d) Awards ......................................................... 26
(e) Unsafe Premises ................................................ 26
14. Utilities ........................................................... 26
15. Assignment and Subletting ........................................... 26
(a) No Consent Required ............................................ 26
(b) Notices ........................................................ 27
16. Conveyance by Landlord .............................................. 27
ii
<PAGE>
PARAGRAPH PAGE
- --------- ----
17. Access to Premises ............................................... 27
(a) Prior Notice ................................................ 27
(b) Accompanied by Tenant ....................................... 27
(c) Secure Areas ................................................ 27
18. Options to Extend ................................................ 28
(a) Grant of Options; Rent ...................................... 28
(b) Exercise .................................................... 29
(c) Amendments .................................................. 30
19. Parcel 2 ......................................................... 30
(a) Inclusion of Parcel 2 in Lease .............................. 30
(b) Construction of Parcel 2 Improvements ....................... 31
(c) Rent ........................................................ 32
(d) Part of Premises ............................................ 34
(e) Lease Extension ............................................. 34
(f) Amendment ................................................... 34
20. Parcel 3 ......................................................... 34
(a) Inclusion of Parcel 3 in Lease .............................. 34
(b) Construction of Parcel 3 Improvements ....................... 36
(c) Rent ........................................................ 37
(d) Part of Premises ............................................ 38
(e) Lease Extension ............................................. 38
(f) Amendment ................................................... 39
(g) Condition Precedent ......................................... 39
21. Tenant's Default; Remedies ....................................... 39
(a) Defaults .................................................... 39
(b) Remedies .................................................... 39
(c) Rental Late Charges and Interest ............................ 41
22. Landlord's Default; Remedies ..................................... 41
23. Subordination; Non-Disturbance ................................... 42
24. Estoppel Certificates ............................................ 42
25. Notices .......................................................... 42
26. Recordation ...................................................... 43
27. Title Policy ..................................................... 43
28. Dispute and Payment Under Protest ................................ 43
29. Arbitration ...................................................... 44
30. Force Majeure .................................................... 44
31. Brokerage ........................................................ 44
iii
<PAGE>
PARAGRAPH PAGE
- --------- ----
32. Miscellaneous .................................................... 44
(a) Headings; Construction; Partial Invalidity;
Governing Law ............................................... 44
(b) Interest on Past-Due Obligations ............................ 45
(c) Time of the Essence ......................................... 45
(d) Counterparts ................................................ 45
(e) Incorporation of Prior Agreements; Amendments ............... 45
(f) Waivers ..................................................... 45
(g) Holding Over ................................................ 45
(h) Covenants and Conditions .................................... 45
(i) Binding Effect .............................................. 45
(j) Attorneys' Fees ............................................. 45
(k) Signs ....................................................... 46
(l) Attornments ................................................. 46
33. Effect of Modifications .......................................... 46
iv
<PAGE>
LIST OF EXHIBITS
EXHIBIT "A-1" LEGAL DESCRIPTION OF PARCEL 1
EXHIBIT "A-2" LEGAL DESCRIPTION OF PARCEL 2
EXHIBIT "A-3" LEGAL DESCRIPTION OF PARCEL 3
EXHIBIT "B" DESCRIPTION OF PLANS
EXHIBIT "C" DEVELOPMENT SCHEDULE
EXHIBIT "D" DESCRIPTION OF PROCESS EQUIPMENT
EXHIBIT "E" DESCRIPTION OF PROCESS EQUIPMENT PLANS
EXHIBIT "F" NONDISCLOSURE AGREEMENT
EXHIBIT "G" PERMITTED EXCEPTIONS
EXHIBIT "H" NONDISTURBANCE AGREEMENT
EXHIBIT "I" MEMORANDUM OF LEASE
v
<PAGE>
OPERATING LEASE
---------------
THIS OPERATING LEASE (the "Lease") is entered into this 20th day of August
1987, by an between R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware corporation,
dba THOMPSON INDUSTRIES ("Tenant").
RECITALS
--------
A. Landlord owns the entire fee simple interest in certain real property
located in Maricopa County, Arizona, and more particularly described on Exhibits
"A-1" ("Parcel 1"), "A-2" ("Parcel 2") and "A-3" ("Parcel 3") attached hereto
and by this reference incorporated herein.
B. Tenant desires, (1) to lease from Landlord Parcel 1, Parcel 2, and
Parcel 3, (2) that Landlord construct or cause to be constructed certain
improvements on Parcel 1 pursuant to preliminary plans and specifications
prepared by Tenant and revised by Landlord and Tenant, and (3) to enter into
certain other agreements with Landlord more specifically described below; all of
which Landlord is willing to do upon and subject to the terms, covenants and
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
LEASE
-----
1. Lease of Premises. Landlord hereby leases to Tenant and Tenant hereby
-----------------
leases from Landlord, upon and subject to the terms, covenants and conditions
hereinafter set forth: (a) Parcel 1, Parcel 2 and Parcel 3; (b) those
improvements to be constructed on Parcel 1 in accordance with the provisions of
Paragraph 2 hereinbelow, which improvements primarily consist of a building of
approximately 169,840 square feet to be used as a manufacturing plant and
warehouse (the "Building"), and associated improvements, and are more
particularly described in the documents listed and described on Exhibit "B"
attached hereto an by this reference incorporated herein (collectively, the
"Parcel 1 Improvements"); and (c) any and all easements, rights, benefits,
rights-of-way, privileges and covenants appurtenant to said Parcel 1, Parcel 2,
Parcel 3 and the Parcel 1 Improvements (the "Appurtenances"). Parcel 1, Parcel
2, Parcel 3, the Parcel 1 Improvements and the Appurtenances are hereinafter
collectively referred to as the "Premises".
2. Construction of Parcel 1 Improvements.
-------------------------------------
(a) Plans. Landlord and Tenant have approved the outline
-----
specifications; architectural, engineering and mechanical specifications; and
site, space, grading, drainage, fire protection and paving plans (collectively,
the "Plans") listed and described on Exhibit "B" attached hereto for the
construction of the Parcel 1 Improvements, which Plans are hereby incorporated
by reference in this Lease the same as if fully set forth herein. Landlord
hereby certifies to Tenant that Landlord has obtained or will obtain from any
and all governmental
<PAGE>
agencies having appropriate jurisdiction all permits and approvals necessary for
Landlord to commence and complete construction of the Parcel 1 Improvements in
accordance with the Plans and pursuant to the provisions of subparagraph 2(b).
(i) Landlord and Tenant understand, however, that as of the date of this
Lease, Landlord has not obtained final governmental approval of all
aspects of the Plans and, in the event any governmental agency having
appropriate jurisdiction requires modifications to any aspect of the
Plans, Landlord will prepare and deliver to Tenant plans and
specifications fully disclosing such modifications within five (5)
days after Landlord's receipt of notice that modifications will be
required. Tenant shall have ten (10) days after receipt thereof to
disapprove such modifications, it being understood that Tenant will
not disapprove such modifications provided that: (A) such
modifications are not substantial and do not require additional
expenditures by Tenant in the form of increased Rent (as hereinafter
defined) or other costs payable by Tenant hereunder, and (B) such
modifications do not materially and adversely affect Tenant's
proposed use of the Premises. If Tenant does not disapprove such
modifications within the above-described ten (10)-day period, Tenant
will be deemed to have approved such modifications. In the event
Tenant timely disapproves any such modifications, Tenant shall
prepare or cause to be prepared alternatives to such modifications.
Such alternative modifications shall be prepared and resubmitted to
the appropriate governmental agency within thirty (30) days after the
expiration of the above-described ten (10)-day period. In the event
the appropriate governmental agency disapproves such alternative
modifications, Landlord shall notify Tenant in writing of such within
five (5) days after Landlord's receipt of such disapproval. Tenant
shall thereupon have the option of cancelling this Lease by giving
Landlord written notice of cancellation within ten (10) days after
Tenant's receipt of Landlord's disapproval notice. If Tenant does not
cancel this Lease within said ten (10)-day period, Tenant shall be
deemed to have waived its right to cancel granted herein and the
parties shall proceed with their respective obligations hereunder.
Landlord and Tenant mutually agree to cooperate and use their best
efforts to achieve all necessary governmental approvals of every
aspect of the Plans.
(ii) Landlord and Tenant also understand that as of the date of this
Lease, Tenant has not reviewed and approved the offsite utility and
landscaping plans and shop drawings relating to the Parcel 1
Improvements (collectively, the "Remaining Plans"). Landlord will
promptly prepare and deliver to Tenant the Remaining Plans for
Tenant's approval, which approval shall not be unreasonably withheld.
Tenant shall have ten (10) days after receipt of the Remaining Plans
to give notice to Landlord of Tenant's disapproval of all or any
portion of the Remaining Plans. If Tenant does not timely disapprove
any of
-2-
<PAGE>
the Remaining Plans, Tenant will be deemed to have approved same.
In the event Tenant timely disapproves any Remaining Plans, Landlord
shall, within ten (10) days following Tenant's notice of disapproval,
revise and resubmit the disapproved Remaining Plans (the "Resubmitted
Plans") and Tenant shall again have ten (10) days from receipt of the
Resubmitted Plans to give notice to Landlord of Tenant's disapproval
thereof. In the event the Resubmitted Plans are timely disapproved by
Tenant, Tenant shall have the option to cancel this Lease by giving
Landlord written notice of cancellation within the time period
provided for disapproving the Resubmitted Plans. If Tenant does not
give notice of cancellation, Landlord shall again revise and resubmit
the Resubmitted Plans and all time limits and rights, including the
right of cancellation shall again apply.
(b) Development Schedule.
--------------------
(i) Landlord, at its sole cost and expense, shall diligently
construct and complete, or cause to be constructed and completed, the
Parcel 1 Improvements in a good and workmanlike manner, in accordance
with the Plans (as hereinafter used in this Lease, "Plans" shall also
be deemed to include the "Remaining Plans" and the "Resubmitted
Plans"), pursuant to the schedule of construction completion dates
(the "Development Schedule") set forth on Exhibit "C" attached hereto
and by this reference made a part hereof, and in compliance with the
"General Conditions" contained in AIA Document No. A201 (the "General
Conditions") (provided, however, that in the event of a conflict
between the provisions of the General Conditions, and the provisions
of this Lease, the provisions of this Lease shall prevail) and all
applicable governmental rules, regulations and requirements.
(ii) Landlord and Tenant have designated on the Development
Schedule certain construction tasks as "Benchmark Tasks" and the
projected completion dates corresponding to such tasks as "Benchmark
Dates".
(iii) The Key Tasks shall be as follows:
(A) "First Key Task" shall mean substantial completion, in
accordance with the provisions of subparagraph
2(f)(i)and (ii) hereof, of the entire warehouse
facility portion of the Building as shown to the east
of column line seven (7) on that portion of the Plans
identified on Exhibit "B" hereto, as Sverdrup prints A2
and A3 (the "Warehouse").
-3-
<PAGE>
(B) "Second Key Task" shall mean completion of construction as
set forth in subparagraph 2(a) hereof.
(iv) The date by which the First Key Task shall be accomplished, as
and if extended pursuant to the provisions of subparagraph 2(b) or
2(c) hereof, shall be December 1, 1987 (the "First Key Date").
(v) The date by which the Second Key Task shall be accomplished, as
and if extended pursuant to the provisions of subparagraph 2(b) or
2(c) hereof, shall be March 1, 1988 (the "Second Key Date").
(vi) Subject to the provisions of subparagraphs 2(c) and 2(d)
hereinbelow, in the event Landlord is unable to perform and complete
a Key Task on or before the corresponding Key Date, Landlord shall
pay Tenant, within thirty (30) days after Tenant's written demand
therefor, an amount equal to one-fifteenth (1/15) of the monthly Rent
(as defined below) payable during the first month of the term of the
Lease for each day following the applicable Key Date until the date
such Key Task is completed (the "Delay Damages"); provided, however,
in the event Tenant, having the right, does not elect to terminate
this Lease pursuant to said subparagraph 2(c) either Tenant or
Landlord shall be entitled to off-set the Delay Damages against the
next ensuing payment(s) of Rent becoming due hereunder. Landlord
understands and agrees that Landlord's failure to complete a Key Task
in a timely fashion will result in Tenant incurring additional
expenses which are extremely difficult to ascertain and that the
Delay Damages are a reasonable estimate, under the circumstances, of
such expenses and do not constitute interest and are not a penalty.
(vii) In the event Landlord is unable to complete a Key Task or
Benchmark Task within thirty (30) days following the corresponding
Key Date or Benchmark Date, as the case may be, Tenant, subject to
the provisions of subparagraph 2(c) hereinbelow (and, with respect to
a delay in timely completing a Key Task, in addition to being
entitled to the Delay Damages), shall have the option of doing either
of the following:
(A) Undertake, at Landlord's sole cost and expense, completion
of construction of the Parcel 1 improvements; or
(B) Allow Landlord an additional thirty (30) days to complete
such task.
-4-
<PAGE>
Tenant shall notify Landlord in writing of its election
within five (5) days after the expiration of the initial
thirty (30)-day period following the applicable Key Date
or Benchmark Date. In the event Tenant elects the option
described in 2(b)(vii)(B) hereinabove, at the expiration
of the thirty (30)-day period described therein the
options described in 2(b)(vii)(A) and (B) hereinabove
shall again become available to Tenant. The foregoing to
the contrary notwithstanding, in the event the Parcel 1
improvements and the Premises are not Substantially
Completed (as that term is defined pursuant to sub-
paragraph 8.1.3 of the General Conditions) within sixty-
one (61) days after the Second Key Date, Tenant, in addition
to the options described in 2(b)(vii)(A) and (B) herein-
above, shall also have the option of cancelling this Lease
by giving written notice thereof to Landlord within five
(5) days after expiration of said sixty-one (61)-day period.
For purposes of this subparagraph 2(b), a Key Task or
Benchmark task shall not be deemed completed until every
aspect of such task has been fully completed in strict
accordance with the Plans (except for those items which
cannot be completed due to installation of the Process Equip-
ment) and the architect for the construction of the Parcel 1
Improvements (the "Architect") certifies in a writing
delivered to Tenant that the Key Task or Benchmark Task has
been completed, and the date of such completion.
(viii) If Landlord does not complete the First Key
Task by December 1, 1987, or the Second Key Task by
March 1, 1988, or any Benchmark Task by the date fixed in the
Development Schedule (subject to the provisions of sub-
paragraph 2(c) of this Lease), any time or date for performance
by Tenant under this Lease which is calculated from such date
shall be extended by the number of days completion of such
task is delayed.
(c) Excusable Delay. The provisions of subparagraph 2(b) to the
---------------
contrary notwithstanding, in the event Landlord is delayed in completing a Key
task or Benchmark Task by the corresponding Key Date or Benchmark Date, as the
case may be, for any of the following reasons, the Key Date or Benchmark Date,
as the case may be, shall be deemed to be extended the actual number of days of
such delay; provided, however, in the event such delay is more than one hundred
twenty (120) days, and such delay is not directly caused by Tenant's negligence
or willful wrongful act, Tenant shall have the option of cancelling this Lease
upon written notice to Landlord within ten (10) days after the expiration of the
such one hundred twenty (120)-day period :
(i) Any delay directly resulting from changes in the Plans
or construction work to be performed hereunder made by
Tenant pursuant to the provisions of subparagraph 2(g);
-5-
<PAGE>
(ii) Any delay directly resulting from inclement weather; fire,
flood or other natural disaster; inability by the exercise of
reasonable diligence to obtain supplies or parts necessary to
perform and complete Landlord's construction obligations
hereunder; or war or other national emergency;
(iii) Any delay directly resulting from the negligent or wilful,
wrongful act of Tenant or agents acting solely on behalf of
Tenant in the discharge of Tenant's duties under this Lease;
or
(iv) Any delay directly resulting from Tenant's failure to timely
install the Process Equipment (as defined below), provided
Tenant has not elected to require Landlord to install the
Process Equipment pursuant to subparagraph 2(d) hereof.
(d) Process Equipment.
-----------------
(i) Landlord and Tenant acknowledge that the machinery and
equipment described on Exhibit "D" attached hereto and by this
reference made a part hereof (the "Process Equipment") has
been designed and manufactured at Tenant's request and is
essential to the conduct and performance of Tenant's business
to be conducted on the Premises. Landlord and Tenant
understand and agree that, subject to the provisions of
subparagraph 2(d)(iv) hereof, Tenant shall be solely
responsible for installing the Process Equipment in the
Building pursuant to the working drawings and blueprints
listed on Exhibit "E" attached hereto and by this reference
made a part hereof (the "Process Equipment Plans").
(ii) Pursuant to the Development Schedule, the installation of the
Process Equipment is not designated a Key Task or Benchmark
Task. Landlord and Tenant understand and agree, however, that
in the event Tenant elects to have Landlord install the
Process Equipment, the failure to install the Process
Equipment by the date designated on the Development Schedule
shall allow Tenant to avail itself of the options and remedies
to which it would otherwise be entitled due to the failure to
complete a Key Task by a Key Date, provided such delay is not
caused by any of the reasons specified in subparagraph 2(c)
hereof.
-6-
<PAGE>
(iii) Upon receipt of Tenant's written notice, Landlord
will allow Tenant reasonable access to the Premises
to install and test the Process Equipment, provided
Tenant first complies with the insurance provisions
applicable to Tenant's early entry set forth in
Paragraph 9 hereof and provided further that Tenant
shall pay Landlord, in addition to the rent otherwise
payable hereunder, a monthly sum for such early entry
(the "Early Entry Rent") equal to one-half (1/2) of
the difference between the monthly rent payable for
the entire Premises during the first twelve (12) months
following the Occupancy Date (as hereinafter defined) and
the monthly Warehouse Rent (as hereinafter defined). The
Early Entry shall commence upon the later of the
Commencement Date or ten (10) days following the notice
provided for in the first sentence of this subparagraph
2(d)(iii) and shall be paid as provided for payment of
Rent; provided, however, that Tenant shall only be
obligated to pay Early Entry Rent for the period of
time between the date of Tenant's Early Entry and the
Occupancy Date. Tenant shall perform the installation
of the Process Equipment diligently and in a good and
workmanlike manner in accordance with the Process
Equipment Plans.
(iv) Anything herein to the contrary notwithstanding,
Landlord, upon Tenant's written demand, shall, within
one hundred eighty (180) days from the giving of such
demand, install, or cause to be installed, the Process
Equipment. In the event Tenant gives Landlord such
written demand, the installation of the Process
Equipment shall thenceforth be Landlord's sole
responsibility and obligation and shall be deemed to
be a Key Task entitling Tenant to exercise any options
and remedies to which Tenant is entitled under this
Lease in the event a Key Task is not timely completed.
(e) Completion of Construction. Landlord shall not have completed
--------------------------
its construction obligations hereunder until Landlord has Substantially
Completed construction of the Premises and the Parcel 1 improvements in
accordance with the Plans and pursuant to the provisions of this Paragraph 2 and
all applicable governmental rules, regulations and requirements.
(f) Possession. Landlord shall deliver possession of the Premises to
----------
Tenant as follows:
-7-
<PAGE>
(i) On the First Key Date, Landlord shall deliver actual
possession of the Warehouse to Tenant broom clean and
undamaged, (subject, however, to any debris caused by
Tenant's installation of the Process Equipment) as
follows:
(A) The construction of all aspects of the Warehouse
shall be Substantially Completed in accordance with the
Plans;
(B) All fire protection systems and equipment completed
as provided herein and all utilities, including, without
limitation, sewer, water, drainage, telephone, electric
and natural gas service and all meters, connected to the
Building in the locations depicted in the Plans and in
adequate supply to permit use of the Warehouse in full
accordance with Tenant's intended use of the Warehouse
as depicted in the Plans and elsewhere in this Lease;
(C) The Warehouse shall be in full compliance with all
applicable building codes and other governmental rules,
regulations and requirements;
(D) Landlord's insurance requirements hereunder, shall
be in full force and effect; and
(E) The Warehouse and the Premises shall be free from
the effects of any suppliers, materialmen's and
mechanic's liens.
(ii) On the Second Key Date, Landlord shall deliver actual
possession of the Parcel 1 Improvements and the Premises
to Tenant broom clean and undamaged, (subject, however,
to any debris caused by Tenant's installation of the
Process Equipment) as follows:
(A) The construction of all aspects of the Parcel 1
Improvements and the Premises shall be Substantially
Completed in accordance with the Plans;
(B) All fire protection systems and equipment completed
as provided herein and all utilities, including, without
limitation, sewer, water, drainage, telephone, electric
and natural gas service and all meters, connected to the
Building in the locations depicted in the Plans and in
adequate supply to permit use of the Premises in full
accordance with Tenant's intended use of the Premises as
depicted in the Plans and elsewhere in this Lease;
(C) The Premises shall be in full compliance with all
applicable building codes and other governmental rules,
regulations and requirements;
(D) Landlord's insurance requirements hereunder, shall
be in full force and effect; and
-8-
<PAGE>
(E) The Premises and the Parcel 1 Improvements shall be free
from the effects of any suppliers, materialmen's and mechanic's
liens.
(g) Discharge of Liens. Each party hereby agrees to promptly pay, or
------------------
cause to be paid, all suppliers, materialmen, contractors and subcontractors
performing work for it on the Premises in connection with any of its
construction obligations hereunder. At all times during the performance of its
construction obligations hereunder, and from time to time, each party shall
remove and discharge, or cause to be removed or discharged, any and all
suppliers', materialmen's and mechanic's liens recorded against the Premises
within sixty (60) days after their recordation. In lieu of such discharge,
however, each party may instead provide bonds with respect to any such liens in
the form prescribed by A.R.S. (S)33-1004, and thereby satisfy its obligations
set forth in the preceding sentence.
(h) Changes to Plans. Tenant shall have the right to request that
----------------
Landlord make changes to the Plans (a "Change Order"), which requests shall be
in a writing delivered to Landlord and shall not be unreasonably denied;
provided, however, that the incremental increase or decrease of the overall
costs of constructing the Improvements directly attributable to a Change Order
shall be reflected increasing or decreasing the rent payable under this Lease.
(Amount of Cost Increase or Cost Decrease) x (1.09) x *(.0954) =
--------------------------------------------------------------
(12)
(Amount to be Added to or Subtracted from Tenant's Monthly Rent)
In the event a Change Order results in the total square footage of the Building
as set forth in subparagraph 4(a) hereof, being increased or decreased, such
square footage and Rent payable hereunder shall be proportionately adjusted.
Anything herein to the contrary notwithstanding, in the event the additional
work contemplated by a Change Order will result in a delay in completing a Key
Task or Benchmark Task, Landlord, within ten (10) days after receipt of the
Change Order, will notify Tenant of such in a writing specifying the Key Task or
Benchmark Task which will be delayed and the anticipated length of the delay.
Tenant shall have five (5) days following receipt of Landlord's notification in
which to either, at Tenant's option, (i) rescind in writing the Change Order,
(ii) dispute in writing anticipated length of delay set forth in Landlord's
notification, in which event Landlord and Tenant shall have five (5) additional
days in which to arrive at a mutually agreeable length of anticipated delay and,
failing such mutual agreement, the anticipated length of delay shall be
determined pursuant to the arbitration provisions of Paragraph 29 herein,
(provided however, that construction under the Change Order shall commence
immediately and shall not await determination of the length of delay under this
subparagraph 2(h), or (iii) approve the length of the anticipated delay. In the
event Tenant does not notify Landlord of Tenant's election with five (5) days
after receipt of Landlord's notification of anticipated delay, Tenant shall be
deemed to have approved the anticipate length of delay
* This rate is subject to equitable adjustment in the event the Change Order
results in any special additions to the Parcel 1 Improvements not contemplated
by the Plans and not practically capable of amortization as provided for herein.
Any disputes regarding any such adjustment or the need therefore, shall be
settled pursuant to the arbitration provisions of Paragraph 29 hereof.
-9-
<PAGE>
specified therein; in which event completion of the Key Task or Benchmark Task
shall be deemed to be delayed as specified by Landlord. In the event Landlord
does not notify Tenant of any anticipated delay within ten (10) days after
receipt of a Change Order, it shall be conclusively deemed that such Change
Order will not result in delay in completing a Key Task or Benchmark Task.
(i) Surety Bond. Prior to commencing construction of the Parcel 1
-----------
Improvements, Landlord shall obtain from a reputable company approved by Tenant,
a surety bond (or other similar bond) guaranteeing to Tenant completion of
construction of the Parcel 1 Improvements. Such surety bond shall be in form
satisfactory to Tenant.
(j) Inspection Reports. Landlord shall provide Tenant, during all
------------------
phases of construction of the Parcel 1 Improvements, with copies of all
inspection reports relating to soils, drainage, roofing and welding. In
addition, Landlord shall, within five (5) days following Landlord's receipt
thereof, provide Tenant with copies of all inspection reports prepared by
Landlord, Landlord's agents, architects, engineers, contractors and consultants,
and any governmental agencies, relating to all utilities, roadways, signage,
structural components, electrical systems, plumbing systems and mechanical
systems to be located, constructed or placed on the Premises.
(k) Early Entry. In addition to Tenant's right of early entry to
-----------
install and test the Process Equipment pursuant to subparagraph 2(d)
hereinabove, Tenant may, at any time prior to the Commencement Date (as defined
below), at its sole risk, enter upon the Premises for purposes of inspection or
installing equipment or furnishings, or for any other purposes not inconsistent
with the provisions of this Lease; provided, however, that (i) Tenant's early
entry shall not unreasonably interfere with Landlord's construction of the
Parcel 1 Improvements, (ii) Tenant shall execute an indemnity agreement with
respect to Tenant's early entry in favor of Landlord in form and substance
reasonably satisfactory to Landlord, and (iii) Tenant shall comply with the
insurance provisions applicable to Tenant's early entry set forth in Paragraph 9
hereof.
(l) Quality of Construction. Landlord warrants and represents that
-----------------------
all work shall be done in a good and workmanlike manner and in compliance with
all applicable laws and lawful ordinances, bylaws, regulations and orders of
governmental authority and of the insurers of the Parcel 1 Improvements and free
from defects in material and workmanship. All warranties that an owner would be
entitled to under the General Conditions will run in favor of Tenant.
(m) Punch-List. Within ten (10) days prior to the Commencement
----------
Date, Landlord, Roth (as defined below), the Architect and Tenant shall conduct
a "walk-through" of the Premises and the Parcel 1 Improvements for purposes of
identifying and preparing a list of patent or apparent defects or deficiencies
in the Improvements and the Premises and Landlord's construction work thereon
(the "Punch-List"). Landlord, at its sole cost and expense, shall promptly
repair or cure, or cause to be repaired or cured, the items set forth in the
Punch-List in a good and workmanlike manner. From time to time, within sixty
(60) days following the Commencement Date, Tenant shall have the right and
option to require Landlord, Landlord's contractor, and/or the architect to
conduct an additional "walk-through" of the Premises for purposes of identifying
and preparing a list of additional patent or apparent defects or deficiencies in
the Parcel 1 Improvements and the Premises and Landlord's construction work
thereon, but excluding there-
-10-
<PAGE>
from any cosmetic defects or deficiencies (an "Additional Punch-List").
Landlord, at its sole cost and expense, shall promptly repair or cure, or cause
to be repaired or cured, the items set forth on any Additional Punch-List.
(n) Nondisclosure of Process Equipment. Landlord will use its best
----------------------------------
efforts to (i) provide fenced enclosure and access control to insure that the
Premises, Parcel 1 Improvements, Process Equipment, Plans and Process Equipment
Plans are only accessible to and viewed by such persons as are absolutely
necessary to complete construction of the Parcel 1 Improvements, and (ii)
execute and deliver to Tenant and require all persons performing work on the
Premises or the Parcel 1 Improvements on and after the earlier of the Occupancy
Date or the date Early Entry Rent begins to accrue as provided in subparagraph
2(d)(iii) hereof, to execute and deliver to Tenant, a nondisclosure agreement in
the form attached hereto as Exhibit "F."
(o) Contractor. Tenant understands, and Landlord agrees, that Landlord
----------
shall use Ronald G. Roth Company ("Roth") as primary contractor in constructing
the Parcel 1 Improvements. Landlord agrees that Tenant: (i) shall be a
third-party beneficiary (and shall be expressly identified as such) of any and
all agreements and contracts between Roth and Landlord relating to the
construction of the Parcel 1 Improvements (collectively, the "Construction
Contract"), (ii) shall have reasonable approval rights prior to the execution
thereof or the execution of any amendments or modifications thereto, and (iii)
shall have the right to (A) enforce and receive the benefits of, in Landlord's
name and stead, the terms and provisions of the Construction Contract, and (B)
exercise any and all remedies to which Landlord is entitled in the event of
Roth's default under the Construction Contract, and any and all amendments or
modifications thereto, immediately upon Landlord's execution thereof. The
foregoing to the contrary notwithstanding, nothing herein shall be construed to
relieve Landlord, in whole or in part, of any of Landlord's obligations
hereunder; including, without limitation, all of Landlord's construction
obligations set forth in this Paragraph 2.
(p) Fire Protection Systems.
-----------------------
(i) Anything herein to the contrary notwithstanding, within
seven (7) days following the date hereof, Landlord shall
provide, or cause to be provided, to Tenant or the insurer
(the "FPS Insurer") of the fire protection systems to be
installed by Landlord pursuant to the Plans (the "Fire
Protection Systems") with copies of all plans,
specifications, drawings and diagrams relating to the Fire
Protection Systems (the "FPS Plans"). Within twenty-one
(21) days following receipt of the FPS Plans by Tenant, the
FPS Insurer shall notify Landlord whether such plans are
approved or disapproved. If the FPS Plans are disapproved,
the FPS Insurer shall specify the reasons for such
disapproval and Landlord shall promptly correct the FPS
Plans accordingly and submit such corrections to the Fire
Protection Systems Insurer for approval or disapproval
pursuant to the provisions set forth in the first two (2)
sentences of this subparagraph (2)(p). If and when the FPS
Plans are approved by the FPS Insurer, Landlord shall
commence and complete construction
-11-
<PAGE>
and installation of the Fire Protection Systems in
accordance with the Development Schedule and the FPS
Plans.
(ii) Landlord shall notify Tenant and the FPS Insurer in
writing immediately following the completion of the
construction and installation of the Fire Protection
Systems. Within twenty-one (21) days following the receipt
by the FPS Insurer of such notice, Landlord and the FPS
Insurer shall commence (at such time or times as may be
reasonably designated by the FPS Insurer) performance
testing of the Fire Protection Systems pursuant to
standards prescribed by the FPS Insurer and delivered or
communicated to Landlord. Landlord's construction
obligations with respect to the Fire Protection Systems
shall not be deemed completed unless and until the FPS
Insurer certifies in writing that the FPS have been
completed in accordance with the FPS Plans and have met or
exceeded the performance standards established by the FPS
Insurer for the Fire Protection Systems.
3. Term. The term of this Lease shall be for a period of ten (10) years
----
and three (3) months, commencing on the later of December 28, 1987 or the date
possession of the Warehouse is delivered to Tenant in accordance with
subparagraph 2(f) of this Lease (the "Commencement Date"); subject, however, to
(a) earlier termination pursuant to Paragraphs 2 and 6 hereof, (b) Tenant's
option to extend the term of this Lease pursuant to Paragraph 18 hereof, and (c)
certain termination and extension rights with respect to Parcel 2 and Parcel 3
pursuant to Paragraphs 19 and 20 hereof. Landlord and Tenant agree to execute an
amendment to this Lease within (30) days following the determination of the
Commencement Date memorializing such date.
4. RENT: Commencing as of the Commencement Date, Tenant shall pay
----
Landlord rent for the Premises (the "Rent") during the term of this Lease as
follows:
(a) Payment. Subject to the provisions of subparagraphs 4(b) and 4(c)
hereinbelow and any other provisions in this Lease adjusting the Rent,
(i) For the first (1st) through thirty-ninth (39th) months
following the Commencement Date, Tenant's Rent shall be an
amount equal to FIFTY TWO THOUSAND THREE HUNDRED TEN and
72/100 DOLLARS ($52,310.72) per month, which amount has
been calculated based on $.308 per square foot of the
Building per month;
(ii) For the fortieth (40th) through sixty-third (63rd) months
following the Commencement Date, Tenant's Rent shall be an
amount equal to FIFTY-SEVEN THOUSAND SEVEN HUNDRED FORTY-
FIVE and 60/100 DOLLARS ($57,745.60) per month, which
amount has been calculated based
<PAGE>
on $.340 per square foot of the Building per month;
(iii) For the sixty-fourth (64th) through ninety-ninth (99th)
months following the Commencement Date, Tenant's Rent
shall be SIXTY-ONE THOUSAND SIX HUNDRED FIFTY-ONE and
92/100 DOLLARS ($61,651.92) per month, which amount has
been calculated based on $.363 per square foot of the
Building per month; and
(iv) For the one hundredth (100th) through one hundred twenty
third (123rd) months following the Commencement Date,
Tenant's Rent shall be SIXTY-EIGHT THOUSAND TWO HUNDRED
SEVENTY-FIVE and 68/100 DOLLARS ($68,275.68) per month,
which amount has been calculated based on $.402 per
square foot of the Building per month.
Landlord and Tenant agree that, subject to the provisions of subparagraph 2(h)
hereof, for purposes of calculating Rent hereunder, the Building shall be deemed
to consist of 169,840 square feet.
(b) Industrial Development Bonds. Landlord and Tenant acknowledge
----------------------------
that Landlord is attempting to obtain industrial development bonds (the "IDB"),
to be issued by the city of Tolleson, Arizona, in the anticipated aggregate
amount of approximately Seven Million and 00/100 Dollars ($7,000,000.00), as an
alternative means of financing Landlord's acquisition of the Premises and
construction of the Improvements and if elected by Tenant, the Process
Equipment. Landlord, however, will not pursue obtaining the IDB if the adjusted
Rent to be paid by Tenant in the event the IDB is obtained is greater than the
Rent specified in subparagraph (a) hereinabove. In the event Landlord obtains
the IDB, Tenant's Rent shall be adjusted and determined pursuant to the
following formula in lieu of the Rent specified in subparagraph 4(a)
hereinabove:
(i) For the first through thirty-ninth months following the Commencement Date,
Tenant's Rent will be calculated as follows:
($.2797)(IDBR) + ($.0385) + (BC 1) + (BC 2)
- -------------- --------------- = AMR
(.0954) (169,840)(12)
(ii) For the fortieth through sixty-third months following the Commencement
Date, Tenant's Rent will be calculated as follows:
($.2810)(IDBR) + ($.0705) + (BC 1) + (BC 2)
- -------------- --------------- = AMR
(.0954) (169,840)(12)
(iii) For the sixty-fourth through ninety-ninth months following the
Commencement Date, Tenant's Rent will be calculated as follows:
($.2819)(IDBR) + ($.0935) + (BC 1) + (BC 2)
- -------------- --------------- = AMR
(.0954) (169,840)(12)
-13-
<PAGE>
(iv) For the one hundredth through one hundred twenty-third months following the
Commencement Date, Tenant's Rent will be calculated as follows:
($.2835) (IDBR) (BC 1) + (BC 2)
- --------------- + ($.1315) + --------------- = AMR
(.0954) (169,840)(12)
Definitions:
"IDBR" is the interest rate payable per annum on the IDB adjusted to
reflect a thirty (30)-year amortization constant.
"BC 1" is the acquisition costs (i.e., attorneys' fees, trustee's
fees, organization fees, etc) in obtaining the IDB amortized at the IDBR over
ten (10) years.
"BC 2" is the renewal cost of the IDB for one (1) year.
"AMR" is the per square foot monthly Rent payable during the
designated years.
Provided the IDB will result in lower Rent payments, Landlord shall use its best
----
efforts to obtain the IDB and shall diligently and promptly perform all
requirements and deliver all documents reasonably required in connection
therewith. Tenant will take all reasonable precautions to insure that Tenant
does not cause the IDB to lose tax-exempt status and agrees to reasonably
cooperate with Landlord in obtaining the IDB. If Tenant shall directly cause the
IDB to lose tax-exempt status the Rent payable hereunder will be adjusted as
provided in the IDB. Within thirty (30) days after Landlord obtains the IDB,
Landlord and Tenant shall execute an amendment to this Lease setting forth the
actual amount of the IDB (or a formula therefor in the event the IDBR is a
"floating rate") and Tenant's Rent as revised pursuant to the formula set forth
in this subparagraph 4(b).
(c) Warehouse Rent. Anything herein this paragraph 4 to the
--------------
contrary notwithstanding, from the Commencement Date until the date Landlord
delivers possession of the entire Premises to Tenant pursuant to the
subparagraph 2(f) of this Lease (the "Occupancy Date"), the Rent shall be an
amount equal to the Rent as determined and payable according to this Lease
divided by the total square footage of the Building, multiplied by the total
square footage of the Warehouse (the "Warehouse Rent").
(d) Due and Payable. Tenant's Rent shall be due and payable on
---------------
or before the first (1st) day of each and every month during the term of this
Lease.
(e) Pro Rata Rent. Rent for any month during the term of this Lease
-------------
which is for less than one (1) month shall be a pro rata portion of the Rent due
in that particular month. Rent shall be payable in lawful money of the United
States to Landlord at the address stated in Paragraph 24 hereof or to such other
persons or at such other places as Landlord may designate in writing.
-14-
<PAGE>
5. Use.
---
(a) General. The Premises shall be used and occupied for the purpose
-------
of processing, manufacturing, storing and shipping all manner of commercial
products and any other use not inconsistent with the provisions of this Lease or
applicable zoning and governmental laws, orders, rules and regulations.
(b) Compliance with Law. Tenant shall, at Tenant's sole cost and
-------------------
expense, comply with all present and future laws, ordinances, orders,
declarations of covenants and restrictions, rules, regulations and requirements
of all federal, state and municipal governments, courts, departments,
commissions, boards, and officers which may be applicable to Tenant's use of the
Premises.
6. Permitted Exceptions; Landlord's Warranties and Representations; Quiet
----------------------------------------------------------------------
Enjoyment.
- ---------
(a) Permitted Exceptions. Tenant hereby accepts the Premises subject
--------------------
only to applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises and those matters
set forth on Exhibit "G" attached hereto and by this reference incorporated
herein (collectively, the "Permitted Exceptions").
(b) Landlord's Warranties and Representations. Landlord hereby
-----------------------------------------
warrants and represents to Tenant that:
(i) Landlord owns and is possessed of the entire fee simple
interest in the Premises, subject only to the Permitted
Exceptions;
(ii) Landlord is legally and effectively authorized to enter
into and perform all of Landlord's obligations under this
Lease;
(iii) The person executing this Lease on behalf of Landlord has
been authorized to do so pursuant to a validly executed
and binding partnership resolution executed by all
partners required to do so according to Landlord's
partnership agreement and such execution creates a binding
obligation on behalf of Landlord;
(iv) Landlord has not made, and shall not make, any commitments
or representations to any applicable governmental
authority, or to any adjoining or surrounding property
owner, which would in any manner be binding upon Tenant or
interfere with Tenant's use and enjoyment of or right or
ability to conduct its business in the Premises, all in
full accordance with the provisions of this Lease; and
Landlord has no knowledge of any such commitments or
representations made by any of Landlord's predecessors in
title;
-15-
<PAGE>
(v) There are no threatened or pending claims, actions, causes
of action, or annexation proceedings or other litigation or
proceedings against or affecting any part of the Premises;
(vi) There are no pending or proposed zoning or other land use
ordinances, rules, regulations or other actions on the part
of any governmental body, department or agency having
jurisdiction which would adversely affect Tenant's proposed
use of the Premises;
(vii) Landlord has no notice of taking of any part of the Premises
by a governmental or quasi-governmental agency acting under
the power of eminent domain, or that any such taking is
contemplated, and Landlord has not requested or supported
any such taking;
(viii) There are no parties in possession of any portion of the
Premises as Tenant, Tenant at sufferance, or trespasser;
(ix) The Premises have full and free access to and from public
highways, streets, or roads;
(x) Parcel 1 is contiguous with Parcel 2 and Parcel 2 is
contiguous with Parcel 3; and
(xi) The Premises are zoned and otherwise suitable for erecting
and operating the Parcel 1 Improvements.
(xii) The sewer and effluent systems (both on-site and off-site)
servicing the Premises and disposing of effluent discharged
from the Premises to waste-water or other off-site treatment
plants have the capacity to service and dispose of at least
50,000 gallons of effluent discharged from the Premises per
twenty-four (24)-hour period.
The foregoing warranties and representations shall survive the expiration or
earlier termination of this Lease.
(c) Quiet Enjoyment. So long as Tenant is not in breach of its duty
---------------
to pay Rent, or in the performance of any of its other covenants and agreements
hereunder, beyond the applicable grace periods, Tenant shall peaceably and
quietly have, hold and enjoy the Premises, and all rights, covenants,
appurtenances and privileges belonging or in any way appertaining thereto, from
and after the date hereof and throughout the term of this Lease, without
molestation or hindrance by Landlord or anyone claiming by, through or under
Landlord. If at any time during the term hereof, the title of Landlord to the
Premises shall fail or it shall be discovered that Landlord's title shall not
enable it to grant the estate as hereby
-16-
<PAGE>
demised and Landlord shall fail to cure such defect within the time frames
specified in Paragraph 22 hereof, Tenant, at its option, shall be entitled to:
(i) correct such defect and deduct the reasonable expenses thereof (including
reasonable attorneys' fees) from the next ensuing payments of Rent due under
this Lease, or (ii) terminate this Lease. Each of the foregoing alternatives
shall be with full reservation of Tenant's right to damages (if any) and to
equitable relief, including specific performance.
7. Maintenance and Repairs; Surrender; Trade Fixtures.
--------------------------------------------------
(a) Tenant's Maintenance. Subject to the provisions of subparagraph
--------------------
7(b) hereinbelow, Tenant shall, as to the Warehouse throughout the term of this
Lease, and from and after the Occupancy Date as to all Parcel 1 Improvements and
the Premises, at Tenant's sole cost and expense, keep and maintain the Premises,
including, without limitation, the roof, outside wall surfaces, subfloors and
floor coverings of the Building and the Parcel 1 Improvements, any and all
alterations and additions made by Tenant pursuant to the provisions hereof, all
walks, driveways, parking and loading areas, lawns and landscaping, fences and
signs located on the Premises, in all respects in good repair and maintained in
a commercially reasonable manner and in a clean and safe condition.
(b) Landlord's Obligations. The provisions of subparagraph 7(a)
----------------------
hereinabove to the contrary notwithstanding, Tenant shall not be required to
make any repairs (i) necessitated because of Landlord's negligence, willful
wrongful act or failure to perform its obligations under this Lease, or (ii) to
be made pursuant to the provisions of Paragraph 11; it being the intention of
the parties that such repairs shall be the obligation of Landlord.
(c) Surrender; Removal of Trade Fixtures. Upon the expiration or
------------------------------------
earlier termination of this Lease, Tenant shall surrender the Premises to
Landlord in the same condition as when received, ordinary wear and tear
excepted; provided, however, Tenant shall be entitled to remove all or any
portion of Tenant's trade fixtures, personal property, furnishings, Process
Equipment and equipment (collectively, the "Trade Fixtures") from the Premises
on or before the expiration or earlier termination of this Lease. In the event
Tenant gives prior written notice thereof, Tenant shall have an additional sixty
(60) days following the expiration or earlier termination of this Lease to
remove such Trade Fixtures as Tenant desires from the Premises, in which event
Tenant shall be deemed to be subject to the hold-over provisions of subparagraph
32(g) hereof until the expiration of said sixty (60)-day period. It is
understood and agreed by Landlord, however, that Tenant shall be under no
obligation whatsoever to remove from the Premises any of Tenant's Trade Fixtures
or any alterations or improvements made by Tenant to the Premises.
(d) Depreciation; Repair of Damage. Unless and until such time as
------------------------------
any of the Trade Fixtures become the property of Landlord pursuant to
subparagraph 7(c), the Trade Fixtures shall be the property of Tenant and Tenant
shall be entitled to all depreciation allowance and other cost recovery
with respect to the Trade Fixtures. Tenant shall repair any damage to
the Premises occasioned by the removal of Tenant's Trade Fixtures, which repair
shall include, without limitation, the patching and filling of holes and repair
of structural damage.
-17-
<PAGE>
(e) Insurance. If any repair or restoration that Tenant is required
---------
to make hereunder is the subject of any insurance maintained by or on behalf of
Landlord, Landlord shall, as Tenant is completing such repair or restoration,
remit to Tenant the net proceeds of insurance received therefor by Landlord and
attributable to such repair or restoration.
(f) Right of Entry. If Tenant fails to perform Tenant's obligations
--------------
under this Paragraph 7, Landlord may, at its option, enter upon the Premises
after thirty (30) days prior written notice to Tenant, and put the same in good
order, condition and repair. Tenant shall pay to Landlord any amounts expended
by Landlord in the performance of Tenant's obligations pursuant to this
subparagraph (f) within fifteen (15) days after receipt of Landlord's invoice
therefor. Nothing herein shall imply any duty upon the part of Landlord to do
any such work and the performance thereof by Landlord shall not constitute a
waiver of Tenant's default in failing to perform the same.
8. Alterations and Additions. Tenant shall be entitled to make such non-
-------------------------
structural alterations, improvements and additions to the Premises as Tenant
desires. Tenant shall not, however, make any structural alterations,
improvements or additions to the Premises without first obtaining Landlord's
written consent thereto, which consent shall not be unreasonably withheld.
9. Insurance.
---------
(a) General Liability. Tenant, at its sole cost and expense, but for
------------------
the mutual benefit of Landlord and Tenant as named insureds, shall maintain com-
prehensive general liability insurance on an "occurrence basis" against claims
for personal injury, including without limitation, bodily injury, death or
property damage, occurring upon, in or about the Premises. Such insurance shall
afford immediate minimum protection at the time of the earlier to occur of (i)
Tenant's early entry of the Premises pursuant to the provisions of Paragraph 2
hereof, or (ii) the Lease Commencement Date, and at all times thereafter until
the expiration or earlier termination of this Lease, to a limit of not less
than One Million Dollars ($1,000,000.00) combined single-limit with respect to
personal injury or death to any one or more persons or to damage to property.
Such insurance shall also provide coverage against liability for bodily injury
or property damage arising out of the use on the Premises, by or on behalf of
Tenant, of automotive equipment.
(b) Extended Coverage. Tenant, at its sole cost and expense, but
------------------
for the mutual benefit of Landlord and Tenant as named insureds, shall maintain
insurance on the Parcel 1 Improvements, effective as of the Lease Commencement
Date and thereafter throughout the term of this Lease, insuring the Parcel 1
Improvements against loss or damage by fire and such other risks as are covered
by endorsements commonly known as "broad form extended coverage" or "all-risk"
to the full extent of the replacement value of the Parcel 1 Improvements
(exclusive of the cost of excavations, foundations, and footings below the
lowest floor of the Buildings) and any improvements constructed or installed on
the Premises. Such full replacement value shall be determined at Landlord's
expense from time to time (but no less frequently than once every twenty-four
(24) calendar months) by (i) the engineering or other appropriate department of
the insurance company issuing the policy, or (ii) application of appropriate
construction cost indexes acceptable to Landlord and Tenant. Tenant shall also,
at its sole cost and expense, keep the Premises insured, in such amounts as are
reasonably approved by Landlord, against fire sprinkler damage.
-18-
<PAGE>
(e) Landlord's Insurance. Landlord, at its sole cost and expense
--------------------
(except as hereinafter modified), but for the mutual benefit of Landlord and
Tenant as named insureds, shall maintain "Course of Construction" insurance on
the Parcel 1 Improvements, effective as of the date construction of the Parcel 1
Improvements is commenced and continuing until the Occupancy Date, insuring the
Premises, the Parcel 1 Improvements and the Process Equipment against loss or
damage by fire and such other risks as are covered by endorsements commonly
known as "broad from extended coverage" or "all-risk" to the full extent of the
replacement value thereof. Such full replacement value shall be determined at
Landlord's expense from time to time (but no less frequently than once every
three (3) calender months) by (i) the engineering department or other
appropriate department of the insurance company issuing the policy, or (ii)
application of appropriate construction costs indexes acceptable to Landlord and
Tenant. Such insurance shall remain in full force and effect and shall also
insure any loss occurring during the period of time Tenant enters the Premises
for purposes of installing and testing the Process Equipment; provided, however,
that within fifteen (15) days following Tenant's entry for such purposes, Tenant
shall pay to Landlord an amount equal to the additional premium, if any, payable
by Landlord as a result of Tenant's early on to the Premises.
(d) Form. All insurance provided by the parties hereunder shall be
----
effected under valid and enforceable policies in form mutually satisfactory to
the parties, issued by insurers of recognized responsibility which are licensed
to do business under the laws of the United States and the state wherein the
Premises are located and well rated by national rating organizations.
(e) Evidence. Tenant, on or before the earlier to occur of Tenant's
--------
early entry of the Premises pursuant to the provisions of Paragraph 2, or the
Commencement Date, and Landlord, concurrently with the execution hereof, shall
each deliver to the other duplicates or certificates of the policies to be
obtained by Landlord and Tenant hereunder, bearing notations evidencing the
prepayment of premiums or accompanied by other evidence of such prepayment.
(f) Waiver of Subrogation. Landlord and Tenant hereby waive any and
---------------------
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party or its property or the property of others under its
control to the extent that such loss or damage is insured against under any
insurance policies which either party may have in force at the time of such loss
or damage. Landlord agrees to use its best efforts to obtain a waiver from any
insurance carrier with which Landlord carries insurance required by this
Paragraph 9 releasing such insurance carrier's subrogation rights as against
Tenant. Tenant agrees to use his best efforts to obtain a waiver from any
insurance carrier with which Tenant carries insurance required by this Paragraph
9 releasing such insurance carrier's subrogation rights against Landlord. Each
party hereto agrees to give each insurance company written notice of the terms
of said waivers, and to have said insurance policies properly endorsed, if
necessary, to prevent invalidation of said insurance coverages by reason of said
waivers.
(g) Proceeds. Landlord and Tenant shall cooperate fully with each
--------
other in obtaining recovery of any insurance proceeds and shall execute any and
all consents and other instruments and take any and all other actions necessary
or desirable in order to effectuate the same and to cause such proceeds to be
paid as
-19-
<PAGE>
hereinabove provided. Neither Landlord nor Tenant shall carry any insurance
concurrent in coverage and contributing in the event of loss with any other
insurance required to be furnished by the parties hereunder if the effect of
such separate insurance would be to reduce the protection or the payment to be
made pursuant to any insurance as herein provided.
(h) Compliance. Landlord and Tenant shall comply with all
----------
conditions and requirements of the foregoing insurance policies to the extent
such conditions and requirements relate to their respective duties under this
Lease.
(i) Tenant's Contents. Tenant shall assume the risk of damage to
-----------------
any Trade Fixtures which remain the property of Tenant or as to which Tenant
retains the right of removal from the Premises, and Landlord shall not be liable
for injury to Tenant's business or any loss of income therefrom relative to such
damage, unless such damage (i) occurs to the Process Equipment prior to the
Lease Commencement Date and Landlord is responsible for installing the Process
Equipment pursuant to the provisions of subparagraph 2(d) hereof, or (ii) is
caused by Landlord's negligence or willful wrongful act. Tenant shall maintain
insurance coverage with respect to such items during the term of this Lease
against fire, extended coverage, and vandalism and malicious mischief perils in
an amount not less than ninety percent (90%) of the full replacement cost
thereof.
(j) Worker's Compensation.
---------------------
(i) Tenant. Tenant shall, at its sole cost and expense, keep
------
and maintain in full force and effect during the term of
this Lease, a policy or policies of worker's
compensation insurance covering all Tenant's employees
working on the Premises, and shall furnish Landlord with
certificates thereof.
(ii) Landlord. Landlord shall, at its sole cost and expense,
--------
keep and maintain in full force and effect, commencing as
of the date hereof and continuing throughout the term of
this Lease, a policy or policies of worker's compensation
insurance covering any and all of Landlord's employees
working on or about the Premises, and shall furnish
Tenant with certificates thereof.
(k) Blanket-Policy. Tenant may satisfy its insurance obligations
--------------
hereunder by including them in Tenant's "Blanket-Policy" of insurance.
(l) Rent Abatement Insurance. Either party hereto shall have the
------------------------
right, but not the obligation, to obtain rent abatement or rent-interruption
insurance at its sole cost and expense.
10. Indemnification.
---------------
(a) Tenant. Tenant agrees to indemnify and save harmless the
------
Landlord from and against all liability, damages, penalities, judgments and
claims of whatever nature arising from injury or damage to person or property
sustained by anyone in or on the Premises and proximately caused by the
negligence of
-20-
<PAGE>
Tenant or Tenant's employees, agents, licensees, invitees and contractors while
acting within the scope of their employment. Tenant shall, at its sole cost and
expense, defend any and all suits or actions (just or unjust) which may be
brought against Landlord, or in which Landlord may be impleaded, based upon any
such matter or claim. This indemnity and hold harmless agreement shall include
indemnity against all costs, expenses (including reasonable attorneys' fees) and
liabilities incurred, in, or in connection with, any such claim or proceeding
brought thereon and the defense thereof. Notwithstanding the foregoing, the
liability of Tenant to indemnity Landlord, as hereinabove set forth, shall not
extend to any matter or claim (i) against which Landlord shall be effectively
protected by insurance, provided, however, that if the amount involved shall
exceed the amount of the effective and collectible insurance in question, the
said liability of Tenant shall apply to such excess, or (ii) arising out of any
negligence or intentional misconduct on the part of Landlord, or Landlord's
agents, contractors or employees while acting within the scope of their
employment, or any breach of Landlord's duties under this lease.
(b) Landlord. Landlord agrees to indemnify and save harmless Tenant
--------
for, from and against all liability, damages, penalties, judgments and claims
of whatever nature arising from injury or damage to person or property sustained
by anyone (i) in or on the Premises and proximately caused by the negligence of
Landlord or Landlord's employees, agents, licensees, invitees or
contractors while acting within the scope of their employment, or (ii) in
connection with any rebuilding, restoration, maintenance, repair or construction
performed on the Premises at Landlord's direction. Landlord shall, at its sole
cost and expense, defend any and all suits or actions (just or unjust) which may
be brought against Tenant, or in which Tenant may be impleaded, based upon any
such matter or claim. This indemnity and hold harmless agreement shall include
indemnity against all costs, expenses (including reasonable attorneys' fees) and
liabilities incurred in, or in connection with, any such claim or proceeding
brought thereon and the defense thereof. Notwithstanding the foregoing, the
liability of Landlord to indemnify Tenant, as hereinabove set forth, shall not
extend to any matter or claim (i) against which Tenant shall be effectively
protected by insurance, provided, however, that if the amount involved shall
exceed the amount of the effective and collectible insurance in question, the
said liability of Landlord shall apply to such excess, or (ii) arising out of
any negligence or intentional misconduct on the part of Tenant, or Tenant's
agents, contractors or employees while acting within the scope of their
employment, or any breach of Tenant's duties under this Lease.
11. Damage or Destruction.
---------------------
(a) Landlord's Repair. If the Premises or Parcel 1 Improvements or
-----------------
any other improvements to the Real Property constructed pursuant to this Lease
are damaged or destroyed by fire or other casualty during the term of this
Lease, Landlord shall, except as hereinafter provided, diligently repair and
restore them to the condition in which they existed immediately prior to such
damage or destruction.
(b) Abatement. Rent due and payable hereunder shall be abated
---------
proportionately during any period in which, by reason of such damage or
destruction, Tenant reasonably determines that there is substantial interference
with Tenant's use or possession of the Premises; provided, however, that Rent
shall not abate in the event such damage or destruction was caused by the
negligent or
21
<PAGE>
willful wrongful act of Tenant or Agents acting solely on behalf of Tenant in
the discharge of Tenant's duties under this Lease. Such abatement shall continue
for the period commencing with such damage or destruction and ending with
completion by Landlord of the repair or restoration which Landlord is obligated
or undertakes to do.
(c) Time for Completion. In the event such restoration and repair
-------------------
shall not be completed within six (6) months following such damage or
destruction, then Tenant shall have the right, by written notice to the Landlord
mailed within sixty (60) days after the expiration of such six (6)-month period,
to cancel and terminate this Lease as of the date of such notice.
(d) Major Damage. Notwithstanding the provisions of subparagraphs (a)
------------
and (c) hereinabove, in the event the Premises or the Parcel 1 Improvements
shall be damaged or destroyed by fire or other casualty and such destruction or
damage shall amount to (i) thirty-three and one-third percent (33-1/3%) or more
of the Premises, the Parcel 1 Improvements or the insurable value of the
Premises or the Parcel 1 Improvements (exclusive of the land and foundations)
and such damage or destruction cannot be repaired within forty-five (45) days
after the occurrence thereof, this Lease may be terminated at the election of
Tenant, provided that notice in writing of such election shall be sent by Tenant
to Landlord within thirty (30) days after the occurrence of such destruction or
damage, or (ii) fifty percent (50%) or more of the Premises, the Parcel 1
Improvements or the insurable value of the Premise or the Parcel 1 Improvements
(exclusive of the land and foundations) and such damage or destruction cannot be
repaired within sixty (60) days after the occurrence thereof, this Lease may be
terminated at the election of Landlord, provided that notice in writing of such
election shall be sent by Landlord to Tenant within thirty (30) days after the
occurrence of such destruction or damage. Upon any termination of this Lease as
aforesaid, this Lease and the term hereof shall cease and come to an end, any
unearned Rent or other charges paid in advance shall be refunded to Tenant, and
the parties hereto shall have no further rights or liabilities under this Lease,
except with respect to any defaults which have theretofore occurred. If such
destruction or damage to the Premises or the Parcel 1 Improvements is such that
neither Landlord nor Tenant shall have the right to terminate the Lease under
the provisions of this Paragraph 11, or if, having such right, neither Landlord
nor Tenant shall elect to terminate this Lease within the time periods provided,
then and in either such event, Landlord shall immediately and diligently repair
and restore, or continue to repair or restore, as the case may be, the Premises
or the Parcel 1 Improvements pursuant to the provisions of this Paragraph 11.
(c) Escrow of Proceeds. Unless and until either Landlord or Tenant
------------------
exercises any of its rights to terminate this Lease as herein provided, Tenant
shall be entitled to require, and Landlord shall execute any and all documents
to effect such requirement, that insurance proceeds in excess of Twenty-Five
Thousand and No/100 Dollars ($25,000.00) from the insurance policies enumerated
in Paragraph 9 be deposited in escrow with a banking institution of Tenant's
choosing to be held and paid out by such depository as restoration and repair
progresses in accordance with a payment schedule mutually agreeable to Landlord
and Tenant; provided, however, if Landlord and Tenant cannot agree on an
appropriate payment schedule, the payment schedule shall be determined pursuant
to the arbitration provisions of Paragraph 29. The fees of such depository shall
be borne equally by Landlord and Tenant.
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<PAGE>
(f) Damage Near End of Term. If, during the last twenty-four (24)
-----------------------
months of the term or any extended term of this Lease, the Parcel 1 Improvements
are destroyed or damaged to the extent described in subparagraph 11(d)(i)
Landlord may, at Landlord's option, cancel and terminate this Lease as of the
date of occurrence of such damage or destruction by giving written notice to
Tenant of Landlord's election to do so within thirty (30) days after the date of
occurrence of such damage; provided, however, that if such damage or destruction
occurs during any term of this Lease that is subject to any of Tenant's options
to extend set forth in Paragraph 18, Landlord shall not be entitled to cancel
and terminate this Lease if Tenant notifies Landlord in writing within thirty
(30) days after Tenant's receipt of Landlord's notice of intent to cancel that
Tenant desires to exercise such option to extend, in which event Tenant shall be
deemed to have exercised such option and the provisions of subparagraphs 11(a)
through (e) shall apply with respect to such damage or destruction.
12. Property Taxes.
--------------
(a) Payment. Except as otherwise provided to the contrary herein,
-------
Tenant shall pay to Landlord all Property Taxes (as defined below) applicable to
the Premises during the term of this Lease. Landlord shall deliver to Tenant
all tax or assessment statements, invoices, notices of valuation and any other
notices from the appropriate taxing or assessing authorities relating to the
Premises within fifteen (15) days after Landlord's receipt thereof and at least
thirty (30) days prior to the delinquent date of the particular tax or
assessment. Provided Tenant timely receives the invoices therefor, Tenant
shall pay the amount required to Landlord not less that fifteen (15) days prior
to the delinquency date of such payment, except that the amount of any
commercial rental tax shall be paid by Tenant to Landlord simultaneously with
the rental payment to which such tax is attributable. Within a reasonable time
following Tenant's written request therefor, Landlord shall furnish Tenant with
evidence satisfactory to Tenant that the Property Taxes have been paid. If any
Property Taxes due with respect to the Premises shall cover any period of time
prior to or after the expiration or earlier termination of this Lease, Tenant's
share of such Property Taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year during which this Lease shall be in
effect. If Landlord shall fail to pay any Property Taxes, Tenant shall have the
right, but not the obligation, to pay the same, in which case Tenant may deduct
such amount from the next Rent installment.
(b) Definition. As used herein, the term "Property Taxes" shall
----------
include any form of general or special assessment, license, fee, commercial
rental tax, levy, penalty,or tax (other than inheritance, estate taxes, or tax
computed on Landlord's income), imposed by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, lighting, drainage or other improvement district,
or any part or parts thereof, or against any legal or equitable interest of
Landlord in the Premises or any part thereof or against Landlord's right to Rent
or other income therefrom (but exclusive of taxes levied on or computed by
reference to Landlord's income as a whole), it being the intention of the
parties hereto that the Rent to be paid hereunder, except as otherwise provided
to the contrary herein, shall be paid to Landlord absolutely net, without
deduction of any nature whatsoever, foreseeable or unforeseeable.
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<PAGE>
(c) Separate Assessment. If the Premises are not separately assessed,
-------------------
Tenant'a liability shall be an equitable portion of the Property Taxes for all
of the land and improvements included within the tax parcel assessed, such
portion to be mutually determined by Landlord and Tenant from the respective
valuations assigned in the assessor's work sheet or such other information as
may be reasonably available.
(d) Personal Property. Tenant shall directly pay to the taxing or
-----------------
assessing authority prior to delinquency all taxes assessed against and levied
upon the Trade Fixtures and all other personal property of Tenant's to be
assessed and billed separately from the Premises.
(e) Declaration. To the extent permitted by law and the appropriate
-----------
taxing or assessing authority, Tenant alone shall have the duty of attending to,
making or filing any declaration, statement, or report which may be provided or
required by law as the basis of or in connection with the determination,
equalization, reduction or payment of any Property Taxes which are to be borne
or paid or which may become payable by Tenant under the provisions of this
Paragraph and Landlord shall provide Tenant with any and all information,
documents, reports and data necessary for Tenant to prepare and file any such
declaration, statement or report.
(f) Contest. Tenant, at Tenant's sole cost and expense, may contest
-------
the validity or amount of any Property Taxes, in which event Tenant may, to the
extent permitted by law, defer the payment thereof for such period as such
contest shall be actively prosecuted and shall be pending undetermined. Landlord
shall not have the right to initiate and/or pursue any such contest without the
prior written consent of Tenant. Landlord will cooperate with Tenant in each and
every such contest and real estate tax assessment protest, and Landlord will,
upon Tenant's written request and at Tenant's expense, join in the same and
sign any and all necessary documents in connection therewith. Any and all
refunds received as a result of any such contest or protest shall be applied
first towards the payment of all costs and expenses (including reasonable
attorney's fees) incurred in connection with such contest or protest and then
towards reimbursing Tenant for the excess Property Taxes paid by Tenant.
However, no provision of this Lease shall be construed to require Landlord to
allow any such items to be contested to remain unpaid for such length of time as
shall permit the Premises, or the lien thereon created by such item to be
contested, to be foreclosed or sold by the federal, county or municipal taxing
or assessing authority for the nonpayment thereof or for such length of time as
shall constitute a default under any bona fide mortgage encumbering the
Premises; provided, however, at Tenant's written request, Landlord shall give
whatever notices, post whatever bonds, and perform such other acts as may be
required under said mortgages in order to pursue such contests or protests, all
of which acts shall be done at Tenant's cost and expense. Furthermore, if
required by law, Tenant shall pay Property Taxes due hereunder even if Tenant's
protest or contest with respect to earlier assessments is then still pending.
(g) Lump-Sum Assessments. Tenant shall have the right to request that
--------------------
any lump-sum special assessment levied by any government authority against the
Premises before or during the term of this Lease be payable in annual
installments, in which event Landlord shall cooperate with Tenant and sign
documents as may be necessary in connection therewith.
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<PAGE>
13. Eminent Domain.
--------------
(a) Total Taking. If during the term of this Lease the whole of the
------------
Premises shall be taken or a perpetual easement shall be declared thereon under
the power of eminent domain (or a purchase in lieu thereof) by any public or
private authority having appropriate jurisdiction, then (i) this Lease and the
term hereof shall automatically cease and terminate as of the date of such
taking and Tenant shall have the right, at is sole election, to continue to
occupy the Premises subject to the provisions of this Lease for all or such
part, as Tenant may determine, of the period between the date of such taking and
the date when possession of the Premises shall actually be taken and possessed
by the taking authority; and (ii) any unearned Rent and other amounts paid in
advance shall be refunded to Tenant. If Tenant elects to continue its occupancy
as aforesaid, Tenant shall procure from the applicable governmental authority
all necessary consents and authorizations to continue to occupy the Premises
from and after the date of such taking.
(b) Partial Taking. If at any time during the term of this Lease, any
--------------
public or private authority with appropriate jurisdiction shall, under the power
of eminent domain, declare a perpetual easement on or make a taking (including a
purchase in lieu thereof) of less than the whole of the Premises, but such
taking (i) results in the reduction of the ground floor area of the Building by
more than ten percent (10%); (ii) results in the reduction of the area of the
Premises exclusive of the Building by more than ten percent (10%); or (iii)
results in such a nuisance or interference with pedestrian or vehicular ingress
or egress to or from the Premises or with parking that, in the reasonable
opinion of Tenant, the Premises are no longer reasonably suitable for the
conduct of Tenant's business; then and in any such event, Tenant may terminate
this Lease by giving Landlord written notice of termination prior to the taking
of possession of the Premises by the governmental authority. In the event of
termination by Tenant under the provisions of this subparagraph (b), (i) this
Lease and the term hereof shall cease and terminate as of the last day of the
calendar month in which such notice of termination is given, with the right of
Tenant, at its election, to continue to occupy the Premises subject to the
provisions of this Lease for all or such part, as Tenant may determine, of the
period between said last day and the date when possession of the Premises shall
actually be taken by the taking authority; and (ii) any unearned Rent and other
amounts paid in advance, shall be refunded to Tenant.
(c) Restoration. In the event that Tenant, having such right, shall
-----------
not elect to terminate this Lease pursuant to subparagraph (b) hereof, or any
public or private authority shall, under the power of eminent domain, declare a
perpetual easement on or make a taking of the Premises (including a purchase in
lieu thereof) which does not entitle Tenant to terminate this Lease under
subparagraphs 13(a) or (b): (i) this Lease and the term hereof shall continue in
full force and effect, (ii) Landlord shall, at its expense, forthwith restore
what may remain of the improvements or the rest of the Premises, as the case may
be, to the same condition they were in prior to such taking or damage, (iii) a
just proportion of the Rent and the other amounts payable by Tenant under this
Lease, according to the nature and extent of the injury to the Premises and
Tenant's use and possession thereof, shall be suspended or abated until what may
remain of the Premises shall be restored as aforesaid, and (iv) thereafter a
just proportion of the Rent and such other amounts according to the nature and
extent of the taking and resulting injury to the Premises and Tenant's use and
possession thereof, shall be permanently abated for the balance of the term of
this Lease.
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<PAGE>
(d) Awards. Landlord and Tenant shall be entitle to separately
------
claim, prove and receive in any eminent domain preceding (or purchase in
lieu thereof), whether affecting the whole or any part of the Premises, such
awards and damages as each may respectively legally be entitled to claim based
upon its respective interest or estate; provided, however, in the event the
tribunal hearing such eminent domain proceeding does not separately value and
allocate any awards between Landlord's fee interest in the Premises and Tenant's
leasehold interest in the Premises including the value of the unexpired portion
of the term hereof, together with any options to renew or rights of first
refusal to which Tenant would otherwise be entitled under the terms of this
Lease. Any dispute as to allocation of the award between Landlord and Tenant
shall be resolved as provided in Paragraph 29 of this Lease. Tenant shall also
be entitled to separately claim, prove and receive in any such eminent domain
proceding (or purchase in lieu thereof) such awards as may be allowed for
Tenant's personal property, Trade Fixtures, loss of business, loss of
"goodwill", moving expenses and depreciation or injury to and cost of removal of
stock in trade, and in no event shall Landlord be entitled to any portion
whatsoever of any such awards.
(e) Unsafe Premises. In the event the Premises are condemned as unsafe
---------------
at any time during the term of this Lease as a result of Landlord's negligence
in constructing the improvements, and as a consequence thereof, Tenant shall be
unable to occupy the same to operate its business therein, Landlord shall
promptly cause the same to be put in safe condition and the condemnation
removed. Rent and all other charges payable hereunder shall abate during the
period that Tenant is unable to use the Premises for the conduct of its
business, and Landlord shall be responsible for Tenant's damage suffered on
account of such condemnation. It is expressly understood, however, that there
shall be no cessation or abatement of Rent or other charges as herein provided
if such condemnation has been occasioned by the negligence or fault of Tenant,
its agents or employees.
14. Utilities. Tenant shall directly contract for and directly pay for all
---------
water, gas, heat, light, power, telephone, garbage collection and other
utilities and service supplied to the Premises.
15. Assignment and Subletting.
-------------------------
(a) No Consent Required. Provided Tenant notifies Landlord in writing of
-------------------
such, Tenant shall have the right, at any time and from time to time during the
term of this Lease, to encumber, mortgage or pledge its interest in this Lease
and the Premises, to assign this Lease, in whole or in part, and to sublet (and
to grant occupancy rights and licenses of any kind with respect to) the whole or
any part of the Premises or of the term of this Lease, all without the consent
of Landlord. In the event Tenant assigns this Lease, Tenant shall remain liable
hereunder as a guarantor or surety; however, if the assignee has a net worth at
least equal to that of Tenant as of the date of assignment and has demonstrated
commercially reasonable ability to meet all of Tenant's obligations hereunder,
Tenant shall be released from all further liability under this Lease, provided
such assignee assumes in writing all of Tenant's obligations hereunder. The term
"Tenant" as used in this Lease shall be deemed to mean the then holder of the
leasehold estate created hereby.
-26-
<PAGE>
(b) Notices. Simultaneously with the giving of any notice under this
-------
Lease to Tenant, Landlord shall send a copy of such notice to all leasehold
mortgagees, assignees and subtenants permitted hereunder. Any of such
mortgagees, assignees and/or subtenants shall have the same rights as Tenant to
cure any defaults under this Lease as may be specified in any such notices, and
Landlord shall accept performance by any of such mortgagees, assignees or
subtenants as if such performance were rendered by Tenant. However, Landlord
shall not be obligated to send notices to a particular mortgagee, assignee or
subtenant unless Tenant shall have notified Landlord in writing of the name and
address of such mortgagee, assignee or subtenant and Tenant shall have directed
Landlord, in writing, to send a copy of all notices to such mortgagee, assignee
or subtenant.
16. Conveyance by Landlord. Whenever Landlord conveys its interest in
----------------------
the Premises or assigns its interest in this Lease (other than an assignment for
security purposes), provided Landlord first provides Tenant with the assumption
agreement described in the following sentence, Landlord shall automatically be
released from the further performance of covenants on the part of Landlord
herein contained, and from any and all further liability, obligations, costs and
expenses, demands, causes of action, claims or judgments arising from or growing
out of or connected with this Lease after the effective date of said release and
Tenant shall thereafter attorn to the assignee of Landlord's interest in this
Lease. The effective date of said release shall be the date Tenant receives an
executed original of a legally enforceable assignment and assumption agreement,
signed by the assignee of Landlord's interest in this Lease, and pursuant to
which (a) Tenant is expressly made a third-party beneficiary thereof, and (b)
the assignee expressly agrees to assume and undertake all of Landlord's
obligations, duties, responsibilities and liabilities with respect to this
Lease, including without limitation, if applicable, Landlord's obligations to
construct the Improvements.
17. Access to Premises. Landlord shall have the right to enter upon the
------------------
Premises at all reasonable times for purposes of inspecting the Premises to
insure that Tenant is complying with its obligations hereunder, performing
Landlord's duties hereunder and, during the last nine (9) months of the then
current term of this Lease, showing the Premises to prospective tenants or
purchasers; subject however, to the following conditions:
(a) Prior Notice. Landlord shall give Tenant prior notice (and
------------
with respect to any entry for purposes of showing Premises to prospective
Tenants or Purchasers, three (3) days' prior notice) of Landlord's intent to
enter the Premises, specifying the purpose of such entry;
(b) Accompanied by Tenant. Landlord shall not enter and remain
---------------------
on the Premises unless accompanied by Tenant or Tenant's designated agent
therefor; and
(c) Secure Areas. Landlord shall not show to third parties or
------------
prospective tenants or purchasers those portions of the Premises designated by
Tenant as "secure areas" and shall take all reasonable precautions to insure
that such third parties or prospective tenants or purchasers do not view or have
access to such secure areas.
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<PAGE>
18. Options to Extend.
-----------------
(a) Grant of Options; Rent. If Tenant shall not then be in default under
----------------------
this Lease, Landlord hereby grants to Tenant the right and option to extend the
term of this Lease for two (2) successive periods of ten (10) years each on the
same terms and conditions as contained herein; provided, however, that the Rent
applicable during such option periods shall be adjusted as follows:
(i) Rent during the first option period:
(A) For the one hundred twenty fourth through one
hundred fifty ninth months following the
Commencement Date, Tenant's Rent shall be an amount
equal to SEVENTY-ONE THOUSAND SIX HUNDRED SEVENTY-
TWO and 48/100 DOLLARS ($71,672.48) per month,
which amount has been calculated based on $.422 per
square foot of the Building per month;
(B) For the one hundred sixtieth through one
hundred eighty-third months following the
Commencement Date, Tenant's Rent shall be an amount
equal to SEVENTY-SEVEN THOUSAND FOUR HUNDRED FORTY-
SEVEN and 04/100 DOLLARS ($77,447.04) per month,
which amount has been calculated based on $.456 per
square foot of the Building per month;
(C) For the one hundred eighty-fourth through two
hundred nineteenth months following the
Commencement Date, Tenant's Rent shall be EIGHTY-
ONE THOUSAND SIX HUNDRED NINETY-THREE and 04/100
DOLLARS ($81,693.04) per month, which amount has
been calculated based on $.481 per square foot of
the Building per month; and
(D) For the two hundred twentieth through two
hundred forty-third months following the
Commencement Date, Tenant's Rent shall be EIGHTY-
EIGHT THOUSAND ONE HUNDRED FORTY-SIX and 96/100
DOLLARS ($88,146.96) per month, which amount has
been calculated based on $.519 per square foot of
the Building per month.
(ii) Rent during the second option period:
(A) For the two hundred forty-fourth through
two hundred seventy-ninth months following the
Commencement Date. Tenant's Rent shall be an
amount equal to NINETY-THREE THOUSAND FOUR
HUNDRED TWELVE and 00/100 DOLLARS ($93,412.00)
per month, which amount
-16-
<PAGE>
has been calculated based on $.550 per square foot of the
Building per month;
(B) For the two hundred eightieth through three hundred
three months following the Commencement Date, Tenant's Rent
shall be an amount equal to ONE HUNDRED TWO THOUSAND SEVENTY
THREE and 84/100 DOLLARS ($102,073.84) per month, which
amount has been calculated based on $.601 per square foot of
the Building per month;
(C) For the three hundred three through three hundred
thirty-ninth months following the Commencement Date,
Tenant's Rent shall be ONE HUNDRED EIGHT THOUSAND EIGHTEEN
and 24/100 DOLLARS ($108,018.24) per month, which amount
has been calculated based on $.636 per square foot of the
Building per month; and
(D) For the three hundred fortieth through three hundred
sixtieth third months following the Commencement Date,
Tenant's Rent shall be ONE HUNDRED EIGHTEEN THOUSAND THIRTY
EIGHT and 80/100 DOLLARS ($118,038.80) per month, which
amount has been calculated based on $.695 per square foot of
the Building per month.
(iii) The foregoing to the contrary notwithstanding, in the event
that during the original term of this Lease, Tenant's Rent is
calculated pursuant to the formula set forth in subparagraph
4(b) hereof, Tenant's Rent during the above-referenced option
periods shall be calculated utilizing such formula, with such
modifications as are necessary to (A) provide for
proportionately similar incremental margin increases during
each of the time periods specified above (i.e., the second
component of such formula), and (B) delete "B 1" from the
formula.
(b) Exercise. Between the twelfth (12th) and seventh (7th) months prior
--------
to the expiration of the initial term or first extension of this Lease, Landlord
shall give Tenant written notice reminding Tenant that Tenant must exercise its
next option to extend at least six (6) months prior to the expiration of such
current term (the "Reminder Notice"). Tenant shall exercise each option to
extend by giving Landlord written notice thereof at least six (6) months prior
to the expiration of the then current term; provided, however, that if Landlord
fails to timely give the Reminder Notice to Tenant, and if Tenant fails to
timely give Landlord written notice exercising the option to extend, then
Landlord shall give Tenant written notice that such option to extend has not be
exercised, and Tenant then shall have an additional thirty (30) days after
receiving Landlord's notice during which to exercise such option to extend by
giving Landlord written notice
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<PAGE>
thereof within said additional thirty (30)-day period.
(c) Amendments. Within thirty (30) days following each instance that
-----------
Tenant exercises any of the options to extend granted hereinabove, the parties
hereto shall execute and deliver an amendment to this Lease memorializing such
exercise by Tenant.
19. Parcel 2.
--------
(a) Inclusion of Parcel 2 in Lease. Landlord and Tenant acknowledge
------------------------------
and agree that Parcel 2 is included in this Lease and the Premises upon and
subject to the following terms and conditions:
(i) Unless Tenant has previously notified Landlord that Tenant
desires that Landlord construct the Parcel 2 Improvements
(as defined below) pursuant to the provisions of
subparagraph (b) hereinbelow and subject to the provisions
of (ii) hereinbelow, this Lease shall terminate with
respect to Parcel 2 on the fifth anniversary of the
Commencement Date.
(ii) The foregoing to the contrary notwithstanding, this Lease,
and all of the terms and provisions hereof, shall continue
in full force and effect with respect to Parcel 2 for so
long a period of time as Tenant pays to Landlord the Parcel
2 Monthly Carrying Charge (as hereinafter defined). For
purposes of this Paragraph 19, the "Parcel 2 Monthly
Carrying Charge" shall be payable in advance commencing on
the fifth anniversary of the Commencement Date and on the
same day of each and every month thereafter during the term
of the Lease (subject, however, to the provisions of
subparagraph (c) hereinbelow) and shall mean the actual
out-of-pocket monthly "carrying costs" directly
attributable to Parcel 2, determined as follows:
(A) At least sixty (60) days prior to the fifth
anniversary of the Commencement Date, Landlord and Tenant
shall, in good faith and using reasonable diligence,
determine the fair market value of Parcel 2 (the "Parcel 2
Fair Market Value"). In determining the Parcel 2 Fair
Market Value, Landlord and Tenant shall take into
consideration all relevant factors, including, without
limitation, the then existing value of like-land located
within the metropolitan area of Phoenix, Arizona, similar
in size, quality and location to Parcel 2. If Landlord and
Tenant cannot agree on the Parcel 2 Fair Market Value on or
before thirty (30) days prior to the fifth anniversary of
the Commencement Date, the
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<PAGE>
Parcel 2 Fair Market Value shall be determined pursuant to the
arbitration provisions of Paragraph 29 hereof; provided, however,
that each of the arbitrators to be appointed shall be persons
knowledgeable and qualified in the appraisal of real estate in
Maricopa County, Arizona.
(B) The Parcel 2 Monthly Carrying Charge shall be calculated
pursuant to the following formula:
(Parcel 2 Fair Market Value)(PR)
-------------------------------- = (Parcel 2 Monthly
Carrying Charge)
For the purposes of this subparagraph 19(a)(ii)(B), "PR" shall mean
the prime lending rate of The Valley National Bank of Arizona for its
most credit-worthy commercial customers, plus one and one-half (1-1/2)
percentage points. The PR shall be determined as of the fifteenth
(15th) day of each month the Parcel 2 Monthly Carrying Charge shall be
in effect and shall apply to the next succeeding month's Parcel 2
Monthly Carrying Charge. This Lease will terminate with respect to
Parcel 2 at such time as Tenant fails to pay the Parcel 2 Monthly
Carrying Charge, unless such failure is due to the fact that the
Parcel 2 Improvements have been Substantially Completed pursuant to
subparagraph (b) hereinbelow.
(b) Construction of Parcel 2 Improvements. Until such time as this Lease
-------------------------------------
is terminated with respect to Parcel 2, Tenant shall have the right to require
that certain improvements be constructed on Parcel 2, upon and subject to the
following terms and conditions:
(i) Upon receipt of Tenant's written demand therefor, Landlord shall
commence construction of certain improvements on Parcel 2 (the
"Parcel 2 Improvements") pursuant to preliminary and final plans and
specifications (the "Parcel 2 Plans") prepared by Tenant, or at
Tenant's direction, and approved by Landlord; which approval shall not
be withheld if the Parcel 2 Improvements are reasonably similar in
form, scope and function (but not size) to the Parcel 1 Improvements.
(ii) Upon Landlord's approval of the Parcel 2 Plans, Landlord shall
diligently proceed to construct the Parcel 2 Improvements in a good
and workmanlike manner, pursuant to the provisions of Paragraph 2
hereof; provided, however, that with respect to Landlord's
construction of the Parcel 2 Improvements, said Paragraph 2 shall be
deemed modified as follows:
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<PAGE>
(A) Where inconsistent with the provisions of Paragraph
2, the provisions of this Paragraph 19 shall prevail;
(B) Key Dates and Benchmark Dates shall be established by
the parties to reflect then applicable dates;
(C) The term "Commencement Date" shall refer to the date
the Parcel 2 Improvements are Substantially Completed and
Parcel 2 Rent (as hereinafter defined) begins to accrue;
(D) The term "Parcel 2" shall be deemed substituted for
every reference to "Parcel 1" and the term "Parcel 2
Plans" shall be deemed substituted for every reference to
the "Plans"); and
(E) Such other revisions are as necessary to reflect any
inherent or obvious differences between the Parcel 1
Improvements and the Parcel 2 Improvements.
In the event Landlord and Tenant disagree with respect to any aspect of the
construction of the Parcel 2 Improvements and/or the installation of the Process
Equipment, if any, to be placed in the Parcel 2 Improvements, or any other
provision set forth in this Paragraph 19, their dispute shall be resolved
pursuant to the arbitration provisions set forth in Paragraph 29 hereof.
(c) Rent. Effective as of the date the Parcel 2 Improvements have
----
been Substantially Completed, Tenant shall no longer be obligated to pay the
Parcel 2 Monthly Carrying Charge, but shall instead commence paying additional
Rent (the "Parcel 2 Rent"), to be determined as follows:
(i) Prior to commencing construction of the Parcel 2
Improvements, Landlord shall advise Tenant in writing of
Landlord's estimated costs of constructing the Parcel 2
Improvements, which estimated costs shall include, but are
not limited to actual costs of construction of the Parcel
2 Improvements, plus architectural, engineering, field and
office overhead costs, developer's fees not to exceed ten
percent (10%) of the actual cost of construction, the
financing costs, permit costs and fees.
(ii) If Tenant does not object to such estimated costs within
thirty (30) days after receipt of Landlord's notification
thereof, such estimated costs shall be deemed to be the
"Parcel 2 Construction Costs;" provided, however, that if
Tenant timely objects in writing to such estimated costs,
Landlord and Tenant shall solicit and obtain at least
three (3) bona fide bids from reputable licensed
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<PAGE>
contractors for the construction of the Parcel 2 Improvements,
and the lowest bid shall be deemed to be the "Parcel 2
Construction Costs." The bid form shall contain requirements
denoting any and all construction time frames and penalties
that are to be applicable to the Landlord.
(iii) Parcel 2 Rent shall be payable monthly, commencing on the next
successive date Rent (as defined pursuant to Paragraph 4
hereof) is due following the date the Parcel 2 Improvements are
Substantially Completed (with pro rata adjustments as
necessary), and shall be calculated as follows:
(Parcel 2 Construction Costs + Parcel 2 Land Costs)(CMR)
--------------------------------------------------------
12
= (Parcel 2 Rent)
For purposes of this subparagraph (c)(iii),
(A) "Parcel 2 Land Costs" shall mean the Parcel 2 Fair Market
Value; and
(B) "CMR" shall mean the then existing commercial lending rate
of The Valley National Bank of Arizona for its most
credit-worthy borrowers for purposes of financing real estate
acquisition, based upon a thirty (30)-year amortization;
provided, however, that any construction items that, when
affixed or added to the Parcel 2 improvements, increase the
value of the building to be constructed on Parcel 2 pursuant to
the Parcel 2 plans (the "Parcel 2 Building") to an amount equal
to or greater than one hundred ten percent (110%) of the value
of the Parcel 2 Building as valued without such construction
items, and which cannot be utilized by subsequent tenants or
users of Parcel 2, shall be subject to an amortization constant
not to exceed the greater of, (A) the life of such construction
items; or (B) ten (10) years.
(iv) The Parcel 2 Rent shall be subject to escalation in amounts and
during periods proportionately similar to those set forth in
subparagraph 4(a) hereof.
(v) In the event an IDB is obtained to finance the Parcel 2
Construction Costs, the Parcel 2 Rent shall be determined
pursuant to subparagraph 4(b), with appropriate adjustments to
reflect the difference between the Parcel 2 Construction
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<PAGE>
Costs and the cost of constructing the
Parcel 1 Improvements.
(vi) Any disputes between Landlord and Tenant with respect to
Parcel 2 Rent shall be resolved pursuant to the arbitration
provisions set forth in Paragraph 29 thereof.
(d) Part of Premises. The Parcel 2 Improvements shall constitute a
----------------
part of the Premises upon the date they are Substantially
Completed and all references in this Lease to the Parcel 1
Improvements shall also be deemed to refer to the Parcel 2
Improvements,unless the context otherwise requires.
(e) Lease Extension. Anything herein to the contrary notwithstanding,
---------------
in the event the Parcel 2 Improvements are not Substantially
Completed on or before that date which is five (5) years prior to
the expiration of the then current term of this Lease, the then
current term of this Lease shall be extended for an additional
period of time equal to: (i) five (5) years, less (ii) the amount
of time remaining until the expiration of the then current term
following the date that the Parcel 2 Improvements have been
Substantially Completed. In the event the then current term of
this Lease is extended pursuant to the provisions of this
subparagraph (e), all Rent payable with respect to Parcel 1 for
the period of time following the original expiration date of the
then current term until the extended expiration date of the then
current term shall be at the rate payable immediately prior to
such original expiration date, equitably adjusted to reflect
incremental increases proportionately similar to the incremental
rental increases as provided in this Lease.
(f) Amendment. Within thirty (30) days after the Parcel 2 Improvements
---------
are Substantially Completed, Landlord and Tenant shall execute an
amendment to this Lease memorializing the same.
20. Parcel 3.
--------
(a) Inclusion of Parcel 3 in Lease. Landlord and Tenant acknowledge
------------------------------
and agree that Parcel 3 is included in this Lease and the Premises
upon and subject to the following terms and conditions:
(1) Unless Tenant has previously notified Landlord that Tenant
desires that Landlord construct the Parcel 3 Improvements (as
defined below) pursuant to the provisions of subparagraph (b)
hereinbelow and subject to the provisions of (ii)
hereinbelow, this Lease shall terminate with respect to
Parcel 3 on the fifth anniversary of the Lease Commencement
Date.
(ii) The foregoing to the contrary notwithstanding, this Lease,
and all of the terms and provisions hereof, shall continue in
full force and effect with respect to Parcel 3 for so long a
period of time as Tenant pays to Landlord the Parcel 3
Monthly Carrying Charge (as hereinafter defined). For
purposes of this Paragraph 20, the
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<PAGE>
"Parcel 3 Monthly Carrying Charge" shall be payable in advance
commencing on the fifth anniversary of the Lease Commencement
Date and on the same day of each and every month thereafter
during the term of the Lease (subject, however to the provisions
of subparagraph (c) hereinbelow) and shall mean the actual out-
of-pocket monthly "carrying costs" directly attributable to
Parcel 3, determined as follows:
(A) At least sixty (60) days prior to the fifth anniversary of
the Lease Commencement Date, Landlord and Tenant shall, in good
faith and using reasonable diligence, determine the fair market
value of Parcel 3 (the "Parcel 3 Fair Market Value"). In
determining the Parcel 3 Fair Market Value, Landlord and Tenant
shall take into consideration all relevant factors, including,
without limitation, the then existing value of like-land located
within the metropolitan area of Phoenix, Arizona, similar in
size, quality and location to Parcel 3. If Landlord and Tenant
cannot agree on the Parcel 3 Fair Market Value on or before
thirty (30) days prior to the fifth anniversary of the Lease
Commencement Date, the Parcel 3 Fair Market Value shall be
determined pursuant to the arbitration provisions of Paragraph
29 hereof; provided, however, that each of the arbitrators to be
appointed shall be persons knowledgeable and qualified in the
appraisal of real estate in Maricopa County, Arizona.
(B) The Parcel 3 Monthly Carrying Charge shall be calculated
pursuant to the following formula:
(Parcel 3 Fair Market Value)(PR)
-------------------------------- = (Parcel 3 Monthly
12 Carrying Charge)
For the purposes of this subparagraph 20(a)(ii)(B), "PR" shall mean the
prime lending rate of The Valley National Bank of Arizona for its most
credit-worthy commercial customers, plus one and one-half (1-1/2)
percentage points. The PR shall be determined as of the fifteenth (15th)
day of each month the Parcel 3 Monthly Carrying Charge shall be in effect
and shall apply to the next succeeding month's Parcel 3 Monthly Carrying
Charge. This Lease will terminate with respect to Parcel 3 at such time
as Tenant fails to pay the Parcel 3 Monthly Carrying Charge, unless such
failure is due to the fact that the Parcel 3 Improvements have been
Substantially Completed pursuant to subparagraph (b) hereinbelow.
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<PAGE>
(b) Construction of Parcel 3 Improvements. Until such time as this
-------------------------------------
Lease is terminated with respect to Parcel 3, Tenant shall have the right to
require that certain improvements be constructed on Parcel 3, upon and subject
to the following terms and conditions:
(i) Upon receipt of Tenant's written demand therefor, Landlord
shall commence construction of certain improvements on
Parcel 3 (the "Parcel 3 Improvements") pursuant to
preliminary and final plans and specifications (the "Parcel
3 Plans") prepared by Tenant, or at Tenant's direction, and
approved by Landlord; which approval shall not be withheld
if the Parcel 3 Improvements are reasonably similar in
form, scope and function (but not size) to the Parcel 1
Improvements.
(ii) Upon Landlord's approval of the Parcel 3 Plans, Landlord
shall diligently proceed to construct the Parcel 3
Improvements in a good and workmanlike manner, pursuant to
the provisions of Paragraph 2 hereof; provided, however,
that with respect to Landlord's construction of the Parcel
3 Improvements, said Paragraph 2 shall be deemed modified
as follows:
(A) Where inconsistent with the provisions of Paragraph 2,
the provisions of this Paragraph 20 shall prevail;
(B) Key Dates and Benchmark Dates shall be established by
the parties to reflect then applicable dates;
(C) The term "Commencement Date" shall refer to the date
the Parcel 3 Improvements are Substantially Completed and
Parcel 3 Rent (as hereinafter defined) begins to accrue;
(D) The term "Parcel 3" shall be deemed substituted for
every reference to "Parcel 1" and the term "Parcel 3
Plans" shall be deemed substituted for every reference to
the Plans; and
(E) Such other revisions are as necessary to reflect any
inherent or obvious differences between the Parcel 1
Improvements and the Parcel 3 Improvements.
In the event Landlord and Tenant disagree with respect to any aspect of the
construction of the Parcel 3 Improvements and/or the installation of the Process
Equipment, if any, to be placed in the Parcel 3 Improvements, or any other
provision set forth in this Paragraph 20, their dispute shall be resolved
pursuant to the arbitration provisions set forth in Paragraph 29 hereof.
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<PAGE>
(c) Rent. Effective as of the date the Parcel 3 Improvements have been
----
Substantially Completed, Tenant shall no longer be obligated to pay the Parcel 3
Monthly Carrying Charge, but shall instead commence paying additional Rent (the
"Parcel 3 Rent"), to be determined as follows:
(i) Prior to commencing construction of the Parcel 3 Improvements,
Landlord shall advise Tenant in writing of Landlord's estimated
costs of constructing the Parcel 3 Improvements, which
estimated costs shall include, but are not limited to actual
costs of construction of the Parcel 3 Improvements, plus
architectural, engineering, field and office overhead costs,
developer's fees not to exceed ten percent (10%) of the actual
cost of construction, financing costs, permit costs and fees.
(ii) If Tenant does not object to such estimated costs within thirty
(30) days after receipt of Landlord's notification thereof,
such estimated costs shall be deemed to be the "Parcel 3
Construction Costs;" provided, however, that if Tenant timely
objects in writing to such estimated costs, Landlord and Tenant
shall solicit and obtain at least three (3) bona fide bids from
reputable licensed contractors for the construction of the
Parcel 3 Improvements, and the lowest bid shall be deemed to be
the "Parcel 3 Construction Costs." The bid form shall contain
requirements denoting any and all construction time frames and
penalties that are to be applicable to the Landlord.
(iii) Parcel 3 Rent shall be payable monthly, commencing on the next
successive date Rent (as defined pursuant to Paragraph 4
hereof) is due following the date the Parcel 3 Improvements are
Substantially Completed (with pro rata adjustments as
necessary), and shall be calculated as follows:
(Parcel 3 Construction Costs + Parcel 3 Land Costs)(CMR)
--------------------------------------------------------
12
= (Parcel 3 Rent)
For purposes of this subparagraph (c)(iii),
(A) "Parcel 3 Land Costs" shall mean the Parcel 3 Fair Market
Value, and
(B) "CMR" shall mean the then existing commercial lending rate
of The Valley National Bank of Arizona for its most
credit-worthy
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<PAGE>
borrowers for purposes of financing real estate
acquisition, based upon a thirty (30)-year amortization;
provided, however, that any construction items that when
affixed or added to the Parcel 3 Improvements, increase
the value of the building to be constructed on Parcel 3
pursuant to the Parcel 3 Plans (the "Parcel 3 Building")
to an amount equal to or greater than one hundred ten
percent (110%) of the value of the Parcel 3 Building as
valued without such construction items, and which cannot
be utilized by subsequent Tenants or users of Parcel 3,
shall be subject to an amortization constant not to exceed
the greater of, (A) the life of such construction items,
or (B) ten (10) years.
(iv) The Parcel 3 Rent shall be subject to escalation in
amounts and during periods proportionately similar to
those set forth in subparagraph 4(a) hereof.
(v) In the event an IDB is obtained to finance the Parcel 3
Construction Costs, the Parcel 3 Rent shall be determined
pursuant to subparagraph 4(b), with appropriate
adjustments to reflect the difference between the Parcel 3
Construction Costs and the cost of constructing the Parcel
1 Improvements.
(vi) Any disputes between Landlord and Tenant with respect to
Parcel 3 Rent shall be resolved pursuant to the
arbitration provisions set forth in Paragraph 29 hereof.
(d) Part of Premises. The Parcel 3 Improvements shall constitute a
----------------
part of the Premises upon the date they are Substantially Completed and all
references in this Lease to the Parcel 1 Improvements shall also be deemed to
refer to the Parcel 3 Improvements, unless the context otherwise requires.
(e) Lease Extension. Anything herein to the contrary
---------------
notwithstanding, in the event the Parcel 3 Improvements are not Substantially
Completed on or before that date which is five (5) years prior to the expiration
of the then current term of this Lease and provided the Parcel 3 Improvements
are not capable of being operated independently from the Parcel 1 Improvements
and the Parcel 2 Improvements, the then current term of this Lease shall be
extended for an additional period of time equal to: (i) five (5) years, less
(ii) the amount of time remaining until the expiration of the then current term
following the date that the Parcel 3 Improvements have been Substantially
Completed. In the event the then current term of this Lease is extended pursuant
to the provisions of this subparagraph (e), all Rent payable with respect to
Parcel 1 for the period of time following the original expiration date of the
then current term until the extended expiration date of the then current term
shall be at the rate payable immediately prior to such original expiration date,
equitably adjusted to reflect incremental increases proportionately similar to
the incremental rental increases as provided in this Lease.
-38-
<PAGE>
(f) Amendment. Within thirty (30) days after the Parcel 3
-----------
Improvements are Substantially Completed, Landlord and Tenant shall execute an
amendment to this Lease memorializing the same.
(g) Condition Precedent. Anything herein to the contrary
--------------------
notwithstanding, Tenant shall not be entitled to require Landlord to construct,
and Landlord shall not be obligated to construct, the Parcel 3 Improvements
unless Tenant has first required Landlord to construct the Parcel 2 Improvements
pursuant to Paragraph 19 hereof.
21. Tenant's Default; Remedies.
--------------------------
(a) Defaults. The occurrence of any one or more of the following
--------
events shall constitute a default and breach of this Lease by Tenant:
(i) The abandonment of the Premises by Tenant;
(ii) The failure by Tenant to make any payment of Rent or any
other payment required to be made by Tenant hereunder, as
and when due, and such failure shall constitute for a
period of ten (10) days after written notice thereof from
Landlord to Tenant; or
(iii) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be
observed or performed by Tenant, other than described in
subparagraph (ii) above, and such failure shall continue
for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that if
the nature of Tenant's default is such that more than
thirty (30) days are required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences
such cure within such thirty (30)-day period and thereafter
diligently prosecutes such cure to completion.
(b) Remedies.
--------
(i) In the event of any default and breach by Tenant of any of
its obligations under this Lease and notwithstanding the
abandonment of the Premises by Tenant, Landlord may, at
Landlord's option and without limiting Landlord in the
exercise of any other rights or remedies which it may have
by reason of such default and breach, exercise all of its
rights and remedies hereunder, including, without
limitation:
(A) Declare the term of this Lease ended and to re-enter
the Premises and take possession thereof and remove all
persons therefrom;
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<PAGE>
(B) Bring an action or actions without terminating
this Lease, to collect Rent and other charges
hereunder which are from time to time past due and
unpaid or in enforcement of any other provisions of
this Lease imposing obligations on Tenant; it being
understood that the bringing of any such action or
actions shall not terminate this Lease unless
written notice of termination is given.
(ii) Should Landlord terminate this Lease and thereafter
relet the Premises the proceeds of any such
reletting shall first be applied to the payment of
the costs and expenses of reletting the Premises,
including without limitation, reasonable alterations
and repairs which Landlord deems reasonably
necessary and advisable and to the payment of
reasonable attorneys' fee incurred by Landlord in
connection with the retaking of the Premises and
such reletting. When such costs and expenses of
reletting have been paid, Tenant shall be entitled
to a credit for the amount of rental receivable from
such reletting each month during the unexpired
balance of the Term. At Landlord's sole election;
(A) Tenant shall pay Landlord monthly on the first
day of each month as specified herein the difference
between the rental receivable from reletting and the
Rent specified herein for the same period; or (B) an
amount equal to the present value of the Rent for
the balance of the term and the rental receivable
from reletting for the same period.
(iii) All Trade Fixtures or other personal property of
Tenant remaining on the Premises at the time that
Landlord takes possession thereof may be removed by
Tenant within sixty (60) days of such possession. If
Tenant fails or refuses to remove its Trade
Fixtures, Landlord may, at Landlord's election,
store same at Tenant's expense for Tenant's account.
Unless Tenant gives written Notice to Landlord
abandoning same Landlord shall have no right or
power to sell the Trade Fixtures.
(iv) All rights, options, elections, powers and remedies
of Landlord under the provisions of this Lease are
cumulative of each other and of every other right,
option, election, power or remedy which Landlord may
otherwise have at law or in equity and all or any of
which Landlord is hereby authorized to exercise. The
exercise of one or more rights, options, elections,
powers or remedies shall not prejudice or impair the
concurrent
-40-
<PAGE>
or subsequent exercise of other rights or
remedies Landlord may have upon a breach and
default under this Lease and shall not be deemed
to be a waiver of Landlord's rights or remedies
thereupon or to be a release of Tenant from
Tenant's obligations thereon unless such waiver
or release is expressed in writing and signed by
Landlord.
(v) Landlord may bring one or more actions to
collect amounts due under this Lease as follows:
(A) Without terminating this Lease, for
amounts due as they become due;
(B) After terminating this Lease; (i) for
monthly amounts due under Paragraph 21(b)(ii)(A)
as such become due; or (ii) a single suit for
the amount due under paragraph 21(b)(ii)(B)
which action may be commenced at any time after
termination of this Lease.
(c) Rental Late Charges and Interest. Tenant hereby
--------------------------------
acknowledges that Rent is due on the first of each month during the term of this
Lease and that late payment by Tenant to Landlord of Rent will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Accordingly, if any installment of Rent due
from Tenant shall not be received by Landlord within ten (10) days after such
amount shall be due, Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. In the event any installment of Rent
due from Tenant shall not be received within fifteen (15) days following the
above-referenced ten (10)-day period, interest on such overdue amount, and on
any late charges on such overdue amount, shall begin to accrue at a rate equal
to two (2) percentage points added to the prime lending rate of The Valley
National Bank of Arizona, as published from time to time, and shall be due and
payable when such overdue amount is paid.
22. Landlord's Default; Remedies. In the event Landlord shall fail,
----------------------------
within thirty (30) days after written notice from Tenant, to perform any
obligation by Landlord under this Lease, or to commence to cure within said
thirty (30)-day period and diligently proceed to cure any such obligation which
cannot reasonably be cured within said thirty (30)-day period, Tenant shall have
the right to perform such obligation and to deduct the costs thereof (including
reasonable attorneys' fees) from the next ensuing payments of Rent due
hereunder. Notwithstanding the foregoing, in the event of an emergency, danger
to person or property, or substantial interference with Tenant's business
conducted on the Premises, Tenant shall have the right to perform Landlord's
obligation and deduct the costs thereof without giving the foregoing described
notice to Landlord, and/or before the expiration of the foregoing described
period to cure, to the extent the exigencies of the particular situation require
a quicker remedy. The foregoing is in addition to, and not in lieu of, all other
rights and remedies available to Tenant at law or in equity or pursuant to the
terms of this Lease.
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<PAGE>
23. Subordination; Non-Disturbance. This Lease and all of the rights of
------------------------------
Tenant hereunder may be subject and subordinate to the lien of any deeds of
trust or mortgages previously, now or hereafter placed on the Premises or any
part thereof (except Tenant's personal property or the Trade Fixtures) by
Landlord, and to any renewals, modifications, consolidations, replacements,
extensions or substitutions of any such deeds or trust or mortgages; provided,
however, Tenant's rights under this Lease shall be subordinate only if the
holders of such deeds of trust or mortgages execute and deliver to Tenant for
recordation a legally enforceable non-disturbance agreement substantially in the
form attached hereto as Exhibit "H". The execution and delivery to Tenant of the
above-described agreement is a condition precedent to Tenant's responsibility or
obligation to pay Rent or other payments under this Lease.
24. Estoppel Certificates. Each party shall, without charge, at any time
---------------------
and from time to time, within fifteen (15) days after receipt of the written
request of the other party, deliver a written instrument to such other party or
to any other person, firm, or corporation specified by such party, duly executed
and acknowledged, certifying that (a) this Lease is unmodified and in full force
and effect (if such be the case) or, if there has been any modification, that
said Lease is in full force and effect as modified, and stating and describing
any and all such modifications; (b) neither party hereunder is in default (if
such be the case) or, if either party is in default, the nature of such default;
and (c) specifying the dates to which the rentals have been paid.
25. Notices. Whenever it is provided herein that notice, demand, request,
-------
or other communication shall or may be given to either of the parties by the
other, such notice, demand, request, or other communication shall be in writing
and, any law or statute to the contrary notwithstanding, shall not be effective
for any purpose unless it shall be served by hand-delivery or by mailing by
registered or certified mail, postage prepaid, return receipt requested, to the
address hereinafter set forth or to such other address as either party may from
time to time designate by notice given pursuant to the provisions of this
Paragraph 25. Any such notice, demand, request, or other communication shall be
deemed to have been given when such notice has been personally received, if
hand-delivered, or if mailed, seventy-two (72) hours after being deposited in
the United States Mail, postage prepaid, certified or registered, and addressed
as follows:
If from Tenant to Landlord:
R-K VENTURES UNIT I LIMITED PARTNERSHIP
c/o Ronald G. Roth Company
11001 North 24th Avenue, Suite 612
Phoenix, Arizona 85029
Attn: Ronald G. Roth; and
K-F-T LIMITED PARTNERSHIP
6200 Huntress Drive
Paradise Valley, Arizona 85253
Attn: R. A. Kite, Jr., President
-42-
<PAGE>
If from Landlord to Tenant:
Thompson Industries
2501 East Magnolia
Phoenix, Arizona 85034
Attn: President,
with a copy to:
Richard Q. Nye
Nye, Shaw, Ahern, McCormley
Chambliss & Brown, P.C.
2390 East Camelback Road, Suite 325
Phoenix, Arizona 85016
26. Recordation. Concurrent with the execution of this Lease, the
-----------
parties shall execute and acknowledge a memorandum of this Lease in the form of
Exhibit "I" attached hereto and by this reference incorporated herein. Such
memorandum shall be recorded by the parties immediately after the execution of
this Lease in the public records of Maricopa County, Arizona, with the parties
to share equally the costs of such recordation. The foregoing to the contrary
notwithstanding, Tenant may, at Tenant's sole option, require that this Lease in
its entirety, in lieu of a memorandum thereof, be recorded in the public records
of Maricopa County, Arizona.
27. Title Policy. In the event Tenant has purchased or does purchase a
------------
policy of title insurance with respect to its leasehold interest granted herein
at any time prior to or during the term of this Lease, Landlord agrees to
execute any and all affidavits and indemnities requested by the insurer of such
policy of title insurance to eliminate any exception for (a) unfiled mechanic's
liens, unrecorded easements, rights of parties in possession, unrecorded leases,
and other matters not disclosed by the public records of Maricopa County,
Arizona, (b) any matters of record which are not Permitted Exceptions, and (c)
any of the matters covered by the representations and warranties of Landlord
contained in this Lease.
28. Dispute and Payment Under Protest. If at any time a dispute shall
---------------------------------
arise between the parties hereto as to any amount or sum of money to be paid by
one party to the other under the provisions of this Lease, then the party
against whom the obligation to pay is asserted shall have the right to make such
payment "under protest", whereupon such payment shall not be regarded as a
voluntary payment or an accord and satisfaction; rather there shall survive the
right on the part of the party making the payment in such manner to institute
arbitration proceeds hereunder for the recovery of such sum, and if it shall be
determined that there was no legal obligation on the part of said party to pay
such sum or any party thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease. If at any time a dispute shall arise between the parties hereto as a
to any work to be performed by either of them under the provisions of this
Lease, then the party against whom the obligation to perform the work is
asserted shall have the right to perform such work and pay the costs thereof
"under protest", whereupon the performance of such work shall not be regarded as
voluntary performance, or an accord and satisfaction; rather, there shall
survive the right on the part of the party performing the work in such manner to
institute arbitration proceedings
-43-
<PAGE>
hereunder for the recovery of the costs of performing such work (including
overhead and administrative costs), and if it shall be determined that there
was no legal obligation on the part of said party to perform such work or any
part thereof, said party shall be entitled to recover the costs of such work
(including overhead and administrative costs), or the costs of so much thereof
as said party was not legally required to perform under the provisions of this
Lease. The foregoing provisions of this Paragraph 28 are not intended to waive
or modify any rights or remedies a party may otherwise have under this Lease
with respect to a payment made, or work performed, not "under protest"
hereunder.
29. Arbitration. Any and all disputes under this Lease shall be settled
-----------
by the parties hereto by arbitration pursuant to the Commercial Arbitration
rules and guidelines, then in effect, of the American Arbitration Association.
30. Force Majeure. Except as may be otherwise expressly provided to the
-------------
contrary in this Lease, it is understood and agreed that with respect to any
obligations to be performed by either party during the term of this Lease, the
party required to perform the same shall in no event be liable for failure to do
so when substantially impaired by any cause beyond the reasonable control of
such party, such as strike, lockout, breakdown, accident, order or regulation or
delay of or by any governmental authority, failure of supply, inability by the
exercise of reasonable diligence to obtain the supplies or parts or employees
necessary to comply with such obligations, war or other emergency, or breach or
act or neglect of the other party hereto or such other party's servants or
agents or employees or any assignee or sublessee or successor-in-interest to
such other party. The time within which such obligations shall be performed
shall be extended for a period of time equivalent to the delay from such cause.
Lack of funds shall not be deemed a cause beyond the control of either party.
31. Brokerage. Landlord and Tenant each warrant to the other that it,
---------
the warranting party, has not worked with or employed any real estate broker or
agent with respect to this Lease transaction other than Grubb & Ellis, whose
commission Landlord is obligated to pay pursuant to a separate agreement. Each
party agrees to indemnify and to hold harmless the other party from and against
any and all liability, damages and costs (including reasonable attorneys' fees)
suffered by such other party due to any breach, or a claim of breach, of the
foregoing warranty by the indemnifying party.
32. Miscellaneous.
-------------
(a) Headings; Construction; Partial Invalidity; Governing Law.
---------------------------------------------------------
Paragraph captions are solely for the convenience of the parties and shall not
be deemed to or be used to define, construe, or limit the terms hereof. As used
in this Lease, the masculine, feminine and neuter genders shall be deemed to
include the others; the terms "herein", "hereunder", "hereto", "hereof", and
similar words shall refer to this entire Lease; and the singular number shall be
deemed to include the plural, whenever the context so requires. The invalidity
of any provision of this Lease as determined by a court of competent
jurisdiction shall in no way affect the validity of any other provision hereof.
This Lease shall be governed by the laws of the state in which the Premises are
located.
-44-
<PAGE>
(b) Interest on Past-Due Obligations. Except with respect to Rent,
--------------------------------
which is governed by the provisions of subparagraph 21(c) hereof, any amount
due to either party hereunder that is not paid when due shall bear interest at
the lesser of (i) ten percent (10%) per annum, or (ii) the maximum rate
permitted by law, from the date such amount becomes overdue until the date such
amount is paid. Payment of such interest shall be made when such amount is
paid. Payment of such interest shall not excuse or cure any default by Landlord
or Tenant under this Lease.
(c) Time of the Essence. Time is of the essence of this Lease and
--------------------
all of the covenants and obligations hereof.
(d) Counterparts. This Lease may be executed in two (2) or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(e) Incorporation of Prior Agreements; Amendments. This Lease
---------------------------------------------
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified or amended in writing only, signed by
the parties in interest at the time of the modification or amendment.
(f) Waivers. No waiver by either party hereto of any provision
-------
hereof shall be deemed a waiver of any other provision hereof or of any
subsequent breach by the other party of the same or any other provision. A
party's consent to or approval of any act shall not be deemed to render
unnecessary the obtaining of such party's consent to or approval of any
subsequent act by the other party.
(g) Holding Over. If Tenant remains in possession of the Premises
------------
or any part thereof after the expiration of the term of sooner termination of
this Lease without the express written consent of Landlord, such occupancy shall
be a tenancy from month-to-month at a rental equal to one hundred ten percent
(110%) of the last monthly Rent, plus any Rent escalation increases then
applicable, and upon all the terms hereof applicable to a month-to-month
tenancy.
(h) Covenants and Conditions. Each of Landlord's covenants set
------------------------
forth in this Lease, and Landlord's due performance thereof, shall be considered
and construed as a condition precedent to Tenant's payment of rent hereunder.
(i) Binding Effect. Subject to the provisions of Paragraphs 15 and
--------------
16 hereof, this Lease, and the terms, covenants and conditions hereof, shall be
binding upon and enforceable against the parties hereto and their personal
representatives, successors and assigns.
(j) Attorneys' Fees. If either party brings an action to enforce
---------------
the terms hereof or declare rights under this Lease, the prevailing party in the
final adjudication of any such action, on trial or appeal, shall be entitled to
its costs and expenses of suit, including, without limitation, its actual
attorneys' fees to be paid by the losing party as fixed by the Court.
-45-
<PAGE>
(k) Signs. Landlord agrees to cooperate with Tenant, and appear at
-----
all public hearings or meetings as reasonably requested by Tenant in connection
therewith, in obtaining governmental approval of all of Tenant's signage
requirements for the Premises.
(l) Attornment. Tenant shall, provided Tenant has received
----------
appropriate agreements in the form required by Paragraph 23 hereof, in the event
any proceedings are brought for the foreclosure of, or in the event of exercise
of the power of sale under any mortgage or deed of trust made by the Landlord,
its successor or assigns, encumbering the Premises, or any part thereof, and if
so requested, attorney to the purchaser upon such foreclosure or sale or upon
any grant of a deed in lieu of foreclosure and shall recognize such purchaser as
the landlord under this Lease.
33. Effect of Modifications. It is acknowledged Lenders making loans to
-----------------------
Landlord for acquisition and construction of the Premises pursuant to this Lease
("Lenders") may require modifications to the terms of this Lease. Landlord and
Tenant shall execute modifications required by Lenders or re-execute a new lease
containing the modifications required by Lenders unless such modifications
materially adversely effect the rights or liabilities of such party under this
Lease.
IN WITNESS WHEREOF, the Parties hereto have executed this Lease as of the
day and year first above written.
"LANDLORD"
R-K VENTURES UNIT I LIMITED
PARTNERSHIP, an Arizona limited partnership
By /s/ Ronald G. Roth
-------------------------------------
Ronald G. Roth, its general partner
By K-F-T LIMITED PARTNERSHIP,an
Arizona limited partnership, its general partner
By KITE FAMILY COMPANIES, INC., an
Arizona corporation, its general partner
By [SIGNATURE APPEARS HERE]
------------------------------------
Its PRESIDENT
----------------------------------
"TENANT"
WMF CONTAINER CORPORATION,
a Delaware corporation,
dba THOMPSON INDUSTRIES
By [SIGNATURE APPEARS HERE]
--------------------------------------
Its PRESIDENT
----------------------------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary Public,
personally appeared RONALD G. ROTH who acknowledged himself to be the general
partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ J. A. Vasey
--------------------------------
Notary Public
My commission expires:
January 28, 1991
- ----------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary Public,
personally appeared Roy A. Kite, who acknowledged himself to be the President of
KITE FAMILY COMPANIES, INC., an Arizona corporation, general partner of K-F-T
LIMITED PARTNERSHIP, an Arizona limited partnership, general partner of R-K
VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited partnership, and
acknowledged that he, as such officer, being authorized so to do, executed the
foregoing instrument on behalf of the limited partnership for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ J. A. Vasey
--------------------------------
Notary Public
My commission expires:
January 28, 1991
- ----------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared, Jon O. Underwood, who acknowledged himself to
----------------
be the President of WMF CONTAINER CORPORATION, a Delaware corporation,
---------
dba THOMPSON INDUSTRIES, and acknowledged that he, as such officer of the
corporation, being authorized so to do, executed the foregoing instrument on
behalf of the corporation for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ J. A. Vasey
-------------------------------
Notary Public
My commission expires:
January 28, 1991
- ----------------
<PAGE>
When Recorded, Return to:
Gordon M. Wasson, Esq.
NYE, SHAW, AHERN, McCORMLEY,
CHAMBLISS & BROWN, P.C.
2390 E. Camelback Road
Suite 325
Phoenix, Arizona 85016
MEMORANDUM OF OPERATING LEASE
This Memorandum of Operating Lease is made as of the 20th day of August,
1987, by and between R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware
corporation,dba THOMPSON INDUSTRIES ("Tenant").
W I T N E S S E T H
- - - - - - - - - -
Landlord and Tenant have this date entered into that certain Operating
Lease (the "Lease"), pursuant to which, among other things, Landlord leased to
Tenant and Tenant leased from Landlord that certain parcel of real property
located in Maricopa County, Arizona, and described in more particularity in
Exhibit "A" attached hereto and by this reference made a part hereof.
The terms, covenants, agreements, conditions, provisions of the Lease are
set forth with more particularity therein and are hereby incorporated herein by
this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Operating Lease as of the day and year first above written.
WMF CONTAINER CORPORATION, R-K VENTURES UNIT I
a Delaware corporation, dba LIMITED PARTNERSHIP,
THOMSON INDUSTRIES an Arizona limited
partnership
By /s/ [SIGNATURE APPEARS HERE] By /s/ Ronald G. Roth
---------------------------- -----------------------
Its President Ronald G. Roth,
---------------------------
"Tenant" Its General Partner
By K-F-T LIMITED PARTNERSHIP,
an Arizona limited partnership,
its general partner
By Kite Family Companies, Inc.
an Arizona corporation, its
general partner
By /s/ [SIGNATURE APPEARS HERE]
----------------------------
Its President
---------------------------
"Landlord"
<PAGE>
EXHIBIT "A"
TO MEMORANDUM OF OPERATING LEASE
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot One (1), Lot Two (2), Lot Seven (7), Lot Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres +/- Net
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page
4, Maricopa County Recorders Office, Maricopa County,Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6);except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as
measured along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres +/- Net
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
<PAGE>
EXHIBIT "A-1"
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot One (1), Lot Two (2), Lot Seven (7), Lot Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
<PAGE>
EXHIBIT "A-2"
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres = Net
<PAGE>
EXHIBIT "A-3"
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
<PAGE>
EXHIBIT "B"
PLANS AND SPECIFICATIONS
A1 SITE PLAN
A2 FLOOR PLAN AREA A
A3 FLOOR PLAN AREA B
A4 OFFICE AREA ENLARGED PLAN
A5 OFFICE AREA REFLECTED CEILING PLAN
A6 BUILDING ELEV
A7 BUILDING SECTION
A8 ROOF PLAN AND DETAILS
A9 WALL SECTION
A10 WALL SECTIONS
A11 DETAILS & SCHEDULES
A12 DETAILS
S1 GENERAL NOTES & DETAILS
S2 FOUNDATION PLAN
S3 FOUNDATION PLAN
S4 ROOF FRAMING PLAN
S5 ROOF FRAMING PLAN
S6 DETAILS
S7 DETAILS
S8 PANEL DETAILS
S9 PANEL DETAILS
S10 PANEL DETAILS
S11 PANEL DETAILS
S12 PANEL DETAILS
S13 FRAMING DETAILS
S14 FRAMING DETAILS
S15 SCREEN WALL PLAN & DETAILS
M1 HVAC PARTIAL PLAN AREA A
M2 HVAC OFFICE AREA
M3 HVAC DETAILS & SCHEDULES
M4 PLUMBING PARTIAL PLAN AREA A
M5 PLUMBING PARTIAL PLAN AREA B
M6 PLUMBING OFFICE AREA
M7 PLUMBING DETAILS & SCHEDULES
E1 SITE PLAN
E2 ELECTRICAL AREA A
E3 ELECTRICAL AREA B
E4 LIGHTING OFFICE AREA
E5 POWER SPECIAL SYSTEMS OFFICE AREA
E6 DETAILS
E7 SCHEDULES
E8 ONE LINE DIAGRAM
Page 1 of 2 pages
<PAGE>
EXHIBIT "B" (cont.)
CIVIL
1-2 GRADE & DRAIN FOR
THOMPSON INDUSTRIES
2-2 GRADE & DRAIN FOR
THOMPSON INDUSTRIES
FIRE PROTECTION
1 SITE PLAN
2 FIRE PUMP & SPRINKLER
RISER DETAILS
3 SYS I, II, III PIPING
PLAN
4 SYS IV & V PIPING PLAN
5 OFFICE AREA
6 SECTIONS AND HANGER
DETAILS
Plans and Specifications designated with the letters "A," "M" and "E" are
dated March 27, 1987, and were prepared by Sverdrup Corporation.
Plans and Specifications designated with the letter "S" are dated May 20,
1987, and were prepared by Robert Simmons and Associates.
Plans and Specifications designated "Civil" are dated April 15, 1987, and
were prepared by Advanced Engineering, Inc.
Plans and Specifications designated "Fire Protection" are dated March 27,
1987, and were prepared by Alliance Fire Protection.
<PAGE>
EXHIBIT "C"
DEVELOPMENT SCHEDULE
August 31, 1987 (BD) Erect Precast (BT)
September 9, 1987 (BD) Begin Rough Carpentry Work (BT)
September 21, 1987 (BD) Begin Girders/Joists/Deck (BT)
September 21, 1987 (BD) Installation of Fire
Protection Systems (BT)
September 21, 1987 (BD) Begin Roofing (BT)
September 28, 1987 (BD) Begin Aluminum Frame and
Glazing (BT)
October 5, 1987 (BD) Begin HVAC (BT)
October 12, 1987 (BD) Begin Metal Studs & Drywall (BT)
November 23, 1987 (BD) Completion of Fire Protection
Systems Testing (BT)
Definitions: "BD" = Benchmark Date
"BT" = Benchmark Task
<PAGE>
EXHIBIT "D"
PROCESS EQUIPMENT PLANS
MP-1 PROCESS PIPING FLOW DIAGRAM
MP-2 PROCESS PIPING GENERAL EQUIPMENT AREA AND
EQUIPMENT SCHEDULES
MP-3 PROCESS PIPING SYMBOLS AND ABBREVIATIONS
MP-4 VALUE INSTRUCTION AND HANGER SCHEDULES
MP-5 STANDARDS DRAIN AND CONNECTION
MP-6 P AND ID
MP-7 P AND ID
MP-8 P AND ID
MP-9 PIPING LAYOUT UTILITY ROOM
MP-10 PIPING LAYOUT UTILITY ROOM
MP-11 PIPING LAYOUT UTILITY AREA
MP-12 PIPING LAYOUT MANUFACTURING AREA
MP-13 PIPING LAYOUT PACKAGING AREA
MP-14 PROCESS PIPING ISOMETRIC
MP-15 PROCESS PIPING ISOMETRIC
MP-16 PROCESS PIPING ISOMETRIC
MP-17 DETAILS
MP-18 DETAILS
MP-19 DETAILS (TI DRAWINGS)
MP-20 DETAILS (TI DRAWINGS)
MP-21 DETAILS (TI DRAWINGS)
EP-1 PROCESS ELECTRICAL LEGEND DRAWING LIST AND
GENERAL ARRANGEMENT
EP-2 PROCESS ELECTRICAL UTILITY ROOM
EP-3 PROCESS ELECTRICAL UTILITY ROOM
EP-4 PROCESS ELECTRICAL UTILITY AREA
EP-5 PROCESS ELECTRICAL MFG
EP-6 PROCESS ELECTRICAL PACKAGING
EP-7 PROCESS ELECTRICAL PACKAGING
EP-8 MFG LINE CONTROLS SCHEMATIC
EP-9 MFG LINE CONTROLS SCHEMATIC
EP-10 MFG LINE CONTROLS PANEL LAYOUT
EP-11 MFG LINE ELECTRICAL LAYOUT
EP-12 PACKAGE LINE ELECTRICAL LAYOUT
EP-13 PRINTING LINE ELECTRICAL LAYOUT
EP-14 DETAILS
EP-15 SCHEDULES
EP-16 ONE LINE DIAGRAM MCC-1
EP-17 ONE LINE DIAGRAM MCC-2
EP-18 ONE LINE DIAGRAM MCC-3
<PAGE>
EXHIBIT "E"
LIST OF PROCESS EQUIPMENT
UTILITY SYSTEM PHASE 1A
- -----------------------
BOILER 1
STAND BY FUEL OIL SYSTEM 1
DEAERATOR 1
WATER SOFTENERS 1
CHEM FEED SYSTEM 1
BLOW DOWN SYSTEM 1
STACK HEAT EXCHANGER 0
STACK 1
STEAM CONTROL VALVES 4
ASME SPOOL 1
GAS TRAIN, VALVES & PIPING 1
GAS METER 1
MAKE UP VALVES 1
TRAPS 16
GAGES 15
COMPRESSOR 300 HP 2
AFTER COOLER 1
AIR RECEIVER 1
JACKET PUMPS 2
TOWER PUMPS 2
COMPRESSOR TOWER 1
AIR VALVES
PROCESS VALVES
PCW TOWER 1
TOWER PUMPS 2
PROCESS PUMPS 2
ANTI SUCTION VALVE 1
VACUUM PUMP 4
MOISTURE SEPARATOR 1
PRE-EXPANSION PHASE IA
- ----------------------
MIXER 1
LOADER SYSTEM 1
DUAL EXPANDER 3
SCREENERS 8
FEEDERS 8
EXPANDER PANELS 3
BEAD BAGS 24
BAG FRAMES 44
RECYCLE FRAMES 4
DISTRIBUTION SYSTEM 1
<PAGE>
EXHIBIT "E" (cont'd)
PRODUCTION EQUIPMENT PHASE 1A
- -----------------------------
HEADERS 4
HEADER VALVES 96
MACHINE HOSES 96
CUP MACHINES 24
LONG CONVEYORS W/DIVIDERS 4
PRODUCT HANDLING EQUIPMENT
- --------------------------
UNSCRAMBLERS 8
HORIZONTAL INSPECTORS 8
BAGGERS 8
UB CONVEYORS 8
BINS 8
TUBING 8
STATIC ELIMINATORS 8
<PAGE>
EXHIBIT "F"
NONDISCLOSURE AGREEMENT
In connection with the construction and operation of a manufacturing
and warehouse facility on the real property located in Maricopa County, Arizona
and described in Exhibit "A" attached hereto and made a part hereof, the
undersigned will be made aware of certain mechanical, engineering, technical and
business information relating to the manufacture of foam styrene cups (the
"Information") to be produced by WMF Container Corporation, a Delaware
corporation, dba Thompson Industries ("Thompson"), at such manufacturing and
warehouse facility. The undersigned agrees to keep the information secret and
confidential and agrees not to make copies of any written Information or use or
disclose any Information to any third parties without the prior written consent
of Thompson. The obligations of the undersigned set forth herein shall continue
until such time as the Information becomes legally available to the
public-at-large in written form.
DATED this ____ day of ________________, 1987.
-----------------------------------
-----------------------------------
By
---------------------------------
Its
-------------------------------
<PAGE>
EXHIBIT "A" TO NON-DISCLOSURE AGREEMENT
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot One (1), Lot Two (2), Lot Seven (7), Lot Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres + Net
-
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book
312 of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
<PAGE>
EXHIBIT "G"
1. Any charge upon said land by reason of its inclusion within the Salt
River Project.
2. 1987 taxes, a lien not yet due and payable.
3. Right of way for electric transmission lines as shown in resolution
recorded in Book 60 of Miscellaneous, page 26, and in Book 73 of Miscellaneous,
page 35, records of Maricopa County, Arizona.
4. An easement for electric transmission lines and rights incident thereto
as set forth in instrument recorded in Docket 1685, page 220, records of
Maricopa County, Arizona.
5. Reservation of the sole and exclusive right to take, withdraw and use
the groundwaters underlying the surface of the within planned, as reserved and
more fully set forth in Instrument No. 83-314328.
6. Right of way for railroad is shown on plat of said subdivision recorded
in Book 307 of Maps, page 6, records of Maricopa County, Arizona.
7. Easements, restrictions, conditions and covenants as shown on the
recorded plat of said subdivision, but admitting, if any, restrictions based
race, color, religion or national origin.
<PAGE>
When recorded, return to:
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
EXHIBIT "H"
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance and Attornment Agreement (the
"Agreement"), is made this __ day of __________, 1987, by and between
_____________, ("Lender"), and WMF CONTAINER CORPORATION, a Delaware
corporation, dba THOMPSON INDUSTRIES ("Tenant").
RECITALS
A. R-K Ventures Unit I Limited Partnership, an Arizona limited
partnership ("Landlord"), as landlord, and Tenant, as tenant, entered into that
certain Operating Lease, dated __________, 1987, (the "Lease"), for those
premises described on Exhibit "A" attached hereto and made a part hereof (the
"Premises").
B. Landlord, as trustor, _____________________________, as trustee, and
Lender, as beneficiary, entered into that certain Deed of Trust (the "Deed of
Trust"), dated __________, 1987, and recorded on __________, 1987, as Instrument
No. ____, in the records of Maricopa County, Arizona, which Deed of Trust
covers the Premises and secures certain obligations of Landlord to Lender as
more specifically described therein.
C. Lender desires that Tenant subordinate its interest in the Premises
and the Lease to the lien of the Deed of Trust and Tenant is willing to do so
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lender and Tenant agree as follows:
AGREEMENT
1. Upon and subject to the terms and conditions hereinafter set forth,
Tenant hereby subordinates all of its right, title and interest in and to the
Premises and the Lease to the lien of the Deed of Trust, it being the intent of
Tenant that henceforth all of Tenant's right, title and interest in and to the
Premises and the Lease shall be second in rank and subordinate to the Deed of
Trust.
<PAGE>
2. So long as Tenant is not in default in the payment of rent or in
the performance of any of its obligations under the Lease, Tenant's possession
of the Premises and Tenant's rights and privileges under the Lease shall not be
diminished or interfered with by Lender nor will Lender instruct or allow the
trustee of the Deed of Trust to diminish or interfere with any of Tenant's
rights and privileges under the Lease.
3. In the event the Deed of Trust is foreclosed, or in the event the
power of sale thereunder is exercised for any reason, Tenant shall be bound to
the purchaser (whether or not such purchaser is the Lender) under all of the
terms of the Lease for the balance of the term or terms of the Lease remaining
with the same force and effect as if such purchaser were the landlord under the
Lease, and Tenant hereby agrees to attorn to such purchaser as its tenant, such
attornment to be effective and self-operative without the execution of any
further instrument on the part of either of the parties hereto, immediately upon
such purchaser succeeding to the interest of the landlord under the Lease. The
respective rights and obligations of Tenant and such purchaser upon such
attornment shall, to the extent of the then remaining balance of the term or
terms of the Lease, be the same as now set forth therein, it being the intention
of the parties hereto for this purpose to incorporate the Lease in this
Agreement by reference with the same force and effect as if set forth at length
herein.
4. In the event the Deed of Trust is foreclosed, or in the event the
power of sale thereunder is exercised for any reason, the purchaser (whether or
not such purchaser is the Lender) shall be bound to Tenant under all the terms
of the Lease, and the Tenant shall, from and after such event, have the same
remedies against such purchaser for the breach of any of the landlord's
obligations under the Lease that Tenant might have had under the Lease against
the prior landlord thereunder.
5. The laws of the State of Arizona shall govern the validity,
performance and enforcement of this Agreement.
6. The parties hereto shall record this Agreement with the County
Recorder of Maricopa County, Arizona, immediately after the execution hereof.
7. The covenants, terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors and
assigns.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
-------------------------------
-------------------------------
By
-----------------------------
Its
-------------------------
"LENDER"
WMF CONTAINER CORPORATION, a
Delaware corporation dba
THOMPSON INDUSTRIES
By
-----------------------------
Its
-------------------------
"TENANT"
-3-
<PAGE>
STATE OF ARIZONA )
)ss.
County of Maricopa )
On this ___ day of March 1987, before me, the undersigned Notary Public,
personally appeared _________________ known to me to be the person whose name is
subscribed to be the ____ of __________________________ and that s/he as such
officer, being authorized to do so, acknowledged that s/he executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------
Notary Public
My commission expires:
- --------------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this ___ day of March 1987, before me, the undersigned Notary Public,
personally appeared _________________________, known to me to be the person
whose name is subscibed to be the _________________ of WMF CONTAINER
CORPORATION, a Delaware cororation, dba THOMPSON INDUSTRIES, and that he as such
officer, being authorized to do so, acknowledged that he executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------
Notary Public
My commission expires:
- ---------------------------
-4-
<PAGE>
EXHIBIT "A" TO SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
Legal Description of Parcel 1
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot One (1), Lot Two (2), Lot Seven (7), Lot Eight (8) and the South 172.00
feet, as measured along the West line of Lot Six (6), of the West 76.00 feet of
Lot Six (6), as measured along the South line of Lot Six (6).
336,824 Sq. Ft.
7.7324 Acres + Net
-
Legal Description of Parcel 2
A portion of Commerce Center Southwest, as recorded in Book 312 of Maps, page 4,
Maricopa County Recorders Office, Maricopa County, Arizona; more particularly
described as follows:
Lot Three (3) and Lot Six (6); except the South 172.00 feet, as measured along
the West line of Lot Six (6), of the West 76.00 feet of Lot Six (6), as measured
along the South line of Lot Six (6).
169,508 Sq. Ft.
3.8914 Acres + Net
-
Legal Description of Parcel 3
Lots Four (4) and Five (5) of Commerce Center Southwest, as recorded in Book 312
of Maps, page 4, Maricopa County Recorders Office, Maricopa County, Arizona.
-5-
<PAGE>
When Recorded, Return to:
Gordon M. Wasson, Esq.
NYE, SHAW, AHERN, McCORMLEY
CHAMBLISS & BROWN, P.C.
2390 E. Camelback Road
Suite 325
Phoenix, Arizona 85016
EXHIBIT "T"
MEMORANDUM OF OPERATING LEASE
This Memorandum of Operating Lease is made as of the 20th day of August,
1987, by and between R-K VENTURES UNIT 1 LIMITED PARTNERSHIP, an Arizona
limited partnership ("Landlord"), and WMF CONTAINER CORPORATION, a Delaware
corporation, dba THOMPSON INDUSTRIES ("Tenant").
W I T N E S S E T H
- - - - - - - - - -
Landlord and Tenant have this date entered into that certain Operating Lease
(the "Lease"), pursuant to which, among other things, Landlord leased to Tenant
and Tenant leased from Landlord that certain parcel of real property located in
Maricopa County, Arizona, and described in more particularity in Exhibit "A"
attached hereto and by this reference made a part hereof.
The terms, covenants, agreements, conditions, provisions of the Lease are
set forth with more particularity therein and are hereby incorporated herein by
this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Operating Lease as of the day and year first above written.
WMF CONTAINER CORPORATION, R-K VENTURES UNIT 1
a Delaware corporation, dba LIMITED PARTNERSHIP,
THOMPSON INDUSTRIES an Arizona limited
partnership
By By
------------------------------- ----------------------------
Its Ronald G. Roth,
----------------------------- Its General Partner
"Tenant"
By K-F-T LIMITED PARTNER-
SHIP, an Arizona limited
partnership, its general
partner
By Kite Family Companies, Inc.
an Arizona corporation, its
general partner
By
----------------------------
Its
--------------------------
"Landlord"
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared RONALD G. ROTH who acknowledged himself to be the
general partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such general partner of the limited
partnership, being authorized so to do, executed the foregoing instrument on
behalf of the limited partnership for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------------
Notary Public
My commission expires:
- ------------------------------------
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared _______________________, who acknowledged himself to
be the President of KITE FAMILY COMPANIES, INC., an Arizona corporation,
general partner of K-F-T LIMITED PARTNERSHIP, an Arizona limited partnership,
general partner of R-K VENTURES UNIT I LIMITED PARTNERSHIP, an Arizona limited
partnership, and acknowledged that he, as such officer, being authorized so to
do, executed the foregoing instrument on behalf of the limited partnership for
the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------------
Notary Public
My commission expires:
- ------------------------------------
<PAGE>
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 20th day of August 1987, before me, the undersigned Notary
Public, personally appeared __________________________________, who acknowledged
himself to be the ____________________________ of WMF CONTAINER CORPORATION, a
Delaware corporation, dba THOMPSON INDUSTRIES, and acknowledged that he, as such
officer of the corporation, being authorized so to do, executed the foregoing
instrument on behalf of the corporation for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-----------------------------------------
Notary Public
My commission expires:
- ----------------------------
<PAGE>
EXHIBIT 10.32
STANDARD FORM
MULTI-TENANCY INDUSTRIAL LEASE
(TRIPLE NET)
1. BASIC LEASE TERMS
A. DATE OF LEASE: June 1, 1994
-----------------------------
B. TENANT: Wincup Holdings, Incorporated, a Delaware Corporation
------------------------------------------------------
Trade name: Wincup Holdings
----------------
Address (Leased Premises): 2093 E. Magnolia, Phoenix, AZ 85034
------------------------------------
___________________________________________ Building/Unit:3/2093
------
Address (For Notices): 7980 W. Buckeye Road
---------------------
Phoenix, AZ 85034
-------------------------------------------
C. LANDLORD: CK Airpark Associates, a California Limited Partnership
--------------------------------------------------------
Address (For Notices): c/o The Hewson Company
-------------------------------------------
2602 S. 24th Street, Suite 105
-----------------------------------------------------------------
Phoenix, AZ 85034
D. TENANT'S USE OF PREMISES: general office and warehouse for the
----------------------------------------
fabrication, repair and storage of
-----------
styroproduct equipment.
E. PREMISES AREA: 12,174 square feet Rentable Square Feet
-------------------
63,094 building S.F. Prorata share 19%
F. PROJECT AREA: *358,552 project S.F. Prorata share 3% Square Feet
-----------------------------------------
*Project square footage subject to change
G. TERM OF LEASE: Commencement June 1, 1994 Expiration May 31, 1999
------------- -------------
Number of Months 60
-------
H. BASE MONTHLY RENT:$ 3,165.25 plus applicable tax
----------------------------------
Tenant pays prorata share of real
I. RENT ADJUSTMENT (Initial One): estate taxes, insurance and operating
expenses up to a maximum of $.10 per
square feet per month for 1994.
(A)
(1) Cost of Living. If this provision is initialed, the
cost of living provisions of section 4.b(1) apply.
(2) Step Increase. If this provision is Initialed, the
step adjustment provisions of Section 4.b(2) apply
as follows:
<TABLE>
<CAPTION>
Effective Date of New Base
Rent Increase Monthly Rent
<S> <C>
June 1, 1997 $ 3,408.72
---------- -- ----------
----------, 19-- $----------
----------, 19-- $----------
----------, 19-- $----------
----------, 19-- $----------
</TABLE>
J. PREPAID RENT. $ 3,165.25 plus applicable tax
----------------------------------
K. SECURITY DEPOSIT: $ 3,262.64 NON-REFUNDABLE CLEANING FEE: $ 125.00
----------- ----------
L. BROKER(S)
CB Commercial
---------------------------------------------------------------------
_____________________________________________________________________
M. GUARANTOR(S):
N/A
---------------------------------------------------------------------
_____________________________________________________________________
N. ADDITIONAL SECTIONS
Additional sections of this lease numbered 29 through ------ are
------
attached hereto and made a part hereof. If none, so state in the
following space ---------.
---------
O. ADDITIONAL EXHIBITS
Additional exhibits lettered D through E are attached hereto and made
---
a part hereof. If none, so state in the following space ---------.
---------
(A) Controllable operating expenses, excluding property taxes and
insurance, shall not exceed a 5% increase from the previous year.
<PAGE>
2. PREMISES. Landlord leases to Tenants the premises described in section 1 and
Exhibit A (the "Premises"), located in this project described on Exhibit B
(the "Project"). By entry on the Premises, Tenant acknowledges that it has
examined the Premises and accepts the Premises in their present condition,
subject to any additional work Landlord has agreed to do. Tenant represents
and warrants that it agrees with the square footage specified for the
Premises in Section 1 and will not hereafter challenge such determination
and agreement.
3. TERM. The term of this lease is for the period set forth in Section 1,
commencing on the date in Section 1. If Landlord, for any reason, cannot
deliver possession of the Premises to Tenant upon commencement of the term,
this Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting from such delay. In that event
however, there shall be a rent abatement covering the period between the
commencement of the term and the time where Landlord delivers possession to
Tenant, and all other terms and conditions of this Lease shall remain in
full force and effect provided, however, that if Landlord cannot deliver
possession of the Premises to Tenant, this Lease shall be void. If a delay
in possession is caused by Tenant's failure to perform any obligation in
accordance with this Lease, the term shall commence as set forth in Section
1 and there shall be no reduction of rent between the commencement of the
term and the time Tenant takes possession.
4. RENT
a. Base Rent. Tenant shall pay Landlord monthly base rent in the initial
amount in Section 1 which shall be payable monthly in advance on the
first day of each and every calendar month ("Base Monthly Rent")
provided, however, the first month's rent is due and payable upon
execution of this Lease. If the term of this Lease contains any rental
abatement period, Tenant hereby agrees that if Tenant breaches the Lease
and/or abandons the Premises before the end of the Lease term, or if
Tenant's right to possession is terminated by Landlord because of
Tenant's breach of the Lease, Landlord shall, at its option, (1) void
the rental abatement period; and (2) recover from Tenant. In addition to
any damages due Landlord under the terms and conditions of the Lease,
rent prorated for the entirety of the rental abatement period at a
rental rate equivalent to two(2) times the Base Monthly rent.
For purposes of Section 467 of the Internal Revenue Code, the parties to
this Lease hereby agree to allocate the stated rents, provided herein,
to the periods which correspond to the actual rent payments as provided
under the terms and conditions of this agreement.
b. Rent Adjustment.
1) Cost of Living Adjustment. If Section 1.1(1) is initialed, the Base
Monthly Rent shall be subject to increase on each annual anniversary of
the commencement of the term of this Lease. The base for computing the
increase is the Consumer Price Index All Urban Consumers U.S. City
Average (1982-84=100), published by the United States Department of
Labor, Bureau of Labor Statistics ("Index"), which is in effect on the
ninetieth (90th) day preceding the date of the commencement of the term
("Beginning Index"). The Index published and in effect on the ninetieth
(90th) day preceding each anniversary of the term of this Lease
("Extension Index") is to be used in determining the amount of the
increase from one year to the next. Beginning with the rent due on and
after the first anniversary the Base Monthly Rent shall be increased to
equal the product achieved by multiplying the full Base Monthly Rent
due with respect to the month immediately preceding such anniversary
date by a fraction. On the first anniversary of the Commencement Date,
the numerator of the fraction will be the Extension Index and the
denominator will be the Beginning Index. On the second and any
subsequent anniversaries of the Commencement Date, the numerator of the
fraction will be the current Extension Index and the denominator will
be the Extension Index used to calculate the previous year's rental
increase. If there is a decline from one lease year to the next in the
Extension Index, the monthly rent due during the subsequent lease year
shall equal the monthly rent due during the then present lease year.
If the Index is changed so that the base year differs from that in
effect when the term commences, the Index shall be converted in
accordance with the conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics. If the Index is
discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not
been discontinued or revised.
2) Step Increase. If Section 1.i.(2) is initialed. Base Monthly Rent shall
be increased periodically to the amounts and at the times set forth in
Section 1.i.(2).
c. Expenses. The purpose of this Section 4.c is to ensure that Tenant bears
a share of all Expenses related to the use, maintenance, ownership,
repair or replacement, and insurance of the Project. Accordingly,
beginning on the date Tenant takes possession of the Premises. Tenant
shall pay to Landlord, Tenant's Share (as defined below) of Expenses
related to the Project.
1) Expenses Defined. The term "Expenses" shall mean all costs and
expenses of the ownership, operation, maintenance, repair or
replacement, and insurance of the Project, including without
limitation, the following costs:
(a) All supplies, materials, labor, equipment, and utilities used
in or related to the operation and maintenance of the Project;
(b) All maintenance, management, janitorial, legal, accounting,
insurance, and service agreement costs related to the Project;
(c) All maintenance, replacement and repair costs relating to the
areas within or around the Project, including, without
limitation, air conditioning systems, sidewalks, landscaping,
service areas, driveways, parking areas (including resurfacing
and restriping parking areas), walkways, building exteriors
(including painting), signs and directories, repairing roofs,
walls, etc. These costs may be included either based on actual
expenditures or the use of an accounting reserve based on past
cost experience for the Project.
2
<PAGE>
(d) Amortization (along with reasonable financing charges) of
capital improvements made to the Project which may be
required by any government authority or which will improve
the operating efficiency of the Project (provided, however,
that the amount of such amortization for improvements not
mandated by government authority shall not exceed in any
year the amount of costs reasonably determined by Landlord
in its sole discretion to have been saved by the expenditure
either through the reduction or minimization of increases
which would have otherwise occurred).
(e) Real Property Taxes including all taxes, assessments
(general and special) and other impositions or charges which
may be taxed, charged, levied, assessed or imposed upon all
or any portion of or in relation to the Project or any
portion thereof, any leasehold estate in the Premises or
measured by rent from the Premises, including any increase
caused by the transfer, sale or encumbrance of the Project
or any portion thereof. "Real Property Taxes" shall also
include any form of assessment, levy, penalty, charge or tax
(other than estate, inheritance, net income, or franchise
taxes) imposed by any authority having a direct or indirect
power to tax or charge, including, without limitation, any
city, county, state federal or any improvement or other
district, whether such tax is (1) determined by the value of
the Project or the rent or other sums payable under this
Lease; (2) upon or with respect to any legal or equitable
interest of Landlord in the Project or any part thereof; (3)
upon this transaction or any document to which Tenant is a
party creating a transfer in any interest in the Project;
(4) in lieu of or as a direct substitute in whole or in part
of or in addition to any real property taxes on the Project;
(5) based on any parking spaces or parking facilities
provided in the Project; or (6) in consideration for
services, such as police protection, fire protection,
street, sidewalk and roadway maintenance, refuse removal or
other services that may be provided by any governmental or
quasi-governmental agency from time to time which were
formerly provided without charge or with less charge to
property owners or occupants.
2) ANNUAL ESTIMATE OF EXPENSES; TENANT'S SHARE. When Tenant takes
possession of the Premises, Landlord shall estimate Tenant's
share of Expenses for the remainder of the calendar year, and at
the commencement of each calendar year thereafter, Landlord shall
estimate Tenant's Share of Expenses for the coming year by
multiplying the estimated annual per square foot Project Expenses
by the Premises Area.
3) MONTHLY PAYMENT OF EXPENSES. Tenant shall pay to Landlord,
monthly in advance, as additional rent, one-twelfth (1/12) of the
Annual Estimate of Expenses beginning on the date Tenant takes
possession of the Premises. As soon as practical following each
calendar year, Landlord shall prepare an accounting of actual
Expenses incurred during the prior calendar year and such
accounting shall reflect Tenant's Share of Expenses. If the
additional rent paid by Tenant under this Section 4.c.3 during
the preceding calendar year was less than the actual amount of
Tenant's Share of Expenses, Landlord shall so notify Tenant and
Tenant shall pay such amount to Landlord within 30 days of
receipt of such notice. Such amount shall be deemed to have
accrued during the prior calendar year and shall be due and
payable from Tenant even though the term of this Lease has
expired or this Lease has been terminated prior to Tenant's
receipt of this notice. Tenant shall have thirty (30) days from
receipt of such notice to contest the amount due; failure to so
notify Landlord shall represent final determination of Tenant's
Share of expenses. If Tenant's payments were greater than the
actual amount, then such overpayment shall be credited by
Landlord to all present rent due under this Section 4.c.3.
4) RENT WITHOUT OFFSET AND LATE CHARGE. All rent shall be paid by
Tenant to Landlord monthly in advance on the first day of every
calendar month, at the address shown in Section 1, or such other
place as landlord may designate in writing from time to time. All
rent shall be paid without prior demand or notice and without any
deduction or offset whatsoever. All rent shall be paid in lawful
currency of the United States of America. Proration of rent due
for any partial month shall be calculated by dividing the number
of days in the month for which rent is due by the actual number
of days in that month and multiplying by the applicable monthly
rate. Tenant acknowledges that late payment by Tenant to Landlord
of any rent or other sums due under this Lease will cause
Landlord to incur costs not contemplated by this Lease, the exact
amount of such cost being extremely difficult and impracticable
to ascertain. Such costs include, without limitation, processing
and accounting charges and late charges that may be imposed on
Landlord by the terms of any encumbrance or note secured by the
Premises. Therefore, if any rent or other sum due from Tenant is
not received when due, Tenant shall pay to Landlord an additional
sum equal to 10% of such overdue payment. Landlord and Tenant
hereby agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by
reason of any such late payment and that the late charge is in
addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall
not be deemed a waiver of any other default. Additionally, all
such delinquent rent or other sums, plus this late charge, shall
bear interest at the rate of 18 percent per annum. If the
interest rate specified in this Lease is higher than the rate
permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law. Any payments of any
kind returned for insufficient funds will be subject to an
additional handling charge of $25.00, and thereafter, Landlord
may require Tenant to pay all future payments of rent or other
sums due by money order or cashier's check.
5. PREPAID RENT. Upon the execution of this Lease, Tenant shall pay to
Landlord the prepaid rent set forth in Section 1, and if Tenant is not in
default of any provisions of this Lease, such prepaid rent shall be applied
toward the rent due for the last month of the term. Landlord's obligations
with respect to the prepaid rent are those of a debtor and not of a
trustee, and Landlord can commingle the prepaid rent with Landlord's
general funds. Landlord shall not be required to pay Tenant interest on the
prepaid rent. Landlord shall be entitled to immediately endorse and cash
Tenant's prepaid rent; however, such endorsement and cashing shall not
constitute Landlord's acceptance of this Lease. In the event Landlord does
not accept this Lease, Landlord shall return said prepaid rent
6. DEPOSIT. Upon execution of this Lease, Tenant shall deposit a security
deposit and a cleaning fee as set forth in Section 1 with Landlord. If
Tenant is in default, Landlord can use the security deposit or any portion
of it to cure the default or to compensate Landlord for any damages
sustained by Landlord resulting from Tenant's default. Upon demand, Tenant
shall immediately pay to Landlord a sum equal to the portion of the
security deposit expended or applied by Landlord to restore the security
deposit to its full amount. In no event will Tenant have the right to apply
any part of the security deposit to any rent or other sums due under this
Lease. If Tenant is not in default at the expiration or termination of this
Lease. Landlord shall return the security deposit to Tenant, and retain
the cleaning fee, which shall equal 10% of first months rent or $125
whichever is greater. Landlord's obligations with respect to the deposit
are those of a debtor and not of a trustee and
3
<PAGE>
Landlord can commingle the security deposit with Landlord's general funds.
Landlord shall not be required to pay Tenant interest on the deposit.
Landlord shall be entitled to immediately endorse and cash. Such
endorsement and cashing shall not constitute Landlord's acceptance of this
Lease. In the event Landlord does not accept this Lease, Landlord shall
return said prepaid deposit. Each time the Base Rent is increased, Tenant
shall deposit additional funds with Landlord sufficient to increase the
security deposit to an amount which bears the same relationship to the
adjusted Base Rent as the initial security deposit bore to the initial Base
Rent.
7. USE OF PREMISES AND PROJECT FACILITIES. Tenant shall use the Premises
solely for the purposes set forth in Section 1 and for no other purpose
without obtaining the prior written consent of Landlord. Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Premises or with respect to
the suitability of the Premises or the Project for the conduct of Tenant's
business, nor has Landlord agreed to undertake any modification, alteration
or improvement to the Premises or the Project, except as provided in
writing in this Lease. Tenant acknowledges that Landlord may from time to
time at its sole discretion, make such modifications, alterations,
deletions or improvements to the Project as Landlord may deem necessary
desirable, without compensation or notice to Tenant. Tenant shall promptly
comply with all laws, ordinances, orders and regulations affecting the
Premises and the Project, including, without limitation, any rules and
regulations that may be attached to this Lease and to any reasonable
modifications to these rules and regulations as Landlord may adopt from
time to time. Tenant shall not do or permit anything to be done in or about
the Premises or bring or keep anything in the Premises that will in any
increase the premiums paid by Landlord on its insurance related to the
Project or which will in any way increase the premiums for fire or casualty
insurance carried by other tenants in the Project. Tenant will not perform
any act or carry on any practices that may injure the Premises or the
Project; that may be a nuisance or menace to other tenants in the Project
or that shall in any way interfere with the quiet enjoyment of such other
tenants. Tenant shall not use the Premises for sleeping, washing clothes,
cooking or the preparation, manufacture or mixing of anything that might
emit any objectionable odor, noises, vibrations or lights onto such other
tenants. If sound insulation is required to muffle noise produced by Tenant
on the Premises, Tenant at its own cost shall provide all necessary
insulation. Tenant shall not do anything on the premises which will
overload any existing parking or service to the Premises. Pets and/or
animals of any type shall not be kept on the Premises.
8. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE.
A. EMISSIONS. Tenant shall not:
1) Permit any vehicle on the premises to emit exhaust which is in
violation of any governmental law, rule, regulation or requirement:
2) Discharge, emit or permit to be discharged or emitted, any liquid,
solid or gaseous matter, or any combination thereof, into the
atmosphere, the ground or any body of water which matter, as
reasonable determined by Lessor or any governmental entity, does, or
may, pollute or contaminate the same, or is, or may become,
radioactive or does, or may, adversely affect the (a) health or
safety of persons, whenever located, whether on the Premises or
anywhere else, (b) condition, use or enjoyment of the Premises or any
other real or personal property, whether on the Premises or anywhere
else, or (c) Premises or any of the Improvements thereto or thereon
including buildings, foundations, pipes, utility lines, landscaping
or parking areas;
3) Produce, or permit to be produced, any intense glare, light or heat
except within an enclosed or screened area and then only in such
manner that the glare, light or heat shall not be discernible from
outside the Premises.
4) Create, or permit to be created, any sound pressure level which will
interere with the quiet enjoyment of any real property outside the
Premises, or which will create a nuisance or violate any governmental
law, rule, regulation or requirement.
5) Create or permit to be created, any ground vibration that is
discernible outside the Premises.
6) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is harmful or
hazardous to any person or property in, or about the Premises, or
anywhere else.
B. STORAGE AND USE.
1) Storage. Subject to the uses permitted and prohibited to Tenant under
this lease, Tenant shall store in appropriate leak proof containers
all solid, liquid or gaseous matter, or any combination thereof,
which matter, if discharged or emitted into the atmosphere, the
ground or any body of water, does or may (a) pollute or contaminate
the same, or (b) adversely affect the (i) health or safety of
persons, whether on the Premises or anywhere else, (ii) condition,
use or enjoyment of the Premises or any real or personal property,
whether on the Premises or anywhere else, or (iii) Premises or any of
the improvements thereto or thereon.
2) Use. In addition, without Landlord's prior written consent, Tenant
shall not use, store or permit to remain on the Premises any solid,
liquid or gaseous matter which is, or may become radioactive. If
Landlord does its consent, Tenant shall store the materials in such a
manner that no radioactivity will be detectable outside a designated
storage area and Tenant shall use the materials in such a manner that
(a) no real or personal property outside the designated storage area
shall become contaminated thereby or (b) there are and shall be no
adverse effects on the (i) health or safety of persons, whether on
the Premises or anywhere else. (ii) condition, use or enjoyment of
the Premises or any real or personal property thereon or therein, or
(iii) Premises or any of the improvements thereto or thereon.
c. DISPOSAL OF WASTE
1) Refuse Disposal. Tenant shall not keep any trash, garbage, waste
or other refuse on the Premises except in sanitary containers and
shall regularly and frequently remove same from the Premises.
Tenant shall keep all incinerators, containers or other equipment
used for storage or disposal of such materials in a clean and
sanitary condition.
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2) Sewage Disposal. Tenant shall properly dispose of all sanitary
sewage and shall not use the sewage disposal system (a) for the
disposal of anything except sanitary sewage or (b) excess of the
lesser amount (i) reasonably contemplated by the uses permitted
under this Lease or (ii) permitted by any governmental entity.
Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition.
3) Disposal of Other Waste. Tenant shall properly dispose of all
other waste or other matter delivered to, stored upon, located
upon or within, used on, or removed from, the Premises in such a
manner that it does not, and will not adversely affect the (a)
health or safety of persons, wherever located, whether on the
Premises or elsewhere, (b) condition, use or enjoyment of the
Premises or any other real or personal property, wherever located,
whether on the Premises or anywhere else, or (c) Premises or any
of the improvements thereto or thereon including buildings,
foundations, pipes, utility lines, landscaping or parking
areas.
D. INFORMATION. Tenant shall provide Landlord with any and all
information regarding hazardous or toxic materials in the Premises,
including copies of all filings and reports to governmental entities
at the time they are originated, and any other information requested
by Landlord. In the event of any accident, spill or other incident
involving hazardous or toxic matter, Tenant shall immediately report
the same to Landlord and supply Landlord with all information and
reports with respect to the same. All information described herein
shall be provided to Landlord regardless of any claim by Tenant that
it is confidential or privileged.
E. COMPLIANCE WITH LAW. Notwithstanding any other provision in this Lease
to the contrary. Tenant shall comply with all laws, statutes,
ordinances, regulations, rules and other governmental requirements in
complying with its obligations under this lease, and in particular,
relating to the storage, use and disposal of hazardous or toxic
matter.
F. INDEMNIFICATION. Tenant shall defend, indemnify and hold Landlord
harmless from any loss, claim, liability or expense including
attorneys' fees and costs, arising out of or in connection with its
failure to observe or comply with the provisions of this Lease.
9. SIGNAGE. All signing shall comply with rules and regulations set forth by
Landlord as may be modified from time to time. Current rules and
regulations relating to signs are described on Exhibit C. Tenant shall
place no window covering (e.g., shades, blinds, curtains, drapes, screens,
or tinting materials), stickers, signs, lettering, banners or advertising
or display material on or near exterior windows or doors if such materials
are visible from the exterior of the Premises, without Landlord's prior
written consent. Similarly, Tenant may not install any alarm boxes, foil
protection tape or other security equipment on the Premises without
Landlord's prior written consent. Any material violating this provision may
be destroyed by Landlord without compensation to Tenant.
10. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied assesed or imposed
upon its business operations as well as upon all trade fixtures, leasehold
improvements, merchandise and other personal property in or about the
Premises.
11. PARKING. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees, a non-exclusive license to use the designated
parking areas in the Project for the use of motor vehicles during the term
of this Lease. Landlord reserves the right at any time to grant similar
non-exclusive use to other tenants, to promulgate rules and regulations
relating to the use of such parking areas, including reasonable
restrictions on parking by tenants and employees, to designate specific
spaces for the use of any tenant, to make changes in the parking layout
from time to time, and to establish reasonable time limits on parking.
Overnight parking is prohibited and any vehicle violating this or any other
vehicle regulation adopted by Landlord is subject to removal at the owner's
expense.
12. UTILITIES. (Strike and initial clause which does not apply)
a. [struck out]
b. INDUSTRIAL SPACE. Tenant shall pay for all water, gas, heat, light,
power, sewer, electricity, telephone or other service metered,
chargeable or provided to the Premises. Landlord reserves the right
to install separate meters for any such utility and to charge Tenant
for the cost of such installation.
13. MAINTENANCE. Landlord shall maintain, in good condition, the structural
parts of the Premises, which shall include only the foundations, bearing
and exterior walls (excluding glass), subflooring and roof (excluding
skylights), the unexposed electrical, plumbing and sewerage systems,
including those portions of the systems lying outside the Premises, gutters
and downspouts on the Building and the heating, ventilating and air
conditioning system servicing the Premises; provided however, the cost of
all such maintenance shall be considered "Expenses" for purposes of Section
4.c. Except as provided above, Tenant shall maintain and repair the
Premises in good condition, including, without limitation, maintaining and
repairing all walls, storefronts, floors, ceilings, interior and exterior
doors, exterior and interior windows and fixtures and interior plumbing as
well as damage caused by Tenant, its agents, employees or invitees. Upon
expiration or termination of this Lease, Tenant shall surrender the
Premises to Landlord in the same condition as existed at the commencement
of the term, except for reasonable wear and tear or damage caused by fire
or other casualty for which Landlord has received all funds necessary for
restoration of the Premises from insurance proceeds.
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14. ALTERATIONS. Tenant shall not make any alterations to the Premises, or to
the Project, including any changes to the existing landscaping, without
Landlord's prior written consent. If Landlord gives its consent to such
alterations, Landlord may post notices in accordance with the laws of the
state in which the premises are located. Any alterations made shall remain
on and be surrendered with the Premises upon expiration or termination of
this Lease, except that Landlord may, within 30 days before or 30 days
after expiration of the term, elect to require Tenant to remove any
alterations which Tenant may have made to the Premises. If Landlord so
elects, at its own cost Tenant shall restore the Premises to the condition
designated by Landlord in its election, before the last day of the term or
within 30 days after notice of its election is given, whichever is
later.
Should Landlord consent in writing to Tenant's alteration of the Premises,
Tenant shall contract with a contractor approved by Landlord for the
construction of such alterations, shall secure all appropriate governmental
approvals and permits, and shall complete such alterations with due
diligence in compliance with plans and specifications approved by Landlord.
All such construction shall be performed in a manner which will not
interfere with the quiet enjoyment of other tenants of the Project. Tenant
shall pay all costs for such construction and shall keep the Premises and
the Project free and clear of all mechanics' liens which may result from
construction by Tenant.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant agrees
that Landlord shall not be liable to Tenant for any damage to Tenant or
Tenant's property from any cause, and Tenant waives all claims against
Landlord for damage to persons or property arising for any reason, except
for damage resulting directly from Landlord's breach of its express
obligations under this Lease which Landlord has not cured within a
reasonable time after receipt of written notice of such breach from Tenant.
Tenant shall indemnify and hold Landlord harmless from all damages arising
out of any damage to any person or property occurring in, on or about the
Premises or Tenant's use of the Premises or Tenant's breach of any term of
this Lease.
16. INSURANCE. Tenant, at its cost, shall maintain public liability and
property damage Insurance and products liability insurance with a single
combined liability limit of $1,000,000, insuring against all liability of
Tenant and its representatives, employees, invitees, and agents arising out
of or in connection with Tenant's use or occupancy of the Premises. Public
liability Insurance, products liability Insurance and property damage
Insurance shall insure performance by Tenant of the indemnity provisions of
Section 15. Landlord shall be named as additional insured and the policy
shall contain cross-liability endorsements. On all its personal property,
at its cost, Tenant shall maintain a policy of standard fire and extended
coverage Insurance with vandalism and malicious mischief endorsements and
"all risk" coverage on all Tenant's improvements and alterations, including
without limitation, all items of Tenant responsibility described in Section
13 in or about the Premises, to the extent of at least 90% of their full
replacement value. The proceeds from any such policy shall be used by
Tenant for the replacement of personal property and the restoration of
Tenant's improvements or alterations. All insurance required to be provided
by Tenant under this Lease shall release Landlord from any claims for
damage to any person or the Premises and the Project, and to Tenant's
fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks insured against
under any insurance policy carried by Tenant in force at the time of such
damage. All insurance required to be provided by Tenant under this Lease:
(a) shall be issued by insurance companies authorized to do business in the
state in which the premises are located with a financial rating of at least
an A + XII status as rated in the most recent edition of Best's Insurance
Reports; (b) shall be issued as a primary policy; and (c) shall contain an
endorsement requiring at least 30 days prior written notice of cancellation
to Landlord and Landlord's lender, before cancellation or change in
coverage, scope or amount of any policy. Tenant shall deliver a certificate
or copy of such policy together with evidence of payment of all current
premiums to Landlord within 30 days of execution of this Lease. Tenant's
failure to provide evidence of such coverage to Landlord may, in Landlord's
sole discretion, constitute a default under this Lease.
17. DESTRUCTION. If during the term, the Premises or Project are more than 10%
destroyed from any cause, or rendered inaccessible or unusable from any
cause, Landlord may, in its sole discretion, terminate this Lease by
delivery of notice to Tenant within 30 days of such event without
compensation to Tenant. If in Landlord's estimation, the Premises cannot be
restored within 90 days following such destruction, the Landlord shall
notify Tenant and Tenant may terminate this Lease by delivery of notice to
Landlord within 30 days of receipt of Landlord's notice. If Landlord does
not terminate this Lease and if in Landlord's estimation the Premises can
be restored within 90 days, then Landlord shall commence to restore the
Premises in compliance with then existing laws and shall complete such
restoration with due diligence. In such event, this Lease shall remain in
full force and effect, but there shall be an abatement of rent between the
date of destruction and the date of completion of restoration, based on the
extent to which destruction interferes with Tenant's use of the Premises.
18. CONDEMNATION.
a. DEFINITIONS. The following definitions shall apply, (1) "Condemnation"
means (a) the exercise of any governmental power of eminent domain,
whether by legal proceedings or otherwise by condemnor and (b) the
voluntary sale or transfer by Landlord to any condemnor either under
threat of condemnation or while legal proceedings for condemnation
are proceeding; (2) "Date of Taking" means the date the condemnor has
right to possession of the property being condemned; (3) "Award" means
all compensation, sums or anything of value awarded, paid or received
on a total or partial condemnation; and (4) "Condemnor" means any
public or quasi-public authority, or private corporation or
individual, having power of condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the term of the Lease
there is any taking of all or any part of the Premises or the Project,
the rights and obligations of the parties shall be determined pursuant
to this Lease.
c. TOTAL OR PARTIAL TAKING. If the Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking. If any
portion of the Premises is taken by condemnation, this Lease shall
remain in effect, except that Tenant can elect to terminate this Lease
if the remaining portion of the Premises is rendered unsuitable for
Tenant's continued use of Premises. If Tenant elects to terminate this
Lease, Tenant must exercise its right to terminate by giving notice to
Landlord within 30 days after the nature and extent of the taking have
been finally determined. If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination, which
date shall not be earlier than 30
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days nor later than 90 days after Tenant has notified Landlord of its
election to terminate, except that this Lease shall terminate on the
date of taking if the date of taking falls on a date before the date
of termination as designated by Tenant. If any portion of the Premises
is taken by condemnation and this Lease remains in full force and
effect, on the date of taking the rent shall be reduced by an amount
in the same ratio as the total number of square feet in the Premises
taken bears to the total number of square feet in the Premises
immediately before the date of taking.
19. ASSIGNMENT OR SUBLEASE. Tenant shall not assign or encumber its interest in
this Lease or the Premises or sublease all or any part of the Premises or
allow any other person or entity (except Tenant's authorized
representatives, employees invitees, or guests) to occupy or use all or any
part of the Premises without first obtaining Landlord's consent which
Landlord may withhold or condition in its sole discretion. Any assignment,
encumbrance or sublease without Landlord's written consent shall be
voidable and at Landlord's election, shall constitute a default. If Tenant
is a partnership, a withdrawal or change, voluntary, involuntary or by
operation of law of any partner, or the dissolution of the partnership,
shall be deemed a voluntary assignment. If Tenant consists of more than one
person, a purported assignment, voluntary or involuntary or by operation of
law from one person to the other shall be deemed a voluntary assignment. If
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or sale or other transfer of a controlling
percentage of the capital stock of Tenant, or the sale of at least 25% of
the value of the assets of Tenant shall be deemed a voluntary assignment.
The phrase "controlling percentage" means ownership of and right to vote
stock possessing at least 25% of the total combined voting power of all
classes of Tenant's capital stock issued, outstanding and entitled to vote
for election of directors. This Section 19 shall not apply to corporations
the stock of which is traded through an exchange or over the counter. All
rent received by Tenant from its subtenants in excess of the rent payable
by Tenant to Landlord under this Lease shall be paid to Landlord, or any
sums to be paid by an assignee to Tenant in consideration of the assignment
of this Lease shall be paid to Landlord. If Tenant requests Landlord to
consent to a proposed assignment or subletting, Tenant shall pay to
Landlord, whether or not consent is ultimately given, $100 or Landlord's
reasonable attorney's fees incurred in connection with such request,
whichever is greater.
No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the
transfer of this Lease by testacy or intestacy). Each of the following acts
shall be considered an involuntary assignment: (a) if Tenant is or becomes
bankrupt or insolvent, makes an assignment for the benefit of creditors, or
institutes proceedings under the Bankruptcy Act in which Tenant is the
bankrupt; or if Tenant is a partnership or consists of more than one person
or entity, if any partner of the partnership or other person or entity is
or becomes bankrupt or insolvent, or makes an assignment for the benefit of
creditors; or (b) if a writ of attachment or execution is levied on this
Lease; or (c) if in any proceeding or action to which Tenant is a party, a
receiver is appointed with authority to take possession of the Premises. An
involuntary assignment shall constitute a default by Tenant and Landlord
shall have the right to elect to terminate this Lease, in which case this
Lease shall not be treated as an asset of Tenant.
20. DEFAULT. The occurrence of any of the following shall constitute a default
by Tenant: (a) a failure to pay rent or other charge when due; (b)
abandonment and vacation of the Premises (failure to occupy and operate the
Premises for ten consecutive days shall be deemed an abandonment and
vacation); or (c) failure to perform any other provision of this Lease.
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if Tenant
is in default. (These remedies are not exclusive; they are cumulative and
in addition to any remedies now or later allowed by law): Landlord may
terminate Tenant's right to possession of the Premises at any time. No act
by Landlord other than giving notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises, or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession.
Upon termination of Tenant's right to possession, Landlord has the right to
recover from Tenant: (1) the worth of the unpaid rent that had been
earned at the time of termination of Tenant's right to possession; (2)
the worth of the amount of the unpaid rent that would have been earned
after the date of termination of Tenant's right to possession; (3) any
other amount, including but not limited to, expenses incurred to relet the
premises, court, attorney and collection costs, necessary to compensate
Landlord for all detriment caused by Tenant's default. "The Worth," as used
for Item 21(1) in this Paragraph 21 is to be computed by allowing interest
at the rate of 18 percent per annum. If the interest rate specified in this
Lease is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law. The Worth as
used for Item 21(2) in this Paragraph 21 is to be computed by discounting
the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of termination of Tenant's right of possession.
22. ENTRY ON PREMISES. Landlord and its authorized representatives shall have
the right to enter the Premises at all reasonable times for any of the
following purposes: (a) to determine whether the Premises are in good
condition and whether Tenant is complying with its obligations under this
Lease; (b) to do any necessary maintenance and to make any restoration to
the Premises or the Project that Landlord has the right or obligation to
perform; (c) to post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last 90 days of the term, or
during any period while Tenant is in default; (d) to show the Premises to
prospective brokers, agents, buyers, tenants or persons interested in
leasing or purchasing the Premises, at any time during the term; or (e) to
repair, maintain or improve the Project and to erect scaffolding and
protective barricades around and about the Premises but not so as to
prevent entry to the Premises and to do any other act or thing necessary
for the safety or preservation of the Premises or the Project. Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss
of business, nuisance or other damage arising out of Landlord's entry onto
the Premises as provided in this Section 22. Tenant shall not be entitled
to an abatement or reduction of rent if Landlord exercises any rights
reserved in this Section 22. Landlord shall conduct his activities on the
Premises as provided herein in a manner that will cause the least
inconvenience, annoyance or disturbance to Tenant. For each of these
purposes, Landlord shall at all times have and retain a key with which to
unlock all the doors in, upon and about the Premises, excluding Tenant's
vaults and safes. Tenant shall not alter any lock or install a new or
additional lock or bolt on any door of the Premises without prior written
consent of Landlord. If Landlord gives its consent, Tenant shall furnish
Landlord with a key for any such lock.
23. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination and at the
election of Landlord or any mortgagee or any beneficiary of a Deed of Trust
with a lien on the Project or any ground lessor with respect to the
Project, this Lease shall be subject and subordinated at all times to (a)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Project, and (b) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed in any amount for which
the Project, ground leases or underlying leases or Landlord's interest or
estate in any of said items is specified as security. In the event that
any
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ground lease or underlying lease terminates for any reason or any mortgage
or Deed of Trust is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall notwithstanding any subordination, attorn
to and become the Tenant of the successor in interest to Landlord, at the
option of such successor in interest. Tenant covenants and agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground lease or underlying leases or
the lien of any such mortgage of Deed of Trust. Tenant hereby irrevocably
appoints Landlord as attorney-in-fact of Tenant to execute, deliver and
record any such document in the name and on behalf of Tenant.
Tenant, within ten days from notice from Landlord, shall execute and
deliver to Landlord, in recordable form, certificates stating that this
lease is not in default, is unmodified and in full force and effect, or in
full force and effect as modified, and stating the modifications. This
certificate should also state the amount of current monthly rent, the dates
to which rent has been paid in advance, and the amount of any security
deposit and prepaid rent. Failure to deliver this certificate to Landlord
within ten days shall be conclusive upon Tenant that this Lease is in full
force and effect and has not been modified except as may be represented by
Landlord.
24. NOTICE. Any notice, demand, request, consent, approval or communication
desired by either party or required to be given, shall be in writing and
served either personally or sent by prepaid certified first class mail,
addressed as set forth in Section 1. Either party may change its address by
notification to the other party. Notice shall be deemed to be communicated
48 hours from the time of mailing, or from the time of service as provided
in this Section 24.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver. No
act or conduct of Landlord, including without limitation, acceptance of the
keys to the Premises, shall constitute an acceptance of the surrender of
the Premises by Tenant before the expiration of the term. Only written
notice from Landlord to Tenant shall constitute acceptance of the surrender
of the Premises and accomplish termination of the Lease. Landlord's consent
to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's
consent to or approval of any subsequent act by Tenant. Any waiver by
Landlord of any default must be in writing and shall not be a waiver of any
other default concerning the same or any other provision of the Lease.
26. SURRENDER OF PREMISES; HOLDING OVER. Upon expiration of the term, Tenant
shall surrender to Landlord the Premises and all Tenant improvements and
alterations in good condition, except for ordinary wear and tear and
alterations Tenant has the right or is obligated to remove under the
provisions of Section 14 herein. Tenant shall remove all personal property
including, without limitation, all wallpaper, panelling and other
decorative improvements or fixtures and shall perform all restoration made
necessary by the removal of any alterations or Tenant's personal property
before the expiration of the term, including for example, restoring all
wall surfaces to their condition prior to the commencement of this Lease.
Landlord can elect to retain or dispose of in any manner Tenant's personal
property not removed from the Premises by Tenant prior to the expiration of
the Term. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of Tenant's
personal property. Tenant shall be liable to Landlord for Landlord's cost
for storage, removal or disposal of Tenant's personal property.
If Tenant, with Landlord's consent, remains in possession of the Premises
after expiration or termination of the term, or after the date in any
notice given by Landlord to Tenant terminating this Lease, such possession
by Tenant shall be deemed to be a month-to-month tenancy terminable on
written 30-day notice at any time, by either party. All provisions of this
Lease, except those pertaining to term and rent, shall apply to the month-
to-month tenancy. Tenant shall pay monthly rent in an amount equal to 125%
of Rent for the last full calendar month during the regular term plus 100%
of said last month's estimate of Tenant's share of Expenses pursuant to
Section 4.c.3.
27. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant agrees that, in the event of any actual or alleged
failure, breach or default of this Lease by Landlord, if Landlord is a
partnership:
a. The sole and exclusive remedy shall be against the partnership and
its partnership assets;
b. No partner of Landlord shall be sued or named as a party in any suit
or action;
c. No service of process shall be made against any partner of Landlord;
d. No partner of Landlord shall be required to answer or otherwise plead
to any service or process;
e. No judgment may be taken against any partner of Landlord;
f. Any judgment taken against any partner of Landlord shall be vacated
and set aside at any time without hearing;
g. No writ of execution will ever be levied against the assests of any
partner of Landlord;
h. These covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord;
Tenant agrees that each of the foregoing provisions shall be applicable to
any covenant or agreement either expressly contained in this Lease or
imposed by statute or at common Law.
28. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of this
Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the benefit of
the parties and their successors, except as provided in Section 19
herein.
c. LANDLORD'S CONSENT. Any consent required by Landlord under this Lease
must be granted in writing and may be withheld or conditioned by
Landlord in its sole and absolute discretion.
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D. Commissions. Each party represents that it has not had dealings with
any real estate broker, finder or other person with respect to this Lease in any
manner, except for the broker identified in Section 1 who shall be compensated
by Landlord.
E. OTHER CHARGES. If Landlord becomes a party to any litigation
concerning this Lease, the Premises or the Project, by reason of any
act or omission of Tenant or Tenant's authorized representatives,
Tenant shall be liable to Landlord for reasonable attorney's fees and
court costs incurred by Landlord in the litigation. Should the court
render a decision which is thereafter appealed by any party thereto,
Tenant shall be liable to Landlord for reasonable attorneys' fees and
court costs incurred by Landlord in connection with such appeal.
If either party commences any litigation against the other party or
files an appeal of a decision arising out of or in connection with the
Lease, the prevailing party shall be entitled to recover from the
other party reasonable attorney's fees and costs of suit. If Landlord
employs a collection agency to recover delinquent charges, Tenant
agrees to pay all collection agency and attorneys' fees charged to
Landlord in addition to rent, late charges, interest and other sums
payable under this Lease. Tenant shall pay a charge of $75 to Landlord
for preparation of a demand for delinquent rent.
F. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Project, the same shall operate to release Landlord
from any liability under this Lease, and in such event Landlord's
successor in interest shall be solely responsible for all obligations
of Landlord under this Lease.
G. INTERPRETATION. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the premises are
located. This Lease constitutes the entire agreement between the
parties with respect to the Premises and the Project, except for such
guarantees of modifications as may be executed in writing by the
parties from time to time. When required by the context of this Lease,
the singular shall include the plural, and the masculine shall include
the feminine and/or the neuter. "Party" shall mean Landlord or Tenant.
If more than one person or entity constitutes Landlord or Tenant, the
obligations imposed upon that party shall be joint and several. The
enforceability, Invalidity or Illegality of any provision shall not
render the other provisions unenforceable, invalid or illegal.
CK AIRPARK ASSOCIATES
LANDLORD: a California Limited Partnership
-------------------------------
BY: Connecticut General Life Insurance Company
on behalf of its Separate Account R
BY CIGNA INVESTMENTS, INC.
-----------------------------
STEPHEN J. OLSTEIN
Managing Director
BY
-----------------------------
TENANT :
--------------------------------
BY /s/ Donald Rogalski
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Donald Rogalski
Senior Vice President of Administration
BY
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H. Landlord to allow Tenant to locate fenced 6'x8' compressor on the
exterior of the west end of building 3 at a location determined by
Landlord. Landlord has the right at any time during the lease term to
require Tenant to relocate said compressor.
9
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[MAP APPEARS HERE]
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[LETTERHEAD OF IDS APPEARS HERE] CK AIRPARK ASSOCIATES
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THE HEWSON COMPANY
2602 S. 24th Street, Suite 105
Phoenix, AZ 85034
<PAGE>
EXHIBIT "B"
[MAP APPEARS HERE]
BUILDING 3
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2107 EAST MAGNOLIA
#2093 SCOTT CONTAINER "2107 VACANT
12,174 S.F. 12,174 S.F.
#2093a VACANT TOTAL 63,094 S.F.
19,373 S.F.
#2105 VACANT
14,530 S.F.
#2510A CORT FURNITURE (MONTH TO MONTH)
4843 S.F.
[FLOOR PLAN OF TOTAL PARKING APPEARS HERE]
WILL - HAYES ARCHITECTS LTD
<PAGE>
KOLL AIRPARK
SIGN CRITERIA
EXHIBIT C
This criteria is designed to establish and maintain guidelines consistent with
the signage policies of the landlord and the sign ordinances of the City of
Phoenix. Tenants, when applying for signs, are requested to conform with these
guidelines and conformance will be strictly enforced by Landlord.
GENERAL.
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1. Sign and permit costs are the responsibility of the Tenant.
2. All sign copy and layouts are subject to approval by the Landlord.
FORMAT.
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1. Tenant ID to be vinyl die cut letters.
2. Size of primary copy not to exceed 3" high and size of secondary copy not
to exceed 2" high. Total copy area not to exceed 100 square inches. (Gross
area)
3. Letter style is to be HELVETICA MEDIUM, all upper case.
4. Copy color is White #3650 3M standard Scotchal color.
INSTALLATION.
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All Tenant identification copy is to be displayed on the window area
directly beside the Tenant door, 3" from window mullion. It will be located
to provide uniformity throughout the park and as designated per individual
building window mullions.
PROCEDURE FOR SIGN APPLICATION AND APPROVAL.
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1. Print or type copy, as it will appear on the sign.
(Unless otherwise specified, HELVETICA MEDIUM copy style will be used.
2. Stylized monograms, logos, or specific layout requirements, whether
furnished by Tenant or designed by the sign company, must be submitted in
clear legible form in duplicate for approval by landlord before
installation.
RESTRICTIONS/VIOLATIONS/DAMAGE.
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1. No electric or audible signs are permitted.
2. No additional-form of advertising on the sign, building, windows, or grounds
is permitted.
3. Signs in violation will be brought into conformity at the expense of the
Tenant.
4. Upon removal of any sign, any damage to the building or property will be
repaired at the Tenant's expense.
The attached diagram is to scale and may be used to illustrate the desired
wording and placement of the sign.
Contact the individual below for the fabrication and installation of your sign.
<PAGE>
[PICTURE OF WALL SIGN DIMENSIONS APPEARS HERE]
WALL SIGN SPECIFICATIONS
1. Tenants are permitted one metal framed black cabinet sign with a Lexan face.
2. The sign's dimensions shall be 24" high by a length in proporation to the
leased office frontage, as per landlord approval.
3. All lettering and/or logos shall be white on a black background. No other
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colors will be allowed.
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[DISPLAY OF WALL PLAN APPEARS HERE]
STANDARD TENANT IDENTIFICATION ON WINDOW
<PAGE>
Exhibit "D"
Premises Condition
PROJECT: CK AIRPARK ASSOCIATES BLDG UNIT: 3/2093
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QUANTITY AND/OR SIZE
WEIGHT, LENGTH, ETC.
ITEM:
STANDARD IMPROVEMENTS ONLY
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STANDARD IMPROVEMENTS PLUS THOSE SHOWN BELOW
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PARTITIONS:
CEILINGS:
DOORS:
FLOOR COVERING:
PLUMBING:
LIGHTS:
SWITCHES:
WALL ELECTRICAL OUTLETS:
TELEPHONE OUTLETS:
AIR CONDITIONING VENT FAN:
AIR CONDITIONING HOOK UP:
WATER HEATER:
PAINTING:
OTHER:
<PAGE>
ITEM (1)
HAZERDOUS MATERIAL
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Please list of any Hazerdous Material, their use and means of Disposal.
<PAGE>
EXHIBIT 10.33
LEASE FOR
1000 HARVESTER
WEST CHICAGO, ILLINOIS
THIS AGREEMENT of Lease (hereinafter referred to as "Lease") is made this
17th day of February, 1993 between JAMES RIVER PAPER COMPANY, INC., a Virginia
corporation, having its principal business office at 120 Tredegar Street,
Richmond, Virginia 23219-4326, (hereinafter referred to as "Landlord"), and
CENTRAL INK COMPANY, an Illinois corporation, having its principal business
office at 1100 N. Harvester, West Chicago, IL 60185 (hereinafter referred to as
"Tenant").
WITNESSETH:
That Landlord in consideration of the rents and covenants specified to be
paid and performed by Tenant, hereby leases to Tenant and Tenant hereby rents
from Landlord the Leased Premises hereinafter described upon the terms and
conditions set forth:
1. LEASED PREMISES. The Leased Premises shall consist of approximately seven
thousand (7,000) square feet of commercial warehouse and contiguous office
space located in an approximately sixty-eight thousand (68,000) square foot
Building at 1000 Harvester, West Chicago, Illinois, depicted on Exhibit A
attached hereto and made a part hereof. Such office space shall be
comprised of the block of four (4) offices (two [2] contiguous to the
warehouse; two [2] with window line) at the north end of the office area.
Landlord shall secure this area for the exclusive use of Landlord and
Tenant. Tenant shall have temporary access to the office bathrooms and
lunchroom area through the office corridor until Landlord leases this space
to another tenant who requests to have the area secured. Tenant shall have
an expansion option as set forth in Paragraph 9. The Leased Premises shall
include all easements, improvements, tenements, appurtenances, fixtures,
rights and privileges thereto belonging or in any way appertaining, and
including common areas ("Common Areas") and rights-of-way relating to or
affecting the Leased Premises. All heating, ventilation, air conditioning,
plumbing, lighting, electrical and other fixtures, mains, ducts, conduits
and systems necessary to the general operations and maintenance of the
Leased Premises shall be and remain the property of Landlord, whether
present at the commencement of the Term or subsequently purchased by
Landlord. All improvements to the Leased Premises made by Landlord shall be
the property of Landlord.
2. TERM. The original Term of this Lease shall commence on the date first
recited above (the "Commencement Date") and shall expire on the one (1)
year anniversary thereof, unless terminated sooner in accordance with the
Terms of this Lease. Any delay in commencement shall not extend the Term
hereof. Thereafter, Tenant shall have the option to renew this Lease for
concurrent annual (twelve [12] month) renewal Terms (the "Renewal Term")
upon ninety (90) days written
<PAGE>
notice to Landlord prior to the expiration of the original Term and each
subsequent Renewal Term. The renewal options shall in no event extend the
Term of this Lease beyond January 31, 1996.
3. RENT.
(a) On or before the first day of each calendar month of the Term, Tenant
shall pay Landlord Rent in the sum of Two Thousand One Hundred and Eighty-
Seven Dollars and Fifty Cents ($2,187.50) full gross (to include Rent,
Taxes, Insurance, Common Areas Maintenance, heat and electricity),
calculated as Three Dollars and Seventy-Five Cents per Square Foot ($3.75
per sq. ft.), which payment shall be made to Landlord at its principal
business office or at such other place designated by Landlord in a notice
to Tenant. If the original Term shall commence on a day other than the
first day of a calendar month, then Tenant shall pay on the Commencement
Date a portion of the Rent for that calendar month prorated on a per diem
basis with respect to the portion of the fractional calendar month included
in the original Term. Landlord shall have the right to increase the Rent
five percent (5%) above the then existing Rent on the one (1) year
anniversary date of the Commencement Date. Landlord shall provide Tenant
thirty (30) days' prior written notice of such Rent increase. Thereafter,
on each subsequent annual anniversary of the Commencement Date, Landlord
shall have the right to increase the Rent at a market rate to be determined
by mutual agreement between the parties at least thirty (30) days prior to
the start of each Renewal Term. If Landlord and Tenant cannot agree upon a
market rate increase to the Rent, this Lease shall terminate automatically
on the expiration of the then existing Renewal Term.
(b) Tenant shall deposit with Landlord on the Commencement Date Two
Thousand One Hundred Eighty-Seven Dollars and Fifty Cents ($2,187.50),
which represents one month's Rent, as security for Tenant's compliance with
the terms and conditions of this Lease. Tenant shall not mortgage, assign
or encumber Tenant's rights to the security deposit. The security deposit
shall not be used by Tenant towards the payment of Rent hereunder. Upon
expiration or earlier termination of this Lease, Landlord may apply the
security deposit toward any Rent that Tenant has not paid, and Landlord may
use the security deposit to pay for any costs or damages caused by the
breach of any term of this Lease. Landlord shall return to Tenant the
remainder of the security deposit, if any, plus interest, within thirty
(30) days after the expiration or earlier termination of this Lease. The
return to Tenant of the security deposit shall not affect any additional
claim that Landlord may have against Tenant for Tenant's breach of any of
the terms of this Lease.
4. TAXES. Landlord shall pay all taxes and other governmental charges or
levies, general and special, ordinary and
<PAGE>
extraordinary, unforeseen as well as foreseen, of any kind and nature for
public improvements, services or benefits (hereinafter collectively
referred to as "Taxes"), which are assessed, levied, confirmed, imposed or
which become a lien upon the Leased Premises or become payable with respect
to a period of time occurring within the Term. As used herein, the term
"Taxes" shall include any form of assessment, license fee, license tax,
business fee, business license tax, commercial rental tax, levy, charge,
penalty, tax or similar imposition, imposed by any authority having the
direct power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, as against any legal or
equitable interest of Landlord in the Leased Premises. Notwithstanding the
foregoing, Tenant shall pay or cause to be paid any and all taxes and
assessments levied upon any and all trade fixtures, inventories and other
personal property placed in or upon the Leased Premises by Tenant.
5. UTILITIES. Landlord shall be solely responsible for and shall promptly pay
all charges for electricity, water, sewer, heat, common area maintenance
and any other utilities used or consumed on the Leased Premises. Tenant
shall be solely responsible for any telephone, facsimile or other
communication services used by Tenant in the operation of its business on
the Leased Premises. Landlord shall not be liable for interruption in or
curtailment of any utility service, nor shall any such interruption or
curtailment constitute a constructive eviction or grounds for Rent
abatement in whole or in part hereunder.
6. LANDLORD REPAIR AND MAINTENANCE. Except as may be attributable to the
Tenant's negligence or willful misconduct or breach of its obligations
hereunder, Landlord shall keep and maintain in good condition and repair
the exterior walls, structural elements and the roof structure and roof
skin of the Building. In addition, Landlord shall maintain the driveways,
sidewalks, walkways, parking lots and other Common Areas of the Building.
Tenant expressly waives the benefit of any statute or regulation that would
otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Leased
Premises in good order, condition and repair. Landlord shall not be liable
to Tenant for injury or damage that may result from any defect in the
construction or condition of the Leased Premises. Tenant waives any right
to make repairs at the expense of Landlord under any law, statute or
ordinance now or hereafter in effect.
7. ALTERATIONS AND FIXTURES.
(a) Installation and Removal of Alterations. Tenant shall not, without
Landlord's prior written consent, make any alterations, improvements or
additions, including, without limitation, the installation of lighting
fixtures, space
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<PAGE>
heaters, air conditioning, electrical equipment, power panels, carpeting,
window coverings, air lines and fencing or other changes in, on or about
the Leased Premises, except for interior non-structural alterations. In no
event shall Tenant be entitled to penetrate the exterior or roof of the
Building with respect to any alteration without Landlord's prior written
approval. Landlord may permit Tenant to remove any or all said alterations
at the expiration of the Term and restore the Leases Premises to their
condition prior to Tenant's installing alterations, ordinary wear and tear
excepted. If Tenant makes any alterations without the prior approval of
Landlord, Landlord may require that Tenant remove any or all of the same.
(b) Expiration of Term. Unless Landlord permits their removal, as set forth
above, all alterations which are made by Tenant on the Leased Premises
shall become the property of Landlord and shall remain upon and be
surrendered with the Leased Premises at the expiration of the Term or upon
earlier termination. Notwithstanding the provision of this section,
Tenant's machinery and equipment, other than that which is affixed to the
Leased Premises so that it cannot be removed without material damage to the
Leased Premises, shall remain the property of the Tenant and may be removed
by Tenant. Subject to the foregoing, on the expiration date of the Term
hereof, or on any earlier termination, Tenant shall surrender the Leased
Premises to Landlord in the same condition as when received, broom clean,
ordinary wear and tear excepted. Tenant, at its sole cost and expense,
shall repair any damage to the Leased Premises occasioned by the removal of
Tenant's trade fixtures, furnishings and equipment pursuant to this
section, which repair shall include the patching and filling of holes and
repair of structural damage. Notwithstanding anything to the contrary
stated or implied elsewhere in this Lease, Tenant shall leave all power
panels, electrical systems, lighting fixtures, plumbing, space heaters, air
conditioning, air lines, and fencing on the Leased Premises in good
operating condition.
(c) Installation and Removal of Fixtures. Except as may be otherwise
provided above, Tenant, at Tenant's sole cost and expense, may install any
necessary trade fixtures, equipment and furniture in the Leased Premises,
provided that such items are installed and are removable without damage to
the structure of the Building. Landlord reserves the right to approve or
disapprove curtains, draperies, shades, paint, or other interior
improvements visible from outside the Building on wholly aesthetic grounds.
Such improvements must be submitted for Landlord's written approval prior
to installation, or Landlord may remove or replace such items at Tenant's
sole expense. Said trade fixtures, equipment and furniture shall remain
Tenant's property and shall be removed by Tenant upon expiration of the
Term, or earlier termination of this Lease, unless Tenant is then in
default hereunder, in which event Landlord hereby is granted a
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<PAGE>
security interest in such property of Tenant to secure the performance of
Tenant's obligations hereunder. Tenant shall repair, at its sole cost and
expense, all damage caused by the installation or removal of trade fixtures,
equipment, furniture or temporary improvements. If Tenant fails to remove the
foregoing items on expiration or earlier termination of this Lease, Landlord may
keep and use them or remove any or all of them and cause them to be stored or
sold in accordance with applicable law. Landlord may require Tenant to execute
on demand any reasonable security agreement or Uniform Commercial Code (UCC-1)
form to evidence said security interests.
8. INSPECTION OF LEASED PREMISES. Landlord, at reasonable times, may enter
the Leased Premises for the purpose of inspecting the same, for the purpose
of inspecting the performance by Tenant of the terms and conditions hereof,
and/or for the purpose of affixing reasonable signs and displays and
showing the Leased Premises to prospective purchasers, tenants and lenders.
9. EXPANSION AND USE OF LEASED PREMISES. Tenant shall use the Leased Premises
exclusively for warehouse and office space. Tenant shall perform no
manufacturing on the Leased Premises. Tenant reserves the right of first
refusal to lease at the then existing Rent any space that becomes available
in the Building during the Term that Landlord does not use or does not
choose to use, exclusive of five thousand (5,000) square feet contiguous to
Mason Corporation's leased premises in the Building, if Mason Corporation
chooses to renew their lease and to expand their space. Landlord shall
provide Tenant twenty-four (24) hours advance written notice of such space
availability. Said right of first refusal shall be effective for twenty-
four (24) hours after receipt of written notice. Landlord shall cohabit the
Building with Tenant without any demising walls. Landlord shall have the
right to add additional tenants without erecting demising walls, as
Landlord deems fit. Tenant intends to and shall use the Leased Premises in
part for the purpose of unloading/loading trucks and packing and storage of
general merchandise freight. Tenant shall have non-exclusive use of two (2)
loading docks.
10. EMINENT DOMAIN. If the whole of the Leased Premises is acquired or
condemned for any public or quasi-public use or purpose, or if any part of
the Leased Premises is partially condemned and such partial condemnation
renders the Leased Premises unusable for the business of Tenant, then the
Lease shall terminate as of the date of title vesting in such proceeding,
and Rent shall be adjusted pro rata to the date of termination. Tenant
shall immediately notify Landlord of any such occurrence. Landlord shall be
entitled to the entire award paid for any such condemnation, and Tenant
waives any right or claim in any part thereof from Landlord or the
condemning authority.
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<PAGE>
11. COMMON AREAS. Landlord hereby grants to Tenant and its successors and
assigns a non-exclusive license and right for Tenant and its permitted
assignees and subtenants, in common with Landlord and all persons, firms
and corporations conducting business in the Building and their respective
customers, guests, licensees, invitees, subtenants, employees and agents to
use the Common Areas for vehicular parking, for pedestrian and vehicular
ingress, egress and travel. Nothing to the contrary herein, Tenant agrees
for itself and for its successors, assigns, employees, and agents that
Tenant and they shall use the Common Areas only for the purposes permitted
hereby. All uses permitted within the Common Areas shall be undertaken with
reason and judgment so as not to interfere with the primary use of said
Common Areas, which is to provide parking, vehicular and pedestrian access
throughout the Common Areas and to adjacent public streets for the
Landlord, its tenants, subtenants and all persons, firms and corporations
conducting business within the Building and their respective customers,
guests, and licensees. In no event shall Tenant erect or cause to be
erected any structure, building, trailer, fence, wall, sign or other
obstructions on the Common Areas, nor shall Tenant store or sell any
merchandise, equipment and/or materials on the Common Areas. It is
understood and agreed that all Common Areas and all improvements located
from time to time within such Common Areas are for the general use, in
common, of the Landlord and its tenants and subtenants and all persons,
firms and corporations conducting business in the Building and their
respective customers, guests, licensees, invitees, employees and agents,
and shall at all times be subject to the exclusive control and management
of the Landlord.
12. SIGNS. Any sign placed or erected by Tenant on the Leased Premises shall
contain only Tenant's name or the name of any affiliate of Tenant actually
occupying the Leased Premises, and shall not contain any advertising
matter. No such sign shall be erected until Tenant has obtained Landlord's
written approval of the location, materials, size, design and content
thereof and any necessary permit therefor. Tenant shall remove any such
sign upon termination or expiration of this Lease and shall return the
Leased Premises to their condition prior to the placement or erection of
said sign.
13. DAMAGE OR DESTRUCTION. If the Leased Premises are damaged or destroyed
during the Term, Landlord shall diligently repair or rebuild them to
substantially the condition in which they existed immediately prior to such
damage or destruction. If the Leased Premises are damaged or destroyed to
the extent that Landlord determines that they cannot, with reasonable
diligence, be fully repaired or restored by Landlord within one hundred
eighty (180) days after commencement of restoration work with respect to
the damage or destruction, the sole right of both Landlord and Tenant shall
be the option to terminate this Lease, without
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<PAGE>
further penalty. Landlord's determination shall be conclusive on Tenant.
Landlord shall notify Tenant of its determination, in writing, within thirty
(30) days after the date of the damage or destruction.
14. ENVIRONMENTAL CLAIMS. Tenant shall not cause or permit any hazardous,
toxic, explosive or dangerous materials to be located on the Leased Premises
without the express prior written permission of Landlord, excepting general
office supplies and materials used in the ordinary course of business in the
manner for which they were designed. Tenant shall not store any flammable or
combustible goods or materials, including, without limitation, solvents, on
the Leased Premises without the express prior written permission of
Landlord. In no event shall Tenant store or attempt to store any goods or
materials on the Leased Premises that would require any structural
installations, alterations or improvements to the Leased Premises or to the
Building, including, without limitation, installation of new, or alteration
of existing, fire sprinklers or fire alarms. Tenant shall indemnify Landlord
for any and all claims, obligations and liabilities, and all costs, expenses
and attorneys' fees based upon or arising out of any obligation, liability,
loss, damage or expense of any kind or nature, contingent or otherwise,
known or unknown, incurred under or imposed by any provision of federal,
state or local law or regulation or common law pertaining to health, safety
or environmental protection (including without limitation, costs incurred
for investigation, testing, remedial or corrective action) and arising out
of any contract, strict liability or any act or omission of Tenant, its
employees, agents, subcontractors, representatives or assigns arising out of
Tenant's lease, use or possession the Leased Premises.
15. PROPERTY INSURANCE. Landlord, at Landlord's expense, shall obtain and keep
in force during the Term of this Lease a policy or policies of insurance
covering loss or damage to the Building included in the Premises in the
amount of the replacement value thereof (but not less than Two Million and
00/100 Dollars [$2,000,000]), providing protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, and special extended perils (all risk). Tenant shall
insure at its sole expense any personal property, fixtures, goods,
merchandise, equipment, furniture, stores or inventory of Tenant or which
Tenant may have upon or within the Leased Premises. Tenant shall assume the
risk of damage thereto and Landlord shall not be liable for injury to
Tenant's business or any loss of income therefrom relative to such damage.
16. LIABILITY INSURANCE. Tenant shall, at its own cost and expense, obtain and
keep in full force during the Term of this Lease, a policy or policies of
comprehensive general liability insuring Tenant's activities with respect to
the
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<PAGE>
use, occupancy or maintenance of the Leased Premises and all areas
appurtenant thereto. Each such insurance policy shall name Landlord as an
additional insured and shall be in an amount of not less than One Million
and 00/100 ($1,000,000.00) Dollars for injury to or death of more than one
person in any one accident or occurrence. Such insurance shall further
insure Landlord and Tenant against liability for property damage of at
least One Million and 00/100 ($1,000,000.00) Dollars. The limits of said
insurance shall not be construed as limiting Tenant's liability hereunder.
17. COMPLIANCE WITH LAWS. Tenant shall not conduct any activities upon the
Leased Premises which shall in any way be construed as incompatible with
the reasonable use of the balance of the Leased Premises by others or that
in any way would raise the insurance rates of Landlord. If Tenant complies
with the Terms of this Lease and any and all applicable laws, regulations,
orders or decrees, Tenant shall have the peaceful and quiet use of the
Leased Premises without hindrance on the part of Landlord.
18. LIENS. Tenant shall not permit and shall promptly discharge at its own
expense including attorneys' fee, any lien placed upon the Leased Premises
as a result of Tenant's lease, use or possession thereof. Tenant shall
promptly notify Landlord of any such lien and the disposition thereof.
19. INDEMNIFICATION. Tenant shall protect, indemnify and save Landlord and the
Leased Premises harmless from and against any and all liability and expense
of any nature whatsoever, including reasonable attorney's fees, arising
from injury to persons or loss or damage of property, in any manner arising
from or connected with Tenant's use and occupancy of the Leased Premises or
the conditions thereof. Landlord shall protect, indemnify and save Tenant
harmless for any and all liability and expenses of any nature whatsoever,
including reasonable attorney's fees, arising from injury to persons or
loss or damage of property on the Leased Premises caused by Landlord's
gross negligence or willful breach of its obligations hereunder.
20. WAIVER OF SUBROGATION. Nothing in this Lease shall be construed to
authorize or permit any insurer of Landlord or Tenant to be subrogated to
any right of Landlord or Tenant against the other. Landlord and Tenant
hereby release each other with respect to any loss to the extent of their
insurance coverage even if such loss or other casualty shall be brought
about by the fault or negligence of the other party or persons for whose
acts that party is liable.
21. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, mortgage, pledge or
otherwise transfer this Lease, in whole or in part, nor sublet or permit
occupancy by any party other than Tenant of all or any part of the Leased
Premises, without the prior written consent of Landlord in each
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<PAGE>
instance. Any purported assignment or subletting contrary to the provisions
hereof without consent shall be void. The consent by Landlord to any
assignment or subletting shall not constitute a waiver of the necessity for
such consent to any subsequent assignment or subletting. Tenant shall
reimburse Landlord for reasonable legal and other expenses incurred by
Landlord in connection with any request by Tenant for consent to assignment
or subletting. Tenant shall deliver to Landlord an assignment in recordable
form which contains an assumption by the assignee, or subleases, but the
failure or refusal of the assignee to execute such instrument or assumption
shall not release or discharge assignee from liability as Tenant hereunder,
provided that the Terms and provisions of the assignment or subletting
specifically make applicable to the assignee or subleases all of the
provisions of this Lease.
22. TENANT DEFAULT. In the event that during the terms of this Lease (other
than the pendency of a bankruptcy, reorganization, receivership, insolvency
or other proceeding in law, in equity or before any administrative
tribunal, which has prevented or might prevent compliance by Tenant with
the Terms of the Lease):
(a) Tenant shall default in the observance or performance of any of
Tenant's covenants, agreements or obligations hereunder, and such default
shall not be cured within ten (10) days after Landlord shall have given to
Tenant written notice specifying such default or defaults; or
(b) Tenant is finally adjudicated bankrupt or insolvent; or
(c) A receiver is appointed for all or substantially all of Tenant's
business or assets on the ground of Tenant's insolvency; or
(d) A trustee is appointed for Tenant after a Petition has been filed for
Tenant's reorganization under the bankruptcy laws of the United States
having the same general purpose; or
(e) Tenant shall make an assignment for the benefit of its creditors.
Landlord shall have the right at its own election, at any time thereafter
while any such default or condition continues, to re-enter and take
complete peaceable possession of the Leased Premises and any and all
improvements then forming part of the Leased Premises, and to declare the
Term of this Lease ended, whereupon this Lease and all the rights, title
and interest of Tenant hereunder shall terminate and be of no further force
or effect. In the event of such declaration, Landlord shall have the right
to sue for and recover all Rent and other sums accrued up to the time of
such termination, including damages arising out of any breach on the part
of Tenant.
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<PAGE>
Landlord shall also have the right, without reentering the Leased Premises
or Terminating this Lease, to sue for and recover all Rent and other sums,
including damages, at any time and from time to time accruing hereunder
less any sums received from reletting the Leased Premises. Landlord shall
have the right to seize, hold, assert a lien or any interest in or upon
Tenant's property located within or on the Leased Premises, and may charge
Tenant reasonable storage charges for such property until it is removed.
23. CUMULATIVE RIGHTS. No right or remedy herein conferred upon or reserved to
Landlord or Tenant is intended to be exclusive of any other right or remedy
herein or by law provided, but each shall be cumulative and in addition to
every other right or remedy given herein now or hereafter existing at law
or in equity or by statute.
24. INTEREST ON OVERDUE RENT. Any installments of Rent overdue for a period of
more than thirty (30) days shall bear interest at the then existing prime
interest rate until paid.
25. WAIVER. No waiver by Landlord or Tenant of any breach of an obligation,
agreement or covenant hereunder shall be a waiver or subsequent breach of
any other obligation, agreement or covenant, nor shall any forbearance by
either party to seek a remedy for any breach by the other be a waiver of
any rights and remedies with respect to such or any subsequent breach.
26. HOLDING OVER. No holding over by the Tenant shall operate to extend or
renew this Lease and any holding over after the expiration of the original
Term or any Renewal Term shall constitute a tenancy from month to month
only, subject to the provisions of this Lease consistent with a month-to-
month tenancy, with either party having the right to terminate the
relationship by giving thirty (30) days notice in writing to the other.
27. NOTICES. Any notice provided for herein shall be given by certified
registered mail with return receipt requested, addressed, if to Landlord,
as follows:
James River Paper Company, Inc.
120 Tredegar Street
Richmond, VA 23219-4326
Attn: Matthew J. Hiles
and to Tenant as follows:
Central Ink Company
1100 N. Harvester
West Chicago, IL 60185
Attn:
- 10 -
<PAGE>
28. MODIFICATIONS. This Lease shall be modified only by written agreement signed
by Landlord and Tenant.
29. DESCRIPTIVE HEADINGS. The descriptive headings of this Lease are inserted
for convenience in reference only and do not constitute a part of this
Lease.
30. COVENANTS. All agreements, conditions and understandings and all of the
covenants, provisions, terms and conditions of this Lease, whether so
expressed or not shall extend to and be binding upon the representatives,
beneficiaries, heirs, personal representatives, and successors and assigns
of the respective parties hereto.
31. ENTIRE AGREEMENT. This Lease shall constitute the entire agreement between
the parties and cancel and supersede all prior verbal or written leases and
agreements or understandings relating to the Leased Premises or the terms
and conditions of the Lease.
32. GOVERNING LAW. This Lease shall be construed in accordance with the laws of
the State of Illinois.
IN WITNESS WHEREOF, the Landlord has caused these presents to be executed by
its authorised representatives and Tenant has executed these presents as of the
day and year first above written.
JAMES RIVER PAPER COMPANY, INC.
By: [SIGNATURE APPEARS HERE]
-----------------------------------
Title: DIR. REAL ESTATE
--------------------------------
CENTRAL INK COMPANY
By: [SIGNATURE APPEARS HERE]
-----------------------------------
Title: GENERAL MANAGER
--------------------------------
-11-
<PAGE>
LEASE FOR 1000 HARVESTER DRIVE
WEST CHICAGO, ILLINOIS
AMENDMENT NO. 1
THIS AMENDMENT is made this day of , 1993, by and between
---------- ----------
James River Paper Company, Inc. (hereinafter referred to as "Landlord") and
Central Ink Company (hereinafter referred to as "Tenant") and amends the Lease
for 1000 Harvester Drive, West Chicago, Illinois (hereinafter referred to as
"Lease") by and between the parties hereto dated February 17, 1993.
NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant amend the Lease as follows:
Paragraph 1. LEASED PREMISES is amended to increase the Leased Premises
by approximately Eight Hundred and Thirty-Three Square Feet (833 sq.
ft.), as shown in Exhibit A attached hereto and incorporated by
reference. The effective date of occupancy shall be April 5, 1993.
Paragraph 3. RENT. The Rent for the entire Leased Premises shall remain
Three Dollars and Seventy-Five Cents Per Square Foot ($3.75/sq. ft.).
Except as expressly amended hereby, the Lease remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
JAMES RIVER PAPER COMPANY, INC.
BY:
----------------------------
TITLE:
-------------------------
CENTRAL INK COMPANY
BY:
----------------------------
TITLE:
-------------------------
<PAGE>
LEASE FOR 1000 HARVESTER DRIVE
WEST CHICAGO, ILLINOIS
AMENDMENT NO.2
THIS AMENDMENT is made this 21st day of June , 1993, by and between
---------- ----------
James River Paper Company, Inc. (hereinafter referred to as "Landlord") and
Central Ink Company (hereinafter referred to as "Tenant") and amends the Lease
for 1000 Harvester Drive, West Chicago, Illinois (hereinafter referred to as
"Lease") by and between the parties hereto dated February 17, 1993, as first
amended by Amendment No. a dated , 1993.
--------------------
NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant amend the Lease as follows:
Paragraph 1. LEASED PREMISES is amended to increase the Leased Premises
by approximately Seven Thousand Eight Hundred Square Feet (7,800 sq.
ft.), as shown in Exhibit A attached hereto and incorporated by
reference. The effective date of occupancy shall be June 11, 1993.
Paragraph 3. RENT. The Rent for the entire Leased Premises shall remain
Three Dollars and Seventy-Five Cents Per Square Foot ($3.75/sq. ft.).
Except as expressly amended hereby, the Lease remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
JAMES RIVER PAPER COMPANY, INC.
BY: [SIGNATURE APPEARS HERE]
---------------------------
TITLE: DIRECTOR REAL ESTATE
------------------------
CENTRAL INK COMPANY
BY: [SIGNATURE APPEARS HERE]
---------------------------
TITLE: GENERAL-MGR.
------------------------
<PAGE>
LEASE FOR 1000 HARVESTER DRIVE
WEST CHICAGO, ILLINOIS
AMENDMENT NO. 2
THIS AMENDMENT is made this 21st day of June, 1993, by and between James River
Paper Company, Inc. (hereinafter referred to as "Landlord") and Central Ink
Company (hereinafter referred to as "Tenant") and amends the Lease for 1000
Harvester Drive, West Chicago, Illinois (hereinafter referred to as "Lease") by
and between the parties hereto dated February 17, 1993, as first amended by
Amendment No. a dated _______________________________, 1993.
NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant amend the Lease as follows:
Paragraph 1. LEASED PREMISES is amended to increase the Leased Premises
by approximately Seven Thousand Eight Hundred Square Feet (7,800 sq. ft.),
as shown in Exhibit A attached hereto and incorporated by reference. The
effective date of occupancy shall be June 11, 1993.
Paragraph 3. RENT. The Rent for the entire Leased Premises shall remain
Three Dollars and Seventy-Five Cents Per Square Foot ($3.75/sq. ft.).
Except as expressly amended hereby, the Lease remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
JAMES RIVER PAPER COMPANY, INC.
BY: [SIGNATURE APPEARS HERE]
----------------------------
TITLE: DIRECTOR REAL ESTATE
------------------------
CENTRAL INK COMPANY
BY: [SIGNATURE APPEARS HERE]
----------------------------
TITLE: GENERAL-MGR.
------------------------
<PAGE>
EXHIBIT 10.34
RADNOR CORPORATION CENTER OFFICE LEASE
--------------------------------------
Between
RADNOR CENTER ASSOCIATES
------------------------
(a Pennsylvania limited partnership)
as Landlord
-and-
WINCUP HOLDINGS, L.P.
---------------------
(a Delaware Limited Partnership)
as Tenant
___________________________________
___________________________________
Dated: May 31, 1996
Premises:
---------
7,965 Rentable Square Feet
Third Floor-Suite TBD
Three Radnor Corporate Center
Radnor, Pennsylvania 19087
<PAGE>
RADNOR CORPORATE CENTER OFFICE LEASE
------------------------------------
TABLE OF CONTENTS
Paragraph Page
--------- ----
1. Demised Premises; Use ....................................................1
---------------------
1.1. Letting and Demised Premises; Use ..................................1
---------------------------------
1.2. Corporate Center ...................................................1
----------------
1.3. Common Facilities ..................................................1
-----------------
1.4. Rentable Square Feet ...............................................1
--------------------
2. Term; Commencement .......................................................2
------------------
2.1. Duration ...........................................................2
--------
2.2. Substantial Completion .............................................2
----------------------
2.3. Confirmation .......................................................2
------------
2.4. Acceptance of Work .................................................2
------------------
3. Minimum Rent; Increase in Minimum Rent; Security Deposit .................3
--------------------------------------------------------
3.1. Amount and Payment .................................................3
------------------
3.2. Partial Month ......................................................3
-------------
3.3. Address For Payment ................................................3
-------------------
3.4. Non-Waiver of Rights ...............................................3
--------------------
3.5. Additional Sums Due; No Set-Off ....................................3
-------------------------------
3.6. Personal Property and Other Taxes ..................................4
---------------------------------
3.7. Minimum Rent Increases .............................................4
----------------------
3.8. Security Deposit ...................................................4
----------------
4. Increases in Taxes and Operating Expenses.................................4
-----------------------------------------
4.1. Definitions ........................................................4
-----------
4.2. General Allocation Procedures ......................................8
-----------------------------
4.3. Tenant's Share of Taxes and Operating Expenses .....................8
----------------------------------------------
4.4. Disputes ...........................................................9
--------
4.5. Right to Audit .....................................................9
--------------
4.6. Survival ..........................................................11
--------
5. Services ................................................................11
--------
5.1. HVAC and Electricity ..............................................11
--------------------
5.2. Water and Sewer ...................................................13
---------------
5.3. Elevator; Access ..................................................14
----------------
5.4. Janitorial ........................................................14
----------
5.5. Security...........................................................14
--------
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.6. Repairs............................................................................. 15
-------
5.7. System changes...................................................................... 15
--------------
5.8. Directory........................................................................... 15
---------
5.9. Limitation Regarding Services....................................................... 15
-----------------------------
6. Care of Demised Premises.................................................................. 16
------------------------
6.1. Insurance and Governmental Requirements............................................. 16
---------------------------------------
6.2. Access.............................................................................. 16
------
6.3. Condition........................................................................... 17
---------
6.4. Surrender........................................................................... 17
---------
6.5. Signs............................................................................... 17
-----
6.6. Care: Insurance..................................................................... 17
---------------
6.7. Alterations; Additions.............................................................. 17
----------------------
6.8. Mechanics' Liens.................................................................... 18
----------------
6.9. Vending Machines.................................................................... 18
----------------
6.10. Rules and Regulations............................................................... 18
---------------------
6.11. Environmental Compliance............................................................ 18
------------------------
7. Subletting and Assigning.................................................................. 19
------------------------
7.1. General Restrictions................................................................ 19
--------------------
7.2. Definitions......................................................................... 20
-----------
7.3. Procedure for Approval of Assignment or Sublease.................................... 20
------------------------------------------------
7.4. Conditions.......................................................................... 21
----------
7.5. Special Conditions for Assignment or Subletting to Affiliates of Tenant............. 21
-----------------------------------------------------------------------
8. Fire or Other Casualty.................................................................... 21
----------------------
9. Regarding Insurance and Liability......................................................... 22
---------------------------------
9.1. Damage in General................................................................... 22
-----------------
9.2. Indemnity........................................................................... 22
---------
9.3. Tenant's Insurance.................................................................. 23
------------------
9.4. Waiver of Subrogation............................................................... 23
---------------------
9.5 Limitation on Personal Liability.......................................................... 24
--------------------------------
9.6. Successors in Interest to Landlord, Mortgages....................................... 24
---------------------------------------------
9.7. Survival............................................................................ 24
--------
10. Eminent Domain............................................................................ 24
--------------
11. Insolvency................................................................................ 25
----------
12. Default................................................................................... 25
-------
12.1. Events of Default................................................................... 25
-----------------
</TABLE>
ii
<PAGE>
12.2. Accelerated Rent Component.......................................26
--------------------------
12.3. Re-entry.........................................................26
--------
12.4. Continuing Liability.............................................27
--------------------
12.5. Credit...........................................................27
------
12.6. No Duty to Relet.................................................28
----------------
12.7. Confession of Judgment...........................................28
----------------------
12.8. Bankruptcy.......................................................29
----------
12.9. Waiver of Defects................................................29
-----------------
12.10. Non-Waiver by Landlord...........................................29
----------------------
12.11. Partial Payment..................................................29
---------------
12.12. Overdue Payments.................................................30
----------------
12.13. Cumulative Remedies..............................................30
-------------------
13. Subordination............................................................30
-------------
13.1. General..........................................................30
-------
13.2. Rights of Mortgagee..............................................31
-------------------
13.3. Modifications....................................................31
-------------
14. Notices..................................................................31
-------
14.1. If to Landlord...................................................31
--------------
14.2. If to Tenant.....................................................31
------------
15. Holding Over.............................................................32
------------
16. Reservations in Favor of Landlord........................................32
---------------------------------
17. Completion of Improvements; Delay in Possession..........................32
-----------------------------------------------
17.1 Landlord Improvements....................................................32
---------------------
17.2. Tenant Improvements..............................................33
-------------------
17.3. Performance of Landlord and Tenant Improvements..................33
-----------------------------------------------
17.4. Acceptance.......................................................33
----------
17.5. Delay in Possession..............................................33
-------------------
18. Landlord's Reliance......................................................34
-------------------
19. Prior Agreements; Amendments.............................................34
----------------------------
20. Captions.................................................................35
--------
21. Landlord's Right to Cure.................................................35
------------------------
22. Estoppel Statement.......................................................35
------------------
iii
<PAGE>
23. Relocation of Tenant....................................................35
--------------------
24. Broker..................................................................36
------
25. Miscellaneous...........................................................36
-------------
25.1. Certain Interpretations..........................................36
-----------------------
25.2. Partial Invalidity...............................................37
------------------
25.3. Governing Law....................................................37
-------------
26. Quiet Enjoyment.........................................................37
---------------
27. Free Rent...............................................................37
---------
28. Right to First Offer....................................................37
--------------------
28.1. Tenant's Notice..................................................37
---------------
28.2. Landlord's Notice................................................37
-----------------
28.3. Exercise.........................................................38
--------
28.4. Lease Terms......................................................38
-----------
28.5. Failure to Exercise..............................................38
-------------------
29. Termination Option......................................................39
------------------
29.1. Grant of Option..................................................39
---------------
29.3. Terms............................................................39
-----
29.4. Termination......................................................40
-----------
30. Confidentiality.........................................................40
---------------
==========================
iv
<PAGE>
SCHEDULE OF EXHIBITS
--------------------
Exhibit Contents Page Nos.
- ------- -------- ---------
A FLOOR PLAN OF THE DEMISED PREMISES A-1 only
B SITE PLAN B-1 only
C CONFIRMATION OF LEASE TERM C-1 through C-2
D JANITORIAL SERVICES D-1 through D-3
E RULES AND REGULATIONS E-1 through E-5
F RESPECTING IMPROVEMENTS TO THE
DEMISED PREMISES F-1 through F-4
ANNEX: BUILDING STANDARD
-----
CONSTRUCTION ITEMS
G MINIMUM RENT INCREASES G-1 through G-2
H ESTOPPEL CERTIFICATE H-1 through H-5
v
<PAGE>
RADNOR CORPORATE CENTER
OFFICE LEASE
THIS OFFICE LEASE (the "Lease") is made this 31st day of May, 1996, by and
between RADNOR CENTER ASSOCIATES, a Pennsylvania limited partnership
(hereinafter called "Landlord"), and WINCUP HOLDINGS, L.P., a Delaware Limited
Partnership (hereinafter called "Tenant").
1. Demised Premises; Use.
---------------------
1.1. Letting and Demised Premises; Use. Landlord, for the term and
---------------------------------
subject to the provisions and conditions hereof, leases to Tenant, and Tenant
rents from Landlord, the space (hereinafter referred to as the "Demised
Premises" and more particularly delineated on the floor plan attached hereto as
Exhibit "A" and made a part hereof) being, for purposes of the provisions hereof
7,965 rentable square feet, located on the third floor of the office building
(hereinafter referred to as the "Building") known as Building No. Three of
Radnor Corporate Center, or such other name as Landlord may from time to time
designate, with an address of 100 Matsonford Road, Radnor Township, Delaware
County, Pennsylvania 19087, located as shown on the Site Plan attached hereto as
Exhibit "B", to be used by Tenant only for general office purposes and
associated incidental uses and for no other purpose without the prior written
consent of Landlord.
1.2. Corporate Center. Radnor Corporate Center consists of
----------------
approximately 57.021 acres of ground and certain buildings and other
improvements thereon (including five separate office buildings, of which the
Building is one, and related amenities), all located at or about Matsonford Road
and King of Prussia Road in Radnor Township, Delaware County, Pennsylvania (the
"Corporate Center"). Landlord reserves the right, in its sole discretion, at any
time and from time to time, to expand and/or reduce the amount of ground and/or
improvements of which the Corporate Center consists.
1.3. Common Facilities. Tenant and its agents, employees and invitees,
-----------------
shall have the right to use, in common with all others granted such rights by
Landlord, in a proper and lawful manner, the common sidewalks, access roads,
parking areas and other outdoor areas within the Corporate Center, the common
entranceways, lobbies and elevators furnishing access to the Demised Premises,
and (if the Demised Premises includes less than a full floor) the common
lobbies, hallways and toilet rooms on the floor on which the Demised Premises is
located. Such use shall be subject to the terms of this Lease and to such
reasonable rules, regulations, limitations and requirements as Landlord may from
time to time prescribe with respect thereto, including, without limitation, the
reservation of any particular parking spaces or parking areas for the exclusive
use of other tenants of the Corporate Center.
1.4. Rentable Square Feet. Tenant understands, acknowledges and agrees
--------------------
(i) that the amount of rentable square feet set forth in Paragraph 1.1 above is
calculated based on certain
<PAGE>
assumptions, and (ii) that such amount of rentable square feet is hereby
accepted by Tenant for all purposes of this Lease, including, without
limitation, for purposes of determining minimum rent, Tenant's Proportionate
Share of applicable items of Taxes and Operating Expenses (as those terms are
hereinafter defined), Tenant's construction allowance, if any, and other items
which are based upon the computation of square footage.
2. Term: Commencement.
------------------
2.1. Duration. The term of this Lease shall commence (the
--------
"Commencement Date") on June 1, 1996; or, if Landlord is responsible as
hereinafter provided for the completion of work in the Demised Premises and for
the completion of Tenant's fit-out work and other leasehold improvements
therein, then the Commencement Date shall be the earlier of the following:
(i) the later of (x) June 1, 1996, or (y) the date of "Substantial Completion",
as defined below, of the Demised Premises, or (ii) the date on which Tenant
shall take possession of the Demised Premises or any part thereof, or (iii) the
date on which Tenant would have taken possession of the Demised Premises had
Tenant not delayed in its obligations to furnish Landlord plans and other
drawings pursuant to Exhibit "F" attached hereto or otherwise caused a delay in
the Substantial Completion of the Demised Premises. Unless extended or sooner
terminated as herein provided, the initial term of this Lease shall continue
until, and shall expire on, the expiration of one hundred twenty (120) months
following the Commencement Date, or if the Commencement Date is a date other
than the first day of a month, then on the expiration of one hundred twenty
(120) months from the first day of the month following the month in which the
Commencement Date occurs.
2.2. Substantial Completion. The term "Substantial Completion" shall
----------------------
mean that state of completion of the Demised Premises which will, (a) except for
any improvements or work to be performed by Tenant, allow Tenant to utilize the
Demised Premises for their intended purposes (including the availability of
required utility services) without material interference to the customary
business activities of Tenant by reason of the completion of Landlord's work,
all as more fully described in Paragraph 17 below and Exhibit "F" attached
hereto and (b) allow all appropriate governmental authorities to issue a
certificate of occupancy for the Demised Premises. The Demised Premises shall be
deemed substantially complete even though minor or insubstantial details of
construction, mechanical adjustment or decoration remain to be performed, the
noncompletion of which does not materially interfere with Tenant's use of the
Demised Premises or the conduct of its business therein.
2.3. Confirmation. When the Commencement Date of the term of this
------------
Lease is established, Landlord and Tenant shall promptly execute and acknowledge
a Confirmation of Lease Term, in the form set forth in Exhibit "C" hereto,
containing the information as it relates to this Lease as set forth in Exhibit
"C" and acknowledging the Commencement Date and expiration date of the term
hereof.
2.4. Acceptance of Work. On the Commencement Date of the term of this
Lease, it shall be presumed that all work theretofore performed by or on behalf
of Landlord was satisfac-
2
<PAGE>
torily performed in accordance with, and meeting the requirements of, this
Lease. The foregoing presumption shall not apply, however, (i) to required work
not actually completed by Landlord and identified and described in a written
punch-list to be jointly prepared and initialed by Landlord and Tenant at or
about the date on which Tenant shall occupy the Demised Premises; or (ii) to
deficiencies or inadequacies in the work which Tenant brings to Landlord's
attention in writing, with specificity, on or before the Commencement Date or
within thirty (30) business days thereafter (and all of the work so identified
and described on the punch-list or as timely brought to Landlord's attention as
aforesaid which is Landlord's responsibility shall be completed by Landlord with
reasonable speed and diligence). In addition, Landlord shall, at its sole cost
and expense, repair and replace any defective work identified by Tenant within
one (1) year after the Commencement Date, provided Landlord shall not be
responsible to repair or replace items damaged due to ordinary wear and and tear
or caused by Tenant.
3. Minimum Rent; Increases in Minimum Rent; Security Deposit.
---------------------------------------------------------
3.1. Amount and Payment. Minimum rent for the Demised Premises shall
------------------
accrue during the term beginning thirty (30) days after the Commencement Date
(the "Rent Commencement Date") at the annual rate of One Hundred Ninety One
Thousand One Hundred Sixty and 00/100 Dollars ($191,160.00), and shall be
payable during the term hereof, in advance, in equal monthly installments of
one-twelfth of the annual amount (i.e., in a monthly amount equal to
----
$15,930.00), the first installment to be payable upon the execution of this
Lease and subsequent installments to be payable on the first day of each
successive month of the term hereof following the Rent Commencement Date.
3.2. Partial Month. If the Rent Commencement Date is a day other than
-------------
the first day of a month, rent from such day until the first day of the
following month shall be prorated (at the rate of one-thirtieth (1/30) of the
fixed monthly rental for each day) and shall be payable, in arrears, on the
first day of the first full calendar month following the Rent Commencement Date
(and, in such event, the installment of rent paid at execution hereof shall be
applied to the rent due for the first full calendar month following the Rent
Commencement Date).
3.3. Address For Payment. All rent and other sums due to Landlord
-------------------
hereunder shall be payable to Radnor Center Associates, c/o The Rubenstein
Company, 4100 One Commerce Square, 2005 Market Street, Philadelphia,
Pennsylvania 19103, or to such other party or at such other address as Landlord
may designate, from time to time, by written notice to Tenant.
3.4. Non-Waiver of Rights. If Landlord, at any time or times, shall
--------------------
accept rent or any other sum due to it hereunder after the same shall become due
and payable, such acceptance shall not excuse delay upon subsequent occasions,
or constitute, or be construed as, a waiver of any of Landlord's rights
hereunder.
3.5. Additional Sums Due; No Set-Off. All sums payable by Tenant under
-------------------------------
this Lease, whether or not stated to be rent, minimum rent or additional rent,
shall be collectible by
3
<PAGE>
Landlord as rent, and upon default in payment thereof Landlord shall have the
same rights and remedies as for failure to pay rent (without prejudice to any
other right or remedy available therefor). All minimum rent, additional rent and
other sums payable by Tenant under this Lease shall be paid, when due, without
offset, abatement, diminution or reduction.
3.6. Personal Property and Other Taxes. As additional rent, Tenant shall
---------------------------------
pay monthly or otherwise when due, whether collected by Landlord or collected
directly by the governmental agency assessing the same, any taxes imposed or
calculated on Tenant's rent or with respect to Tenant's use or occupancy of the
Demised Premises or Tenant's business or right to do business in the Demised
Premises, including, without limitation, a gross receipts tax or sales tax on
rents or a business privilege tax or use or occupancy tax, whether such tax
exists at the date of this Lease or is adopted hereafter during the term of this
Lease or during any renewal or extension thereof; but nothing herein shall be
taken to require Tenant to pay any income, estate, inheritance, transfer or
franchise tax imposed upon Landlord. In addition to the foregoing, Tenant shall
be responsible to pay when due all taxes imposed upon all personal property of
Tenant.
3.7. Minimum Rent Increases. Provisions with respect to increases in
----------------------
minimum rent hereunder are as set forth in Exhibit "G" attached hereto and made
a part hereof.
3.8. Security Deposit. As additional security for the full and prompt
----------------
performance by Tenant of the terms and covenants of this Lease. Tenant has
deposited with the Landlord the sum of Fifteen Thousand Nine Hundred Thirty and
00/100 Dollars ($15,930.00), (the "Security Deposit") which shall not constitute
rent for any month (unless so applied by Landlord on account of Tenant's
default). Tenant shall, upon demand, restore any portion of the Security Deposit
which may be applied by Landlord to the cure of any default by Tenant hereunder.
To the extent that Landlord has not applied the Security Deposit on account of a
default, the Security Deposit shall be returned (without interest) to Tenant
promptly after the expiration of this Lease. Until returned to Tenant after the
expiration of the Lease and the full performance of Tenant hereunder, the
Security Deposit shall remain the property of Landlord.
4. Increases in Taxes and Operating Expenses.
-----------------------------------------
4.1 Definitions. As used in this Paragraph 4, the following terms shall be
-----------
defined as hereinafter set forth:
(i) "Taxes" shall mean all real estate taxes and assessments of
-----
whatever kind, general or special, ordinary or extraordinary, foreseen or
unforeseen, imposed upon the Building or with respect to the ownership of the
Building and the Corporate Center and the parcel of land on which the Building
and the Corporate Center are located, and any existing or future improvements to
the Building or the Corporate Center or to the parcel of land on which the
Building or the Corporate Center is located, all of the foregoing as allocable
and attributable to each given calendar year which occurs during the term of
this Lease (and any renewals and extensions thereof). If, due to a future change
in the method of taxation, any franchise, income, profit or other tax,
4
<PAGE>
however designated, shall be levied or imposed in addition to or in
substitution, in whole or in part, for any tax which would otherwise be included
within the definition of Taxes, such other tax shall be deemed to be included
within Taxes as defined herein. Taxes also shall include amounts paid to anyone
engaged by Landlord to contest the amount or rate of taxes, provided that the
amounts so paid do not exceed the savings procured.
(ii) (1) "Operating Expenses" shall mean Landlord's actual
--------------------
out-of-pocket expenses, adjusted as set forth herein and as allocable and
attributable to each given calendar year which occurs during the term of this
Lease (and any renewals and extensions thereof), in respect of the ownership,
operation, maintenance, repair, replacement and management of the Building and
the Corporate Center (after deducting any reimbursement, discount, credit,
reduction or other allowance received by Landlord) and shall include, without
limitation: (A) wages and salaries (and taxes and insurance imposed upon
employers with respect to such wages and salaries) and fringe benefits paid to
persons employed by Landlord to render services in the normal operation,
maintenance, cleaning, repair and replacement of the Building and the Corporate
Center and any security personnel for the Building and the Corporate Center,
excluding any overtime wages or salaries paid for providing extra services
exclusively for any specific tenants; (B) costs of independent contractors hired
(on an arm's length basis) for, and other costs in connection with, the
operation, security, maintenance, cleaning, repair and replacement of the
Building and related facilities and amenities in the Corporate Center; (C) costs
of materials, supplies and equipment (including trucks) used in connection with
the operation, security, maintenance, cleaning, repair and replacement of the
Building and related facilities and amenities in the Corporate Center; (D) costs
of electricity, steam, water, sewer, fuel and other utilities used at the common
areas of the Building or the Corporate Center, together with the cost of
providing the services specified in Paragraph 5 hereof, to the extent such
utilities and/or services are not separately chargeable to an occupant of the
Building or an occupant elsewhere in the Corporate Center; (E) cost of insurance
for public and general liability insurance and insurance relating to the
Building and the Corporate Center, including fire and extended coverage or "All-
Risk" coverage, if available, and coverage for elevator, boiler, sprinkler
leakage, water damage, and property damage, plate glass, personal property owned
by landlord, fixtures, and rent protection (all with such coverages and in such
amounts as Landlord may elect or be required to carry), but excluding any charge
for increased premiums due to acts or omissions of other occupants of the
Building or elsewhere in the Corporate Center because of extra risk which are
reimbursed to Landlord by such other occupants; (F) costs of tools, supplies and
services; (G) costs of "Essential Capital Improvements", as defined in and to
the extent permitted pursuant to subparagraph 4.1(ii)(3) below; (H) costs of
alterations and improvements to the Building or the Corporate Center made
pursuant to any Governmental Requirements (as defined in subparagraph 4.1(iii)
below) which are not capital in nature (except to the extent permitted by
subparagraph 4.1(ii)(3) below), and which are not the obligation of Tenant or
any other occupant of the Building or elsewhere in the Corporate Center; (I)
reasonable legal and accounting fees and disbursements necessarily incurred in
connection with the ownership, maintenance and operation of the Building and the
Corporate Center, and the preparation, determination and certification of bills
for Taxes and Operating Expenses pursuant to this and other leases at the
Building and the Corporate Center; (J) sales, use or excise taxes on supplies
and services and on any of the other items included
5
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in Operating Expenses; (K) costs of redecorating, repainting, maintaining,
repairing and replacing the common areas of the Building and the Corporate
Center (including seasonal decorations); (L) management fees payable to the
managing agent for the Building and the Corporate Center (provided, however,
-----------------
that if management fees are paid to any affiliate of Landlord, then the amount
thereof to be included in Operating Expenses shall not exceed such amount as is
customarily being charged for similar services rendered to comparable buildings
in the geographical submarket within which the Corporate Center is located);
(M) the cost of telephone service, postage, office supplies, maintenance and
repair of office equipment and similar costs related to operation of the
Building's and the Corporate Center's management and superintendent's offices;
(N) the cost of licenses, permits and similar fees and charges related to
operation, maintenance, repair and replacement of the Building and the Corporate
Center, other than any of the foregoing relating to tenant improvements; and (O)
without limiting any of the foregoing, any other expenses or charges which, in
accordance with sound accounting and management principles generally accepted
with respect to a first-class suburban office building, would be construed as an
operating expense. Operating Expenses (including such as are stated above which
relate or are applicable to the Corporate Center) shall include, without
limitation, any and all sums for landscaping, ground and sidewalk maintenance,
santitation control, extermination, cleaning, lighting, snow removal, parking
area and driveway striping and resurfacing, fire protection, fire safety,
policing, security systems, public liability and property damage insurance, and
expenses for the upkeep, maintenance, repair, replacement and operation of the
Corporate Center, all as payable in respect of or allocable to the Building by
virtue of the ownership thereof and/or under and pursuant to the Declaration (as
hereinafter defined). The term "Operating Expenses" shall not include: (a) the
cost of redecorating or special cleaning or similar services to individual
tenant spaces, not provided on a regular basis to other tenants of the Building;
(b) wages or salaries paid to executive personnel of Landlord not providing
fulltime service at the Corporate Center; (c) the cost of any new item (not
replacement or upgrading of an existing item) which, by standard accounting
principles, should be capitalized (except as provided above or in subparagraph
4.1(ii)(3) below); (d) any charge for depreciation or interest paid or incurred
by Landlord; (e) costs for soliciting tenants and leasing commissions; (f)
Taxes; (g) any charge for Landlord's income tax, excess profit taxes, franchise
taxes or similar taxes on Landlord's business; (h) legal fees for the
negotiation or enforcement of leases; (i) cost of repair which has been
compensated by insurance held by Landlord; (j) costs of preparing tenant spaces
for leases; or (k) fees paid to affiliates of Landlord performing services to
the Building and the Corporate Center to the extent such fees exceed the amount
which would typically be charged by an independent third party on an arms length
basis for such services. If Landlord is not furnishing any particular work or
service (the cost of which, if performed by Landlord, would constitute an
Operating Expense) to a tenant who has undertaken to perform such work or
service in lieu of performance by Landlord, Operating Expenses shall
nevertheless be deemed to include the amount Landlord would reasonably have
incurred if Landlord had in fact performed the work or service at its expense.
The costs of electric consumption and water, sewer and other utility services to
the Demised Premises (including, without limitation, for HVAC usage) are not
included as Operating Expenses of the Building and shall be paid for by Tenant
separately in accordance with Paragraph 5 of this Lease. Notwithstanding the
foregoing, in the event the Landlord now, or in the future, employs oil or gas
to partially fuel the HVAC at the Building, the cost of such oil or gas shall be
6
<PAGE>
included in Operating Expenses.
(2) In determining Operating Expenses for any
year, if less than 95% of the rentable square feet of the Building shall have
been occupied by tenants at any time during such year, Operating Expenses shall
be deemed for such year to be an amount equal to the like expenses which
Landlord reasonably determines would normally be incurred had such occupancy
been 95% throughout such year. In no event shall the total of Taxes and
Operating Expenses for any year be deemed to be less than the Base Amount for
Taxes and Operating Expenses.
(3) In the event Landlord shall make a capital
expenditure for an "Essential Capital Improvement, as hereinafter defined in
this subsection (3), during any year, the annual amortization of such
expenditure (determined by dividing the amount of the expenditure by the useful
life of the improvement, but in no event longer than five years), plus any
reasonable interest or financing charges thereon (or, if such improvements are
funded from reserves, a reasonable sum imputed in lieu of such financing
charges), shall be deemed an Operating Expense for each year of such period. As
used herein, an "Essential Capital Improvement" means any of the following:
(A) a labor saving device, energy saving device or other installation,
improvement, upgrading or replacement which reduces or is intended to reduce
Operating Expenses as referred to above, whether or not voluntary or a
Governmental Requirement; or (B) an installation, improvement, alteration or
removal of any improvements including architectural or communication barriers
which are made to the Building by reason of any Governmental Requirement whether
or not such improvements are structural in nature and whether or not such
Governmental Requirement either existed or was required of the Landlord on the
date of execution of this Lease, if such Governmental Requirement is or will be
applicable generally to similar suburban office buildings in the vicinity of
Radnor Township; or (C) an installation or improvement which directly enhances
the safety of occupants or tenants in the Building generally, whether or not
voluntary or a Governmental Requirement (as, for example, but without
limitation, for general safety, fire safety or security).
(iii) "Governmental Requirements" shall mean all
-------------------------
applicable requirements under any federal, state or local statutes, rules,
regulations, ordinances, or other requirements of any duly constituted public
authority having jurisdiction over the Building (including, without limitation,
the Demised Premises) including, but not limited to, requirements under
applicable Radnor Township building, zoning and fire codes and federal, state
and local requirements and regulations governing accessibility by persons with
physical disabilities.
(iv) "Base Amount for Taxes and Operating Expenses" shall
--------------------------------------------
mean the total of Taxes and Operating Expenses allocable and attributable to
calendar year 1996 for the Building. The Base Amount for Operating Expenses
shall be calculated on the basis of the Building being 95% occupied in
accordance with Paragraph 4.1(ii)(2) hereof. The Base Amount for Taxes and
Operating Expenses shall be adjusted for the calendar year above stated to
adjust for average and reasonable allowances for on-going repairs and
maintenance and to exclude from the Base Amount
7
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extraordinary items of Taxes and/or Operating Expenses incurred in such calendar
year.
(v) "Tenant's Proportionate Share" shall be six and 6824/10000
----------------------------
percent (6.6824%). This is equal to the ratio of the rentable square feet of the
Demised Premises, as set forth above, to the total rentable square feet of space
in the Building.
(vi) "Tenant's Share of Taxes and Operating Expenses" shall mean,
----------------------------------------------
with respect to any calendar year, the product of (A) Tenant's Proportionate
Share, multiplied by, (B) the amount, if any, by which the total of Taxes and
Operating Expenses for such calendar year exceeds the Base Amount for Taxes and
Operating Expenses.
(vii) "Tenant's Estimated Share" shall mean, with respect to any
------------------------
calendar year, the product of (A) Tenant's Proportionate Share, multiplied by
(B) the amount, if any, by which landlord's good faith estimate of the total of
Taxes and Operating Expenses for such calendar year exceeds the Base Amount for
Taxes and Operating Expenses.
(viii) "Declaration" shall mean the Declaration of Radnor Corporate
-----------
Center Covenants, Restrictions and Easements, together with all existing or
future amendments, addenda and supplements thereto, executed by Landlord (or
Landlord's predecessor in title to the Corporate Center) and placed of record,
submitting the Corporate Center or portion thereof to system of reciprocal
easements, restrictions, benefits and burdens for the use and maintenance
thereof by owners and tenants, and to which all such owners and tenants shall be
subject.
4.2. General Allocation Procedures. Landlord and Tenant acknowledge the
-----------------------------
following:
(i) To the extent practicable and known exactly, all Taxes and
Operating Expenses will be accounted for and attributed separately for the
Building and for the four other office buildings which presently comprise the
Corporate Center (the "Other Corporate Center Buildings"). To the extent
allocations of an item of Taxes or Operating Expenses in accordance with the
foregoing sentence is not practicable and known exactly, allocations will be
made between and among the Building and the Other Corporate Center Buildings
proportionately among all thereof (based upon the respective square footage of
each), or equally among all thereof, or in such other proportions as may
reasonably be determined by Landlord in the exercise of prudent management
practices.
(ii) Notwithstanding the foregoing, and to the extent deemed
reasonable by Landlord, all common area and other charges under and as permitted
by the Declaration will be charged and allocated among the Building, the Other
Corporate Center Buildings, and any other building, facility or property subject
to the Declaration, all in accordance with the terms and provisions of the
Declaration.
4.3. Tenant's Share of Taxes and Operating Expenses.
----------------------------------------------
8
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(i) For and with respect to each calendar year which occurs during
the term of this Lease (and any renewals or extensions thereof) there shall
accrue, as additional rent, Tenant's Share of Taxes and Operating Expenses,
appropriately prorated for any partial calendar year occurring with the term.
(ii) Landlord shall furnish to Tenant, on or before December 31 of
each calendar year during the term hereof, a statement for the next succeeding
calendar year setting forth Tenant's Estimated Share and the information on
which such estimate is based. On the first day of the new calendar year, Tenant
shall pay to Landlord, on account of Tenant's Estimated Share, an amount equal
to one-twelfth (1/12) of Tenant's Estimated Share, and on the first day of each
succeeding month up to and including the time that Tenant shall receive a new
statement of Tenant's Estimated Share, Tenant shall pay to Landlord, on account
of Tenant's Estimated Share, an amount equal to one-twelfth (1/12) of the then
applicable Tenant's Estimated Share.
(iii) Landlord shall furnish to Tenant, on or before April 30 of
each calendar year during the term hereof, a statement (the "Expense Statement")
prepared by Landlord or its agent or accountants setting forth for the previous
calendar year: (A) the actual amount of Taxes and Operating Expenses for the
previous calendar year; (B) the Base Amount for Taxes and Operating Expenses;
(C) the Tenant's Proportionate Share; (D) the Tenant's Share of Taxes and
Operating Expenses; (E) the Tenant's Estimated Share; and (F) a statement of the
amount due to Landlord, or to be credited to Tenant, as a final adjustment in
respect of Tenant's Share of Taxes and Operating Expenses for the previous
calendar year (the "Final Adjustment Amount"). The Final Adjustment Amount shall
be calculated by subtracting the Tenant's Estimated Share from the Tenant's
Share of Taxes and Operating Expenses. On the first day of the first calendar
month (but in no event sooner than ten [10] days) following delivery of the
Expense Statement to Tenant, Tenant shall pay to Landlord the Final Adjustment
Amount calculated as set forth in the Expense Statement. If the Final Adjustment
Amount is a negative quantity, then Landlord shall credit Tenant with the amount
thereof against the next payment of minimum rent due by Tenant hereunder or,
with respect to the last year of the term of this Lease, reimburse such amount
to Tenant. In no event, however, shall Tenant be entitled to receive a credit
greater than the payments made by Tenant as payments of Tenant's Estimated Share
for the calendar year to which the Final Adjustment Amount relates.
4.4 Disputes. The information set forth on all statements furnished to
--------
Tenant pursuant to this Paragraph 4, including each Expense Statement, and all
documents relating to Tenant's Estimated Share, Tenant's Share of Taxes and
Operating Expenses, the Final Adjustment Amount, and all supportive
documentation and calculations, shall be deemed approved by Tenant unless,
within sixty (60) days after submission to Tenant, Tenant shall notify Landlord
in writing that it disputes the correctness thereof, specifying in detail the
basis for such assertion. Pending the resolution of any dispute, however, Tenant
shall continue to make payments in accordance with the statement or information
as furnished.
4.5 Right to Audit. Tenant shall have the right (the "Audit Right"),
--------------
subject to
9
<PAGE>
the following terms and conditions:
(i) Tenant's audit shall be at its sole expense and at
reasonable times during normal business hours at Landlord's office in
Philadelphia, Pennsylvania, or at such other office location in or about
Philadelphia, Montgomery or Delaware County, Pennsylvania as Landlord may from
time to time determine. Tenant may audit (an "Audit") Landlord's books and
records relating to this Lease and the general management and operation of the
Building and the Corporate Center for any year or years during the Term, but
only one time with respect to any particular year. An Audit Right must be
exercised, if at all, on and subject to the following terms and conditions:
(a) an Audit Right must be exercised by Tenant, if at all, by notice (an "Audit
Notice") from Tenant to Landlord given on or prior to sixty (60) days following
the date of Tenant's receipt from Landlord of an Expense Statement for the year
for which the Audit is intended to be conducted (the "Audit Year") and ten (10)
days prior to the date Tenant wishes to conduct its Audit; (b) if the Audit
reveals, in the judgment of Tenant, an overcharge to Tenant with respect to
Taxes or Operating Expenses, as the case may be, for the given Audit Year (an
"Overcharge"), then Tenant will be required to give notice to Landlord of the
Overcharge, accompanied by a reasonably detailed explanation of and together
with reasonably detailed supporting data evidencing the basis on which the claim
of an Overcharge is made (an "Overcharge Notice"); (c) an Overcharge Notice must
be given, if at all, on or prior to sixty (60) days following the completion of
Tenant's Audit (but no more than one hundred fifty (150) days from the date
Tenant received its Expense Statement of actual Taxes or Operating Expenses, as
the case may be, for the Audit Year for which the Audit is being conducted); and
(d) in the event Tenant fails timely to give either an Audit Notice or an
Overcharge Notice in accordance with the foregoing, then Tenant thereafter will
be estopped from challenging the Expense Statement of actual Taxes or Operating
Expenses, as the case may be, for the then Audit Year.
(ii) Upon receipt of an Overcharge Notice, Landlord
shall either (a) notify Tenant in writing within thirty (30) days of receipt of
the Overcharge Notice, that it agrees with the determination set forth in the
Overcharge Notice and Landlord shall credit Tenant with the amount of such
overcharge against the next succeeding amount of Minimum and Additional Rent due
from Tenant, or (b) within thirty (30) days of receipt of the Overcharge Notice,
notify Tenant that it does not agree with the determination set forth in the
Overcharge Notice ("Landlord's Dispute Notice"). Landlord's failure to timely
provide a Landlord's Dispute Notice shall be treated as if Landlord provided a
Landlord's Dispute Notice. In the event Landlord provides Tenant with a
Landlord's Dispute Notice, then the Landlord shall select a consultant, who
shall be either a certified public accountant or such other financial consultant
as Landlord may deem appropriate ("Landlord's Consultant"), to review and
examine the Overcharge Notice. If Landlord's Consultant agrees with the
Overcharge Notice, Landlord shall be deemed to have agreed with the Overcharge
Notice as provided in clause (ii)(a) above. If Landlord's Consultant shall not
agree with the Overcharge Notice, it shall either adopt the Landlord's Dispute
Notice or provide its own independent dispute notice (either of which if
supplied by Landlord's Consultant shall hereinafter be referred to as
"Landlord's Consultant's Dispute Notice"). Upon receipt of a
10
<PAGE>
Landlord's Consultant's Dispute Notice, Tenant may, within five (5) days, either
(aa) accept the contents of such Landlord's Consultant's Dispute Notice, in
which case the determination of Landlord's Consultant shall determine the
matter, or (bb) appoint its own independent consultant who shall be either a
certified public accountant or such other financial consultant as Tenant may
deem appropriate ("Tenant's Consultant") and who, together with Landlord's
Consultant, shall appoint an independent consultant who shall be a reputable
certified public accountant licensed to practice in the Commonwealth of
Pennsylvania who is experienced in the management and operation of commercial
real estate in the geographical location of the Building (the "Independent
Consultant"). The panel of Landlord's Consultant. Tenant's Consultant and the
Independent Consultant shall, within thirty (30) days after the appointment of
the Independent Consultant, produce a written accounting setting forth their
determination. The determination of the panel of consultants shall be final and
binding on Landlord and Tenant. Landlord and Tenant shall each bear the cost of
their respective consultants and shall share equally the cost of the Independent
Consultant.
(iii) In the event a determination of the panel of Landlord's
Consultant, Tenant's Consultant and the Independent Consultant, as set forth in
Paragraph 4.5 (ii) above, reveals that there has been an Overcharge, or in the
event Landlord agrees with Tenant's Overcharge Notice, as set forth in Paragraph
4.5 (ii) above, then, notwithstanding the terms of Paragraph 4.4 and this
Paragraph 4.5 of the Lease, Tenant shall be permitted to Audit the books and
records of Landlord for the two calendar years immediately prior to the year
covered by such Audit solely with respect to the item which generated
Overcharge.
4.6. Survival. Notwithstanding anything herein contained to the
--------
contrary, Tenant understands and agrees that additional rent for increases of
Taxes and Operating Expenses described in this Paragraph 4 are attributable to
and owing for a specific twelve (12) month period, and are generally determined
in arrears. Accordingly, Tenant agrees that, at any time following the
expiration of the term of this Lease, or after default by Tenant with respect to
this Lease, Landlord may bill Tenant for (i) the entire amount of accrued and
uncollected additional rent attributable to increases in Taxes and Operating
Expenses under this Paragraph 4, and (ii) any unpaid charges for usage, services
or other amounts with respect to any period during the term of this Lease; and
the amount of such bill shall be due and payable to Landlord within ten (10)
business days after rendering thereof.
5. Services. Landlord agrees that during the term of the Lease, Landlord
--------
shall provide services as set forth in Paragraph 5.
5.1. HVAC and Electricity. Landlord shall furnish (a) heat,
--------------------
ventilation and air conditioning (including the labor, maintenance and equipment
necessary to provide the same), (b) electricity and other utilities needed to
operate such systems and (c) electricity for lighting and general power for
office use, each of the foregoing to be paid for by Tenant as follows:
(i) Standard Usage: Business Hours. Tenant shall pay its pro
------------------------------
rata
11
<PAGE>
share (based upon Tenant's Proportionate Share, but subject to the last sentence
of this subparagraph) of the cost to the Building (including applicable sales or
use taxes) for the foregoing services during "Business Hours" (as hereinafter
defined) and for "Building Standard Consumption" (as hereinafter defined). Such
payment shall be made by Tenant within ten (10) days after submission by
Landlord of a statement to Tenant setting forth the amount due. "Business Hours"
shall mean Monday through Friday from 8:00 a.m. to 6:00 p.m. and on Saturday
from 8:00 a.m. to 1:00 p.m., Holidays (defined below) excepted. New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas, or any day
set aside to celebrate such holidays are "Holidays" under this Lease. "Building
Standard Consumption" shall mean the consumption necessary, in Landlord's
reasonable judgement, for use and comfortable occupancy of the Demised Premises
when occupied by the density of people for which the building standard system
was designed with occupants using Standard Office Equipment. "Standard Office
Equipment" shall mean all office equipment normally found in an office facility
but shall not include computer and communication systems, telephone switches and
conference or training rooms (or items similar thereto) which require Additional
Electric Equipment, as hereinafter defined in Paragraph 5.1(v) below, or
additional air conditioning service or systems. In determining Tenant's pro rata
share for the foregoing services for any period, the cost for the foregoing
services shall be deemed for such period to be an amount equal to the like
expenses which Landlord reasonably determines would normally be incurred had the
Building been fully occupied throughout such period.
(ii) Non-Standard Usage: After-Hours. Tenant shall pay the cost
-------------------------------
of supplying the Demised Premises with the foregoing services at times outside
of Business Hours or in amounts in excess of Building Standard Consumption, at
such rates as Landlord shall specify from time to time to cover all of the
estimated costs and expenses incurred by Landlord in connection with supplying
the Demised Premises with such service, including without limitation the costs
of labor and utilities associated with such service and including applicable
sales or use taxes thereon, such amounts to be paid by Tenant within ten (10)
days after submission by Landlord of a statement to Tenant setting forth the
amount due. With respect to heat, ventilation and air conditioning required by
Tenant outside of Business Hours, Tenant shall notify Landlord by 12:00 noon on
the day such after-hours use is desired, except if such use is desired for a
weekend, in which event Tenant shall notify Landlord no later than 12:00 noon on
the Friday immediately preceding such weekend.
(iii) Separate Metering: Survey. Landlord reserves the right, at
-------------------------
Tenant's sole cost if Tenant is believed to be an excess user of electricity or,
otherwise, at Landlord's sole cost, to determine Tenant's charge for electrical
usage by separate meter or electrical engineering survey. At any time after the
installation of separate metering for the Demised Premises (or any part
thereof), or the completion of such survey, Landlord shall furnish to Tenant a
statement setting forth the amount due for Tenant's electric usage (or the part
thereof that is so metered or subject to such survey), and the total amount set
forth in such statement shall be due and payable by Tenant within ten (10) days
after submission to Tenant by Landlord of such statement. In such case, Tenant
shall pay for such consumption based upon the average KWH rate paid by
12
<PAGE>
Landlord.
(iv) System Failure. Landlord shall not be responsible for any
--------------
failure or inadequacy of the air conditioning system if such failure or
inadequacy results from the occupancy of the Demised Premises by persons in
excess of the density anticipated on for which the system was designed, or if
Tenant uses the Demised Premises in a manner for which it was not designed, or
if Tenant installs or operates machines, appliances or equipment which exceed
the maximum wattage per square foot contemplated by, or generate more heat than
anticipated in, the design of the Demised Premises (as such design standards may
be set forth in Exhibit "F" attached hereto or otherwise established by Landlord
if not so set forth).
(v) Additional Electrical Equipment. Tenant will not install or
-------------------------------
use electrically-operated equipment in excess of the design capacity of the
Demised Premises (as such design standards may be set forth in Exhibit "F"
attached hereto or otherwise established by Landlord if not so set forth) and
Tenant will not install or operate in the Demised Premises any
electrically-operated equipment or machinery other than that commonly used in a
normal office operation without first obtaining the prior written consent of the
Landlord. Landlord may condition any consent required under this
Paragraph 5.1 (v) upon the installation of separate meters (and transformers or
electrical panels) for such equipment or machinery at Tenant's expense and the
payment by Tenant of additional rent as compensation for the additional
consumption of electricity occasioned by the operation of such additional
equipment or machinery, at the rates and in the manner set forth in
Paragraph 5.1 (ii) and (iii) above. Landlord shall replace, when and as
requested by Tenant (the cost of which replacement light bulbs and tubes, and
ballasts, plus the labor cost for such replacement, to be chargeable to Tenant)
light bulbs and tubes, and ballasts, within the Demised Premises which are
Building standard (but at Landlord's option such undertaking of Landlord shall
not include bulbs or tubes for any non-Building standard lighting, high hats, or
other specialty lighting of Tenant, which shall be and remain the responsibility
of Tenant).
(vi) Regulatory Compliance. The furnishing of the foregoing
---------------------
heating, ventilation, air conditioning and electricity services shall be subject
to any statute, ordinance, rule, regulation, resolution or recommendation for
energy conservation which may be promulgated by any governmental agency or
organization which Landlord shall be required to comply with or which Landlord
determines in good faith to comply with.
5.2 Water and Sewer. Furnish the Building with water (i) for
---------------
drinking, lavatory, toilet and sanitary sewer purposes drawn through fixtures
installed by Landlord, (ii) necessary for the operation of the Building's fire
safety devices, and (iii) if required by the Building's HVAC system, necessary
for the operation of such system. The cost of usage of such services
attributable to the Demised Premises shall be paid for by Tenant pursuant to a
statement furnished by Landlord to Tenant setting forth the amount due as a
result of such usage attributable to the Demised Premises, and the total amount
set forth in such statement shall be due and payable by Tenant within ten (10)
days after submission thereto by Landlord of such
13
<PAGE>
statement.
5.3. Elevator; Access. Provide passenger elevator service to the
----------------
Demised Premises during Business Hours, with one elevator subject to call at all
other times. Tenant and its employees and agents shall have access to the
Demised Premises at all times, subject to compliance with such security measures
as shall be in effect for the Building. Elevator services for freight shall be
supplied in common with service to other tenants and for other Building
requirements at reasonable times during Business Hours for routine deliveries in
the ordinary course of Tenant's business. Unusual or unusually large deliveries
requiring use of the freight elevators shall be scheduled in advance with
Landlord so as not to interfere with the operations of the Building or other
tenants. Freight elevator service of Business Hours shall be provided to Tenant
upon reasonable written advance notice, at charges equal to Landlord's estimated
cost for providing such service from time to time, which shall be payable by
Tenant to Landlord not later than ten (10) days after Landlord's bill therefor.
5.4. Janitorial. Provide janitorial service to the Demised Premises
----------
as specified on Exhibit "D" annexed hereto. Any and all additional or
specialized janitorial or trash removal service desired by Tenant (i) shall be
contracted for by Tenant directly with Landlord's janitorial agent and the cost
and payment thereof shall be and remain the sole responsibility of Tenant, or
(ii) at the option of Landlord, shall be contracted for by Landlord and paid for
by Tenant to Landlord within ten (10) days after the submission by Landlord of a
statement to Tenant setting forth the amount due. If Landlord shall from time to
time reasonably determine that the use of any cleaning service in the Demised
Premises, including without limitation, removal of refuse and rubbish from the
Demised Premises, is an amount greater than usually attendant upon the use of
such Demised Premises as offices, the reasonable cost of such additional
cleaning services shall be paid by Tenant to Landlord as additional rent, on
demand.
5.5. Security. Landlord provides a security card or code access
--------
systems for Tenant's convenience. Tenant and Tenant's employees, as well as
other tenants of the Building, will have access to the Building using such
access system. Landlord makes no representation that the access system or any
future system employed at the Building to monitor access to the Building outside
of Business Hours will prevent unauthorized access to the Building or the
Demised Premises, and Tenant acknowledges that no security guards are provided
by Landlord. Accordingly, Tenant agrees that Tenant shall be responsible for
security of the Demised Premises and the security and safety of Tenant's
employees, invitees, officers, directors, contractors, subcontractors and
agents. In furtherance of the foregoing, Landlord assumes no liability or
responsibility for Tenant's personal property whether such are located in the
Demised Premises or elsewhere in the Building or the Corporate Center. Tenant
further acknowledges that Landlord may (but shall have no obligation to) alter
current security measures in the Building, and Tenant agrees that it shall
cooperate fully, and shall cause its employees and invitees to cooperate fully,
with any reasonable requests of Landlord in connection with the implementation
of any new security procedures or other arrangements.
14
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5.6. Repairs. Make (i) all structural repairs to the Building and the
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Corporate Center, (ii) all repairs to the exterior windows and glass and all
repairs to the common areas of the Building and (iii) all repairs which may be
needed to the mechanical, electrical and plumbing systems in the Demised
Premises, excluding repairs to (or replacement of) any non-building standard
fixtures or other improvements in the Demised Premises installed by Tenant or
made by or at the request of Tenant and requiring unusual or special
maintenance. In the event that any repair is required by reason of the
negligence or abuse of Tenant or its agents, employees, invitees or of any other
person using the Demised Premises with Tenant's consent, express or implied,
Landlord may make such repair and add the cost thereof to the first installment
of rent which will thereafter become due, unless Landlord shall have actually
recovered such cost through insurance proceeds.
5.7. System Changes. Tenant shall not install any equipment of any
--------------
kind or nature whatsoever which would or might necessitate any changes,
replacement or additions to the water, plumbing, heating, air conditioning or
the electrical systems servicing the Demised Premises or any other portion of
the Building; nor install any plumbing fixtures in the Demised Premises; nor use
in excess of normal office use any of the utilities, the common areas of the
Building, the janitorial or trash removal services, or any other services or
portions of the Building without the prior written consent of the Landlord, and
in the event such consent is granted, the cost of any such installation,
replacements, changes, additions or excessive use shall be paid for by Tenant,
in advance in the case of any installations replacements and additions, and
promptly upon being billed therefor in the case of charges in excessive use.
5.8. Directory. Landlord shall maintain a directory of office tenants
---------
in the lobby area of the Building, on which shall be listed the name of Tenant.
In the event Landlord permits Tenant to add more names to the directory (which
Landlord may grant or deny in its sole discretion), Tenant shall pay the actual
cost of lobby directory signage over an allowance of one (1) directory space per
Tenant.
5.9. Limitation Regarding Services. It is understood that Landlord does
-----------------------------
not warrant that any of the services referred to in this Paragraph 5 will be
free from interruption from causes beyond the control of Landlord. Landlord
reserves the right, without any liability to Tenant, and without being in breach
of any covenant of this Lease, to interrupt or suspend service of any of the
heating, ventilating, air-conditioning, electric, sanitary, elevator or other
Building systems serving the Demised Premises, or the providing of any of the
other services required of Landlord under this Lease, whenever and for so long
as may be necessary by reason of accidents, emergencies, strikes or the making
of repairs or changes which Landlord is required by this Lease or by law to make
or in good faith deems advisable, or by reason of difficulty in securing proper
supplies of fuel, steam, water, electricity, labor or supplies, or by reason of
any other cause beyond Landlord's reasonable control, including without
limitation, mechanical failure and governmental restrictions on the use of
materials or the use of any of the Building systems. In each instance however,
Landlord shall exercise commercially reasonable diligence to eliminate the cause
of interruption and to effect restoration of service, and shall give Tenant
reasonable
15
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notice, when practicable, of the commencement and anticipated duration of such
interruption. Tenant shall not be entitled to any diminution or abatement of
rent or other compensation nor shall this Lease or any of the obligations of the
Tenant be affected or reduced by reason of the interruption, stoppage or
suspension of any of the Building systems or services arising out of the causes
set forth in this Paragraph except that if because of any failure to furnish
electric or HVAC service, or elevator access, to the Demised Premises for five
(5) consecutive business days, and provided that such interference is not caused
by Force Majeure (as hereinafter defined) or Tenant's negligence, and further
provided that Tenant is unable to and does not use the Demised Premises or a
portion thereof for Tenant's use solely as a result of such interruption, then
Minimum Rent shall abate on a per diem basis form the third day of such
interruption through the date on which Tenant is able to use the Demised
Premises or a portion thereof for Tenant's permitted use hereunder. Force
Majeure shall mean any delay in performance hereunder caused any by event
beyond the reasonable control of Landlord including, without limitation, labor
disputes, civil commotion, war, war-like operations, invasion, rebellion,
hostilities, military power, sabotage, governmental regulations or controls,
fire or other casualty, inability to obtain material or services, or acts of
God.
6. Care of Demised Premises. Tenant agrees, on behalf of itself, its
------------------------
employees and agents, that during the term of this Lease, Tenant shall comply
with the covenants and conditions set forth in this Paragraph 6.
6.1. Insurance and Governmental Requirements. At all times during
---------------------------------------
the term of this Lease and any extension of renewal hereof, Tenant, at its cost,
shall comply with and shall promptly correct any violations of, (i) all
applicable requirements of any insurance underwriters, or (ii) any Governmental
Requirements relating to Tenant's use and occupancy of the Demised Premises.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all loss, damages, claims of third parties, cost of correction, expenses
(including reasonable attorney's fees and cost of suit or administrative
proceedings) or fines arising out of or in connection with Tenant's failure to
comply with Governmental Requirements. The provisions of this Paragraph 6.1
shall survive the expiration or termination of this Lease.
6.2. Access. Tenant shall give Landlord, its agents and employees,
------
access to the Demised Premises at all reasonable times upon at least twenty four
(24) hours notice, and at any time in the case of an emergency, without charge
or diminution of rent, to enable Landlord (i) to examine the same and to make
such repairs, additions and alterations as Landlord may be permitted to make
hereunder or as Landlord may deem advisable for the preservation of the
integrity, safety and good order of the Building or any part thereof; and (ii)
upon reasonable notice, to show the Demised Premises to prospective mortgagees
and purchasers and to prospective tenants. If representatives of Tenant shall
not be present on the Demised Premises to permit entry upon the Demised Premises
by Landlord or its agents or employees, at any time when such entry by Landlord
is necessary or permitted hereunder, Landlord may enter the Demised Premises by
means of a master key (or, in the event of any emergency, forcibly) without any
liability whatsoever to Tenant (except for property damage caused by Landlord's
16
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negligence and provided Tenant is unable to collect for such damage from
Tenant's insurance carrier) and without such entry constituting an eviction of
Tenant or termination of this Lease. Landlord shall not be liable by reason of
any injury to or interference with Tenant or Tenant's business arising from the
making of any repairs, alterations, additions or improvements in or to the
Demised Premises or the Building or to any appurtenance or any equipment
therein. Landlord shall cooperate with Tenant not to interfere unreasonably
with Tenant's business during such entry and shall not store material or
equipment within the Demised Premises.
6.3. Condition. Tenant shall keep the Demised Premises and all
---------
improvements, installations and systems therein in good order and condition,
reasonable wear and tear excepted and replace all glass broken by Tenant, its
agents, employees or invitees, with glass of the same quality as that broken,
except for glass broken by fire and extended coverage type risks, and Tenant
shall commit no waste in the Demised Premises.
6.4. Surrender. Upon the termination of this Lease in any manner
---------
whatsoever, Tenant shall remove Tenant's goods and effects and those of any
other person claiming under Tenant, and quit and deliver up the Demised Premises
to Landlord peaceably and quietly in as good order and condition as at the
inception of the term of this Lease or as the same hereafter may be improved by
Landlord or Tenant, reasonable use and wear thereof, damage from fire and other
insured casualty and repairs which are Landlord's obligation excepted. Goods
and effects not removed by Tenant at the termination of this Lease, however
terminated, shall be considered abandoned and Landlord may dispose of and/or
store the same as it deems expedient, the cost thereof to be charged to Tenant.
6.5. Signs. Tenant shall not place signs on or about any part of the
-----
Building, or on the outside of the Demised Premises or on the exterior doors,
windows or walls of the Demised Premises, except on doors and then only of a
type and with lettering and text approved by Landlord.
6.6. Care: Insurance. Tenant shall not overload, damage or deface
---------------
the Demised Premises or do any act which might make void or voidable any
insurance on the Demised Premises or the Building or which may render an
increased or extra premium payable for insurance (and without prejudice to any
right or remedy of Landlord regarding this subparagraph, Landlord shall have the
right to collect from Tenant, within ten (10) days of demand, any such increase
or extra premium).
6.7. Alterations: Additions. Tenant shall not make any alteration of
----------------------
or addition to the Demised Premises without the prior written approval of
Landlord (except for work of a decorative nature). Such approval shall not be
unreasonably delayed or conditioned withheld for nonstructural interior
alteration, provided that (i) no Building systems, structure, or areas outside
of the Demised Premises are affected by such proposed alteration, and (ii) if
the cost of the work is projected to exceed $5,000, reasonably detailed plans
and specifications for construction of the work, including but not limited to
any and all alterations having any impact
17
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on or affecting any electrical systems, plumbing, HVAC, sprinkler system and
interior walls and partitions, are furnished to Landlord in advance
commencement of any work. All such alterations and additions, as well as all
fixtures, equipment, improvements and appurtenances installed in and affixed to
the Demised Premises at the inception of this Lease term (but excluding Tenant's
trade fixtures and modular furniture systems) shall, upon installation, become
and remain the property of Landlord. All such alterations and additions shall be
maintained by Tenant in the same manner and order as Tenant is required to
maintain the Demised Premises generally and, provided Landlord so informs Tenant
at the time such alteration or addition is installed, upon termination of the
term hereof, shall be removed without damage to the Demised Premises upon
surrender. All alterations and additions by Tenant shall be performed in
accordance with the plans and specifications therefor submitted to and approved
by Landlord, to extent the same are required, in a good and workerlike manner
and in conformity with all Governmental Requirements. In addition, all such
alterations and additions shall be performed in strict compliance with the
requirements governing work by Tenant's contractors as set forth in Exhibit "F"
hereto.
6.8. Mechanics' Liens. Tenant, within fifteen (15) days after notice
----------------
from Landlord, (i) shall discharge (by bonding or otherwise) any mechanics' lien
for material or labor claimed to have been furnished to the Demised Premises on
Tenant's behalf (except for work contracted for by Landlord), (ii) shall deliver
to Landlord satisfactory evidence thereof, and (iii) shall indemnify and hold
harmless Landlord from any loss incurred in connection therewith.
6.9. Vending Machines. Tenant shall not install or authorize the
----------------
installation of any coin-operated vending machines within the Demised Premises,
except machines for the purpose of dispensing coffee, cold beverages, snack
foods and similar items to the employees of Tenant for consumption upon the
Demised Premises, the installation and continued maintenance and repair of which
shall be at the sole cost and expense of Tenant.
6.10. Rules and Regulations. Tenant shall observe the rules and
---------------------
regulations annexed hereto as Exhibit "E", as the same may form time to time be
amended by Landlord for the general safety, comfort and convenience of Landlord,
occupants and tenants of the Building. Landlord shall provide Tenant with
written notice of any change or amendment to the rules and regulations and
Landlord shall not enforce the rules and regulations in a discriminatory manner.
6.11. Environmental Compliance. Tenant will not manufacture, store,
------------------------
treat, dispose of, discharge, use, produce or transport "Waste" (as hereinafter
defined) at, from or within the Demised Premises or the Building, or otherwise
at, from or within the Corporate Center. "Waste" is defined as any hazardous or
radioactive material, polychlorinated biphenyls, friable asbestos or other
hazardous or medical waste substances as defined by the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, or by any
other applicable federal, state or local law, statute, rule, regulation or order
(including any Governmental Requirements) concerning environmental matters, and
all hydrocarbons and petroleum products (collectively, "Waste"). Tenant
covenants and agrees that Tenant will be and
18
<PAGE>
will remain in full compliance with all applicable Governmental Requirements
governing the use and occupancy of the Demised Premises, including, without
limitation, the manufacturing, storage, treatment, disposal, discharge, use,
production and transportation of Waste, and any Waste regulated under any
applicable Governmental Requirements. Notwithstanding the foregoing, Tenant may
use cleaning materials and office supplies in the ordinary course of Tenant's
business, in reasonable quantities and provided that such materials and supplies
are used, stored and disposed of in compliance with all applicable laws,
ordinances and regulations, as now or hereafter enacted.
7. Subletting and Assigning.
------------------------
7.1. General Restrictions. Tenant shall not assign this Lease or sublet
--------------------
all or any portion of the Demised Premises without first obtaining
Landlord's prior written consent thereto, which shall not be unreasonably
withheld, conditioned or delayed. By way of example and without limitation, the
parties agree it shall be reasonable for Landlord to withhold consent: (1) if
the proposed use within the Demised Premises conflicts with the use provision
set forth herein or is incompatible or unacceptable with the character, use and
image of the Building or the tenancy at the Building in Landlord's reasonable
opinion, or conflicts with exclusive use rights granted to another tenant of
the Building; (2) if the business reputation and experience of the proposed
transferee is not sufficient, in Landlord's reasonable opinion, for it to
operate a business of the type and quality permitted under this Lease; (3) if
the document creating the sublease or assignment is not reasonably acceptable to
Landlord and the nature of the fixtures and improvements to be performed or
installed are not consistent with general office use and the terms of this
Lease; or (4) if the proposed transferee is an existing tenant of Landlord
(except if Landlord has no other comparable or available space) or is
negotiating with Landlord for other space in the Building; or (5) if the
proposed user is a governmental or quasi-governmental agency; or (6) if the
proposed transferee will be using or if Landlord has reasonable cause to believe
that it is likely to use hazardous materials at the Demised Premises other than
hazardous Materials normally used in general office operations in compliance
with applicable Governmental Requirements; or (7) if Landlord has reasonable
cause to believe that the proposed transferee's assets, business or inventory
would be subject to seizure or forfeiture under any laws related to criminal or
illegal activity; or (8) if the parking requirements of the proposed transferee
exceed the parking requirement of Tenant as contemplated by this Lease. If
Landlord consents to an assignment or subletting, such consent, if given, will
not release Tenant from its obligations hereunder and will not be deemed a
consent to any further subletting or assignment. Tenant shall furnish to
Landlord, in connection with any request for such consent, reasonably detailed
information as to the identity and business history of the proposed assignee or
subtenant, as well as the proposed effective date of the assignment or sublease
and, prior to the execution thereof, a complete set of the final documentation
governing such assignment or subletting, all of which shall be satisfactory to
Landlord in form and substance. If Landlord consents to any such subletting or
assignment, the effectiveness thereof shall nevertheless be conditioned on the
following: (i) a fully executed copy of the documentation governing the sublease
or assignment, in the form and substance approved by Landlord shall be furnished
to Landlord; (ii)
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<PAGE>
any sublessee shall acknowledge that its rights arise through and are limited by
the Lease, and shall agree to comply with the Lease (with such exceptions as may
be consented to by Landlord), and (iii) any assignee shall assume in writing all
obligations of Tenant hereunder from and after the effective date of such
assignment or subletting. Tenant shall not advertise or otherwise disseminate
any information regarding the Building or the Demised Premises (including,
without limitation, rental rates or other terms upon which Tenant intends to
sublease or assign) to potential assignees and/or subtenants without in each
instance obtaining Landlord's prior written approval and consent which consent
shall not be unreasonable withheld or delayed, as to the specific form and
content of any such advertisement, statement, offering or other information
(including, without limitation, approval of rental rates and terms). Landlord's
acceptance of any name for listing on the Building Directory will not be deemed,
nor will it substitute for, Landlord's consent, as required by this Lease, to
any sublease, assignment, or other occupancy of the Demised Premises. Tenant
shall not mortgage or encumber this Lease.
7.2 Definitions. For purposes hereof, an assignment shall include any
-----------
direct or indirect transfer of fifty percent (50%) or more of the voting stock
of a corporate Tenant, or fifty percent (50%) or more of the interests in
partnership profits of a partnership Tenant in any single or related series of
transaction.
7.3 Procedure for Approval of Assignment or Sublease. If Tenant wishes
------------------------------------------------
to request Landlord's consent to sublease or assignment, Tenant shall submit
such request to Landlord, in writing, together with reasonably detailed
financial information and information as to the identity and business
information and information as to the identity and business history of the
proposed assignee or subtenant, as well as the proposed effective date of the
assignment or sublease. If Landlord fails to respond or request additional
information from tenant within fifteen (15) business days after receipt of
Tenant's proper request for approval, Tenant shall submit an additional request
to Landlord, setting forth the same information and further notifying Landlord
on such request that Landlord's failure to respond or request additional
information from Tenant within an additional five (5) business days shall be
deemed an approval. If Landlord fails to respond or request additional
information from Tenant within such additional five (5) business days, such
failure to so respond shall be deemed a consent to the sublease or assignment.
If Landlord requests additional information, Landlord shall respond within (10)
business days after receipt of all requested information, and Landlord's failure
to do so shall be deemed a consent to the sublease or assignment. If Landlord
consents to any such subletting or assignment, such consent shall be given on
Landlord's form of consent, which shall be executed by Tenant and the assignee
or subtenant of Tenant. It shall nevertheless be a condition to the deemed
effectiveness thereof that Landlord be furnished a fully executed copy of the
sublease or assignment, in form and substance approved by Landlord which
approval as to form and substance shall not be unreasonably withheld or delayed.
It shall not be unreasonable for Landlord to object to sublease provisions
which, inter alia, attempt to make Landlord a party to the sublease or impose
----- ----
any obligation on Landlord to the subtenant. If Landlord fails to respond (with
changes or approval) to a sublease or assignment document within five (5)
business days after receipt thereof, Landlord's approval of the document shall
be deemed given. If Landlord
20
<PAGE>
disapproves the document or requests changes, Landlord shall have five (5)
business days after each resubmission to approve or disapprove the document,
until the document is approved.
7.4. Conditions. In the event Landlord consents to an assignment or
----------
sublease of all or any portion of the Demised Premises. Landlord may condition
its consent, inter alia, on agreement by Tenant and its assignee and/or
----------
sublessee, as the case may be, that any rental payable under such assignment or
sublease arrangement which exceeds the amount of rental payable hereunder be
payable to Landlord (after deduction by Tenant for all reasonable and necessary
costs associated with such sublease or assignment) as consideration of the
granting of such consent. Nothing herein shall, however, be deemed to be a
consent by Landlord of any assignment or sublease or a waiver of Landlord's
right not to consent to any assignment or sublease. Any purported assignment or
subletting not in accordance with the terms hereof shall at Landlord's option,
to be exercised at any time after Landlord becomes aware of any such purported
assignment of subletting, be void, and may at Landlord's option be treated as an
event of default hereunder.
7.5. Special Conditions for Assignment or Subletting to Affiliates of
----------------------------------------------------------------
Tenant. Notwithstanding anything to the contrary set forth above, Tenant shall
- ------
be permitted without Landlord's prior written consent, and subject to the terms
of this subparagraph 7.4, to sublease all or a portion of the Demised Premises
to an "Affiliate" of Tenant. For purposes of this subparagraph, Affiliate shall
mean; (i) a corporation which owns fifty percent (50%) of the outstanding common
stock of Tenant, or (ii) a corporation which has fifty percent (50%) of its
common stock owned by Tenant, or (iii) a partnership which owns fifty percent
(50%) of the common stock of Tenant, or (iv) a partnership which has fifty
percent (50%) or more of its interest in partnership profits owned by Tenant,
(iv) or an entity which is the surviving entity in a merger pursuant to state
corporation or partnership law with the Tenant. The effectiveness of such
sublease to an Affiliate of Tenant shall nevertheless be conditioned on the
following: (a) Landlord receiving a fully executed copy of the full
documentation governing the sublease, in the form and substance approved by
Landlord, and (b) such sublessee shall acknowledge that its rights arise through
and are limited by the Lease, and shall agree to comply with the Lease (with
such exceptions as may be consented to by Landlord), and (c) a written
acknowledgment by Tenant evidencing that Tenant is not released from its
obligations under this Lease.
8. Fire or Other Casualty. In case of damage to the Demised Premises or
----------------------
those portions of the Building providing access or essential services thereto,
by fire or other casualty, Landlord shall, at its expense, cause the damage to
be repaired to a condition as nearly as practicable to that existing prior to
the damage, with reasonable speed and diligence, subject to delays which may
arise by reason of adjustment of loss under insurance policies, Governmental
Regulations, and for delays beyond the reasonable control of Landlord, including
a "force majeure". Landlord shall not, however, be obligated to repair, restore,
or rebuild any of Tenant's property or any alterations or additions made by
Tenant. To the extent and for the time that the Demised Premises are thereby
rendered untenantable, minimum rent and additional rent shall proportionately
abate. In the event the damage shall involve the Building generally and shall be
21
<PAGE>
so extensive that Landlord shall decide, at its sole discretion, not to repair
or rebuild the Building, or if the casualty shall not be of type insured
against under standard fire policies with extended type of coverage, or if the
holder of any mortgage, deed of trust or similar security interest covering the
Building shall not permit the application of adequate insurance proceeds for
repair or restoration, this Lease shall, at the sole option of Landlord,
exercisable by written notice to Tenant given within sixty (60) days after
Landlord is notified of the casualty and to the extent thereof, be terminated as
of a date specified in such notice (which shall not be more than ninety [90]
days thereafter), and the rent (taking into account any abatement as aforesaid)
shall be adjusted to the termination date (subject to any abatement thereof in
accordance with the preceding sentence) and Tenant shall thereupon promptly
vacate the Demised Premises. Notwithstanding the foregoing, Tenant shall be
permitted to terminate this Lease in the event the Demised Premises have been
rendered untenantable, inaccessible or unsafe for its intended use by Tenant,
and Landlord does not complete such restoration within two hundred (200) days
from the date of such casualty (by giving Landlord ten (10) days notice at the
expiration of such two hundred (200) day period).
9. Regarding Insurance and Liability.
---------------------------------
9.1 Damage in General. Tenant agrees that Landlord and its
-----------------
Building manager and their respective partners, officers, employees and agents
shall not be liable to Tenant, and Tenant hereby releases such parties, for any
personal injury or damage to or loss of personal property in the Demised
Premises from any cause whatsoever unless such damage, loss or injury is the
result of the gross negligence or willful misconduct of Landlord, its Building
manager, or their partners, officers, employees or agents, and Landlord and its
Building manager and their partners, officers or employees shall not be liable
to Tenant for any such damage or loss whether or not the result of their gross
negligence or willful misconduct to the extent Tenant is compensated therefor by
Tenant's insurance or would have been compensated therefor under commonly
available commercial policies, and Landlord shall in no event be liable to
Tenant for any consequential damages.
9.2 Indemnity. Tenant shall defend, indemnify and save harmless
---------
Landlord and its agents and employees against and from all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses, including
reasonable attorneys' fees, which may be imposed upon or incurred by or asserted
against Landlord and/or its agents or employees by reason of any of the
following which shall occur during the term of this Lease, or during any period
of time prior to the Commencement Date hereof or after the expiration date
hereof when Tenant may have been give access to or possession of all or any part
of the Demised Premises:
(i) any work or act done in, on or about the Demised
Premises or any part thereof at the direction of Tenant, its agents,
contractors, subcontractors, servants, employees, licensees or invitees, except
if such work or act is done or performed by Landlord or its agent or employees:
22
<PAGE>
(ii) any negligence or other wrongful act or omission on the
part of Tenant or any of its agents, contractors, subcontractors, servants,
employees, subtenants, licensees or invitees;
(iii) any accident, injury or damage to any person or property
occurring in, on or about the Demised Premises or any part thereof, unless
caused by the gross negligence or willful misconduct of Landlord, its employees
or agents; and
(iv) any failure on the part of Tenant to perform or comply
with any of the covenants, agreements, terms, provisions, conditions or
limitations contained in this Lease on its part to be performed or complied
with.
9.3 Tenant's Insurance. At all times during the term hereof, Tenant
------------------
shall maintain in full force and effect with respect to the Demised Premises and
Tenant's use thereof, comprehensive public liability insurance, naming
Landlord and Landlord's agent as an additional insured, covering injury to
persons in amounts at least equal to $2,000,000.00 per person and $2,000,000.00
per accident, and damage to property of at least $500,000.00. Each such policy
shall provide that it shall not be cancelable without at least thirty (30) days
prior written notice to Landlord and to any mortgagee named in an endorsement
thereto and shall be issued by an insurer and in a form reasonably satisfactory
to Landlord. Tenant shall lodge with Landlord duplicate originals or
certificates of such insurance, in a form reasonably acceptable to Landlord, at
or prior to the commencement date of the term hereof, together with evidence of
paid-up premiums, and shall lodge with Landlord renewals thereof at least
fifteen (15) days prior to expiration. In addition to the foregoing, Tenant
shall also be responsible, at Tenant's own cost, to keep and maintain (i)
insurance in respect of and covering Tenant's own furniture, furnishings,
equipment and other personal property, all insured for the replacement cost
thereof, against all risks and hazards, including but not limited to sprinkler
and leakage damage, and theft, and (ii) workers' compensation insurance with
respect to and covering all employees of Tenant. Tenant shall also carry, at
Tenant's own cost and expense, such other insurance, in amounts and for
coverages and on such other terms as Landlord may from time to time deem
commercially reasonable and appropriate provided such additional insurance is
required by Landlord's mortgagee. Except to the extent caused by the gross
negligence or intentional misconduct of Landlord, Tenant assumes all risk of
loss of any or all of its personal property.
9.4 Waiver of Subrogation. Each party hereto hereby waives any and
---------------------
every claim which arises or which may arise in its favor and against the other
party hereto during the term of this Lease or any extension or renewal thereof
for any and all loss of, or damage to, any or its property located within or
upon or constituting a part of the Building, to the extent that such loss or
damage is recovered under an insurance policy or policies and to the extent
such policy or policies contain provisions permitting such waiver of claims.
Each party agrees to request its insurers to issue policies containing such
provisions and if any extra premium is payable therefor, the party which would
benefit from the provision shall have the option to pay such additional premium
in order to obtain such benefit.
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<PAGE>
9.5 Limitation on Personal Liability. Anything in this Lease, either
--------------------------------
expressed or implied, to the contrary notwithstanding, Tenant acknowledges and
agrees that each of the covenants, undertakings and agreements herein made on
the part of Landlord, while in form purporting to be covenants, undertakings and
agreements of Landlord, are, nevertheless, made and intended not as personal
covenants, undertakings and agreements of Landlord, or for the purpose of
binding Landlord personally or the assets of Landlord, except Landlord's
interest in the Building; and that no personal liability or personal
responsibility is assumed by, nor shall at any time be asserted or enforceable
against Landlord, any partner of Landlord, any parent, subsidiary or partner of
Landlord or any partner of Landlord, or any of their respective heirs, personal
representatives, successors and assigns, or officers or employees on account of
this Lease or on account of any covenant, undertaking or agreement of Landlord
in this Lease contained, all such personal liability and personal
responsibility, if any, being expressly waived and released by Tenant.
9.6 Successors in Interest to Landlord Mortgagees. The term
---------------------------------------------
"Landlord" as used in this Lease means the fee owner of the Building, or, if
different, the party holding and exercising the right, as against all others
(except space tenants of the Building) to possession of the entire Building.
Landlord as above-named represents that it is the holder of such rights as of
the date hereof. In the event of the voluntary or involuntary transfer of such
ownership or right to a successor-in-interest of Landlord, Landlord shall be
freed and relieved of all liability and obligation hereunder which shall
thereafter accrue and Tenant shall look solely to such successor-in-interest for
the performance of the covenants and obligations of the Landlord hereunder which
shall thereafter accrue. The liability of any such successor in interest to
Landlord under or with respect to this Lease shall be strictly limited to and
enforceable only out of its or their interest in the Building and Land, and
shall not be enforceable out of any other assets. No mortgagee or ground lessor
which shall succeed to the interest of Landlord hereunder (either in terms of
ownership of possessory rights) shall: (i) be liable for any previous act or
omission of a prior Landlord, (ii) be subject to any rental offsets or defenses
against a prior Landlord, (iii) be bound by an amendment of this Lease made
without its written consent, (iv) be bound by payment by Tenant of rent in
advance in excess of one (1) month's rent, (v) be liable for any construction of
the improvements to be made to the Demised Premises, or for any allowance or
credit to Tenant for rent, construction costs or other expenses, or (vi) be
liable for any security deposit not actually received by it. Subject to the
foregoing, the provisions hereof shall be binding upon and inure to the benefit
of the successors and assigns of Landlord.
9.7 Survival. The provisions of this Paragraph 9 shall survive
--------
termination of this Lease.
10. Eminent Domain. If the whole or a substantial part of the Building
--------------
shall be taken or condemned for public or quasi-public use under any statute or
by right of eminent domain or private purchase in lieu thereof by any competent
authority, Tenant shall have no claim against Landlord and shall not have any
claim or right to any portion of the amount that may be awarded as damages or
paid as a result of any such condemnation or purchase; and all
24
<PAGE>
right of the Tenant to damages therefor are hereby assigned by Tenant to
Landlord. The foregoing shall not, however, deprive Tenant of any separate award
for moving expenses, business dislocation damages or for any other award which
would not reduce the award payable to Landlord. Upon the date the right to
possession shall vest in the condemning authority, this Lease shall, at the
option of Landlord or (only in the case of condemnation or taking of the entire
Building or such partial taking as results in the untenantability of the Demised
Premises) at the option of Tenant, cease and terminate with rent adjusted to
such date and Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease.
11. Insolvency. Each of the following shall constitute an event of
----------
default by Tenant under this Lease, upon the occurrence of any such event of
default Landlord shall have, without need of any notice, the rights and remedies
enunciated in Paragraph 13 of this Lease for events of default hereunder:
(i) the commencement of levy, execution or attachment proceedings against
Tenant, or any of the assets of Tenant, or the application for or appointment of
a liquidator, receiver, custodian, sequester, conservator, trustee, or other
similar judicial officer; or (ii) the insolvency, under either the bankruptcy or
equity definition, of Tenant or (iii) the assignment for the benefit of
creditors, or the admission in writing of an inability to pay debts generally as
they become due, or the ordering of the winding-up or liquidation of the affairs
of Tenant; or (iv) the commencement of a case by or against Tenant under any
insolvency, bankruptcy, creditor adjustment, debtor rehabilitation or similar
laws, state or federal, or the determination by any of them to request relief
under any insolvency, bankruptcy, creditor adjustment, debtor rehabilitation or
similar proceeding, state or federal, including, without limitation, the consent
by Tenant to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequester or similar official for it or for any of
its property or assets (unless, in the case of involuntary proceedings, the same
shall be dismissed within sixty [60] days after institution).
12. Default.
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12.1. Events of Default. If Tenant shall fail to take possession
-----------------
of the Demised Premises on the Commencement Date, or if Tenant fails to pay rent
or any other sums payable to Landlord hereunder when due and such default shall
continue for ten (10) days after it is due, or if Tenant shall fail to perform
or observe any of the other covenants, terms or conditions contained in this
lease within thirty (30) days (or such longer period as is reasonably required
to correct any such default, provided Tenant promptly commences and diligently
continues to effectuate a cure [but in any event within sixty (60) days]) after
written notice thereof by Landlord; provided, however, that Landlord shall not
-------- -------
be required to given any such notice more than twice within any twelve (12)
month period, and provided that the events hereinafter enumerated shall be
-------- ----
deemed events of default under this Lease without any notice, grace or cure
period: (a) if any of the events specified in Paragraph 11 occur, or (b) if
Tenant fails to take actual bona-fide occupancy of the Demised Premises or
manifests an intention not to take actual, bona-fide occupancy of the Demised
Premises, or if Tenant vacates or abandons the Demised Premises during the term
hereof or removes or manifests an intention to remove any of Tenant's goods or
25
<PAGE>
property therefrom other than in the ordinary and usual course of Tenant's
business, then, and in any such cases (notwithstanding any former breach of
covenant or waiver thereof in a former instance) (each of the foregoing an
"Event of Default"), Landlord, in addition to all other rights and remedies
available to it by law or equity or by any other provisions hereof, may at any
time thereafter:
(i) upon three (3) days' notice to Tenant, declare to be
immediately due and payable, on account of the rent and other charges herein
reserved for the balance of the term of this Lease (taken without regard to any
early termination of such term on account of an Event of Default), a sum equal
to the Accelerated Rent Component (as hereinafter defined), in which event
Tenant shall remain liable to Landlord as hereinafter provided; and/or
(ii) Terminate this Lease on at least five (5) days' notice
to Tenant and, on the date specified in such notice, this Lease and the term
hereby demised and all rights of Tenant hereunder shall expire and terminate and
Tenant shall thereupon quit and surrender possession of the Demised Premises to
Landlord in the condition elsewhere herein required in which event Tenant shall
remain liable to Landlord as herein provided.
12.2. Accelerated Rent Component. For purposes hereof, the
--------------------------
"Accelerated Rent Component" shall mean the aggregate of:
(i) all rent and other charges, payments, costs and
expenses due from Tenant to Landlord and in arrears at the time of the election
of Landlord to recover the Accelerated Rent Component;
(ii) the present value of (using a discount rate equal to
2% less than the Prime Rate of Interest as published in the Wall Street Journal
at the time of such computation) the minimum rent reserved for the then entire
unexpired balance of the term of this Lease (taken without regard to any early
termination of the term by virtue of an Event of Default), plus all other
charges, payments, costs and expenses herein agreed to be paid by Tenant up to
the end of such term which shall be capable of precise determination at the time
of Landlord's election to recover the Accelerated Rent Component; and
(iii) Landlord's good faith estimate of all charges,
payments, costs and expenses herein agreed to be paid by tenant up to the end of
such term which shall not be capable of precise determination as aforesaid (and
for such purposes no estimate of any component of additional rent to accrue
pursuant to the provisions of Paragraph 4 hereof shall be less than the amount
which would be due if each such component continued at the hightest monthly rate
or amount in effect during the twelve [12] months immediately preceding the
Event of Default).
12.3. Re-entry. In any case in which this Lease shall have been
--------
terminated, or in any case in which Landlord shall have elected to recover the
Accelerated Rent Component and
26
<PAGE>
any portion of such sum shall remain unpaid, Landlord may, without further
notice, enter upon and repossess the Demised Premises, by force, summary
proceedings, ejectment or otherwise, and may dispossess Tenant and remove Tenant
and all other persons and property from the Demised Premises and may have, hold
and enjoy the Demised Premises and the rents and profits therefrom. Landlord
may, in its own name, as agent for Tenant, if this Lease has not been
terminated, or in its own behalf, if this Lease has been terminated, relet the
Demised Premises or any part thereof for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the term of this Lease) and on such terms, conditions and provisions
(which may include concessions or free rent) as Landlord in its sole reasonable
discretion may determine. Landlord may, in connection with any such reletting,
cause the Demised Premises to be redecorated, altered, divided, consolidated
with other space or otherwise changed or prepared for reletting. At Landlord's
option, such reletting shall or shall not be deemed a surrender and acceptance
of the Demised Premises.
12.4. Continuing Liability. Tenant shall, with respect to all
--------------------
periods of time up to and including the expiration of the term of this Lease (or
what would have been the expiration date in the absence of default or breach)
remain liable to Landlord as follows:
(i) In the event of termination of this Lease on account
of an Event of Default and provided Landlord does not elect to collect the
Accelerated Rent Component, Tenant shall remain liable to Landlord for damages
equal to the rent and other charges payable under this Lease by Tenant as if
this Lease were still in effect, less the net proceeds of any reletting after
deducting all costs incident thereto (including without limitation all
repossession costs, brokerage and management commission, operating and legal
expenses and fees, alteration costs [where appropriate, amortized or chargeable
only for the remaining term] and the reasonable costs of preparation for
reletting, and interest relating thereto) and, regardless of Landlord's election
to collect the Accelerated Rent Component, Tenant shall remain liable to
Landlord for any legal expenses and fees (as well as other costs attributable
solely to Tenant's default and which would not have been incurred by Landlord in
the normal course of business as a result of entering into a new lease
transaction with respect to the Demised Premises) to the extent such fees and
costs are not recovered by Landlord by virtue of payment by Tenant of the
Accelerated Rent Component (but without prejudice to the right of Landlord to
demand and receive the Accelerated Rent Component). Such costs or expenses
shall be payable to Landlord monthly upon presentation to Tenant of a bill for
the amount due.
(ii) In the event and so long as this Lease shall not have
been terminated after an Event of Default, the rent and all other charges
payable under this Lease shall be reduced by the net proceeds of any reletting
by Landlord (after deducting all reasonable costs incident thereto as above set
forth) and by any portion of the Accelerated Rent Component paid by Tenant to
Landlord, and any amount due to Landlord shall be payable monthly upon
presentation to Tenant of a bill for the amount due.
12.5. Credit. In the event Landlord, after an Event of Default,
------
shall recover the
27
<PAGE>
Accelerated Rent Component from Tenant and it shall be determined at the
expiration of the term of this Lease (taken without regard to early termination
for an Event of Default) that a credit is due Tenant because the net proceeds of
reletting, as aforesaid, plus the amounts paid to Landlord by Tenant exceed the
aggregate of rent and other charges accrued in favor of Landlord to the end of
such term, Landlord shall return such excess.
12.6. No Duty to Relet. Landlord shall in no event be responsible or
----------------
liable for any failure to relet the Demised Premises or any part thereof, or
for any failure to collect any rent due upon a reletting. Notwithstanding the
foregoing, Landlord agrees: (i) to add the Demised Premises to its inventory of
space available; (ii) not to withhold notice of the availability of the Demised
Premises to third parties; and (iii) to use commercially reasonable efforts to
relet the Demised Premises; provided, however, that Landlord shall not be
obligated to show or lease the Demised Premises prior to showing or leasing
other available space in the Building and Landlord shall incur no liability to
Tenant for preferentially showing or leasing other space in the Building.
12.7. Confession of Judgment. LANDLORD SHALL HAVE THE FOLLOWING RIGHTS
----------------------
TO CONFESS JUDGMENT AGAINST TENANT AND ALL PERSONS CLAIMING THROUGH TENANT, FOR
POSSESSION OF THE DEMISED PREMISES:
(i) WHEN THIS LEASE SHALL BE TERMINATED BY REASON OF A DEFAULT BY
TENANT OR ANY OTHER REASON WHATSOEVER, EITHER DURING THE ORIGINAL TERM OF THIS
LEASE OR ANY RENEWAL OR EXTENSION THEREOF, AND ALSO WHEN THE TERM HEREBY CREATED
OR ANY EXTENSION THEREOF SHALL HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANY ATTORNEY
TO APPEAR FOR TENANT IN ANY AND ALL SUITS OR ACTIONS WHICH MAY BE BROUGHT FOR
POSSESSION AND/OR EJECTMENT; AND AS ATTORNEY FOR TENANT TO CONFESS JUDGMENT IN
EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING UNDER TENANT FOR THE RECOVERY
BY LANDLORD OF POSSESSION OF THE DEMISED PREMISES, FOR WHICH THIS LEASE SHALL BE
LANDLORD'S SUFFICIENT WARRANT. UPON SUCH CONFESSION OF JUDGMENT FOR POSSESSION,
IF LANDLORD SO DESIRES, A WRIT OF EXECUTION OR OF POSSESSION MAY ISSUE
FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS WHATSOEVER. IF FOR ANY REASON
AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED, THE SAME SHALL BE DETERMINED AND
THE POSSESSION OF THE DEMISED PREMISES SHALL REMAIN IN OR BE RESTORED TO TENANT,
THEN LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT OR CONTINUING DEFAULT OR
DEFAULTS, OR AFTER EXPIRATION OF THE LEASE, OR UPON THE TERMINATION OF THIS
LEASE AS HEREINBEFORE SET FORTH, TO BRING ONE OR MORE FURTHER ACTIONS AS
HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE DEMISED PREMISES.
(ii) In any action of ejectment, Landlord shall cause to be filed
in such
28
<PAGE>
action an affidavit made by Landlord or someone acting for Landlord setting
forth the facts necessary to authorize the entry of judgment, of which facts
such affidavit shall be conclusive evidence. If a true copy of this Lease shall
be filed in such action (and the truth of the copy as asserted in the affidavit
of Landlord shall be sufficient evidence of same), it shall not be necessary to
file the original Lease as a warrant of attorney, any rule of court, custom or
practice to the contrary notwithstanding.
(iv) The right to enter judgment against Tenant and to enforce
all of the other provisions of this Lease herein provided for, at the option of
any assignee of this Lease, may be exercised by any assignee of Landlord's
right, title and interest in this Lease in Tenant's own name, notwithstanding
the fact that any or all assignments of such right, title and interest may not
be executed and/or witnessed in accordance with the Act of Assembly of May 28,
1715, 1 Sm. L. 94, and all supplements and amendments thereto that have been or
may hereafter be passed. Tenant hereby expressly waives the requirements of such
Act of Assembly and any and all laws regulating the manner and/or form in which
such assignments shall be executed and witnessed.
(v) Tenant acknowledges that it has been represented by
counsel in connection with the negotiation of this Lease, that it has read and
discussed with such counsel the provisions herein relating to confession of
judgement, and that it understands the nature and consequences of such
provisions.
12.8 Bankruptcy. Nothing contained in this Lease shall limit or
----------
prejudice the right of Landlord to prove for and obtain as damages incident to a
termination of this Lease, in any bankruptcy, reorganization or other court
proceedings, the maximum amount allowed by any statue or rule of law in effect
when such damages are to be proved.
12.9 Waiver of Defects. Tenants hereby waives all errors and
-----------------
defects of a procedural nature in any proceedings brought against it by Landlord
under this Lease. Tenant further waives the right to trial by jury and any
notices to quit as may be specified in the Landlord and Tenant Act of
Pennsylvania, Act of April 6, 1951 (68 P.S.C.A. Section 250.101 et seq.), as the
-------
same may have been or may hereafter be amended, and agrees that the notices
provided in this Lease shall be sufficient in any case where a longer period may
be statutorily specified.
12.10 Non-Waiver by Landlord. The failure of Landlord to insist in
----------------------
any one or more instances upon the strict performance of any one or more of the
agreements, terms, covenants, conditions or obligations of this Lease, or to
exercise any right, remedy or election herein contained, shall not be construed
as a waiver or relinquishment in the future of such performance or exercise, but
the same shall continue and remain in full force and effect with respect to any
subsequent breach, act or omission.
12.11 Partial Payment. No payment by Tenant or receipt by Landlord
---------------
of a
-29-
<PAGE>
lesser amount than the correct Minimum Rent or additional rent due hereunder
shall be deemed to be other than a payment on account, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment be
deemed to effect or evidence an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance or pursue any other remedy in this Lease or at law provided.
12.12. Overdue Payments. If rent or any other sum due from Tenant to
----------------
Landlord shall be overdue for more than five (5) days, it shall thereafter,
until paid, bear interest at the higher of (i) five percent (5%) above the prime
rate published in the Wall Street Journal, if available (and, if not available,
then such comparable substitute rate as may be selected by Landlord), from time
to time, and (ii) the rate of eighteen percent (18%) per annum (or, if lower,
the highest legal rate).
12.13. Cumulative Remedies. No right or remedy herein conferred upon or
-------------------
reserved to Landlord is intended to be exclusive of any other right or remedy
herein or by law provided, but each shall be cumulative and in addition to every
other right or remedy given herein or now or hereafter existing at law or in
equity or by statute.
13. Subordination
-------------
13.1. General. This Lease is and shall be subject and subordinate to
-------
all ground or underlying leases of the entire Building (or of the entire
Corporate Center) and to all mortgages, deeds of trust and similar security
documents which may now or hereafter be secured upon the Building (or upon the
Corporate Center), and to all renewals, modifications, consolidations,
replacements and extensions thereof. This clause shall be self-operative and no
further instrument of subordination shall be required by any lessor or
mortgagee, but in confirmation of such subordination, Tenant shall execute,
within ten (10) business days after request, any certificate that Landlord may
reasonably require acknowledging such subordination. Notwithstanding the
foregoing, the party holding the instrument to which this Lease is subordinate
shall have the right to recognize and preserve this Lease in the event of any
foreclosure sale or possessory action, and in such case, this Lease shall
continue in full force and effect at the option of the party holding the
superior lien and Tenant shall attorn to such party and shall execute,
acknowledge and deliver any instrument that has for its purpose and effect the
confirmation of such attornment. If Landlord shall so request, Tenant shall send
to any mortgagee or ground lessor of the Building designated by Landlord, a copy
of any notice given by Tenant to Landlord alleging a material breach by Landlord
in its obligations under this Lease. In the event Tenant exercises its Right of
First Offer with respect to both the First First Offer Space and the Second
First Offer Space (as hereinafter defined), Landlord shall exercise all
reasonable effort to obtain from its current mortgagee a Subordination, Non-
Disturbance and Attornment Agreement (an "SNDA"), in which Tenant shall join,
under which this Lease and the rights of Tenant hereunder shall not be affected
or modified by foreclosure or the exercise of any other right or remedy by the
mortgagee so long as Tenant shall not be in default under any of the provisions
of this Lease beyond any applicable period of grace, and under which Tenant
shall attorn to and recognize the
30
<PAGE>
mortgagee or any purchaser at foreclosure sale or other successor-in-interest to
the Landlord as Tenant's landlord hereunder.
13.2 Rights of Mortgagee. In the event of any act or omission
-------------------
of Landlord which would give Tenant the right, immediately or after lapse of a
period of time, to cancel or terminate this Lease, or to claim a partial or
total eviction, Tenant shall not exercise such right (i) until it has given
written notice of such act or omission to the holder of each such mortgage and
ground lease whose name and address shall previously have been furnished to
Tenant in writing, and (ii) until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice (which
reasonable period shall in no event be less than the period to which Landlord
would be entitled, under this Lease or otherwise, after similar notice, to
effect such remedy plus an additional period of time of thirty (30) days for a
monetary default, or for any other default, the number of days reasonably
required for the holder of each such mortgage and ground lease to obtain
possession of the Building and to cure such default (but in no event less than
an additional thirty (30) day period)).
13.3 Modifications. If, in connection with obtaining,
-------------
continuing or renewing financing for which the Building, Land or the Demised
Premises or any interest therein represents collateral in whole or in part, a
banking, insurance or other lender shall request reasonable modifications of
this Lease as a condition of such financing, Tenant will not unreasonably
withhold, delay, condition or defer its consent thereto, provided that such
-------- ----
modifications do not increase the monetary obligations of Tenant hereunder or
adversely affect to a material degree Tenant's leasehold interest hereby
created.
14. Notices. All notices and other communications hereunder, to be
-------
effective, must be in writing (whether or not a writing is expressly required
hereby), and must be either (i) hand delivered, or (ii) sent by a recognized
national overnight courier service, fees prepaid, or (iii) sent by United States
registered or certified mail, return receipt requested, postage prepaid, in all
of the foregoing cases to the following respective addresses:
14.1. If to Landlord:
--------------
Radnor Center Associates
c/o The Rubenstein Company
4100 One Commerce Square
2005 Market Street
Philadelphia, Pennsylvania 19103
Attention: Mark E. Rubenstein
14.2 If to Tenant:
------------
Prior to the Commencement Date:
------------------------------
31
<PAGE>
Mr. Michael T. Kennedy
Trinity Capital Partners
Suite 305
Chesterbrook Corporate Center
735 Chesterbrook Blvd.
Wayne, Pennsylvania 19087
Following the Commencement Date:
-------------------------------
Mr. Michael T. Kennedy
Trinity Capital Partners
Three Radnor Corporate Center
Radnor, Pennsylvania 19087
or at such other address or to the attention of such other person as either
party may hereafter give the other for such purpose. Notices will be deemed to
have been given (a) when so delivered (by hand delivery, courier service as
aforesaid), or (b) three days after being so mailed (by registered or certified
mail as aforesaid).
15. Holding Over. Should Tenant continue to occupy the Demised
-----------
Premises after expiration of the Term of this Lease or any renewal or renewals
thereof, or after a forfeiture or other termination thereof, such tenancy shall
(without limitation on any of Landlord's rights or remedies therefor) be one at
sufferance from month to month at a minimum monthly rent equal to one and one
half times the greater of (i) the minimum rent and additional rent payable for
the last month of the term of this Lease, or (ii) the fair market rental value
of the Demand Premises at the time of such holdover (including the appropriate
estimate of additional rent at that time) and, in addition, all other charges
payable with respect to such last month of this Lease and all damages suffered
or incurred by Landlord as a result of or arising from such holdover tenancy.
16. Reservations in Favor of Landlord. (i) All walls, windows and
---------------------------------
doors bounding the Demised Premises (including exterior Building walls, core
corridor walls and doors and any core corridor entrance), except the inside
surfaces thereof, (ii) any terraces or roofs adjacent to the Demised Premises,
and (iii) any space in or adjacent to the Demised Premises used for shafts,
pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other
Building facilities, and the use thereof, as well as reasonable access thereto
through the Demised Premises for the purposes of operation, maintenance,
decoration and repair, are reserved to Landlord.
17. Completion of Improvements: Delay in Possession.
------------------------------------------------
17.1. Landlord Improvements. Landlord, at Landlord's own cost,
---------------------
shall furnish, install and otherwise provide and be responsible for all
"Landlord Improvements" identified on Exhibit "F", and Landlord shall perform,
observe and complete its obligations with respect to Landlord Improvements, all
within the time periods therefor and all as more
32
<PAGE>
completely set forth herein and in Exhibit "F".
17.2. Tenant Improvements. Tenant, at Tenant's own cost, shall furnish,
-------------------
install and otherwise provide and be responsible for all "Tenant Improvements"
identified on Exhibit "F", and Tenant shall perform, observe and complete its
obligations with respect to Tenant Improvements, all within the time periods
therefor and all as more completely set forth herein and in Exhibit "F".
17.3. Performance of Landlord and Tenant Improvements. The responsibility
-----------------------------------------------
for costs, preparation of preliminary and final plans, working drawings and
specifications, bidding process, contracting, payment arrangements, and all
other undertakings with respect to the design and performance of Landlord
Improvements and Tenant Improvements, and the timing and mechanics thereof and
therefor, including Landlord's and Tenant's respective consent and approval
rights related thereto, and also including matters relating to the consequences
of delays and the meaning and definition of "Substantial Completion," are all as
set forth herein and in Exhibit "F".
17.4. Acceptance. Tenant represents that the Building, Land, and the
----------
Demised Premises, the street or streets, sidewalks, parking areas, curbs and
access ways adjoining them, and the present uses and non-uses thereof, have been
examined by Tenant, and Tenant accepts them in the condition or state in which
they now are, or any of them now is, without relying on any representation,
covenant or warranty, express or implied, by Landlord, except as may be
expressly contained herein with respect to Landlord Improvements to be
constructed in the Demised Premises and subject to any latent defects. Tenant's
occupancy of the Demised Premises shall constitute acceptance of the Landlord
Improvements, subject to any punchlist items which Landlord has the obligation
hereunder to complete. The provisions of this paragraph shall survive the
termination of this Lease.
17.5. Delay in Possession. If Landlord shall be unable to deliver
-------------------
possession of the Demised Premises to Tenant on the date specified for
commencement of the term hereof (i) because a certificate of occupancy has not
been procured, or (ii) because of the holding over or retention of possession of
any tenant or occupant, or (iii) if repairs, improvements or decoration of the
Demised Premises, or of the Building, are not completed, or (iv) because of the
operation of a "force majeure" (which shall mean any delay, in performance
hereunder caused by any event beyond the control of Landlord including without
limitation, labor disputes, civil commotion, war, war-like operations, invasion,
rebellion, hostilities, military power, sabotage, governmental regulations or
controls, fire or other casualty, inability to obtain material or services or
acts of God), or (v) for any reason identified in Exhibit "F" attached hereto,
or for any other reason, then in any such case Landlord shall not be subject to
any liability to Tenant. Under such circumstances, except as set forth in
Exhibit "F" to this Lease relating to delays resulting from actions or omissions
by Tenant, the rent reserved and covenanted to be paid herein shall not commence
until possession of the Demised Premises is given or the Demised Premises are
available for occupancy by Tenant, and no such failure to give possession shall
in any other
33
<PAGE>
respect affect the validity of this Lease or any obligation of the Tenant
hereunder (except as to the date of commencement of accrual of rent).
Notwithstanding the foregoing, in the event the Demised Premises are not
Substantially Complete by September 15, 1996, Tenant may, upon five (5) days
written notice to Landlord, terminate this Lease and thereafter this Lease shall
be null and void and of no further force or effect.
18. Landlord's Reliance. Landlord has executed the Lease in reliance upon
-------------------
certain financial information which has been submitted by Tenant to Landlord
prior to the execution of the Lease (the "Financial Information"). From time to
time, upon five (5) business days written request by Landlord, Tenant will
submit to Landlord current financial information, in detail reasonably
satisfactory to Landlord, in order for Landlord to properly determine Tenant's
then financial condition. As a material inducement to Landlord to enter into
this Lease, Tenant (and each party executing this Lease on behalf of Tenant
individually) represents and warrants to Landlord that: (i) the Financial
Information is complete, true and correct and a presents a fair representation
of Tenant's financial condition at the time of signing of this Lease; (ii)
Tenant and the party executing on behalf of Tenant are fully and properly
authorized to execute and enter into this Lease on behalf of Tenant and to
deliver the same to Landlord; (iii) the execution, delivery and full performance
of this Lease by Tenant does not constitute a violation of any contract,
agreement, undertaking, judgement, law, decree, governmental or court order or
other restriction of any kind to which Tenant is a party or by which Tenant may
be bound; (iv) Tenant has executed this Lease free from fraud, undue influence,
duress, coercion or other defenses to the execution of this Lease; (v) this
Lease constitutes a valid and binding obligation of Tenant, enforceable against
Tenant in accordance with its terms; (vi) each individual executing this Lease
on behalf of Tenant is legally competent, has attained the age of majority and
has full capacity to enter into this Lease; and (vii) if Tenant is a corporation
or a partnership: (a) Tenant is duly organized, validly existing and in good
standing under the laws of the state of its organization and has full power and
authority to enter into this Lease, to perform its obligations under this Lease
in accordance with its terms, and to transact business in Pennsylvania; (b) the
execution of this Lease by the individual or individuals executing it on behalf
of Tenant, and the performance by Tenant of its obligations under this Lease,
have been duly authorized and approved by all necessary corporate or partnership
action, as the case may be; and (c) the execution, delivery and performance of
this Lease by Tenant is not in conflict with Tenant's bylaws or articles of
incorporation, agreement of partnership, or other charters, agreements, rules or
regulations governing Tenant's business as any of the foregoing may have been
supplemented, modified, amended, or altered in any manner.
19. Prior Agreement Amendments. This Lease constitutes the entire agreement
--------------------------
between the parties relating to the subject matter contained herein. Neither
party hereto has made any representations or promises, except as contained
herein or in some further writing signed by the party making such representation
or promise, which, by its express terms, is intended to supplement the terms
hereof. Without limiting the foregoing, this Lease supersedes all prior
negotiations, agreements, informal brochures, letters, promotional information,
proposals, and other statements and materials made or furnished by Landlord or
its agents. No
34
<PAGE>
agreement hereinafter made shall be effective to change, modify, discharge,
waive obligations under, or effect an abandonment of this Lease, in whole or in
part, unless such agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge, waiver or abandonment is
sought. Notwithstanding the foregoing, no warranty, representation, covenant,
writing, document, instrument, amendment, modification, agreement or like
instrument shall be binding upon or enforceable against Landlord unless executed
by Landlord.
20. Captions. The captions of the paragraphs and subparagraphs in this
--------
Lease are inserted and included solely for convenience and shall not be
considered or given any effect in construing the provisions hereof.
21. Landlord's Right to Cure. Landlord may (but shall not be obligated to),
------------------------
on five (5) days' notice to Tenant (except that no notice need be given in case
of emergency), cure on behalf of Tenant any default hereunder by Tenant, and the
cost of such cure (including any attorney's fees incurred) shall be deemed
additional rent payable upon demand.
22. Estoppel Statement. Tenant shall from time to time, within ten (10)
------------------
days after request by Landlord, execute, acknowledge and deliver to Landlord, or
to any third party designated by Landlord, a statement certifying that this
Lease is unmodified and in full force and effect (or that the same is in full
force and effect as modified, listing any instruments of modification),
confirming the rents and other charges under this Lease and the dates to which
rent and other charges have been paid, and certifying whether or not, to the
best of Tenant's knowledge, Landlord is in default hereunder or whether Tenant
has any claims or demands against Landlord (and, if so, the default, claim
and/or demand shall be specified) and such other reasonable information as
Landlord shall require, in the form set forth in Exhibit "H" hereto or such
similar form as may be required by any subsequent mortgagee or third party. To
the extent such estoppel statement is not received from Tenant in a timely
manner in accordance with this paragraph, Landlord shall be entitled to furnish
to any third party to whom such estoppel statement would have been delivered
Landlord's good faith statement to the effect requested from Tenant, and Tenant
shall be bound by, and deemed to have delivered, such Landlord's estoppel
statement with respect to this Lease. Landlord shall, upon twenty (20) days
prior notice, and no more than one time during the term of this Lease, execute,
acknowledge and deliver to Tenant, or to any third party designated by Tenant, a
statement certifying that this Lease is unmodified and in full force and effect
(or that the same is in full force and effect as modified, listing any
instruments of modification), confirming the rents and other charges under this
Lease and the dates to which rent and other charges have been paid, and
certifying whether or not, to the best of Landlord's knowledge, Tenant is in
default hereunder or whether Landlord has any claims or demands against Tenant.
23. Relocation of Tenant. After the Commencement Date, Landlord, at its
--------------------
sole expense, upon not less than sixty (60) days prior written notice to Tenant
(the ""Relocation Notice"), may require Tenant to relocate from the Demised
Premises to other premises of
35
<PAGE>
comparable size within the Corporate Center in order to permit Landlord to
consolidate the Demised Premises with other adjoining space leased or to be
leased to another tenant in or coming into the Building; provided, however, that
-------- -------
in the event of delivery of any such Relocation Notice, Tenant, by written
notice to landlord given not later than thirty (30) days following Tenant's
receipt of the Relocation Notice, may elect not to relocate to such other
premises, and in lieu thereof, may terminate this Lease, in which case Tenant
shall vacate the Demised Premises thirty (30) days thereafter. In the event of
any such relocation, Landlord shall; (i) pay all the expenses of preparing and
decorating the new premises so that such premises will be substantially similar
to the Demised Premises; (ii) pay the expense of moving Tenant's furniture,
furnishings, equipment, files and other personal property to the new premises
(including the installation of Tenant's telephone lines and computer cables);
(iii) pay the reasonable costs of replacing existing stocks of Tenant's
letterhead, envelopes, billing statements and other stationery having Tenant's
address thereon; and (iv) place a temporary sign in the lobby of the Building
for thirty (30) days advising persons of Tenant's relocation. Use and occupancy
by Tenant of the new premises shall be under and pursuant to the same terms,
conditions and provisions of this Lease and Tenant shall execute any and all
amendments to this Lease as Landlord shall deem necessary to effectuate the
provisions of this paragraph. Landlord shall exercise its rights under this
paragraph reasonably and in good faith. Tenant shall have no obligation to move
into the new premises until they are substantially complete. If Tenant has
exercised both of the First Offer Options set forth herein, this provision shall
be deemed null and void and Landlord shall not have the further right to
relocate Tenant from the Demised Premises.
24. Broker. Each of Landlord and Tenant represents and warrants to the
------
other that it has not dealt with any broker or agent in the negotiation for or
the obtaining of this Lease, other than David Leeds, Jackson-Cross Company
("Agent"), and each agrees to indemnify, defend and hold the other harmless from
any and all cost or liability for compensation claimed by any such broker or
agent, other than Agent, employed or engaged by it or claiming to have been
employed or engaged by it. Agent is entitled to a leasing commission in
connection with the making of this Lease, and Landlord shall pay such commission
to Agent pursuant to a separate agreement between Landlord and Agent.
25. Miscellaneous.
-------------
25.1. Certain Interpretations. The word "Tenant" as used in this Lease
-----------------------
shall be construed to mean tenants in all cases whether there is more than one
tenant (and in such case the liability of such tenants shall be joint and
several), and the necessary grammatical changes required to make the provisions
hereof apply to corporations, partnerships or individuals, men or women, shall
in all cases be assumed as though in each case fully expressed. Each provision
hereof shall extend to and shall as the case may require, bind and inure to the
benefit of Tenant and its successors and assigns, provided that this Lease shall
not inure to the benefit of any assignee or successor of Tenant except upon the
express written consent of Landlord as herein provided.
36
<PAGE>
25.2 Partial Invalidity. If any of the provisions of this Lease,
------------------
or the application thereof to any person or circumstances, shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such provision or provisions to persons or circumstances other
than those as to whom or to which it is held invalid or unenforceable, shall
not be affected thereby, and every provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
25.3 Governing Law. This Lease shall be governed in all respects
-------------
by the laws of the Commonwealth of Pennsylvania.
26. Quiet Enjoyment. Upon payment by Tenant of the rent and other sums
---------------
provided herein and Tenant's observance and performance of the covenants, terms
and conditions of this Lease to be observed and performed by Tenant, Tenant
shall peaceably hold and quietly enjoy the Demised Premises for the term of this
Lease without hindrance or obstruction by Landlord or any other person claiming
by, through or under Landlord, subject to the terms and conditions of this
Lease, and to any mortgage or ground lease which is superior to this Lease.
27. Free Rent. As set forth in Exhibit "F" attached hereto, Landlord
---------
shall construct the Landlord Improvements at a price not to exceed the
Construction Allowance, as defined in Exhibit "F". In the event the cost to
construct the Landlord Improvements is less than the Construction Allowance,
Tenant shall be afforded a rent credit with respect to the next installment of
minimum rent to the extent of the Construction Allowance not spent by Landlord
to construct the Landlord Improvements up to the maximum amount of Seven
Thousand Nine Hundred Sixty Five and 00/100 Dollars ($7,965.00). Upon completion
of the Landlord Improvements, Landlord shall submit to Tenant invoices and bills
evidencing the cost of the Landlord Improvements and the amount of any overage.
28. Right of First Offer. Tenant is hereby granted the right and option
--------------------
(each, a "First Offer Option") to lease one or both of the adjacent two spaces
to the Demised Premises, the first space consisting of 5,384 rentable square
feet (the "First First Offer Space") and the second space consisting of 3,540
rentable square feet (the "Second First Offer Space") each as more fully
described on Exhibit "A" attached hereto, provided the First First Offer Space
and the Second First Offer Space is then available for lease and not leased or
subject to any renewal, expansion, first offer or other option heretofore given
or granted to any other person. The First Offer Options as aforesaid are hereby
granted to Tenant at all times during the initial term hereof, all on and
subject to the following terms and conditions.
28.1. Tenant's Notice. Tenant shall notify Landlord of its
---------------
desire to expand into the First First Offer Space and the Second First Offer
Space ( a "Tenant's Request"). With respect to the First First Offer Space, the
Tenant's Request must be provided on or before April 1, 2000.
28.2. Landlord's Notice. Within thirty (30) days of receipt of
-----------------
Tenant's
37
<PAGE>
Request and provided the First First Offer Space or the Second First Offer Space
(whichever is applicable to the particular Tenant Request. Landlord shall
notify Tenant in writing of such availability of the either, or both First Offer
Space ("Landlord's Notice"). Landlord's Notice shall contain the proposed terms
of a supplemental lease between Landlord and Tenant in respect of such space,
which terms shall include: (i) commencement date, (ii) minimum rent (and
increases in or adjustments of minimum rent), (iii) provisions relating to
additional rent (including Tenant's Proportionate Share of Taxes and the
increase in Operating Expenses and the Base Amount Operating Expenses), (iv)
construction allowances or other concessions, and (v) term. In respect of the
foregoing, Landlord's Notice (and the terms set forth therein) shall in all
cases provide for the following: (a) as to allowances, Tenant will be offered a
----------------
construction allowance in respect of any and all First Offer Space equal to (1)
the then current market amount of construction allowance for renewal tenants in
the Building, adjusted to reflect any differences in term with respect to a
proposed lease for such First Offer Space and the lease employed for such
comparison; (b) as to minimum rent, the minimum rent for the First Offer Space
------------------------------------
shall be the market rate for renewal tenants in the Building; and (c) as to
-----
term, the term for any First Offer Space shall commence on the date specified in
- ----
Landlord's Notice (the "First Offer Space Commencement Date") and shall expire
on the expiration date of this Lease.
28.3 Exercise. A First Offer Option must be exercised, if at all, on
--------
and subject to the following terms and conditions: (i) a First Offer Option must
be exercised by Tenant, if at all, by notice from Tenant to Landlord given not
later than ten (10) days following the date of Tenant's receipt of a Landlord's
Notice in respect thereof; (ii) at the time of exercising any First Offer
Option, this Lease shall be in full force and effect and there shall exist no
continuing Event of Default by Tenant; and (iii) Tenant must exercise its First
Offer Option with respect to all of the particular First Offer Space in question
and may not request only a portion of such First Offer Space.
28.4. Lease Terms. In the event a First Offer Option is effectively
-----------
exercised as aforesaid, all terms and conditions contained in the Lease shall
continue to apply in respect of the First Offer Space so taken, effective as of
the First Offer Space Commencement Date, on and subject to (and expressly
including) all of the terms and provisions set forth in the applicable
Landlord's Notice. All First Offer Space that is taken, in accordance with the
foregoing provisions of this Paragraph 28, shall become part of the Demised
Premises and included as such for all purposes of the Lease, and all First Offer
Space so taken shall be leased for the terms as set forth in Landlord's Notice.
If Tenant effectively exercises its First Offer Option as aforesaid, then
Landlord and Tenant shall promptly thereafter execute a supplement to this Lease
confirming such exercise and reflecting the terms and conditions set forth
herein and in the Landlord's Notice.
28.5 Failure to Exercise. In the event Tenant fails to exercise a
-------------------
First Offer Option in the manner and within the applicable time period therefor
set forth herein, such unexercised First Offer Option shall lapse and no longer
shall be of any force or effect and Landlord shall have the right to lease for a
period of one year following Landlord's Notice, any
38
<PAGE>
portion or all of the applicable First Offer Space that was the subject thereof
to others; provided, however,that if Landlord shall wish to lease any such First
Offer Space on terms more favorable to the proposed tenant than the terms
contained in the most recent Landlord's Notice with respect to such space, or if
Landlord intends or wishes to lease less than all of the First Offer Space,
Landlord shall first furnish to Tenant a revised Landlord's Notice reflecting
the revised terms or smaller square footage and Tenant may exercise its First
Offer Option subject to the requirements of Paragraph 28.2 except that the
period for the giving by Tenant of notice to Landlord in such case shall be five
(5) business days following the date for Tenant's receipt of the revised
Landlord's Notice.
29. Termination Option.
------------------
29.1. Grant of Option. Tenant shall have one (1) option (the
---------------
"Termination Option") to terminate this Lease (for all of the Demised Premises
which is the subject hereof), effective as of the last day of the sixtieth
(60th) month of the term of this Lease (excluding any renewals thereof) hereof
(the "Termination Date"). The Termination Option is granted on and subject to
the following terms and conditions:
(i) Notice. Tenant must give Landlord written notice of Tenant's
------
election to exercise the Termination Option, which notice is given not later
than twelve (12) months prior to the Termination Date and shall include a check
for all sums due hereunder at the time of such election (including particularly,
but without limitation, the Termination Fee hereinafter set forth); and
(ii) No Default. No Event of Default has occurred and is
----------
continuing and there exists no event which, except for the passage of time or
otherwise, would constitute an Event of Default either on the date that Tenant
exercises the Termination Option or up to, and on and as of, the Termination
Date; and
(iii) Termination Fee. Tenant shall pay to Landlord, concurrently
---------------
with Tenant's exercise of the Termination Option, a cash termination fee (the
"Termination Fee") in an amount equal to five (5) months of the then current
minimum rent due under this Lease as of the Termination Date plus the
unamortized amount as of the Termination Date of the Construction Allowance
provided to Tenant hereunder, plus the unamortized amount payable by Landlord to
Agent hereunder in respect of fees and commissions due Agent in respect of the
execution of this Lease, amortized at a eleven and one-half percent (11.50%)
annual interest rate over the term of this Lease excluding any renewals thereof)
of the Lease.
29.3 Terms. If Tenant timely and properly exercises the Termination
-----
Option: (i) all minimum rent and additional rent payable under this Lease shall
be paid through and apportioned as of the Termination Date (in addition to
payment by Tenant of the Termination Fee); (ii) neither party shall have any
rights, estates, liabilities or obligations under this Lease for the period
accruing after the Termination Date, except those which, by the provisions of
this
39
<PAGE>
Lease, expressly survive the expiration or termination of the term of this
Lease; (iii) Tenant shall surrender and vacate the Demised Premises and deliver
possession thereof to Landlord on or before the Termination Date in the
condition required under this Lease for surrender of the Demised Premises; and
(iv) Landlord and Tenant shall enter into a written agreement reflecting the
termination of this Lease upon the terms provided for herein, which agreement
shall be executed within thirty (30) days after Tenant exercises the Termination
Option. The failure of Tenant and Landlord enter into the agreement described in
this subparagraph (iv) shall not affect the enforceability of the termination of
the Lease.
29.4 Termination. The Termination Option shall automatically
-----------
terminate and become null and void upon the earlier to occur of: (i) the
termination of Tenant's right to possession of the Demised Premises; (ii) the
assignment by Tenant of this Lease, in whole or in part; (iii) the sublease by
Tenant of all or any part of the Demised Premises; and (iv) the failure of
Tenant to timely or properly exercise the Termination Option.
30. Confidentiality. TENANT ACKNOWLEDGES AND AGREES THAT THE TERMS OF
---------------
THIS LEASE AND THE NEGOTIATIONS WHICH LED TO THE EXECUTION OF THIS LEASE ARE
CONFIDENTIAL IN NATURE. TENANT COVENANTS THAT, EXCEPT AS MAY BE REQUIRED BY LAW
OR BY ANY LENDER IN CONNECTION WITH CURRENT OR PROPOSED FINANCING FOR TENANT,
TENANT SHALL NOT COMMUNICATE THE TERMS OR ANY OTHER ASPECT OF THIS TRANSACTION
WITH, AND WILL NOT DELIVER ALL OR ANY PORTION OF THIS LEASE TO, ANY PERSON OR
ENTITY OTHER THAN LANDLORD OR TENANT'S ATTORNEYS, ACCOUNTANTS AND OTHER
CONSULTANTS.
40
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have caused this Lease to be executed by their duly authorized
representatives the day and year first above written.
WITNESS: LANDLORD:
--------
RADNOR CENTER ASSOCIATES
By: TRC Realty, Inc.-RAD
General Partner
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ------------------------------ ------------------------------
Authorized Signature
WITNESS: TENANT:
------
WINCUP HOLDINGS, L.P.
By: Wincup Holdings, Inc.
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ------------------------------ ------------------------------
Authorized Signature
41
<PAGE>
EXHIBIT "A"
[FLOOR PLAN OF BUILDING THREE, THIRD FLOOR APPEARS HERE]
A-1
<PAGE>
EXHIBIT "B"
[MAP OF THE RADNOR CORPORATE CENTER APPEARS HERE]
B-1
<PAGE>
EXHIBIT "C"
CONFIRMATION OF LEASE TERM
--------------------------
THIS CONFIRMATION OF LEASE TERM is made this _____ day of _____, 19__, by
and between RADNOR CENTER ASSOCIATES, a Pennsylvania limited partnership
(hereinafter referred to as "Landlord"), and _____________________________,
a ________________________ corporation (hereinafter referred to as "Tenant").
RECITALS
--------
A. Under a certain Office Lease between Landlord and Tenant dated
_______________, 19__ (the "Lease"), Landlord leased to Tenant, and Tenant
leased from Landlord, certain Demised Premises more particularly identified
therein, consisting of approximately ___________ rentable square feet on the
_________ floor of the office building known as Building No. ___ of Radnor
Corporate Center, having an address of 100 Matsonford Road, Radnor Township,
Delaware County, Pennsylvania 19087. Capitalized terms, when used herein without
separate definition, will have the same respective meanings as in the Lease.
B. The Lease provides that the parties shall execute a confirmation of
certain information when the Commencement Date of the term of the Lease has been
determined.
CONFIRMATION
------------
NOW, THEREFORE, Landlord and Tenant hereby confirm and acknowledge the
following:
1. Term. The term of the Lease commenced on the _____ day of _____, 19__
----
(the "Commencement Date"), and shall continue until the _____ day of _____,
19__, unless sooner terminated as provided for in the Lease.
2. Demised Premises. Tenant acknowledges that it is in possession of the
----------------
Demised Premises; that rent as specified in the Lease began accruing from the
Commencement Date; that the tenant improvement work to be performed by Landlord
in respect of the Demised Premises has been completed; and that the Demised
Premises, and the tenant improvement work therein so completed, have been
accepted by Tenant as being in conformance with the terms of the Lease.
3. Lease in Effect. Landlord and Tenant each acknowledges that, as of the
---------------
date hereof, the Lease is in full force and effect and neither party is aware of
any default by the other thereunder.
C-1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Confirmation
of Lease Term to be executed the day and year first above written.
LANDLORD:
WITNESS: RADNOR CENTER ASSOCIATES
By: TRC Realty, Inc.-RAD
General Partner
- ----------------------- By:
----------------------
Authorized Signature
TENANT:
WITNESS: [------------------------]
- ----------------------- By:
----------------------
Authorized Signature
C-2
<PAGE>
EXHIBIT "D"
CLEANING SPECIFICATIONS/JANITORIAL SERVICES
------------------------------------------
================================================================================
A. GENERAL CLEANING
----------------
Nightly
-------
1. Empty and clean all waste receptacles and wash whenever necessary.
Remove waste to a designated central location for disposal.
2. Empty and damp wipe clean all ash trays and receptacles.
3. Clean cigarette urns and replace sand and/or water as necessary.
4. Vacuum all rugs and carpeted areas, moving light furniture and spot
clean when necessary.
5. Hand dust and wipe clean all exposed furniture tops, fixtures,
shelving, window sills and wash whenever necessary.
6. Dust all telephones as necessary.
7. All vinyl/asphalt floors or similar types of flooring (that may be
waxed or treated) to be swept using approved dust-down preparation.
8. All stone, ceramic, tile, marble, terrazzo and other untreated flooring
to be swept nightly using approved dust-down preparation; wash such
flooring once a month.
9. Remove all fingerprints, smudges and other marks from partitions and
doors.
10. Thoroughly clean all drinking fountains and water coolers.
11. Wipe clean all chrome, aluminum and other metal work.
12. Dust and/or clean all directory boards and display glass.
13. Dust and wipe clean elevator doors.
14. Interior of elevator cabs to be thoroughly cleaned, dusted, vacuumed
and walls freed.
D-1
<PAGE>
of fingerprints nightly.
15. Remove all gum and foreign matter on sight.
16. All lights will be turned off, and specified doors locked at the
completion of cleaning.
Weekly
------
1. All stairwell treads and landings to be swept and/or damp
mopped.
2. Dust all molding, ledges, chair rails, baseboards, trim and file
cabinet tops.
Monthly
-------
1. Vacuum upholstered furniture.
Quarterly
---------
1. Dust all pictures, frames, prints, and similar wall hangings not
reached in nightly cleaning.
2. Dust clean all pipes, ventilation and air conditioning louvers,
ducts, high moldings and other high areas not reached in
nightly cleaning.
3. Dust venetian blinds.
B. LAVATORIES
----------
1. Sweep and wash all lavatory floors with a disinfectant. Wash
and polish all mirrors, powder shelves, bright work and enamel
surfaces.
2. Wash and disinfect basins, urinals, and bowls using scouring
powder to remove stains, making certain to clean under sides
of rim of urinals and bowls.
3. Wash both sides of all toilet seats.
4. Hand dust and clean, washing where necessary, all partitions,
tile walls, dispensers and receptacles.
5. Replenish all supplies relating to the dispensing of
mechanically operated lavatory fixtures (toilet tissue, paper
towels, soap, etc.)
D-2
<PAGE>
6. All wastepaper cans and all receptacles are to be emptied. Remove waste
to a centrally designated area for disposal.
7. Scrub floors as necessary.
8. Wash and polish all wall tile and stall surfaces as often as necessary,
but in no event less than once a quarter.
C. BUILDING LOBBY AND PUBLIC AREAS
-------------------------------
Nightly
-------
1. Floor of entrance lobby to be swept and washed.
2. Vacuumed nightly.
D. WINDOW CLEANING
---------------
1. Clean all perimeter windows inside and out twice yearly.
2. Clean all partition glass once a month.
3. Public entrance doors and lobby glass to be cleaned daily.
D-3
<PAGE>
EXHIBIT "E"
RULES AND REGULATIONS
---------------------
================================================================================
DEFINITIONS
- -----------
1. Wherever in these Rules and Regulations the word "Tenant" is used, it shall
be taken to apply and include the Tenant and its agents, employees,
invitees, licenses, permitted subtenants and contractors, and is to be
deemed of such number and gender as the circumstances require. The words
"room", "space" or "Demised Premises" are to be taken to include the space
covered by the Lease. The word "Landlord" shall be taken to include the
employees and agents of Landlord.
CONSTRUCTION
- ------------
2. The streets, parking ares, sidewalks, entrances, lobbies, halls, passages,
elevators, stairways and other common areas provided by Landlord shall not
be obstructed by Tenant, or use by Tenant, its employees or invitees, for
any other purpose than for ingress and egress to and from the Demised
Premises. No furniture or other property shall be placed outside of the
Demised Premises or in any lobby or corridor.
WASHROOMS
- ---------
3. Toilet rooms, water-closets and other water apparatus shall not be used for
any purposes other than those for which they were constructed, and any
damage resulting to them from misuse or abuse by a Tenant or its agents,
employees or invitees, shall be borne by the Tenant.
INSURANCE REGULATIONS
- ---------------------
4. Tenant shall not do anything in the rooms, or bring or keep anything
therein, which will in anyway increase or tend to increase the risk of fire
or the rate of fire insurance, or which will conflict with the regulations
of the Fire Department or the fire laws, or with any insurance policy on
the Building or any part hereof, or with any law, ordinance, rule or
regulations affecting the occupancy and use of the rooms, now existing or
hereafter enacted or promulgated by a public authority or by the Board of
Fire Underwriters.
PUBLICITY
- ---------
5. Tenant shall not use the name of the Building in any way in connection with
its business
E-1
<PAGE>
except as the address thereof. Landlord shall also have the right to
prohibit any advertising by Tenant, which, in its opinion, tends to impair
the reputation of the Building or its desirability as a building for
offices, and upon written notice from Landlord, Tenant shall immediately
refrain from or discontinue such advertising.
MOVEMENT OF EQUIPMENT
- ---------------------
6. Landlord reserves the right to designate the time when, and the method
whereby, freight, small office equipment, furniture, safes and other like
articles may be brought into, moved or removed from the Building or rooms,
and to designate the location for temporary disposition of such items. In
no event shall any of the foregoing items be taken from Tenant's space for
the purposes of removing same from the Building without the express written
consent of both Landlord and Tenant.
REGULATION CHANGES
- ------------------
7. Landlord shall have the right to make such other and further reasonable
rules and regualtions and amend existing rules and regulations as in the
judgment of Landlord, may from time to time be necessary or expedient for
the safety, appearance, care and cleanliness of the Building and for the
preservation of good order therein. Any further or amended rules and
regulations will be binding upon each Tenant from and after the date of
delivery thereof to Tenant. Landlord shall not be responsible to Tenant for
any violation of rules and regulations by other tenants.
PUBLIC ENTRANCES
- ----------------
8. Landlord reserves the right to exclude the general public from the
Building upon such days and at such hours as in Landlord's judgment will be
for the best interest of the Building and its tenants. Persons entering the
Building after 6:00 P.M. on business days and at all times on weekends and
holidays must meet the security requirements of Landlord.
9. The janitor of the Building may at all times keep a pass key, and he/she
and other agents of the Landlord shall at all times be allowed admittance
to the Demised Premises for purposes permitted in Tenant's Lease.
GENERAL
- -------
10. In order to insure proper use and care of the Demised Premises, Tenant
shall not;
(a) Keep animals or birds in the rooms.
(b) Use rooms as sleeping apartments or for lodging or any immoral
purposes.
E-2
<PAGE>
(c) Allow any sign, advertisement or notice to be affixed to the Building,
inside or outside, without Landlord's consent. Signs on interior glass
doors will be painted only by the person designated by Landlord, and the
cost of the painting will be paid by Tenant.
(d) Make improper noises or disturbances of any kind; sing, play or operate
any musical instrument, radio or television without the prior written
consent of Landlord, or otherwise do anything to disturb other tenants or
tend to injure the reputation of the Building.
(e) Mark or defile elevators, water-closets, toilet rooms, walls, windows,
doors or any other part of the Building.
(f) Place anything on the outside of the Building, including roof setbacks,
window ledges and other projections; or drop anything from the windows,
stairways, or parapets; or place trash or other matter in the halls,
stairways, elevators or other areas of the Building.
(g) Cover or obstruct any window, skylight, door or transom that admits
light.
(h) Fasten any article, drill holes, drive nails or screws into the walls,
floors, woodwork, or partitions; nor shall the same be painted, or
otherwise covered or in any way marked or broken without the prior
consent of Landlord.
(i) Operate any machinery other than small office equipment.
(j) Interfere with the heating or cooling apparatus.
(k) Allow anyone but Landlord's employees or contractors to clean rooms.
(l) Leave Demised Premises without locking doors, stopping all office
machines, and extinguishing all lights.
(m) Install any shades, blinds, or awnings without the consent of Landlord.
(n) Use or store any electric heating device, kerosene, camphene, burning
fluid or other illumination permission of Landlord.
(o) Install call boxes, or any kind of wire in or on the Building without
Landlord's permission and direction. If any Tenant desires telephonic,
word processing,computerized or other electronic or electrical
connections or communications systems, Landlord or its agents will
direct the electricians as to where and how the wires may be introduced,
and without such directions no boring or cutting of wires
E-3
<PAGE>
will be permitted.
(p) Manufacture any commodity, or prepare or dispense any foods or
beverages, tobacco, drugs, flowers or other commodities or articles without the
prior written consent of Landlord.
(q) Secure duplicate keys for rooms or toilets, except from Landlord.
(r) Use desk chairs on carpeted areas without protective chair pads.
(s) Place any weights in any portion of the Building beyond the safe
carrying capacity of the structure.
(t) Enter any mechanical or electrical areas, telephone closets, loading
areas, roof or building storage areas without the prior written
consent of Landlord.
(u) Place door mats in public corridors without the prior consent of
Landlord.
11. All safes or other heavy articles shall be carried up or into the leased
premises only at such times and in such manner as shall be prescribed by
Landlord and Landlord shall in all cases have the right to specify a
maximum weight and proper position of location of any such safe or other
heavy article. Any damage done to the Building by taking in or removing any
safe or from overloading any floor in any way shall be paid by the Tenant.
The cost of repairing or restoring any part of the Building which shall be
defaced or injured by a Tenant, its agents or employees, shall be paid for
by the Tenant.
12. Each Tenant will refer all contractors, contractors' representatives and
installation technicians rendering any service on or to the Demised
Premises for the Tenant to Landlord for Landlord's prior approval and
supervision before performance of any contractual service. This provision
shall apply to all work performed in the Building, including without
limitation, installation of telephones, computer and communications
equipment, electrical devices and attachments and installations of any
nature affecting floors, walls, woodwork, trim, windows, ceilings,
equipment or any other physical portion of the Building.
13. Each Tenant shall have the nonexclusive use, in common with the Landlord,
other tenants, their guests and invitees, of the uncovered automobile
parking areas, driveways and footways surrounding the Building, subject to
reasonable rules and regulations for the use thereof as prescribed from
time to time by Landlord. Landlord shall have the right to designate
parking areas for the use by the Tenants and their employees, and the
Tenants and their employees shall only park in parking areas which are so
designated. Upon written notice from Landlord, each Tenant will furnish to
Landlord, within five (5) days from receipt of such notice, the state
automobile license numbers assigned to automobiles of such Tenant and its
employees.
E-4
<PAGE>
14. No additional locks shall be placed upon any doors without the prior
written consent of Landlord. All necessary keys shall be furnished by
Landlord, and the same shall be surrendered upon the termination of the
Lease, and the Tenant shall then give Landlord or its agent explanation
of the combination of all locks upon the doors of vaults.
15. No bicycles or similar vehicles will be allowed in the Building.
E-5
<PAGE>
EXHIBIT "F"
RESPECTING IMPROVEMENTS TO THE DEMISED PREMISES
-----------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. Tenant Plans.
------------
1.1. Tenant's Final Plans. Tenant shall prepare at its expense,
--------------------
and deliver to Landlord not later than thirty (30) days from the date hereof,
for Landlord's approval, complete architectural plans, drawings and
specifications (the "Final Plans") for the construction of the Demised Premises
for Tenant's occupancy, including partition and electric requirements and all
information for all special equipment, and designating (with specificity) all
items with a long lead time for procurement. The Final Plans shall be in
conformity with and in substantial compliance with all Governmental Requirements
relating to Tenant's use and occupancy of the Demised Premises. Landlord's
approval of the Final Plans shall not constitute an implication, certification
or representation by Landlord that the tenant improvements contemplated thereby
are in compliance with Governmental Requirements. If in the opinion of Landlord,
detailed working drawings are required for Landlord to obtain governmental
approval or to construct the Landlord Improvements, Tenant shall cause to be
prepared and submitted to Landlord, within ten (10) days after receipt of
Landlord's approval, detailed working drawings based thereon (the "Working
Drawings"). Within three (3) days after submission to Landlord by Tenant of the
Working Drawings, Landlord shall give it's written approval thereof or shall
specify in detail any non-conformity (and, in the latter event, Landlord shall
again approve or specify any non-conformity within three (3) days after each
resubmission).
1.2. Payment for Plans. The architectural and engineering
-----------------
costs in preparation of the Final Plans and Working Drawings shall be paid by
Tenant except to the extent the same are included in Building Standard
Construction Items (the "Building Standards") set forth on the Annex attached
hereto and made a part of this Exhibit "F" (the "Annex"). (As used herein,
"Building Standard" or "Building Standards" shall mean the quality and qualities
of materials shown for a category on the Annex or otherwise typically employed
by Landlord for standard improvements elsewhere in the Building). In addition,
Tenant shall pay for cost of any items noted on Tenant's Final Plans as an item
to be paid by Tenant or noted as "add/alternate" items and for any construction
items or finishing details or quantities in excess of Building Standards.
1.3. Tenant Delay. In the event Tenant fails to comply with
------------
the foregoing within the time(s) specified, any resulting delay in completing
the Demised Premises shall not in any manner affect the Commencement Date of
this Lease or Tenant's liability for the payment of rent from such Commencement
Date.
2. Landlord Work. Landlord shall, in a good and workerlike manner,
-------------
cause the Demised Premises to be completed in accordance with the Final Plans or
Working Drawings (as
F-1
<PAGE>
the case may be) approved by Landlord and Tenant pursuant to Paragragh 1 hereof
and in accordance with Building Standards (the "Landlord Improvements").
Landlord shall engage a reputable, licensed general contractor selected by
Landlord for the performance of all Landlord Improvements. Landlord reserves
the right (i) to make substitutions of material of equivalent grade and quality
when and if any specified material shall not be readily and reasonably
available, and (ii) to make changes necessitated by conditions met during the
course of construction, provided that Tenant's approval of any substantial
-------- ----
change shall first be obtained (which approval shall not be unreasonably
withheld or delayed so long as there shall be general conformity with the Final
Plans or Working Drawings, as the case may be).
3. Charges for Work. Landlord's maximum allowance amount for Landlord
----------------
Improvements (including for all Building Standard work) is twenty two and 00/100
Dollars ($22.00) per rentable square foot of the Demised Premises (i.e., a
----
maximum allowance of $175,230.00)(the "Construction Allowance"). Improvements
or work (including Landlord Improvements) in excess of the Construction
Allowance shall be at Tenant's sole cost and expense. The total cost of such
Landlord Improvements shall be equal to Landlord's out-of-pocket expense in
connection with the Landlord Improvements, including, but not limited to,
Landlord's contract or purchase price for materials, labor and services, plus
(i) 5% of Landlord's out-of-pocket expenses for general overhead (the "Overhead
Fee") and (ii) 5% of the sum of such out-of-pocket costs plus the Overhead Fee,
for administration and supervision (the "Administration Fee"). It is Tenant's
responsibility to prepare Tenant's Preliminary Plans, Final Plans or Working
Drawings (as the case may be) within Tenant's budget for the cost of Landlord
Improvements. Landlord shall notify Tenant prior to commencement of
construction of the estimated amount, if any, by which the cost of Landlord
Improvements will exceed the Construction Allowance. Landlord shall not be
obligated to commence work on the Landlord Improvements unless and until Tenant
agrees to pay the additional cost involved in completing the Landlord
Improvements, and any delay occassioned by the decision of Tenant whether to pay
the difference or to revise the Final Plans or Working Drawings (as the case may
be) shall be deemed a Tenant-caused delay under this Lease, and shall not delay
the Commencement Date or the date upon which rent commences to accrue hereunder.
4. Payment for Work. Tenant shall pay Landlord for all excess of the
----------------
cost of Landlord Improvements that is greater than the Construction Allowance,
within ten (10) days of receipt by Tenant of an invoice or invoices therefor
(which invoice or invoices, at Landlord's election, may be presented from time
to time prior to, upon, or following the Commencement Date of the term hereof,
but not more frequently than once a month), in amounts proportional to the
percentage of the work that has been completed. Subject to paragragh 27 of the
Lease, any portion of the Construction Allowance not fully expended on or prior
to the thirtieth (30th) day following the Commencement Date shall be withdrawn,
and in that case Landlord no longer shall be obligated for any portion thereof
not then fully expended.
5. Changes. If Tenant requests changes to the Landlord Improvements
-------
after Landlord and Tenant have approved Tenant's Final Plans or Working Drawings
(as the case may be), Tenant shall pay the entire cost of such changes. The
total cost shall be equal to Landlord's out-of-
F-2
<PAGE>
pocket expenses in connection with the changes, including Landlord's direct
out-of-pocket costs, Overhead Fee and Administration Fee. In addition, Tenant
shall be responsible for any delays resulting from the changes pursuant to
Paragraph 9 below.
6. Access. Landlord shall afford Tenant and its employees, agents
------
and contractors access to the Demised Premises, at reasonable times prior to the
Commencement Date of this Lease, and at Tenant's sole risk and expense, for the
purposes of inspecting and verifying the performance and completion of the
Landlord Improvements. Tenant shall inspect the performance of Landlord
Improvements regularly and diligently and shall advise Landlord promptly of any
objections to the performance of the work. Access for such purpose shall not
be deemed to constitute possession or occupancy. Landlord shall promptly
undertake and diligently prosecute the correction of any defective work of which
it is notified as aforesaid.
7. Tenant's Contractors. Tenant may at its sole expense select and
--------------------
employ its own contractors for specialized or finishing work in the Demised
Premises which is not to be performed by Landlord and which is reflected as such
in Tenant's Final Plans or Working Drawings (as the case may be), such as
carpeting, telephone installation, installation of computer and other
specialized equipment, special cabinetwork and millwork, and other similar
decoration and installation, subject to the following qualifications, conditions
and limitations:
7.1. Tenant shall first obtain the approval of Landlord in
writing of the specific work it proposes to perform and shall furnish Landlord
with reasonable information requested by Landlord (such approval by landlord
not to be unreasonably withheld, conditioned or delayed);
7.2. The work shall be performed by responsible contractors and
subcontractors, properly licensed to work and approved in advance by landlord,
who shall not, in Landlord's reasonable opinion, prejudice Landlord's
relationship with Landlord's contractors or subcontractors, or the relationship
between the contractors and their subcontractors or employees, or disturb
harmonious labor relations, and who shall, if requested by Landlord, prior to
the commencement of any work, file waivers of mechanics' liens on account of the
work to be performed by any of Tenant's contractors, subcontractors or material
suppliers;
7.3. Tenant shall have sole responsibility for compliance with
Governmental Requirements, and shall at its expense procure all permits
necessary with respect to the work to be performed by Tenant's contractors or
subcontractors;
7.4. No such work shall be performed in such manner or at such
times as to interfere with any work being done by any of Landlord's contractors
or subcontractors in the Demised Premises or in the Building generally.
Landlord shall endeavor, however, to allow Tenant access for such work prior to
the Commencement Date, at the earliest time consistent with the remainder of
this subsection;
F-3
<PAGE>
7.5. Tenant and its contractors and subcontractors shall be solely
responsible for the transportation, storage and safekeeping of materials and
equipment used in the performance of any work, for the removal of waste and
debris resulting therefrom on a daily basis, and for any damage caused by them
to any installations or work performed by Landlord's contractors and
subcontractors; and Tenant's contractors and subcontractors shall each deliver
to Landlord a certificate of insurance indicating contractor liability in
amounts and with companies and otherwise satisfactory to Landlord, and naming
the Demised Premises as an insured site; and
7.6 Tenant's contractors and subcontractors shall be subject to the
general administrative supervision of Landlord's general contractor for
scheduling purposes, but Landlord's general contractor shall not be responsible
for any aspect of the work performed by Tenant's contractors or subcontractors,
or for the coordination of the work of Landlord's contractors with Tenant's
contractors or subcontractors.
8. Concerning Substantial Completion. In addition to the description of
---------------------------------
"Substantial Completion" found elsewhere in the Lease, it is further agreed that
the Demised Premises shall be deemed "substantially complete" even though minor
or insubstantial matters or details of construction, mechanical adjustment or
decoration remain to be performed, the noncompletion of which does not
materially interfere with Tenant's use of the Demised Premises or the conduct
of its business therein.
9. Delay in Possession. If Landlord shall be unable to deliver possession
-------------------
of the Demised Premises to Tenant on the date specified for commencement of the
term of this Lease because a certificate of occupancy has not been procured or
because of the holding over or retention of possession of any tenant or
occupant, or if repairs, improvements or decoration of the Demised Premises, or
of the Building, are not completed, or because of the operation of a "force
majeure" (which shall mean any delay in performance hereunder caused by any
event beyond the reasonable control of Landlord including, without limitation,
labor disputes, civil commotion, war, war-like operations, inovation, rebellion,
hostilities, military power, sabotage, governmental regulations or controls,
fire or other casualty, inability to obtain material or services, or acts of
God), or for any other reason, Landlord shall not be subject to any liability to
Tenant. Under such circumstances, except as set forth above in this Exhibit or
elsewhere in this Lease relating to delays resulting from actions or omissions
by Tenant, the rent reserved and covenanted to be paid herein shall not commence
until possession of the Demised Premises is given or the Demised Premises are
available for occupancy by Tenant. No such failure to give possession shall in
any other respect affect the validity of this Lease or any obligation of the
Tenant hereunder (except as to the date of commencement of accrual of rent).
F-4
<PAGE>
EXHIBIT "F"
ANNEX
-----
BUILDING STANDARD CONSTRUCTION ITEMS
------------------------------------
================================================================================
Partitions: Steel Stud Construction (2-1/2). Studding to be covered
with 1/2" thick sheetrock on each side to ceiling
height. Partition allowance 1-lineal foot per thirteen
square feet. Partitions shall be painted two coats latex
paint, and receive a 4" vinyl wall base.
Ceiling: Ceilings to be fully accessible 2' x 4' acoustical
fissured mineral tile supported on an exposed aluminum
T-frame system. The thickness shall be 5/8".
Window Covering: All windows will be provided with horizontal narrowline
blinds.
Floor Covering: Carpet shall be 28 oz. glued-down installation and may
be selected by Tenant from building standard quality and
color section. Carpet upgrades available.
Doors: Entrance: Nominal 3' wide x 1-3/4" thick, full height,
--------
stain grade, solid core, panel. Door frame to be 16
gauge steel with oil base paint finish.
Interior: Nominal 3' wide x 1-3/4" thick, 7' in height,
--------
paint grade, solid core, panel. Door frame to be 16
guage steel. Both door and frame to be painted with oil
base paint finish. One interior door will be furnished
per each 450 rentable square feet of the Demised
Premises.
Hardware: All hardware including latch or lock sets to be Schlage
D or equal. Lock sets and exposed closers to be provided
on one door to public corridors.
Lighting: Recessed 2' x 4' building standard fluorescent light
fixtures with prismatic lenses in accordance with local
electric codes in a quantity equal to one fixture for
each 90 square feet. One light switch will be provided
per 400 square feet. In open office areas, switches
will be provided at convenient points to accommodate
Tenant's requirements.
ANNEX F-1
<PAGE>
Electrical Outlets: Furnish and install 100 VAC wall mounted duplex
electric receptacle in a ratio of one per 100 square
feet. Number of circuits will be based on the maximum
of outlets per circuit allowed by local electrical
codes. Floor receptacles and dedicated outlets
installed at Tenant's expense.
Drawings: Preliminary Drawings: A preliminary drawing will be
--------------------
provided by Landlord (utilizing Landlord's contractor),
along with one revision. Subsequent revisions or
changes will be at Tenant's expense.
Working Drawings: Building standard working drawings
----------------
are included. All upgraded drawings will be considered
a "Special Item" as defined herein.
Signage: One (1) Building Standard door sign, with one (1) name
displayed shall be provided.
Special Items: Special equipment, installations and Tenant
requirements above building standard that require
extraordinary design, cost, engineering or expertise
shall be at the Tenant's sole expense. The Landlord
will make reasonable efforts through his existing
project team, including architectural,engineering and
contractors, to assist the Tenant with any special
requirements above and beyond the given building
standard.
NOTE: For reconstructed spaces, existing materials will be utilized wherever
possible.
[Updated 11/94]
ANNEX F-2
<PAGE>
EXHIBIT "G"
MINIMUM RENT INCREASES
----------------------
================================================================================
1. Definitions. As used in this Exhibit "G":
-----------
1.1. "Minimum Rent" shall initially mean the minimum rent set forth
in Paragraph 3.1 of this Lease and thereafter shall mean the Minimum Rent as
adjusted pursuant to the terms of this Exhibit "G".
1.2. "Adjustment Date: shall mean (A) the first anniversary of the
Commencement Date if the Commencement Date is the first date of a month; or (B)
the first anniversary of the first day of the next month following the
Commencement Date, if the Commencement Date is not the first day of a month; and
(C) each subsequent anniversary of such first day of the month during the term
of this Lease.
1.3. "Lease Year" shall mean (A) the period of twelve (12) full
calendar months commencing on the Commencement Date if the Commencement Date is
the first day of the month; or (B) the period of twelve (12) full calendar
months commencing on the first day of the next month following the Commencement
Date, if the Commencement Date is not the first day of the month; and (C) each
consecutive twelve (12) month period thereafter during the term of this Lease.
2. Operative Provisions. Landlord and Tenant acknowledge that Minimum
--------------------
Rent shall be adjusted annually as herein specified. Therefore, the Minimum
Rent shall be adjusted on the first Adjustment Date and on each subsequent
Adjustment Date during the term of this Lease by application of the following
formula:
2.1. The new Minimum Rent for the Lease Year beginning with the
applicable Adjustment Date shall be equal to one hundred percent (101%) of the
Minimum Rent for the Lease Year immediately preceding the applicable Adjustment
Date except that beginning with the sixth Lease Year, in addition to the
increase called for by this subparagraph 2.1, the Minimum Rent in such year
shall be increased by one and 50/100 Dollar ($1.50) per rentable square foot per
annum.
2.2. The Minimum Rent established on each Adjustment Date shall
continue in effect until again revised on the next Adjustment Date in accordance
with the terms and conditions of this Exhibit "G".
2.3. Any delay or failure of Landlord, beyond any Adjustment Date
in any year, in computing or billing for the rental adjustments hereinabove
provided, shall not constitute a waiver of or in any way impair the continuing
obligation of Tenant to pay such rental adjustments hereunder.
G-1
<PAGE>
2.4. Notwithstanding any expiration or termination of this Lease
prior to the date that this Lease is scheduled to expire (except in case of a
cancellation by mutual written agreement), Tenant's obligation to pay rent as
adjusted under this Exhibit "G" shall continue and shall cover all periods up to
the date that this Lease is scheduled to expire, and shall survive any
expiration or termination of this Lease.
G-2
<PAGE>
EXHIBIT "H"
TENANT ESTOPPEL CERTIFICATE
---------------------------
PREMISES: Building: _____ Radnor Corporate Center, Radnor, Pennsylvania
- -------- --------
Floor/Suite:
-----------
Rentable Square Feet:
--------------------
LANDLORD: Radnor Center Associates (a Pennsylvania limited partnership).
- --------
TENANT:
- ------
[Note if different from original tenant under Lease.]
LEASE: Original Lease Date:
- ----- -------------------
Modifications, amendments, extensions, renewals (dates):
-------------------------------------------------------
Assignments/subleases (dates):
-----------------------------
TENANT'S NOTICE ADDRESS:
- -----------------------
DATE OF ESTOPPEL CERTIFICATE:
- ----------------------------
================================================================================
The undersigned Tenant hereby certifies to each of (i) Landlord, its
successors in interest and assigns ("Landlord"), and (ii) the Comptroller of the
State of New York as Trustee of the Common Retirement Fund, its successors in
interest and assigns ("Comptroller"), and any other lender to be secured by a
mortgage on the above-referenced Building and related land of which Tenant has
been notified in writing ("Lender"), that all of the above information is
correct, complete and current, and that:
1. Tenant has accepted possession of the Premises pursuant to the
Lease. The Lease term commenced on ________________________. The termination
date of the current Lease term, excluding renewals and extensions not exercised,
is _____________________. Tenant has no renewal, extension, expansion or
termination rights pursuant to the Lease except as follows:___________________
_______________________________________________. Tenant has no option or other
right to purchase or otherwise acquire any equity interest in the Building or
the Premises.
H-1
<PAGE>
2. Any improvements required by the terms of the Lease to be made by
Landlord have been completed to the satisfaction of Tenant in all respects, and
Landlord has fulfilled all of its duties under the Lease.
3. The Lease has not been modified, supplemented or amended in any way,
and there are no assignments of the Lease or subleases of all or any portion of
the Premises except as may be set forth above. The Lease constitutes the entire
agreement between the parties and there are no other agreements between Landlord
and Tenant concerning the Premises.
4. The Lease is valid and in full force and effect and, to the best of
Tenant's knowledge, neither the Landlord nor Tenant is in default thereunder.
Tenant has no defense, setoff or counterclaim against Landlord arising out of
the Lease or in any way relating thereto, or arising out of any other
transaction between Tenant and Landlord, and no event has occurred and no
condition exists which, with the giving of notice or the passage of time, or
both, will constitute a default under the Lease.
5. No rent or other sum payable under the Lease has been paid more than
one month in advance.
6. All rent and additional rent payable under the Lease is payable
without offset, abatement, diminution or reduction, except as may be expressly
provided in the Lease. The monthly rent presently payable under the Lease is as
follows:
Current base monthly rent: $__________
Current monthly operating/
expense pass-throughs:
Real Estate Taxes: $__________
Operating Expenses: $__________
Use & Occupancy Tax: $__________
Other (specify): $__________
Total current monthly rent: $__________
Security Deposit: $__________
Tenant's Proportionate Share of operating costs is equal to ____% of
actual operating expenses for the Building and ____% of real estate taxes for
the Building, in each case above:
. an expense stop equal to $__________ per rentable square foot
of rentable area;
H-2
<PAGE>
- OR -
. a base year of 19__ equal to $________ per rentable
square foot of rentable area.
Tenant has paid rent through the following date: _______________.
7. Tenant acknowledges that Tenant has received notice that the
Lease will be assigned to the Comptroller, and understands that the Lease may be
assigned thereafter to another Lender. Tenant has received no notice of a prior
assignment, hypothecation or pledge of the Lease or the rents, income, deposits
or profits arising thereunder, except to General Electric Capital Corporation.
Tenant understands that under the provisions of any such assignment to the
Comptroller (or to another Lender): (i) the Lease cannot be terminated by
Landlord (either directly or by the exercise of any option which could lead to
termination), (ii) the Lease cannot be modified in any of its terms, and
(iii) no consent can be given to the release of any party having liability
thereof, without, in any such case, the prior written consent of the Comptroller
or any such other Lender. Tenant further understands that, without such
consent, no rent may be collected or accepted more than one month in advance and
that the interest of the Landlord in the Lease has been assigned to the
Comptroller (or such other Lender) solely as security for the purposes specified
in the assignment and neither the Comptroller nor any other Lender assumes any
duty, liability or obligations whatever under the Lease or any extension or
renewal thereof.
8. Tenant acknowledges that the Lease, the leasehold estate
created thereby and all rights of Tenant thereunder are and shall be subject and
subordinate to any mortgages held or to be held by the Comptroller or any other
Lender, as any of the same may be modified, extended, supplemented or replaced
hereafter, the liens created thereby and the rights of the Comptroller or any
other Lender thereunder, unless the Comptroller or such other Lender elects
otherwise. Tenant hereby acknowledges and agrees that if the Comptroller, any
other Lender or any other person shall succeed to the interest of Landlord under
the Lease: (A) neither the Comptroller nor any such other Lender or other person
shall be (i) liable for any act or omission of any prior landlord (including
the present Landlord), (ii) liable for the return of any security deposit,
(iii) subject to any offset against or abatement, diminution or reduction in
rent or additional rent, or defense which Tenant may have against any such prior
landlord (including the present Landlord), (iv) bound by and rent or additional
rent Tenant may have paid for more than the current month to any such prior
landlord (including the present Landlord), or (v) bound by any assignment,
surrender, termination, cancellation, waiver, release, amendment or modification
of the Lease made without its express written consent; and (B) at the election
of the Comptroller or such other Lender or other person, Tenant shall attorn
thereto.
9. Tenant shall give the Comptroller (and any other Lender of
which it receives written notice) prompt written notice of any default of
Landlord under the Lease, if such default entitles Tenant, under law or
otherwise, to terminate the Lease, reduce rent or credit or offset any amount
against future rents. Tenant shall also give the Comptroller or such other
Lender reasonable time to cure any such default prior to exercising (and as a
condition precedent to its right to exercise) any right Tenant may have to
terminate the Lease or to reduce rent or credit or offset any amounts
H-3
<PAGE>
against the rent. Tenant shall give such written notice to any successor in
interest of the Comptroller or such other Lender, any purchaser at a foreclosure
sale under any mortgage, any transferee who acquires the Building or Premises by
deed in lieu of foreclosure, and any successor or assign of any thereof.
10. Tenant shall not look to the Comptroller (or any other Lender) as
mortgagee, or, in the event the Comptroller (or any other Lender) shall become a
mortgagee in possession or successor in title to the Building or Premises, in
connection with the return of or accountability with respect to any security
deposit required by landlord (or any other landlord), unless such sums have
actually been received by the Comptroller (or such other Lender) as security for
Tenant's performance under the Lease.
11. Tenant shall neither suffer nor itself manufacture, store, handle,
transport, dispose of, spill, leak or dump any toxic or hazardous waste, waste
product or substances (as they may be defined in any federal or state statute,
rule or regulation pertaining to or governing such wastes, waste products or
substances) on the Building or Premises at any time during the term, or extended
term, of the Lease, exclusive of products of types and amounts routinely
employed in normal and customary office use, and waste products customarily
derived therefrom.
12. All notices and other communications from Tenant to the
Comptroller shall be in writing and shall be delivered or mailed by registered
or certified mail, postage paid, return receipt requested, addressed to the
Comptroller at:
Office of The Comptroller of the State of New York
270 Broadway - 23rd Floor
New York, New York 10007
Attention: Assistant Deputy Comptroller for Real Estate
--------- Investments
-and-
---
Assistant Counsel for Real Estate Investments
- with copy to:
------------
Wilkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677
Attention: Monty Davis, Esq.
---------
or at such other address as the Comptroller or any other Lender, or any
successor, purchaser or transferee of any of them, shall furnish to Tenant in
writing.
13. Tenant is not the subject of any bankruptcy, reorganization or
insolvency proceedings.
H-4
<PAGE>
14. Tenant's billing address is:
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
15. This Estoppel Certificate is being executed and delivered
by Tenant to induce Landlord to enter into certain business arrangements, and to
induce the Comptroller and any other Lender to make a loan to be secured in part
by an assignment to the Comptroller (or such other Lender) of Landlord's
interest in the Lease, and with the intent and understanding that the above
statements will be relied upon by the Landlord, the Comptroller and any other
Lender and their respective successors and assigns. The undersigned Tenant
agrees that the Landlord, the Comptroller, and any other Lender, and each of
them and their respective successors and assigns, may so rely.
THIS ESTOPPEL CERTIFICATE is executed by Tenant on the date set
forth on the first page hereof.
TENANT:
------
By:
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Name:
Title:
H-5
<PAGE>
EXHIBIT 10.35
STANDARD COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 Parties. This lease agreement ("Lease") is entered into by and
between the following Lessor and Lessee:
BRADFORD MANAGEMENT COMPANY OF DALLAS, INC., As Agent for Owner ("Lessor")
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SCOTT POLYMERS, INC., a Texas corporation ("Lessee")
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1.02 Leased Premises. In consideration of the rents, terms, provisions and
covenants of this Lease, Lessor hereby leases, lets and demises to Lessee the
following described premises ("leased premises"):
54,810 (755 office) (Approximate sq. ft.) 1197465 (Job no.)
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PYLON DISTRIBUTION CENTER (Name of building or project)
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4933 Pylon Street (Street address/suite number)
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Fort Worth, Texas 76106 (City, State, and Zip Code)
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1.03 Term. Subject to and upon the conditions set forth herein, the term
of this Lease shall commence on (July 1, 1994 the "commencement date"), and
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shall terminate 36 months thereafter.
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1.04 Base Rent and Security Deposit. Base rent is $10,277.00 per month.
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Security deposit is $10,277.00.
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1.05 Addresses.
Lessor's Address: Lessee's Address:
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2777 Stemmons Freeway 4933 Pylon Street
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Dallas, Texas 75207 Fort Worth, Texas 76106
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1.06 Permitted Use. STORAGE & DISTRIBUTION OF EXPANDABLE POLYSTYRENE &
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CRYSTAL POLYSTYRENE RESIN
ARTICLE 2.00 RENT
2.01 Base Rent. Lessee agrees to pay monthly as base rent during the term
of this Lease the sum of money set forth in section 1.04 of this Lease, which
amount shall be payable to Lessor at the address shown above. One monthly
installment of rent shall be due and payable on the date of execution of this
Lease by Lessee for the first month's rent and a like monthly installment shall
be due and payable on or before the first day of each calendar month succeeding
the commencement date or completion date during the term of this Lease;
provided, if the commencement date or the completion date should be a date other
than the first day of a calendar month, the monthly rental set forth above shall
be prorated to the end of that calendar month, and all succeeding installments
of rent shall be payable on or before the first day of each succeeding calendar
month during the term of this Lease. Notwithstanding the foregoing, Lessor
hereby waives the base rent for the second month of the primary term of this
Lease. Lessee shall pay, as additional rent, all other sums due under this
Lease.
2.02 Operating Expenses. In the event Lessor's operating expenses for the
building and/or project of which the leased premises are a part shall, in any
calendar year during the term of this Lease, exceed the actual operating
expenses per sq. ft. for the calendar year 1994, Lessee agrees to pay as
additional rent Lessee's pro rata share of such excess operating expenses.
Lessor shall invoice Lessee monthly for Lessee's pro rata share of the estimated
operating expenses for each calendar year, which amount shall be adjusted each
year based upon anticipated operating expenses. Within nine months following the
close of each calendar year, Lessor shall provide Lessee an accounting showing
in reasonable detail all computations of additional rent due under this section.
In the event the accounting shows that the total of the monthly payments made by
Lessee exceeds the amount of additional rent due by Lessee under this section,
the accounting shall be accompanied by a refund. In the event the accounting
shows that the total of the monthly payments made by Lessee is less than the
amount of additional rent due by Lessee under this section, the account shall be
accompanied by an invoice for the additional rent. Notwithstanding any other
provision in this Lease, during the year in which the Lease terminates, Lessor,
prior to the termination date, shall have the option to invoice Lessee for
Lessee's pro rata share of the excess operating expenses based upon the previous
year's operating expenses. If this Lease shall terminate on a day other than the
last day of a calendar year, the amount of any additional rent payable by Lessee
applicable to the year in which such termination shall occur shall be prorated
on the ratio that the number of days from the commencement of the calendar year
to and including the termination date bears to 365. Lessee shall have the right,
at its own expense and within a reasonable time, to audit Lessor's books
relevant to the additional rent payable under this section. Lessee agrees to pay
any additional rent due under this section within ten days following receipt of
the invoice or accounting showing additional rent due. Lessee's pro rata share
is 36.527%.
2.03 Definition of Operating Expenses. The term "operating expenses"
includes all expenses incurred by Lessor with respect to the maintenance and
operation of the building of which the leased premises are a part, including,
but not limited to, the following: maintenance, repair and replacement costs;
security; management fees, wages and benefits payable to employees of Lessor
whose duties are directly connected with the operation and maintenance of the
building; all services, utilities, supplies, repairs, replacements or other
expenses for maintaining and operating the common parking and plaza areas; the
cost, including interest, amortized over its useful life, of any capital
improvement made to the building by Lessor after the date of this Lease which is
required under any governmental law or regulation that was not applicable to the
building on the date of this Lease; the cost, including interest, amortized over
its useful life, of installation of any device or other equipment which improves
the operating efficiency of any system within the leased premises and thereby
reduces operating expenses; all other expenses which would generally be regarded
as operating and maintenance expenses which would reasonably be amortized over a
period not to exceed five years; all real property taxes and installments of
special assessments, including dues and assessments by means of deed
restrictions and/or owners' associations which accrue against the building of
which the leased premises are a part during the term of this Lease; and all
insurance premiums Lessor is required to pay or deems necessary to pay,
including public liability insurance, with respect to the building. The term
operating expenses does not include the following: repairs, restoration or other
work occasioned by fire, wind, the elements or other casualty; income and
franchise taxes of Lessor; expenses incurred in leasing to or procuring of
lessees, leasing commissions, advertising expenses and expenses for the
renovating of space for new lessees; interest or principal payments on any
mortgage or other indebtedness of Lessor; compensation paid to any employee of
Lessor above the grade of property manager; any depreciation allowance or
expense; or operating expenses which are the responsibility of Lessee.
2.04 Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by Lessor on or
before the tenth day of the month for which the rent is due, or if any other
payment due Lessor by Lessee is not received by Lessor on or before the tenth
day of the month next following the month in which Lessee was invoiced, a late
payment charge of five percent of such past due amount shall become due and
payable in addition to such amounts owed under this Lease.
2.05 Increase in Insurance Premiums. If an increase in any insurance
premiums paid by Lessor for the building is caused by Lessee's use of the leased
premises in a manner other than as set forth in section 1.06, or if Lessee
vacates the leased premises and causes an increase in such premiums, then Lessee
shall pay as additional rent the amount of such increase to Lessor.
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<PAGE>
2.06 Security Deposit. The security deposit set forth above shall be held
by Lessor for the performance of Lessee's covenants and obligations under this
Lease, it being expressly understood that the deposit shall not be considered an
advance payment of rental or a measure of Lessor's damage in case of default by
Lessee. Upon the occurrence of any event of default by Lessee or breach by
Lessee of Lessee's covenants under this Lease, Lessor may, from time to time,
without prejudice to any other remedy, use the security deposit to the extent
necessary to make good any arrears of rent, or to repair any damage or injury,
or pay any expense or liability incurred by Lessor as a result of the event of
default or breach of covenant, and any remaining balance of the security deposit
shall be returned by Lessor to Lessee upon termination of this Lease. If any
portion of the security deposit is so used or applied, Lessee shall upon ten
days written notice from Lessor, deposit with Lessor by cash or cashier's check
an amount sufficient to restore the security deposit to its original
amount.
2.07 Holding Over. In the event that Lessor does not vacate the leased
premises upon the expiration or termination of this Lease, Lessee shall be a
tenant at will for the holdover period and all of the terms and provisions of
this Lease shall be applicable during that period, except that Lessee shall pay
Lessor as base rental for the period of such holdover an amount equal to one and
one-half times the base rent which would have been payable by Lessee had the
holdover period been a part of the original term of this Lease. Lessee agrees
to vacate and deliver the leased premises to Lessor upon Lessee's receipt of
notice from Lessor to vacate. The rental payable during the holdover period
shall be payable to Lessor on demand. No holding over by Lessee, whether with or
without the consent of Lessor, shall operate to extend the term of this Lease.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 Use. Lessee warrants and represents to Lessor that the leased
premises shall be used and occupied only for the purpose as set forth in section
1.06. Lessee shall occupy the leased premises, conduct its business and control
its agents, employees, invitees and visitors in such a manner as is lawful,
reputable and will not create a nuisance. Lessee shall not permit any operation
which emits any odor or matter which intrudes into other portions of the
building, use any apparatus or machine which makes undue noise or causes
vibration in any portion of the building or otherwise interfere with, annoy or
disturb any other lessee in its normal business operations or Lessor in its
management of the building. Lessee shall neither permit any waste on the leased
premises nor allow the leased premises to be used in any way which would, in the
opinion of Lessor, be extra hazardous on account of fire or which would in any
way increase or render void the fire insurance on the building. Lessee warrants
to Lessor that the insurance questionnaire (filled out by Lessee, signed and
presented to Lessee prior to the execution of this Lease) accurately reflects
Lessee's original intended use of the leased premises. The insurance
questionnaire is made a part of this Lease by reference as though fully copied
herein. If at any time during the term of this Lease the State Board of
Insurance or other insurance authority disallows any of Lessor's sprinkler
credits or imposes an additional penalty or surcharge in Lessor's insurance
premiums because of Lessee's original or subsequent placement or use of storage
racks or bins, method of storage or nature of Lessee's inventory or any other
act of Lessee, Lessee agrees to pay as additional rent the increase (between
fire walls) in Lessor's insurance premiums.
3.02 Signs. No sign of any type or description shall be erected, placed or
painted in or about the leased premises or project except those signs submitted
to Lessor in writing and approved by Lessor in writing, and which signs are in
conformance with Lessor's sign criteria established for the project.
3.03 Compliance with Laws, Rules and Regulations. Lessee, at Lessee's sole
cost and expense, shall comply with all laws, ordinances, orders, rules and
regulations of state, federal, municipal or other agencies or bodies having
jurisdiction over use, condition and occupancy of the leased premises. Lessee
will comply with the rules and regulations of the building adopted by Lessor
which are set forth on a schedule attached to this Lease. Lessor shall have the
right at all times to change and amend the rules and regulations in any
reasonable manner as may be deemed advisable for the safety, care, cleanliness,
preservation of good order and operation or use of the building or the leased
premises provided that no such change modifies or alters any provision of this
Lease resulting in more expense to Lessee, or modifies Lessee's right and
obligations hereunder. All changes and amendments to the rules and regulations
of the building will be sent by Lessor to Lessee in writing and shall thereafter
be carried out and observed by Lessee. See Addendum "A" attached hereto and made
a part hereof.
3.04 Warranty of Possession. Lessor warrants that it has the right and
authority to execute this Lease, and Lessee, upon payment of the required rents
and subject to the terms, conditions, covenants and agreements contained in this
Lease, shall have possession of the leased premises during the full term of this
Lease as well as any extension or renewal thereof. Lessor shall not be
responsible for the acts or omissions of any other lessee or third party that
may interfere with Lessee's use and enjoyment of the leased premises other than
Lessor's agents, employees, contractors and licensees.
3.05 Inspection. Lessor or its authorized agents shall at any and all
reasonable times and upon reasonable notice, except in the case of emergency
have the right to enter the leased premises to inspect the same, to supply
janitorial service or any other service to be provided by Lessor, to show the
leased premises to prospective purchasers or lessees, and to alter, improve or
repair the leased premises or any other portion of the building. Lessee hereby
waives any claim for damages for injury or inconvenience to or interference with
Lessee's business, any loss of occupancy or use of the leased premises, and any
other loss occasioned thereby. Lessor shall at all times have and retain a key
with which to unlock all of the doors in, upon and about the leased premises.
Lessee shall not change Lessor's lock system or in any other manner prohibit
Lessor from entering the leased premises. Lessor shall have the right to use any
and all means which Lessor may deem proper to open any door in an emergency
without liability therefor.
ARTICLE 4.00 UTILITIES AND SERVICE
4.01 Building Services. Lessor shall provide the normal utility service
connections to the building. Lessee shall pay the cost of all utility services,
including, but not limited to, initial connection charges, all charges for gas,
electricity, water, sanitary and storm sewer service, and for all electric
lights. However, in a multi-occupancy building, Lessor may provide water to the
leased premises, in which case Lessee agrees to pay to Lessor its pro rata share
of the cost of such water. Lessee shall pay all costs caused by Lessee
introducing excessive pollutants or solids other than ordinary human waste into
the sanitary sewer system, including permits, fees and charges levied by any
governmental subdivision for any such pollutants or solids. Lessee shall be
responsible for the installation and maintenance of any dilution tanks, holding
tanks, settling tanks, sewer sampling devices, sand traps, grease traps or
similar devices as may be required by any governmental subdivision for Lessee's
use of the sanitary sewer system. If the leased premises are in a
multi-occupancy building, Lessee shall pay all surcharges levied due to Lessee's
use of sanitary sewer or waste removal services insofar as such surcharges
affect Lessor or other lessees in the building. Lessor shall not be required to
pay for any utility services, supplies or upkeep in connection with the leased
premises or building.
4.02 Theft or Burglary. Lessor shall not be liable to Lessee for losses to
Lessee's property or personal injury caused by criminal acts or entry by
unauthorized persons into the leased premises or the building.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 Lessor Repairs. Lessor shall not be required to make any
improvements, replacements or repairs of any kind or character to the leased
premises or the project during the term of this Lease except as are set forth in
this section. Lessor shall maintain only the roof, foundation, parking and
common areas, and the structural soundness of the exterior walls (excluding
windows, windowglass, plate glass and doors). Lessor's costs of maintaining the
items set forth in this section are subject to the additional rent provisions in
section 2.02. Lessor shall not be liable to Lessee, except as expressly provided
in this Lease, for any damage or inconvenience, and Lessee shall not be entitled
to any abatement or reduction of rent by reason of any repairs, alterations or
additions made by Lessor under this Lease.
5.02 Lessee Repairs. Lessee shall, at its sole cost and expense, maintain,
repair and replace all other parts of the leased premises in good repair and
condition, including, but not limited to, heating, ventilating and air
conditioning systems, down spouts, fire sprinkler system, dock bumpers, lawn
maintenance, pest control and extermination, trash pick-up and removal, and
exterior doors. Lessee shall repair and pay for any damage caused by any act or
omission of Lessee or Lessee's agents, employees, invitees, licensees or
visitors. If the leased premises are in a multi-occupancy building or project,
Lessor reserves the right to perform, on behalf of Lessee, lawn maintenance,
painting, and trash pick-up and removal; Lessee agrees to pay Lessor, as
additional rent, Lessee's pro rata share of the cost of such services within ten
days from receipt of Lessor's invoice, or Lessor may by monthly invoice direct
Lessee to prepay the estimated costs for the current calendar year, and such
amount shall be adjusted annually. If the leased premises are served by rail. If
Lessee fails to make the repairs or replacements promptly as required herein,
Lessor may, at its option and after delivery to Lessee of thirty (30) days prior
written notice, make the repairs and replacements and the cost of such repairs
and replacements shall be charged to Lessee as additional rent and shall become
due and payable by Lessee within ten days from
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<PAGE>
receipt of Lessor's invoice. Costs incurred under this section are the total
responsibility of Lessee and do not constitute operating expenses under section
2.02
5.03 Request for Repairs. All requests for repairs or maintenance that
are the responsibility of Lessor pursuant to any provision of this Lease must be
made in writing to Lessor at the address in section 1.05 except in the event of
an emergency when no such written notice shall be required.
5.04 Lessee Damages. Lessee shall not allow any damage to be committed
on any portion of the leased premises or building, and at the termination of
this Lease, by lapse of time or otherwise, Lessee shall deliver the leased
premises to Lessor in as good condition as existed at the commencement date of
this Lease, ordinary wear and tear excepted. The costs and expense of any
repairs necessary to restore the condition of the leased premises shall be borne
by Lessee.
5.05 Maintenance Contract. Lessee shall, at its sole cost and expense,
during the term of this Lease maintain a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for all hot water,
heating and air conditioning systems and equipment within the leased premises.
The maintenance contractor and contract must be approved by Lessor and must
include monthly servicing, replacement of filters, replacement or adjustment of
drive belts, periodic lubrication and oil change and any other services
suggested by the equipment manufacturer.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 Lessor Improvements. If construction to the leased premises is to
be performed by Lessor prior to or during Lessee's occupancy, Lessor will
complete the construction of the improvements to the leased premises, in
accordance with plans and specifications agreed to by Lessor and Lessee, which
plans and specifications are made a part of this Lease by reference. Lessee
shall execute a copy of the plans and specifications and change orders, if
applicable, setting forth the amount of any costs to be borne by Lessee within
seven days of receipt of the plans and specifications. In the event Lessee fails
to execute the plans and specifications and change order within the seven day
period, Lessor may, at its sole option, declare this Lease cancelled or notify
Lessee that the base rent shall commence on the completion date even though the
improvements to be constructed by Lessor may not be complete. Any changes or
modifications to the approved plans and specifications shall be made and
accepted by written change order or agreement signed by Lessor and Lessee and
shall constitute an amendment to this Lease.
6.02 Lessee Improvements. Lessee shall not make or allow to by made any
alterations or physical additions in or to the leased premises without first
obtaining the written consent of Lessor, which consent may in the sole and
absolute discretion of Lessor be denied. Any alterations, physical additions or
improvements to the leased premises made by Lessee shall at once become the
property of Lessor and shall be surrendered to Lessor upon the termination of
this Lease; provided, however, Lessor at its option, may require Lessee to
remove any physical additions and/or repair any alterations in order to restore
the leased premises to the condition existing at the time Lessee took
possession, all costs of removal and/or alterations to be borne by Lessee. This
clause shall not apply to moveable equipment or furniture owned by Lessee, which
may be removed by Lessee at the end of the term of this Lease if Lessee is not
then in default and if such equipment and furniture are not then subject to any
other rights, liens and interest of Lessor. Lessee may add dock levelers,
subject to the provision of this Section 6.02. Any request by Lessor pursuant to
this Section 6.02 may also require Lessor to advise Lessee prior to such
alterations or additions whether the removal thereof will be required at the
termination of this lease.
6.03 Mechanics Lien. Lessee will not permit any mechanic's or
materialman's lien(s) or other lien to be placed upon the leased premises or
the building and nothing in this Lease shall be deemed or construed in any way
as constituting the consent or request of Lessor, express or implied, by
inference or otherwise, to any person for the performance of any labor or the
furnishing of any materials to the leased premises, or any part thereof, nor as
giving Lessee any right, power, or authority to contract for or permit the
rendering of any services or the furnishing of any materials that would give
rise to any mechanic's, materialman's or other lien against the leased premises.
In the event any such lien is attached to the leased premises and is not
released or discharged within thirty (30) days after Lessee receives notice of
same then, in addition to any other right or remedy of Lessor, Lessor may, but
shall not be obligated to, obtain the release of or otherwise discharge the
same. Any amount paid by Lessor for any of the aforesaid purposes shall be paid
be Lessee to Lessor on demand as additional rent.
ARTICLE 7.00 CASUALTY AND INSURANCE
7.01 Substantial Destruction. If the leased premises should be totally
destroyed by fire or other casualty, or if the leased premises should be damaged
so that rebuilding cannot reasonably be completed within ninety working days
after the date of written notification by Lessee to Lessor of the destruction,
this Lease shall terminate and the rent shall be abated for the unexpired
portion of the Lease, effective as of the date of such destruction.
7.02 Partial Destruction. If the leased premises should be partially
damaged by fire or other casualty, and rebuilding or repairs can reasonably be
completed within ninety working days from the date of written notification by
Lessee to Lessor of the destruction, this Lease shall not terminate, and Lessor
shall at its sole risk and expense proceed with reasonable diligence to rebuild
or repair the building or other improvements to substantially the same condition
in which they existed prior to the damage. If the leased premises are to be
rebuilt or repaired and are untenantable in whole or in part following the
damage, and the damage or destruction was not caused or contributed to by act or
negligence of Lessee, its agents, employees, invitees or those for whom Lessee
is responsible, the rent payable under this Lease during the period for which
the leased premises are untenantable shall be adjusted to such an extent as may
be fair and reasonable under the circumstances. In the event that Lessor fails
to complete the necessary repairs or rebuilding within ninety working days from
the date of written notification by Lessee to Lessor of the destruction, Lessee
may at its option terminate this Lease by delivering written notice of
termination to Lessor, whereupon all rights and obligations under this Lease
shall cease to exist.
7.03 Property Insurance. Lessor shall at all times during the term of
this Lease maintain a policy or policies of insurance with the premiums paid in
advance, issued by and binding upon some solvent insurance company, insuring the
building against all risk of direct physical loss in an amount equal to at least
ninety percent of the full replacement cost of the building structure and its
improvements as of the date of the loss; provided, Lessor shall not be obligated
in any way or manner to insure any personal property (including, but not limited
to, any furniture, machinery, goods or supplies) of Lessee upon or within the
leased premises, any fixtures installed or paid for by Lessee upon or within the
leased premises, or any improvements which Lessee may construct on the leased
premises. Lessee shall have no right in or claim to the proceeds of any policy
of insurance maintained by Lessor even though the cost of such insurance is
borne by Lessee as set forth in Article 2.00.
7.04 Waiver of Subrogation. Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release each other of and
from any and all right of recovery, claim, action or cause of action, against
each other, their agents, officers and employees, for any loss or damage that
may occur to the leased premises, improvements to the building of which the
leased premises are a part, or personal property within the building, by reason
of fire or the elements, regardless of cause or origin, including negligence of
Lessor or Lessee and their agents, officers and employees. Lessor and Lessee
agree immediately to give their respective insurance companies which have issued
policies of insurance covering all risk of direct physical loss, written notice
of the terms of the mutual waivers contained in this section, and to have the
insurance policies properly endorsed, if necessary, to prevent the invalidation
of the insurance coverages by reason of the mutual waivers.
7.05 Hold Harmless. Lessor shall not be liable to Lessee's employees,
agents, invitees, licensees or visitors, or to any other person, for an injury
to person or damage to property on or about the leased premises caused by any
act or omission of Lessee, its agents, servants or employees, or of any other
person entering upon the leased premises under express or implied invitation by
Lessee, or caused by the improvements located on the leased premises becoming
out of repair, the failure or cessation of any service provided by Lessor
(including security service and devices), or caused by leakage of gas, oil,
water or steam or by electricity emanating from the leased premises. Lessee
agrees to indemnify and hold harmless Lessor of and from any loss, attorney's
fees, expenses or claims arising out of any such damage or injury.
ARTICLE 8.00 CONDEMNATION
8.01 Substantial Taking. If all or a substantial part of the leased
premises are taken for any public or quasi-public use under any governmental
law, ordinance or regulation, or by right of eminent domain or by purchase in
lieu thereof, and the taking would prevent or materially interfere with the use
of the leased premises for the purpose for which it is then being used, this
Lease shall terminate and the rent shall be abated during the unexpired portion
of this Lease effective on the date physical possession is taken by the
condemning authority. Lessee shall have no claim to the condemnation award or
proceeds in lieu thereof.
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<PAGE>
8.02 Partial Taking. If a portion of the leased premises shall be taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in section 8.01 above, Lessor shall at
Lessor's sole risk and expense, restore and reconstruct the building and other
improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances. Lessee shall have no claim to the
condemnation award or proceeds in lieu thereof.
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 Lessor Assignment. Lessor shall have the right to sell, transfer or
assign, in whole or in part, its rights and obligations under this Lease and in
the building. Any such sale, transfer or assignment shall operate to release
Lessor from any and all liabilities under this Lease arising after the date of
such sale, assignment or transfer.
9.02 Lessee Assignment. Lessee shall not assign, in whole or in part,
this Lease, or allow it to be assigned, in whole or in part, by operation of law
or otherwise (including without limitation by transfer of a majority interest of
stock, merger, or dissolution, which transfer of majority interest of stock,
merger or dissolution shall be deemed an assignment) or mortgage or pledge the
same, or subject the leased premises, in whole or in part without the prior
written consent of Lessor which shall not be unreasonably withheld and in no
event shall any such assignment or sublease ever release Lessee or any guarantor
from any obligation or liability hereunder. No assignee or sublessee of the
leased premises or any portion thereof may assign or sublet the leased premises
or any portion thereof.
9.03 Conditions of Assignment. If Lessee desires to assign or sublet all
or any part of the leased premises, it shall so notify Lessor at least twenty
days in advance of the date on which Lessee desires to make such assignment or
sublease. Lessee shall provide Lessor with a copy of the proposed assignment or
sublease and such information as Lessor might reasonably request concerning the
proposed sublessee or assignee to allow Lessor to make informed judgments as to
the financial condition, reputation, operations and general desirability of the
proposed sublessee or assignee. Within fifteen days after Lessor's receipt of
Lessee's proposed assignment or sublease and all required information concerning
the proposed sublessee or assignee, Lessor shall have the following options:
(1) cancel this Lease as to the leased premises or portion thereof proposed to
be assigned or sublet; (2) consent to the proposed assignment or sublease, and,
if the rent due and payable by any assignee or sublessee under any such
permitted assignment or sublease (or a combination of the rent payable under
such assignment or sublease plus any bonus or any other consideration or any
payment incident thereto) exceeds the rent payable under this Lease for such
space, Lessee shall pay to Lessor all such excess rent or other consideration
provided by Lessee in lieu of excess rent which is attributable to rent and rent
only within ten days following receipt thereof by Lessee; or (3) refuse, in its
reasonable discretion, to consent to the proposed assignment or sublease, which
refusal shall be deemed to have been exercised unless Lessor gives Lessee
written notice providing otherwise. Upon the occurrence of an event of default,
if all or any part of the leased premises are then assigned or sublet, Lessor,
in addition to any other remedies provided by this Lease or provided by law,
may, at its option, collect directly from the assignee or sublessee all rents
becoming due to Lessee by reason of the assignment or sublease, and Lessor shall
have a security interest in all properties on the leased premises to secure
payment of such sums. Any collection directly by Lessor from the assignee or
sublessee shall not be construed to constitute a novation or a release of Lessee
or any guarantor from the further performance of its obligations under this
Lease.
9.04 Subordination. Lessee accepts this Lease subject and subordinate to
any recorded mortgage or deed of trust lien presently existing or hereafter
created upon the building or project and to all existing recorded restrictions,
covenants, easements and agreements with respect to the building or project.
Lessor is hereby irrevocably vested with full power and authority to subordinate
Lessee's interest under this Lease to any first mortgage or deed of trust lien
hereafter placed on the leased premises, and Lessee agrees upon demand to
execute additional instruments subordinating this Lease as Lessor may require.
If the interests of Lessor under this Lease shall be transferred by reason of
foreclosure or other proceedings for enforcement of any first mortgage or deed
of trust lien on the leased premises, Lessee shall be bound to the transferee
(sometimes called the "Purchaser") at the opinion of the Purchaser, under the
terms, covenants and conditions of the Lease for the balance of the term
remaining, including any extensions or renewals, with the same force and effect
as if the Purchaser were Lessor under the Lease, and, if requested by the
Purchaser, Lessee agrees to attorn to the Purchaser including the first
mortgagee under any such mortgage if it be the Purchaser, as its Lessor.
9.05 Estoppel Certificates. Lessee agrees to furnish, from time to time,
within ten days after receipt of a request from Lessor or Lessor's mortgagee, a
statement certifying, if applicable, the following: Lessee is in possession of
the leased premises; the leased premises are acceptable; the Lease is in full
force and effect; the Lease is unmodified; Lessee claims no present charge,
lien, or claim of offset against rent; the rent is paid for the current month,
but is not prepaid for more than one month and will not be prepaid for more than
one month in advance; there is no existing default by reason of some act or
omission by Lessor; and such other matters as may be reasonably required by
Lessor or Lessor's mortgagee. Lessee's failure to deliver such statement, in
addition to being a default under this Lease, shall be deemed to establish
conclusively that this Lease is in full force and effect except as declared by
Lessor, that Lessor is not in default of any of its obligations under this
Lease, and that Lessor has not received more than one month's rent in advance.
ARTICLE 10.00 LIENS
ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 Default by Lessee. The following shall be deemed to be events of
the default by Lessee under this Lease: (1) Lessee shall fail to pay when due
any installment of rent or any other payment required pursuant to this Lease and
the failure is not cured within (5) business days after Lessee's receipt of
written notice thereof; provided however, that Lessor shall not be required to
give such written notice more than twice during any 12 month period; (2) Lessee
shall abandon any substantial portion of the leased premises; (3) Lessee shall
fail to comply with any term, provision or covenant of this Lease, other than
the payment of rent, and the failure is not cured with twenty days after written
notice to Lessee; (4) Lessee shall file a petition or be adjudged bankrupt or
insolvent under any applicable federal or state bankruptcy or insolvency law or
admit that it cannot meet its financial obligations as they become due; or a
receiver or trustee shall be appointed for all or substantially all of the
assets of Lessee; or Lessee shall make a transfer in fraud of creditors or shall
make an assignment for the benefit of creditors; or (5) Lessee shall do or
permit to be done any act which results in a lien being filed against the leased
premises or the building and/or project of which the leased premises are a part
and such lien is not released, discharged or bonded within thirty (30) days
after Lessee receives written notice of such lien.
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<PAGE>
11.02 Remedies for Lessee's Default. Upon the occurrence of any event of
default set forth in this Lease, Lessor shall have the option to pursue any one
or more of the remedies set forth herein without any notice or demand. (1)
Lessor may enter upon and take possession of the leased premises, by picking or
changing locks if necessary, and lock out, expel or remove Lessee and any other
person who may be occupying all or any part of the leased premises without being
liable for any claim for damages, and relet the leased premises on behalf of
Lessee and receive the rent directly by reason of the reletting. Lessee agrees
to pay Lessor on demand any deficiency that may arise by reason of any reletting
of the leased premises; further Lessee agrees to reimburse Lessor for any
expenditures made by it in order to relet the leased premises, including, but
not limited to, remodeling and repair costs. (2) Lessor may enter upon the
leased premises, by picking or changing locks if necessary, without being liable
for any claim for damages, and do whatever Lessee is obligated to do under the
terms of this Lease. Lessee agrees to reimburse Lessor on demand for any
expenses which Lessor may incur in effecting compliance with Lessee's
obligations under this Lease; further, Lessee agrees that Lessor shall not be
liable for any damages resulting to Lessee from effecting compliance with
Lessee's obligations under this Lease caused by the negligence of Lessor or
otherwise. (3) Lessor may terminate this Lease, in which event Lessee shall
immediately surrender the leased premises to Lessor, and if Lessee fails to
surrender the leased premises, Lessor may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take
possession of the leased premises, by picking or changing locks if necessary,
and lock out, expel or remove Lessee and any other person who may be occupying
all or any part of the leased premises without being liable for any claim for
damages. Lessee agrees to pay on demand the amount of all loss and damage which
Lessor may suffer by reason of the termination of this Lease under this section,
whether through inability to relet the leased premises on satisfactory terms or
otherwise. Notwithstanding any other remedy set forth in this Lease, in the
event Lessor has made rent concessions of any type or character, or waived any
base rent, and Lessee fails to take possession of the leased premises on the
commencement or completion date or otherwise defaults at any time during the
term of this Lease, the rent concessions, including any waived base rent, shall
be cancelled and the amount of the base rent or other rent concessions shall be
due and payable immediately as if no rent concessions or waiver of any base rent
had ever been granted. A rent concession or waiver of the base rent shall not
relieve Lessee of any obligation to pay any other charge due and payable under
this Lease including without limitation any sum due under section 2.02.
Notwithstanding anything contained in this Lease to the contrary, this Lease may
be terminated by Lessor only by mailing or delivering written notice of such
termination to Lessee, and no other act or omission of Lessor shall be construed
as a termination of this Lease.
ARTICLE 12.00 RELOCATION
12.01
12.02
ARTICLE 13.00 DEFINITIONS
13.01 Abandon. "Abandon" means the vacating of all or a substantial
portion of the leased premises by Lessee whether or not Lessee is in default of
the rental payments due under this Lease.
13.02 Act of God or Force Majeure. An "act of God" or "force majeure" is
defined for purposes of this Lease as strikes, lockouts, sitdowns, material or
labor restrictions by any governmental authority, unusual transportation delays,
riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections and any other cause not reasonably
within the control of Lessor and which by the exercise of due diligence Lessor
is unable, wholly or in part, to prevent or overcome.
13.03 Building or Project. "Building" or "project" as used in this Lease
means the building and/or project described in section 1.02, including the
leased premises and the land upon which the building or project is situated.
13.04 Commencement Date. "Commencement date" shall be the date set forth
in section 1.03. The commencement date shall constitute the commencement of the
term of this Lease for all purposes, whether or not Lessee has actually taken
possession.
13.05 Completion Date. "Completion date" shall be the date on which the
improvements erected and to be erected upon the leased premises shall have been
completed in accordance with the plans and specifications described in article
6.00. The completion date shall constitute the commencement of the term of this
Lease for all purposes, whether or not Lessee has actually taken possession.
Lessor shall use its best efforts to establish the completion date as the date
set forth in section 1.03. In the event that the improvements have not in fact
been completed as of that date, Lessee shall notify Lessor in writing of its
objections. Lessor shall have a reasonable time after delivery of the notice in
which to take such corrective action as may be necessary and shall notify Lessee
in writing as soon as it deems such corrective action has been completed and the
improvements are ready for occupancy. Upon completion of construction, Lessee
shall deliver to Lessor a letter accepting the leased premises as suitable for
the purposes for which they are let and the date of such letter shall constitute
the commencement of the term of this Lease. Whether or not Lessee has executed
such letter of acceptance, taking possession of the leased premises by Lessee
shall be deemed to establish conclusively that the improvements have been
completed in accordance with the plans and specifications, are suitable for the
purposes for which the leased premises are let, and that the leased premises are
in good and satisfactory condition as of the date possession was so taken by
Lessee, except for latent defects, if any.
13.06 Square Feet. "Square feet" or "square foot" as used in this Lease
includes the area contained within the leased premises together with a common
area percentage factor of the leased premises proportionate to the total
building area.
ARTICLE 14.00 MISCELLANEOUS
14.01 Waiver. Failure of Lessor to declare an event of default immediately
upon its occurrence, or delay in taking any action in connection with an event
of default, shall not constitute a waiver of the default, but Lessor shall have
the right to declare the default at any time and take such action as is lawful
or authorized under this Lease. Pursuit of any one or more of the remedies set
forth in article 11.00 above shall not preclude pursuit of any one or more of
the other remedies provided elsewhere in this Lease or provided by law, nor
shall pursuit of any remedy constitute forfeiture or waiver of any rent or
damages accruing to Lessor by reason of the violation to any of the terms,
provisions or convenants of this Lease. Failure by Lessor to enforce one or more
of the remedies provided upon an event of default shall not be deemed or
construed to constitute a waiver of the default or of any other violation or
breach of any of the terms, provisions and convenants contained in this Lease.
14.02 Act of God. Neither Lessee nor Lessor shall be required to perform
any covenant or obligation in this Lease, or be liable in damages to the other,
so long as the performance or non-performance of the covenant or obligation is
delayed, caused or prevented by an act of God, force majeure or by the other
party.
14.03 Attorney's Fees. In the event either party defaults in the
performance of any of the terms, covenants, agreements or conditions contained
in this Lease and the other party places in the hands of an attorney the
enforcement of all or any part of this Lease, the collection of any rent due or
to become due or recovery of the possession of the leased premises, the
defaulting party agrees to pay the prevailing party's costs of collection,
including reasonable attorney's fees for the services of the attorney.
14.04 Successors. This Lease shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and agreed that
should Lessor's interest in the leased premises cease to exist for any reason
during the term of this Lease, then notwithstanding the happening of such event
this Lease nevertheless shall remain unimpaired and in full force and effect,
and Lessee hereunder agrees to attorn to the then owner of the leased premises.
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<PAGE>
14.05 Rent Tax. If applicable in the jurisdiction where the leased premises
are situated, Lessee shall pay and be liable for all rental, sales and use taxes
or other similar taxes, if any, levied or imposed by any city, state, county or
other governmental body having authority, such payments to be in addition to all
other payments required to be paid to Lessor by Lessee under the terms of this
Lease. Any such payment shall be paid concurrently with the payments of the
rent, additional rent, operating expenses or other charge upon which the tax is
based as set forth above.
14.06 Captions. The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
14.07 Notice. All rent and other payments required to be made by Lessee
shall be payable to Lessor at the address set forth in section 1.05. All
payments required to be made by Lessor to Lessee shall be payable to Lessee at
the address set forth in section 1.05, or at any other address within the
United States as Lessee may specify from time to time by written notice. Any
notice or document required or permitted to be delivered by the terms of this
Lease shall be deemed to be delivered (whether or not actually received) when
deposited in the United States Mail, postage prepaid, certified mail, return
receipt requested, addressed to the parties at the respective addresses set
forth in section 1.05.
14.08 Submission of Lease. Submission of this Lease to Lessee for signature
does not constitute a reservation of space or an option to lease. This Lease is
not effective until execution by and delivery to both Lessor and Lessee.
14.09 Corporate Authority. If Lessee executes this Lease as a corporation,
each of the persons executing this Lease on behalf of Lessee does hereby
personally represent and warrant that Lessee is a duly authorized and existing
corporation, that Lessee is qualified to do business in the state in which the
leased premises are located, that the corporation has full right and authority
to enter into this Lease, and that each person signing on behalf of the
corporation is authorized to do so. In the event any representation or warranty
is false, all persons who execute this Lease shall be liable, individually, as
Lessee.
14.10 Severability. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
14.11 Lessor's Liability. If Lessor shall be in default under this Lease
and, if as a consequence of such default, Lessee shall recover a money judgment
against Lessor, such judgment shall be satisfied only out of the right, title
and interest of Lessor in the building as the same may then be encumbered and
neither Lessor nor any person or entity comprising Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy execution
against any property of Lessor nor any person or entity comprising Lessor other
than its interest in the building as herein expressly provided.
14.12 Indemnity. Lessor agrees to indemnify and hold harmless Lessee from
and against any liability or claim, whether meritorious or not, arising with
respect to any broker whose claim arises by, through or on behalf of Lessor.
Lessee agrees to indemnify and hold harmless Lessor from and against any
liability or claim, whether meritorious or not, arising with respect to any
broker whose claim arises by, through or on behalf of Lessee.
ARTICLE 15.00 AMENDMENT AND LIMITATION OF WARRANTIES
15.01 Entire Agreement. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE OR
TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
15.02 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
15.03 Limitation of Warranties. LESSOR AND LESSEE EXPRESSLY AGREE THAT THERE
ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND
THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS
LEASE.
ARTICLE 16.00 OTHER PROVISIONS
16.01 RENEWAL OPTIONS: If at the end of the primary term of this Lease, the
Lessee is not in default of any of the terms, conditions, or covenants of the
Lease, Lessee but not any assignee or subtenant of Lessee, is hereby granted an
option to renew this Lease with the following exceptions:
a) The renewal option term will contain no further renewal options unless
expressly granted by Lessor in writing; and
b) The rental for the renewed term shall be based on then prevailing rental
rates for properties of equivalent quality, size, utility and location, with the
length of the Lease term and credit standing of the Lessee to be taken into
account. If Lessee desires to renew this Lease, Lessee will notify the Lessor
its intention to renew no later than six months prior to the expiration date of
this Lease; Lessor shall within the next fifteen (15) days, notify Lessee in
writing of the proposed renewal rate and the Lessee shall, within the next
fifteen (15) days following receipt of the proposed rate, notify the Lessor in
writing its acceptance or rejection of the proposed rental rate.
16.02 Lessee accepts the premises on an "as is" basis.
16.03 See Addendum "A" & "B" attached hereto and made a part hereof.
ARTICLE 17.00 SIGNATURES
SIGNED Dallas, Texas this 22nd day of June , 1994
----------------------------- -------- ------------------ --
LESSOR LESSEE
BRADFORD MANAGEMENT COMPANY OF SCOTT POLYMERS, INC.,
- ---------------------------------- -------------------------------------
DALLAS, INC., As Agent for Owner a Texas corporation
- ---------------------------------- -------------------------------------
By: /s/ Henry Knapek By: /s/ Richard Davidovich, President
------------------------------- ----------------------------------
Henry Knapek, Executive V.P. Richard Davidovich, President
- ---------------------------------- -----------------------------------
(Type Name and Title) (Type Name and Title)
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ADDENDUM "A"
HAZARDOUS WASTE. The term "Hazardous Substances," as used in this lease shall
mean pollutants, contaminants, toxic or hazardous wastes, or any other
substances, the use and/or the removal of which is required or the use of which
is restricted, prohibited or penalized by any "Environmental Law," which term
shall mean any federal, state or local law, ordinance or other statute of a
governmental or quasi-governmental authority relating to pollution or protection
of the environment. Lessee hereby agrees that (i) no activity will be conducted
on the premises that will produce any Hazardous Substance, except for such
activities that are part of the ordinary course of Lessee's business activities
(the "Permitted Activities") provided said Permitted Activities are conducted in
accordance with all Environmental Laws and have been approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (ii) the premises will not be used in any manner for the
storage of any Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Lessee's business (the
"Permitted Materials") provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the premises will be used as a landfill
or a dump; (iv) Lessee will not install any underground or above ground tanks of
any type; (v) Lessee will not allow any surface or subsurface conditions to
exist or come into existence that constitute, or with the passage of time may
constitute a public or private nuisance; (vi) Lessee will not permit any
Hazardous Substances to be brought onto the premises, except for the Permitted
Materials described below, and if so brought or found located thereon, the same
shall be immediately removed, with proper disposal, and all required cleanup
procedures shall be diligently undertaken pursuant to all Environmental Laws.
Lessor or Lessor's representatives shall have the right but not the obligation
to enter the premises for the purpose of inspecting the storage, use and
disposal of Permitted Materials to ensure compliance with all Environmental
Laws. Should it be determined, in Lessor's sole opinion, that said Permitted
Materials are being improperly stored, used, or disposed of, then Lessee shall
immediately take such corrective action as requested by Lessor. Should Lessee
fail to take such corrective action within 24 hours, Lessor shall have the right
to perform such work and Lessee shall promptly reimburse Lessor for any and all
costs associated with said work. If at any time during or after the term of the
lease, the premises is found to be so contaminated or subject to said
conditions, Lessee shall diligently institute proper and thorough cleanup
procedures at Lessee's sole cost. Before taking any action to comply with
hazardous material laws or to clean up hazardous material contaminating the
premises, Lessee shall submit to Lessor a plan of action, including any and all
plans and documents required by any hazardous material law to be submitted to a
governmental authority (collectively, a "plan of action"). Before Lessee begins
the actions necessary to comply with hazardous material laws or to clean up
contamination from hazardous materials, Lessor shall have (1) approved the
nature, scope and timing of the plan of action, and (2) approved any and all
covenants and agreements to effect the plan of action. Lessee agrees to
indemnify and hold Lessor harmless from all claims, demands, actions,
liabilities, costs, expenses, damages and obligations of any nature arising from
or as a result of the use of the premises by Lessee. The foregoing
indemnification and the responsibilities of Lessee shall survive the termination
or expiration of this Lease.
Permitted Materials (if none, enter "None"): Expandable Polystyrene, Crystal
Polystyrene Resin
3.03 (cont'd.) COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Should the building
of which the leased premises are a part not be classified as a "commercial
facility which is a place of public accommodations" as defined in Title III of
the American With Disabilities Act of 1990 (the Act) on the date hereof, and
Lessee's use, alterations or improvements thereafter cause the building to be
classified as such, Lessee shall be responsible for and shall indemnify Lessor
against any and all costs and expenses of Lessor associated with complying with
the Act.
LIABILITY INSURANCE. Lessee shall, at its sole expense, maintain at all times
during the term of this Lease public liability insurance with respect to the
leased premises and the conduct or operation of Lessee's business therein,
naming Lessor as an additional insured, with limits of not less that
$1,000,000.00 for death or bodily injury to any one or more persons in a single
occurrence and $500,000.00 for property damage. Lessee shall deliver a
certificate of such insurance to Lessor on or before the commencement date and
thereafter from time to time upon request.
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ADDENDUM "B"
16.0 Environmental Compliance. Lessee will not cause or permit the leased
------------------------
premises or Lessee to be in violation of, or do anything or permit anything to
be done which will subject the leased premises to any remedial obligations
under, any Applicable Laws (as hereinafter defined) assuming disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances know to Lessee, if any, pertaining to the leased premises and
Lessee and Lessee will promptly notify Lessor in writing of any existing,
pending or threatened investigation or inquiry by any governmental authority in
connection with any Applicable Laws upon Lessee's receipt of notice thereof.
Lessee shall obtain or cause to be obtained any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements,
fixtures and equipment forming a part of the leased premises required under any
Applicable Laws. Lessee shall take all steps reasonably necessary to determine
that no hazardous substances or solid wastes are being disposed of otherwise
released on or to the leased premises in violation of Applicable Laws. Lessee
will not cause or permit the disposal or other release of any hazardous
substances or solid waste on or to the leased premises in violation of
Applicable Laws and covenants and agrees to keep or cause the leased premises to
be kept free of any hazardous substance or solid waste except in compliance with
Applicable Laws and to remove the same (or if removal is prohibited by law, to
take whatever action is required by law) promptly upon discovery at its sole
expense. In the event Lessee fails to comply with or perform any of the
foregoing covenants and obligations within fifteen (15) days after written
notice, Lessor may declare a default hereunder and in addition to Lessor's
remedies available by reason thereof, Lessor may (without any obligations,
express or implied) remove any hazardous substance or solid waste from the
leased premises (or if removal is prohibited by law, take whatever action is
required by law) and the cost of the removal or such other action shall be paid
by Lessee to Lessor as additional rent. Lessee grants to Lessor and its agents,
employees, contractors and consultants access to the leased premises and the
right to enter upon the leased premises and remove the hazardous substance or
solid waste (or if removal is prohibited by law, to take whatever action is
required by law.)
For purposes of this Lease the term "Applicable Laws" shall mean all
applicable restrictive covenants, zoning ordinances and any buildings codes,
flood disaster laws, applicable health and environmental laws and regulations
and all other applicable laws, statutes, ordinances, rules, regulations, orders,
determinations and court decisions, including with limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(hereinafter called "CERCLA"), the Resource Conservation and Recovery Act of
1976, as amended (hereinafter called "RCRA"), the Texas Water Code and the Texas
Solid Waste Disposal Act.
Lessee will not install in the leased premises nor permit to be installed
in the leased premises, asbestos, material containing asbestos which is or may
become friable or material containing asbestos deemed hazardous by Applicable
Laws, and, if any such asbestos or material containing asbestos exists in or on
the leased premises, Lessee will remove the same (or if removal is prohibited or
not required by law, will take whatever action is required by law, including
without limitation implementing any required operation and maintenance program)
promptly upon discovery at its sole expense. In the event Lessee fails to comply
with or perform any of the foregoing covenants and obligations within fifteen
(15) days notice thereof, Lessor may declare a default hereunder and in addition
to Lessor's remedies available by reason thereof, Lessor may (without any
obligation, express or implied) remove such asbestos or material containing
asbestos (or if removal is prohibited or not required by law, take whatever
action is required by law including without limitation implementing any required
operation and maintenance program) and the reasonable cost of removal or such
other action shall be paid by Lessee to Lessor as additional rent. Lessee grants
to Lessor and its agents, employees, contractors and consultants access to the
leased premises and a license to remove such asbestos or materials containing
asbestos (or if removal is prohibited or not required by law, take whatever
action is required by law, including without limitation implementing any
required operation and maintenance program).
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<PAGE>
RULES AND REGULATIONS
1. Lessor agrees to furnish Lessee two keys without charge. Additional keys
will be furnished at a nominal charge. Lessee shall not change locks or
install additional locks on doors without prior written consent of Lessor.
Lessee shall not make or cause to be made duplicates of keys procured from
Lessor without prior approval of Lessor. All keys to leased premises shall
be surrendered to Lessor upon termination of this Lease.
2. Lessee will refer all contractors, contractor's representatives and
installation technicians rendering any service on or to the leased premises
for Lessee to Lessor for Lessor's approval before performance of any
contractual service. Lessee's contractors and installation technicians
shall comply with Lessor's rules and regulations pertaining to construction
and installation. This provision shall apply to all work performed on or
about the leased premises or project, including installation of telephones,
telegraph equipment, electrical devices and attachments and installations
of any nature affecting floors, walls, woodwork, trim, windows, ceilings
and equipment or any other physical portion of the leased premises or
project.
3. Lessee shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.
4. Lessee shall not place, install or operate on the leased premises or in any
part of the building any engine, stove or machinery, or conduct mechanical
operations or cook thereon or therein, or place or use in or about the
leased premises or project any explosives, gasoline, kerosene, oil, acids,
caustics, or any flammable explosive or hazardous material without written
consent of Lessor.
5. Lessor will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the leased premises or the project
regardless of whether such loss occurs when the area is locked against
entry or not.
6. No dogs, cats, fowl, or other animals shall be brought into or kept in or
about the leased premises or project.
7. Employees of Lessor shall not receive or carry messages for or to any
Lessee or other person or contract with or render free or paid services to
any Lessee or to any of Lessee's agents, employees or invitees.
8. None of the parking, plaza, recreation or lawn areas, passages, doors,
elevators, hallways or stairways shall be blocked or obstructed or any
rubbish, litter, trash, or material of any nature placed, emptied or thrown
into these areas or such area used by Lessee's agents, employees or
invitees at any time for purposes inconsistent with their designation by
Lessor.
9. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed, and any damage
resulting to them from misuse or by the defacing or injury of any part of
the building shall be borne by the person who shall occasion it. No person
shall waste water by interfering with the faucets or otherwise.
10. No person shall disturb occupants of the building by the use of any radios,
record players, tape recorders, musical instruments, the making of unseemly
noises or any unreasonable use.
11. Nothing shall be thrown out of the windows of the building or down the
stairways or other passages.
12. Lessee and its employees, agents and invitees shall park their vehicles
only in those parking areas designated by Lessor. Lessee shall furnish
Lessor with state automobile license numbers of Lessee's vehicles and its
employees' vehicles within five days after taking possession of the leased
premises and shall notify Lessor of any changes within five days after such
change occurs. Lessee shall not leave any vehicle in state of disrepair
(including without limitation, flat tires, out of date inspection stickers
or license plates) on the leased premises or project. If Lessee or its
employees, agents or invitees park their vehicles in areas other than the
designated parking areas or leave any vehicle in a state of disrepair,
Lessor, after giving written notice to Lessee of such violation, shall have
the right to remove such vehicles at Lessee's expense.
13. Parking in a parking garage or area shall be in compliance with all parking
rules and regulations including any sticker or other identification system
established by Lessor. Failure to observe the rules and regulations shall
terminate Lessee's right to use the parking garage or area and subject the
vehicle in violation of the parking rules and regulations to removal and
impoundment. No termination of parking privileges or removal of impoundment
of a vehicle shall create any liability on Lessor or be deemed to
interfere with Lessee's right to possession of its leased premises.
Vehicles must be parked entirely within the stall lines and all directional
signs, arrows and posted speed limits must be observed. Parking is
prohibited in areas not striped for parking, in aisles, where "No Parking"
signs are posted, on ramps, in cross hatched areas, and in other areas as
may be designated by Lessor. Parking stickers or other forms of
identification supplied by Lessor shall remain the property of Lessor and
not the property of Lessee and are not transferable. Every person is
required to park and lock his vehicle. All responsibility for damage to
vehicles or persons is assumed by the owner of the vehicle or its driver.
14. Movement in or out of the building of furniture or office supplies and
equipment, or dispatch or receipt by Lessee of any merchandise or materials
which requires use of elevators or stairways, or movement through the
building entrances or lobby, shall be restricted to hours designated by
Lessor. All such movement shall be under supervision of Lessor and carried
out in the manner agreed between Lessee and Lessor by prearrangement
before performance. Such prearrangement will include determination by
Lessor of time, method, and routing of movement and limitations imposed by
safety or other concerns which may prohibit any article, equipment or any
other item from being brought into the building. Lessee assumes, and shall
indemnify Lessor against, all risks and claims of damage to persons and
properties arising in connection with any said movement.
15. Lessor shall not be liable for any damages from the stoppage of elevators
for necessary or desirable repairs or improvements or delays of any sort
or duration in connection with the elevator service.
16. Lessee shall not lay floor covering within the leased premises without
written approval of the Lessor. The use of cement or other similar adhesive
materials not easily removed with water is expressly prohibited.
17. Lessee agrees to cooperate and assist Lessor in the prevention of
canvassing, soliciting and peddling with the building or project.
18. It is Lessor's desire to maintain in the building or project the highest
standard of dignity and good taste consistent with comfort and convenience
for Lessees. Any action or condition not meeting this high standard should
be reported directly to Lessor. Your cooperation will be mutually
beneficial and sincerely appreciated. Lessor reserves the right to make
such other and further reasonable rules and regulations as in its judgment
may from time to time be necessary, for the safety, care and cleanliness of
the leased premises and for the preservation of good order therein.
-9-
<PAGE>
ACCEPTANCE OF PREMISES
LESSEE SCOTT POLYMERS, INC., a Texas Corporation
--------------------------------------------------------------------------
LESSOR BRADFORD MANAGEMENT COMPANY OF DALLAS, INC., As Agent for Owner
-------------------------------------------------------------------------
DATE LEASE SIGNED: 6-22-94
-------------------------------------------------------------
TERMS OF LEASE: 36 MONTHS
----------
ADDRESS OF LEASED PREMISES: Suite containing approximately
--------------------
54,810 sq.ft located at 4933 Pylon Street, Fort Worth, TX 76106
- ------------- --------------------------------------------------
- --------------------------------------------------------------------------------
COMMENCEMENT DATE: July 1, 1994
--------------------------------------------------------------
EXPIRATION DATE: June 30, 1997
----------------------------------------------------------------
The above described premises are accepted by Lessee as suitable for the purpose
for which they were let. The above described lease term commences and expires on
the dates set forth above. Lessee acknowledges that it has been received from
Lessor 6 number of keys to the leased premises.
-------
LESSEE
SCOTT POLYMERS, INC., a Texas Corporation
-----------------------------------------
(Type Name of Lessee)
By /s/ Richard Davidovich, 6-29-94
--------------------------------------
Richard Davidovich, President
-----------------------------------------
(Type Name and Title)
6/29/94
-----------------------------------------
(Date Signed)
TENANT
<PAGE>
MODIFICATION AND RATIFICATION
OF LEASE
This Modification and Ratification of Lease Agreement is made and entered
into between Bradford Management Company of Dallas, Inc., As
------------------------------------------------------------------
Agent for Owner (Lessor) and StyroChem
- ---------------------------------------------------------- ----------
International, Inc., a Texas corporation (formerly Scott Polymers, Inc.), a
- -------------------------------------------------------------------------------
Texas Corporation (Lessee) for and in consideration of One Dollar ($1.00) and
- -----------------
other good and valuable consideration, receipt of which is hereby acknowledged.
W I T N E S S E T H:
1. Lessor and Lessee hereby confirm and ratify, except as modified
below, all of the terms, conditions and covenants in that certain written Lease
Agreement dated June 22, 1994, between Lessor and Lessee, for the rental of the
-------------
following described property:
Approximately 54,810 total square feet of office/warehouse space of which
approximately 755 square feet is fully air conditioned office space located
in Pylon Distribution Center at 4933 Pylon Street, Fort Worth, Texas 76106
per Bradford Job #1197465.
2. Lessor and Lessee agree that effective August 3, 1994, Lessee's
name shall change from Scott Polymers, Inc., a Texas corporation to StyroChem
International, Inc., a Texas corporation.
SIGNED at Dallas, Texas, this 5th day of April , 1996.
---------------------- --- -----------
LESSOR:
BRADFORD MANAGEMENT COMPANY
OF DALLAS, INC., as Agent for Owner
----------------------------------------
By: /s/Henry Knapek
--------------------------------
Henry Knapek
Title: Executive Vice President
-----------------------------
LESSEE:
StyroChem International, Inc.,
----------------------------------------
a Texas corporation
----------------------------------------
By: /s/Richard Davidovich
-------------------------------------
Richard Davidovich
Title: President
----------------------------------
Attest
-------------------------
(Corporate Seal)
<PAGE>
RENEWAL OF LEASE
This Renewal Agreement is made and entered into between
--------------------
Bradford Management Company of Dallas, Inc., As Agent for Owner (Lessor)
- -------------------------------------------------------------------------------
and Styrochem International, Inc., a Texas corporation (Lessee)
-----------------------------------------------------------------
for and in consideration of One Dollar ($1.00) and other good and valuable
consideration, receipt of which is hereby acknowledged.
W I T N E S S E T H:
1. Lessor and Lessee hereby confirm and ratify, except as modified below,
all of the terms, conditions and covenants in that certain written Lease
Agreement dated June 22, 1994, and Modification dated April 5, 1996 between
---------------------------------------------------
Lessor and Lessee, for the rental of the following described property:
Approximately 54,810 square feet of office/warehouse space of which
approximately 755 square feet is fully air conditioned office space
located in the Pylon Distribution Center at 4933 Pylon Street, Fort
Worth, Texas 76106 per Bradford Job #1197465.
2. Lessee warrants that Lessee has accepted and is now in possession of the
demised premises and that the Lease Agreement is valid and presently in full
force and effect.
3. Lessor and Lessee agree that the term of this Lease Agreement shall be
extended for 36 months so that the expiration date shall be changed from June
-- ----
30, 1997, to June 30, 2000.
- -------- -------------
4. Lessor and Lessee agree that beginning July 1, 1997, the monthly rental
------------
payments set out in the Lease Agreement shall be changed from $10,277.00 per
----------
month to $12,332.25 per month. Upon execution of this Renewal Agreement Lessee
----------
agrees to deposit $-0- with Lessor as additional security deposit.
----
5. RENEWAL OPTION. See Addendum "A" attached hereto and made a part hereof.
SIGNED at Dallas, Texas, this 22nd day of October, 1996.
-------------- ---- -------
LESSOR:
BRADFORD MANAGEMENT COMPANY
OF DALLAS, INC., as Agent for Owner
-----------------------------------
By: /s/ Henry Knapek
--------------------------------
Henry Knapek
Title: Executive Vice President
----------------------------
LESSEE:
STYROCHEM INTERNATIONAL,INC.,
-----------------------------------
a Texas corporation
-----------------------------------
By: /s/ Richard Davidovich
-------------------------------
Richard Davidovich
Title: President
-----------------------------
Attest
------------------------------
(Corporate Seal)
<PAGE>
ADDENDUM "A"
------------
RENEWAL OPTION(S)
-----------------
If at the end of the renewal term of this Lease, and the Lessee is not in
default of any of the terms, conditions, or covenants of the Lease, Lessee but
not any assignee or subtenant of Lessee, is hereby granted an option to renew
this Lease for an additional term of 36 months upon the same terms and
--
conditions contained in the lease dated June 22, 1994 with the following
exceptions:
a) The Renewal Option term will contain no further renewal options
unless expressly granted by Lessor in writing, and;
b) The rental for the renewed term shall be $3.00 per square foot
-----
or $13,702.50 per month with the length of the Lease term and
----------
credit standing of the Lessee to be taken into account. If
Lessee desires to renew this Lease, Lessee will notify the
Lessor its intention to renew no later than six (6) months prior
to the expiration date of this Lease; Lessor shall within the
next fifteen (15) days, notify Lessee in writing of the proposal
renewal rate and the Lessee, shall within the next fifteen (15)
days following receipt of the proposed rate, notify the Lessor
in writing its acceptance or rejection of the proposed rental
rate.
<PAGE>
EXHIBIT 10.36
[LETTERHEAD OF CARGOLOGAN INC. L'EXPRESS DE STE. ANNE INC. APPEARS HERE]
Le 2 aout 1996
Madame Pierrette Morissette
Styrochem International Ltee
19250, Clark Graham
Baie D'Urfe, Quebec
H9X 3R8
Madame,
La presente consiste en une Offre de Location en reponse a votre demande
d'occuper a titre de Locataire une portion de l'espace industriel situe dans
l'edifice 19 000 Trans-Canadienne, Baie D'Urfe. L'immeuble ci-dessus decrit a
une superficice approximative de 74 000 pieds carres.
Le bail sera sur une base mensuelle et pourra etre resilie par l'un ou l'autre
des deuz parties concernees par un preavis de 45 jours.
Le loyer net mensuel sera de six mille dollars (6,000 $), ce qui permettra au
Locataire d'occuper une surface maximum de 15 000 pieds carres (Annexe A). Toute
surface utilisee par le Locataire en excedant ce maximum sera chargee a ce
dernier a un taux de 3.00 $ par palette par mois calendrier.
Le locataire aura droit a deux portes d'expedition pour fin de dechargement et
chargement. Il est entendu que le Locataire fournira l'equipement, et le
personnel pour ses operations. Le Locataire s'engage a prendre les assurances
responsabilite et civile necessaires afin de couvrir ses operations.
...2
entreposage frigorifique/cold warehousing 324 Marie-Curie, Vaudreuil, Quebec
J7V 5V5
<PAGE>
- STYROCHEM INTERNATIONAL -
Le Locataire s'engage a: a) occuper les lieux en date du ler septembre 1996
b) accepter le local tel quel c) obtenir l'approbation du Locateur avant
d'effectuer toute modification, ces modifications seront faites au frais du
Locataire.
Les lieux loues seront utilises pour fin d'entreposage seulement.
Il est entendu que la temperature dudit immeuble sera maintenue a un maximum de
50 degres Fahrenheit par le Locateur. Tout autre moyen utilise pour augmenter la
temperature de l'espace loue sera aux frais du Locateur.
L'acceptation de cette Offre de Location constitue un bail liant les deux
parties impliquees.
Nous vous prions d'accepter, madame, l'assurance de nos salutations les plus
distinguees.
Yvan Ronsse
Directeur
EN FOI DE QUOI nous avons signe les presentes a Baie D'Urfe, Que ce 5th jour
d'aout 1996.
STYROCHEM INTERNATIONAL LTEE CARGOLOGAN INC
/s/ Pierrette Morisette /s/ Yvan Ronsse
- ---------------------------- -------------------------
Pierrette Morisette Yvan Ronsse
<PAGE>
[LETTERHEAD OF CARGOLOGAN INC. APPEARS HERE]
- STYROCHEM INTERNATIONAL -
LISTE DE PRIX
Transport - transfert Baie D'Urfe
heures normales semaine: 100.00$ par chargement
heures week-end : 125.00$ par chargement
Voyage Special : 45.00$ par chargement
Voyage Pointe-Claire : 150.00$ par chargement
Voyage Terrasse-Vaudreuil : 135.00$ par chargement
Taux horaire chariot elevateur : 38:00$ par heure
Taux horaire camion semi-remorque : 38:00$ par heure
Palette 76" X 58" 4 de haut : 5.00$ par palette par mois calendrier
Palette couverts 4 de haut : 4.00$ par palette par mois calendrier
entreposage frigorifique/cold warehousing
324 Marie - Curie, Vaudreuil, Quebec J7V 5V5
<PAGE>
ANNEXE "I-A"
[BLUEPRINT APPEARS HERE]
<PAGE>
[LETTERHEAD OF CARGOLOGAN INC. L'EXPRESS DE STE. ANNE INC. APPEARS HERE]
ADDENDUM NO 1 DATE DU 01 JOUR DU MOIS DE OCTOBRE 1996
A compter du 01 octobre 1996 et ce, sur une base mensuelle, Cargologan Inc. un
espace d'entreposage de 2 baies de 750 pieds carres chacune soit un total de
1500 pieds carres.
A compter du 01 octobre 1996, le loyer pour cet espace sera de mille dollars
($1,000.00) plus les taxes s'y rapportant, payable a l'avance.
EN FOI DE QUOI . les parties ont duement signe a la date ci-haut mentionnee.
CARLOGAN INC
par; [SIGNATURE APPEARS HERE]
-------------------------------
STYROCHEM
par; [SIGNATURE APPEARS HERE]
-------------------------------
<PAGE>
TRANSLATION OF DOCUMENT DATED AUG.2/96 - FROM CARGOLOGAN INC.
This document is an Offer to lease following your demand to occupy part of the
industrial space located in the building at 19000 Trans-Canadienne, Baie d'Urfe.
The building hereby described has an approximate surface of 74,000 s.f. of
warehousing space.
The lease will be on a monthly base and can be cancelled by either party upon a
45 day notice.
The net monthly lease is Can$ 6,000 for a maximum surface of 15,000 square feet
(annex A) Any additional surface required by the lessor will be charged at the
rate of CAN$ 3.00 per box per calendar month.
The lessee is entitled to use two shipping doors for loading and unloading. It
is understood that the lessee will supply the equipment and the personnel for
its operations. The lessee is responsible for his own responsibility insurance
covering his operations.
The lessee agrees to: a) occupy the premises starting September 1, 1996
b) accepts the premises as is
c) obtain permission from the lessor before any
modification are undertaken on the building. Such
modifications will be at the lessee's expense.
The space rented will only be used for warehousing.
It is understood that the temperature of the building will be set at a maximum
of 50 degreed Fahrenheit by the lessor. Any equipment used to increase the
temperature of the rented space will be at the lessee's expense.
The acceptance of the offer constitute a lease binding both parties.
Please accept...........
<PAGE>
EXHIBIT 10.39
AMENDMENT
TO THE
BENCHMARK CORPORATION OF DELAWARE
EQUITY INCENTIVE PLAN
WHEREAS, Benchmark Corporation of Delaware, a Delaware corporation (the
"Company"), maintains the Benchmark Corporation of Delaware Equity Incentive
Plan (the "Option Plan"); and
WHEREAS, effective May 21, 1993, the Company reduced, by means of a 1 for
1,000 reverse stock split (the "Stock Split"), the total number of outstanding
shares of all classes of the Company's stock as well as the number of shares the
Company is authorized to issue; and
WHEREAS, the Board of Directors has adjusted the number of shares reserved
out of the authorized but unissued shares of the Company's Nonvoting Common
Stock for issuance under the Company's Purchase Plan to 1,249, par value $.10
per share (the "Board Adjustment"); and
WHEREAS, the Company desires to amend the Option Plan in order to reflect
the effect of the Stock Split and the Board Adjustment upon certain terms and
conditions of the Option Plan.
NOW THEREFORE, the Option Plan shall be hereby amended as follows:
1. The first sentence of Section 3 is hereby amended to read in its
entirety as follows:
"The shares that may be issued under the Plan shall not exceed in the
aggregate 1,249 shares of nonvoting common stock, par value $.10, of the Company
(the "Common Stock")."
2. The first sentence of subsection 6(c) is hereby amended to read in its
entirety as follows:
"Each Option agreement shall state the period or periods of time within
which the Option may be exercised, in whole or in part, which shall be
such period or periods of time as may be determined by the Committee,
provided that no Option shall be exercisable after ten years from the
date of grant thereof and further provided that no Option shall be
exercisable with respect to fractional shares
<PAGE>
except upon the exercise of the entire Option."
This Amendment shall be effective as of May 21, 1993. Except as expressly
modified herein, all of the terms and conditions of the Plan shall continue in
full force and effect.
TO RECORD the adoption of this Amendment, the Company has caused its duly
authorized officer to affix its corporate name hereto as of the 1st day of
November, 1993.
BENCHMARK CORPORATION OF
DELAWARE
By: [SIGNATURE APPEARS HERE]
------------------------
President
<PAGE>
BENCHMARK CORPORATION OF DELAWARE
---------------------------------
EQUITY INCENTIVE PLAN
---------------------
1. Purpose. The purpose of the Benchmark Corporation of Delaware Equity
-------
Incentive Plan (the "Plan") is to further the growth, development and
financial success of Benchmark Corporation of Delaware (the "Company") and
any subsidiary by providing additional incentives to those officers, key
employees and consultants who are responsible for the management of the
business affairs of the Company and any subsidiary, and which will enable
them to participate directly in the growth of the capital stock of the
Company. The Company intends that the Plan will facilitate securing,
retaining, and motivating management employees and consultants of high
caliber and potential.
2. Administration.
--------------
(a) The Company's Board of Directors (the "Board") shall appoint a Stock
Option Plan Committee (the "Committee") which shall consist of not less than
three (3) nor more than five (5), members, at least one of whom shall be a
director of the Company. Subject to the provisions of the Plan, the Committee
shall have full and final authority, in its sole discretion, to interpret the
provisions of the Plan and to decide all questions of fact arising in its
application; to determine the employees and consultants to whom awards shall
be made under the Plan; to determine the type of awards to be made and the
amount, size and terms of each such award; to determine the time when awards
shall be granted; and to make all other determinations necessary or advisable
for the administration of the Plan.
(b) The Board may, from time to time, appoint members of the Committee
in substitution for members previously appointed and may fill vacancies,
however caused, in the Committee; provided, however, that at all times at
least one member shall be a director of the Company. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. All decisions, determinations,
and interpretations of the Committee shall be final and binding on all
Optionees. All actions of the Committee shall be taken by a majority vote of
its members. The Committee may appoint a secretary to keep minutes of its
meetings and shall make rules and regulations for their conduct as it shall
deem advisable.
3. Stock Subject to the Plan. The shares that may be issued under the Plan
-------------------------
shall not exceed in the aggregate 1,425,000
<PAGE>
shares of nonvoting common stock, par value $.0001, of the Company (the
"Common Stock"). Such shares may be authorized and unissued shares or
shares issued and subsequently reacquired by the Company. Except as
otherwise provided herein, any shares subject to an Option or right which
for any reason expires or is terminated unexercised as to such shares shall
again be available under the Plan. The Committee may grant to holders of
outstanding options, in exchange for the surrender and cancellation of such
options, new options having purchase prices lower than provided in the
options so surrendered and cancelled, and containing such other terms and
conditions as the Committee may prescribe in accordance with the provisions
of the Plan, without regard to the price, period of exercise, or any other
terms or conditions of the option surrendered. Shares delivered under the
Plan shall be fully paid and non-assessable.
4. Eligibility to Receive Options. Persons eligible to receive stock options
------------------------------
under the Plan shall be limited to those consultants and to those officers
and other employees of the Company and any subsidiary (as defined in
Section 425 of the Internal Revenue Code of 1986 (the "Code"), or any
amendment or substitute thereto), who may also be directors and who are in
positions in which their decisions, actions and counsel significantly
impact upon the profitability and success of the Company and any
subsidiary. Directors of the Company, who are not also officers or
employees of the Company or any subsidiary, shall not be eligible to
participate in the Plan.
5. Form of Grants. Grants may be made at any time and from time to time by the
--------------
Committee in the form of stock options to purchase shares of Common Stock
of the Company. The stock options shall be nonqualified stock options which
are not intended to qualify as incentive stock options within the meaning
of Section 422 of the Code.
6. Stock Option Agreements. Stock options for the purchase of Common Stock
-----------------------
("Options") shall be evidenced by written agreements in such form not
inconsistent with the Plan as the Committee shall approve from time to time
and which shall contain in substance the following terms and conditions:
(a) Type of Option. Each Option agreement shall identify the Options
--------------
represented thereby as nonqualified stock options.
(b) Option Price. The purchase price of the Common Stock subject to an
------------
Option shall not be less than 75% of the fair market value of such
stock on the date the Option is granted, as determined by the
Committee. In no event shall the purchase price per share be less than
the par value of such share.
-2-
<PAGE>
(c) Exercise Term. Each Option agreement shall state the period or
-------------
periods of time within which the Option may be exercised, in whole or
in part, which shall be such period or periods of time as may be
determined by the Committee, provided that no Option shall be
exercisable after ten years from the date of grant thereof and further
provided that no Option shall be exercisable with respect to
fractional shares. Subject to the foregoing, the Committee shall have
the power, at or prior to the time Options are granted, to determine
in its discretion conditions to be met before Options become
exercisable with respect to all or any part of the shares covered
thereby, including the time or times of exercise and performance
standards to be met by optionees. The Committee shall have the power
to permit an acceleration of previously established exercise terms,
subject to the requirements set forth herein, upon such circumstances
and subject to such terms and conditions as the Committee deems
appropriate.
(d) Exercise and Payment for Shares. Options may be exercised in whole or
-------------------------------
in part, from time to time, by giving written notice of exercise to
the Secretary or his office, specifying the number of shares to be
purchased. The purchase price of the shares with respect to which an
Option is exercised shall be payable in full with the notice of
exercise in cash, by delivery of shares of the Company's common stock
already owned by the optionee at fair market value, or a combination
thereof, as the Committee may determine from time to time and subject
to such terms and conditions as may be prescribed by the Committee for
such purpose.
(e) Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Securities and
Exchange Act of 1934 (the "Exchange Act"), the rules and regulations
promulgated thereunder and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to
such compliance. As a condition to the exercise of an Option, the
Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to
sell or distribute such shares if, in the opinion of counsel for the
-3-
<PAGE>
Company, such a representation is required by any of the
aforementioned relevant provisions of law.
(f) Rights Upon Termination of Employment. In the event that an optionee
-------------------------------------
ceases to be an employee of the Company or any subsidiary for any
reason other than death, retirement, as hereinafter defined, or
disability (within the meaning of Section 72(m)(7) of the Code or any
substitute therefor), the optionee shall have the right to exercise
the Option within a period of three months after such termination (but
in no event after the expiration of the term of the Option) to the
extent that the Option was exercisable at the time of termination, or
within such other period, and subject to such terms and conditions, as
may be specified by the Committee. In the event that an optionee dies,
retires or becomes disabled prior to the expiration of his Option and
without having fully exercised his Option, the optionee or his
successor shall have the right to exercise the Option within a period
of one (1) year after termination of employment due to death,
retirement or disability (but in no event after the expiration of the
term of the Option) to the extent that the Option was exercisable at
the time of termination, or within such other period, and subject to
such terms and conditions, as may be specified by the Committee. As
used in this Section 6(f), "retirement" means a termination of
employment by reason of an optionee's retirement at or after his
earliest permissible retirement date pursuant to and in accordance
with his employer's regular retirement plan or personnel practices.
(g) Nontransferability. Each Option agreement shall state that the
------------------
Option is not transferable other than by will or by the laws of
descent and distribution, and that during the lifetime of the optionee
the Option is exercisable only by him.
(h) Substitution of Options. Options may be granted under the Plan from
-----------------------
time to time in substitution for stock options held by employees of
other corporations who are about to become and who do concurrently
with the grant of such options become employees of the Company or a
subsidiary as a result of a merger or consolidation of the employing
corporation with the Company or a subsidiary, or the acquisition by
the Corporation or a subsidiary of the assets of the employing
corporation, or the acquisition by the Company, or a subsidiary of
stock of the subsidiary. The terms and conditions of the substitute
options so granted may vary from the terms and conditions set forth in
this Section 6 of the Plan to such extent as the Committee at the time
of
-4-
<PAGE>
grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are
granted.
(i) Other Provisions. Each Option agreement shall contain such other
----------------
provisions not inconsistent with the Plan as the Committee shall deem
advisable.
7. Date of Grant. The date on which an Option shall be deemed to have been
-------------
granted under this Plan shall be the date of the Committee's authorization
of the Option or such later date as may be determined by the Committee at
the time the Option is authorized. Notice of the determination shall be
given to each individual to whom an Option is so granted within a
reasonable time after the date of such grant.
8. General Restrictions. Each Option under the Plan shall be subject to the
--------------------
requirement that if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock
subject or related thereto upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any government
regulatory body, or (iii) an agreement by the recipient of an Option with
respect to the disposition of shares of Common Stock is necessary or
desirable as a condition of or in connection with the granting of such
Option or the issuance or purchase of shares of Common Stock thereunder,
such Option shall not be consummated in whole or in part unless such
listing, registration, qualification, consent, approval, or agreement shall
have been effected or obtained free of any conditions not acceptable to the
Committee.
9. Single or Multiple Agreements. The Options granted hereunder may be
-----------------------------
evidenced by a single agreement or by multiple agreements, as determined by
the Committee in its sole discretion.
10. Rights of a Shareholder. The recipient of any Option under the Plan,
-----------------------
unless otherwise provided by the Plan, shall have no rights as a
shareholder with respect thereto unless and until certificates for shares
of Common Stock are issued and delivered to him.
11. Right to Terminate Service. Nothing in the Plan nor in any agreement
--------------------------
entered into pursuant to the Plan shall confer upon any optionee the right
to continue in the service of the Company or any subsidiary as an employee
or consultant or affect any right which the Company or any subsidiary may
have to terminate the employment or consulting relationship with such
optionee.
-5-
<PAGE>
12. Withholding. Whenever the Company proposes or is required to issue or
-----------
transfer shares of Common Stock under the Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient
to satisfy any federal, state or local withholding tax requirements prior
to the delivery of any certificate or certificates for such shares.
Whenever under the Plan payments are to be made in cash, such payments
shall be net of an amount sufficient to satisfy any federal, state or local
withholding tax requirements. If and to the extent authorized by the
Committee, in its sole discretion, an optionee may make an election, by
means of a form of election to be prescribed by the Committee, to have
shares of Common Stock which are acquired upon exercise of an Option
withheld by the Company or to tender other shares of Common Stock or other
securities of the Company owned by the optionee to the Company at the time
of exercise of an Option to pay the amount of tax that would otherwise be
required by law to be withheld by the Company as a result of any exercise
of an Option from amounts payable to such optionee. Any such election shall
be irrevocable and shall be subject to the disapproval of the Committee at
any time. Any securities so withheld or tendered will be valued by the
Committee as of the date of exercise.
13. Non-Assignability. No Option under the Plan shall be assignable or
-----------------
transferable by the recipient thereof except by will or by the laws of
descent and distribution or by such other means as the Committee may
approve. During the life of the recipient such Option shall be exercisable
only by such person or by such person's guardian or legal representative.
14. Non-Uniform Determinations. The Committee's determinations under the Plan
--------------------------
(including without limitation determinations of the persons to receive
grants of Options, the form, amount and timing of such grants, the terms
and provisions of such grants, and the agreements evidencing same) need not
be uniform and may be made selectively among persons who receive, or are
eligible to receive, grants of Options under the Plan whether or not such
persons are similarly situated.
15. Adjustments Upon Changes in Capitalization or Merger. Subject to any
----------------------------------------------------
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, as well as the price
per share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from
-6-
<PAGE>
a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
each outstanding Option will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. The Committee may, in the exercise of its sole discretion in
such instances, declare that each outstanding Option shall terminate as of
a date fixed by the Committee and give each optionee the right to exercise
his Option as to all or any part of the optioned Common Stock, including
shares as to which the Option would not otherwise be exercisable. In the
event of the merger of the Company or any subsidiary with or into another
corporation, the affected Options shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, provided that the successor
corporation consents to such assumption or substitution. Moreover, the
Committee may determine, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the affected optionees shall have
the right to exercise their Options as to all of the optioned Common Stock,
including shares as to which the Option would not otherwise be exercisable.
If the Committee makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Committee
shall notify the optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option
will terminate upon the expiration of such period.
16. Amendment or Termination. The Committee may terminate or amend the Plan at
------------------------
any time, except that without shareholder approval the Committee may not
increase the maximum number of shares which may be issued under the Plan
(other than increases pursuant to Section 15 hereof), extend the maximum
period during which any Option may be exercised pursuant to Section 6(c)
hereof, extend the term of the Plan or change the minimum Option price. The
termination or any
-7-
<PAGE>
modification or amendment of the Plan shall not, without the consent of an
optionee, affect his rights under an Option previously granted.
17. Effect on Other Plans. Participation in this Plan shall not affect an
---------------------
employee's eligibility to participate in any other benefit or incentive
plan of the Company or any subsidiary. Any Options granted pursuant to this
Plan shall not be used in determining the benefits provided under any other
plan of the Company or any subsidiary unless specifically provided.
18. Duration of the Plan. The Plan shall remain in effect until all Options
--------------------
granted under the Plan have been satisfied by the issuance of shares, but
no Option shall be granted more than ten years after the earlier of the
date the Plan is adopted by the Company or is approved by the Company's
shareholders.
19. Forfeiture for Dishonesty. Notwithstanding anything to the contrary in
-------------------------
this Plan, if the Committee finds, by a majority vote, after full
consideration of the facts presented on behalf of both the Company and any
optionee, that the optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or other dishonest conduct in the course of his
employment by the Company or any subsidiary which damaged the Company or
any subsidiary or that the optionee has disclosed trade secrets of the
Company or any subsidiary, the optionee shall forfeit all unexercised
Options and all exercised Options under which the Company has not yet
delivered the certificates. The decision of the Committee as to the cause
of an optionee's discharge and the damage done to the Company or any
subsidiary shall be final. No decision of the Committee, however, shall
affect the finality of the discharge of such optionee by the Company or any
subsidiary in any manner.
20. No Prohibition on Corporate Action. No provision of this Plan shall be
----------------------------------
construed to prevent the Company or any officer or director thereof from
taking any corporate action deemed by the Company or such officer or
director to be appropriate or in the Company's best interest, whether or
not such action could have an adverse effect on the Plan or any Options
granted hereunder, and no optionee or optionee's estate, personal
representative or beneficiary shall have any claim against the Company or
any officer or director thereof as a result of the taking of such action.
21. Use of Proceeds. The proceeds received by the Company from the exercise of
---------------
any Option issued pursuant to the Plan shall be used for general corporate
purposes.
22. Indemnification. With respect to the administration of the Plan, the
---------------
Company shall indemnify each present and future
-8-
<PAGE>
member of the Committee and the Board against, and each member of the
Committee and the Board shall be entitled without further act on his part
to indemnity from the Company for all expenses (including the amount of
judgments and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by him in connection with or arising out of,
any action, suit or proceeding in which he may be involved by reason of his
being or having been a member of the Committee and the Board, whether or
not he continues to be such member of the Committee and the Board at the
time of incurring such expenses; provided, however, that such indemnity
shall not include any expenses incurred by any such member of the Committee
and the Board (i) in respect of matters as to which he shall be finally
adjudged in any such action, suit or proceeding to have been guilty of
gross negligence or willful misconduct in the performance of his duty as
such member of the Committee and the Board; or (ii) in respect of any
matter in which any settlement is effected for an amount in excess of the
amount approved by the Company on the advice of its legal counsel; and
provided further that no right of indemnification under the provisions set
forth herein shall be available to or enforceable by any such member of the
Committee and the Board unless within 60 days after institution of any such
action, suit or proceeding, he shall have offered the Company in writing
the opportunity to handle and defend same at its own expense. The foregoing
right of indemnification shall inure to the benefit of the heirs, executors
or administrators of each such member of the Committee and the Board and
shall be in addition to all other rights to which such member of the
Committee and the Board may be entitled as a matter of law, contract or
otherwise.
23. Miscellaneous Provisions.
------------------------
(a) No optionee or other person shall have any right with respect to the Plan,
the Common Stock reserved for issuance under the Plan or in any Option
until written evidence of the Option shall have been delivered to the
optionee and all the terms, conditions and provisions of the Plan and the
Option applicable to such optionee (and each person claiming under or
through him) have been met.
(b) No shares of Common Stock, other securities or property of the Company, or
other forms of payment shall be issued hereunder with respect to any Option
unless counsel for the Company shall be satisfied that such issuance will
be in compliance with applicable federal, state, local and foreign legal,
securities exchange and other applicable requirements.
-9-
<PAGE>
(c) To the extent that Rule 16b-3 under the Exchange Act applies to Options
granted under this Plan, it is the intent of the Company that the Plan
comply in all respects with the requirements of Rule 16b-3, that any
ambiguities or inconsistencies in construction of the Plan be interpreted
to give effect to such intention and that if any provision of the Plan is
found not to be in compliance with Rule 16b-3, such provision shall be
deemed null and void to the extent required to permit the Plan to comply
with Rule 16b-3.
(d) The Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Option under the Plan, and rights to the payment
of Options shall be no greater than the rights of the Company's general
creditors.
(e) By accepting any Option or other benefit under the Plan, each optionee and
each person claiming under or through him shall be conclusively deemed to
have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee or
its delegates.
(f) The masculine pronoun shall include the feminine and neuter, and the
singular shall include the plural, where the context so indicates.
(g) This Plan shall be effective as of April 24, 1992. No Option shall
be granted pursuant to this Plan after May 31, 2002.
TO RECORD the adoption of this Plan, the Board has caused this instrument
to be executed on this 24th day of April, 1992.
BENCHMARK CORPORATION
OF DELAWARE
By: [SIGNATURE APPEARS HERE]
------------------------
Chairman
-10-
<PAGE>
EXHIBIT 10.40
BENCHMARK CORPORATION OF DELAWARE
MANAGEMENT EQUITY PARTICIPATION PLAN
------------------------------------
1. Purpose. The purpose of this Management Equity Participation Plan (the
-------
"Plan") is to advance the interests of Benchmark Corporation of Delaware (the
"Company") and its stockholders by offering the opportunity to purchase shares
of the Company's common stock to those management employees of the Company and
its subsidiaries who contribute materially to the Company's success by their
creativity, ability, industry, loyalty or exceptional service. The Plan is also
intended to provide a means of reinforcing the commonality of interest between
the Company's stockholders and the Company's management employees and to
provide a means of attracting and retaining management employees of outstanding
abilities and specialized skills.
2. Definitions. The following definitions shall be applicable to the terms
-----------
used in the Plan:
a. Administrator means the Board or any committee designated by the
-------------
Board to perform any or all of the administrative functions required by this
Plan.
b. Board means of the Board of Directors of the Company or any
-----
committee thereof which is authorized to act on behalf of such Board of
Directors.
c. Common Stock means the nonvoting common stock (par value
------------
$.0001 per share) of the Company.
d. Company means Benchmark Corporation of Delaware, a Delaware
-------
corporation.
<PAGE>
e. Eligible Employee means any employee of the Company or any of
-----------------
its subsidiaries who is employed on a managerial level or above.
f. Participant means any Eligible Employee who is granted the right
-----------
in accordance with the provisions of paragraph 5 hereof to purchase Common Stock
hereunder.
g. Wherever appropriate, words used in the Plan in the singular may
mean the plural; the plural may mean the singular, and the masculine may mean
the feminine or neuter.
3. Administration. This Plan shall be administered by the Administrator.
--------------
The Administrator shall have exclusive and final authority with respect to all
determinations and decisions affecting the Plan and its Participants. In
addition to its duties as elsewhere set forth in this Plan, the Administrator
shall have the sole authority to interpret the Plan, to establish and revise
rules and regulations relating to the Plan, to delegate such responsibilities or
duties as it deems desirable and to make any other determinations which it
believes necessary or advisable for the administration of the Plan. Any decision
or action made or taken by the Administrator, arising out of or in connection
with the construction, administration, interpretation and effect of the Plan and
of its rules and regulations, shall be conclusive and binding upon all
Participants and any person claiming through or under any Participant, unless
otherwise determined by the Administrator.
-2-
<PAGE>
4. Shares Subject to Plan. The number of shares of Common Stock which may
----------------------
be made available for purchase under the Plan shall not exceed 750,000 shares.
Shares purchased under the Plan may be in whole or in part, as determined by the
Administrator, authorized but unissued shares of Common Stock or issued shares
of the Common Stock reacquired by the Company.
5. Participation. Individual participation in the Plan shall be determined
-------------
solely by the Administrator which shall select Participants from the class of
Eligible Employees. Those directors of the Company who are not regular salaried
officers or executives of the Company shall not be eligible to participate in
the Plan. However, no officer or other executive of the Company shall be
ineligible to participate solely because such person is also a director of the
Company.
6. Awards. As soon as practicable after the effective date of the Plan and
------
at any time and from time to time thereafter, the Administrator shall determine
(i) the Eligible Employees who shall become Participants, (ii) the number of
shares of Common Stock that each Participant may purchase, (iii) the price at
which each share of Common Stock may be purchased and (iv) the terms on which
each share of Common Stock may be purchased. Recommendations as to such matters
shall be made to the Administrator by the Company's President.
-3-
<PAGE>
7. Subscription Agreement. Subject to the terms and provisions of this Plan,
----------------------
the terms and conditions under which the Common Stock may be purchased by a
Participant shall be set forth in a written agreement (hereinafter referred to
as the "Subscription Agreement") in the form attached hereto as Exhibit A and
made a part hereof, containing such modifications thereto and such other
provisions as the Administrator, in its sole discretion, may determine. Each
Subscription Agreement shall incorporate the provisions of this Plan by
reference.
8. Notice and Price. As soon as practicable after the determination by the
----------------
Administrator of the Participants and the number of shares each Participant may
purchase, the Administrator shall give written notice thereof to each
Participant in the form attached hereto as Exhibit B and made a part hereof,
containing such modifications thereto and such other provisions as the
Administrator, in its sole discretion, may determine. Each notice shall be
accompanied by the Subscription Agreement to be executed by the Participant.
Within the period specified in this notice, a Participant may exercise his right
to purchase the Common Stock by executing the Subscription Agreement and
returning it to the Administrator. The price for each share of Common Stock
purchased pursuant to this paragraph 8 shall be determined by the Administrator,
it being understood that (i) such price need not be the fair market value of the
shares and (ii) the price determined by the Administrator may vary from one
Participant to another.
-4-
<PAGE>
9. Payment. The Administrator shall determine the terms for payment by
-------
each Participant for his shares of Common Stock. These terms shall be set forth
or referred to in the Subscription Agreement. The terms for payment set forth by
the Administrator may vary from one Participant to another.
10. Delivery of Shares. The Company shall deliver to or on behalf of each
------------------
Participant the number of shares of Common Stock that the Participant elects to
purchase as soon as practicable after the Company receives the Subscription
Agreement appropriately executed and the purchase price, as determined under
paragraph 8 hereof and set forth in the Subscription Agreement. The shares,
which shall be fully paid and nonassessable upon the issuance thereof and shall
be represented by a certificate or certificates registered in the name of the
Participant and stamped with an appropriate legend referring to the restrictions
thereon set forth in the Subscription Agreement.
11. Rights of Participants as Stockholders. Subject to the terms and
--------------------------------------
provisions of the Delaware General Corporation Law and the Subscription
Agreement to which the Participant is a party, a Participant shall have all the
rights of a stockholder with respect to his shares of Common Stock, including
the right to receive all dividends or other distributions paid or made with
respect thereto, from and after the date on which the Participant delivers his
executed Subscription Agreement to the Administrator, together with
-5-
<PAGE>
payment of the purchase price in the amount and on the terms described therein.
12. Ratification. By purchasing shares of Common Stock under this Plan, each
------------
Participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board, the Administrator or any
of their delegates.
13. Governing Law and Construction. The place of administration of this Plan
------------------------------
shall be conclusively deemed to be within the Commonwealth of Pennsylvania and
the validity, construction, interpretation administration and effect of this
Plan and any of its rules and regulations and the rights of any and all persons
having or claiming to have an interest therein or thereunder shall be governed
by and determined exclusively and solely in accordance with the laws of the
Commonwealth of Pennsylvania. The paragraph headings are provided herein for
convenience of reference only and are not to serve as a basis for interpretation
or construction of this Plan.
14. Nontransferability. The rights and interest of any Participant under this
------------------
Plan may not be assigned, transferred, pledged or encumbered and any attempt to
do so shall be void.
-6-
<PAGE>
15. Costs and Expenses. All costs and expenses with respect to the adoption,
------------------
implementation, interpretation and administration of the Plan shall be borne by
the Company.
16. Contract and Employment Rights. Nothing in this Plan shall be deemed to
------------------------------
give any officer or employee of the Company or any of its subsidiaries, his
legal representatives or assigns, or any other person or entity claiming under
or through him any contract or other right to participate in the benefits of
this Plan. Nothing in this Plan shall be construed as constituting a commitment,
guarantee, agreement or understanding of any kind or nature that the Company or
its subsidiaries shall continue to employ any individual, whether or not a
Participant. The Plan shall not affect in any way the right of the Company or
any subsidiary to terminate the employment of any individual, whether or not a
Participant, at any time.
17. Changes in Capitalization. In the event that the outstanding shares of
-------------------------
Common Stock are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of shares, the Administrator shall make an appropriate and
equitable adjustment in the number and kind of shares as to which purchase
rights under this Plan have been or will be granted. Any such adjustment made by
the Administrator shall be final and
-7-
<PAGE>
binding upon the Participants, the Company and all other interested persons.
18. Amendment or Termination. The Plan may be amended or terminated in whole
------------------------
or in part at any time by the Board, in its sole discretion, provided that
without the consent of a Participant, no amendment shall affect the
Participant's rights under any outstanding offer to purchase Common Stock
hereunder. Any such amendment shall be in writing. Moreover, such amendment or
termination shall be evidenced by a written resolution of the Board.
19. Burden and Benefit. The terms and provisions of this Plan shall be binding
------------------
upon, and shall inure to the benefit of, each Participant and his executors and
administrators, heirs and personal and legal representatives.
20. Effective Date. Upon adoption by the Board this Plan shall be effective
--------------
as of March 10, 1993.
TO RECORD the adoption of this Plan, the Company has caused its authorized
officers to affix its corporate name and seal hereto on this 10th day of March,
1993.
Attest: BENCHMARK CORPORATION OF
DELAWARE
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ----------------------------- ------------------------------
Secretary Chairman
-8-
<PAGE>
EXHIBIT A
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION.
FURTHERMORE, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES COMMISSION OF ANY OTHER
JURISDICTION, NOR HAS ANY SUCH COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. ACQUISITION OF
THESE SECURITIES SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN
A TOTAL LOSS OF THEIR INVESTMENT.
Benchmark Corporation of Delaware
735 Chesterbrook Boulevard
Suite 305
Wayne, PA 19087
Gentlemen:
The undersigned is entering into this Subscription Agreement (the
"Agreement") in connection with the offer by Benchmark Corporation of Delaware
(the "Company") pursuant to the terms and conditions of a Notice dated ________,
199_ (the "Notice") and the Company's Management Equity Participation Plan (the
"Plan") to purchase shares of the Company's Nonvoting Common Stock, $.0001 par
value (the "Nonvoting Stock").
1. Subscription. Subject to the terms and conditions set forth herein and
------------
in the Plan, the undersigned hereby subscribes for and agrees to purchase ____
shares (the "Shares") of Nonvoting Stock. The purchase price for each Share is
$____ and is payable as follows: [detail per award]. [Brief description of any
other terms and conditions of award relevant to exercise, such as minimum
number of Shares exercisable.] The undersigned also is delivering to the Company
together with this executed Subscription Agreement an executed copy of the
Transfer Restriction Agreement in the form of Schedule I attached hereto and
understands that the delivery of such executed agreement is a condition to the
Company's obligation to accept this subscription.
2. Acceptance of Subscription. The undersigned understands and agrees
--------------------------
that the certificate to be issued and delivered on account of this
subscription will be issued only in the name of, and delivered only to, the
undersigned.
3. Representations and Warranties. By executing this Subscription
------------------------------
Agreement, the undersigned further:
(a) acknowledges and understands that the Shares are being offered
and issued under exemptions from registration under
<PAGE>
the Securities Act of 1933, as amended (the "Act") and the securities laws of
other jurisdictions;
(b) represents and warrants that he is acquiring the Shares without
being furnished any offering literature, prospectus or information relating to
the Company other than information contained herein or attached hereto as
Schedule II and information, if any, requested by the undersigned or his
representatives;
(c) acknowledges that the Company has provided him or his
representatives reasonable opportunity to ask questions of the officers of the
Company and full access to all records, books, documents and other information
which may be helpful or necessary to understand the information set forth herein
and to evaluate the merits and risks of an investment in the Shares and that his
investment decision with respect to the Shares was based solely on information
contained herein or received by the undersigned or his representatives as a
result of his position as a manager of the Company or the independent
investigation of the undersigned or his representatives;
(d) acknowledges that this transaction has not been examined by the
Securities and Exchange Commission or the securities commission of any other
jurisdiction;
(e) represents, warrants and acknowledges that he has read and
understands the risk factors involved in the acquisition of the Shares as set
forth on Schedule I attached hereto;
(f) represents and warrants that (i) he is acquiring the Shares solely
for his own account for investment purposes only and not with a view to or for
the resale, distribution, subdivision or fractionalization thereof and (ii) he
has no contract, understanding, arrangement or agreement, formal or informal,
with any person to sell, transfer or pledge the Shares to any person nor any
present plans to enter into any such contract, undertaking, arrangement or
agreement;
(g) represents and warrants that he has, together with his purchaser
representatives, if any, such knowledge and experience in financial and business
matters that he is, or they are, capable of evaluating the merits and risks of
an investment in the Shares based solely on the information contained herein,
including Schedule I hereto, and the information otherwise known or made
available by the Company to the undersigned or his representatives;
(h) represents and warrants that he (A) is able to bear the economic
risk of losing his total investment in the Shares; (B) is able to hold the
Shares for an indefinite period of time; (C) has adequate means of providing for
his current
A-2
<PAGE>
needs and possible personal contingencies; and (D) has no need for liquidity in
his investment;
(i) represents and warrants that (A) his overall commitment to
investments which are not liquid is reasonable in relation to and not
disproportionate to his net worth and current needs; (B) his investment in the
Shares will not cause such overall commitment to become unreasonable or
disproportionate and (C) the financial representations made by him herein
accurately reflect his financial condition, with respect to which he does not
anticipate any material adverse changes;
(j) confirms that he understands and has considered fully for
purposes of this investment that there are substantial restrictions on the
transferability of the Shares because (i) the Shares have not been registered
under the Act or the securities laws of any other jurisdiction and the Company
has no obligation to take any action which would make available any exemption
from the registration requirements of such laws and that as a result of such
restrictions on transferability, it may not be possible for the undersigned to
liquidate his investment in the Shares in case of an emergency or to use the
Shares as collateral for a loan;
(k) agrees and understands that he may not sell the Shares unless
the Shares are registered or he provides the Company with an opinion of counsel
satisfactory to the Company and its counsel (both as to the issuer of the
opinion and the form and substance thereof) that the Shares may be transferred
in reliance on an applicable exemption from the registration requirements of the
Act and any applicable state securities laws, unless such requirement is waived
by the Company in its sole discretion;
(l) consents to the placement of a legend on the certificate
representing the Shares, which legend will be in substantially the following
form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR WITH ANY OTHER
AGENCY UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTION. THE SALE OR OTHER DISPOSITION OF
THESE SHARES IS PROHIBITED UNLESS THE SHARES
ARE REGISTERED OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
AND ITS COUNSEL (BOTH AS TO THE ISSUER OF THE
OPINION AND THE FORM AND SUBSTANCE THEREOF)
THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE APPLICABLE
SECURITIES LAWS OF ANY OTHER JURISDICTION,
UNLESS SUCH REQUIREMENT IS WAIVED BY THE
A-3
<PAGE>
COMPANY IN ITS SOLE DISCRETION. BY ACQUIRING
THE SHARES REPRESENTED BY THIS CERTIFICATE, THE
HOLDER HEREOF REPRESENTS THAT HE HAS ACQUIRED
THESE SHARES FOR INVESTMENT AND THAT HE WILL
NOT SELL OR OTHERWISE DISPOSE OF THESE SHARES
WITHOUT REGISTRATION OR OTHER COMPLIANCE WITH
THE AFORESAID ACTS AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
(m) understands and acknowledges that the foregoing
representations, warranties, agreements, acknowledgements and understandings are
made by the undersigned with the intent that they be relied upon by the Company
in determining the applicability of the exemption from registration under the
Act and the applicable state securities laws upon which the Company is relying.
4. Transferability. The undersigned agrees not to transfer or assign
---------------
this Subscription Agreement or any interest herein and further agrees that the
assignment, sale or other transfer of the Shares shall be effected only
accordance with all applicable laws.
5. Revocation. The undersigned agrees that it may not cancel, revoke
----------
or terminate this Subscription Agreement or any agreement made hereunder and
that this Subscription Agreement shall be binding upon and inure to the benefit
of the undersigned's successors and assigns.
6. Miscellaneous.
-------------
(a) All notices or other communications given or made hereunder
shall be delivered or mailed, postage prepaid, to the undersigned at his address
as set forth herein and to the Company at 735 Chesterbrook Boulevard, Suite 305,
Wayne, Pennsylvania 19087.
(b) This Subscription Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
A-4
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the _______ day of __________, 199_.
---------------------------------
Name of Subscriber (Please Print)
---------------------------------
Signature of Subscriber
Residence Address: Mailing Address (if different from
residence address)
- ------------------------------------ ---------------------------------
- ------------------------------------ ---------------------------------
- ------------------------------------ ---------------------------------
Social Security or Federal Employer Identification Number:
- -------------------------
This Subscription Agreement is hereby accepted subject to the terms
and conditions hereof this ____ day of __________, 199_.
BENCHMARK CORPORATION OF
DELAWARE
By:
-----------------------------
Michael T. Kennedy
Chairman
A-5
<PAGE>
Exhibit B
[to be retyped on Benchmark letterhead]
_________________, 199_
[Name of Award Recipient]
[Address]
Re: Benchmark Corporation of Delaware
Management Equity Participant Plan (the "Plan")
-----------------------------------------------
Dear [ ]:
On behalf of the Board of Directors of Benchmark Corporation of Delaware
(the "Company"), it is my pleasure to inform you that you have been granted the
right to purchase up to _______shares (the "Offered Shares") of the Company's
Nonvoting Common Stock, par value $.0001 per share (the "Nonvoting Stock") under
the terms of the Plan and subject to the terms and conditions of this Notice.
The purchase price shall be $____ per Offered Share.
Your right to purchase any of the Offered Shares pursuant to this award
shall expire on the earlier to occur of the termination of your employment with
the Company or ____ days from the date of this Notice (the "Expiration Date").
The right may be exercisable in whole or in part, and from time to time prior to
the Expiration Date, by returning to the undersigned the Subscription Agreement
accompanying this Notice together with payment for the Offered Shares you have
elected to purchase in accordance with the terms of the Subscription Agreement
and this Notice. [Payment terms and other terms and conditions of each Award,
including minimum purchase terms, to be specified]
This Notice and the award described herein are being delivered and made
pursuant to the Plan, the terms and conditions of which are incorporated herein
by reference. A copy of the Plan is also being furnished to you together with
this Notice. The grant of the award described in this Notice shall not, and
shall not be deemed to, grant you any rights as a stockholder of the Company,
and you shall have no such rights with respect to the Offered Shares unless and
until one or more certificates evidencing Offered Shares you have duly elected
to purchase in accordance with the terms of this Notice, the Plan and the
accompanying Subscription Agreement are issued and delivered to you.
Sincerely,
Michael T. Kennedy
Chairman
Encl.
<PAGE>
AMENDMENT
TO THE
BENCHMARK CORPORATION OF DELAWARE
MANAGEMENT EQUITY PARTICIPATION PLAN
WHEREAS, Benchmark Corporation of Delaware, a Delaware corporation
(the "Company"), maintains the Benchmark Corporation of Delaware Management
Equity Participation Plan (the "Purchase Plan"); and
WHEREAS, effective May 21, 1993, the Company reduced, by means of a 1
for 1,000 reverse stock split (the "Stock Split"), the total number of
outstanding shares of all classes of the Company's stock as well as the number
of shares the Company is authorized to issue; and
WHEREAS, the Board of Directors has adjusted the number of shares
reserved out of the authorized but unissued shares of the Company's Nonvoting
Common Stock for issuance under the Company's Purchase Plan to 251, par value
$.10 per share (the "Board Adjustment"); and
WHEREAS, the Company desires to amend the Purchase Plan in order to
reflect the effect of the Stock Split and the Board Adjustment upon certain
terms and conditions of the Purchase Plan.
NOW THEREFORE, the Purchase Plan shall be hereby amended as follows:
1. Subparagraph 2.c. shall be amended to read in its entirety as
follows:
"Common Stock means the nonvoting common stock (par value $.10 per
------------
share) of the Company."
2. The first sentence of Paragraph 4 shall be amended to read in its
entirety as follows:
"The number of shares of Common Stock which may be made available
for purchase under the Plan shall not exceed 251 shares."
This Amendment shall be effective as of May 21, 1993. Except as
expressly modified herein, all of the terms and conditions of the Purchase Plan
shall continue in full force and effect.
<PAGE>
TO RECORD the adoption of this Amendment, the Company has caused its duly
authorized officer to affix its corporate name hereto as of the 1st day of
November, 1993.
BENCHMARK CORPORATION OF
DELAWARE
By: [SIGNATURE APPEARS HERE]
------------------------
President
<PAGE>
EXHIBIT 10.41
===============================================================================
AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
===============================================================================
THE BANK OF NEW YORK COMMERCIAL CORPORATION
(AS LENDER AND AS AGENT)
===============================================================================
WITH
===============================================================================
WINCUP HOLDINGS, L.P.
WINCUP HOLDINGS, INC.
SP ACQUISITION CO.
STYROCHEM INTERNATIONAL, INC.
and
RADNOR HOLDINGS CORPORATION
(BORROWERS)
===============================================================================
December 5, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
I. DEFINITIONS...................................................................... 1
1.1. Accounting Terms........................................................... 1
1.2. General Terms.............................................................. 1
1.3. Uniform Commercial Code Terms.............................................. 18
1.4. Certain Matters of Construction............................................ 18
II. ADVANCES, PAYMENTS............................................................... 18
2.1.............................................................................. 18
(b) Holdings Borrowing Base............................................... 19
(c) Acquisition Borrowing Base............................................ 20
(d) StyroChem Borrowing Base.............................................. 20
(e) Radnor Borrowing Base................................................. 21
(f) Discretionary Rights.................................................. 21
(g) Inventory Advances.................................................... 21
2.2. Procedure for Borrowing.................................................... 22
2.3. Disbursement of Advance Proceeds........................................... 24
2.4. Intentionally Omitted...................................................... 25
2.5. Maximum Advances; Repayment of Excess Advances............................. 25
2.6. Repayment of Advances...................................................... 25
2.7. Intentionally Omitted...................................................... 26
2.8. Statement of Account....................................................... 26
2.9. Letters of Credit.......................................................... 26
2.10. Issuance of Letters of Credit.............................................. 27
2.11. Requirements For Issuance of Letters of Credit............................. 27
2.12. Additional Payments........................................................ 29
2.13. Manner of Borrowing and Payment............................................ 29
III. INTEREST AND FEES................................................................ 32
3.1. Interest................................................................... 32
3.2. Letter of Credit Fees...................................................... 32
3.3. (a) Closing Fee........................................................... 33
(b) Facility Fee.......................................................... 33
(c) Agency Fee............................................................ 33
3.4. (a) Collateral Evaluation Fee............................................. 33
(b) Collateral Monitoring Fee............................................. 33
3.5. Computation of Interest and Fees........................................... 34
3.6. Maximum Charges............................................................ 34
3.7. Increased Costs............................................................ 34
3.8. Basis For Determining Interest Rate Inadequate or Unfair................... 35
3.9. Capital Adequacy........................................................... 36
IV. COLLATERAL: GENERAL TERMS....................................................... 36
4.1. Acknowledgement and Grant of Security Interests............................ 36
4.2. Perfection of Security Interest............................................ 37
4.3. Disposition of Collateral.................................................. 37
4.4. Preservation of Collateral................................................. 38
4.5. Ownership of Collateral.................................................... 38
4.6. Defense of Agent's and Lender's Interests.................................. 38
</TABLE>
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<TABLE>
<S> <C> <C>
4.7. Books and Records.......................................................... 39
4.8. Financial Disclosure....................................................... 39
4.9. Compliance with Laws....................................................... 40
4.10. Inspection of Premises..................................................... 40
4.11. Insurance.................................................................. 40
4.12. Failure to Pay Insurance................................................... 41
4.13. Payment of Taxes........................................................... 41
4.14. Payment of Leasehold Obligations........................................... 42
4.15. Receivables................................................................ 42
(a) Nature of Receivables................................................. 42
(b) Solvency of Customers................................................. 42
(c) Locations of Borrower................................................. 42
(d) Collection of Receivables............................................. 42
(e) Notification of Assignment of Receivables............................. 43
(f) Power of Agent to Act on Borrowers' Behalf............................ 43
(g) No Liability.......................................................... 44
(h) Establishment of a Lockbox Account, Dominion Account.................. 44
(i) Adjustments........................................................... 44
4.16. Inventory.................................................................. 44
4.17. Maintenance of Equipment................................................... 44
4.18. Exculpation of Liability................................................... 45
4.19. Environmental Matters...................................................... 45
V. REPRESENTATIONS AND WARRANTIES................................................... 46
5.1. Authority.................................................................. 46
5.2. Formation and Qualification................................................ 46
5.3. Survival of Representations and Warranties................................. 47
5.4. Tax Returns................................................................ 47
5.5. Financial Statements....................................................... 47
5.6. Corporate Name............................................................. 48
5.7. O.S.H.A. and Environmental Compliance...................................... 48
5.8. Solvency; No Litigation, Violation, Indebtedness or Default................ 49
5.9. Patents, Trademarks, Copyrights and Licenses............................... 50
5.10. Licenses and Permits....................................................... 51
5.11. Default of Indebtedness.................................................... 51
5.12. No Default................................................................. 51
5.13. No Burdensome Restrictions................................................. 51
5.14. No Labor Disputes.......................................................... 51
5.15. Margin Regulations......................................................... 51
5.16. Investment Company Act..................................................... 51
5.17. Disclosure................................................................. 51
5.18. Delivery of Acquisition Agreement.......................................... 52
5.19. Swaps...................................................................... 52
5.20. Conflicting Agreements..................................................... 52
5.21. Application of Certain Laws and Regulations................................ 52
5.22. Business and Property of Borrower.......................................... 52
5.23. Acquisition................................................................ 52
VI. AFFIRMATIVE COVENANTS............................................................ 53
6.1. Payment of Fees............................................................ 53
6.2. Conduct of Business and Maintenance of Existence and Assets................ 53
</TABLE>
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<TABLE>
<S> <C> <C>
6.3. Violations.................................................................. 53
6.4. Government Receivables...................................................... 53
6.5. Net Worth................................................................... 54
6.6. Current Ratio............................................................... 54
6.7. Fixed Charge Coverage....................................................... 54
6.8. Interest Coverage........................................................... 54
6.9. Net Income.................................................................. 54
6.10. Execution of Supplemental Instruments....................................... 54
6.11. Payment of Indebtedness..................................................... 54
6.12. Standards of Financial Statements........................................... 54
6.13. Exercise of Rights.......................................................... 55
VII. NEGATIVE COVENANTS................................................................ 55
7.1. Merger, Consolidation, Acquisition and Sale of Assets....................... 55
7.2. Creation of Liens........................................................... 55
7.3. Guarantees.................................................................. 55
7.4. Investments................................................................. 55
7.5. Loans....................................................................... 56
7.6. Capital Expenditures........................................................ 56
7.7. Dividends................................................................... 56
7.8. Indebtedness................................................................ 58
7.9. Nature of Business.......................................................... 58
7.10. Transactions with Affiliates................................................ 58
7.11. Leases...................................................................... 58
7.12. Subsidiaries................................................................ 58
7.13. Fiscal Year and Accounting Changes.......................................... 59
7.14. Pledge of Credit............................................................ 59
7.15. Amendment of Agreement of Limited Partnership, Etc......................... 59
7.16. Compliance with ERISA....................................................... 59
7.17. Senior Notes................................................................ 60
7.18. Intentionally Omitted....................................................... 60
7.19. Intentionally Omitted....................................................... 60
7.20. Prepayment of Indebtedness.................................................. 60
VIII. CONDITIONS PRECEDENT.............................................................. 60
8.1. Conditions to Initial Advances.............................................. 60
(a) Notes.................................................................. 60
(b) Filings, Registrations and Recordings.................................. 60
(c) Proceedings of Borrowers............................................... 60
(d) Incumbency Certificates of Borrowers................................... 61
(e) Certificates........................................................... 61
(f) Good Standing Certificates............................................. 61
(g) Legal Opinion.......................................................... 61
(h) No Litigation.......................................................... 61
(i) Financial Condition Opinions........................................... 61
(j) Collateral Examination................................................. 62
(k) Fees................................................................... 62
(l) Pro Forma Financial Statements......................................... 62
(m) Other Documents........................................................ 62
(n) Other Documents........................................................ 62
(o) Insurance.............................................................. 62
(p) Environmental Reports.................................................. 62
</TABLE>
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<TABLE>
<S> <C> <C>
(q) Payment Instructions.................................................. 62
(r) Blocked Accounts...................................................... 62
(s) Consents.............................................................. 63
(t) No Material Adverse Change............................................ 63
(u) Leasehold Agreements.................................................. 63
(v) Contract Review....................................................... 63
(w) Closing Certificate................................................... 63
(x) Borrowing Base........................................................ 63
(y) Compliance............................................................ 63
(z) Agreements............................................................ 64
(aa) Acquisition........................................................... 64
8.2. Conditions to Each Advance................................................. 64
(a) Representations and Warranties........................................ 64
(b) No Default............................................................ 64
(c) Maximum Advances...................................................... 64
IX. INFORMATION AND GENERAL PARTNER.................................................. 65
9.1. Disclosure of Material Matters............................................. 65
9.2. Schedules.................................................................. 65
9.3. Intentionally Omitted...................................................... 65
9.4. Litigation................................................................. 65
9.5. Material Occurrences....................................................... 66
9.6. Government Receivables..................................................... 66
9.7. Annual Financial Statements................................................ 66
9.8. Quarterly Financial Statements............................................. 67
9.9. Monthly Financial Statements............................................... 67
9.10. Other Reports.............................................................. 67
9.11. Additional Information..................................................... 67
9.12. Projected Operating Budget................................................. 68
9.13. Intentionally Omitted...................................................... 68
9.14. Notice of Suits, Adverse Events............................................ 68
9.15. ERISA Notices and Requests................................................. 68
9.16. Additional Documents....................................................... 69
X. EVENTS OF DEFAULT................................................................ 69
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT....................................... 72
11.1. Rights and Remedies........................................................ 72
11.2. Agent's Discretion......................................................... 73
11.3. Setoff..................................................................... 74
11.4. Rights and Remedies not Exclusive.......................................... 74
11.5. Actions in Concert......................................................... 74
XII. WAIVERS AND JUDICIAL PROCEEDINGS................................................. 74
12.1. Waiver of Notice........................................................... 74
12.2. Delay...................................................................... 74
12.3. Jury Waiver................................................................ 74
XIII. EFFECTIVE DATE AND TERMINATION................................................... 75
13.1. Term....................................................................... 75
13.2. Termination................................................................ 75
XIV. REGARDING AGENT.................................................................. 76
14.1. Appointment................................................................ 76
</TABLE>
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<TABLE>
<S> <C> <C>
14.2. Nature of Duties.......................................................... 76
14.3. Lack of Reliance on Agent and Resignation................................. 77
14.4. Certain Rights of Agent................................................... 77
14.5. Reliance.................................................................. 78
14.6. Notice of Default......................................................... 78
14.7. Indemnification........................................................... 78
14.8. Agent in its Individual Capacity.......................................... 78
14.9. Delivery of Documents..................................................... 79
14.10. Borrowers' Undertaking to Agent........................................... 79
XIV. MISCELLANEOUS.................................................................... 79
15.1. Governing Law............................................................. 79
15.2. Entire Understanding...................................................... 79
15.3. Successors and Assigns; Participations; New Lenders....................... 81
15.4. Application of Payments................................................... 82
15.5. Indemnity................................................................. 82
15.6. Notice.................................................................... 83
15.7. Survival.................................................................. 84
15.8. Severability.............................................................. 84
15.9. Expenses.................................................................. 84
15.10. Injunctive Relief......................................................... 84
15.11. Consequential Damages..................................................... 85
15.12. Captions.................................................................. 85
15.13. Construction.............................................................. 85
XVI. BORROWING AGENCY................................................................. 85
16.1. Borrowing Agency Provisions............................................... 85
16.2. Waiver of Subrogation..................................................... 86
XVII. CROSS-GUARANTY................................................................... 86
17.1. Cross Guaranty............................................................ 86
17.2. Contribution with Respect to Guaranty Obligations......................... 86
17.3. Obligations Absolute...................................................... 87
17.4. Waiver.................................................................... 88
17.5. Recovery.................................................................. 89
17.6. Liability Cumulative...................................................... 89
</TABLE>
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<PAGE>
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit 2.9 - Form of Letter of Credit and Security Agreement
Exhibit 5.5(b) - Financial Projections
Exhibit 8.1(i) - Form of Officers' Certificate
Exhibit 15.3 - Form of Commitment Transfer Supplement
SCHEDULES
Schedule 1.2 - Permitted Encumbrances
Schedule 4.5 - Locations of Equipment and Inventory
Schedule 4.15 - Location of Borrowers' Executive Offices
Schedule 4.20 - Financing Statements
Schedule 5.2(a) - Formation and Qualification
Schedule 5.2(b) - Subsidiaries
Schedule 5.4 - Federal Tax Identification Numbers
Schedule 5.6 - Corporate Names
Schedule 5.8(b) - Pending Litigation
Schedule 5.8(d) - Multiemployer Plans
Schedule 5.9 - Licenses, Trademarks, Patents, Copyrights,
Source Code Escrow Agreements
Schedule 5.10 - Licenses and Permits
Schedule 5.14 - Labor Disputes
Schedule 7.3 - Guarantees
Schedule 8.1(y) - Compliance Certificate
-vi-
<PAGE>
AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
Amended and Restated Revolving Credit and Security Agreement dated as
of December 5, 1996 between WINCUP HOLDINGS, L.P. ("Wincup"), WINCUP HOLDINGS,
INC. ("Holdings"), SP ACQUISITION CO. ("Acquisition"), STYROCHEM INTERNATIONAL,
INC. ("StyroChem") and RADNOR HOLDINGS CORPORATION ("Radnor") (Wincup, Holdings,
Acquisition, StyroChem and Radnor each, a "Borrower" and jointly and severally,
the "Borrowers") the undersigned financial institutions and such financial
institutions which become a party hereto pursuant to Section 15.3 (collectively,
the "Lenders" and individually a "Lender") and THE BANK OF NEW YORK COMMERCIAL
CORPORATION ("BNYCC"), a corporation organized under the laws of the State of
New York, as administrative and collateral agent for the Lenders (BNYCC, in such
capacity, the "Agent").
B A C K G R O U N D
-------------------
Wincup and Holdings entered into a Revolving Credit, Term Loan and
Security Agreement dated as of January 22, 1996 (as same may have been amended,
modified or supplemented, the "Existing Loan Agreement"). By execution of this
Agreement, Wincup, Holdings, Agent and Lenders wish to add certain entities as
Borrowers and to amend and restate the Existing Loan Agreement on the terms and
conditions hereinafter set forth.
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, Wincup, Holdings, Acquisition, StyroChem, Radnor, Agent and Lenders
hereby agree as follows:
I. DEFINITIONS.
-----------
1.1. Accounting Terms. As used in this Agreement or any certificate,
----------------
report, note or other document made or delivered pursuant to this Agreement,
accounting terms not defined in Section 1.2 or elsewhere in this Agreement and
accounting terms partly defined in Section 1.2 to the extent not defined, shall
have the respective meanings given to them under GAAP; provided, however,
-------- -------
whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP applied in preparation of the audited
financial statements of Borrowers on a consolidated basis for the fiscal period
ended June 30, 1996.
1.2. General Terms. For purposes of this Agreement the following
-------------
terms shall have the following meanings:
"Acquisition" shall mean SP Acquisition Co., a corporation
-----------
organized and existing under the laws of the State of Delaware.
<PAGE>
"Acquisition Agreement" shall mean the Stock Purchase Agreement
---------------------
including all exhibits and schedules thereto dated as of October 28, 1996 among
Richard Davidovich, Richard Davidovich Charitable Trust, James River Paper
Company, Inc., Grupo Industrial Hermes, S.A. de C.V., E.M. Rosenthal, Rozanne
Rosenthal, Ashli M. Rosenthal Trust, Benjamin A. Rosenthal Trust, Madelyn E.
Rosenthal Trust, JMC Family Investment Ltd. Partnership and Richard C. Penshorn
(collectively, "Sellers") as sellers and Radnor as buyer.
"Acquisition Formula Amount" shall have the meaning set forth in
--------------------------
Section 2.1(c) hereof.
"Acquisition Inventory Advance Rate" shall have the meaning set
----------------------------------
forth in Section 2.1(c) hereof.
"Acquisition Receivables Advance Rate" shall have the meaning set
------------------------------------
forth in Section 2.1(c) hereof.
"Advances" shall mean and include the Revolving Advances and the
--------
Letters of Credit.
"Advance Rates" shall mean collectively, the Wincup Advance
-------------
Rates, Holdings Advance Rates, Acquisition Advance Rates, StyroChem Advance
Rates and Radnor Advance Rates.
"Affiliate" of any Person shall mean (a) any Person (other than a
---------
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a partner,
shareholder, director or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 5% or more of the securities having ordinary voting power
for the election of directors of such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Alternate Base Rate" shall mean, for any day, a rate per
-------------------
annum equal to the higher of (i) the Prime Rate in effect on such day and (ii)
the Federal Funds Rate in effect on such day plus 1/2 of 1%.
"Authority" shall have the meaning set forth in Section 4.19(d).
---------
"Average Monthly Eurodollar Rate" shall mean, as to any one month
-------------------------------
Interest Period, the average one month LIBOR as published in the Wall Street
Journal over the course of such one month Interest Period.
"Bank" shall mean The Bank of New York.
----
"Blocked Accounts" shall have the meaning set forth in Section
----------------
4.15(h).
-2-
<PAGE>
"Borrower" or "Borrowers" shall have the meaning set forth in the
-------- ---------
preamble to this Agreement and shall include all permitted successors and
assigns of such Persons.
"Borrowers on a consolidated basis" shall mean the
---------------------------------
consolidation in accordance with GAAP of the accounts or other items of
Borrowers.
"Borrowing Agent" shall mean Radnor.
---------------
"Business Day" shall mean with respect to Eurodollar Rate Loans,
------------
any day on which commercial banks are open for domestic and international
business, including dealings in Dollar deposits in London, England and New York,
New York and with respect to all other loans, any day other than a day on which
commercial banks in New York or Baltimore, Maryland are authorized or required
by law to close.
"CERCLA" shall mean the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980, as amended, 42 U.S.C. (S)(S)9601 et seq.
------
"Change of Control" shall mean (a) the occurrence of any event
-----------------
(whether in one or more transactions) which results in a transfer of control of
any Borrower to a Person who is not an Original Owner or an Affiliate of an
Original Owner or (b) any merger or consolidation of or with any Borrower or
sale or transfer of all or substantially all of the property or assets of any
Borrower with or to a Person that is not a Borrower hereunder. For purposes of
this definition, "control of Borrower" shall mean the power, direct or indirect,
(x) to vote 50% or more of the securities having ordinary voting power for the
election of directors of any Borrower or (y) to direct or cause the direction of
the management and policies of Borrower, by contract or otherwise.
"Change of Ownership" shall mean any transfer (whether in one
-------------------
or more transactions) of ownership of (a) 45% or more of the partnership
interests of Wincup held by any Partner to any Person other than a transfer of
Radnor's limited partnership interest in Wincup to Holdings or (b) 50% or more
of the common stock of any Borrower (including for the purposes of the
calculation of percentage ownership, any shares of common stock into which any
capital stock of any Borrower held by any Original Owner is convertible or for
which any such shares of the capital stock of any Borrower or of any other
Person may be exchanged and any shares of common stock issuable to its Parent
upon exercise of any warrants, options or similar rights which may at the time
of calculation be held by such Original Owners) to a Person who is neither (at
the time of such transfer) an Original Owner nor an Affiliate of an Original
Owner or (b) any merger, consolidation or sale of substantially all of the
property or assets of any Borrower with or to a Person that is not a Borrower
hereunder.
"Charges" shall mean all taxes, charges, fees, imposts, levies or
-------
other assessments, including, without limitation, all net income, gross income,
gross receipts, sales, use, ad valorem, value
-3-
<PAGE>
added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including, without
limitation, the PBGC or any environmental agency or superfund), upon the
Collateral, any Borrower or any of its Affiliates.
"Code" shall mean the Internal Revenue Code of 1986, as amended
----
from time to time and the regulations promulgated thereunder.
"Collateral" shall mean and include:
----------
(a) all Receivables;
(b) all General Intangibles;
(c) all Inventory;
(d) all of each Borrower's right, title and interest in
and to (i) all merchandise returned or rejected by Customers, relating to or
securing any of the Receivables; (ii) all of each Borrower's rights with respect
to Inventory as a consignor, a consignee, an unpaid vendor, mechanic, artisan,
or other lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to any Borrower
from any Customer relating to the Receivables; (iv) other property, including
warranty claims, relating to any goods securing this Agreement; (v) all of each
Borrower's contract rights, rights of payment which have been earned under a
contract right, instruments, documents, chattel paper, warehouse receipts,
deposit accounts, money and securities; (vi) if and when obtained by any
Borrower, all real and personal property of third parties in which such Borrower
has been granted a lien or security interest as security for the payment or
enforcement of Receivables; and (vii) any other goods, personal property or real
property now owned or hereafter acquired in which any Borrower has expressly
granted a security interest or may in the future grant a security interest to
Agent for the ratable benefit of the Lenders hereunder, or in any amendment or
supplement hereto or thereto, or under any other agreement between Agent and any
Borrower;
(e) all of each Borrower's ledger sheets, ledger cards,
files, correspondence, records, books of account, business papers, computers,
computer software (whether owned by any Borrower or in which it has an
interest), computer programs, tapes, disks and documents relating to (a), (b),
(c) or (d) of this Paragraph; and
(f) all proceeds and products of (a), (b), (c), (d) and (e)
in whatever form, including, but not limited to: cash, deposit accounts (whether
or not comprised solely of proceeds), certificates of deposit, insurance
proceeds (including hazard, flood and credit insurance), negotiable instruments
and other instruments
-4-
<PAGE>
for the payment of money, chattel paper, security agreements, documents, eminent
domain proceeds, condemnation proceeds and tort claim proceeds.
"Commitment Percentage" of any Lender shall mean the percentage
---------------------
set forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 15.3(b) hereof.
"Commitment Transfer Supplement" shall mean a document in the
------------------------------
form of Exhibit 15.3 hereto, properly completed and otherwise in form and
------------
substance satisfactory to Agent by which the Purchasing Lender purchases and
assumes a portion of the obligation of Lenders to make Advances under this
Agreement.
"Contribution Agreements" shall mean collectively, (i) the
-----------------------
Agreement made as of October 31, 1995 between Holdings and James River, (ii) the
Capital Contribution Agreement made as of the Initial Closing Date, between
Holdings and Wincup and (iii) the Capital Contribution Agreement made as of the
Initial Closing Date between James River and Wincup.
"Consents" shall mean all filings and all licenses, permits,
--------
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties, domestic or foreign, necessary to carry on
Borrower's business, including, without limitation, any Consents required under
all applicable federal, state or other applicable law.
"Contract Rate" shall mean, as applicable, the Revolving Interest
-------------
Rate or the Default Rate.
"Controlled Group" shall mean all members of a controlled group
----------------
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"Current Assets" at a particular date, shall mean all cash, cash
--------------
equivalents, accounts and inventory of Borrowers on a consolidated basis and all
other items which would, in conformity with GAAP, be included under current
assets on a balance sheet of Borrowers on a consolidated basis as at such date;
provided, however, that such amounts shall not include (a) any amounts for any
- -------- -------
Indebtedness owing by an Affiliate of any Borrower, unless such Indebtedness
arose in connection with the sale of goods or rendition of services in the
ordinary course of business and would otherwise constitute current assets in
conformity with GAAP, (b) any shares of stock issued by an Affiliate of any
Borrower, or (c) the cash surrender value of any life insurance policy.
"Current Liabilities" at a particular date, shall mean all
-------------------
amounts which would, in conformity with GAAP, be included under current
liabilities on a balance sheet of Borrowers on a consolidated
-5-
<PAGE>
basis as at such date, but in any event including, without limitation, the
amounts of (a) all Indebtedness of any Borrower payable on demand, or, at the
option of the Person to whom such Indebtedness is owed, not more than twelve
(12) months after such date, (b) any payments in respect of any Indebtedness of
any Borrower (whether installment, serial maturity, sinking fund payment or
otherwise) required to be made not more than twelve (12) months after such date,
(c) all reserves in respect of liabilities or Indebtedness payable on demand or,
at the option of the Person to whom such Indebtedness is owed, not more than
twelve (12) months after such date, the validity of which is not contested at
such date, and (d) all accruals for federal or other taxes measured by income
payable within a twelve (12) month period.
"Customer" shall mean and include the account debtor with
--------
respect to any Receivable and/or the prospective purchaser of goods, services or
both with respect to any contract or contract right, and/or any party who enters
into or proposes to enter into any contract or other arrangement with any
Borrower, pursuant to which any Borrower is to deliver any personal property or
perform any services.
"Debt Payments" shall mean and include all cash actually
-------------
expended by Borrowers to make (a) interest payments on any Indebtedness, plus,
----
(b) scheduled principal payments on all Indebtedness.
"Default" shall mean an event which, with the giving of notice or
-------
passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1
------------
hereof.
"Depository Accounts" shall have the meaning set forth in Section
-------------------
4.15(h) hereof.
"Documents" shall have the meaning set forth in Section 8.1(c)
---------
hereof.
"Dollars" and the sign "$" shall mean lawful money of the United
-------
States of America.
"Domestic Rate Loan" shall mean any Advance that bears interest
------------------
based upon the Alternate Base Rate.
"EBITDA" shall mean the net income of Borrowers on a consolidated
------
basis plus interest expense, taxes, depreciation and amortization deducted in
calculating net income for such period.
"Effective Date" shall mean December 5, 1996 or such other date
--------------
as may be agreed to by the parties hereto.
-6-
<PAGE>
"Eligible Inventory" shall mean and include Inventory excluding
------------------
work in process, with respect to each Borrower, valued at the lower of cost or
market value, determined on a first-in-first-out basis, which is not, in Agent's
opinion, obsolete, slow moving or unmerchantable and which Agent, in its sole
discretion, shall not deem ineligible Inventory, based on such considerations as
Agent may from time to time deem appropriate including, without limitation,
whether the Inventory is subject to a perfected, first priority security
interest in favor of Agent for the ratable benefit of the Lenders and whether
the Inventory conforms to all standards imposed by any governmental agency,
division or department thereof which has regulatory authority over such goods or
the use or sale thereof.
"Eligible Receivables" shall mean and include, with respect to
--------------------
each Borrower, each Receivable arising in the ordinary course of such Borrower's
business and which Agent, in its sole credit judgment, shall deem to be an
Eligible Receivable, based on such considerations as Agent may from time to time
deem appropriate. A Receivable shall not be deemed eligible unless such
Receivable is subject to Agent's first priority perfected security interest for
the ratable benefit of the Lenders and no other Lien other than Permitted
Encumbrances, and is evidenced by an invoice, bill of lading or other
documentary evidence satisfactory to Agent. In addition, no Receivable shall be
an Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to an Affiliate
of any Borrower or to a Person controlled by an Affiliate of any Borrower;
(b) it is due or unpaid more than ninety (90) days after the
original invoice date;
(c) twenty-five percent (25%) or more of the Receivables from
the Customer are not deemed Eligible Receivables hereunder. Such percentage may,
in Agent's sole discretion, be increased or decreased from time to time;
(d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
-7-
<PAGE>
(f) the sale is to a Customer outside the continental United
States of America, unless the sale is on letter of credit, guaranty or
acceptance terms, in each case acceptable to Agent in its sole discretion;
(g) the sale to the Customer is on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment or any other repurchase or
return basis or is evidenced by chattel paper;
(h) Agent believes, in its sole judgment, that collection of
such Receivable is insecure or that such Receivable may not be paid by reason of
the Customer's financial inability to pay;
(i) the Customer is the United States of America, any state or
any department, agency or instrumentality of any of them, unless the applicable
Borrower effectuates an assignment of its right to payment of such Receivable to
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise
-- --- -- ---
complied with other applicable statutes or ordinances;
(j) the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the Customer or the services giving
rise to such Receivable have not been performed by the applicable Borrower and
accepted by the Customer or the Receivable otherwise does not represent a final
sale;
(k) the Receivables of the Customer exceed a credit limit
determined by Agent, in its sole discretion, to the extent such Receivable
exceeds such limit;
(l) the Receivable is subject to any offset, deduction, defense,
dispute, or counterclaim to the extent of such offset, deduction, defense,
dispute or counterclaim, the Customer is also a creditor or supplier of a
Borrower or the Receivable is contingent in any respect or for any reason;
(m) the applicable Borrower has made any agreement with a
Customer for any deduction therefrom, except for discounts or allowances made in
the ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
(n) shipment of the merchandise or the rendition of services has
not been completed;
(o) any return, rejection or repossession of the merchandise has
occurred;
(p) such Receivable is not payable to a Borrower; or
-8-
<PAGE>
(q) such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.
"Environmental Complaint" shall have the meaning set forth in
-----------------------
Section 4.19(d) hereof.
"Environmental Laws" shall mean all federal, state and local
------------------
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each Borrower all of
---------
such Borrower's goods (excluding Inventory) whether now owned or hereafter
acquired and wherever located including, without limitation, all equipment,
machinery, apparatus, motor vehicles, fittings, furniture, furnishings,
fixtures, parts, accessories and all replacements and substitutions therefor or
accessions thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time and the rules and regulations promulgated
thereunder.
"Escrow Agreement" shall mean the Environmental Escrow Agreement
----------------
dated this date among Radnor, Richard Davidovich and Duane, Morris & Heckscher,
as escrow agent.
"Eurodollar Rate Loan" shall mean an Advance at any time that
--------------------
bears interest based on the Eurodollar Rate or the Average Monthly Eurodollar
Rate.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for
---------------
the then current Interest Period relating thereto the rate per annum (such
Eurodollar Rate to be adjusted to the next higher 1/100 of one (1%) percent)
equal to the quotient of (a) LIBOR, divided by (b) a number equal to 1.00 minus
the aggregate of the rates (expressed as a decimal) of reserve requirements
current on the day that is two Business Days prior to the beginning of the
Interest Period (including without limitation basic, supplemental, marginal and
emergency reserves) under any regulation promulgated by the Board of Governors
of the Federal Reserve System (or any other governmental authority having
jurisdiction over the Bank) as in effect from time to time, dealing with reserve
requirements prescribed for Eurocurrency funding including any reserve
requirements with respect to "Eurocurrency liabilities" under Regulation D of
the Board of Governors of the Federal Reserve System.
"Event of Default" shall mean the occurrence and continuance of
----------------
any of the events set forth in Article X hereof.
-9-
<PAGE>
"Federal Funds Rate" shall mean, for any day, the weighted
------------------
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by the Bank.
"Fixed Charge Coverage" for any period shall mean the ratio for
---------------------
any period of (1) EBITDA to (2) (a) all Debt Payments plus (b) capital
expenditures actually made plus (c) cash payments of taxes.
"Formula Amount" individually, shall mean each of the Wincup
--------------
Formula Amount, the Holdings Formula Amount, the Acquisition Formula Amount, the
StyroChem Formula Amount and the Radnor Formula Amount and collectively shall
mean each of the foregoing in the aggregate.
"GAAP" shall mean generally accepted accounting principles in the
----
United States of America in effect from time to time.
"General Intangibles" shall mean and include as to each
-------------------
of such Borrower's general intangibles, whether now owned or hereafter acquired
including, without limitation, all choses in action, causes of action, corporate
or other business records, inventions, designs, patents, patent applications,
equipment formulations, manufacturing procedures, quality control procedures,
trademarks, service marks, trade secrets, goodwill, copyrights, design rights,
registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, computer programs, all claims under guaranties, security interests or
other security held by or granted to such Borrower to secure payment of any of
the Receivables by a Customer, all rights of indemnification and all other
intangible property of every kind and nature (other than Receivables).
"Governmental Body" shall mean any nation or government, any
-----------------
state or other political subdivision thereof or any entity exercising the
legislative, judicial, regulatory or administrative functions of or pertaining
to a government.
"Hazardous Discharge" shall have the meaning set forth in Section
-------------------
4.19(d) hereof.
"Hazardous Substance" shall mean, without limitation, any
-------------------
flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated byphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or toxic substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA or any other
------
-10-
<PAGE>
applicable Environmental Law and in the regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to
----------------
regulation under CERCLA, RCRA or applicable state law, and any other applicable
Federal and state laws now in force or hereafter enacted relating to hazardous
waste disposal.
"Holdings" shall mean Wincup Holdings, Inc., a corporation
--------
organized under the laws of the State of Delaware.
"Holdings Formula Amount" shall have the meaning set forth in
-----------------------
Section 2.1(b) hereof.
"Holdings Inventory Advance Rate" shall have the meaning set
-------------------------------
forth in Section 2.1(b) hereof.
"Holdings Receivables Advance Rate" shall have the meaning set
---------------------------------
forth in Section 2.1(b) hereof.
"Indebtedness" of a Person at a particular date shall mean all
------------
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all indebtedness secured by
a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness
of such Person resulting from the acquisition by such Person of any assets
subject to any Lien shall be deemed, for the purposes hereof, to be the
equivalent of the creation, assumption and incurring of the indebtedness secured
thereby, whether or not actually so created, assumed or incurred.
"Indenture" shall mean the Indenture dated as of December 5, 1996
---------
between Radnor, as issuer, Wincup, Holdings, Acquisition and StyroChem as
guarantors and First Union National Bank, as trustee.
"Initial Closing Date" shall mean January 22, 1996 or such other
--------------------
date as may be agreed to by the parties hereto.
"Interest Coverage" for any period shall mean the ratio of (1)
-----------------
EBITDA to (2) Total Interest.
"Interest Period" shall mean the period provided for any
---------------
Eurodollar Rate Loan pursuant to Section 2.2(b).
"Inventory" shall mean and include as to each Borrower all of
---------
such Borrower's now owned or hereafter acquired goods, merchandise and other
personal property, wherever located, to be
-11-
<PAGE>
furnished under any contract of service or held for sale or lease, all raw
materials, work in process, finished goods and materials and supplies of any
kind, nature or description which are or might be used or consumed in such
Borrower's business or used in selling or furnishing such goods, merchandise and
other personal property, and all documents of title or other documents
representing them.
"Inventory Advance Rate" shall mean, singularly and collectively,
----------------------
the Wincup Inventory Advance Rate, Holdings Inventory Advance Rate, Acquisition
Inventory Advance Rate, StyroChem Inventory Advance Rate and the Radnor
Inventory Advance Rate.
"James River" shall mean James River Paper Company, Inc.
-----------
"Lender" and "Lenders" shall have the meaning ascribed to such
------ -------
term in the Preamble, each Purchasing Lender and shall include each person which
is a transferee, successor or assign of any Lender or any Purchasing Lender.
"Letters of Credit" shall have the meaning set forth in Section
-----------------
2.9.
"Letter of Credit Fees" shall have the meaning set forth in
---------------------
Section 3.2.
"LIBOR" shall mean for any Eurodollar Rate Loan for the then
-----
current Interest Period relating thereto, the rate per annum quoted by the Bank
two (2) Business Days prior to the first day of such Interest Period for the
offering by the Bank to prime commercial banks in the London interbank
Eurodollar market of Dollar deposits in immediately available funds for a period
equal to such Interest Period and in an amount equal to the amount of such
Eurodollar Rate Loan.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, assignment, security interest, lien (whether statutory or
otherwise), Charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction.
"Material Adverse Effect" shall mean a material adverse effect
-----------------------
on (a) the condition, operations, assets, business or prospects of the
applicable Person or Persons, (b) any Borrower's ability to pay the Obligations
in accordance with the terms thereof, (c) the value of the Collateral, the Liens
on the Collateral or the priority of any such Lien, or (d) the practical
realization of the benefits of Agent and Lenders' rights and remedies under this
Agreement and the Other Documents, all as determined by the Required
-12-
<PAGE>
Lenders in the good faith exercise of their sole and absolute discretion.
"Maximum Loan Amount" shall mean $30,000,000.
-------------------
"Monthly Advances" shall have the meaning set forth in Section
----------------
3.1 hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
------------------
in Sections 3(37) and 4001(a)(3) of ERISA.
"Net Worth" at a particular date, shall mean the aggregate
---------
amount of all assets of Borrowers on a consolidated basis as may properly be
classified as such in accordance with GAAP consistently applied and such other
assets as are properly classified as "intangible assets", less (b) the aggregate
amount of all Indebtedness of Borrowers on a consolidated basis.
"Notes" shall mean collectively, the Revolving Credit Notes.
-----
"Obligations" shall mean and include any and all of each
-----------
Borrower's Indebtedness and/or liabilities to Agent or any of the Lenders or any
corporation that directly or indirectly controls or is controlled by or is under
common control with any Lender of every kind, nature and description, direct or
indirect, secured or unsecured, joint, several, joint and several, absolute or
contingent, due or to become due, now existing or hereafter arising, contractual
or tortious, liquidated or unliquidated under this Agreement or under any Other
Document and all obligations of any Borrower to Agent or the Lenders to perform
acts or refrain from taking any action under this Agreement or any Other
Document.
"Other Documents" shall mean the Notes, the Questionnaire and
---------------
any and all other agreements, instruments and documents, including, without
limitation, guaranties, pledges, powers of attorney, consents, and all other
writings heretofore, now or hereafter executed and/or delivered by any Borrower
to Agent or any Lender in respect of the transactions contemplated by this
Agreement.
"Parent" shall mean with respect to any Person, a corporation
------
or other entity owning, directly or indirectly at least 50% of the shares of
stock or other ownership interests having ordinary voting power to elect a
majority of the directors of the Person, or other Persons performing similar
functions for any such Person.
"Participant" shall mean each Person who shall be granted the
-----------
right by any Lender to participate in any of the Advances and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
"Partners" shall mean Holdings and Radnor.
--------
-13-
<PAGE>
"Payment Office" shall mean initially 1290 Avenue of the
--------------
Americas, New York, New York 10104; thereafter, such other office of Agent, if
any, which it may designate by notice to Borrowing Agent and each Lender to be
the Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
----
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent
----------------------
for the ratable benefit of the Lenders; (b) Liens for taxes, assessments or
other governmental charges not delinquent or being contested in good faith and
by appropriate proceedings and with respect to which proper reserves have been
taken by Borrowers; provided, that, the Lien shall have no effect on the
-------- ----
priority of the Liens in favor of Agent for the ratable benefit of the Lenders
or the value of the assets in which Agent has such a Lien and a stay of
enforcement of any such Lien for the ratable benefit of the Lenders shall be in
effect; (c) Liens disclosed in the financial statements referred to in Section
5.5; (d) deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance; (e) deposits
or pledges to secure bids, tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, surety and appeal bonds and
other obligations of like nature arising in the ordinary course of any
Borrower's business; (f) judgment Liens that have been stayed or bonded and
mechanics', worker's, materialmen's or other like Liens arising in the ordinary
course of any Borrower's business with respect to obligations which are not due
or which are being contested in good faith by the applicable Borrower; (g) Liens
placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided that (x) any such lien shall not encumber any other
property of any Borrower and (y) the aggregate amount of Indebtedness secured by
such Liens incurred as a result of such purchases during any fiscal year shall
not exceed the amount provided for in Section 7.6; and (g) Liens disclosed on
Schedule 1.2.
- ------------
"Person" shall mean any individual, sole proprietorship,
------
partnership, corporation, business trust, joint stock company, trust,
unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or government
(whether Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of
----
Section 3(3) of ERISA, maintained for employees of Borrower or any member of the
Controlled Group or any such Plan to which Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"Prepayment Date" shall have the meaning set forth in Section
---------------
13.1 hereof.
-14-
<PAGE>
"Prime Rate" shall mean the prime commercial lending rate of
----------
the Bank as publicly announced to be in effect from time to time, such rate to
be adjusted automatically, without notice, on the effective date of any change
in such rate. This rate of interest is determined from time to time by the Bank
as a means of pricing some loans to its customers and is neither tied to any
external rate of interest or index nor does it necessarily reflect the lowest
rate of interest actually charged by the Bank to any particular class or
category of customers of the Bank.
"Pro Forma Balance Sheet" shall have the meaning set forth in
-----------------------
Section 5.5(a) hereof.
"Pro Forma Financial Statements" shall have the meaning set forth
------------------------------
in Section 5.5(b) hereof.
"Projections" shall have the meaning set forth in Section 5.5(b)
-----------
hereof.
"Purchasing Lender" shall have the meaning set forth in Section
-----------------
15.3 hereof.
"Questionnaire" shall mean the Documentation Information
-------------
Questionnaire and the responses thereto provided by Borrowers and delivered to
Agent and/or its counsel.
"Radnor" shall mean Radnor Holdings Corporation, a corporation
------
organized and existing under the laws of the State of Delaware.
"Radnor Formula Amount" shall have the meaning set forth in
---------------------
Section 2.1(e).
"Radnor Inventory Advance Rate" shall have the meaning set forth
-----------------------------
in Section 2.1(e) hereof.
"Radnor Receivables Advance Rate" shall have the meaning set
-------------------------------
forth in Section 2.1(e) hereof.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42
----
U.S.C. (S)(S) 6901 et seq., as same may be amended from time to time.
------
"Receivables" shall mean and include as to each Borrower all of
-----------
such Borrower's accounts, contract rights, instruments (including those
evidencing indebtedness among Borrowers and its Affiliates), documents, chattel
paper, general intangibles relating to accounts, drafts and acceptances, and all
other forms of obligations owing to such Borrower arising out of or in
connection with the sale or lease of Inventory or the rendition of services, all
guarantees and other security therefor, whether secured or unsecured, now
existing or hereafter created, and whether or not specifically sold or assigned
to the Agent for the ratable benefit of the Lenders hereunder.
-15-
<PAGE>
"Receivables Advance Rate" shall mean, singularly and
------------------------
collectively, the Wincup Receivable Advance Rate, Holdings Receivable Advance
Rate, Acquisition Receivable Advance Rate, StyroChem Receivable Advance Rate and
the Radnor Receivable Advance Rate.
"Related Person" shall mean as to any Person, any other Person
--------------
which, together with such Person, is treated as a single employer under Section
414(c) of the Code.
"Release" shall have the meaning set forth in Section 5.7(c)(i)
-------
hereof.
"Reportable Event" shall mean a reportable event described in
----------------
Section 4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least fifty one
----------------
percent (51%) of the Advances or if no Advances are outstanding, fifty one
percent (51%) of the Commitment Percentages.
"Revolving Advances" shall mean Advances made other than Letters
------------------
of Credit.
"Revolving Credit Notes" shall mean the promissory notes referred
----------------------
to in Section 2.1 hereof.
"Revolving Interest Rate" shall mean an interest rate per annum
-----------------------
equal to (a) the sum of the Alternate Base Rate plus one quarter of one percent
(.25%) with respect to Domestic Rate Loans, (b) the sum of the Eurodollar Rate
plus one and three quarters percent (1.75%) with respect to Eurodollar Rate
Loans (other than Eurodollar Rate Loans made pursuant to Section 2.2(h) hereof)
or (c) the sum of the Average Monthly Eurodollar Rate plus one and three
quarters percent (1.75%) with respect to Eurodollar Rate Loans made pursuant to
Section 2.2(h) hereof..
"Settlement Date" shall mean the Effective Date and thereafter
---------------
Wednesday of each week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.
"Senior Notes" shall mean the 10% Senior Notes due 2003 issued by
------------
Radnor pursuant to the Indenture in conjunction with the Transactions and any
notes issued in exchange or substitution therefor.
"StyroChem" shall mean StyroChem International, Inc., a
---------
corporation organized and existing under the laws of the State of Texas.
"StyroChem Formula Amount" shall have the meaning set forth in
------------------------
Section 2.1(d).
"StyroChem Inventory Advance Rate" shall have the meaning set
--------------------------------
forth in Section 2.1(d) hereof.
-16-
<PAGE>
"StyroChem Receivables Advance Rate" shall have the meaning set
----------------------------------
forth in Section 2.1(d) hereof.
"Subsidiary" shall mean a corporation or other entity of whose
----------
shares of stock or other ownership interests having ordinary voting power (other
than stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"Term" shall mean the Effective Date through January 22, 2001.
----
"Termination Event" shall mean (i) a Reportable Event with
-----------------
respect to any Plan or Multiemployer Plan; (ii) the withdrawal of either
Borrower or any member of the Controlled Group from a Plan or Multiemployer Plan
during a plan year in which such entity was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or
Multiemployer Plan; (v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may
result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of either Borrower or any member of the Controlled Group
from a Multiemployer Plan.
"Total Interest" for any period shall mean the accrued and unpaid
--------------
interest obligations of Borrowers on a consolidated basis with respect to its
outstanding Indebtedness during such period.
"Toxic Substance" shall mean and include any material present
---------------
on any real property owned by any Borrower or any leasehold interests of any
Borrower which has been shown to have significant adverse effect on human health
or which is subject to regulation under the Toxic Substances Control Act (TSCA),
15 U.S.C. (S)(S) 2601 et seq., applicable state law, or any other applicable
------
Federal or state laws now in force or hereafter enacted relating to toxic
substances. "Toxic substance" includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.
"Transferee" shall have the meaning set forth in Section 15.3(b)
----------
hereof.
"Transactions" shall have the meaning set forth in Section 5.5
------------
hereof.
"Undrawn Availability" at a particular date shall mean an
--------------------
amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum
Loan Amount, minus (b) the sum of (i) the outstanding
-----
-17-
<PAGE>
amount of Advances plus (ii) all amounts due and owing to Borrowers' trade
creditors which are outstanding more than sixty (60) days past the due date
therefor.
"Week" shall mean the time period commencing with a Wednesday and
----
ending on the following Tuesday.
"Wincup" shall mean Wincup Holdings, L.P., a limited partnership
------
organized under the laws of the State of Delaware.
"Wincup Formula Amount" shall have the meaning set forth in
---------------------
Section 2.1(a) hereof.
"Wincup Inventory Advance Rate" shall have the meaning set forth
-----------------------------
in Section 2.1(a) hereof.
"Wincup Receivables Advance Rate" shall have the meaning set
-------------------------------
forth in Section 2.1(a) hereof.
"Working Capital" at a particular date, shall mean the excess,
---------------
if any, of Current Assets over Current Liabilities at such date.
1.3. Uniform Commercial Code Terms. All terms used herein and defined
-----------------------------
in the Uniform Commercial Code as adopted in the State of New York shall have
the meaning given therein unless otherwise defined herein.
1.4. Certain Matters of Construction. The terms "herein", "hereof" and
-------------------------------
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. Wherever appropriate in the context,
terms used herein in the singular also include the plural and vice versa. All
---- -----
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. All references to any
instruments or agreements to which Agent is a party, including, without
limitation, references to any of the Other Documents shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.
II. ADVANCES, PAYMENTS.
------------------
2.1. (a) Wincup Borrowing Base. Subject to the terms and conditions
---------------------
set forth in this Agreement, each Lender, severally and not jointly, agrees to
make Revolving Advances to Wincup in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
minus the sum of (1) outstanding Advances made to or for the benefit of
- -----
Holdings, Acquisition, StyroChem and Radnor and (2) the undrawn amount of
outstanding Letters of Credit issued on behalf of Wincup, or (y) the sum of:
-18-
<PAGE>
(i) up to 85%, subject to the provisions of Section 2.1(f)
hereof ("Wincup Receivables Advance Rate"), of Eligible Receivables of Wincup,
plus
- ----
(ii) up to 60%, subject to the provisions of Section 2.1(f)
and Section 2.1(g) hereof ("Wincup Inventory Advance Rate"), of Eligible
Inventory of Wincup (the Wincup Receivables Advance Rate and the Wincup
Inventory Advance Rate shall be referred to, collectively, as the "Wincup
Advance Rates"), minus
-----
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, minus
-----
(iv) the undrawn or unreimbursed amount of outstanding
Letters of Credit issued on behalf of Wincup.
The amounts derived from (x) the sum of Sections 2.1(a)(y)(i) plus
----
2.1(a)(y)(ii) minus (y) the amount of Section 2.1(a)(y)(iii) at any time and
-----
from time to time shall be referred to as the "Wincup Formula Amount".
(b) Holdings Borrowing Base. Subject to the terms and conditions set
-----------------------
forth in this Agreement, each Lender, severally and not jointly, agrees to make
Revolving Advances to Holdings in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
minus the sum of (1) outstanding Advances made to or for the benefit of Wincup,
- -----
Acquisition, StyroChem and Radnor and (2) the undrawn amount of outstanding
Letters of Credit issued on behalf of Holdings or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(f)
hereof ("Holdings Receivables Advance Rate"), of Eligible Receivables of
Holdings, plus
----
(ii) up to 60%, subject to the provisions of Section 2.1(f)
and Section 2.1(g) hereof ("Holdings Inventory Advance Rate"), of Eligible
Inventory of Holdings (the Holdings Receivables Advance Rate and the Holdings
Inventory Advance Rate shall be referred to, collectively, as the "Holdings
Advance Rates"), minus
-----
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, minus
-----
(iv) the undrawn or unreimbursed amount of outstanding
Letters of Credit issued on behalf of Holdings.
The sum of the amounts derived from (x) the sum of Sections
2.1(b)(y)(i) plus 2.1(b)(y)(ii) minus (y) the amount of Section 2.1(b)(y)(iii)
---- -----
at any time and from time to time shall be referred to as the "Holdings Formula
Amount".
-19-
<PAGE>
(c) Acquisition Borrowing Base. Subject to the terms and conditions
--------------------------
set forth in this Agreement, each Lender, jointly and not severally, agrees to
make Revolving Advances to Acquisition in accordance with the procedures
provided for herein in an aggregate amount outstanding at any time not greater
than such Lender's Commitment Percentage of the lesser of (x) the Maximum Loan
Amount minus the sum of (1) outstanding Advances made to or for the benefit of
-----
Wincup, Holdings, StyroChem and Radnor and (2) the undrawn amount of outstanding
Letters of Credit issued on behalf of Acquisition or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(f)
hereof ("Acquisition Receivables Advance Rate"), of Eligible Receivables of
Acquisition, plus
----
(ii) up to 60%, subject to the provisions of Section 2.1(f) and
Section 2.1(g) hereof ("Acquisition Inventory Advance Rate"), of Eligible
Inventory of Acquisition (the Acquisition Receivables Advance Rate and the
Acquisition Inventory Advance Rate shall be referred to, collectively, as the
"Acquisition Advance Rates"), minus
-----
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, minus
-----
(iv) the undrawn or unreimbursed amount of outstanding
Letters of Credit issued on behalf of Acquisition.
The sum of the amounts derived from (x) the sum of Sections 2.1(c)(y)(i)
plus 2.1(c)(y)(ii) minus (y) the amount of Section 2.1(c)(y)(iii) at any time
- ---- -----
and from time to time shall be referred to as the "Acquisition Formula Amount".
(d) StyroChem Borrowing Base. Subject to the terms and conditions set
------------------------
forth in this Agreement, each Lender, severally and not jointly, agrees to make
Revolving Advances to StyroChem in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
minus the sum of (1) outstanding Advances made to or for the benefit of Wincup,
- -----
Holdings, Acquisition and Radnor and (2) the undrawn amount of outstanding
Letters of Credit issued on behalf of StyroChem or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(f)
hereof ("StyroChem Receivables Advance Rate"), of Eligible Receivables of
StyroChem, plus
----
(ii) up to 60%, subject to the provisions of Section 2.1(f) and
Section 2.1(g) hereof ("StyroChem Inventory Advance Rate"), of Eligible
Inventory of StyroChem, minus
-----
-20-
<PAGE>
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, minus
-----
(iv) the undrawn or unreimbursed amount of outstanding
Letters of Credit issued on behalf of StyroChem.
The sum of the amounts derived from (x) the sum of Sections 2.1(d)(y)(i)
plus 2.1(d)(y)(ii) minus (y) the amount of Section 2.1(d)(y)(iii) at any time
- ---- -----
and from time to time shall be referred to as the "StyroChem Formula Amount".
(e) Radnor Borrowing Base. Subject to the terms and conditions set
---------------------
forth in this Agreement, each Lender, severally and not jointly, agrees to make
Revolving Advances to Radnor in accordance with the procedures provided for
herein in an aggregate amount outstanding at any time not greater than such
Lender's Commitment Percentage of the lesser of (x) the Maximum Loan Amount
minus the sum of (1) outstanding Advances made to or for the benefit of Wincup,
- -----
Holdings, Acquisition and StyroChem and (2) the undrawn amount of outstanding
Letters of Credit issued on behalf of Radnor or (y) the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(f)
hereof ("Radnor Receivables Advance Rate"), of Eligible Receivables of Radnor,
plus
- ----
(ii) up to 60%, subject to the provisions of Section 2.1(f) and
Section 2.1(g) hereof ("Radnor Inventory Advance Rate"), of Eligible Inventory
of Radnor, minus
-----
(iii) such reserves as Agent may, in a commercially
reasonable manner, reasonably deem proper and necessary, minus
-----
(iv) the undrawn or unreimbursed amount of outstanding
Letters of Credit issued on behalf of Radnor.
The sum of the amounts derived from (x) the sum of Sections 2.1(d)(y)(i)
plus 2.1(d)(y)(ii) minus (y) the amount of Section 2.1(d)(y)(iii) at any time
- ---- -----
and from time to time shall be referred to as the "Radnor Formula Amount".
(f) Discretionary Rights. The Advance Rates may be increased or with
--------------------
the consent of the Required Lenders, decreased by Agent at any time and from
time to time in the exercise of its reasonable discretion. Borrowers consent to
any such increases or decreases and acknowledge that decreasing the Advance
Rates or increasing the reserves may limit or restrict Advances requested by any
Borrower.
(g) Inventory Advances. In no event shall the aggregate Advances with
------------------
respect to Inventory of Borrowers outstanding at any time pursuant to Section
2.1(a)(ii), Section 2.1(b)(ii),
-21-
<PAGE>
Section 2.1(c)(ii), Section 2.1(d)(ii) and Section 2.1(e)(ii) exceed $15,000,000
in the aggregate.
2.2. Procedure for Borrowing.
-----------------------
(a) Borrowing Agent on behalf of any Borrower may notify Agent
prior to 11:00 a.m. on a Business Day of a Borrower's request to incur, on that
day, an Advance hereunder. Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or any Lender, or with respect to any other Obligation,
become due, same shall be deemed a request for a Revolving Advance as of the
date such payment is due, in the amount required to pay in full such interest,
fee, charge or Obligation under this Agreement or any other agreement with Agent
or any Lender, and such request shall be irrevocable. Any request for an Advance
shall be deemed reduced automatically and without notice so as not to be in
excess of, after giving effect to the requested Advance, an amount which would
cause the aggregate amount of all Advances to be greater than the lesser of (1)
for Wincup, (i) the Maximum Loan Amount minus outstanding Advances made to
-----
Holdings, Acquisition, StyroChem and Radnor or (ii) the Wincup Formula Amount,
(2) for Holdings, (i) the Maximum Loan Amount minus outstanding Advances made to
-----
Wincup, Acquisition, StyroChem and Radnor or (ii) the Holdings Formula Amount,
(3) for Acquisition, (i) the Maximum Loan Amount minus outstanding Advances made
-----
to Wincup, Holdings, StyroChem and Radnor or (ii) the Acquisition Formula
Amount, (4) for StyroChem, (i) the Maximum Loan Amount minus outstanding
Advances made to Wincup, Holdings, Acquisition and Radnor or (ii) the StyroChem
Formula Amount and (5) for Radnor, (i) the Maximum Loan Amount minus outstanding
-----
Advances made to Wincup, Holdings, Acquisition and StyroChem or (ii) the Radnor
Formula Amount.
(b) Notwithstanding the provisions of (a) above, in the event any
Borrower desires to obtain a Eurodollar Rate Loan, it shall give Agent at least
three (3) Business Days' prior written notice; specifying (i) the date of the
proposed borrowing (which shall be a Business Day), (ii) the amount on the date
of such Advance to be borrowed, which amount shall be an integral multiple of
$1,000,000, and (iii) the duration of the first Interest Period therefor.
Interest Periods for Eurodollar Loans shall be for one (1), two (2), three (3)
or six (6) months. There shall not be outstanding more than five (5) Eurodollar
Rate Loans, in the aggregate.
(c) Each Interest Period of a Eurodollar Rate Loan shall commence
on the date such Eurodollar Rate Loan is made and shall end on such date as a
Borrower may elect as set forth in (b)(iii) above provided that:
(i) any Interest Period which would otherwise end on a day
which is not a Business Day shall be the next preceding or succeeding Business
Day as is Bank's custom in the market to which such Eurodollar Rate Loan
relates;
-22-
<PAGE>
(ii) no Interest Period shall end after the last day of the
Term; and
(iii) any Interest Period which begins on a day for which
there is no numerically corresponding day in the calendar month during which
such Interest Period is to end, shall (subject to clause (i) above) end on the
last day of such calendar month.
Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(d), as the case may be. Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and be
continuing, any Borrower may, on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan or Domestic
Rate Loan convert any such loan into a loan of another type in the same
aggregate principal amount provided that any conversion of a Eurodollar Rate
Loan shall be made only on the last Business Day of the then current Interest
Period applicable to such Eurodollar Rate Loan. If Borrower desires to convert
a loan, Borrowing Agent shall give the Agent not less than three (3) Business
Days' prior written notice, specifying the date of such conversion, the loans to
be converted and if the conversion is from a Domestic Rate Loan to any other
type of loan, the duration of the first Interest Period therefor.
(e) Borrowers may prepay the Advances in accordance with the
provisions of Section 13.1 upon payment of the early termination fee set forth
in Section 13.1 with accrued interest on the principal being prepaid to the date
of such repayment. In the event that any prepayment of a Eurodollar Rate Loan
is required or permitted on a date other than the last Business Day of the then
current Interest Period with respect thereto Borrowers shall indemnify Agent and
Lenders therefor in accordance with Section 2.2(f) hereof.
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses that Agent and
any Lender may sustain or incur as a consequence of any prepayment or any
default by any Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including (but not limited to) any interest payable
-23-
<PAGE>
by Agent or any Lender to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
(g) Notwithstanding any other provision hereof, if any applicable
law, treaty, regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender
(for purposes of this subsection (g), the term "Lender" shall include any Lender
and the office or branch where any Lender or any corporation or bank controlling
such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain
its Eurodollar Rate Loans, the obligation of any Lender to make Eurodollar Rate
Loans hereunder shall forthwith be cancelled and Borrower shall, if any affected
Eurodollar Rate Loans are then outstanding, promptly upon request from Agent,
either pay all such affected Eurodollar Rate Loans or convert such affected
Eurodollar Rate Loans into loans of another type. If any such payment or
conversion of any Eurodollar Rate Loan is made on a day that is not applicable
to such Eurodollar Rate Loan, Borrowers shall pay such Lender, upon such
Lender's request, such amount or amounts as may be necessary to compensate such
Lender for any loss or expense sustained or incurred by such Lender in respect
of such Eurodollar Rate Loan as a result of such payment or conversion,
including (but not limited to) any interest or other amounts payable by such
Lender to lenders of funds obtained by such Lender in order to make or maintain
such Eurodollar Rate Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Agent to Borrower shall be
conclusive absent manifest error; provided, each Lender shall use its best
efforts to minimize or avoid any such additional payment.
(h) Anything in Section 2.2(b) to the contrary notwithstanding,
any Borrower may obtain a Eurodollar Rate Loan upon at least three (3) Business
Days' prior written notice for an Interest Period of one month with interest on
such Eurodollar Rate Loans to be charged at the Average Monthly Eurodollar Rate.
Borrowing Agent shall specifically provide in the prior written notice that
interest is to be charged at the Average Monthly Eurodollar Rate; otherwise,
interest shall be charged at the Eurodollar Rate for Eurodollar Rate Loans
having an Interest Period of one month.
2.3. Disbursement of Advance Proceeds. All Advances shall be disbursed
--------------------------------
from whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or any of the
Lenders, shall be charged to the applicable Borrower's account on Agent's books.
During the Term, Borrowers may use the Revolving Advances by borrowing,
prepaying and reborrowing, all in accordance with the terms and conditions
hereof. The proceeds of each Revolving Advance requested on behalf of any
Borrower or deemed to have been requested by such Borrower under Section 2.2(a)
hereof shall, with respect to requested Revolving Advances to the extent the
Lenders make such Revolving Advances, be made available to such Borrower on the
day so requested by way of credit to such Borrower's operating account at the
Bank, or such
-24-
<PAGE>
other bank as Borrowing Agent may designate following notification to Agent, in
federal funds or other immediately available funds or, with respect to Revolving
Advances deemed to have been requested, be disbursed to Agent to be applied to
the outstanding Obligations giving rise to such deemed request.
2.4. Intentionally Omitted.
---------------------
2.5. Maximum Advances; Repayment of Excess Advances. The aggregate
----------------------------------------------
balance of Revolving Advances outstanding at any time to Borrowers shall not
exceed the lesser of (a) Maximum Loan Amount less outstanding Letters of Credit
or (b) the Formula Amount. The aggregate balance of Advances outstanding at any
time either (a) to Wincup in excess of the lesser of the (i) Wincup Formula
Amount as at such time, or (ii) Maximum Loan Amount minus the outstanding
-----
Advances made to or for the benefit of Holdings, Acquisition, StyroChem and
Radnor or (b) to or for the benefit of Holdings, in excess of the lesser of (i)
Holdings Formula Amount as at such time, or (ii) Maximum Loan Amount minus the
-----
outstanding Advances made to or for the benefit of Wincup, Acquisition,
StyroChem and Radnor or (c) to Acquisition in excess of the lesser of the (i)
Acquisition Formula Amount as at such time, or (ii) Maximum Loan Amount minus
-----
the outstanding Advances made to or for the benefit of Wincup, Holdings,
StyroChem and Radnor or (d) to StyroChem in excess of the lesser of the (i)
StyroChem Formula Amount as at such time, or (ii) Maximum Loan Amount minus the
-----
outstanding Advances made to or for the benefit of Wincup, Holdings, Acquisition
and Radnor or (e) to Radnor in excess of the lesser of the (i) Radnor Formula
Amount as at such time, or (ii) Maximum Loan Amount minus the outstanding
-----
Advances made to or for the benefit of Wincup, Holdings, Acquisition and
StyroChem shall be immediately due and payable without the necessity of any
demand, at the place designated by Agent, whether or not a Default or Event of
Default has occurred hereunder.
2.6. Repayment of Advances.
---------------------
(a) The Advances shall be due and payable in full on the last day
of the Term subject to earlier prepayment as herein provided.
(b) Borrowers recognize that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of
Collateral may not be collectible by Agent on the date received. In
consideration of Agent's agreement to conditionally credit a Borrower's account
as of the Business Day on which Agent receives those items of payment, each
Borrower agrees that, in computing the charges under this Agreement, all items
of payment shall be deemed applied by Agent on account of the Obligations one
(1) Business Day after receipt by Agent of good funds with respect to such items
of payment. Agent is not, however, required to credit any Borrower's account for
the amount of any item of payment which is unsatisfactory to Agent and Agent may
charge such Borrower's account for the amount of any item of payment which is
returned to Agent unpaid.
-25-
<PAGE>
(c) All payments of principal, interest and other amounts payable
hereunder, or under any of the related agreements shall be made to Agent at the
Payment Office not later than 1:00 P.M. (New York Time) on the due date therefor
in lawful money of the United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to effectuate
payment on any and all Obligations due and owing hereunder by charging the
applicable Borrower's account or by making Advances as provided in Section 2.2
hereof.
(d) Borrowers shall pay principal, interest, and all other amounts
payable hereunder, or under any related agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any setoff or
counterclaim.
2.7. Intentionally Omitted.
---------------------
2.8. Statement of Account. Agent shall maintain, in accordance with
--------------------
its customary procedures, a loan account in the name of each Borrower in which
shall be recorded the date and amount of each Advance made by Lenders and the
date and amount of each payment in respect thereof; provided, however, the
-------- -------
failure by Agent to record the date and amount of any Advance shall not
adversely affect Agent or any Lender. Each month, Agent shall send to Borrowing
Agent a statement showing the accounting for the Advances made, payments made or
credited in respect thereof, and other transactions between Lenders and each
Borrower, during such month. The monthly statements shall be deemed correct and
binding upon Borrowers in the absence of manifest error and shall constitute an
account stated between Lenders and Borrowers unless Agent receives a written
statement of a Borrower's specific exceptions thereto within thirty (30) days
after such statement is received by Borrowing Agent. The records of Agent with
respect to the loan account shall be prima facie evidence of the amounts of
----- -----
Advances and other charges thereto and of payments applicable thereto, absent
manifest error.
2.9. Letters of Credit. (a) Subject to the terms and conditions
-----------------
hereof, Agent shall issue or cause the issuance of standby and documentary
letters of credit for Wincup and StyroChem ("Letters of Credit") provided,
--------
however, that Agent will not be required to issue or cause to be issued Letters
- -------
of Credit (i) for Wincup to the extent that the face amount of such Letters of
Credit would then cause the outstanding Advances to Wincup (with the requested
Letter of Credit being deemed to be outstanding for purposes of this
calculation) to exceed the lesser of (A) the Maximum Loan Amount minus
-----
outstanding Advances to or for the benefit of Holdings, Acquisition, StyroChem
and Radnor or (B) the Wincup Formula Amount or (ii) for StyroChem to the extent
that the face amount of such Letters of Credit would then cause the outstanding
Advances to StyroChem (with the requested Letter of Credit being deemed to be
outstanding for purposes of this calculation) to exceed the lesser of (A) the
Maximum Loan Amount minus outstanding Advances to or for the benefit of Wincup,
-----
Holdings, Acquisition and Radnor or (B) the StyroChem Formula Amount.
-26-
<PAGE>
(b) The maximum amount of outstanding (i) Letters of Credit that
are standby letters of credit hereunder shall not exceed $5,000,000 in the
aggregate at any time and (ii) Letters of Credit that are documentary letters of
credits hereunder shall not exceed $1,000,000 in the aggregate at any time.
(c) All disbursements or payments related to Letters of Credit
shall be deemed to be Revolving Advances and shall bear interest at the
Revolving Interest Rate for Domestic Rate Loans (unless and until converted to a
Eurodollar Rate Loan); and to the extent not drawn upon, Letters of Credit that
have not been drawn upon shall not bear interest. Letters of Credit shall be
subject to the terms and conditions set forth in the Application and Agreement
for Letter of Credit attached hereto as Exhibit 2.9.
-----------
2.10. Issuance of Letters of Credit.
-----------------------------
(a) Borrowing Agent on behalf of Wincup or StyroChem may request
Agent to issue or cause the issuance of a Letter of Credit by delivering to
Agent at the Payment Office, Agent's standard form of Letter of Credit and
Security Agreement together with Bank's standard form of Letter of Credit
Application (collectively, the "Letter of Credit Application") completed to the
satisfaction of Agent; and, such other certificates, documents and other papers
and information as Agent may reasonably request.
(b) Each Letter of Credit shall, among other things, (i) provide
for the payment of sight drafts when presented for honor thereunder in
accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date not later than twelve (12) months
after such Letter of Credit's date of issuance and in no event later than the
last day of the Term. Each Letter of Credit Application and each Letter of
Credit shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
and any amendments or revision thereof and, to the extent not inconsistent
therewith, the laws of the State of New York.
2.11. Requirements For Issuance of Letters of Credit.
----------------------------------------------
(a) In connection with the issuance of any Letter of Credit,
Borrowers shall indemnify, save and hold Agent and each Lender harmless from any
loss, cost, expense or liability, including, without limitation, payments made
by Agent and any Lender, and expenses and reasonable attorneys' fees incurred by
Agent or any Lender arising out of, or in connection with, any Letter of Credit
to be issued or created for a Borrower. Borrowers shall be bound by Agent's or
any issuing or accepting bank's regulations and good faith interpretations of
any Letter of Credit issued or created for its account, although this
interpretation may be different from its own;, and, neither Agent nor any
Lender, the bank which opened the Letter of Credit, nor any of its
correspondents shall be liable for any error, negligence, or mistakes, whether
of omission or commission, in following Borrowing Agent's or any Borrower's
instructions or those
-27-
<PAGE>
contained in any Letter of Credit or of any modifications, amendments or
supplements thereto or in issuing or paying any Letter of Credit, except for
Agent's or any Lender's or such correspondents' willful misconduct or gross (not
mere) negligence.
(b) Borrowing Agent shall authorize and direct any bank which issues a
Letter of Credit to name the applicable Borrower as the "Account Party" therein
and to deliver to Agent all instruments, documents, and other writings and
property received by the bank pursuant to the Letter of Credit and to accept and
rely upon Agent's instructions and agreements with respect to all matters
arising in connection with the Letter of Credit, the application therefor or any
acceptance therefor.
(c) In connection with all Letters of Credit issued or caused to be
issued by Agent under this Agreement, each Borrower hereby appoints Agent, or
its designee, as its attorney, with full power and authority, (i) to sign and/or
endorse such Borrower's name upon any warehouse or other receipts, letter of
credit applications and acceptances; (ii) to sign such Borrower's name on bills
of lading; (iii) to clear Inventory through the United States of America Customs
Department ("Customs") in the name of such Borrower or Agent or Agent's
designee, and to sign and deliver to Customs officials powers of attorney in the
name of such Borrower for such purpose; and (iv) to complete in such Borrower's
name or Agent's, or in the name of Agent's designee, any order, sale or
transaction, obtain the necessary documents in connection therewith, and collect
the proceeds thereof. Neither Agent nor its attorneys will be liable for any
acts or omissions nor for any error of judgment or mistakes of fact or law,
except for Agent's or its attorney's willful misconduct or gross (not mere)
negligence. This power, being coupled with an interest, is irrevocable as long
as any Letters of Credit remain outstanding.
(d) Each Lender shall to the extent of the percentage amount equal to
the product of such Lender's Commitment Percentage times the aggregate amount of
all disbursements made with respect to the Letters of Credit be deemed to have
irrevocably purchased an undivided participation in each Revolving Advance made
as a consequence of such disbursement. In the event that at the time a
disbursement is made the unpaid balance of Revolving Advances exceeds or would
exceed, with the making of such disbursement, the lesser of the Maximum Loan
Amount or the Formula Amount, and such disbursement is not reimbursed by
Borrowers within two (2) Business Days, Agent shall promptly notify each Lender
and upon Agent's demand each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement together with such
Lender's proportionate share of Agent's unreimbursed costs and expenses relating
to such unreimbursed disbursement. Upon receipt by Agent of a repayment from
Borrowers of any amount disbursed by Agent for which Agent had already been
reimbursed by the Lenders, Agent shall deliver to each of the Lenders that
Lender's pro rata share of such repayment. Each Lender's participation
commitment shall continue until the last to occur of any of the following
events: (A) Agent ceases to be obligated to issue Letters of Credit hereunder;
(B) no Letter of
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Credit issued hereunder remains outstanding and uncancelled or (C) all Persons
(other than Borrowers) have been fully reimbursed for all payments made under or
relating to Letters of Credit.
2.12. Additional Payments. Any sums expended by Agent or any Lender due
-------------------
to any Borrower's failure to perform or comply with its obligations under this
Agreement or any Other Document including, without limitation, any Borrower's
obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be
charged to such Borrower's account as a Revolving Advance and added to the
Obligations, provided Agent shall promptly thereafter provide to Borrowing Agent
a copy of documentation supporting such charges.
2.13. Manner of Borrowing and Payment.
-------------------------------
(a) Each borrowing of Revolving Advances shall be advanced
according to the Commitment Percentages of the Lenders.
(b) Each payment (including each prepayment) by Borrowers on
account of the principal of and interest on the Revolving Advances, shall be
applied to the Revolving Advances pro rata according to the applicable
Commitment Percentages of the Lenders. Except as expressly provided herein, all
payments (including prepayments) to be made by Borrowers on account of
principal, interest and fees shall be made without set-off or counterclaim and
shall be made to Agent on behalf of the Lenders to the Payment Office, in each
case on or prior to 1:00 P.M., New York time, in Dollars and in immediately
available funds.
(c) (i) Notwithstanding anything to the contrary contained in
Sections 2.13(a) and (b) hereof, commencing with the first Business Day
following the Effective Date, each borrowing of Revolving Advances shall be
advanced by Agent and each payment by Borrowers on account of Revolving Advances
shall be applied first to those Revolving Advances made by Agent. On or before
1:00 P.M., New York time, on each Settlement Date commencing with the first
Settlement Date following the Effective Date, Agent and the Lenders shall make
certain payments as follows: (I) if the aggregate amount of new Revolving
Advances made by Agent during the preceding Week exceeds the aggregate amount of
repayments applied to outstanding Revolving Advances during such preceding Week
(if any), then each Lender shall provide Agent with funds in an amount equal to
its Commitment Percentage of the difference between (w) such Revolving Advances
and (x) such repayments and (II) if the aggregate amount of repayments applied
to outstanding Revolving Advances during such Week exceeds the aggregate amount
of new Revolving Advances made during such Week, then Agent shall provide each
Lender with funds in an amount equal to its Commitment Percentage of the
difference between (y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to earn interest at the
applicable Contract Rate on outstanding Advances which it has funded.
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(iii) Promptly following each Settlement Date, Agent shall
submit to each Lender a certificate with respect to payments received and
Advances made during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.
(d) If any Lender or any Transferee (a "benefitted Lender") shall at
any time receive any payment of all or part of its Advances, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily or by set-off) in a greater proportion than any such payment to
and Collateral received by any other Lender, if any, in respect of such other
Lender's Advances, or interest thereon, and such greater proportionate payment
or receipt of Collateral is not expressly permitted hereunder, such benefitted
Lender shall purchase for cash from the other Lenders such portion of each such
other Lender's Advances, or shall provide such other Lender with the benefits of
any such Collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the Lenders; provided, however, that
-------- -------
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Lender so purchasing a portion of another Lender's Advances may
exercise all rights of payment (including, without limitation, rights of set-
off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(e) Unless Agent shall have been notified by telephone, confirmed in
writing, by any Lender that such Lender will not make the amount which would
constitute its applicable Commitment Percentage of the Advances available to
Agent, Agent may (but shall not be obligated to) assume that such Lender shall
make such amount available to Agent and, in reliance upon such assumption, make
available to Borrowers a corresponding amount. Agent will promptly notify
Borrowing Agent of its receipt of any such notice from a Lender. If such amount
is made available to Agent on a date after a Settlement Date, such Lender shall
pay to Agent on demand an amount equal to the product of (i) the daily average
Federal Funds Rate (computed on the basis of a year of 360 days) during such
period as quoted by Agent, times (ii) such amount, times (iii) the number of
days from and including such Settlement Date to the date on which such amount
becomes immediately available to Agent. A certificate of Agent submitted to any
Lender with respect to any amounts owing under this paragraph (e) shall be
conclusive, in the absence of manifest error. If such amount is not in fact
made available to Agent by such Lender within three (3) Business Days after such
Settlement Date, Agent shall be entitled to recover such an amount, with
interest thereon at the domestic rate per annum then applicable to Revolving
Advances hereunder, on demand from Borrowers; provided, however, that Agent's
-------- -------
right to such recovery shall not prejudice or otherwise adversely affect any
Borrower's rights (if any) against such Lender.
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(f) Notwithstanding anything to the contrary contained herein, in the
event any Lender (x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its Commitment
Percentage of any Advance or (y) notifies either Agent or Borrowers that it does
not intend to make available its Commitment Percentage of any Advance (if the
actual refusal would constitute a breach by such Lender of its obligations under
this Agreement) (each, a "Lender Default"), all rights and obligations hereunder
of such Lender (a "Defaulting Lender") as to which a Lender Default is in effect
and of the other parties hereto shall be modified to the extent of the express
provisions of this Section 2.13(f) while such Lender Default remains in effect.
(i) Revolving Advances shall be allocated pro rata among
--- ----
Lenders (the "Non-Defaulting Lenders") which are not Defaulting Lenders in
accordance with their respective Commitment Percentages, and no Commitment
Percentage of any Lender or any pro rata share of any Revolving Advances
--- ----
required to be advanced by any Lender shall be increased as a result of such
Lender Default. Amounts received in respect of principal of Advances shall be
applied to reduce Advances of each Lender pro rata based on the aggregate of the
--- ----
outstanding Advances of all Lenders at the time of such application; provided
that, such amount shall not be applied to any Advances of a Defaulting Lender at
any time when, and to the extent that, the aggregate amount of Advances of any
Lender that is not a Defaulting Lender exceeds such Lender's Commitment
Percentage of all Advances then outstanding.
(ii) Lenders shall participate in Letters of Credit on the basis
of their respective pro rata shares, and no participation or reimbursement
--- ----
obligation of any Lender shall be increased as a result of a failure of any
Defaulting Lender to reimburse Agent with respect to any amounts drawn on or
otherwise payable with respect to any Letters of Credit (the amount that any
such Defaulting Lender has failed to reimburse is hereinafter referred to as
such Defaulting Lender's "Unreimbursed Amount"). Until such Defaulting Lender
has reimbursed Agent for any Unreimbursed Amount owed by it, all payments and
other amounts received from any source with respect to the Obligations or
otherwise under or in connection with this Agreement (including any letter of
credit fees) which would otherwise be payable to such Defaulting Lender will
instead be paid to Agent for application to such Unreimbursed Amount until such
Unreimbursed Amount has been paid in full. A Defaulting Lender shall not be
entitled to receive any portion of the letter of credit fees or any other fees
payable in connection with this Agreement, or any indemnity arising from its
agreement to make Revolving Advances and/or participate in Letters of Credit
hereunder.
(iii) A Defaulting Lender shall not be entitled to give
instructions to Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement or the Other Documents. All amendments,
waivers and other modifications of this
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Agreement and the Other Documents may be made without regard to a Defaulting
Lender and, solely for purposes of the definition of "Required Lenders", a
Defaulting Lender shall be deemed not to be a Lender and not to have Advances
outstanding.
(iv) Other than as expressly set forth in this Section 2.13(f),
the rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in
this Section 2.13(f) shall be deemed to release any Defaulting Lender from its
obligations under this Agreement or the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender
may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.
(v) In the event a Defaulting Lender retroactively cures, to
the satisfaction of Agent, the breach which caused such Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender
and shall be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
-----------------
3.1. Interest. Interest on Advances shall be payable in arrears on the
--------
last day of each month with respect to Domestic Rate Loans and, with respect to
Eurodollar Rate Loans, at the end of each Interest Period or, for Eurodollar
Rate Loans with an Interest Period in excess of three months, at the earlier of
(a) the last day of each three month period from the date of the commencement of
such Eurodollar Rate Loan or (b) the end of the Interest Period. Interest
charges shall be computed on the actual principal of Advances outstanding during
the month (the "Monthly Advances") at a rate per annum equal to the applicable
Contract Rate. Whenever, subsequent to the date of this Agreement, the
Alternate Base Rate is increased or decreased, the applicable Contract Rate with
respect to Domestic Rate Loans shall be similarly changed without notice or
demand of any kind by an amount equal to the amount of such change in the
Alternate Base Rate during the time such change or changes remain in effect.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, the Obligations shall bear interest at the applicable
Revolving Interest Rate plus two (2%) percent per annum (the "Default Rate").
3.2. Letter of Credit Fees.
---------------------
Borrowers shall pay Agent (i) for the ratable benefit of the
Lenders for issuing or causing the issuance of a Standby Letter of Credit, a fee
computed at a rate per annum of one and three quarters percent (1.75%) on the
outstanding amount thereof from time to time, (ii) for the ratable benefit of
the Lenders for issuing or causing the issuance of a Documentary Letter of
Credit, a fee computed at a rate per annum of one and one half percent (1.50%)
and
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<PAGE>
(iii) Bank's other customary charges payable in connection with Letters of
Credit as in effect from time to time (which charges shall be furnished to
Borrowers by Agent upon request). Such fees and charges shall be payable in the
case of any Letter of Credit, on its opening monthly thereafter in advance and
upon each increase in the outstanding amount thereof. Any such charge in effect
at the time of a particular transaction shall be the charge for that
transaction, notwithstanding any subsequent change in Bank's prevailing charges
for that type of transaction. All Letter of Credit Fees payable hereunder shall
be deemed earned in full on the date when the same are due and payable hereunder
and shall not be subject to rebate or proration upon the termination of this
Agreement for any reason.
3.3. (a) Closing Fee. Upon the execution of this Agreement, Borrower
-----------
shall pay to Agent for the ratable benefit of the Lenders a closing fee of
$30,000.
(b) Facility Fee. If, for any month during the Term, the average
------------
daily unpaid balance of the Revolving Advances for each day of such month plus
outstanding Letters of Credit does not equal the Maximum Loan Amount, then
Borrower shall pay to Agent for the ratable benefit of the Lenders a fee at a
rate equal to .375% per annum on the amount by which the Maximum Loan Amount
exceeds such average daily unpaid balance plus outstanding Letters of Credit.
Such fee shall be payable to Agent in arrears on the last day of each month and
on the last day of the Term.
(c) Agency Fee. Borrower shall pay to Agent (for the sole
----------
benefit of Agent) an agency fee of $90,000 per annum payable to Agent on January
22, 1997 and on each January 22 thereafter during the Term. The agency fee shall
be deemed earned in full on the date when same is due and payable hereunder and
shall not be subject to rebate or proration upon termination of this Agreement
for any reason.
3.4. (a) Collateral Evaluation Fee. Borrower shall pay to Agent (for
-------------------------
the sole benefit of Agent) a collateral evaluation fee equal to $2,500 per month
payable on the first day of each month commencing on the first day of the month
following the Effective Date and on the first day of each month thereafter
during the Term. The collateral evaluation fee shall be deemed earned in full
on the date when same is due and payable hereunder and shall not be subject to
rebate or proration upon termination of this Agreement for any reason.
(b) Collateral Monitoring Fee. Borrower shall pay to Agent (for
-------------------------
the sole benefit of Agent) on the first day of each month following any month in
which Agent performs any collateral monitoring - namely any field examination,
collateral analysis or other business analysis, the need for which is to be
determined by Agent and which monitoring is undertaken by Agent or for Agent's
benefit - a collateral monitoring fee in an amount equal to $600 per day for
each person performing such monitoring, plus all costs and disbursements
incurred by Agent in the performance of such examination or analysis.
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<PAGE>
In addition, Borrowers agree to pay to NationsBank, N.A. (for so long as it is a
Lender hereunder) such collateral monitoring fee on the same terms and
conditions set forth above with respect to one collateral monitoring field
examination per year provided that Borrowers' obligation to make such payment to
NationsBank, N.A. shall not exceed $5,000 per year.
3.5. Computation of Interest and Fees. Interest and fees hereunder
--------------------------------
shall be computed on the basis of a year of 360 days and for the actual number
of days elapsed. If any payment to be made hereunder becomes due and payable on
a day other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest thereon shall be payable at the
applicable Contract Rate during such extension.
3.6. Maximum Charges. In no event whatsoever shall interest and other
---------------
charges charged hereunder exceed the highest rate permissible under law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that Agent or any Lender has
received interest and other charges hereunder in excess of the highest rate
permissible hereto, such excess amount shall be first applied to any unpaid
principal balance owed by Borrowers, and if the then remaining excess amount is
greater than the previously unpaid principal balance, the Lenders shall promptly
refund such excess amount to Borrowers and the provisions hereof shall be deemed
amended to provide for such permissible rate.
3.7. Increased Costs. In the event that any applicable law, treaty or
---------------
governmental regulation, or any change therein or in the interpretation or
application thereof, or compliance by any Lender (for purposes of this Section
3.7, the term "Lender" shall include Agent or any Lender and any corporation or
bank controlling Agent or any Lender) and the office or branch where Agent or
any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether or not having the force of law) from any central
bank or other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Rate Loan or change the basis of
taxation of payments to Agent or any Lender of principal, fees, interest or any
other amount payable hereunder or under any Other Documents (except for changes
in the rate of tax on the overall net income of Agent or any Lender by the
jurisdiction in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by, any office of
Agent or any Lender, including (without limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or
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<PAGE>
(c) impose on Agent or any Lender or the London interbank Eurodollar
market any other condition with respect to this Agreement, any Other Documents
or any Eurodollar Rate Loan;
and the result of any of the foregoing is to increase the cost to Agent or
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be , provided that the
foregoing shall not apply to increased costs which are reflected in the
Alternate Base Rate or the Eurodollar Rate, as the case may be. Agent or such
Lender shall certify the amount of such additional cost or reduced amount to
Borrowing Agent, and such certification shall be conclusive absent manifest
error.
3.8. Basis For Determining Interest Rate Inadequate or Unfair. In the
--------------------------------------------------------
event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the Eurodollar
Rate for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank Eurodollar market, with
respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan,
or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan;
Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be cancelled or made as an unaffected type of Eurodollar
Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have
been converted to an affected type of Eurodollar Rate Loan shall be continued as
or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior
to the proposed conversion, shall be maintained as an unaffected type of
Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans
shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall
notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business
Days prior to the last Business Day of the then current Interest Period
applicable to such affected Eurodollar Rate Loan, shall be converted into an
unaffected type of Eurodollar Rate Loan, on the last Business Day of the then
current Interest Period for such affected Eurodollar Rate Loans. Until such
notice has been withdrawn, the Lenders shall have
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<PAGE>
no obligation to make an affected type of Eurodollar Rate Loan or maintain
outstanding affected Eurodollar Rate Loans and no Borrower shall have the right
to convert a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan
into an affected type of Eurodollar Rate Loan.
3.9. Capital Adequacy.
----------------
(a) In the event that Agent or any Lender shall have determined that
any applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by Agent or any
Lender (for purposes of this Section 3.9, the term "Lender" shall include Agent
or any Lender and any corporation or bank controlling Agent or any Lender) and
the office or branch where Agent or any Lender (as so defined) makes or
maintains any Eurodollar Rate Loans with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on Agent or any Lender's capital as a consequence of its
obligations hereunder to a level below that which Agent or such Lender could
have achieved but for such adoption, change or compliance (taking into
consideration Agent's and each Lender's policies with respect to capital
adequacy) by an amount deemed by Agent or any Lender to be material, then, from
time to time, Borrowers shall pay upon demand to Agent or such Lender such
additional amount or amounts as will compensate Agent or such Lender for such
reduction. In determining such amount or amounts, Agent or such Lender may use
any reasonable averaging or attribution methods. The protection of this Section
3.9 shall be available to Agent and each Lender regardless of any possible
contention of invalidity or inapplicability with respect to the applicable law,
regulation or condition.
(b) A certificate of Agent or such Lender setting forth such amount or
amounts as shall be necessary to compensate Agent or such Lender with respect to
Section 3.9(a) hereof when delivered to Borrowers shall be conclusive absent
manifest error.
IV. COLLATERAL: GENERAL TERMS
--------------------------
4.1. Acknowledgement and Grant of Security Interests.
-----------------------------------------------
(a) Each Borrower hereby acknowledges, confirms and agrees that Agent
for the ratable benefit of Lenders has and shall continue to have a lien upon
and security interest in all Collateral heretofore granted to Agent pursuant to
the Existing Loan Agreement to secure the Obligations, and, to the extent not
otherwise granted thereunder or under the Other Documents or otherwise granted
to or held by Agent, Borrowers hereby pledge and assign to Agent for the ratable
benefit of Lenders and grant to Agent for the ratable benefit
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<PAGE>
of Lenders a continuing security interest to secure the Obligations in, all of
the Collateral, wherever located, whether in any Borrower's possession or in the
possession and control of a third party for any Borrower's or Agent's or any
Lender's account. All of each Borrower's ledger sheets, files, records, books
of account, business papers and documents relating to the Collateral shall,
until delivered to or removed by Agent, be kept by such Borrower in trust for
Agent for the ratable benefit of Lenders.
(b) The liens and security interests of Agent for the ratable benefit
of Lenders in the Collateral shall be deemed to be continuously perfected from
the earliest date of the granting of such liens and security interests, whether
hereunder, under the Other Documents, or under the Existing Loan Agreement.
4.2. Perfection of Security Interest. Each Borrower shall take all
-------------------------------
action that may be necessary or desirable, or that Agent may request, so as at
all times to maintain the validity, perfection, enforceability and priority of
Agent's security interest for the ratable benefit of the Lenders in the
Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii) obtaining
landlords' or mortgagees' lien waivers, (iii) delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may specify, and stamping
or marking, in such manner as Agent may specify, any and all chattel paper,
instruments, letters of credits and advices thereof and documents evidencing or
forming a part of the Collateral, (iv) entering into warehousing, lockbox and
other custodial arrangements satisfactory to Agent, and (v) executing and
delivering financing statements, instruments of pledge, mortgages, notices and
assignments, in each case in form and substance satisfactory to the Required
Lenders, relating to the creation, validity, perfection, maintenance or
continuation of Agent's security interest for the ratable benefit of the Lenders
under the Uniform Commercial Code or other applicable law. Agent is hereby
authorized to file financing statements covering the Collateral signed by Agent
instead of Borrower in accordance with Section 9-402(2) of the Uniform
Commercial Code as adopted in the State of New York. All charges, expenses and
fees Agent may incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrower's account as a Revolving Advance and added
to the Obligations, or, at the Agent's option, shall be paid to Agent for the
ratable benefit of the Lenders immediately upon demand.
4.3. Disposition of Collateral. Each Borrower will safeguard and
-------------------------
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise except (a) the sale of Inventory in
the ordinary course of business and (b) the disposition or transfer of obsolete
and worn-out Equipment or Equipment no longer useful in the ordinary course of
business during any fiscal year having an aggregate fair market value of not
more than $250,000.
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4.4. Preservation of Collateral. Following the occurrence and during
--------------------------
the continuance of an Event of Default, in addition to the rights and remedies
set forth in Section 11.1 hereof, Agent: (a) may at any time take such steps as
Agent deems necessary to protect Agent's and Lenders' interest in and to
preserve the Collateral, including the hiring of such security guards or the
placing of other security protection measures as Agent may deem appropriate; (b)
may employ and maintain at any Borrower's premises a custodian who shall have
full authority to do all acts necessary to protect Agent's and Lenders'
interests in the Collateral; (c) may lease warehouse facilities to which Agent
may move all or part of the Collateral; (d) may use any Borrower's owned or
leased lifts, hoists, trucks and other facilities or equipment for handling or
removing the Collateral; and (e) shall have, and is hereby granted, a right of
ingress and egress to the places where the Collateral is located, and may
proceed over and through any Borrower's owned or leased property. Each Borrower
and General Partner shall cooperate fully with all of Agent's efforts to
preserve the Collateral and will take such actions to preserve the Collateral as
Agent may direct. All of Agent's expenses of preserving the Collateral,
including any expenses relating to the bonding of a custodian, shall be charged
to the Borrowers' accounts as a Revolving Advance in such manner as Agent deems
appropriate and added to the Obligations.
4.5. Ownership of Collateral. With respect to the Collateral, at the
-----------------------
time the Collateral becomes subject to Agent's security interest for its benefit
and for the ratable benefit of the Lenders: (a) each Borrower shall be the sole
owner of and fully authorized and able to sell, transfer, pledge and/or grant a
first security interest in each and every item of the Collateral to Agent for
its benefit and for the ratable benefit of the Lenders; and, except for
Permitted Encumbrances the Collateral shall be free and clear of all Liens and
encumbrances whatsoever; (b) each document and agreement executed by each
Borrower or delivered to Agent or any Lender in connection with this Agreement
shall be true and correct in all respects; (c) all signatures and endorsements
of each Borrower that appear on such documents and agreements shall be genuine
and each Borrower shall have full capacity to execute same; and (d) each
Borrower's Inventory shall be located as set forth on Schedule 4.5 and shall not
------------
be removed from such location(s) without the prior written consent of Agent
except with respect to the sale of Inventory in the ordinary course of business.
4.6. Defense of Agent's and Lender's Interests. Until (a) payment and
-----------------------------------------
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent's and Lenders' interests in the Collateral shall continue in
full force and effect. During such period no Borrower shall, without Required
Lenders' prior written consent, pledge, sell (except Inventory in the ordinary
course of business), assign, transfer, create or suffer to exist a Lien upon or
encumber or allow or suffer to be encumbered in any way except for Permitted
Encumbrances, any part of the Collateral. Each Borrower shall defend Agent and
Lenders' interests in the Collateral against any and all persons whatsoever. At
any time following the occurrence
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and during the continuance of an Event of Default and a demand by Agent for
payment of all Obligations, Agent shall have the right to take possession of the
indicia of the Collateral and the Collateral in whatever physical form
contained, including without limitation: labels, stationery, documents,
instruments and advertising materials. If Agent exercises this right to take
possession of the Collateral, Borrowers shall, upon demand, assemble it in the
best manner possible and make it available to Agent at a place reasonably
convenient to Agent. In addition, with respect to all Collateral, Agent and the
Lenders shall be entitled to all of the rights and remedies set forth herein and
further provided by the Uniform Commercial Code or other applicable law. Each
Borrower shall, and Agent may, at its option, instruct all suppliers, carriers,
forwarders, warehouses or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest for its
benefit and for the ratable benefit of the Lenders to deliver same to Agent
and/or subject to Agent's order and if they shall come into any Borrower's
possession, they, and each of them, shall be held by Borrower in trust as
Agent's trustee, and such Borrower, as the case may be, will immediately deliver
them to Agent in their original form together with any necessary endorsement.
4.7. Books and Records. Each Borrower (a) shall keep proper books of
-----------------
record and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs; (b) set
up on its books accruals with respect to all taxes, assessments, charges, levies
and claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables as the case may be, advances
and investments and all other proper accruals (including without limitation by
reason of enumeration, accruals for premiums, if any, due on required payments
and accruals for depreciation, obsolescence, or amortization of properties),
which should be set aside from such earnings in connection with its business.
All determinations pursuant to this subsection shall be made in accordance with,
or as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Borrowers.
4.8. Financial Disclosure. Each Borrower hereby irrevocably authorizes
--------------------
and directs all accountants and auditors employed by Borrowers at any time
during the Term to exhibit and deliver to Agent and each Lender copies of any
Borrower's financial statements, trial balances or other accounting records of
any sort in the accountant's or auditor's possession, and to disclose to Agent
and each Lender any information such accountants may have concerning any
Borrower's financial status and business operations. Each Borrower hereby
authorizes all federal, state and municipal authorities to furnish to Agent and
each Lender copies of reports or examinations relating to Borrowers, whether
made by a Borrower or otherwise; however, Agent and each Lender will attempt to
obtain such information or materials directly from Borrowers, as the case may
be, prior to obtaining such information or materials from such accountants or
such authorities.
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<PAGE>
4.9. Compliance with Laws. Each Borrower shall comply in all material
--------------------
respects with all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to the Collateral or any
part thereof or to the operation of such Borrower's business the non-compliance
with which could have a Material Adverse Effect on such Borrower. Each Borrower
may, however, contest or dispute any acts, rules, regulations, orders and
directions of those bodies or officials in any reasonable manner, provided that
any related lien is inchoate or stayed and sufficient reserves are established
to the reasonable satisfaction of the Lenders to protect Agent's Lien on or
security interest in the Collateral. The Collateral at all times shall be
maintained in accordance with the requirements of all insurance carriers which
provide insurance with respect to the Collateral so that such insurance shall
remain in full force and effect.
4.10. Inspection of Premises. At all reasonable times Agent and each
----------------------
Lender shall have full access to and the right to audit, check, inspect and make
abstracts and copies from any Borrower's books, records, audits, correspondence
and all other papers relating to the Collateral and the operation of their
respective businesses. Agent, any Lender and their agents may enter upon any
Borrower's premises at any time during business hours and at any other
reasonable time, and from time to time without prior notice, for the purpose of
inspecting the Collateral and any and all records pertaining thereto and the
operation of their respective businesses.
4.11. Insurance. Each Borrower shall bear the full risk of any loss of
---------
any nature whatsoever with respect to the Collateral. At Borrowers' own cost
and expense in amounts and with carriers acceptable to Agent, each Borrower
shall (a) keep all insurable properties and properties in which it has an
interest insured against the hazards of fire, flood, sprinkler leakage, those
hazards covered by extended coverage insurance and such other hazards, and for
such amounts, as is customary in the case of companies engaged in similar
businesses including, without limitation, business interruption insurance;, (b)
maintain a bond in such amounts as is customary in the case of companies engaged
in similar businesses insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of Borrowers
either directly or through authority to draw upon such funds or to direct
generally the disposition of such assets; (c) maintain public and product
liability insurance against claims for personal injury, death or property damage
suffered by others; (d) maintain all such worker's compensation or similar
insurance as may be required under the laws of any state or jurisdiction in
which it is engaged in business; (e) furnish Agent with (i) copies of all
policies and evidence of the maintenance of such policies by the renewal thereof
at least thirty (30) days before any expiration date, and (ii) appropriate loss
payable endorsements in form and substance satisfactory to Agent, naming Agent
as a co-insured and loss payee as its interests may appear with respect to all
insurance coverage referred to in clauses (a), and (b) above, and providing (A)
that all proceeds thereunder in
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<PAGE>
excess of $100,000 shall be payable to Agent for the ratable benefit of the
Lenders, (B) no such insurance shall be affected by any act or neglect of the
insured or owner of the property described in such policy, and (C) that such
policy and loss payable clauses may not be cancelled, amended or terminated
unless at least thirty (30) days' prior written notice is given to Agent. In
the event of any loss thereunder, the carriers named therein hereby are directed
by Agent or any Borrower to make payment for such loss in excess of $100,000 to
Agent and not to a Borrower and Agent jointly. If any insurance losses are paid
by check, draft or other instrument payable to a Borrower and Agent jointly,
Agent may endorse such Borrower's name thereon and do such other things as Agent
may deem advisable to reduce the same to cash. Agent is hereby authorized to
adjust and compromise claims under insurance coverage referred to in clauses (a)
and (b) above. All loss recoveries received by Agent upon any such insurance
may be applied to the Obligations, in such order as Agent in its sole discretion
shall determine; provided, upon any Borrower's request such proceeds shall be
--------
disbursed to such Borrower for the restoration of damaged property if such
proceeds together with other amounts provided by such Borrower are sufficient to
fully restore such property to its condition prior to the casualty loss. Any
surplus shall be paid by Agent to Borrowers or applied as may be otherwise
required by law. Any deficiency thereon shall be paid by Borrowers, to Agent,
on demand.
4.12. Failure to Pay Insurance. If any Borrower shall fail to obtain
------------------------
insurance as hereinabove provided, or to keep the same in force, Agent, if Agent
so elects, may obtain such insurance and pay the premium therefor for such
Borrower's account, and charge such Borrower's account therefor and such
expenses so paid shall be part of the Obligations, provided Agent shall promptly
thereafter provide to such Borrower documentation supporting such charges.
4.13. Payment of Taxes. Each Borrower will pay, when due, all taxes,
----------------
assessments and other Charges lawfully levied or assessed upon any Borrower or
any of the Collateral including, without limitation, real and personal property
taxes, assessments and charges and all franchise, income, employment, social
security benefits, withholding, and sales taxes. If any tax by any governmental
authority is or may be imposed on or as a result of any transaction between any
Borrower and Agent or any Lender which Agent or any Lender may be required to
withhold or pay or if any taxes, assessments, or other Charges remain unpaid
after the date fixed for their payment, or if any claim shall be made which, in
Agent's or Lender's opinion, may possibly create a valid Lien on the Collateral,
Agent may without notice to such Borrower pay the taxes, assessments or other
Charges and Borrowers hereby indemnify and hold Agent and each Lender harmless
in respect thereof. The amount of any payment by Agent under this Section 4.13
shall be charged to the applicable Borrower's accounts as a Revolving Advance
and added to the Obligations and, until a Borrower shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that due
provision for the payment thereof has been made), Agent may hold without
interest any balance standing to any
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<PAGE>
Borrower's credit and Agent shall retain its security interest in any and all
Collateral held by Agent.
4.14. Payment of Leasehold Obligations. Each Borrower shall at all
--------------------------------
times pay, when and as due, its rental obligations under all leases under which
it is a tenant, and shall otherwise comply, in all material respects, with all
other terms of such leases and keep them in full force and effect and, at
Agent's request, will provide evidence of having done so.
4.15. Receivables.
-----------
(a) Nature of Receivables. Each of the Receivables shall be a bona
---------------------
fide and valid account representing a bona fide indebtedness incurred by the
Customer therein named, for a fixed sum as set forth in the invoice relating
thereto (provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated terms of such Borrower, or work, labor or services theretofore
rendered by Borrower as of the date each Receivable is created. Same shall be
due and owing in accordance with such Borrower's standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
(b) Solvency of Customers. Each Customer, to the best of Borrowers'
---------------------
knowledge, as of the date each Receivable is created, is and will be solvent and
able to pay all Receivables on which the Customer is obligated in full when due
or with respect to such Customers of any Borrower who are not solvent such
Borrower has set up on its books and in its financial records bad debt reserves
adequate to cover such Receivables.
(c) Locations of Borrowers. Each Borrower's chief executive office
----------------------
and the office at which each maintains its books and records pertaining to
Receivables is the address set forth on Schedule 4.15(c) hereto. Until written
----------------
notice is given to Agent by Borrowing Agent of any other office at which it
keeps its records pertaining to Receivables all such records shall be kept at
such offices.
(d) Collection of Receivables. Until a Borrower's authority to do so
-------------------------
is terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default), Borrower will, at their sole
cost and expense, but on Agent's behalf and for Agent's account, collect as
Agent's property and in trust for Agent all amounts received on Receivables, and
shall not commingle such collections with its respective funds or use the same
except to pay Obligations. Each Borrower shall, upon request, deliver to Agent
or the Blocked Account in original form and on the date of receipt thereof, all
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.
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<PAGE>
(e) Notification of Assignment of Receivables. At any time following
-----------------------------------------
the occurrence and during the continuance of an Event of Default or a Default,
Agent shall have the right to send notice of the assignment of, and Agent's
security interest in, the Receivables to any and all Customers or any third
party holding or otherwise concerned with any of the Collateral. Thereafter,
Agent shall have the sole right to collect the Receivables, take possession of
the Collateral, or both, for the ratable benefit of the Lenders. Agent's actual
collection expenses, including, but not limited to, stationery and postage,
telephone and telegraph, secretarial and clerical expenses and the salaries of
any collection personnel used for collection, may be charged to Borrower's
accounts and added to the Obligations.
(f) Power of Agent to Act on Borrowers' Behalf. Agent shall have the
------------------------------------------
right to receive, endorse, assign and/or deliver in the name of Agent, or any
Borrower any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Each
Borrower hereby constitutes Agent or Agent's designee as its respective attorney
with power (A) at any time following the occurrence and during the continuance
of an Event of Default hereunder (i) to endorse its name upon any notes,
acceptances, checks, drafts, money orders or other evidences of payment or
Collateral; (ii) to sign its name on any invoice or bill of lading relating to
any of the Receivables, drafts against Customers or assignments of Receivables;
(iii) to demand payment of the Receivables; (iv) to enforce payment of the
Receivables by legal proceedings or otherwise; (v) to exercise all of its rights
and remedies with respect to the collection of the Receivables and any other
Collateral; (vi) to settle, adjust, compromise, extend or renew the Receivables;
(vii) to settle, adjust or compromise any legal proceedings brought to collect
Receivables; (viii) to prepare, file and sign its name on a proof of claim in
bankruptcy or similar document against any Customer; (ix) to prepare, file and
sign its name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables; and (B) at any time (i) to
send verifications of Receivables to any Customer; (ii) to sign its name on all
financing statements or any other documents or instruments deemed necessary or
appropriate by Agent to preserve, protect, or perfect Agent's interest in the
Collateral and to file same; (iii) to do all other acts and things necessary to
carry out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of omission or commission nor for any error of judgment or mistake of fact
or of law, unless done maliciously or with gross (not mere) negligence; this
power being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time following the occurrence
and during the continuance of an Event of Default, to change the address for
delivery of mail addressed to any Borrower to such address as Agent may
designate.
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<PAGE>
(g) No Liability. Neither Agent nor any Lender shall, under any
------------
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom. Following the occurrence and during the
continuance of an Event of Default Agent may, without notice or consent from any
Borrower, sue upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the Receivables
or any other securities, instruments or insurance applicable thereto and/or
release any obligor thereof. Agent is authorized and empowered to accept
following the occurrence and during the continuance of an Event of Default the
return of the goods represented by any of the Receivables, without notice to or
consent by any Borrower, all without discharging or in any way affecting the
Obligations hereunder.
(h) Establishment of a Lockbox Account, Dominion Account. All
----------------------------------------------------
proceeds of Collateral shall, at the direction of Agent, be deposited by
Borrowers into a lockbox account, dominion account or such other "blocked
account" ("Blocked Accounts") as Agent may require pursuant to an arrangement
with such bank(s) as may be selected by Borrowers and be acceptable to Agent.
Borrowers shall issue to any such bank, an irrevocable letter of instruction
directing said bank to transfer such funds so deposited to Agent, either to any
account maintained by Agent at said bank or by wire transfer to appropriate
account(s) of Agent. All funds deposited in such "blocked account" shall
immediately become the property of Agent, and Borrowers shall obtain the
agreement by such bank to waive any offset rights against the funds so
deposited. Agent assumes no responsibility for such "blocked account"
arrangement including, without limitation, any claim of accord and satisfaction
or release with respect to deposits accepted by any bank thereunder.
Alternatively, Agent may establish depository accounts ("Depository Accounts")
in the name of Agent at a bank or banks for the deposit of such funds and
Borrowers shall deposit all proceeds of Collateral or cause same to be
deposited, in kind, in such Depository Accounts of Agent in lieu of depositing
same to the Blocked Accounts.
(i) Adjustments. No Borrower will, without Agent's consent,
-----------
compromise or adjust any Receivables (or extend the time for payment thereof) or
accept any material returns of merchandise or grant any additional discounts,
allowances or credits thereon except for those compromises, adjustments,
returns, discounts, credits and allowances as have been heretofore customary in
the business of such Borrower, as the case may be.
4.16. Inventory. All Inventory has been, and will be, produced by
---------
Borrowers with the Federal Fair Labor Standards Act of 1938, as amended, and all
rules, regulations and orders thereunder.
4.17. Maintenance of Equipment. The Equipment shall be maintained in
------------------------
good operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs
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<PAGE>
thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved. No Borrower shall use or operate
the Equipment in violation of any law, statute, ordinance, code, rule or
regulation.
4.18. Exculpation of Liability. Nothing herein contained shall be
------------------------
construed to constitute Agent or any Lender as any Borrower's agent for any
purpose whatsoever, nor shall Agent or any Lender be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause thereof,
unless such shortage, discrepancy, damage, loss or destruction results from the
gross (not mere) negligence or willful misconduct of Agent or Lenders. Neither
Agent nor any Lender, whether by anything herein or in any assignment or
otherwise, assume any Borrower's obligations under any contract or agreement
assigned to Agent or such Lender, and neither Agent nor any Lender shall be
responsible in any way for the performance by any Borrower of any of the terms
and conditions thereof.
4.19. Environmental Matters. (a) Borrowers will ensure that all real
---------------------
property owned or occupied by Borrowers remains in compliance in all material
respects with all Environmental Laws and they will not place or permit to be
placed any Hazardous Substances on any such property except as not prohibited by
applicable law or appropriate governmental authorities.
(b) Borrowers will establish and maintain a system to assure and
monitor continued compliance with all applicable Environmental Laws which system
shall include periodic reviews of such compliance.
(c) Promptly upon the written request of Agent from time to
time, Borrowers shall provide Agent, at Borrowers' expense, with an
environmental site assessment or environmental audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of Agent, to
assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances found on, under, at or within any real
property owned or occupied by a Borrower. Any report or investigation of such
Hazardous Discharge proposed and acceptable to an appropriate Authority that is
charged to oversee the clean-up of such Hazardous Discharge shall be acceptable
to Agent. If such estimates, individually or in the aggregate, exceed $100,000,
Agent shall have the right to require Borrowers to post a bond, letter of credit
or other security reasonably satisfactory to Agent to secure payment of these
costs and expenses.
(d) Borrowers shall defend and indemnify Agent and the Lenders
and hold Agent, the Lenders and their respective employees, agents, directors
and officers harmless from and against all loss, liability, damage and expense,
claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by Agent or the
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<PAGE>
Lenders under or on account of any Environmental Laws, including, without
limitation, the assertion of any lien thereunder, with respect to any Hazardous
Discharge, the presence of any Hazardous Substances, whether or not the same
originates or emerges from any real property owned or occupied by a Borrower or
any contiguous real estate, except to the extent such loss, liability, damage
and expense is attributable to any Hazardous Discharge resulting from actions on
the part of Agent or any Lender. Borrowers' obligations under this Section 4.19
shall arise upon the discovery of the presence of any Hazardous Substances at
any real property owned or occupied by a Borrower, whether or not any federal,
state, or local environmental agency has taken or threatened any action in
connection with the presence of any Hazardous Substances. Borrowers'
obligations and the indemnifications hereunder shall survive the termination of
this Agreement.
(e) For purposes of Sections 4.19 and 5.7, all references to any
real property owned or occupied by a Borrower shall be deemed to include all of
Borrower's right, title and interest in and to its owned and leased premises.
4.20. Except as respects the financing statements filed by Agent and
the financing statements described on Schedule 4.20, no financing statement
-------------
covering any of the Collateral or any proceeds thereof is on file in any public
office.
V. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each Borrower represents and warrants as follows:
5.1. Authority. It has full power, authority and legal right to enter
---------
into this Agreement and the Other Documents and perform its respective
Obligations hereunder and thereunder. The execution, delivery and performance
hereof and of the Other Documents (a) are within its respective partnership and
corporate powers, have been duly authorized, are not in contravention of law or
the terms of any Borrower's certificate or agreement of limited partnership, by-
laws, certificate of incorporation or other applicable documents relating to the
formation or conduct of its respective business or of any material agreement or
undertaking to which it is a party or by which it is bound, and (b) will not
conflict with nor result in any breach in any of the provisions of or constitute
a default under or result in the creation of any Lien except Permitted
Encumbrances upon any of its respective assets under the provisions of any
agreement, charter document, instrument, by-law, or other instrument to which it
or its property is a party or by which it may be bound.
5.2. Formation and Qualification. (a) Each is duly formed and in good
---------------------------
standing under the laws of its state of incorporation or formation and is
qualified to do business and is in good standing in the states listed on
Schedule 5.2(a) which constitute all states in which qualification and good
- ---------------
standing are necessary for each to conduct its business and own its property and
where the failure to so
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<PAGE>
qualify could have a Material Adverse Effect. Each Borrower has delivered to
Agent true and complete copies of its certificate of limited partnership,
agreement of limited partnership, certificate of incorporation and/or by-laws
and each will promptly notify Agent of any amendment or changes thereto.
(b) The only Subsidiaries of Borrowers are listed on Schedule
--------
5.2(b).
- -------
5.3. Survival of Representations and Warranties. All representations
------------------------------------------
and warranties of each Borrower contained in this Agreement and the Other
Documents shall be true at the time of the execution of this Agreement and the
Other Documents, and shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions described
therein or related thereto.
5.4. Tax Returns. Each Borrower's federal tax identification number is
set forth on Schedule 5.4. Borrowers have each filed all federal, state and
------------
local tax returns and other reports it is required by law to file and has paid
all taxes, assessments, fees and other governmental charges that are due and
payable. The provision for taxes on the books of Borrowers are adequate for all
years not closed by applicable statutes, and for its current fiscal year, and no
Borrower has any knowledge of any deficiency or additional assessment in
connection therewith not provided for on its books.
5.5. Financial Statements.
--------------------
(a) The pro forma balance sheet of Borrowers on a consolidated
basis (the "Pro Forma Balance Sheet") furnished to Agent and the Lenders on the
Effective Date reflects the consummation of the transactions contemplated by the
Acquisition Agreement, the Indenture and under this Agreement (the
"Transactions") and are accurate, complete and correct and fairly reflect in all
material respects the financial condition of Borrowers on a consolidated basis
as of the Effective Date after giving effect to the Transactions, and have been
prepared in accordance with GAAP, consistently applied. The Pro Forma Balance
Sheet has been certified as accurate, complete and correct in all material
respects by the Chief Financial Officer of Radnor. All financial statements
referred to in this subsection 5.5(a), including the related schedules and notes
thereto, have been prepared, in accordance with GAAP, except as may be disclosed
in such financial statements.
(b) The twelve-month cash flow projections of Borrowers and
their projected balance sheets as of the Effective Date, copies of which have
been previously submitted to Agent and the Lenders (the "Projections") were
prepared by the Chief Financial Officer of each Borrower, are based on
underlying assumptions which provide a reasonable basis for the projections
contained therein and reflect such Borrower's judgment based on present
circumstances of the most likely set of conditions and course of action for the
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<PAGE>
projected period. The Projections together with the Pro Forma Balance Sheet of
Borrowers on a consolidated basis, are referred to as the "Pro Forma Financial
Statements".
(c) The balance sheets of each Borrower as of September 30,
1996, and the related statements of income, changes in stockholder's equity, and
changes in cash flow for the period ended on such date, which have been
delivered to Agent, have been prepared in accordance with GAAP, consistently
applied and present fairly the financial position of each Borrower at such date
and the results of their operations for such period. Since September 30, 1996
there has been no change in the condition, financial or otherwise, of any
Borrower as shown on the balance sheets as of such date, except changes in the
ordinary course of business, none of which individually or in the aggregate has
caused a Material Adverse Effect.
5.6. Corporate Name. No Borrower has been known by any other corporate
--------------
name in the past five years and does not sell Inventory under any other name
except as set forth on Schedule 5.6, nor has any Borrower been the surviving
------------
entity of a merger or consolidation or acquired all or substantially all of the
assets of any Person during the preceding five (5) years, except for (i) the
acquisition of certain assets of Wincup pursuant to the Contribution Agreements,
(ii) the acquisition of stock of Acquisition pursuant to the Acquisition
Agreement and (iii) the acquisition by Radnor of the limited partnership
interest of James River in Wincup.
5.7. O.S.H.A. and Environmental Compliance.
-------------------------------------
Except as disclosed in the Phase I and Phase II environmental
reports prepared by Dames & Moore and Conestoga Rovers & Associates and
delivered to Agent on or before the Effective Date:
(a) Each Borrower has duly complied in all material respects
with, and the facilities, business, assets, property and leaseholds of each are
in compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; there have been no outstanding citations, notices
or orders of material non-compliance issued to Borrower or relating to its
business, assets, property, leaseholds or equipment under any such laws, rules
or regulations.
(b) Each Borrower has been issued all required federal, state
and local licenses, certificates or permits relating to all applicable
Environmental Laws.
(c) There are no visible signs of releases, spills, discharges,
leaks or disposal (collectively referred to as "Releases") of Hazardous
Substances at, upon, under or within any Borrower's premises; (i) there are no
underground storage tanks or polychlorinated biphenyls on any Borrower's
premises; (ii) none of Borrower's premises have ever been used as a treatment,
storage or
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<PAGE>
disposal facility of Hazardous Waste; and (iii) no Hazardous Substances are
present on any Borrower's premises, excepting such quantities as are handled in
accordance with all applicable manufacturer's instructions and governmental
regulations and in proper storage containers and as are necessary for the
operation of the commercial business of any Borrower or its tenants.
5.8. Solvency; No Litigation, Violation, Indebtedness or Default.
-----------------------------------------------------------
(a) After giving effect to the Transactions, each Borrower will
be solvent, able to pay its respective debts as they mature, have capital
sufficient to carry on its respective business and all businesses in which it is
about to engage, and (i) as of the Effective Date, the fair present saleable
value of its assets, calculated on a going concern basis, is in excess of the
amount of its liabilities and (ii) subsequent to the Effective Date, the fair
saleable value of its assets (calculated on a going concern basis) will be in
excess of the amount of its liabilities.
(b) Except as disclosed in Schedule 5.8(b) or the Pro Forma
---------------
Financial Statements, no Borrower has (i) any pending or threatened litigation,
arbitration, actions or proceedings which involve the possibility of having a
Material Adverse Effect on such Borrower or on its ability to perform this
Agreement, and (ii) any liabilities nor indebtedness other than the Obligations.
(c) No Borrower is in violation of any applicable statute,
regulation or ordinance in any respect which could have a Material Adverse
Effect on such Borrower and no Borrower is in violation of any order of any
court, governmental authority or arbitration board or tribunal which could have
a Material Adverse Effect on such Borrower.
(d) No Borrower nor any member of the Controlled Group maintains
or contributes to any Plan other than those listed on Schedule 5.8(d) hereto.
---------------
Except as set forth in Schedule 5.8(d), (i) no Plan has incurred any
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the Code, whether or not waived, and each Borrower and each
member of the Controlled Group has met all applicable minimum funding
requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan
which is intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, (iii) no
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of
-49-
<PAGE>
the accrued benefits and other liabilities of such Plan and no Borrower nor any
member of the Controlled Group knows of any facts or circumstances which would
materially change the value of such assets and accrued benefits and other
liabilities, (vi) no Borrower nor any member of the Controlled Group has
breached any of the responsibilities, obligations or duties imposed on it by
ERISA with respect to any Plan, (vii) no Borrower nor any member of a Controlled
Group has incurred any liability for any excise tax arising under Section 4972
or 4980B of the Code, and no fact exists which could give rise to any such
liability, (viii) no Borrower nor any member of the Controlled Group nor any
fiduciary of, nor any trustee to, any Plan, has engaged in a "prohibited
transaction" described in Section 406 of the ERISA or Section 4975 of the Code
nor taken any action which would constitute or result in a Termination Event
with respect to any such Plan which is subject to ERISA, (ix) Borrower and each
member of the Controlled Group has made all contributions due and payable with
respect to each Plan, (x) there exists no event described in Section 4043(b) of
ERISA, for which the thirty (30) day notice period contained in 29 CFR (S)2615.3
has not been waived, (xi) no Borrower nor any member of the Controlled Group has
any fiduciary responsibility for investments with respect to any plan existing
for the benefit of persons other than employees or former employees of Borrowers
and any member of the Controlled Group, and (xii) no Borrower nor any member of
the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980.
5.9. Patents, Trademarks, Copyrights and Licenses. All patents, patent
--------------------------------------------
applications, trademarks, trademark applications, service marks, service mark
applications, copyrights, copyright applications, design rights, tradenames,
assumed names, trade secrets and licenses owned or utilized by any Borrower are
set forth on Schedule 5.9, are valid and have been duly registered or filed with
------------
all appropriate governmental authorities and constitute all of the intellectual
property rights which are necessary for the operation of its business; there is
no objection to or pending challenge to the validity of any such material
patent, trademark, copyright, design rights tradename, trade secret or license
and Borrower is not aware of any grounds for any challenge, except as set forth
in Schedule 5.9 hereto. Each patent, patent application, patent license,
------------
trademark, trademark application, trademark license, service mark, service mark
application, service mark license, copyright, copyright application and
copyright license owned or held by any Borrower and all trade secrets used by
any Borrower consist of original material or property developed by such Borrower
or was lawfully acquired by such Borrower from the proper and lawful owner
thereof. Each of such items has been maintained so as to preserve the value
thereof from the date of creation or acquisition thereof. With respect to all
software used by any Borrower, such Borrower is in possession of all source and
object codes related to each piece of software or is the beneficiary of a source
code escrow agreement, each such source code escrow agreement being listed on
Schedule 5.9 hereto.
- ------------
-50-
<PAGE>
5.10. Licenses and Permits. Except as set forth in Schedule 5.10, each
-------------------- -------------
Borrower (a) is in compliance with and (b) has procured and is now in possession
of, all material licenses or permits required by any applicable federal, state
or local law or regulation for the operation of its business in each
jurisdiction wherein it is now conducting or proposes to conduct business and
where the failure to procure such licenses or permits could have a Material
Adverse Effect.
5.11. Default of Indebtedness. No Borrower is in default in the payment
-----------------------
of the principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.
5.12. No Default. No Borrower is in default in the payment or
----------
performance of any of its material contractual obligations and no Default has
occurred.
5.13. No Burdensome Restrictions. No Borrower is party to any contract
--------------------------
or agreement the performance of which could have a Material Adverse Effect. No
Borrower has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.
5.14. No Labor Disputes. No Borrower is involved in any labor dispute;
-----------------
there are no strikes or walkouts or union organization of any Borrower's
employees threatened or in existence and no labor contract is scheduled to
expire during the Term other than as set forth on Schedule 5.14 hereto.
-------------
5.15. Margin Regulations. No Borrower is engaged, nor will either of
------------------
them engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U or Regulation G of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the
proceeds of any Advance will be used for "purchasing" or "carrying" "margin
stock" as defined in Regulation U of such Board of Governors.
5.16. Investment Company Act. No Borrower is an "investment company"
----------------------
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is either entity controlled by such a company.
5.17. Disclosure. No representation or warranty made by any Borrower
----------
in this Agreement or in any financial statement, report, certificate or any
other document furnished in connection herewith or therewith contains any untrue
statement of a material fact or omits
-51-
<PAGE>
to state any material fact necessary to make the statements herein or therein
not misleading. There is no fact known to any Borrower or which reasonably
should be known to any Borrower which such Borrower has not disclosed to Agent
in writing with respect to the transactions contemplated by the Contribution
Agreements or this Agreement which could reasonably be expected to have a
Material Adverse Effect.
5.18. Delivery of Acquisition Agreement; Indenture. Agent and Lenders
--------------------------------------------
have received complete copies of the Acquisition Agreement and the Indenture
(including all exhibits, schedules and disclosure letters referred to therein or
delivered pursuant thereto, if any) and all amendments thereto, waivers relating
thereto and other side letters or agreements affecting the terms thereof. None
of such documents and agreements has been amended or supplemented, nor have any
of the provisions thereof been waived, except pursuant to a written agreement or
instrument which has heretofore been delivered to Agent and Lenders.
5.19. Swaps. No Borrower is a party to, nor will it be a party to, any
-----
swap agreement whereby such Borrower has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited "two-way basis"
without regard to fault on the part of either party.
5.20. Conflicting Agreements. No provision of any mortgage, indenture,
----------------------
contract, agreement, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent which has not
already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.
5.21. Application of Certain Laws and Regulations. No Borrower nor any
-------------------------------------------
Affiliate of any Borrower is subject to any statute, rule or regulation which
regulates the incurrence of any Indebtedness, including without limitation,
statutes or regulations relative to common or interstate carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.
5.22. Business and Property of Borrowers. Upon and after the Effective
----------------------------------
Date, Borrowers do not propose to engage in any business other than the
manufacture and/or distribution of polystyrene beads and disposable products
sold to or through the food service industry and activities necessary to conduct
the foregoing. On the Effective Date, each Borrower will own all the property
and possess all of the rights and Consents necessary for the conduct of its
business.
5.23. Acquisition. Each Borrower has acquired all of its assets and
-----------
property in accordance with all applicable statutes and laws, such property is
free and clear of all Liens other than Permitted Encumbrances.
-52-
<PAGE>
VI. AFFIRMATIVE COVENANTS.
---------------------
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. Payment of Fees. Pay to Agent on demand all usual and customary
---------------
fees and expenses which Agent incurs in connection with (a) the forwarding of
Advance proceeds and (b) the establishment and maintenance of any Blocked
Accounts or Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge the accounts of Borrowers for all such fees and
expenses, provided Agent shall promptly thereafter provide Borrowing Agent with
copies of supporting documentation.
6.2. Conduct of Business and Maintenance of Existence and Assets. (a)
-----------------------------------------------------------
Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
design rights, tradenames, trade secrets and trademarks and take all actions
necessary to enforce and protect the validity of any intellectual property right
or other right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business; and (c) make all such reports and pay all
such franchise and other taxes and license fees and do all such other acts and
things as may be lawfully required to maintain its rights, licenses, leases,
powers and franchises under the laws of the United States or any political
subdivision thereof.
6.3. Violations. Promptly notify Agent in writing of any violation of
----------
any law, statute, regulation or ordinance of any Governmental Body, or of any
agency thereof, applicable to any Borrower which may have a Material Adverse
Effect on any Borrower.
6.4. Government Receivables. Take all steps necessary to protect
----------------------
Agent's and Lenders' interest in the Collateral under the Federal Assignment of
Claims Act or other applicable state or local statutes or ordinances and deliver
to Agent appropriately endorsed, any instrument or chattel paper connected with
any arising out of contracts between any Borrower and the United States, any
state or any department, agency or instrumentality of any of them.
-53-
<PAGE>
6.5. Net Worth. Maintain Net Worth in an amount not less than the
---------
amounts set forth below as of the dates set forth below:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
12-31-96 $6,000,000
12-31-97 $7,000,000
12-31-98 $8,000,000
12-31-99 $9,000,000
12-31-00 $10,000,000
</TABLE>
6.6. Current Ratio. Maintain a ratio of Current Assets to Current
-------------
Liabilities of not less than 1.00 to 1.00 at the end of each fiscal quarter.
6.7. Fixed Charge Coverage. Maintain for each fiscal quarter of
---------------------
Borrower a Fixed Charge Coverage equal to or greater than 1.00 to 1.00 at the
end of each fiscal quarter.
6.8. Interest Coverage. Maintain for each fiscal quarter of Borrower
-----------------
an Interest Coverage equal to or greater than 1.25 to 1.00 at the end of each
fiscal quarter.
6.9. Net Income. Achieve net income (excluding non-cash extraordinary
----------
items) of at least $1 in each fiscal year.
6.10. Execution of Supplemental Instruments. Execute and deliver to
-------------------------------------
Agent from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the
Collateral, and such other instruments as Agent may request, in order that the
full intent of this Agreement may be carried into effect.
6.11. Payment of Indebtedness. Pay, discharge or otherwise satisfy at
-----------------------
or before maturity (subject, where applicable, to specified grace periods and,
in the case of the trade payables, to normal payment practices) all its material
obligations and liabilities of whatever nature, except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and each Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any applicable
subordination arrangement in favor of Agent and the Lenders.
6.12. Standards of Financial Statements. Cause all financial statements
---------------------------------
referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13 and 9.14 as to
those to which GAAP is applicable to be complete and correct in all material
respects (subject, in the case of interim financial statements, to normal year-
end audit adjustments) and to be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein (except
as concurred in by such reporting accountants or officer, as the case may be,
and disclosed therein).
-54-
<PAGE>
6.13. Exercise of Rights. Enforce all of its rights under the
------------------
Contribution Agreements, the Acquisition Agreement, the Escrow Agreement and all
documents executed in connection therewith including, but not limited to, all
indemnification rights and pursue all remedies available to it with diligence
and in good faith in connection with the enforcement of any such rights.
VII. NEGATIVE COVENANTS.
------------------
No Borrower shall, until satisfaction in full of the Obligations and
termination of this Agreement:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
-----------------------------------------------------
(a) Enter into any merger, consolidation or other reorganization
with or into any other Person (other than another Borrower) or acquire all or a
substantial portion of the assets or stock of any Person (other than another
Borrower) or permit any other Person (other than another Borrower) to
consolidate with or merge with it.
(b) Sell, lease, transfer or otherwise dispose of all or any
material part of its properties or assets, except in the ordinary course of its
business.
7.2. Creation of Liens. Create or suffer to exist any Lien or transfer
-----------------
upon or against any of its property or assets now owned or hereafter acquired,
except Permitted Encumbrances.
7.3. Guarantees. Become liable upon the obligations of any Person by
----------
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders)
except (a) as disclosed on Schedule 7.3, and (b) the endorsement of checks in
------------
the ordinary course of business.
7.4. Investments. Purchase or acquire obligations or stock of, or any
-----------
other interest in, any Person, except (a) obligations issued or guaranteed by
the United States of America or any agency thereof; (b) commercial paper with
maturities of not more than 180 days and a published rating of not less than A-1
or P-1 (or the equivalent rating); (c) certificates of time deposit and bankers'
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency; (d) U.S. money market funds that invest
solely in obligations issued or guaranteed by the United States of America or an
agency thereof; and (e) investments in one or more Subsidiaries in an aggregate
sum not to exceed the sum of (i) 50% of the cumulative net income of Borrowers
on a consolidated basis plus (ii) $3,000,000; provided, at the time of such
--------
investment (x) no Event of Default has occurred or would occur after giving
effect to
-55-
<PAGE>
such payment and (y) and, if such investment is being made by StyroChem or
Wincup, after giving effect to such investment the difference between (1)
Undrawn Availability calculated solely with respect to the Borrower making such
investment and (2) the aggregate amount of such Borrower's accounts payable more
than sixty (60) days past due is more than $2,000,000.
7.5. Loans. Make advances, loans or extensions of credit to any
-----
Person, including without limitation, any Parent, Subsidiary or Affiliate except
with respect to (a) the extension of commercial trade credit in connection with
the sale of Inventory in the ordinary course of its business, (b) loans to its
employees in the ordinary course of business not to exceed the aggregate amount
of $100,000 at any time outstanding, (c) loans by Wincup to its Partners to
enable each to pay its respective Partner Tax Liability provided no such loan
--------
shall be made to any Partner if, after giving effect to such loan, the sum of
the loans to and any distributions made or being made to such Partner under
Section 7.7 for such Partner's Partner Tax Liability exceeds such Partner's
actual Partner Tax Liability for which such loans and distributions are being
made, (d) loans to another Borrower so long as (i) such loan or advance is
evidenced by a promissory note and such note is assigned to Agent as collateral
security for the Obligations and (ii) at the time of such loan no Event of
Default has occurred or would occur after giving effect to such loan or advance
and (e) loans to StyroChem International, Ltd. in an aggregate amount not to
exceed $4,000,000 at any time outstanding so long as (i) after giving effect to
any such loan or advance the difference between (x) Undrawn Availability
calculated solely with respect to the Borrower making such loan and (y) the
aggregate amount of such Borrower's accounts payable more than 60 days past due
is more than $2,000,000 and (ii) at the time of such loan no Event of Default
has occurred or would occur after giving effect to such loan or advance.
7.6. Capital Expenditures. Contract for, purchase or make any
--------------------
expenditure or commitments for fixed or capital assets (including capitalized
leases) in an amount in excess of the amounts set forth below for the fiscal
years set forth below:
<TABLE>
<CAPTION>
Fiscal Year Ended Amount
------------------------------------
<S> <C>
12-31-97 $9,000,000
12-31-98 6,000,000
12-31-99 6,000,000
12-31-00 6,000,000
</TABLE>
7.7. Dividends; Distributions. Declare, pay or make any dividend or
------------------------
distributoin to any of its partners (whether general partners or limited
partners) or shareholders or apply any of its funds, property or assets to the
purchase, redemption or other retirement of any of its capital stock or
partnership interests except, so long as (a) a notice of termination with regard
to this Agreement shall not be outstanding and (b) if Undrawn Availability is
less than $5,000,000 the purpose for such distribution shall be as set forth in
writing to Lenders at ten (10) days prior to such
-56-
<PAGE>
distribution and such distribution shall in fact be used for such purpose: (i)
Wincup shall be permitted to make distributions to its Partners for any taxable
year in an amount equal to the federal, state and local income and franchise tax
liability attributable to taxable income of Wincup for such taxable year (after
giving full effect to deductions, credits, and losses of prior years similarly
attributable to Wincup or its operations assuming that such deductions, credits
and losses are available to such partners, regardless of whether such
deductions, credits and losses have otherwise been utilized by such Partners)
("Partner Tax Liability"), calculated for this purpose by assuming all of such
income (net of such deductions, and after offsetting such credits and losses of
prior years) is taxable at the maximum marginal federal and state combined tax
rate that is applicable for such taxable year to each Partner taking into
account the deductibility or creditability of any such tax against any other
such tax, and provided that such distributions may be made periodically with
respect to each taxable year on or before the times at which estimated and final
payments (including any payments required as a result of adjustments subsequent
to the filing of Wincup's tax return for such year) of the federal and state tax
to which such distributions relate would be required to be made by a calendar
year corporate taxpayer, so long as quarterly payments made on an estimated
basis are made on the basis of good faith estimates, and are, as soon as
practicable, reconciled to actual facts and information relating to Wincup's
financial results and any distribution in excess of that distribution which
would in fact have been necessary to satisfy the tax burden assumed, as
determined as a result of such reconciliation, is credited against the next
succeeding quarterly distribution to be made to that recipient, and any amount
in excess of the amount so credited against the next succeeding distribution in
excess of $1,000 is repaid promptly to Wincup if, at the time of and after
giving effect to any such distribution no Event of Default has occurred or would
occur; (ii) any Borrower shall be permitted to make distributions to any of its
Partners or shareholders who are Borrowers hereunder to enable Radnor to make
its regularly scheduled payments of interest on the Senior Notes if (x) the
aggregate amount of such distributions do not exceed the interest payments then
required to be paid by Radnor on the Senior Notes and (y) at the time of and
after giving effect to any such distribution no Event of Default has occurred or
would occur; and (iii) any Borrower shall be permitted to make distributions to
any of its Partners or shareholders for any purpose if (x) at the time of and
after giving effect to such distribution no Event of Default has occurred or
would occur, (y) in the event such distribution is made by Wincup, StyroChem or
another Borrower who has Revolving Advances outstanding hereunder in excess of
$2,000,000 at the time of such distribution, after giving effect to such
distribution the difference between (1) Undrawn Availability calculated solely
with respect to the Borrower making such payment and (2) the aggregate amount of
such Borrower's accounts payable more than 60 days past due is more than
$2,000,000 and (z) in the event such distribution is made by Radnor, after
giving effect to such distribution, the aggregate amount of all payments or
distributions made by Radnor during such fiscal year does not exceed 50% of the
net
-57-
<PAGE>
income of Borrowers on a consolidated basis for the immediately preceding
fiscal year. In the event that any of the foregoing amounts referred to in
subclause (i) hereof are not repaid to Wincup in a timely manner by any Partner,
then Wincup may not pay or make any distribution with respect to or purchase,
redeem or retire, any partnership interest of Wincup held by such Partner until
such amounts are repaid. Notwithstanding the foregoing, no such distribution
shall be made to the Partners if, after giving effect to such distribution, the
sum of the distributions and any loans made or being made to such Partners under
Section 7.5 for the Partners' Tax Liability exceeds the Partners' actual Partner
Tax Liability for which such loans and distributions are being made.
7.8. Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness (exclusive of trade debt) except in respect of Indebtedness to
Lenders; Indebtedness incurred for capital expenditures permitted under Section
7.6 hereof; Indebtedness due under the Senior Notes; and (iv) Indebtedness in a
maximum aggregate amount outstanding not greater than $10,000,000.
Notwithstanding the foregoing, Borrowers may incur Indebtedness in excess of the
foregoing amounts if, after giving pro forma effect to the incurrence of such
Indebtedness, Interest Coverage Ratio for each of the four fiscal quarters most
recently ended would equal or exceed 2.0 to 1.0 if calculated as if such
Indebtedness was outstanding for the entire four quarter period.
7.9. Nature of Business. Substantially change the nature of the
------------------
business in which it is presently engaged, nor except as specifically permitted
hereby purchase or invest, directly or indirectly, in any assets or property
other than in the ordinary course of business for assets or property which are
useful in, necessary for and are to be used in its business as presently
conducted.
7.10. Transactions with Affiliates. Directly or indirectly, purchase,
----------------------------
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, any Affiliate, except transactions disclosed in the
ordinary course of business, on an arm's-length basis on terms no less favorable
than terms which would have been obtainable from a Person other than an
Affiliate.
7.11. Leases. Enter as lessee into any lease arrangement for real or
------
personal property (unless capitalized and permitted under Section 7.6 hereof) if
after giving effect thereto, aggregate annual rental payments for all leased
property would exceed $6,000,000 in any one fiscal year.
7.12. Subsidiaries.
------------
(a) Form any Subsidiary unless (A) (i) such Subsidiary expressly
joins in this Agreement as a borrower and becomes jointly and severally liable
for the obligations of Borrowers hereunder and under any other agreement between
Borrowers, Agent and Lenders and (ii) Agent shall have received all documents,
including legal
-58-
<PAGE>
opinions, it may reasonably require to establish compliance with each
of the foregoing conditions or (B) such Subsidiary is formed pursuant to the
provisions of Section 7.4 hereof.
(b) Enter into any partnership, joint venture or similar
arrangement.
7.13. Fiscal Year and Accounting Changes. Change its fiscal year from
----------------------------------
December 31 or make any change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as required by law.
7.14. Pledge of Credit. Now or hereafter pledge any Lender's credit on
----------------
any purchases or for any purpose
whatsoever or use any portion of any Advance in or for any business other than
Borrower's business as conducted on the date of this Agreement.
7.15. Amendment of Agreement of Limited Partnership, Etc. Amend, modify
--------------------------------------------------
or waive any material term or material provision of its Certificate of Limited
Partnership, Agreement of Limited Partnership, Certificate of Incorporation, By-
laws or the Senior Notes.
7.16. Compliance with ERISA. (i) (x) Maintain, or permit any member of
---------------------
the Controlled Group to maintain, or (y) become obligated to contribute, or
permit any member of the Controlled Group to become obligated to contribute, to
any Plan, other than those Plans disclosed on Schedule 5.8(d); (ii) engage, or
---------------
permit any member of the Controlled Group to engage, in any non-exempt
"prohibited transaction", as that term is defined in section 406 of ERISA and
Section 4975 of the Code; (iii) incur, or permit any member of the Controlled
Group to incur, any "accumulated funding deficiency", as that term is defined in
Section 302 of ERISA or Section 412 of the Code; (iv) terminate, or permit any
member of the Controlled Group to terminate, any Plan where such event could
result in any liability of any Borrower or any member of the Controlled Group or
the imposition of a lien on the property of any Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA; (v) assume, or permit any
member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on Schedule 5.8(d); (vi) incur, or permit any
---------------
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify the Agent of the occurrence of
any Termination Event; (viii) fail to comply, or permit a member of the
Controlled Group to fail to comply, with the requirements of ERISA or the Code
or other applicable laws in respect of any Plan; (ix) fail to meet, or permit
any member of the Controlled Group to fail to meet, all minimum funding
requirements under ERISA or the Code or postpone or delay or allow any member of
the Controlled Group to postpone or delay any funding requirement with respect
of any Plan.
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<PAGE>
7.17. Senior Notes. At any time, directly or indirectly, pay, prepay,
------------
repurchase, redeem, retire or otherwise acquire, or make any payment on account
of any principal of, interest on or premium payable in connection with the
repayment or redemption of the Senior Notes, except that Radnor may pay all
regularly scheduled payments of interest on the Senior Notes so long as no Event
of Default has occurred or would occur after giving effect to such payment.
7.18. Intentionally Omitted.
---------------------
7.19. Intentionally Omitted.
---------------------
7.20. Prepayment of Indebtedness. At any time, directly or indirectly,
--------------------------
prepay any Indebtedness (other than to Agent and the Lenders), or repurchase,
redeem, retire or otherwise acquire any Indebtedness of Borrower.
VIII. CONDITIONS PRECEDENT.
--------------------
8.1. Conditions to Initial Advances. The agreement of Lenders to make
------------------------------
the initial Advances requested to be made on the Effective Date is subject to
the satisfaction, or waiver by Required Lenders, immediately prior to or
concurrently with the making of such Advances, of the following conditions
precedent:
(a) Notes. Agent shall have received the Notes duly executed and
-----
delivered by an authorized officer of Borrowers;
(b) Filings, Registrations and Recordings. Each document
-------------------------------------
(including, without limitation, any Uniform Commercial Code financing statement)
required by this Agreement, any related agreement or under law or reasonably
requested by the Agent to be filed, registered or recorded in order to create,
in favor of Agent for its benefit and for the ratable benefit of the Lenders, a
perfected security interest in or lien upon the Collateral shall have been
properly filed, registered or recorded in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested, and Agent shall
have received an acknowledgment copy, or other evidence satisfactory to it, of
each such filing, registration or recordation and satisfactory evidence of the
payment of any necessary fee, tax or expense relating thereto;
(c) Proceedings of Borrowers. Agent shall have received a copy of
------------------------
the resolutions in form and substance reasonably satisfactory to Agent, of the
Partners and the Board of Directors of Borrowers, as the case may be,
authorizing (i) the execution, delivery and performance of this Agreement, the
Notes, any related agreements, the Acquisition Agreement, the Senior Notes and
all documents executed in connection therewith (collectively the "Documents")
and (ii) the granting by Borrowers of the security interests in and liens upon
the Collateral in each case certified by the General Partner of Wincup and the
President of each other Borrower as of the Effective Date; and, such certificate
shall state
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that the resolutions thereby certified have not been amended, modified, revoked
or rescinded as of the date of such certificate;
(d) Incumbency Certificates of Borrowers. Agent shall have
------------------------------------
received a certificate of the Secretary of each Borrower, dated the Effective
Date, as to the incumbency and signature of the officers of each Borrower
executing this Agreement, any certificate or other documents to be delivered by
it pursuant hereto, together with evidence of the incumbency of such officer;
(e) Certificates. Agent shall have received a copy of the
------------
Articles or Certificate of Incorporation, Certificate of Limited Partnership and
all amendments to each of the foregoing, certified by the Secretary of State or
other appropriate official of its jurisdiction of formation together with copies
of the by-laws, partnership agreements and shareholders agreements of each
Borrower, as applicable, certified as accurate and complete by the general
partner or secretary of each Borrower;
(f) Good Standing Certificates. Agent shall have received good
--------------------------
standing certificates for each Borrower dated not more than ten (10) days prior
to the Effective Date, issued by the Secretary of State or other appropriate
official of each Borrower's jurisdiction of formation and each jurisdiction
where the conduct of a Borrower's business activities or the ownership of its
properties necessitates qualification;
(g) Legal Opinion. Agent shall have received the executed legal
-------------
opinions of Duane Morris & Heckscher and such other counsel as may be required
by the Lenders in form and substance satisfactory to the Lenders which shall
cover such matters incident to the transactions contemplated by this Agreement,
the Contribution Agreements, the Acquisition Agreement, the Notes, and related
agreements as Agent may reasonably require and Borrowers hereby authorize and
direct such counsel to deliver such opinions to Agent and the Lender;
(h) No Litigation. (i) No litigation, investigation or proceeding
-------------
before or by any arbitrator or Governmental Body shall be continuing or
threatened against any Borrower or against the officers or directors of any
Borrower (A) in connection with the Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of the Agent, is
deemed material or (B) which if adversely determined, could, in the reasonable
opinion of the Agent, have a Material Adverse Effect on any Borrower; and (ii)
no injunction, writ, restraining order or other order of any nature materially
adverse to any Borrower or the conduct of its business or inconsistent with the
due consummation of the Transactions shall have been issued by any Governmental
Body;
(i) Financial Condition Opinions. Agent shall have received an
----------------------------
executed Officers' Certificate in the form of Exhibit 8.1(i).
--------------
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(j) Collateral Examination. Agent shall have completed Collateral
----------------------
examinations and received appraisals as shall be required by the Lenders with
respect to the Receivables, Inventory and General Intangibles the results of
which shall be satisfactory in form and substance to the Agent;
(k) Fees. Agent shall have received all fees payable to Agent and
----
to the Lenders on or prior to the Effective Date pursuant to Article III hereof;
(l) Pro Forma Financial Statements. Agent and Lenders shall have
------------------------------
received a copy of the Pro Forma Financial Statements which shall be
satisfactory in all respects to Lenders;
(m) Other Documents. Agent and Lenders shall have received final
---------------
executed copies of the Acquisition Agreement, the Senior Notes and the Indenture
and all related agreements, documents and instruments as in effect on the
Effective Date all of which shall be in form and substance satisfactory to Agent
and Lenders and shall provide, among other things, for such indemnifications and
consents as Agent or any Lender deems reasonably necessary and the transactions
contemplated by such documentation shall be consummated concurrently with the
making of the initial Advance;
(n) Other Documents. Agent shall have received the executed Other
---------------
Documents, each in form and substance satisfactory to Lenders;
(o) Insurance. Agent shall have received in form and substance
---------
satisfactory to Agent, certified copies of each Borrower's casualty insurance
policies evidencing coverage on all Collateral in such amounts, with such
carriers and covering such risks as is acceptable to Agent, together with loss
payable endorsements on Agent's standard form of loss payee endorsement naming
Agent as loss payee, and certified copies of each Borrower's liability insurance
policies, together with endorsements naming Agent as an additional or co-
insured;
(p) Environmental Reports. Agent shall have received in form and
---------------------
substance satisfactory to Agent and Lenders an environmental Phase I and Phase
II audits prepared by Dames & Moore and Conestoga Rovers & Associates with
respect to all real property owned and/or leased by Borrowers;
(q) Payment Instructions. Agent shall have received written
--------------------
instructions from Borrower directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(r) Blocked Accounts. Agent shall have received duly executed
----------------
agreements establishing the Blocked Accounts or Depository Accounts with
financial institutions acceptable to Agent for the collection or servicing of
the Receivables and all other proceeds of the Collateral;
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(s) Consents. Agent shall have received any and all Consents
--------
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and, Agent shall have received such Consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
(t) No Material Adverse Change. (i) since September 30, 1996, (a)
--------------------------
no material adverse change shall have occurred in the condition, financial or
otherwise, operations, properties or prospects of any Borrower, (b) no material
damage or destruction shall have occurred to any of the Collateral and no
material depreciation in the value thereof, (c) no material adverse deviation
shall have occurred from the forecasts and projections previously delivered to
Agent and (d) no event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect on any Borrower shall have occurred
and (ii) no representations made or information supplied to Agent or the Lenders
shall have been proven to be inaccurate or misleading in any material respect;
(u) Leasehold Agreements. Agent shall have received landlord,
--------------------
mortgagee or warehouseman agreements satisfactory to Agent with respect to all
premises leased or owned by any Borrower at which Inventory is located;
(v) Contract Review. Agent shall have reviewed all material
---------------
contracts of each Borrower including, without limitation, leases, union
contracts, labor contracts, vendor supply contracts, license agreements and
distributorship agreements and such contracts and agreements shall be
satisfactory in all respects to Agent;
(w) Closing Certificate. Agent shall have received closing
-------------------
certificate signed by the Chief Financial Officer of Borrower dated as of the
date hereof, stating that (i) all representations and warranties made by each as
set forth in this Agreement and the other Documents are true and correct on and
as of such date, (ii) Borrowers are on such date in compliance with all the
terms and provisions set forth in this Agreement and the other Documents and
(iii) on such date no Default or Event of Default has occurred or is continuing;
(x) Borrowing Base. Agent and Lenders shall have received
--------------
evidence from Borrowers that the aggregate amount of Eligible Receivables and
Eligible Inventory is sufficient in value and amount to support Revolving
Advances and Letters of Credit in the amount requested by Borrower on the
Effective Date and, so that after giving effect to the initial Advances
hereunder, Borrowers shall have Undrawn Availability of at least $3,000,000;
(y) Compliance. Agent shall have received evidence that (i)
----------
except as disclosed on Schedule 8.1(y) hereto Borrowers' operations comply, in
all respects deemed material by Agent, with all applicable environmental and
OSHA statutes and regulations, (ii) Borrowers' operations are not the subject of
any federal, state or local investigation, evaluation or remedial action which
require or
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necessitate an expenditure deemed material by Agent, all of which shall have
been confirmed by the Phase I and Phase II environmental reports of Dames &
Moore delivered to Agent prior to closing.
(z) Agreements. Agent and Lenders shall have received copies of
----------
all agreements evidencing the obligations of any Borrower with respect to its
Indebtedness for borrowed money, which agreements shall be in form and substance
satisfactory to Agent and shall set forth the conditions on which (i) such
Borrower may make and the holder(s) of such indebtedness may receive payments
with respect thereto and (ii) the holder(s) of such indebtedness may accelerate
such obligations, commence any action against or otherwise exercise any rights
or enforce any remedies against such Borrower, which conditions shall be
satisfactory in form and substance to Agent in its discretion.
(aa) Acquisition. Agent and Lenders shall have received evidence
-----------
satisfactory to them that Borrower has acquired all of its assets in accordance
with all applicable laws and that such assets are free and clear of all Liens
other than Permitted Encumbrances.
8.2. Conditions to Each Advance. The agreement of Lenders to make any
--------------------------
Advance requested to be made on any date (including, without limitation, the
initial Advance), is subject to the satisfaction of the following conditions
precedent as of the date such Advance is made:
(a) Representations and Warranties. Each of the representations
------------------------------
and warranties made by Borrower and/or General Partner in or pursuant to this
Agreement and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such date
except as such representations and warranties are modified in a manner
consistent with this Agreement;
(b) No Default. No Event of Default or Default shall have
----------
occurred and be continuing on such date, or would exist after giving effect to
the Advances requested to be made, on such date and, in the case of the initial
Advance, after giving effect to the consummation of the transactions
contemplated by the Acquisition Agreement and the Senior Notes; provided,
--------
however that Lenders in their sole discretion, may continue to make Advances
- -------
notwithstanding the existence of an Event of Default or Default and that any
Advances so made shall not be deemed a waiver of any such Event of Default or
Default; and
(c) Maximum Advances. In the case of any Revolving Advances
----------------
requested to be made or Letters of Credit to be issued, after giving effect
thereto, the aggregate Revolving Advances and
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outstanding Letters of Credit shall not exceed the maximum Revolving Advances
permitted under Section 2.1 hereof.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AND GENERAL PARTNER.
-------------------------------
Each Borrower shall, until satisfaction in full of the Obligations and the
termination of this Agreement:
9.1. Disclosure of Material Matters. Immediately upon learning thereof,
------------------------------
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
any Borrower's reclamation or repossession of, or the return to any Borrower of,
a material amount of goods or claims or disputes asserted by any Customer or
other obligor.
9.2. Schedules. Deliver to Agent and if requested, the Lenders, on or
---------
before the fifteenth (15th) day of each month as and for the prior month (a)
accounts receivable ageings, (b) accounts payable schedules and (c) Inventory
reports for each Borrower; provided, if Undrawn Availability is less than (x)
--------
$4,000,000 with respect to all Borrowers or (y) $2,000,000 with respect to
StyroChem or Wincup, individually, Borrowers shall provide Agent with daily
reports of sales, collections, credits issued, debits or other adjustments made
by any Borrower with respect to Receivables. In addition, each Borrower will
deliver to Agent at such intervals as Agent may require: (i) confirmatory
assignment schedules, (ii) copies of Customer's invoices, (iii) evidence of
shipment or delivery, and (iv) such further schedules, documents and/or
information regarding the Collateral as Agent may require including, without
limitation, trial balances and test verifications. Agent shall have the right
to confirm and verify all Receivables by any manner and through any medium it
considers advisable and do whatever it may deem reasonably necessary to protect
its interests hereunder. The items to be provided under this Section are to be
in form satisfactory to Agent and executed by each Borrower and delivered to
Agent from time to time solely for Agent's convenience in maintaining records of
the Collateral, and any Borrower's failure to deliver any of such items to Agent
shall not affect, terminate, modify or otherwise limit Agent's Lien with respect
to the Collateral.
9.3. Intentionally Omitted.
---------------------
9.4. Litigation. Promptly notify Agent and Lenders in writing of any
----------
litigation, suit or administrative proceeding affecting any Borrower, whether or
not the claim is covered by insurance, and of any suit or administrative
proceeding, which may have a Material Adverse Effect on any Borrower.
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<PAGE>
9.5. Material Occurrences. Promptly notify Agent and Lenders in writing
--------------------
upon the occurrence of (a) any Event of Default or Default; (b) any event of
default or (c) any event which with the giving of notice or lapse of time, or
both, would constitute an event of default under the Senior Notes; (d) any
event, development or circumstance whereby any financial statements or other
reports furnished to Agent or any Lender fail in any material respect to present
fairly, in accordance with GAAP consistently applied, the financial condition or
operating results of any Borrower as of the date of such statements; (e) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Internal Revenue Code, could subject Borrower to a tax imposed by Section
4971 of the Internal Revenue Code; (f) each and every default by any Borrower
which might result in the acceleration of the maturity of any Indebtedness,
including the names and addresses of the holders of such Indebtedness with
respect to which there is a default existing or with respect to which the
maturity has been or could be accelerated, and the amount of such Indebtedness;
and (g) any other development in the business or affairs of any Borrower which
might reasonably be expected to be materially adverse; in each case describing
the nature thereof and the action such Borrower proposes to take with respect
thereto.
9.6. Government Receivables. Notify Agent immediately if any of the
----------------------
Receivables arise out of contracts between any Borrower and the United States,
any state, or any department, agency or instrumentality of any of them.
9.7. Annual Financial Statements. Furnish Agent and the Lenders within
---------------------------
ninety (90) days after the end of each fiscal year of Borrowers, financial
statements of Borrowers on a consolidated basis including, but not limited to,
statements of income and partners' equity and cash flow from the beginning of
the current fiscal year to the end of such fiscal year and the balance sheet as
at the end of such fiscal year, all prepared in accordance with GAAP applied on
a basis consistent with prior practices, and in reasonable detail and reported
upon without qualification by an independent certified public accounting firm
selected by Borrower and satisfactory to Agent (the "Accountants"). The report
of such accounting firm shall be accompanied by a statement of such accounting
firm certifying that (i) they have caused this Agreement to be reviewed, (ii) in
making the examination upon which such report was based either no information
came to their attention which to their knowledge constituted an Event of Default
or a Default under this Agreement or any related agreement or, if such
information came to their attention, specifying any such Default or Event of
Default, its nature, when it occurred and whether it is continuing, and such
report shall contain or have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by Sections
6.5, 6.6, 6.7, 6.8, 6.9, 7.6 and 7.11 hereof. In addition, the reports shall be
accompanied by a certificate of each Borrower's Chief Financial Officer which
shall state that, based on an examination sufficient to permit him to make an
informed
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<PAGE>
statement, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by such Borrower with respect
to such event and, such certificate shall have appended thereto calculations
which set forth Borrowers' compliance with the requirements or restrictions
imposed by Sections 6.5, 6.6, 6.7, 6.8, 6.9, 7.6 and 7.11 hereof.
9.8. Quarterly Financial Statements. Furnish Agent and Lenders within
------------------------------
thirty (30) days after the end of each fiscal quarter, an unaudited balance
sheet of Borrowers on a consolidated basis and unaudited statements of income
and partners' equity and cash flow reflecting results of operations from the
beginning of the fiscal year to the end of such quarter,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal year end adjustments. The reports shall
be accompanied by a certificate of each Borrower's Chief Financial Officer which
shall state that, based on an examination sufficient to permit him to make an
informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by such Borrower
with respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 6.9, 7.6 and 7.11 hereof.
9.9. Monthly Financial Statements. Furnish Agent and Lenders within
----------------------------
thirty (30) days after the end of each month, an unaudited balance sheet of
Borrowers on a consolidated basis and unaudited statements of income and
partners' equity and cash flow reflecting results of operations from the
beginning of the fiscal year to the end of such month and for such month,
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal year end adjustments. The reports shall
be accompanied by a certificate of each Borrower's Chief Financial Officer which
shall state that, based on an examination sufficient to permit him to make an
informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by such Borrower
with respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 6.9, 7.6 and 7.11 hereof.
9.10. Other Reports. Furnish Agent and Lenders as soon as available, but
-------------
in any event within ten (10) days after the issuance thereof, (i) with copies of
such financial statements, reports and returns as Borrower shall send to its
partners and (ii) copies of all notices sent pursuant to the Senior Notes.
9.11. Additional Information. Furnish Agent and Lenders with such
----------------------
additional information as Agent and Lenders shall reasonably
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request in order to enable Agent and Lenders to determine whether the terms,
covenants, provisions and conditions of this Agreement and the Notes have been
complied with by Borrowers including, without limitation and without the
necessity of any request by Agent or any Lender, (a) copies of all environmental
audits and reviews, (b) at least thirty (30) days prior thereto, notice of any
Borrower's opening of any new office or place of business or any Borrower's
closing of any existing office or place of business, and (c) promptly upon
learning thereof, notice of any labor dispute to which any Borrower may become a
party, any strikes or walkouts relating to any of its plants or other
facilities, and the expiration of any labor contract to which any Borrower is a
party or by which any Borrower is bound.
9.12. Projected Operating Budget. Furnish Agent and Lenders, no later
--------------------------
than (x) sixty (60) days following the Effective Date and (y) thirty (30) days
prior to the beginning of each fiscal year commencing with fiscal year 1998, a
month by month projected operating budget and cash flow of Borrower for such
fiscal year (including an income statement for each month and a balance sheet as
at the end of the last month in each fiscal quarter), such projections to be
accompanied by a certificate signed by each Borrower's Chief Financial Officer
to the effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial
statements and that such officer has no reason to question the reasonableness of
any material assumptions on which such projections were prepared.
9.13. Intentionally Omitted.
---------------------
9.14. Notice of Suits, Adverse Events. Furnish Agent and Lenders with
-------------------------------
prompt notice of (i) any lapse or other termination of any Consent issued to
Borrowers by any Governmental Body or any other Person that is material to the
operation of any Borrower's business, (ii) any refusal by any Governmental Body
or any other Person to renew or extend any such Consent; and (iii) copies of any
periodic or special reports filed by any Borrower with any Governmental Body or
Person, if such reports indicate any material change in the business,
operations, affairs or condition of any Borrower, or if copies thereof are
requested by Agent or any Lender, and (iv) copies of any material notices and
other communications from any Governmental Body or Person which specifically
relate to any Borrower.
9.15. ERISA Notices and Requests. Furnish Agent and Lenders with
--------------------------
immediate written notice in the event that (i) any Borrower or any member of the
Controlled Group knows or has reason to know that a Termination Event has
occurred, together with a written statement describing such Termination Event
and the action, if any, which Borrower or member of the Controlled Group has
taken, is taking, or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, Department of Labor
or PBGC with respect thereto, (ii) Borrower, General Partner or any member of
the Controlled Group knows or has reason to know that a
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<PAGE>
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred together with a written statement describing
such transaction and the action which such Borrower or any member of the
Controlled Group has taken, is taking or proposes to take with respect thereto,
(iii) a funding waiver request has been filed with respect to any Plan together
with all communications received by Borrower, General Partner or any member of
the Controlled Group with respect to such request, (iv) any increase in the
benefits of any existing Plan or the establishment of any new Plan or the
commencement of contributions to any Plan to which such Borrower or any member
of the Controlled Group was not previously contributing shall occur, (v) any
Borrower or any member of the Controlled Group shall receive from the PBGC a
notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) any Borrower
or any member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue Code,
together with copies of each such letter; (vii) any Borrower or any member of
the Controlled Group shall receive a notice regarding the imposition of
withdrawal liability, together with copies of each such notice; (viii) any
Borrower or any member of the Controlled Group shall fail to make a required
installment or any other required payment under Section 412 of the Internal
Revenue Code on or before the due date for such installment or payment; (ix) any
Borrower or any member of the Controlled Group knows that (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
9.16. Additional Documents. Execute and deliver to Agent, upon request,
--------------------
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purpose
s, terms or conditions of this Agreement.
X. EVENTS OF DEFAULT.
-----------------
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
10.1. failure by any Borrower to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein or any Other Document when due;
10.2. any representation or warranty made or deemed made by any Borrower
in this Agreement or any related agreement or in any certificate, document or
financial or other statement furnished at
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<PAGE>
any time in connection herewith or therewith shall prove to have been misleading
in any material respect on the date when made or deemed to have been made;
10.3. failure by any Borrower to (i) furnish financial information when
due or when requested, or (ii) permit the inspection of its books or records;
10.4. issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Borrower's property;
10.5. (i) a failure or neglect of any Borrower to perform, keep or
observe any term, provision, condition or covenant, contained in Sections 4.7,
4.8, 4.9, 4.14, 4.17, 4.19, 6.1, 6.2, 6.3, and 6.9 hereof which is not cured
within thirty (30) days from the occurrence of such failure or neglect; or (ii)
failure or neglect of any Borrower to perform, keep or observe any other term,
provision, condition, covenant herein contained, or contained in any other
agreement or arrangement, now or hereafter entered into between any Borrower,
Agent and the Lenders after expiration of all applicable grace periods;
10.6. any judgment in excess of $100,000 is rendered against any Borrower
or judgment liens filed against any Borrower of judgments in excess of $400,000
in the aggregate are rendered against all Borrowers for an amount which within
thirty (30) days of such rendering or filing is not either satisfied, stayed or
discharged of record;
10.7. any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of creditors, (iii)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vi) acquiesce to, or fail to have dismissed, within forty five (45)
days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing;
10.8. any Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;
10.9. any Subsidiary of any Borrower or any Guarantor, shall (i) apply
for, consent to or suffer the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (ii) admit in writing its inability,
or be generally unable, to pay its debts as they become due or cease operations
of its present business, (iii) make a general assignment for the benefit
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of creditors, (iv) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, within forty five (45) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
10.10. any change in the condition or affairs (financial or otherwise) of
any Borrower which in Agent's opinion impairs the Collateral or the ability of
any Borrower to perform its Obligations under this Agreement;
10.11. any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected
Lien having a first priority interest;
10.12. an event of default has occurred and been declared under the
Senior Notes which default shall not have been cured or waived within any
applicable grace period;
10.13. a default of the obligations of any Borrower under any other
agreement to which it is a party shall occur which materially adversely affects
its condition, affairs or prospects (financial or otherwise) which default is
not cured within any applicable grace period;
10.14. termination or breach of any Guaranty or similar agreement
executed and delivered to Agent in connection with the Obligations of any
Borrower, or if any Guarantor attempts to terminate, challenges the validity of,
or its liability under, any such Guaranty or similar agreement;
10.15. any Change of Ownership or Change of Control shall have occurred;
10.16. any material provision of this Agreement shall, for any reason,
cease to be valid and binding on any Borrower, or Borrower shall so claim in
writing to Agent;
10.17. (i) any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any license, permit, patent, trademark or tradename of any
Borrower, the continuation of which is material to the continuation of any
Borrower's business, or (B) commence proceedings to suspend, revoke, terminate
or adversely modify any such license, permit, trademark, tradename or patent and
such proceedings shall not be dismissed or discharged within sixty (60) days, or
(c) schedule or conduct a hearing on the renewal of any license, permit,
trademark, tradename or patent necessary for the continuation of any Borrower's
business and the staff of such Governmental Body issues a report recommending
the termination, revocation, suspension or material, adverse modification of
such license, permit, trademark, tradename or patent; (ii) any agreement
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which is necessary or material to the operation of any Borrower's business shall
be revoked or terminated and not replaced by a substitute acceptable to Agent
within thirty (30) days after the date of such revocation or termination, and
such revocation or termination and non-replacement could reasonably be expected
to have a Material Adverse Effect on any Borrower;
10.18. any portion of the Collateral shall be seized or taken by a
Governmental Body or the title and rights of any Borrower shall have become the
subject matter of litigation which might, in the opinion of Agent, upon final
determination, result in impairment or loss of the security provided by this
Agreement or the Other Documents;
10.19. the operations of any Borrower's manufacturing facilities are
interrupted at any time for more than fourteen (14) consecutive days, or if any
Borrower's manufacturing capacity is reduced by 25% as a result of such an
interruption of operations (other than permanent interruptions resulting from
planned closing of up to three (3) plants) unless such Borrower shall (i) be
entitled to receive for such period of interruption, proceeds of business
interruption insurance sufficient to assure that its per diem cash needs during
such period is at least equal to its average per diem cash needs for the
consecutive twelve (12) month period immediately preceding the initial date of
interruption and (ii) receive such proceeds in the amount described in clause
(i) preceding not later than thirty (30) days following the initial date of any
such interruption; provided, however, that notwithstanding the provisions of
clauses (i) and (ii) of this section, an Event of Default shall be deemed to
have occurred if any Borrower shall be receiving the proceeds of business
interruption insurance for a period of thirty (30) consecutive days; or
10.20. an event or condition specified in Sections 7.16 or 9.15 hereof
shall occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Borrower or
any member of the Controlled Group shall incur, or in the opinion of Lender be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of the Required Lenders, could have a Material
Adverse Effect on any Borrower.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
------------------------------------------
11.1. Rights and Remedies. Upon the occurrence of (i) an Event of
-------------------
Default pursuant to Section 10.7 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated; and, (ii) any of the other Events of Default and at any
time thereafter (such default not having previously been cured), at the option
of Required Lenders all Obligations shall be immediately due and payable and the
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances. Upon the occurrence of any
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Event of Default, Agent may, and at the direction of the Required Lenders shall,
exercise any and all other rights and remedies provided for herein, under the
Uniform Commercial Code and at law or equity generally, including, without
limitation, the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process. Agent may enter any Borrower's premises or other premises without legal
process and without incurring liability to any Borrower therefor, and Agent may
thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as Agent may deem
advisable and Agent may require Borrowers to make the Collateral available to
Agent at a convenient place. With or without having the Collateral at the time
or place of sale, Agent may sell the Collateral, or any part thereof, at public
or private sale, at any time or place, in one or more sales, at such price or
prices, and upon such terms, either for cash, credit or future delivery, as
Agent may elect. Except as to that part of the Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Agent shall give Borrowers reasonable notification of such
sale or sales, it being agreed that in all events written notice mailed to
Borrowing Agent at least five (5) days prior to such sale or sales is reasonable
notification. At any public sale Agent or any Lender may bid for and become the
purchaser, and Agent, any Lender or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and such right and
equity are hereby expressly waived and released by each Borrower. In connection
with the exercise of the foregoing remedies, Agent is granted permission to use
(a) all of each Borrower's trademarks, trade styles, trade names, patents,
patent applications, licenses, franchises and other proprietary rights which are
used in connection with Inventory for the purpose of disposing of such Inventory
and (b) Equipment for the purpose of completing the manufacture of unfinished
goods without cost to Agent. The proceeds realized from the sale of any
Collateral shall be applied as follows: first, to the reasonable costs, expenses
and attorneys' fees and expenses incurred by Agent for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second, to interest due upon any of the Obligations; and, third, to
the principal of the Obligations. If any deficiency shall arise, each Borrower
shall remain liable to Agent and the Lenders therefor.
11.2. Agent's Discretion. Agent shall have the right in its sole
------------------
discretion, but with the consent of the Required Lenders to determine which
rights, Liens, security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination will not in any way modify or affect any of
Agent's or Lenders' rights hereunder.
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11.3. Setoff. In addition to any other rights which Agent or any Lender
------
may have under applicable law, upon the occurrence of an Event of Default
hereunder, Agent and such Lender shall have a right to apply any of Borrowers'
property held by Agent and such Lender or by the Bank to reduce the Obligations.
11.4. Rights and Remedies not Exclusive. The enumeration of the
---------------------------------
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any right or remedy shall not preclude the exercise of any other right or
remedies provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.
11.5. Actions in Concert. Anything in this Agreement to the contrary
------------------
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including, without limitation, exercising any right of
set-off) without first obtaining the prior written consent of Agent and Required
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of the Agent and the Required Lenders.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
--------------------------------
12.1. Waiver of Notice. Each Borrower each hereby waives notice of non-
----------------
payment of any of the Receivables, demand, present ment, protest and notice
thereof with respect to any and all in struments, notice of acceptance hereof,
notice of loans or advances made, credit extended, Collateral received or
delivered, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
12.2. Delay. No delay or omission on Agent's or any Lender's part in
-----
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.
12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
-----------
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
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WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
------------------------------
13.1. Term. This Agreement, which shall inure to the benefit of and
----
shall be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until the last day of the Term unless
sooner terminated as herein provided. Borrower may terminate this Agreement at
any time upon ninety (90) days' prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full and this Agreement
is terminated prior to the last day of the Term (the date of such prepayment
hereinafter referred to as the "Prepayment Date"), Borrower shall pay an early
termination fee to Agent for the ratable benefit of the Lenders in an amount
equal to (x) $1,500,000 if the Prepayment Date occurs from the Effective Date to
and including the date immediately preceding the first anniversary of the
Initial Closing Date, (y) $1,000,000 if the Prepayment Date occurs from the
first anniversary of the Initial Closing Date to and including the date
immediately preceding the second anniversary of the Initial Closing Date, and
(z) $500,000 if the Prepayment Date occurs on or after the second anniversary of
the Initial Closing Date to and including the date immediately preceding the
third anniversary of the Initial Closing Date. Notwithstanding the foregoing, if
any Lender shall enter into a recapitalization or refinancing arrangement with
Borrowers upon the termination of this Agreement, the aforementioned early
termination fee shall be reduced by an amount equal to such Lender's Commitment
Percentage of the applicable early termination fee and such Lender's ratable
portion of the remaining balance of the early termination fee shall be $0.
13.2. Termination. The termination of the Agreement shall not affect any
-----------
Borrower's, Agent's or any Lender's rights, or any of the Obligations having
their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and the Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrower's account may from time
to time be temporarily in a zero or credit position, until all of the
Obligations of Borrowers have been paid or performed in full after the
termination of this Agreement or Borrowers have furnished Agent and the Lenders
with an indemnification satisfactory to Agent and the Lenders with respect
thereto. Accordingly, each Borrower waives any rights which it may have under
Section 9-404(1) of the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be
required to send such UCC termination statements to Borrowers, or to file them
with any filing office,
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unless and until this Agreement shall have been terminated in accordance with
its terms and all Obligations paid in full in immediately available funds.
XIV. REGARDING AGENT.
---------------
14.1. Appointment. Each Lender hereby designates BNYCC to act as Agent
-----------
for such Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
3.3(a)(i), 3.3(c), 3.4(a) and 3.4(b) charges and collections (without giving
effect to any collection days) received pursuant to this Agreement, for the
ratable benefit of Lenders. Agent may perform any of its duties hereunder by or
through its agents or employees. As to any matters not expressly provided for
by this Agreement (including without limitation, collection of the Notes) Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding; provided, however, that Agent shall not
-------- -------
be required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
14.2. Nature of Duties. Agent shall have no duties or responsibilities
----------------
except those expressly set forth in this Agreement and the Other Documents.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross negligence (but not mere
negligence) or willful misconduct, or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of any Borrower to perform its respective obligations
hereunder. Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any of the Other Documents, or
to inspect the properties, books or records of any Borrower or General Partner.
The duties of Agent as respects the Advances to any Borrower shall be mechanical
and administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship
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in respect of any Lender; and nothing in this Agreement, expressed or implied,
is intended to or shall be so construed as to impose upon Agent any obligations
in respect of this Agreement except as expressly set forth herein.
14.3. Lack of Reliance on Agent and Resignation. Independently and
-----------------------------------------
without reliance upon Agent or any other Lender, each Lender has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of each Borrower in connection with the making and the
continuance of the Advances hereunder and the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the creditworthiness of
Borrowers. Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the
Advances or at any time or times thereafter except as shall be provided by
Borrower pursuant to the terms hereof. Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or warranties
herein or in any agreement, document, certificate or a statement delivered in
connection with or for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any Other
Document, or of the financial condition of each Borrower, or be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Notes, the Other Documents or
the financial condition of each Borrower, or the existence of any Event of
Default or any Default.
Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowers and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and the term "Agent" shall mean such successor agent effective
upon its appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent. After any Agent's resignation as Agent, the provisions of
this Article XIV shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
14.4. Certain Rights of Agent. If Agent shall request instructions
-----------------------
from Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting
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hereunder in accordance with the instructions of the Required Lenders.
14.5. Reliance. Agent shall be entitled to rely, and shall be fully
--------
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Other Documents and
its duties hereunder, upon advice of counsel selected by it. Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.
14.6. Notice of Default. Agent shall not be deemed to have knowledge or
-----------------
notice of the occurrence of any Default or Event of Default hereunder or under
the Other Documents, unless Agent has received notice from a Lender or any
Borrower referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders. Agent shall take such action with respect to such
Default or Event of Default as shall be directed by the Required Lenders;
provided, that, unless and until Agent shall have received such directions,
- -------- ----
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of Lenders.
14.7. Indemnification. To the extent Agent is not reimbursed and
---------------
indemnified by Borrowers, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the Advances (or, if no Advances are
outstanding, according to its Commitment Percentage), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its
duties hereunder, or in any way relating to or arising out of this Agreement or
any Other Document; provided that, Lenders shall not be liable for any portion
-------- ----
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's
willful misconduct or gross (not mere) negligence.
14.8. Agent in its Individual Capacity. With respect to the obligation
--------------------------------
of Agent to lend under this Agreement, the Advances made by it shall have the
same rights and powers hereunder as any other Lender and as if it were not
performing the duties as Agent specified herein; and the term "Lender" or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender. Agent may engage in business with
Borrowers as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in
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connection with this Agreement or otherwise without having to account for the
same to Lenders.
14.9. Delivery of Documents. To the extent Agent receives documents and
---------------------
information from any Borrower pursuant to the terms of this Agreement, Agent
will promptly furnish such documents and information to Lenders.
14.10. Borrowers' Undertaking to Agent. Without prejudice to their
-------------------------------
respective obligations to the Lenders under the other provisions of this
Agreement, each Borrower hereby undertakes with Agent to pay to Agent from time
to time on demand all amounts from time to time due and payable by it for the
account of Agent or the Lenders or any of them pursuant to this Agreement to the
extent not already paid. Any payment made pursuant to any such demand shall pro
---
tanto satisfy Borrowers' obligations to make payments for the account of the
- -----
Lenders or the relevant one or more of them pursuant to this Agreement.
XIV. MISCELLANEOUS.
-------------
15.1. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York. Any judicial proceeding brought
by or against any Borrower with respect to any of the Obligations, this
Agreement or any related agreement may be brought in any court of competent
jurisdiction in the State of New York, United States of America, and, by
execution and delivery of this Agreement, each Borrower each accepts for itself
and in connection with its properties, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. Each
Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by registered mail (return
receipt requested) directed to Borrowing Agent at its address set forth in
Section 15.6. Nothing herein shall affect the right to serve process in any
manner permitted by law or shall limit the right of the Agent to bring
proceedings against any Borrower in the courts of any other jurisdiction. Each
Borrower waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Any judicial proceeding by any
--------------------
Borrower against the Agent or Lenders involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or state
court located in the City of New York, State of New York.
15.2. Entire Understanding. (a) This Agreement and the documents
--------------------
executed concurrently herewith contain the entire understanding between
Borrowers, Agent and each Lender and supersedes all prior agreements and
understandings, if any, relating to the
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subject matter hereof. Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by each Borrower's, Agent's and each Lender's respective
officers. Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged. Each Borrower
acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
(b) The Required Lenders, Agent with the consent in writing of the
Required Lenders, and each Borrower may, subject to the provisions of this
Section 15.2 (b), from time to time enter into written supplemental agreements
to this Agreement, the Notes or the Other Documents executed by Borrowers, for
the purpose of adding or deleting any provisions or otherwise changing, varying
or waiving in any manner the rights of the Lenders, Agent or any Borrower
thereunder or the conditions, provisions or terms thereof or waiving any Event
of Default thereunder, but only to the extent specified in such written
agreements; provided, however, that no such supplemental agreement shall, (x)
-------- -------
amend Sections 6.5, 6.6, 6.7, 6.8 and 7.6 without the consent of 67% of the
Lenders or (y) without the consent of all the Lenders:
(i) increase or decrease the Commitment Percentage of any
Lender or the Maximum Loan Amount or the Advance Rates.
(ii) extend the maturity of any Note or the due date for any
amount payable hereunder, or decrease the rate of interest or reduce any fee
payable by Borrowers to Agent or Lenders pursuant to this Agreement.
(iii) alter the definition of the term Required Lenders or
alter, amend or modify this Section 15.2(b).
(iv) release any Collateral during any calendar year having an
aggregate value in excess of $100,000.
(v) change the rights and duties of Agent.
Any such supplemental agreement shall apply equally to each of the Lenders and
shall be binding upon Borrowers, the Lenders and Agent and all future holders of
the Obligations. In the case of any waiver, Borrowers, Agent and the Lenders
shall be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
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15.3. Successors and Assigns; Participations; New Lenders.
---------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit
of Borrowers, Agent, each Lender, all future holders of the Notes and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Agent and Required Lenders.
(b) Each Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other financial
institutions (each such transferee or purchaser of a participating interest, a
"Transferee"). Each Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the portion of such
Advances held by it or other Obligations payable hereunder as fully as if such
Transferee were the direct holder thereof provided that Borrowers shall not be
required to pay to any Transferee more than the amount which it would have been
required to pay to the Lender which granted an interest in its Advances or other
Obligations payable hereunder to such Transferee had such Lender retained such
interest in the Advances hereunder or other Obligations payable hereunder and in
no event shall Borrowers be required to pay any such amount arising from the
same circumstances and with respect to the same Advances or other Obligations
payable hereunder to both such Lender and such Transferee. Each Borrower hereby
grants to any Transferee a continuing security interest in any deposits, moneys
or other property actually or constructively held by such Transferee as security
for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not be
unreasonably withheld or delayed sell, assign or transfer all or any part of its
rights under this Agreement and the Other Documents to one or more additional
banks or financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a "Purchasing Lender"),
pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender,
the transferor Lender, and Agent and delivered to Agent for recording provided
no Purchasing Lender shall be sold an aggregate commitment of less than
$5,000,000. Upon such execution, delivery, acceptance and recording, from and
after the transfer effective date determined pursuant to such Commitment
Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have the
rights and obligations of a Lender thereunder with a Commitment Percentage as
set forth therein, and (ii) the transferor Lender thereunder shall, to the
extent provided in such Commitment Transfer Supplement, be released from its
obligations under this Agreement, the Commitment Transfer Supplement creating a
novation for that purpose. Such Commitment Transfer Supplement shall be deemed
to amend this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting adjustment of
the Commitment Percentages arising
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from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the Other
Documents. Each Borrower hereby consent to the addition of such Purchasing
Lender and the resulting adjustment of the Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents. Each Borrower shall execute and deliver such further documents and do
such further acts and things in order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each Commitment
Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Advances owing to each Lender from
time to time. The entries in the Register shall be conclusive, in the absence
of manifest error, and each Borrower, Agent and Lenders may treat each Person
whose name is recorded in the Register as the owner of the Advance recorded
therein for the purposes of this Agreement. The Register shall be available for
inspection by Borrowers, or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Agent shall receive a fee in the amount of
$2500 payable by the applicable Purchasing Lender upon the effective date of
each transfer or assignment to such Purchasing Lender.
(e) Each Borrower authorizes each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or Purchasing
Lender any and all financial information in such Lender's possession concerning
Borrowers which has been delivered to such Lender by or on behalf of any
Borrower pursuant to this Agreement or in connection with such Lender's credit
evaluation of Borrowers.
15.4. Application of Payments. Agent shall have the continuing and
-----------------------
exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion of the Obligations. To the extent that
any Borrower makes a payment or Agent or any Lender receives any payment or
proceeds of the Collateral for any Borrower's benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver, custodian or any other
party under any bankruptcy law, common law or equitable cause, then, to such
extent, the Obligations or part thereof intended to be satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Agent or such Lender.
15.5. Indemnity. Each Borrower shall indemnify Agent and each Lender and
---------
their officers, employees and agents from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Agent or any Lender in any litigation, proceeding or
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investigation instituted or conducted by any governmental agency or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement, whether or not Agent or any Lender is a party thereto, except to the
extent that any of the foregoing arises out of the willful misconduct or gross
(not mere) negligence of the party being indemnified.
15.6. Notice. Any notice or request hereunder may be given to any
------
Borrower or to Agent or any Lender at their respective addresses set forth below
or at such other address as may hereafter be specified in a notice designated as
a notice of change of address under this Section. Any notice or request
hereunder shall be given by (a) hand delivery, (b) overnight courier, (c)
registered or certified mail, return receipt requested, (d) telex or telegram,
subsequently confirmed by registered or certified mail, or (e) telecopy to the
number set out below (or such other number as may hereafter be specified in a
notice designated as a notice of change of address) with telephone communication
to a duly authorized officer of the recipient confirming its receipt as
subsequently confirmed by registered or certified mail. Any notice or other
communication required or permitted pursuant to this Agreement shall be deemed
given (a) when personally delivered to any officer of the party to whom it is
addressed, (b) on the earlier of actual receipt thereof or three (3) days
following posting thereof by certified or registered mail, postage prepaid, or
(c) upon actual receipt thereof when sent by a recognized overnight delivery
service or (d) upon actual receipt thereof when sent by telecopier to the number
set forth below with telephone communication confirming receipt and subsequently
confirmed by registered, certified or overnight mail to the address set forth
below, in each case addressed to each party at its address set forth below or at
such other address as has been furnished in writing by a party to the other by
like notice:
(A) If to Agent or The Bank of New York
BNYCC at: Commercial Corporation
1290 Avenue of the Americas
New York, New York 10104
Attention: Ryan Peak
Telephone: (212) 408-4087
Telecopier: (212) 408-4317
with a copy to: Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118
Attention: Steven J. Seif, Esq.
Telephone: (212) 736-1000
Telecopier: (212) 594-7167
(B) If to a Lender other than Agent, as specified on the signature pages
hereof
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(C) If to a Borrower: c/o Radnor Holdings Corporation
Three Radnor Corporate Center
Suite 300
100 Matsonford Road
Radnor, Pennsylvania 19087
Attention: Michael T. Kennedy
Telephone: (610) 995-2568
Telecopier: (610) 995-2697
with a copies to: Duane Morris & Heckscher
One Liberty Place
Philadelphia, Pennsylvania 19103
Attention: Stephen Teaford, Esq.
Telephone: (215) 979-1220
Telecopier: (215) 979-1020
15.7. Survival. The obligations of Borrowers under Sections 2.2(f),
--------
3.7, 3.8, 3.9, 14.7 and 15.5 shall survive termination of this Agreement and the
Other Documents and payment in full of the Obligations.
15.8. Severability. If any part of this Agreement is contrary to,
------------
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
15.9. Expenses. All costs and expenses including, without limitation,
--------
reasonable attorneys' fees and disbursements incurred by Agent, any Lender and
Agent on behalf of the Lenders (a) in all efforts made to enforce payment of any
Obligation or effect collection of any Collateral, or (b) in connection with the
entering into, modification, amendment, administration and enforcement of this
Agreement or any consents or waivers hereunder and all related agreements,
documents and instruments, or (c) in instituting, maintaining, preserving,
enforcing and foreclosing on Agent's security interest in or Lien on any of the
Collateral, whether through judicial proceedings or otherwise, or (d) in
defending or prosecuting any actions or proceedings arising out of or relating
to Agent's or any Lender's transactions with any Borrower, or (e) in connection
with any advice given to Agent or any Lender with respect to its rights and
obligations under this Agreement and all related agreements, may be charged to
Borrowers' accounts and shall be part of the Obligations.
15.10. Injunctive Relief. Each Borrower recognizes that, in the event
-----------------
any Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Agent and the Lenders; therefore, Agent and each Lender, if Agent or
such Lender so requests, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving that actual damages are
not an adequate remedy.
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15.11. Consequential Damages. Neither Agent nor Lenders nor any agent or
---------------------
attorney for any of them shall be liable to any Borrower for consequential
damages arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Obligations.
15.12 Captions. The captions at various places in this Agreement are
--------
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.
15.11. Counterparts; Telecopied Signatures. This Agreement may be
-----------------------------------
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed to be
an original signature hereto.
15.13. Construction. The parties acknowledge that each party and its
------------
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
XVI. BORROWING AGENCY.
----------------
16.1. Borrowing Agency Provisions.
---------------------------
(a) Each Borrower hereby irrevocably designates Borrowing Agent to
be its attorney and agent and in such capacity to borrow, sign and endorse
notes, and execute and deliver all instruments, documents, writings and further
assurances now or hereafter required hereunder, on behalf of such Borrower or
Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds
hereunder in accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing
facility with a borrowing agent in the manner set forth in this Agreement is
solely as an accommodation to Borrowers and at their request. Neither Agent nor
any Lender shall incur liability to Borrowers as a result thereof. To induce
Agent and Lenders to do so and in consideration thereof, each Borrower hereby
indemnifies Agent and each Lender and holds Agent and each Lender harmless from
and against any and all liabilities, expenses, losses, damages and claims of
damage or injury asserted against Agent or any Lender by any Person arising from
or incurred by reason of the handling of the financing arrangements of Borrowers
as provided herein, reliance by Agent or any Lender on any request or
instruction from Borrowing Agent or any other action taken by Agent or any
Lender with respect to this Section 15.1 except due to willful misconduct or
gross (not mere) negligence by the indemnified party.
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<PAGE>
(c) All Obligations shall be joint and several, and each Borrower
shall make payment upon the maturity of the Obligations by acceleration or
otherwise, and such obligation and liability on the part of each Borrower shall
in no way be affected by any extensions, renewals and forbearance granted to
Agent or any Lender to any Borrower, failure of Agent or any Lender to give any
Borrower notice of borrowing or any other notice, any failure of Agent or any
Lender to pursue or preserve its rights against any Borrower, the release by
Agent or any Lender of any Collateral now or thereafter acquired from any
Borrower, and such agreement by each Borrower to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by Agent or
any Lender to the other Borrowers or any Collateral for such Borrower's
Obligations or the lack thereof.
16.2. Waiver of Subrogation. Each Borrower expressly waives any and all
---------------------
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Borrower may now or hereafter have against the other
Borrowers or other Person directly or contingently liable for the Obligations
hereunder, or against or with respect to the other Borrowers' property
(including, without limitation, any property which is Collateral for the
Obligations), arising from the existence or performance of this Agreement, until
termination of this Agreement and repayment in full of the Obligations.
XVII. CROSS-GUARANTY.
--------------
17.1. Cross Guaranty. Each Borrower hereby acknowledges and agrees that
--------------
such Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to each other Borrower, Agent and Lenders the full
and prompt payment of, all Obligations owed or hereafter owing by each other
Borrower. Each Borrower further agrees to pay all costs and expenses including,
without limitation, all court costs and reasonable attorneys' and paralegals'
fees and expenses, paid or incurred by Lender in endeavoring to collect all or
any part of the Obligations from, or in prosecuting any action against, such
Borrower or any other guarantor of all or any part of the Obligations.
17.2. Contribution with Respect to Guaranty Obligations.
-------------------------------------------------
(a) To the extent that any Borrower shall make a payment under
this Section 17 of all or any of the Obligations for which such Borrower is not
primarily liable (a "Guarantor Payment") which, taking into account all other
Guarantor Payments then previously or concurrently made by the other Borrower,
exceeds the amount which such Borrower would otherwise have paid if each
Borrower had paid the aggregate Obligations satisfied by such Guarantor Payment
in the same proportion that such Borrower's "Allocable Amount" (as defined
below) (in effect immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of all of the Borrowers in effect immediately prior
to the making of such
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Guarantor Payment, then such Borrower shall be entitled to receive contribution
----
and indemnification payments from, and be reimbursed by, the other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
--- ----
Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
--------- ------
Borrower shall be equal to the maximum amount of the claim which could then be
recovered from such Borrower under this Section 17 without rendering such claim
voidable or avoidable under Section 548 of chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This subsection 17.2 is intended only to define the relative
rights of the Borrowers and nothing set forth in this subsection 17.2 is
intended to or shall impair the obligations of the Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and payable
in accordance with the terms of this Agreement, and nothing contained in this
subsection 17.2 shall limit the liability of any Borrower to pay the Obligations
for which it is primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of any Borrower to which
such contribution and indemnification is owing.
17.3. Obligations Absolute. The liability of each Borrower to Agent and
--------------------
Lenders hereunder shall not be affected or impaired by any of the following: (a)
the validity or enforceability of the Obligations or any part thereof, or of the
Note or other instrument or document evidencing all or any part of the
Obligations, (b) the absence of any attempt to collect the Obligations from a
Borrower or any other guarantor or other action to enforce the same, (c) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all Obligations; (d) one or more extensions or renewals of
Obligations (whether or not for longer than the original period) or any
modification of the interest rates, fees, maturities or principal amount of, or
other contractual terms applicable to any Obligations; (e) any waiver or
indulgence granted to a Borrower, any delay or lack of diligence in the
enforcement of Obligations, or any failure to institute proceedings, file a
claim, give any required notices or otherwise protect any Obligations; (f) any
full or partial release of, compromise or settlement with, or agreement not to
sue a Borrower or any guarantor or other person liable in respect of any
Obligations; (g) any release, surrender, cancellation or other discharge of any
evidence of any of the Obligations or the acceptance of any instrument in
renewal or substitution therefore; (h) any failure to obtain collateral security
(including rights of setoff) for any of the Obligations, or to obtain or
maintain the proper or sufficient creation and perfection thereof, or to
establish the priority thereof, or to preserve, protect, insure care for,
exercise or enforce any collateral security; (i) any collection, sale, lease or
disposition of, or any other foreclosure or enforcement of or
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<PAGE>
realization on, any collateral security; (j) any assignment, pledge or other
transfer of any of the Obligations or any evidence thereof; (k) any manner,
order or method of application of any payments or credits upon any of the
Obligations; (l) Agent's or any Lender's election, in any case or proceedings
under the Bankruptcy Code of the application of Section 1111(b)(2) thereof,
(xiii) any borrowing or grant of a Lien by a Borrower as debtor in possession
under Section 364 of the Bankruptcy Code and (m) the disallowance under the
Bankruptcy Code of all or any portion of Agent's or such Lender's claim for
repayment of the Obligations. Each Borrower hereby waives any and all legal and
equitable defenses and discharges available to a surety guarantor, or
accommodation co-obligor.
Each Borrower hereby assumes responsibility for keeping itself informed
of the financial condition of the other Borrower, and any and all endorsers and
other guarantors of any agreement, instrument or document evidencing or security
all or any part of the Obligations and of all other circumstances bearing upon
the risk of nonpayment of the Obligations or any part thereof that diligent
inquiry would reveal, and each Borrower hereby agrees that neither Agent nor any
Lender shall have any duty to advise such Borrower of information regarding such
condition or any such circumstances. Each Borrower hereby acknowledges
familiarity with the other Borrower's financial condition and has not relied on
any statements by Agent or Lenders in obtaining such information. In the event
Agent or any Lender, in its sole discretion, undertakes at any time or from time
to time to provide any such information to a Borrower, it shall not be under any
obligation (i) to undertake any investigation with respect thereto, (ii) to
disclose any information which, pursuant to accepted or reasonable credit
practices, Agent wishes to maintain confidential or (iii) to make any other or
future disclosures of such information, or any other information, to such
Borrower.
17.4. Waiver. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, AGENT OR ANY
------
LENDER MAY, AT ITS SOLE ELECTION, PROCEED DIRECTLY, WITHOUT NOTICE, AGAINST A
BORROWER TO COLLECT AND RECOVER ALL OR ANY PART OF THE OBLIGATIONS WITHOUT FIRST
PROCEEDING AGAINST THE OTHER BORROWER, ANY OTHER GUARANTOR, OR ANY COLLATERAL
FOR THE OBLIGATIONS.
EACH BORROWER ALSO WAIVES ALL SETOFFS AND COUNTERCLAIMS AND ALL
PRESENTMENTS, DEMANDS FOR PERFORMANCE, NOTICES OF NONPERFORMANCE, PROTESTS,
NOTICES OF PROTEST, NOTICES OF DISHONOR, AND NOTICES OF ACCEPTANCE OF THIS
GUARANTY. EACH BORROWER FURTHER WAIVES ALL NOTICES OF THE EXISTENCE, CREATION
OR INCURRING OF NEW OR ADDITIONAL INDEBTEDNESS, ARISING EITHER FROM ADDITIONAL
LOANS EXTENDED TO THE OTHER BORROWERS OR OTHERWISE, AND EXCEPT FOR NOTICES
EXPRESSLY REQUIRED HEREUNDER, ALSO WAIVES ALL NOTICES THAT THE PRINCIPAL AMOUNT,
OR ANY PORTION THEREOF, OR ANY INTEREST ON ANY AGREEMENT, INSTRUMENT OR DOCUMENT
EVIDENCING OR SECURING ALL OR ANY PART OF THE OBLIGATIONS IS DUE, NOTICES OF ANY
AND ALL PROCEEDINGS TO COLLECT FROM THE MAKER, ANY ENDORSER OR ANY OTHER
GUARANTOR OF ALL OR ANY PART OF THE OBLIGATIONS, OR FROM ANY OTHER PERSON, AND
TO THE EXTENT PERMITTED BY LAW, NOTICES OF EXCHANGE, SALE, SURRENDER OR OTHER
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HANDLING OF ANY COLLATERAL GIVEN TO AGENT AND LENDERS TO SECURE PAYMENT OF THE
OBLIGATIONS.
17.5. Recovery. Each Borrower agrees that, to the extent that the other
--------
Borrower makes a payment or payments to Agent or any Lender, or receives any
proceeds of Collateral, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to such other Borrower, its estate, trustee, receiver
or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, the
Obligations or the part thereof which has been paid, reduced or satisfied by
such amount shall be reinstated and continued in full force and effect as of the
date such initial payment, reduction or satisfaction occurred, and this cross
guaranty shall continue to be in existence and full force and effect,
irrespective of whether any evidence of the Obligations has been surrendered or
cancelled.
17.6. Liability Cumulative. The liability of the Borrowers under this
--------------------
Section 17 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the Other Documents
to which such Borrower is a party or in respect of any Obligations or obligation
of the other Borrower, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
Each of the parties has signed this Agreement as of the day and year
first above written.
WINCUP HOLDINGS, L.P.
By: WinCup Holdings, Inc.,
its General Partner
By: [SIGNATURE APPEARS HERE]
----------------------------------
Its: President
---------------------------------
3 Radnor Corporate Center, Suite 300
100 Matsonford Road
Radnor, PA 19087
-------------------------------------
Address
WINCUP HOLDINGS, INC.
By: [SIGNATURE APPEARS HERE]
----------------------------------
Its: President
---------------------------------
3 Radnor Corporate Center, Suite 300
100 Matsonford Road
Radnor, PA 19087
-------------------------------------
Address
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<PAGE>
SP ACQUISITION CO.
By: [SIGNATURE APPEARS HERE]
--------------------------------
Its: President
-------------------------------
3 Radnor Corporate Center,
Suite 300
100 Matsonford Road
Radnor, PA 19087
-----------------------------------
Address
STYROCHEM INTERNATIONAL, INC.
By: [SIGNATURE APPEARS HERE]
--------------------------------
Its: President
-------------------------------
3 Radnor Corporate Center,
Suite 300
100 Matsonford Road
Radnor, PA 19087
-----------------------------------
Address
RADNOR HOLDINGS, INC.
By: [SIGNATURE APPEARS HERE]
--------------------------------
Its: President
-------------------------------
3 Radnor Corporate Center,
Suite 300
100 Matsonford Road
Radnor, PA 19087
-----------------------------------
Address
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Lender and as Agent
By: [SIGNATURE APPEARS HERE]
-------------------------------
Its: Vice President
------------------------------
1290 Avenue of the Americas
New York, New York 10104
Commitment Percentage: 50%
NATIONSBANK, N.A., as Lender
By: [SIGNATURE APPEARS HERE]
--------------------------------
Its: Vice President
-------------------------------
-----------------------------------
Address
Commitment Percentage: 50%
-90-
<PAGE>
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc., a Corporation which is the general
partner of WinCup Holdings, L.P., the partnership described in and which
executed the foregoing instrument; that he had authority to sign the same and he
acknowledged to me that he executed the same as the act and deed of said
partnership for the use and purposes therein mentioned and that he signed his
name thereto by order of the Board of Directors of WinCup Holdings, Inc.
[SIGNATURE APPEARS HERE]
---------------------------------
NOTARY PUBLIC
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, L.P, the corporation described in and which
executed the foregoing instrument and that he signed his name thereto by order
of the board of directors of said corporation.
[SIGNATURE APPEARS HERE]
---------------------------------
NOTARY PUBLIC
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of SP Acquisition Co., the corporation described in and which
executed the foregoing instrument and that he signed his name thereto by order
of the board of directors of said corporation.
[SIGNATURE APPEARS HERE]
---------------------------------
NOTARY PUBLIC
-91-
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STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc, the corporation described in and
which executed the foregoing instrument and that he signed his name thereto by
order of the board of directors of said corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of Radnor Holdings, Inc., the corporation described in and which
executed the foregoing instrument and that he signed his name thereto by order
of the board of directors of said corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 5th day of December, 1996, before me personally came
Ryan D. Peak, to me known, who, being by me duly sworn, did depose
and say that he is the Vice President of The Bank of New York Commercial
Corporation, the corporation described in and which executed the foregoing
instrument and that he signed his name thereto by order of the board of
directors of said corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
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STATE OF MARYLAND )
) ss.
COUNTY OF BALTIMORE )
On this 5th day of December, 1996, before me personally came Vickie L.
Tillman, to me known, who, being by me duly sworn, did depose and say that she
is the Vice President of Nations Bank N.A., the corporation described in and
which executed the foregoing instrument and that he signed his name thereto by
order of the board of directors of said corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
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<PAGE>
(EXHIBITS AND SCHEDULES OMITTED)
<PAGE>
EXHIBIT 10.42
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$15,000,000 New York, New York
December 5, 1996
This Amended and Restated Revolving Credit Note is executed and
delivered under and pursuant to the terms of that certain Amended and Restated
Revolving Credit and Security Agreement dated as of the date hereof (as amended,
supplemented or modified from time to time, the "Loan Agreement") by and among
WINCUP HOLDINGS, L.P., WINCUP HOLDINGS, INC., SP ACQUISITION CO., STYROCHEM
INTERNATIONAL, INC. and RADNOR HOLDINGS CORPORATION (collectively, the
"Borrowers"), THE BANK OF NEW YORK COMMERCIAL CORPORATION ("BNYCC"), the
financial institutions named therein and the financial institutions which
hereafter become a party thereto (BNYCC and each of the other financial
institutions, collectively, "Lenders") and BNYCC as administrative and
collateral agent ("Agent") for Lenders. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the Borrowers jointly and severally hereby promise
to pay to the order of BNYCC, at Agent's offices located at 1290 Avenue of the
Americas, New York, New York 10104 or at such other place as the holder may
from time to time designate to Borrower in writing:
(i) the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000) or, if
different from such amount, the unpaid principal balance of BNYCC's Commitment
Percentage of Revolving Advances as may be due and owing under the Loan
Agreement, payable in accordance with the provisions of the Loan Agreement,
subject to acceleration upon the occurrence of an Event of Default under the
Loan Agreement, termination of the Loan Agreement pursuant to the terms thereof
or repayment as required by the Loan Agreement; and
(ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of Revolving Credit Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----- ----
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This Note may be prepaid, in whole or in part, on the terms and
conditions set forth in the Loan Agreement.
This Note is being delivered in the State of New York and shall be
construed and enforced in accordance with the laws of such state.
Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Loan
Agreement.
This Note amends and restates in its entirety and is issued in full
substitution and replacement for (but not satisfaction of) the Revolving Credit
Note dated as of January 22, 1996 issued by WinCup Holdings, L.P. to BNYCC in
the original principal sum of $14,000,000.
WINCUP HOLDINGS, L.P.
By: WINCUP HOLDINGS, INC., the
General Partner
By:[SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
WINCUP HOLDINGS, INC.
By:[SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
SP ACQUISITION CO.
By:[SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
STYROCHEM INTERNATIONAL, INC.
By:[SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
RADNOR HOLDINGS CORPORATION
By:[SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
-2-
<PAGE>
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA )
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of each of WinCup Holdings, Inc., Radnor Holdings Corporation, SP
Acquisition Co. and StyroChem International, Inc.; that WinCup Holdings,Inc. is
the general partner of WinCup Holdings, L.P., that each of the forgoing
companies executed the foregoing instrument; that he had authority to sign the
same and that he signed his name thereto as the act and deed of such partnership
and corporations by order of the board of directors of each corporation.
[SIGNATURE APPEARS HERE]
-----------------------------
NOTARY PUBLIC
-3-
<PAGE>
EXHIBIT 10.43
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$15,000,000 New York, New York
December 5, 1996
This Amended and Restated Revolving Credit Note is executed and
delivered under and pursuant to the terms of that certain Amended and Restated
Revolving Credit and Security Agreement dated as of the date hereof (as amended,
supplemented or modified from time to time, the "Loan Agreement") by and among
WINCUP HOLDINGS, L.P., WINCUP HOLDINGS, INC., SP ACQUISITION CO., STYROCHEM
INTERNATIONAL, INC. and RADNOR HOLDINGS CORPORATION (collectively, the
"Borrowers"), THE BANK OF NEW YORK COMMERCIAL CORPORATION ("BNYCC"), the
financial institutions named therein and the financial institutions which
hereafter become a party thereto (BNYCC and each of the other financial
institutions, collectively, "Lenders") and BNYCC as administrative and
collateral agent ("Agent") for Lenders. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Loan Agreement.
FOR VALUE RECEIVED, the Borrowers jointly and severally hereby promise
to pay to the order of Nationsbank, at Agent's offices located at 1290 Avenue of
the Americas, New York, New York 10104 or at such other place as the holder may
from time to time designate to Borrower in writing:
(i) the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000) or, if
different from such amount, the unpaid principal balance of NationsBank's
Commitment Percentage of Revolving Advances as may be due and owing under the
Loan Agreement, payable in accordance with the provisions of the Loan Agreement,
subject to acceleration upon the occurrence of an Event of Default under the
Loan Agreement, termination of the Loan Agreement pursuant to the terms thereof
or repayment as required by the Loan Agreement; and
(ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at such interest rates
and at such times as are specified in the Loan Agreement. In no event, however,
shall interest hereunder exceed the maximum interest rate permitted by law.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is one of Revolving Credit Notes referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
----- ----
Agreement and the Other Documents, is entitled to the benefits of the Loan
Agreement and the Other Documents and is subject to all of the agreements, terms
and conditions therein contained.
<PAGE>
This Note may be prepaid, in whole or in part, on the terms and
conditions set forth in the Loan Agreement.
This Note is being delivered in the State of New York and shall be
construed and enforced in accordance with the laws of such state.
Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Loan
Agreement.
This Note amends and restates in its entirety and is issued in full
substitution and replacement for (but not satisfaction of) the Revolving Credit
Note dated as of January 22, 1996 issued by WinCup Holdings, L.P. to Nationsbank
in the original principal sum of $14,000,000.
WINCUP HOLDINGS, L.P.
By: WINCUP HOLDINGS, INC., the
General Partner
By: [SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
WINCUP HOLDINGS, INC.
By: [SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
SP ACQUISITION CO.
By: [SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
STYROCHEM INTERNATIONAL, INC.
By: [SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
RADNOR HOLDINGS CORPORATION
By: [SIGNATURE APPEARS HERE]
----------------------------------
Title: President
-------------------------------
<PAGE>
STATE OF Pennsylvania )
) ss.
COUNTY OF Philadelphia )
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of each of WinCup Holdings, Inc., Radnor Holdings Corporation, SP
Acquisition Co. and StyroChem International, Inc.; that WinCup Holdings,Inc. is
the general partner of WinCup Holdings, L.P., that each of the forgoing
companies executed the foregoing instrument; that he had authority to sign the
same and that he signed his name thereto as the act and deed of such partnership
and corporations by order of the board of directors of each corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
-3-
<PAGE>
EXHIBIT 10.44
TRADEMARK COLLATERAL SECURITY AGREEMENT
---------------------------------------
THIS AGREEMENT is made as of the 5th day of December, 1996, by and
between StyroChem International, Inc. a corporation organized under the laws of
the State of Texas, having a mailing address at 3607 North Sylvania Avenue,
Fort Worth, TX 76111, ("Styrochem"), and The Bank of New York Commercial
Corporation as administrative and collateral agent for Lenders (as hereafter
defined), having a mailing address at 1290 Avenue of the Americas, New York, New
York 10104 (in such capacity, "Agent").
BACKGROUND
----------
Styrochem, WinCup Holdings, Inc., WinCup Holdings, L.P., Radnor
Holdings Corporation, and SP Acquisition Co., have entered into an Amended and
Restated Revolving Credit and Security Agreement dated as of the date hereof (as
amended and supplemented from time to time, the "Loan Agreement") with The Bank
of New York Commercial Corporation, ("BNYCC"), the various financial
institutions named therein or which hereafter become a party thereto
(collectively, "Lenders") and BNYCC, as administrative and collateral monitoring
agent (BNYCC in such capacity, the "Agent"). In order to induce Agent and
Lenders to execute and deliver the Loan Agreement, Styrochem agreed to execute
and deliver to Agent for the benefit of Lenders this Trademark Collateral
Security Agreement ("Security Agreement"). This Security Agreement, covering
Trademarks (as hereinafter defined), is being executed contemporaneously with
the Loan Agreement under which Agent for the benefit of Lenders is granted a
lien on and security interest in, inter alia, the Trademarks and the machinery,
----- ----
equipment formulations, manufacturing procedures, quality control procedures and
product specifications ("Other Assets") relating to products sold under the
Trademarks, whereby Agent on behalf of Lenders shall have the right to foreclose
simultaneously on the Trademarks and the Other Assets in the event of the
occurrence and continuance of a default hereunder or an Event of Default under
the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, Styrochem and Agent
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
-------------
the Loan Agreement shall have their defined meanings when used herein and the
following terms shall have the following meanings, unless the context otherwise
requires:
"Code" shall mean the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2
of this Security Agreement.
-1-
<PAGE>
"Licenses" shall mean the trademark license agreements of
Styrochem designated on Schedule I hereto, as any of the same may from time to
----------
time be amended or supplemented.
"Proceeds" shall have the meaning assigned to it under Section
9-306 of the Code, and in any event, shall include, but not be limited to (i)
any and all proceeds of any insurance, indemnity, warranty or guarantee payable
to Styrochem from time to time with respect to any of the Collateral, (ii) any
and all payments (in any form whatsoever) made or due and payable to Styrochem
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of governmental authority), and (iii) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral.
"Security Agreement" shall mean this Security Agreement, as the
same may from time to time be amended or supplemented.
"Trademarks" shall mean the U.S. registered trademarks and
pending applications shown in the attached Schedule A, and those trademarks
----------
which are hereafter adopted or acquired by Styrochem, and all right, title and
interest therein and thereto, and all registrations, applications, and
recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, all whether
now owned or hereafter acquired by Styrochem.
2. Grant of Security Interest. As collateral security for the
--------------------------
prompt payment of the Obligations, Styrochem hereby grants and conveys to Agent
for the benefit of Lenders a security interest in and to (a) the entire right,
title and interest of Styrochem in and to the Trademarks, including the
registrations and applications appurtenant thereto, listed in Schedule A hereto
----------
(as the same may be amended pursuant hereto from time to time), and in and to
any and all trademarks, and registrations and applications appurtenant thereto,
hereafter acquired or filed by Styrochem, including without limitation all
renewals thereof, all proceeds of infringement suits, the rights to sue for
past, present and future infringements and all rights corresponding thereto in
the United States and the goodwill of the business to which each of the
Trademarks relates and (b) all of Styrochem's right, title and interest in, to
and under the following:
(i) all Licenses;
(ii) all Receivables, contract rights and General Intangibles
arising under or relating to each and every License (including, without
limitation, (A) all moneys due and to become
-2-
<PAGE>
due under any License, (B) any damages arising out of or for breach or default
in respect of any such License, (C) all other amounts from time to time paid or
payable under or in connection with any such License, and (D) the right of
Styrochem to terminate any such License or to perform and to exercise all
remedies thereunder); and
(iii) to the extent not otherwise included, all Proceeds and
products of any or all of the foregoing. All of the property referred to in this
paragraph 2 is hereinafter collectively called the "Collateral."
3. Representations and Warranties. Styrochem covenants and warrants
------------------------------
that as of the date of this Security Agreement:
(a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable;
(b) To the best of Styrochem's knowledge, each of the Trademarks
is valid and enforceable;
(c) There is no outstanding claim that the use of any of the
Trademarks violates the rights of any third person;
(d) Styrochem is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, (including, without
limitation, pledges, assignments, licenses, registered user agreements and
covenants by Styrochem not to sue third persons), except for the Licenses
referred to in Schedule I attached hereto;
----------
(e) Styrochem has the right to enter into this Security
Agreement and perform its terms;
(f) Styrochem has used, and will continue to use for the
duration of this Security Agreement, proper statutory notice, where appropriate,
in connection with its use of the Trademarks; and
(g) Styrochem has used, and will continue to use for the
duration of this Security Agreement, consistent standards of quality in its
manufacture of products sold under the Trademarks.
4. Right of Inspection. Styrochem hereby grants to Agent and its
-------------------
employees and agents the right to visit Styrochem's plants and facilities which
manufacture, inspect or store products sold under any of the Trademarks, and to
inspect the products and quality control relating thereto at reasonable times
during regular business hours. Styrochem shall use its best efforts to do any
and all acts required by Agent to ensure Styrochem's compliance with paragraph
3(g) above.
-3-
<PAGE>
5. New Trademarks. (a) If, before the Obligations shall have been
--------------
paid in full, Styrochem shall obtain rights to any new trademarks, the
provisions of paragraph 2 shall automatically apply thereto and Styrochem shall
give Agent prompt written notice thereof. (b) Styrochem grants Agent a power-
of-attorney, irrevocable so long as the Loan Agreement is in existence, to
modify this Security Agreement by amending Schedule A to include any future
----------
trademarks, including trademark registrations or applications appurtenant
thereto covered by this Security Agreement.
6. Covenants. Styrochem covenants and agrees with Agent that from
---------
and after the date of this Security Agreement and until the Obligations are
fully satisfied:
(a) Further Documentation; Pledge of Instruments. At any time
--------------------------------------------
and from time to time, upon the written request of Agent, Styrochem will
promptly and duly execute and deliver any and all such further instruments and
documents and take such further action as Agent may reasonably deem desirable in
obtaining the full benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Code with respect to the liens
and security interests granted hereby. Styrochem also hereby authorizes Agent to
file any such financing or continuation statement without the signature of
Styrochem to the extent permitted by applicable law. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged to Agent hereunder, duly endorsed in a manner satisfactory
to Agent.
(b) Maintenance of Trademarks. Styrochem will not do any act,
-------------------------
or omit to do any act, whereby the Trademarks or any registration or application
appurtenant thereto, may become abandoned, invalidated, unenforceable, avoided,
avoidable, or will otherwise diminish in value, and shall notify Agent
immediately if it knows of any reason or has reason to know of any ground under
which this result may occur. Styrochem shall take appropriate action at its
expense to halt the infringement of the Trademarks and shall properly exercise
its duty to control the nature and quality of the goods offered by any licensees
in connection with the Licenses set forth in Schedule I.
----------
(c) Indemnification. (A) Styrochem assumes all responsibility
---------------
and liability arising from the use of the Trademarks, and Styrochem hereby
indemnifies and holds Agent and Lenders harmless from and against any claim,
suit, loss, damage or expense (including reasonable attorneys' fees) arising out
of Styrochem's operations of its business from the use of the Trademarks. (B)
In any suit, proceeding or action brought by Agent or any Lender under any
License for any sum owing thereunder, or to enforce any provisions of such
License, Styrochem will indemnify and keep Agent and Lenders harmless from
-4-
<PAGE>
and against all expense, loss or damage suffered by reason of any defense, set
off, counterclaim, recoupment or reduction or liability whatsoever of the
obligee thereunder, arising out of a breach of Styrochem of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligee or its successors from Styrochem,
and all such obligations of Styrochem shall be and remain enforceable against
and only against Styrochem and shall not be enforceable against Agent or any
Lender.
(d) Limitation of Liens on Collateral. Styrochem will not
---------------------------------
create, or suffer to exist, and will defend the Collateral against and take such
other action as is necessary to remove any lien, security interest, encumbrance,
claim or right, in or to the Collateral, and will defend the right, title and
interest of Agent in and to any of Styrochem's rights under the Licenses and to
the Proceeds thereof against the claims and demands of all persons whomever.
(e) Limitations on Modifications of Licenses. Styrochem will
----------------------------------------
not (i) amend, modify, terminate or waive any provision of any License in any
manner which might materially adversely affect the value of such License or the
Trademarks as Collateral, without the written consent of Agent, (ii) fail to
exercise promptly and diligently each and every material right which it may have
under each License (other than any right of termination), without the prior
written consent of Agent, or (iii) fail to deliver to Agent a copy of each
material demand, notice or document sent or received by it relating in any way
to any License or Trademark.
(f) Notices. Styrochem will advise Agent promptly, in
-------
reasonable detail (i) of any lien or claim made or asserted against any of the
Collateral, (ii) of any material change in the composition of the Collateral and
(iii) of the occurrence of any other event which would have a material adverse
effect on the value of any of the Collateral or on the security interests
created hereunder.
(g) Limitation on Further Uses of Trademarks. Styrochem will
----------------------------------------
not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a
security interest in or lien upon, encumber, grant an exclusive or non-exclusive
license, or otherwise dispose of any of the Collateral, without prior written
consent of Agent.
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Styrochem hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Styrochem and in the name of Styrochem or in its own name,
from time to time in Agent's discretion, for the purposes of carrying out the
terms of this Security Agreement, to take any and all
-5-
<PAGE>
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement and, without limiting the generality of the foregoing, hereby gives
Agent the power and right, on behalf of Styrochem, to do the following:
(i) Upon the occurrence and during the continuance of an
Event of Default, to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any License and, in
the name of Styrochem or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any License and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests
or other encumbrances levied or placed on or threatened against the Collateral,
to effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and during the continuance of an
Event of Default (A) to direct any party liable for any payment under any of the
Licenses to make payment of any and all moneys due and to become due thereunder
directly to Agent or as Agent shall direct; (B) to receive payment of and
receipt for any and all moneys, claims and other amounts due and to become due
at any time in respect of or arising out of any Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (D) to defend any suit,
action or proceeding brought against Styrochem with respect to any Collateral;
(E) to settle, compromise, or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as Agent
may deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though gent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Security Agreement, all as fully
and effectively as Styrochem might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, Styrochem further agrees to
execute any additional documents which Agent may require in order to confirm
this power
-6-
<PAGE>
of attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Styrochem for any act or failure to act, except for its own gross (not mere)
negligence or willful misconduct.
(c) Styrochem also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, Styrochem is executing and delivering to Agent, in the form
of Schedule II hereto, ten (10) originals of a Power of Attorney for the
-----------
implementation of the assignment, sale or other disposal of the Trademarks
pursuant to paragraph 7 hereof.
9. Performance by Agent of Styrochem's Obligations. If Styrochem
-----------------------------------------------
fails to perform or comply with any of its agreements contained herein and
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Agent incurred in connection with such performance or
compliance shall be payable by Styrochem to Agent on demand and shall constitute
Obligations secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by Styrochem under or in
connection with any of the Collateral shall be held by Styrochem in trust for
Lenders, shall be segregated from other funds of Styrochem and shall forthwith
upon receipt by Styrochem, be turned over to Agent, in the same form as received
by Styrochem (duly indorsed by Styrochem to Agent, if required); and
(ii) Any and all such payments so received by Agent
(whether from Styrochem or otherwise) may, in the sole dis cretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall
-7-
<PAGE>
be paid over to Styrochem or to whomsoever may be lawfully entitled to receive
the same.
(b) If any Event of Default shall occur and be continuing, Agent
and Lenders may exercise in addition to all other rights and remedies granted to
them in this Security Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Uniform Commercial Code. Styrochem shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all amounts to which Lenders are entitled. Styrochem
shall also be liable for the reasonable fees of any attorneys employed by Agent
and Lenders to collect any such deficiency and also as to any reasonable
attorney's fees incurred by Agent and Lenders with respect to the collection of
any of the Obligations and the enforcement of any of Agent's and Lenders'
respective rights hereunder.
11. Termination. At such time as Styrochem shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to Styrochem all
such releases, deeds, assignments and other instruments as may be necessary or
proper to re-vest in Styrochem full title to the Trademarks, subject to any
disposition thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or Styrochem under this
-------
Agreement shall be given in the manner and to the parties designated in the Loan
Agreement.
13. No Waiver. No course of dealing between Styrochem, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
-8-
<PAGE>
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
STYROCHEM INTERNATIONAL, INC.
WITNESS:
[SIGNATURE APPEARS HERE] By: /s/ Michael T. Kennedy
- ----------------------- --------------------------
Name: Michael T. Kennedy
Title: President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent
WITNESS:
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- -------------------------- --------------------------
Name:
Title:
-9-
<PAGE>
STATE OF Pennsylvania )
) ss.:
COUNTY OF Philadelphia )
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF New York )
) ss.:
COUNTY OF New York )
Before me, the undersigned, on this 5th day of December, 1996,
personally appeared Ryan D. Peak, to me known personally, and who being
by me duly sworn, deposes and says that he is the Vice President of The
Bank of New York Commercial Corporation, and that said instrument was signed on
behalf of said corporation by authority of its Board of Directors, and he
acknowledged said instrument to be the free act and deed of said
corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
-10-
<PAGE>
SCHEDULE A
Schedule A to a Trademark Collateral Security Agreement dated as of December
5, 1996, by and between StyroChem International, Inc. and THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- --------------- ---- -----------
<S> <C> <C>
1,998,140 STYROCHEM INTERNATIONAL 7/23/96
(CL.17)
1,983,030 STYROCHEM INTERNATIONAL 7/25/96
74/567,764 STYROCHEM (CL.17)
(Serial Number)
74/567,762 STYROCHEM
(Serial Number)
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF __________ )
) ss.:
COUNTY OF _________ )
KNOW ALL MEN BY THESE PRESENTS, that STYROCHEM INTERNATIONAL INC, a
corporation organized under the laws of the State of Texas, with its principal
office at 3607 North Sylvania Avenue, Fort Worth, TX 76111, (hereafter called
"Styrochem"), pursuant to a Trademark Collateral Security Agreement, dated as of
the date hereof, (the "Security Agreement"), hereby appoints and constitutes THE
BANK OF NEW YORK COMMERCIAL CORPORATION, a New York corporation, with offices at
1290 Avenue of the Americas, New York, New York 10104, in its capacity as
administrative and collateral agent ("Agent") for itself and the various other
financial institutions named in and which hereafter become a party to that
certain Amended and Restated Revolving Credit and Security Agreement dated as of
the date hereof among Styrochem, The Bank of New York Commercial Corporation
("BNYCC"), the various financial institutions named therein and which hereafter
become a party thereto (collectively, "Lenders") and Agent, its true and lawful
attorney, with full power of substitution, and with full power and authority to
perform the following acts on behalf of Styrochem:
1. Assigning, selling or otherwise disposing of all right, title and
interest of Styrochem in and to the Trademarks listed on Schedule
--------
A of the Security Agreement, and including those trademarks which
-
are added to the same subsequent hereto, and all registrations
and recordings thereof, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
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<PAGE>
This power of attorney is made pursuant to the Security Agreement
between Styrochem and Agent and may not be revoked until the payment in full of
all Obligations as defined in the Security Agreement.
STYROCHEM INTERNATIONAL, INC.
By:___________________________
Michael T. Kennedy
President
STATE OF __________ )
) ss.
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael
T. Kennedy, to me known, who, being by me duly sworn, did depose and say that he
is the President of StyroChem International, Inc., and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of each corporation.
________________________________
NOTARY PUBLIC
-14-
<PAGE>
SCHEDULE III
------------
TRADEMARKS
----------
1. "STYROCHEM INTERNATIONAL", (CL. 17), Federal Trademark Registration
No. 1,998,140, entered on the Principal Register on July 23, 1996.
2. "STYROCHEM INTERNATIONAL", Federal Trademark Registration No.
1,983,030, entered on the Principal Register on June 25, 1996.
3. "STYROCHEM", (CL. 17), U.S. Trademark Application Serial No.
74/567,764; second request for extension of time to file statement of
use was dated August 26, 1996.
4. "STYROCHEM", U.S. Trademark Application Serial No. 74/567,762; second
request for extension of time to file statement of use dated August
26, 1996.
-15-
<PAGE>
EXHIBIT 10.45
TRADEMARK ASSIGNMENT OF SECURITY
--------------------------------
WHEREAS, STYROCHEM INTERNATIONAL, INC., a corporation partnership
originated under the laws of the State of Texas ("Styrochem"), located at 3607
North Sylvania Avenue, Fort Worth, Texas, 76111, owns the trademarks and
trademark applications shown in the attached Schedule A (the "Marks"), for which
----------
there are recordings or applications in the United States Patent and Trademark
Office under the numbers shown in the attached Schedule A; and
----------
WHEREAS, pursuant to (i) that certain Amended and Restated Revolving
Credit and Security Agreement, dated as of the date hereof, by and among
Styrochem, WinCup Holdings, Inc., WinCup Holdings, L.P., Radnor Holdings
Corporation, and SP Acquisition Co., The Bank of New York Commercial Corporation
("BNYCC"), the various financial institutions named therein and which hereafter
become a party thereto (collectively, "Lenders") and BNYCC as administrative and
collateral agent for Lenders (BNYCC in such capacity, "Agent") and (ii) a
certain Trademark Collateral Security Agreement, dated as of the date hereof,
made by Styrochem in favor of Agent for the benefit of Lenders (as amended,
supplemented, modified or restated from time to time, collectively, the
"Agreements"), Borrowers are obligated to Agent and Lenders; and
WHEREAS, pursuant to the Agreements, Styrochem is granting to Agent
for the benefit of Lenders a security interest in the Marks, all proceeds
thereof, all rights corresponding thereto, the goodwill of the business
symbolized by the Marks, and the recordings and applications therefor.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Styrochem does hereby assign unto Agent for the benefit
of Lenders and grant to Agent for the benefit of Lenders a security interest in
and to the Marks, all proceeds thereof, all rights corresponding thereto, the
recordings and applications therefor, together with the goodwill of the business
to which each of the Marks relates, which assignment and security interest shall
secure all the Obligations as defined in the Agreements and in accordance with
the terms and provisions thereof.
<PAGE>
Styrochem expressly acknowledges and affirms that the rights and
remedies of Agent and Lenders with respect to the assignment and security
interest granted hereby are more fully set forth in and are subject to the
Agreements.
Dated: New York, New York
December 5, 1996
STYROCHEM INTERNATIONAL, INC.
Witness:
[SIGNATURE APPEARS HERE]
- -------------------------- By:/s/ Michael T. Kennedy
------------------------------
Michael T. Kennedy
President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent
Witness:
[SIGNATURE APPEARS HERE]
- -------------------------- By:[SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
-2-
<PAGE>
STATE OF Pennsylvania )
) ss.:
COUNTY OF Philadelphia )
On this 5th day of December, 1996, before me personally came Michael
T. Kennedy, to me known, who, being by me duly sworn, did depose and say that he
is the President of StyroChem International, Inc., and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of each corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF New York )
) ss.:
COUNTY OF New York )
On this 5th day of December, 1996, before me personally came Ryan D.
Peak, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President of The Bank of New York Commercial Corporation, the
corporation described in and which executed the foregoing instrument; and that
he signed his name thereto by like order by order of the board of directors of
said corporation.
[SIGNATURE APPEARS HERE]
-----------------------------
Notary Public
-3-
<PAGE>
SCHEDULE A
----------
Schedule A to a Trademark Assignment of Security Agreement dated December 5,
1997, by and between STYROCHEM INTERNATIONAL, INC., and THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- ----------------- ------------------------ -----------
<S> <C> <C>
1,998,140 STYROCHEM INTERNATIONAL 7/23/96
(CL.17)
1,983,030 STYROCHEM INTERNATIONAL 7/25/96
74/567,764 STYROCHEM (CL.17)
(Serial Number)
74/567,762 STYROCHEM
(Serial Number)
</TABLE>
-4-
<PAGE>
and against all expense, loss or damage suffered by reason of any defense, set
off, counterclaim, recoupment or reduction or liability whatsoever of the
obligee thereunder, arising out of a breach of Styrochem of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligee or its successors from Styrochem,
and all such obligations of Styrochem shall be and remain enforceable against
and only against Styrochem and shall not be enforceable against Agent or any
Lender.
(d) Limitation of Liens on Collateral. Styrochem will not
---------------------------------
create, or suffer to exist, and will defend the Collateral against and take such
other action as is necessary to remove any lien, security interest, encumbrance,
claim or right, in or to the Collateral, and will defend the right, title and
interest of Agent in and to any of Styrochem's rights under the Licenses and to
the Proceeds thereof against the claims and demands of all persons whomever.
(e) Limitations on Modifications of Licenses. Styrochem will
----------------------------------------
not (i) amend, modify, terminate or waive any provision of any License in any
manner which might materially adversely affect the value of such License or the
Trademarks as Collateral, without the written consent of Agent, (ii) fail to
exercise promptly and diligently each and every material right which it may have
under each License (other than any right of termination), without the prior
written consent of Agent, or (iii) fail to deliver to Agent a copy of each
material demand, notice or document sent or received by it relating in any way
to any License or Trademark.
(f) Notices. Styrochem will advise Agent promptly, in
-------
reasonable detail (i) of any lien or claim made or asserted against any of the
Collateral, (ii) of any material change in the composition of the Collateral and
(iii) of the occurrence of any other event which would have a material adverse
effect on the value of any of the Collateral or on the security interests
created hereunder.
(g) Limitation on Further Uses of Trademarks. Styrochem will
----------------------------------------
not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a
security interest in or lien upon, encumber, grant an exclusive or non-exclusive
license, or otherwise dispose of any of the Collateral, without prior written
consent of Agent.
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Styrochem hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Styrochem and in the name of Styrochem or in its own name,
from time to time in Agent's discretion, for the purposes of carrying out the
terms of this Security Agreement, to take any and all
-5-
<PAGE>
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement and, without limiting the generality of the foregoing, hereby gives
Agent the power and right, on behalf of Styrochem, to do the following:
(i) Upon the occurrence and during the continuance of an
Event of Default, to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any License and, in
the name of Styrochem or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any License and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests
or other encumbrances levied or placed on or threatened against the Collateral,
to effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and during the continuance of an
Event of Default (A) to direct any party liable for any payment under any of the
Licenses to make payment of any and all moneys due and to become due thereunder
directly to Agent or as Agent shall direct; (B) to receive payment of and
receipt for any and all moneys, claims and other amounts due and to become due
at any time in respect of or arising out of any Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (D) to defend any suit,
action or proceeding brought against Styrochem with respect to any Collateral;
(E) to settle, compromise, or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as Agent
may deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though gent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Security Agreement, all as fully
and effectively as Styrochem might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, Styrochem further agrees to
execute any additional documents which Agent may require in order to confirm
this power
-6-
<PAGE>
of attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Styrochem for any act or failure to act, except for its own gross (not mere)
negligence or willful misconduct.
(c) Styrochem also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, Styrochem is executing and delivering to Agent, in the form
of Schedule II hereto, ten (10) originals of a Power of Attorney for the
-----------
implementation of the assignment, sale or other disposal of the Trademarks
pursuant to paragraph 7 hereof.
9. Performance by Agent of Styrochem's Obligations. If Styrochem
-----------------------------------------------
fails to perform or comply with any of its agreements contained herein and
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Agent incurred in connection with such performance or
compliance shall be payable by Styrochem to Agent on demand and shall constitute
Obligations secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by Styrochem under or in
connection with any of the Collateral shall be held by Styrochem in trust for
Lenders, shall be segregated from other funds of Styrochem and shall forthwith
upon receipt by Styrochem, be turned over to Agent, in the same form as received
by Styrochem (duly indorsed by Styrochem to Agent, if required); and
(ii) Any and all such payments so received by Agent
(whether from Styrochem or otherwise) may, in the sole dis cretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall
-7-
<PAGE>
be paid over to Styrochem or to whomsoever may be lawfully entitled to receive
the same.
(b) If any Event of Default shall occur and be continuing, Agent
and Lenders may exercise in addition to all other rights and remedies granted to
them in this Security Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Uniform Commercial Code. Styrochem shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all amounts to which Lenders are entitled. Styrochem
shall also be liable for the reasonable fees of any attorneys employed by Agent
and Lenders to collect any such deficiency and also as to any reasonable
attorney's fees incurred by Agent and Lenders with respect to the collection of
any of the Obligations and the enforcement of any of Agent's and Lenders'
respective rights hereunder.
11. Termination. At such time as Styrochem shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to Styrochem all
such releases, deeds, assignments and other instruments as may be necessary or
proper to re-vest in Styrochem full title to the Trademarks, subject to any
disposition thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or Styrochem under this
-------
Agreement shall be given in the manner and to the parties designated in the Loan
Agreement.
13. No Waiver. No course of dealing between Styrochem, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
-8-
<PAGE>
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
STYROCHEM INTERNATIONAL, INC.
WITNESS:
_______________________ By:__________________________
Name:
Title:
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent
WITNESS:
__________________________ By:__________________________
Name:
Title:
-9-
<PAGE>
STATE OF __________ )
) ss.:
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
STATE OF __________ )
) ss.:
COUNTY OF _________ )
Before me, the undersigned, on this ____day of December, 1996,
personally appeared _____________________, to me known personally, and who being
by me duly sworn, deposes and says that he is the ____________________ of The
Bank of New York Commercial Corporation, and that said instrument was signed on
behalf of said corporation by authority of its Board of Directors, and he
acknowledged said instrument to be the free act and deed of said corporation.
______________________________
NOTARY PUBLIC
-10-
<PAGE>
SCHEDULE A
Schedule A to a Trademark Collateral Security Agreement dated as of December
___, 1996, by and between StyroChem International, Inc. and THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- --------------- ---- -----------
<S> <C> <C>
1,998,140 STYROCHEM INTERNATIONAL 7/23/96
(CL.17)
1,983,030 STYROCHEM INTERNATIONAL 7/25/96
74/567,764 STYROCHEM (CL.17)
(Serial Number)
74/567,762 STYROCHEM
(Serial Number)
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF __________ )
) ss.:
COUNTY OF _________ )
KNOW ALL MEN BY THESE PRESENTS, that STYROCHEM INTERNATIONAL INC, a
corporation organized under the laws of the State of Texas, with its principal
office at 3607 North Sylvania Avenue, Fort Worth, TX 76111, (hereafter called
"Styrochem"), pursuant to a Trademark Collateral Security Agreement, dated as of
the date hereof, (the "Security Agreement"), hereby appoints and constitutes THE
BANK OF NEW YORK COMMERCIAL CORPORATION, a New York corporation, with offices at
1290 Avenue of the Americas, New York, New York 10104, in its capacity as
administrative and collateral agent ("Agent") for itself and the various other
financial institutions named in and which hereafter become a party to that
certain Amended and Restated Revolving Credit and Security Agreement dated as of
the date hereof among Styrochem, The Bank of New York Commercial Corporation
("BNYCC"), the various financial institutions named therein and which hereafter
become a party thereto (collectively, "Lenders") and Agent, its true and lawful
attorney, with full power of substitution, and with full power and authority to
perform the following acts on behalf of Styrochem:
1. Assigning, selling or otherwise disposing of all right, title and
interest of Styrochem in and to the Trademarks listed on Schedule
--------
A of the Security Agreement, and including those trademarks which
-
are added to the same subsequent hereto, and all registrations
and recordings thereof, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
-13-
<PAGE>
This power of attorney is made pursuant to the Security Agreement
between Styrochem and Agent and may not be revoked until the payment in full of
all Obligations as defined in the Security Agreement.
STYROCHEM INTERNATIONAL, INC.
By:___________________________
Michael T. Kennedy
President
STATE OF __________ )
) ss.
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael
T. Kennedy, to me known, who, being by me duly sworn, did depose and say that he
is the President of StyroChem International, Inc., and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of each corporation.
________________________________
NOTARY PUBLIC
-14-
<PAGE>
SCHEDULE III
------------
TRADEMARKS
----------
1. "STYROCHEM INTERNATIONAL", (CL. 17), Federal Trademark Registration
No. 1,998,140, entered on the Principal Register on July 23, 1996.
2. "STYROCHEM INTERNATIONAL", Federal Trademark Registration No.
1,983,030, entered on the Principal Register on June 25, 1996.
3. "STYROCHEM", (CL. 17), U.S. Trademark Application Serial No.
74/567,764; second request for extension of time to file statement of
use was dated August 26, 1996.
4. "STYROCHEM", U.S. Trademark Application Serial No. 74/567,762; second
request for extension of time to file statement of use dated August
26, 1996.
-15-
<PAGE>
EXHIBIT 10.46
TRADEMARK COLLATERAL SECURITY AGREEMENT
---------------------------------------
THIS AGREEMENT is made as of the 5th day of December, 1996, by and
between WinCup Holdings, Inc. a corporation organized under the laws of the
State of Delaware, having a mailing address at Three Radnor Corporate Center,
Suite 300, 100 Matsonford Road, Radnor, PA 19087 ("WinCup"), and The Bank of New
York Commercial Corporation as administrative and collateral agent for Lenders
(as hereafter defined), having a mailing address at 1290 Avenue of the Americas,
New York, New York 10104 (in such capacity, "Agent").
BACKGROUND
----------
WinCup, WinCup Holdings, L.P., Radnor Holdings Corporation, StyroChem
International, Inc., and SP Acquisition Co., have entered into an Amended and
Restated Revolving Credit and Security Agreement dated as of the date hereof (as
amended and supplemented from time to time, the "Loan Agreement") with The Bank
of New York Commercial Corporation, ("BNYCC"), the various financial
institutions named therein or which hereafter become a party thereto
(collectively, "Lenders") and BNYCC, as administrative and collateral monitoring
(BNYCC, in such capacity, the "Agent"). In order to induce Agent and Lenders to
execute and deliver the Loan Agreement, WinCup agreed to execute and deliver to
Agent for the benefit of Lenders this Trademark Collateral Security Agreement
("Security Agreement"). This Security Agreement, covering Trademarks (as
hereinafter defined), is being executed contemporaneously with the Loan
Agreement under which Agent for the benefit of Lenders is granted a lien on and
security interest in, inter alia, the Trademarks and the machinery, equipment
----- ----
formulations, manufacturing procedures, quality control procedures and product
specifications ("Other Assets") relating to products sold under the Trademarks,
whereby Agent on behalf of Lenders shall have the right to foreclose
simultaneously on the Trademarks and the Other Assets in the event of the
occurrence and continuance of a default hereunder or an Event of Default under
the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, WinCup and Agent
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
-------------
the Loan Agreement shall have their defined meanings when used herein and the
following terms shall have the following meanings, unless the context otherwise
requires:
"Code" shall mean the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2
of this Security Agreement.
-1-
<PAGE>
"Licenses" shall mean the trademark license agreements of WinCup
designated on Schedule I hereto, as any of the same may from time to time be
----------
amended or supplemented.
"Proceeds" shall have the meaning assigned to it under Section 9-306
of the Code, and in any event, shall include, but not be limited to (i) any and
all proceeds of any insurance, indemnity, warranty or guarantee payable to
WinCup from time to time with respect to any of the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to WinCup from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), and (iii) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"Security Agreement" shall mean this Security Agreement, as the
same may from time to time be amended or supplemented.
"Trademarks" shall mean the U.S. registered trademarks and pending
applications shown in the attached Schedule A, and those trademarks which are
----------
hereafter adopted or acquired by WinCup, and all right, title and interest
therein and thereto, and all registrations, applications, and recordings
thereof, including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof, all whether now owned
or hereafter acquired by WinCup.
2. Grant of Security Interest. As collateral security for the
--------------------------
prompt payment of the Obligations, WinCup hereby grants and conveys to Agent for
the benefit of Lenders a security interest in and to (a) the entire right, title
and interest of WinCup in and to the Trademarks, including the registrations and
applications appurtenant thereto, listed in Schedule A hereto (as the same may
----------
be amended pursuant hereto from time to time), and in and to any and all
trademarks, and registrations and applications appurtenant thereto, hereafter
acquired or filed by WinCup, including without limitation all renewals thereof,
all proceeds of infringement suits, the rights to sue for past, present and
future infringements and all rights corresponding thereto in the United States
and the goodwill of the business to which each of the Trademarks relates and (b)
all of WinCup's right, title and interest in, to and under the following:
(i) all Licenses;
(ii) all Receivables, contract rights and General Intangibles
arising under or relating to each and every License (including, without
limitation, (A) all moneys due and to become due under any License, (B) any
damages arising out of or for
-2-
<PAGE>
breach or default in respect of any such License, (C) all other amounts from
time to time paid or payable under or in connection with any such License, and
(D) the right of WinCup to terminate any such License or to perform and to
exercise all remedies thereunder); and
(iii) to the extent not otherwise included, all Proceeds and
products of any or all of the foregoing. All of the property referred to in
this paragraph 2 is hereinafter collectively called the "Collateral."
3. Representations and Warranties. WinCup covenants and warrants
------------------------------
that as of the date of this Security Agreement:
(a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable;
(b) To the best of WinCup's knowledge, each of the Trademarks
is valid and enforceable;
(c) There is no outstanding claim that the use of any of the
Trademarks violates the rights of any third person;
(d) WinCup is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, (including, without
limitation, pledges, assignments, licenses, registered user agreements and
covenants by WinCup not to sue third persons), except for the Licenses referred
to in Schedule I attached hereto;
----------
(e) WinCup has the right to enter into this Security Agreement
and perform its terms;
(f) WinCup has used, and will continue to use for the duration
of this Security Agreement, proper statutory notice, where appropriate, in
connection with its use of the Trademarks; and
(g) WinCup has used, and will continue to use for the duration
of this Security Agreement, consistent standards of quality in its manufacture
of products sold under the Trademarks.
4. Right of Inspection. WinCup hereby grants to Agent and its
-------------------
employees and agents the right to visit WinCup's plants and facilities which
manufacture, inspect or store products sold under any of the Trademarks, and to
inspect the products and quality control relating thereto at reasonable times
during regular business hours. WinCup shall use its best efforts to do any and
all acts required by Agent to ensure WinCup's compliance with paragraph 3(g)
above.
5. New Trademarks. (a) If, before the Obligations shall have been
--------------
paid in full, WinCup shall obtain rights to any new trademarks, the provisions
of paragraph 2 shall automatically apply thereto and WinCup shall give Agent
prompt written notice
-3-
<PAGE>
thereof. (b) WinCup grants Agent a power-of-attorney, irrevocable so long as
the Loan Agreement is in existence, to modify this Security Agreement by
amending Schedule A to include any future trademarks, including trademark
----------
registrations or applications appurtenant thereto covered by this Security
Agreement.
6. Covenants. WinCup covenants and agrees with Agent that from and
---------
after the date of this Security Agreement and until the Obligations are fully
satisfied:
(a) Further Documentation; Pledge of Instruments. At any time
--------------------------------------------
and from time to time, upon the written request of Agent, WinCup will promptly
and duly execute and deliver any and all such further instruments and documents
and take such further action as Agent may reasonably deem desirable in obtaining
the full benefits of this Security Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Code with respect to the liens and security
interests granted hereby. WinCup also hereby authorizes Agent to file any such
financing or continuation statement without the signature of WinCup to the
extent permitted by applicable law. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be immediately pledged to
Agent hereunder, duly endorsed in a manner satisfactory to Agent.
(b) Maintenance of Trademarks. WinCup will not do any act, or
-------------------------
omit to do any act, whereby the Trademarks or any registration or application
appurtenant thereto, may become abandoned, invalidated, unenforceable, avoided,
avoidable, or will otherwise diminish in value, and shall notify Agent
immediately if it knows of any reason or has reason to know of any ground under
which this result may occur. WinCup shall take appropriate action at its expense
to halt the infringement of the Trademarks and shall properly exercise its duty
to control the nature and quality of the goods offered by any licensees in
connection with the Licenses set forth in Schedule I.
----------
(c) Indemnification. (A) WinCup assumes all responsibility and
---------------
liability arising from the use of the Trademarks, and WinCup hereby indemnifies
and holds Agent and Lenders harmless from and against any claim, suit, loss,
damage or expense (including reasonable attorneys' fees) arising out of WinCup's
operations of its business from the use of the Trademarks. (B) In any suit,
proceeding or action brought by Agent or any Lender under any License for any
sum owing thereunder, or to enforce any provisions of such License, WinCup will
indemnify and keep Agent and Lenders harmless from and against all expense, loss
or damage suffered by reason of any defense, set off, counterclaim, recoupment
or reduction or liability whatsoever of the obligee thereunder, arising out of a
breach of WinCup of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from WinCup, and
-4-
<PAGE>
all such obligations of WinCup shall be and remain enforceable against and only
against WinCup and shall not be enforceable against Agent or any Lender.
(d) Limitation of Liens on Collateral. WinCup will not create,
---------------------------------
permit or suffer to exist, and will defend the Collateral against and take such
other action as is necessary to remove any lien, security interest, encumbrance,
claim or right, in or to the Collateral, and will defend the right, title and
interest of Agent in and to any of WinCup's rights under the Licenses and to the
Proceeds thereof against the claims and demands of all persons whomever.
(e) Limitations on Modifications of Licenses. WinCup will not
----------------------------------------
(i) amend, modify, terminate or waive any provision of any License in any manner
which might materially adversely affect the value of such License or the
Trademarks as Collateral, without the written consent of Agent, (ii) fail to
exercise promptly and diligently each and every material right which it may have
under each License (other than any right of termination), without the prior
written consent of Agent, or (iii) fail to deliver to Agent a copy of each
material demand, notice or document sent or received by it relating in any way
to any License or Trademark.
(f) Notices. WinCup will advise Agent promptly, in reasonable
-------
detail (i) of any lien or claim made or asserted against any of the Collateral,
(ii) of any material change in the composition of the Collateral and (iii) of
the occurrence of any other event which would have a material adverse effect on
the value of any of the Collateral or on the security interests created
hereunder.
(g) Limitation on Further Uses of Trademarks. WinCup will not
----------------------------------------
assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security
interest in or lien upon, encumber, grant an exclusive or non-exclusive license,
or otherwise dispose of any of the Collateral, without prior written consent of
Agent.
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) WinCup hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of WinCup and in the name of WinCup or in its own name, from
time to time in Agent's discretion, for the purposes of carrying out the terms
of this Security Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives Agent the power and
right, on behalf of WinCup, to do the following:
-5-
<PAGE>
(i) Upon the occurrence and during the continuance of an Event
of Default, to ask, demand, collect, receive and give acquittances and receipts
for any and all moneys due and to become due under any License and, in the name
of WinCup or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any License and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and during the continuance of an Event
of Default (A) to direct any party liable for any payment under any of the
Licenses to make payment of any and all moneys due and to become due thereunder
directly to Agent or as Agent shall direct; (B) to receive payment of and
receipt for any and all moneys, claims and other amounts due and to become due
at any time in respect of or arising out of any Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (D) to defend any suit,
action or proceeding brought against WinCup with respect to any Collateral; (E)
to settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as Agent may
deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though gent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Security Agreement, all as fully
and effectively as WinCup might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, WinCup further agrees to execute
any additional documents which Agent may require in order to confirm this power
of attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a
-6-
<PAGE>
result of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to WinCup for any act or
failure to act, except for its own gross (not mere) negligence or willful
misconduct.
(c) WinCup also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, WinCup is executing and delivering to Agent, in the form of
Schedule II hereto, ten (10) originals of a Power of Attorney for the
- -----------
implementation of the assignment, sale or other disposal of the Trademarks
pursuant to paragraph 7 hereof.
9. Performance by Agent of WinCup's Obligations. If WinCup fails to
--------------------------------------------
perform or comply with any of its agreements contained herein and Agent, as
provided for by the terms of this Security Agreement, shall itself perform or
comply, or otherwise cause performance or compliance, with such agreement, the
expenses of Agent incurred in connection with such performance or compliance
shall be payable by WinCup to Agent on demand and shall constitute Obligations
secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by WinCup under or in
connection with any of the Collateral shall be held by WinCup in trust for
Lenders, shall be segregated from other funds of WinCup and shall forthwith upon
receipt by WinCup, be turned over to Agent, in the same form as received by
WinCup (duly indorsed by WinCup to Agent, if required); and
(ii) Any and all such payments so received by Agent
(whether from WinCup or otherwise) may, in the sole discretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall be paid over to
WinCup or to whomsoever may be lawfully entitled to receive the same.
(b) If any Event of Default shall occur and be continuing,
Agent and Lenders may exercise in addition to all other rights and remedies
granted to them in this Security Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code.
-7-
<PAGE>
WinCup shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all amounts to which
Lenders are entitled. WinCup shall also be liable for the reasonable fees of
any attorneys employed by Agent and Lenders to collect any such deficiency and
also as to any reasonable attorney's fees incurred by Agent and Lenders with
respect to the collection of any of the Obligations and the enforcement of any
of Agent's and Lenders' respective rights hereunder.
11. Termination. At such time as WinCup shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to WinCup all such
releases, deeds, assignments and other instruments as may be necessary or proper
to re-vest in WinCup full title to the Trademarks, subject to any disposition
thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or WinCup under this
-------
Agreement shall be given in the manner and to the parties designated in the Loan
Agreement.
13. No Waiver. No course of dealing between WinCup, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
-8-
<PAGE>
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
WINCUP HOLDINGS, INC.
WITNESS:
[SIGNATURE APPEARS HERE] By: /s/ Michael T. Kennedy
- --------------------------- --------------------------
Name: Michael T. Kennedy
Title: President
THE BANK OF NEW YORK COMMERCIAL CORPORATION,
as Agent
WITNESS:
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- --------------------------- --------------------------
Name:
Title:
-9-
<PAGE>
STATE OF PENNSYLVANIA )
: ss.:
COUNTY OF PHILADELPHIA)
On this 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
Before me, the undersigned, on this 5th day of December, 1996,
personally appeared Ryan D. Peak, to me known personally, and who being by me
duly sworn, deposes and says that he is the Vice President of The Bank of New
York Commercial Corporation, and that said instrument was signed on behalf of
said corporation by authority of its Board of Directors, and he acknowledged
said instrument to be the free act and deed of said corporation.
[SIGNATURE APPEARS HERE]
----------------------------
Notary Public
-10-
<PAGE>
SCHEDULE A
Schedule A to a Trademark Collateral Security Agreement dated as of December
5, 1996, by and between WinCup Holdings, Inc. and THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- --------------- ---- -----------
<S> <C> <C>
75/187876 ComPac 10/25/96
(serial number)
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF __________ )
: ss.:
COUNTY OF _________ )
KNOW ALL MEN BY THESE PRESENTS, that WinCup HOLDINGS INC, a
corporation organized under the laws of the State of Delaware, with its
principal office at Three Radnor Corporate Center, Suite 300, 100 Matsonford
Road, Radnor, PA 19087, (hereafter called "WinCup"), pursuant to a Trademark
Collateral Security Agreement, dated as of the date hereof, (the "Security
Agreement"), hereby appoints and constitutes THE BANK OF NEW YORK COMMERCIAL
CORPORATION, a New York corporation, with offices at 1290 Avenue of the
Americas, New York, New York 10104, in its capacity as administrative and
collateral agent ("Agent") for itself and the various other financial
institutions named in and which hereafter become a party to that certain Amended
and Restated Revolving Credit and Security Agreement dated as of the date hereof
among WinCup, The Bank of New York Commercial Corporation ("BNYCC"), the various
financial institutions named therein and which hereafter become a party thereto
(collectively, "Lenders") and Agent, its true and lawful attorney, with full
power of substitution, and with full power and authority to perform the
following acts on behalf of WinCup:
1. Assigning, selling or otherwise disposing of all right, title and
interest of WinCup in and to the Trademarks listed on Schedule A
----------
of the Security Agreement, and including those trademarks which
are added to the same subsequent hereto, and all registrations
and recordings thereof, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
-13-
<PAGE>
This power of attorney is made pursuant to the Security Agreement
WinCup and Agent and may not be revoked until the payment in full of all
Obligations as defined in the Security Agreement.
WINCUP HOLDINGS, INC.
By:__________________________________
Michael T. Kennedy
President
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
-14-
<PAGE>
SCHEDULE III
------------
TRADEMARKS
----------
"COMPAC", U.S. Trademark Serial No. 75/187876; filed on the Federal Register on
October 25, 1996.
-15-
<PAGE>
EXHIBIT 10.47
TRADEMARK ASSIGNMENT OF SECURITY
--------------------------------
WHEREAS, WINCUP HOLDINGS, INC., a corporation originated under the
laws of the State of Delaware ("WinCup"), located at Three Radnor Corporate
Center, Suite 300, 100 Matsonford Road, Radnor, PA 19087, owns the trademarks
and trademark applications shown in the attached Schedule A (the "Marks"), for
----------
which there are recordings or applications in the United States Patent and
Trademark Office under the numbers shown in the attached Schedule A; and
----------
WHEREAS, pursuant to the Amended and Restated Revolving Credit and
Security Agreement, dated as of the December 5, 1996, by and among WinCup,
WinCup Holdings, Inc., Radnor Holdings Corporation, SP Acquisition Co., and
StyroChem International, Inc. (collectively, the "Borrowers"), The Bank of New
York Commercial Corp. ("BNYCC"), the various financial institutions named
therein and which hereafter become a party thereto ("Lenders") and BNYCC, as
administrative and collateral monitoring agent for Lenders (BNYCC in such
capacity, "Agent"), and (ii) a certain Trademark Collateral Security Agreement,
dated this date, made by WinCup in favor of Agent for the benefit of Lenders (as
amended, supplemented, modified or restated from time to time, collectively, the
"Agreements"), the Borrowers are obligated to Agent and Lenders; and
WHEREAS, pursuant to the Agreements, WinCup is granting to Agent for
the benefit of Lenders a security interest in the Marks, all proceeds thereof,
all rights corresponding thereto, the goodwill of the business symbolized by the
Marks, and the recordings and applications therefor.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, WinCup does hereby assign unto Agent for the benefit of
Lenders and grant to Agent for the benefit of Lenders a security interest in and
to the Marks, all proceeds thereof, all rights corresponding thereto, the
recordings and applications therefor, together with the goodwill of the business
to which each of the Marks relates, which assignment and security interest shall
secure all the Obligations as defined in the Agreements and in accordance with
the terms and provisions thereof.
WinCup expressly acknowledges and affirms that the rights and remedies
of Agent and Lenders with respect to the
<PAGE>
assignment and security interest granted hereby are more fully set forth in and
are subject to the Agreements.
Dated: New York, New York
December 5, 1997
WINCUP HOLDINGS, INC.
Witness:
[SIGNATURE APPEARS HERE] By: /s/ Michael T. Kennedy
- ------------------------- ------------------------------
Name: Michael T. Kennedy
Title: President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent
Witness:
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ------------------------- ------------------------------
Name:
Title
-2-
<PAGE>
STATE OF PENNSYLVANIA )
) ss.:
COUNTY OF PHILADELPHIA )
On the 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc.; and that he signed his name thereto on
behalf of the partnership as the free act and deed of the partnership.
[SIGNATURE APPEARS HERE]
-------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 5th day of December, 1996, before me personally came Ryan D. Peak,
to me known, who, being by me duly sworn, did depose and say that he is the Vice
President of The Bank of New York Commercial Corporation, the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by like order by order of the board of directors of said
corporation.
[SIGNATURE APPEARS HERE]
-----------------------------
Notary Public
-3-
<PAGE>
SCHEDULE A
----------
Schedule A to a Trademark Assignment of Security Agreement dated December 5,
1997, by and between WINCUP HOLDINGS, INC. and THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- --------------- ---- -----------
<S> <C> <C>
75/187876 ComPac 10/25/96
(serial number)
</TABLE>
-4-
<PAGE>
all such obligations of WinCup shall be and remain enforceable against and only
against WinCup and shall not be enforceable against Agent or any Lender.
(d) Limitation of Liens on Collateral. WinCup will not create,
---------------------------------
permit or suffer to exist, and will defend the Collateral against and take such
other action as is necessary to remove any lien, security interest, encumbrance,
claim or right, in or to the Collateral, and will defend the right, title and
interest of Agent in and to any of WinCup's rights under the Licenses and to the
Proceeds thereof against the claims and demands of all persons whomever.
(e) Limitations on Modifications of Licenses. WinCup will not
----------------------------------------
(i) amend, modify, terminate or waive any provision of any License in any manner
which might materially adversely affect the value of such License or the
Trademarks as Collateral, without the written consent of Agent, (ii) fail to
exercise promptly and diligently each and every material right which it may have
under each License (other than any right of termination), without the prior
written consent of Agent, or (iii) fail to deliver to Agent a copy of each
material demand, notice or document sent or received by it relating in any way
to any License or Trademark.
(f) Notices. WinCup will advise Agent promptly, in reasonable
-------
detail (i) of any lien or claim made or asserted against any of the Collateral,
(ii) of any material change in the composition of the Collateral and (iii) of
the occurrence of any other event which would have a material adverse effect on
the value of any of the Collateral or on the security interests created
hereunder.
(g) Limitation on Further Uses of Trademarks. WinCup will not
----------------------------------------
assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security
interest in or lien upon, encumber, grant an exclusive or non-exclusive license,
or otherwise dispose of any of the Collateral, without prior written consent of
Agent.
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) WinCup hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of WinCup and in the name of WinCup or in its own name, from
time to time in Agent's discretion, for the purposes of carrying out the terms
of this Security Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives Agent the power and
right, on behalf of WinCup, to do the following:
-5-
<PAGE>
(i) Upon the occurrence and during the continuance of an Event
of Default, to ask, demand, collect, receive and give acquittances and receipts
for any and all moneys due and to become due under any License and, in the name
of WinCup or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any License and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and during the continuance of an Event
of Default (A) to direct any party liable for any payment under any of the
Licenses to make payment of any and all moneys due and to become due thereunder
directly to Agent or as Agent shall direct; (B) to receive payment of and
receipt for any and all moneys, claims and other amounts due and to become due
at any time in respect of or arising out of any Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (D) to defend any suit,
action or proceeding brought against WinCup with respect to any Collateral; (E)
to settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as Agent may
deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though gent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and Agent's security interest
therein, in order to effect the intent of this Security Agreement, all as fully
and effectively as WinCup might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, WinCup further agrees to execute
any additional documents which Agent may require in order to confirm this power
of attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a
-6-
<PAGE>
result of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to WinCup for any act or
failure to act, except for its own gross (not mere) negligence or willful
misconduct.
(c) WinCup also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, WinCup is executing and delivering to Agent, in the form of
Schedule II hereto, ten (10) originals of a Power of Attorney for the
- -----------
implementation of the assignment, sale or other disposal of the Trademarks
pursuant to paragraph 7 hereof.
9. Performance by Agent of WinCup's Obligations. If WinCup fails to
--------------------------------------------
perform or comply with any of its agreements contained herein and Agent, as
provided for by the terms of this Security Agreement, shall itself perform or
comply, or otherwise cause performance or compliance, with such agreement, the
expenses of Agent incurred in connection with such performance or compliance
shall be payable by WinCup to Agent on demand and shall constitute Obligations
secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by WinCup under or in
connection with any of the Collateral shall be held by WinCup in trust for
Lenders, shall be segregated from other funds of WinCup and shall forthwith upon
receipt by WinCup, be turned over to Agent, in the same form as received by
WinCup (duly indorsed by WinCup to Agent, if required); and
(ii) Any and all such payments so received by Agent
(whether from WinCup or otherwise) may, in the sole discretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall be paid over to
WinCup or to whomsoever may be lawfully entitled to receive the same.
(b) If any Event of Default shall occur and be continuing,
Agent and Lenders may exercise in addition to all other rights and remedies
granted to them in this Security Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Uniform Commercial Code.
-7-
<PAGE>
WinCup shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all amounts to which
Lenders are entitled. WinCup shall also be liable for the reasonable fees of
any attorneys employed by Agent and Lenders to collect any such deficiency and
also as to any reasonable attorney's fees incurred by Agent and Lenders with
respect to the collection of any of the Obligations and the enforcement of any
of Agent's and Lenders' respective rights hereunder.
11. Termination. At such time as WinCup shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to WinCup all such
releases, deeds, assignments and other instruments as may be necessary or proper
to re-vest in WinCup full title to the Trademarks, subject to any disposition
thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or WinCup under this
-------
Agreement shall be given in the manner and to the parties designated in the Loan
Agreement.
13. No Waiver. No course of dealing between WinCup, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
-8-
<PAGE>
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
WINCUP HOLDINGS, INC.
WITNESS:
__________________________ By:__________________________
Name:
Title:
THE BANK OF NEW YORK COMMERCIAL CORPORATION,
as Agent
WITNESS:
__________________________ By:__________________________
Name:
Title:
-9-
<PAGE>
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
STATE OF _________)
: ss.:
COUNTY OF ________)
Before me, the undersigned, on this ____day of December, 1996,
personally appeared _____________________, to me known personally, and who being
by me duly sworn, deposes and says that he is the ____________________ of The
Bank of New York Commercial Corporation, and that said instrument was signed on
behalf of said corporation by authority of its Board of Directors, and he
acknowledged said instrument to be the free act and deed of said corporation.
____________________________
Notary Public
-10-
<PAGE>
SCHEDULE A
Schedule A to a Trademark Collateral Security Agreement dated as of December
___, 1996, by and between WinCup Holdings, Inc. and THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as Agent.
<TABLE>
<CAPTION>
Reg. No. or Reg. or
Application No. Mark Filing Date
- --------------- ---- -----------
<S> <C> <C>
75/187876 ComPac 10/25/96
(serial number)
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF __________ )
: ss.:
COUNTY OF _________ )
KNOW ALL MEN BY THESE PRESENTS, that WinCup HOLDINGS INC, a
corporation organized under the laws of the State of Delaware, with its
principal office at Three Radnor Corporate Center, Suite 300, 100 Matsonford
Road, Radnor, PA 19087, (hereafter called "WinCup"), pursuant to a Trademark
Collateral Security Agreement, dated as of the date hereof, (the "Security
Agreement"), hereby appoints and constitutes THE BANK OF NEW YORK COMMERCIAL
CORPORATION, a New York corporation, with offices at 1290 Avenue of the
Americas, New York, New York 10104, in its capacity as administrative and
collateral agent ("Agent") for itself and the various other financial
institutions named in and which hereafter become a party to that certain Amended
and Restated Revolving Credit and Security Agreement dated as of the date hereof
among WinCup, The Bank of New York Commercial Corporation ("BNYCC"), the various
financial institutions named therein and which hereafter become a party thereto
(collectively, "Lenders") and Agent, its true and lawful attorney, with full
power of substitution, and with full power and authority to perform the
following acts on behalf of WinCup:
1. Assigning, selling or otherwise disposing of all right, title and
interest of WinCup in and to the Trademarks listed on Schedule A
----------
of the Security Agreement, and including those trademarks which
are added to the same subsequent hereto, and all registrations
and recordings thereof, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
-13-
<PAGE>
This power of attorney is made pursuant to the Security Agreement
WinCup and Agent and may not be revoked until the payment in full of all
Obligations as defined in the Security Agreement.
WINCUP HOLDINGS, INC.
By:__________________________________
Michael T. Kennedy
President
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of WinCup Holdings, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
-14-
<PAGE>
SCHEDULE III
------------
TRADEMARKS
----------
"COMPAC", U.S. Trademark Serial No. 75/187876; filed on the Federal Register on
October 25, 1996.
-15-
<PAGE>
EXHIBIT 10.48
PATENT COLLATERAL SECURITY AGREEMENT
------------------------------------
THIS AGREEMENT is made as of the 5th day of December, 1996, by and
between StyroChem International, Inc., a corporation organized under the laws of
the State of Texas having a mailing address at 3607 North Sylvania Avenue, Fort
Worth, TX 76111, ("Styrochem") and The Bank of New York Commercial Corporation
as administrative and collateral agent for Lenders (as hereafter defined),
having a mailing address at 1290 Avenue of the Americas, New York, New York
10104 (in such capacity, "Agent").
BACKGROUND
----------
Styrochem, WinCup Holdings, Inc., Radnor Holdings Corporation, SP
Acquisition Co., and WinCup Holdings, L.P. have entered into an Amended and
Restated Revolving Credit and Security Agreement dated as of the date hereof (as
amended and supplemented from time to time, the "Loan Agreement") with The Bank
of New York Commercial Corporation, ("BNYCC"), the various financial
institutions named therein or which hereafter become a party thereto
(collectively, "Lenders") and BNYCC as administrative and collateral agent for
the Lenders (in such capacity "Agent"). In order to induce Agent and Lenders to
execute and deliver the Loan Agreement, Styrochem agreed to execute and deliver
to Agent for the benefit of Lenders this Patent Collateral Security Agreement
("Security Agreement"). This Security Agreement, covering Patents (as
hereinafter defined), is being executed contemporaneously with the Loan
Agreement under which Agent for the benefit of Lenders is granted a lien on and
security interest in, inter alia, the Patents, whereby Agent shall have the
----- ----
right to foreclose simultaneously on the Patents in the event of the occurrence
and continuance of a default hereunder or an Event of Default under the Loan
Agreement.
NOW, THEREFORE, in consideration of the premises, Styrochem and Lender
hereby agree as follows:
1. Defined Terms. As used in this Security Agreement, terms defined
-------------
in the Loan Agreement shall have their defined meanings when used herein and the
following terms shall have the following meanings, unless the context otherwise
requires:
"Code" shall mean the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2
of this Security Agreement.
"Licenses" shall mean the patent license agreements of Styrochem
designated on Schedule I hereto, as any of the same may from time to time be
----------
amended or supplemented.
<PAGE>
"Patents" shall mean all right, title and interest in and to the
patent applications and patents shown in the attached Schedule A and those
patents which are hereafter obtained or acquired by Styrochem and all
registrations, applications and recordings thereof, including, without
limitation, all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, and all applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other province
or country, all whether now owned or hereafter acquired by Styrochem.
"Proceeds" shall have the meaning assigned to it under Section 9-
306 of the Code, and in any event, shall include, but not be limited to (i) any
and all proceeds of any insurance, indemnity, warranty or guarantee payable to
Styrochem from time to time with respect to any of the Collateral, (ii) any and
all payments (in any form whatsoever) made or due and payable to Styrochem from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any governmental
body, authority, bureau or agency (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security Agreement" shall mean this Security Agreement, as the
same may from time to time be amended or supplemented.
2. Grant of Security Interest. As collateral security for the
--------------------------
prompt payment of the Obligations, Styrochem hereby grants and conveys to Agent
for the benefit of Lenders a security interest in and to (a) the entire right,
title and interest of Styrochem in and to the Patents, including the
registrations and applications appurtenant thereto, listed in Schedule A hereto
----------
(as the same may be amended pursuant hereto from time to time), and in and to
any and all patents, and registrations and applications appurtenant thereto,
hereafter acquired or filed by Styrochem, including without limitation all
renewals thereof, all proceeds of infringement suits, the rights to sue for
past, present and future infringements and all rights corresponding thereto in
the United States and all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and (b) all of Styrochem's right,
title and interest in, to and under the following:
(i) all Licenses;
(ii) all Receivables, contract rights and General Intangibles
arising under or relating to each and every License (including, without
limitation, (A) all moneys due and to become due under any License, (B) any
damages arising out of or for
-2-
<PAGE>
breach or default in respect of any such License, (C) all other amounts from
time to time paid or payable under or in connection with any such License, and
(D) the right of Styrochem to terminate any such License or to perform and to
exercise all remedies thereunder); and
(iii) to the extent not otherwise included, all Proceeds and
products of any or all of the foregoing. All of the property referred to in
this paragraph 2 is hereafter collectively called the "Collateral".
3. Representations and Warranties. Styrochem covenants and warrants
------------------------------
that as of the date of this Security Agreement:
(a) The Patents are subsisting and have not been adjudged
invalid or unenforceable in whole or in part;
(b) To the best of Styrochem's knowledge, each of the Patents is
valid and enforceable;
(c) There is no outstanding claim that the use of any of the
Patents violates the rights of any third person;
(d) Styrochem is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Patents, free and
clear of any liens, charges and encumbrances, (including without limitation
pledges, assignments, licenses, registered user agreements and covenants by
Styrochem not to sue third persons), except for the items disclosed in Schedule
--------
I attached hereto;
- -
(e) Styrochem has the right to enter into this Security
Agreement and perform its terms;
(f) Styrochem has used, and will continue to use for the
duration of this Security Agreement, proper statutory notice, where appropriate,
in connection with its use of the Patents; and
(g) Styrochem has used, and will continue to use for the
duration of this Security Agreement, consistent standards of quality in its
manufacture of products sold under the Patents.
4. Right of Inspection. Styrochem hereby grants to Agent and its
-------------------
employees and agents the right to visit Styrochem's plants and facilities which
manufacture, inspect or store products sold under any of the Patents, and to
inspect the products and quality control relating thereto at reasonable times
during regular business hours. Styrochem shall use its best efforts to do any
and all acts required by Agent to ensure Styrochem's compliance with paragraph
3(g) above.
-3-
<PAGE>
5. New Patents. (a) If, before the Obligations shall have been paid
-----------
in full, Styrochem shall obtain rights to any new Patents or become entitled to
the benefit of any patent application or patent for any reissue, division,
continuation, renewal, extension, or continuation-in-part of any Patent or any
improvement on any Patent, the provisions of paragraph 2 shall automatically
apply thereto and Styrochem shall give Agent prompt written notice thereof. (b)
Styrochem grants Agent a power-of-attorney, irrevocable so long as the Loan
Agreement is in existence, to modify this Security Agreement by amending
Schedule A to include any future Patents, including Patent registrations or
- ----------
applications appurtenant thereto covered by this Security Agreement.
6. Covenants. Styrochem covenants and agrees with Agent that from
---------
and after the date of this Security Agreement and until the Obligations are
fully satisfied:
(a) Further Documentation; Pledge of Instruments. At any time
--------------------------------------------
and from time to time, upon the written request of Agent, Styrochem will
promptly and duly execute and deliver any and all such further instruments and
documents and take such further action as Agent may reasonably deem desirable in
obtaining the full benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Code with respect to the liens
and security interests granted hereby. Styrochem also hereby authorizes Agent to
file any such financing or continuation statement without the signature of
Styrochem to the extent permitted by applicable law. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged to Agent hereunder, duly endorsed in a manner satisfactory
to Agent.
(b) Maintenance of Patents. Styrochem will not do any act, or
----------------------
omit do any act, whereby the Patents or any registration or application
appurtenant thereto, may become aban doned, invalidated, unenforceable, avoided,
avoidable, or will otherwise diminish in value, and shall notify Agent
immediately if it knows of any reason or has reason to know of any ground under
which this result may occur. Styrochem shall take appropriate action at its
expense to halt the infringement of the Patents and shall properly exercise its
duty to control the nature and quality of the goods offered by any licensees in
connection with the Licenses set forth in Schedule I.
----------
(c) Indemnification. (A) Styrochem assumes all responsibility
---------------
and liability arising from the use of the Patents, and Styrochem hereby
indemnifies and holds Agent and Lenders harmless from and against any claim,
suit, loss, damage or expense (including reasonable attorneys' fees) arising out
of Styrochem's operations of its business from the use of the
-4-
<PAGE>
Patents. (B) In any suit, proceeding or action brought by Agent or any Lender
under any License for any sum owing thereunder, or to enforce any provisions of
such License, Styrochem will indemnify and keep Agent and Lenders harmless from
and against all expense, loss or damage suffered by reason of any defense, set
off, counterclaim, recoupment or reduction or liability whatsoever of the
obligee thereunder, arising out of a breach of Styrochem of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligee or its successors from Styrochem,
and all such obligations of Styrochem shall be and remain enforceable against
and only against Styrochem and shall not be enforceable against Agent or any
Lender.
(d) Limitation of Liens on Collateral. Styrochem will not
---------------------------------
create, permit or suffer to exist, and will defend the Collateral against and
take such other action as is necessary to remove any lien, security interest,
encumbrance, claim or right, in or to the Collateral, and will defend the right,
title and interest of Agent in and to any of Styrochem's rights under any
License and to the Proceeds thereof against the claims and de mands of all
persons whomever.
(e) Limitations on Modifications of Licenses. Styrochem will
----------------------------------------
not (i) amend, modify, terminate or waive any provision of any License in any
manner which might materially adversely affect the value of such License or the
Patents as Collateral, (ii) fail to exercise promptly and diligently each and
every material right which it may have under each License (other than any right
of termination), or (iii) fail to deliver to Agent a copy of each material
demand, notice or document sent or received by it relating in any way to any
License or Patent.
(f) Notices. Styrochem will advise Agent promptly, in
-------
reasonable detail (i) of any lien or claim made or asserted against any of the
Collateral, (ii) of any material change in the composition of the Collateral and
(iii) of the occurrence of any other event which would have a material adverse
effect on the value of any of the Collateral or on the security interests
created hereunder.
(g) Limitation on Further Uses of Patents. Styrochem will not
-------------------------------------
assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security
interest in or lien upon, encumber, grant an exclusive or non-exclusive license,
or otherwise dispose of any of the Collateral, without prior written consent of
Agent.
-5-
<PAGE>
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Styrochem hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Styrochem and in the name of Styrochem or in its own name,
from time to time in Agent's discretion, for the purposes of carrying out the
terms of this Security Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives Agent the power and
right, on behalf of Styrochem, to do the following:
(i) Upon the occurrence and continuance of an Event of
Default, to ask, demand, collect, receive and give acquittances and receipts for
any and all moneys due and to become due under any License and, in the name of
Styrochem or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any License and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests
or other encumbrances levied or placed on or threatened against the Collateral,
to effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and continuance of an Event of
Default (A) to direct any party liable for any payment under any License to make
payment of any and all moneys due and to become due thereunder directly to Agent
or as Agent shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (C) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral; (D) to defend any suit, action or
proceeding brought against Styrochem with respect to any Collateral; (E) to
settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as Agent may
deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Agent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or
-6-
<PAGE>
realize upon the Collateral and Agent's security interest therein, in order to
effect the intent of this Security Agreement, all as fully and effectively as
Styrochem might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, Styrochem shall execute any
additional documents which Agent may require in order to confirm this power of
attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Styrochem for any act or failure to act, except for its own gross (not mere)
negligence or willful misconduct.
(c) Styrochem also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, Styrochem is executing and delivering to Agent, in the form
of Schedule II hereto, ten (10) originals of a Power of Attorney for the
-----------
implementation of the assignment, sale or other disposal of the Patents pursuant
to paragraph 7 hereof.
9. Performance by Agent of Styrochem's Obligations. If Styrochem
-----------------------------------------------
fails to perform or comply with any of its agreements contained herein and
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Agent incurred in connection with such performance or
compliance shall be payable by Styrochem to Agent on demand and shall constitute
Obligations secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by Styrochem under or in
connection with any of the Collateral shall be held by Styrochem in trust for
Agent, shall be segregated from other funds of Styrochem and shall forthwith
upon receipt by Styrochem, be turned over to Agent, in the same form as received
by Styrochem (duly indorsed by Styrochem or Agent, if required); and
-7-
<PAGE>
(ii) Any and all such payments so received by Agent
(whether from Styrochem or otherwise) may, in the sole discretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall be paid over to
Styrochem or to whomsoever may be lawfully entitled to receive the same.
(b) If any Event of Default shall occur and be continuing, Agent
and Lenders may exercise in addition to all other rights and remedies granted to
them in this Security Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Uniform Commercial Code. Styrochem shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all amounts to which Lenders are entitled. Styrochem
shall also be liable for the reasonable fees of any attorneys employed by Agent
and Lenders to collect any such deficiency and also as to any reasonable
attorney's fees incurred by Agent and Lenders with respect to the collection of
any of the Obligations and the enforcement of any of Agent's and Lenders'
respective rights hereunder.
11. Termination. At such time as Styrochem shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to Styrochem all
such releases, deeds, assignments and other instruments as may be necessary or
proper to re-vest in Styrochem full title to the Patents, subject to any
disposition thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or Styrochem under this
-------
Security Agreement shall be given in the manner and to the parties designated in
the Loan Agreement.
13. No Waiver. No course of dealing between Styrochem, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
-8-
<PAGE>
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
STYROCHEM INTERNATIONAL, INC.
WITNESS:
[SIGNATURE APPEARS HERE] By: /s/ Michael T. Kennedy
- ------------------------- ----------------------------
Name: Michael T. Kennedy
Title: President
THE BANK OF NEW YORK COMMERCIAL
WITNESS: CORPORATION, as Agent
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- ------------------------ ----------------------------
Name:
Title:
-9-
<PAGE>
STATE OF Pennsylvania )
: ss.:
COUNTY OF Philadelphia)
On the 5th day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto on
behalf of the corporation as the free act and deed of the corporation.
[SIGNATURE APPEARS HERE]
-------------------------------
Notary Public
STATE OF New York )
: ss.:
COUNTY OF New York )
Before me, the undersigned, on this 5th day of December, 1996,
personally appeared Ryan D. Peak, to me known personally, and who being
by me duly sworn, deposes and says that he is the Vice President of The
Bank of New York Commercial Corporation, and that said instrument was signed on
behalf of said corporation by authority of its Board of Directors, and he
acknowledged said instrument to be the free act and deed of said
corporation.
[SIGNATURE APPEARS HERE]
--------------------------------
Notary Public
-10-
<PAGE>
SCHEDULE A
----------
Schedule A to a Patent Collateral Security Agreement dated December 5, 1996, by
and between STYROCHEM INTERNATIONAL, INC. and THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent.
<TABLE>
<CAPTION>
APPLICATION OR EXPIRATION
PATENT NO. COUNTRY DATE TITLE
- -------------- ------- ---- -----
<S> <C> <C> <C>
4,792,572 U.S. 12/20/2005 U.S. Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
614,046 Australia 2/24/2005 Foreign Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
1,305,373 Canada 7/21/2005 Foreign Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
1,255,450 Canada 6/6/2059 Canadian issued letters Patent,
relating to the preparation of
expandable or foamable polystyrene.
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF _________ )
: ss.:
COUNTY OF ________ )
KNOW ALL MEN BY THESE PRESENTS, that STYROCHEM INTERNATIONAL, INC., a
limited corporation organized under the laws of the State of Delaware, with its
principal office at 3607 North Sylvania Avenue, Fort Worth, TX 76111, (hereafter
called "Styrochem"), pursuant to a Patent Collateral Security Agreement, dated
as of the date hereof, (the "Security Agreement"), hereby appoints and
constitutes THE BANK OF NEW YORK COMMERCIAL CORPORATION, a New York corporation,
with offices at 1290 Avenue of the Americas, New York, New York 10104, in its
capacity as administrative and collateral agent ("Agent") for itself and the
various other financial institutions named in and which hereafter become a party
to that certain Amended and Restated Revolving Credit and Security Agreement
dated as of the date hereof among Styrochem, WinCup Holdings, Inc., WinCup
Holdings, L.P., Radnor Holdings Corporation, SP Acquisition Co., The Bank of New
York Commercial Corporation ("BNYCC"), the various financial institutions named
therein and which hereafter become a party thereto (collectively, "Lenders") and
Agent, its true and lawful attorney, with full power of substitution, and with
full power and authority to perform the following acts on behalf of Styrochem:
1. Assigning, selling or otherwise disposing of all right, title and
interest of Styrochem in and to the Patents listed on Schedule A
----------
of the Security Agreement, and including those trademarks which
are added to the same subsequent hereto, and all registrations
and recordings here of, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
This power of attorney is made pursuant to the Security Agreement,
dated as of the date hereof, between Styrochem and Agent and may not be revoked
until the payment
-13-
<PAGE>
in full of all Obligations as defined in such Security Agreement.
STYROCHEM INTERNATIONAL, INC.
By:__________________________
Michael T. Kennedy
President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
-14-
<PAGE>
EXHIBIT 10.49
PATENT ASSIGNMENT OF SECURITY
-----------------------------
WHEREAS, StyroChem International, Inc., a corporation organized under
the laws of the State of Texas ("Styrochem"), located at 3607 North Sylvania
Avenue, Fort Worth, TX 76111,, owns the patents and patent applications shown in
the attached Schedule A (the "Patents"), for which there are recordings or
----------
applications in the United States Patent and Trademark Office under the numbers
shown in the attached Schedule A; and
----------
WHEREAS, pursuant to (i) that certain Amended and Restated Revolving
Credit and Security Agreement, dated as of the date hereof, by and among
Styrochem, WinCup Holdings, Inc., WinCup Holdings, L.P., Radnor Holdings
Corporation, and SP Acquisition Co. (collectively, Borrowers"), The Bank of New
York Commercial Corporation ("BNYCC"), the various financial institutions named
therein and which hereafter become a party thereto (collectively, "Lenders") and
BNYCC as administrative and collateral agent for Lenders (BNYCC in such
capacity, "Agent") and (ii) a certain Patent Collateral Security Agreement,
dated as of the date hereof, made by Borrowers in favor of Agent for the benefit
of Lenders (collectively, the "Agreements"), Borrowers are obligated to Agent
and Lenders; and
WHEREAS, pursuant to the Agreements, Styrochem is granting to Agent
for the benefit of Lenders a security interest in the Patents, all proceeds
thereof, all rights corresponding thereto and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, and the
recordings and applications therefor.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Styrochem does hereby assign unto Agent for the benefit
of Lenders a security interest in and to the Patents, and recordings and
applications therefor, which assignment and security interest shall secure all
the Obligations as defined in the Agreements and in accordance with the terms
and provisions thereof.
Styrochem expressly acknowledges and affirms that the rights and
remedies of Agent and Lenders with respect to the assignment and security
interest granted hereby are more fully
<PAGE>
set forth in the Agreements.
Dated: New York, New York
December 5, 1996
STYROCHEM INTERNATIONAL, INC.
By: Michael T. Kennedy, president
Witness:
[SIGNATURE APPEARS HERE]
- --------------------------- By:/s/ Michael T. Kennedy
--------------------------
Title: President
-----------------------
THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as
Agent
Witness:
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- --------------------------- --------------------------
Title:
-----------------------
-2-
<PAGE>
STATE OF PENNSYLVANIA )
) ss.
COUNTY OF PHILADELPHIA )
On this 5th day of December, 1996, before me personally came Michael
T. Kennedy, to me known, who, being by me duly sworn, did depose and say that he
is the President of StyroChem International, Inc., and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of each corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On this 5th day of December, 1996 before me personally came Ryan D.
Peak, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President of The Bank of New York Commercial Corporation, the
corporation described in and which executed the foregoing instrument; and that
he signed his name thereto by like order by order of the board of directors of
said corporation.
[SIGNATURE APPEARS HERE]
------------------------------
NOTARY PUBLIC
-3-
<PAGE>
SCHEDULE A
----------
Schedule A to a Patent Assignment of Security dated December 5, 1996, by and
between STYROCHEM INTERNATIONAL, INC. and THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent.
<TABLE>
<CAPTION>
APPLICATION OR EXPIRATION
PATENT NO. COUNTRY DATE TITLE
- --------------- ------- ---- -----
<S> <C> <C> <C>
4,792,572 U.S. 12/20/2005 U.S. Utility Patent
For novel particulate expandable Styrene
Polymers having short minimum molding
times and method for preparing same.
</TABLE>
-4-
<PAGE>
Patents. (B) In any suit, proceeding or action brought by Agent or any Lender
under any License for any sum owing thereunder, or to enforce any provisions of
such License, Styrochem will indemnify and keep Agent and Lenders harmless from
and against all expense, loss or damage suffered by reason of any defense, set
off, counterclaim, recoupment or reduction or liability whatsoever of the
obligee thereunder, arising out of a breach of Styrochem of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligee or its successors from Styrochem,
and all such obligations of Styrochem shall be and remain enforceable against
and only against Styrochem and shall not be enforceable against Agent or any
Lender.
(d) Limitation of Liens on Collateral. Styrochem will not
---------------------------------
create, permit or suffer to exist, and will defend the Collateral against and
take such other action as is necessary to remove any lien, security interest,
encumbrance, claim or right, in or to the Collateral, and will defend the right,
title and interest of Agent in and to any of Styrochem's rights under any
License and to the Proceeds thereof against the claims and de mands of all
persons whomever.
(e) Limitations on Modifications of Licenses. Styrochem will
----------------------------------------
not (i) amend, modify, terminate or waive any provision of any License in any
manner which might materially adversely affect the value of such License or the
Patents as Collateral, (ii) fail to exercise promptly and diligently each and
every material right which it may have under each License (other than any right
of termination), or (iii) fail to deliver to Agent a copy of each material
demand, notice or document sent or received by it relating in any way to any
License or Patent.
(f) Notices. Styrochem will advise Agent promptly, in
-------
reasonable detail (i) of any lien or claim made or asserted against any of the
Collateral, (ii) of any material change in the composition of the Collateral and
(iii) of the occurrence of any other event which would have a material adverse
effect on the value of any of the Collateral or on the security interests
created hereunder.
(g) Limitation on Further Uses of Patents. Styrochem will not
-------------------------------------
assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security
interest in or lien upon, encumber, grant an exclusive or non-exclusive license,
or otherwise dispose of any of the Collateral, without prior written consent of
Agent.
-5-
<PAGE>
7. Agent's Appointment as Attorney-in-Fact.
---------------------------------------
(a) Styrochem hereby irrevocably constitutes and appoints Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Styrochem and in the name of Styrochem or in its own name,
from time to time in Agent's discretion, for the purposes of carrying out the
terms of this Security Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives Agent the power and
right, on behalf of Styrochem, to do the following:
(i) Upon the occurrence and continuance of an Event of
Default, to ask, demand, collect, receive and give acquittances and receipts for
any and all moneys due and to become due under any License and, in the name of
Styrochem or its own name or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any License and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;
(ii) To pay or discharge taxes, liens, security interests
or other encumbrances levied or placed on or threatened against the Collateral,
to effect any repairs or any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) Upon the occurrence and continuance of an Event of
Default (A) to direct any party liable for any payment under any License to make
payment of any and all moneys due and to become due thereunder directly to Agent
or as Agent shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (C) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral; (D) to defend any suit, action or
proceeding brought against Styrochem with respect to any Collateral; (E) to
settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as Agent may
deem appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Agent were the absolute owner thereof for all purposes,
and to do, at Agent's option all acts and things which Agent deems necessary to
protect, preserve or
-6-
<PAGE>
realize upon the Collateral and Agent's security interest therein, in order to
effect the intent of this Security Agreement, all as fully and effectively as
Styrochem might do.
This power of attorney is a power coupled with an interest and shall
be irrevocable. Notwithstanding the foregoing, Styrochem shall execute any
additional documents which Agent may require in order to confirm this power of
attorney, or which Agent may deem necessary to enforce any of its rights
contained in this Security Agreement.
(b) The powers conferred on Agent hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Styrochem for any act or failure to act, except for its own gross (not mere)
negligence or willful misconduct.
(c) Styrochem also authorizes Agent to execute, in connection
with the sale provided for in paragraph 10(b) of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
8. Execution of Power of Attorney. Concurrently with the execution
------------------------------
and delivery hereof, Styrochem is executing and delivering to Agent, in the form
of Schedule II hereto, ten (10) originals of a Power of Attorney for the
-----------
implementation of the assignment, sale or other disposal of the Patents pursuant
to paragraph 7 hereof.
9. Performance by Agent of Styrochem's Obligations. If Styrochem
-----------------------------------------------
fails to perform or comply with any of its agreements contained herein and
Agent, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Agent incurred in connection with such performance or
compliance shall be payable by Styrochem to Agent on demand and shall constitute
Obligations secured hereby.
10. Remedies, Rights Upon Event of Default.
--------------------------------------
(a) If an Event of Default shall occur and be continuing:
(i) All payments received by Styrochem under or in
connection with any of the Collateral shall be held by Styrochem in trust for
Agent, shall be segregated from other funds of Styrochem and shall forthwith
upon receipt by Styrochem, be turned over to Agent, in the same form as received
by Styrochem (duly indorsed by Styrochem or Agent, if required); and
-7-
<PAGE>
(ii) Any and all such payments so received by Agent
(whether from Styrochem or otherwise) may, in the sole discretion of Agent, be
held by Agent as collateral security for, and/or then or at any time thereafter
applied in whole or in part by Agent against all or any part of the Obligations
in such order as Agent shall elect. Any balance of such payments held by Agent
and remaining after payment in full of all the Obligations shall be paid over to
Styrochem or to whomsoever may be lawfully entitled to receive the same.
(b) If any Event of Default shall occur and be continuing, Agent
and Lenders may exercise in addition to all other rights and remedies granted to
them in this Security Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Uniform Commercial Code. Styrochem shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all amounts to which Lenders are entitled. Styrochem
shall also be liable for the reasonable fees of any attorneys employed by Agent
and Lenders to collect any such deficiency and also as to any reasonable
attorney's fees incurred by Agent and Lenders with respect to the collection of
any of the Obligations and the enforcement of any of Agent's and Lenders'
respective rights hereunder.
11. Termination. At such time as Styrochem shall completely pay in
-----------
full all of the Obligations and the Loan Agreement is terminated, this Security
Agreement shall terminate and Agent shall execute and deliver to Styrochem all
such releases, deeds, assignments and other instruments as may be necessary or
proper to re-vest in Styrochem full title to the Patents, subject to any
disposition thereof which may have been made by Agent pursuant hereto.
12. Notices. Any notice to be given to Agent or Styrochem under this
-------
Security Agreement shall be given in the manner and to the parties designated in
the Loan Agreement.
13. No Waiver. No course of dealing between Styrochem, Agent or any
---------
Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Agent or any Lender, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
14. Cumulative Remedies. All of Agent's and Lenders' rights and
-------------------
remedies with respect to the Collateral, whether established hereby or by the
Loan Agreement, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
-8-
<PAGE>
15. Severability. The provisions of this Security Agreement are
------------
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
16. No Modification Except in Writing. This Security Agreement is
---------------------------------
subject to modification only by a writing signed by the parties, except as
provided in paragraphs 5 and 7.
17. Successors and Assigns. The benefits and burdens of this
----------------------
Security Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
18. Governing Law. The validity and interpretation of this Security
-------------
Agreement and the rights and obligations of the parties shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
STYROCHEM INTERNATIONAL, INC.
WITNESS:
_________________________ By:____________________________
Name:
Title:
THE BANK OF NEW YORK COMMERCIAL
WITNESS: CORPORATION, as Agent
________________________ By:____________________________
Name:
Title:
-9-
<PAGE>
STATE OF _________)
: ss.:
COUNTY OF ________)
On the ___ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto on
behalf of the corporation as the free act and deed of the corporation.
_______________________________
Notary Public
STATE OF _________)
: ss.:
COUNTY OF ________)
Before me, the undersigned, on this ____day of December, 1996,
personally appeared _____________________, to me known personally, and who being
by me duly sworn, deposes and says that he is the ____________________ of The
Bank of New York Commercial Corporation, and that said instrument was signed on
behalf of said corporation by authority of its Board of Directors, and he
acknowledged said instrument to be the free act and deed of said corporation.
________________________________
Notary Public
-10-
<PAGE>
SCHEDULE A
----------
Schedule A to a Patent Collateral Security Agreement dated December __, 1996, by
and between STYROCHEM INTERNATIONAL, INC. and THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as Agent.
<TABLE>
<CAPTION>
APPLICATION OR EXPIRATION
PATENT NO. COUNTRY DATE TITLE
- -------------- ------- ---- -----
<S> <C> <C> <C>
4,792,572 U.S. 12/20/2005 U.S. Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
614,046 Australia 2/24/2005 Foreign Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
1,305,373 Canada 7/21/2005 Foreign Utility Patent
For novel particulate
expandable Styrene Polymers
having short minimum molding
times and method for preparing
same.
1,255,450 Canada 6/6/2059 Canadian issued letters Patent,
relating to the preparation of
expandable or foamable polystyrene.
</TABLE>
-11-
<PAGE>
SCHEDULE I
----------
LICENSES
--------
-12-
<PAGE>
SCHEDULE II
-----------
SPECIAL POWER OF ATTORNEY
-------------------------
STATE OF _________ )
: ss.:
COUNTY OF ________ )
KNOW ALL MEN BY THESE PRESENTS, that STYROCHEM INTERNATIONAL, INC., a
limited corporation organized under the laws of the State of Delaware, with its
principal office at 3607 North Sylvania Avenue, Fort Worth, TX 76111, (hereafter
called "Styrochem"), pursuant to a Patent Collateral Security Agreement, dated
as of the date hereof, (the "Security Agreement"), hereby appoints and
constitutes THE BANK OF NEW YORK COMMERCIAL CORPORATION, a New York corporation,
with offices at 1290 Avenue of the Americas, New York, New York 10104, in its
capacity as administrative and collateral agent ("Agent") for itself and the
various other financial institutions named in and which hereafter become a party
to that certain Amended and Restated Revolving Credit and Security Agreement
dated as of the date hereof among Styrochem, WinCup Holdings, Inc., WinCup
Holdings, L.P., Radnor Holdings Corporation, SP Acquisition Co., The Bank of New
York Commercial Corporation ("BNYCC"), the various financial institutions named
therein and which hereafter become a party thereto (collectively, "Lenders") and
Agent, its true and lawful attorney, with full power of substitution, and with
full power and authority to perform the following acts on behalf of Styrochem:
1. Assigning, selling or otherwise disposing of all right, title and
interest of Styrochem in and to the Patents listed on Schedule A
----------
of the Security Agreement, and including those trademarks which
are added to the same subsequent hereto, and all registrations
and recordings here of, and all pending applications therefor,
and for the purpose of the recording, registering and filing of,
or accomplishing any other formality with respect to the
foregoing, and to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or
advisable to effect such purpose;
2. To execute any and all documents, statements, certificates or
other papers necessary or advisable in order to obtain the
purposes described above as Agent may in its sole discretion
determine.
This power of attorney is made pursuant to the Security Agreement,
dated as of the date hereof, between Styrochem and Agent and may not be revoked
until the payment
-13-
<PAGE>
in full of all Obligations as defined in such Security Agreement.
STYROCHEM INTERNATIONAL, INC.
By:__________________________
Michael T. Kennedy
President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this _____ day of December, 1996, before me personally came Michael T.
Kennedy, to me known, who, being by me duly sworn, did depose and say that he is
the President of StyroChem International, Inc., and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of each corporation.
______________________________
NOTARY PUBLIC
-14-
<PAGE>
EXHIBIT 10.50
COLLATERAL ASSIGNMENT
---------------------
COLLATERAL ASSIGNMENT made as of this 5th day of December, 1996 by
RADNOR HOLDINGS CORPORATION with its principal place of business at Three Radnor
Corporate Center, 100 Matsonford Rd., Radnor, PA 19807 ("Assignor") to THE BANK
OF NEW YORK COMMERCIAL CORPORATION, as agent for the Lenders (as hereafter
defined) with offices at 1290 Avenue of the Americas, New York, N.Y. 10104
("Assignee").
FOR VALUE RECEIVED, and as collateral security for all debts,
liabilities and obligations of Assignor to Agent and Lenders (each as defined in
the Loan Agreement), now existing or hereafter arising under that certain
Amended and Restated Revolving Credit and Security Agreement dated this date (as
amended, modified, restated or supplemented from time to time, the "Loan
Agreement"), Assignor hereby assigns, transfers and sets over unto Assignee for
the ratable benefit of the Lenders all of its rights and claims to receive
moneys due and/or to become due to Assignor, but not its obligations under that
certain Stock Purchase Agreement dated October 30, 1996, between Assignor and
Richard Davidovich, The Davidovich Charitable Trust, James River Paper Company,
Inc., Grupo Industrial Hermes, S.A. de C.V. and Rosenthal Group (collectively,
"Seller") and all of the agreements and documents executed in connection
therewith by which assets or rights of Seller are transferred to Assignor other
than the Environmental Escrow Agreement or the Working Capital Escrow Agreement
(as may be amended, modified, restated or supplemented from time to time, the
"Purchase Agreements").
Assignor hereby specifically authorizes and directs Seller, at any
time following the occurrence of an Event of Default under and as defined in the
Loan Agreement, to make all payments due under or arising under the Purchase
Agreements which are payable to Assignor directly to Assignee and hereby
irrevocably authorizes and empowers Assignee, at any time following the
occurrence of an Event of Default under and as defined in the Loan Agreement, to
ask, demand, receive, receipt and give acquittance for any and all amounts which
may be or become due or payable to Assignor, or remain unpaid at any time and
times to Assignor by Seller under and pursuant to the Purchase Agreements, and
to endorse any checks, drafts or other orders for the payment of money payable
to Assignor in payment thereof, and in Assignee's discretion to file any claims
or take any action or institute any proceeding, either in its own name or in the
name of Assignor or otherwise, which Assignee may deem necessary or advisable in
the premises. It is expressly understood and agreed, however, that Assignee
shall not be required or obligated in any manner to make any demand or to make
any inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or
<PAGE>
take any other action to collect or enforce the payment of any amounts which may
have been assigned to Assignee or to which Assignee may be entitled hereunder at
any time or times.
Seller is hereby authorized to recognize Assignee's claims to rights
hereunder without investigating any reason for any action taken by Assignee or
the validity or the amount of the obligations or existence of any default, or
the application to be made by Assignee of any of the amounts to be paid to said
Assignee. Checks for all or any part of the sums payable under this Assignment
shall be drawn to the sole and exclusive order of Assignee.
Without first obtaining the written consent of Assignee, Assignor
shall not amend or modify the Purchase Agreements or agree to or suffer any
amendment, extension, renewal, release, acceptance, forbearance, modification or
waiver with respect to any rights arising under the Purchase Agreements except
releases and/or acceptances issued (a) with respect to a determination of the
Adjustment Amount under and as defined in the Purchase Agreements or (b)
dispositions from (x) the Escrow Fund under and as defined in the Working
Capital Agreement and (y) the Escrow Fund under and as defined in the
Environmental Agreement, in each case, pursuant to the terms of such agreements
as in effect on the date hereof.
In the event Assignor declines to exercise any rights under the
Purchase Agreements at any time following the occurrence of an Event of Default
under and as defined in the Loan Agreement, Assignee shall have the right to
enforce any and all such rights of Assignor against Seller.
IN WITNESS WHEREOF, Assignor has duly executed this Assignment the day
and year first above written.
RADNOR HOLDINGS CORPORATION
By: /s/ Michael T. Kennedy
-----------------------------
Name: Michael T. Kennedy
Its: President
-2-
<PAGE>
Seller hereby acknowledges the provisions of this Collateral Assignment as of
this 5th day of December, 1996.
RICHARD DAVIDOVICH ASHLI M. ROSENTHAL TRUST
By: /s/ Richard Davidovich By: [SIGNATURE APPEARS HERE]
-------------------------- ----------------------------
Name: Name:
Its: Its: Trustee
RICHARD DAVIDOVICH CHARITABLE
TRUST BENJAMIN A. ROSENTHAL TRUST
By: [SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
-------------------------- ----------------------------
Name: Name:
Its: Trustee Its: Trustee
JAMES RIVER PAPER COMPANY, INC.
MADELYN E. ROSENTHAL TRUST
By: /s/ C.A. Cutchins IV
-------------------------- By: [SIGNATURE APPEARS HERE]
Name: C.A. Cutchins IV ----------------------------
Its: Sr. V.P. Name:
Its: Trustee
GRUPO INDUSTRIAL HERMES, S.A. de C.V. JMC FAMILY INVESTMENT LTD.
PARTNERSHIP.
Jon M. Cohen, General Partner
By: [SIGNATURE APPEARS HERE]
-------------------------- By: /s/ Jon M. Cohen
Name: ----------------------------
Its: Name: Jon M. Cohen
Its: General Partner
E.M. ROSENTHAL
JOSEPH C. PENSHORN
By: /s/ E.M. Rosenthal
---------------------------- By: /s/ Joseph C. Penshorn
Name: ----------------------------
Its: Name:
Its:
ROZANNE ROSENTHAL
By: /s/ Rozanne Rosenthal
----------------------------
Name:
Its:
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<PAGE>
EXHIBIT 10.63
AGREEMENT RESPECTING A TERM LOAN AND OTHER CREDIT FACILITIES
------------------------------------------------------------
BETWEEN: BANK OF MONTREAL
OF THE FIRST PART
AND: POLYMERES SCOTT, LTEE-
SCOTT POLYMERS, LTD.
OF THE SECOND PART
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TABLE OF CONTENTS
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Page
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ARTICLE 1 INTERPRETATION.......................................... 1
1.1 Definitions....................................... 1
1.2 Control........................................... 7
1.3 Headings and Table of Contents.................... 8
1.4 References........................................ 8
1.5 Singular and Plural; Gender....................... 8
1.6 Generally Accepted Accounting Principles.......... 8
ARTICLE 2 REPRESENTATIONS AND WARRANTIES.......................... 8
2.1 Representations and Warranties.................... 8
ARTICLE 3 THE TERM LOAN........................................... 11
3.1 Amount and Advance of the Term Loan............... 11
3.2 Repayment of the Term Loan........................ 12
3.3 Interest on the Term Loan......................... 12
3.4 Prepayment of the Term Loan....................... 12
ARTICLE 4 OTHER CREDIT FACILITIES................................. 13
4.1 Terms and Conditions.............................. 13
ARTICLE 5 FEES.................................................... 13
5.1 Commitment Fee.................................... 13
5.2 Application Fee................................... 14
ARTICLE 6 CHANGE IN CIRCUMSTANCES................................. 14
6.1 Increased Costs................................... 14
6.2 Illegality........................................ 15
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(i)
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ARTICLE 7 PAYMENTS, TAXES EXPENSES AND INDEMNITY................ 15
7.1 Time and Place of Payment...................... 15
7.2 Currency of Payment............................ 16
7.3 Setoff Etc..................................... 16
7.4 Taxes.......................................... 16
7.5 Evidence of Indebtedness - Notes............... 17
7.6 Expenses and Indemnity......................... 17
7.7 Survival of Indemnification Obligations........ 18
7.8 Application of Payments........................ 18
ARTICLE 8 PRE-DISBURSEMENT CONDITIONS........................... 18
8.1 Conditions Precedent to the initial Advance.... 18
8.2 Conditions Precedent to each Advance........... 20
8.3 Waiver......................................... 21
ARTICLE 9 CONVENANTS............................................ 21
9.1 Covenants of the Borrower...................... 21
ARTICLE 10 ENVIRONMENTAL MATTERS................................. 27
10.1 Definitions.................................... 27
10.2 Representations and Warranties................. 28
10.3 Covenants...................................... 28
10.4 Indemnity...................................... 30
10.5 Environmental Clean-Up......................... 31
ARTICLE 11 DEFAULT............................................... 32
11.1 Events of Default.............................. 32
11.2 Effect of a Default............................ 35
11.3 Remedies Cumulative; No Waiver................. 35
11.4 Setoff......................................... 36
11.5 Default Ipso Facto............................. 36
ARTICLE 12 NOTICE................................................ 36
12.1 Notices, Etc................................... 36
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(ii)
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ARTICLE 13 GOVERNING LAW; JURISDICTION; JUDGMENT
CURRENCY................................................... 38
13.1 Governing Law....................................... 38
13.2 Jurisdiction........................................ 38
13.3 Judgment Currency................................... 39
ARTICLE 14 SUCCESSORS AND ASSIGNS..................................... 40
14.1 Sale, Assignment, Transfer or Grant of Interest..... 40
14.2 Successors, and Assigns............................. 40
ARTICLE 15 MISCELLANEOUS.............................................. 41
15.1 Severability........................................ 41
15.2 Survival of Representations......................... 41
15.3 Amendments, Waivers, Etc............................ 41
15.4 Term of Agreement................................... 41
15.5 Execution in Counterparts........................... 42
15.6 Not an Adhesion Contract............................ 42
15.7 Conflict............................................ 42
15.8 New Legislation..................................... 42
15.9 Foreign Exchange Future Contracts................... 42
15.10 Death of Guarantor.................................. 43
15.11 Language............................................ 43
15.12 Formal Date......................................... 43
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EXHIBIT A - DESCRIPTION OF LANDS
EXHIBIT B - DESCRIPTION OF MATERIAL CONTRACTS
(iii)
<PAGE>
AGREEMENT RESPECTING A TERM LOAN AND OTHER CREDIT FACILITIES
------------------------------------------------------------
THIS AGREEMENT DATED AS OF THE 25TH DAY OF FEBRUARY 1994.
BETWEEN: BANK OF MONTREAL, a Canadian chartered bank, duly
incorporated under the laws of Canada, having its head
office and principal place of business at the City of
Montreal in the Province of Quebec, (the "LENDER")
OF THE FIRST PART
AND: POLYMERES SCOTT, LTEE - SCOTT POLYMERS, LTD., a company
duly incorporated under the laws of the Province of
Quebec, having its registered office and principal
place of business at the City of Baie d'Urfe in the
Province of Quebec, (the "BORROWER")
OF THE SECOND PART
ARTICLE 1
INTERPRETATION
--------------
1.1 Definitions
-----------
In this Agreement unless something in the subject-matter or the context
otherwise is inconsistent therewith:
1.1.1 "ACQUISITION AGREEMENT" - has the meaning ascribed to such term in
Section 8.1.3;
1.1.2 "ADVANCE" - means an advance of monies by the Lender to the Borrower
pursuant to the Term Loan provided for in Section 3.1.1 hereof or
pursuant to any other of the Credit Facilities;
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1.1.3 "AFFILIATE" - of a Person means any Person which, directly or
indirectly, controls or is controlled by or is under common control
with that Person;
1.1.4 "AGREEMENT" - means this agreement as it may be amended, supplemented,
restated or otherwise modified from time to time;
1.1.5 "BANKING DAY" - means a day on which banking institutions in Montreal;
Canada are open for business;
1.1.6 BORROWER" - has the meaning ascribed to such term in the preamble of
this Agreement, and includes any permitted successor or assignee of
POLYMERES SCOTT, LTEE - SCOTT POLYMERS, LTD.;
1.1.7 "BORROWING" - means a utilization by the Borrower of the Credit
Facilities whether by way of an Advance from the Lender or in any
other manner permitted from time to time by the Lender;
1.1.8 "BRANCH" - means the branch of the Lender located at 6702 TransCanada
Highway, City of Pointe-Claire, Province of Quebec or such other
address in Canada as the Lender may advise the Borrower in writing;
1.1.9 "BUSINESS DAY" - means a Banking Day on which banking institutions in
New York City, U.S.A. are open for business;
1.1.10 "CANADIAN RATE" - means the annual rate of interest which is at any
time equal to the aggregate of (a) the fluctuating annual rate of
interest established from time to time by the Lender as the base it
will use at such time to determine rates of interest on CDollar loans
to customers in Canada and designated as its prime rate plus (b) one
and one-half of one percent (1 1/2%);
1.1.11 "CDOLLARS" and the symbol: "C$" each means lawful money of Canada;
1.1.12 "CREDIT FACILITIES" - means each of the credit facilities (including
the Term Loan) which the Lender will make available to the Borrower
pursuant to the Letter of Offer, as same may be increased, decreased,
renewed, restated or
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otherwise modified or replaced from time to time, together with any
other credit facilities which may be granted from time to time by the
Lender to the Borrower;
1.1.13. "EQUIVALENT AMOUNT" - means, on any date, the amount in CDollars or
USDollars, as the case may be, which would be obtained on the
conversion of an amount in USDollars into CDollars or CDollars into
USDollars, respectively, at the rate of exchange which is the noon
spot rate for purchase of USDollars with CDollars or CDollars with
USDollars, respectively, as reported by the Bank of Canada on such
date;
1.1.14 "EVENT OF DEFAULT" - means each of the events specified in Section
11.1 hereof;
1.1.15 "GUARANTOR" - has the meaning ascribed to such term in Section 11.1.5;
1.1.16 "LANDS" - means the property described in Exhibit A;
1.1.17 "LENDER" - has the meaning ascribed to such term in the preamble of
this Agreement and includes its successors and assigns;
1.1.18 "LETTER OF OFFER" - means collectively the Lender's letter dated
January 21, 1994 addressed to Richard Davidovich and the term sheet
attached to it accepted by the said Richard Davidovich on January 27,
1994 relating to the credit facilities offered by the Lender to the
Borrower in the aggregate principal amount of THREE MILLION THREE
HUNDRED THOUSAND CDOLLARS (C$3,300,000), as the said letter and the
said term sheet may have been heretofore or may be hereafter amended,
supplemented, replaced, renewed or otherwise modified from time to
time;
1.1.19 "LOAN" - at any given time means the aggregate principal amount of all
Borrowings outstanding at such time including, without limitation, the
face amount of all outstanding letters of guarantee and letters of
credit issued by the Lender for the account of the Borrower;
1.1.20 "MATERIAL CONTRACTS" - means the contracts referred to in Exhibit B;
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1.1.21 "NOTE" - means a demand promissory note of the Borrower payable to the
Lender, duly completed, executed and delivered by the Borrower
pursuant to a Borrowing under the Credit Facilities and "NOTES" means
each and every Note;
1.1.22 "PERSON" - includes any individual, firm, company, corporation,
government, governmental body, agency or instrumentality, association,
partnership, trust and joint venture;
1.1.23 "PERMITTED ENCUMBRANCES" means:
1.1.23.1 undetermined or inchoate liens and charges incidental to
construction, maintenance or operations which have not at
the time been filed or registered pursuant to law and any
liens and charges incidental to construction, maintenance or
operation which, although filed, relate to obligations not
overdue of the Borrower;
1.1.23.2 liens for taxes, rates, assessments and governmental charges
for the then current year; liens for taxes, rates,
assessments and governmental charges not at the time due or
delinquent; liens securing workers' compensation
assessments; and liens for taxes, rates, assessments and
governmental charges which are overdue but the validity of
which is being contested at the time in good faith or for
which security in form and amount acceptable to the Lender
has been delivered to the Lender;
1.1.23.3 cash, cheques or other financial instruments or governmental
obligations deposited in the ordinary course of business in
connection with contracts, bids, tenders or to secure
workers' compensation, unemployment insurance, surety or
appeal bonds, costs of litigation, when required by law,
public and statutory obligations, liens or claims incidental
to current construction, mechanics', warehousemen's
carriers' and other similar liens;
<PAGE>
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1.1.23.4 easements, rights of way, restrictive covenants, covenants
in favour of governments or municipal authorities,
servitudes and other similar rights in land granted to or
reserved or taken by other persons which in the opinion of
Lender's counsel will not in the aggregate materially impair
the usefulness to the business of the Borrower of the
property affected;
1.1.23.5 title defects or irregularities of title which in the
opinion of the Lender's counsel are of a minor nature and in
the aggregate do not and will not materially impair or
materially adversely affect the security under the Security
Documents or the usefulness to the business of the Borrower
of the property affected;
1.1.23.6 purchase money liens; conditional sales agreements or other
title retention mortgage, charge, hypothec, pledge, lien or
other encumbrance on a property or asset created, issued or
assumed to secure the unpaid purchase price in respect of
such property or asset but not to exceed the aggregate
amount of one hundred thousand CDollars (C$100,000) in any
one fiscal year of the Borrower (collectively "TITLE
RETENTION INSTRUMENTS"); provided that in relation to any
given Title Retention Instrument such unpaid purchase price
does not exceed 80% of the original purchase price of such
property or asset; the whole subject to the provisions
hereof restricting the maximum aggregate amount of capital
expenditures which the Borrower may make in any fiscal year;
1.1.23.7 the lien of any judgment rendered or action, claim, lis
pendens or certificate of pending litigation, which is being
contested at the relevant time in good faith by the
Borrower; provided that the Borrower shall have either paid
into court or deposited with the Lender appropriate
collateral including without limitation a bond issued by a
licensed bonding company, in either case in an amount and of
a type reasonably acceptable to the Lender as adequate
therefor;
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1.1.23.8 zoning and building by-laws and ordinances, municipal
by-laws and regulations and other restrictions on the use
of real estate property provided same are being complied
with and which in the reasonable opinion of the Lender do
not and will not adversely affect the security under the
Security Documents or materially impair the usefulness to
the business of the Borrower of the property affected;
1.1.23.9 the reservations, limitations, provisos and conditions, if
any, in any original grants from the Crown of real estate
property and statutory exceptions to title;
1.1.23.10 hypothecs, privileges, liens and other charges resulting
from the Security Documents; and
1.1.23.11 such other liens as may be in favour of, or consented to
in writing by, the Lender;
1.1.24 "SECURITY DOCUMENTS" - means collectively all security from time to
time granted or to be granted in favour of the Lender, as security for
the fulfilment of any or all of the debts, liabilities and other
obligations, present and future, of the Borrower under or pursuant any
of the Credit Facilities including without limitation, the security
referred to in the Letter of Offer;
1.1.25 "SUBORDINATED INDEBTEDNESS" - means the aggregate loans and other
indebtedness owing by the Borrower to any Person, the repayment of
which has been fully and validly postponed and subordinated to the
repayment of all present and future loans and indebtedness of the
Borrower to the Lender to the satisfaction of the Lender;
1.1.26 "SUBSIDIARY" - of a Person means a company or corporation controlled
by that Person;
1.1.27 "TAX" - means all taxes, assessments, levies, imposts, stamp taxes,
duties, charges to tax, fees, deductions, withholdings and any
restrictions or
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conditions resulting in a charge imposed, levied, collected, withheld
or assessed as of the date of this Agreement or at any time in the
future, and all penalty, interest and other payments on or in respect
thereof;
1.1.28 "TERM LOAN" - has the meaning ascribed to such term in Section 3.1.1;
1.1.29 "USDOLLARS" - means the lawful money for the time being of the United
States of America in same day immediately available funds or, if such
funds are not available, the form of money of the United States of
America which is customarily used in the settlement of international
banking transactions on that day and "US$" has a corresponding
meaning;
1.1.30 "VOTING SHARES" - means the capital stock of any class or classes of a
corporation which carry voting rights under any circumstances provided
that, for the purposes hereof, shares which only carry the right to
vote conditionally on the happening of an event shall be considered
Voting Shares only upon the happening of such event and then only
while they retain the right to vote;
1.1.31 "WRITTEN" or "IN WRITING" shall include printing, typewriting, or any
electronic means of communication capable of being visibly reproduced
at the point of reception including telex or telegraph.
1.2 Control
-------
For the purposes of this Agreement, a Person controls a company or corporation
if that Person and/or one or more of its Subsidiaries beneficially owns,
directly or indirectly, an aggregate amount of the Voting Shares of such company
or corporation sufficient to enable it to elect a majority of the directors (or
other persons performing similar functions) of that company or corporation
regardless of the manner in which other Voting Shares are voted or has, through
the operation of any agreement or otherwise, the ability to elect or cause the
election of a majority of the directors (or other persons performing similar
functions), and the expressions "controlled by" and "under common control" shall
have correlative meanings.
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1.3 Headings and Table of Contents
------------------------------
The headings of Articles and Sections and the table of contents are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.4 References
----------
Unless the Context otherwise requires, all references to Sections, Articles and
Exhibits are to Sections, Articles and Exhibits in this Agreement.
1.5 Singular and Plural; Gender
---------------------------
In this Agreement, where the context admits, the singular includes the plural
and vice versa; and gender is used as a reference term only and applies with the
same effect whether the parties are of masculine or feminine gender, corporate
or other form.
1.6 Generally Accepted Accounting Principles
----------------------------------------
Each accounting term used in this Agreement shall be construed in accordance
with generally accepted accounting principles in Canada consistently applied,
unless something in the subject-matter or the context otherwise is inconsistent
therewith.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lender that, on the date of
execution hereof and on the date of each Borrowing:
2.1.1 it is a company duly incorporated and organized and validly existing
under the laws of Canada, the jurisdiction of its incorporation, and
in good standing under the laws of Canada and the province of Quebec;
it is duly authorized to do business whether the nature of its
property or activities requires authorization, and it has the
corporate power and authority and all
<PAGE>
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governmental licences, authorizations, consents, registrations and
approvals required to own and lease its properties and assets, to
conduct the business in which it is presently engaged and to enter
into, deliver and perform its obligations under this Agreement, its
Notes, the Letter of Offer and each of the Security Documents;
2.1.2 the execution, delivery and the performance by the Borrower of this
Agreement, its Notes, the Letter of Offer and the Security Documents
(i) has been duly authorized by all necessary corporate action, (ii)
does not contravene any provision of its charter, its by-laws, any
unanimous agreement of all the shareholders of the Borrower, if any,
or any law, decree, order, rule or regulation of Canada, the province
of Quebec or other jurisdiction in which its assets are located, (iii)
will not contribute to, or constitute, or result in a breach of, or a
default under, or be in conflict with, any deed, indenture, mortgage,
franchise, licence, judgment, agreement or instrument to which the
Borrower is a party or by which it is bound; and (iv) will not result
in any lien, charge or encumbrance on any of the property or assets of
the Borrower except as provided in the Security Documents;
2.1.3 all registrations, filings, consents (including landlord's security
holders' consents), licences, decrees, approvals (including exchange
control approvals), and notices to, with or of, any governmental
authority or agency, tribunal, department, commission or other public
body or authority which are necessary for the due execution, delivery
and performance by the Borrower of this Agreement, its Notes, the
Letter of Offer and the Security Documents or for the legality,
validity and enforceability thereof, have been obtained and are in
full force and effect;
2.1.4 this Agreement, the Letter of Offer and each of the Security Documents
are, and each of its Notes when delivered to the Lender will be,
legal, valid and binding direct and unconditional obligations of the
Borrower enforceable against the Borrower in accordance with their
respective terms, except to the extent such enforcement may be
restricted by any applicable bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights
generally;
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2.1.5 there is no litigation, action or other legal proceeding pending or
threatened before any court, tribunal, commission or other
administrative agency against the Borrower or any of its property
which, if adversely determined, might result in a material adverse
change in the Borrower's financial condition or its assets or
operations or which might affect the Borrower's ability to perform its
obligations under this Agreement, its Notes, the Letter of Offer or
the Security Documents;
2.1.6 the Borrower is not in default under this Agreement, its Notes, the
Letter of Offer or the Security Documents nor has it done or omitted
to do anything which, with the giving of notice or the passage of
time, or both, would constitute an Event of Default and the Borrower
is not in default under any other agreement for monies borrowed,
raised or guaranteed to which the Borrower is a party or by which it
is bound and no holder of such outstanding indebtedness has given
notice of any default thereunder which has not been cured;
2.1.7 the opening balance sheet of the Borrower as at the Closing Date (as
defined in the Acquisition Agreement) presents fairly the financial
condition of the Borrower as at such date; since the last day of the
fiscal period covered by the financial statements of the Borrower most
recently delivered to the Lender pursuant to Section 9.1 hereof, there
has occurred no material adverse change in the Borrower's operations
or financial condition as reflected in such financial statements; the
information, exhibits and reports furnished to the Lender contain no
material misstatement of fact nor do they omit to state any fact
which might make any statement contained in them misleading;
2.1.8 there are no outstanding judgments, writs of execution, work orders,
notices of deficiency capable of resulting in work orders, injunctions
or directives against the Borrower or any of its property or assets;
2.1.9 the Borrower is the sole owner of, and has good and marketable title
to, all its assets, and, subject to Permitted Encumbrances, the same
are free and clear of all mortgages, hypothecs, liens, privileges and
other encumbrances and the Borrower has good right and lawful
authority to hypothecate, mortgage,
<PAGE>
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pledge, charge, cede, transfer or assign to the Lender the property
hypothecated, mortgaged, pledged, charged, ceded, transferred or
assigned to the Lender pursuant to the Security Documents and has
granted no security to any Person which ranks, or is capable of
ranking, prior to or pari passu with the security granted pursuant to
the Security Documents;
2.1.10 a policy of insurance or policies of insurance in compliance with the
requirements of Section 9.1.13 of this Agreement are in effect;
2.1.11 the Borrower is a wholly-owned Subsidiary of SP ACQUISITION CO., A
Delaware corporation;
2.1.12 SCOTT POLYMERS, INC., a Texas corporation,is a wholly-owned Subsidiary
of SP Acquisition Co., a Delaware corporation;
2.1.13 the issued and paid up capital stock of the Borrower consists of 10
common shares;
ARTICLE 3
THE TERM LOAN
-------------
3.1 Amount and Advance of the Term Loan
-----------------------------------
3.1.1 Subject to the provisions of this Agreement and of the Letter of
Offer, the Lender hereby agrees to lend to the Borrower an amount of
ONE MILLION THREE HUNDRED THOUSAND CDOLLARS (C$1,300,000) (the "TERM
LOAN").
3.1.2 The Term Loan is to be lent to the Borrower for the exclusive purpose
of refinancing a portion of the debt of the Borrower towards SCOTT
PAPER COMPANY in the amount of TWO MILLION U.S. DOLLARS
(U.S.$2,000,000).
3.1.3 The Term Loan shall be entirely drawn down by the Borrower by way of
one Advance on or before March 31, 1994, after which date the Lender's
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commitment to advance the Term Loan shall expire, without any notice
being required to such effect.
3.2 Repayment of the Term Loan
--------------------------
The Term Loan shall be repaid by the Borrower to the Lender in sixteen (16)
equal consecutive quarterly instalments of EIGHTY-ONE THOUSAND TWO HUNDRED AND
FIFTY CDOLLARS (C$81,250) each, the first of such instalments to be paid on the
last Banking Day of February, 1995 and thereafter on the last Banking Day of
each succeeding months of February, May, August and November up to and including
the last Banking Day of November, 1998, the date on which all amounts then due
and owing under the Term Loan, in capital, interest and costs, shall become due
and payable.
3.3 Interest on the Term Loan
-------------------------
3.3.1 The Term Loan and the balance thereof at any time remaining unpaid
shall bear interest both before and after maturity and both before and
after default at a variable rate per annum which at all time shall be
equal to the Canadian Rate.
3.3.2 All overdue interest and principal sums in respect of the Term Loan
payable hereunder shall bear interest both before and after maturity
and before and after default at the Canadian Rate from the due date to
the date of actual payment.
3.3.3 Interest on the Term Loan shall be payable by the Borrower to the
Lender at the Lender's Branch monthly in arrears on the last Banking
Day in each month from February 28, 1994.
3.4 Prepayment of the Term Loan
---------------------------
Prepayments on the Term Loan may be made only in accordance with the terms and
conditions of the Letter of Offer. The term of the Term Loan is for the benefit
of the Lender and of the Borrower. All prepayments will be applied against the
last installment or
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instalments on the Term Loan. The Borrower acknowledges that the Letter of
Offer provides for mandatory prepayments in certain circumstances.
ARTICLE 4
OTHER CREDIT FACILITIES
-----------------------
4.1 Terms and Conditions
--------------------
4.1.1 The Borrower hereby acknowledges and agrees to all the terms and
conditions of the Letter of Offer including, without limitation, those
pertaining to the Credit Facilities.
4.1.2 The Borrower acknowledges and agrees that notwithstanding the
authorized amount of each Credit Facilities, Borrowings under the
Credit Facilities may not be available if the Borrower is not or,
after such Borrowing, would not be in compliance with the margin
requirements set forth in the Letter of Offer.
4.1.3 The Borrower acknowledges that amounts owing from time to time under
the Credit Facilities shall bear interest at rate(s) agreed upon from
time to time between the Borrower and the Lender, calculated and
payable monthly in arrears and compounded monthly at such rate(s).
ARTICLE 5
FEES
----
5.1 Commitment Fee
--------------
The Borrower agrees to pay to the Lender a commitment fee in CDollars on the
maximum authorized amount of the Term Loan at a rate of three eights of one
percent (3/8%) per annum from January 21, 1994 up to and including the date on
which the Term Loan is advanced to the Borrower. Such commitment fee shall be
payable in arrears on the last Banking Day of March, June, September and
December. The commitment fee shall be computed on the basis of the actual
number of days for which such fee is payable divided by the actual number of
days in the year.
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5.2 Application Fee
---------------
The Borrower shall pay to the Lender an application fee of TWENTY-FIVE THOUSAND
CDOLLARS (C$25,000) in respect of the credit facilities offered in the Letter of
Offer. This fee is non refundable and was fully earned by the Lender at the
time of issuance of the Letter of Offer.
ARTICLE 6
CHANGE IN CIRCUMSTANCES
-----------------------
6.1 Increased Costs
---------------
If either the introduction of or any change in any law, regulation, treaty or
official directive, or in the interpretation thereof, presently or subsequently
in effect, or the Lender's compliance with any request from any central bank or
other governmental authority (whether or not having the force of law):
6.1.1 subjects the Lender to any Tax with respect to payments of principal
of, interest on or any other amount due from the Borrower to the
Lender in USDollars (except for taxes on the overall net income of the
Lender); or
6.1.2 imposes, modifies or deems applicable any reserve, capitalization,
special deposit or similar requirements against assets held by, or
deposits in or for the account of, or loans by, an office of the
Lender; or
6.1.3 imposes on the Lender any other condition or term with respect to all
or any portion of the Loan in USDollars;
and, as a result thereof, the Lender directly or indirectly incurs an increase
in its cost or a reduction of the income receivable by it in respect of the
Loan or any portion thereof, the Borrower shall pay to the Lender within ten
(10) days of receipt of the notice referred to in the next sentence hereof, that
amount which shall compensate the Lender for such additional cost or reduction
in income (herein "ADDITIONAL COMPENSATION"). Upon the Lender having determined
that it is entitled to Additional Compensation in accordance with the provisions
of this Section 6.1, it shall promptly give the Borrower notice thereof. A
certificate of the
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Lender setting forth the amount of such payment and the basis of calculation
thereof shall be prima facie evidence of such amount.
6.2 Illegality
----------
Notwithstanding anything to the contrary contained in this Agreement or the
Letter of Offer, if any introduction of or change in any law, regulation, treaty
or official directive or any change in the interpretation or application thereof
by any court or by any governmental authority charged with the administration
thereof makes it unlawful or prohibited for the Lender to make, fund or maintain
all or any portion of the Loan in USDollars or to give effect to its obligations
contemplated by this Agreement or the Letter of Offer, the Lender shall notify
the Borrower in writing of the change and, within the period determined by the
Lender acting reasonably and specified in the notice, at the option of the
Borrower,
6.2.1 the Borrower shall elect that the Loan in USDollars shall be
immediately converted into CDollars and interest thereon shall be
payable at the rate applicable to Advances in CDollars under the
relevant Credit Facility; or
6.2.2 the Borrower shall elect to repay and, within the time required by the
new law (or at the end of any longer period that such Lender at its
discretion may agree), the Borrower shall repay the Loan in USDollars
together with accrued interest up to the date of payment and all other
amounts which are due, and in any such event the obligation of the
Lender to make any further Loan in USDollars shall terminate for so
long as any circumstance entitling the Lender to give such a notice
shall continue.
ARTICLE 7
PAYMENTS, TAXES, EXPENSES AND INDEMNITY
---------------------------------------
7.1 Time and Place of Payment
-------------------------
The Borrower shall make each payment pursuant to this Agreement, the Letter of
Offer and the Credit Facilities in cash or any other form of payment which the
Lender may accept from time to time before 11:30 a.m. (Montreal time) on the day
specified for payment at the Lender's Branch. Whenever a payment is due to be
made on a day which is not a Banking
<PAGE>
-16-
Day, the day for payment shall be the following Banking Day. Notwithstanding the
provisions of Article 1564 of the Civil Code of Quebec, no payment made by the
Borrower to the Lender shall be valid unless the Lender actually receives the
value of such payment.
7.2 Currency of Payment
-------------------
Principal, interest and interest on overdue amounts on the Borrowings in
CDollars shall be payable in CDollars and principal, interest and interest
on overdue amounts on Borrowings in USDollars shall be payable in US Dollars.
7.3 Setoff Etc.
----------
The Borrower shall make all payments hereunder, the Letter of Offer and the
Credit Facilities regardless of any setoff, counterclaim or compensation.
7.4 Taxes
-----
The Borrower shall make all payments on the Loan in USDollars free and clear of,
and exempt from, and without deduction for, or on account of, any Tax. If any
Tax, other than taxes on the overall net income of the Lender, is deducted or
withheld from any payment, the Borrower shall promptly remit to the Lender the
amount so deducted or withheld together with relevant receipts from the taxing
authority addressed to the Lender. If the Borrower is prevented by operation of
law or otherwise from paying, causing to be paid or remitting such Tax, the
interest payable under this Agreement or the Letter of Offer will be increased
to the rates necessary to yield and remit to the Lender the principal sum
advanced together with interest at the rates specified in this Agreement of the
Letter of Offer after provision for payment of such Tax. At the request of the
Lender, the Borrower shall from time to time execute and deliver any and all
further documents as may be necessary or advisable to give full force and effect
to such increase in the rate of interest. The Borrower further covenants to
indemnify the Lender in respect of any claim or loss incurred as a result of the
Borrower's delay or failure to deduct or to withhold any such Tax, including all
penalties and interest.
<PAGE>
-17-
7.5 Evidence of Indebtedness - Notes
--------------------------------
The indebtedness of the Borrower resulting from each Advance shall, if requested
by the Lender, be evidenced by a Note, each Note to be in the currency and for
the principal amount of the Advance, dated the date of the Advance, payable to
the Lender, duly completed and executed by the Borrower, in all cases delivered
in accordance with Article 8.
7.6 Expenses and Indemnity
----------------------
7.6.1 The Borrower shall supply all statements, reports, certificates,
opinions, appraisals and other documents or information required to be
furnished to the Lender pursuant to this Agreement or the Letter of
Offer without cost to the Lender.
7.6.2 The Borrower agrees to pay on demand all reasonable out-of-pocket
costs and expenses of the Lender in connection with the preparation,
negotiation, execution, delivery, registration and operation of this
Agreement, the Notes, the Letter of Offer and the Security Documents
including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Lender and of special counsel who may be
retained by said counsel or by the Lender with respect thereto and
with respect to advising the Lender as to its rights and
responsibilities under this Agreement, the Notes, the Letter of Offer
and the Security Documents. The Borrower further agrees to pay on
demand all costs and expenses, if any, of the Lender (including
reasonable fees and expenses of counsel and special counsel for the
Lender), in connection with any enforcement of this Agreement, the
Notes, the Letter of Offer and the Security Documents including,
without limitation, costs and expenses sustained by the Lender as a
result of any failure by the Borrower to perform or observe its
obligations contained herein or in any of the Security Documents.
7.6.3 The Borrower agrees to indemnify the Lender against any loss or
expense which it may sustain or incur in obtaining or redeploying
deposits as a result of the failure by the Borrower to pay when due
any principal of the Loan, to the extent that any such loss or expense
is not recovered pursuant to any other provisions hereof. A
certificate of the Lender setting forth the basis for
<PAGE>
-18-
the determination of the interest due on overdue principal or interest
and of the amounts necessary to indemnify such Lender in respect of
such loss or expense, submitted to the Borrower, shall be conclusive
and binding for all purposes except in case of manifest error.
7.7 Survival of Indemnification Obligations
---------------------------------------
Without prejudice to the survival or termination of any other agreement of the
Borrower under this Agreement, the obligations of the Borrower under Sections
7.4 and 7.6 survive the termination of the Credit Facilities and the repayment
in full of the Loan.
7.8 Application of Payments
-----------------------
All payments made by or on behalf of the Borrower to the Lender pursuant to this
Agreement, the Credit Facilities or the Letter of Offer shall be applied as the
Lender, in its discretion, may from time to time determine.
ARTICLE 8
PRE-DISBURSEMENT CONDITIONS
---------------------------
8.1 Conditions Precedent to the initial Advance
-------------------------------------------
The obligation of the Lender to make its initial Advance hereunder is subject to
and conditional upon the prior fulfilment of the following conditions to the
satisfaction of the Lender and its counsel:
8.1.1 on or prior to 10:00 a.m. (Montreal time) on the initial Drawdown
Date, the Lender shall have received the following, each dated the
Drawdown Date:
8.1.1.1 certified copies of the charter and by-laws of the Borrower
and of all documents and resolutions evidencing necessary
corporate action of the Borrower, approving and authorizing
the execution, delivery and performance of this Agreement,
the Notes, the Letter of Offer and each Security Document
and evidencing any other necessary corporate action with
respect to
<PAGE>
-19-
this Agreement, the Notes, the Letter of Offer and each
Security Document and the instruments, certificates or other
documents contemplated herein, and approving and authorizing
the manner in which and by whom the foregoing documents are
to be executed and delivered;
8.1.1.2 certified copies of any and all necessary governmental
authorizations and approvals (including any exchange control
approvals) required with respect to this Agreement, the
Notes, the Letter of Offer and each Security Document;
8.1.1.3 a certificate of the Secretary of the Borrower certifying
the names and true signature of the officers of the Borrower
authorized to sign this Agreement, the Notes, the Letter of
Offer and each Security Document and any other documents or
certificates to be delivered pursuant to this Agreement;
8.1.1.4 a certificate of two senior officers of the Borrower to the
effect that the officers signing have personal knowledge of
the facts and that all representations and warranties of the
Borrower set forth in Article 2 and Article 10 hereof are
true as of the Drawdown Date;
8.1.1.5 a favourable opinion of legal counsel to the Borrower,
addressed to the Lender and its counsel, in form and
substance satisfactory to the Lender and its counsel,
respecting all transactions relating to the Credit
Facilities and security and other documentation required
hereunder, as to matters set forth in Article 2 hereof and
as to other matters reasonably requested by the Lender;
8.1.1.6 a favourable opinion of legal counsel to the Lender,
addressed to the Lender, in form and substance satisfactory
to the Lender;
<PAGE>
-20-
8.1.2 the Borrower shall have duly executed and delivered to the Lender each
of the Security Documents, each such Security Document to be in form
and substance satisfactory to the Lender and its counsel;
8.1.3 the Lender shall have received evidence satisfactory to the Lender
that the transactions set forth in the Acquisition Agreement dated
January 25, 1994 between Scott Paper Company and SP Acquisition Co.
(the "ACQUISITION AGREEMENT") have been consummated and that the said
agreement constitutes valid and binding obligations of the parties
thereto enforceable in accordance with its terms, the whole in form
and substance satisfactory to the Lender and its legal counsel;
8.1.4 all other conditions provided in the Letter of Offer shall have been
met to the satisfaction of the Lender; and
8.1.5 the Borrower shall have delivered to the Lender insurance certificates
or other evidence issued by the insurer or a reputable broker
evidencing that the Borrower is in compliance with Section 9.1.13 of
this Agreement, together with originals (or copies certified by the
insurers) of all policies evidencing such insurance (or certificates
therefor), which certificates or other evidence and policies shall be
in form and substance satisfactory to the Lender.
8.2 Conditions Precedent to each Advance
------------------------------------
The obligation of the Lender to make each Advance, including the initial Advance
under any of the Credit Facilities, hereunder is subject to and conditional
upon the prior fulfilment of the following conditions to the satisfaction of the
Lender and its counsel:
8.2.1 if required by the Lender, the Lender shall have received a Note
payable to the Lender, in the currency of and the amount of each
Advance required duly completed and executed by the Borrower and in
form and substance satisfactory to the Lender and its counsel;
8.2.2 on the date of each such Advance, the following statements shall be
true to the satisfaction of the Lender and its counsel (and the
acceptance by the
<PAGE>
-21-
Borrower of the proceeds of such Advance shall be deemed to constitute
a representation and warranty by the Borrower that on the date of such
Advance such statements are true):
8.2.2.1 the representations and warranties contained in Article 2
and Article 10 are true and correct on and as of the date of
such Advance as though made on and as of such date; and
8.2.2.2 no event has occurred and is continuing, or would result
from such Advance, which constitutes an Event of Default or
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
8.2.3 the Borrower shall have delivered all such other documents and
complied with all such other conditions provided the Letter of Offer
on which the Lender may reasonably require or establish.
8.3 Waiver
------
The terms and conditions of Sections 8.1 and 8.2 hereof are inserted for the
sole benefit of the Lender and may be waived by the Lender in whole or in part,
with or without terms or conditions, in respect of any Advance without
prejudicing the right of the Lender to assert these terms and conditions in
whole or in part in respect of any other Advance.
ARTICLE 9
COVENANTS
---------
9.1 Covenants of the Borrower
-------------------------
The Borrower covenants and agrees with the Lender that, so long as any of the
indebtedness of the Borrower hereunder or under any of the Credit Facilities
shall remain unpaid or all the obligations to make any Advance to the Borrower
shall not have been terminated, unless the Lender shall otherwise have
previously consented in writing:
<PAGE>
-22-
9.1.1 the Borrower shall duly and punctually pay all sums of money due by it
under the terms of or pursuant to this Agreement, the Letter of Offer,
the Credit Facilities and the Notes at the times and places and in the
manner provided for by this Agreement, the Letter of Offer and the
Notes and shall duly and punctually perform and observe all other
obligations on its part to be performed or observed hereunder and
under the Security Documents at the times and in the manner provided
for herein or therein;
9.1.2 the Borrower shall maintain its corporate existence in good standing
and shall not consolidate with, amalgamate with or merge with any
other Person or permit any other Person to consolidate, amalgamate or
merge with it;
9.1.3 the Borrower shall, as soon as available and in any event within one
hundred and twenty (120) days after the end of each fiscal year of the
Borrower, cause to be prepared and delivered to the Lender audited
financial statements (including a balance sheet as of the end of such
fiscal year and statements of income and retained earnings and of
changes in financial position for the period commencing at the end of
the previous fiscal year and ending with the end of such fiscal year)
of the Borrower prepared in accordance with generally accepted
accounting principles and reported on by Laliberte Lanctot Coopers &
Lybrand or other independent chartered accountants of recognized
standing, together with a certificate of the chief financial officer
of the Borrower containing sufficient information as to permit the
Lender to determine that the covenants contained in this Section are
being met by the Borrower as required and to the effect that, to the
best knowledge of such officer, as of the date of such certificate, no
event has occurred and is continuing which constitutes an Event of
Default hereunder or which would, with the giving of notice or lapse
of time or both, constitute an Event of Default hereunder;
9.1.4 the Borrower shall deliver to the Lender as soon as available and in
any event within forty-five (45) days after the end of each of the
quarterly fiscal periods in each fiscal year of the Borrower, a copy
of its unaudited financial statements (including a balance sheet as of
the end of such quarter and statements of income and retained earning
and of changes in financial position
<PAGE>
-23-
for the period from the end of the preceding fiscal year to the end of
such quarterly period) prepared in accordance with generally accepted
accounting principles, together with a certificate of the chief
financial officer of the Borrower to the effect that, to the best of
knowledge of such officer, as of the date of such certificate no event
has occurred and is continuing which constitutes an Event of Default
hereunder or which would, with the giving of notice or lapse of time
or both, constitute an Event of Default hereunder;
9.1.5 the Borrower shall from time to time deliver to the Lender any other
financial and operating reports, information and statements which the
Lender reasonably requests including, without limitation, those
referred to in the Letter of Offer, the whole in form and substance
satisfactory to the Lender;
9.1.6 the Lenders may rely on the authority of the individuals named in the
certificate delivered pursuant to Section 8.1.1.3 hereof until notice
to the contrary from the Borrower is received by the Lender;
9.1.7 the Borrower shall promptly give notice to the Lender of the
occurrence of any Event of Default or of any event or condition which
would, with the giving of notice or lapse of time or both, constitute
an Event of Default;
9.1.8 the Borrower shall as soon as possible, and in any event within ten
(10) days after the Borrower has received notice of the commitment
thereof, give notice to the Lender of any litigation, proceeding or
dispute affecting the Borrower or its property before any court,
tribunal, commission or other administrative agency which, if
determined adversely, would have a material adverse effect on the
financial condition or operations of the Borrower; from time to time,
the Borrower shall provide all reasonable information requested by the
Lender concerning the status of any such litigation, proceeding or
dispute;
9.1.9 except for Permitted Encumbrances, the Borrower shall not, nor shall
it permit any Subsidiary to, create, assume, incur or suffer to exist
any mortgage, hypothec, lien, prior claims, security interest, charge
or other encumbrance or rights in respect of any property of the
Borrower or of any Subsidiary, whether the property is owned at the
date of this Agreement or acquired subsequently;
<PAGE>
-24-
9.1.10 the Borrower shall do all things required by the Lender in order to
fully and effectively maintain and keep maintained the security
created by the Security Documents as valid and effective security;
9.1.11 the Borrower shall not sell, transfer, dispose of or lease or enter
into any commitment or option for the sale, transferal, disposition or
lease of all or substantially all of its assets to any Person, save
and except for the sale of assets of the Borrower not exceeding the
aggregate amount of ONE HUNDRED THOUSAND CDOLLARS (C$100,000) in any
fiscal year of the Borrower;
9.1.12 the Borrower shall promptly pay or cause to be paid all rents or Taxes
levied, assessed or imposed on all or any part of its property as and
when the same become due;
9.1.13 the Borrower shall at all times insure and keep insured all of its
buildings, plants, equipment and all other property which is of an
insurable nature with responsible and reputable insurers to the full
replacement cost thereof against loss or damage by accident, fire,
theft and other insurable risks in the manner and to the extent
usually carried by companies in similar businesses and owning similar
properties; the Borrower shall also maintain business interruption
insurance in such amounts and with such insurers as shall be
satisfactory to the Lender; the Borrower shall duly and promptly pay
all premiums and other sums of money for the placing and maintaining
of such insurance and shall cause the insurance money thereunder to be
payable to the Lender as its interest hereunder and under the Security
Documents may appear; and the Borrower shall promptly deliver to the
Lender certificates of insurance for any such insurance policies with
appropriate endorsements designating the Lender as an additional
insured as its interests may appear and, when required, deliver
evidence of payment of premium; such certificates of insurance shall
contain a loss-payee clause, in form and substance satisfactory to the
Lender, and shall contain a notice of cancellation provision
satisfactory to the Lender. In the event the Borrower fails to insure
and keep insured or fails to pay any premiums in accordance with the
foregoing, the Lender may so insure, keep in insured and pay premiums
and the Borrower
<PAGE>
-25-
shall indemnify the Lender for any amount thereby expended or cost
thereby incurred;
9.1.14 the Borrower shall not make capital expenditures (net of proceeds of
trade ins and disposal) or incur any debt or liability therefore
(including leases and purchase money security interest) in excess of a
maximum aggregate amount of ONE MILLION NINE HUNDRED AND TWENTY
THOUSAND CDOLLARS (C$1,920,000) in its fiscal year ending December 31,
1994, of THREE HUNDRED AND EIGHTY-FOUR THOUSAND CDOLLARS (C$384,000)
in its fiscal year ending December 31, 1995, of SIX HUNDRED AND FORTY
THOUSAND CDOLLARS (C$640,000) in its fiscal year ending December 31,
1996 and of THREE HUNDRED AND EIGHTY-FOUR THOUSAND CDOLLARS
(C$384,000) in its fiscal year ending December 31, 1997 and
thereafter. The Borrower may defer capital expenditures not exceeding
a maximum aggregate amount of FOUR HUNDRED THOUSAND CDOLLARS
(C$400,00) for a period not exceeding one (1) year;
9.1.15 the Borrower shall maintain at all times, the ratio of its "CASH
AVAILABLE FOR DEBT SERVICE" to its "DEBT SERVICE" equal to or greater
than 4.0:1 for each consecutive twelve (12) month period ending in its
fiscal year ending December 31, 1994, equal to or greater than 2.0:1
for each consecutive twelve (12) month period ending in its fiscal
year ending December 31, 1995, equal to or greater than 2.0:1 for
each consecutive twelve (12) month period ending in its fiscal year
ending December 31, 1996, equal to or greater than 2.0:1 for each
consecutive twelve (12) month period ending in its fiscal year ending
December 31, 1997 and equal to or greater than 3.0:1 for each
consecutive twelve (12) month period ending in its fiscal year ending
December 31, 1998 and thereafter. For the purposes hereof, (i) "CASH
AVAILABLE FOR DEBT SERVICE" means earnings before deduction of
interest, depreciation, amortization and taxes and other non-cash
items, as appropriate, minus actual capital expenditures made to
sustain existing fixed assets and current taxes payable; (ii) "DEBT
SERVICE" means the total of interest expense and scheduled principal
repayments in respect of all amounts owing by the Borrower under the
Credit Facilities and all amounts owing in respect of any other debt
obligation (including leases);
<PAGE>
-26-
9.1.16 the Borrower shall maintain its "TOTAL DEBT" to "TANGIBLE NET WORTH"
equal to or less than 3.0:1 during its fiscal year ending December 31,
1994, equal to or less than 2.0:1 during its fiscal year ending
December 31, 1995, equal to or less than 2.0:1 during its fiscal year
ending December 31, 1996 and equal to or less than 1.0:1 during its
fiscal year ending December 31, 1997 and thereafter. For the purposes
hereof, "TOTAL DEBT" of the Borrower shall mean all debts of the
Borrower less Subordinated Indebtedness; and "TANGIBLE NET WORTH" of
the Borrower shall mean the aggregate of paid up capital and retained
earnings of the Borrower plus Subordinated Indebtedness less non
tangible assets of the Borrower (including goodwill, loans to or
investments in Affiliates and Subsidiaries and loans and advances to
any director, officer, employee or shareholder of the Borrower), the
whole as determined by the Lender;
9.1.17 the Borrower shall maintain at all times the ratio of its "CURRENT
ASSETS" to "CURRENT LIABILITIES" at no less than 0.5:1 during its
fiscal year ending December 31, 1994, at no less than 0.5:1 during its
fiscal year ending December 31, 1995, at no less than 0.75:1 during
its fiscal year ending December 31, 1996, at no less than 0.75:1
during its fiscal year ending December 31, 1997 and at no less than
1.0:1 during its fiscal year ending December 31, 1998 and thereafter.
"CURRENT ASSET" and "CURRENT LIABILITIES" shall have the meaning
ascribed to such terms in accordance with the generally accepted
accounting principles in Canada applied consistently;
9.1.18 the Borrower shall not declare or pay any dividends or make any other
payment of distribution in respect of any shares of its capital stock
or make any change in its issued or authorized capital stock either by
way of redemption of stock or otherwise;
9.1.19 the Borrower shall not make any loans or advances or otherwise grant
any financial assistance of any nature whatsoever to any Person;
9.1.20 the Borrower shall not pay to any Affiliate of the Borrower
administration or management fees or other inter-company charges in
excess of an aggregate
<PAGE>
-27-
principal amount of TWENTY-FIVE THOUSAND CDOLLARS (C$25,000) in any
one of its fiscal year;
9.1.21 the Borrower shall not amend any of the Material Contracts entered
into; and
9.1.22 the Borrower shall not incur or create any further or additional
indebtedness except to the Lender, except such additional indebtedness
as may be incurred in the ordinary course of business and except for
such indebtedness secured or evidenced by Title Retention Instruments,
the whole subject to the provisions of Section 9.1.14.
ARTICLE 10
ENVIRONMENTAL MATTERS
---------------------
10.1 Definitions
-----------
In this article:
10.1.1 "APPLICABLE ENVIRONMENTAL LAWS" means all applicable federal,
provincial, municipal and other laws, statutes, regulations, by-laws
and codes, now or hereafter in existence, intended to protect the
environment or relating to Hazardous Material (as hereinafter
defined), including without limitation the Environment Quality Act
(Quebec), the Occupational Health and Safety Act (Quebec), the Water
Courses Act (Quebec), the Fisheries Act (Canada), the Canadian
Environmental Protection Act (Canada), the Environmental Assessment
and Review Process Guidelines Order (Canada), the Transportation of
Dangerous Goods Act (Canada) and the Navigable Waters Protection Act
(Canada);
10.1.2 "HAZARDOUS MATERIAL" means, collectively, any contaminant or pollutant
or any other substance which when released to the natural environment
is likely to cause at some immediate or future time, material harm or
degradation to the natural environment or material risk to human
health and without restricting the generality of the foregoing
hazardous waste or toxic substances as defined by Applicable
Environmental Laws.
<PAGE>
-28-
10.2 Representations and Warranties
------------------------------
The Borrower hereby represents and warrants that:
10.2.1 neither the Borrower nor, to its knowledge, after due enquiry
excluding an environmental audit, any other Person (including without
limitation any tenant or previous tenant or occupant of the Lands or
any part thereof) has ever caused or permitted any Hazardous Material
to be disposed of on, under or at the Lands and all Hazardous Material
stored on the Lands are and shall be stored in compliance with
Applicable Environmental Laws;
10.2.2 the business and assets of the Borrower are in compliance with all
Applicable Environmental Laws;
10.2.3 the Borrower has not received notice nor has any knowledge of any
control order, stop order, minister's order, preventive order or other
enforcement action threatened or issued or pending by any governmental
agency in respect of the Lands and Applicable Environmental Laws; and
10.2.4 the Borrower has not received notice nor has any knowledge of any
action or proceeding, threatened or pending, relating to the existence
in, on or under the Lands or on property adjoining the Lands of, or
the spilling, discharge or emission on or from the Lands or any such
adjoining property of, any Hazardous Material.
10.3 Covenants
---------
The Borrower covenants that:
10.3.1 the Borrower will not cause or knowingly permit to occur, a discharge,
spillage, seepage or filtration of any Hazardous Material at, upon,
under, into or within the Lands or any contiguous real estate to the
Lands;
10.3.2 the Borrower shall, and shall use best efforts to cause any Person
permitted by the Borrower to use or occupy the Lands or any part
thereof, to continue
<PAGE>
-29-
to operate its business and assets (including the Lands) in compliance
with the Applicable Environmental Laws and upon delivery of the notice
set out in Section 10.3.5 to the Lender, shall permit the Lender on
reasonable notice to the Borrower, subject to the rights of tenants
and in default of the Borrower taking appropriate action, to conduct
at the Borrower's expense (provided such expense is reasonable) tests,
inspections and appraisals including without limitation, the right to
conduct soil tests of all or any of the Lands and to review and copy
any relevant records of the Borrower (which are not subject to a
confidentiality obligation) insofar as they relate to the Lands at any
time and from time to time to ensure compliance;
10.3.3 the Borrower shall comply with the requirements of the Applicable
Environmental Laws (including, but not limited to obtaining any
permits, licenses or similar authorizations to construct, occupy,
operate or use the Lands or any fixtures or equipment located thereon
by reason of the Applicable Environmental Laws) and shall notify the
Lender promptly in the event of any spill or location of Hazardous
Material upon the Lands, and shall promptly forward to the Lender
copies of all orders, notices, permits, applications or other
communications and reports in connection with any spill or any other
matters relating to the Applicable Environmental Laws, as they may
affect the Lands;
10.3.4 the Borrower will not install on the Lands, nor knowingly permit to be
installed on the Lands, asbestos or any substance containing asbestos
deemed hazardous by any Applicable Environmental Laws;
10.3.5 the Borrower shall promptly notify the Lender of any suspected
violation of the Applicable Environmental Laws or any threatened
investigation or inquiry by any governmental authority which comes to
the attention of the Borrower in connection with any Applicable
Environmental Laws; and
10.3.6 the Borrower, promptly upon the written request of the Lender from
time to time shall complete the Lender's environmental checklist and
if such completed checklist discloses a matter concerning a Hazardous
Material or possible violation of environmental laws then the
Borrower, promptly upon
<PAGE>
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the written request of the Lender, shall provide the Lender with an
environmental site assessment or environmental audit report, or an
update of such assessment or report, respecting such matter, all in
scope, form and content satisfactory to the Lender, at the Borrower's
expense.
10.4 Indemnity
---------
The Borrower indemnifies and holds harmless the Lender and its officers,
directors, employees, agents and shareholders and any receiver or receiver and
manager appointed by or on the application of the Lender (the "INDEMNIFIED
PERSONS"), from and against and shall reimburse the Lender for any and all
losses, liabilities, claims, damages, costs and expenses, including legal fees
and disbursements on a solicitor and his own client basis, suffered, incurred by
or asserted against any of the Indemnified Persons whether as holder of any
security, as mortgagee in possession, as successor in interest to the Borrower
as owner of the Lands by virtue of foreclosure or acceptance of a transfer in
lieu of foreclosure or otherwise:
10.4.1 under or on account of the Applicable Environmental Laws, including
the assertion of any lien thereunder;
10.4.2 for, with respect to, or as a result of, the presence on or under, or
the discharge, emission, spill or disposal from, the Lands or into or
upon any land or the atmosphere, of any Hazardous Material where a
source of the Hazardous Material is the Lands or any fixtures or
equipment located thereon including, without limitation:
10.4.2.1 the costs of defending and or counterclaiming or
claiming over against third parties in respect of any
action or matter; and
10.4.2.2 any costs, liability or damage arising out of a
settlement of any action entered into by the Lender;
10.4.3 in complying with or otherwise in connection with any order, consent,
decree, settlement, judgment or verdict arising from the deposit,
storage, disposal, burial, dumping, injecting, spilling, leaking, or
other placement or release in,
<PAGE>
-31-
on or from the Lands of any Hazardous Material (including without
limitation any order under the Applicable Environmental Laws to clean-
up or decommissioning), whether or not such deposit, storage,
disposal, burial, dumping, injecting, spilling, leaking or other
placement or release in, on or from the Lands of any Hazardous
Material:
10.4.3.1 resulted by, through or under the Borrower; or
10.4.3.2 occurred with the Borrower's knowledge and consent; or
10.4.3.3 occurred before or after the date of this Agreement,
whether with or without the Borrower's knowledge.
The provisions of this paragraph shall survive foreclosure of the
charges, hypothecs and security interests constituted by any Security
Document and satisfaction and release of the Security Documents and
satisfaction and repayment of the indebtedness secured by the Security
Documents. Any amounts for which the Borrower shall become liable to
the Lender hereby under this Section 10.4 shall, if paid by any
Indemnified Person, bear interest from the date of payment at the
Canadian Rate.
10.5 Environmental Clean-Up
----------------------
In the event of any spill of Hazardous Material affecting the Lands, whether or
not the same originates or emanates from the Lands, and if the Borrower fails to
comply with any of the requirements of the Applicable Environmental Laws in
respect thereof, or if the Borrower otherwise fails to comply with any of the
requirements of the Applicable Environmental Laws the Lender may at its
election, but without the obligation so to do, give such notices and cause such
work to be performed at the Lands and take any and all other actions as the
Lender shall deem necessary or advisable in order to remedy said spill of
Hazardous Material or cure said failure of compliance and any reasonable amounts
paid as a result thereof, together with interest thereon at the Canadian Rate
from the date of payment by the Lender shall be immediately due and payable by
the Borrower to the Lender and until paid shall be added to and become a part of
the indebtedness secured by the Security Documents.
<PAGE>
-32-
ARTICLE 11
DEFAULT
-------
11.1 Events of Default
-----------------
Each of the following events shall constitute an Event of Default under this
Agreement, the Letter of Offer and the Credit Facilities:
11.1.1 the Borrower shall fail to make any payment of principal on the Loan
when due, whether due by acceleration or otherwise; or
11.1.2 the Borrower shall fail to make any payment of interest or other
payment (other than a payment referred to in Section 11.1.1) due under
this Agreement, the Credit Facilities, the Letter of Offer or the
Security Documents; or
11.1.3 any representation, warranty, statement or certificate made or
delivered to the Lender or any representation or warranty deemed
pursuant to Section 8.2 hereof to have been made to the Lender or any
financial statement or other information delivered in writing to the
Lender by the Borrower or any of its officers in, or in connection
with, this Agreement, the Credit Facilities or the Letter of Offer is
incorrect or misleading in any material respect; or
11.1.4 the Borrower, Scott Polymers, Inc. or SP Acquisition Co., shall fail
to pay any of its indebtedness (other than that referred to in
Sections 11.1.1 and 11.1.2) or any interest or premium thereon, when
due (whether at scheduled maturity or by required prepayment,
acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such indebtedness; or any other default
under any agreement or instrument relating to any such indebtedness of
the Borrower, Scott Polymers, Inc. or SP Acquisition Co., or any other
event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such
indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment),
<PAGE>
-33-
prior to the stated maturity thereof; provided however that in the
case of indebtedness of Scott Polymers, Inc. or SP Acquisition Co.
towards a lender other than the Lender or a default of Scott Polymers,
Inc. or SP Acquisition Co. towards a lender other than the Lender, for
so long as Scott Polymers, Inc. or SP Acquisition Co., as the case may
be, are in good faith negotiating diligently with such other lender in
order to arrive at an agreement in respect of such indebtedness or
such default and such other lender shall not have enforced any of its
rights, it shall not constitute an Event of Default hereunder; or
11.1.5 the Borrower or any Person having guaranteed the indebtedness of the
Borrower towards the Lender (hereinafter called a "GUARANTOR") shall
not pay its debts generally as such debts become due, or shall admit
in writing its inability to pay its debts generally as they become
due, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be commenced or instituted by or against the
Borrower or a Guarantor seeking to adjudicate it bankrupt or
insolvent, or seeking winding-up, reorganization, arrangement,
adjustment, dissolution, protection, relief, liquidation or
composition of it or its debt under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, sequestrator or other similar
official for it or for any substantial or material part of its
property or seeking the suspension of the operations of the Borrower
or a Guarantor and, in the case of any such proceeding instituted
against the Borrower or a Guarantor and in respect of which the
Borrower or a Guarantor, as the case may be, has not by any act
indicated its consent to, approval of, or acquiesence in, such
proceeding, such proceeding shall remain undismissed for a period of
thirty (30) days unless the Borrower or the Guarantor, as the case may
be, is diligently and in good faith contesting the validity of such
proceeding and forthwith furnishes to the Lender security satisfactory
to the Lender in nature and amount against all loss and damage which
the Lender might suffer by reason thereof; or the Borrower or a
Guarantor shall take corporate action to authorize any of the actions
set forth above in this Section 11.1.5; or a Guarantor gives notice to
the Lender of termination of its guarantee in favour of the Lender or,
subject to the
<PAGE>
-34-
provisions of Section 15.10, such guarantee otherwise terminates
without the consent of the Lender; or
11.1.6 the Borrower ceases, or takes steps to cease, carrying on its business
or makes, or agrees to make, a sale of all or any substantial or
material part of its assets; or the Borrower consolidates, amalgamates
or merges with, or takes any action with a view to its consolidation,
amalgamation or merger with, any other Person; or
11.1.7 a writ, execution, attachment or other similar process is issued or
levied against all, or a substantial or material portion of, the
property of the Borrower or of a Guarantor and the writ, execution,
attachment or similar process is not released, bonded, satisfied,
discharged, vacated or stayed within fifteen (15) days after its
entry, issuance, commencement or levy unless the Borrower is
diligently and in good faith contesting the validity of such
proceeding and forthwith furnishes to the Lender security satisfactory
to the Lender in nature and amount against all loss and damage which
the Lender might suffer by reason thereof; or
11.1.8 an encumbrancer or lienor takes possession of any substantial part of
the property of the Borrower or a Guarantor; or an execution or other
similar process is enforced against such property and remains
unsatisfied for such period as would permit such property to be sold
thereunder, less ten (10) Banking Days unless the Borrower is
diligently and in good faith contesting the validity of such
proceeding and forthwith furnishes to the Lender security satisfactory
to the Lender in nature and amount against all loss and damage which
the Lender might suffer by reason thereof; or
11.1.9 the occurrence of an event of default under the Security Documents; or
11.1.10 the occurrence of a change in the control of the Borrower; or
11.1.11 the outstanding Borrowings under any Credit Facility exceed the
maximum authorized amount thereof; or
<PAGE>
-35-
11.1.12 the Borrower, Scott Polymers, Inc. or SP Acquisition Co. shall fail to
perform or observe any term, covenant or agreement contained in this
Agreement, in the Letter of Offer or the Security Documents, other
than those heretofore dealt with in this Section 11.1 or shall fail to
perform or observe any term, covenant or provision of any agreement
executed pursuant to, relating to or referred to in this Agreement,
the Letter of Offer or any of the Security Documents and any such
failure shall remain unremedied for fifteen (15) days after written
notice thereof shall have been given to the Borrower by the Lender.
11.2 Effect of a Default
-------------------
Without waiving or otherwise affecting any right of the Lender to demand payment
at any time of all amounts repayable on demand under the Credit Facilities, upon
the occurrence of any Event of Default, the Lender may by notice to the Borrower
(i) declare the obligation of the Lender to make Advances to the Borrower to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
Loan, all interest accrued and unpaid thereon and all other amounts payable
under this Agreement, the Letter of Offer, the Notes, the Credit Facilities and
the Security Documents, including the face amount of any outstanding letter or
credit or letter of guarantee, to be forthwith due and payable, whereupon the
Loan, all such accrued interest and all such other amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower,
and any collateral security including the Security Documents shall thereupon
become enforceable. Thereupon the Borrower shall immediately pay to the Lender
all such amounts due and payable.
11.3 Remedies Cumulative; No Waiver
------------------------------
For greater certainty, it is expressly understood and agreed that the rights and
remedies of the Lender under this Agreement, the Notes, the Letter of Offer, the
Security Documents and any other security the Lender may from time to time hold
as security for the performance of all or any part of the Borrower's obligations
hereunder and thereunder are cumulative and are in addition to, not in
substitution for, any rights or remedies provided by law; no failure on the part
of the Lender to exercise, and no delay in exercising, any right or remedy
hereunder or thereunder shall operate as a waiver thereof, nor shall any single
or partial
<PAGE>
-36-
exercise by the Lender of any right or remedy for a default or breach of any
term, covenant, condition or agreement herein or therein contained prejudice or
preclude any other or further exercise thereof or the exercise of any other
right or remedy for the same or any other default or breach and shall not waive,
alter, affect or prejudice any other right or remedy.
11.4 Setoff
------
In addition to, and not in limitation of, any rights now or hereafter granted
under applicable law, the Lender is hereby expressly authorized at any time or
from time to time without notice to the Borrower or to any other person, any
such notice being hereby expressly waived by the Borrower, to set-off and to
appropriate and to apply any and all deposits, general or special, matured or
unmatured, and any other indebtedness at any time held by or owing by the Lender
to, or for the credit of, or the account of, the Borrower against and on account
of the obligations and liabilities of the Borrower due and payable to the Lender
under this Agreement, under the Notes, under the Letter of Offer or under the
Security Documents including, without limitation, all claims of any nature or
description arising out of, or connected with, this Agreement, the Notes, the
Letter of Offer or the Security Documents, irrespective of whether or not the
Lender made any demand therefor and although such obligations and liabilities
of, or claims against, the Borrower, or any of them, are contingent or
unmatured.
115. Default Ipso Facto
------------------
In each of the cases set forth in Section 11.1, the Borrower shall be in default
by the mere lapse of time, without any notice putting the Borrower in default
being required.
ARTICLE 12
NOTICE
------
12.1 Notices, Etc.
------------
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be writing to the party for whom it is intended and
shall be mailed, sent or delivered, to such party at its address set forth
hereunder or shall be sent by telex, telecopier
<PAGE>
-37-
or other means of rapid communication at its rapid communication address set
forth hereunder, or at such other address or rapid communication address as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective (i) if mailed,
three (3) Banking Days after deposited in the mails, first class, postage
prepaid, (ii) if delivered, when delivered and (iii) if sent by telex,
telecopier or other means of rapid communication, on the date of transmission if
transmitted before 3 p.m. (Montreal time) on a Banking Day or, in any other
case, on the next following Banking Day. In the event of a postal strike or any
slow-down in the postal service, no notice of or communication by mail shall be
effective if sent during, or within ten (10) Banking Days prior to the
commencement of, such strike or slow-down unless it is actually received by the
party to whom it is addressed and, in such event, it shall be effective only on
the date of actual receipt. The addresses referred to above are as follows:
LENDER: BANK OF MONTREAL
6702 TransCanada Highway
Pointe-Claire (Quebec)
H9R 1C4
Attention: Account Manager
-----------------------------
Telecopier: (514) 630-4955
BORROWER: POLYMERES SCOTT, LTEE -
SCOTT POLYMERS, LTD.
19250 Clark Graham
Baie d'Urfe (Quebec)
H9X 3R8
Attention: General Manager
----------------------------
Telecopier: (514) 457-4390
<PAGE>
-38-
WITH A COPY, FOR Richard Davidovich
INFORMATION PURPOSES ONLY, TO: C/O SCOTT POLYMERS, INC.
3607 Sylvania
Fort Worth (Texas)
U.S.A. 76111
Telecopier: (817) 831-0206
-and-
LENGVARI BRAMAN
Suite 2707
1, Place Ville Marie
Montreal (Quebec)
H3B 4G4
Attention: Mr. Fred Braman
----------------------------
Telecopier: (514) 866-4773
ARTICLE 13
GOVERNING LAW; JURISDICTION; JUDGMENT CURRENCY
----------------------------------------------
13.1 Governing Law
-------------
This Agreement and the Letter of Offer shall be governed by, and construed in
accordance with, the laws of the Province of Quebec and the laws of Canada
applicable therein.
13.2 Jurisdiction
------------
Any suit, action or proceeding against the Borrower in relation to any matter
arising out of this Agreement, the Notes, the Letter of Offer, the Security
Documents or the Credit Facilities or any judgment entered by any court in
respect thereof may be brought in the courts of the Province of Quebec or in any
other court of competent jurisdiction as the Lender in its sole discretion may
elect and the Borrower hereby submits to the non-exclusive jurisdiction of such
courts for the purposes of any such suit, action or proceeding.
<PAGE>
-39-
13.3 Judgment Currency
-----------------
13.3.1 If for any purpose, including the obtaining of judgment in any court,
it is necessary to convert a sum due hereunder, under the letter of
Offer or pursuant to any Note or any of the Credit Facilities from the
currency in which it is payable ("the PAYMENT CURRENCY") into another
currency (the "JUDGMENT CURRENCY"), the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which, in accordance with normal
banking procedures, the Lender could purchase the Payment Currency
with the Judgment Currency in the New York foreign exchange market on
the Business Day preceding the date of final judgment.
13.3.2 The obligation of the Borrower in respect of any sum due from it to
the Lender hereunder, under the Letter of Offer or pursuant to any
Note or any of the Credit Facilities shall, notwithstanding any
judgment or payment in a currency other than the Payment Currency, be
discharged only to the extent that on the Business Day following
receipt by the Lender of any sum so paid or adjudged to be so due in
the Judgment Currency the Lender may in accordance with normal banking
procedures, purchase the Payment Currency with the amount of the
Judgment Currency so paid or adjudged to be due; if the amount in the
Payment Currency so purchased is less than the sum originally due to
the Lender in the Payment Currency, the Borrower agrees, as a separate
obligation and additional cause of action and notwithstanding any such
payment or judgment, to indemnify the Lender against such loss and if
the amount in the Payment Currency so purchased exceeds the sum
originally due to the Lender in the Payment Currency, the Lender
agrees to remit to the Borrower such excess.
13.3.3 The term "RATE OF EXCHANGE" in this Section 13.3 means the spot rate
at which the Lender, in accordance with normal practices, is able on
the relevant date to purchase the Payment Currency with the Judgment
Currency and includes any premium and costs of exchange payable in
connection with the purchase.
<PAGE>
-40-
ARTICLE 14
SUCCESSORS AND ASSIGNS
----------------------
14.1 Sale, Assignment, Transfer or Grant of Interest
-----------------------------------------------
14.1.1 The Borrower shall not sell, assign or transfer its rights or
obligations under this Agreement, the Notes, the Letter of Offer, the
Credit Facilities or any Security Documents or any interest therein,
nor shall it amalgamate, consolidate or merge with any other Person
without the prior written consent of the Lender.
14.1.2 At any time and from time to time the Lender may sell, assign,
transfer or grant an interest to any financial institution, or may
enter into a participation agreement with any financial institution
with respect to, all or any part of, or any interest in, the Lender's
rights, benefits or obligations hereunder and under the Letter of
Offer, the Notes and any Security Documents and, in the event of such
a sale, assignment, transfer, grant or participation and to the extent
thereof, such purchaser, assignee, transferee, grantee or participant
shall have the same rights and benefits against the Borrower as it
would have had if it were a Party of the First Part and a Lender
hereunder. The Borrower and the Lender agree to consent to any
amendments hereto which may be required to give effect to such sale,
assignment, transfer, grant or participation provided that no
additional liability hereunder will be incurred by any party hereto by
reason of such amendment.
14.2 Successors and Assigns
----------------------
This Agreement when executed and delivered by the parties hereto shall be
binding upon, and inure to the benefit of, the Borrower, the Lender and their
respective successors and assigns.
<PAGE>
-41-
ARTICLE 15
MISCELLANEOUS
-------------
15.1 Severability
------------
Any provision of this Agreement which is or becomes prohibited or unenforceable
in any jurisdiction shall not invalidate, affect or impair the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction does not invalidate or render unenforceable any such provision in
any other jurisdiction.
15.2 Survival of Representations
---------------------------
The representations and warranties made in or pursuant to this Agreement shall
survive the execution and delivery of this Agreement and continue in full force
and effect until the full payment and performance of all obligations of the
Borrower hereunder or pursuant hereto.
15.3 Amendments, Waivers, Etc.
------------------------
No amendment, modification or waiver of any provision of, and no waiver of the
strict observance, performance or compliance by the Borrower with any term,
covenant, condition or agreement contained in, this Agreement, the Notes, the
Letter of Offer or the Security Documents or any other security the Lender may
from time to time hold as security for the performance by the Borrower of its
obligations hereunder or thereunder and no indulgence granted by the Lender or
consent to any departure by the Borrower therefrom, shall in any event be
effective unless it shall be in writing and signed by the Lender and the
Borrower, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given.
15.4 Term of Agreement
-----------------
This Agreement shall continue in full force and effect until both the Credit
Facilities have terminated and all indebtedness of the Borrower under or
pursuant to this Agreement, the Letter of Offer and the Credit Facilities have
been indefeasibly paid and satisfied in full.
<PAGE>
-42-
15.5 Execution in Counterparts
-------------------------
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
15.6 Not an Adhesion Contract
------------------------
The Borrower confirms that this Agreement is not an adhesion contract and that
the terms and conditions hereof have been freely negotiated with the Lender.
15.7 Conflict
--------
In the case of any inconsistencies between the provisions of this Agreement and
the provisions of the Letter of Offer, the provisions of this Agreement shall
govern to the extent of such inconsistency.
15.8 New Legislation
---------------
The Borrower shall sign all documents or confirmations which the Lender may
reasonably request as a result of the introduction of new legislation, including
without limitation the coming into force of the new Civil Code of Quebec, for
the purpose of confirming, perfecting or granting the security granted or
intended to be granted pursuant to the Security Documents or confirming the
rights, title and interests of the Lender under this Agreement and/or the Letter
of Offer.
15.9 Foreign Exchange Future Contracts
---------------------------------
The Borrower hereby confirms and recognizes that amounts owing from time to time
under any foreign exchange future contract entered into between the Borrower and
the Lender shall be secured under the Security Documents.
<PAGE>
-43-
15.10 Death of Guarantor
------------------
If a Guarantor dies, the Lender shall have the right to immediately reduce the
authorized amount of any of its Credit Facilities by an amount equal to the
aggregate principal amount of all guarantees signed by such Guarantor whether
for the indebtedness of the Borrower or another Guarantor.
15.11 Language
--------
The parties hereby confirm their express wish that the present Agreement and all
documents and agreements directly and indirectly related thereto, including
notices, be drawn up in English. Notwithstanding such express wish, the parties
agree that any of such documents, agreements and notices or any part thereof or
of this Agreement may be drawn up in French. Les parties reconnaissent leur
volonte expresse que la presente convention ainsi que tous les documents et
conventions qui s'y rattachent directement ou indirectement, y compris les avis,
soient rediges en langue anglaise. Nonobstant telle volonte expresse, les
parties conviennent que n'importe quel desdits documents, conventions et avis ou
toute partie de ceux-ci ou de cette convention puissent etre rediges en langue
francaise.
15.12 Formal Date
-----------
For the purposes of convenience this Agreement may be referred to as bearing
formal date of February 25, 1994 irrespective of the actual date of execution.
<PAGE>
-44-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives thereunto duly authorized as of the date
first above written.
BANK OF MONTREAL
by: [SIGNATURE APPEARS HERE]
------------------------------
POLYMERES SCOTT, LTEE
SCOTT POLYMERS, LTD.
by: [SIGNATURE APPEARS HERE]
------------------------------
by: [SIGNATURE APPEARS HERE]
------------------------------
<PAGE>
EXHIBIT A TO THE AGREEMENT RESPECTING A TERM LOAN AND OTHER CREDIT FACILITIES
BEARING FORMAL DATE OF FEBRUARY 25, 1994 BETWEEN BANK OF MONTREAL AND POLYMERES
SCOTT, LTEE- SCOTT POLYMERS, LTD.
[DESCRIPTION OF LANDS]
An emplacement fronting on Clark Graham Avenue in the Town of Baie
d'Urfe, known and designated as the subdivision lot number FOURTEEN of
the original lot number THREE HUNDRED AND TWENTY-SIX (326-14) upon the
official plan and book of reference of the Parish of Sainte-Anne,
Registration Division of Montreal
together with all buildings, construction and immoveable property now
or hereafter located thereon or therein including without limitation
the building known as 19250 Clark Graham Avenue in the said Town;
<PAGE>
EXHIBIT B TO THE AGREEMENT RESPECTING A TERM LOAN AND OTHER CREDIT FACILITIES
BEARING FORMAL DATE OF FEBRUARY 25, 1994 BETWEEN BANK OF MONTREAL AND POLYMERES
SCOTT, LTEE SCOTT POLYMERS, LTD.
[DESCRIPTION OF MATERIAL CONTRACTS]
(1) Letter Agreement dated September 10, 1993 between Richard
Davidovich and Chevron Chemical Company;
(2) Styrene Monomer Sales Contract dated as of February 25, 1994 by
and among Chevron Chemical Company and SP Acquisition Co., Scott
Polymers, Inc. and the Borrower;
(3) Letter Agreement dated November 4, 1993 between Richard
Davidovich and James River Corporation;
(4) Supply Agreement dated as of December 23, 1993 by and between
Richard Davidovich and James River Corporation.
<PAGE>
[LETTERHEAD OF BANQUE DE MONTREAL]
Mai le 4 1995
StyroChem International Ltd
19250 Clark Graham
Baie d'Urfe Quebec
H9X 3R8
Attention Mme Pierrette Morissette
Chere Pierrette,
Tel que discute lors de notre conversation telephonique
d'aujourd'hui, nous confirmons que la disponibilite du credit d'exploitation de
$2,000,000. a ete augmentee a $2,500,000. sujet aux conditions deja en place. De
plus le maximum anterieurement autorise pour depenses en immobilisation a ete
augmente de $1,920,000. a $2,120,000.
Esperant le tout a votre satisfaction, nous demeurons
Bien a vous
/s/ Yvon Longpre
Yvon Longpre
Directeur principal
<PAGE>
UNOFFICIAL TRANSLATION
----------------------
BANK OF MONTREAL
Kirkland
2867 St-Charles Blvd.
Kirkland, Quebec
H9H 3B5
Telephone No.: 694-9351
Telecopier No.: 694-4411
May 4, 1995
StyroChem International Ltd.
19250 Clark Graham
Baie d'Urfe, Quebec
H9X 3E8
Attention: Mrs. Pierrette Morissette
- ------------------------------------
Dear Pierrette;
As discussed during our telephone conversation of today, we confirm
that the available operating credit has been increased from $2,000,000.00 to
$2,500,000 subject to the same conditions. Furthermore, the maximum authorized
amount for capital expenditures has been increased from $1,920,000 to
$2,120,000.
Hoping the whole to be satisfactory, we remain,
Yours very truly,
Yves Longpre
Principal Manager
<PAGE>
[LETTERHEAD OF BANQUE DE MONTREAL]
November 20th 1996
Mr. Radcliffe Hastings
Senior Vice-President and Treasurer
Radnor Holding Corporation
3 Radnor Corporate Center
Suite 300
Radnor Pensylvania
19087
Dear Mr Hastings
ACQUISITION OF STYROCHEM INTERNATIONAL LTD
------------------------------------------
As recently discussed, we enclosed copy of a letter with terms and
conditions for the renewal of credit facilities under the name of StyroChem
International Ltd sent to Mr. Richard Davidovich. In addition to the above
documentation we enclosed as appendix "A" conditions to be obtained before the
change of ownership of the company. The letter of undertaking mentioned in
appendix "A" has to be prepared on letterhead of StyroChem International Ltd and
countersign by Radnor Holding Corporation.
If you have any question please do not hesitate to contact me
Yours Truly
Yvon Longpre
<PAGE>
StyroChem International Ltd -1- November 19, 1996
Borrower: StyroChem International Ltd
FACILITY
Facility #1 FirstBank Cash Management Account (FCMA) in the amount of
$2,500,000 subject to terms and conditions as outlined herein.
Bank of Montreal Prime Rate plus one percent per annum (i.e.
Prime + 1.000%) floating, accrued from day to day, calculated and
payable monthly in arrears based on a calender year.
A monthly fee of $280 is payable (subject to review and
adjustment annually by the Bank).
Under this facility the borrower has the following option(s)
within the global amount of the facility described above:
Demand Loan revolving U.S funds in canadian dollars equivalent
with role over by multiple of $50,000.
Bank of Montreal U.S. Base Rate plus one percent per annum (i.e.
USBR + 1.000%) floating, accrued from day to day, calculated and
payable monthly in arrears based on a calender year.
Commercial Letters of Credit issued and accepted for a total of
$750,000 canadian dollars equivalent not to be used to
guaranteeing obligations to third parties and for a maximum of 12
months.
Commission: Standard
Foreign Exchange Foward Contract up to $500,000. (10% of
$5,000,000) for a term not to exceed 12 months.
Commission: Standard
Facility #2 Fixed Rate Term Loan in the amount of $731,250. (original amount
was $1,300,000.) Loan is repayable over 16 quarterly payments of
$81,250 principal plus interest, calculated on a calendar year
basis. Last payment will be November 30th 1998.
Bank of Montreal Prime Rate plus one point fifty percent per
annum (i.e. Prime + 1.5000%) floating, accrued from day to day,
calculated and payable monthly in arrears based on a calender
year.
<PAGE>
StyroChem International Ltd -2- November 19, 1996
Repayment: 100% of net cash proceeds from the permitted sale/sale-
---------
leaseback of any fixed asset of the Borrower shall applied, in reverse
order relative to maturity, to the prepayment under the facility #2 to
the extend not reinvested in replacement assets.
Optional Prepayment: Prepayments from internal cash flow(CFADS)
-------------------
including the permitted sale/sale-leaseback of any asset of the
Borrower as outlined in scheduled repayments, or from further equity
issues, will be permitted on facility 2 in inverse order of maturity
without penalty. A fee of 3 months interest will apply on the amount
prepaid in the case of all other prepayments of facility 2.
Prime Rate and US Base Rate:
"Prime Rate" and "US Base Rate" means the floating annual rate of
interest established from time to time by the Bank of Montreal as the
reference rate it will use to determine rates of interest on Canadian
dollar loans, and U.S. dollar loans to borrowers in Canada.
TERM AND PREPAYMENT:
The demand facility shall revolve, and may be terminated in whole or in part and
amounts outstanding thereunder shall be payable in whole or in part upon demand
by the Bank, notwithstanding the payment or nonpayment of principal, interest or
fees by the Borrower or compliance or noncompliance with any undertaking or
covenant given to the Bank herein or elsewhere.
The term loan facility shall be non-revolving and all outstanding principal,
interest and fees accrued in connection therewith shall be due and payable by
the Borrower to the Bank on November 30, 1998 or such earlier date as default
occurs under the applicable loan documentation entered into by the Borrower in
connection therewith.
MARGINS:
The availability of funds under Facility Number 1 is subject to a maximum of:
75% of the Bank's valuation of assigned/hypothecated canadian accounts
receivable, 60% of U.S. accounts receivable after deducting for both can, and
us, all the accounts receivable 60 days or more past due, accounts in dispute,
holdbacks, intercompany accounts, contra accounts and the value of any prior
ranking claim plus 90% of accounts receivable insured by EDC. plus 40% of the
---- ----
Bank's valuation of assigned/hypothecated inventory located at the Quebec plan
site (at lower of cost or market) which is free and clear, excluding work in
process, consignment inventory or inventory subject to any prior charge or claim
and 30 day goods. The maximum margin value of inventory is $700,000. Also, a
maximum of 50% of advances are permitted to be margined by inventory.
<PAGE>
StyroChem International Ltd -3- November 19, 1996
SECURITY:
Appropriate documentation evidencing corporate authority.
FirstBank Lending Agreement.
Registered Moveable Hypothec on all present and future accounts receivable and
inventory.
Assignment of Inventory via Section 427 of the Bank Act.
Registered Moveable Hypothec (Universality), providing the Bank with a first
charge over all present and future Property.
Registered Moveable Hypothec (Equipment), providing the Bank with a first
charge over all equipments.
An unconditional Guarantee by S. P. Acquisition Ltd of payment of all present
and future debts and liabilities, both direct and indirect, of the Borrower to
the Bank up to the sum of $3,300,000 along with appropriate borrowing
resolutions, solvency certificate and legal opinion.
Registered Collateral Demand Hypothec for $3,300,000 providing a first rank
charge over property located at 19250 Clark Graham Baie d'Urfe Hypothec of full
covering insurance with standard mortgage clause showing the Bank as loss payee.
Subrogation and Subordination of indebtedness owing by the Borrower to S. P.
Acquisition Co. and a completed pledge to the Bank of the endorsed note
evidencing such indebtedness. $6,200,000 of loans are to be Subrogated.
Subrogation and Subordination of indebtedness owing by the Borrower to StyroChem
International Inc. and a completed pledge to the Bank of the endorsed note
evidencing such indebtedness. $1,125,000. of loans are to be subrogated. This
subrogation is subject to be released or reduced only when the debt/equity
ratio of 1.5:1 will be achieved.
Letter of undertaking to the effect that there will be no dividends, advances,
loans to any individuals or entities without prior Bank consent. The maximum
amount of inter-company charges is limited to $25M per year.
Assignment of EDC Insurance on foreign accounts receivable
Acquisition agreement between Scott Paper Co. and S.P. Acquisition co.
Satisfactory legal opinion pertaining to the validity & efficacity of the
hypothecs and loan agreement.
Environmental audits phase 1 and 11
Environmental chek list.
Solicitors favourable opinion on the collateral demand hypothec
Assignment of fire insurance policy.
<PAGE>
StyroChem International Ltd -4- November 19, 1996
Letter of undertaking to subrogate additional funds when required by the Bank in
order to respect covenants.
Moveable hypothec and pledge of 10 shares of the capital stocks of Scott
Polymers
GENERAL CONDITIONS:
The following reports are required;
Quarterly company-prepared financial statements within 45 days of quarter end.
Annual audited financial statements within 120 days of fiscal year end.
MARGIN REPORTING:
Within fifteen (15) business days after the last calendar day of each month and
as at the last business day of such month there shall be delivered to the Bank:
- - a certified aged list of outstanding accounts receivable identifying accounts
in dispute, intercompany accounts, contra accounts and the value of any
prior ranking claims.
- - a certified valuation of inventory excluding inventory held on a consignment
basis, and identifying all inventory subject to a prior charge or claim in
favour of a creditor other than the Bank.
COVENANTS:
Standard legal covenants included in security documentation required by the
Bank.
In addition the Borrower covenants that:
1) Capital expenditures will not exceed $384,000 in any fiscal year.
2) Its total debt to equity ratio should not exceed 2.0:1 for the year ending
mar/96 and 1.5:1 for the year ending mar/97 and thereafter.
3) It will maintain a minimum working capital ratio of 0.750:1 for year
ending mar/96 and 1.01:1 for year ending mar/97 and thereafter.
4) It will maintain a minimum CFADS ratio of 2.0:1 for year ending mar/96 and
2.5:1 for year ending mar/97 and thereafter.
<PAGE>
StyroChem International Ltd -5- November 19,1996
EXPENSES:
The borrower will be responsible, in addition to those fees outlined above, for
the following:
All legal, accounting and other professional fees, registry searches and
registration fees for searching, preparing, execution and registration of all
loan and security documentation.
All other costs and out of pocket expenses incurred by the Bank in connection
with the establishment, administration and enforcement of the
Facility/Facilities and the obtaining of applicable security.
An application fee of $3,000 to offset the Bank's cost for further evaluating
your financing request is payable before further evaluation will be conducted.
<PAGE>
APPENDIX "A"
------------
CONDITIONS AND/OR DOCUMENTATIONS TO OBTAINED
--------------------------------------------
AT TIME NEW OWNERSHIP WILL TAKE OVER OF
---------------------------------------
STYROCHEM INTERNATIONAL LTD
---------------------------
- - Favorable bankers reports on Radnor Holding Corporation and WinCup Holding
Inc.
- - Letter of undertaking to be obtained from the company and countersigned by
Radnor Holding Corporation to the effect there will be no upstream flow of
funds by way of dividends, bonus, administration fees interest paid on funds
loaned to the subsidiary or any other form for over a maximum of $25,000.
yearly.
- - According to section 7.9 of the draft Stock Purchase Agreement, the buyer has
stipulated that a Phase 1 environmental survey and Phase 11 if needed will be
conducted. A copy of these reports are required.
- - The "Offering" of senior notes makes mention on page 9 of restrictions to be
imposed on additional credit requirements. Full particulars will be needed to
ensure the account will operate in accordance with the covenants contained in
the indenture.
- - Written information and/or documentation explaining the $23.8MM forgiven debts
by Bank of America during year 1995.
<PAGE>
EXHIBIT 10.65
GUARANTY
--------
Date: February 25, 1994
IN CONSIDERATION of credit and financial accommodations extended, to be
extended or continued to SCOTT POLYMERS, LTD., a Quebec corporation (the
"Borrower"), by BANK OF MONTREAL (the "Bank"), and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
each of the undersigned, jointly and severally, if more than one person signs
this Guaranty (hereinafter together with all heirs, if any, successors, and
assigns individually called a "Guarantor" and collectively, if more than one,
called the "Guarantors"), unconditionally guarantees to the Bank the prompt and
full payment when due of the Guaranteed Indebtedness, as defined below, together
with any and all costs and expenses incurred by the Bank in enforcing this
Guaranty, including reasonable attorneys' fees.
The term "Guaranteed Indebtedness," shall mean (i) all indebtedness,
obligations, and liabilities of the Borrower to the Bank of any kind or
character, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, and regardless of whether such indebtedness, obligations,
and liabilities may, prior to their acquisitions by the Bank, be or have been
payable to or in favor of a third party and subsequently acquired by the Bank
(it being contemplated that the Bank may make such acquisitions from third
parties), including without limitation, all indebtedness, obligations, and
liabilities of the Borrower to the Bank now existing or hereafter arising by
note, draft, acceptance, guaranty, endorsement, letter of credit assignment,
purchase, overdraft, discount, indemnity agreement or otherwise, (ii) all
accrued but unpaid interest on any of the indebtedness described in (i) above,
(iii) all obligations of the Borrower to the Bank under any documents
evidencing, securing, governing, and/or pertaining to all or any part of the
indebtedness described in (i) and (ii) above (collectively, the "Loan
Documents"), (iv) all costs and expenses incurred by the Bank in connection with
the collection and administration of all or any part of the indebtedness and
obligations described in (i), (ii), and (iii) above or the protection or
preservation of, or realization upon, the collateral securing all or any part of
such indebtedness and obligations, including without limitation, all reasonable
attorneys' fees, and (v) all renewals, extensions, modifications, and
rearrangements of the indebtedness and obligations described in (i), (ii), (iii)
and (iv) above.
If and only if a dollar amount is inserted in the blank lines in this
paragraph, the liability of the Guarantors hereunder shall not exceed an
aggregate principal amount at any time of Three Million Three Hundred Thousand
and No/100 Dollars (C$3,300,000.00) in lawful money of Canada, plus interest
thereon at a rate of one and one-half of one percent (1 1/2) per annum above the
Bank's prime rate in effect from time to time, from date of demand for payment
<PAGE>
of same. The term "Bank's prime rate" means the floating annual rate of interest
established from time to time by the Bank as the base rate it will use to
determine rates of interest on loans in lawful money of Canada to customers in
Canada and designated as its Prime Rate.
If for the purpose of obtaining judgment in any court, it is necessary to
convert a sum due hereunder in lawful money of Canada ("Canadian dollars") into
lawful money of the United States ("US dollars"), the rate of exchange used
shall be that at which in accordance with normal banking procedures the Bank
could purchase Canadian dollars with US dollars on the business day preceding
that on which final judgment is given. The obligation of the undersigned in
respect of any such sum due to the Bank hereunder shall, notwithstanding any
judgment in US dollars, be discharged only to the extent that on the business
day following receipt by the Bank of any sum adjudged to be so due in US
dollars, the Bank may in accordance with normal banking procedures purchase
Canadian dollars with the US dollars; IF THE CANADIAN DOLLARS SO PURCHASED ARE
LESS THAN THE SUM ORIGINALLY DUE TO THE BANK IN CANADIAN DOLLARS, THE
UNDERSIGNED AGREES, AS A SEPARATE OBLIGATION AND NOTWITHSTANDING ANY SUCH
JUDGMENT, TO INDEMNIFY THE BANK AGAINST SUCH LOSS AND IF CANADIAN DOLLARS
PURCHASED EXCEED THE SUM ORIGINALLY DUE TO THE BANK IN CANADIAN DOLLARS, THE
BANK AGREES TO REMIT TO THE UNDERSIGNED SUCH EXCESS.
This is an absolute, continuing, irrevocable, and unconditional Guaranty,
and all extensions of credit and financial accommodations heretofore,
concurrently herewith, or hereafter made by the Bank to the Borrower, including,
without limitation, the Guaranteed Indebtedness, shall be conclusively presumed
to have been or acquired in acceptance hereof; provided, that interest
guaranteed hereunder shall not exceed the maximum permitted by applicable law.
Each Guarantor represents and warrants to the Bank that:
(1) such Guarantor has received, or will receive, direct or indirect
benefit from the making of this Guaranty and if Guarantor is a corporation, the
Board of Directors of Guarantor has determined that this Guaranty may reasonably
be expected to benefit, directly or indirectly, Guarantor;
(2) such Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of the Borrower and is
familiar with the value of any and all collateral intended to be security for
the payment of any amounts guaranteed hereunder; however, such Guarantor is not
relying on such financial condition or collateral as an inducement to enter into
this Guaranty;
-2-
<PAGE>
(3) such Guarantor has the power and authority to execute, deliver, and
perform this Guaranty, and the execution, delivery, and performance of the
Guaranty by such Guarantor do not and will not violate any law or any rule,
regulation, or order of any governmental authority;
(4) neither the Bank nor any other party has made any representation,
warranty, or statement to any Guarantor in order to induce such Guarantor to
execute this Guaranty; and
(5) as of the date hereof, and after giving effect to this Guaranty and
the contingent obligation evidenced hereby, each Guarantor is, and will be,
solvent, and has and will have property and assets which, fairly valued, exceed
its, his, or her obligations, liabilities, and debts.
Each Guarantor waives promptness, diligence, notice of acceptance of this
Guaranty, and notice of the incurring of any obligation, indebtedness, or
liability to which this Guaranty applies or may apply, and waives presentment,
demand of payment, notice of intent to accelerate, notice of acceleration,
notice of dishonor or nonpayment, and the taking of any other action by the Bank
and giving any notice of default or any other notice to, or making any demand on
the Borrower, any other guarantor, or any other party. Each Guarantor
specifically waives any requirements imposed by Chapter 34 of the Texas
Business and Commerce Code.
This is an absolute Guaranty of payment and not of collection. In the
event of a default by the Borrower in the payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, the
Guarantors, jointly and severally, shall without notice or demand, promptly pay
the amount due thereon to the Bank in lawful money of the United States. Should
the Bank seek to enforce the obligations of any Guarantor hereunder by action in
any court, each Guarantor waives any requirement, substantive or procedural,
that a judgment first be rendered against the Borrower or any other person or
entity, or that any action be brought against the Borrower or any other person
or entity, or that the Borrower or any other person or entity should be joined
in such cause, or that the Bank shall first enforce rights against any
collateral which shall ever have been given to secure this Guaranty or the
Guaranteed Indebtedness or any part thereof. The obligations of the Guarantors
and each of them hereunder are several from those of the Borrower, or any other
person or entity, and are primary obligations concerning which each Guarantor is
a principal obligor. Such waiver shall be without prejudice to the Bank's right,
at its option, to proceed against the Borrower or any other person or entity,
whether by separate action or by joinder. The Guarantors agree that this
Guaranty shall not be discharged except by the complete payment and performance
in full of the Guaranteed Indebtedness. The obligations of
-3-
<PAGE>
the Guarantors hereunder shall not be released, diminished, impaired, reduced,
or affected by, nor shall the Bank be liable for, any reason or event,
including, without limitation, one or more of the following: (1) any disability
of the Borrower, or any receivership, insolvency, bankruptcy, or other
proceedings affecting the Borrower or any of the Borrower's property; (2)
receivership, insolvency, bankruptcy, or other proceedings affecting any
Guarantor or any other person or entity; (3) the release or discharge of the
Borrower, any Guarantor, or any other person or entity from the performance of
any obligation contained in any promissory note or other instrument issued in
connection with, evidencing, or securing the Guaranteed Indebtedness or any part
thereof, whether occurring by reason of law or otherwise; (4) the taking or
accepting of any collateral for this Guaranty or any or all of the Guaranteed
Indebtedness; (5) any failure by the Bank to acquire, perfect, or continue any
lien or security interest on collateral securing the Guaranteed Indebtedness or
any part thereof or this Guaranty; (6) the impairment of any collateral securing
the Guaranteed Indebtedness or any part thereof of this Guaranty; (7) any
failure by the Bank to sell any collateral securing the Guaranteed Indebtedness
or any portion thereof or this Guaranty in a commercially reasonable manner or
as otherwise required by law; (8) any invalidity or unenforceability of or
defect or deficiency in any promissory note, loan agreement, security agreement,
deed of trust, or other instrument issued in connection with, evidencing, or
securing the Guaranteed Indebtedness or any part thereof or this Guaranty; or
(9) any other circumstance which might otherwise constitute a defense available
to, or discharge of, the Borrower or any Guarantor. This Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Guaranteed Indebtedness is rescinded or must otherwise be returned
by the Bank upon the insolvency, bankruptcy, or reorganization of the Borrower,
any Guarantor, or otherwise, all as though such payment had not been made.
The Bank may at any time, without the consent of or notice to any
Guarantor, without incurring responsibility to the undersigned and without
impairing, releasing, reducing, or affecting the obligations of the undersigned
hereunder: (1) change the manner, place, or terms of the Guaranteed Indebtedness
or any part thereof, renew, extend, modify, rearrange, or alter the Guaranteed
Indebtedness or any part thereof, and this Guaranty shall apply to the
Guaranteed Indebtedness as any such Guaranteed Indebtedness may be changed,
extended, renewed, modified, rearranged, or altered in any manner; (2) sell,
exchange, release, surrender, subordinate, realize upon, or otherwise deal with
in any manner and in any order any collateral for the Guaranteed Indebtedness or
any portion thereof or any setoff against any of said Guaranteed Indebtedness;
(3) exercise or refrain from exercising any rights against the Borrower or
others, or otherwise act or refrain from acting; (4) settle or compromise any
Guaranteed Indebtedness, and subordinate the payment of all or any part of such
Guaranteed Indebtedness to
-4-
<PAGE>
the payment of any obligations, indebtedness, or liabilities which may be or
become due to the Bank or others; and (5) apply any sums paid to the Bank by any
Guarantor, the Borrower, or others to the Guaranteed Indebtedness in such order
and manner as the Bank in its sole discretion may determine. Whenever any
Guarantor pays any sum which is or may become due under this Guaranty, notice
shall be delivered to the Bank at the time of such payment that the payment has
been made by such Guarantor and in the absence of such notice any sum received
by the Bank on account of the Guaranteed Indebtedness shall be conclusively
deemed paid by the Borrower.
Notwithstanding any payment or payments made by any Guarantor by reason of
this Guaranty, such Guarantor shall not be subrogated to any rights of the Bank
until all of the Guaranteed Indebtedness shall have been paid and performed in
full. Any claim of any Guarantor against the Borrower arising from the payment
or payments made by such Guarantor by reason of this Guaranty shall be in all
respects subordinated to the full and complete payment and discharge of the
Guaranteed Indebtedness, and no payment by any Guarantor by reason of this
Guaranty shall give rise to any claim of such Guarantor against the Bank. Unless
and until the Guaranteed Indebtedness shall have been paid and discharged in
full, no Guarantor will assign or otherwise transfer any such claim against the
Borrower to any other person or entity.
In the event that the Guarantors are entitled to receive any notice under
the Uniform Commerical Code as enacted in the State of Texas of the sale or
other disposition of any collateral for the Guaranteed Indebtedness or this
Guaranty, reasonable notice shall be deemed given when such notice is deposited
in the United States mail, postage prepaid, at the address for each Guarantor
given above, five (5) days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
No delay on the part of the Bank in exercising any right hereunder or
failure to exercise the same shall operate as a waiver of such right, nor in any
event shall any modification or waiver of the provisions of this Guaranty be
effective unless in writing and signed by the Bank; nor shall any such waiver be
applicable except in the specific instance for which given.
Upon the failure of the Borrower to pay any portion of the Guaranteed
Indebtedness, the Bank is hereby authorized, to the extent permitted by
applicable law, at any time and from time to time, without notice to any
Guarantor (any such notice being expressly waived by each Guarantor), to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held, and any and all other sums at any time owing, by the
Bank to or for the credit or account of any Guarantor, against any and all of
the obligations of such Guarantor
-5-
<PAGE>
now or hereafter existing under this Guaranty, irrespective of whether or not
the Bank shall have made any demand under this Guaranty and irrespective of
whether or not such obligations may be contingent and unmatured. The rights of
the Bank under this paragraph are in addition to all other rights and remedies
(including, without limitation, other rights of setoff) which the Bank may have
hereunder or under any applicable law.
As security for the Guaranteed Indebtedness and this Guaranty, each
Guarantor hereby grants the Bank a security interest in all money, instruments,
securities, deposits, cash, and other property of such Guarantor now or
hereafter in the possession or control of the Bank.
This Guaranty is for the benefit of the Bank, its successors, and assigns,
and in the event of an assignment by the Bank, its successors, or assigns, of
the Guaranteed Indebtedness or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Guaranteed Indebtedness or portion
thereof so assigned, may be transferred with such indebtedness. This Guaranty is
binding upon each Guarantor and its successors and assigns, including, without
limitation, any person or entity obligated by operation of law upon the
reorganization, merger, consolidation, or other change in the organizational
structure (corporate, partnership, or otherwise) of such Guarantor, or, if the
Guarantor is an individual, the heirs, executors, administrators, and personal
representatives, if any, of such Guarantor.
If more than one Guarantor signs this Guaranty, each Guarantor shall be
jointly and severally liable hereunder. Anyone signing this Guaranty shall be
bound hereby, whether or not any other party signs this Guaranty or is released
herefrom at any time. Each Guarantor hereby agrees that the Bank shall not be
liable for any act or omission on the part of the Bank, its officers, employees,
or agents except willful misconduct.
Each Guarantor shall furnish to the Bank at any time and from time to time
such reports, data, and financial statements concerning such Guarantor's
business and financial condition as the Bank may require.
Each Guarantor shall pay on demand all attorney's fees and all other costs
and expenses incurred by the Bank in connection with the preparation,
administration, enforcement, and/or collection of this Guaranty, including,
without limitation, all attorneys' fees and all other costs and expenses
incurred by the Bank in connection with any bankruptcy or insolvency proceeding.
This Guaranty is in addition to and does not replace, cancel, modify, or
affect any other guaranty of the Guarantors, or any of them, now or hereafter
held by the Bank that relates to the Borrower or any other person or entity.
-6-
<PAGE>
Any provisions of this Guaranty held by a court of competent jurisdiction
to be invalid or unenforceable shall not impair or invalidate the remainder of
this Guaranty and the effect thereof shall be confined to the provision held to
be invalid or unenforceable.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. THIS GUARANTY HAS BEEN ENTERED INTO IN TARRANT COUNTY, TEXAS, AND IT
SHALL BE PERFORMABLE FOR ALL PURPOSES IN SUCH COUNTY. COURTS WITHIN THE STATE
OF TEXAS SHALL HAVE JURISDICTION OVER ANY AND ALL DISPUTES ARISING UNDER OR
PERTAINING TO THIS GUARANTY. VENUE IN ANY SUCH DISPUTE MAY BE IN TARRANT
COUNTY, TEXAS, BUT NOTHING HEREIN CONTAINED SHALL PREVENT THE BANK FROM
PROCEEDING AT ITS ELECTION AGAINST THE GUARANTORS IN THE COURTS OF ANY OTHER
STATE, PROVINCE OR COUNTRY.
Executed as of the day and year first written above.
Guarantor: Guarantor's Address:
SP ACQUISITION CO., 3607 North Sylvania Ave.
a Delaware corporation Fort Worth, TX 76111
By: /s/ signature appears here
-----------------------------
Name:
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Title:
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