SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended February 26, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to________
Commission file number 1-4415
Park Electrochemical Corp.
(Exact name of registrant as specified in its charter)
New York 11-1734643
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 Dakota Drive, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 354-4100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
[Not Applicable]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing.
As of close
Title of Class Aggregate market value of business on
Common Stock, $209,701,968* May 5, 1995
$.10 par value
[cover page 1 of 2 pages]
Page 1 of 282; Exhibit index appears on page 41
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date.
Shares As of close
Title of Class outstanding of business on
Common Stock, 5,725,651 May 5, 1995
$.10 par value
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for 1995 Annual Meeting of Shareholders--
Incorporated by reference into Part III of this Form 10-K.
=====================================================================
*Included in such amount are 781,556 shares of common stock valued at
$36.625 per share and held by Jerry Shore, the Registrant's Chief
Executive Officer and Chairman of the Board and a member of the
Registrant's Board of Directors.
[cover page 2 of 2 pages]
PART I
Item 1. Business.
General
Park Electrochemical Corp. ("Park"), through its subsidiaries
(unless the context otherwise requires, Park and its subsidiaries are
hereinafter called the "Company"), is primarily engaged in the design,
manufacture and marketing of advanced electronic materials used in the
production of sophisticated, multilayer printed circuit boards. The Company
is a leading supplier of high performance laminates, prepregs and semi-
finished circuit boards to computer and electronics original equipment
manufacturers ("OEMs") and to major independent printed circuit board
manufacturers. The Company's advanced electronic materials are used in
computer, telecommunication, transportation, aerospace, military electronics
and other sophisticated electronic equipment applications. The Company is
also engaged in the design, manufacture and marketing of plumbing hardware
and industrial components.
The Company's business is divided into two industry segments:
electronics and plumbing and industrial components. See Note 12 of the
Notes to Consolidated Financial Statements included in Item 8 of this Report
for information concerning the amounts of sales to unaffiliated customers,
operating profit, identifiable assets, depreciation and amortization, and
capital expenditures attributable to each of the Company's industry segments
during its last three fiscal years.
The sales, operating profit and identifiable assets of the Company's
foreign operations for the last three fiscal years are also set forth in
Note 12 of the Notes to Consolidated Financial Statements included in Item
8 of this Report. Such operations primarily consist of the operations of
the Company's subsidiaries in the United Kingdom, France and Singapore. The
Company's foreign operations are subject to the impact of foreign currency
fluctuations. See Note 1 of the Notes to Consolidated Financial Statements
contained in Item 8 of this Report.
Electronic Operations
The Company produces high technology laminates which are
manufactured primarily to customer specifications and are used principally
in the production of sophisticated multilayer printed circuit boards. These
laminates are made of conductive metals attached to insulating materials and
require rigorous process and quality control during production. The process
of converting the composite laminates into a printed circuit board involves
the transfer of the graphics of the printed wiring pattern to the sheet to
be processed, etching off that part of the conductive sheet that is not
required, and leaving the printed wiring conductors on the insulating
materials. The predominant composite used in the manufacture of advanced
electronic materials consists of the combination of copper conductive
material and insulation made of epoxy and other resins reinforced with woven
fiberglass or prepreg. The Company produces prepreg both for use in the
production of high technology laminates and for direct sale to its
customers. These customers would normally perform the process of assembling
the prepreg and the copper conductive material to the core printed circuit
board. These customers would then complete the multilayer printed circuit
board by transferring and etching the printed wiring pattern to the outside
layers as described above. The Company also produces sophisticated semi-
finished multilayer printed circuit boards and panels. The production of
this product requires additional processing, by the Company, of its laminate
and prepreg products.
Industry Background
Printed circuit boards are widely used in the manufacture of
electronic equipment as the foundation for, and the interconnection between,
various integrated circuits and electronic components. Printed circuit
boards consist of metallic traces which conduct electrical current and which
are on or bonded within laminates. Initially, most boards produced were
double-sided printed circuit boards, with a different pattern of metallic
traces printed on each side of the printed circuit boards. Rapid techno-
logical advances in both semiconductor design and fabrication techniques
have placed significant demands on the performance of printed circuit boards
and have served as the impetus for development of new electronic materials,
including increasingly more advanced laminates. Greater density, complexity
and miniaturization of electronic circuitry have resulted in the development
of increasingly sophisticated electronic equipment which combines higher
performance and reliability with reduced size and cost. This has created
increased demand for more sophisticated printed circuit boards and, in
response to this demand, multilayer printed circuit boards were developed
which incorporate multiple layers of metallic traces and expand the amount
of circuitry available on the board. In addition, innovative electronic
manufacturing techniques, such as the direct surface mounting of components
to the printed circuit boards, have been developed in order to achieve
higher density circuitry and lower cost per circuit interconnection.
These trends in the printed circuit board industry have placed
increasingly rigorous demands on the electrical, thermal, chemical and
mechanical properties of the electronic materials used in printed circuit
board production. For example, electrical properties of laminates must be
highly consistent and predictable in order to avoid circuit timing mal-
functions. Likewise, mechanical properties must be tightly controlled so
that the various layers used in a multilayer printed circuit board can be
properly aligned. Thermal stability is also critical, particularly for
dense, high speed systems, because of the heat generated on the printed
circuit board.
Products and Services
The Company's high technology laminates are produced to customer
specifications using varying concentrations of insulating materials and
conducting materials. The Company's high technology prepreg and semi-
finished multilayer products are also manufactured to customer specifica-
tions. The Company specializes in creating electrically, mechanically,
chemically and thermally predictable materials which consistently meet the
special requirements of its customers. Because product requirements vary
from customer to customer, the Company's electronics circuitry business
requires a significant degree of customer service. The Company must be
capable of simultaneously filling many diverse customer orders on a timely
basis. The Company believes that its success in meeting these requirements
is based in large part on its ability to work with its customers in
developing product specifications, its willingness to allocate research and
development resources to meet new product requirements and its application
of stringent quality control to its technologically advanced production
process. The quality control program employed by the Company involves
monitoring each product and the materials used in its manufacture for purity
and uniformity, and maintaining highly disciplined process control
throughout the manufacturing cycle to assure uniformity and conformity with
each customer's specifications. The Company also offers incentive programs
to employees for their contribution to meeting product specifications on a
consistent basis.
Due to its emphasis on service and its desire to remain close to its
markets and customers, the Company has established multiple electronic
circuitry facilities in the Northeast United States, the Southwest United
States (California and Arizona), the United Kingdom, France and Singapore.
During the fiscal year ended February 28, 1993, the Company added two new
facilities dedicated to the manufacture of very high performance leading
edge printed circuitry materials, one in Arizona, USA and one in Lannemezan,
France.
Marketing and Customers
The Company's electronic materials and circuitry products are
marketed primarily to large computer and electronics OEMs and to major
independent printed circuit board manufacturers who are located throughout
the United States, Canada, Europe and the Far East. The Company's selling
effort typically involves several stages and relies on the talents of
Company personnel at different levels, from management to sales personnel
and quality engineers. Accordingly, the Company's strategy emphasizes the
use of multiple facilities established in market areas in close proximity to
its customers. After securing an order, Company personnel work closely with
the customer in developing the specifications needed for that customer's
product. The development work done with one customer, nevertheless, is
often applicable to the needs of other customers.
During the Company's 1995 fiscal year, more than 10% of the
Company's sales were made to a major domestic manufacturing concern. This
concern purchased electronic circuitry product manufactured by the Company.
The Company believes its relations with this customer to be very
satisfactory and further believes this customer will continue to make
significant purchases during the immediate future. Although the Company's
electronics segment is not dependent on this single customer, the loss of
this customer could have a material adverse effect on the business of this
segment. Although no other single customer accounted for 10% or more of
total sales of the Company for the 1995 fiscal year and the electronics
segment is not dependent on any other single customer, the loss of a major
customer or of a group of this segment's customers could have a material
adverse effect upon the business of this segment.
The Company's electronics segment's products are marketed by sales
personnel in industrial centers in the United States, Europe and the Far
East. Such personnel include both salaried employees and independent sales
representatives who work on a commission basis.
Materials and Sources of Supply
The principal materials used in the manufacture of the Company's
electronics products consist of copper foil, fiberglass cloth and synthetic
reinforcements, and specially formulated resins and chemicals. It is the
Company's philosophy to identify and concentrate on a limited number of
chosen suppliers of copper foil, resins and chemicals, and fiberglass cloth
and reinforcements. The Company attempts to develop and maintain close
working relationships with these chosen suppliers who have dedicated
themselves to complying with the Company's stringent specifications and
technical requirements. Although, as stated, the Company attempts to
concentrate on a limited number of suppliers for these materials, the
Company has nevertheless identified alternate sources of supply for each of
the aforesaid materials. However, there exists a limited number of
qualified suppliers of these materials. Therefore, although the Company
considers its relationships with its suppliers to be satisfactory, a
disruption of the supply of material from one of the Company's principal
suppliers could adversely affect the electronics segment's business.
Substitutes for the aforesaid materials are not readily available and an
inability to obtain essential materials, if prolonged, could materially
adversely affect the business of the Company's electronics segment.
Competition
The Company's electronics business is highly competitive. The
Company has many competitors of varying sizes and financial resources in the
electronic materials business located in the United States, Western Europe
and the Far East. Since the Company attempts to focus its efforts toward
the more sophisticated and "high-tech" end of the electronic materials
markets, quality and service, as well as price, are very significant
competitive factors. The Company's competitors in the high performance
electronic materials market consist of companies dedicated to particular
specialty areas as well as divisions and subsidiaries of some of the world's
major electronics and manufacturing concerns. These major concerns are
substantially larger and have significantly greater financial resources than
the Company. The principal competitive factors in the electronic materials
market are quality, customer service and price. The Company believes that
its competitive advantage is based on its ability to deliver, on a timely
basis, quality products that consistently meet customers' specifications.
The markets in which the Company's electronics operations compete
are characterized by rapid technological advances, and the Company's
position in these markets depends largely on its continued ability to
develop technologically advanced and highly specialized products. Although
the Company's products are currently technologically competitive and the
Company directs a significant amount of its time and resources toward
maintaining its technological competitive advantage, there is no assurance
that the Company's products will be technologically competitive in the
future, or that the Company will continue to develop new products that are
technologically competitive.
Plumbing and Industrial Component Operations
The Company's plumbing and industrial component segment is comprised
of its plumbing, advanced composite, and industrial adhesive tape busi-
nesses. The Company markets plumbing hardware products which it designs and
manufactures typically from chrome and brass plated zinc and plastic. The
Company also markets brass cast and plastic plumbing hardware products and
components. These products are sold to OEMs, hardware and plumbing
wholesalers and home improvement centers. The Company's plumbing hardware
products are designed for low cost and ease of installation and repair and
also for water and energy conservation. The advanced composite business'
products are utilized by the defense, aerospace and other commercial
industries. The Company's specialty industrial adhesive tape business
produces tapes and bonding films for a variety of applications including
joining industrial components together.
Marketing and Customers
The Company's plumbing and industrial component customers,
substantially all of which are located in the United States, include OEMs,
hardware and plumbing wholesalers, home improvement centers and manufactur-
ers in the defense and aerospace industry. All of such products are
marketed by sales personnel including both salaried employees and
independent sales representatives who work on a commission basis. Zinc and
plastic plumbing hardware products are manufactured and assembled at the
Company's facilities in Grand Rapids and Comstock Park, Michigan. The
Company's brass cast plumbing hardware products are designed by the Company
and manufactured by a prominent Mexican faucet manufacturer under a long
term contract between the Company and this manufacturer. The Company's
advanced composite manufacturing facility is located in Waterbury,
Connecticut. Holyoke, Massachusetts is the site of the Company's specialty
adhesive tape business.
The Company has entered into an exclusive contract with a major U.S.
faucet manufacturer to supply them with a key group of plastic assembled
products. No single plumbing and industrial component customer accounted
for 10% or more of the Company's total sales during the last fiscal year.
However, the loss of a major customer or of a group of some of the largest
customers of the plumbing and industrial component segment could have a
material adverse effect upon this segment.
Manufacturing and Sources of Supply
The Company designs and manufactures its plumbing hardware to its
own specifications and to the specifications of OEMs, using combinations of
materials and product designs that are developed by its personnel. The
Company usually combines chrome-plated zinc and plastic moldings for its
products.
The principal materials used in the manufacture of the Company's
plumbing hardware products consist of zinc, plastics, plating materials, and
other component parts. The Company purchases these materials from several
suppliers. Although satisfactory substitutes for these materials are not
readily available, the Company has experienced no difficulties in obtaining
such materials. The Company purchases brass castings from one supplier and
the Company has a long-term contract with this supplier.
In addition, the Company designs and manufactures its advanced
composites and industrial tapes to its own specifications and to the
specifications of its customers. The materials used in the manufacture of
these industrial components include chemicals, films, resins, fiberglass,
plastics, and other fabricated materials and adhesives. The Company
purchases these materials from several suppliers. Although satisfactory
substitutes for many of these materials are not readily available, the
Company has experienced no difficulties in obtaining such materials.
Competition
The Company has many competitors in the plumbing and industrial
component segment, including some major corporations which have substantial-
ly greater financial resources than the Company. The Company competes for
industrial components business on the basis of product performance and
development, product qualification and approval, the ability to manufacture
and deliver products in accordance with customers' needs and requirements,
and price. The Company's plumbing hardware business can be affected by
fluctuations in the housing industry.
Product Development
The Company's high performance laminates, prepregs and semi-finished
multilayer printed circuit boards are produced to customer specifications,
which are typically developed with the Company's assistance. Generally, the
Company utilizes funds first to develop a product or process in concept, and
later to refine and shape the product or process to fit the specifications
of a particular customer. The development work performed for one customer
is also often applicable to the needs of other customers.
Most of the Company's product development expenditures are
attributable to the efforts of the Company's electronics operations to
develop products that will be technologically competitive. The product
development work of the Company's electronic materials business is focused
on development of new and improved materials, products and processes to meet
the changing performance, signal transmission speed, density and reliability
requirements of the electronics industry. In response to rapid changes in
the electronic materials business, these expenditures on product development
have increased over the past several years.
The advanced composites manufactured by the Company are also
produced to customer specifications. Product development efforts are
devoted toward the conforming of the Company's advanced composites to the
specifications of, and the obtaining of approvals from, the Company's
customers.
The Company's product development efforts relating to its plumbing
hardware business operations are directed toward the development of new
decorative plumbing hardware product designs and new materials to be used in
the manufacture of plumbing products. This requires market research,
industrial design, engineering and testing for ease of installation and
durability.
Backlog
The Company records an item as backlog when it receives a purchase
order specifying the number of units to be purchased, the purchase price,
specifications and other customary terms and conditions. At April 28, 1995,
the unfilled portion of all purchase orders believed to be firm was
approximately $20,381,000, as compared to $15,959,000 at April 29, 1994.
Backlog of the Company's two industry segments at April 28, 1995, as
compared to April 29, 1994, was as follows:
April 28, 1995 April 29, 1994
Electronics $11,614,000 $11,518,000
Plumbing and Industrial
Components 8,767,000 4,441,000
Total $20,381,000 $15,959,000
Various factors contribute to the size of the Company's backlog.
Accordingly, the foregoing information may not be indicative of the
Company's results of operations for any period subsequent to the fiscal year
ended February 26, 1995.
Patents and Trademarks
The Company holds several patents and trademarks or licenses thereto.
In the Company's opinion, some of these patents and trademarks, particularly
those related to certain of its electronics and plumbing hardware products,
are important to such products. Generally, however, the Company does not
believe that its inability to obtain new, or to defend existing, patents and
trademarks would have a material adverse effect on the Company's business.
Employees
At February 26, 1995, the Company had approximately 1,830 employees.
Of these employees, 1,490 are engaged in the Company's electronics
operations, 320 in its plumbing and industrial components operations and 20
consisted of executive personnel and general administrative staff.
Approximately 10% of the Company's employees, most of whom are engaged in
the plumbing and industrial components operations and foreign electronics
operations, are subject to collective bargaining agreements. Management
considers its labor relations to be satisfactory.
Environmental Matters
The Company is subject to stringent environmental regulation. The
Company believes that it currently is in substantial compliance with the
applicable federal, state and local environmental laws and regulations to
which it is subject and that continuing compliance therewith will not have
a material effect on its capital expenditures, earnings or competitive
position. The Company does not currently anticipate making material capital
expenditures for environmental control facilities during the remainder of
its current fiscal year or its succeeding fiscal year. However, other
possible developments, such as the enactment or adoption of even more
stringent environmental laws and regulations, could conceivably result in
substantial additional costs to the Company.
The Company and certain of its subsidiaries have been named by the
Environmental Protection Agency (the "EPA") or a comparable state agency
under the Comprehensive Environmental Response, Compensation and Liability
Act (the "Superfund Act") or similar state law as potentially responsible
parties for a number of hazardous waste disposal sites or other potentially
contaminated areas. Under the Superfund Act and similar state laws, all
parties who may have contributed any waste to a hazardous waste disposal
site or contaminated area identified by the EPA or comparable state agency
are jointly and severally liable for the cost of cleanup unless the EPA or
such agency agrees otherwise. Generally, these sites are locations at which
numerous persons dispose hazardous waste. In the case of the Company's
subsidiaries, generally the waste was removed from their manufacturing
facilities and disposed at the waste sites by various companies which
contracted with the subsidiaries to provide waste disposal services.
Neither the Company nor any of its subsidiaries have been accused of or
charged with any wrongdoing or illegal acts in connection with any such
sites. The Company believes it maintains a very effective and comprehensive
environmental compliance program. Management believes the ultimate
disposition of known environmental matters will not have a material adverse
effect upon the Company's business.
Item 2. Properties.
The following chart indicates the significant properties owned and
leased by the Company, the industry segment(s) which use the properties, and
the location and size of each such property. (All of such properties,
except for the Lake Success, New York property, are used principally as
manufacturing, warehouse and assembly facilities.)
<TABLE>
<CAPTION> Size
Owned or (Square
Location Leased Use Footage)
<S> <C> <C> <C>
Lake Success, NY Leased Executive Offices 7,000
Walden, NY Owned Electronics 51,000
Newburgh, NY Owned Electronics 57,000
New Windsor, NY Leased Electronics 11,000
Fullerton, CA Leased Electronics 72,000
Anaheim, CA Leased Electronics 26,000
Tempe, AZ Leased Electronics 52,000
Tempe, AZ Leased Electronics 38,000
Tempe, AZ Leased Electronics 15,000
Mirebeau, France Owned Electronics 81,000
Lannemezan, France Owned Electronics 29,000
Skelmersdale, England Owned Electronics 54,000
Galashiels, Scotland Leased Electronics 13,000
Chippenham, England Leased Electronics 5,000
Singapore Owned Electronics 54,000
Singapore Leased Electronics 10,000
Grand Rapids, MI Owned Plumbing and 165,000
Industrial Components
Comstock Park, MI Leased Plumbing and 39,000
Industrial Components
Holyoke, MA Leased Specialty Adhesive 17,000
Tapes and Films
Waterbury, CT Leased Advanced Composites 100,000
</TABLE>
The Company believes its facilities and equipment to be in good
condition and reasonably suited and adequate for its current needs.
Item 3. Legal Proceedings.
(a) There are no material pending legal proceedings to which the
Company is a party or to which any of its properties is subject.
(b) No material pending legal proceeding was terminated during the
fiscal quarter ended February 26, 1995.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Executive Officers of the Registrant:
Name Title Age
Jerry Shore Chairman of the Board, Chief 69
Executive Officer, President and
a Director
E. Philip Smoot Executive Vice President and a 57
Director
Brian E. Shore Executive Vice President and a 43
Director
Allen Levine Vice President and Chief 65
Financial Officer, Secretary and
Treasurer
Jerry Shore has served the Company in the capacities stated above
for more than the past five years.
Mr. Smoot has served the Company in the capacities stated above for
more than the past five years.
Brian Shore has served as a Director of the Company for more than
the past five years. Brian Shore was elected a Vice President of the
Company in January 1993 and was elected Executive Vice President of the
Company in May of 1994. Brian Shore also served as General Counsel of the
Company from April, 1988 until April, 1994.
Mr. Levine has served the Company as Vice President for more than
the past five years and became the Chief Financial Officer of the Company in
March 1990. Mr. Levine was elected to the additional offices of Secretary
and Treasurer of the Company in May of 1991.
There are no family relationships between the directors or executive
officers of the Company, except that Brian Shore is the son of Jerry Shore.
The term of office of each executive officer of the Company expires
upon the election and qualification of his successor.
PART II
Item 5. Market for the Registrant's Common
Stock and Related Stockholder Matters.
The Company's Common Stock is listed and trades on the New York
Stock Exchange (trading symbol PKE). (The Common Stock also trades on the
Midwest Stock Exchange.) The following table sets forth, for each of the
quarterly periods indicated, the high and low sale prices for the Common
Stock as reported on the New York Stock Exchange and dividends declared on
the Common Stock.
For the Fiscal Year Stock Price Dividends
Ended February 26, 1995 High Low Declared
First Quarter 30 7/8 25 7/8 $.08
Second Quarter 34 3/4 25 5/8 $.08
Third Quarter 35 3/4 29 3/8 $.12
Fourth Quarter 35 3/8 27 1/4 $.12
For the Fiscal Year Stock Price Dividends
Ended February 27, 1994 High Low Declared
First Quarter 16 1/2 11 1/2 $.08
Second Quarter 15 7/8 14 5/8 $.08
Third Quarter 18 14 3/4 $.08
Fourth Quarter 27 16 5/8 $.08
As of May 5, 1995, there were 2,397 holders of record of Common
Stock.
The Company expects, for the immediate future, to continue to pay
regular cash dividends.
Item 6. Selected Financial Data.
The following selected consolidated financial data of Park and its
subsidiaries is qualified by reference to, and should be read in conjunction
with, the consolidated financial statements, related notes, and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained elsewhere herein. Insofar as such consolidated financial
information relates to the five fiscal years ended February 26, 1995 and is
as of the end of such periods, it is derived from the consolidated financial
statements for such periods and as of such dates audited by Ernst & Young
LLP independent Certified Public Accountants, for the two fiscal years ended
February 26, 1995 and Deloitte & Touche LLP independent Certified Public
Accountants for all prior periods presented. The consolidated financial
statements as of February 26, 1995 and February 27, 1994 and for the three
years ended February 26, 1995, together with the auditors' reports for the
three years ended February 26, 1995, appear elsewhere in this Report.
Item 6
<TABLE>
<CAPTION>
Fiscal Year Ended
Feb 26, Feb 27, Feb 28, Mar 1, Mar 3,
1995 1994 1993 1992 1991
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS INFORMATION:
NET SALES $253,022 $208,410 $175,176 $165,287 $163,982
COSTS AND EXPENSES:
Cost of sales 196,917 168,175 149,145 141,717 141,278
Selling, general and administrative 29,995 25,930 22,865 21,250 21,385
Total costs and expenses 226,912 194,105 172,010 162,967 162,663
Operating profit 26,110 14,305 3,166 2,320 1,319
OTHER INCOME (EXPENSE):
Interest expense (431) (2,407) (2,058) (2,649) (2,735)
Other income, net 1,822 947 1,967 2,252 4,323
Total other income (expense) 1,391 (1,460) (91) (397) 1,588
EARNINGS BEFORE INCOME TAXES 27,501 12,845 3,075 1,923 2,907
INCOME TAX PROVISION 10,156 4,783 810 608 1,018
EARNINGS BEFORE EXTRAORDINARY GAIN 17,345 8,062 2,265 1,315 1,889
EXTRAORDINARY GAIN - Net of taxes 290
NET EARNINGS $ 17,345 $ 8,062 $ 2,265 $ 1,315 $ 2,179
PRIMARY EARNINGS PER COMMON SHARE:
Earnings before extraordinary gain $ 3.19 $ 2.02 $ .50 $ .29 $ .38
Extraordinary gain .06
NET EARNINGS $ 3.19 $ 2.02 $ .50 $ .29 $ .44
FULLY DILUTED EARNINGS PER COMMON
SHARE:
Earnings before extraordinary gain $ 3.04 $ 1.69 $ .50 $ .29 $ .38
Extraordinary gain .06
NET EARNINGS $ 3.04 $ 1.69 $ .50 $ .29 $ .44
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Primary 5,429 3,993 4,534 4,528 4,923
Fully diluted 5,785 5,727 4,534 4,528 4,923
DIVIDENDS PER COMMON SHARE $ .40 $ .32 $ .32 $ .32 $ .32
BALANCE SHEET INFORMATION:
Working capital $ 55,035 $ 45,867 $ 45,811 $ 51,737 $ 56,790
Total assets 162,051 140,750 129,009 130,734 135,759
Long-term debt 23 32,861 33,957 33,439 33,420
Stockholders' equity 112,048 61,454 60,700 62,275 63,676
</TABLE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations
Fiscal 1995 Compared with Fiscal 1994
During the Company's fiscal year ended February 26, 1995, sales in-
creased 21% to $253,022,000 from $208,410,000 during the fiscal year ended
February 27, 1994. Operating profit for the 1995 year increased 83% to
$26,110,000 from $14,305,000 for the prior year. During the 1995 fiscal
year, the Company's electronics segment accounted for $218,288,000 in sales
or 86% of the Company's total sales worldwide, compared to $182,559,000 or
88% of the Company's total worldwide sales during fiscal 1994. The
Company's foreign operations, which are dedicated almost exclusively to the
electronics segment, accounted for $58,927,000 in sales or 23% of total
sales worldwide during the 1995 year. Foreign sales during fiscal 1995
increased 27% compared to the prior year's foreign sales of $46,491,000.
During fiscal 1995, sales by the plumbing and industrial components segment
increased 34% to $34,734,000 from $25,851,000 during the prior year.
The gross profit percentage for the Company's worldwide operations
was 22.2% for the 1995 fiscal year, as compared to 19.3% for the prior year.
The improvement in the Company's results during the 1995 year was
predominantly due to the increased operating profits of the Company's
electronics operations.
The improvement in the operating results of the electronics segment
was attributable to the broad based strengthening among the electronics
segment's operating units. The growth trend of the prior year continued in
the United States and Southeast Asia for the sophisticated printed circuitry
materials produced by this segment during the 1995 year. As a result of
this growth, as well as through enhanced operating efficiencies and a
continual refocus toward higher technology, higher margin products, the
operating profits of these units were able to offset the impact of rising
raw material costs and aggressive competitive market pressures. Progress
was also made by the Company's European electronics operations during 1995,
where the market for the Company's sophisticated printed circuitry materials
has improved.
The Company focused its capital investment principally on its
electronics business for the purpose of enhancing capability and expanding
capacity in that business. As a result of these investments in prior years,
the Company was well positioned to support the growth discussed above. The
Company also continues to invest in the electronics business' leading edge
technology and product development efforts. The expansion of the Company's
Singapore facility has been completed, and the expansions of the electronics
facilities in New York and Arizona will be completed during fiscal 1996.
Strategic acquisition opportunities for the electronics business continues
to be actively evaluated by the Company. The Company believes that its
ongoing investment in its electronics business' manufacturing capability and
leading edge technology will continue to enhance and secure its leading
position in the worldwide sophisticated printed circuitry materials
industry.
During fiscal 1995 the Company's non-electronics businesses have
been combined into one segment for financial reporting purposes, namely the
plumbing and industrial components segment. Prior to the current fiscal
year, these businesses had been reported as two segments, each of which
would currently represent less than 10% of the Company's sales, earnings and
assets. These businesses have been placed under common, central management.
This new combined plumbing and industrial components segment is comprised of
the Company's plumbing hardware, advanced composite and industrial adhesive
tape businesses.
During the second half of the 1995 fiscal year, the Company's
plumbing hardware business returned to modest profitability. This business
entered into an exclusive, long-term contract with a very significant U.S.
faucet manufacturer early in fiscal 1995, which has fortified the Company's
market presence in a key target product area. In addition, the plumbing
business is expanding its existing plated zinc and plastic plumbing hardware
product lines through a long-term manufacturing, marketing and product
development contract with Mexico's largest faucet manufacturer. The
addition of high quality decorative brass plumbing products has substantial-
ly increased the potential market for the Company's plumbing business'
products. This business also made meaningful improvements in operating
efficiencies and effectiveness, which contributed to its better performance
in the latter part of the year.
The Company's advanced composite business' performance improved
meaningfully during the 1995 fiscal year under its new management team. As
a result of the decline in the military and aerospace markets which it
serves, this business is refocusing its product towards non-military
applications, such as wireless communications.
The Company's specialty adhesive tape business performed well during
fiscal 1995. This business grew its top and bottom line, in part, by
focusing towards high-technology, high margin product.
Selling, general and administrative expenses, measured as a percent-
age of sales, were 11.9% during the 1995 fiscal year, as compared to 12.4%
during the prior fiscal year. This reduction in percentage is a function of
the partially fixed nature of the selling, general and administrative
expenses, relative to the increase in sales.
During the 1995 fiscal year, interest expense decreased 82% to
$431,000 from $2,407,000 during the prior fiscal year. These expenses were
attributable to the interest payments made by the Company on its Convertible
Debentures and, to a lesser extent, on loans carried by certain of the
Company's foreign subsidiaries. The decrease in this expense was attribut-
able to the Company's call for redemption of its 7 1/4% Convertible
Subordinated Debentures as of May 31, 1994. As a result of this call for
redemption, virtually all the outstanding debentures were converted into the
Company's common stock. Other income, which is principally composed of
investment income, increased 92% to $1,822,000 during the 1995 fiscal year
from $947,000 during the 1994 fiscal year. This increase in investment
income occurred because the average rate of interest earned by the Company
during the 1995 fiscal year was higher than during the 1994 fiscal year and
because the Company had more cash available for investment. The Company's
cash reserves continued to be invested primarily in short term taxable
instruments and government securities.
The Company's effective income tax rate for fiscal 1995 was 36.9%,
as compared to 37.2% for fiscal 1994. The effective tax rate for fiscal
1995 decreased primarily due to the impact of favorable foreign tax rate
differentials.
The Company's net earnings increased 115% in fiscal 1995 to
$17,345,000 from $8,062,000 during fiscal 1994. The increase in net profit
was attributable to the increase in operating profit and the reduction of
interest expense due to the aforementioned conversion of debentures into
common stock. Primary and fully diluted earnings per share increased to
$3.19 and $3.04, respectively, for the 1995 fiscal year compared to $2.02
and $1.69, respectively, for the 1994 year.
The impact of inflation on the Company's operations was not consid-
ered to be significant during these periods.
Fiscal 1994 Compared with Fiscal 1993
During the Company's fiscal year ended February 27, 1994, sales in-
creased 19% to $208,410,000 from $175,176,000 during the fiscal year ended
February 28, 1993. Operating profit for the 1994 fiscal year increased 352%
to $14,305,000 from $3,166,000 for the prior fiscal year. During the 1994
fiscal year, the Company's electronics segment accounted for $182,559,000 in
sales or 88% of the Company's total sales worldwide, compared to
$147,419,000 or 84% of the Company's total worldwide sales during fiscal
year 1993. The Company's foreign operations, which are dedicated almost
exclusively to the electronics segment, accounted for $46,491,000 in sales
or 22% of total sales worldwide during the 1994 fiscal year. Foreign sales
during this fiscal year were virtually flat compared to the prior fiscal
year's foreign sales of $46,347,000. During fiscal 1994, sales by the
plumbing and industrial components segment decreased 7% to $25,851,000 from
$27,757,000 during the prior fiscal year.
The gross profit percentage for the Company's worldwide operations
was 19.3% for the 1994 fiscal year, as compared to 14.9% for the prior
fiscal year.
The Company's overall improvement in profitability during the 1994
fiscal year was due predominantly to increased sales volume and a fairly
significant increase in the operating profits of the Company's United States
based electronics operations.
As mentioned above, the performance of the electronics segment, and
particularly the United States based electronics operations, improved during
the 1994 fiscal year. This improvement came in spite of continuing price
pressure in the 1994 fiscal year on the sophisticated printed circuitry
materials produced by this segment, even in the United States. The negative
impact of this price pressure was offset by increased market share and sales
volume, improved yields and more effective and efficient resource utiliza-
tion, particularly at the United States based electronics operations. The
European sophisticated printed circuit materials industry continued to
operate at depressed levels during the 1994 fiscal year. The decline in the
market for products which support the manufacture of sophisticated
electronic gear in Europe resulted in significant overcapacity in the
printed circuit materials industry, which led to fierce price cutting for
the products manufactured by the Company's European electronics operations.
This market shrinkage and severe price pressure adversely affected the
Company's European electronics operations. The Company's Far East based
electronics operations performed reasonably well, but were also affected by
price pressure.
During the 1994 fiscal year, the Company continued its significant
investment in the machinery and equipment of its electronics business for
the purpose of enhancing capability and expanding capacity. The Company
also continued to invest in the electronics business' leading edge
technology and product development efforts.
During fiscal 1994, the Company's plumbing hardware business
continued to underperform. However, during the year the Company entered
into a long-term manufacturing, marketing and product development contract
with Mexico's largest faucet manufacturer. Through this agreement, high
quality decorative brass plumbing products were added to the existing plated
zinc and plastic plumbing hardware product lines carried by the Company's
plumbing business.
The performance of the industrial adhesive tape business improved
significantly during the 1994 fiscal year. Unfortunately, this improvement
was overshadowed by the poor performance of FiberCote, the Company's 80%
owned advanced composite business. As previously reported, during the 1994
fiscal year, the Company's internal accounting staff discovered financial
and accounting errors and irregularities at FiberCote. After thorough
internal investigation revealed that the FiberCote problems were caused, at
least in part, by the collusive conduct of certain members of FiberCote's
senior management, the Company restated its previously reported financial
statements and took corrective action to address the financial and
accounting problems at FiberCote, including the dismissal of FiberCote's
chief executive officer and chief financial officer. The FiberCote business
accounted for less than 5% of the Company's sales and net worth. In
addition to these problems, FiberCote suffered as a result of reductions in
the military and aerospace markets which it serves.
Selling, general and administrative expenses, measured as a percent-
age of sales, were 12.4% during the 1994 fiscal year, as compared to 13.1%
during the prior fiscal year. This reduction in percentage was due to the
partially fixed nature of the selling, general and administrative expenses,
relative to the increase in sales.
During the 1994 fiscal year, interest expense increased 17% to
$2,407,000 from $2,058,000 during the prior fiscal year. These expenses
were attributable to the interest payments made by the Company on its
Convertible Debentures and, to a lesser extent, on loans carried by certain
of the Company's foreign subsidiaries. The increase in this expense was
attributable to the reduction in interest capitalized to property, plant and
equipment during fiscal 1994 compared to fiscal 1993. Other income
decreased 52% to $947,000 during the 1994 fiscal year from $1,967,000 during
the 1993 fiscal year. Investment income, which was the principal component
of other income, decreased 42% to $947,000 during fiscal year 1994, as
compared to $1,619,000 during the prior fiscal year. This reduction in
investment income occurred because the average rate of interest earned by
the Company during the 1994 fiscal year was lower than that in effect during
the 1993 fiscal year. Also included in other income for the 1993 fiscal
year was a $348,000 gain derived from foreign currency transactions. The
Company's cash reserves continued to be invested primarily in short term
taxable instruments and government securities.
The Company's effective income tax rate for fiscal 1994 was 37.2%,
as compared to 26.3% for fiscal 1993. The effective tax rate for fiscal
1994 increased due to the reductions in general business credits, the
reduced impact of favorable foreign tax rate differentials, and the
adjustment in the prior year of Federal and state income tax accruals.
These increases were partially offset by the reduced impact of state and
local taxes, and foreign net operating losses without tax benefit, on the
1994 effective tax rate.
The Company's net earnings increased 256% in fiscal 1994 to
$8,062,000 from $2,265,000 during fiscal 1993. The increase in net profit
was attributable to the increase in operating profit. Primary and fully
diluted earnings per share increased to $2.02 and $1.69, respectively, for
the 1994 fiscal year compared to $.50 for both primary and fully diluted
earnings per share for the 1993 fiscal year.
The impact of inflation on the Company's operations was not consid-
ered to be significant during these periods.
Liquidity and Capital Resources
At February 26, 1995, the Company's cash and temporary investments
amounted to $45,910,000, as compared to $38,053,000 at February 27, 1994.
This increase in the Company's cash and investment position was attributable
to several factors, including cash generated from operations. The Company's
working capital position was $55,035,000 at February 26, 1995, as compared
to $45,867,000 at February 27, 1994. The Company's current ratio, or the
ratio of current assets to current liabilities, was 2.3 to 1 at February 26,
1995, compared to 2.1 to 1 at February 27, 1994.
During the three year period ended February 26, 1995, the Company
generated $58,416,000 of funds from operations and expended $37,451,000 for
the purchase of property, plant and equipment.
The Company elected to redeem its outstanding 7 1/4% Convertible
Subordinated Debentures effective May 31, 1994. A $1,000 principal amount
debenture was convertible into 48.31 shares of the Company's common stock at
any time prior to the close of business on May 27, 1994. As a result of the
Company's call for redemption, virtually all of the outstanding debentures
were converted into the Company's common stock, and substantially all of the
Company's long-term debt was eliminated, along with the debt service costs
associated therewith.
The Company believes its financial resources will be sufficient, for
the foreseeable future, to provide for continued investment in property,
plant and equipment and for general corporate purposes. Such resources are
also available for appropriate acquisitions and other expansions of the
Company's business.
Item 8. Financial Statements and Supplementary Data.
[The Company's Financial Statements begin on the next page.]
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Park Electrochemical Corp.
Lake Success, New York
We have audited the accompanying consolidated balance sheets of Park
Electrochemical Corp. and subsidiaries as of February 26, 1995 and
February 27, 1994 and the related consolidated statements of earnings,
stockholders' equity, and cash flows for the years then ended. Our audits
also included the financial statement schedules listed in the Index at
Item 14(a)(2). These financial statements and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the 1995 and 1994 consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Park Electrochemical Corp. and subsidiaries as of February 26,
1995 and February 27, 1994, and the results of their operations and their
cash flows for the years then ended in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
ERNST & YOUNG LLP
New York, New York
April 17, 1995
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Park Electrochemical Corp.
Lake Success, New York
We have audited the accompanying consolidated statements of earnings,
stockholders' equity, and cash flows of Park Electrochemical Corp. and
subsidiaries for the year ended February 28, 1993. Our audit also
included the financial statement schedule listed in the Index at Item
14(a)(2). These financial statements and financial statement schedule are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements and financial statement
schedule based on our audit. We did not audit the financial statements
relating to certain wholly-owned subsidiaries, which statements reflect
total net sales constituting 9.8% of consolidated total net sales for the
fiscal year ended February 28, 1993. Such financial statements were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for such subsidiar-
ies, is based solely on the reports of such other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
and the reports of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audit and the reports of other auditors, such
consolidated financial statements present fairly, in all material
respects, the results of operations and cash flows of Park Electrochemical
Corp. and subsidiaries for the year ended February 28, 1993 in conformity
with generally accepted accounting principles. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
As discussed in Note 14, the accompanying consolidated financial
statements for the year ended February 28, 1993 have been restated.
DELOITTE & TOUCHE LLP
May 7, 1993
(October 8, 1993 as to Note 14)
AUDITORS' REPORT
Board of Directors and Shareholders
Park Electrochemical Corp.
Lake Success, New York
We have audited the balance sheet of New England Laminates (UK) Limited (a
wholly-owned United Kingdom subsidiary of Park Electrochemical Corp.) as
of February 28, 1993 and the related statements of operations, shareholde-
rs' equity, and cash flows for the year then ended. These financial
statements (which are not presented separately herein) are the responsi-
bility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of New England Laminates (UK) Limited as
of February 28, 1993 and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN
Chartered Accountants and Registered Auditors
Manchester, England
May 1, 1993
AUDITORS' REPORT
Board of Directors and Shareholders
Park Electrochemical Corp.
Lake Success, New York
We have audited the balance sheet of Technocharge Limited (a wholly-owned
United Kingdom subsidiary of Park Electrochemical Corp.) as of February
28, 1993 and the related statements of operations, shareholders' equity,
and cash flows for the year then ended. These financial statements (which
are not presented separately herein) are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Technocharge Limited as of February
28, 1993 and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN
Chartered Accountants and Registered Auditors
Manchester, England
May 1, 1993
AUDITORS' REPORT
Board of Directors and Shareholders
Park Electrochemical Corp.
Lake Success, New York
We have audited the balance sheet of Tweedbank P.C.B. Supplies Limited (a
wholly-owned United Kingdom subsidiary of Park Electrochemical Corp.) as
of February 28, 1993 and the related statements of operations, shareholde-
rs' equity, and cash flows for the year then ended. These financial
statements (which are not presented separately herein) are the responsi-
bility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Tweedbank P.C.B. Supplies Limited as
of February 28, 1993 and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN
Chartered Accountants and Registered Auditors
Manchester, England
May 1, 1993
<TABLE>
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Shares and Per Share Amounts)
<CAPTION>
February 26, February 27,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 30,803 $ 14,135
Marketable securities (Note 2) 15,107 23,918
Accounts receivable, less allowance for
doubtful accounts of $2,490 and $2,673,
respectively 33,172 28,904
Inventories (Note 3) 16,181 16,144
Prepaid expenses and other current
assets (Note 7) 3,057 2,738
Total current assets 98,320 85,839
PROPERTY, PLANT AND EQUIPMENT - At cost, less
accumulated depreciation and amortization
(Note 4) 61,427 51,398
OTHER ASSETS (Notes 6, 7 and 10) 2,304 3,513
TOTAL $162,051 $140,750
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans payable $ - $ 78
Accounts payable 24,616 24,443
Accrued liabilities (Note 5) 15,844 12,487
Income taxes payable 2,825 2,964
Total current liabilities 43,285 39,972
LONG-TERM DEBT (Note 6) 23 32,861
DEFERRED INCOME TAXES (Note 7) 5,243 4,772
DEFERRED PENSION LIABILITY (Note 10) 1,452 1,691
COMMITMENTS AND CONTINGENCIES (Notes 10 and 11)
STOCKHOLDERS' EQUITY (Notes 6, 8, 9 and 10):
Preferred stock, $1 par value per share -
authorized, 500,000 shares; issued, none - -
Common stock, $.10 par value per share -
authorized, 15,000,000 shares; issued,
6,790,009 and 5,203,825 shares, respectively 679 520
Additional paid-in capital 51,407 17,965
Retained earnings 72,216 57,098
Currency translation adjustments 1,545 177
Pension liability adjustment (972) (1,148)
Unrealized losses on investments (139) -
124,736 74,612
Less treasury stock, at cost, 1,068,208 and
1,150,642 shares, respectively (12,688) (13,158)
Total stockholders' equity 112,048 61,454
TOTAL $162,051 $140,750
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except Per Share Amounts)
<CAPTION>
52 Weeks Ended
February 26, February 27, February 28,
1995 1994 1993
<S> <C> <C> <C>
NET SALES $253,022 $208,410 $175,176
COSTS AND EXPENSES:
Cost of sales 196,917 168,175 149,145
Selling, general and administrative 29,995 25,930 22,865
Total costs and expenses 226,912 194,105 172,010
Operating profit 26,110 14,305 3,166
OTHER INCOME (EXPENSE):
Interest expense (Note 6) (431) (2,407) (2,058)
Other income, net (Note 2) 1,822 947 1,967
Total other income (expense) 1,391 (1,460) (91)
EARNINGS BEFORE INCOME TAXES 27,501 12,845 3,075
INCOME TAX PROVISION (Note 7) 10,156 4,783 810
NET EARNINGS $ 17,345 $ 8,062 $ 2,265
EARNINGS PER COMMON SHARE (Note 9):
Primary $3.19 $2.02 $ .50
Fully diluted $3.04 $1.69 $ .50
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands, Except Shares and Per Share Amounts)
<CAPTION> Additional Currency Pension Unrealized
Common Stock Paid-in Retained Translation Liability Losses on Treasury Stock
Shares Amount Capital Earnings Adjustments Adjustment Investments Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 1, 1992 5,177,451 $518 $17,313 $49,498 $2,590 $ (365) $ - 652,335 $ (7,279)
Net earnings 2,265
Exchange rate changes (2,481)
Change in pension
liability adjustment (33)
Stock options exercised (63) (16,875) 188
Cash dividends, $.32/share (1,451)
Purchase of treasury stock 1
BALANCE, FEBRUARY 28, 1993 5,177,451 518 17,250 50,312 109 (398) - 635,461 (7,091)
Net earnings 8,062
Exchange rate changes 68
Change in pension
liability adjustment (750)
Stock options exercised 184 (43,625) 499
Conversion of debentures 26,374 2 531
Cash dividends, $.32/share (1,276)
Purchase of treasury stock 558,806 (6,566)
BALANCE, FEBRUARY 27, 1994 5,203,825 520 17,965 57,098 177 (1,148) - 1,150,642 (13,158)
Net earnings 17,345
Exchange rate changes 1,368
Change in pension
liability adjustment 176
Market revaluation (139)
Stock options exercised 696 (106,350) 1,220
Conversion of debentures 1,586,184 159 32,746
Cash dividends, $.40/share (2,227)
Purchase of treasury stock 23,916 (750)
BALANCE, FEBRUARY 26, 1995 6,790,009 $679 $51,407 $72,216 $1,545 $ (972) $(139) 1,068,208 $(12,688)
<FN>
See notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<CAPTION>
52 Weeks Ended
February 26, February 27, February 28,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 17,345 $ 8,062 $ 2,265
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 8,951 8,733 7,840
Provision for doubtful accounts receivable (44) (3) 1,904
Loss (gain) on sale of marketable securities 17 (61) (180)
Provision for deferred income taxes 355 (52) (1,025)
Accrued interest in connection with
Debenture conversion 389 - -
Other, net (89) 282 220
Changes in operating assets and liabilities:
(Increase) in accounts receivable (3,536) (2,773) (1,154)
Decrease (increase) in inventories 249 (1,908) (1,100)
(Increase) decrease in prepaid expenses
and other current assets (77) 89 784
Decrease (increase) in other assets 25 164 (2,138)
(Decrease) increase in accounts payable (620) 5,265 544
Increase in accrued liabilities 3,719 3,247 810
Increase in income taxes payable 277 1,007 633
Net cash provided by operating activities 26,961 22,052 9,403
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net (17,523) (9,627) (10,301)
Purchases of marketable securities (11,161) (200,404) (288,213)
Proceeds from sales of marketable securities 19,827 200,309 293,584
Net cash used in investing activities (8,857) (9,722) (4,930)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings (84) (64) (1,402)
Dividends paid (2,227) (1,276) (1,451)
Proceeds from exercise of stock options 1,499 683 -
Purchase of treasury stock (750) (6,566) -
Other (100) - 3
Net cash used in financing activities (1,662) (7,223) (2,850)
INCREASE IN CASH AND CASH EQUIVALENTS
BEFORE EFFECT OF EXCHANGE RATE CHANGES 16,442 5,107 1,623
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 226 22 (544)
INCREASE IN CASH AND CASH EQUIVALENTS 16,668 5,129 1,079
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 14,135 9,006 7,927
CASH AND CASH EQUIVALENTS, END OF YEAR $ 30,803 $ 14,135 $ 9,006
<FN>
See notes to consolidated financial statements.
</TABLE>
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED February 26, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Principles of Consolidation - The consolidated financial statements
include the accounts of Park Electrochemical Corp. ("Park") and its
subsidiaries (collectively, the "Company"), substantially all of which
are wholly-owned. All significant intercompany balances and
transactions have been eliminated.
b. Accounting Period - The Company's fiscal year is the 52 or 53 week
period ending the Sunday nearest to the last day of February. Fiscal
years 1995, 1994 and 1993 ended on February 26, 1995, February 27,
1994 and February 28, 1993, respectively. Each fiscal year presented
included 52 weeks.
c. Marketable Securities - All marketable securities are classified as
available-for-sale and carried at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of
stockholders' equity. Realized gains and losses, amortization of
premiums and discounts, and interest and dividend income are included
in other income. The cost of securities sold is based on the specific
identification method.
d. Inventories - Inventories are stated at the lower of cost (first-in,
first-out method) or market.
e. Depreciation and Amortization - Depreciation and amortization are
computed principally by the straight-line method over the estimated
useful lives of the related assets or, with respect to leasehold
improvements, the term of the lease, if shorter.
f. Income Taxes - Deferred income taxes are provided for temporary
differences in the reporting of certain items, primarily depreciation,
for income tax purposes as compared to financial accounting purposes.
United States ("U.S.") Federal income taxes have not been provided on
the undistributed earnings (approximately $10,700,000 at February 26,
1995) of the Company's foreign subsidiaries, since it is management's
practice and intent to reinvest such earnings in the operations of
these subsidiaries.
g. Foreign Currency Translation - Assets and liabilities of foreign
subsidiaries using currencies other than the U.S. dollar as their
functional currency are translated into U.S. dollars at year-end
exchange rates and income and expense items are translated at average
exchange rates for the period. Gains and losses resulting from
translation are recorded as currency translation adjustments in
stockholders' equity.
h. Deferred Charges - Preoperating and start-up costs incurred in
connection with new manufacturing facilities are deferred and included
in other assets and amortized on a straight-line basis over five
years.
Costs incurred in connection with the issuance of debt financing are
deferred and included in other assets and amortized on a straight-line
basis over the respective debt repayment period.
i. Consolidated Statements of Cash Flows - The Company considers all
money market securities and investments with maturities at the date of
purchase of 90 days or less to be cash equivalents.
Supplemental cash flow information:
<TABLE>
<CAPTION> Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Cash paid during the year for:
Interest $ 42,000 $2,352,000 $2,002,000
Income taxes 9,712,000 3,960,000 1,072,000
</TABLE>
2. MARKETABLE SECURITIES
<TABLE>
The following is a summary of available-for-sale securities:
<CAPTION>
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
February 26, 1995
U.S. Treasury and other
government securities $12,019,000 $ - $235,000 $11,784,000
U.S. corporate debt
securities 3,000,000 - 5,000 2,995,000
Total debt securities 15,019,000 - 240,000 14,779,000
Equity securities 303,000 25,000 - 328,000
$15,322,000 $25,000 $240,000 $15,107,000
February 27, 1994
U.S. Treasury and other
government securities $18,912,000 $ - $130,000 $18,782,000
U.S. corporate debt
securities 3,000,000 - - 3,000,000
Other debt securities 2,000,000 - - 2,000,000
Total debt securities 23,912,000 - 130,000 23,782,000
Equity securities 145,000 - 9,000 136,000
$24,057,000 $ - $139,000 $23,918,000
</TABLE>
The Company adopted SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", effective February 28, 1994. The cumulative
effect of the adoption of SFAS No. 115 was not significant.
The gross realized gains on sales of available-for-sale securities totalled
$76,000 and $301,000 for 1994 and 1993, respectively, and the gross realized
losses totalled $17,000, $15,000 and $121,000 for 1995, 1994 and 1993,
respectively. The net of tax adjustment to unrealized holding losses
included as a separate component of stockholders' equity totalled $139,000
in 1995.
The amortized cost and estimated fair value of the debt and marketable
equity securities at February 26, 1995, by contractual maturity are shown
below.
<TABLE>
<CAPTION> Estimated
Fair
Cost Value
<S> <C> <C>
Due in one year or less $11,002,000 $10,910,000
Due after one year through three years 4,017,000 3,869,000
15,019,000 14,779,000
Equity securities 303,000 328,000
$15,322,000 $15,107,000
</TABLE>
<TABLE>
3. INVENTORIES
<CAPTION>
February 26, February 27,
1995 1994
<S> <C> <C>
Raw materials $ 5,215,000 $ 4,727,000
Work-in-process 2,997,000 3,479,000
Finished goods 7,446,000 7,581,000
Manufacturing supplies 523,000 357,000
$16,181,000 $16,144,000
</TABLE>
<TABLE>
4. PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
February 26, February 27,
1995 1994
<S> <C> <C>
Land, buildings and improvements $ 21,353,000 $17,460,000
Machinery, equipment, furniture
and fixtures 103,822,000 88,463,000
125,175,000 105,923,000
Less accumulated depreciation
and amortization 63,748,000 54,525,000
$ 61,427,000 $51,398,000
</TABLE>
Depreciation and amortization expense relating to property, plant and
equipment amounted to $8,501,000, $8,188,000 and $7,148,000 for fiscal
1995, 1994 and 1993, respectively. Interest expense capitalized to
property, plant and equipment amounted to $109,000 and $508,000 for
fiscal 1994 and 1993, respectively.
<TABLE>
5. ACCRUED LIABILITIES
<CAPTION> February 26, February 27,
1995 1994
<S> <C> <C>
Payroll and commissions $ 4,641,000 $ 3,112,000
Taxes, other than income taxes 1,230,000 1,191,000
Other 9,973,000 8,184,000
$15,844,000 $12,487,000
</TABLE>
<TABLE>
6. LONG-TERM DEBT
<CAPTION> February 26, February 27,
1995 1994
<S> <C> <C>
7.25% Convertible Subordinated
Debentures $ - $32,852,000
Other 29,000 71,000
29,000 32,923,000
Less current portion (included
in accrued liabilities) 6,000 62,000
$23,000 $32,861,000
</TABLE>
On June 12, 1986, the Company issued $35,000,000 of principal amount
7.25% Convertible Subordinated Debentures maturing on June 15, 2006 with
interest payable semiannually on June 15 and December 15 of each year.
The Debentures were unsecured, subordinated to bank loans payable and
other long-term debt and were convertible at any time prior to maturity,
or earlier redemption, into shares of the Company's common stock at
$20.70 per share. The Company had the option to redeem the Debentures
at specified prices, plus accrued interest. On April 5, 1994, the
Company announced that it had elected to redeem the Debentures on May 31,
1994. (Prior to that announcement, during the 1991 fiscal year, the
Company had repurchased, in the open market, an aggregate of $1,602,000
principal amount of Debentures.) Including conversions prior to the call
for redemption, $33,381,000 principal amount of Debentures were converted
into 1,612,558 shares of the Company's common stock. The remaining
$17,000 principal amount of Debentures not converted into common stock
were redeemed on May 31, 1994. The $720,000 unamortized balance of
deferred issuance costs incurred in connection with this financing was
transferred from other assets to additional paid-in capital.
As a result of the conversion and redemption of the Debentures, virtually
all of the Company's long-term debt and associated interest expense has
been eliminated. Furthermore, $792,000 of accrued interest expense and
costs related to the conversion of these Debentures was reclassified to
additional paid-in capital during fiscal 1995. If the conversion of
substantially all the debentures had occurred as of the beginning of the
1995 fiscal year, the primary earnings per share for fiscal 1995 would
have closely approximated the fully diluted earnings per share for that
period.
Foreign lines of credit totalled $5,500,000 at February 26, 1995 all of
which remains available to the subsidiaries.
7. INCOME TAXES
<TABLE>
The income tax provision includes the following:
<CAPTION>
Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Current:
Federal $8,798,000 $4,300,000 $1,650,000
State and local 1,003,000 535,000 185,000
9,801,000 4,835,000 1,835,000
Deferred:
Federal 50,000 396,000 (475,000)
State and local 40,000 (145,000) (160,000)
Foreign 265,000 (303,000) (390,000)
355,000 (52,000) (1,025,000)
$10,156,000 $4,783,000 $ 810,000
</TABLE>
The Company's effective income tax rate differs from the statutory U.S.
Federal income tax rate as a result of the following:
Fiscal Year
1995 1994 1993
Statutory U.S. Federal tax rate 35.0% 35.0% 34.0%
Tax accruals no longer required - - (16.3)
Foreign net operating losses
without tax benefit .5 4.6 34.1
Foreign tax rate differentials (2.0) (.9) (21.9)
State and local taxes, net of
Federal benefit 2.5 2.0 8.0
General business credits (.5) (2.8) (11.0)
Other, net 1.4 (.7) (.6)
36.9% 37.2% 26.3%
The Company has foreign net operating loss carryforwards of approximately
$19,600,000 which was primarily acquired through a business combination,
none of which relates to goodwill or other intangible assets.
Approximately $8,500,000 of the foreign tax net operating loss
carryforwards expire in varying amounts from 1996 through 1999; the
remainder have an indefinite expiration.
At February 26, 1995 and February 27, 1994, current deferred tax assets
of $1,099,000 and $962,000, respectively, which are primarily
attributable to reserves not currently deductible for tax purposes, are
included in other current assets. Long-term deferred tax assets of
$319,000 and $339,000 are net of valuation reserves of approximately
$6,200,000 and $8,300,000 at February 26, 1995 and February 27, 1994,
respectively, which are primarily attributable to foreign net operating
loss carryforwards, are included in other assets. The long-term deferred
tax liabilities consist primarily of timing differences relating to
depreciation.
8. STOCKHOLDERS' EQUITY
a. Stock Options - Under the stock option plans approved by the Company's
stockholders, key employees may be granted options to purchase shares of
common stock exercisable at prices not less than the fair market value
at the date of grant. Options become exercisable 25% one year from the
date of grant, with an additional 25% exercisable each succeeding year.
The options expire 10 years from the date of grant.
On July 14, 1992, the Company's stockholders approved the adoption of a
1992 stock option plan (the "1992 Plan") pursuant to which options to
acquire 300,000 shares of the Company's common stock are available for
grant to key employees. The purchase price for common stock to be
acquired, upon the exercise of options, will be no less than 100% of the
fair market value of such stock at the date the options are granted. The
1992 Plan will expire in March 2002.
Information with respect to the Company's stock option plans follows:
Range of Outstanding Options
Exercise Prices Granted Exercisable
Balance, March 1, 1992 $ 7.41 - $17.17 189,925 87,926
Options becoming exercisable 11.00 - 13.63 - 27,100
Granted 13.25 - 14.85 39,009 -
Exercised 7.41 (16,875) (16,875)
Cancelled 11.00 - 13.63 (1,350) (476)
Balance, February 28, 1993 11.00 - 17.17 210,709 97,675
Options becoming exercisable 11.00 - 14.85 - 36,552
Granted 14.75 - 14.88 90,650 -
Exercised 11.00 - 17.17 (43,625) (43,625)
Cancelled 11.00 - 14.85 (12,000) (3,800)
Balance, February 27, 1994 11.00 - 17.17 245,734 86,802
Options becoming exercisable 11.00 - 14.88 - 56,341
Granted 26.25 - 34.00 69,800 -
Exercised 11.00 - 17.17 (56,350) (56,350)
Cancelled 11.00 - 26.25 (6,825) (3,263)
Balance, February 26, 1995 $11.00 - $34.00 252,359 83,530
At February 26, 1995, 127,416 stock options were available for future
grant under the plans.
b. Dividends - During fiscal 1995, the Company declared and paid cash
dividends of $.40 per share, aggregating $2,227,000. A cash dividend of
$.12 per share was declared on March 14, 1995 payable on May 9, 1995 to
stockholders of record on April 11, 1995.
c. Treasury Stock - The Company repurchased twelve shares and six shares of
its common stock under authorizations of the Board of Directors during
fiscal 1995 and 1994, respectively.
On March 9, 1993, in a privately negotiated transaction with an
unaffiliated third party, the Company repurchased 558,800 shares of its
common stock for $6,566,000. The purchase was made outside the Company's
stock repurchase program.
Pursuant to a grant approved by the Company stockholders dated July 24,
1985, an officer of the Company exercised options on November 22, 1994
to purchase 50,000 shares of the Company's common stock. As permissible
under the terms of the option agreement, the exercise price was paid by
surrendering 23,904 shares of the Company's common stock (which was held
as a long-term investment by the officer) to the Company, valued at
$31.375 per share, the market price at that time.
d. Stockholders' Rights Plan - On February 2, 1989, the Company adopted a
stockholders' rights plan designed to protect stockholder interests in
the event the Company is confronted with coercive or unfair takeover
tactics. Under the terms of the plan, each stockholder of record on
February 15, 1989 received one right for each share of common stock owned
at that date. In the event that a person has acquired, or has the right
to acquire, 30% or more of the then outstanding common stock of the
Company or tenders for 20% of more of the outstanding common stock of the
Company (in either event, an "acquiring person"), such rights will become
exercisable, unless the Board of Directors otherwise determines. Upon
becoming exercisable as aforesaid, each right will entitle the holder
thereof to purchase one one-hundredth of a share of Series A Preferred
Stock for $60. In addition, each holder of an unexercised exercisable
right, other than an acquiring person, shall have the right to purchase
one share of the principal voting security of the acquiring person for
each right held by such holder at a purchase price per share equal to 50%
of the then market price per share of such acquiring person's securities.
Under certain circumstances, each unexercised exercisable right may
instead entitle the holder thereof to purchase one or fewer shares of the
Company's common stock at a 50% discount of the then market price. The
Company may redeem the rights for a nominal consideration at any time.
Unless redeemed or exercised earlier, all rights expire on February 15,
1999.
e. Reserved Common Shares - At February 26, 1995, 379,775 shares of common
stock were reserved for issuance upon exercise of stock options.
9. EARNINGS PER COMMON SHARE
Primary earnings per common share are computed based on the weighted
average number of common shares outstanding during the period. For
fiscal year 1993, the assumed conversion of the Company's 7.25%
Convertible Subordinated Debentures (after elimination of related
interest expense and amortization of deferred debt issuance costs,
net of income tax effect) was not considered in the calculation of
the fully diluted earnings per share, as the effect was antidilutive.
The weighted average number of common shares used to compute earnings
per share are as follows:
<TABLE>
<CAPTION> Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Primary 5,429,000 3,993,000 4,534,000
Fully diluted 5,785,000 5,727,000 4,534,000
</TABLE>
10. EMPLOYEE BENEFIT PLANS
a. Profit Sharing Plan - Park and certain of its subsidiaries have a
noncontributory profit sharing retirement plan covering their regular
full-time employees. The plan may be modified or terminated at any
time, but in no event may any portion of the contributions revert to
the Company. The Company's contributions under the plan amounted to
$2,297,000, $1,513,000 and $708,000 for fiscal 1995, 1994 and 1993,
respectively. Contributions are discretionary and may not exceed the
amount allowable as a tax deduction under the Internal Revenue Code.
b. Pension Plans - A subsidiary of the Company has two pension plans
covering its union employees. The pension plans are noncontributory
defined benefit plans. The Company's funding policy is to contribute
annually the amounts necessary to satisfy the Internal Revenue
Service's funding standards.
In accordance with SFAS No. 87, the Company records its unfunded
pension liability related to its two defined benefit pension plans,
which amounted to $1,452,000 and $1,691,000 at February 26, 1995 and
February 27, 1994, respectively. The effect on the Company's
consolidated financial statements in recording the liability is to
recognize an asset (included in "Other Assets") of $480,000 and
$543,000 at February 26, 1995 and February 27, 1994, respectively, and
to record a reduction of stockholders' equity of $972,000 and
$1,148,000 at February 26, 1995 and February 27, 1994, respectively.
Pension cost includes the following components:
<TABLE>
<CAPTION>
Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 65,000 $ 48,000 $ 41,000
Interest cost on projected benefit
obligation 279,000 276,000 247,000
Return on plan assets - actual (24,000) (40,000) (94,000)
Net amortization and deferral 9,000 (39,000) (5,000)
Net periodic pension cost $329,000 $245,000 $189,000
</TABLE>
<TABLE>
The funded status of the pension plans follows:
<CAPTION>
February 26, February 27,
1995 1994
<S> <C> <C>
Accumulated benefit obligation (including
vested benefit obligation of $3,665,000
and $3,816,000, respectively) $3,671,000 $3,816,000
Projected benefit obligation $3,671,000 $3,816,000
Plan assets at fair value 1,997,000 1,983,000
Excess of projected benefit obligation
over plan assets 1,674,000 1,833,000
Unrecognized net loss (976,000) (1,152,000)
Unrecognized prior service cost (268,000) (301,000)
Unrecognized initial net obligation being
amortized over 15 years (208,000) (238,000)
Accrued pension liability $ 222,000 $ 142,000
</TABLE>
The projected benefit obligation was determined using an assumed
discount rate of 8.25% and 7% for fiscal 1995 and 1994, respectively,
and the assumed long-term rate of return on plan assets was 8% for
both fiscal years. Projected wage increases are not applicable as
benefits pursuant to the plans are based upon years of service without
regard to levels of compensation.
At February 26, 1995, plan assets were invested in U.S. government
securities, discounted bank notes and equity securities.
11. COMMITMENTS AND CONTINGENCIES
a. Lease Commitments - The Company conducts certain of its operations
from leased facilities which include several manufacturing plants,
warehouses and offices, and land leases. The leases on facilities are
for terms of up to 10 years, the latest of which expires in 2000.
Many of the leases contain renewal options for periods ranging from 1
to 15 years and require the Company to pay real estate taxes and other
operating costs. The latest land lease expiration is 2013 and this
land lease contains renewal options of up to 35 years.
These noncancelable operating leases have the following payment
schedule:
Fiscal Year Amount
1996 $1,779,000
1997 1,320,000
1998 1,313,000
1999 726,000
2000 441,000
Thereafter 1,264,000
$6,843,000
Rental expense, inclusive of real estate taxes and other costs,
amounted to $2,226,000, $2,142,000 and $1,755,000 for fiscal 1995,
1994 and 1993, respectively.
b. Environmental Contingencies - The Company and certain of its
subsidiaries have been named by the Environmental Protection Agency
(the "EPA") or a comparable state agency under the Comprehensive
Environmental Response, Compensation and Liability Act (the "Superfund
Act") or a similar state law as potentially responsible parties for a
number of hazardous waste disposal sites or other potentially
contaminated areas. Under the Superfund Act and similar state laws,
all parties who may have contributed any waste to a hazardous waste
disposal site or contaminated area identified by the EPA or a
comparable state agency are jointly and severally liable for the cost
of cleanup unless the EPA or such agency agrees otherwise. Generally,
these sites are locations at which numerous persons dispose hazardous
waste. In the case of the Company's subsidiaries, generally the waste
was removed from their manufacturing facilities and disposed at waste
sites by various companies which contracted with the subsidiaries to
provide waste disposal services. Neither the Company nor any of its
subsidiaries have been accused of or charged with any wrongdoing or
illegal acts in connection with any such sites. The Company believes
it maintains a very effective and comprehensive environmental
compliance program.
Included in cost of sales are charges for actual expenditures and
accruals, based on estimates, for certain environmental matters
described above. The Company accrues estimated costs associated with
known environmental matters, when such costs can be estimated.
Management believes the ultimate disposition of known environmental
matters will not have a material adverse effect upon the liquidity,
capital resources, business or consolidated financial position of the
Company. However, one or more of such environmental matters could
have a significant negative impact on the Company's consolidated
financial results for a particular reporting period.
12. BUSINESS SEGMENTS
The Company has two major business segments: electronics and plumbing and
industrial components. The Company's electronic materials and circuitry
products are marketed primarily to large computer and electronics original
equipment manufacturers ("OEMs") and to major independent printed circuit
board manufacturers that are located throughout the United States, Canada,
Europe and the Far East. The Company's plumbing and industrial components
customers, the majority of which are locating in the United States,
include OEMs, hardware and plumbing wholesalers, home improvement centers
and aerospace and defense manufacturers.
Financial information concerning the Company's business segments follows
(all amounts stated in thousands of dollars):
<TABLE>
<CAPTION> Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Sales to unaffiliated customers:
Electronics $218,288 $182,559 $147,419
Plumbing and industrial components 34,734 25,851 27,757
Net sales $253,022 $208,410 $175,176
Operating profit (1):
Electronics $ 28,710 $ 18,597 $ 6,292
Plumbing and industrial components 1,226 (1,244) (555)
Total operating profit 29,936 17,353 5,737
General corporate expense (3,826) (3,048) (2,571)
Interest expense (431) (2,407) (2,058)
Other income, net 1,822 947 1,967
Total other income (expense) 1,391 (1,460) (91)
Earnings before income taxes $ 27,501 $ 12,845 $ 3,075
Identifiable assets (2):
Electronics $104,478 $ 91,786 $ 85,880
Plumbing and industrial components 12,588 9,516 11,318
117,066 101,302 97,198
Corporate assets 44,985 39,448 31,811
Total assets $162,051 $140,750 $129,009
Depreciation and amortization:
Electronics $ 8,133 $ 7,910 $ 6,955
Plumbing and industrial components 793 737 782
8,926 8,647 7,737
Corporate depreciation 25 86 103
Total depreciation and
amortization $ 8,951 $ 8,733 $ 7,840
Capital expenditures:
Electronics $ 16,302 $ 9,193 $ 9,758
Plumbing and industrial components 1,472 266 618
17,774 9,459 10,376
Corporate capital expenditures 30 23 17
Total capital expenditures $ 17,804 $ 9,482 $ 10,393
<FN>
(1) Operating profit is comprised of total operating revenues, less costs
and expenses other than interest expense, general corporate expense
and income taxes.
(2) Identifiable assets consist of those assets which are used by the
segments. Corporate identifiable assets consist primarily of cash,
cash equivalents and marketable securities.
Sales to customers under common control, which were mostly attributed
to the electronics segment, were 21.8%, 25.3% and 15.6% of the
Company's consolidated sales for fiscal 1995, 1994 and 1993,
respectively. Intersegment sales and sales between geographic areas
were not significant.
</TABLE>
Financial information regarding the Company's foreign operations,
which are conducted substantially in the United Kingdom, France and
Singapore, follows:
Fiscal Year
1995 1994 1993
Sales to unaffiliated customers $58,927 $46,491 $46,347
Sales to U.S. affiliates (1) 2,992 - -
$61,919 $46,491 $46,347
Operating income (loss) $ 1,531 $(3,252) $(2,942)
Income (loss) before income
taxes $ 1,535 $(3,242) $(2,989)
Identifiable assets $44,150 $38,477 $37,031
(1) Sales to U.S. affiliates are accounted for at cost and are eliminated
in consolidation.
<TABLE>
13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<CAPTION>
Quarter
First Second Third Fourth
(Amounts in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Fiscal 1995:
Net sales $62,769 $58,795 $64,834 $66,624
Gross profit 13,247 12,520 14,774 15,564
Net earnings 3,670 3,756 4,779 5,140
Earnings per common share:
Primary $.78 $.66 $.84 $.90
Fully diluted $.68 $.65 $.82 $.89
Weighted average common
shares outstanding:
Primary 4,708 5,672 5,687 5,716
Fully diluted 5,732 5,772 5,829 5,805
Fiscal 1994:
Net sales $49,229 $47,318 $54,063 $57,800
Gross profit 8,031 8,902 10,378 12,924
Net earnings 892 1,588 2,177 3,405
Earnings per common share:
Primary $.22 $.40 $.55 $.85
Fully diluted $.22 $.35 $.45 $.66
Weighted average common
shares outstanding:
Primary 4,002 3,983 3,983 4,005
Fully diluted 4,002 5,728 5,728 5,728
</TABLE>
Earnings per common share is computed separately for each quarter.
Therefore, the sum of such quarterly per share amounts may differ from
the total for the years.
14. RESTATEMENT
On September 20, 1993, the Company announced that its internal
accounting staff had recently uncovered financial and accounting
errors and irregularities at FiberCote Industries, Inc. ("FiberCote"),
its 80% owned advanced composites subsidiary. On the basis of the
Company's investigation of such financial and accounting errors and
irregularities, the Company had determined to restate the audited
consolidated financial statements. The adjustments involved the
write-off of certain improperly recorded receivables and the
recognition of previously unrecorded liabilities at FiberCote. The
consolidated financial statements have been restated to reverse the
overstatements of net earnings in the following amounts:
Fiscal Year 1993
(Amounts in Thousands,
Except Per Share Amounts)
Earnings before income taxes,
as previously reported $3,370
Adjustments (295)
Earnings before income taxes,
as restated $3,075
Net earnings, as previously reported $2,460
Adjustments (195)
Net earnings, as restated $2,265
Earnings per common share
primary and fully diluted,
as previously reported $ 0.54
Adjustments to earnings (0.04)
Earnings per common share
primary and fully diluted,
as restated $ 0.50
*******
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information called for by this Item (except for information as
to the Company's executive officers, which information appears elsewhere in
this Report) is incorporated by reference to the Company's definitive proxy
statement for the 1995 Annual Meeting of Shareholders to be filed pursuant
to Regulation 14A.
Item 11. Executive Compensation.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1995 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1995 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1995 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
PART IV
Item 14. Exhibits, Financial Statement Page
Schedules, and Reports on Form 8-K.
(a) Documents filed as a part of this report
(1) Financial Statements:
The following Consolidated Financial
Statements of the Company are
included in Part II, Item 8:
Report of Ernst & Young LLP,
independent auditors 19
Report of Deloitte & Touche LLP,
independent auditors 20
Reports of Arthur Andersen & Co.,
independent auditors 21
Balance sheets 24
Statements of earnings 25
Statements of stockholders' equity 26
Statements of cash flows 27
Notes to consolidated financial
statements (1-14) 28
(2) Financial Statement Schedules:
Schedule II - Valuation and qualifying
accounts 48
All other schedules have been omitted because they are inapplicable
or not required, or the information is included elsewhere in the financial
statements or notes thereto.
<PAGE>
(3)Exhibits:
Exhibit
Number Description
3.01 Restated Certificate of Incorporation filed with the Secretary
of State of the State of New York on April 10, 1989.
3.02 By-Laws of the Company, as amended to date. (Reference is made
to Exhibit 3.02 of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference.)
4.01 Summary of Rights to Purchase Series A Preferred Stock of the
Company. (Reference is made to Exhibit 4.02 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
27, 1994, Commission File No. 1-4415, which is incorporated
herein by reference.)
4.02 Rights Agreement, dated as of February 15, 1989, by and between
the Company and Registrar and Transfer Company, relating to the
Company's Preferred Stock Purchase Rights. (Reference is made
to Exhibit 4.03 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference.)
Information concerning Registrant's long-term debt is set forth
in Note 7 of the Notes to Consolidated Financial Statements
included in Item 8 of this Report. No instrument defining the
rights of holders of such long-term debt relates to securities
having an aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its subsidiaries;
therefore, in accordance with paragraph (iii) of Item 4 of Item
601(b) of Regulation S-K, the instruments defining the rights of
holders of long-term debt are not filed herewith. Registrant
hereby agrees to furnish a copy of any such other instrument to
the Securities and Exchange Commission upon request.
10.01 Lease Agreement dated as of June 21, 1975, regarding real
property located at 1100 East Kimberly Avenue, Anaheim, Califor-
nia, between Nelco Products, Inc. and James and Velma Emmi and
modification executed as of December 21, 1979. (Reference is
made to Exhibit 10.01 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.01(a) Lease Agreement dated December 12, 1989 regarding real property
located at 1100 East Kimberly Avenue, Anaheim, California
between Nelco Products, Inc. and James Emmi. (Reference is made
to Exhibit 10.01(a) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 25, 1990, Commission File No.
1-4415, which is incorporated herein by reference.)
10.02 Lease dated as of April 20, 1976, regarding real property
located at 1107 East Kimberly Avenue, Anaheim, California,
between Nelco Products, Inc. and James and Velma Emmi and
modification executed as of December 21, 1979. (Reference is
made to Exhibit 10.02 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.02(a) Lease Agreement dated December 12, 1989 regarding real property
located at 1107 East Kimberly Avenue, Anaheim, California
between Nelco Products, Inc. and James Emmi. (Reference is made
to Exhibit 10.02(a) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 25, 1990, Commission File No.
1-4415, which is incorporated herein by reference.)
10.03 Lease Agreement dated August 16, 1983 regarding real property
located at 1411 E. Orangethorpe Avenue, Fullerton, California
between Nelco Products, Inc. and TCLW/Fullerton. (Reference is
made to Exhibit 10.04 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.03(a) Addendum dated January 26, 1987 between Nelco Products, Inc. and
TCLW/Fullerton to Lease Agreement dated August 16, 1983 (see
Exhibit 10.03 hereto) regarding real property located at 1421 E.
Orangethorpe Avenue, Fullerton, California.
10.03(b) Third and Fourth Addenda dated January 7, 1991 between Nelco
Products, Inc. and TCLW/Fullerton to Lease Agreement dated
August 16, 1983 (see Exhibit 10.03 hereto) regarding real
property located at 1411, 1421 and 1431 E. Orangethorpe Avenue,
Fullerton, California. (Reference is made to Exhibit 10.03(b)
of the Company's Annual Report on Form 10-K for the fiscal year
ended March 3,1991, Commission file No. 1-4415, which is
incorporated herein by reference.)
10.04 Lease Agreement dated February 15, 1983 regarding real property
located at 1130 West Geneva Drive, Tempe, Arizona between Nelco
Products, Inc. and CMD Southwest, Inc. (Reference is made to
Exhibit 10.05 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 25, 1990, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.04(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated
February 15, 1983 regarding real property located at 1130 West
Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and
CMD Southwest Inc., and novation substituting Nelco Technology,
Inc. for Nelco Products, Inc. (Reference is made to Exhibit
10.04(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.05 Lease Agreement, dated May 26, 1982 regarding real property
located at 4 Gul Crescent, Jurong, Singapore between Nelco
Products Pte. Ltd. (lease was originally entered into by Kiln
Technique (Private) Limited, which subsequently assigned this
lease to Nelco Products Pte. Ltd. and the Jurong Town
Corporation. (Reference is made to Exhibit 10.05 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
Exhibit
Number Description
10.05(a) Deed of Assignment, dated April 17, 1986 between Nelco Products
Pte. Ltd., Kiln Technique (Private) Limited and Paul Ma, Richard
Law, and Michael Ng, all of Peat Marwick & Co., of the Lease
Agreement dated May 26, 1982 between Kiln Technique (Private)
Limited and the Jurong Town Corporation regarding real property
located at 4 Gul Crescent, Jurong, Singapore. (Reference is
made to Exhibit 10.05(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.06(a) 1974 Amended Stock Option Plan of the Company. (Reference is
made to Exhibit 10.06 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference. This
exhibit is a management contract or compensatory plan or
arrangement.)
10.06(b) Amended and Restated 1982 Stock Option Plan of the Company.
(Reference is made to Exhibit 10.06(a) of the Company's Annual
Report on Form 10-K for the fiscal year ended March 1, 1992,
Commission File No. 1-4415, which exhibit is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
10.06(c) 1992 Stock Option Plan of the Company. (Reference is made to
Exhibit 10.06(b) of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(a) Option Agreement dated November 27, 1984 between Park and Jerry
Shore. (Reference is made to Exhibit 10.07(b) of the Company's
Annual Report on Form 10-K for the fiscal year ended March 3,
1991, Commission File No. 1-4415, which is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
10.07(b) Amended and Restated Employment Agreement dated February 28,
1994 between Park and Jerry Shore. (Reference is made to
Exhibit 10.07(c) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(c) Amendment No. 1 dated March 1, 1995 to the Amended and Restated
Employment Agreement dated February 28, 1994 (see Exhibit
10.07(b) hereto) between Park and Jerry Shore. (This exhibit is
a management contract or compensatory plan or arrangement.)
10.08 Lease Agreement dated April 15, 1988 regarding real property
located at 172 East Aurora Street, Waterbury, Connecticut
between FiberCote Industries, Inc. (lease was initially entered
into by USP Composites, Inc., which subsequently changed its
name to FiberCote Industries, Inc.) and Geoffrey Etherington,
II.
Exhibit
Number Description
10.08(a) Lease Amendment dated December 21, 1992 to Lease Agreement dated
April 15, 1988 regarding real property located at 172 East
Aurora Street, Waterbury, Connecticut between FiberCote
Industries, Inc. and Geoffrey Etherington II. (Reference is
made to Exhibit 10.08(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.09 Lease Agreement dated March 14, 1988 regarding real property
located at 1117 West Fairmont, Tempe, Arizona between Nelco
Products, Inc. and CMD Southwest One.
10.09(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated
March 14, 1988 regarding real property located at 1117 West
Fairmont, Tempe, Arizona between Nelco Technology, Inc. and CMD
Southwest One, and novation substituting Nelco Technology, Inc.
for Nelco Products, Inc. (Reference is made to Exhibit 10.09(a)
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.10 Lease Agreement dated October 1, 1991 regarding real property
located at 25 North Park, N.E., Comstock Park, Michigan between
Zin-Plas Corporation and Philip L. Johnson d/b/a Johnson
Development Company. (Reference is made to Exhibit 10.10 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.11 Lease Agreement dated August 31, 1989 regarding real property
located at 1104 West Geneva Drive, Tempe, Arizona between Nelco
Technology, Inc. and Cemanudi Associates. (Reference is made to
Exhibit 10.12 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 25, 1990, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.11(a) First Amendment to Lease dated October 21, 1994 to Lease
Agreement dated August 31, 1989 regarding real property located
at 1104 West Geneva Drive, Tempe, Arizona between Nelco
Technology, Inc. and Cemanudi Associates.
10.12 Lease Agreement dated October 12, 1990 between New England
Laminates Co., Inc. and Adams/CRR Corp. regarding real property
located in New Windsor, New York. (Reference is made to Exhibit
10.12 of the Company's Annual Report on Form 10-K for the fiscal
year ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.12(a) Letter Amendment dated October 28, 1992 to Lease Agreement dated
October 12, 1990 between New England Laminates Co., Inc. and
Adams/CRR Corp. regarding real property located in New Windsor,
New York. (Reference is made to Exhibit 10.12(a) of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
Exhibit
Number Description
10.13 Lease Agreement dated December 12, 1990 between Neltec, Inc. and
NZ Properties, Inc. regarding real property located at 1420 W.
12th Place, Tempe, Arizona. (Reference is made to Exhibit 10.13
of the Company's Annual Report on Form 10-K for the fiscal year
ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.14 Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14 of the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 1993,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(a) Extension of Lease dated May 13, 1986 to Indenture of Lease
dated November 1, 1984 between Dielectric Polymers, Inc. and
Holyoke Supply Company, Inc. regarding real property located at
218 Race Street, Holyoke, Massachusetts. (Reference is made to
Exhibit 10.14(a) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.14(b) Second Extension of Lease dated May 30, 1991 to Indenture of
Lease dated November 1, 1984 between Dielectric Polymers, Inc.
and Holyoke Supply Company, Inc. regarding real property located
at 218 Race Street, Holyoke, Massachusetts. (Reference is made
to Exhibit 10.14(b) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 28, 1993, Commission File No.
1-4415, which is incorporated herein by reference.)
10.14(c) Amendment to Second Extension of Lease dated May 19, 1994 to
Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14(c) of the Company's Annual
Report on Form 10-K for the fiscal year ended February 27, 1994,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.15 Lease Agreement dated January 8, 1992 between Nelco Technology,
Inc. and CMD Southwest, Inc. regarding real property located at
1135 West Geneva Drive, Tempe, Arizona. (Reference is made to
Exhibit 10.15 of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference.)
10.16 Lease Assignation, dated April 18, 1991 between New England
Laminates (UK) Limited and Tweedbank Circuit Supplies Limited,
of the Lease Agreement dated October 20, 1986 between Tweedbank
Circuit Supplies Limited and the Scottish Development Agency
regarding real property located at Block 2 and Unit 2 of Block
8, Tweedbank Industrial Estate, Galashiels, Scotland. (Reference
is made to Exhibit 10.16 of the Company's Annual Report on Form
10-K for the fiscal year ended March 1, 1992, Commission File
No. 1-4415, which exhibit is incorporated herein by reference.)
Exhibit
Number Description
10.17 Sublease Agreement dated April 27, 1992 between New England
Laminates (U.K.) Limited and Mill Book Company Limited regarding
real property located at Bumpers Farm Industrial Estate, Brunel
Way, Chippenham, England. (Reference is made to Exhibit 10.17
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.18 Tenancy Agreement dated October 8, 1992 between Nelco Products
Pte. Ltd. and Jurong Town Corporation regarding real property
located at 36 Gul Lane, Jurong Town, Singapore. (Reference is
made to Exhibit 10.18 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 28, 1993, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.19 Lease Agreement dated February 26, 1988 between the New York
State Department of Transportation and the Edgewater Stewart
Company regarding real property located at 15 Governor Drive in
the Stewart International Airport Industrial Park, New Windsor,
New York.
10.19(a) Assignment and Assumption of Lease Agreement dated February 16,
1995 between New England Laminates Co., Inc. and The Edgewater
Stewart Company regarding the assignment of the lease (see
Exhibit 10.19 hereto) for the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York.
10.19(b) Lease Amendment No. 1 dated February 17, 1995 between New
England Laminates Co., Inc. and the New York State Department of
Transportation regarding the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York.
11.01 Computation of fully-diluted earnings per common share.
22.01 Subsidiaries of the Company.
24.01 Consent of Ernst & Young LLP.
24.02 Consent of Deloitte & Touche LLP.
24.03 Consent of Arthur Andersen & Co.
(b) Reports on Form 8-K filed during the fiscal quarter ended
February 26, 1995.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 24, 1995 PARK ELECTROCHEMICAL CORP.
By:
Jerry Shore,
Chairman of the Board and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board,
Jerry Shore President and Director
(principal executive
officer) May 24, 1995
Vice President (principal
Allen Levine financial and accounting
officer) May 24, 1995
Director
E. Philip Smoot May 24, 1995
Director
Brian E. Shore May 24, 1995
Director
Anthony Chiesa May 24, 1995
Director
Lloyd Frank May 24, 1995
Director
Norman M. Schneider
May 24, 1995
<TABLE>
Schedule II
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column F
Balance at Charged to Other Balance at
Beginning Cost and Accounts Translation End
Description of Period Expenses Written Off Adjustment of Period
(A)
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
<S> <C> <C> <C> <C> <C>
52 weeks ended February 26, 1995 $2,673,000 $ (44,000) $ (186,000) $ 47,000 $2,490,000
52 weeks ended February 27, 1994 $2,977,000 $ (3,000) $ (317,000) $ 16,000 $2,673,000
52 weeks ended February 28, 1993 $1,645,000 $1,904,000 $ (451,000) $ (121,000) $2,977,000
<FN>
(A) Uncollectible accounts, net of recoveries
</TABLE>
=================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
EXHIBITS
filed with
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 26, 1995
___________________
PARK ELECTROCHEMICAL CORP.
=================================================
Exhibit
Number Description
3.01 Restated Certificate of Incorporation filed with the Secretary
of State of the State of New York on April 10, 1989.
3.02 By-Laws of the Company, as amended to date. (Reference is made
to Exhibit 3.02 of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference.)
4.01 Summary of Rights to Purchase Series A Preferred Stock of the
Company. (Reference is made to Exhibit 4.02 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
27, 1994, Commission File No. 1-4415, which is incorporated
herein by reference.)
4.02 Rights Agreement, dated as of February 15, 1989, by and between
the Company and Registrar and Transfer Company, relating to the
Company's Preferred Stock Purchase Rights. (Reference is made
to Exhibit 4.03 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference.)
Information concerning Registrant's long-term debt is set forth
in Note 7 of the Notes to Consolidated Financial Statements
included in Item 8 of this Report. No instrument defining the
rights of holders of such long-term debt relates to securities
having an aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its subsidiaries;
therefore, in accordance with paragraph (iii) of Item 4 of Item
601(b) of Regulation S-K, the instruments defining the rights of
holders of long-term debt are not filed herewith. Registrant
hereby agrees to furnish a copy of any such other instrument to
the Securities and Exchange Commission upon request.
10.01 Lease Agreement dated as of June 21, 1975, regarding real
property located at 1100 East Kimberly Avenue, Anaheim, Califor-
nia, between Nelco Products, Inc. and James and Velma Emmi and
modification executed as of December 21, 1979. (Reference is
made to Exhibit 10.01 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.01(a) Lease Agreement dated December 12, 1989 regarding real property
located at 1100 East Kimberly Avenue, Anaheim, California
between Nelco Products, Inc. and James Emmi. (Reference is made
to Exhibit 10.01(a) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 25, 1990, Commission File No.
1-4415, which is incorporated herein by reference.)
10.02 Lease dated as of April 20, 1976, regarding real property
located at 1107 East Kimberly Avenue, Anaheim, California,
between Nelco Products, Inc. and James and Velma Emmi and
modification executed as of December 21, 1979. (Reference is
made to Exhibit 10.02 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.02(a) Lease Agreement dated December 12, 1989 regarding real property
located at 1107 East Kimberly Avenue, Anaheim, California
between Nelco Products, Inc. and James Emmi. (Reference is made
to Exhibit 10.02(a) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 25, 1990, Commission File No.
1-4415, which is incorporated herein by reference.)
10.03 Lease Agreement dated August 16, 1983 regarding real property
located at 1411 E. Orangethorpe Avenue, Fullerton, California
between Nelco Products, Inc. and TCLW/Fullerton. (Reference is
made to Exhibit 10.04 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.03(a) Addendum dated January 26, 1987 between Nelco Products, Inc. and
TCLW/Fullerton to Lease Agreement dated August 16, 1983 (see
Exhibit 10.03 hereto) regarding real property located at 1421 E.
Orangethorpe Avenue, Fullerton, California.
10.03(b) Third and Fourth Addenda dated January 7, 1991 between Nelco
Products, Inc. and TCLW/Fullerton to Lease Agreement dated
August 16, 1983 (see Exhibit 10.03 hereto) regarding real
property located at 1411, 1421 and 1431 E. Orangethorpe Avenue,
Fullerton, California. (Reference is made to Exhibit 10.03(b)
of the Company's Annual Report on Form 10-K for the fiscal year
ended March 3,1991, Commission file No. 1-4415, which is
incorporated herein by reference.)
10.04 Lease Agreement dated February 15, 1983 regarding real property
located at 1130 West Geneva Drive, Tempe, Arizona between Nelco
Products, Inc. and CMD Southwest, Inc. (Reference is made to
Exhibit 10.05 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 25, 1990, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.04(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated
February 15, 1983 regarding real property located at 1130 West
Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and
CMD Southwest Inc., and novation substituting Nelco Technology,
Inc. for Nelco Products, Inc. (Reference is made to Exhibit
10.04(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.05 Lease Agreement, dated May 26, 1982 regarding real property
located at 4 Gul Crescent, Jurong, Singapore between Nelco
Products Pte. Ltd. (lease was originally entered into by Kiln
Technique (Private) Limited, which subsequently assigned this
lease to Nelco Products Pte. Ltd. and the Jurong Town
Corporation. (Reference is made to Exhibit 10.05 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
Exhibit
Number Description
10.05(a) Deed of Assignment, dated April 17, 1986 between Nelco Products
Pte. Ltd., Kiln Technique (Private) Limited and Paul Ma, Richard
Law, and Michael Ng, all of Peat Marwick & Co., of the Lease
Agreement dated May 26, 1982 between Kiln Technique (Private)
Limited and the Jurong Town Corporation regarding real property
located at 4 Gul Crescent, Jurong, Singapore. (Reference is
made to Exhibit 10.05(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.06(a) 1974 Amended Stock Option Plan of the Company. (Reference is
made to Exhibit 10.06 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 25, 1990, Commission File
No. 1-4415, which is incorporated herein by reference. This
exhibit is a management contract or compensatory plan or
arrangement.)
10.06(b) Amended and Restated 1982 Stock Option Plan of the Company.
(Reference is made to Exhibit 10.06(a) of the Company's Annual
Report on Form 10-K for the fiscal year ended March 1, 1992,
Commission File No. 1-4415, which exhibit is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
10.06(c) 1992 Stock Option Plan of the Company. (Reference is made to
Exhibit 10.06(b) of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(a) Option Agreement dated November 27, 1984 between Park and Jerry
Shore. (Reference is made to Exhibit 10.07(b) of the Company's
Annual Report on Form 10-K for the fiscal year ended March 3,
1991, Commission File No. 1-4415, which is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
10.07(b) Amended and Restated Employment Agreement dated February 28,
1994 between Park and Jerry Shore. (Reference is made to
Exhibit 10.07(c) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(c) Amendment No. 1 dated March 1, 1995 to the Amended and Restated
Employment Agreement dated February 28, 1994 (see Exhibit
10.07(b) hereto) between Park and Jerry Shore. (This exhibit is
a management contract or compensatory plan or arrangement.)
10.08 Lease Agreement dated April 15, 1988 regarding real property
located at 172 East Aurora Street, Waterbury, Connecticut
between FiberCote Industries, Inc. (lease was initially entered
into by USP Composites, Inc., which subsequently changed its
name to FiberCote Industries, Inc.) and Geoffrey Etherington,
II.
Exhibit
Number Description
10.08(a) Lease Amendment dated December 21, 1992 to Lease Agreement dated
April 15, 1988 regarding real property located at 172 East
Aurora Street, Waterbury, Connecticut between FiberCote
Industries, Inc. and Geoffrey Etherington II. (Reference is
made to Exhibit 10.08(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.09 Lease Agreement dated March 14, 1988 regarding real property
located at 1117 West Fairmont, Tempe, Arizona between Nelco
Products, Inc. and CMD Southwest One.
10.09(a) Lease Amendment dated December 10, 1992 to Lease Agreement dated
March 14, 1988 regarding real property located at 1117 West
Fairmont, Tempe, Arizona between Nelco Technology, Inc. and CMD
Southwest One, and novation substituting Nelco Technology, Inc.
for Nelco Products, Inc. (Reference is made to Exhibit 10.09(a)
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.10 Lease Agreement dated October 1, 1991 regarding real property
located at 25 North Park, N.E., Comstock Park, Michigan between
Zin-Plas Corporation and Philip L. Johnson d/b/a Johnson
Development Company. (Reference is made to Exhibit 10.10 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.11 Lease Agreement dated August 31, 1989 regarding real property
located at 1104 West Geneva Drive, Tempe, Arizona between Nelco
Technology, Inc. and Cemanudi Associates. (Reference is made to
Exhibit 10.12 of the Company's Annual Report on Form 10-K for
the fiscal year ended February 25, 1990, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.11(a) First Amendment to Lease dated October 21, 1994 to Lease
Agreement dated August 31, 1989 regarding real property located
at 1104 West Geneva Drive, Tempe, Arizona between Nelco
Technology, Inc. and Cemanudi Associates.
10.12 Lease Agreement dated October 12, 1990 between New England
Laminates Co., Inc. and Adams/CRR Corp. regarding real property
located in New Windsor, New York. (Reference is made to Exhibit
10.12 of the Company's Annual Report on Form 10-K for the fiscal
year ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.12(a) Letter Amendment dated October 28, 1992 to Lease Agreement dated
October 12, 1990 between New England Laminates Co., Inc. and
Adams/CRR Corp. regarding real property located in New Windsor,
New York. (Reference is made to Exhibit 10.12(a) of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
Exhibit
Number Description
10.13 Lease Agreement dated December 12, 1990 between Neltec, Inc. and
NZ Properties, Inc. regarding real property located at 1420 W.
12th Place, Tempe, Arizona. (Reference is made to Exhibit 10.13
of the Company's Annual Report on Form 10-K for the fiscal year
ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.14 Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14 of the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 1993,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(a) Extension of Lease dated May 13, 1986 to Indenture of Lease
dated November 1, 1984 between Dielectric Polymers, Inc. and
Holyoke Supply Company, Inc. regarding real property located at
218 Race Street, Holyoke, Massachusetts. (Reference is made to
Exhibit 10.14(a) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993, Commission File No. 1-
4415, which is incorporated herein by reference.)
10.14(b) Second Extension of Lease dated May 30, 1991 to Indenture of
Lease dated November 1, 1984 between Dielectric Polymers, Inc.
and Holyoke Supply Company, Inc. regarding real property located
at 218 Race Street, Holyoke, Massachusetts. (Reference is made
to Exhibit 10.14(b) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 28, 1993, Commission File No.
1-4415, which is incorporated herein by reference.)
10.14(c) Amendment to Second Extension of Lease dated May 19, 1994 to
Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14(c) of the Company's Annual
Report on Form 10-K for the fiscal year ended February 27, 1994,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.15 Lease Agreement dated January 8, 1992 between Nelco Technology,
Inc. and CMD Southwest, Inc. regarding real property located at
1135 West Geneva Drive, Tempe, Arizona. (Reference is made to
Exhibit 10.15 of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference.)
10.16 Lease Assignation, dated April 18, 1991 between New England
Laminates (UK) Limited and Tweedbank Circuit Supplies Limited,
of the Lease Agreement dated October 20, 1986 between Tweedbank
Circuit Supplies Limited and the Scottish Development Agency
regarding real property located at Block 2 and Unit 2 of Block
8, Tweedbank Industrial Estate, Galashiels, Scotland. (Reference
is made to Exhibit 10.16 of the Company's Annual Report on Form
10-K for the fiscal year ended March 1, 1992, Commission File
No. 1-4415, which exhibit is incorporated herein by reference.)
Exhibit
Number Description
10.17 Sublease Agreement dated April 27, 1992 between New England
Laminates (U.K.) Limited and Mill Book Company Limited regarding
real property located at Bumpers Farm Industrial Estate, Brunel
Way, Chippenham, England. (Reference is made to Exhibit 10.17
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.18 Tenancy Agreement dated October 8, 1992 between Nelco Products
Pte. Ltd. and Jurong Town Corporation regarding real property
located at 36 Gul Lane, Jurong Town, Singapore. (Reference is
made to Exhibit 10.18 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 28, 1993, Commission File
No. 1-4415, which is incorporated herein by reference.)
10.19 Lease Agreement dated February 26, 1988 between the New York
State Department of Transportation and the Edgewater Stewart
Company regarding real property located at 15 Governor Drive in
the Stewart International Airport Industrial Park, New Windsor,
New York.
10.19(a) Assignment and Assumption of Lease Agreement dated February 16,
1995 between New England Laminates Co., Inc. and The Edgewater
Stewart Company regarding the assignment of the lease (see
Exhibit 10.19 hereto) for the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York.
10.19(b) Lease Amendment No. 1 dated February 17, 1995 between New
England Laminates Co., Inc. and the New York State Department of
Transportation regarding the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York.
11.01 Computation of fully-diluted earnings per common share.
22.01 Subsidiaries of the Company.
24.01 Consent of Ernst & Young LLP.
24.02 Consent of Deloitte & Touche LLP.
24.03 Consent of Arthur Andersen & Co.
(b) Reports on Form 8-K filed during the fiscal quarter ended
February 26, 1995.
None.
EXHIBIT 3.01
RESTATED
CERTIFICATE OF INCORPORATION
OF
PARK ELECTROCHEMICAL CORP.
Under Section 807 of the Business Corporation Law-,
The undersigned, being respectively a Vice President and the
Secretary of Park Electrochemical Corp. , for the purposes of
changing-- and restating the Certificate of Incorporation of Park
Electrochemical Corp., pursuant to Section 807 of the Business
Corporation Law of the State of Now York, do hereby certify as
follower
1. (a) The name of the corporation is "PARK
ELECTROCHEMICAL CORP. 11,
(b) The corporation was originally formed under the
none of "Park Name Plate Inc.
2. The Certificate of Incorporation of the corporation
was filed by the Department of State on the 31st day of March,
1954.
3. The Certificate of Incorporation of the corporation
is hereby changed to affect the following changes authorized by
paragraph (b) of Section 803 of the Business Corporation Laws
(a) to change the location of the office of the
corporation from the City of New York, County of NOW York
and State of New York, tot the County of Nassau and State of
New York.
(b) to change the address to which the secretary of
State of the state of Now York in directed to mail a copy of
process in any action or proceeding against the corporation
which may be served upon him from: Parker, Chapin and
Flattau, Esqs., 530 fifth Avenue, Now York 36, New York, to:
Park Electrochemical Corp., 5 Dakota Drive, Lake Success, New
York 11042, Attention: General Counsel.
The text of the Certificate of Incorporation of the corpora-
ion is hereby restated as heretofore amended and as changed
hereby to read in full as set forth in Paragraph 4 hereof.
<PAGE>
4. CERTIFICATE OF INCORPORATION
OF
PARK ELECTROCHEMICAL CORP.
I. The name of the corporation shall be PARK ELECTROCHEMICAL
CORP.
II. The purposes for which the corporation is formed are,
A. To carry on the general business of manufacturing and
distributing metal nameplates and decorative trim and
other components and/or products and generally to do all
acts and things which may be necessary or convenient to
the furtherance of the aforementioned purposes.
D. To acquire, and pay for in cash, stock or bonds of
this corporation or otherwise, the goodwill, rights,
assets and property, and to undertake or assume the whole
or any part of the obligations or liabilities of any
person, firm# association or corporation.
C. To manufacture, purchase, or otherwise acquire in any
lawful manner, and to hold, own, mortgage, pledge, sell,
transfer, convert, store, import, export or deal in any
other manner, dispose of and to invest, trade, deal in
and deal with all goods wares, merchandise and property
of every class and description.
D. To acquire, hold, use, sell, assign, lease, grant
licenses in respect of, mortgage or otherwise dispose of
letters patent of the United States or any foreign
country patent rights inventions, improvements and
processes, copyrights, trademarks and trade names,
relating to or useful in connection with any business of
this corporation.
E. To acquire by purchase, subscription or otherwise, and
to receive, hold, own, guarantee, sell, assign, exchange,
transfer, mortgage, pledge or otherwise dispose of or
deal in and with any of the shares of the capital stock,
or any voting trust certificates in respect of the shares
of capital stock, scrip, warrants, rights, bonds,
debentures, notes, trust receipts, and other securities,
obligations, choses in action and evidences of indebted-
ness or interest issued or created by any corporations,
joint stock companies, syndicates, associations, partner-
ships, firms, trusts or persons, public or private, or by
the government of the United States of America, or by any
foreign government, or by any state territory, province,
municipality or other political subdivision or by any
governmental agency, and as owner thereof, to possess and
exercise all the rights do any and all acts and things
necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
F. To borrow, or raise moneys for any of the purposes of
the corporation, and, from time to time without limit as
to amount, to draw, make, accept, endorse,execute and
issue promissory notes, drafts,bills of exchange,
warrants, bonds, debentures and other negotiable or
non-negotiable instruments and evidences of indebtedness,
and to secure the payment of any thereof and of the
interest thereon by mortgage upon, pledge, conveyance or
assignment in trust of the whole or any part of the
property of the corporation, whether at the time owned or
thereafter acquired, and to sell, pledge or otherwise
dispose of such bonds or other obligations of the
corporation for its Corporate purposes.
To make any guarantee respecting dividends, shares of
stock, bonds, debentures, contracts or other obligations
to the extent that such power may be exercised by
corporations organized under the Stock Corporation Law.
G. To loan to any person, firm, partnership or corpora-
tion any of its surplus funds, either with or without
security.
H. To purchase, hold, sell and transfer the shares of its
capital stock; provided it shall not use its funds or
property for the purchase of its own shares of capital
stock when such use would cause any impairment of its
capital except as otherwise permitted by law, and
provided further that shares of its own capital stock
belonging to it shall not be voted upon directly or
indirectly.
I. To have one or more offices, to carry on all or any of
its operations and business and without restriction or
limit as to amount to purchase or otherwise acquire,
hold, own, mortgage, sell, convey or otherwise dispose
of, real and personal property of every class and
description in any of the states, districts, territories
or colonies of the United states, and in any and all
foreign countries, subject to the laws of such state,
district, territory, colony or country.
J. To enter into, make, perform and carry out contracts
of every kind, which may be necessary for or incidental
to the business of the corporation with any person, firm,
corporation, private, public or municipal, body politic,
under the government of the United States, or any
territory district, protectorate, dependency or insular
or other possession or acquisition of the United States,
or any foreign governments so far as, and to the extent
that, the same may be done and performed by a corporation
organized under the Stock Corporation Law.
K. To do any and all things necessary, suitable, conve-
nient or proper for, or in connection with,or incidental
to, the accomplishment of any of the purposes or the
attainment of any one or more of the objects herein
enumerated, or designed directly or indirectly to promote
the interests of the corporation, or to enhance the value
of any of its properties and in general to do any and all
things and exercise any and all powers which it may now
or hereafter be lawful for the corporation to do or to
exercise under any of the laws of the State of New York
that may now or hereafter be applicable to the corpora-
tion.
L. The purposes and powers specified in the foregoing
clauses are to be construed both as purposes and powers
and shall, except where otherwise expressed be in no way
limited or restricted by reference to or inference from,
the terms of any other clause in this certificate of
incorporation, but the purposes and powers specified in
each of the foregoing clauses of this article shall be
regarded as independent purposes and powers.
III. The aggregate number of shares which the Corporation shall
have authority to issue shall consist of 15,000,000 shares of
Common Stock of the par value of S-10 per share, And 500,000 shares
of Preferred stock of the par value of $1 per share. The Preferred
stock shall be issuable in series with such designations relative
rights, preferences and limitations as may be fixed from time to
time by the Board of Directors.
The designations, relative voting, dividend, liquidation and
other right, preferences and limitations of the Preferred Stock
(unless otherwise fixed by the Board of Directors) and the Common
Stock are as follows:
1. The shares of Preferred Stock may be divided into and
issued in one or more series, and each series shall be so designat-
ed so as to distinguish the shares thereof from the shares of all
other series. All shares of Preferred Stock shall be identical
except in respect of particulars which may be fixed by the Board of
Directors as hereinafter provided pursuant to authority which is
hereby expressly vested in the Board of Directors. Each share of a
series shall be identical in all respects with all other shares of
such series, except as to the date from which dividends thereon
shall be cumulative on any series as to which dividends are
cumulative. Shares of Preferred Stock of any series which have been
cancelled in any manner, including shares redeemed or reacquired by
the Corporation and shares which have been converted into or
exchanged for shares of any other class, or any series of the same
or any other classy shall have the status of authorized but
unissued shares of Preferred Stock and may be reissued as shares of
the series of which they were originally a part or may be issued as
shares of a now series or any other series of the same class.
2. Before any shares of Preferred Stock of any series shall be
issued, the Board of Directors, pursuant to authority hereby
expressly vested in it, shall fix by resolution or resolutions the
following provisions in respect of the shares of each such series
so far as the same are not inconsistent with the provisions of this
Article III applicable to all series of Preferred Stock.
(a) the distinctive designations of such series and
the number of shares which shall constitute such Series
which number may be increased (except where otherwise
provided by the Board of Directors in creating such
series) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like
action of the Board of Directors.
(b) the annual rate or amount of dividends payable on
shares of such series, whether such dividends shall be
cumulative or noncumulative, the conditions upon which
and/or the dates when such dividends shall be payable &nd
the date from which dividends on cumulative series shall
accrue and be cumulative on all shares of such series
issued prior to the payment date for the first dividend
of such series;
(c) whether such series shall be redeemable and, if
so, the terms and conditions of such redemption, includ-
ing the time or times when and the price or prices at
which shares of such series $hall be redeemed;
(d) the rights of the shares of such series in the
event of liquidation, dissolution or winding up of the
affairs of the Corporation)
(e) whether such series shall be convertible into or
exchangeable for shares of any other class, or any series
of the same or any other class, and, if so, the terms and
conditions thereof, including the date or dates when such
shares shall be convertible into or exchangeable for
shares of any other class, or any series of the same or
any other class, the price or prices or the rate or rates
at which shares of such series shall be so convertible or
exchangeable, and any adjustments which shall be made,
and the circumstances in which any such adjustments shall
be made, in such conversion or exchange prices or rates;
(f) whether such series shall have any voting rights
in addition to those prescribed by law and, if so, the
terms and conditions of exercise of such voting rights;
and
(g) any other designations, relative rights, prefer-
ences or limitations.
3. (a) So long an any shares of Preferred Stock of
any series shall be outstanding, the Corporation
will not declare or pay any dividends on the
Common Stock (other than dividends payable solely
in shares of Common Stock) or make any distribu-
tions of any kind, either directly or indirectly,
in respect of shares of Common stock, or make any
payment on account of the purchase, redemption or
other acquisition of Common Stock, unless on the
payment, distribution or redemption date, as the
case may be, all dividends on the then outstanding
shares of Preferred Stock of all series for all
past dividend periods shall have been paid to the
full extent of the preference, if any, to which
each series of Preferred Stock is entitled.
(b) In case the corporation shall not pay in full all
stated dividends required to be paid on all shares of all
aeries of Preferred Stock at the time outstanding to the
full extent of the preference, if any, to which each such
series is entitled, the shares of all series of Preferred
Stock shall share ratably in the payment of dividends,
including accumulations, if any, in accordance with the
sums which would be payable on such shares if all divi-
dends were declared and aid in full. Accumulations of
dividends shall not bear interest.
(c) In case the Corporation shall not pay
in full all amounts required to be paid on all
shares of all series of Preferred Stock at the time
outstanding in the event of the liquidation,
dissolution or winding up of the affairs of the
Corporation,the shares of all series of Preferred
Stock shall share ratably in the payment of all
amounts payable in the event of such liquidation,
dissolution or winding U in accordance with the
sums which would be payable on such shares if all
amounts payable on such liquidation, dissolution or
winding up were paid in full.
W When dividends shall have been paid
(or declared and set aside for payment) on the
Preferred Stock to the full extent of the
preference, if any, to which the Preferred Stock in
entitled, dividends on the remaining class or
classes of stock may then be paid out of the funds
of the Corporation which are legally available
therefor.
(a) Subject to the limitations prescribed
in this Article III and any further limitations
which may f rom time to time be prescribed by the
Board of Directors in accordance herewith the
holders of Common Stock shall be entitled to
receive dividends on the Common Stock, when, as and
if declared by the Board of Directors out of the
funds of the, Corporation which are legally
available therefor.
4. The* authorized but unissued shares of
Common Stock and the authorized but unissued shares
of Preferred stock may be issued for such
consideration, not less than the par value thereof,
an may be fixed from time to time by the Board of
Directors.
5 . (a) Except as otherwise determined pur-
suant to authority of the Board of Directors an
hereinbefore provided, or by the Business Corpora-
tion Law of the State of Now York, all voting
rights shall be vested exclusively in the holders
<PAGE>
of the outstanding shares of Common Stock and each
such holder shall be entitled to one vote per share
for all purposes for each share of Common Stock
hold of record by him.
(b) Except as otherwise determined
pursuant to authority of the Board of Directors as
hereinbefore provided, or by the Business
Corporation Law of the State of New York, the
holders of Preferred Stock shall not be entitled to
vote for any purpose nor shall they be entitled to'
notice of meetings of shareholders.
6. The Board of Directors has authorized a
series of Preferred Stock which series shall be
designated as $Sri*# A Preferred Stock (the "Series
A Preferred Stock") and this number of shares
constituting such series shall be 150,000.
(a) The holders of record of shares of
Series A Preferred Stock shall be entitled to
receive,when, as and if declared by the Board
of Directors or a duly authorized committee
thereof out of funds legally available for the
purpose, dividends in cash at the rate per
share of 5% per annum (calculated an a
percentage of the liquidation value per share
of $100). Dividends shall be payable
quarterly, on the dates on which a quarterly
dividend or distribution on the Common Stock,
$.10 par value per share ("Common Stock") of
the Corporation is payable (other than a
dividend payable in Common Stock) (each such
date being referred to herein as a "Dividend
Payment Date"), commencing on the first
Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A
Preferred Stock, or, if no such dividends on
the Common Stock are Payable then on such
quarterly dates designated by the Board of
Directors or a duly authorized committee
thereof. To the extent the Board of Directors
or a duly authorized committee thereof does
not declare the full 5% dividend or, if so
declared, such dividend is not fully paid in
cash the amount not so declared or paid shall
accumulate as provided in paragraph (b) of
this Section 6. The Board of Directors or a
duly authorized committee thereof may fix a
record date for the determination of holders
of shares of Series A Preferred Stock entitled
to receive payment of a dividend declared
thereon, which record data shall be not less
than 10 days nor more that 50 days prior to
the date fixed for the payment thereof.
(b) Dividends on the outstanding shares
of Series A Preferred Stock shall be cumula-
tive from the date of issue of such shares.
Accrued dividends, whether or not declared,
that are not paid shall compound quarterly at
St per annum until the date of payment of such
dividends.The amounts ' with respect to such
compounding shall also constitute accrued
dividends.Accumulated but unpaid dividends
may be declared and paid at any time, without
reference to any regular Dividend Payment
Date, to holders of record on such date, not
less than 10 days nor more than 50 days
preceding the payment date thereof, as may be
fixed by the Board of Directors of the Cor-
poration or a duly authorized committee
thereof.
(c) So long as any of the shares of
Series A Preferred Stock are outstanding, no
dividends shall be paid or declared, nor any
distribution be made, on the Common Stock, or
any other security junior to @he Series A
Preferred Stock, other than a dividend payable
in common stock or such other junior security,
nor shall any shares of Common Stock, or any
other security junior to the Series A
Preferred Stock, be acquired for consideration
by the Corporation, unless all dividends on
the Series A Preferred Stock for all past
dividend dates shall have been paid and -the*
full dividends thereon for tho most recent
dividend date shall have been paid or
declared and a sum sufficient for the payment
thereof set &part. Subject to the foregoing
provisions, dividends on the Common stock
(payable in cash, stock or otherwise) as may
be determined by the Board of Directors may be
declared and paid from time to time out of the
remaining funds legally available for the
payment of dividends, and the Series A
Preferred Stock shall not be -entitled to
participate in any such dividends, whether
payable in cash, stock or otherwise.
(d) The holders of record of shares of
Series A Preferred Stock shall not be entitled
to any voting rights, except as otherwise
provided by law.
<PAGE>
-10-
(e) The Corporation may at the discrimina-
tion of a majority of the Continuing Directors
(as hereinafter defined) redeem, at any time,
in whole but not in part, all of the shares
and fractional shares of Series A Preferred
stock at a redemption price of $6,060 Per
whole share, reduced pro rata for redemptions
of fractional shares, plus accrued and unpaid
dividends thereon (as provided in paragraphs
(a), (b) and W of this Section 6 above) to
the date fixed -for optional redemption, and
adjusted if, and to the extent that, the price
at which the Series A Preferred Stock is
issued is more or less than $6,000 per share.
(f) In the event the Corporation shall
redeem the shares of Series A Preferred Stock,
notice of such redemption shall be given by
first class mails postage prepaid, mailed not
less than 15 days nor more than 60 days prior
to the redemption date I to each holder of
record of such shares at such holder's address
as the same appears on the stock register of
the Corporation, provided however, that no
failure to mail 'such notice nor any defect
therein shall affect the validity of the
redemption of the shares of Series A Preferred
Stock to be redeemed. Each such notice shall
state (i) the redemption date; (ii). the
Place or places where certificates for shares
are to be surrendered for payment of the
redemption price and (iii) that dividends on
the shares will cease to accrue on such
redemption date.
(g) Notice having been mailed as afore-
said, from and after the redemption date
(unless default shall be made by the
Corporation in providing money for the payment
of the redemption price) dividends on the
share of Series A Preferred stock shall cease
to accrue and all rights of the holders
thereof as stockholders of the Corporation
(except the right to receive from the
corporation the redemption price and any
accrued and unpaid dividends) shall cease.
Upon surrender in accordance with said notice
of the certificates for shares (properly
endorsed or assigned for transfer, if the
Continuing Directors of the Corporation shall
so require and the notice shall so state),
such shares shall be redeemed by the Corporation
at the redemption price aforesaid.<PAGE>
"Continuing Director" shall mean a
member of the Corporation's Board of Directors
who was a member of the Corporation's Board of
Directors prior to the time an Acquiring
Person (as hereinafter defined) became an
Acquiring Person# and any successor of a
Continuing Director who is recommended in
writing to succeed a Continuing Director by a
majority of Continuing Directors then on the
Corporation's Board of Directors.
"Acquiring Person" shall mean any
person who or which, together with all
affiliates and associates of such person, is
the Beneficial Owner (as hereinafter defined)
of 30% or more of the shares of Common Stock
then outstanding but shall not include the
corporation, any employee benefit plan of the
Corporation or any person holding shares of
Common Stock and which was organized
appointed or established by the Corporation
for or pursuant to the terms of any such plan.
A person shall be deemed the "Bene-
ficial owner" of, and shall be deemed to
"beneficially own" any securities W which
such person or any of such person's affiliates
or associates beneficially owns, direct or
indirectly; (ii) which such person or any of
such person's affiliates or associates has (A)
the right to acquire (whether such right is
exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding (whether or ' not
in writing) or upon the exercise of conversion
rights,exchange rights, rights, warrants or
options,or otherwise Provided however. that
a person shall not be deemed the "Beneficial
owner" of, or to "beneficially own", se=i-
-ties tendered pursuant to a tender or exchange
off or made by such person or any of such
person's affiliates or associates until such
tendered securities are accepted for purchase
or exchanger or (B) the right to vote pursuant
to any agreement# arrangement or understanding
(whether or not in writing), provided, how-
ever, that a person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own", any security under this clause (3) if
the agreement, arrangement or understanding to
vote such security (1) arises solely from a
revocable proxy given in response to a public
proxy or consent solicitation made pursuant
to, and in accordance with, the applicable<PAGE>
-12-
rules and regulations of the Securities
Exchange Act of 1934, an amended, and (2) is
not also then reportable by such person on
Schedule 13D under said Securities Exchange
Act (or any comparable or successor report)j
or (iii) which are beneficially owned,
directly or indirectly, by any other person
with which such person or any of such person's
affiliates or associates has or has had any
agreement, arrangement or understanding
(whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant
to a revocable proxy as described in clause
(B)of subparagraph (ii) of this paragraph
or disposing of any securities of the
Corporation.
W Any shares of Series A Preferred
Stock which shall have been redeemed shall,
after such redemption, have the status of
authorized but unissued shares of Preferred
Stock, without designation as to series until
such shares are once more designated as part
of a particular series by the Board of
Directors.
(l) In the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the affairs of the CorporatIon,
the holders of shares of Series A Preferred
Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation
available for distribution to its stockholders
An amount in cash equal to the greater of (i)
$100 for each whole share outstanding, or (ii)
an aggregate amount for each whole share
outstanding equal to 100 times the aggregate
amount distributable per share with respect to
the Common Stock; such amount in either case
to be reduced pro rata for any fractional
shares outstanding, plus an amount in cash
equal to all accrued but unpaid dividends
thereon (as provided in paragraphs (a), (b)
and (c) of this Section 6 above) to the date
fixed for liquidation, dissolution or winding
up before any payment shall be made or any
assets distributed to the holders of any
shares of Common Stock or to the holders of
any shares of stock ranking Junior (either as
to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred
Stock. if the assets of the corporation are
-13-
not sufficient to pay in full the liquidation
payments payable to the holders of outstanding
shares of series A Preferred Stock, than the
holders of all such shares shall share
ratably in such distribution of assets in
accordance with the amount which would be
payable on such distribution if the amounts
to which the holders of outstanding shares of
Series A Preferred Stock are entitled were
paid in full.
(m) For the purposes of this Section 6
neither the voluntary sale, conveyance,
exchange or transfer For cash, shares of
stock, securities or other consideration) of
all or substantially all the property or
assets of the Corporation nor the
consolidation or merger of the Corporation
with one or more other corporations shall be
deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless
such voluntary sale, conveyance, exchange or
transfer shall be in connection with a
dissolution or winding up the business of the
Corporation.
(n) The Series A Preferred Stock shall
be pari passu to all other series of the
Corporation's Preferred Stock as to the
payment of dividends and the distribution of
mots, except to the extent a series is made
junior or subordinate to the Series A
Preferred Stock.
(o) Each fractional share of the Series
A Preferred Stock outstanding shall 'be
entitled to A ratably proportionate amount of
all rights relating to the shares of the
Series A Preferred Stock, including dividend
and voting rights. The liquidation payment
or redemption payment with respect to each
fractional share of Series A Preferred Stock
shall be equal to a ratably proportionate
amount of the liquidation payment or
redemption payment with respect to each
outstanding share of Series A Preferred
stock.
IV. The office of the corporation in
to be located in the County of Nassau and
State of New York.
VI Its duration in to be perpetual.
-14-
VI. The Board of Directors is expressly authorized
and empowered from time to time (a) to fix, by resolution
adopted by a majority of the entire Board, the number of
directors which shall constitute the entire Board of
Directors, such number to be not less than three (3), and
(b) to amend or repeal any BY-Laws or adopt any now By-
Laws, but any By-Law adopted by the Board of Directors may
be amended or repealed by the, shareholders at any Annual
Meeting or at any Special Meeting.
VII. Shares of stock in other corporations held by
this corporation, shall be voted by such officer or offi-
cers of this corporation as the board of directors, by a
majority vote shall designate for this purpose, or by a
proxy thereunto duly authorized by a like vote of said
board.
VIII. It is hereby provided, pursuant to section 74
of the Stock Corporation Law# that this corporation shall
have power to issue the whole or any part of the shares of
its capital stock as partly paid stock, subject to calls
there,on until the whole thereof shall have been paid in.
IX. No contract or other transaction between the
corporation and any other corporation shall ")e affected, or
invalidated by the f act that any one or more of the directors of
this corporation is or are interested in, or is a
director or officer, or are directors or officers of such
other corporation and any director or directors, individu-
ally or jointly, may be a party or parties to, or may be
interested in, any contract or transaction of this corpora-
tion or in which this corporation is interested) and no
contract, act or transaction of this corporation with any
person or persons, firm, or corporations, shall be Affect-
ed, or invalidated by the fact that any director or direc-
tors of this corporation is a party, or are parties to or
interested in such contract, act or transaction, or in any
way connected with such person or persons, firm, associa-
tion or corporation, and each and every person who may
become a director of this corporation is hereby relieved
from any liability that might otherwise exist from con-
tracting with the corporation for the benefit of himself or
any,firm or association or corporation in which he may be
%A W -_ & Ad %0-0
X. No holder of either class of stock shall be
entitled an of right, to purchase or subscribe for any part
of unissued stock of either class, or any additional stock
to be issued by reason of any increase of the authorized
capital stock of the company, or any bonds, certificates of
indebtedness, debentures or other securities convertible
into stock of the corporation# but any such unissued stock
or such additional authorized issue of now stock, or of
other securities convertible into stock may be issued and
disposed of pursuant to resolution of the board of direc-
tors to such persons, firms, corporations or associations
and upon such terms as ma y be doomed advisable by the board
of directors in the exercise of their discretion.
XI. The corporation shall indemnify any
person made a party to any action, suit or proceeding, by reason of
the fact that he, his testator or intestate, is or was a
directors officer or employee of the corporation, or of any
firm, corporation, or association which he served an such
at the request of the corporation, against the reasonable
expenses (including attorney's fees and, to the extent
permitted by law, any amount paid in a court approved
settlement) actually and necessarily incurred by him in
connection with the defense of such action, suit or pro-
ceeding, or in connection with any appeal therein, except
in relation to matters as to-which it shall be adjudged in
such action, suit or proceeding that such officer, director
or employee is liable for negligence or misconduct in the
performance of his duties.
XII. The Secretary of $tat* is designated
as agent of the corporation for the service of process, and
directed to mail a copy of such process to the corporation at the
following address: Park Electrochemical Cory., 5 Dakota
Drive, Lake Success, Now York 11042, Attention: General
Counsel.
5. The changes not forth in paragraph 3
hereof, and the restatement of the Certificate Of Incorporation set
forth in Paragraph 4 hereof, were duly authorized by the affirma-
tive vote of the Board of Directors of the corporation at a duly
convened meeting thereof held the 28th day of March, 1989.
IN WITNESS WHEREOF, we, the undersigned have
executed and subscribed this certificate and do affirm the
foregoing as true under the penalties of perjury this 28th
day of March, 1989.
__________________________________
Allen Levine, Vice President
_________________________________
Harry Linzer, Secretary
EXHIBIT 10.03(a)
SECOND ADDENDUM TO LEASE
This Second Addendum to Lease by and between TCLW/Fullerton, a
California general partnership ("Landlord") and Nelco Products,
Inc. , a Delaware corporation ("Tenant") shall amend that certain
Lease Agreement dated August 16, 1983 and shall amend the First
Addendum to Lease known as Exhibit "C" dated August 16, 1983 by
and between Landlord and Tenant relating to certain real property
located in Orange County, California, as follows:
For purposes of this Addendum the existing leased premises at 1411
E. Orangethorpe Avenue shall be called "1411" and the additional
leased premises at 1421 E. Orangethorpe Avenue shall be called
111421".
55. Demised Premises. Commencing January 1, 1987 Tenant shall
increase its current space of 36,462 square feet "1411" to
include the adjacent space of 21,240 square feet "142111, as
further outlined in Exhibit "D" attached.
56. Extension of 1411 E. Orangethorpe Avenue Lease. In
consideration for the terms and conditions of the leasing
of "1421", tenant shall execute the attached Exhibit "E" thereby
exercising its option to extend the existing lease at 1411
E.Orangethorpe Avenue.
57. Lease Term. The lease term with respect to "1421" shall be
for six (6) years and nine (9) months commencing on January
1, 1987 and ending on September 30, 1993.
58. Rent Schedule. The rent with respect to "1421" shall be on
a net basis and structured as follows:
January 1, 1987 - $6,372.00 per month.
September 30, 1988:
October 1, 1988 - The rent on October 1, 1988 shall
September 30, 1993: be adjusted upwards in accordance
with the percentage increases
that occur in the Consumer Price
Index from the December 1, 1986
commencement date, with a ceiling
factor, as further outlined in
Paragraph 50 of Exhibit
The adjusted rent shall remain
constant for the following thirty
(30) month period and on April
1, 1991 be adjusted once more
in accordance with the adjustment
formula outlined in Paragraph
50 of Exhibit "C".
59. Option to Extend. While this Lease is in full force and effect
and provided that Tenant is not in default of any of the terms,
covenants, and conditions thereof, Tenant shall have the option
to extend the term of the "1421" lease for two further terms
of sixty (60) months. Such extension(s) of the "1421" lease
term shall be on the same terms, covenants, and conditions
as those provided for in the "1411" lease except that the rent shall be
equal to the rent being paid on the "1411" leased premises. Addition
ally, the provisions outlined in subparagraph b, c, d and e of
paragraph 51 shall apply.
60. Tenant's Proportionate Share. Tenant's Proportionate Share
as referenced in Paragraph 4 & 5 of the lease shall be increased
to 60.93%: (Total building area = 94,702 square feet; leased
premises "1421" and "1411" equal 57,702 square feet).
61. Tenant Improvements. Tenant shall be leasing the premises
at "1421" in an "as is" condition with the following exceptions:
1. Landlord shall provide an opening in the demizing wall
separating "1411" from "1421".
2. Landlord shall provide a two-inch water line in a manner
which does not substantially exceed the cost for that
previously installed in "1421".
The lease term shall commence and all Tenant's obligations
under this lease, including payment of rent, shall commence
on January 1, 1987, regardless of the status of the above
work to be performed by Landlord. Landlord agrees to
diligently pursue and complete such work.
62. Prior Claims. Tenant hereby waives any pending claims on
Landlord as of the date of this Second Addendum.
63. Landlord shall designate, with no obligation to enforce,
thirty-five (35) parking spaces with respect to "1421' for
Tenant's exclusive use, in that portion of the common area
that is marked in yellow on Exhibit A of the original lease.
All other terms and conditions of the lease shall remain in full
force and effect for the leased premises at "1421".
LANDLORD:
TCLW/FULLERTON,
a California general partnership
By:
Its:General Partner
TENANT:
NELCO PRODUCTS, INC.,
a Delaware corporation
By: /s/ E.Philip Smoot
Its: President
<PAGE>
EXHIBIT "E"
This Extension Agreement is to be attached to and form a part of
the lease (which together with any amendments, modifications and
extensions thereof is hereinafter called the Lease), made the 16th
day of August, 1983, by and between TCLW/Fullerton, a California
general partnership ("Landlord") and Nelco Products, Inc., a Delaware
corporation ("Tenant") covering the premises known as 1411 E.
Orangethorpe Avenue, Fullerton, California.
The Lease is hereby renewed and extended for a further term of
sixty (60) months to commence on the 1st day of October, 1988,
and to end on the 30th day of September, 1993, on condition that
Landlord and Tenant comply with all the provisions of the covenants
and agreements contained in the Lease.
The parties hereto have signed this extension agreement this 26th
day of January, 1989.
LANDLORD:
TCLW/FULLERTON,
California general partnership
By:__________________________
Its: General Partner
By: /s/E.Philip Smoot
Its: President
EXHIBIT 10.07(c)
THIS AMENDMENT NO. 1, made and entered into as of the day of
March, 1995, by and between PARK ELECTROCHEMICAL CORP., a New
York corporation (hereinafter called the "Company"), having an
office at 5 Dakota Drive, Lake Success, New York 11042, and JERRY
SHORE (hereinafter called "Shore"), residing at Lighthouse Road,
Sands Point, Long Island, New York (this "Amendment").
WITNESSETH:
WHEREAS, the Company and Shore have previously executed
and delivered an Amended and Restated Employment Agreement, dated
as of February 28, 1994 (the "Original Agreement"), relating to the
employment of Shore by the Company; and
WHEREAS, the Company and Shore wish to modify certain of
the terms and conditions of the Original Agreement as hereinafter
set forth;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Additional Payment. In addition to all other
amounts payable by the Company to Shore (or his legal representa-
tive or the executor or administrator of Shore's estate) pursuant
to the Original Agreement, the Company shall pay to Shore on
the Payment Date (as hereinafter defined) an amount equal to
$264,289, plus an amount equal to interest accruing thereon at the
Prime Rate (as hereinafter defined) from time to time, compounded
monthly, from September 1, 1994 to the Payment Date. The Company
and Shore acknowledge and agree that the payment to be made
by the Company to Shore pursuant to this Section is an unsecured
obligation of the Company, that Shore is only a general creditor of
the Company in that respect and that the amounts due from the
Company are assets of the Company until paid to Shore
which are available to satisfy the claims of the Company's
creditors generally.
As used in this Amendment, the following terms shall have
the following meanings:
(a) "Payment Date" shall mean the earliest of
(1) the date which is 30 days after the effective date of Shore's
retirement from full-time employment with the Company, (2) the date
which is 30 days after the date of Shore's death or (3) the date
which is 30 days after the date of Shore's "disability" (as defined
in the Original Agreement).
(b) "Prime Rate" shall mean the rate of interest
announced from time to time by Bankers Trust Company as its "prime
rate", with each change therein to be effective hereunder at the
time such change is effective for Bankers Trust Company.
-1-
2. Additional Compensation.
(a) Section 4(b) of the Original Agreement shall be
amended to read as follows:
11(b) As additional compensation, the Company shall
pay Shore an amount ("additional compensation") equal to four
percent (4%) of the amount by which After-Tax Net Earnings (as
defined below) of the Company for any Fiscal Year (commencing with
the Fiscal Year beginning February 28, 1994) exceeds $7,500,000;
provided, however, that in no event shall the additional
compensation in respect of any Fiscal Year exceed $350,000.11
(b) Section 4(c) of the Original Agreement shall be
amended by deleting Section 4(c)(ii) and redesignating Sections
4(c)(iii) and 4(c)(iv) as Sections 4(c)(ii) and 4(c)(iii),
respectively.
3. Additional Amendment. Section 4(i) of the Original
Agreement is hereby amended to change the reference therein to
section 415 of the Internal Revenue Code of 1986, as amended (the
"Code"), to be a reference to sections 401 and 415 of the Code.
4. Entire Agreement. This Amendment and the Original
Agreement together constitute the entire agreement between the
parties with respect to the subject matter hereof, and may not be
modified or amended except by an instrument in writing signed by
the parties hereto.
5. Successors and Assigns. This Amendment and all of
its terms and conditions shall be binding upon, and shall inure to
the benefit of the parties hereto and their respective heirs, legal
representatives and successors. This Amendment is personal and
shall not be assignable by Shore or the Company except that, in the
event of any consolidation with or merger into any other
corporation by the Company or the sale or distribution of all or a
substantial part of the assets of the Company to another
corporation, the surviving or acquiring corporation shall assume
this Amendment and become obligated to perform all of the terms and
conditions hereof and Shore's obligations hereunder shall continue
in favor of such corporation.
6. Notices. All notices and other communications
required or permitted to be given hereunder shall be given in
accordance with Section 14 of the Original Agreement.
7. No Waiver. No waiver of any breach or default
hereunder shall be considered valid unless in writing and signed by
the party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar
nature.
-2-
8. Governing Law. This Amendment shall in all
respects be construed and enforced in accordance with, and governed
by, the laws of the State of New York which would be applicable to
contracts made and to be performed in New York.
IN WITNESS WHEREOF, the parties hereunto have duly
executed this Amendment as of the date first above written.
PARK ELECTROCHEMICAL CORP.
By: /s/Brian E. Shore
Title: Executive Vice President
By: /s/Jerry Shore
Title: President
APPROVED:
EXECUTIVE COMPENSATION COMMITTEE
_______________________
Lloyd Frank
_______________________
Norman Schneider
_______________________
Anthony Chiesa
-3-
EXHIBIT 10.08
LEASE
THIS INDENTURE, made this 15th day of April, 1988,
between GEOFFREY ETHERINGTON, II, of Jupiter, Florida, (herein-
after called "Landlord") and USP COMPOSITES, INC. whose address
is 172 East Aurora Street, Waterbury, Connecticut, (hereinafter
called 'Tenant").
W I T N E S S E T H
That for and in consideration of the payment by Tenant
of the rent hereinafter reserved and the performance by Tenant
of the covenants and agreements hereinafter agreed to be per-
formed by Tenant in accordance with the provisions hereinafter
set forth, Landlord does hereby let and demise unto Tenant and
Tenant does hereby take and hire from Landlord, that certain
real property (hereinafter referred to as the 'leased prem-
ises"), described in Exhibit "A" attached hereto and made a part
hereof by reference, for the term commencing on April 15, 1988
and ending on December 31, 1992 at a rent of $175,380.00 per
annum, payable to Landlord in equal monthly installments of
$14,615.00 in advance, without notice, on the first day of each
month during the term of this Lease. Tenant shall have the one
time right to extend the term of this Lease for a period of up
to five (5) years by written notice given not later than
June 30, 1992. During such extended term all of the terms and
conditions of the Lease shall remain in full force and effect
except that the rent during such extended term shall be fixed at
one time and shall be the fair market rent for the leased prem-
ises for such extended term (but in no event less than
$175,380.00 per annum).
If Tenant, not later than June 30, 1992, shall have
given written notice as aforesaid of the exercise of its right
to extend the term of this Lease, then, for the purposes of the
foregoing, "fair market rent' shall be determined as follows:
Landlord shall make the initial determination of fair market
rent. Landlord shall give notice to Tenant of Landlord's deter-
mination of fair market rent prior to July 15, 1992. If Tenant
shall dispute Landlord's determination, Tenant shall give notice
of such dispute within fifteen (15) days after receipt of Land-
lord's determination. Within fifteen (15) days thereafter, if
both parties fail to agree as to fair market rent then both par-
ties shall agree to the appointment of a disinterested person of
recognized competence in the field as an appraiser. The
appraiser thus appointed shall as promptly as possible determine
fair market rent. If Tenant shall dispute any determination by
the appraiser, or if both parties cannot agree as to an
appraiser prior to September 1, 1992, fair market rent shall be
determined by arbitration before the American Arbitration Asso-
ciation of Hartford, Connecticut, in accordance with its rules
then obtaining. All costs of any arbitration pursuant to the
foregoing shall be borne by Landlord and Tenant equally. In the
event of any arbitration pursuant to the foregoing, or in the
event that Landlord and Tenant for any reason fail to agree as
to fair market rent prior to September 1, 1992, then notwith-
standing anything to the contrary contained herein, the last
date upon which Tenant shall have the right to give notice of
exercise of the option to purchase provided for in Paragraph
20(A)(iii) hereof shall be extended from December 31, 1992 until
a date which is 45 days after fair market rent has been deter-
mined by such arbitration or Landlord and Tenant have agreed as
to fair market rent. In the event that the Closing (as defined
in Paragraph 20(A)) shall be scheduled to occur after
December 31, 1992, Tenant shall be entitled to remain in occu-
pancy of the leased premises until the Closing (but not beyond
June 30, 1993 unless this Lease shall have been extended for the
extended term as provided above), during which pre-Closing
period all provisions of this Lease shall continue in effect as
if this Lease had been so extended and Tenant shall pay the fair
market rent. Notwithstanding anything in this Lease to the con-
trary, if Tenant shall give notice of its exercise of its option
to purchase the leased premises on or after June 30, 1992 and
Tenant shall have given written notice of the exercise of its
right to extend the term of this Lease not later than June 30,
1992, Tenant may (a) delay the Closing to a date not more than
45 days after the fair market rent shall have been determined or
agreed upon as aforesaid and (b) rescind such purchase option
exercise at any time during such 45-day period.
In the event during the initial term or any renewal
term hereof, any monthly installment of rental reserved herein
shall not be paid within ten (10) days after the same shall
become due, Tenant shall pay to Landlord a late charge which
shall be equal to two percent (2%) of the rental payment due.
If, however, the date on which Tenant is given posses-
sion begins on a date other than the first day of any month,
then the rental payment for the period from the date of posses-
sion to the beginning of the term shall cover the pro rata rent
for a fractional part of the month from the date possession
begins through the last day of that calendar month.
This Lease is made upon the foregoing and the follow-
ing agreements, covenants, and conditions, all and every one of
which Landlord and Tenant agree to keep and perform during the
initial term of this Lease and any renewal thereof:
1.USE OF PREMISES Tenant may use and occupy the
leased premises for any lawful business purposes. Tenant will
comply with any and all laws, ordinances, orders, and regula-
tions of any governmental authority which are applicable to his
use of the leased premises.
2. TAXES, ASSESSMENTS, AND UTILITY CHARGES Tenant
shall pay all real estate taxes, assessments, licenses, permits
and charges of any nature which are levied, imposed or assessed
upon or against the leased premises by any governmental body.
Tenant shall pay all charges for sewage disposal, jan-
itorial services, electricity, water and gas or other fuel or
other utilities consumed by it upon the leased premises.
It is the intent of the parties hereto that this Lease
shall be a pure net lease and that Landlord receive all rents
hereunder free of any and all impositions, charges or expenses
relating to the leased premises in any part or aspect thereof
(excepting only mortgages, liens or encumbrances placed (or suf-
fered to be placed) on the leased premises by Landlord) all of
which shall be paid by Tenant.
3. INSURANCE Tenant shall procure and maintain a
standard fire insurance policy with extended coverage and addi-
tional extended coverage in an amount equal to the full replace-
ment value from time to time of building and improvements on the
leased premises naming Landlord as an additional insured and the
loss payee with respect to the leased premises and covering all
mortgagees on the leased premises under standard Connecticut
mortgagee endorsements. "Full replacement value" for the pur-
pose of this Lease shall.be deemed to be $3,250,000 (subject to
a deductible not exceeding $100,000), which full replacement
value will be adjusted annually based upon the recommendation of
the insurer as to the then full replacement value of the leased
premises.
Tenant shall also procure and maintain in force during
the period of time this Lease is in effect general liability
insurance insuring the Landlord and Tenant (naming them both in
the policy) against any liability whatsoever occasioned by acci-
dent on or about the leased premises, or any appurtenances
thereto, such policy to be in an amount of not less than Five
Million ($5,000,000.00) Dollars in respect to injury, including
death, of any one person, and in amount of not less than Five
Million ($5,000,000.00) Dollars in respect to any one accident
and not less than Five Hundred Thousand ($500,000.00) Dollars
for property damage.
The original policies of fire insurance and general
liability insurance referred to above or certificates thereof
shall be furnished by Tenant to the Landlord prior to the
commencement of the term of this Lease, with a copy thereof to
be provided to the Connecticut Development Authority as promptly
thereafter as practicable, and said policies shall be renewed
from time to time not less than ten (10) days prior to the expi-
ration date of the policies, certificates of renewals to be
promptly furnished to the Landlord, and the Connecticut Develop-
ment Authority.
4. MAINTENANCE AND REPAIRS Tenant at its sole cost
and expense shall at all times maintain and keep in good repair
and condition and make all necessary repairs to and replacements
of all or any part of the leased premises, including, but not
limited to, all glass, all electrical, heating, air conditioning
and plumbing systems and, during the initial term of this Lease,
all structural members, exterior walls and roof; provided, how-
ever, that, during the renewal term of this Lease, Tenant shall
provide ordinary maintenance for all structural members, exte-
rior walls and roof, and Landlord shall be responsible for all
necessary repairs to and replacements of said structural mem-
bers, exterior walls and roof unless the same is necessitated by
Tenant's act or omission (other than ordinary wear and tear) or
those or its agents, employees or contractors. Tenant shall
commit no waste nor suffer the same to be committed on the
leased premises.
Tenant shall bear all risk of loss from the use and
occupation of the leased premises, except as provided in the
preceding paragraph and except loss for which Tenant has
obtained fire and extended coverage insurance protection but
only to the extent that Landlord receives sums from such insur-
ance carriers on account of any such loss. Landlord shall
assign to Tenant all manufacturers' warranties upon the roof and
the heat@ing and cooling equipment if any. Upon the commencement
of the renewal term Tenant shall reassign to Landlord such war-
ranties as relate to the roof.
Landlord shall have the right to enter upon the leased
premises from time to time in order to inspect the same, but
this right shall be exercised in such manner as not to interfere
with Tenant's use and enjoyment of the leased premises and shall
be subject to any and all laws, orders, or regulations of the
United States Government or any department or agency thereof,
relating to information affecting the national security which
may at any time apply to Tenant's use of the leased premises.
Tenant shall comply with the requirements, with
respect to the use, occupancy and/or maintenance of the leased
premises, of the Connecticut Development Authority as contained
in the Mortgage Deed between the Connecticut Development Author-
ity and Landlord dated June 19, 1981, provided, however, that
Tenant, unless otherwise provided herein, shall not be obligated
in any way with respect to the note secured by such Mortgage
Deed, any tax obligations contained in such Mortgage Deed, any
insurance obligations contained in such Mortgage Deed
including, without limitation, any insurance for the loan
secured by such Mortgage Deed, any insurance on the leased prem-
ises or improvements thereto and any insurance on the life or
well being of any person) and any other obligations contained in
such Mortgage Deed which do not relate directly to the use,
occupancy and/or maintenance of the leased premises by a tenant
thereof, and further provided that the foregoing shall not in
any way be deemed to be an assumption by Tenant of any of Land-
lord's obligations under such Mortgage Deed.
5. ACTION OF PUBLIC AUTHORITIES In the event that
any exercise of the power of eminent domain by any governmental
authority, Federal, State, County, or Municipal, or by any other
party vested by law with such power shall at any time prevent
the full use and enjoyment of the leased premises Tenant for the
purposes set forth in Section 1, Tenant shall have the right
thereupon to terminate this Lease. In the event of any such
action both Landlord and Tenant shall have the right to claim,
recover, and retain from the governmental authority or other
party taking such action the damages suffered by them
respectively as a result of such action.
6. IMPROVEMENTS BY TENANT Tenant, upon receipt of
approval from or failure to object after a reasonable time by
the Connecticut Development Authority after due notice thereto,
shall have the right to make such structural and non-structural
alterations, additions, or improvements in or to the leased
premises as it shall consider necessary or desirable for the
conduct-of its business, provided that all such work shall be
done in a good and workmanlike manner, and the structural integ-
rity of the building shall not be impaired, and that no liens
shall attach to Landlord's interest in the leased premises by
reason thereof. Upon the termination of this lease, Tenant's
alterations, additions, or improvements shall at the option of
the Landlord (1) become the property of Landlord, or (2) be
removed by the Tenant at Tenant's expense and Tenant shall
restore to its original condition any part of the leased prem-
ises damaged by the removal of such alterations, additions, or
improvements, reasonable wear and tear being excepted. Tenant
may, at Tenant's expense, raise the height of the roof of the
treater room approximately 25 feet over an area of approximately
1,000 square feet. If Tenant raises said roof then upon the
termination of this Lease Tenant shall not be required to lower
said roof to its original height.
7. FIXTURES AND SIGNS Tenant shall have the right
to install in or place on the leased premises such fixtures,
machines, tools, or other equipment (including but not limited
to trade fixtures, lighting fixtures, water coolers, or other
equipment) as it may choose. Such fixtures, machines, tools or
other equipment shall at all times remain the personal property
of Tenant regardless of the manner or degree of attachment
thereof-to the leased premises and may be removed at any time by
Tenant whether at the termination of this Lease or otherwise;
provided, however, that Tenant shall make proper restoration of
the leased premises in the event that any damage is done thereto
in the removal of any such property.
Tenant shall have the right to install or erect on the
leased premises or to affix to the building which is a part of
the leased premises, such signs as it may deem necessary or
appropriate to advertise its name and business; provided that
such signs comply with all appropriate governmental regulations
and provided that upon the termination of this Lease, Tenant
shall remove all signs placed upon the leased premises and
restore any part of the leased premises affected by the removal
of Tenant's sign to its original condition.
8. DEFAULT If Tenant shall fail to pay any rent to
Landlord when the same is due and payable under the terms of
this Lease and such default shall continue for a period of ten
(10) days after written notice thereof has been given to Tenant
by Landlord, or if the Tenant shall fail to perform any other
duty or obligation imposed upon it by this Lease and such
default shall continue for a period of thirty (30) days after
written notice thereof has been given to Tenant by Landlord
except that if such default cannot be cured within thirty (30)
days Tenant shall not be deemed in default by reason thereof
unless Tenant fails to commence to cure such default within said
thirty (30) day period and thereafter diligently prosecute the
curing of such default, or if the Tenant shall be adjudged bank-
rupt, or shall make a general assignment for the benefit of its
creditors, or if a receiver of any property of Tenant in or upon
the leased premises be appointed in any action, suit, or pro-
ceeding by or against Tenant and such appointment shall not be
vacated or annulled within sixty (60) days, or if the interest
of Tenant in the leased premises shall be sold under execution
or other legal process, then and in any such event upon ten (10)
days written notice by Landlord to Tenant and Tenant's failure
to cure such default within said ten (10) day period the balance
of all rentals then due and/or provided for under the terms
hereof shall become immediately due and payable and Landlord
shall have the right to enter upon the leased premises and again
have, possess, and enjoy the same as if this Lease had not been
made, and thereupon this Lease shall terminate, without preju-
dice, however, to the right of Landlord to recover from Tenant
all rent due under this Lease together with all costs of collec-
tion and legal expenses including a reasonable attorney's fee.
In the event of any such default and re-entry, Landlord shall
attempt _in good faith to relet the leased premises for the
remainder of the then existing term whether such term be the
initial term of this Lease or any renewed or extended term for
the highest rent then obtainable and permitted by Connecticut
Development Authority, and to recover from Tenant the difference
between the rent reserved by this Lease and the amount obtained
through such reletting less the costs and expenses reasonably
incurred by Landlord.
9. ASSIGNMENT: SUBLETTING Tenant shall have the
right to assign this Lease or to sublet the leased premises or
any part thereof subject to the written consent of Landlord and
of the Connecticut Development Authority which consent shall not
unreasonably be withheld; provided, however, that no such
assignment or subletting shall relieve Tenant from its duty to
perform all of the agreements, covenants, and conditions set
forth in this Lease, and Tenant shall remain primarily liable
hereunder provided that if Tenant's assignee defaults hereunder
Tenant shall have the right to be reinstated as the Tenant under
this Lease.
10. TITLE Landlord covenants and warrants that Land-
lord has lawful title and right to make this Lease, that Land-
lord will maintain Tenant in full and exclusive possession of
the leased premises, and that, if Tenant shall pay the rent and
perform all the agreements, covenants, and conditions required
by this Lease to be performed by it, Tenant may freely,
peaceably, and quietly occupy and enjoy the leased premises
without molestation or hindrance, lawful or unlawful, of any
person or entity whomsover.
11. SURRENDER When this Lease shall terminate in
accordance with the terms hereof, Tenant shall quietly and
peaceably deliver up possession to Landlord without notice from
Landlord. Tenant expressly waives the benefits of all laws now
or hereafter in force requiring notice from Landlord with
respect to termination. Tenant shall deliver up possession of
the leased premises in as good order, repair, and condition as
the same are in at the beginning of the term of this Lease
except for reasonable wear and tear, and subject to such damage
or destruction or condition as Tenant is not required to restore
or remedy under other terms and conditions of this Lease.
12. NOTICE Any notice or demand required by the pro-
vision of the Lease to be given to Landlord shall be deemed to
have been given adequately if sent by Certified mail to Landlord
at the following address:
Geoffrey Etherington, II
P.O. Box 706
New Haven, Connecticut 06503
With a copy to:
Arthur S. Sachs, Esq.
Sachs, Berman, Rashba & Shure, P.C.
One Church Street
New Haven, Connecticut 06510
Any notice or demand required by the provisions of
this Lease to be given to Tenant shall be deemed to have been
given adequately if sent by Certified Mail to Tenant at the fol-
lowing address:
President
USP Composites, Inc.
172 East Aurora Street
Waterbury, Connecticut
With a copy to:
Park Electrochemical Corp.
5 Dakota Drive
Lake Success, New York 10042
Attn: Harry Linzer
Any notice or demand required by the provisions of
this Lease to be given to the Connecticut Development Authority
shall be deemed to have been given adequately if sent by
Certified Mail to the Connecticut Development Authority at the
following address:
Stanley Piorkowski, Esq.
Connecticut Development Authority
217 Washington Street
Hartford, Connecticut
Any party shall have the right to change its address
as above designated by giving to the other parties fifteen (15)
days' notice of his or its intention to make such change and of
the substituted address at which any notice or demand may be
directed.
13. SUBORDINATION Tenant agrees to subordinate and
does hereby subordinate this Lease to the lien of any mortgage
or mortgages (the only one of which, as of the date hereof, is
granted to the Connecticut Development Authority) now on the
leased premises or hereafter placed on the leased premises pro-
vided that Tenant shall enjoy all of its rights under the Lease
regardless of any inconsistent provision in such mortgage and
provided further that the holder of such mortgage shall enter
into a written agreement, in recordable form, with Tenant to the
effect that as long as Tenant is not in default in the payment
of rental or any other material convenants or conditions of this
Lease, the rights of Tenant under this Lease shall not be termi-
nated and the possession of Tenant shall not be disturbed by the
holder of any such mortgage or by any proceedings on the debt
which any such mortgage secures, or by any person, firm or cor-
poration whose rights were acquired as a result of such proceed-
ings or by virtue of a right or power contained in any such
mortgage or the bond or note secured thereby.
14. ESTOPPEL CERTIFICATE Tenant agrees to execute at
such times as Landlord may request, estoppel statements cer-
tifying, among other things and if such be the case, that Tenant
is in possession of the leased premises, that all rental pay-
ments and other charges required hereunder to be paid by Tenant
have been paid, that this Lease has not been amended or
modified, that Landlord is not in default hereunder and that
Tenant has no defense or set-offs against Landlord hereunder.
15. ATTORNEYS' FEES In the event either party to
this Lease shall default in any of the terms and conditions
hereof and the other party shall be required to obtain the ser-
vices of an attorney to enforce the provision hereof, whether or
not such enforcement shall result in a court proceeding, then
the defaulting party agrees to pay to the non-defaulting party
all reasonable costs of such enforcement, including attorneys'
fees and attorneys' fees on appeal or for services rendered in
any bankruptcy proceeding.
16. CONSTRUCTION It is distinctly understood, cove-
nanted and agreed that the terms "Landlord" and "Tenant" herein
employed shall be construed to include all individuals, corpora-
tions and any and all other person or entities, and the respec-
tive heirs, executors, administrators, legal representatives,
successors in assigns of the parties hereto, and all those hold-
ing under either of them, whenever and wherever the context so
admits or requires; and the pronouns used herein shall include,
when appropriate, either gender and both singular and plural.
17. COVENANTS TO BIND RESPECTIVE PARTIES This Lease
and all of the agreements, covenants, and conditions contained
herein shall be binding upon Landlord and Tenant and upon their
respective heirs, personal representatives, successors and
assigns.
18. LIMITATION OF LIABILITY Except as specifically
provided to the contrary in Paragraph 20(C) hereof, Tenant
agrees that it shall look solely to the estate and property of
the Landlord in the land and buildings comprising the leased
premises and subject to the prior rights of any mortgagee of the
Premises for the collection of any judgment (or other judicial
process) requiring the payment of money by Landlord in the event
of any default or breach by Landlord with respect to any of the
terms, covenants, and conditions of this Lease to be observed
and/or performed by Landlord, and no other assets of the Land-
lord shall be subject to levy, execution or other procedures for
the satisfaction of Tenant's remedies and no action shall be
brought by Tenant respecting this Lease against Landlord.
19. PREJUDGMENT REMEDY, REDEMPTION, COUNTERCLAIM, AND
JURY TRIAL The Tenant, for itself and for all persons claiming
through or under it, hereby acknowledges that this Lease consti-
tutes a commercial transaction as such term is used and defined
in Chapter 903a of the Connecticut General Statutes (the 'Act")
and hereby expressly waives any and all rights which are or may
be conferred upon the Tenant by the Act to any notice or hearing
prior to a prejudgment remedy. Tenant further waives any and
all rights which are or may be conferred by any present or
future law to redeem the said leased premises, or to any new
trial in any action of ejectment under any provision of law,
after re-entry thereupon, or upon any part thereof, by the Land-
lord, or after any warrant to dispossess or final judgment in
ejectment. If the Landlord shall acquire possession of the said
leased premises by summary proceedings, or in any other lawful
manner without judicial proceedings, it shall be deemed a
re-entry within the meaning of that word as used in this Lease.
In the event that Landlord commences any summary proceedings or
action for non-payment of rent or other charges provided for in
this Lease, the Tenant shall not interpose any counterclaim of
any nature or description in any proceeding or action. The Ten-
ant and the Landlord both waive a trial by jury of any or all
issues arising in any action or proceeding between the parties
hereto. or their successors, under or connected with this Lease,
or any of its provisions.
20. TENANT'S OPTION TO PURCHASE
(A) Tenant shall have an option to purchase the
leased premises at the applicable option price set forth below,
which option shall be exercisable by written notice given to
Landlord in the manner provided in paragraph 12 at any time on
or prior to December 31, 1992. Such notice shall be given not
later than six (6) months prior to the proposed date of purchase
of the leased premises. The option price shall be: M
$2,800,000 if Tenant exercises said option on or before
December 31, 1990; Hi) $3,000,000 if Tenant exercises said
option between January 1, 1991 and December 31, 1991, and Hii)
$3,200,000 if Tenant exercises said option between January 1,
1992 and December 31, 1992; payable in each case all in current
funds at the closing of such purchase (the "Closing").
(B) Prior to the execution of this Lease, Land-
lord has provided Tenant with a Commitment for Title Insurance
(the "Commitment'), issued by Connecticut Attorneys Title
Insurance Company (the "Title Insurance Company") respecting the
leased premises, which Tenant acknowledges to be in all respects
satisfactory to Tenant. If Landlord conveys the leased premises
to Tenant at the Closing by Connecticut form of warranty deed
showing the leased premises to be subject only to the encum-
brances described in the Schedule A annexed hereto as 'Permitted
Encumbrances" and provides Tenant, at Tenant's cost, with a Pol-
icy of Title Insurance (issued by the Title Insurance Company)
insuring title to the leased premises in compliance with said
Commitment (subject only to the Permitted Encumbrances), then
Landlord shall have fulfilled all of Landlord's obligations
hereunder with respect to such conveyance. If Landlord shall
H) not be able to convey the leased premises to Tenant at the
Closing by such deed showing the leased premises to be subject
only to the Permitted Encumbrances or Hi) not be able to pro-
vide Tenant, at Tenant's cost, with such Policy of Title Insur-
ance, Tenant may waive the foregoing non-compliance and all
related warranties and representations and consummate the
Closing hereunder notwithstanding such non-compliance. If Land-
lord shall fail to consummate the Closing when obligated to do
so hereunder, then, notwithstanding the provision of Paragraph
18 above, Tenant shall be entitled to specific performance of
conveyance hereunder, but not to any action for personal
liability against Landlord. Landlord shall pay for the cost of
Landlord's title search and the cost, if any, of said Commitment
and Tenant shall pay for said Policy of Title Insurance.
(C) On or before six months (but not before six
months, unless Tenant shall so consent) after receipt of Ten-
ant's notice that it has elected to purchase the leased prem-
ises, Landlord shall convey the leased premises to Tenant by
Connecticut form of warranty deed bearing sufficient federal,
state or local documentary stamps and with payment by Landlord
of any other tax or imposition charged by any jurisdictional
authority upon the transfer of real property and as provided in
Paragraph 20(B). During the term of this Lease, Landlord cove-
nants and agrees that no mortgage will be placed upon the leased
premises unless (a) same is with a bank or insurance company,
(b)such mortgage provides that same is prepayable at any time,
(c)the holder of such mortgage executes a non-disturbance
agreement in substantially the form provided for in Paragraph 13
of this Lease, and W the aggregate principal indebtedness
under any such mortgage or mortgages, taken together with all
other mortgages, liens and encumbrances upon the leased prem-
ises, will not exceed the minimum option price set forth in
Paragraph 20(A) above. The foregoing covenant and agreement in
this Paragraph 20(C) and the agreement of Landlord not to
encumber the leased premises in any other way that will frus-
trate Tenant's consummation of the Closing following Tenant's
exercise of its option to purchase, shall be a personal liabil-
ity and obligation of Landlord notwithstanding the limitation
upon such liability set forth above in Paragraph 18. Landlord
agrees that, at the Closing, Tenant may apply its payment of the
option price to the discharge of the indebtedness secured by
such mortgages, liens and other encumbrances.
(D) Tenant shall have sixty (60) days, after
receipt by Landlord of Tenant's notice that it has elected to
purchase the leased premises, to engage Goldman Environmental
Consultants, Inc. ("Goldman") or another reputable environmental
consultant reasonably satisfactory to Landlord (such consultant
so engaged being hereinafter referred as the 'Tenant's Engi-
neer") to perform certain environmental studies of the leased
premises of such scope and degree as are satisfactory to Tenant
and to report the results thereof to Tenant (the "Environmental
Report").Tenant shall deliver a copy of the Environmental
Report to Landlord within ten (10) days of Tenant's receipt
thereof.If Tenant is not satisfied, in its sole discretion,
with the condition of the leased premises as shown in the Envi-
ronmental Report, Tenant may, by sending Notice to Landlord,
received by Landlord within thirty (30) days after the
Environmental Report is received by both parties, rescind the
option to purchase. In addition, if Tenant has not elected to
rescind such option to purchase, Landlord shall have the right,
by sending notice to Tenant within 30 days after the Environ-
mental Report is. received by both parties, to cancel Tenant's
exercise of such purchase option if the Environmental Report
shall indicate the presence of environmental contamination, the
cost of investigation and remediation of which may reasonably
exceed $250,000 in additional costs not theretofore spent by
Landlord, provided, however, that Landlord shall not have such
right if Tenant shall agree to pay the excess of such costs
above $250,000.
If Tenant shall not rescind this option to pur-
chase as aforesaid, it shall be irrebutably presumed that Tenant
and Park Electrochemical Corp. are satisfied with the condition
of the leased premises from an environmental standpoint and
therefore, except as to those liabilities and obligations allo-
cated to Etherington Industries, Inc. ("EI") pursuant to Para-
graphs 25(A) and 25(B) hereof, Tenant and Park Electrochemical
Corp. shall, upon the Closing and without any further action by
either of them: M assume, jointly and severally, effective as
of the Closing, all liability and obligations relating to the
following (the 'Environmental Conditions"): Any Spill, Release,
Hazardous Waste (as defined in Conn. Gen. Stat. Sec 22a-115),
Hazardous Substance (as defined in 42 U.S. Code Sec. 9601 et
seq.) and/or environmental contamination of any sort at or
emanating from the leased premises; and the presence of any
underground storage tanks (or the contents thereof) on the
leased premises; and (ii) agree, effective as of the Closing, to
indemnify, jointly and severally, Landlord against and hold
Landlord harmless of and from all loss, costs, claims, damages,
charges, fines, liens, liability and expense (including, but not
limited to, consultant's fees and attorneys' fees) arising from
or in connection with any of the Environmental Conditions.
21. CASUALTY
(A) In case of casualty to the leased premises
resulting in damage or destruction, Tenant shall promptly give
written notice thereof to Landlord. Tenant shall, to the extent
of the insurance proceeds received by it from Landlord, restore,
repair, rebuild or alter the same as nearly as possible to the
value, condition and character of the same as it was immediately
prior to such damage or destruction. Such restorations,
repairs, replacements, rebuilding or alternations shall be com-
menced promptly and prosecuted with reasonable diligence,
unavoidable delays excepted.
(B) All insurance money paid to Landlord on
account of such damage or destruction, less the actual cost,
fees and expenses, if any, incurred in connection with adjust-
ment of the loss, shall be applied by Landlord (or reimbursed to
Tenant if Tenant has advanced moneys pursuant to Paragraph 21(A)
hereof) to the payment of the cost of the aforesaid demolition,
restoration, repairs, replacement, rebuilding or alterations,
including the cost to Landlord of those repairs for which, under
the terms of Paragraph 4, Landlord may be liable ("Structural
Repairs"), the cost of temporary repairs or for the protection
of property pending the completion of permanent restoration,
repairs, replacements rebuilding or alterations (all of which
Structural Repairs, temporary repairs, protection of property
and permanent restoration, repairs, replacement, rebuilding or
alterations are hereinafter collectively referred to as the
"Restoration"), and shall be paid out from time to time as such
Restoration progresses pursuant to the terms of the Mortgage, if
applicable.
22. ADDITIONAL RENT In addition to the foregoing
minimum rent, all other payments to be made by Tenant pursuant
to the terms of this Lease shall be deemed to be and shall
become additional rent hereunder whether or not the same be des-
ignated as such; and shall be due and payable on demand or
together with the next succeeding installment of rent; whichever
shall first occur together with interest thereon at the then
prevailing legal rate; and Landlord shall have the same remedies
for failure to pay the same as for a nonpayment of rent. Land-
lord, at its election, shall have the right to pay or do any act
which requires the expenditure of any sums of money by reason of
the failure or neglect of Tenant to perform any of the provi-
sions of this Lease, and in the event Landlord shall at its
election pay such sums or do such acts requiring the expendi-
tures of moneys, Tenant agrees to pay Landlord, upon demand, all
such sums, and the sum so paid by Landlord, together with inter-
est thereon, shall be deemed additional rent and be payable as
such.
23. LIENS Should any mechanic's or other lien be
filed against the leased premises or any part thereof for any
reason whatsoever by reason of Tenant's acts or omissions or
because of a claim against Tenant, Tenant shall cause the same
to be cancelled and discharged of record by bond or otherwise
within thirty (30) days after notice by Landlord.
24. LIABILITY In addition to any other indemnity by
Tenant of Landlord herein, Tenant shall indemnify Landlord and
save it harmless from suits, actions, damages, liability and
expense in connection with the loss of life, bodily or personal
injury or property damage arising from or out of the use or
occupancy of the leased premises or any part thereof, or occa-
sioned wholly or in part by any act or omission of Tenant, its
agents, contractors, employees, servants, invitees, licensees,
or concessionaires.
25.INVESTIGATION AND REMEDIATION
OF PRIOR ENVIRONMENTAL CONDITIONS
(A) EI, without cost or expense to Tenant, shall
present, either prior to or within sixty (60) days after the
date of execution of this Lease by Landlord and Tenant, to the
Attorney General of the State of Connecticut (the "Attorney Gen-
eral"), with copies to Tenant and the Connecticut Department of
Environmental Protection Hazardous Waste Management Unit (the
"DEP"), a study (the "EI Study') regarding the environmental
condition of the leased premises prepared by HRP Associates,
Inc. ("HRP"), or other reputable environmental engineer (the
"Other Engineer').The February 1988 report on such premises
prepared by Goldman(the "Goldman Report'), which has been fur-
nished by EI to HRP or the Other Engineer, shall be furnished by
EI to the Attorney General and the DEP as an appendix to the EI
Study. EI shall furnish Tenant with copies of the receipts
issued by the Attorney General and the DEP acknowledging the
furnishing of the EI Study, including the Goldman Report, to
them, which copies shall be furnished promptly following the
receipt of the EI Study by the Attorney General and the DEP. EI
shall, without cost or expense to or obligation of Tenant
(except as provided in Paragraph 25(C) hereof), perform such
further investigation and/or remedial actions (including without
limitation, the remediation of environmental contamination of
any sort-) as may be ordered or directed judicially or adminis-
tratively (after right to appeal shall have lapsed) or agreed to
by EI with the DEP and any other governmental authority concern-
ing environmental contamination of the leased premises present
thereon at the time of execution of this Lease; provided that
the degree, extent and composition of such environmental contam-
ination shall have been reported in writing to EI by HRP, the
Other Engineer, the Goldman Report, or is reported by Tenant's
Engineer in the Environmental Report. A compliance letter from
the DEP or other governmental authority shall be compliance
hereunder.
(B) EI further agrees that, upon the execution
of this Lease by Landlord, without any further action on the
part of EI, and except as provided in Paragraph 25(C) hereof, EI
shall indemnify Tenant against and hold Tenant harmless from all
loss, costs, claims, damages, charges, fines, liens, liability
and expense (including, but not limited to, consultant's fees
and attorneys' fees) that may arise from (i) any of the environ-
mental conditions as to which EI is obligated to investigate or
remediate pursuant to Paragraph 25(A) hereof and (ii) any breach
by EI of its obligations under Paragraph 25(A) hereof.
(C) Tenant acknowledges that investigation
and/or remediation of environmental contamination may require
physical- disturbance of the leased premises. Consequently, and
notwithstanding anything to the contrary in this Lease or else-
where, Tenant agrees to release and discharge Landlord, EI and
their employees, agents, contractors, consultants, officers,
heirs, successors and assigns from any and all claims and lia-
bilities (other than arising from their negligence or willful
misconduct) resulting from temporary disruption to Tenant's nor-
mal use of the leased premises or from physical disturbance of
the leased premises arising from or in connection with investi-
gation and/or remediation of environmental contamination of the
leased premises; provided, however, that Landlord and EI shall
use their best efforts to cause the leased premises to be
restored, as expeditiously as practicable, to a condition which
will permit the resumption of Tenant's normal use of the leased
premises and provided, further, that if investigation and/or
remediation of environmental contamination shall require a sus-
pension of all of Tenant's operations at the leased premises,
the rent under this Lease shall be abated and forgiven for the
period of such suspension.
26.ACCESS TO PREMISES
(A) Landlord and its authorized representatives
shall be entitled to enter the leased premises for inspection,
repair, compliance with laws and with Tenant's obligations
hereunder, and (to the extent otherwise permitted by this Lease)
improvement of the leased premises, and for the exhibition of
said leased premises to prospective mortgagees and to existing
or prospective tenants or purchasers. Any inspection by or on
behalf of prospective tenants and prospective purchasers, and to
existing and prospective tenants or prospective purchasers, as
the case may be, shall occur only during the six (6) months pre-
ceding the expiration of this Lease or the expiration of Ten-
ant's option to purchase the leased premises, as the case may
be.
(B) Tenant shall permit inspection of the leased
premises by any federal, state, county or municipal officer or
representative of Landlord to determine if the leased premises
shall comply with any relevant law or are in need of repair,
correction, addition, or improvement.
27. LANDLORD SIGNS Landlord shall be permitted to
affix to any outer wall or walls of the leased premises one or
more "For Rent' or "For Sale" signs (or be fastened to a door or
window), but only during the six (6) months preceding the expi-
ration of this Lease or the expiration of Tenant's option to
purchase the leased premises. Tenant agrees that such signs
shall remain unmolested.
28.RIGHT TO REPAIR OR REMEDIATE
AND TO STORE EQUIPMENT
(A) Landlord shall be entitled to make any
repairs or perform any work or construction mentioned in
Paragraph 26 or 27, whether such repairs or performance are
required of Landlord or Tenant by law or this Lease; provided,
however, that Landlord shall not unreasonably interfere with
Tenant's use of the leased premises. Landlord and EI shall also
have the right to enter the leased premises to perform investi-
gation and/or remedial actions with respect to any environmental
contamination related to the leased premises, including but not
limited to that investigation and/or remedial actions, if any,
required of Tenant or Park Electrochemical Corp. pursuant to
Paragraph 29, (if Tenant or Park Electrochemical Corp. shall
have failed to perform its obligations thereunder). Such
repairs or other performance, if made by Landlord or EI, shall
not constitute a waiver by Landlord or EI of M Tenant's
default in failing to perform the same or (ii) Landlord's or
EI's right to payment therefor, as such event of default or
right of payment may be set forth elsewhere in this Lease.
(B) During the course of any repair, investiga-
tion, remediation, work or construction which the Landlord or EI
is other-wise entitled to perform in the leased premises, Land-
lord or EI may store therein all necessary materials, tools,
supplies and equipment. No inconvenience, annoyance, distur-
bance, loss of business, or other damage suffered by Tenant or
any subtenant by reason of such repairs, remediation, work, or
construction, or storage of materials, shall, unless
constituting negligence or willful misconduct, constitute an
element of an actual or constructive eviction of Tenant, or
result in any liability of Landlord or EI, and the obligations
of the Tenant under this Lease shall not be affected thereby.
(C)Any right given Landlord or EI by this para-
graph to enter the leased premises shall be exercised, to the
extent practicable and permitted by law, only during ordinary
business hours, and subject to reasonable advance notification
and the Tenant's reasonable security precautions; except that if
there is reasonable ground to believe an emergency exists or is
threatened, Landlord or EI shall be entitled to take such
actions and to proceed at such times that Landlord or EI shall
deem appropriate.
(D) Except as otherwise provided herein, the
rights of Landlord or EI given or mentioned in this paragraph do
not impose, nor does Landlord or EI assume by reason thereof,
any responsibility for the care, maintenance or supervision of
the leased premises, or any part thereof.
29.MAINTENANCE OF LEASED PREMISES IN ENVIRONMENTALLY
CLEAN CONDITION
(A) Subject to the provisions of Paragraph
29(C), below: (i) Tenant and Park Electrochemical Corp. will, at
their cost and expense, promptly comply with any and all state,
federal or local laws, regulations, rules, standards,
guidelines, ordinances, orders, agreements, or any such author-
ity, (all, the "Regulations'), which regulate or protect or in
any way pertain to the environment or to human health or to
human safety, or, without limiting the foregoing, to underground
storage tanks, hazardous wastes, or hazardous substances (all,
the "Environmental matters"), and which relate to or affect the
leased premises after the date of execution of this Lease.
Without limiting the foregoing, Tenant agrees to (and Park
Electrochemical Corp. agrees to cause Tenant to) comply with any
and all applicable Regulations which in any way pertain to
Tenant's generation, recycling, reclaiming, reusing, storage,
handling, treatment, transportation, or disposal of "Hazardous
Substances" (as defined in 42 U.S.C. Sec. 9602 et seg.), "Haz-
ardous Wastes' (as defined in Conn. Gen. Stat. (Sec. 22a-115),
or oil or petroleum products after the date of execution of this
Lease; (ii) Tenant agrees to (and Park Electrochemical Corp.
agrees to cause Tenant to) timely deliver to the appropriate
persons and authorities, at Tenant's sole cost and expense, such
declaration, certification, and/or other representation as may
be required pursuant to Connecticut General Statutes Section
22a-134 et seg., as may be hereafter amended, in connection with
any transfer of ownership of the Tenant's operations or of the
leased premises during the Term of this Lease as the same may be
extended, as well as at the end of said Term or at any other
time that the Tenant vacates the leased premises for any reason;
(iii)Tenant agrees to (and Park Electrochemical Corp. agrees to
cause Tenant to) install, (subject to the Landlord's approval,
which shall not be unreasonably withheld), any and all under-
ground storage tanks and/or underground storage tank systems
(both 'USTs') on the leased premises in accordance and compli-
ance with any and all applicable Regulations, and to use, main-
tain and remove any and all USTs on the leased premises in
accordance and compliance with any and all applicable
Regulations; (iv) Tenant agrees to (and Park Electrochemical
Corp. agrees to cause Tenant to) take any and all steps neces-
sary whenever required to do so pursuant to the foregoing (or at
the Landlord's written request) to promptly respond, remove,
remedy, mitigate, or otherwise abate the existence or threatened
existence of any Hazardous Waste, Hazardous Substance, or oil or
petroleum Spill or Release, or any other environmental contami-
nation (all, 'Contamination") of or from the leased premises
after the date of execution of this Lease; and (v) Tenant agrees
to (and Park Electrochemical Corp. agrees to cause Tenant to)
send to Landlord copies of any and all materials received and/or
sent by Tenant to or from any governmental authority which per-
tain in any way to any environmental matter or any Hazardous
Substance, Hazardous Waste, Spill, or Release affecting the
leased premises.
(B) Subject to the provisions of Paragraph
29(C), below, Tenant and Park Electrochemical Corp., jointly and
severally, agree to indemnify against and hold harmless the
Landlord from any and all obligations, losses, costs, claims,
damages, charges, fines liens, liabilities and expenses
(including environmental consultant's fees and/or attorneys'
fees) under the Federal Resource Conservation and Recovery Act,
42 U.S. Code Section 6901 et seg., the Federal Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.
Code Section 9601 et seq., Chapter 446K of the Connecticut Gen-
eral Statutes, or other applicable federal, state or local laws,
regulations, ordinances, orders or regulations either related to
waste disposal, and/or related to environmental protection with
respect to hazardous, toxic, or other wastes generated or pro-
duced at- and/or transported from the leased premises during the
term of this Lease, and/or related to environmental protection
with respect to conditions created, events occurring or dis-
charges made during the term of this Lease.
(C) Notwithstanding anything contained in Para-
graphs 29(A) or (B), above, the Tenant shall not be liable or
otherwise responsible for the liabilities and obligations allo-
cated to EI pursuant to Paragraphs 25(A) and/or 25(B) of this
Lease.
30.APPROVAL OF LANDLORD FOR STOCKPILING
OF CERTAIN MATERIALS
The Tenant further agrees that Tenant will not (and
Park Electrochemical Corp. will cause Tenant not to) generate,
handle, transport, use recycle or store materials that consti-
tute or contain Hazardous Substances or Hazardous Wastes, oil or
petroleum products, or other chemical liquids, solids or gases
except in accordance with all applicable management and other
regulations, laws,.standards, ordinances, orders and agreements,
including but not limited to Chapters 445 and 446K of the Conn.
Gen. Statutes or other performance standards for management of
Hazardous Waste on or after the effective date of this Lease
that may be required pursuant to Leslie Carothers,
Commissioner v. U.S, Prolam, Cv 88-03400946.
IN WITNESS WHEREOF, Landlord and Tenant have executed
this Lease on the day and year above written.
Signed, Sealed and Delivered
in the presence of
__________________________
Geoffrey Etherington, II
_____________________________
_____________________________
_____________________________ USP COMPOSITES, INC.
_____________________________ By:/s/Andrew M. Esposito
President
The undersigned does hereby accept
and confirm the obligation of
the undersigned as provided in
Paragraphs 25(A), @5(B), 25(C)
and 28 of this Lease:
ETHERINGTON INDUSTRIES, INC.
By:
President
The undersigned does hereby
accept and confirm the ob-
ligation of the undersigned
as provided in Paragraphs
20(D), 28(A), 29 and 30:
PARK ELECTROCHEMICAL CORP.
By:/s/Harry Linzer
Vice President & Secretary
SCHEDULE A
PERMITTED ENCUMBRANCES
Permitted Encumbrances are those matters described in pages 2-
3 of Schedule A of the attached Commitment for Title Insurance No.
CN15505 issued by First American Title Insurance Company, with an
effective date of April 7, 1988, (the "Commitment"), and the
following matters listed on Schedule B of the Commitment: Items
1, 2, (but only as to an accurate survey made as of April 15,
1988), 7, 12, 13, 14, 17, 18, 19, 20, 21, 22, 23, and 24; and
Taxes due to the City of Waterbury; and
Water and sewer use charges; and
Fire service charges.
<PAGE>
Form 548 (9/73)
Commitment
Policy CN-15505
COMMITMENT FOR TITLE INSURANCE
ISSUED BY
First American Title Insurance Company
FIRST AMERICAN TITLE INSURANCE COMPANY, herein called the
Company., for valuable consideration, hereby commits to issue its
Policy or policies of title insurance. as identified in Schedule A,
in favor of the proposed Insured named in Schedule A, as owner or
mortgagee of the ovate or interest covered hereby In the land
described or referred to in Schedule A. upon payment of the
premiums and charges therefor; all subject to the provisions of
Schedules A and B and to the Conditions and Stipulations hereof.
This Commitment shall be off active only when the identity of
the proposed Insured and the amount of the policy or policies
committed for haw been inserted in Schedule A hereof by the
Company, either at the time of the issuance of this Commitment or
by subsequent endorsement.
This Commitment is preliminary to the issuance of such policy
or policies of title insurance and all liability and obli-
gations hereunder shall cease and terminate six (6) months after
the effective date hereof or when the policy or policies
committed for shall issue, whichever first occurs, provided that
the failure to issue such policy or policies is not the fault
of the Company. This Commitment shall not be valid or binding until
countersigned by an authorized officer or agent.
IN WITNESS WHEREOF, the Company has caused this Commitment to be
signed and sealed, to become valid when countersigned by an
authorized officer or agent of the Company. all in accordance with
its By-Laws. This Commitment Is effective as of the date shown in
Schedule A as "Effective Date."
First American Title Insurance Company
by_________________________ President
by_________________________ Secretary
by_________________________ Countersigned
SCHEDULE A
Commitment No. CN-15505
1.Effective Date: April 7, 1988 at 9;00 A.M.
2.Policy or Policies to be issued:
ALTA Owner's Policy
Proposed Insured:USP Composites, Inc.
Amount: $3,200,000.00
ALTA Loan Policy
Proposed Insured:
Amount:$
Proposed Insured:
Amount:$
3. The estate or interest in the land described or referred to in
this Commitment and covered herein is fee simple and title
thereto is at the effective date hereof vested in:
Geoffrey Etherington, II
4.The land referred to in this Commitment is located at:
Address:
City/Town: Waterbury
County: Now Haven
State of Connecticut
and is further described in SCHEDULE A attached.
NOTE: UNLESS A SPECIFIC AMOUNT OF INSURANCE IS STATED ON THIS
SCHEDULE A, OR SET FORTH IN AN ENDORSEMENT TO THIS COMMITMENT
THE LIABILITY OF THE COMPANY SHALL NOT EXCEED $1..000.
THIS COMMITMENT IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING
THE ISSUANCE OF A POLICY OR POLICIES OF TITLE INSURANCE BY FIRST
AMERICAN TITLE INSURANCE COMPANY#J AND THE COMPANY'S LIABILITY
SHALL BE LIMITED TO THE TERMS OF ITS POLICY OR POLICIES.
<PAGE>
SCHEDULE A
A certain place or parcel of land situated on the
northwesterly aide of East Aurora Street and the easterly side of
land now or formerly of the Penn Central Co. (Watertown Branch),
in the City of Waterbury, County of New Haven and State of
Connecticut, bounded and described as follows:
Beginning at a point in the northwesterly line of Cast
Aurora Street and the easterly line of land now or formerly of
the Penn Central Co., being the southwesterly corner of the
within described land, thence running northeasterly in the
northwesterly line of East Aurora Street 481.59 felt thence.
running-northerly at right angles to the last described line
12.46 feet to a point of curve, thence running northerly in a
line curving to the right having a radius of 375.00 feet and a
central angle of 350 001 a distance of 229.07 feet to the point
of tangency, thence, running northerly and tangent to the curve
92.47 f*et, thence making an interior angle of 894 541 with the
last described line and running westerly 321.00 foot to land now
or formerly of the Penn Central Cor,; thence making an interior
angle of 899 57' 30' with the I&at described line and running
southerly in the easterly line of land now or formerly of the
Penn Central Co., 593.44 feet to East Aurora Street and the point
of beginning the last described line making an interior angle, of
55' 08' 30' with the first described line. Bounded;
Northerly by land now or formerly of The Bristol
Flowed Casket Company;
EASTERLY by land now or formerly of Harold Stein,
Trustee;
SOUTHEASTERLY by East Aurora Street: and
WESTERLY by land now or formerly of the Penn
Central Co. (Watertown Branch).
Said promises are more particularly shown on a map
entitled: 'Map of Land of Geoffrey Etheringtons XI Water-
bury,
Conn. The A.J. Patton Co. Surveyor, Waterbury, Conn, Nov. 51
1980 scaler 11&201 Rev. May 12, 1961' which map was filed on
June 22, 1981 with the, Town Clerk of Waterbury, Drawer XI, Page
53.
Together with and subject to rights and agreements with
respect to a 20 foot right of way running north from East Aurora
Street an net forth in deeds from Peter Marcuse Trustee to
Cellular Industries Incorporated dated June 1, 1967 recorded in
Volume 911, Page 605 of the Waterbury Land Records; Harold Stein
Trustee dated June 1, 1967 recorded In Volume 911, Page 629 of the
Waterbury Land Records, and The Bristol Flowed Gasket Company
dated June l, 1967 recorded in Volume 911, Page 629 of the
Waterbury Land Records.
Together also with the rights, if any, In and to the
agreements set forth in the aforementioned deeds recorded in
Volume 911, pages 605, 621 and 629 of the Waterbury Land Records,
and in deeds recorded in Volume 911, Pages 608 and 627 of the
Waterbury land Records.
Being the same premises described in a warranty deed
from The Fairmont Corporation of Connecticut to Geoffrey
Etherington II dated July 24, 1980 recorded in Volume 1456, page
284 of the Waterbury Land Records.4
<PAGE>
SCHEDULE B
EXCEPTIONS
Commitment No. CN-15505
PROVIDED THE PROPER INSTRUMENT(S) CREATING THE ESTATE(S) OR
INTEREST($) TO BE INSURED MUST BE EXECUTED AND DULY FILED FOR
RECORD;
The policy or policies to be issued will contain exception to the
following unless the same are disposed of to the satisfaction of
the Company:
1. Rights of tenants and parties in possession.
2. Any state of facts which an accurate survey or personal
inspection of the premises would disclose.
3. Any lien, or. right to lien, for services, labor or materials
theretofore or hereafter furnished, imposed by law and not shown by
the public record.
4. Defects, liens, encumbrances, adverse claims or other matters,
if any, created, first appearing in the public record or attaching
subsequent to the effective date hereof but prior to the date the
proposed insured acquires of record, for value, the estate or
interest or mortgage thereon covered by this commitment.
5. Taxes on the List of October 1, 1987, not yet due and payable,
and taxes for prior list years as may be due the City of Waterbury.
6. Water and sewer use charges, now or hereafter due and payable.
7. Such Assessments as may be due the City of Waterbury.
8. Open End Mortgage, $5,000,000.00, Geoffrey Etherington, II to
Connecticut Development Authority dated April 30, 1985, recorded
in Volume 1766,Page 131. Assigned to Colonial Bank by instrument
dated April 29,1985 and recorded in Volume 1767,Page 1 of the
Waterbury Land Records.
9. Open End Mortgage, $5,277,397.00, Geoffrey Etherington, II to
the First National Bank of Boston dated April 30, 1985, recorded
in Volume 1767, Page 2 of the Waterbury Land Records.
10. UCC-1 Financing Statement, U.S. Prolam, Inc. to Connecticut
Development Authority recorded April 30, 1985 in Volume 1767,
Page 92. Assigned by UCC-2 to Colonial Bank on April 30, 1985 in
Volume 1767 at Page 95 of the Waterbury Land Records.
11. UCC-1 Financing Statement, U.S. Prolam, Inc. to The First
National Bank of Boston recorded April 30, 1985 in Volume 1767,
Page 98 of the Waterbury Land Records.
12. UCC-1 Financing Statement and Assignment, U.S.Prolan, Inc. to
Air Compressor Engineering Co., Inc., assigned to Ingersoll-Rand
Financial Corp. recorded July 22, 1987 in Volume 2124, Page 121
of the Waterbury Land Records.
13. Notice of Air Compliance Order, U.S. Prolam,Inc. to
Connecticut Department of Environmental Protection dated August
25, 1987, recorded in Volume 2150, Page 315 of the Waterbury Land
Records.
14. Notice of Air Compliance Order, U.S. Prolam, Inc. to
Connecticut Department of Environmental Protection dated August
25, 1987, recorded in Volume 2150, Page 316 of the Waterbury Land
Records.
15. Attachment, $6,500.00, U.S.Prolam, Inc., et al to Carmine and
Theresa Capozzi d/b/a The Floor Store dated and recorded
September 25, 1987 in Volume 2161, Page 316 of the Waterbury Land
Records.
16. The lien for current fire service charges, not yet due and
payable.
17. Building lines: 5 foot setback from street established.
Volume 1, Page 460 of the Waterbury Building Lines and
Assessments.
18. Slope rights established - benefits and damage equal Volume 2
Page 268 of the Waterbury Land Records.
19. A pole license from the Waterbury Tool Company to The
Connecticut Light and Power Company dated May 31, 1940 recorded
in Volume 504 Page 263 of the Waterbury Land Records.
20. An easement from Cellular Industries, Incorporated to The
Connecticut Light and Power Company dated August 29, 1967 and
recorded in Volume 917 Page 211 of the Waterbury Land Records.
21. A right of way over a ten foot strip of the subject premises
along the easterly boundary, being part of a twenty foot right of
way, as granted in deeds from Peter Marcuse Trustee to Harold
Stein, Trustee dated June 1, 1967 recorded in Volume 911 at Page
621 of said Land Records and to The Bristol Flowed Gasket Company
dated June 1,1967 recorded in Volume 911 Page 629 of said Land
Records, which right of way is to be kept open and unobstructed.
Said Right of way is reserved in a deed from Peter Marcuse,
Trustee to Cellular Industries, incorporated dated June 1, 1967
and recorded in Volume 911 at Page 605 of the said Land Records.
22. The obligation of a joint maintenance of a twenty foot right
of way as described in deeds from Peter Marcuse, Trustee to
Harold Stein,, Trustee (dated June 1,1967 recorded in Volume 911
Page 621 of said Land Records), from Peter Marcuse Trustee to The
Bristol Flowed Gasket Company dated June 1, 1967 recorded in
Volume 911 Page 629 of the said Land Records, and from Peter
Marcuse, Trustee to Cellular Industries Incorporated (the
instant premises) dated June 1,1967 recorded in Volume 911 at
Page 605 of the said Land Records in the ratio of 4:4:3 as to the
owners of plants 1, 2 and 3 respectively.
23. A possible encroachment of a building of plant no. 2 on the
twenty foot right of way described above.
24. Agreements contained in deeds above described recorded in
Volume 911 Pages 605, 608, 621, 627 and 629 of the said Land
Records.
25. Mortgage from Geoffrey Etherington IT to Connecticut
Development Authority in the principal amount of $850,000.00
dated June 19, 1981 recorded in Volume 1509 Page 199 of the said
Land Records.
26. Collateral Assignment of Leases and Rentals from Geoffrey
Etherington. II to Connecticut Development Authority ' dated June
19, 1981 recorded in Volume 1509 at Page 219 of the said Land
Records.
27. Financing statement from U.S. Prolam. to Colonial Bank
recorded n April 26, 1985, Doc. No. 680572.
NOTE: A mortgage from Geoffrey Etherington 11 to The First
National Bank of Boston in the principal amount of $5,277,397
dated April 30, 1985 was recorded in said Land Records. Under the
terms of Section l(b) of said mortgage (exception #9), and
Section l(B) of the mortgage in Exception #8, both mortgages are
deemed to have equal priority of lien with the other, and shall
be in pari passu.
<PAGE>
COMMITMENT
Conditions and Stipulations
1. The term "mortgage." when used herein, shall include deed of
trust, trust deed, or other security instrument.
2. If the proposed Insured has or acquires actual knowledge of any
defect, lien, encumbrance, adverse claim or other matter affecting
the estate or interest or mortgage thereon covered by this
Commitment other than those shown in Schedule 8 hereof, and shall
fail to disclose such knowledge to the Company in writing, the
Company shall be relieved from liability for any less or damage
resulting from any act of reliance hereunto the extent the Company
Is prejudiced by failure to so disclose such knowledge, If the
proposed Insured shall disclose such knowledge to the Company, or
if the Company otherwise acquires actual knowledge of any such
defect, lien, encumbrance, adverse claim or other matter, the
Company at its option may amend Schedule 8 of this Commitment
accordingly, but such amendment shall not relieve the Company from
liability previously incurred pursuant to paragraph 3 of than
Conditions and Stipulations.
3. Liability of the Company under this Commitment "II be only to
the named proposed Insured and such parties included under the
definition of Insured in the form of policy or policies committed
for and only for actual loss incurred In reliance hereon in
undertaking in good faith (a) to comply with the requirements
hereof, or (b) to eliminate exceptions shown in Schedule 8, or (c)
to acquire or create the estate of interest or mortgage thereon
covered by this Commitment. In no event shall such liability exceed
the amount stated in Schedule A for the policy or policies
committed for and such liability is subject to the Insuring
provisions, exclusion from coverage, and the Conditions and
Stipulations of the form of policy or policies committed for in
favor of the proposed Insured which are hereby incorporated by
reference and are made a part of this Commitment except as
expressly modified herein.
4. Any claim of loss or damage, whether or not based on negligence,
and which arises out of the status of the title to the estate or
interest or the lien of the insured mortgage covered hereby or any
action asserting such claim, shall be restricted to the provisions
and conditions and stipulations of this Commitment.
EXHIBIT 10.09
LEASE
THIS INDENTURE, made this 14 day of March A.D. 1988, by and between
CMD SOUTHWEST ONE, an Illinois Limited Partnership (hereinafter, for
convenience, referred to as the "Lessor"), and NELCO PRODUCTS, INC., a
corporation organized and existing by and pursuant to the laws of the state
of Delaware, qualified to do business in Arizona (Hereinafter, for
convenience, referred to as the "Lessee"),
W I T N E S S E T H:
ARTICLE I
THE LEASED PREMISES,
FIXTURES AND EQUIPMENT:
SEC. 101 THE LEASED PREMISES. That the Lessor, for and in consideration
of TEN DOLLARS ($10.00), to It In hand paid by the Lessee, the receipt
whereof is hereby acknowledged; and In consideration of the agreements,
conditions, covenants and obligations to be kept, fulfilled, observed or
performed by the Lessee, does hereby demise and lease, and the Lessee does
hereby take and rent from the Lessor, in "As Is" condition and upon the
terms herein set forth, approximately 43,399 square feet of land, more
specifically described on Exhibit "A" attached hereto, which Exhibit is by
this reference expressly made a part hereof, together with a building
located thereon containing approximately 13,180 square feet (the 'Building")
and including all easements, improvements, tenements, appurtenances,
hereditaments, fixtures, rights and privileges thereto belonging, or In any
way appertaining and subject to any restrictions, easements and
encroachments and to any zoning ordinances, laws, rules or regulations of
any Public Authority, now or hereafter In effect, relating to or affecting
the Demised Premises, including, without limitation, all those indicated on
Exhibit "A".
The Demised Premises are commonly known as 1117 W. Fairmont, Tempe,
Arizona, 85282.
SEC. 102:1. BUILDING FIXTURES AND EQUIPMENT. AR fixtures, machinery
and equipment which are necessary to the general operation and maintenance
of the Demised Premises, and which are now in the Demised Premises shall be
the property of the Lessor, whether owned by Lessor at the commencement of
the term, subsequently purchased by Lessor, or purchased by Lessee in
accordance with the provisions of this Lease. Without in any way limiting
the generality of the aforegoing, all electric power panels, lighting
fixtures, plumbing, heating and air-conditioning equipment presently located
In the Demised Premises shall be considered necessary to the general
operation and maintenance of the Demised Premises.
SEC. 102:2. TRADE FIXTURES. Only those trade fixtures, machinery, non-
structural partitions and other equipment and items which are supplied,
installed and used by Lessee In the conduct of Its business, including
process machinery and equipment, process piping and process electric switch
gear (other than replacement of building equipment referred to above), which
may hereafter be installed therein, shall be the property of Lessee and may
be removed by Lessee at any time prior to or upon termination of the Lease,
whether by lapse of time or otherwise; provided the Lessee is not, at any
such time, in default of any of the terms or conditions of this Lease.
Lessee shall remove, on demand by Lessor and at Lessee's expense, any and
all such items at the termination of the Lease term, whether by lapse of
time or otherwise, and repair any damage caused by such removal, restoring
the Demised Premises to their condition prior to the installation of all
such Items or any of them.
SEC. 103. 'DEMISED PREMISES' and "IMPROVEMENTS' DEFINED. "Demised
Premises" shall mean the real estate described In Exhibit "A" and shall
Include any and all Improvements, now or hereafter, located or constructed
thereon.
"Improvements" shall mean all buildings and all other Improvements,
(except for Lessee's trade fixtures) now or hereafter located or constructed
on the Demised Premises, including, without limitation, the Building,
fixtures, other structures and equipment on such premises which are the
property of Lessor as above described in Sec. 102:1.
ARTICLE 2
TERM Possession:
SEC. 201. TERM. The term of this Lease shall be for a period of Five
(5) years and one (1) month commencing upon February 1, 1988 and ending at
midnight February 28, 1993 subject to the further provisions of this Lease.
SEC. 202. HOLD-OVER TENANCY. In the event the Lessee remains in
possession of the Demised Premises after the expiration of the term of this
Lease, or any extension hereof, without written consent of Lessor, the
Lessee shall then be obligated to pay double the rate of the then current
annual rent as set forth herein, in equal installments on the first day of
each calendar month, for so long as the Lessor is willfully kept out of
possession of the Demised Premises. No such payment, nor the acceptance
thereof, shall in any way constitute a waiver of the rights of Lessor to
dispossess the Lessee and recover possession of the Demised Premises and the
just and former estate of the Lessor and to bring any action f or damages
suffered by Lessor on account of Lessee's f allure to vacate the Premises.
Notwithstanding the foregoing, In the event there is a dispute as to the
"Market Rental", as such term Is hereafter defined, or if such "Market
Rental" has not been determined prior to the time within which Lessee must
exercise Its second option to extend, as provided In Schedule 6, Lessee may
elect to extend the then term of this Lease one (1) additional month on the
same terms and conditions and at the same rental as Lessee Is then paying,
by notifying Lessor of such election not less than sixty (60) days prior to
the expiration of the Lease.
ARTICLE 3
RENTAL:
SEC. 301. RENTAL. The Lessee hereby covenants and agrees with the
Lessor, as follows:
To take and accept said demise and lease of the Demised Premises on the
terms as herein set forth and to pay as Annual Net Basic Rent for said
Demised Premises; the sum of $64,845.60 commencing February 1, 1988 and
ending January 31, 1991.
Such rental shall be paid In then lawful money of the United States of
America in equal monthly installments of $5,403.80 one installment to be
paid In advance upon the first day of each and every calendar month during
the term hereof to the Lessor at such place as may, from time to time, be
designated by them; and in the absence of such designation, at the last
known office of the Lessor in Tempe, Arizona, except that the Net Basic
Rent for the period February 1, 1988 through May 31, 1988 shall be $10.00.
Commencing on February 1, 1991 and through and including the remainder of
the Lease Term the Annual Net Basic Rent shall be as described In Schedule
I attached hereto and made a part hereof.
It is intended that the rent provided for In this Lease shall be an
absolutely net return to Lessor for the term of this Lease, and any
renewals or extensions thereof, free of any and all expenses or charges
with respect to the Demised Premises Including, without limitation, any
Taxes and assessments, now or hereafter imposed upon or related to the
Demised Premises, commonly known as real estate taxes, general or special
or Improvement assessments, and any taxes and assessments, whether by way
of an Income tax or otherwise which may be levied, assessed or Imposed by
the State In which the Demised Premises are located, or by any political
or taxing subdivision thereof, upon the income arising from the rents
provided herein In lieu of or as a substitute for taxes or assessments
imposed upon or related to the Demised Premises and commonly known as real
estate taxes; and that Lessee, and not Lessor, shall be required to, and
shall pay, such taxes and assessments, but not to pay any other income tax
or franchise, gift, estate or transfer tax which may be levied against the
Lessor, or any of Lessor's interest or mortgage payments, Lessor's
expenses in negotiating this Lease, or management fees, if any, paid by
Lessor to third parties.
Lessee hereby acknowledges that late payment by Lessee to Lessor of rent
and other sums due hereunder will cause Lessor to incur costs not
Contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include but are not limited to,
processing and accounting charges and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Demised
Premises. Accordingly, if any installment of rent or any other payment
due f rom. Lessee shall not be received by Lessor within Ten (1O) days
after such amount shall be due, Lessee shall pay to Lessor in addition to
the amount due, a late charge equal to Five Percent (5%) of such overdue
amount. The parties hereto hereby agree that such late charge by Lessor
is a fair and reasonable estimate of the costs Lessor will Incur by reason
of any such late payment. Such late charge is deemed to be only one of
several cumulative remedies available to Lessor hereunder and acceptance
of such late charge by Lessor shall In no event constitute a waiver of
Lessee's default with respect to such overdue amount nor prevent Lessor f
rom exercising any of the other rights and remedies granted hereunder.
ARTICLE 4
TAXES, ASSESSMENTS, UTILITY CHARGES,
INSPECTION FEES AND LIENS:- SEC. 401. TAXES, ASSESSMENTS. The Lessee shall
pay as additional rent, during the full term hereof, all taxes; including,
without limitation, ad valorem general real estate taxes, installments of
assessments, general and special, and au other public charges levied upon or
assessed against and properly attributable to the Demised Premises, or any
part thereof, or arising by reason of the existence, occupancy, use or
possession of the Demised Premises, or the business carried on therein,
including, without limitation, the Arizona Rental Income Tax, all of which
are hereinafter, collectively referred to as "Taxes!'; but not to pay any
other income tax, or franchise, gift, estate or transfer tax which may be
levied against the Lessor.
The Lessee shall pay to Lessor, contemporaneously with the monthly rent
payments One Twelfth (1-12th) of the estimated annual Taxes, such estimate
to be made by Lessor. Upon receipt of the real estate tax bills each year
the Lessor will make payment thereof prior to delinquency and promptly
provide Lessee with a copy of the receipted tax bill.
Adjustments of amounts (credit or debit) shall be made between the par-
ties within thirty (30) days of the receipt by Lessor, of any such bill.
All Taxes shall be prorated for the first and last years of the term hereof
and any extension or renewal thereof. Proration with respect to the Taxes
for the last year of the term shall be made on the basis of the last
available tax bill, provided, however, that upon receipt of the tax bill an
appropriate adjustment shall be made.
SEC. 402. UTILITY CHARGE& Lessee shall secure service and pay all
charges for water, electricity, gas, telephone and any and all other utility
services furnished to the Demised Premises.
The-Lessor, the Public Authorities and the Utilities servicing or
located on the Demised Premises shall, at all reasonable hours, by Its or
their agents or employees, have the right to Install, repair and replace the
utility conduits, meters and other facilities located on the Demised
Premises; It being understood and agreed, however, that the Lessor shall not
be liable for the care, upkeep or maintenance of such facilities.
SEC. 403. LICENSES, PERMITS AND FEES. All licenses, permits and fees
of any kind or character whatsoever, Imposed on the Demised Premises or the
use and operation thereof by the City, County, State or Federal Government,
or any other governmental unit or Public Authority or for Inspection of the
Demised Premises, or any part thereof during the term hereof, shall be paid
promptly by Lessee prior to delinquency.
SEC. 404. MECHANIC'S LIENS. Lessee shall not permit any liens to stand
against the Demised Premises for any labor or material in connection with
work of any character performed or claimed to have been performed on the
Demised Premises at the direction or sufferance of Lessee (except work__done
by Lessor), whether such work-was performed or furnished prior to, or
subsequent to the commencement of the term of this Lease.
In the event of any such Hen attaching to the Demised Premises, Lessee
will promptly notify Lessor of such event and Lessee will pay off the same
and have such lien released of record within Thirty (30) days of the filing
of such lien of record.
SEC. 405. PAYMENT BY LESSOR. If at any time, any tax, assessment,
charge, rate, fee or inspection fee, generally or specifically charged or
assessed against and properly attributable to said Demised Premises shall
become due or payable and the Lessee shall not pay the same, or have paid
same to Lessor or, in the event any lien for labor or material shall not be
released of record by Lessee within Thirty (30) days of the f fling of such
lien of record, the Lessor may, at Its option, pay the same at any time
thereafter without inquiring Into the validity thereof, and the amount of
any and all such payments so made by the Lessor (with interest thereon at
Eighteen Percent (18% ) per annum. from and after the date any such payment
paid by Lessor) shall be and hereby Is declared to be so much additional and
further rent for the Demised Premises, due from and payable by the Lessee
with the next Installment of rent and may be collected in the same manner as
other rents due hereunder; provided, however, that subject to the further
provisions hereinafter set forth, Lessee shall have the right, at Lessee's
expense, to contest in good faith the validity of any Taxes, assessments,
charges, liens, rates or fees so specifically charged or assessed against
the Demised Premises; provided, however, that Lessee notifies Lessor in
writing of Lessee's intention to so contest within Fifteen (15) days In
advance of the date such Taxes, assessments, charges, liens, rates or fees
charged or assessed against the Demised Premises were due and payable; and
further provided that such contest Is commenced within Thirty (30) days of
the date of such notice.
SEC. 406. CONTEST. In the event Lessee desires to contest any Taxes,
assessments, charges, liens, rates or fees herein provided, It shall do so
by paying the amounts under protest, or shall provide for the payment
thereof, together with all penalties, Interest, costs and expenses, by the
deposit of a sufficient sum of money to be held In escrow by Lessor or, at
the option of Lessor, by a good and sufficient undertaking as may be
required or permitted by law, all to the end that no delinquency or
proceedings based upon delinquency shall in anywise affect the title or
interest of Lessor in the Demised Premises.
Lessee agrees that It will prosecute any such contest with due diligence
and In the event any such contest be adjudicated adversely to Lessee, that
Lessee will, within Thirty (30) days after final determination, or within
the time provided for In such adjudication, whichever Is sooner thereof, pay
the full amount of any such Taxes, assessments, charges, liens, rates or
fees, or other obligations not paid by Lessee to Lessor which may have been
the subject of such contest as so determined, together with all interest-and
penalties, costs and charges which may be payable in connection therewith
and satisfy and cause the release of the same of record.
Lessee shall keep the Lessor notified, f rom time to time throughout the
period of its pendency, as to the progress and status of any such contest.
If a final determination is not had within Three (3) years from the date of
instituting any such contest, or in the event of any default of the Lessee,
pursuant to the terms of this Lease, Lessor at its option, may pay out of
any funds held in escrow any such Taxes, assessments, charges, liens, rates
or fees which may be under contest, together with all penalties, interest
charges and other expenses whatever in connection with such contest and
Lessee shall immediately upon written demand from Lessor, terminate any such
contest.
In the event the funds so held are Insufficient to pay and satisfy the
same, Lessor, at its option, may pay any deficiency and any amount so paid
will be reimbursed by Lessee as additional rent due hereunder, promptly upon
demand, notwithstanding any previous termination of the term of this Lease
by lapse of time or otherwise, with interest at Eighteen Percent (18%) per
annum from the date of expenditure by Lessor.
Nothing contained In this agreement shall be construed to authorize
Lessee to create or Incur on behalf of Lessor any liability, indebtedness or
obligation whatsoever. Anything herein to the contrary, notwithstanding,
Lessee shall def end, completely indemnify and hold Lessor forever harmless
from any and all consequences of any such Taxes, assessments, charges,
liens, rates or fees, or any contest thereof which were the obligations of
Lessee to pay hereunder.
ARTICLE 5
INSURANCE:
SEC. 501. PROPERTY INSURANCE. The Lessee covenants and agrees that
immediately upon the commencement of the term hereof, Lessee will cause, at
Lessee's expense, the Building and Improvements placed on the Demised
Premises by the Lessor, including any and all additions thereto, to be
Insured for full replacement cost against loss or damage by fire, lightning
and other casualty covered by the provisions of endorsements for Extended
Coverage and Special Extended Coverage, to include the peril of collapse,
vandalism and malicious mischief, replacement cost, and will keep Insurance
to the full replacement value, as determined by Lessor from time to time, of
the Building and Improvements placed on said Demised Premises by Lessor,
Including any and all additions thereto, In full f force and effect during
the term hereof so long as this Lease Is In effect, Including all extensions
hereof.
No such policy of insurance shall include either the contents of the
Building located on the Demised Premises or any other property of the Lessee
or any third party except as a separate stated item of insurance, separate
and in addition to the coverage which shall apply exclusively to Lessor's
Building and other Improvements owned by Lessor. All such policies shall
provide that Lessor and any Mortgagee(s) shall be the
Insureds as their interests appear, and shall further provide that any
loss shall be payable to Lessor and any Mortgagee(s) notwithstanding any act
or omission of Lessee which might otherwise result In a forfeiture or
reduction of said insurance.
In addition, Lessee shall maintain steam boiler insurance In such
amounts as Lessor may from time to time reasonably require on all steam
boilers, pressure boilers or such apparatus as Lessor may deem necessary to
be covered by such Insurance, If any.
. The Lessee will not place, nor permit to be placed, any other policies
of Insurance upon the Building or other Improvements placed upon Demised
Premises by Lessor without advance written permission of Lessor and without
Lessor and Lessors Mortgagee(is as a named Insured, provided, however, that
nothing herein shall be construed As limiting in any way the manner In which
Lessee Insures Its property placed within the Demised Premises.
SEC. 502. PUBLIC LIABILITY INSURANCE. Lessee, at Lessee's expense, and
for mutual benefit of the Lessor any Mortgagee(s) and the Lessee, shall
maintain Comprehensive Public Liability Insurance, covering the Demised
Premises In an amount not less than ONE MILLION DOLLARS($1,000,000). Such
Insurance shall Include the following coverages: premises/operations,
Independent contractors, personal Injury, broad form property damage and
contractual liability.
SEC. 503. INSURANCE GENERALLY. All insurance policies shall be with
companies satisfactory to Lessor and shall provide for at least Thirty (30)
days mandatory advance written notice to Lessor before cancellation,
reduction or other amendment and the property policies shall contain a
standard mortgage clause. Certificates evidencing such Insurance shall be
delivered by Lessee to Lessor at the commencement of the term of this Lease
and all subsequent amendments and endorsements shall be promptly delivered
to Lessor. Statements for premiums on such policies shall be sent to and
paid by Lessee.
In the event Lessee shall refuse or fall to provide the Insurance
coverage herein required or to provide evidence of such coverage as herein
described, the Lessor may, at Its election, but with no obligation so to do,
procure and, from time to time, renew such Insurance and all amounts
expended therefor with Interest thereon at Eighteen Percent (18%) per annum
from the respective dates of such expenditures shall be so much additional
rent hereunder due from the Lessee on demand.
Lessee agrees to Indemnify the Lessor for any loss suffered as the
result of the exercise of any deductible feature that may be Incorporated In
the Insurance contract and Lessor hereby reserves the right to disapprove
the amount and provisions of any such deductible feature. Lessee agrees to
be a self Insurer as to such deductible amounts and further agrees to pay
such amounts to Lessor In the same manner as though such Insurance Policies
did not contain deductible provisions.
ARTICLE 6
USE MAINTENANCE AND CONDITION OF THE DEMISED PREMISES.
SEC. 601. DEMISED PREMISES Lessee shall not breach or suffer the
breach of any of the conditions, agreements and restrictions of record
affecting the Demised Premises and shall defend, completely indemnify and
hold Lessor forever harmless from all consequences of any such breach.
Lessee may use and occupy the Demised Premises for light manufacturing,
(including mass lamination, manufacturing of copper clad boards, printing
and etching of copper clad laminated boards and the manufacturing of pre-
preg), storage, assembly, distribution and for offices in connection
therewith; provided, however, that Lessee shall strictly comply with all
present and future laws, ordinances and regulations of public authorities,
as well as all Insurance underwriting and Inspection and rating
requirements, now or hereafter In any manner affecting,__the__use of the
Demised Premises, the sidewalks, alleys, driveways and parkways adjacent
thereto, If any, or any Building thereon, or t h - e use thereof. Lessee
shall not permit any unlawful occupation, business, trade or nuisance to be
conducted on the Demised Premises, or any use to be made thereof contrary to
any law, ordinance or regulation. Without in any way limiting the
generality of the aforegoing, Lessee will not, at any time, store any
material or equipment of any kind or character outside the Building(s)
located on the Demised Premises except In strict compliance with all
applicable ordinances, laws or regulations of any governmental unit or other
public authority having jurisdiction.
Lessee, at the sole cost and expense of Lessee, shall have the right
to contest the validity of any such rules, laws, ordinances or regulations
affecting the use of the Demised Premises; provided, however, in any event,
that Lessee shall defend, completely Indemnify and hold the Lessor forever
harmless from all consequences of any such contest and the violation of any
such rule, law, ordinance or regulation.
Lessee will not use or permit to be used upon or in said Demised
Premises or any Building thereon anything that will Invalidate any policy of
insurance at any time insuring the Demised Premises, or any Building(s) or
Improvements thereon, nor &hall Lessee permit any dangerous condition to
exist on the Demised Premises for which appropriate and sufficient
safeguards have not been taken.
Lessee shall not cause or suffer any signs to be erected upon the
Demised Premises, nor upon any Building(s) or Improvements located thereon
without the prior written approval of Lessor, which shall not be
unreasonably withheld.
Anything herein to the contrary, notwithstanding, Lessee shall not at
any time overload any structural member (including, by way of illustration
and not limitation, all roofs, columns, walls, beams, trusses and floors) of
the Building located on the Demised Premises; nor shall Lessee cause or
suffer the demolition of the Building(s) or Improvements, or any part(s)
thereof (except as provided in SEC. 603) without the prior written approval
of Lessor.
The Lessee further covenants and agrees that the entry into occupancy
of the Demised Premises by the Lessee shall constitute an acknowledgment
that the same and the Building(s) and Improvements thereon have been
received by the Lessee in first--class condition and repair, subject to the
warranties set forth herein.
SEC. 602. MAINTENANCE. The Lessor warrants that the following shall
be free from defects In material and workmanship to and including the
periods set forth: Roof: January 31, 1989; Structural (foundation
and exterior bearing walls) and mechanical and electrical systems
(HVAC): January 31, 1989; Plumbing: January 31, 1989, provided however,
that drains are guaranteed to be free and clear flowing only at time
of occupancy. In the event of the occurrence of any such defect during
the appropriate warranty period and upon receipt of written notice from
Lessee, Lessor shall promptly commence and diligently prosecute to
completion such repairs as are necessary to correct such defect.
Except for the aforegoing Lessor warranties, the Lessee shall maintain
and preserve the Demised Premises, Including, without limitation, the
Interior and exterior of the Building thereon In first-class and clean
condition making all repairs, replacements and restorations necessary
for such maintenance and preservation: Including, without limitation,
tuckpointing, painting, glass replacement, glazing, caulking and the
repair, replacement and restoration docks, landscaping and, parking
areas. All repairs, replacements and restorations shall be in quality
at least equal to the original construction.
At the termination of this Lease, by lapse of time or otherwise, Lessee
shall deliver the Demised Premises to the Lessor in first-class condition
and repair as obtained therein at the commencement of the term of this Lease
subject, however, to the loss Or damage due to any casualty to the extent
actually recovered by Lessor under Insurance policies to be obtained and
maintained by Lessee as herein set forth and normal wear and tear. Anything
herein to the contrary, notwithstanding, Lessee will not suffer any waste to
occur on the Demised Premises and will make every reasonable effort to
prevent the Demised Premises from falling Into disrepair; including, without
limitation, the prompt performance of all repair, replacement and
restoration obligations of Lessee as herein set forth.
SEC. 603. ALTERATIONS. Lessee shall make no alterations to the
Demised Premises Without prior written approval of Lessor which shall not be
unreasonably withheld provided, however, Lessee shall make no material
alterations to the Demised Premises(including roof,floor,and structured wall
penetration). Lessee shall remove,on demand by Lessor and at Lessee's
expense, any and all alterations at the termination of this Lease, whether
by lapse of time or otherwise, and shall repair any damage caused by such
removal, restoring the Demised Premises to their condition prior to the
making of any such alterations, or any of them.
Any and all alterations, additions and Improvements made to or placed
upon the Demised Premises by the Lessee, or suffered by Lessee to be made to
or placed upon the Demised Premises, as well as all fixtures and articles of
personal property attached to or made a part of the Demised Premises, which
Lessee has not removed or been required to remove by Lessor, shall
Immediately become the property of the Lessor at the termination of this
Lease and shall be surrendered to the Lessor.
Subject to the provisions hereinabove set forth, the Lessee may expend
such additional sums of money upon the Demised Premises, the Building and
Improvements on said Demised Premises as the Lessee may desire, with the
full understanding that such additional sums so paid shall not be deducted
from or set off against any rents or other payments due hereunder.
SEC. 604. LESSORS RIGHT TO INSPECT AND REPAIR. Lessor, Its agents and
employees shall have the right, at any reasonable time, after notice to
Lessee, to enter upon the Demised Premises to inspect the same In the
presence of an agent of Lessee and Lessee agrees to make such agent
available. In the event Lessee falls to commence such repairs, replacements
or restorations as are necessary to maintain the Demised Premises In first-
class condition, within Thirty (30) days after notice from Lessor or falls
to diligently prosecute the same to completion, the Lessor, at Its option,
but without any obligation so to do, may make such repairs, replacements, or
restorations, and amounts expended for such work by the Lessor shall be
reimbursed by the Lessee as additional rent due hereunder, promptly on
demand, together with interest at Eighteen Percent (18%) per annum from date
of expenditure.
Anything herein to the contrary, notwithstanding, Lessor shall have the
right, at any time, to enter upon the Demised Premises, but without any
obligation so to do, in order to effect any repair, replacement or
restoration of an emergency nature and Lessee shall reimburse Lessor as
additional rent due hereunder, promptly upon demand, for expenditures
incurred for such work and If Lessee denies Lessor such access, Lessee
agrees to defend, indemnify and hold forever harmless the Lessor from and
against any and all liability, fines, suits, claims, demands, actions,
causes of action, losses, costs, damages, judgments and expenses of any kind
or character, name or nature due to or arising directly or Indirectly out of
such emergency.
ARTICLE 7
INDEMNIFICATION AND HOLDING
HARMLESS OF LESSOR:
SEC. 701. INDEMNIFICATION. To the extent permitted by law, Lessee
shall def end, completely indemnify and hold forever harmless the Lessor f
rom and against any and all liability, fines, suits, claims, demands,
actions, causes of action, losses, costs, damages, judgments and expenses of
any kind or character, name or nature, due to or arising out of:
(a) Any breach, violation or non-performance of any covenant,
obligation, condition or agreement In this Lease set forth and
contained on the part of the Lessee to be fulfilled, kept, observed
or performed; and/or
(b) any damage to, loss or destruction of any property arising
directly or Indirectly out of Lessee's use and occupancy of the
Demised Premises; and/or
(c) any Injury to any person(s), including death, resulting at any
time therefrom, occurring in or about the Demised Premises and/or
the sidewalks, drive and alleyways, parkways, if any, and any and
all other appurtenances thereunto appertaining.
In the event the Lessor Is made a party to any action or proceeding
which Lessee is required to defend pursuant to the provisions of this Lease,
the Lessor shall have the right to appear and to take part in any such
action or proceeding by legal counsel of Lessor's choice-at Lessor's cost
and expense.
Lessee and Lessor hereby agree to completely indemnify the prevailing
party as to all costs and expenses Incurred to enforce any of the terms,
provisions, conditions or covenants of this Lease; Including, but not
limited to, attorney's fees.
Nothing herein shall be construed as obligating the Lessee to indemnify
or hold harmless any party from and against the consequences of negligent
act or omission of the party to be Indemnified.
SEC. 702. LOSS OF PROPERTY. Anything In this Lease to the contrary
notwithstanding Lessee agrees that under no circumstances shall Lessor be
liable to Lessee or to any third party for any loss of, destruction of,
damage to or shortage of any property; including, by way of Illustration and
not limitation, equipment or Inventory placed on the Demised Premises or
suffered to be placed thereon by Lessee, It being the intention of the
parties hereto that the risk of any and all such loss, destruction, damage
or shortage shall be borne by Lessee and Lessee agrees to defend, completely
Indemnify and hold Lessor forever harmless from and against any and all
liability, suits, claims, demands, actions causes of action, losses, costs,
damages, judgments and expenses If any arising out of such loss,
destruction, damage or shortage.
ARTICLE 8
DAMAGE OR DESTRUCTION
OF BUILDINGS:
SEC. 801. DAMAGE OR Destruction OF BUILDINGS. If any Building or
Improvements placed by the Lessor on the Demised Premises shall be Injured
or destroyed by fire or other casualty insured against pursuant to the terms
of this Lease, the Lessor will, with due diligence and dispatch, proceed to
collect the Insurance thereon and If the Lessor elects to repair or restore
such Building, the Lessor will apply the Insurance monies derived from said
policies to such repair and restoration.
In the event that the monies realized from the insurance policies shall
not be sufficient to restore such Building and/or Improvements to their
condition immediately prior to such fire or other such casualty, the Lessor
may, at the option of Lessor, advance the additional funds necessary
therefor, and to the extent that the Insufficiency of the insurance proceeds
was due to the failure of Lessee to comply with the provisions of this Lease
and to the extent of any deductible feature in the insurance coverage to be
provided by the Lessee, the Lessee covenants and agrees to repay any such
advance to the Lessor as additional rent due hereunder, promptly upon
demand, with interest at the rate of Eighteen Percent (18% ) per annum from
the date of such expenditure.
In the event Lessor does not elect to repair or restore such Building
and/or Improvements within Thirty (30) days after such a casualty, such
election to be evidenced by written notice to Lessee within said time
period, or if the repair or restoration cannot reasonably be accomplished
within a period of one hundred twenty (120) days after such casualty, then
In either of such events this Lease and the term hereof, may be terminated
and cancelled at the election of either party hereto, provided written
notice is given to the other party within Ten (10) days after the expiration
of the last aforementioned such Thirty (30) day period. Absent such timely
notice this Lease shall re main In full force and effect.
ARTICLE 9
RENT ABATEMENT
BECAUSE OF DAMAGE:
In the event Improvements on the Demised Premises shall be damaged by
fire or other casualty covered by the provisions of the Insurance policies
then in effect as provided for herein, the Lessee shall not be required to
pay rent on any untenantable portion of said Building and the rental
reserved hereunder shall be reduced to the proportion that the square foot
area of the Building remaining tenantable bears to the square foot area of
the original Building. Such rental shall be increased pro rata, from time
to time, if and when additional areas of the Building are returned to
tenantable condition.
ARTICLE 10
CONDEMNATION:
SEC. 1001. AWARD. In the event the Demised Premises, or any part
thereof, shall be condemned or taken for a public or a quasi-public use, or
is sold by Lessor under threat of condemnation, any award made or sales
price paid to compensate for the value of the Demised Premises, Building(s)
and Improvements thereon, or for damages to the remainder thereof shall be
paid to the Lessor and Lessee shall have no claim thereto and the Lessee
hereby Irrevocably assigns and transfers to the Lessor any right to any such
compensation or damage awards, providing, however, that Lessee shall have
the right to prove in the proceeding and to receive any award which may be
made for damages for or condemnation of Lessee's personal property,
including movable trade fixtures and equipment and relocation costs.
In the event any or all of the Demised Premises shall be so condemned or
taken, the Lessee shall execute and deliver to Lessor, promptly on demand,
all documents necessary and proper to evidence the termination of the
interest of the Lessee In and to the Demised Premises and this Lease,
including, without limitation, a recordable release and cancellation of this
Lease and a quit claim deed. The failure of the Lessee to so execute and
deliver such documents shall in no way affect such termination of this Lease
and the interest of the Lessee in and to the Demised Premises.
SEC. 1002. REMAINDER SUSCEPTIBLE OF OCCUPANCY. In the event a part of
the Demised Premises remains which is susceptible of occupation for the uses
set forth herein, this Lease shall, as to the part so taken, terminate as of
the date title shall vest in the condemning authority and the rent payable
hereunder shall be adjusted so that the Lessee shall be required to pay for
the remainder of the term only such fractional portion of such rent as the
area of the part of the building located on the Demised Premises remaining
after condemnation bears to the area of said Building as of the date of
condemnation; and in such event, this Lease shall remain in full force and
effect and the Lessor shall promptly commence and diligently prosecute to
completion the restoration of the Building so that it shall again constitute
a complete architectural unit but the Lessee shall be required to pay only
that fractional portion of the rent as is provided for hereinabove in this
SEC. 1002.
In the event the Lessor does not so terminate this Lease, this Lease
shall remain in full force and effect and the Lessor shall promptly commence
and diligently prosecute to completion the restoration of the Building so
that it shall again constitute a complete architectural unit but the Lessee
shall be required to pay only that fractional portion of the rent as is
provided for hereinabove in this SEC. 1002.
SEC. 1003. REMAINDER NOT SUSCEPTIBLE OF OCCUPANCY. Subject to the
further provisions of SEC. 1004 hereof, and in the event all of the Demised
Premises, or such part thereof be taken or condemned so that there does not
remain a portion susceptible for occupancy for the uses set forth herein,
this Lease shall terminate upon the date the title to the part taken vests
In the condemning authority and Lessee's obligation to pay rent or to
discharge any other obligation hereunder, other than the payment of money
then due and damages arising out of any breach of the covenants, conditions
or terms hereof by the Lessee, shall cease.
Notwithstanding anything herein to the contrary, the Demised Premises
shall not, be deemed "susceptible for occupancy" in the event more than
twenty-five percent (25 % of the area of the Building located on the Demised
Premises is taken or condemned.
ARTICLE 11
DEFAULT, BANKRUPTCY
SEC. 1101. DEFAULT, BANKRUPTCY. It Is mutually agreed and understood
by and between the parties hereto that in the event during the term of this
Lease, regardless of the pendency of any bankruptcy, insolvency,
receivership or reorganization proceedings, in law, equity or before any
administrative tribunal, or any other governmental entity which has been
prevented or which might prevent compliance by Lessee with the terms or
provisions of this Lease:
(1) Lessee shall default in the payment of any installment of rent
or other payment required to be made by Lessee pursuant to the
provisions of this lease and such default shall continue for Ten
(10) days; after notice of such default f rom Lessor provided
however that In the event Lessor has had to give Lessee notices of
such default more than twice in any twelve consecutive month period,
this notice requirement shall thereupon terminate and Lessee shall
be In default after the expiration of any such ten (10) day period
regardless of lack of notice from Lessor; or
(2) Lessee shall make default in the provisions of any of the
agreements, conditions, covenants or obligations hereunder to be
kept, fulfilled, observed or performed by the Lessee and such
default shall not be cured within Thirty (30) days after notice of
such default from Lessor to Lessee;
Anything hereinabove to the contrary, notwithstanding, as to any
such default except the payment of any rent or other monies reserved
herein, in the event the Lessee shall, within said Thirty (30) day
period, commence the cure of such default and diligently pursue to
completion any such cure as soon as reasonably practicable, the
Lessor may not declare the term ended and this Lease terminated and
cancelled; or
(3) If any voluntary petition or similar pleading under any
bankruptcy act or any federal or state law seeking reorganization or
arrangement with creditors or adjustment of debts Is filed by
Lessee, or if any such petition or pleadings is involuntary and
Lessee Is not discharged thereof within Thirty (30) days after the
date of Its filing;or
(4) If Lessee admits Its Inability to pay Its debts or if a
receiver, trustee or other appointee of a court, administrative
tribunal or other public authority Is appointed for all or a
substantial part of Lessee's property and If such appointment Is not
vacated within Thirty (30) days after being made; or
(5) if the leasehold interest of Lessee is levied upon or attached
by process of law, and such levy or attachment is not released of
record within Thirty (30) days; or
(6) If Lessee makes an assignment for the benefit of creditors, or
if any proceedings are filed by or against Lessee to declare Lessee
insolvent or unable to meet its debts and such proceedings are not
discharged within Thirty (30) days after the date of their filing;
or
(7) If a receiver or similar type of appointment or court
appointee or nominee of any name or character is made for all or a
substantial part of Lessee's property and if such receiver Is not
discharged within Thirty (30) days after appointment;
then, In any such event, Lessor shall have the right, at any time
thereafter, (but prior to any timely cure as hereinabove provided), with or
without notice to avail Itself to any or all of the following remedies, (a)
to lock the doors of the Demised Premises and exclude Lessee-therefrom; (b)
to re-enter and take complete possession of the Demised Premises pursuant to
Landlord's statutory lien; (c) to remove all persons and all of Lessee's
property therefrom; (d) to terminate this Lease forthwith; (e) to sue for
the rent due and to become -due under this Lease; (f) to sue for any damages
sustained by Lessor and/or (g) to keep this Lease In full force and effect
reletting the Demised Premises on such terms and conditions as Lessor may
deem appropriate without prejudicing Lessor's rights to recover past and
future rents or other obligations of Lessee hereunder.
Anything herein to the contrary, notwithstanding any payment of rent or
any other payment to be made by the Lessee to Lessor, pursuant to the
provisions of this Lease, shall bear interest at the rate of Eighteen
Percent (18%) per annum from the date payment was due.
In the event the right, title and Interest of Lessee in and to the
Demised Premises and this Lease is terminated, whether by lapse of time or
otherwise, the Lessee shall execute and deliver to Lessor, promptly on
demand, all documents reasonably requested by Lessor to evidence such
termination: Including, without limitation, a recordable release and
cancellation of this Lease and a quit claim deed. The failure of Lessee to
so execute and deliver such documents shall In no way affect the termination
of this Lease and the Interest of the Lessee In and to the Demised Premises.
SEC. 1102. NO WAIVER. No waiver by Lessor of any default by the Lessee
of any of the obligations, agreements, conditions or covenants on the part
of the Lessee to be fulfilled, kept, observed or performed hereunder shall
be a waiver of any subsequent default or of any other obligation, agreement,
condition or covenant, nor shall any forbearance by Lessor to seek a remedy
for any default by Lessee be a waiver by Lessor of any of the rights and
remedies available to Lessor hereunder or by law granted or permitted, with
respect to such or any subsequent default.
ARTICLE 12
TRANSFER, ASSIGNMENT, SUBLEASE
SEC. 1201. TRANSFER, ASSIGNMENT, SUBLEASE. The Lessee may not assign,
transfer, mortgage or pledge this Lease or the Interest of the Lessee herein
or hereunder or sublet Demised Premises or any portion thereof; without, In
each case, the prior written consent of the Lessor which shall not -he-
unreasonably withheld. Any purported assignment, mortgage, transfer,pledge
or sublease without the prior written consent of Lessor shall be absolutely
null and void and of no legal force or effect.
SEC. 1202. INCREASED RENT TO LESSOR. As a condition precedent to the
approval of any sublease, assignment or any other type of transfer by the
Lessee to any third party of all or a portion of its interest in and to the
Demised Premises pursuant to the provisions of this Lease, Lessee agrees
that It will pay to the Lessor, contemporaneously with the rental payments
due hereunder, Fifty Percent (50% ) of any increased economic benefit
received by Lessee, including, without limitation, rent in excess of the
rent reserved herein and in the event less than all of the Demised Premises
are so subleased, assigned or transferred in any way, the Lessee shall pay
to the Lessor Fifty Percent (50%) of any Increase In the square foot rate of
rent paid to Lessee by any third party. Lessee shall also Increase any
security deposit required hereunder to the amount of a full month's rent.
The rent that Lessee pays to the Lessor for the purpose of this Section
1202. shall be calculated by dividing the monthly rent reserved herein by
the square foot area of the building located on the Demised Premises as
stated hereinabove.
SEC. 1203. MAINTENANCE, REPAIR, AND RESTORATION UPON ASSIGNMENT OR
SUBLETTING. As a condition precedent to Lessor's consent to any assignment
or subletting of- this Lease or all or any part of the Demised Premises
Lessor may at It's sole discretion require Lessee to undertake any deferred
maintenance and to make all repairs and restorations which are the
obligations of Lessee under this Lease prior to the effective date of any
such assignment or sublease in the same fashion could be required at the
expiration of this Lease Term.
SEC. 1204. LESSOR MAY SELL, MORTGAGE, TRANSFER OR ASSIGN. Lessor shall
have the right to sell, mortgage, pledge, hypothecate or In any other manner
transfer or assign the Interest of the Lessor In the Demised Premises and/or
In the Lease, subject to all of the covenants and conditions of and Lessee's
rights under this Lease. The term "Lessor", as used in this Lease, means
only the owner for the time being of the Demised Premises and in the event
of any sale, conveyance or other transfer of the Demised Premises, or the
interest of Lessor In the Demised Premises, the Lessor shall upon
purchaser's assumption, be entirely freed of all covenants and obligations
of Lessor hereunder arising after the date of such sale, transfer assignment
or conveyance. This Lease shall not be affected by any such sale and Lessee
agrees to attorn to the purchaser or assignee.
SEC. 1205. SUBORDINATION. This Lease shall be subject and subordinate
to the lien of any mortgage or mortgages which at any time may be placed
upon the Demised Premises by Lessor, Its successors or assigns, and to any
replacements, renewals or extensions thereof, provided that the holder of
the encumbrance agrees to recognize for itself and Its successors and
assigns, Lessee's rights hereunder notwithstanding any foreclosure Lessee
agrees, at any time hereafter, on demand, to execute and deliver any
instruments, releases or other documents that may be required for the
purpose of subjecting and subordinating this Lease to the lien of any such
mortgage or mortgages,' subject to the provisions set forth above.
SEC. 1206. LESSEES ESTOPPEL LETTER. Lessee agrees at any time and from
time to time upon not less than Ten (10) days prior written request by
Lessor to execute, acknowledge and deliver to Lessor a statement In writing
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications that the same is In full force and effect as
modified and stating the modifications), and the dates to which the basic
rent and other charges have been paid in advance, if any, and all of the
defaults of Lessor hereunder, if any, it being intended that any such
statement delivered pursuant to this Section may be relied upon by any
prospective purchaser of the fee or mortgagee or assignee of any mortgage
upon the fee of the Demised Premises.
ARTICLE 13
MISCELLANEOUS.
SEC. 1301. NOTICES. Any notice provided for herein shall be given by
registered or certified mail addressed, if to Lessor, as follows:
CMD SOUTHWEST, INC.
3225 S. Hardy Drive, Suite 105
Tempe, Arizona 85282
with a copy, to:
CMD SOUTHWEST, INC.
One First National Plaza
Chicago, Illinois 60603
Attention: Law Department
and if to Lessee, as follows:
NELCO PRODUCTS, INC.
1130 West Geneva Drive
Tempe, Arizona 85282
Attention: General Manager
NELCO PRODUCTS@ INC.
1411 East Orangethorp
Fullerton, California 92631
Attention: President
with a copy to:
PARK ELECTROCHEMICAL CORPORATION
5 Dakota Drive
Lake Success, New York 10142
Attention: Corporate Controller
SEC. 1302. CHANGE OF ADDRESS. The person and places to which notices
or payments are to be mailed may be changed, from time to time, by Lessor
or Lessee upon written notice to the other.
SEC. 1303. MODIFICATION. This Lease may be modified only by written
agreement signed by Lessor and Lessee.
SEC. 1304. DESCRIPTIVE HEADING& The descriptive headings and index of
this Agreement are Inserted for convenience In reference only and do not
constitute a part of this Agreement.
SEC. 1305. SUCCESSORS AND ASSIGN& This Lease and the covenants,
terms, conditions and provisions hereof, shall be binding upon the
respective parties hereto and upon their respective successors, assigns
and personal representatives and shall inure to the benefit of said
respective parties hereto and their said respective successors, assigns
and personal representatives.
Wherever In this Lease a reference to any of the parties hereto Is made,
such reference shall be deemed to include, wherever applicable and even
though not expressly stated, also a reference to the successors, assigns and
personal representatives of such party, as the case may be, the same as If
in every case expressly stated.
The phrase "successors and assigns Is used In this Lease In its broadest
possible meaning and includes, in addition to administrators, trustees and
conservators; every person, firm, corporation or other entity succeeding to
the interest In or to this Lease, or any part thereof, or in or to any real
estate, or any part or portion thereof, described or referred to herein or
any part hereto, or of any of the successors or assigns of any such party,
whether such succession results f rom. the act of a party In interest,
occurs by operation of law or Is the effect of the operation of law together
with any act(s) of any such party or parties.
SEC. 1306. ENTRY TO SHOW PREMISES. Lessor, its agents or assigns may,
from time to time, during the term of this Lease, and each and every
extension hereof, enter the Demised Premises at reasonable times to show the
same to prospective buyers or tenants.
During the last Six (6) months of the term of this Lease or after the
occurrence of any default on the part of the Lessee hereunder, (and prior to
the curing of such default) the Lessor hereby reserves the right to enter
the Demised Premises, after notice to and in the company of Lessee, and to
place, on the outer walls or roof of any building(s) located thereon and
upon any part of the Demised Premises, outside such buildings), "For Sale"
and/or "For Rent" signs of a type similar to those used in the area. Lessee
agrees not to remove, Interfere with, or obstruct the view of any such
sign(s).
SEC. 1307. TIME OF ESSENCE. Time is of the essence of this Lease and
in all of the conditions, obligations, agreements, provisions, terms and
covenants hereof.
SEC. 1308. RESOLUTION. Lessee shall, contemporaneously with the
execution and delivery of this Lease, also deliver to Lessor a copy of a
Resolution of the Board of Directors of Lessee, specifically authorizing
those of Lessee's officers whose names are subscribed hereto to enter Into
this Lease Agreement with the Lessor named herein. Such Resolution shall be
duly certified to by the Secretary of said Board of Directors and shall be
appended hereto as Schedule 4 . Lessor shall, contemporaneously with the
execution and delivery of this Lease, also deliver to Lessee evidence of
Lessor's general partner's authority and the authority to bind Lessor of the
officer of Lessor's general partner who executes this Lease Agreement.
SEC. 1309. UNENFORCEABILITY. In the event any covenant, term,
provision, obligation, agreement or condition of this Lease is held to be
unenforceable at law it is mutually agreed and understood, by and between
the parties hereto, that the other covenants, terms, provisions,
obligations, agreements and conditions herein contained shall re main in
full force and effect.
SEC. 1310. WAIVER OF TRIAL BY JURY. The Lessee waives a trial by jury
of any or all issues arising in any action, or proceeding between the
parties hereto, or their successors arising out of, or in any way connected
with this Lease, or any of Its provisions the Lessee% use, or occupancy of
the Demised Premises and/or any claim of injury or damage.
SEC. 1311. GOVERNING LAW. This Lease and the rights of the parties
hereto shall be Interpreted and determined in accordance with the laws of
Arizona.
SEC. 1312. ENTIRE AGREEMENT. This Lease contains the Entire Agreement
between the parties respecting the matters herein set forth and supersedes
all prior agreements between the parties hereto about such matters.
SEC. 1313. ADDITIONAL TERM. The Lessor hereby covenants, represents
and warrants as follows:
a. The Demised Premises consists of approximately 43,399 square feet
of land together with a building located thereon containing approximately
13,180 square feet.
b. Lessor has not received any notice of any violation of any zoning
ordinances, building codes or other local, state and federal statutes,
codes, ordinances, laws and regulations and has no knowledge of the
existence i of any such violation. Required lot splits will be obtained by
Lessor, and Lessor will hold Lessee harmless from Lessor's failure to so do.
All equipment within the Demised is in good working order at the
commencement of Lessee's occupancy of the Demised Premises.
c. At Lessee's request, Lessor shall promptly execute and acknowledge
and deliver to Lessee a Memorandum of this Lease summarizing the material
terms of this Lease.
d. Lessor's covenants, representations and warranties shall be true
on and as of the date hereof , on and as of February 1, 1988.
SEC. 1314. EXHIBITS AND SCHEDULES. The following Exhibits and
Schedules are attached hereto and expressly made a part hereof, to wit:
Exhibit A - Legal Description
Exhibit B - Drawings of Lessee's Improvements as per Schedule 2
Schedule 1 - Rent During Last 26 Months of the Lease Term
Schedule 2 - Additional Improvements by Lessee and Lessor's
Payment thereof.
Schedule 3 - Security Deposit
Schedule 4 - Lessee's Board Resolution
Schedule 5 - option for Additional Land
Schedule 6 - First and Second Option to Extend Term
Schedule 7 - SRP Easement
IN WITNESS WHEREOF, said Lessor and Lessee have caused this instrument
to be executed by their respective duly authorized officers, all as of the
day and year first above written.
CMD SOUTHWEST ONE
An Illinois Limited Partnership
By: CMD SOUTHWEST, INC.
Its: General Partner
By:______________________________
President
ATTEST:
_____________________
Secretary
NELCO PRODUCTS, INC.
Lessee
By:_______________________
Vice President
ATTEST:
/s/Ron Fleming
Facilities Manager
SCHEDULE I
RENTAL DURING PERIOD OF FEBRUARY 1, 1991 THROUGH END OF LEASE TERM:
The Annual Net Basic Rent from, February 1, 1991 will be the greater of
the following:
<TABLE>
<S> <C>
(a) ($64,845.60); or
(Most Recent index prior to Jan, 1.199.1) )
(--------------------------------------- -1)x(.50)]+$64,845.60
(b) [($64,845.60)(Most Recent Index prior to Jan. 1. 1988 )
</TABLE>
All such Annual Net Basic Rent shall be paid in equal monthly
installments, in advance, in the same manner as the rent paid during the
original Three (3) years of the Term of this Lease.
The Index referred to hereinabove is the United States All Item Consumer
Price Index (1967= 100) All Urban Consumer Section, Issued by the Bureau of
Labor Statistics, U.S. Department of Labor published the period Immediately
prior to said dates.
In the event that the Index hereinabove referred to ceases to
incorporate a significant number of Items contained therein In the Index
last published prior to the commencement date of the original term of this
Lease, or U a substantial change is made in the method of establishing such
Index, then the Index shall be adjusted to the figure that would have
resulted had no change occurred In the manner of computing such index. In
the event that such Index (or a successor or substitute Index) Is not
available, a reliable governmental or other nonpartisan publication
evaluating the information theretofore used In determining the Index, shall
be used In lieu of such Index.
SCHEDULE 2
ADDITIONAL WORK TO BE PERFORMED BY LESSEE
Upon execution of this Lease agreement, Lessee shall promptly commence
and diligently prosecute to completion the installation or construction of
only the following Improvements:
Those attached hereto and made a part hereof as Exhibit B.
Such Improvements shall be deemed fixtures and shall be installed at
Lessee's cost and expense (subject to the further provisions hereof) and
shall be completed promptly, and with due diligence, unless delayed at any
time by reason of strikes, labor disputes, unavailability of materials
and/or labor, governmental laws or regulations, riots, acts of a public
enemy, national emergency, flood or other casualty, or other causes beyond
Lessee's reasonable control. Upon substantial completion of the
Improvements, in a good workmanlike manner, free of all liens and
encumbrances, and in compliance with all codes, rules, regulations,
ordinances and statutes of public authority, Lessor shall acknowledge that
such Improvements have been completed and Lessor shall promptly pay to
Lessee the sum of $31,000.00 only, as Lessor's total share thereof. The
ownership of said Improvements shall be as is set forth in Article I. Prior
to the termination of this Lease by lapse of time or otherwise Lessee, at
Lessor's option, evidenced by written notice to Lessee, shall remove such of
the Improvements described In said notice which were described In this
Schedule 2, restoring the Demised Premises to their condition prior the
Installation of such Improvements.
SCHEDULE 3
SECURITY DEPOSIT:
Lessee has deposited the sum of Five Thousand Dollars ($5,000.00) with
the Lessor as security for the full and faithful performance by the Lessee
of the terms of this Lease. It is agreed that in the event Lessee defaults
in respect of any of the terms provisions and conditions of this Lease,
including, but not limited to, the payment of rent and additional rent,
Lessor may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rent and additional
rent or any other sum as to which Lessee is in default or for any sum which
Lessor may expend or may be required to expend by reason of Lessee's default
in respect of any of the terms, covenants and conditions of this Lease,
including, but not limited to, any damages or deficiency accrued before or
after summary proceedings or other reentry by Lessor.
In the event that Lessee shall fully and faithfully comply with the
terms, provisions, covenants and conditions of the Lease, the security shall
be returned to Lessee promptly after the date fixed as the end of the Lease
Term and after delivery of the entire possession of the Demised Premises to
Lessor.
In the event of a sale of the Demised Premises, Lessor then has the
right to transfer the security to the purchaser, and upon the purchaser's
assumption Lessor shall thereupon be released by Lessee from all liability
for return of such security and Lessee agrees to look to the new Lessor
solely for return of said security.
SCHEDULE 4
LESSEE'S BOARD RESOLUTION
CERTIFICATE OF RESOLUTION
OF
NELCO PRODUCTS, INC.
The undersigned, Harry Linzer, Secretary of NELCO PRODUCTS, INC., a
Delaware corporation (hereinafter referred to as the "Corporation"),
hereby certifies that the following resolutions were duly and regularly
passed and adopted in all respects as required by law and the Bylaws of
the Corporation, and that such resolutions,,are still in full force and
effect and have not been revoked:
RESOLVED, that the Corporation should, and it hereby does, approve
that certain Lease by and between CMD Southwest One, an Illinois
limited partnership, as Lessor, and the Corporation, as Lessee,
for approximately 43,399 square feet of land, together with a
building located thereon containing approximately 13,180 square
feet, and an option for leasing additional land located on a
portion of Lot 2, Broadway Industrial Park, Unit 4-A, as recorded
in Book 228 of Maps, page 38, of the records of the Maricopa
County, Arizona Recorder, commonly known as 1117 West Fairmont,
Tempe, Arizona 85282; and
FURTHER RESOLVED, that Ronald'B. Hart, President of the
Corporation, Lee H. Newton, Vice President of the Corporation, and
Robert A. Forcier, Vice President of the Corporation, should be,
and each of them acting alone hereby is, authorized to execute
said Lease on behalf of the Corporation.
IN WITNESS WHEREOF, the undersigned has signed his
name as Secretary of the Corporation on this 29th day of February, 1988.
/s/Harry Linzer
SCHEDULE 5
OPTION FOR ADDITIONAL LAND
Lessee, at Its option, may lease the additional real estate described
below Option Parcel') by delivering Irrevocable written notice thereof upon
the Lessor no later than 5:00 p.m. local time January 31, 1990 subject,
however, to the further provisions of this schedule. The term of the lease
for the Option Parcel shall commence on the wake of written exercise thereof
and terminate upon the termination of this Lease whether by lapse of time or
otherwise.
RENTAL ON OPTION PARCEL:
In the event the option Is exercised as hereinabove provided, the Annual
Net Basic Rent during the term on the Option Parcel will be determined as
follows:
In the event the option is exercised during January 1988 the Annual Net
Basic Rent will be $3,180.00 ($265.00 monthly). In the event the option Is
exercised after January 31, 1988 the Annual Net Basic Rent will be the
greater of the following:
(a) $3,180.00; or
(b) $3,180.00 x Most Recent Index prior to Date of Exercise
-------------------------------------------
Most Recent Index prior to February 1, 1988
All such Annual Net Basic Rent due to be paid shall be paid In equal
monthly installments, In advance, In the same manner as the other rent paid
during the Term of this Lease.
The Index referred to hereinabove Is the United States AU Item Consumer
Price Index (1967= 100) All Urban Consumer Section, Issued by the Bureau of
Labor Statistics, U.S. Department of Labor published the period Immediately
prior to said dates.
In the event that the index hereinabove ref erred to ceases to
Incorporate a significant number of items contained therein In the Index
last published prior to the commencement date of the original term of this
Lease, or if a substantial change Is made in the method of establishing such
Index, then the Index shall be adjusted to the figure that would have
resulted had no change occurred in the manner of computing such Index. In
the event that such Index (or a successor or substitute Index) Is not
available, a reliable governmental or other non-partisan publication
evaluating the information theretofore used In determining the Index, shall
be used In lieu of such Index.
After the establishment of the original Annual Net Basic Rent as
aforesaid, said Option Parcel rent also shall be subject to adjustment at
the time and In the manner set f orth in Schedule 1.
LEGAL DESCRIPTION:
The East 187 feet of Lot 2, Unit 4A, Broadway Industrial Park as
recorded in Book 228 of Maps, Page 38, Marlcopa County Records, Phoenix,
Arizona; EXCEPT the East 162 feet of Lot 2; and, EXCEPT a triangle of
land formed by the South lot line of said Lot 2, a line parallel and 162
feet West of the East lot line of said Lot 2, and the hypotenuse of a
right triangle whose Western extremity is 187 feet West of the East lot
line of said Lot 2, as measured along the South line of said Lot 2 and
whose Northern extremity is 37.5 feet North of the South line of said
Lot 2 as measured along a line parallel and 162 feet West of the East
line of said Lot 2.
SCHEDULE 6
FIRST OPTION TO EXTEND TERM
Lessee, at Its option, may extend the term of this Lease for an
additional Five (5) years by delivering Irrevocable written notice thereof
upon the Lessor at least Six (6) Months prior to the expiration of the then
existing Lease Term, and upon delivery of said notice, the term of this
Lease shall be extended for said additional period upon the same terms
without further action of the parties; subject, however, to the further
provisions of this schedule.
RENTAL DURING FIRST EXTENSION OF TERM:
In the event the original term of this Lease is extended as hereinabove
provided, the Annual Net Basic Rent during the first three (3) years of the
extended term will be the greater of the following:
(a) The Annual Net Basic Rent during the last two (2) years
of the original Lease term; or
(b) An amount equal to the product of Sixty-Four Thousand
Eight Hundred Forty-Five Dollars and Sixty Cents
($64,845.60) multiplied by a fraction which has as Its
denominator the United States All Item Consumer Price
Index (1967=100), An Urban Consumer Section, Issued by
the Bureau of Labor Statistics, U. S. Department of
Labor (hereinafter the 11CPIU") published for the month
Immediately prior to the beginning of the original term
of this Lease and, as its numerator said Index published
for the month Immediately prior to the commencement date
of said extension;
In the event the original term of this Lease Is extended as herein
provided, the Annual Net Basic Rent during the last two (2) years of the
extended term will be the greater of the following:
(c) The Annual Net Basic Rent during the first three (3) years of the
extended term; or
(d) An amount calculated by the following formula:
(A)x(.50) x (B - 1.00 + (A) = Annual Basic Rent during last two (2)
C years of extended term of Lease.
where A = The amount described in preceding
subparagraphs (a) or (b) whichever is
greater;
where B = The CPI-U published for the period
immediately prior to the commencement
date of the last two year period of the
extended term.
where C = The CPI-U published for the period
Immediately prior to the commencement of
the Five year extended term.
All such Annual Net Basic Rent due to be paid during any and all
extensions of the original Lease Term shall be paid In equal monthly
installments, In advance, In the same manner as the rent paid during the
original Term of this Lease.
In the event that the Index hereinabove referred to ceases to
incorporate a signif leant number of Items contained therein in the Index
last published prior to the commencement date of the original term of this
Lease, or If a substantial change is made In the method of establishing
such Index, then the Index shall be adjusted to the figure that would have
resulted had no change occurred in the manner of computing such Index. In
the event that such Index (or a successor or substitute Index) Is not
available, a reliable governmental or other non-partisan publication
evaluating the Information theretofore used In determining the Index,
shall be used In lieu of such Index.
SECOND OPTION TO EXTEND TERM:
Provided Lessee has validly exercised the First Option to Extend Term
hereinabove described, Lessee, at Its option, may extend the term of this
Lease for a second, additional Five (5) years by delivering Irrevocable
written notice thereof upon the Lessor at least Six (6) months prior to
the expiration of the first Five year extension of the Lease Term, and
upon delivery of said notice, the term of this Lease shall be extended for
said additional period upon the same terms without further action of the
parties, subject, however to the further provisions of this Schedule.
RENTAL DURING SECOND EXTENSION OF TERM:
The Annual Net Basic Rent due to be paid to Lessor for said Demised
Premises during the first Three (3) years of the second option to extend
shall be the "Market Rental, as that term is hereinafter defined. The
Market Rental will be equal to the product of 13,180 multiplied by the
market rate of rent per square foot for comparable warehouse/of f fee
space for a comparable lease term on the commencement date of the option
term (hereinafter referred to as "Market Rate"). The Market Rate will be
determined as hereinafter set forth without regard to (a) the rate of rent
Lessee is then paying for the Demised Premises, and (b) the value of
Lessee's Improvements and trade fixtures. In the event Lessee desires to
consider exercising Its second option to extend as set f orth In this
Schedule, Lessee shall submit to Lessor nine (9) months prior to the
expiration of the then existing lease term, a written statement setting
forth the Lessee's proposed Market Rate, which statement shall include the
method used and assumptions made in arriving at such a rate. Lessor shall
within twenty (20) days of receipt of the statement accept or reject the
same or submit a revised statement of Market Rate which statement shall
include the method used and assumptions made In arriving at such a rate.
If Lessor accepts Lessee's statement of Market Rate, Market Rate shall be
determined as set forth therein and Lessee shall, In the event it
exercises Its option to extend, pay to Lessor during the first Three (3)
years of the second option to extend, Annual Net Basic Rent equal to the
product of Market Rate times 13,180 square feeL if Lessor elects to submit
a revised statement, Lessee shall within ten (10) days of receipt thereof
either accept or reject the same. if Lessee accepts Lessor's revised
statement of Market Rate, Market Rate shall be determined as set forth
therein and Lessee shall, in the event It exercises Its option to extend,
pay to Lessor Annual Net Basic Rent determined as set forth above In this
paragraph. If, however, Lessor rejects Lessee's statement of Market Rate
or Lessee rejects Lessor's revised statement of Market Rate, the rejecting
party shall name and appoint an Independent M.A.I. appraiser and give
written notice thereof to the non-rejecting party within five (5) days of
the date of such rejection. The non-rejecting party shall, within five
(5) days of the receipt of said notice of rejection, name and appoint
another appraiser and give the rejecting party written notice thereof.
Thereafter, said appraisers shall select a third appraiser. If said
appraisers are unable to agree on the selection of a third appraiser
within five (5) days, they shall jointly petition the Superior Court of
the County of Maricopa, Arizona, for the appointment of a third appraiser.
Thereupon, the said appraisers shall independently determine the market
rate for leasing the Demised Premises. Their respective written reports
of Market Rate shall be submitted to Lessor and Lessee not later than
seven (7) months prior to the expiration of the then term or on such later
date as Lessor and Lessee may mutually agree. Upon delivery of the
aforesaid written reports of value, the Market Rate shall be computed as
follows: (a) average the three appraisals and disregard the appraisal
which deviates the greatest from the average; and (b) average the two
remaining appraisals. The average of the two remaining appraisals shall
constitute the Market Rate and shall be binding upon the Lessor and
Lessee. In the event Lessee then exercises Its option to extend, the
exercise of which shall take place, if at all, at least six (6) months
prior to the expiration of the then existing lease term, Lessee shall pay
to Lessor during the first three (3) years of the second& option to extend
Annual Net Basic Rent equal to the product of Market Rate times 13,180
square feet. The Lessor and Lessee shall each bear the fees, cost and
expense of the appraiser selected by It, and the fees, costs and expenses
of the appraiser appointed by the Parties' appraisers shall be shared
equally by Lessor and Lessee. Either party's failure to fully comply In a
timely fashion with the provisions regarding determination of Market Rate
shall be deemed an abandonment of this method of determining rental, and
the Market Rate shall be determined solely by the non-defaulting party's
appraiser. Thereafter, the Annual Net Basic Rent to be paid f or the
Demised Premises during the fourth and fifth years of the second option to
extend shall be the greater of the following:
(a) The Market Rental (as determined hereinabove); or
(b) An amount calculated by the following formula:
(A)x(.50)x(B/C - 1.00 +(A) = Annual Basic Rent during last two (2)
years of second extended term of Lease.
where A = The Annual Net Basic Rent during the
of the extended term.
where B = The CP1-U published for the period
immediately prior to the commencement
date of the last two year period of the
second extended term.
where C = The CPI-U published for the period
immediately prior to the commencement
date of the second Five year extended
term.
In the event that the Price index hereinabove referred to ceases to
Incorporate a significant number of Items contained in the Index last
published prior to March 1, 1998, or If a substantial change Is made In the
method of establishing such Index, then the Index shall be adjusted to the
figure that would have resulted had no change occurred In the manner of
computing such Index. In the event that such Index (or a successor or
substitute Index) is not available, a reliable governmental or other
nonpartisan publication evaluating the Information theretofore used In
determining the Index, shall be used in lieu of such Index.
All such rental required herein shall be paid In then lawful money of
the United States of America in equal monthly Installments; one Installment
to be paid upon the first day of each and every calendar month during the
term hereof to the Lessor at such place as may, from time to time, be
designated by them; and In the absence of such designation, at the last
known office of the Lessor in Tempe, Arizona.
RESTRICTIONS ON OPTION:
Lessee may not exercise an Option If Lessee Is In any way In default of
any of the terms, conditions or covenants contained In this Lease beyond an
applicable cure period, and the occurrence of any default by Lessee from and
af ter the date of notice of exercise of an Option and Lessee's subsequent
failure to cure said default within the applicable period, shall result In
the Immediate termination forever of the Options, and all rights of Lessee
as set forth In this Schedule without further action of the parties and all
without prejudice to the other rights of Lessor.
The Options are for the sole benefit of the above named Lessee and shall
automatically terminate upon any assignment of this Lease, sublease of the
Demised Premises, or other transfer of this Lease and or the rights of
Lessee, provided, however, that Lessee shall have the right to exercise only
the next available option to extend the term an additional five (5) years In
the event Lessee assigns or subleases this Lease, pursuant to the provisions
of SEC. 1201, subject however, to the following terms and conditions:
1) This right to exercise one (1) option to extend the term In the
event of an assignment or sublease is a one time right, and shall
not be applicable In the event of any subsequent assignments or
subleases;
2) Notwithstanding the provisions of Article 3 with regard to
determining the Annual Net Basic Rent, the Annual Net Basic Rent
during the extended term H this option Is exercised following an
assignment or lease,,,411.1 be the "Market Rental, and shall be
determined substantially in accordance with the procedures set
forth In this Schedule 6 for determining Market RentaL
3) Notwithstanding the Provisions of SEC. 1202, as a condition
precedent to the approval of any sublease, assignment or any other
type of transfer by the Lessee to any third party of all or a
portion of its interest in and to the Demised Premises pursuant to
the provisions of this lease, Lessee agrees that it will pay to
the Lessor, contemporaneously with the rental payments due during
the five year option period, any amounts Lessee may receive in
excess of the Market Rent as determined aforesaid, and in the
event less than all of the Demised Premises are so subleased,
assigned or transferred In any way, the Lessee shall pay to the
Lessor any increase in the square foot rate of rent paid to Lessee
during this option third party.
RUNNER PICK UP: R/W 12381 AST. 14C
Maricopa County
SALT RIVER PROJECT Parcel #123-40-42
Land Management Department Work Order #KA1-7914
P.O. Box 52025 W MC C CR
Phoenix, AZ 85072-2025
E A S E N E N T
Underground Power
CMD SOUTHWEST. INC., an Arizona corporation,
for and in consideration of the sum of One Dollar, and other valuable
consideration, receipt of which is hereby acknowledged, do hereby grant to
the SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER, a political
subdivision of the State of Arizona, its successors and assigns, t e 19
T',."easement and privilege to construct,W_@ operate and maintain
underground electrical conduits, together with its manholes, transformer
pads and vaults and other appurtenances through, over, under and across the
following described property:
The East 162.0 feet of Lot 2, BROADWAY INDUSTRIAL PARK UNIT 4-A. as
recorded in Book 228-.of Maps, Page 38, Maricopa County, Arizona;
said subdivision being a resubdivision of Lots 1 through 11 of
BROADWAY INDUSTRIAL PARK UNIT 4, according to Book 210 of Maps, Page
48, records of Maricopa County, Arizona.
Said easement being 7.0 feet in width, 3.5 feet on each side of the
following described centerline:
COMMENCING at the Northeast corner of said Lot 2, BROADWAY
INDUSTRIAL PARK UNIT 4-A; thence North 89'5315311 West (assumed
bearing) along the North line of said Lot 2, a distance of 46.0
feet; thence South 03'061431 East a distance of 8.0 feet to the TRUE
POINT OF BEGINNING of the easement herein described; thence continue
South 03*06143" East a distance of 173.0 feet to the North edge of
a-5.5 foot by 7.5 foot wide transformer pad, said transformer pad
being a part of this easement.
It being understood that there shall be an 8.0 foot wide clear area
adjacent to and immediately in front of the transformer opening and
that no obstructions,, -trees shrubs or permanent structures shall
be placed within this area
CAUTION: The above described easement contains high voltage electrical
equipment. Notice is hereby given that the location of the underground
electrical conduits may vary form the locations indicated in the above
description, therefore all persons who may excavate in the area must
accordingly proceed with caution.
The Grantee shall at all times have the right of full and fee ingress
and egress to said easement for the purpose heretofore specified, and the
rights herein granted, all rights herein granted shall cease and revert to
the grantors, their heirs or assigns.
The covenants and agreements herein shall be binding on the heirs,
successors in ownership and estate, assigns and lessess of the respective
parties hereto.
IN WITNESS WHEREOF, CMD SOUTHWEST, INC., an Arizona corporation, has caused
its corporate name to be signed by the undersigned officers thereunto duly
authorized, this 31 day of January, 1986.
__________________________
President
State of Arizona )
ss. ATTEST_____________________
County of Maricopa) Asst. Secretary
On this 31st day of January, 1986, before me Marlene L. Holcombe the
undersigned officer, personally appeared Gleen G. Martin and Cordell E.
Kefferling who acknowledged themselves to the President and Asst. Secretary
respectively of the CMD SOUTHWEST, INC., an ARizona corporation, and that
they as such officers respectively being authorized so to do, executed the
same for the purpose therein contained by signing the name of said
corporation by themselves as such officers respectively.
In witness whereof I have hereunto set my hand and official seal.
My Commission expires Sept. 16, 1988 Marlene L. Holcombe
Notary Public
EXHIBIT 10.11(a)
FIRST AMENDMENT TO LEASE
This FIRST AMENDMENT is made on this 21st day of October,
1994 between CEMANUDI ASSOCIATES, an Illinois Limited Partner-
ship ("Lessor") and NELCO TECHNOLOGY, INC., an Arizona corpora-
tion ("Lessee").
A. Lessor and Lessee previously entered into that certain Lease
dated August 31, 1989 for the lease of the premises commonly
known as II 04 West Geneva Drive, Tempe, Arizona ("Lease").
B. Lessor and Lessee now desire to extend the term of
the Lease, subject to the terms and conditions set forth in
this First Amendment.
Lessor and Lessee agree as follows:
1. Definitions. All of the terms used in this First
Amendment shall have the same meanings set forth therefor in
the Lease, except to the extent expressly set forth otherwise
herein.
2. First Extension Term. The term of the Lease is hereby
extended for the period ("First Extension Term") commencing on
and including September 1, 1994 and ending at 11:59 P.M. (local
time at the Demised Premises) on August 31, 1999.
3. First Extension Term Annual Net Basic Rent. Lessee
agrees to pay to Lessor Annual Net Basic Rent during the First
Extension Term as follows:
(a) During the period commencing on and including
September 1, 1994 and ending August 31, 1997, Lessee shall pay
to Lessor as Annual Net Basic Rent the greater of (i)
Sixty-Nine Thousand Seven Hundred Fifty-Eight and 40/1 00
Dollars ($69,758.40), or (ii) an amount equal to the product of
Sixty-Three Thousand Eight Hundred Seventeen and 20/100 Dollars
($63,817.20) multiplied by a fraction which has as its denomi-
nator the United States All Item Consumer Price Index (I
982-1984 = I 00), All Urban Consumer Section, issued by the
Bureau of Labor Statistics, U.S. Department of Labor ("CPI-U")
published for August, 1989 and as its numerator the CPI-U
published for August, 1994 ("Initial Rent").
(b) During the period commencing on and including
September 1, 1997 and ending August 31, 1999, Lessee shall pay
to Lessor as Annual Net Basic Rent the greater of (i) the
Initial Rent, or (ii) an amount calculated by the following
formula:
(A)x (.50) x {(B/C - 1.00} + A = Annual Basic Rent
during the last two (2) years of extended term of lease.
where A = Initial Rent
where B = The CPI-U published for August 1997, the
period immediately prior to the commencment date of the last
two year period of the extended term.
where C = The CPI-U published for August 1994, the
period immediately prior to the commencment date of the five
year extended term.
Such Annual Net Basic Rent shall be paid to Lessor in equal
monthly installments on or before the first day of the First
Extension Term and on or before the first day of each succes-
sive calendar month throughout the First Extension Term.
4. Full Force and Effect. Except to the extent expressly
provided otherwise in this First Amendment, all of the terms
and conditions set forth in the Lease shall remain in full
force and effect.
5. Conflicts. In the event that any of the provisions of
the Lease conflict with any of the terms and provisions of this
First Amendment, the terms and provisions of this First
Amendment shall prevail.
6. Time of Essence. Time is of the essence of each and
every term of this First Amendment.
IN WITNESS WHEREOF, said Lessor and Lessee have caused
this instrument to be executed by their respective duly
authorized officers, all as of the day and year first written
above.
LESSOR
CEMANUDI ASSOCIATES, an Illinois
Limited Partnership
By CMD CORPORATION
By:___________________
Its: Vice President
LESSEE
NELCO TECHNOLOGY, INC., an Arizona
corporation
By:___________________
Its: Vice President and General Manager
EXHIBIT 10.19
LEASE CONTRACT
BETWEEN
THE NEW YORK STATE
DEPARTMENT OF TRANSPORTATION
AND
THE EDGEWATER STEWART COMPANY
February 26, 1988
C 0 N T E N T S
Article Page
Introduction 1
1 Term 3
2 Leased Premises 4
3 Use of Leased Premises 6
4 Rental 8
5 Acceptance, Care, Maintenance,
Improvements and Repair 11
6 Additional Obligations of Lessee 17
7 Ingress and Egress 21
8 Insurance, Damage or Destruction 23
9 Liabilities and Indemnities 29
10 Leasehold Mortgages 32
11 Assignment and Sublease 49
12 Condemnation 54
13 Non-Discrimination 59
14 Governmental Requirements 61
15 Rights of Entry Reserved 63
16 Additional Rents and Charges 66
17 Termination by the Department 68
18 Surrender and Right of Re-Entry 71
19 Services to Lessee 72
20 Survival of the Obligations of the Lessee 74
21 Use Subsequent to Cancellation or Termination 76
22 Notices 77
<PAGE>
Article Page
23 Holding Over 79
24 Invalid Provisions 80
25 Miscellaneous Provisions:
Remedies to be Nonexclusive 81
Non-Waiver of Rights 81
Force Majeure 81
Non-liability of Individuals 82
Quiet Enjoyment 82
Estoppel Certificate 82
Short Form of Lease 83
General Provisions 83
26 Supplementary Provisions 85
27 Entire Agreement 87
AA Disbursement of Deposited Moneys AA-1
<PAGE>
LEASE AGREEMENT
This Agreement of Lease, made and entered into this, day of February,
1988, by and between: THE STATE OF NEW YORK ACTING BY AND THROUGH its
DEPARTMENT OF TRANSPORTATION, having offices at 1220 Washington Avenue,
Albany, New York 12232, hereinafter referred to as the "Department and
THE EDGEWATER STEWART COMPANY, a New York general partnership, having an
office at The Hilton Tower, 465 South Salina Street, Syracuse, New York
13202-24-87, hereinafter referred to as the "Lessee". Lessee's Employer
Identification Number is 16-1314192.
WITNESSETH THAT:
WHEREAS, the Department is the fee owner of the premises known as Stewart
International Airport Industrial Park located in the Town of New Windsor,
New
York and presently comprising approximately 8,000 acres, and wherever "Park"
is used in this Lease it shall be construed to mean the Industrial Park as
it
may be expanded from time to time; and
WHEREAS, Lockheed Air Terminal Inc. is the current Park Manager for the
Department under an agreement dated April 1, 1983, and wherever "Department"
is used herein it shall be construed to mean the New York State Department
of
Transportation or its Park Manager acting on its behalf; and
WHEREAS, the Department and the Lessee are mutually desirous of entering
into
a Lease for the development of a certain area in the Park; and WHEREAS, the
Department desires to further promote, accommodate and enhance
the economic development of the Mid Hudson Valley area through development
at
the Park and the Lessee desires to construct and lease a light industrial
fabrication and distribution facility in the Park area; and
WHEREAS, the Department and the Lessee have reached an understanding in
principle which envisions the Lessee's construction and use of an
approximately 57,200 square foot light industrial fabrication and
distribution
facility, hereinafter the "Facility", and associated site improvements
without
cost to the Department on the Leased Premises.
NOW, THEREFORE, in consideration of the premises and of the rents, covenants
and conditions herein contained, the Department does hereby lease to the
Lessee the area of the Park described in Article 2 hereof (hereinafter
referred to as "the Leased Premises"), during the term hereof for the term
and
pursuant to the conditions hereinafter set forth.
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<PAGE>
ARTICLE 1
TERM
1.1 The Initial Term of this Agreement shall be for a period of
twenty-five (25) years and eight (8) months commencing on February 1,
1988, and expiring on September 30, 2013, unless sooner terminated in
accordance with the provisions hereof.
1.2 The Lessee shall have an option to extend the term of this Agreement
for seven (7) additional periods of five (5) years each, (the
"Extended Terms") provided Lessee is not, at the time of its exercise
of such option, in default of its obligations hereunder. In the
event Lessee exercises said options it shall do so no later than one
year prior to the expiration of the Initial Term or the then current
Extended Term. The terms and conditions during the Extended Terms
shall be the same. The rent escalation shall continue throughout the
Initial Term and Extended Terms as set forth in Article 4 hereof.
1.3 The Initial Term of this Agreement is subject to Lessee's right of
termination as set forth in Section 5.1.3 hereof.
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<PAGE>
ARTICLE 2
LEASED PREMISES
2.1 The Leased Premises consist of:
2.1.1 A six and eight tenths (6.8) acre parcel of land on the Westerly
portion of Lot 6 of the Park more particularly described and shown on
Exhibit A attached hereto and made a part hereof.
2.1.2 All improvements now or hereafter constructed on the aforementioned
land.
2.2.The Department warrants and represents that it has obtained by
eminent domain or otherwise, fee title to the Leased Premises, free
of any restriction or encumbrance which would prevent the
construction of the improvements which Lessee is required hereunder
to construct or which would prevent the use of such improvements as a
light industrial fabrication and distribution facility.
2.3 The Department represents and warrants to Lessee that it has
unencumbered title to the Leased Premises by virtue of the
acquisition of certain parcels of land now a part of the Airport
through the 1967 New York State Transportation Bond Issue and the
provisions of Section 400 of the Transportation Law of the State of
New York.
<PAGE>
2.4 The Department agrees to provide Lessee immediate access to the
Leased Premises and the surrounding environs during normal business
hours for the purpose of site testing to determine its suitability
for the proposed construction.
2.the Leased Premises is subject to the Department's perpetual
easement, fifty feet in width, running in a Northerly direction along
the Easterly boundary of the Leased Premises from Governor Drive to
Lot-6-B.
2. Lessee shall have an option for the development of Lot 6-B,
consisting of approximately three acres between the Leased Premises
and the Park boundary along Interstate 84, for the sole purpose of
expanding the Facility for a period of three years commencing August
1, 1988 and expiring July 31, 1991. To exercise its option, the
Lessee shall be in compliance with all the terms and conditions of
this Agreement and shall pay the Department a fee of $1,000 annually
in advance therefor.
2.6. At the time Lessee exercises the option: (a) Lot 6-B shall merge
into the Leased Premises and become a part thereof; (b) the perpetual
easement set forth in Section 2.5 shall be extinguished, and; (c) the
rent for Lot 6-B shall be at the same rate as for the Leased Premises
at that time and shall escalate thereafter at the times and amounts
as set forth in Article 4 hereof.
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<PAGE>
ARTICLE 3
USE OF LEASED PREMISES
3.1 The Lessee shall occupy and use the Leased Premises for the
construction and leasing of light industrial fabrication and
distribution facilities. Nothing herein shall be construed to
prevent Lessee from using these Premises for any other lawful
purposes consistent with the provisions of this Agreement and the
Park's current Performance and Development Standards.
3.2 Lessee shall not use or allow the Leased Premises to be used for any
unlawful purpose or in violation of any certificate of occupancy
covering or affecting the use of the Leased Premises, or any part
thereof, or for any use which, in law, constitutes a nuisance, public
or private, or which voids or makes voidable any insurance then in
force with respect thereto.
3.3 There is hereby reserved to the State of New York, its successors and
assigns, for the use and benefit of the public, the right of flight
of aircraft in the airspace above the surface of the Leased Premises
herein conveyed. This public right of flight shall include the right
to cause in said airspace, any noise inherent in the operation of any
aircraft used in navigation enroute to or from, or taking off or
landing at, or operating at Stewart International Airport, Newburgh,
New York.
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<PAGE>
3.4 Nothing contained in this Agreement shall be construed to grant to
the Lessee any additional rights in the airspace above the Leased
Premises which would be in violation of Federal Aviation
Administration rules, regulations or orders currently in force as
subsequently promulgated.
3.5 Lessee's use of the Leased Premises is subject to the Department's
easement described in Sections 2.5 and 2.6.1 hereof.
3.6 Except for the exclusive right of the Lessee to possession of the
Leased Premises, no exclusive rights in the Park are granted by this
Agreement and no greater rights or privileges with respect to the use
of the Leased Premises or any part thereof are granted or intended to
be granted to the Lessee by this Agreement, or by any provision
thereof, than the rights and privileges expressly and specifically
granted hereby.
3.7 Lessee agrees that all water, mineral and any other subsurface rights
are the sole property of the Department and Lessee shall not have any
rights or rights of access thereto.
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<PAGE>
ARTICLE 4
RENTAL
4.1 For use and occupancy of the Leased Premises and privileges herein
granted, the Lessee agrees to pay to the Department during the period
commencing on October 1, 1988, and ending on September 30, 1993, an
annual rental of thirty-four thousand six dollars, eighty cents
($34,006.80).
4.1. The annual rental payable hereunder shall be paid in equal monthly
installments on the first day of each month in advance at the Office
of the Park Manager or at such other office as may be directed in
writing by the Department. The monthly installment for the first
five years of the lease term through September 30, 1993 shall be two
thousand eight hundred thirty-three dollars, ninety cents ($2,833.90).
4.1. Commencing October 1, 1993 and ending September 30, 1998, Lessee
shall pay an annual rent of thirty-seven thousand three hundred
ninety-three dollars, twenty cents ($37,393.20) plus a rent
escalation on the Rent amount in Section 4.1 above as calculated in
accordance with the provisions of Section 4.2 hereof.
4. Commencing on October 1, 1993 and on each fifth anniversary thereof
during the remainder of the Initial Term, the annual rent payable
hereunder shall be adjusted (subject to the provisions of 4.2.1
hereof) by multiplying the annual rent payable in the next preceding
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<PAGE>
year of the Leased Term by a fraction, the numerator of which shall
be the C.P.I. (as such term is hereinafter defined) published for the
month of October of the year in which such adjustment is made and the
denominator of which shall be the C.P.I. published for the month of
September of the calendar year in which the last preceding such
adjustment was made; provided, however that the denominator for first
adjustment shall be the C.P.I. for the month of September, 1988. In
no event shall the annual rental payable under this Section 4.2 be
less than the amount payable for the last adjusted period.
4.2.1 The term "C.P.I." as used herein shall mean the Consumer Price Index
for all Urban Consumers, all items, Selected Large Cities, for the
New York/Northeastern New Jersey Area as published by the Bureau of
Labor Statistics of the United States Department of Labor, 1982-84
base equals 100, provided, however, that for the purpose of this
Agreement, the escalation of the C.P.I. shall not exceed twenty-five
percent (25%) in any five years during the Initial Term. In the
event that the base year is changed, the C.P.I. shall be converted to
the equivalent of the base year 1982-84 equals 100.
4.2.2 If the option for any Extended Term is exercised by the Lessee, then
the Department shall, six months prior to the commencement of each of
the Extended Terms, complete an appraisal of the land value of the
Leased Premises. The appraisal will be performed by an appraiser
selected by the Department. The appraiser shall be certified by the
American Institute of Real Estate Appraisers (M.A.I.) and licensed to
do business in the State of New York. The annual rent during the
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<PAGE>
first Extended Term shall be ten percent (10%) of the appraised fair
market value of the land, exclusive of the Facility and without
regard to the fair market value of the Facility, but in no event less
than the annual rental rate paid during the last five years of the
Initial Term or during the then current Extended Term.
4.3 Promptly upon the execution of this Agreement, Lessee shall submit
plans and specifications to the Department in accordance with the
provisions of the Department's Construction Application and Appendix
B hereof.
4.4 As additional rent, the Lessee shall construct, or cause to be
constructed, the Facility at the Leased Premises generally in
accordance with the Lessee's site plans SP-1 dated November 10, 1987
and revised February 3, 1988 and SP-2 dated November 10, 1987 and
revised February 9, 1988 as modified, supplemented or amended
pursuant to the Department's review and approval process as set forth
in Section 5.4 and Appendix B hereof (the "Initial Improvements"). A
copy of that site plans are attached hereto as Exhibits B-1 and B-2,
respectively, and made a part hereof.
4.5 The Facility shall be substantially completed on or before December
31, 1988. Construction of the facility must begin within ninety (90)
days after approval of the Lessee's plans and specifications by the
Department. If Lessee delay-s construction beyond that date, the
Department may, in its sole discretion, terminate this Agreement by
prompt written notice to Lessee.
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<PAGE>
ARTICLE 5
ACCEPTANCE, CARE, MAINTENANCE,
IMPROVEMENTS AND REPAIR
5.1 Subject to the provisions of 2.4 hereof, and in reliance upon the
representations of the Department set forth in this Section 5.1,
Lessee warrants that it has inspected the Leased Premises and accepts
possession of the Leased Premises "as is" in its present condition
and.acknowledges its suitableness and sufficiency for the uses
permitted hereunder. The Department represents to the Lessee that,
to its knowledge, the Leased Premises is free of any adverse
environmental conditions and no part of the Leased Premises lies in a
flood hazard area or constitutes a fresh water wetland, nor is any
part of the Leased Premises within 100 feet of a fresh water
wetland. Except as may otherwise be provided for herein, the
Department shall not be required to maintain nor to make any
improvements, repairs or restoration upon or to the Leased Premises
or to any of the improvements presently located thereon. The
Department shall not have any obligation to repair, maintain or
restore, during the term of this Agreement, any improvements placed
upon the Leased Premises by the Lessee, its successors and assigns.
5.1.1 In the event the representations made in Section 5.1 above are not
accurate and hazardous material is found on or under the Leased
Premises and such hazardous material existed prior to the date of
Agreement, the Department accepts responsibility for performing, or
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<PAGE>
causing to be performed by the Lessee and reimbursable to the Lessee
by the Department, any and all clean-up efforts required by law.
5.1.2 Alternatively, the Department agrees to offer to Lessee an alternate
comparable site for the Facility, if one is available.
5.1.3 In the event the clean-up efforts cannot be performed, or it an
alternate site is not available in a timely manner to meet Lessee's
timetable for construction for Johnson Controls, then this Agreement
shall be terminable upon written notice by either party to the other.
5.1.4 In the event Lessee discovers any hazardous material on the Leased
Premises, it will promptly notify the Department in writing and
comply with all directives by the Department.
5.1.5 The Department will facilitate environmental approvals as necessary
or appropriate for the construction and operation of the project
described herein. Lessee agrees to cooperate fully and promptly with
the Department in providing it with any data, forms or other
information required by the Department.
5.1.6 The Lessee's obligation under this Agreement is contingent upon the
Leased Premises being free of any adverse environmental condition and
Lessee's ability to obtain all necessary permits and approvals for
the Facility and other improvements to be used by Johnson Controls,
provided that Lessee pursues the obtaining of said permits and
approvals with all due diligence.
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<PAGE>
5.1.7 Lessee shall be responsible for permits issued by involved agencies
relative to industrial processes and operations.
5.2 The Lessee shall throughout the term of this Agreement assume the
entire responsibility, cost and expense for all cleaning, repair and
maintenance whatsoever on the Leased Premises and all improvements
thereon in a good and workmanlike manner, whether such repair or
maintenance be ordinary or extraordinary, structural or otherwise.
Additionally, the Lessee, without limiting the generality hereof,
shall:
5.2.1 Provide and maintain on the Leased Premises all obstruction lights
and similar devices, and safety equipment required by law.
5.2.2 Take measures to prevent erosion, including but not limited to the
planting and replanting of grasses with respect to all portions of
the Leased Premises not paved or built upon, and in particular shall
plant, maintain and replant any landscaped areas.
5.2.3 Be responsible for the maintenance and repair of all utility service
lines placed on the Leased Premises and used by the Lessee
exclusively, including, but not limited to, water lines, gas lines,
electrical power and telephone conduits and lines, sanitary sewers
and storm sewers provided however, that the Department shall be
responsible for assuring the maintenance and repair of the road and
utilities which it is obligated to install hereunder up to the
boundary lines of the Leased Premises.
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<PAGE>
5.3 In the event the Lessee fails: (a) to commence to maintain, clean,
repair, replace, rebuild or repaint within a period of thirty (30)
days after written notice from the Department to do any maintenance
or repair work required to be done under the provisions of this
Agreement, including preventive maintenance within a period of ninety
(90) days of the said written notice specifying that the work to be
accomplished by the Lessee involves preventive maintenance only; (b)
or to diligently continue to completion any repairs, replacement,
rebuilding, painting or repainting as required under this Agreement;
then, the Department may, at its option, and in addition to any other
remedies which may be available to it, enter the premises involved,
without such entering causing or constituting a cancellation of this
Agreement or an interference with the possession of the Leased
Premises, and repair, replace, rebuild or paint all or any part of
the Leased Premises or the improvements thereon, and do all things
reasonably necessary to accomplish the work required, and the cost
and expense thereof shall be payable to the Department by the Lessee
on demand. The Department's costs and expenses shall include all
direct costs and expenses of the Department, its agents, contractors,
and employees and all allocations of fringe benefits, overhead, legal
and administration charges actually incurred. Furthermore, should
the Department, its officers, employees or agents undertake any work
hereunder, the Lessee hereby waives any claim for damages,
consequential or otherwise, as a result therefrom except for claims
for damages arising from the negligence of the Department, its agents
and contractors. The foregoing shall in no way affect or alter the
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<PAGE>
primary obligations of Lessee as set forth in this Agreement, and
shall not impose or be construed to impose upon the Department any
obligations to maintain the Leased Premises, unless specifically
stated otherwise herein.
5.4 Plans and specifications for all major repairs, construction,
alterations, modifications, additions or replacements costing in
excess of fifty thousand dollars ($50,000), which amount shall be
escalated by the C.P.I. over the Term and Extended Term of the
Agreement in the same manner as the rent is escalated in Article 4
hereof, (hereinafter referred to as "Improvements') including,
without limitation the Facility to be constructed by the Lessee
pursuant to Section 4.4.1 above and Appendix B hereto and the Park's
Performance and Development Standards, shall be submitted to and
receive the written approval of the Department, and no such work
shall be commenced until such written approvals are obtained from the
Department which approval shall not be unreasonably withheld or
delayed. The Department shall advise the Lessee within thirty (30)
days after receipt of the written request, together with copies of
the plans and specifications for the proposed improvements in
sufficient detail to make a proper review thereof, of its approval or
disapproval of the proposed work, and in the event it disapproves,
stating its reasons therefore.
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<PAGE>
In determining whether to approve a major repair, construction,
alteration, modification, addition or replacement, the Department
shall be guided by the criteria set forth in Section 3 of Appendix B
and the Park's Performance and Development Standards.
5.5 If the Lessee makes any Improvements without Departmental approval or
that are disapproved by the Department, then, upon notice to do so,
the Lessee shall remove the same or at the option of the Department
cause the same to be changed to the reasonable satisfaction of the
Department. If the Lessee fails to comply with such notice within
thirty (30) days or to commence to comply and pursue diligently to
completion, the Department may effect the removal or change and the
Lessee shall pay the cost (as defined in Section 5.3) thereof to the
Department.
5.6 The complete and unencumbered title to Improvements shall vest in the
Department at the expiration of the Initial Term or the expiration of
the Extended Term, if exercised, of this Agreement or upon the
earlier termination of this Agreement.
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<PAGE>
ARTICLE 6
ADDITIONAL OBLIGATIONS OF LESSEE
6.1 The Lessee shall conduct its operations hereunder so as not to
unreasonably annoy, disturb, or endanger others.
6.2 The Lessee shall take all reasonable measures not to produce or cause
to be produced any electrical, electronic or other disturbance that
interferes with the operation by the Department or the Federal
Aviation Administration of air navigational, communication or flight
equipment on Stewart International Airport (hereinafter "Airport") or
on aircraft using the Airport, or with ground transportation
communications.
6.3 The Lessee shall control the conduct and demeanor of its officers,
agents, employees, invitees and, upon reasonable objection from the
Department concerning the conduct, demeanor of any such person, the
Lessee shall immediately take all lawful steps necessary to remove
the cause of the objection.
6.4 The Lessee shall comply with all health and safety laws and any other
federal, state or municipal laws, rules, regulations and building
codes applicable to the Leased Premises and the improvements thereon
and its operations at the Park hereunder.
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6.5 The Lessee shall be responsible for removal from the Park of all
garbage, debris and other waste materials (whether solid or liquid)
arising out of its occupancy of the Leased Premises or out of its
operations. The Lessee shall dispose of its sewage through the
sewerage system operated by the Town of Newburgh. The Lessee shall
provide and use suitable covered metal or other rigidly and sturdily
constructed receptacles, suitably screened from public view, for all
garbage, trash and other refuse created on or arising in connection
with the activities conducted on the Leased Premises. Piling of
boxes, cartons, barrels or other similar items, in an unsightly or
unsafe manner, on or about the Leased Premises is forbidden. The
manner of handling and disposing of trash, garbage and other refuse
and the frequency of removal thereof from the Park premises shall at
all times be subject to the lawful and reasonable rules, regulations
and approval of the Department.
6.6 The Lessee shall commit no nuisance or waste on the Leased Premises,
and shall not do, or permit to be done, anything which may result
in
the creation, commission or maintenance of such nuisance, waste on
the Leased Premises.
6.7 The Lessee shall not do, nor permit to be done, anything which may
interfere with the effectiveness or accessibility of the drainage
system, sewerage system, fire protection system, sprinkler system,
alarm system and fire hydrants and hoses, if any, installed or
located on the Leased Premises.
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6.8 The Lessee shall not overload any floor, structure, structural member
or paved area on the Leased Premises and shall repair at the Lessee's
expense any floor, structure, structural member, or any paved area
damaged by overloading without limiting the Lessee's obligations
pursuant to Article 5 hereof.
6.9 The Lessee shall not do, nor permit to be done, any act or thing upon
the Leased Premises which will cause a default in, or invalidate, any
fire insurance policies applicable to the Leased Premises or any part
thereof.
6.10 From time to time, the Department may conduct pressure, water flow,
and other appropriate tests of the fire extinguishing system and
apparatus which constitutes a part of the Leased Premises, if
installed, and the Lessee's proportionate share of the cost of which
tests shall be paid to the Department by the Lessee upon demand.
6.11 Except for the accommodation of its employees and guests, the Lessee
shall not install, maintain, operate or permit the installation,
maintenance or operation of any restaurant, kitchen, stand or other
establishment of any type for the sale of food or of any vending
machines or device designed to dispense or sell merchandise or
services of any kind to the general public.
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6.12 It is the intent of the parties hereto that noise shall be held to a
reasonable minimum. To this end the Lessee will conduct its
operations in such a manner as to keep the noise produced by trucks
and other mechanical and electrical equipment thereof or any other
noise to a minimum by such methods as are practicable, considering
the extent and type of the operations of the Lessee.
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ARTICLE 7
INGRESS AND EGRESS
7.1 The Lessee shall have the right of ingress and egress between the
Leased Premises and the public roadways by means of connecting paved
roads. Such rights of ingress and egress shall be in common with
others having rights of passage thereon.
7.2 The use of any such roadway shall be subject to the lawful Rules and
Regulations of the Park which are now in effect or which may
hereafter be promulgated. The Department may, at any time,
temporarily close or consent to or request the closing of, any such
roadway and any other way at, in or near the Leased Premises
presently or hereafter used as such, so long as a reasonable means of
ingress and egress as provided above remains available to the
Lessee. The Lessee hereby releases and discharges the Department,
its officers, employees and agents, and all municipalities and other
governmental authorities and their respective successors and assigns,
of and from any and all claims, demands, or causes of action which
the Lessee may now or at any time hereafter have against any of the
foregoing, arising or alleged to arise out of the closing of any
street, roadway or other area, provided that a reasonable means of
access to the Leased Premises remains available to the Lessee whether
within the Leased Premises or outside the Leased Premises at the Park
unless-otherwise mandated by safety considerations or lawful exercise
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of the police power. The Lessee shall not do or permit anything to
be done which will interfere with the free access and passage of
others up to the boundary of the Leased Premises or in any streets or
roadways near the Leased Premises.
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ARTICLE 8
INSURANCE, DAMAGE OR DESTRUCTION
OF LEASED PREMISES AND IMPROVEMENTS
8.1 The Lessee at its sole cost and expense shall procure and maintain
throughout the term of this lease insurance protection for all risk
coverage on the structure and improvements of which the Leased
Premises is a part, to the extent of one hundred percent (100%) of
the actual replacement cost thereof. Such insurance shall be written
by insurers of recognized financial standing authorized to conduct
business in the State of New York. If said insurers become
financially incapable of performing under the terms of said policy,
the Lessee shall promptly obtain a new policy issued by a financially
responsible carrier and shall submit such new policy as previously
provided. In the event Lessee elects to insure itself for the
required coverage, it shall request the prior written approval of the
Department and it shall document its capability to self insure to the
satisfaction of the Department every two years on the anniversary of
the effective date of this Agreement.
8.1.1 The above stated property insurance shall be for the benefit of the
New York State Department of Transportation and Lessee as their
interests may appear and provide thirty (30) days notice of
cancellation or material change, by registered mail, to the
Department, Attention: Department Counsel, and the Park Manager.
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8.1.2 The Lessee shall provide certificates of insurance evidencing
existence of all insurance required to be maintained prior to the
commencement of the lease term. Upon the failure of the Lessee to
maintain such insurance as above provided, the Department, at its
option, may take out such insurance and charge the cost thereof to
the Lessee with the next installment of the monthly fee due
hereunder
or may give notice of a default hereunder pursuant to Article 19
herein.
8.2 In the event any improvements, insurable or uninsurable, on the
Leased Premises are damaged or destroyed to the extent that they are
unusable by the Lessee for the purposes for which they were used
prior to such damage, or same are destroyed, the Lessee shall repair
and reconstruct the improvements substantially as they were
immediately prior to such casualty or in a new or modified design
subject to applicable existing building codes at the time of
repairing or rebuilding. Provided, however that if the aforesaid
damage or destruction occurs in the last five years of the Term of
this Agreement or during any Extended Term, the Lessee may elect not
to repair and reconstruct the improvements subject to the following
terms and conditions:
8.2.1 The Lessee shall give the Department written notice of its election
not to repair and reconstruct the improvements within forty-five (45)
days of the date upon which the improvements were damaged or
destroyed.
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8.2.2 The Lessee shall clear the site, remove all debris, stub up all
utilities, and generally restore the site to it's cleared condition
prior to commencement of construction.
8.2.3 The Lessee shall permit the Department to retain all insurance
coverage and proceeds as described in Section 8.1 hereof, subject to
the provisions of Section 8.7 hereof.
8.2.upon the occurrence of 8.2.1, 8.2.2 and 8.2.3 above, the Department
shall terminate this Agreement and relieve Lessee of all future
rental obligations hereunder.
8.3In the event of damage or destruction to any of the improvements upon
the Leased Premises, the Department shall have no obligation to
repair or rebuild the improvements or any fixtures, equipment or
other personal property installed by the Lessee pursuant to this
Agreement.
8.4 In the event the Lessee repairs or reconstructs as aforesaid, Lessee,
shall, at its expense, replace and repair any and all fixtures,
equipment and other personal property necessary to properly and
adequately continue its business at the Park, but in no event shall
Lessee be obligated to provide equipment and fixtures in excess of
those existing prior to such damage or destruction except for
requirements of construction codes existing at the time of repair or
replacement. The Lessee agrees that such work will be promptly
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commenced and prosecuted to completion with due diligence subject to
delays beyond the Lessee's control.
8.5 The insurance policies required under this Lease to be furnished by
Lessee to the Department may, at the election of Lessee, be furnished
and/or paid for by any subtenant or other person having an insurable
interest in the Leased Premises, and the Department shall accept such
policies as though they had been supplied and paid for by Lessee
provided such policies shall comply otherwise with the requirements
of this Lease.
8.6 All policies of insurance required herein shall name the Department
as an additional insured. Subject to be provisions and limitations
hereinafter set forth in this Section 8.6 and in Sections 8.7 and
8.8, all such policies of insurance shall also provide, if required
by either party hereto, for the loss thereunder to be payable to the
holder of any Leasehold Mortgage, as the interests of such holder may
appear, pursuant to a standard mortgage clause or endorsement.
Notwithstanding anything to the contrary contained in this lease, the
Lessee, in consultation with the Department, shall have the right to
adjust or otherwise settle any claim for insurance proceeds under any
insurance policy maintained pursuant hereto.
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8.7 The loss, if any, under all policies of the character referred to in
Section 8.1, shall be payable (i) to Lessee in the case of any
particular casualty resulting in a loss payment not exceeding one
hundred fifty thousand dollars ($150,000) (adjusted for C.P.I. in the
same manner as rent), or (ii) in case of any particular casualty
resulting in a loss payment in excess of one hundred fifty thousand
($150,000) dollars (adjusted for C.P.I. in the same manner.as rent),
to the first Leasehold Mortgagee, or if there is none, to a bank or
trust company, as insurance trustee, to be designated by Lessee in a
notice given to the insurance companies and to the Department
promptly following the occurrence of the casualty, which bank or
trust company shall have an office in the County of Orange, and shall
disburse the loss proceeds in accordance with the provisions of
Article AA hereof. All policies of the character aforesaid shall
expressly provide that loss thereunder shall be adjusted and paid as
provided in Section 8.8 and this Section 8.7. Any agreement which
the Department or Lessee shall enter into with any bank or trust
company acting as trustee hereunder may include as a party thereto
the holder of any mortgage on this Lease, when so requested, provided
such mortgage shall provide or the holder thereof shall agree in
writing for application of insurance proceeds in the same manner as
provided in this Lease.
8.8 Any loss paid under any insurance policy to Lessee shall be held by
Lessee in trust for application to the cost of restoring,- repairing,
replacing or rebuilding the Building-g and any loss so paid to the
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first Leasehold Mortgagee or the insurance trustee shall be disbursed
by it in accordance with the provisions of Article AA.
8.9 Whenever in this Agreement, provision is made for the carrying of any
insurance, it shall be deemed that such provision is complied with if
such insurance otherwise complying with such provision is carried
under a blanket policy or policies covering the Leased Premises as
well as other properties.
8.10 Lessee shall not violate, or permit to be violated, any of the
conditions of any of the said policies; any Lessee shall perform and
satisfy, or cause to be satisfied, the requirements of the companies
writing such policies.
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ARTICLE 9
LIABILITIES AND INDEMNITIES
9.1 The Department shall not in any way be liable for any cost,
liability, damage or injury including cost of suit and reasonable
expenses of legal services, claimed or recovered by any person
whomsoever, or occurring on the Leased Premises or as a result of any
operations, works, acts or omissions performed on the Leased Premises
by-the Lessee, its sublessees or tenants, or their guests or invitees.
9.2 The Lessee agrees to indemnify, save and hold harmless, the
Department (its officers, agents, servants and employees) of and from
any and all costs, liability, damage and expense (including costs of
suit and reasonable expenses of legal services) claimed or recovered,
justly or unjustly, falsely, fraudulently or frivolously, by any
person, firm or corporation by reason of injury to, or death of, any
person or persons, including Department personnel and damage to,
destruction or loss of use of any and all property, including
Department property, arising from, or resulting from, any operations,
works, acts or omissions of Lessee, its agents, servants, employees,
contractors, sublessees or tenants. In any case in which such
indemnification would violate Sections 5-321.1 or 5-322.1 of the New
York General Obligations Law, or any other applicable legal
prohibition, the foregoing provisions concerning indemnification
shall not be construed to indemnify the Department, its officers,
employees or agents for damage arising out of bodily injury to
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persons or damage to property caused by or resulting from the
negligence of the Department, its officers, employees or agents.
Upon the filing with the Department by anyone of a claim for damages
arising out of incidents for which the Lessee herein agrees to
indemnify and hold the Department harmless, the Department shall
notify the Lessee of such claim and in the event that the Lessee does
not settle or compromise such claim, then the Lessee shall undertake
the legal defense of such claim both on behalf of the Lessee and
behalf of the Department. It is specifically agreed, however, that
the Department at its own cost and expense, may participate in the
legal defense of any such claim. Any judgment, final beyond all
possibility of appeal, rendered against the Department for any cause
for which the Lessee is liable hereunder shall be conclusive against
the Lessee as to liability and amount upon the expiration of the time
for appeal.
9.3In addition to the Lessee's undertaking, as stated in this Article,
and as a means of further protecting the Department, its officers,
employees and agents, the Lessee shall at all times during the term
of this Agreement obtain and maintain in effect Public Liability
Insurance coverage as set forth in Schedule A attached hereto and
made a part hereof. In this connection, the Lessee agrees to require
its contractors doing work in the Park, and the Lessee's tenants and
sublessees, to carry adequate insurance coverage, and if the Lessee
so desires, it may accomplish same by an endorsement to the Lessee's
policies to include such persons or parties as additional named
insureds.
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9.3. The Lessee shall review its coverage annually and increase the
minimum liability insurance set forth in Schedule A to a reasonable
threshold when, in the Lessee's opinion, the risks attendant to the
Lessee's operations hereunder have increased. The Department shall
never be liable for any shortfall in Lessee's coverage.
9.4 The Lessee represents that it is the owner of or fully authorized to
use any and all services, processes, machines, articles, marks, names
or slogans used by it in its operations under or in anywise connected
with this Agreement. The Lessee agrees to save and hold the
Department, its officers, employees, agents and representatives free
and harmless of and from any loss, liability, expense, suit or claim
for damages in connection with any actual or alleged infringement of
any patent, trademark or copyright, or arising from any alleged or
actual unfair competition or other similar claim arising out of the
operations of the Lessee under or in anywise connected with this
Agreement.
9.5 The Lessee represents and warrants that no broker has been concerned
on its behalf in the negotiation of this Agreement and shall
indemnify and save harmless the Department from all liability,
damage, cost and expense, including reasonable attorneys' fees,
resulting from any breach of this representation and warranty.
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ARTICLE 10
LEASEHOLD MORTGAGES
10. On one or more occasions, with the Department's prior written
consent, not to be unreasonably withheld, Lessee may take back a
Leasehold Mortgage upon a sale and assignment of the leasehold estate
created by this Agreement or may mortgage or otherwise encumber
Lessee's leasehold estate to an Institutional Investor (as
hereinafter defined), under one or more Leasehold Mortgages and
assign this Agreement as security for such Mortgage or Mortgages;
subject, however, to the limitations of this Article. At no time
shall the Department permit subordination of the fee interest in the
Leased Premises. The Department hereby consents to Lessee's use of
Chemical Bank as a Leasehold Mortgagee.
10.2(a)(i) If Lessee shall, on one or more occasions, take back a
Leasehold Mortgage upon a sale and assignment of the leasehold estate
or shall mortgage Lessee's leasehold estate to an Institutional
Investor, and if the holder of such Leasehold Mortgage shall provide
the Department with notice of such Leasehold Mortgage together with a
true copy of such Leasehold Mortgage and the name and address of the
Mortgagee, the Department and Lessee agree that, following receipt of
such notice by the Department, the provisions of this Article 10
shall apply in respect to each such Leasehold Mortgage; provided that
the provisions o-f this Article shall not be binding on the
Department, unless and until such notice shall have been given and
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such copy delivered to the Department, notwithstanding any other form
of notice, actual or constructive.
In the event of any assignment of a Leasehold Mortgage or in
the event of a change of address of a Leasehold Mortgagee or of an
assignee of such Mortgage, notice of the new name and address shall
be promptly provided to the Department; provided that the provisions
of this Article as to such mortgagee or assignee shall not be binding
on the Department, unless and until such notice shall have been given
and such copy delivered to the Department, notwithstanding any other
form of notice, actual or constructive.
(b) the Department shall upon receipt of notice provided for by
Section 10.2(a) promptly acknowledge the receipt of such
communication, as constituting the notice provided for by Section
10.2(a) or in the alternative, notify the Lessee and Leasehold
Mortgagee of the rejection of such communication as not conforming
with the provisions of Section 10.2(a) and specify the specific basis
of such rejection.
10.3(a) The terms 'Institutional Investor' or 'Institution' as used in
this Agreement shall refer to a savings bank, savings and loan
association, commercial bank or trust company (whether for its own
account or as fiduciary), credit union, insurance company, college,
university, real estate investment trust, a pension fund, welfare or
retirement fund, an eleemosynary institution, or any combination of
the foregoing.
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(b) The term "Leasehold Mortgage" as used in this Agreement
shall
include a mortgage, a deed of trust, a deed to secure debt, or other
security instrument by which Lessee's leasehold estate is mortgaged,
conveyed, assigned, or otherwise transferred, to secure a debt or
other obligation under the provisions of this Agreement.
(c) The term "Leasehold Mortgagee" as used in this Agreement shall
refer to a holder of a Leasehold Mortgage in respect to which the
notice provided for by Section 10.1(a) has been given and received
and as to which the provisions of this Agreement are applicable.
10.4 The Department, upon providing Lessee any notice of (a) default under
this Agreement; or (b) a termination of this Agreement or (c) a
matter on which the Department may predicate or claim a default,
shall at the same time provide a copy of such notice to every
Leasehold Mortgagee. No such notice by the Department to Lessee
shall be deemed to have been duly given unless and until a copy
thereof has been so provided to every Leasehold Mortgagee by
certified mail at the address specified in the notice given pursuant
to Section 10.2(a). From and after the date such notice has been
given to a Leasehold Mortgagee, such Leasehold Mortgagee shall have
the additional periods of time specified in Sections 10.6 and 10.7
hereof to remedy, commence remedying, or cause to be remedied the
defaults or acts or omissions which are specified in any such
notice. The Department shall accept such performance by or at the
instigation of such Leasehold Mortgagee as if the same had been done
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by Lessee. Lessee authorizes such Leasehold Mortgagee to take any
such action at such Leasehold Mortgagee's option and does hereby
authorize entry upon the Leased Premises by Leasehold Mortgagee for
such purposes consistent with the provisions of this Agreement.
10.5(a) Anything contained in this Agreement to the contrary,
notwithstanding, if any default shall occur which entitles the
Department to terminate this Agreement, the Department shall have no
right to terminate this Agreement unless, following the expiration of
the - period of time given Lessee to cure such default or the act or
omission which gave rise to such default, the Department shall notify
every Leasehold Mortgagee of the Department's intent to so terminate
("Termination Notice") at least thirty (30) days in advance of the
proposed effective date of such termination if such default is
capable of being cured by the payment of money, and at least
forty-five (45) days in advance of the proposed effective date of
such termination if such default is not capable of being cured by the
payment of money. The provisions of Section 10.6 below shall apply
if, during such thirty (30) or forty-five (45) day Termination Notice
period, any Leasehold Mortgagee shall:
notify the Department of such Leasehold Mortgagee's desire to
defeat such Termination Notice, and (ii) pay or cause to be paid all
rent, additional rent, and other payments then due and in arrears as
specified in the Termination Notice to such Leasehold Mortgagee and
which may become due during such thirty (30) day period; and
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(iii) comply or in good faith, with due diligence and continuity,
commence to comply with all non-monetary requirements of this
Agreement then in default pursuant to a written schedule mutually
agreed upon by the Department and the Leasehold Mortgagee.
(b) Any notice to be given by the Department to a Leasehold
Mortgagee pursuant to any provision of this Article shall be deemed
properly addressed if sent to the Leasehold Mortgagee who served the
notice referred to in Section 10.2(a)(i) or Section 10.2(a)(ii) as
the case may be.
10.6(a) If the Department shall elect to terminate this Agreement by
reason of any default of Lessee, and a Leasehold Mortgagee shall have
proceeded in the manner provided for by Section 10.5, the specified
date for termination of this Agreement as fixed by the Department in
its Termination Notice shall be deemed extended and this Agreement
shall not be terminated without the consent of such Leasehold
Mortgagee provided that such Leasehold Mortgagee shall, during such
extended period:
(i) Pay or cause to be paid the rent, additional rent, and other
monetary obligations of Lessee under this Agreement as the same
become due, and continue with due diligence to perform all of
Lessee's other obligations under this Agreement, which Leasehold
Mortgagee can perform without having first obtained possession of the
Lessee's interest in this Agreement; and
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(ii) Within three (3) months from receipt of the Termination Notice,
take steps to acquire or sell Lessee's interest in this Agreement by
foreclosure of the Leasehold Mortgage or other appropriate means and
prosecute the same to completion with due diligence; provided,
however, that if the Leasehold Mortgagee is otherwise complying with
this Section 10.6(a) and is enjoined or stayed from taking steps to
acquire or sell Lessee's interest in this Agreement, this Agreement
shall not terminate and the time for completion by such Leasehold
Mortgagee of its proceedings shall continue so long as such Leasehold
Mortgagee is enjoined or stayed and thereafter for so long as such
Leasehold Mortgagee proceeds to complete steps to acquire or sell
Lessee's interest in this Agreement by foreclosure of the Leasehold
Mortgage or by other appropriate means with reasonable diligence and
continuity. Nothing in this Section 10.6, however, shall be
construed to extend this Agreement beyond the original term thereof,
as extended by any options to extend the term of this Agreement
properly exercised by Lessee or a Leasehold Mortgagee within the time
limits set forth in Article 1, nor to require a Leasehold Mortgagee
to continue such foreclosure proceedings after the default has been
cured. If the default shall be cured and the Leasehold Mortgagee
shall discontinue such foreclosure proceedings, this Agreement shall
continue in full force and effect as if Lessee had not defaulted
under this Agreement.
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(iii)If the Leasehold Mortgagee is complying with Section 10.6(a)
(i) and is enjoined or stayed from taking steps to acquire or sell
Lessees interest in this Agreement, this Agreement shall not then
terminate and the time for completion by such Leasehold Mortgagee of
its proceedings shall continue so long as such Leasehold Mortgagee is
enjoined or stayed and thereafter for so long as such Leasehold
Mortgagee proceeds to complete steps to acquire or sell Lessee's
interest in this Agreement by foreclosure of the Leasehold Mortgagee
or by other appropriate means with due diligence and continuity.
Nothing in this Section 10.6, however, shall be construed to extend
this Agreement beyond the original term thereof as extended by any
options to extend the term of this Agreement properly exercised by
Lessee or a Leasehold Mortgagee within the time limits set forth in
Article 1, nor to require a Leasehold Mortgagee to continue such
foreclosure proceedings after the default has been cured. If the
default shall be cured and the Leasehold Mortgagee shall discontinue
such foreclosure proceedings, this Agreement shall continue in full
force and effect as if Lessee had not defaulted under this Agreement.
(b) If a Leasehold Mortgagee is complying with Section 10.6(a)(i),
upon the acquisition of Lessee's estate herein by such Leasehold
Mortgagee or its designee or any other purchaser at a foreclosure
sale or otherwise and the discharge by foreclosure or otherwise of
any lien, charge or encumbrance against the Lessee's interest in this
Agreement or the Leased Premises which is junior in priority to the
lien of the Leasehold Mortgagee held by such Leasehold Mortgagee and
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which Lessee is obligated to satisfy and discharge by the terms of
this Agreement, this Agreement shall continue in full force and
effect as if Lessee had not defaulted under this Agreement.
(c) The making of a Leasehold Mortgage shall not be deemed to
constitute an assignment or transfer of this Agreement or of the
leasehold estate hereby created, nor shall any Leasehold Mortgagee,
as such, be deemed to be an assignee or transferee of this Agreement
or-of the leasehold estate hereby created so as to require such
Leasehold Mortgagee, as such, to assume the performance of any of the
terms, covenants or conditions on the part of the Lessee to be
performed hereunder, but the purchaser at any sale of this Agreement
of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignee or transferee
of this Agreement and of the leasehold estate hereby created under
any instrument of assignment or transfer in lieu of the foreclosure
of any Leasehold Mortgagee shall be deemed to be a permitted assignee
or transferee, subject to the provisions of Section 10.19 hereof, and
shall be deemed to have agreed to perform all of the terms, covenants
and conditions on the part of the Lessee to be performed hereunder
from and after the date of such purchase and assignment, but only for
so long as such purchaser or assignee is the owner of the leasehold
estate. If the Leasehold Mortgagee or its designee shall become
holder of the leasehold estate and if the buildings and improvements
on the Leased Premises shall have been or become materially damaged
on, before, or after the date of such purchase and assignment, the
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Leasehold Mortgagee or its designee shall be obligated to repair,
replace or reconstruct the building or other improvements.
(d) Any Leasehold Mortgagee or other acquirer of the leasehold
estate of Lessee pursuant to foreclosure, assignment in lieu of
foreclosure or other proceedings may, upon acquiring Lessee's
leasehold estate, without further consent of the Department, sell and
assign the leasehold estate on such terms and to such person and
organizations as are acceptable to such Mortgagee or acquirer and the
Department, and thereafter be relieved of all obligations under this
Agreement; provided that such assignee has delivered to the
Department its written agreement to be bound thereafter by all of the
provisions of this Agreement.
(e)Notwithstanding any other provisions of this Agreement, any
sale
of this Agreement and of the leasehold estate hereby created in any
proceedings for the foreclosure of any Leasehold Mortgage, or the
assignment or transfer of this Agreement and of the leasehold estate
hereby created in lieu of the foreclosure of any Leasehold Mortgage
shall be deemed to be a permitted sale, transfer, or assignment of
this Agreement and of the leasehold estate hereby created, subject to
the provisions of Section 10.19 hereof.
10.7 In the event of the termination of this Agreement as a result of
Lessee's default, the Department shall, in addition to providing the
notices of default and termination as required by Sections 10.5 and
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10.6, provide each Leasehold Mortgagee with written notice that the
Agreement has been terminated, together with a statement of all sums
which would at that time be due under this Agreement but for such
termination, and of all other defaults, if any, then known to the
Department ("the Department's Notice of Termination"). The
Department agrees to enter into a new Agreement("New Agreement") of
the Leased Premises with the first Leasehold Mortgagee or its
designee for the remainder of the Term of this Agreement, effective
as of the date of termination, at the rent and additional rent, and
upon the terms, covenants, and conditions (including all options to
renew but excluding requirements which are not applicable or which
have already been fulfilled) of this Agreement provided:
(a) Such Leasehold Mortgagee shall make written request upon the
Department for such New Agreement within forty-five (45) days after
the date such Leasehold Mortgagee receives the Department's Notice of
Termination of this Agreement given pursuant to this Section 10.7.
(b) Such Leasehold Mortgagee or its designee shall pay or cause to
be paid to the Department at the time of execution and delivery of
such New Agreement, any and all sums which would at the time of
execution and delivery thereof be due pursuant to this Agreement but
for such termination and, in addition thereto, all reasonable
expenses, including reasonable attorney's fees, which the Department
shall have incurred by reason of such termination and the execution
and delivery of the New Agreement and which have not otherwise. been
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received by the Department from Lessee or other party in interest
under Lessee. Upon the execution of such new Agreement, the
Department shall allow to the Lessee named therein as an offset
against the sums otherwise due under this Section 10.7(b) or under
the New Agreement, an amount equal to the net income derived by the
Department from the Leased Premises during the period from the date
of termination of this Agreement to the date of the beginning of the
lease term of such New Agreement. In the event of a controversy as
to the amount to be paid to the Department pursuant to this Section
10. 7(b), the payment obligation shall be satisfied if the Department
shall be paid the amount not in controversy, and the Leasehold
Mortgagee or its designee shall agree to pay any additional sum
ultimately determined to be due plus interest at the existing prime
rate as established by Citibank, N.A. (or its successor or other
major New York Metropolitan Area lending institution of comparable
stature) plus two (2) percentage points.
(c) Such Leasehold Mortgagee or its designee shall agree to remedy
any of Lessee's defaults of which said Leasehold Mortgagee was
notified by the Department's Notice of Termination.
(d) Any New Agreement made pursuant to this Section 10.7 shall be
prior in lien to any mortgage or other lien, charge, or encumbrance
on the fee of the Leased Premises and the Lessee under such New
Agreement shall have the same right, title and interest in and to the
Leased Premises and the building and improvements thereon as Lessee
had under this Agreement.
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(e) The Lessee under any such New Agreement shall be liable to
perform the obligations imposed on the Lessee by such New Agreement.
(f) Effective upon the commencement of the term of any New
Agreement
pursuant to this Section 10.7, all subleases shall be assigned and
transferred without recourse by the Department to the Lessee under
the New Agreement and all moneys on deposit with the Department
pursuant to such subleases, if any, shall be similarly assigned to
the tenant under the New Agreement.
10.8 If more than one Leasehold Mortgagee shall request a New Agreement
pursuant to Section 10.7, the Department shall enter into such New
Agreement with the Leasehold Mortgagee whose mortgage is prior in
lien,or with the designee of such Leasehold Mortgagee and thereupon
the requests for a New Agreement of each holder of a Leasehold
Mortgage junior in lien shall be and be deemed to be void and of no
force or effect. The Department, without liability to Lessee or any
Leasehold Mortgagee with an adverse claim, may rely upon a mortgage
title insurance policy issued by a title insurance company licensed
to do business within the State of New York and selected by the
Department as a basis for determining the appropriate Leasehold
Mortgagee who is entitled to such New Agreement.
10.9(a) Nothing herein contained shall require any Leasehold Mortgagee
or its designee as a condition to its exercise of right hereunder to
cure any default of Lessee not reasonably susceptible of being cured
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by such Leasehold Mortgagee or its designee such as referred to in
Sections 17.1.2, 17.1.3 and 17.1.4, hereof, in order to comply with
the provisions of Section 10.5 and 10.6, or as a condition of
entering into the New Agreement provided for by Section 10.7.
(b) If the Department shall elect to terminate this Agreement by
reason of any default of Lessee not reasonably susceptible of being
cured by a Leasehold Mortgagee, and a Leasehold Mortgagee shall have
proceeded in the manner provided for by Section 10.5(a), the
specified date for the termination of this Agreement as fixed by the
Department in its termination notice shall be extended as provided
for in Section 10.6, provided that such Leasehold Mortgagee shall
proceed in the manner provided for in Section 10.6.
10.10 Lessee's share, as provided by Article 12 of this Agreement of the
proceeds arising from an exercise of the power of eminent domain
shall, subject to the provisions of such Article, be disposed of as
provided for by any Leasehold Mortgage.
10.11 A standard mortgagee clause naming each Leasehold Mortgagee may be
added to any and all insurance policies required to be carried by
Lessee hereunder on condition that the insurance proceeds are to be
applied in the manner specified in this Agreement and the Leasehold
Mortgagee may provide a manner for the disposition of such proceeds,
if any, payable jointly to the Department and Lessee pursuant to the
provisions of this Agreement.
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10.12 The Department shall give each Leasehold Mortgagee prompt written
notice of any legal proceedings between the Department and Lessee
involving obligations under this Agreement. Each Leasehold Mortgagee
shall have the right to intervene in any such proceedings and be made
a party to such proceedings, and the parties hereto do hereby consent
to such intervention. In the event that any Leasehold Mortgagee
shall not elect to intervene or become a party to any such
proceedings, the Department shall give the Leasehold Mortgagee notice
of, and a copy of any award of decision made in any such proceedings,
which shall be binding on all Leasehold Mortgagees not intervening
after receipt of notice thereof.
10.13 So long as any Leasehold Mortgage is in existence, unless all
Leasehold Mortgagees shall otherwise expressly consent in writing,
the fee title to the Leased Premises and the leasehold estate of
Lessee therein created by this Agreement shall not merge but shall
remain separate and distinct, notwithstanding the acquisition of
said fee title and said leasehold estate by the Department or by
Lessee or by a third party, by purchase or otherwise.
10.14 In the event on any occasion hereafter Lessee seeks to mortgage its
leasehold estate under this Agreement or any portion hereof under any
subsequent individual lease, the Department agrees to amend this
Agreement from time to time to the extent reasonably requested by an
Leasehold Mortgagee proposing to make Lessee a loan secured by a
first lien upon Lessee's leasehold estate, provided that such
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proposed amendments do not materially and adversely affect the rights
of the Department or its interest in the Leased Premises. All
reasonable expenses incurred by the Department in connection with any
such amendment shall be paid by Lessee.
10.15 The Department shall, without charge, at any time and from time to
time hereafter, but not more frequently then twice in any one year
period (or more frequently if such request is made in connection with
any sale or mortgaging of Lessee's leasehold interest or permitted
subletting by Lessee), within thirty (30) days after written request
of Lessee to do so, certify by written instrument duly executed and
acknowledged to any Leasehold Mortgagee or purchaser, or proposed
Leasehold Mortgagee or proposed purchaser, or any other person, firm
or corporation specified in such request:
(a)As to whether this Agreement has been supplemented or amended
and, if so, the substance and manner of such supplement or
amendment;
(b)as to the validity and force and effect of this Agreement, in
accordance with its tenor;
(c)as to the existence of any default hereunder;
(d)as to the existence of any offsets, counterclaims, or defenses
hereto on the part of the Lessee;
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(e)as to the commencement and expiration dates of the term of this
Agreement; and
(f) as to any other matters as may be reasonably so requested.
Any such certificate may be relied upon by the Lessee and any other
person, firm or corporation to whom the same may be exhibited or .
delivered, and the contents of such certificate shall be binding on
the Department.
10.16 Notices from the Department to each Leasehold Mortgagee shall be
mailed to the address furnished the Department pursuant to Section
10.2, and those from the Leasehold Mortgagee to the Department shall
be mailed to the address designated pursuant to the provisions of
Article 22 hereof. Such notices, demands, and requests shall be
given in the matter described in Article 22 and shall in all respects
be governed by the provisions of that Article.
10.17 No payment made to the Department by a Leasehold Mortgagee shall
constitute agreement that such payment was, in fact, due under the
terms of this Agreement; and a Leasehold Mortgagee having made any
payment to the Department pursuant to the Department's wrongful,
improper or mistaken notice or demand shall be entitled to the return
of any such payment of portion thereof.
10.18 An Institutional Leasehold Mortgagee shall have the right to act as
depositary pursuant to Article AA.
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10.19 The prior written consent of the Department shall be required for any
sale, transfer, or assignment of this Agreement and of the Leasehold
estate hereby created. If such sale, transfer or assignment is to
the immediate transferee of such Leasehold Mortgagee or to a
purchaser at a foreclosure sale or the grantee of a deed in lieu
thereof, the Department shall have fourteen (14) calendar days within
which to provide its consent after receipt of request therefor, which
consent shall not be unreasonably withheld.
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ARTICLE 11
ASSIGNMENT AND SUBLEASE
11.1 Assignment of the Agreement and subletting under it are permitted by
the Department with it's prior written consent, which consent shall
not be unreasonably withheld. For the purpose of such assignment and
subletting the Department agrees it shall respond to a written
request for assignment or subletting within thirty (30) calendar days
of-receipt of request for same.
11.2 Except as provided in Section 11.1 hereof Lessee shall not assign
this Lease without the prior written consent of the Department, which
shall not be unreasonably withheld, provided, that any such
assignment and transfer shall include the entire interest in this
Agreement and all obligations attendant thereto, provided also that
no such assignment and transfer shall be effective for any purpose
unless and until there shall be delivered to the Department (i) a
duplicate original of the instrument or instruments of assignment and
transfer in recordable form containing the name and address of the
transferee thereof and (ii) an instrument of assumption by said
assignee or transferee of all Lessee's obligations under this
Agreement; provided, however, any person or entity to which this
Lease is assigned pursuant to the provisions of the Bankruptcy Code
(11 U.S.C. 101, et seq.) shall be deemed without further act or deed
to have assumed all of the obligations arising under this lease on
and after the date of such assignment. Any such assignee shall, upon
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demand, execute and deliver to the Department an instrument
confirming such assignment.
11.3 Except as provided in Section 11.1 hereof Lessee shall not have the
right to sublet and subtenants shall not have the right to re-sublet,
the Leased Premises, or any part thereof and any improvement
constructed thereon, in whole or in part. All such subleases shall
be expressly subordinate to this Agreement. No such sublease shall
release Lessee from performance of or compliance with any term,
condition, covenant or obligation imposed upon Lessee hereunder and
no such sublease shall extend for a term beyond the Term and the
Extended Term (as hereinabove defined) for which an option has been
exercised.
11.4 The Department and Lessee agree that this Agreement shall not be
rescinded, surrendered, modified or amended without the prior written
consent of the holder or holders (who shall have given the Department
written notice of its or their identity and address) of any Leasehold
Mortgage.
11.5 Provided (i) that the first Institutional Leasehold Mortgagee shall
have entered into a Non-Disturbance Agreement with any of the
Lessee's subtenants; or that each such subtenant shall have leased at
lease five (5%) percent of the floor area in the new building to be
constructed by Lessee hereunder; and (ii) that such subtenants shall,
at the option of the Department agree to attorn to the Department,
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and (M) such subtenant shall be subject to the service of legal
process in the State of New York, the Department shall enter into a
Non-Disturbance Agreement with each such subtenant in the form
annexed hereto as Exhibit "C" and made a part hereof. The term of
any such sublease including renewal options shall not extend beyond
the later of the original Term of this Agreement or the Extended Term
of any extension for which an option has been exercised and the
rental reserved under any such sublease shall not be less than the
then prevailing rate for comparable space and shall include an
escalation clause requiring such subtenant to pay, as additional
rental, the subtenant's proportionate share of the increase, from and
after the beginning of the term of the sublease, in the real estate
taxes, in the cost of insurance, labor and all operation costs
affecting the subleased premises.
11.6 Lessee shall not modify any sublease, which shall have been the
subject of a Non-Disturbance Agreement, as mentioned in Section 11.4
hereof, so as to reduce the rent, shorten the term, or adversely
affect in any other respect to any material extent the rights of the
lessor thereunder, or permit cancellation or accept the surrender of
any such sublease without prior written consent of the Department in
each instance, which consent shall not be required for the
institution or prosecution of any action or proceedings against such
sublessee by reason of a default on the part of such sublessee under
the terms of such sublease. Such consent of the Department shall not
be required to (i) move any such subtenant to another part of the
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Leased Premises, provided that thereafter such subtenant shall be
obliged to pay a rent which shall be no less than either the going
rate of its new space or that payable by it for the vacated space; or
(ii) to cancel any such sublease, or portion thereof provided that it
be replaced by another sublease which shall qualify for and become
subject to a non-disturbance agreement and provided, further, that
such new sublease shall require a rental which shall be no less than
either the going rate for the sublet space or that payable under the
canceled lease. In addition to being subject and subordinate to the
rights of the Department hereunder, as required by the provision of
Section 11.4 hereof, each sublease that is subject to a
Non-Disturbance Agreement shall contain a specific provision to the
effect that except in those instances in which Lessee and/or
sublessees are complying with the provisions of the immediately
preceding sentence, such sublease may not be modified or amended so
as to reduce the rent, shorten the term, or adversely affect in any
other respect to any material extent the rights of the lessor
thereunder, or be canceled or surrendered without the prior written
consent of the Department in each instance.
11.7 Each sublease shall provide that in the event of a termination of
this Agreement and the execution and delivery of a New Agreement
pursuant to Section 10.8 hereof, the sublessee shall attorn to and
recognize the Lessee thereunder as its Lessor.
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11.8 Any act required to be performed by Lessee pursuant to the terms of
this Lease may be performed by any sublessee of Lessee occupying all
or any part of the Leased Premises and the performance of such act
shall be deemed to be performance by Lessee and shall be acceptable
as Lessee's act by the Department.
11.9 The Department hereby consents to the Lessee subletting the Leased
Premises to Johnson Controls, Incorporated.
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ARTICLE 12
CONDEMNATION
12.1 If, at any time during the Term of this Agreement, there shall be a
total taking or a constructive total taking (as hereinafter defined)
of the Leased Premises in condemnation proceedings or by any right of
eminent domain or by agreement between the Department and Lessee and
those authorized to exercise such rights (any such matters being
hereinafter referred to as a "taking"), this Agreement shall
terminate and expire on the date of such taking and the fixed annual
rental, and other charges payable by Lessee hereunder shall be
apportioned and paid to the date of such taking. For the purposes of
this Article the term a "constructive total taking" shall mean a
taking of such scope that the untaken portion of the Leased Premises
cannot, in the reasonable opinion of Lessee, be developed, repaired
or reconstructed.
12.2 Rentals for that portion of the Leased Premises condemned shall be
abated from the date that the Lessee is dispossessed therefrom;
provided, however, if all of the Leased Premises are condemned or if
a portion of the Leased Premises are condemned and in the Lessee's
judgment, the remaining portion of the Leased Premises is
insufficient for the Lessee's operations authorized hereunder, the
Lessee may terminate this Agreement and all of its rights and
unaccrued obligations-hereunder effective as of the date it is
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thereafter and within 90 days of the date of such dispossession by
giving the Department 30 days written notice of such termination.
12.3 The Lessee shall be entitled to the award made for a temporary taking
of possession of all or part of the Leased Premises for any period of
time within the term of this Agreement. Such award shall be full
compensation to the Lessee for such temporary taking and no claims
for damages arising out of the temporary taking shall be made against
the Department.
12.4 Lessee and the holder of any Leasehold Mortgage, as well as the
Department shall have the right to participate in any condemnation
proceeding or agreement for the purpose of protecting their interests
in the Leased Premises and their rights hereunder. In this
connection, specifically and without limitation, each of such parties
may introduce evidence independently of each other to establish the
value of or damage to the Land and/or the Facility. Each party so
participating shall pay its own expenses therein.
12.5 Except as provided in Section 12.6 below, in the event of any taking
and the consequent termination of this Agreement, the total aggregate
award for said taking ("Condemnation Proceeds') shall be apportioned
and paid to the extent available in the following order of priority:
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(i) The holder of the first Leasehold Mortgage, if any shall be
entitled to receive and retain from the Condemnation Proceeds the sum
required to pay the unpaid principal balance of the first Leasehold
Mortgage, plus interest accrued thereon from the date of taking to
the date of payment to the institutional first Leasehold Mortgagee at
the rate specified in said Leasehold Mortgage and other sums secured
by the Leasehold Mortgage.
(ii) Then, the Department shall be entitled to retain from the
balance of the Condemnation Proceeds the sum equal to the then
present value of the leasehold reversion as if the Lessee's Renewal
option had been exercised plus the then present value of the future
rentals payable to the Department under this Agreement, if this
Agreement had not terminated pursuant to Section 12.1 above, with
interest thereon, from the date of taking and at the rate paid by the
condemning authority. If the condemnation award specifies the amount
allocable to the land taken as if vacant, unimproved and free of this
Agreement, such amount shall be deemed conclusive for all purposes as
to the value thereof.
(iii) Then, the Lessee shall be entitled to receive and retain the
balance of the Condemnation Proceeds.
12.6 Notwithstanding Section 12.5 above, if prior to the time when Lessee
shall have obtained all governmental permits and authorizations for
the new construction required to be performed by Lessee hereunder,
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this Agreement shall terminate, pursuant to the provisions of Section
12.1 hereof, the Condemnation Proceeds shall be apportioned and paid,
to the extent available, the following order of priority:
(a) The Department shall be entitled to an amount equal to the fair
market value of the Land (immediately prior to the taking) considered
as vacant, unimproved and free of this Agreement and without any of
the permits and approvals previously obtained by Lessee, with
interest thereon from the date of taking at the rate paid by the
condemning authority. If the condenmation award separately specifies
the amount allocable to the Land taken as if vacant and unimproved
without this Agreement, such amount shall be deemed conclusive as to
the value thereof.
(b) The Lessee next shall be entitled to an amount equal to its
aggregate costs and expenses, if any, of every kind and nature (not
compensated for by insurance) incurred and paid in connection with
and for the acquisition of all governmental permits and licenses and
the development of plans and specifications for any improvements at
the Leased Premises.
(c) The Department shall be entitled to the balance of the award.
(d) Notwithstanding the foregoing, prior to the application of the
Condemnation Proceeds as set forth in subsections (a) through (c) of
this Section, the holder of the Leasehold Mortgage, if any, shall be
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entitled to receive and retain from the Condemnation Proceeds the sum
required to pay the unpaid principal balance of the first Leasehold
Mortgage, plus interest accrued thereon from the date of taking to
the date of payment to said holder, at the rate specified in the
Leasehold Mortgage and other sums secured by the Leasehold Mortgage.
The balance, if any, shall then be applied as hereinabove provided.
12.7 If the Lessee shall assign to any Leasehold Mortgagee any
condemnation Proceeds to which it shall be entitled under the
pro visions of this Article, the Department shall recognize such
assignment and shall consent to the payment of said Condenmation
Proceeds to said assignee as its interest may appear.
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ARTICLE 13
NON-DISCRIMINATION
13.1 Lessee agrees to comply with Section 296 of the New York State Human
Rights Law.
13.2 Specifically, Lessee agrees not to:
13.2.1 Refuse to rent, lease or otherwise deny to or withhold from any
person or group of persons such commercial space because of the age
of such person or persons; or such land or commercial space because
of the race, creed, color, national origin, sex, or disability or
marital status of such person or persons.
13.2 Discriminate against any person because of his race, creed, color,
national origin, sex, or disability or marital status in the terms,
conditions or privileges of the sale, rental or lease of any such
land or commercial space or because of his age in relation to such
commercial space; or in the furnishing of facilities or services in
connection therewith.
13.2. Print or circulate or cause to be printed or circulated any
statement, advertisement or publication, or to use any form of
application for the purchase, rental or lease of such land or
commercial space or to make any record or inquiry in connection with
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the prospective purchase, rental or lease of such land or commercial
space which expresses, directly or indirectly, any limitation,
specification or discrimination as to race, creed, color, national
origin, sex, or disability or marital status, or in relation to
commercial space as to age; or any intent to make any such
limitation, specification or discrimination.
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ARTICLE 14
GOVERNMENTAL REQUIREMENTS
14.1 The Lessee agrees to observe and obey any and all applicable Federal,
State and municipal rules, regulations, laws and building codes and
to require its officers, agents, employees, contractors, and
suppliers, to observe and obey the same. This provision requires.
compliance with the Park's Performance and Development Standards as
issued by the Department and Appendix A to this Agreement.
14.2 The Lessee shall procure all licenses, certificates, permits or other
authorization from all governmental authorities, if any, having
jurisdiction over the Lessee's operations at the Leased Premises
which may be necessary for the Lessee's operations thereat.
14.3 The Lessee shall pay all taxes, license, certification, permit and
examination fees and excise taxes which may be assessed, levied,
exacted or imposed on the Leased Premises or operation hereunder or
on the gross receipts or gross income to the Lessee therefrom, and
shall make all applications, reports and returns required in
connection therewith.
14.4 Lessee agrees to remit Payments in Lieu of Taxes, hereinafter
P.I.L.O.T. to the local taxing jurisdictions, hereinafter
"Communities" participating in the P.I.L.O.T. program using their
normal payment and billing cycle. All evaluations, payments and
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schedules for P.I.L.O.T. shall be governed by the P.I.L.O.T. Program
as adopted by the Department in consultation with the Stewart Airport
Commission from time to time during the term of this Agreement.
Provided, however, that in no event shall the P.I.L.O.T. payments be
more than taxes which would otherwise be payable by the Lessee if the
Leased Premises were taxable in the Communities.
14.5 The P.I.L.O.T. Program recognizes that there may be tax abatements
and tax exemptions negotiated between the Lessee and the
Communities. Non-payment of P.I.L.O.T. within the applicable periods
of notice and grace shall be a default under this Agreement.
14.6 Lessee shall establish an escrow account and maintain on deposit
adequate funds to pay the P.I.L.O.T. and water and sewer charges, as
applicable, to the Town of Newburgh (the "Town"), provided, however,
that Lessee shall not be precluded from making any such payment
directly to the Town outside of escrow by mutual agreement between
the Lessee and the Town, a copy of which agreement shall be given to
the Department; in which event, no escrow account need be established.
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ARTICLE 15
RIGHTS OF ENTRY RESERVED
15. On prior reasonable notice, the Department, by its officers,
employees, agents, representatives and contractors shall have the
right at all reasonable times to enter upon the Leased Premises for
any and all purposes not inconsistent with this Agreement, provided,
such action by the Department, its officers, employees, agents,
representatives and contractors does not unreasonably interfere with
the Lessee's use, occupancy, or security requirements of the Leased
Premises.
15.2 Without limiting the generality of the foregoing, the Department, by
its officers, employees, agents, representatives, contractors and
furnishers of utilities and other services, shall have the right, at
its own cost and expense, whether for its own benefit, or for the
benefit of others than the Lessee at the Park, to maintain existing
utility, mechanical, electrical and other utility systems and on
prior/reasonable notice to enter upon the Leased Premises at all
reasonable times to make such repairs, replacements or alterations
thereto, as may, be necessary or advisable, and from time to time to
construct or install over, in or under the Leased Premises such
systems or parts thereof and in connection with such maintenance, use
the Leased Premises for access to other parts of the Park otherwise
not conveniently accessible, provided, however, that in the exercise
of such right of access, repair, alteration or new construction, the
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Department shall not install a utility under or through any building
or parking area or effect any existing improvement on the Leased
Premises or interfere with the actual use and occupancy of the Leased
Premises by the Lessee. It is specifically understood and agreed
that the reservation of the aforesaid right by the Department shall
not impose or be construed to impose upon the Department any
obligation to repair, replace or alter any utility service lines now
or hereafter located on the Leased Premises for the purpose of
providing utility services only to the Leased Premises.
15.3 In the event that any personal property of the Lessee shall obstruct
the access of the Department, its officers, employees, agents or
contractors, or the utility company furnishing utility service to any
of the existing utility, mechanical, electrical and other systems,
and thus shall interfere with the inspection, maintenance or repair
of any such system pursuant to Section 15.2, the Lessee shall move
such property, as reasonably directed by the Department or said
utility company, in order that access may be had to the system or
part thereof for inspection, maintenance or repair. If the Lessee
shall fail to so move such property after direction from the
Department or said utility company to do so, the Department or the
utility company may move it, and the Lessee hereby agrees to pay the
cost of such moving upon demand, and further the Lessee hereby waives
any claim against the Department for damages as a result therefrom,
except for claims for damages arising from the Department's
negligence.
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15.4 Exercise of any or all of the foregoing rights in this Article, by
the Department, or others under right of the Department, shall not
be, nor be construed to be, an eviction of the Lessee, nor be made
the grounds for any abatement of rental nor any claim or demand for
damages against the Department, consequential or otherwise, except
claims for damage to person or property caused by the negligence of
the Department.
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ARTICLE 16
ADDITIONAL RENTS AND CHARGES
16.1 Except as provided in Section 5.3 (a), in the event the Lessee fails
within thirty (30) days after receipt of written notice from the
Department to perform or commence to perform with due diligence any
obligation required herein to be performed by the Lessee, the
Department may enter the Leased Premises (without such entering
causing or constituting a cancellation of this Agreement or an
interference with the possession of such Leased Premises by the
Lessee) and do all things reasonably necessary to perform such
obligation, charging to the Lessee the cost and expense thereof, and
the Lessee agrees to pay to the Department upon demand such charge in
addition to any other amounts payable by the Lessee hereunder,
provided, however, that if the Lessee's failure to perform any such
obligation endangers the safety of the public or employees or
property of the Department, or other tenants of the Park, and the
Department so states in its notice to the Lessee, the Department as
its sole remedy may perform such obligation of the Lessee at any time
after the giving of such notice, and charge to the Lessee the
reasonable cost and expense thereof which the Lessee shall pay upon
demand.
16.2 If the Department elects to pay any sum or sums or incur any
obligation or expense by reason of the failure, neglect or refusal of
the Lessee to perform or fulfill any one or more of the conditions,
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covenants or agreements contained in this Agreement, or as the result
of any act or omission of the Lessee contrary to said conditions,
covenants or agreements, the Lessee hereby agrees to pay the sum or
sums so paid or expense so incurred by the Department as the result
of such failure, neglect or refusal of the Lessee, including
interest, at the existing prime rate as established by Citibank, N.A.
or other major New York Metropolitan Area lending institution of
comparable stature together with all reasonable costs, and damages.
In such event, the total of such amounts may be added to any
installment of rent thereafter due hereunder, and each and every part
of the same shall be and become additional rent recoverable by the
Department in the same manner and with like remedies as if it were
originally a part of the rent provided for in this Agreement.
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ARTICLE 17
TERMINATION BY THE DEPARTMENT
17.1 Each of the following shall be deemed a default of the Lessee and a
breach of this Agreement.
17.1 If any rental or additional rental required by this Agreement to be
paid to the Department shall not be paid when due, and such default
shall continue for a period of ten (10) days after written notice by
the Department to the Lessee specifying the items in default, and
shall continue thereafter for a further period of five (5) days after
a second notice from the Department to the Lessee which shall specify
the items in default, and, in addition, shall state the Department's
intention to terminate this Lease by reason of such default or;
17.1 The institution of proceedings in bankruptcy against the Lessee;
provided, however, that the Lessee may avoid such termination if the
petition is dismissed or stayed by appeal within ninety (90) days
after the institution thereof; or,
17.1 The filing of a petition requesting a court to take jurisdiction of
the Lessee or its assets under the provisions of any Federal
reorganization act which, if it is an involuntary petition, is not
dismissed within ninety (90) days after the institution thereof; or,
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17.1 The filing of a request for the appointment of a receiver or trustee
of the Lessee's assets by a court of competent jurisdiction, which if
the request is not made by the Lessee, is not rejected within ninety
(90) days after being made, or the request for the appointment of
a
receiver or trustee of the Lessee's asset by a voluntary agreement
with the Lessee's creditors.
17.1 The default by the Lessee in the performance of any covenant or
conditions required to be performed by the Lessee, and the failure of
the Lessee to remedy such default for a period of thirty (30) days
after receipt from the Department of written notice (except as
otherwise provided in Section 5.3(a) above) which shall specify the
items in default and, in addition, shall state the Department's
intention to terminate this Agreement by reason of such default, or
in the case of a default which cannot with due diligence be cured
within said thirty (30) day period and Lessee fails to proceed within
said thirty (30) day period to cure the same and thereafter to
prosecute the curing of such default with due diligence pursuant to a
written schedule mutually agreed upon by the Department and Lessee.
17. If the Department shall exercise its option to terminate this
Agreement upon the Lessee's failure to cure or remedy any default
hereunder prior to the expiration of the applicable grace periods,
this Agreement shall expire and all of Lessee's rights and interest
hereunder shall terminate upon the expiration of the time specified
in the Department's notice as if such date were the last date of
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the leased term, and the Lessee shall then immediately quit and
surrender the Leased Premises to the Department, including any and
all building erected thereon, and all other improvements, and the
Department may enter into or repossess the Leased Premises and the
Lessee hereby waives the service of notice of intention to reenter or
to institute legal proceedings to that end.
17.3 Notwithstanding the provisions of this Article, the rights of the
Department hereunder are subject to the rights of Leasehold
Mortgagees to cure pursuant to Article 10 hereof.
17.4 Failure by the Department to take any authorized action upon default
by the Lessee of any of the terms, covenants or conditions required
to be performed, kept and observed by the Lessee shall not be
construed to be, nor act as, a waiver of said default nor of any
subsequent default of any of the terms, covenants and conditions
contained herein to be performed, kept and observed by the Lessee.
Acceptance of rentals by the Department from the Lessee, or
performance by the Department under the terms hereof, for any period
or periods after a default by the Lessee of any of the terms,_
covenants and conditions herein required to be performed, kept and
observed by the Lessee shall not be deemed a waiver or estoppel of
any right on the part of the Department to cancel this Agreement for
any subsequent failure by the Lessee to so perform, keep or observe
any of said terms, covenants or conditions.
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ARTICLE 18
SURRENDER AND RIGHT OF RE-ENTRY
18.1 Upon the cancellation or termination of this Agreement pursuant to
the terms hereof, the Lessee agrees peaceably to surrender up the
Leased Premises to the Department in the same condition as they are
at the time of the commencement of the term hereof, and as they may
hereafter be repaired and improved by the Lessee; save and except,
(a) such normal wear and tear thereof as could not have been
prevented by ordinary and usual repairs and maintenance, (b)
obsolescence in spite of repair, and (c) damage to or destruction of
the leasehold improvements for which insurance proceeds are received
by the Department. Upon such cancellation or termination, the
Department may re-enter and repossess the Leased Premises together
with all improvements and additions thereto, or pursue any remedy
permitted by law for the enforcement of any of the provisions of this
Agreement, at the Department's election. Furthermore, upon such
cancellation or termination, and for a reasonable time thereafter
(not exceeding thirty (30) days after such cancellation or
termination, and for which period the Lessee will pay to the
Department current lease rentals), or during the term of this
Agreement, if the Lessee is not in default in rentals or any other
charges or obligations due the Department, the Lessee shall have the
right to remove its personal property, fixtures and trade equipment
which it may have on the Leased Premises, provided that the Lessee
repairs all-damages that might be occasioned by such removal, and
restore the building and site to the condition above required.
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ARTICLE 19
SERVICES TO LESSEE
19.1 The Department covenants and agrees that during the term of this
Agreement it will operate the Park as such for the use and benefit
of
the public, including Lessee, provided, however, that subject to
the
rights of Lessee, the Department may prohibit or limit any given
type, kind, or class of use in the Park if such action is
necessary
to serve the needs of the public. The Department also agrees to
provide and maintain, or cause to be provided and maintained,
water
and sanitary sewer services in areas designated for utilities or
easements adjacent to the Leased Premises for access thereto by
the
Lessee. The Department reserves the right to transfer the
responsibility for maintenance of water to the Town of Newburgh
and
sanitary sewer services to the Crossroads Sewer District. Any
charges related to the Leased Premises shall be paid by the
Lessee.
19.2 The Department agrees to provide utilities (water, natural gas, and
electric) to a boundary line of the Leased Premises and a finished
road as required by law. The water supply will be operated by the
Town of Newburgh which has set its design criteria at 2,500 gallons
per minute at 20 p.s.i. residual pressure.
19.3 The Lessee will contract with and obtain all required permits from
the appropriate departments for any utility services provided by the
Department, paying any required connection fees, including those to
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be paid by owners, and all such services will be provided at rates
and on terms and conditions established by the Department for similar
users in the Park.
19.4 The Lessee will also contract with the furnishers of all other
utilities for the furnishing of such services to the Leased Premises
and shall pay for all water, gas, electricity, sanitary sewer
service, other utilities, telephone, burglary and fire protection
services furnished to the Leased Premises. The Department shall
allow the providers of such utilities reasonable access to the
boundaries of the Leased Premises for the installation of their
utility systems.
19.5 The Department will provide, repair, maintain and replace, or cause
to be provided, repaired, maintained or replaced, a paved access
road, as required by law, of at least two lanes by extending Governor
Drive to the Leased Premises.
19.6 The Department will plow all roads within the Park to the Leased
Premises and shall maintain all retention basins and landscaped areas
in the Park but outside any leased premises.
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ARTICLE 20
SURVIVAL OF THE OBLIGATIONS OF THE LESSEE
20.1 In the event that the Agreement shall have been terminated in
accordance with a notice of termination as provided in Article 17
hereof, all the obligations of the Lessee under this Agreement shall
survive such termination, re-entry, regaining or resumption of
possession and shall remain in full force and effect for the full
term of this Agreement, and the amount or amounts of damages or
deficiency shall become due and payable to the Department to the same
extent, at the same time or times, and in the same manner as if no
termination, re-entry, regaining or resumption of possession had
taken place. The Department may maintain separate actions each month
to recover the damage or deficiency then due or at its option and at
any time may sue to recover the full deficiency less the proper
discount, for the entire unexpired term of this Agreement.
20.2 The amount of damages for the period of time subsequent to
termination (or re-entry, regaining or resumption of possession) on
account of the Lessee's rental obligations, shall be the sum of the
following:
20.2. The amount of the total of all installments of rents as they would
have become due had the term of this Agreement not been terminated,
less the installments thereof payable prior to the effective date of
termination except that the credit to be allowed for the installment
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payable on the first (1st) day of the month in which the termination
is effective shall be prorated for the part of the month the
Agreement remains in effect on the basis of the total days in the
month;
20.2. An amount equal to all reasonable expenses incurred by the Department
and not reimbursed in connection with regaining possession, restoring
the Leased Premises, acquiring a new lease for the Leased Premises,
legal expenses (including but not limited to attorney's fees),
putting the Leased Premises in order.
20. There shall be credited to the account of the Lessee against its
survived obligations hereunder the amount actually received from any
lessee, licensee, permittee or other occupier in connection with the
use of the said Leased Premises or portion thereof during the balance
of the term of use and occupancy as the same is originally stated in
this Agreement, the market value of the occupancy of such portion of
the Leased Premises as the Department may itself during such period
actually use and occupy. No such use and occupancy shall be or be
construed to be an acceptance of a surrender of the Leased Premises,
nor shall such use and occupancy constitute a waiver of any rights of
the Department hereunder. The Department will use its best efforts
to mitigate damages to Lessee under this Article.
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ARTICLE 21
USE SUBSEQUENT TO CANCELLATION OR TERMINATION
21.1 The Department, upon termination or cancellation pursuant to Article
19 hereof, may occupy the Leased Premises or may enter into an
agreement with another lessee and shall have the right to permit any
person, firm or corporation to enter upon the Leased Premises and use
the same. Such use may be of part only of the Leased Premises or of
the entire Leased Premises, together with other premises, and for a
period of time the same as or different from the balance of the term
hereunder remaining, and on terms and conditions the same as or
different from those set forth in this Agreement.
21. The Department shall also, upon said termination or cancellation, or
upon said re-entry, regaining or resumption of possession, have the
right to repair and to make structural or other changes in the Leased
Premises, including changes which alter its character and the
suitability thereof for the purposes of the Lessee under this
Agreement, without affecting, altering or diminishing the obligations
of the Lessee hereunder, provided, that any structural changes shall
not be at Lessee's expense.
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ARTICLE 22
NOTICES
22.1 All notices, consents and approvals required or desired to be given
by the parties hereto shall be given in writing by certified mail,
postage prepaid, return receipt requested, and shall be deemed given
when received at the recipient's notice address. Notice that starts
the running of a time period and is delivered on a non-business day
shall be deemed delivered on the next business day, if left at the
notice address, or the next business day on which it is redelivered
if it is not left at the notice address.
22.2 The notice addresses of the parties are as follows:
To the Department: N.Y. State Department of
Transportation
Building 138
Stewart International Airport
Newburgh, NY 12550
and
Manager
Industrial Park
Building 138
Stewart International Airport
Newburgh, NY 12550
The Lessee: The Edgewater Stewart Company
c/o The Hilton Tower
465 South Salina Street
Syracuse, NY 13202-2487
Attention:Thomas R. Kennedy
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<PAGE>
With a copy to: Bond, Schoeneck & King
One Lincoln Center
Syracuse, NY 13202-1355
Attention:Stephen L. Johnson, Esq.
Such addresses shall be subject to change from time to time to such
other addresses as may have been specified in written notice given by
the intended recipient to the sender.
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<PAGE>
ARTICLE 23
HOLDING OVER
23.1 No holding over by the Lessee after the termination of this lease
shall operate to extend or renew this lease for any further term
whatsoever; but the Lessee will by such holding over become the
tenant at will of the Department and after written notice by the
Department to vacate such premises, continued occupancy thereof by
the Lessee shall constitute the Lessee a trespasser.
23.2 Any holding over by the Lessee beyond the thirty (30) day period
permitted for removal of fixtures without the written consent of the
Department shall make the Lessee liable to the Department for damages
equal to double the rentals provided for herein and which were in
effect at the termination of the Agreement.
23.3 All insurance coverage that the Lessee is required under the
provisions hereof to maintain in effect shall continue in effect for
so long as the Lessee, or any of the Lessee's subleases or tenants
occupy the Leased Premises or any part thereof.
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ARTICLE 24
INVALID PROVISIONS
24.1 The invalidity of any provisions, articles, paragraphs, portions, or
clauses of this agreement shall have no effect upon the validity of
any other part or portion hereof, so long as the remainder shall
constitute an enforceable agreement.
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ARTICLE 25
MISCELLANEOUS PROVISIONS
Remedies to be Nonexclusive.
25.1 All remedies provided in this Agreement shall be deemed cumulative
and additional and not in lieu of, or exclusive of, each other, or of
any other remedy available to the Department, or the Lessee, at law
or in equity, and the exercise of any remedy, or the existence herein
of any remedies or indemnities shall not prevent the exercise of any
other remedy.
Non-Waiver of Rights
25.2 The failure by either party to exercise any right, or rights accruing
to it by virtue of the breach of any covenant, condition or agreement
herein by the other party shall not operate as a waiver of the
exercise of such right or rights in the event of any subsequent
breach by such other party, nor shall such other party be relieved
thereby from its obligations under the terms hereof.
Force Majeure.
25.3 Neither party shall be deemed in violation of this Agreement if it is
prevented from performing any of its obligations hereunder by reason
of labor disputes, acts of God, acts of the public enemy or superior
governmental authority, provided, however, that this section shall
not excuse Lessee from paying the rentals herein specified provided
further however, that if the right of the Lessee to receive rental
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payments pursuant to any approved sublease has been abated as a
result thereof, the rental otherwise payable hereunder shall be
reduced by an amount the Department determines is reasonable in
proportion to the abatement of the rentals otherwise payable under
said subleases.
Non-liability of Individuals.
25. No agent or employee of either party hereto shall be charged
personally or held contractually liable by or to the other party
under any term or provision of this Agreement or of any supplement,
modification or amendment to this Agreement because of any breach
thereof.
Quiet Enjoyment.
25.5 The Department covenants that as long as the Lessee is not in default
of any provision of this Agreement, the Lessee shall and may
peaceably and quietly have, hold and enjoy the Leased Premises
exclusively to it and the rights appurt enant to the Leased Premises
granted in this Agreement during the term hereof unless sooner
canceled as provided in this Agreement.
Estoppel Certificate.
25.6 At the request of the Lessee, the Department shall from time to time
execute and deliver a written statement identifying it as the lessor
under this Lease and certifying: (i) the documents that then
comprise this Lease, (ii) that this Lease is in full force and
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effect, (iii) the then current annual amount of rent and the date
through which it has been paid, (iv) the expiration date of this
Lease, (v) that no amounts are then owed by the Lessee to the
Department (or, if amounts are owed, specifying the same) and (vi)
to the knowledge of the Department, there are not defaults by the
Lessee under this Lease or any facts which but for the passage of
time, the giving of notice or both would constitute such a default.
The party acquiring the lessee's interest in the Lease shall be
entitled to rely conclusively upon such written statement.
Short Form of Lease.
25.7 This Lease shall not be recorded, but at the request of either party,
the other shall execute a memorandum or short form of lease for
recording.
General Provisions.
25.8 Lessee shall not use, or permit the use of, the Leased Premises, or
any part thereof, for any purpose or use other than those authorized
by this Agreement.
25.9 This Agreement shall be performable and enforceable in Orange County,
New York, and shall be construed in accordance with the laws of the
State of New York.
25.10 This Agreement is made for the sole and exclusive benefit of the
Department and the Lessee, their successors and assigns, and is not
made for the benefit of any third party.
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25.11 In the event of any ambiguity in any of the terms of this Agreement,
it shall not be construed for or against any party hereto on the
basis that such party did or did not author the same.
25.12 All covenants, stipulations and agreements in this Agreement shall
extend to and bind each party hereto, its legal representatives,
successors and assigns.
25.13 The titles of the several articles of this Agreement are inserted
herein for convenience only, and are not intended and shall not be
construed to affect in any manner the terms and provisions hereof, or
the interpretation or construction thereof.
25.14 Nothing herein contained shall create or be construed to creating a
co-partnership or joint venture between the Department and the Lessee
or to constitute the Lessee an agent of the Department. The
Department and the Lessee each expressly disclaim the existence of
such a relationship between them.
25.15 The Department, or any successor in interest to the Department, shall
look solely to the Lessee's interest in the leasehold estate and
Lessee's improvements thereon for the satisfaction of the remedies of
the Department in the event of a breach by the Lessee of any of the
covenants or conditions of this Agreement except for the covenants
and conditions of Article 9, hereof, which are not to be so limited.
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ARTICLE 26
SUPPLEMENTARY PROVISIONS
26.1 This Agreement is subject and subordinate to the following:
26.1.1 The Department reserves the right to develop and improve the Park
without interference or hindrance by or on behalf of the Lessee.
Accordingly nothing contained in this Agreement shall be construed to
obligate the Department to relocate the Lessee.
26.1.2 The Department reserves the right to take such action it considers
necessary to protect the aerial approaches to the Airport against
obstruction, together with the right to prevent Lessee from erecting
or permitting to be erected any building or other structure in the
Park which, in the opinion of the Department, would limit the
usefulness of the Airport or constitute a hazard to aircraft.
26-1.3 During the time of war or national emergency, the Department shall
have the right to lease all or any part of the landing area or of the
Park to the United States for military use, and if any such lease is
executed, the provisions of this Agreement insofar as they may be
inconsistent with the provisions of such lease to the Government,
shall be suspended, but such suspension shall not extend the term of
this Agreement. Abatement of rentals shall be reasonably determined
by the Department and Lessee in proportion to the degree of
interference with the Lessee's use of the Leased Premises.
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26.1.4 Except to the extent required for the performance of any obligations
of the Lessee hereunder, nothing contained in this Agreement shall
grant to the Lessee any rights whatsoever in the airspace above the
Leased Premises other than those rights which are subject to Federal
Aviation Administration rules, regulations and orders currently or
subsequently effective.
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ARTICLE 27
ENTIRE AGREEMENT
27.1 This Agreement consists of Articles 1 to 27 inclusive, and Article
AA, Appendices A and B, and Exhibits A, B-1, B-2 and C and Schedule A.
27.2 It constitutes the entire agreement of the parties hereto and may not
be changed, modified, discharged or extended except by written
instrument duly executed by the Department and the Lessee. The
parties agree that no representations or warranties shall be binding
upon the Department or the Lessee unless expressed in writing in this
Agreement of Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day
and year written above.
THE NEW YORK STATE DEPARTMENT OF
TRANSPORTATION
Attest: By:_
THE EDGEWATER STEWART COMPANY
Attest: 'By:
@IA Y
0 V 1! r -9
<PAGE>
TENANT'S ACKNOWLEDGEMENT
STATE OF NEW YORK
COUNTY OF ONANDAGA
On this 26th day of February, 1988, before me personally came Thomas R.
Kennedy to me known, and known to me to be a member of the firm of The
Edgewater Stewart Company, a general partnership duly established and
existing
under the laws of the State of New York, the person described in and who
executed the within instrument on behalf of said firm, and he acknowledged
to
me that he executed the same in behalf of said firm for the purposes herein
mentioned.
Notary Public, County Onandaga
STEPHEN L. JOHNSON
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<PAGE>
CERTIFICATE OF AUTHORITY
I, ___ ___certify that I am a general partner of the firm of
The Edgewater Stewart Company, a general partnership duly established and
existing in the State of New York, named in the foregoing agreement; that
Thomas R. Kennedy who signed said agreement was, at the time of execution,
a
general partner of the firm.
STATE OF NEW YORK
COUNTY OF ONONDAGA
On this 26th day of February, 1988, before me personally
of the firm of The Edgewater Stewart Company, a general partnership duly
established and existing under the laws of the State of New York, the person
described in and who executed the within instrument on behalf of said firm,
and he acknowledged to me that he executed the same in behalf of said firm
for
the purposes herein mentioned.
came _ to me known, and known to me to be a member
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ARTICLE AA
Disbursement of Deposited Moneys
AA.1 All sums of the character referred to in Article 8 and 12
(hereinafter referred to as 'Deposited Sums") paid to or deposited
with a bank or trust company or paid to the first Leasehold Mortgagee
(herein called the "Depositary"), shall be promptly disbursed in the
manner hereinafter provided.
AA-2 From time to time as any restoration, repair, replacement or
rebuilding of any buildings or any portion thereof damaged or
destroyed by fire or any other cause, or not taken in a proceeding of
the character described in Article 8, progresses (hereinafter
collectively referred to as the "Work"), disbursement of any moneys
of the character referred to in the Article shall be made upon
receipt by the Depositary of the following:
(a) A certificate signed by an architect or engineer licensed in
the
State of New York selected by Lessee who shall be reasonably
satisfactory to the Department and also signed by Lessee, dated not
more than thirty (30) days prior to the application for such
disbursement, setting forth in substance the following:
(i) That the sum then requested to be disbursed either has been
paid
by Lessee or is justly due to contractors, subcontractors,
AA-1
<PAGE>
materialmen, engineers, architects or other persons (whose names and
addresses shall be stated) who have rendered and furnished certain
labor and materials for the Work; giving a brief description of such
services and materials and the principal subdivisions or categories
thereof and the amounts so paid or due to each of said persons in
respect thereof, and stating the progress of the Work up to the date
of said certificate.
(ii_) That the sum then requested to be disbursed, plus all sums
previously disbursed, does not exceed the cost of the Work as
actually accomplished up to the date of such certificate and that the
balance of the Deposited Sums will be sufficient to pay in full for
the completion of the Work, or the Department shall have received
other assurances reasonably satisfactory to it of payment in full for
completion thereof.
(iii) That no part of the cost of their services and material
described in the foregoing clause (i) of this paragraph (a), in any
previous or then pending application, has been or is being made the
basis for the disbursement of any part of the Deposited Sums or has
been paid out of insurance moneys not required to be paid to the
Depositary; and
AA-2
<PAGE>
iv) That except for the amounts, if any, stated in said certificate
pursuant to the foregoing clause (i) of this paragraph to be due for
services or materials, there is no outstanding indebtedness known to
the person signing the certificate, after due inquiry, which is then
due and payable for work, labor, services and materials in connection
with the Work, which, if unpaid, might become the basis for a
vendor's, mechanics, laborer's or materialman's statutory or similar
lien upon Lessee's leasehold estate or Lessee's or the Department's
interest in the leased premises or any part thereof.
(b) A certificate signed by Lessee, dated not more than thirty (30)
days prior to the application for such disbursement, setting forth in
substance that, to the best knowledge of Lessee, after due inquiry,
(i) All materials and all property described in the certificate
furnished pursuant to clause (i) of the foregoing paragraph (a) and
every part thereof, are free and clear of all liens and encumbrances,
except such as may secure indebtedness due to persons (whose names
and addresses and the several amounts due them shall be stated)
specified in said certificate, which liens and encumbrances will be
discharged upon payment of such indebtedness and encumbrances to
which this Lease is subject; and
(ii) That no event of default has occurred which has not been
remedied.
AA-3
<PAGE>
(c) An official search, a certificate of title company or other
evidence reasonably satisfactory to the Department showing that there
has not been filed with respect to Lessee's leasehold estate of
Lessee's or the Department's interest in the leased premises or any
part thereof any vendor's, mechanic's, laborer's or materialman's
statutory or similar lien which has not been discharged of record,
except such as will be discharged upon payment of the amount then
requested to be disbursed. Upon compliance with the foregoing
pro-visions of this Section AA.2 the Depositary shall, out of the
Deposited Sums, disburse to the persons named in the certificate
pursuant to the foregoing clause (i) of paragraph (a) the respective
amounts stated in said certificate to be due to them and/or shall
disburse to Lessee the amount stated in said certificate to have been
paid by Lessee.
At any time after the completion, in full, of the Work, the whole
balance of Deposited Sums not theretofore disbursed pursuant to the
foregoing provisions of this Section AA.2 shall be disbursed to
Lessee, upon receipt by the Depositary of (a) a certificate signed by
Lessee, dated not more that thirty (30) days prior to the application
for such disbursement, setting forth in substance the following to
the best knowledge of Lessee, after due inquiry, (i) that the Work
has been completed in full; (ii) that all amounts which Lessee is or
may be entitled to have disbursed under the foregoing provisions of
this Section AM on account of services rendered or materials
AA-4
<PAGE>
furnished in connection with the Work have been disbursed under said
provisions; (iii) that all amounts for whose payment Lessee is or may
become liable in respect of the Work have been paid in full except to
the extent, if any, of any retainage shall be applied to the final
payments of the amounts due and (iv) that no event of default has
occurred which has not been remedied and (b) an official search or a
certificate of a title company reasonably satisfactory to the
Department showing that there has not been filed with respect to
Lessee's leasehold estate or Lessee's or the Department's interest in
the leased premises or any part thereof, any vendor's, mechanic's,
laborer's or materialman's statutory or similar lien which has not
been discharged of record.
AA.3 4 If an event of default shall have occurred and be continuing beyond
any applicable grace periods, prior to the disbursement of the
Deposited Sums or any part thereof, the Department may notify the
Depositary thereof, and thereupon the Depositary shall have no
further right or obligation to disburse any of the deposited Sums to
Lessee, but shall disburse the same in accordance with the
requirements of Section AA.2 to or for the account of the Leasehold
Mortgagee in accordance with the provisions of Article 10 hereof.
AA.4 The Department and Lessee agree that the Depositary shall have the
right to deduct from the Deposited Sums, prior to any disbursement
thereof pursuant to Section AA.2, its reasonable charges for acting
as Depositary hereunder.
AA-5
<PAGE>
AA.5 The balance remaining of Deposited Funds, if any, after disbursement
in accordance with this Article shall be paid to the first leasehold
mortgagee to be applied to the mortgage debt, or if there is no
leasehold mortgagee, to the Department, to be applied to the rent
payable hereunder.
AA.6 The depositary shall pay a penalty of Chase Manhattan Bank's prime
rate on all sums not disbursed in accordance with this Article to the
party entitled thereto within ten (10) days after said depositary's
receipt of all documents required to be submitted to it hereunder.
AA.7 In the event Lessee shall elect, under the provisions of Section
8.2.2 of the Agreement, not to repair or reconstruct the improvements
the Depositary shall disburse the Deposited Funds in accordance with
the provisions of Section 8.6 of the Agreement.
AA-6
<PAGE>
APPENDIX A
STANDARD CLAUSES FOR ALL NEW
YORK STATE CONTRACTS
Addendum to Contract Between
The New York State Department of Transportation (The "State")
and
The Edgewater Stewart Company (The 'Contractor")
Contract No.
The parties to the attached contract, license, lease, or other
agreement
of any kind(hereinafter, the "contract") agree to be bound by the following
clauses which are hereby made a part of said contract:
1. EXECUTORY CLAUSE. In accordance with Section 41 of the State
Finance Law, this contract shall be deemed executory only to the extent of
money available to the State for the performance of this contract and no
liability shall be incurred by the State of New York beyond moneys available
for this contract.
2. NON-ASSIGNMENT CLAUSE. In accordance with Section 138 of the
State
Finance Law, this contract may not be assigned by the contractor or its
right,
title or interest therein assigned, transferred, conveyed, sublet or
disposed
of without the previous consent, in writing, of the State.
3. COMPTROLLER'S APPROVAL. In accordance with Section 112 of the
State Finance Law, no contract at or above the statutory amount or amendment
thereto shall be valid, effective or binding upon the State until it has
been
approved by the State Comptroller and filed in his office. Contractors
A-I
<PAGE>
commencing performance of any such contract or amendment before it has been
approved by the State Comptroller do so at their own risk.
4. WORKERS' COMPENSATION BENEFITS. In accordance with Section 142
of
the State Finance Law, this contract shall be void and of no force and
effect
unless the contractor shall provide and maintain coverage for the benefit of
such employees as are required to be covered by the provisions of the
Workers'
Compensation Law.
5. NON-DISCRIMINATION REQUIREMENTS. The contractor will not
discriminate against any employee or applicant for employment because of
race,
creed, color, sex, national origin, age, disability or marital status.
Furthermore, in accordance with Section 220-e of the Labor Law, if this is
a
contract for the construction, alteration or repair of any public building
or
public work or for the manufacture, sale or distribution of materials,
equipment or supplies, and to the extent that this contract shall be
performed
within the State of New York, contractor agrees that neither it nor its
subcontractors shall, by reason of race, creed, color, disability, sex or
national origin: (a) discriminate in hiring against any New York State
citizen who is qualified and available to perform the work; or (b)
discriminate against or intimidate any employee hired for the performance of
work under this contract. Contractor is subject to the sanctions of Section
220-e for any violation thereof, including possible termination of this
contract and forfeiture of all moneys due hereunder for a second or
subsequent
violation.
A-2
<PAGE>
6. WAGE AND HOURS PROVISIONS. If this is a public work contract
covered by Article 8 of the Labor Law or a building service contract covered
by Article 9 thereof, neither contractor's employees nor the employees of
its
subcontractors may be required or permitted to work more than the number of
hours or days stated therein, except as otherwise provided in the Labor Law.
Furthermore, contractor and its subcontractors must pay at least the
prevailing wage rate, as determined by the State Labor Department in
accordance with the Labor Law.
7. NON-COLLUSIVE BIDDING REQUIREMENT. In accordance with Section
139-d of the State Finance Law, if this contract was awarded based upon the
submission of bids, contractor warrants, under penalty of perjury, that its
bid was arrived at independently and without collusion aimed at restricting
competition. Contractor further warrants that an authorized and responsible
person has executed and delivered to the State a non-collusive bidding
certification on contractor's behalf.
8.INTERNATIONAL BOYCOTT PROHIBITION. In accordance with Section
220-f of the Labor Law and Section 139-h of the State Finance Law, if this
contractexceeds the statutory amount in Section 139-h of the State Finance
Law, thecontractor agrees, as a material condition of the contract, that
neither the contractor nor any substantially owned or affiliated person,
firm,
partnership or corporation has participated, is participating, or shall
participate in an international boycott in violation of federal laws or
regulations thereunder. If such contractor, or any of the aforesaid
affiliates or contractor, is convicted or is otherwise found to have
violated
A-3
<PAGE>
said laws or regulations upon the final determination of the United States
Commerce Department or any other appropriate agency of the United States
subsequent to the contract's execution, such contract, amendment or
modification thereto shall be rendered forfeit and void. The contractor
shall
so notify the State Comptroller within five (5) business days of such
conviction, determination or disposition of appeal (2 NYCRR 105.4).
9. SET-OFF RIGHTS. The State shall have all of its common law
rights
of set-off. These rights and powers shall include, but not be limited to,
the
State's option to withhold for the purposes of set-off any moneys due to the
contractor under this contract up to any amounts due and owing to the State
with regard to this contract, any other contract with any State department
or
agency, including any contract for a term commencing prior to the term of
this
contract, or amounts due and owing to the State for any other reason.
10. RECORD-KEEPING REQUIREMENT. The contractor shall maintain
accurate
books, records, documents, accounts and other evidence directly pertinent to
performance under this contract for a period of six (6) years following the
termination of this contract and any extensions thereto. The State
Comptroller and Attorney General or any other person or entity authorized to
conduct an examination, as well as the agency or agencies involved in this
contract, shall have access to such records during the contract term,
extensions thereof and said six (6) year period thereafter for the purposes
of
inspection, auditing and copying.
A-4
<PAGE>
11. CONFLICTING TERMS. In the event of a conflict between the terms
of
the contract and the terms of this Appendix A, the terms of this Appendix A
shall control.
12. GOVERNING LAW. This contract shall be governed by the laws of
the
State of New York.
13. LATE PAYMENT. Timeliness of payment and any interest to be paid
to
contractor for late payment shall be governed by Article XI-A of the State
Finance Law.
14. NO ARBITRATION. Disputes involving the breach or alleged breach
of
this contract may not be submitted to binding arbitration (except where
statutorily authorized) but must, instead, be heard in a court of competent
jurisdiction of the State of New York.
Signature of Contractor
or Contractor's Authorized
Representative
Printed or Typed Name
Thomas Kennedy
Title
Date
A-5
<PAGE>
APPENDIX B
Construction by Lessee
1The Lessee agrees to construct on the space shown on Exhibits B-1 and
B-2 the following facilities;
1.approximately 57,200 square feet of light industrial space; and
1.paving to accommodate auto and over the road truck parking spaces,
1.together with the grading of the ground area contained within the Space
and the installation on or in the Space of such utilities as may be
appropriate or necessary for the utilization of the Space for the
purposes the Lessee is permitted to use the same.
2 Prior to the commencement of construction of the facilities set forth in
Section 1 above, or any part thereof, Lessee shall submit to the
Department complete plans and specifications for such proposed
construction within 90 days of the effective date of this Agreement.
Such plans and specifications shall be signed and sealed by a
registered
architect or a professional engineer licensed to practice in the State
of New York.
3 The Department may refuse to grant approval if, in its reasonable
opinion, the proposed facilities as laid out and indicated by the
Lessee
on such plans or constructed according to such plans and
specifications:
3.1 will be structurally unsound or unsafe or hazardous for human occupancy
or improper for the use and occupancy for which it is designed;
3.2 will not comply with all the requirements of this Agreement;
3.3 will be in violation of any State code, OSHA-70, the National Electric
Code or any other law, ordinance of regulation of any governmental
authority having jurisdiction over the Airport;
3.4 will not be at locations or not be oriented in accordance with the
approved comprehensive plans for the Park.
4.Upon approval of such plans and specifications by the Department the
Lessee shall proceed expeditiously and with all reasonable diligence to
construct, at its own cost and expense, the facilities in accordance
with such approved plans and specifications and complete the facilities
in accordance with the time limit set forth above.
4.1The Lessee or the Lessee's construction contractor shall furnish the
Department Letters of Credit in a sum equal to the estimated cost of
construction, in a form and with sureties satisfactory to the
Department, for the faithful performance by the Lessee of its
construction obligations contained in this Agreement and
B-1
<PAGE>
for the guarantee of payment of all claims of materialmen, workmen and
subcontractors. The Lessee shall deliver such Letters of Credit to the
Department prior to commencement of construction or within (30) days
after the award by Lessee of construction contract or contracts, which
ever occurs first.
5.All construction work shall be done in accordance with the following
terms and conditions:
5.1The Lessee hereby assumes the risk of loss or damage to all of the
construction work prior to the completion thereof and the risk of loss
or damage to all property of the Department arising out of or in
connection with the performance of the construction work. In the event
of such loss or damage, the Lessee shall forthwith repair, replace and
made good the construction work and the property of the Department
without cost or expense to the Department.
5.2 The Lessee shall itself and shall also require its contractors to
indemnify and hold harmless the Department, the Park Manager, and their
officers, agents and employees from and against all claims and demands,
just or unjust, of third persons (including employees, officers, and
agents of the Department) arising or alleged to arise out of the
performance of the construction work and for all expenses, (whether or
not such claims, demands, causes of action, liabilities etc, are made
or
asserted before or after termination or expiration of this agreement)
incurred by it and by them in the defense, settlement or satisfaction
thereof, including without limitation thereto, claims and demands for
death, for personal injury or for property damage, direct or
consequential, (to include reasonable attorneys and other professional
fees) whether they arise out of or from the acts or omissions of the
Lessee, of any contractors of the Lessee, of the Department or of third
person, or from acts of God or of the public enemy, or otherwise
excepting only claims and demands which result solely from negligent
acts done by the Department, its subsidiaries, its officers, agents and
employees subsequent to the commencement of the construction work.
5.3 The Lessee shall furnish a project manager during the construction
period with whom the Department may communicate at all times.
5.4 The Department shall have the right, through its duly designated
representatives, to inspect the construction work and the plans and
specifications thereof, at any and all reasonable times during the
progress thereof and from time to time, in its discretion, to take
samples and perform testing on any part of the construction work, but
the taking of samples and testing shall be conducted so as to minimize
interference with the construction work. If such minimization of impact
can be accomplished without diminishing the effectiveness of accuracy
of
the samples and or tests.
5.5 The Lessee agrees that it shall deliver to the Department "as-built"
drawings (capable of being reproduced) of the construction work and
shall during the term of this Agreement keep said drawings current
B-2
<PAGE>
showing thereon any changes or modifications which may be made. (No
changes or modifications to be made without the Department's consent not
to be unreasonably withheld or delayed.)
5.6 The Lessee shall pay or cause to be paid all claims lawfully made
against it by its contractors, subcontractors, materialmen and workmen,
and all claims lawfully made against it by other third persons arising
out of or in connection with or because of the performance of the
construction work, and shall cause its contractors and subcontractors
to
pay all such claims lawfully made against them, provided, however, that
nothing herein contained shall be construed to limit the right of the
Lessee to contest any claim of a contractor, subcontractor,
materialman,
workman and/or other person and no such claim shall be considered to be
an obligation of the Lessee within the meaning of this Section unless
and until the same shall have been finally adjudicated. The Lessee
shall use its best efforts to resolve any such claims and shall keep
the
Department fully informed of its actions with respect thereto.
5.7 The Lessee shall procure and maintain comprehensive general liability
insurance, including automotive, with a contractual liability
endorsement covering the obligations assumed by the Lessee in Section
5.2 of this Appendix, which shall be in addition to all policies of
insurance otherwise required under this Agreement or the Lessee may
provide such insurance by requiring each contractor engaged by it for
the construction work to procure and maintain such insurance including
such contractual liability endorsement, said insurance not to contain
any care, custody or control exclusions, any exclusion for explosions,
collapses or damage to bodily injury to or sickness, disease, or death
of any employee of the Lessee or of any of its contractors which would
conflict with or in anyway impair coverage under the contractual
liability endorsement. Said insurance shall name the Department, the
Park Manager and their agents as an additional insureds and be in not
less than the following amounts:
(i)Bodily Injury Liability:
For injury to or wrongful death
to one person $1,000,000
For injury or wrongful death or
more than one person for any
one occurrence $5,000,000
Aggregate Products Completed
Operations $39000,000
(ii)Property Damage Liability:
For all damages arising out of
injury to or destruction of property
in any one occurrence $3,000,000
Aggregate Products Completed
Operations $3,000,000
B-3
<PAGE>
Aggregate Operations $3,000,000
Aggregate Productive $3,000,000
Aggregate Contractual $3,000,000
The insurance required hereunder shall be maintained in effect during
the performance of the construction work. A certified copy of each of
the policies or a certificate or certificates evidencing the existence
thereof, or binders, shall be delivered to the Department at least
fifteen (15) days prior to the commencement of any work. In the event
any binder is delivered, it shall be replaced within thirty (30) days by
a certified copy of the policy or a certificate. Each such copy or
certificate shall contain a valid provision or endorsement that the
policy certificate shall contain a valid provision or endorsement that
the policy may not be canceled, terminated, changed or modified without
giving thirty (30) days' written advance notice thereof to the
Department.
5.8 The Lessee shall procure and maintain or cause to be procured and
maintained Builder's Risk Completed Value Insurance covering the
construction work during the performance thereof including material
delivered to the construction site but not attached to the realty in an
amount and form satisfactory to the Department. Such insurance shall
name the Department, the Lessee and its contractors and subcontractors
as additional assureds and such policy shall provide that the loss
shall
be adjusted with and payable to the Lessee. Such proceeds shall be used
by the Lessee for the repair, replacement or rebuilding of the
construction work. The policies or certificates representing this
insurance shall be delivered by the Lessee to the Department prior to
the commencement of construction and each policy or certificate
delivered shall bear the endorsement of or be accompanied by evidence
of
payment of the premium thereon and, also, a valid provision obligating
the insurance company to furnish the Department fifteen (15) days'
advance notice of the cancellation, termination, change or modification
of the insurance evidenced by said policy or certificate.
5.9 Nothing contained herein shall grant or be deemed to grant to any
contractor, architect, supplier, subcontractor or any other person
engaged by the Lessee of any of its contractors in the performance of
any part of the construction work any right of action or claim against
the Department, its officers, agents and employees with respect to any
work any of them may do in connection with the construction work.
5.10 Nothing contained herein shall create or be deemed to create any
relationship between the Department and any such contractor, architect,
supplier, subcontractor or any other person engaged by the Lessee or
any
of its contractors in the performance of any part of the construction
work and the Department shall not be responsible to any of the
foregoing
for any payments due or alleged to be due thereto for any work
performed
or materials purchased on connection with the construction work.
B-4
<PAGE>
5.11 When the construction work is substantially completed and is ready for
use by the Lessee, the Lessee shall advise the Department to such
effect
and shall deliver to the Department a certificate of completion by a
registered architect or professional engineer licensed to practice in
the State of New York certifying that such construction work has been
constructed in accordance with the approved plans and specifications
and
the provisions of this Agreement and in compliance with all applicable
laws, ordinances and governmental rules, regulations and orders. All
risks thereafter with respect to the construction and installation of
the same and any liability therefor for negligence or other reason
shall
be borne by the Lessee.
The Lessee shall not use or permit the use of the construction work for
the purposes set forth in this Agreement until such certificate is
received by the Department. The date of delivery of the certificate to
the Department shall constitute the Completion Date for the purposes of
this Agreement.
B-5
<PAGE>
Exhibits B-I And B-2
LESSEE'S SITE PLANS
Annexed hereto as separate documents are Lessee's site plans SP-1,
dated
November 10, 1987 and revised February 3, 1988, and SP-2 dated November 10,
1987 and revised February 9, 1988, both of which are initialed by the
Department and Lessee.
<PAGE>
Exhibit C
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT, dated as of the day of
among THE STATE OF NEW YORK acting by and through it's Department of
Transportation (hereinafter called
"Department"), a New York corporation
(hereinafter called ("Tenant") and (hereinafter called
"Subtenant")
WITNESSETH:
WHEREAS, Department and Tenant have entered into a certain land lease
agreement dated March , (the "Agreement") covering premises
located in The Industrial Park at Stewart International Airport, Newburgh,
New
York 12550 ("the Premises') as more particularly described in Exhibit "A"
attached hereto and made a part hereof; and
by and
WHEREAS, Tenant and Subtenant have entered into a certain sublease
agreement (the "Sublease") dated for a portion of the lands
and premises described in Exhibit "A" hereinbefore referred to, said portion
being more particularly described in Schedule 8 attached hereto and made a
part hereof; and
C-1
<PAGE>
WHEREAS, the parties hereto desire to assure Subtenant of continued
occupancy of the Premises under the terms of the Sublease, in the event of
default in or termination of the Agreement
NOW, THEREFORE, in consideration of the sum of one dollar ($1.00) by
each
party in hand paid to the other, the receipt of which is hereby acknowledged
and in consideration of the mutual promises and covenants and agreements
herein contained, the parties hereto, intending to be legally bound hereby,
promise, covenant and agree as follows:
1.In the event the Department takes possession of the Premises as a
result of summary eviction, foreclosure or otherwise, Department agrees not
to
affector disturb Subtenant's right to possession of the Premises under the
Sublease in the exercise of Department's rights under the Lease so long as
Subtenant is not in default under any of the terms, covenants, or conditions
of the Sublease.
2.In the event that Department takes possession of the Premises as
result of any action or proceeding as set forth above, or otherwise succeeds
to the interest of Tenant under the Sublease, Department and Subtenant,
after
ten (10) days written notice by Department of Subtenant, hereby agree to be
bound to one another under all of the terms, covenants and conditions of the
Sublease; accordingly; from and after such event, the Department and
Subtenant
shall have the same remedies against one another for the breach of any
agreement contained in the Sublease as Tenant and Subtenant had before the
Department succeeded to the interest of Tenant.
C-2
<PAGE>
3. All notices given under any of the provisions of this Agreement
shall be deemed to have been duly given if mailed by certified mail, return
receipt requested, as follows:
TO DEPARTMENT:
TO TENANT:
TO SUBTENANT:
4. This Agreement represents the entire agreement of the parties
hereto. Neither this Agreement nor any term or provision hereof may be
changed, waived, discharged, or terminated orally, or in any manner other
than by an instrument in writing signed by the party against which the
enforcement of the change, waiver, discharge, or termination is sought.
5. This Agreement shall inure to the benefit of any be binding upon the
heirs, personal representatives, successors and assigns of the parties
hereto.
C-3
<PAGE>
SCHEDULE A
The Lessee agrees to indemnify, save and hold harmless, the Department
(its officers, agents, servants and employees) of and from any and all
costs,
liability, damage and expense (including costs of suit and reasonable
expenses
of legal services) claimed or recovered, justly or unjustly, falsely,
fraudulently or frivolously, by any person, firm or corporation by reason of
injury to, or death of, any person or persons, including Department
personnel
and damage to, destruction or loss of use of any and all property, including
Department property, arising from, or resulting from, any operations, works,
acts or omissions of Lessee, its agents, servants, employees, contractors,
sublessees or tenants. In any case in which such indemnification would
violate Sections 5-321.1 or 5-322.1 of the New York General Obligations Law,
or any other applicable legal prohibition, the foregoing provisions
concerning
indemnification shall not be construed to indemnify the Department, its
officers, employees or agents for damage arising out of bodily injury to
persons or damage to property caused by or resulting from the negligence of
the Department, its officer, employees or agents. Upon the filing with the
Department by anyone of a claim for damages arising out of incidents for
which
the Lessee herein agrees to indemnify and hold the Department harmless, the
Department shall notify the Lessee of such claim and in the event that the
Lessee does not settle or compromise such claim, then the Lessee shall
undertake the legal defense of such claim both on behalf of the Lessee and
behalf of the Department. It is specifically agreed, however, that the
Department at its own cost and expense, may participate in the legal defense
<PAGE>
of any such claim. Any judgment, final beyond all possibility of appeal,
rendered against the Department for any cause for which the Lessee is liable
hereunder shall be conclusive against the Lessee as to liability and amount
upon the expiration of the time for appeal.
Lessee shall, at its own cost and expense, take out and maintain such
insurance for the term of this Agreement as the Lessee is required under the
Workers' Compensation Act; and also take out and maintain such public
liability as will protect the Lessee, the Department and its Park Manager
from
any claims for damage to persons, property, etc., arising out of, occurring
or
caused by operations under this Agreement by the Lessee or otherwise arising
out of this Agreement. The policy will provide the amounts of insurance
specified inthis Schedule A. Upon execution of this Agreement, certificates
of insurance in form acceptable to the Department should be submitted to the
Department.Each certificate shall have endorsed thereon:
A clause naming New York State and it's Department of Transportation
and
the Park Manager (currently Lockheed Air Terminal of New York) as
additional insureds under the policies.
"No cancellation or change in the policy shall become effective until
after thirty (30) days notice by registered mail to the Park Manager, 1035
First Street, Stewart International Airport, Newburgh New York 12550."
S-2
<PAGE>
Upon failure of Lessee to furnish, deliver and maintain such insurance
as
above provided, the Department may obtain such insurance and charge Lessee
as
additional rental, the cost of the insurance plus all appropriate
administrative charges and incidental expenses associated with the
transaction. Failure of Lessee to take out and/or maintain, or the taking
out
and/or maintenance or any required insurance shall not relieve Lessee from
any
liability under this Agreement, nor shall the insurance requirements be
construed to conflict with the obligations on Lessee concerning
indemnification.
All required insurance must be in effect and so continue during the
life
of this Agreement in not less than the following amounts:
A.Workers' Compensation Unlimited - Statutory - in compliance with the
Compensation Law of the State of New York.
B.General Liability Insurance with a maximum combined single limit of
$15,000,000 per occurrence. This insurance shall indicate on the
Certificate of Insurance the following coverages:
1.Premises - Operations
2.Independent Contractor and Subcontractors
3.Products and Completed Operations
4. Broad Form Contractual
S-3
<PAGE>
C.Disability Benefits: The Contractor shall provide proof of
compliance with the Disability Benefits Law.
Location of operation shall be "All locations in Orange County, New
York".
Nothing herein contained shall prevent the Lessee from taking out any
other insurance for protection of its interest which it deems advisable or
necessary.
S-4
EXHIBIT 10.19(a)
EXHIBIT 10.19(a)
ASSIGNMENT AND ASSUMPTION OF LEASE
FOR VALUE RECEIVED, THE EDGEWATER STEWART COMPANY, a New
York General Partnership, having an office at Nettleton Commons,
323 East Willow Street, Syracuse, New York 13203 (the "Assignor")
hereby assigns to NEW ENGLAND LAMINATES CO., INC., a New York
corporation, with general offices at 3 Elm Street, Walden, New York
12586-1805 (the "Assignee,,) all of Assignor's right, title and
interest as Lessee, including all of Assignor's interest in the
building and improvements, under a Lease Agreement (the "Lease"),
dated February 26, 1988, between THE STATE OF NEW YORK, ACTING BY
AND THROUGH ITS DEPARTMENT OF TRANSPORTATION and Assignor, a
memorandum of which was recorded in the Orange County Clerk's
Office on December 19, 1988 in Liber 3056 of Deeds at page 166.
Assignee hereby accepts this assignment and assumes all
of Assignor's obligations under the Lease.
IN WITNESS WHEREOF, Assignor and Assignee have executed
this instrument as of February 6, 1995.
THE EDGEWATER STEWART COMPANY
By:
Donald F. Moore
General Partner
NEW ENGLAND LAMINATES CO., INC.
By:
John Jongebloed
Vice President
RECORD AND RETURN TO:
David Gubits, Esq.
Jacobowitz and Gubits
168 Orange Avenue
Post Office Box 367
Walden, New York 12586-0367
<PAGE>
STATE OF NEW YORK
) SS.:
COUNTY OF ONONDAGA )
On the 16th day of February, 1995, before me personally
came Donald F. Moore, to me known, who, being by me duly sworn, did
depose and say that he is a general partner in the firm of THE
EDGEWATER STEWART COMPANY, that he had the authority to sign this
instrument and that he did duly acknowledge to me that he executed
the same as the act and deed of THE EDGEWATER STEWART COMPANY, for
the uses and purposes mentioned therein.
Notary Public
GAIL D. GRYGIEL
Notary Public, State of New York
Qualified in Onondaga County
No. 4914538
Commission Expires Dec. 21, 1995
STATE OF NEW YORK )
) SS.:
COUNTY OF ORANGE
On the 17th day of February, 1995, before me personally
came John Jongebloed, to me known, who, being by me duly
sworn, did depose and say that he resides in 12 Walnut Court,
New City, NY 10950 that he is the Vice President of NEW ENGLAND LAMINATES
CO., INC., the corporation described in and which executed the above
instrument; and that he signed his name thereby by order of the Board of
Directors of said corporation.
Notary Public
DAVID B. GUBITS 1596925
Notary Public. State of New York
Qualified in Rockland County
Commission Expires November 30,1995
EXHIBIT 10.19(b)
LEASE AMENDMENT #1
BETWEEN
THE NEW YORK STATE
DEPARTMENT OF TRANSPORTATION
AND
NEW ENGLAND LAMINATES CO., INC.
LEASE AMENDMENT #1
This Amendment #1, dated February 17, 1995 ("Lease Amendment #1),
to Lease Contract #17000 L10046R (the "Agreement") entered into the
26th day of February, 1988 by and between:
THE STATE OF NEW YORK ACTING BY AND THROUGH ITS
DEPARTMENT OF TRANSPORTATION, having offices at 1220
Washington Avenue, Albany, New York 12232, hereinafter
referred to as the "Department", and NEW ENGLAND
LAMINATES CO., INC., a New York corporation, having its
office at 3 Elm Street, Walden, New York 12586-1805,
hereinafter referred to as the "Lessee". Lessee's
Employer Identification Number is 06-0697511.
WITNESSETH THAT:
WHEREAS, the Department is the owner of the Premises Known as
Stewart International Airport Industrial Park located in the Town
of New Windsor, New York and presently comprising approximately
8,000 acres, and wherever "Park" is used in this Lease it shall be
construed to mean the Industrial Park as it may be expanded from
time to time; and
WHEREAS, the Department and The Edgewater Stewart Company
("Original Lessee") mutually entered into the Agreement in February
1988; and
WHEREAS, pursuant to a Consent Agreement of even date herewith,
attached as "Exhibit B", the Department has approved an assignment
by Original Lessee to NEW ENGLAND LAMINATES CO., INC., Lessee, of
all of the obligations, right, title and interest in the Agreement;
and
WHEREAS, the Department and Lessee in consideration of this
assignment and other mutually beneficial consideration desire to
amend the Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions herein contained, the Agreement is amended
as follows:
1.ARTICLE 2, LEASED PREMISES
Delete Sections 2.4, 2.6 and 2.6.1.
2.ARTICLE 3, USE OF LEASED PREMISES
Replace Section 3.1 in its entirety with the following
language:
3.1 The Lessee shall occupy and use the Leased Premises
for the purpose of manufacturing and distribution of
electronic components. Nothing herein shall be construed
to prevent Lessee from using these Leased Premises for
any other lawful purposes consistent with the provisions
of this Agreement and the Park's current Performance and
Development Standards, with the prior approval of the
Department, which approval shall not be unreasonably
withheld.
3.ARTICLE 4, RENTAL
a)Replace Section 4.1.2 in its entirety with the following
language:
4.1.2 Commencing on the date of assignment of the
Agreement pursuant to the Consent Agreement and ending
September 30, 1998, Lessee shall pay an annual rent of
forty-five thousand three hundred fifty dollars and
seventy-nine cents ($45,350.79). Notwithstanding the
foregoing, during the first eight months after New York
State execution of this Lease Amendment #1, the
Department will abate the Rent amount each month by
$3779.23, which amount over an eight month period will
equal $30,233.84 in consideration of an upgrade by
Assignee of the Facility.
b)Replace Section 4.3 in its entirety with the following
language:
4.3 Assignee shall submit to the Department plans and
specifications for any construction, alterations or
changes in accordance with the Department's Tenant
Alteration Application.
c).Replace Section 4.4 in its entirety with the following
language:
4.4 In accordance with the provisions of Chapter 55 of the New
York State Laws of 1992, Section 18 of the State
Finance Law, if any payments shall not be made within
thirty (30) days of the due date thereof pursuant to this
Agreement, Lessee shall pay a late payment charge
equivalent to interest on the outstanding balance
accruing from the due date and calculated at the
underpayment rate set by the New York State Commissioner
of Taxation and Finance, or ten dollars ($10), whichever
is greater. Should Department need to prosecute
collection of rent or additional rent due under this
Agreement by reason of any such amount, or interest
thereon, unpaid in excess of 90 days from the due date
thereof, Lessee shall pay Department collection costs
(inclusive of allocable personnel and/or contractor
costs) for collection of such arrears up to 22 percent of
the amount owed together with interest thereon, as
additional rent.
c)Replace Sections 4.5 in its entirety with the following
language:
4.5 In addition to any other damage provisions herein, if
Lessee defaults under this Agreement and Lease Amendment
#l prior to March 1, 1997 with respect to the payment of
Rent, Lessee shall owe the Department the full amount of
the rent abatement ($30,233.84) set forth in Article
4.1.2 above.
4.ARTICLE 5, ACCEPTANCE, CARE, MAINTENANCE, IMPROVEMENTS AND
REPAIR
a)Replace Section 5.1 in its entirety with the following
language:
5.1 Lessee warrants that it has inspected and studied
the Leased Premises and takes the Leased Premises as documented in the First
Study.
b)Replace Section 5.1.2 in its entirety with the following
language:
5.1.2 Except as may otherwise be provided for herein,
the Department shall not be required to maintain nor to
make any improvements, repairs or restoration upon or to
the Leased Premises or to any of the Leased Premises. The
Department shall not have any obligation to repair,
maintain or restore any improvements upon the Leased
Premises.
C) Delete the following sections in their entirety: 5.1.1,
5.1.2, 5.1.3 and 5.1.6.
d) Delete the following first sentence in Section 5.1.5: "The
Department will facilitate environmental approvals as
necessary or appropriate for the construction and operation of
the project described herein."
5.ARTICLE 6, ADDITIONAL OBLIGATIONS OF LESSEE
a)Add a new Section 6.12 as follows:
6.12 The Lessee will comply with all of the
following Environmental Provisions:
6.12.1 Definitions. - For the purposes of this section, the
following terms shall have the following meanings:
Environmental Condition - Environmental Condition means
any pollutants, contaminants, petroleum, crude oil,
hazardous wastes, radioactive materials or any other
substances, the use and/or the removal of which is
required or the use of which is restricted, prohibited or
unlawful by any "Environmental Law".
Environmental Law - Environmental Law means any Federal,
State or local statute, ordinance, regulation or other
law of a governmental authority relating to pollution or
protection of the environment or the regulation of the
storage facilities or handling of contaminants or other
materials which may be harmful to the environment.
Hazardous Material - Hazardous Material means hazardous
materials defined by 40 CFR Part 300.5.
Person - Person means person defined by 40 CFR 300-5.
Responsible Party - Responsible Party means responsible
party defined by 6 NYCRR 375.
6.12.2 The Lessee accepts possession of the Leased
Premises "as is" in its present condition. Such condition
having been inspected, documented and certified by the
Lessee in an environmental baseline study attached as
Exhibit D (hereinafter "First Study"), prior to assuming
occupancy of the Leased Premises. The scope of services
for the First Study has been agreed to by both the Lessee
and Department.
6.12.3 Upon the expiration or earlier termination of
the Lease, Department will conduct an environmental
baseline study (the "Second Study") at its sole expense.
The same scope of services as used in the First Study
shall serve for the purposes of the initial scope of
services for the Second Study.
6.12.4 If the findings of the Second Study do not
match the findings of the First Study conducted and these
differences are attributable to activity or operations of
Lessee, then the Lessee shall be liable for, and be
required to undertake, at its sole cost and expense, all
remedial actions necessary to assure that the results of
the Second Study meet and come up to the standards of the
results of the First Study. Lessee shall return the
Leased Premises to Department in the same Environmental
Condition, or better, as when Department provided it to
the Lessee, unless differences in the Environmental
Condition are not attributable to activity or operations
of Lessee. In the event that hazardous material is found
on or under the Leased Premises and it is determined that
such hazardous material existed prior to Lessee's
assumption of the Agreement, the Department accepts
responsibility for such hazardous material to the extent
that it is determined to be the responsibility of the
Department and not the responsibility of other third
parties, as determined by law.
6.12.5 Both the First Study and Second Study shall, at
a minimum, address the presence, or lack thereof, of any
adverse Environmental Conditions on or under the Leased
Premises including the presence of any Hazardous
Material.
6.12.6 In the event the Lessee creates or discovers
at any time whatsoever, any adverse Environmental
Condition, or Hazardous Material, on the Leased Premises
or uses any hazardous material, it will promptly notify
the Department in writing and comply with all directives
of the Department not otherwise inconsistent with other
provisions of this Agreement.
6.12.7 The Lessee shall be considered the "generator"
of all adverse Environmental Conditions or Hazardous
Waste upon the Leased Premises (as well as any premises
to which the contamination has migrated) determined to be
present at the completion of the Second Study that were
not identified upon completion of the First Study that
are attributable to activity or operations of Lessee.
Lessee shall be responsible for removing all such
contamination on the Leased Premises and on any premises
to which it has migrated. Throughout the term of this
Agreement, the Lessee shall perform the duties and
responsibilities of the "generator" in compliance with
all applicable laws and regulations, including (without
limitation) identifying, packaging, manifesting,
reporting, recordkeeping, handling, transporting and
disposing of all hazardous and non-hazardous liquid or
solid wastes generated by the Lessee, its tenant(s),
successors) , assignee(s) , guest(s) or patron(s) , within
the Leased Premises. Lessee shall provide Department
with copies of all documentation in support of actions
taken in compliance with this Section.
6.12.8 As generator" of any environmental
contamination, accidental or otherwise, the Lessee shall
undertake immediate containment efforts to minimize
damage to the environment. In addition, the Lessee will
immediately notify the Department of such spill or
contamination and remove all contamination from both the
Leased Premises as well as any property the contamination
may migrate to. Lessee shall provide a written report to
the Department explaining the cause, location, time and
extent of such spill(s) or contamination.
6.12.9 In addition to compliance with Article 14,
Lessee shall conduct its operations and operate, use and
maintain the Leased Premises in such manner that there
will be at all times a practicable minimum of air
pollution, water pollution, or any other type of
pollution arising out of, relating to, or resulting from
the operation, use or maintenance of the Leased Premises.
6.12.10 Lessee shall not perform any repair or
alterations to the Leased Premises that might disturb any
existing environmental condition prior to obtaining the
written approval of the Department, which approval shall
not be unreasonably withheld.
6.12.11 Lessee shall provide the Department with a copy
of any and all reports on Environmental Conditions on the
Leased Premises, including the results of any laboratory
analysis that may be performed.
6.12.12 The Lessee shall be responsible to obtain all
certificates, permits, licenses, approvals, or
authorizations required by any Environmental Law for the
construction, installation, or operation of all
facilities on the Leased Premises. A copy of all such
certificates, approvals or authorizations shall be
provided to Department.
6.12.13 Lessee shall become a "co-permittee" upon the
Department's request for any environmental permit
required by Lessee's use of the Leased Premises.
6.12.14 Lessee acknowledges it is in possession of the
Stewart Industrial Park Final Environmental Impact
Statement and, in addition to any other obligations
herein, agrees to conduct its activities in a manner
consistent therein.
b). Add a new Section 6.13 as follows:
Lessee shall, at Department's request, provide Department
or any of its duly authorized representatives, at any
reasonable time and at its own expense, access to and the
right to examine any books, documents, papers and records
of Lessee pertinent to this Agreement.
c) Add a new section 6.14 as follows:
Lessee shall obtain the Department's prior written
approval before modifying or installing any floor or shop
drain systems, which approval shall not be unreasonably
withheld.
d) Add a new section 6.15 as follows:
For purposes of Section 6.12, "Lessee" shall mean New
England Laminates Co., Inc.
6. ARTICLE 11, ASSIGNMENT AND SUBLEASE
a) Delete Section 11.9.
7. ARTICLE 18, SURRENDER AND RIGHT OF RE-ENTRY
a) Add a new section 18.2 as follows:
18.2 In addition to the obligations of 18.1, Lessee
shall restore the floor to its original condition as it
was as of December 1, 1994 and prior to the placement of
its machinery and restore any other changes made on or
after December 1, 1994 and prior to the expiration of the
Agreement, at the Department's option.
9. ARTICLE 22, NOTICES
Substitute a new address for Lessee in Section 22.2 in lieu of
the address for Lessee as follows:
New England Laminates Co., Inc.
3 Elm Street
Walden, New York 14402
Attention: General Manager
Park Electrochemical Corp.
5 Dakota Drive
Lake Success, New York 11042
Attention: General Counsel
10.ARTICLE 27, ENTIRE AGREEMENT
a) Delete Section 27.1 and substitute the following:
27.1 This Agreement consists of Articles 1 to 27
inclusive, and Article AA, Appendix A and Exhibits A, B,
B-1, B-2, C and D and Schedule A.
<PAGE>
CERTIFICATE OF AUTHORITY
I, Alan R. Lesh, certify that I am the Secretary of New England
Laminates Co., Inc. ("NELCO"), a corporation duly organized and in good
standing under the New York Business Corporaiton Law named in the foregoing
agreement; that Allen Levine
who signed said agreement on behalf Of NELCO was, at the
time of execution, a Vice President of NELCO, that said agreement was duly
signed for and in behalf of said NELCO by authority of its Board of
Directors, thereunto duly authorized, and that such authority is in full
force and effect at the date hereof.
(CORPORATE SEAL)
/s/ Alan R. Lesh
STATE OF New York
ss.:
Nassau COUNTY
On this 16thday of February, 1995 before me personally came
Alan R. Lesh to me known, and known to me to be the Secretary
of New England Laminates, the corporation described in and
which executed the above certificate, who being by me duly sworn
did depose and say that he, the said Alan R. Lesh
resides at 2578 East 2nd Street, Brooklyn, New York 11223
that he is the Secretary of said corporation and knows the corporate seal of
the said corporation; that the seal
affixed to the above certificate in such corporate seal and that it
was so affixed by order of the Board of Directors of said
corporation, and that he signed his/her name thereto by like
order.
________________________
Notary Public Nassau County
EXHBIT 11.01
<TABLE>
EXHIBIT NO. 11.01
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
COMPUTATION OF FULLY-DILUTED EARNINGS PER COMMON SHARE
(In thousands, except per share data)
<CAPTION>
Fiscal year ended
1995 1994 1993
ADJUSTMENT OF NET EARNINGS:
<S> <C> <C> <C>
Net earnings $17,345 $8,062 $2,265
Adjustments resulting from assumed
conversion of 7.25% convertible
subordinated debentures:
Reduction of interest expense
and amortization of deferred
debt financing costs 389 2,476 2,481
Related tax effect on above (136) (867) (844)
Net earnings as adjusted $17,598 $9,671 $3,902
ADJUSTMENT OF WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUT-
STANDING:
Weighted average number of
common shares outstanding 5,429 3,993 4,534
Add weighted average shares
assumed to be issued upon:
Conversion of convertible
subordinated debentures 252 1,610 1,613
Exercise of stock options 104 124
Adjusted weighted average number
of common shares outstanding
during the period 5,785 5,727 6,141
NET EARNINGS PER SHARE FULLY-DILUTED $ 3.04 $ 1.69 $ .63*
_____________________________________
<FN>
*Calculations of fully diluted earnings per share for the fiscal year ended
February 28, 1993 is antidilutive. Accordingly, the Consolidated Statement
of Earnings reflects the primary earnings per share of $.50 for the 1993
fiscal year.
</TABLE>
EXHIBIT 22.01
EXHIBIT 22.01
SUBSIDIARIES OF PARK ELECTROCHEMICAL CORP.
The following table lists Park's subsidiaries and the jurisdiction in which
each such subsidiary is organized.
Jurisdiction of
Name Incorporation
Dielectric Polymers, Inc. Massachusetts
FiberCote Industries, Inc. Connecticut
Grand Rapids Die Casting Corp. Michigan
Metclad S.A. France
Nelco International Corporation Delaware
Nelco GmbH West Germany
Nelco Products, Inc. Delaware
Nelco Products Pte. Ltd. Singapore
Nelco S.A. France
Nelco Technology, Inc. Arizona
Neltec, Inc. Delaware
Neluk, Inc. Delaware
New England Laminates Co., Inc. New York
New England Laminates (U.K.) Ltd. England
Skunk Works, Inc. New York
Technocharge Limited England
Tweedbank P.C.B. Supplies Limited Scotland
Zin-Plas Corporation Michigan
Zin-Plas of Canada, Inc. Canada
EXHIBIT 24.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
Nos. 33-3777, 33-16650, 33-55383 and 33-63956 on Form S-8 of our report
dated April 17, 1995, with respect to the consolidated financial statements
and schedules of Park Electrochemical Corp. included in the Annual Report on
Form 10-K of Park Electrochemical Corp. for the fiscal year ended February
26, 1995.
ERNST & YOUNG LLP
New York, New York
May 24, 1995
EXHIBIT 24.02
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statements
Nos. 33-3777, 33-16650, 33-63956 and 33-55383 of Park Electrochemical Corp.
on Form S-8 of our report dated May 7, 1993 (October 8, 1993 as to Note 14)
(which contains an explanatory paragraph relating to a restatement)
appearing in this Annual Report on Form 10-K of Park Electrochemical Corp.
for the fiscal year ended February 26, 1995.
DELOITTE & TOUCHE LLP
New York, New York
May 23, 1995
EXHIBIT 24.03
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
Nos. 33-3777, 33-16650, 33-63956 and 33-55383 of Park Electrochemical Corp.
on Form S-8 of our reports dated May 1, 1993 relating to the financial
statements of New England Laminates (UK) Limited, Technocharge Limited and
Tweedbank PCB Supplies Limited, wholly owned subsidiaries of Park
Electrochemical Corp. (the "Company") which reports are contained in the
Company's Annual Report on Form 10-K for the fiscal year ended February 26,
1995.
ARTHUR ANDERSEN
Chartered Accountants and Registered Auditors
Manchester, England
May 1, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the financial statements of Park Electrochemical Corp. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> FEB-26-1995
<PERIOD-END> FEB-26-1995
<CASH> 30,803
<SECURITIES> 15,107
<RECEIVABLES> 35,662
<ALLOWANCES> 2,490
<INVENTORY> 16,181
<CURRENT-ASSETS> 98,320
<PP&E> 125,175
<DEPRECIATION> 63,748
<TOTAL-ASSETS> 162,051
<CURRENT-LIABILITIES> 43,285
<BONDS> 23
<COMMON> 679
0
0
<OTHER-SE> 111,369
<TOTAL-LIABILITY-AND-EQUITY> 162,051
<SALES> 253,022
<TOTAL-REVENUES> 254,844
<CGS> 196,917
<TOTAL-COSTS> 226,912
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 431
<INCOME-PRETAX> 27,501
<INCOME-TAX> 10,156
<INCOME-CONTINUING> 17,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,345
<EPS-PRIMARY> $3.19
<EPS-DILUTED> $3.04
</TABLE>
