Lease Between Duke Realty Limited Partnership And Southcorp Packaging USA Inc.

Exhibit 10.35


FIRST LEASE AMENDMENT


THIS FIRST LEASE AMENDMENT (the " Amendment" ) is executed this 30 th day of November 1998, by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership (" Leasor or Landlord" ), and SOUTHCORP PACKAGING USA, INC., a Nevada corporation d/b/a, f/k/a North America Packaging Corp. and f/k/a Rheem Container Corporation (" Lessee or Tenant" )

W I T N E S S E T H :

WHEREAS, Industrial Associates Number One, as predecessor in interest to Landlord, and Tenant entered into a certain lease dated June 14, 1989 (the " Lease" ), whereby Tenant leased from Landlord certain premises consisting of approximately 83,200 square feet of space (the " Original Premises" ) located in Building No. 641 and commonly known as 6061 Guion Road, Indianapolis, Indiana 46254; and


WHEREAS, Landlord and Tenant desire to expand the Original Premises by approximately 3,864 square feet (the " Additional Space" ). Collectively, the Original Premises and Additional Space shall hereinafter be referred to as the " Leased Premises" ; and


WHEREAS, Landlord and Tenant desire to extend the Lease Term;


WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease to reflect such expansion and extension

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained and each act performed hereunder by the parties, Landlord and Tenant hereby enter into this Amendment.


1. Amendment of Section 1 . The Leased Premises . Commencing June 1, 1999, Section 1 of the Lease is hereby amended by substituting Amended Exhibit A , attached hereto and incorporated herein by reference, on which the Original Premises are striped and the Additional Space is cross-hatched, in lieu of Exhibit A attached to the Lease. Section 1 of the Lease is further amended to replace " 83,200" with " 87,064" in the first sentence thereof and to replace " 6069 with " 6061" in the second sentence thereof.


2. Amendment of Section 2 . Term . Section 2 of the Lease is hereby amended no reflect the extension of the Lease Term through May 31, 2009.


3. Amendment of Section 3 . Rent . Commencing June 1, 1999, Paragraphs (a) and (b) of Section 3 of the Lease are hereby deleted in their entirety and the following is substituted in lieu thereof:

(a) During the period from June 1, 1999 through May 31, 2004, the sum of Three Hundred Fifty-eight Thousand Seven Hundred Three Dollars and Sixty-four Cents ($358,703.64) per year, payable in equal monthly installments of Twenty-nine Thousand Eight Hundred Ninety-one Dollars and Ninety-seven Cents ($29,891.97); and


(b) During the period from June 1, 2004 through May 31, 2009, the sum or Three Hundred Ninety-five Thousand Two


Hundred Seventy Dollars and Fifty-two Cents ( $395,270.52) per year, payable in equal monthly installments Thirty-two Thousand Nine Hundred Thirty-nine Dollars and Twenty-one Cents ($32,939.21).


4. Amendment of Section 23 . Notice . Section 23 of the Lease is hereby amended to reflect the following notice and payment addresses:

Landlord:

Duke Realty Limited Partnership

8888 Keystone Crossing, Suite 1200

Indianapolis, IN 46240 Tenant:

Southcorp Packaging USA, Inc.

Guion Road

Indianapolis, IN 46254 Address for rental and other payments:

Duke Realty Limited Partnership

P.O. Box 56259

Indianapolis, IN 46266


5. Additional Provisions . The Lease is hereby amended by adding the following additional sections:

30. Construction of Tenant Improvements . Tenant has personally inspected the Leased Premises and accepts the same " AS IS" without representation or warranty by Landlord of any kind and with the understanding that Landlord shall have no responsibility with respect thereto except to construct in a good and workmanlike manner the improvements designated as Landlord' s obligations in the attached Exhibit D . Such improvements shall be in accordance with and at the expense of the party indicated on Exhibit D .

31. Financial Statements . During the Lease Term and any extensions thereof, Tenant shall provide to Landlord on an annual basis, within ninety (90) days following the end of Tenant' s fiscal year, a copy of Tenant' s most recent certified and audited financial statements prepared as of the end of Tenant' s most recent fiscal year. Such financial statements shall be prepared in conformity with generally accepted accounting principles, consistently applied.


32. Representations and Indemnifications . Any representations and indemnifications or Landlord contained in the Lease shall not be binding upon (i) any mortgagee having a mortgage presently existing or hereafter placed on the Building, or (ii) a successor to Landlord which has obtained or is in the process of obtaining fee title interest to the Building as a result of a foreclosure of any mortgage or a deed in lieu thereof.


6. Tenant' s Representations and Warranties . The undersigned represents and warrants to Landlord that (i) Tenant is duly organized, validly existing and in good standing in accordance with the laws of the state under which it was organized; (ii) all action necessary to authorize the execution of this Amendment has been taken by Tenant; and (iii) the individual executing and delivering this Amendment on behalf of Tenant has been authorized to do so, and such execution and delivery shall bind Tenant. Tenant, at Landlord' s request, shall provide Landlord with evidence of such authority.


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LEASE AGREEMENT


THIS LEASE AGREEMENT is executed this 14 day of June, 1989, by and between INDUSTRIAL ASSOCIATES NUMBER ONE, a partnership with offices in Marion County, Indiana (" Lessor" ) and RHEEM CONTAINER CORPORATION, a Nevada corporation, admitted to do business in Indiana with offices at 6069 Guion Road, Indianapolis, Indiana (" Lessee" ).


WHEREAS, Lessee is currently leasing a building owned by Lessor in Indianapolis, Indiana, commonly known as 6069 Guion Road, pursuant to a Lease Agreement dated May 31, 1974, as supplemented by Addenda dated March 20, 1978 and July 24, 1984, for a term which commenced June 1, 1974 and will expire May 31, 1989 (the " Existing Lease" ); and

WHEREAS, the parties desire to enter into a new lease agreement with respect to the premises described in the Existing Lease for a term commencing June 1, 1989;


NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties enter into the following lease agreement:


1. The Leased Premises . The Lessor hereby leases and grants to the Lessee and the Lessee hereby leases from the Lessor those premises outlined in red on the plot plan which is marked Exhibit A and attached hereto as a part of this Lease, have a gross area of approximately 83,200 square feet (hereinafter referred to as the " Leased Premises" ), together with the


exclusive right to use all parking spaces on the Real Estate (hereinafter defined), the non-exclusive right of ingress to and egress from the Leased Premises over access ways from time to time maintained by Lessor, and the non-exclusive right to use a railroad spur track constructed by Lessor to serve the Leased Premises and other properties, subject to reasonable rules and regulations of Lessor from time to time in effect. The Leased Premises are located on real estate in Marion County, Indiana, commonly known as 6069 Guion Road, Indianapolis, Marion County, Indiana, and more particularly described on Exhibit B attached hereto as a part hereof (herein referred to as the " Real Estate" ).


2. Term . The term of this Lease shall be for a period of ten (10) years, commencing June 1, 1989, and expiring at midnight May 31, 1999 (the " Lease Term" ).


3. Rent . Lessee agrees to pay to Lessor as rent for the Leased Premises during the Lease Term the following amounts:


(a) During the period from June 1, 1989 through May 31, 1994, the sum of Two Hundred Forty Nine Thousand Six Hundred Dollars ($249,600.00) per year, payable in equal monthly installments of Twenty Thousand Eight Hundred Dollars ($20,800.00); and

(b) During the period from June 1, 1994 through May 31, 1999, the annual rent set forth in subparagraph (a)


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above, multiplied by the Cost of Living Quotient. The " Cost of Living Quotient" shall be the quotient obtained by dividing the Cost of Living Index Number for the month of June 1994 by the Cost of Living Index Number for the month of June 1989, but not less than 1, nor more than 1.1. Until the adjusted rent is determined, Lessee shall pay rent based upon the latest available Cost of Living Number subject to adjustment when the Cost of Living Number for June 1994 is available. The " Cost of Living Index Number" shall be the index number set forth in the column for " All- Items" for the group labeled " All Urban Consumers (CPI-U) (1982-84 = 100)" in the Consumer Price Index United States City Average published by the United States Department of Labor, Bureau of Labor Statistics, or, if such index should be discontinued, such other index, standard, or statistics which most nearly measures the relative purchasing power of the consumer dollar on the dates set forth above.

Rent shall be payable without relief from valuation or appraisement laws, and the monthly installments shall be paid in advance on the first day of each month commencing June 1, 1989. In the event the Lease Term terminates on a day other than the last day of a calendar month, Lessor shall refund a pro-rata portion of the monthly rent paid by Lessee for that month.

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Payments of any installments of rent or other charges hereunder overdue for fifteen (15) days or more shall bear interest at the rate of three percent (3%) per annum above the prime interest rate in effect from time to time at INB National Bank, Indianapolis, Indiana, from the due date thereof until paid. In addition, Lessor may exercise its rights under paragraph 10 of this Lease.


4. Property Taxes . Lessor agrees to pay all real property taxes. Commencing with real property taxes payable in 1990, Lessee agrees to pay to Lessor as additional rent the amount of any increase in real property taxes payable with respect to the Real Estate and the improvements thereon over $19,607.80, being the real property taxes payable by Lessor in the year 1989. Lessee' s share of the real property taxes which are assessed during the last year of the Lease Term shall be pro-rated on a per diem basis. The term " real property taxes" shall include any excise, sales or gross receipts tax hereafter levied upon the gross rental receipts of Lessor hereunder. Lessee shall pay its share in semi-annual installments upon demand, provided, that Lessor shall furnish to Lessee copies of the tax statement for the base year, and for each year for which a contribution is due from Lessee, together with a statement showing the computation of Lessee' s share. Lessee shall pay all property taxes levied on Lessee' s personal property in the Leased Premises and on the Real Estate, it being agreed that the silos, cooling towers, tanks,


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compressors, bridge connecting the Leased Premises to the building to the South, manufacturing and material handling equipment and any other equipment installed in and on the Leased Premises, or on the Real Estate, by Lessee shall remain Lessee' s personal property for tax purposes.

5. Brokers . Each of the parties represents and warrants that it has not made any commitments or agreements by reason of which the other party is or will be obligated to pay any brokerage commission or finder' s fee or similar charges in connection with this Lease, and each party shall indemnify the other with respect to any such commissions, fees or charges caused by it.

6. Use of Leased Premises . The Leased Premises shall be used by the Lessee for the following purposes:


The manufacture of molded plastic products, including necessary light steel stamping accessories, warehousing, storage and office, and for no other purpose without the prior written consent of the Lessor, which consent will not be unreasonably withheld.


Lessee shall not use the Leased Premises or fail to maintain them in any manner constituting a violation of any ordinance, statute, regulations or order of any governmental authority, including but not limited to zoning ordinances,


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nor will the Lessee maintain or permit any nuisance to occur or be maintained on the Leased Premises.

Lessee shall not affix to or upon the exterior of the Leased Premises any signs, awnings, or other equipment, except with the prior written approval of Lessor, which will not be unreasonably withheld.

Lessee covenants and agrees that Lessee will use, maintain and occupy the Leased Premises in a careful, safe and proper manner, will not commit waste thereon, and will comply with the provisions of this Lease with respect to the protection of the environment.

7. Environmental Matters . Lessee shall not permit any hazardous materials to be brought upon, maintained or used in or about the Leased Premises or the Real Estate except in strict compliance with all applicable governmental laws and regulations, and shall promptly notify Lessor in writing of any spills, or discharges thereof, and of all notices, investigations, inspections or orders of any governmental agency with respect to Lessee' s operations at the Leased Premises.


Lessee shall promptly correct, and shall indemnify, defend and hold harmless Lessor, and its partners, from all fines, suits, proceedings, claims, actions and liabilities of any kind arising out of or in any way connected with, any spills or discharges of hazardous substances or wastes by Lessee, or any


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invitees or licensees of Lessee, at the Leased Premises or the Real Estate that are based upon events occurring during the period of Lessee' s occupancy from and after June 1, 1974, whether arising under laws and regulations now in effect or enacted or adopted at any time hereafter. Lessee' s obligations and liabilities under this paragraph shall continue so long as Lessor, or its successors and assigns, remain responsible for any spills or discharges of hazardous substances or wastes at or from the Leased Premises or the Real Estate, and shall include, without implied limitation, the payment of all costs incurred in connection with any investigation of site conditions, and any clean-up, removal, and restoration work required by any federal, state or local go ...