Lease Between Carlyle/FR Investors L.L.C. And Southcorp Packaging

Exhibit 10.36


FIRST INDUSTRIAL, L.P.

STANDARD FORM

INDUSTRIAL BUILDING LEASE (Single Tenant)

1. BASIC TERMS . This Section 1 contains the Basic Terms of this Lease between Landlord and Tenant, named below. Other Sections of the Lease referred to in this Section 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.

1.1. Date of Lease: November 1, 1999.

1.2. Landlord: Carlyle/FR Investors, L.L.C., a Delaware limited liability company.

1.3. Tenant: Southcorp Packaging.

1.4. Premises: See " Exhibit A" .

1.5. Lease Term: 10 years 0 months (" Term" ), commencing November 1, 1999 (" Commencement Date" ) and ending October 31, 2009 (" Expiration Date" ).

1.6. Permitted Uses: (See Section 4) Storage and Manufacturing of Plastic Containers.

1.7. Tenant' s Guarantor: (if none, so state) None.

1.8. Brokers: (See Section 23; if none, so state)

(A) Tenant' s Broker: None.

(B) Landlord' s Broker: None.

1.9. Security Deposit: (See Section 4) $22,550.00.

1.10. Base Rent Payable by Tenant is: $27,880.00 per month with annual escalation at 2.5% per annum.

1.11. Riders to Lease: The following riders are attached to and made a part of this Lease (If none, so state) Exhibit A (Legal Description), Exhibit B (Landlord Improvements), Exhibit C (Rheem Lease) and Rules and Regulations.


2. LEASE OF PREMISES; RENT .


2.1. Lease of Premises for Lease Term . Landlord hereby leases the Premises to Tenant, and Tenant hereby rents the Premises from Landlord, for the Term and subject to the conditions of this Lease.

2.2. Types of Rental Payments . Tenant shall pay rents of (a) net base rent payable in monthly installments as set forth in Section 1.10 hereof, in advance, on the first day of each and every calendar month during the Term of this Lease (the " Base Rent" ); and (b) those Operating Expenses (defined below) that exceed, on a per annum basis, the Operating Expenses paid or incurred during the 1999 Operating Year (defined below) [collectively, " Additional Rent" ]; and (c) in the event any monthly installment of Base Rent or Additional Rent, or both, is not paid within 10 days of the date when due, a late charge in an amount equal to 5% of the then delinquent installment of Base Rent and/or Additional Rent (the " Late Charge" ; the Late Charge, Base Rent and Additional Rent shall collectively be referred to as " Rent" ), to Carlyle/FR Investors, 21172 Network Place, Chicago, IL 60673 (or such other entity designated as Landlord' s management agent, if any, and if Landlord so appoints such a management agent, the " Agent" ), or pursuant to such other directions as Landlord shall designate in this Lease or otherwise in writing.

2.3. Covenants Concerning Rental Payments . Tenant shall pay the Rent promptly when due, without notice or demand, and without any abatement, deduction or setoff, except as may otherwise be expressly and specifically provided in this Lease. No payment by Tenant, or receipt or acceptance by Agent or Landlord, of a lesser amount then the correct Rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or letter accompanying any payment be deemed an accord or satisfaction, and Agent or Landlord may accept such payment without prejudice to its right to recover the balance due or to pursue any other remedy available to Landlord. If the Commencement Date occurs on a day other than the first day of a calendar month, the Rent due for the first calendar month of the Term shall be prorated on a per diem basis and paid to Landlord on the Commencement Date, and the Term will be extended to terminate on the last day of the calendar month in which the Expiration Date stated in Section 1.5 occurs.


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3. OPERATING EXPENSES .


3.1. Definitional Terms Relating to Additional Rent . For purposes of this Section and other relevant provisions of the Lease


3.1.1. Operating Expenses . The term " Operating Expenses" shall mean all costs and expenses paid or incurred with respect to the ownership, repair, replacement, restoration, maintenance and operation of the Premises, including, without limitation, the following: (i) all costs, wages and benefits of employees or other agents of Landlord or Agent engaged in the operation, maintenance or rendition of other services to or for the Premises; (ii) to the extent not separately metered, billed, or furnished, all charges for utilities and services furnished to the Premises, together with any taxes on such utilities; (iii) all premiums for casualty, workers' compensation, liability, boiler, flood and all other types of insurance provided by Landlord and relating to the Premises; (iv) the cost of all supplies, tools, materials and equipment utilized in the ownership and operation of the Premises, and sales and other taxes thereon; (v) amounts charged by any or all of contractors, materialmen and suppliers for services, materials and supplies furnished in connection with any or all of the operation, repair and maintenance of any part of the Premises (excluding the structural elements of the Premises for which Landlord is responsible as set forth in Section 13.2 hereof); (vi) any capital improvements made by, or on behalf of, Landlord to the Premises that are either or both (a) designed to reduce Operating Expenses and (b) required to keep the Premises in compliance with all governmental laws, rules and regulations (enacted from and after the date of this Lease) applicable thereto, from time to time; (vii) all professional fees incurred in connection with the operation, management and maintenance of the Premises; and (viii) Taxes, as hereinafter defined.


3.1.2. Taxes . The term " Taxes," as referred to in Section 3.1.1(viii) above shall mean (i) all governmental taxes, assessments, fees and charges of every land or nature (other than Landlord' s income taxes), whether general, special, ordinary or extraordinary, due at any time or from time to time, during the Term and any extensions thereof, in connection with the ownership, leasing, or operation of the Premises, or of the personal property and equipment located therein or used in connection therewith; and (ii) any reasonable expenses incurred by Landlord in contesting such taxes or assessments and/or the assessed value of the Premises. For purposes hereof, Taxes for any year shall be Taxes that are due for payment or paid in that year rather than Taxes that are assessed, become a lien, or accrue during such year.

3.1.3. Operating Year . The term " Operating Year" shall mean the calendar year commencing January 1st of each year (including the calendar year within which the Commencement Date occurs) during the Term.

3.2. Payment of Operating Expenses . Tenant shall pay, as Additional Rent and in accordance with the requirements of Section 3.3, the Operating Expenses as set forth in Sections 2.2. and 3.3. The Additional Rent commences to accrue upon the Commencement Date. Tenant' s share of Operating Expenses payable by Tenant hereunder for the Operating Years in which the Term begins and ends shall be prorated to correspond to that portion of said Operating Years occurring within the Term. Operating Expenses and any other sums due and payable under this Lease shall be adjusted upon receipt of the actual bills therefor and the obligations of this Section 3 shall survive the termination or expiration of the Lease. Following the end of each Operating Year, Landlord shall provide Tenant with written notice (the " Landlord' s Notice" ) of the actual Operating Expenses due and payable by Tenant pursuant to the terms hereof. Within thirty (30) days following receipt of Landlord' s Notice, and upon reasonable prior written notice to Landlord (but no more than one time per Operating Year), Tenant shall have the right, at Tenant' s expense and during Landlord' s normal business hours, to inspect Landlord' s books and records showing such Operating Expenses; provided, however, that the foregoing shall not relieve Tenant of paying any deficiency shown by Landlord' s Notice within thirty (30) days after receipt thereof. Unless Tenant shall by notice to Landlord within such thirty (30) day period, take exception to any item in Landlord' s Notice, the Landlord' s Notice shall be conclusively binding and shall not be contestable by Tenant. In the event Tenant' s review of Landlord' s books and records reveals an overpayment by Tenant, Landlord shall credit the overpayment to the next due installments of Rent or, if this Lease has terminated, Landlord shall refund such overpayment directly to Tenant. Tenant acknowledges that Landlord' s books and records are confidential and proprietary in nature and that Landlord could be damaged if such books and records became public. Therefore, Tenant agrees to keep such books and records in strict confidence and not to publish or disseminate the same or any information therein without Landlord' s prior approval.


3.3. Payment of Additional Rent . Notwithstanding the terms of Section 3.2 to the contrary, Landlord shall have the right to reasonably estimate the Operating Expenses payable by Tenant hereunder for each Operating Year. Upon Landlord' s or Agent' s notice to Tenant of such estimated amount. Tenant shall pay, on the first day of each month during that Operating Year, an amount (the " Estimated Additional Rent" ) equal to the estimate of the Operating Expenses payable by Tenant hereunder divided by 12 (or the fractional portion of the Operating Year remaining at the time Landlord delivers its notice of estimated Operating Expenses due from Tenant for the Operating Year). If the aggregate amount of Estimated Additional Rent actually paid by Tenant during any Operating Year is less than Tenant' s actual ultimate liability for Operating Expenses for that particular Operating Year, Tenant shall pay the deficiency within 30 days of Landlord' s written demand therefor. If the aggregate amount of Estimated. Additional Rent actually paid by Tenant during a given Operating Year exceeds Tenant' s actual liability for such Operating Year, the excess shall be credited against the Estimated Additional Rent next due from Tenant during the immediately subsequent Operating Year, except that in the event that such excess is paid by Tenant during the final Operating Year, then


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upon the expiration of the Term, Landlord or Agent shall pay Tenant the then-applicable excess promptly after determination thereof. No interest shall be payable to Tenant on account of such payments of Estimated Additional Rent and such payments may be commingled.

4. USE OF PREMISES; SIGNAGE; SECURITY DEPOSIT .


4.1. Use of Premises . The Premises shall be used by Tenant for the purpose' s) set forth in Section 1.6 above and for no other purpose whatsoever. Tenant shall not, at any time, use or occupy, or suffer or permit anyone to use or occupy, the Premises, or do or permit anything to be done in the Premises, in any manner that may (a) violate any Certificate of Occupancy for the Premises; (b) cause, or be liable to cause, injury to, or in any way impair the proper utilization of, all or any portion of the Premises (including, but not limited to, the structural elements of the Building, as defined in Exhibit A) or any equipment, facilities or systems therein; (c) constitute a violation of the laws and requirements of any public authority or the requirements of insurance bodies or the rules and regulations of the Premises, including any covenant, condition or restriction affecting the Premises; (d) exceed the load bearing capacity of the floor of the Building; (e) impair or tend to impair the character, reputation or appearance of the Premises; or (f) unreasonably annoy, inconvenience or disrupt the operations or tenancies of other tenant.; or users of the Premises, if any.

4.2. Signage . Tenant shall not affix any sign of any size or character to any portion of the Premises, without prior written approval of Landlord, which approval shall not be unreasonably withheld or delayed. Tenant shall remove all signs of Tenant upon the expiration or earlier termination of this Lease and immediately repair any damage to the Premises caused by, or resulting from, such removal.


4.3. Security Deposit . Simultaneously with the execution and delivery of this Lease, Tenant shall deposit with Landlord or Agent the sum set forth in Section 1.8 above, in cash (the " Security" ), representing security for the performance by Tenant of the covenants and obligations hereunder. The Security shall be held by Landlord or Agent, without interest, in favor of Tenant; provided, however, that no trust relationship shall be deemed created thereby and the Security may be commingled with other assets of Landlord. If Tenant defaults in the performance of any of its covenants hereunder, Landlord or Agent may, without notice to Tenant, apply all or any part of the Security, to the extent required for the payment of any Rent or other sums due from Tenant hereunder, in addition to any other remedies available to Landlord. If such application occurs. Landlord shall make a reasonable effort a so advise Tenant, in writing, promptly following such application. In the event the Security is so applied, Tenant shall, upon demand, immediately deposit with Landlord or Agent a sum equal to the amount so used. If Tenant fully and faithfully complies with all the covenants hereunder, the Security (or any balance thereof) shall be returned to Tenant within 30 days after the last to occur of (i) the date the Term expires or terminates or (ii) delivery to Landlord of possession of the Premises. Landlord may deliver the Security to any purchaser of Landlord' s interest in the Premises [or any Successor Landlord (defined below), if applicable], and thereupon Landlord and Agent shall be discharged from any further liability with respect to the Security.

5. CONDITION AND DELIVERY OF PREMISES .

5.1. Condition of Premises . Tenant agrees that Tenant is familiar with the condition of the Premises, and Tenant hereby accepts the foregoing on an " AS-IS," " WHERE-IS" basis. Tenant acknowledges that neither Landlord nor Agent nor any representative of Landlord has made any representation as to the condition of the foregoing or the suitability of the foregoing for Tenant' s intended use. Tenant represents and warrants that Tenant has made its own inspection of the foregoing. Neither Landlord nor Agent shall be obligated to make any repairs, replacements or improvements (whether structural or otherwise) of any kind or nature to the foregoing in connection with, or in consideration of, this Lease, except (a) as set forth in Sections 18 and 13 and (b) with respect to all (if any) repairs and improvements expressly and specifically described in Exhibit B attached hereto (" Work Items" ). Landlord agrees to make reasonable efforts to enforce, or cause Agent to enforce, upon Tenant' s request, all manufacturer' s or contractor' s warranties, if any, issued in connection with any of the Work Items. Notwithstanding the foregoing to the contrary, Landlord hereby represents and warrants to Tenant that the three (3) Reznor Gas Unit Heaters shall be in good working order on the Commencement Date.


5.2. Delay in Commencement . Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Premises to Tenant on the Commencement Date. The obligations of Tenant under the Lease shall not be affected thereby, except that the Commencement Date shall be delayed until Landlord delivers possession of the Premises to Tenant, and the Lease Term shall be extended by a period equal to the number of days of delay in delivery of possession of the Premises to Tenant, plus the number of days necessary to end the Lease Term on the last day of a month.

6. SUBORDINATION; NOTICES TO SUPERIOR LESSORS AND MORTGAGEES; ATTORNMENT .


6.1. Subordination . Provided that Tenant is provided with a reasonable and customary subordination, nondisturbance and attornment agreement duly executed by the holder of any mortgage or deed of trust or the landlord pursuant to any ground ease, this Lease is and shall be subject and subordinate at all times to all ground leases or underlying leases that may now exist or hereafter be executed affecting the Premises; and to


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any mortgage or deed of trust that may now exist or be placed upon, and encumber, any or all of the Premises; any ground leases or underlying leases for the benefit of the Premises; or all or any portion of Landlord' s interest or estate in any of said items. Notwithstanding the foregoing, Landlord shall have the right to subordinate (or cause to be subordinated) any such ground leases or underlying leases for the benefit of the Premises, or any such mortgage or deed of trust liens, to this Lease. Tenant shall execute and deliver, within 10 days after request by Landlord and in the form reasonably requested by Landlord, any additional documents evidencing the priority of subordination of this Lease with respect to any such ground leased or underlying leases or any such mortgage or deed of trust.

6.2. Estoppel Certificates . Tenant agrees, from time to time and within 10 days after request by Landlord, to deliver to Landlord, or Landlord' s designee, an estoppel certificate stating such matters pertaining to this Lease as may be reasonably requested by Landlord. Failure by Tenant to timely execute and deliver such certificate shall constitute an acceptance of the Premises and acknowledgment by Tenant that the statements included therein are true and correct without exception. Landlord and Tenant intend that any statement delivered pursuant to this section may be relied upon by any prospective purchaser or mortgagee of the Premises or of any interest therein or any other Landlord designee.

6.3. Transfer for Landlord . In the event of a sale or conveyance by Landlord of the Premises, the same shall operate to release Landlord from any future liability for any of the covenants or conditions, express or implied, herein contained in favor of Tenant, and in such event Tenant agrees to look solely to Landlord' s successor in interest with respect thereto and agrees to attorn to such successor; provided, however, that the purchaser of the Premises separately assumes all of Landlord' s obligations and liabilities under this Lease.


7. QUIET ENJOYMENT . Subject to the provisions of this Lease, so long as Tenant pays all of the Rent and performs all of its other obligations hereunder, Tenant shall not be disturbed in its possession of the Premises by Landlord, Agent or any other person lawfully claiming through or under Landlord. This covenant shall be construed as a covenant running with the Premises and is not a personal covenant of Landlord. Notwithstanding the foregoing, however, Tenant acknowledges and agrees that Landlord shall have the unfettered and unilateral right to use portions of the Premises (but not the interior of the Building) for such purposes and uses as Landlord may desire; provided, however, that in all events and under all circumstances. Landlord' s use of any portion of the Premises shall not interfere, in any material respect, with any or all of (a) Tenant' s rights to occupy and use the Premises (in the manner and for the purposes contemplated hereunder); (b) Tenant' s right to utilize the vehicular parking areas located on the Premises; and (c) Tenant' s right of access, ingress and egress to and from the Premises.


8. ASSIGNMENT, SUBLETTING AND MORTGAGING .


8.1. Prohibition . Tenant acknowledges that this Lease and the Rent due under this Lease have been agreed to by Landlord in reliance upon Tenant' s reputation and creditworthiness and upon the continued operation of the Premises by Tenant for the particular use set forth in Section 4 above; therefore, Tenant shall not, whether voluntarily, or by operation of law, or otherwise: (a) assign or otherwise transfer this Lease; (b) sublet the Premises or any part thereof, or allow the same to be used or occupied by anyone other than Tenant; or (c) mortgage, pledge, encumber or otherwise hypothecate this Lease or the Premises, or any part thereof, in any manner whatsoever, without in each instance obtaining the prior written consent of Landlord, which consent may be given or withheld is Landlord' s sole, but reasonable, discretion; provided, however, notwithstanding the foregoing to the contrary, Tenant may assign this Lease or sublet the Premises to an affiliate (defined below) without the prior consent of Landlord. Any purported assignment (to other than a Tenant affiliate), mortgage, transfer, pledge or sublease (to other than a Tenant affiliate) made without the prior written consent of Landlord shall be absolutely null and void. No assignment of this Lease shall be effective and valid unless and until the assignee executes and delivers to Landlord any and all documentation reasonably required by Landlord in order to evidence assignee' s assumption of all obligations of Tenant hereunder. Any consent by Landlord to a particular assignment, sublease or mortgage shall not constitute consent or approval of any subsequent assignment, sublease or mortgage, and Landlord' s written approval shall be required in all such instances. No consent by Landlord to any assignment of sublease shall be deemed to release Tenant from its obligations hereunder and Tenant shall remain fully liable for performance of all obligations under this Lease.


8.2. Rights of Landlord . If this Lease is aligned, or if the Premises (or any part thereof) are sublet or used or occupied by anyone other than Tenant, whether or not in violation of this Lease, Landlord or Agent may (without prejudice to, or waiver of its rights), collect Rent from the assignee, subtenant or occupant. Landlord or Agent may apply the net amount collected to the Rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any of the provisions of this Section 8. With respect to the allocable portion of the Premises sublet, in the event that the total rent and any other considerations received under any sublease by Tenant is greater than the total Rent required to be paid, from time to time, under this Lease, Tenant shall pay to Landlord fifty percent (50%) of such excess as received from any subtenant and such amount shall be deemed a component of the Additional Rent.


8.3. Permitted Transfer . For purposes of this Lease, the term " affiliate" shall mean any entity that controls, is controlled by, or is under common control with Tenant. Any affiliate or other permitted


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transferee hereunder shall execute and deliver to Landlord any and all documentation reasonably require by Landlord in order to evidence assignee' s assumption of all obligations of Tenant hereunder.


9. COMPLIANCE WITH LAWS .


9.1 Compliance with Laws . Tenant shall, it its sole expense (regardless of the cost thereof), comply with all local, state and federal laws, rules, regulations and requirements now or hereafter in force and all judicial and administrative decisions in connection with the enforcement thereof (collectively " Laws" ), pertaining to either or both of the Premises and the Tenant' s use thereof. If any license or permit is required for the conduct of Tenant' s business in the Premises, Tenant, at its expense, shall procure such license prior to the Commencement Date, and shall maintain such license or permit in good standing throughout the Term. Tenant shall give prompt notice to Landlord of any written notice it receives of the alleged violation of any Laws or requirements of any governmental or administrative authority with respect to either or both of the Premises and the use or occupation thereof. The judgment of any court of competent jurisdiction, or the admission of Tenant in any action or proceeding against Tenant, whether Landlord is a party thereto or not, that any such Law pertaining to the Premises has been violated, shall be conclusive of that fact as between Landlord and Tenant.


9.2. Hazardous Materials . If during the Term (or any extension thereof) any Hazardous Material (defined below) is generated, transported, stored, used, treated or disposed of at, to, from, on or in the Premises by, or a result of any act or omission of, any or all of Tenant and any or all of Tenant' s Parties (defined below): (i) Tenant shall, at its own cost, at all times comply (and cause all others to comply) with all laws (federal, state or local) relating to Hazardous Materials, including, but not limited to, all Environmental Laws (defined below), and Tenant shall further, at its own cost, obtain and maintain in full force and effect at all times all permits and other approvals required in connection therewith; (ii) Tenant shall promptly provide Landlord or Agent with complete copies of all communications, permits or agreements with, from or issued by any governmental authority or agency (federal, state or local) or any private entity relating in any way to the presence, release, threat of release, or placement of Hazardous Materials on or in the Premises, or the generation, transportation, storage, use, treatment, or disposal at, on, in or from the Premises, of any Hazardous Materials; (iii) Landlord, Agent and their respective agents and employees shall have the right to either or both (a) enter the Premises and (b) conduct appropriate tests for the purposes of ascertaining Tenant' s compliance with all applicable Laws (including Environmental Laws), rules or permits relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from the Premises or any portion thereof; and (iv) upon written request by Landlord or Agent, Tenant shall provide Landlord with the results of reasonably appropriate tests of air, water or soil to demonstrate that Tenant complies with all applicable Laws relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from the Premises or any portion thereof. This Section 9.2 does not authorize the generation, transportation, storage, use, treatment or disposal of any Hazardous Materials at, to, from, on or in the Premises in contravention of this Section 9. Tenant covenants to investigate, clean up and otherwise remediate, at Tenant' s sole expense, any release of Hazardous Materials caused, contributed to or created by any or all of (A) Tenant and (B) any or all of Tenant' s officers, directors, invitees, agents, employees, contractors or representatives (" Tenant' s Parties" ) during the Term. Such investigation and remediation shall be performed only after Tenant has obtained Landlord' s prior written consent; provided, however, that Tenant shall be entitled to respond immediately to an emergency without first obtaining such consent. All remediation shall be performed in strict compliance with Environmental Laws and to the reasonable satisfaction of Landlord. Tenant shall be liable for any and all conditions covered hereby, and for all costs relating thereto, that are caused or created by any or all of Tenant and Tenant' s Parties. Tenant shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Materials in any way connected to the Premises without first obtaining Landlord' s written consent (which consent may be given or withheld in Landlord' s sole, but reasonable, discretion) and affording Landlord the reasonable opportunity to participate in any such proceedings. Landlord shall be liable for the investigation, clean up and remediation of any release of Hazardous Material to the extent caused, contributed to or created by Landlord or its agents, employees, representatives and contractors. As used herein, the term (x) " Environmental Laws" shall mean any and all Laws pertaining to Hazardous Materials or that otherwise deal with or relate to air or water quality, air emissions, soil or ground conditions or other environmental matters of any kind; and (y) " Hazardous Materials" shall mean any waste, material or substance (whether in the form of liquids, solids or gases, and whether or not air-borne) that is or may be deemed to be or include pesticide, petroleum, asbestos, polychlorinated biphenyl, radioactive material, urea formaldehyde or any other pollutant or contaminant that is or may be deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or that presents a risk to public health or to the environment, and that is or becomes regulated by any Environmental Law.

10. INSURANCE .

10.1. Insurance to be Maintained by Landlord . Landlord shall maintain (a) " all-risk" property insurance covering the Premises (at its full replacement cost), but excluding Tenant' s Property (defined in Section 12.2 below), and (b) commercial general public liability insurance covering Landlord for claims arising out of liabil ...