Maryland-Owings Mill-9830 Reisterstown Road Lease [Amendment No. 1] - Sweetheart Cup Co. Inc. and EarthShell Corp.
FIRST AMENDMENT TO
LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (this "Amendment") dated December
16 2003 (the "Effective Date of this Amendment") is entered into between
SWEETHEART CUP COMPANY INC. ("Landlord"), a Delaware corporation, having an
office at 10100 Reisterstown Road, Owings Mills, Maryland 21117 and EARTHSHELL
CORPORATION, a Delaware corporation, having an office at 800 Miramonte Drive,
Santa Barbara, California 93109 ("Tenant"), with reference to the following
facts:
RECITALS
A. Landlord and Tenant are parties to a certain Lease Agreement dated as of July
11, 2003 (the "Lease") whereby Landlord, in return for the consideration
described therein, has leased to Tenant certain improved property situated at
9830 Reisterstown Road defined and referred to in the Lease as the "Premises";
B. There is presently located on the Premises certain equipment referred to as
the "EarthShell Equipment," as defined in that certain Operating Agreement for
the Production of Hinged Sandwich Containers for McDonald's Corporation dated as
of October 16, 1997 (the "Operating Agreement");
C. Tenant desires to conduct a public auction at the Premises for the purpose of
selling the EarthShell Equipment and has engaged Michael Fox International, Inc.
to conduct an auction at the Premises on December 17, 2003, as well as at
locations in Illinois and Missouri (the "Auction");
D. Under the terms of the Lease the only use Tenant is permitted to
make of the Premises is the storage of the EarthShell Equipment pending
its removal from the Premises. Landlord contends that, accordingly, Tenant is
not permitted to use the Premises for the purpose of conducting a public
auction. Tenant disputes that contention; and
E. In an effort to resolve the dispute over whether Tenant is presently
permitted under the Lease to conduct a public auction on the premises, the
parties have agreed to amend the Lease to expressly permit the Auction to take
place at the Premises in return for a payment of Six Hundred Thousand
Dollars ($600,000.00) and Tenant, has agreed to pay Six Hundred Thousand Dollars
($600,000.00) to Landlord and to assign the first Six Hundred Thousand Dollars
($600,000.00) of net proceeds from the Auction to Landlord for the purpose of
making that payment.
NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing Recitals
and the covenants and agreements set forth herein, together with other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree to amend the Lease as follows:
1. Landlord and Tenant agree that the above recitals are to be
incorporated into and are part of this Amendment.
<PAGE>
2. Article 18 of the Lease shall be amended by the addition of new
Sections 18.02 and 18.03, that shall read as follows:
SECTION 18.02. RIGHT TO CONDUCT PUBLIC AUCTION.
Notwithstanding the provisions of Section 18.01 hereof, at any time
during the Term Landlord shall permit the Tenant to conduct a public
auction at the Premises for the sole purpose of selling the
EarthShell Equipment, provided that Tenant (i) shall furnish to
Landlord in advance of such auction satisfactory evidence that
Tenant and/or its agents have secured insurance (including without
limitation workers compensation insurance and insurance against
liability for bodily and personal injury, death and Premises damage)
sufficient to indemnify against any and all potential losses and
liabilities that could arise in connection with the conduct of the
auction and the removal of the EarthShell Property; and (ii) shall
pay a fee to Landlord in the amount of Six Hundred Thousand Dollars
($600,000.00) in return for such permission. Landlord and Tenant
agree that in the event of such an auction Tenant shall assign the
first $600,000.00 in proceeds (net of auctioneers' fees) generated
by such auction to Landlord and shall direct the Auctioneer, and
obtain in advance of the auction the Auctioneer's written
acknowledgment, that the first $600,000.00 in proceeds (net of
auctioneers' fees) generated by such auction shall be paid directly
by the Auctioneer to Landlord within thirty (30) days following the
first day of the auction. In the event that, as of that date, such
auction yields less than $600,000.00 in net proceeds, the balance of
the $600,000.00 fee shall be immediately due and owing from Tenant
to Landlord.
SECTION 18.03. WAIVER OF REPAIR/RESTORATION OBLIGATIONS. In
the event that Tenant conducts an auction as provided in Section
18.02 and Landlord receives payment of the $600,000.00 fee for
permitting such auction at the Premises, then, notwithstanding any
other provisions of the Lease, Tenant shall have no obligation to
Landlord in connection with repairs occasioned by the removal of the
EarthShell Equipment from the Premises, except with respect to
repairs that are necessitated by reason of a failure by Tenant
and/or Tenant's agents or assigns to accomplish the removal of any
or all of the EarthShell Equipment with reasonable care so as not to
cause any damage to the Premises.
3. In furtherance of Tenant's obligations under Section 18.02 of the
Lease, as amended, Tenant hereby irrevocably and unconditionally assigns to
Landlord without recourse the first $600,000.00 in proceeds (net of auctioneers'
commissions) generated by the Auction.
<PAGE>
4. The parties agree and acknowledge that, in connection with the Auction,
Tenant has satisfied the condition set forth in the new Section 18.02(i) set
forth above.
5. All provisions of the Lease not expressly amended hereby shall remain
in full force and effect. Nothing herein shall be deemed to extend the term of
the Lease.
6. Tenant shall obtain from Fox its written acknowledgement in the form
appearing at page 5 hereof, that Fox shall pay the first $600,000 in proceeds
from the Auction to Sweetheart. In addition, Tenant shall provide a copy of the
executed acknowledgment to Landlord within one (1) business day of the
Effective Date of this Amendment.
7. This Amendment may be executed in one or more counterparts each of
which when taken together with all other signatures shall be deemed one and the
same agreement. A facsimile signature by a party will be the same effect as an
original signature by such party.
EXECUTED as a sealed instrument as of the day and year first above
written.
LANDLORD: TENANT:
SWEETHEART CUP COMPANY, INC. EARTHSHELL CORPORATION
By: /s/ Thomas Uleau By: /s/ Vincent J. Truant
---------------------------- ----------------------
Thomas Uleau Vincent J. Truant
Vice Chairman President and COO
STATE OF __Maryland_____________ )
:ss
COUNTY OF _Baltimore____________ )
On the 16th day of December, 2003, before me personally came Thomas Uleau
to me known, who, being by me duly sworn, did depose and say that he has
an office at 10100 Reisterstown Road, Owings Mills, Maryland, that he is the
Vice Chairman of Sweetheart Cup Company, Inc., a Delaware corporation, described
in and which executed the foregoing instrument; and that he signed his name
thereto as the duly authorized officer of said corporation.
WITNESS my hand and Notarial Seal.
/s/ Mary P. Harrison
------------------------------
Notary Public Mary P. Harrison
My Commission Expires: 7/1/05
<PAGE>
STATE OF _Maryland______________ )
:ss
COUNTY OF _Baltimore____________ )
On the _16th_ day of __December__, 2003, before me personally came Vincent
Truant to me known, who, being by me duly sworn, did depose and say that he has
an office at 6740 Cotona Drive, Santa Barbara, California, 93117 that he is
the President and COO of EarthShell Corporation, a Delaware corporation,
described in and which executed the foregoing instrument; and that he
signed his name thereto as the duly authorized officer of said corporation.
WITNESS my hand and Notarial Seal.
/s/ Mary P. Harrison
-------------------------
Notary Public Mary P. Harrison
My Commission Expires: 7/1/05
ACKNOWLEDGEMENT BY
MICHAEL FOX INTERNATIONAL, INC.
Michael Fox International, Inc., by its undersigned representative,
hereby acknowledges that it has been informed by EarthShell Corporation that
EarthShell Corporation has, irrevocably and without recourse, assigned to
Sweetheart Cup Company the first $600,000.00 of auction proceeds generated by
the auction to be conducted on December 17, 2003 in connection with the
Commission Agreement executed on or about November 4, 2003 between Michael Fox
International, Inc., EarthShell Corporation, and Aaron Equipment Company, and
further acknowledges that, in accordance with that assignment, Michael Fox
International, Inc. shall pay over to Sweetheart Cup Company Inc. the first
$600,000.00 in proceeds generated by that auction.
Michael Fox International, Inc.
By______________________ Date:__12/16/03________
STATE OF _ Maryland__________)
COUNTY OF _Baltimore_________)
On the _16th_ day of _December_______, 2003, before me personally came
Gilbert Schwartzman___ to me known, who, being by me duly sworn, did depose and
say that he is the Sr. __Vice President__ of Michael Fox Internatioan, Inc., a
Maryland corporation, which executed the foregoing instrument; and that he
signed his name thereto as the duly authorized officer of said corporation.
WITNESS my hand and Notorial Seal.
_____Mary P. Harrison______________
Notary Public Mary P. Harrison
My Commission Expires: _7/1/05_