Document:

Exhibit 10.45

 

SUB LEASE AGREEMENT

 

This Lease Agreement is executed
as of the 1st day of July, 2007 , between Kessler Industries, Inc., (“Landlord”
or “Lessor”) and UFP Technologies, Inc. (“Tenant” or “Lessee”).

 

Whereas, Landlord has executed a
lease dated 1 January, 1996  leasing all
of the land and buildings know as 8600 Gateway East or the Kessler Industrial
Plaza further described below in premises from the owners Calvin K. Kessler and
Geraldine J. Kessler (“Owners”) ;and

 

Whereas, Tenant desires to lease
space and Landlord is willing to lease the same to Tenant upon certain terms
and conditions ; and

 

Now, therefore, the parties
hereto agree as follows:

 

1.             Premises.  Landlord hereby leases to Tenant those
certain premises described as follows:

 

A portion of land and building,
consisting of approximately 40,000 square feet, 
municipally numbered 8600 Gateway East, El Paso, Texas, and the fenced
lot located to the east of 8600 Gateway East, bounded by Gateway East to the
north and Kessler Drive to the west, collectively referred to as Kessler
Industrial Plaza, (the “Leased Premises”). 
The property is further described in the attached diagram (Exhibit “A”
).  All of the above property being in
the City of El Paso, El Paso County, Texas, is referred to herein as the “Leased
Premises”.

 

2.             Term, Rental and Option.

 

2.1           Term.  This
lease is for thirty six (36) on July 1, 2007 and ending on June 30,2010,
unless sooner terminated or extended as set out hereafter.

 

2.1.a        Early
Termination.  The Tenant may terminate this lease at any
point in time with 120 days written notice to the Landlord on the following
provisions. At the time of the written notice, the Tenant can not be in default
as 

 

1

 

defined below. Liquidated damages as described in Exhibit “B” and Exhibit “D”
will be due Landlord on early termination.

 

2.2           Rental.   The
tenant shall pay to the landlord monthly rent during the three lease years of
the term, without offset (except as noted below), deduction or demand, payable
in advance on or before the first day of each and every calendar month the
gross sum of $12,500.00 (Twelve Thousand, Five Hundred and 00/100 dollars).

 

2.2.a        Payment
Late Charges   If any amount due under this lease is not
received by the landlord by the fifth day of the month after the due date
thereof, Tenant shall pay to the Landlord an additional amount equal to 5% of
the amounts due.  If the amounts are not
received by the landlord by the 15th day following the first due date, the late
charge will be calculated as above except that the rate will be 10%. The
payment of penalty, and nothing in this paragraph should be construed as to
give the Tenant a grace period in which to pay rent.

 

2.2.b        No  Offset. Tenant agrees that the obligation to pay rent is an independent
covenant of Tenant, and Tenant waives any right of offset or other claim
against property of Landlord.

 

2.3           Options.  So long
as Lessee is not then in default, Lessor grant to lessee an option to renew the
Lease for two additional five years in terms and conditions including rental as
described below. Tenant is to provide Lessor with written notice of his desire
to exercise the option to renew, which notice must be delivered by Tenant to
Lessor no later than 5 months (150 days) prior to the end of the then existing
term..

 

Rental for the first option period shall be calculated as by taking the
then existing monthly rental and multiplying it by 1.075. The resulting rent
will be the rent for the entire first option period.

 

Rental for the second option period shall be increased to an amount
equal to the product obtained by multiplying the Monthly rent in effect just
prior to the option date by a fraction, the numerator of which shall be the
Consumer Price Index for the second month preceding the option date ( for
example, if the option date is July 1, 2015, then August 1, 2015) and
the denominator of which shall be the Consumer Price Index for the same month
of the prior option date(for 

 

2

 

example if the first option date July 1, 2010, June 1, 2010)
which fraction is hereinafter referred to as the “CPI fraction”.  This is commonly referred to as a 100% CPI
increase.  In no event shall the monthly
rental for the second option period exceed 110% of monthly rental during the
first option period.  CPI is the same as
defined in Paragraph 2.2, above.

 

3.             Use of Leased Premises.  Tenant
agrees that during any term hereof, the Premises will be used and occupied
solely for a general manufacturing and warehousing facility, in the usual and
customary manner of similar business in the El Paso area.  Tenant shall comply with all law, ordinances,
rules and regulations of all governmental and municipal agencies having
jurisdiction over the Premises.  Tenant
will not use, occupy or permit the use or occupancy of the Premises for an
unlawful, disreputable or extra hazardous purpose, or maintain or permit the
maintenance of any public or private nuisance, or keep any substance or carry
on or permit any operation which might emit offensive odors or cause hazardous
conditions to exist on or about the Premises or use any apparatus which might
make undue noise or create vibrations in or about the Premises.  Tenant will not allow smoking in any of the
production areas of the premises.

 

4.             Alteration and Removals.  No
alterations may be made without the prior written consent of Landlord.  Unless otherwise agreed, all fixtures
permanently attached to the building shall be deemed to have attached to the
land and become the property of Landlord and shall not be removed without the
prior written consent of the Landlord. 
Tenant shall promptly pay all contractors and materialmen and avoid any
liens, and should any such lien be filed, Tenant shall bond against or discharge
the same within 10 days after written request by Landlord.  All alterations shall conform to all
applicable laws and regulations.  If
Tenant is not in default, Tenant may remove its personal property at the
termination of the term, plus any fixtures for which consent to remove has been
obtained; provided that Landlord must first be satisfied that such removal will
not damage the Premises, or, if some damage will occur, that Tenant at its
expense will repair the same to the satisfaction of Landlord.

 

5.             Maintenance and Repair.  Except as
described in Exhibit “C”, attached, the Tenant accepts the Premises in its
present condition as a date hereof.  It
is Landlord’s 

 

3

 

responsibility to maintain and repair the foundation, roof, permanent
structures, exterior walls (except doors and glass) and utility lines to their
exterior point of entry; provided, however, that Landlord shall not be
responsible for maintenance necessitated by the acts of Tenant, its agents or
invitees.  It is Tenant’s responsibility
to maintain and keep in good repair the interior of the Premises, including
fixtures, windows, doors, utilities, and all other repairs made necessary by
Tenant’s failure to so maintain; provided, however, Tenant shall not be
responsible for maintenance necessitated by the negligence or intentional
wrongful acts of Landlord or its agents. 
Tenant must deliver the Premises to Landlord upon termination in as good
condition as when leased, reasonable wear and tear excepted.

 

If Tenant neglects to so
maintain the Premises, Landlord shall have the right, at Landlord’s option (but
this clause shall not obligate Landlord so to do or relieve Tenant from any
obligation hereunder),after notice to Tenant at the Premises, to act as deemed
necessary by Landlord to maintain and repair the Premises without liability for
loss or damage to Tenant’s property, and charge the reasonable cost
thereof  to Tenant, which sum shall be
promptly paid as additional rent.  If
Tenant determines in good faith that Landlord has neglected to maintain and
repair, Tenant may elect as its sole remedy to notify Landlord in writing in
detail of the necessary repairs, the estimated cost thereof and the intent of
Tenant to complete the same.  If Landlord
(1) fails to give adequate assurance of commencement within 30 days after
receipt of notice,(2) fails to respond, or (3) fails to question in
good faith the necessity of all or a part thereof, Tenant may (if not otherwise
in default) complete such repairs and deduct the reasonable cost thereof on a
prorated basis from each rental installment as it becomes due.

 

6.             Casualty to Premises.  In the
event of substantial damage (as hereinafter defined) to the Premises from fire
or other cause, either party may terminate this Lease by giving written notice
to the other within 30 day after the occurrence of such substantial
damage.  “Substantial damage” shall mean
damage to or destruction of the improvements leased to such extent that it will
reasonably cost in excess of 40% of the then current replacement cost of all
improvements leased to repair or rebuild such improvement (to the extent only
that such improvements were demised on this date by Landlord) to substantially
their condition as they existed prior to such substantial damage.

 

4

 

If the improvements are
materially damaged or destroyed (as hereafter defined) from a cause which is
not covered by insurance then maintained with respect thereto and which could
not at such time be insured against under standard fire and extended coverage
insurance policies available from companies licensed to do business in Texas,
then, in such event, at Landlord’s option, this Lease may be terminated
effective as of the date of such damage or destruction;  provided that notice of termination under
this paragraph must be given by Landlord to Tenant 30 days after such
occurrence.  “Materially damaged or
destroyed” shall mean damage or destruction to the improvements leased to such
extent that it will reasonably cost in excess of 40% of the then current
replacement cost of all improvements leased to repair or rebuild such
improvements to substantially their condition as they existed prior to such
damage or destruction.

 

Except as above provided, this
Lease shall continue in effect in the event of casualty to Premises, and
Landlord shall, subject to any unavoidable delay, repair or rebuild the same
(to the extent only that such improvements are demised on this date by
Landlord), to substantially the condition in which same were immediately prior
to the occurrence of such damage or destruction, at Landlord’s cost and
expense; provided, however, that in no event shall Landlord’s obligation to
repair or rebuild extend beyond the expenditure of a sum equal to the total of
all insurance proceeds actually received by Landlord from fire and extended
coverage insurance policies maintained with respect to the Premises.  Should Landlord repair or rebuild, then Tenant
shall, at its sole cost and expense, replace or repair all signs, fixtures,
equipment, display cases and other equipment installed by Tenant, so as to
continue or resume operation of Tenant’s business in the Premises.

 

Tenant agrees during any period
of reconstruction or repair that Tenant will continue the operation of its
business in the Premises to the extent reasonably practicable.  Until completion hereunder, fixed rent
payable by Tenant shall be reduced proportionately during any period in which
there is substantial interference with the operation of its business.

 

7.             Landlord’s Non-Liability.  Tenant
agrees to use and occupy the Premises at its own risk and hereby releases, to
the full extent permitted by law, Landlord and Landlord’s agents, servants,
contractors, and employees, from all claims and demands of every kind resulting
from any accident, damage 

 

5

 

or injury occurring therein or thereon. 
Landlord shall not be liable to Tenant or to Tenant’s employees, patrons
or visitors for any damage to persons or property caused by any act, omission
or neglect of Tenant, its agents or employees. 
Landlord shall not be responsible or liable for any loss or damage to
any property or person on the Premises occasioned by theft, fire, water, acts
of God, strike, court or administrative order, or any other matter beyond
Landlord’s control.

 

8.             Indemnification of Landlord.  Tenant
agrees to indemnify and save harmless Landlord from and against all claims of
whatever nature arising from any act, omission or negligence of Tenant, or
Tenant’s contractors, licenses, invitees, agents, servants or employees, or
arising from any accident, injury or damage, whatsoever, caused to any person,
or to the property of any person occurring during the term hereof in or about
the Premises, where such accident, damage or injury results or is claimed to
have resulted from any act or omission on the part of Tenant or Tenant’s
contractors, agents, servants, or employees. 
This indemnity and hold harmless agreement shall include, without
limitation, indemnity against all costs, expenses, attorney’s fees and
liabilities incurred on or in connection with any such claim or proceedings
brought thereon, and the investigation and defense thereof.

 

9.             Condemnation.  If the
whole or any part of the Premises shall be taken by any public authority under
the power of eminent domain, then the terms of this Lease shall cease in the
part so taken from the date the possession of that part shall be acquired for
any public purpose, and the rent shall be paid up to that day. If a portion of
the Leased Premises is so taken as to destroy the usefulness of the Premises
for the purpose for which the Premises were leased, then from that day, the
Tenant shall have the right either to terminate this Lease or to continue in
the possession of the remainder of the same under the terms herein provided, in
which latter event the rental shall be reduced in proportion to the area of the
Premises taken.  All damage awarded for
such taking shall belong to the Landlord except that the Landlord shall not be
entitled to any portion of the award made to the Tenant for loss of its
business or removal of its stock and fixtures.

 

10.           Insurance.  Landlord
at its expense shall insure the premises against loss or damage by fire and
other casualty as deemed best by Landlord. 
Tenant shall not do anything which willing way tend to increase
insurance rates, 

 

6

 

and Tenant shall pay as additional rental any increase in premiums
caused by Tenant’s actions.

 

Tenant shall it its own expense,
during the term of this Lease, keep Tenant’s merchandise, trade fixtures,
furnishings, equipment, and personal property on the Leased Premises insured
against loss or damage by fire, windstorm hail, explosion, riot, riot attending
strike, civil commotion, aircraft, vehicles and smoke for 90% of the
replacement value and Tenant shall be responsible for obtaining adequate plate
glass insurance.

 

Tenant shall obtain at its
expense a comprehensive public liability policy with coverage for bodily
injury, property damage liability and personal injury, in a amount equal to but
not less than $1,000,000.00 for any one occurrence and $2,000,000.00 in
aggregate.  An endorsement showing
Landlord as additional insurance shall be attached to the insurance policy and
shown on the certificate of insurance. 
Such policies and all certificates of insurance shall specifically
recognize the contractual provisions of this Lease to include the “waiver of
subrogation” and “hold harmless” by endorsement and written statement.

 

Landlord agrees to use its best
efforts to obtain an endorsement waiving any right of subrogation against
Tenant on insurance which Landlord carries on any claim that Landlord may have
against Tenant.

 

Tenant shall purchase and
maintain, during the terms of the Lease approved statutory Worker’s
Compensation Insurance to include coverage for all active owners or to obtain
an agreed upon substitute where the employees would be covered for their occupational
(on the job) injuries.

 

Tenant shall provide the
Landlord with a certificate of insurance promising notification to Landlord of
cancellation on material or material change to said policy or policies at least
fifteen days prior to the effective date. 
All such insurance required to be maintained by the Tenant shall be
carried with one or more responsible insurance companies duly authorized to
transact business in Texas and shall be subject to review by Landlord or
Landlord’s agent upon demand.

 

Landlord and Tenant and all
parties claiming under them mutually release and discharge each other form all
claims and liabilities arising from or caused by any casualty or hazard covered
or required hereunder to the covered in whole or in 

 

7

 

part by insurance on the Leased Premises or in connection with property
on or activities conducted on the Leased Premises and waive any right of
subrogation which might otherwise exist in or accrue to any person on account
thereof, provided that such release shall not operate in any case where the
affect is to invalidate or increase the cost of such insurance coverage.

 

11.           Taxes and Utilities.  Landlord
shall pay all real property taxes and assessments and Tenant shall pay any and
all taxes on its personal property before delinquency.

 

Tenant shall similarly pay before delinquency for electricity and gas
either on its own meter or to the landlord(without markup) on separate meters
installed at the cost of the landlord.

 

12.           Events of Default.  It shall
be an event of default by Tenant hereunder if (a)Tenant shall fail to pay rent
or other sums agreed to be paid by Tenant or Landlord as herein required; or (b) Tenant
shall fail to observe or perform any of its obligations hereunder; or (c) at
any time during the term of this Lease (I) the Tenant (Tenant’s assignee
or sublessee; any such person being referred to in this article as the “tenant”)who
is then the holder of this Lease shall file in any court a petition or the
issuance of an order for relief under any section or chapter of the Bankruptcy
Code of 1978, as amended, or under an similar laws or statutes of the United
States of or any state thereof, or for the appointment of a receiver or trustee
of all or a portion of such tenant’s property, or (ii)an involuntary petition
of the kind referred to in the preceding subdivision (I) of this
subsection shall be filed against such Tenant, and such petition shall not be
acted or withdrawn within sixty days after the date of filing thereof, or (iii) the
Tenant shall make a general assignment for benefit of creditors, or (iv) such
tenant shall be adjudicated a bankrupt, or (v) a receiver shall be
appointed for the property of such tenant by the order of a court or competent
jurisdiction (except where such receiver shall be appointed in an involuntary
proceeding, if he shall be withdrawn within sixty days from the date of this
appointment).

 

Landlord and Tenant acknowledge
and agree that this is a Lease for nonresidential real property, and in the
event that an order for relief is entered against Tenant under Federal
bankruptcy law, the parties agree that “adequate assurance of future
performance” as that term is defined in

 

8

 

Section 365 of the Bankruptcy Reform Act of 1978, as amended,
shall required (i)an immediate cash deposit to Landlord equal to six months
payment of monthly rent; or (ii) the granting of a first lien on the
property of Tenant to secure an amount equal to six months payment of rent  Said cash or lien under shall not affect in
any way the continuing requirements of Tenant under this Lease including
payment of rent and performance of all obligations hereunder.  Said adequate assurance of future performance
shall be and remain the property of Landlord until termination of this Lease.

 

13.           Landlord’s Remedies.  Upon the
occurrence of an event of default enumerated in subsection (a) or (b) of
Paragraph 12 above, should such default remain uncured after ten days written
notice of default to Tenant in the case of an event of default enumerated in
subsection (a) or after thirty days written notice of default to Tenant in
the case of an event of default enumerated in subsection (b), Landlord may at
once thereafter or at any time subsequent during the existence of such breach
or default, enter into and upon the Leased Premises or any part thereof and
repossess the same, expelling and removing therefrom all persons and property
(which property may be removed and stored at the cost, and for the account of
Tenant), using such force as may be necessary, and either (I) breach, or (ii) without
terminating this Lease, relet the leased premises or any part thereof upon such
terms and conditions as possession of the Leased Premises or the making of
alterations and/or improvements thereto or the reletting thereof shall be
construed as an election on the part of Landlord to terminate this Lease unless
written notice of such intention is given to Tenant.  If Landlord shall proceed in accordance with
the last mentioned alternative (ii), should the net amount received from
reletting the Premises during any month or part thereof be less than the rent
due and owing from Tenant during such month or part thereof under the terms of
this Lease, Tenant shall pay such deficiency immediately upon calculation
thereof and demand therefore by Landlord.

 

Upon the occurrence of an event
of default enumerated in subsection (c) of Paragraph 12 above, Landlord
may, if Landlord so elects, at any time thereafter terminate the Lease and the
term hereof, upon giving to Tenant ten days’ notice in writing of Landlord’s
intention so to do and this lease and the term hereof shall expire and come to
an end on the date fixed in such notice as if said date were the date
originally fixed in this Lease for the expiration hereof.

 

9

 

Notwithstanding the foregoing, and event of default (except the failure
to pay the rent or any other amount due hereunder), the curing of which shall
actually require more than thirty days because of any cause beyond Tenant’s
control, shall be deemed cured by Tenant if Tenant shall have commenced to cure
said default within the thirty day period and shall thereafter have
successfully prosecuted the curation of said default with due diligence.

 

14.           Non-waiver.  Any
waiver by Landlord hereunder, express or implied, or any breach of any term,
covenant or condition hereof, shall not be deemed a waiver of such term,
condition or covenant for any subsequent breach of the same, or of any other
term, covenant or condition hereof. 
Acceptance of rent by the Landlord from the Tenant or any assignee,
subtenant or other successor in interest of Tenant shall never be construed as
a waiver of any breach of any term, condition or covenant of this lease.

 

15.           Insolvency.  If any
insolvency proceedings of any kind are started by or against Tenant, no rights
hereunder, at Landlord’s option, shall accrue to any custodian, receiver or
trustee in bankruptcy, assignee, receiver or officer of a court, or any
individual representing the Tenant or the creditors, and in the event of any of
the above contingencies, Landlord, at Landlord’s option, may cancel this Lease
and terminate the contract as of the date of the happening of such contingency.

 

16.           Hold-over Tenant.  In the
event Tenant shall hold over after the expiration of any term hereunder, such
holding over shall be a forcible detainer without consent or shall be construed
to be a month to month tenancy at a monthly rental of double the amount of the
rental under Lease per month, at Landlord’s option.

 

17.           Assignment.  Tenant shall
have the no right to assign or sublet the Premises in whole or in part during
the Lease term without the prior written consent of Landlord.   Written consent of the Landlord will not be
unreasonably withheld.  Any merger,
consolidation or transfer of corporate shares of tenant, if tenant is a
corporation, so as to result in a change in the present voting control of the
Tenant by the person or persons owning the majority of said corporation shares
in the date of this Lease shall constitute an assignment and be subject to the
conditions of this paragraph.  Landlord
shall have the right to assign or transfer, in whole or in part, Landlord’s
interest herein and 

 

10

 

in
the Premises subject to this Lease, to any party, and Tenant shall recognize
and respect the same.

 

This
lease is and shall always be subject to any mortgages which are now validly
existing on the Premises or which shall at any time hereafter be placed on the
Premises by Landlord, and Tenant agrees to execute and deliver any instrument
deemed necessary to effect the subordination of this Lease to any such
mortgage.  Notwithstanding the foregoing,
so long as Tenant is not in default in the payment of rent provided hereunder,
no action under or pursuant to any mortgagee shall adversely affect this Lease
or the rights of Tenant to continue in possession of the Premises, subject to
the terms of this Lease.

 

19.           Inspection.  Landlord
shall at all times during reasonable business hours have the right to enter on
the Premises for the purpose of inspecting and observing the same and to make
repairs.

 

20.           Quiet Enjoyment & Non-Disturbance.  Landlord
and Owners covenants that Tenant, paying the rents and observing and keeping
all of the covenants of this Lease on his part to be kept and performed, shall
lawfully, peaceably and quietly occupy and enjoy said Premises without any
objection or molestation by Landlord or any other person.

 

21.           Amendments.  This
lease contains the entire agreement between the parties hereto and no provision
hereof may be changed unless the parties hereto agree to the same in writing.

 

22.           Additional Documents.  The
parties hereto will execute and deliver such additional documents as may be
reasonably necessary to further the intent hereof, including but not limited to
memorandum of Lease for recording purposes, estoppe, certificates and financing
statements.

 

23.           Notices.  All
notices to be given hereunder by either party shall be in writing and shall be
mailed to the other party as the address indicated with the signatures below,
certified, return receipt requested.

 

24.           Attorney’s Fees.  Should
either party employ an attorney to preserve, protect or enforce its rights
under this Lease, or with respect to the Premises, in any court proceedings
(administrative or otherwise), because of the filing of court or other
proceedings by the other party 

 

11

 

hereto
or by third parties, or because of the failure of the other party to comply fully
with the terms hereof, then the party who obtains a order preserving,
protecting or enforcing its rights hereunder (including an order for
termination, rejection or assumption of the Lease, or for adequate assurance,
in any bankruptcy proceedings involving a part or its successors and assigns)
shall be entitled to recover reasonable attorney’s expenses, and damages
incurred, an any equitable relief to which it may be entitled.

 

25.           Binding Effect.  This
Lease shall be binding upon and inure to the benefit of the parties hereto, and
their respective heirs, personal representatives, successors and assigns.  This Lease is performable in El Paso County,
Texas and shall be construed in accordance with the laws of the State of Texas.

 

26.          Other Agreements.  The
Landlord and Tenant agree as follows:

 

Security:  Landlord maintains the entire premises under 24
hour security.  Tenant shall provide to
the Landlord and the Security Company a typewritten list of all persons and
vehicles that are to be admitted to the premises during other than normal
business hours.  Any changes in this
authorization (additions or deletions) must be submitted to the guards in
writing, in advance.  The list must also
designate who is authorized to change the authorizations and provide copies of
their signatures. An after hours contact number must also be provided to the
Security Company.

 

All employees of Tenant accessing the facility on foot or by vehicle
through the manned guard gates must have a standard photo id that is to be
presented to the guard.  A copy of the
format will be provided by the Tenant to the Guard.  The human resources department of the
Landlord will badge the  employees of the
Tenant with a standard yellow contractor/tenant badge at no cost for each of
the Tenant’s employees.  Replacement
badges are billed at $10.00 each.  The
Tenant is free to have badges done somewhere else, but they must be standard
and three examples (one for each gate, and one for human resources) must be
provided to the Landlord.

 

Parking:  Employees shall park along (inside) the fence on
Gateway East and in front of the leased area. There is limited parking
available in front of the 

 

12

 

offices of the leased premises and Landlord will put up signs
allocating no less than four (4) parking spaces in front of the offices of
the leased premises for employees and guests.

 

Additional Space:  The Landlord and
Tenant agree that if the Tenant requires additional space for his business, the
landlord will make every reasonable effort to accommodate the Tenant’s needs
with additional adjacent space under the same terms and conditions of this
lease at a rental rate to be mutually agreed.

 

Exhibit “C”:          Exhibit “C”, attached hereto consists of a
list of specific points and commitments of the Landlord and the Tenant.  It is hereby specifically made a part of this
lease.  If any part of Exhibit “C”
is in conflict with the terms and provisions of this Lease then it is
specifically agreed that Exhibit “C” shall prevail.

 

27.          Whole Agreement.              The Landlord and Tenant agree that this lease
represents the whole agreement between the parties and that there are no verbal
agreements or understandings that exist as they relate to the leased premises.

 

28.          Service Addresses:             All notifications to either party required or
necessitated under this agreement are to be made to:

 

	
  Landlord:

  
	
   

  
	
  Calvin K. Kessler, President

  
	
  Kessler Industries, Inc.

  
	
  P.O. Box 17549

  
	
  El Paso, Tx. 79917

  
	
   

  
	
  Or By Federal Express at:

  
	
   

  
	
  Calvin K. Kessler, President

  
	
  Kessler Industries, Inc.

  
	
  8600 Gateway East

  
	
  El Paso, Texas 79907

  

 

13

 

	
  Tenant:

  
	
  George Metcalfe

  
	
  UFP Technologies, Inc

  
	
  2175 Partin Settlement Road

  
	
  Kissimmee, Florida 34744

  
	
   

  
	
  Or By Federal Express at the
  same address

  

 

 

	
  Property Owners:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Calvin K. Kessler

  	
   

  	
   

  
	
   

  	
   

  	
  Geraldine J. Kessler,

  
	
   

  	
   

  	
  Secretary/Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kessler Industries, Inc.

  
	
   

  	
   

  	
  8600 Gateway East

  
	
  Geraldine J. Kessler

  	
   

  	
  El Paso, Texas 79907

  
	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   UFP
  Technologies, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Ronald J.
  Lataille

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

14

 

Exhibit “A” - Description
of Property

 

15

 

Exhibit “B” - Intentionally
Left Blank

 

16

 

Exhibit “C” - Repairs
and Maintenance to Be Provided by Kessler and Other Agreements

 

Landlord
will assist the Tenant in moving from its present location to the Leased
Premises. This will include, but not be limited to moving equipment, setting up
equipment, and moving and setting inventory and racks.  Landlord has personnel available who are
qualified and capable of performing these services.

 

Landlord
will make the electrical drops at the location of the equipment as specified by
the Tenant.  The Landlord will not
connect the equipment or be responsible for the connections.  The tenant will be responsible for contracting
for the actual connections.

 

The
costs of moving the phone and computer lines will be the responsibility of the
Tenant.

 

It
is specifically agreed that the Tenant will provide sufficient supervisory
personnel to direct the Kessler employees and will provide a floor plan of
where each piece of equipment, rack and the inventory are to be placed.

 

If
Tenant desires a monthly invoice for rent, Landlord will provide it at the
local address, or will fax it to the location designated by the Tenant.  If Tenant does not desire an invoice, then
none will be sent, but in any case, the due dates of the rent are unchanged.

 

Exterior
Signage.  Landlord reserves the right to
approve all signs and placards placed on the exterior of the building by any
Tenant.  Any exterior signage must be
approved in writing prior to its installation.

 

Security
Deposit.  The Landlord does not require a
security deposit.

 

17Exhibit 10.46

 

AMENDMENT NO. 4 TO LEASE

 

Raritan, New Jersey

 

THIS AMENDMENT is made this 8 day of October,
2007 by and between RARITAN JOHNSON ASSOCIATES,
a New Jersey Limited Liability Company having an address at 30 Route 22, Green
Brook, New Jersey 08812 (herein after called “Landlord”) and UFP TECHNOLOGIES, INC., a Delaware corporation having an address
at East 172 Main Street, Georgetown, MA 01833 (hereinafter called “Tenant”).

 

WHEREAS, Landlord’s predecessor in interest,
Raritan Associates, and Tenant (under Tenant’s prior name, United Foam Plastics
Corporation) entered into and executed a lease dated as of January 4, 1993
(the “Original Lease”) for the Premises located at 1 Johnson Drive, Building No. 4,
Raritan, New Jersey 08869, and as more particularly described therein:

 

WHEREAS, the Original Lease was amended by
Amendment No. 1 dated January 2, 2000 and by Amendment No. 2
dated August 2001.  The subject
matter of each of Amendments No. 1 and No. 2 was additional space,
not part of the Demised Premises referred to in the Original Lease. The
provisions of both Amendment No. 1 and Amendment No. 2 have become
moot.

 

WHEAREAS, the Original Lease was further
amended by “Amendment No. 3 to Lease” dated September 5, 2002, which
amendment, among other things, extended the Term until February 29, 2008.

 

WHEREAS, Landlord and Tenant mutually desire
to further amend and extend the lease as more specifically described below.

 

NOW, THEREFORE, in consideration of the mutual
covenants herein set forth and of ONE DOLLAR and other good and valuable
consideration, Landlord and Tenant agree to amend and do hereby amend the
Lease, effective as of March 1, 2008, as follows:

 

1.                                       To
the extent that any provision in the Amendment No. 4 conflicts with any
provision of the Original Lease, the provisions of this Amendment No. 4
will prevail. The term “Lease” as used herein means Original Lease as amended
hereby unless a different meaning is clearly required by the context. Reference
in the Original Lease to “this Lease” and terms of like import include
reference to the Original Lease as modified hereby.

 

2.                                       The
Term of the Lease is extended for one five-year additional extension term (“Extension
Term No. 3”). Subject to the provisions of Paragraph 5 below, Extension
Term No. 3 will commence on March 1, 2008 and will terminate on February 28,
2013.

 

3.                                       Basic Monthly
Rental and Basic Annual Rental during Extension Term No. 3 will be as
follows:

 

	
  Basic Monthly Rental:

  	
   

  	
   

  	
   

  
	
  3/1/08 – 2/28/09:

  	
   

  	
  $

  	
  20,976.56

  	
   

  
	
  3/1/09 – 2/28/10:

  	
   

  	
  $

  	
  22,095.31

  	
   

  
	
  3/1/10 – 2/28/11:

  	
   

  	
  $

  	
  22,095.31

  	
   

  
	
  3/1/11 – 2/29/12:

  	
   

  	
  $

  	
  22,095.31

  	
   

  
	
  3/1/12 – 2/28/13:

  	
   

  	
  $

  	
  22,095.31

  	
   

  

 

 

	
  Basic Annual Rental:

  	
   

  	
   

  	
   

  
	
  3/1/08 – 2/28/09:

  	
   

  	
  $

  	
  3.75 per square foot for a total of $251,718.75

  	
   

  
	
  3/1/09 – 2/28/10:

  	
   

  	
  $

  	
  3.95 per square foot for a total of $265,143.75

  	
   

  
	
  3/1/10 – 2/28/11:

  	
   

  	
  $

  	
  3.95 per square foot for a total of $265,143.75

  	
   

  
	
  3/1/11 – 2/29/12:

  	
   

  	
  $

  	
  3.95 per square foot for a total of $265,143.75

  	
   

  
	
  3/1/12 – 2/28/13:

  	
   

  	
  $

  	
  3.95 per square foot for a total of $265,143.75

  	
   

  

 

4.                                       As stated in Section 1.12
of the Original Lease, Tenant shall have the option to renew the Lease for one (1) additional
five (5) year period (beyond Extension Term No. 3); subject to the
terms and conditions of Article XXXI of the Original Lease, except for Section 31.2,
which is hereby deleted and replaced with the following:

 

Section 31.2.                         For
Extension Term No. 4 Basic Annual Rent shall be calculated at fair market
value for comparable buildings in the Raritan, NJ area, as mutually agreed upon
by Tenant and Landlord. In the absence of such agreement within sixty (60) days
after Tenant’s exercise of said option, the fair market rental rate for the
extended term shall be determined within the following thirty (30) days by an
independent, reputable third party appraiser chosen by Landlord, subject to the
Tenant’s reasonable approval, who shall have at least ten (10) years
experience in the commercial real estate market in the area in which the
building is located.  The Tenant may
rescind its exercise of the extension option by so notifying the Landlord
within five (5) business days after receiving the appraiser’s
determination of fair market rent. Time is of the essence of this Lease,
including, without limitation, this Section.

 

5.                                       Notwithstanding
any other provision of this Lease, Tenant shall have the right to terminate
this Lease at any time after the execution date of this Amendment on the
following terms:

 

(a)                                  such termination
shall be effective as of the 180th day after the date on which
Tenant notifies Landlord in writing of Tenant’s election to so terminate; and

 

(b)                              Tenant
shall pay to Landlord all amounts due and payable under this Lease up to said
effective date, and, as a Termination Fee, an amount equal to the lesser of (i) 50%
of the total amount of the Basic Annual Rent payable under this Lease for the
period from the effective date of termination until February 28, 2013, or (ii) one
year’s Basic Annual Rent calculated by taking the sum of Basic Monthly Rental
payments that would have been due from Tenant for the twelve (12) months
beginning on the first day of the month after the month in which the effective
date of termination occurs. Such Termination Fee shall be due and payable no
later than ten (10) days prior to the effective date of termination.

 

 

6.                                       The
provisions of the Original Lease as modified by this Amendment No. 4 are
applicable during Extension Term No. 3. Except as specifically amended
hereby, the Lease remains in full force and effect.

 

EXECUTED as
a sealed instrument as of the date first written above.

 

	
  TENANT:   UFP TECHNOLOGIES,
  INC.

  	
  LANDLORD: 

  	
  RARITAN JOHNSON

  
	
   

  	
   

  	
   

  	
  ASSOCIATES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
     /s/ Ronald J. Lataille

  	
   

  	
  BY:

  	
     /s/ Steve Brimman

  
	
   

  	
  Name:

  	
  Ronald J. Lataille

  	
   

  	
  Name:

  	
  Steve Brimman

  
	
   

  	
  Its:

  	
  Chief Financial Officer

  	
   

  	
  Its:

  	
  Member

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