Exhibit 10.10(m)

 

BILL OF SALE

 

THIS BILL OF SALE made and effective July 30, 2004, by AMERICAN WOODMARK
CORPORATION, a Virginia corporation (“Seller”), to the WEST VIRGINIA ECONOMIC
DEVELOPMENT AUTHORITY, a West Virginia public corporation (“Buyer”).

 

W I T N E S S T H:

 

NOW, THEREFORE, IN CONSIDERATION of the sum of $10.00, the receipt and
sufficiency of which are hereby acknowledged, Seller does hereby SELL, ASSIGN,
CONVEY and DELIVER to Buyer all of Seller’s right, title and interest in and to
the approximately 250,000 square foot manufacturing facility and all of its
related improvements and fixtures on a parcel of real property containing
approximately 40 acres that is owned by Buyer and located at the Robert C. Byrd
Industrial Park in Moorefield, Hardy County, West Virginia, which real property
is more particularly identified in Exhibit A attached hereto and made a part
hereof (collectively, the “Facility”).

 

The sale of the Facility is made on an “AS IS, WHERE IS” basis, and Seller makes
NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY,
REGARDING THE CONDITION OR USE OF THE FACILITY; provided, however, that Seller
does hereby represent and warrant to Buyer that Seller has good and marketable
title to the Facility which is free and clear of all liens, encumbrances and
claims of any type whatsoever.

Seller acknowledges that it shall be responsible for all sales or excise taxes
and assessments, if any, imposed by any governmental entity upon this transfer
of the Facility or the proceeds of this sale by Seller to Buyer.

 

IN WITNESS WHEREOF, American Woodmark Corporation has caused this Bill of Sale
to be executed by its duly authorized officer as of the date first above
written.

 

AMERICAN WOODMARK CORPORATION,

a Virginia corporation

 

By:

 

 

--------------------------------------------------------------------------------

          Glenn E. Eanes           Its Vice President and Treasurer

 

317042

 

2

EXHIBIT A

 

DESCRIPTION OF SURVEY

for

HARDY COUNTY DEVELOPMENT AUTHORITY

of a

PROPOSED LAND PARTITION

and

PROPOSED ROAD RIGHT-OF-WAY

MOOREFIELD DISTRICT, HARDY COUNTY, WV

TAX MAP 285 P/O PARCEL

1 DEED BOOK 221 PAGE 555

 

A CERTAIN TRACT OR PARCEL OF LAND SITUATE ON THE WATERS OF FORT RUN, NEAR WEST
VIRGINIA ROUTE 55, MOOREFIELD DISTRICT, HARDY COUNTY, WEST VIRGINIA BEING MORE
PARTICULARLY BOUNDED AND DESC.RIBED AS FOLLOWS:

 

AMERICAN WOODMARK PARCEL:

 

Beginning at a fence post in concrete found at a common comer of Hardy County
Development Authority, Lot #2 of the Robert C. Byrd Industrial Park (Tax Map 285
Parcel l, Deed Book 221 Page 555) and Patti B. Michael (Tax Map 285 Parcel 95
Will Book 25 Page 272) and other lands of said Hardy County Development
Authority;

 

Thence, leaving said Lot #2 and with said Michael, North 52 degrees 40 minutes
09 seconds West, a distance of 1,431.38 feet to a ½” iron rebar found at a
common comer of said Michael and Betty Branson (Tax Map 284A Parcel 8, Deed Book
158 Page 602);

 

Thence, leaving said Michael and partially with said Branson and Donald and
Carol Smith (Tax Map 284A Parcel 7.1, Deed Book 185 Page 326), Bill and Stacy
Newhouse (Tax Map 284A Parcel 7, Deed Book 276 Page 34), and Tamra Whipp (Tax
Map 284A Parcel 6.1, Deed Book 211 Page 629), North 52 degrees 19 minutes 12
seconds West, a distance of 503.95 feet to a ¾” iron rebar set at a common comer
of Fort Pleasant Farms, Inc. (Tax Map 264 Parcel 12, Deed Book 261 Page 247),
which bears, South 52 degrees 19 minutes 12 seconds East, a distance of 147.58
feet from a 1/2” iron rebar (bent) found at a common comer of said Whipp;

 

Thence, leaving said Whipp and with said Fort Pleasant Farm, Inc., North 35
degrees 08 minutes 19 seconds East, a distance of 839.36 feet to a ¾” iron rebar
set on the proposed southerly controlled access right of way line of U.S. Route
33 (Corridor “H”) at a distance of 224.00 feet right of and perpendicular to
centerline station 1761 +56.70;

 

Thence, leaving said Fort Pleasant Farm, Inc. and with said proposed southerly
controlled access right of way line for two (2) lines, South 76 degrees 25
minutes 47 seconds East, a distance of 592.16 feet to a ¾” iron rebar set at a
distance of 177.00 feet right of and perpendicular to centerline station
1767+47; .

 

1

Thence, South 83 degrees 22 minutes 13 seconds East, a distance of 396.94 feet
to a ¾” iron rebar set at a distance of 98.00 feet right of and perpendicular to
centerline station 1771 +36;

 

Thence, leaving said proposed southerly controlled access right of way line and
with a proposed right of way line of said U.S. Route 33 (Corridor “H”) for four
(4) lines, South 01 degrees 17 minutes 18 seconds East, a distance of 150.55
feet to a ¾” iron rebar set at a distance 240.00 feet right of and perpendicular
to centerline station 1771+86;

 

Thence, South 68 degrees 49 minutes 12 seconds East, a distance of 261.38 feet
to a ¾” iron rebar set at a distance of 254.00 feet right of and perpendicular
to centerline station 1774+47;

 

Thence, South 38 degrees 22 minutes 21 seconds East, a distance of 92.36 feet to
a ¾” iron rebar set at a distance of 305.00 feet right of and perpendicular to
centerline station 1775+24;

 

Thence, North 53 degrees 09 minutes 32 seconds East, a distance of 81.84 feet to
a ¾” iron rebar set at a distance of 238.00 feet right of and perpendicular to
centerline station 1775+71;

 

Thence, leaving said proposed southerly right of way line and through the lands
of said Hardy County Development Authority for six (6) lines, South 06 degrees
04 minutes 19 seconds East, a distance of 583.23 feet to a ¾” iron rebar set;

 

Thence, South 75 degrees 43 minutes 41 seconds East, distance of 146.14 feet to
a ¾” iron rebar set;

 

Thence, South 16 degrees 56 minutes 26 seconds East, a distance of 432.06 feet
to a ¾” iron rebar set a corner common to said Hardy County Development
Authority Lot #11-A and a point on the easterly right-of-way line of Hardy
County Route 55/11, which bears, South 41 degrees 07 minutes 43 seconds West, a
distance of 246.60 feet from a ¾” iron rebar found, a corner common to said Lot
#11-A and Lot #11-B of said Robert C. Byrd Industrial Park;

 

Thence, leaving said Lot #11-A and with said right-of-way for three (3) lines,
South 41 degrees 07 minutes 38 seconds West, a distance of 70,18 feet to a
point;

 

Thence, South 64 degrees 28 minutes 06 seconds West, a distance of 45 .56 feet
to a point;

 

Thence, South 25 degrees 31 minutes 54 seconds East, a distance of 19.66 feet to
a point;

 

Thence, leaving said right-of way and said Hardy County Development Authority
Lot #2, South 41 degrees 07 minutes 38 seconds West, a distance of 22.08 feet
passing a point on the westerly line of said right-of-way, a total distance of
384.82 feet to the PLACE OF BEGINNING, containing 46.64 acres, less 6.64 acres
of road right-of-way, leaving a net acreage of 40.00 acres MORE OR LESS, as
shown on a plat attached hereto and made apart of this description.

 

2

PROPOSED ROAD OF RIGHT-OF-WAY

 

Beginning at a 3/4” iron rebar set on the lands of Hardy County Development
Authority, which bears, South 80 degrees 41 minutes 53 seconds West, a distance
of 575.60 feet from a ¾” iron rebar found, a corner common to said Lot #11-B and
Lot #11-C of the said Robert “C. Byrd Industrial Park;

 

Thence, through said Hardy County Development Authority lands, South 16 degrees
56 minutes 26 seconds East, a distance of 432.06 feet to a 3/4” iron rebar set
a. comer common to said Lot #11-A and a point on the easterly right-of-way line
of Hardy County Route 55/11;

 

Thence, leaving said Lot #11-A and with said right-of-way for four (4) lines,
South 41 degrees 07 minutes 38 seconds West, a distance of 70.18 feet to a
point;

 

Thence, South 64 degrees 28 minutes 06 seconds West, a distance of 45.56 feet to
a point;

 

Thence, South 25 degrees 31 minutes 54 seconds East, a distance of 19.66 feet to
a point;

 

Thence, South 41, degrees 07 minutes 38 seconds West, a distance of 22.08 feet
to a point a corner common to said Lot #11-A and a point on the easterly line of
said right-of-way;

 

Thence, leaving said right-of-way and through said Hardy County Development
Authority for thirty one (31) lines, North 35 degrees 28 minutes 46 seconds
West, a distance of 48.35 feet to a point;

 

Thence, South 53 degrees 27 minutes 48 seconds West, a distance of 170.75 feet
to a point;

 

Thence, South 70 degrees 03 minutes 52 seconds West, a distance of 118.29 feet
to a point;

 

Thence, North 87 degrees 32 minutes 19 seconds West, a distance of 59.84 feet to
a point;

 

Thence, North 66 degrees 10 minutes 15 seconds West, a distance of 117.95 feet
to a point;

 

Thence, North 52 degrees 56 minutes 10 seconds West, a distance 9f 1,000.00 feet
to a point;

 

Thence, North 48 degrees 21 minutes 32 seconds West, a distance of 110.42 feet
to a point;

 

Thence, North 23 degrees 02 minutes 16 seconds West, a distance of 118.75 feet
to a point;

 

Thence, North 05 degrees 36 minutes 37 seconds East, a distance of 118.7S feet
to a point;

 

Thence, North 37 degrees 55 minutes 02 seconds East, a distance of 160.93 feet
to a point;

 

3

Thence, North 37 degrees OS minutes 28 seconds East, a distance of 242.57 feet
to a point;

 

Thence, North 88 degrees 21 minutes 50 seconds East, a distance of 467.41 feet
to a point;

 

Thence, South 52 degrees 43 minutes 1.5 seconds East, a distance of 645:48 feet
to, a point;

 

Thence, South 22 degrees 15 minutes 05 seconds East, a distance of 223.09 feet
to a point;

 

Thence, South 13 degrees 43 minutes 02 seconds East, a distance of 69.28 feet 10
a reference line;

 

Thence, with said reference line, South 22 degrees 54 minutes 48 seconds West, a
distance of 131.18 feet to a point;

 

Thence, South 08 degrees 46 minutes 36 seconds East, a distance of 1.85.27 feet
to a point;

 

Thence, South 37 degrees 28 minutes 00 seconds West, a distance of 259.32 feet
to a point;

 

Thence, South 57 degrees 55 minutes 28 seconds West, a distance of 81.52 feet to
a point;

 

Thence, North 73 degrees 07 minutes 50 seconds West, a distance of 125.14 feet
to a point;

 

Thence, North 52 degrees 56 minutes 10 seconds West, a distance of 1,000.00 feet
to a point;

 

Thence, North 49 degrees 01 minutes 27 seconds West, a distance of 91.49 feet to
a point;

 

Thence, North 23 degrees 02 minutes 16 seconds West, a distance of 84.12 feet to
a point;

 

Thence, North 05 degrees 36 minutes 37 seconds East, a distance of 84.12 feet to
a point;

 

Thence, North 34 degrees 00 minutes 14 seconds East, a distance of 140.46 feet
to a point;

 

Thence, North 52 degrees 54 minutes 32 seconds West, a distance of 14.00 feet to
a. point;

 

Thence, North 49 degrees 53 minutes 54 seconds East, a distance of 255.72 feet
to a point;

 

Thence, South 89 degrees 57 minutes 56 seconds East, a distance of 328.50 feet
to a point;

 

Thence, South 78 degrees 34 minutes 02 seconds East, a distance of 55.10 feet to
a point;

 

Thence, South 53 degrees 30 minutes 42 seconds East, a distance of 564.23 feet
to a point;

 

Thence, South 27 degrees 07 minutes 55 seconds East, a distance of 92.70 feet to
a point;

 

4

Thence, South 13 degrees 23 minutes 18 seconds East, a distance of 296.45 feet
to a point, the said reference June;

 

Thence, with said reference line, North 22 degrees 54 minutes 48 seconds East, a
distance of 131.18 feet to the PLACE OF BEGINNING, containing 6.64 acres, MORE
OR LESS, as shown on a plat attached hereto and made a part of this description.

 

The above described tract or parcel being a part of the same lands conveyed to
Hardy County Development Authority as recorded in the Office of the Clerk, Hardy
County, West Virginia, in Deed Book 221 at Page 555.

 

 

Revised July 2004

WEST VIRGINIA FACILITY LEASE

 

between

 

WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY

Lessor

 

and

 

AMERICAN WOODMARK CORPORATION

Lessee

 

July 30, 2004

TABLE OF CONTENTS

 

     Page

--------------------------------------------------------------------------------

ARTICLE I. DEFINITIONS

   1

ARTICLE II. LEASE

   4

ARTICLE III. PAYMENT OF RENT

   4

ARTICLE IV. QUIET ENJOYMENT; RIGHT TO INSPECT

   4

ARTICLE V. NET LEASE, ETC.

   5

ARTICLE VI. SUBLEASE OR ASSIGNMENT

   5

ARTICLE VII. LESSEE ACKNOWLEDGMENTS

   6

ARTICLE VIII. POSSESSION AND USE OF THE REAL PROPERTY, ETC.

   6

ARTICLE IX. MAINTENANCE AND REPAIR; RETURN

   6

ARTICLE X. MODIFICATIONS, ETC.

   7

ARTICLE XI. COVENANTS WITH RESPECT TO LIENS; EASEMENTS

   8

ARTICLE XII. PERMITTED CONTESTS

   9

ARTICLE XIII. INSURANCE

   9

ARTICLE XIV. CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

   11

ARTICLE XV. INDEMNIFICATION OF LESSOR

   12

ARTICLE XVI. TERMINATION OF LEASE

   13

ARTICLE XVII. EVENTS OF DEFAULT

   13

ARTICLE XVIII. PURCHASE PROVISIONS

   15

ARTICLE XIX. ACCEPTANCE OF SURRENDER

   16

ARTICLE XX. NO MERGER OF TITLE

   16

ARTICLE XXI. INTENT OF THE PARTIES

   16

ARTICLE XXII. MISCELLANEOUS

   16

 

ii

FACILITY LEASE

 

THIS FACILITY LEASE (“Lease”), dated as of July 30, 2004, between the West
Virginia Economic Development Authority, a public corporation and
instrumentality of the State of West Virginia, as lessor (“Lessor”), and
American Woodmark Corporation, a Virginia corporation, as lessee (“Lessee”).

 

W I T N E S S E T H:

 

WHEREAS, Lessee has chosen Hardy County, West Virginia, as a location for its
proposed manufacturing facility (the “Project”), specifically an approximately
forty acre site in Phase II of the Robert C. Byrd Industrial Park in Moorefield,
Hardy County (the “Real Property”);

 

WHEREAS, the Project, over several phases, will include an estimated total
capital investment of $50,000,000 by the Lessee, and will employ an estimated
350 full-time equivalent employees over the life of the Project;

 

WHEREAS, Lessee has previously had discussions with the Lessor and other
representatives of state and local government in the State about the Lessor
acquiring the Real Property and entering into a lease agreement with the Lessor
for the Real Property;

 

WHEREAS, the Lessor is authorized under the West Virginia Economic Development
Authority Act, Chapter 31, Article 15, Section 1, et seq. of the Code of West
Virginia, 1931, as amended (the “Act”), to purchase the Real Property and lease
the Real Property to Lessee for its manufacturing business; and

 

WHEREAS, the Lessor has determined that the acquisition and lease of the Real
Property to Lessee will relieve unemployment in the State, help establish a
balanced economy, and promote economic development in furtherance of its public
purposes as authorized by the Act.

 

NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1 Definitions. Except as otherwise defined herein, the terms
identified below shall have the following meanings as used in this Lease:

 

(a) “Applicable Law” shall mean any existing and future federal, state, county
or local statute, law, ordinance, order, rule or regulation, or any judicial or
administrative decree or decision now or hereafter issued in connection
therewith, including, without limitation, all Environmental Laws.

 

(b) “Basic Rent” shall mean all rent payable pursuant to Section 3.1.

 

(c) “Casualty” shall mean any natural or man made occurrence that causes damage
or destruction to all or any portion of the Real Property which materially
interferes with its use or operation by Lessee.

 

(d) “Commencement Date” shall mean the date hereof.

 

(e) “Condemnation” shall mean an eminent domain or other condemnation proceeding
by a federal, state, county or local governmental entity, or any political
subdivision thereof, that takes or renders nonfunctional all or any portion of
the Real Property which materially interferes with its use or operation by
Lessee.

(f) “Environmental Law” shall mean any federal, state or local statute,
regulation or ordinance or any judicial or administrative decree or decision now
or hereafter promulgated with respect to any “Hazardous Substance” (as
hereinafter defined), drinking water, ground water, landfills, open dumps,
storage tanks, underground storage tanks, solid waste, waste water, storm water
runoff, waste emissions, or wells. Without limiting the generality of the
foregoing, the term Environmental Law shall encompass each of the following
statutes, as may be amended from time to time, and all regulations from time to
time promulgated thereunder: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (codified in scattered sections of 26
U.S.C., 33 U.S.C., 42 U.S.C. and 42 U.S.C. § 9601, et seq.); the Clean Water Act
of 1977 (33 U.S.C. § 1251, et seq.); the Clean Air Act (42 U.S.C. § 7401, et
seq.); the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901, et
seq.); the Safe Drinking Water Act (21 U.S.C. § 349, 42 U.S.C. §§ 201 and 300f
through 300j-9); the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.);
the West Virginia Water Pollution Control Act (W. Va. Code § 22-11-1, et seq.);
the West Virginia Hazardous Waste Management Act (W. Va. Code § 22-18-1, et
seq.); the West Virginia Solid Waste Management Act (W. Va. Code § 22-15-1, et
seq.); the West Virginia Underground Storage Tank Act (W. Va. Code § 22-17-1, et
seq.); the West Virginia Groundwater Protection Act (W. Va. Code § 22-12-1, et
seq.); and the West Virginia Air Pollution Control Act (W. Va. Code § 22-5-1, et
seq.).

 

 

(g) “Environmental Release” shall mean a Release of any Hazardous Substance,
notification of which must be given to any governmental agency under any
Environmental Law, or notification of which has, in fact, been given to any
governmental agency.

 

(h) “Environmental Violation” shall mean any complaint, order, citation or
notice of violation issued to or received by Lessee with regard to air
emissions, water discharges, or any other environmental health or safety matter
affecting the Real Property from any applicable governmental entity, including,
without limitation, the United States Environmental Protection Agency or the
West Virginia Department of Environmental Protection that imposes a penalty or
fine, requires remedial actions or threatens the cessation of operations at the
Real Property.

 

(i) “Event of Total Loss” with respect to the Equipment or the Facility shall
mean any of the following events: (i) loss of all or substantially all of the
Equipment or the Facility or of the use thereof due to theft, disappearance,
destruction, defect or damage to the extent that repair is uneconomical to the
Lessee or impossible, or renders all or substantially all of the Equipment or
Facility permanently unfit for commercial operation for any reason whatsoever;
(ii) any Casualty to the Equipment or Facility which results in an insurance
settlement with respect to the Equipment or Facility on the basis of an actual
or constructive total loss; (iii) any Condemnation of all or substantially all
of the Equipment or the Facility; and (iv) any statute, rule, regulation, order
or other action by any Governmental Authority having jurisdiction (including
without limitation any Federal or State environmental protection agency) over
the Equipment or Facility that prohibits the use of all or substantially all of
the Equipment or the Facility in the normal course of business or declares all
or substantially all of the Equipment or the Facility to be unfit for use, for a
period of three consecutive months. The date of such Event of Total Loss shall
be the date of such theft, disappearance, destruction, damage, Casualty or
Condemnation and the date two months following the action of a government agency
described in clause (iv) of the preceding sentence.

 

(j) “Expiration Date” shall mean July 30, 2024.

 

(k) “Governmental Authority” shall mean the United States, the State and any
political subdivision thereof, and any agency, department, commission, board,
bureau or instrumentality of any of them.

 

(l) “Hazardous Substance” shall mean each and every element, compound, chemical
mixture, petroleum and gas product, substance, contaminant, pollutant,
including, without limitation, substances which are toxic, carcinogenic,
ignitable, corrosive or otherwise dangerous to human, plant or animal health or
well-being, and any other substance defined as a “hazardous substance,”
“hazardous waste,” “hazardous material,” “toxic material,” “toxic waste,” or
“special waste” under any Environmental Law and any other substance which by law
requires special handling in its collection, storage, treatment or disposal.

 

(m) “Insurance Requirements” shall mean the obligations of Lessee to provide all
of the insurance and other risk coverages required pursuant to Article XIII.

 

2

(n) “Lease Balance” shall mean the outstanding unapplied balance of prepaid
Basic Rent plus all unpaid Supplemental Rent and all unpaid administrative fees
due and payable by Lessee to Lessor as of the Purchase Date, minus the
outstanding unapplied balance of prepaid Basic Rent due and payable by Lessee to
Lessor as of the Purchase Date.

 

(o) “Modification” shall have the meaning set forth in Section 10.1.

 

(p) “Overdue Rate” shall mean the interest rate of ten percent (10%) per annum.

 

(q) “Payment Date” shall mean each consecutive date that Rent is payable to
Lessor as provided in Section 3.3.

 

(r) “Permitted Lien” means and includes with respect to the Lessee: (i) liens,
if contested in good faith by appropriate proceedings as allowed pursuant to
Section 12.1 of this Lease, (ii) pledges or deposits to secure obligations under
Workers’ Compensation laws or similar legislation or to secure performance in
connection with bids, tenders and contracts to which the Lessee is a party;
(iii) deposits to secure public or statutory obligations of the Lessee; (iv)
deposits to secure assurety or appeal bonds in proceedings to which the Lessee
is a party; and (v) such other encumbrances as may be consented to, from time to
time, by the Lessor.

 

(s) “Purchase Agreement” shall mean that certain Real Estate Purchase Agreement
between Lessor and the Hardy County Rural Development Authority of even date
herewith for the purchase of the Real Property.

 

(t) “Purchase Date” shall mean the date on which Lessee is required by Lessor to
purchase the Real Property pursuant to Section 16.1 of this Lease, the date on
which Lessee exercises its option to purchase the Real Property pursuant to
Section 18.1 of this Lease, or the date on which Lessee purchases the Real
Property to cure a default pursuant to Section 18.1 of this Lease, that shall
occur on a regularly scheduled Payment Date.

 

(u) “Real Property” shall mean the 250,000 square foot manufacturing facility,
together with all improvements, fixtures, attachments and appurtenances thereto,
located on approximately forty acres of land in the Town of Moorefield, Hardy
County, West Virginia, as more particularly described in Exhibit A attached
hereto.

 

(v) “Release” shall mean any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, storing, escaping, leaching, dumping, burying,
abandoning, or disposing into the environment by the Lessee or any predecessor
in interest of the Lessee on, under or in any way involving or affecting the
Real Property.

 

(w) “Rent” shall mean all payments to be made by the Lessee pursuant to Sections
3.1, 3.2 and 3.4.

 

(x) “Required Modification” shall have the meaning set forth in Section 10.1.

 

(y) “State” shall mean the State of West Virginia.

 

(z) “Supplemental Rent” shall have the meaning set forth in Section 3.2.

 

(aa) “Term” shall have the meaning set forth in Section 2.3.

 

(bb) “Termination Date” shall have the meaning set forth in Sections 16.2, 18.1
and 18.2.

 

(cc) “Termination Notice” shall have the meaning set forth in Sections 16.1,
18.1 and 18.2.

 

3

ARTICLE II

LEASE

 

SECTION 2.1 Lease of Real Property. Lessor hereby agrees to demise, lease and
let to the Lessee hereunder for the Term all of the Lessor’s interest in the
Real Property and any Modifications which thereafter may be constructed on or at
the Real Property.

 

SECTION 2.2 Acceptance of the Real Property. Lessee hereby agrees to accept and
lease from Lessor the Real Property and any Modifications which thereafter may
be constructed on or at the Real Property, subject to the terms and conditions
of this Lease.

 

SECTION 2.3 Lease Term. The term of this Lease (the “Term”) shall begin on the
Commencement Date and end on the Expiration Date, unless previously surrendered
or terminated under the terms and conditions of this Lease.

 

ARTICLE III

PAYMENT OF RENT

 

SECTION 3.1 Basic Rent. The Lessee does hereby pay as a prepayment of Basic Rent
the total amount of $10,770,287, that shall be applied annually on each
anniversary of this Lease to rent due and owing in the amount of $538,515 for
each consecutive year of the term of this Lease commencing with July 30, 2005,
and continuing thereafter on July 30 of the next succeeding 19 years, until the
final payment of rent on or before July 30, 2024:

 

SECTION 3.2 Supplemental Rent. The Lessee shall pay to the Lessor, as
Supplemental Rent, on demand, to the extent permitted by Applicable Law, all
reasonable costs and expenses incurred by Lessor with regard to this Lease, any
indemnification amounts owed by Lessee to Lessor with regard to this Lease, any
insurance proceeds payable to Lessor, any amounts provided by Lessor to finance
Modifications, and all other amounts owed by Lessee to Lessor pursuant to this
Lease. The Lessee shall pay to the Lessor any and all Supplemental Rent promptly
as the same shall become due and payable, pursuant to written notice from Lessor
describing any Supplemental Rent due from Lessee, and if the Lessee fails to pay
any Supplemental Rent, the Lessor shall have all rights, powers and remedies
provided for herein or by law or equity or otherwise in the case of nonpayment
of Basic Rent. The expiration or other termination of the Lessee’s obligations
to pay Basic Rent hereunder shall not limit or modify the obligations of the
Lessee with respect to Supplemental Rent.

 

SECTION 3.3 Method of Payment. Each payment of Supplemental Rent shall be made
by the Lessee to Lessor on or before July 30 of each year during the Term of
this Lease commencing with July 30, 2005, and continuing on July 30 of each
consecutive lease year thereafter in funds consisting of lawful currency of the
United States of America which shall be immediately available on the scheduled
date when such payment shall be due, unless such scheduled date shall not be a
business day, in which case such payment shall be made on the next succeeding
business day.

 

SECTION 3.4 Administrative Fee. In addition to all other Rent, the Lessee shall
pay an administrative fee of $100.00 per month to Lessor during the Term to
reimburse Lessor for overhead expenses incurred for the administration of this
Lease.

 

ARTICLE IV

QUIET ENJOYMENT; RIGHT TO INSPECT

 

SECTION 4.1 Quiet Enjoyment. Subject to Sections 2.3 and 4.2, and subject to the
rights of the Lessor contained in Article XVII, the Lessee shall peaceably and
quietly have, hold and enjoy the Real Property for the Term, free of any action
by the Lessor or anyone claiming by, through or under the Lessor with respect to
any matters arising from and after the date hereof. Such right of quiet
enjoyment is independent of, and shall not affect the Lessor’s rights otherwise
to initiate legal action to enforce, the obligations of the Lessee under this
Lease.

 

SECTION 4.2 Right to Inspect. During the Term, the Lessee shall, upon reasonable
notice from the Lessor, and at Lessor’s expense, permit the Lessor and its
authorized representatives to inspect the Real Property and the records of
Lessee relating to the Real Property, during normal business hours; provided,
that such inspections shall not unreasonably interfere with the Lessee’s
business operations at the Real Property.

 

4

ARTICLE V

NET LEASE, ETC

 

SECTION 5.1 Net Lease. This Lease shall constitute a net lease and Lessee’s
obligations to pay all Rent shall be absolute and unconditional under any and
all circumstances. Any present or future law to the contrary notwithstanding,
this Lease shall not terminate, nor shall the Lessee be entitled to any
abatement, suspension, deferment, reduction, setoff, counterclaim, or defense
with respect to the Rent, nor shall the obligations of the Lessee hereunder be
affected (except as expressly herein permitted and by performance of the
obligations in connection therewith) by reason of: (i) any defect in the
condition, merchantability, design, construction, quality or fitness for use of
the Real Property or any part thereof, or the failure of the Real Property to
comply with Applicable Law, including any inability to occupy or use the Real
Property by reason of such non-compliance; (ii) any damage to, removal,
abandonment, salvage, loss contamination of, or release from, scrapping or
destruction of or any requisition or taking of the Real Property or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Real Property or any part thereof including eviction; (iv)
any defect in title to or rights to the Real Property or any lien on such title
or rights to the Real Property; (v) any change, waiver, extension, indulgence or
other action or omission or breach in respect of any obligation or liability of
or by the Lessor; (vi) to the fullest extent permitted by Applicable Law, any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to the Lessee, the Lessor or any
other entity, or any action taken with respect to this Lease by any trustee or
receiver or the Lessee, the Lessor or any entity, or by any court, in any such
proceeding; (vii) any claim that the Lessee has or might have against any person
or entity, including, without limitation, any vendor, manufacturer, contractor
of or for the Real Property; (viii) any failure on the part of the Lessor to
perform or comply with any of the terms of this Lease (other than performance by
the Lessor of its obligations set forth in Section 2.1 hereof); (ix) any
invalidity or unenforceability or illegality or disaffirmance of this Lease
against or by the Lessee; (x) the impossibility or illegality of performance by
the Lessee, the Lessor (other than with respect to performance by the Lessor of
its obligations set forth in Section 2.1 hereof) or both; (xi) any action by any
court, administrative agency or other governmental entity; (xii) any restriction
or curtailment of or interference with the use of the Real Property or any part
thereof; or (xiii) other than performance by the Lessor of its obligations set
forth in Section 2.1 hereof, any other cause or circumstances whether similar or
dissimilar to the foregoing and whether or not the Lessee shall have notice or
knowledge of any of the foregoing.

 

SECTION 5.2 No Termination or Abatement. The Lessee shall remain obligated under
this Lease in accordance with its terms to the fullest extent permitted by all
Applicable Law and shall not take any action to terminate, rescind or avoid this
Lease, except as otherwise provided herein. The Lessee shall remain obligated
under this Lease in accordance with all of the terms and conditions contained
herein.

 

SECTION 5.3 No Bar. Notwithstanding the foregoing, nothing set forth herein
shall bar, limit, prevent, stay or otherwise adversely affect the Lessee’s right
or ability to bring and pursue any action against the Lessor for any breach or
alleged breach of the Lessor’s obligations hereunder.

 

ARTICLE VI

SUBLEASE OR ASSIGNMENT

 

SECTION 6.1 No Sublease or Assignment. The Lessee shall not assign, sublease,
pledge, encumber, convey or otherwise transfer all or any part of its interest
in this Lease without the prior written consent of the Lessor, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, Lessee shall
be permitted, upon prior written notice to Lessor, to transfer its interest
herein to any wholly owned subsidiary of Lessee or to an affiliated company for
which at least fifty percent (50%) of its stock is owned directly by a majority
of the same owners of Lessee, provided that Lessee shall remain liable for all
of its obligations and liabilities under this Lease. For purposes of this
Section 6.1, a merger of the Lessee or the sale of fifty percent (50%) or more
of the stock of the Lessee shall constitute a transfer, except when the Lessee
is the continuing corporation of such merger or the transferee is a subsidiary
or an affiliate of Lessee and the requirements of the preceding sentence are
satisfied.

 

5

ARTICLE VII

LESSEE ACKNOWLEDGMENTS

 

SECTION 7.1 Condition of the Real Property. THE LESSEE ACKNOWLEDGES AND AGREES
THAT IT IS LEASING THE REAL PROPERTY “AS IS” WITHOUT REPRESENTATION, WARRANTY OR
COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR, AND IN EACH CASE SUBJECT TO (A) THE
EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF,
(C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT
SHOW, AND (D) VIOLATIONS OF APPLICABLE LAW WHICH MAY EXIST ON THE DATE OF THIS
LEASE. THE LESSOR HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) AND SHALL NOT BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY,
STRUCTURAL INTEGRITY, CONSTRUCTION QUALITY, USE, CONDITION, DESIGN, OPERATION,
OR FITNESS FOR USE OF THE REAL PROPERTY, OR ANY OTHER REPRESENTATION, WARRANTY
OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE REAL PROPERTY.
THE LESSOR SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN
OR THE FAILURE OF THE REAL PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAW.

 

SECTION 7.2 Risk of Loss. During the Term, the risk of loss of or decrease in
the enjoyment and beneficial use of the Real Property as a result of the damage
or destruction thereof by flood, fire, windstorm, tornado, other elements,
casualties, thefts, riots, wars or otherwise is assumed by the Lessee, and the
Lessor shall in no event be answerable or accountable therefor, unless such
damage or destruction is the result of the actions or omissions of the Lessor.

 

ARTICLE VIII

POSSESSION AND USE OF THE REAL PROPERTY, ETC

 

SECTION 8.1 Utility and Other Charges. The Lessee shall pay or cause to be paid
all charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service, fire service and all other assessments, fees, rents and utilities used
on or otherwise relating to the Real Property during the Term. The Lessee shall
be entitled to receive any credit or refund with respect to any utility charge
paid by the Lessee, and the amount of any credit or refund received by the
Lessor on account of any utility charges paid by the Lessee, net of the costs
and expenses reasonably incurred by the Lessor in obtaining such credit or
refund, shall be promptly paid over to the Lessee.

 

SECTION 8.2 Possession and Use of the Real Property. The Real Property shall be
used by Lessee as a manufacturing facility, or for any other lawful use. The
Lessee shall pay, or cause to be paid, all charges and costs required in
connection with the use of the Real Property as contemplated by this Lease. The
Lessee shall not commit or permit any waste of the Real Property or any part
thereof.

 

SECTION 8.3 Compliance with Applicable Laws and Insurance Requirements. Subject
to the terms of Article XII relating to permitted contests, the Lessee, at its
sole cost and expense, shall (a) comply in all material respects with all
Applicable Laws (including all Environmental Laws) and Insurance Requirements
relating to the Real Property, including the use, operation, maintenance, repair
and restoration thereof, and (b) procure, maintain and comply with all licenses,
permits, orders, approvals, consents and other authorizations required for the
use, operation, maintenance, repair and restoration of the Real Property and for
the construction, use, operation, maintenance, repair and restoration of the
Modifications.

 

ARTICLE IX

MAINTENANCE AND REPAIR; RETURN

 

SECTION 9.1 Maintenance and Repair; Return. (a) The Lessee, at its sole cost and
expense, shall maintain the Real Property in good condition (ordinary wear and
tear excepted) and make all necessary repairs thereto, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary, structural
or

 

6

nonstructural or foreseen or unforeseen, in each case and in all material
respects (i) as required by all Applicable Law and Insurance Requirements, (ii)
on a basis consistent with the operation and maintenance of properties
comparable in type and location to the Real Property and (iii) in no event less
than the standards applied by the Lessee in the operation and maintenance of
other comparable properties owned or leased by the Lessee or its affiliated
companies.

 

(b) The Lessor shall under no circumstances be required to build any
improvements on the Real Property, make any repairs, replacements, alterations
or renewals of any nature or description to the Real Property, make any
expenditure whatsoever in connection with this Lease or maintain the Real
Property in any way. The Lessee waives any right to (i) require the Lessor to
maintain, repair, or rebuild all or any part of the Real Property or (ii) make
repairs at the expense of the Lessor pursuant to any Applicable Law, Insurance
Requirement, contract, agreement, or covenant, condition or restriction in
effect at any time during the Term.

 

(c) The Lessee shall, upon the expiration or earlier termination of this Lease
(other than as a result of the Lessee’s purchase of the Real Property from the
Lessor as provided herein), vacate and surrender the Real Property to the Lessor
in its then-current, “AS IS” condition, subject to the Lessee’s obligations
under Sections 8.3, 9.1(a), 10.1, 11.1, 14.2 and 19.1.

 

ARTICLE X

MODIFICATIONS, ETC.

 

SECTION 10.1 Modifications, Substitutions and Replacements. (a) The Lessee, at
its sole cost and expense, may at any time and from time to time make
alterations, renovations, improvements and additions to the Real Property or any
part thereof and substitutions and replacements therefor (collectively, the
“Modifications”); provided, however, that:

 

(i) except for any Modification required to be made by an Applicable Law (a
“Required Modification”), no Modification shall materially diminish the fair
market sales value, remaining useful life or residual value or materially
adversely affect the utility of the Real Property from that which existed
immediately prior to such Modification;

 

(ii) the Modification shall be done in a good and workmanlike manner;

 

(iii) the Lessee shall comply in all material respects with all Applicable Laws
(including all Environmental Laws) and Insurance Requirements applicable to the
Modification, including the obtaining of all permits and certificates of
occupancy;

 

(iv) subject to the terms of Article XII relating to permitted contests, the
Lessee shall pay all costs and expenses and shall discharge (or cause to be
insured or bonded over) within sixty (60) days after the same shall be filed (or
otherwise become effective) any liens arising with respect to the Modification;
and

 

(v) such Modifications shall comply with Sections 8.3 and 9.1(a).

 

All Modifications shall remain part of the realty and shall be subject to this
Lease and title thereto shall immediately vest in the Lessor; provided, however,
that Modifications that (x) are not Required Modifications, (y) were not
financed by the Lessor, and (z) are readily removable without impairing the
value, utility, residual value or remaining useful life of the Real Property,
shall be the property of the Lessee, shall not be subject to this Lease and may
be removed by the Lessee at any time.

 

(b) The Lessee may place upon the Real Property any fixtures, machinery,
equipment, inventory, supplies or other property belonging to the Lessee or
third parties and may remove the same at any time during the Term, subject,
however, to the terms of Sections 9.1(a) and 10.1(a); and provided, that,
subject to Section 10.1(a), such fixtures, machinery, equipment, inventory,
supplies or other property do not impair the value, utility, residual value or
remaining useful life of the Real Property.

 

7

ARTICLE XI

COVENANTS WITH RESPECT TO LIENS; EASEMENTS

 

SECTION 11.1 Covenants with Respect to Liens. (a) The Lessee agrees that except
as otherwise provided herein and subject to the terms of Article XII relating to
permitted contests, the Lessee shall not directly or indirectly create or allow
to remain, and shall promptly discharge at its sole cost and expense, any lien,
defect, encumbrance, pledge, attachment, levy or title retention agreement upon
the Real Property or any Modifications, or any lien, attachment, encumbrance,
levy or claim with respect to the Rent, other than Permitted Liens and liens on
machinery, equipment, general intangibles and other personal property not
attached or affixed to the Real Property.

 

(b) Nothing contained in this Lease shall be construed as constituting the
request of the Lessor, expressed or implied, to or for the performance by any
contractor, mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Real Property or any
part thereof. NOTICE IS HEREBY GIVEN THAT THE LESSOR IS NOT LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO
ANYONE HOLDING THE REAL PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE
LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR IN AND TO THE
REAL PROPERTY. Subject to Section 10.1, Lessor has not consented and will not
consent to any contract or to any work or to the furnishing of any materials
which might be deemed to create a lien or liens superior to the lien of this
instrument.

 

SECTION 11.2 Lessee’s Grants and Releases of Easements; Lessor’s Waivers.
Provided that no Event of Default arising under Section 17.1 shall have occurred
and be continuing and provided that the Lessor shall not have commenced its
exercise of remedies with respect to any other Event of Default hereunder that
shall have occurred and be continuing, and subject to the provisions of Articles
VII, IX, and X and Section 8.3, the Lessor hereby consents in each instance to
the following actions by the Lessee, in the name and stead of the Lessor and as
the true and lawful attorney-in-fact of the Lessor with full power and authority
to execute documents on behalf of the Lessor for the following purposes, but at
the Lessee’s sole cost and expense: (a) the granting of, or entry into
agreements in connection with, easements, licenses, rights-of-way, building and
use restrictions and covenants and other rights and privileges in the nature of
easements or similar interests and burdens reasonably necessary or desirable for
the use, repair, maintenance or protection of the Real Property as herein
provided; (b) if required by any applicable governmental authority in connection
with the construction, the dedication or transfer of unimproved portions of the
Real Property for road, highway or other public purposes; (c) the seeking of any
zoning variances or modifications to existing zoning; or (d) the execution of
amendments to, or waivers or releases of, any easements, licenses or covenants
and restrictions affecting the Real Property; provided, however, that in each
case (i) such grant, release, dedication, transfer, amendment, agreement or
other actions does not materially impair the value, utility, residual value or
remaining useful life of the Real Property; (ii) such grant, release,
dedication, transfer, amendment, agreement or other action in the Lessee’s
judgment is reasonably necessary in connection with the use, maintenance,
alteration or improvement of the Real Property; (iii) such grant, release,
dedication, transfer, amendment, agreement or other action will not cause the
Real Property or any portion thereof to fail to comply with the provisions of
this Lease or any Applicable Law (including, without limitation, all applicable
zoning, planning, building and subdivision ordinances, all applicable
restrictive covenants and all applicable architectural approval requirements);
(iv) all governmental consents or approvals required prior to such grant,
release, dedication, transfer, amendment, agreement or other action have been
obtained, and all filings required prior to such action have been made; (v) the
Lessee shall remain obligated under this Lease and under any instrument executed
by the Lessee consenting to the assignment of the Lessor’s interest in this
Lease as security for indebtedness, in each case in accordance with their terms,
as though such grant, release, decision, transfer, amendment, agreement or other
action had not be effected; and (vi) the Lessee shall pay and perform any
obligations of the Lessor under such grant, release, dedication, transfer,
amendment, agreement or other action. The Lessor acknowledges the Lessee’s right
to finance and to secure under the Uniform Commercial Code, inventory,
furnishings, furniture, equipment, machinery, leasehold improvement and other
personal property located at the Real Property, and the Lessor agrees to execute
Lessor waiver forms and release of Lessor’s landlord’s liens in favor of any
purchase money seller, lessor or lender which has financed or may finance in the
future such items. Without limiting the effectiveness of the foregoing,

 

8

provided that no Event of Default arising under Section 17.1 shall have occurred
and be continuing and provided that the Lessor shall not have commenced its
exercise of remedies with respect to any other Event of Default hereunder that
shall have occurred and be continuing, the Lessor shall, upon the request of the
Lessee, and at the Lessee’s sole cost and expense, execute and deliver any
instruments necessary or appropriate to confirm any such grant, release,
dedication, transfer, amendment, agreement or other action to any person or
entity permitted under this Section 11.2, including landlord waivers with
respect to any of the foregoing.

 

SECTION 11.3 Liens Encumbering the Facility. Lessor shall grant a lien in the
Real Property to secure financing provided by a third party financial
institution to Lessee solely and exclusively for those purposes that Lessor and
Lessee agree will directly benefit the Real Property. However, any such lien
shall be subordinate in all respects to the payment of Rent and the Lease
Balance to Lessor under the terms and conditions of this Lease.

 

ARTICLE XII

PERMITTED CONTESTS

 

SECTION 12.1 Permitted Contests in Response of Applicable Law. If, to the extent
and for so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable Law relating to the Real Property or the obligation to comply
therewith shall be prosecuted diligently and in good faith in appropriate
proceedings by the Lessee or (b) compliance with such Applicable Law shall have
been excused or exempted by a valid nonconforming use, variance, permit, waiver,
extension, consent order or forbearance, the Lessee shall not be required to
comply with such Applicable Law but only if and so long as any such test,
challenge, appeal, proceeding, waiver, extension, consent order, forebearance or
noncompliance shall not, in the reasonable opinion of the Lessor, involve (A)
any risk of criminal liability being imposed on the Lessor or the Real Property
or (B) any significant risk of (1) until after an adverse determination therein,
the foreclosure, forfeiture or loss of the Real Property, or any material part
thereof, or (2) the nonpayment of Rent or (C) any substantial risk of (1) the
sale of or, until after an adverse determination therein, the creation of any
lien (other than a Permitted Lien) on, any part of the Real Property, (2) civil
liability being imposed on the Lessor or the Real Property for which the Lessee
is not obligated to indemnify such parties, or (3) enjoinment of, or
interference with, the use, possession or disposition of the Real Property in
any material respect.

 

The Lessor will not be required to join in any proceedings pursuant to this
Section 12.1 unless a provision of any Applicable Law requires that such
proceedings be brought by or in the name of the Lessor or it is customary in the
applicable jurisdiction for the title holder to join in such proceedings; and in
that event the Lessor will join in the proceedings or permit them or any part
thereof to be brought in its name if and so long as the Lessee pays all related
expenses and indemnifies the Lessor.

 

ARTICLE XIII

INSURANCE

 

SECTION 13.1 Comprehensive General Liability Insurance. Lessee shall provide
combined single limit insurance against claims for third-party bodily injury,
including death and third-party property damage occurring on, in or about the
Real Property (including adjoining streets and sidewalks) in an amount at least
equal to $2,000,000 per occurrence. This coverage may be provided in a
combination of umbrella and excess liability policies.

 

SECTION 13.2 Real Property Insurance. Lessee shall provide insurance against
loss or damage covering the Real Property or any portion thereof by reason of
any Peril (as defined below) in an amount (subject to such deductibles and/or
self-insurance in such minimum amounts as is carried by Lessee covering other
similar properties); provided, however, that at no time shall the amount of such
coverage be less than $2,500,000 for the Real Property. The term “Peril” shall
mean, collectively, fire, lightning, flood, windstorm, tornado, hail, explosion,
riot and civil commotion, vandalism and malicious mischief, damage from
aircraft, vehicles and smoke and all other perils covered by the “all risk
endorsement” then in use in the State of West Virginia. Alternatively, at
Lessee’s election, such insurance shall be on a coverage form reasonably
available in the commercial insurance market at the time of the most recent
policy review.

 

9

SECTION 13.3 Workers’ Compensation Insurance. Lessee shall, in the construction
of the Modifications and the operation of the Real Property, comply with the
applicable Workers’ Compensation laws and protect Lessor against any liability
under such laws.

 

SECTION 13.4 Builders’ Risk Insurance. During the construction of any
Modifications, Lessee shall also maintain, for the benefit of Lessor, physical
damage and all-risk builders’ risk insurance in an amount equal to or greater of
the replacement value of such Modifications, as applicable, and the aggregate
cost for the construction of same. All physical damage and all-risk builders’
risk insurance shall be subject to the following provisions: (i) such insurance
shall be subject to a deductible of $100,000 per occurrence; (ii) the
construction budget shall include a line item for such deductible in the amount
of $100,000 per occurrence; (iii) the general contractor will maintain or cause
to be maintained with insurance or reinsurance companies not affiliated with the
general contractor and reasonably acceptable to the Lessor, physical damage
insurance for losses in excess of $500,000, subject to appropriate limits (but
in an amount not less than the lesser of (A) the replacement value of the Real
Property or (B) the Lease Balance, and may maintain with insurance or
reinsurance companies affiliated with the general contractor for any damage
insurance for losses of $500,000 or less; and (iv) the general contractor will
designate the Lessor as loss payee of the insurance described in clause (iii).

 

SECTION 13.5 Other Insurance. Lessee shall provide such other insurance
(excluding business interruption insurance), in each case as is generally
carried by Lessee for similar properties in such amounts and against such risks
as are then customary for properties similar in use, and flood insurance to the
extent required by Applicable Law.

 

SECTION 13.6 Insurance Coverage. Such insurance shall be written by reputable
insurance companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance being
provided by such companies. In the case of liability insurance (except workers’
compensation and employers liability) maintained by Lessee, the Lessee shall
deliver to the Lessor (i) a certificate of insurance confirming the existence of
insurance required by Section 13.1 and (ii) a statement of insurance, in the
amount of $2,000,000, naming Lessor as an additional insured or loss payee, as
appropriate. In the case of property insurance maintained by Lessee, the Lessee
shall deliver to the Lessor a certificate of insurance which names Lessor an
additional insured or loss payee as its interests may appear. Each policy
referred to in this Section 13.6 (except workers’ compensation and employers
liability) shall provide that: (i) it will not be canceled, materially modified
or its limits reduced, or allowed to lapse without renewal, except after no less
than 30 days’ prior written notice to Lessor; (ii) the interests of Lessor shall
not be invalidated by any act or negligence of or breach of warranty or
representation by Lessee; (iii) such insurance is primary with respect to any
other insurance carried by or available to Lessor; (iv) the insurer shall waive
any right of subrogation, setoff, counterclaim, or other deduction, whether by
attachment or otherwise, against Lessor; and (v) such policy shall contain a
cross-liability clause providing for coverage of Lessor, as if separate policies
had been issued to each of them. Lessee will notify Lessor promptly of any
policy cancellation, reduction in policy limits, modification or amendment.

 

SECTION 13.7 Delivery of Insurance Certificates. On the date of this Lease,
Lessee shall deliver to Lessor certificates of insurance satisfactory to the
Lessor evidencing the existence of all insurance required to be maintained
hereunder and setting forth the respective coverages, limits of liability,
carrier, policy number and period of coverage. Thereafter, throughout the Term,
at the time each of Lessee’s insurance policies is renewed (but in no event less
frequently than once each year) or upon written request by Lessor following an
Event of Default, Lessee shall deliver to Lessor certificates of insurance
evidencing that all insurance required by Section 13.6 to be maintained by
Lessee with respect to the Real Property is in effect.

 

SECTION 13.8 Insurance by Lessor. At any time Lessor may, at its own expense,
carry insurance with respect to its interest in the Real Property, except that
such insurance shall not interfere with Lessee’s ability to insure the Real
Property as required by this Section 13 or adversely affect Lessee’s insurance
or the cost thereof, or the ability of Lessee to collect a claim under any such
insurance policy. Any insurance payments received from policies maintained by
Lessor pursuant to the previous sentence shall be retained by Lessor without
reducing or otherwise affecting Lessee’s obligations hereunder.

 

10

ARTICLE XIV

CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

 

SECTION 14.1 Casualty and Condemnation. (a) Subject to the provisions of this
Article XIV, (i) if all or a portion of the Real Property is damaged or
destroyed in whole or in part by a Casualty, any insurance proceeds payable with
respect to such Casualty up to $1,000,000 shall be paid directly to the Lessee,
or if received by the Lessor, shall be paid over to the Lessee for the
reconstruction, refurbishment and repair of the Real Property and (ii) if the
use, access, occupancy, easement rights or title to the Real Property or any
part thereof is the subject of a Condemnation, then any award or compensation
relating thereto up to $1,000,000 shall be paid to the Lessee. Any insurance
proceeds or condemnation award or compensation (other than insurance proceeds
payable by any Affiliate of Lessee) in excess of $1,000,000 for any single
Casualty or Condemnation shall be held in trust by the Lessor in a segregated
account for reimbursement to the Lessee from time to time during the course of
the Lessee’s restoration of the Real Property and compliance with the provisions
of Section 9.1. Any such amounts held by the Lessor shall be invested by the
Lessor from time to time, with all interest and earnings on such investments
being payable to the Lessee promptly upon receipt thereof by Lessor from time to
time. All amounts held by the Lessor on account of any award, compensation or
insurance proceeds paid directly to or otherwise received by the Lessor shall
promptly be remitted to the Lessee to be applied in accordance with this Section
14.1.

 

(b) The Lessee may appear in any proceeding or action to negotiate, prosecute,
adjust or appeal any claim for any award, compensation or insurance payment on
account of any such Casualty or Condemnation and shall pay all expenses thereof.
At the Lessee’s reasonable request, and at the Lessee’s sole cost and expense,
the Lessor shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. The Lessor and the Lessee agree that this Lease shall
control the rights of the Lessor on the one hand, and the Lessee, on the other
hand, in and to any such award, compensation or insurance payment.

 

(c) If the Lessor or the Lessee shall receive notice of a Casualty or of an
actual, pending or threatened Condemnation of the Real Property or any material
interest therein, the Lessor or the Lessee, as the case may be, shall give
notice thereof to each other promptly after the receipt of such notice.

 

(d) If pursuant to this Section and Section 16.1 this Lease shall continue in
full force and effect following a Casualty and Condemnation with respect to the
Real Property, the Lessee shall, at its sole cost and expense, promptly and
diligently repair any damage to the Real Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections 9.1 and 10.1 using
the as-built plans and specifications for the Real Property (as modified to give
effect to any subsequent Modifications, any Condemnation affecting the Real
Property and all Applicable Law) so as to restore the Real Property to at least
the same condition and value as existed immediately prior to such Casualty or
Condemnation with such Modification as the Lessee may elect in accordance with
Section 10.1. In such event, title to the Real Property shall remain with the
Lessor subject to the terms of this Lease. Upon completion of such restoration,
the Lessee shall furnish the Lessor a certificate of completion confirming that
such restoration has been completed pursuant to this Lease.

 

(e) In no event shall a Casualty or Condemnation affect the Lessee’s obligations
to pay Rent pursuant to Article III or to perform its obligations and pay any
amounts due on the Expiration Date or pursuant to Article XVIII.

 

SECTION 14.2 Environmental Matters. Promptly upon the Lessee’s knowledge of the
existence of an Environmental Violation or Environmental Release which is
material with respect to the Real Property, the Lessee shall notify the Lessor
in writing of such Environmental Violation or Environmental Release. At the
Lessee’s sole cost and expense, the Lessee shall promptly and diligently
commence any response, clean up, remedial or other action necessary to remove,
clean up or remediate the Environmental Violation or Environmental Release in
accordance with the terms of Section 8.3. In the event of an Environmental
Release, the Lessee shall, upon the request of the Lessor, cause an
environmental consultant reasonably acceptable to the Lessor to prepare a
written report for Lessor describing specifically the Environmental Release and
the actions taken by the Lessee (or its agents) in response to such
Environmental Release. In the event of an Environmental Violation, the Lessee
shall, provide Lessor with a specific written explanation of the Environmental
Violation and its resolution. Upon the request of Lessor, Lessee shall provide
periodic reports to Lessor describing the nature and progress of actions by
Lessee to resolve each Environmental Violation if such resolution requires a
significant amount of time. Each such

 

11

Environmental Violation or Environmental Release shall be remedied prior to the
Expiration Date unless the Real Property has been purchased by the Lessee (or
its designee) in accordance with Article XVI or Article XVIII; provided,
however, that any necessary or appropriate monitoring after the Expiration Date
shall not be deemed to violate the foregoing requirement, but the Lessee shall
not be relieved of its obligation to complete such monitoring.

 

SECTION 14.3 Notice of Environmental Matters. Promptly, but in any event within
ten (10) business days from the date the Lessee receives written notice of or
otherwise acquires actual knowledge thereof, the Lessee shall provide to the
Lessor written notice of any pending or threatened claim, cause of action or
proceeding involving any Environmental Violation or any Environmental Release
on, at, under or from the Real Property. All such notices shall describe in
reasonable detail the nature of the claim, cause of action or proceeding and the
Lessee’s proposed response thereto. In the event that the Lessor receives
written notice of or otherwise acquires actual knowledge of any pending or
threatened claim, cause of action or proceeding involving any Environmental
Violation or any Environmental Release on or in connection with the Real
Property, the Lessor shall promptly give written notice thereof to the Lessee.

 

ARTICLE XV

INDEMNIFICATION OF LESSOR

 

SECTION 15.1 Indemnity. Lessee hereby agrees to indemnify and hold Lessor and
its board members, officers, employees and agents harmless from any and all
loss, cost, claim, demand, cause of action, liability or damage, including
reasonable attorney’s fees and expenses, arising out of or connected with
Lessee’s use of or operations with regard to the Real Property or arising out of
any breach or default of Lessee in performance of its obligations under this
Lease or arising out of any violations of any law or ordinance by the Lessee,
including, but not limited to, any loss, cost, claim, demand, cause of action,
liability or damage under any Environmental Law for any act or failure to act,
or any event occurring at or relating to the Real Property. In case any cause of
action or proceeding is brought against Lessor or its board members, officers,
employees and agents by reason of any such claim, Lessee agrees to resist and
defend such cause of action or proceeding by reliable legal counsel and to
promptly pay and discharge any final judgment rendered against Lessor therein,
reserving the right to appeal such judgment prior to the payment thereof. The
Lessee covenants that it will protect and hold Lessor and its board members,
officers, employees and agents harmless against claims for loss, damage or
injury, including death of or injury to the person or damage to the property of
others, resulting from any wrongful or negligent act or omission of the Lessee
or its agents, servants, officers, employees or invitees arising from or
relating to the Real Property, and it is understood and agreed that the Lessor
shall not be liable for any damage or injury to the person or property of the
Lessee or its agents, servants, officers, employees or invitees resulting from
the wrongful or negligent act or omission of any person other than the Lessor or
its board members, officers, employees and agents. The obligations of this
Section 15 shall survive the transactions contemplated herein and shall survive
the termination of this Lease. In the event a lawsuit is filed naming Lessee and
Lessor as defendants, settlement by the Lessee with plaintiff(s) will not
release it from its obligations to indemnify Lessor as provided herein.

 

SECTION 15.2 Notice of Cause of Action. The Lessor agrees to provide to the
Lessee notice of any claim brought against the Lessor, its officers, members,
employees or agents for which the Lessor shall seek to be defended or
indemnified against by the Lessee. In connection with any such defense, the
Lessee shall be entitled to select counsel of its choosing subject to approval
of the Lessor provided, however, that in the event the parties reasonably
determine that independent counsel is required, then the Lessee shall be
entitled to engage independent counsel subject to approval of the Lessor which
approval shall not be unreasonably withheld.

 

SECTION 15.3 No Limit on Indemnity. In the event of any claim against the Lessor
or its board members, officers, agents (other than the Lessee) or employees by
any employee of the Lessee or any contractor of the Lessee or anyone directly or
indirectly employed by any of them or anyone for whose acts any of them may be
liable, the obligations of the Lessee hereunder shall not be limited in any way
by any limitation on the amount or type of damages, compensation or benefits
payable by or for the Lessee or such contractor under workers’ compensation
laws, disability laws or other employee benefit laws.

 

SECTION 15.4 Survival of Indemnity. Notwithstanding any other provisions of this
Lease, the obligations of the Lessee pursuant to this Section 15 shall remain in
full force and effect after the termination of this Lease until the expiration
of the period stated in the applicable statute of limitations during which a
claim, cause of action or prosecution relating to the matters herein described
may be brought and the payment in full or the

 

12

satisfaction of such claim, cause of action or prosecution and the payment of
all expenses, charges and costs incurred by the Lessor, including, without
limitation, reasonable attorney’s fees and expenses, or by its officers, board
members, agents (other than the Lessee) or employees, relating thereto.

 

ARTICLE XVI

TERMINATION OF LEASE

 

SECTION 16.1 Termination upon Certain Events. If any Event of Total Loss occurs
with respect to the Real Property during the Term and the Lessor shall have
given written notice (a “Termination Notice”) to the Lessee that, as a
consequence of such event, this Lease is to be terminated, then the Lessee shall
be obligated to purchase the Lessor’s interest in the Real Property on a
Purchase Date no later than sixty (60) days from the date the Lessee receives
the applicable Termination Notice by paying the Lessor an amount equal to the
Lease Balance.

 

SECTION 16.2 Termination Procedures. On the date of the payment by the Lessee of
the Lease Balance with respect to the Real Property in accordance with Section
16.1 (such date, the “Termination Date”), this Lease shall terminate and,
concurrent with the Lessor’s receipt of such payment:

 

(a) the Lessor shall execute and deliver to the Lessee (or to the Lessee’s
designee), at the Lessee’s cost and expense, a release of this Lease, a general
warranty deed of the Real Property, and an assignment of the Lessor’s entire
interest in the Real Property (which shall include an assignment of all of the
Lessor’s right, title and interest in and to any net proceeds with respect to
the Real Property not previously received by the Lessor), in each case, in the
same form as delivered by the Hardy County Rural Development Authority to Lessor
in connection with Lessor’s purchase of the Real Property;

 

(b) the Real Property shall be conveyed to the Lessee (or to the Lessee’s
designee) “AS IS WHERE IS” and in its then present physical condition, free and
clear of the lien of this Lease and any other liens or encumbrances other than
the Permitted Encumbrances as defined in the Purchase Agreement, any other liens
and encumbrances caused by or otherwise attributable to the Lessee, and any
liens or encumbrances attributable to changes in any applicable statutes, rules,
regulations, ordinances or orders enacted or promulgated subsequent to the date
hereof;

 

(c) the Lessor shall convey to the Lessee any net proceeds with respect to the
Casualty or Condemnation giving rise to the termination of this Lease
theretofore received by the Lessor or at the request of the Lessee, such amounts
shall be applied against sums due hereunder; and

 

(d) the Lessor shall execute and deliver to Lessee and the Lessee’s title
insurance company an affidavit as to the absence of any liens created by the
Lease or otherwise attributable to the Lessor, and shall execute and deliver to
Lessee a statement of termination of this Lease.

 

ARTICLE XVII

EVENTS OF DEFAULT

 

SECTION 17.1 Lease Events of Default. The occurrence of any one or more of the
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute an “Event of Default”:

 

(a) the Lessee shall fail to make payment of any Supplemental Rent or
administrative fee due and payable within thirty (30) days after receipt of
written notice thereof; or

 

(b) the Lessee shall fail to observe or perform any material covenant or
agreement of the Lessee under this Lease and such failure shall have continued
for thirty (30) days after Lessee’s receipt of written notice of such default
from the Lessor; provided, however, that if such failure is capable of cure but
cannot be cured by payment of money or cannot be cured by diligent efforts
within such thirty (30) day period but such diligent efforts

 

13

shall be properly commenced within the cure period and the Lessee is diligently
and continuously pursuing the remedy of such failure, the cure period shall be
extended for an additional period of time as may be necessary to cure, not to
extend beyond the Expiration Date; and provided further, that failure by the
Lessee to fully comply with the requirements of Section 20.1 hereof shall not be
subject to any cure period; or

 

(c) the Lessee shall (i) admit in writing its inability to pay its debts
generally as they become due; (ii) file a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof; (iii) make a general
assignment for the benefit of its creditors; (iv) consent to the appointment of
a receiver of itself or the whole or any substantial part of its property; (v)
fail to cause the discharge of any custodian, trustee or receiver appointed for
the Lessee, as the case may be, or the whole or a substantial part of its
property within sixty (60) days after such appointment; or (vi) file a petition
or answer seeking or consenting to reorganization under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof; or

 

(d) insolvency proceedings or a petition under the United States bankruptcy laws
or any other applicable insolvency law or statute of the United States of
America or any State or Commonwealth thereof shall be filed against the Lessee
and not dismissed within sixty (60) days from the date of its filing, or a court
of competent jurisdiction shall enter an order or decree appointing, without the
consent of the Lessee, a receiver of the Lessee or the whole or a substantial
part of any of its property, and such order or decree shall not be vacated or
set aside within sixty (60) days from the date of the entry thereof; or

 

(f) Lessee shall fail to timely cure a default under its Equipment Lease dated
June 30, 2004, with Lessor (the “Equipment Lease”).

 

SECTION 17.2 Remedies. Upon the occurrence of any Event of Default and at any
time thereafter, the Lessor may, so long as such Event of Default is continuing,
do one or more of the following as the Lessor in its sole discretion shall
determine, without limiting any other right or remedy the Lessor may have on
account of such lease Event of Default:

 

(a) the Lessor may, by written notice to the Lessee, rescind or terminate this
Lease as to any or all of the Real Property as of the date specified in such
notice; however, (i) no reletting, reentry or taking of possession of the Real
Property (or any portion thereof) by the Lessor will be construed as an election
on the Lessor’s part to terminate this Lease unless a written notice of such
intention is given to the Lessee; (ii) notwithstanding any reletting, reentry or
taking of possession, the Lessor may at any time thereafter elect to terminate
this Lease for a continuing Event of Default; and (iii) no act or thing done by
the Lessor or any of its agents, representatives or employees and no agreement
accepting a surrender of the Real Property shall be valid unless the same be
made in writing and executed by the Lessor;

 

(b) the Lessor may (i) demand that the Lessee, and the Lessee shall upon the
written demand of the Lessor, return the Real Property promptly to the Lessor in
the manner and condition required by, and otherwise in accordance with all of
the provisions of, Articles VII and IX and Section 8.3 and Section 14.2 hereof
as if the Real Property were being returned at the end of the Term, and the
Lessor shall not be liable for the reimbursement of the Lessee for any costs and
expenses incurred by the Lessee in connection therewith and (ii) without
prejudice to any other remedy which the Lessor may have for possession of the
Real Property, and to the extent and in the manner permitted by Applicable Law,
enter upon Real Property and take immediate possession of (to the exclusion of
the Lessee) the Real Property or any part thereof and expel or remove the
Lessee, by summary proceedings or otherwise, all without liability to the Lessee
for or by reason of such entry or taking of possession, whether for the
restoration of damage to Real Property caused by such taking or otherwise and in
addition to the Lessor’s other damages, the Lessee shall be responsible for all
costs and expenses incurred by the Lessor in connection with any reletting of
the Real Property, including, without limitation, reasonable brokers’ fees and
all costs of any alterations or repairs made by the Lessor;

 

(c) the Lessor may sell all or any part of the Real Property at public or
private sale, as the Lessor may determine, free and clear of any rights of the
Lessee (except that sales proceeds in excess of the Lease Balance are payable to
and shall be paid to the Lessee with respect thereto, in which event the
Lessee’s obligation to pay Basic Rent hereunder for periods commencing after the
date of such sale shall be terminated, and Lessor shall

 

14

recover from the sale proceeds, in addition to the Lease Balance, all costs and
expenses incurred by the Lessor incident to such sale, including, without
limitation, repossession costs, brokerage commissions, prorations, transfer
taxes, fees and expenses for counsel, title insurance fees, survey costs,
recording fees, and any repair costs); plus interest at the Overdue Rate on the
foregoing amount from such Payment Date until the date of payment;

 

(d) the Lessor may exercise any other right or remedy that may be available to
it under Applicable Law, or proceed by appropriate court action (legal or
equitable) to enforce the terms hereof or to recover damages for the breach
hereof.

 

SECTION 17.3 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 17.2, the Lessee waives, to the fullest extent permitted by
law (except as set forth in Section 17.2), (a) any notice of re-entry or the
institution of legal proceedings to obtain re-entry or possession; (b) the
benefit of any laws now or hereafter in force limiting the Lessor with respect
to the election of remedies; and (c) any other rights which might otherwise
limit or modify any of the Lessor’s rights or remedies under this Article XVII.

 

ARTICLE XVIII

PURCHASE PROVISIONS

 

SECTION 18.1 Lessee Purchase Options. Subject to the conditions contained
herein, the Lessee shall have the option on any Purchase Date to purchase (or
cause its designee to purchase) all (and not less than all) of the Real Property
then subject to this Lease at a price equal to the Lease Balance for the Real
Property on the applicable Purchase Date. If not previously purchased during the
Term, Lessee shall exercise its option to purchase the Real Property on the
Expiration Date for a price equal to the Lease Balance plus ten dollars. In
order to exercise its option pursuant to this Section, the Lessee shall deliver
a written purchase notice at least thirty (30) days before the proposed purchase
(a “Termination Notice”), which purchase notice shall specify Lease Balance
payable to Lessor and the applicable Purchase Date. The Lessee may assign its
right to purchase the Real Property to any other person or to designate any
other person as the transferee under any deed to be executed by the Lessor in
connection with such sale; provided, however, that the Lessee shall remain
primarily liable to pay the Lease Balance and all other amounts then due and
owing by the Lessee. Lessee may only exercise its right to purchase the Real
Property in this Section 18.1 in the event that Lessee has also agreed to
purchase all of the machinery and equipment from Lessor that is subject to the
Equipment Lease. If the Lessee exercises its option pursuant to this Section
18.1 then, upon the Lessor’s receipt of all amounts due in connection therewith,
the Lessor shall execute and deliver to Lessee or its designee a general
warranty deed for the Real Property in the same form as delivered by the Hardy
County Rural Development Authority to Lessor in connection with Lessor’s
purchase of the Real Property, subject only to the Permitted Encumbrances (as
defined in the Purchase Agreement), any other liens or encumbrances caused by or
attributable to Lessee, and any liens or encumbrances attributable to any
changes in applicable statutes, rules, regulations, ordinances or orders enacted
or promulgated subsequent to the date hereof. Such transfer shall be effective
as of the applicable Purchase Date, and this Lease shall terminate on the
closing of that transfer (the “Termination Date”).

 

SECTION 18.2 Purchase to Cure Default. Upon the occurrence of an Event of
Default as defined in Section 17 above, Lessee shall have the right to cure such
default by purchasing all of the Real Property at a price equal to the Lease
Balance for the Real Property on the applicable Purchase Date. Lessee shall
exercise its right to cure such default by providing Lessor with written notice
of its election to purchase the Property (a “Termination Notice”) within the
cure period applicable to that particular Event of Default as provided in
Section 17, which purchase notice shall specify the Lease Balance payable to
Lessor and the applicable purchase date. Lessee may only exercise its right to
purchase the Real Property in this Section 18.2 in the event that Lessee has
also agreed to purchase all of the machinery and equipment from Lessor that is
subject to the Equipment Lease. If Lessee exercises its right to purchase the
Real Property pursuant to this Section 18.2, then within thirty (30) days after
Lessor’s receipt of the Termination Notice, Lessee shall pay the Lease Balance
and all other amounts then due and owing to Lessor in exchange for a general
warranty deed for the Real Property in the same form as delivered by the Hardy
County Rural Development Authority to Lessor in connection with Lessor’s
purchase of the Real Property, subject only to the Permitted Encumbrances (as
defined in the Purchase Agreement), any other liens or encumbrances caused by or
attributable to Lessee, and any liens or encumbrances attributable to any
changes in applicable statutes, rules, regulations, ordinances or orders enacted
or promulgated subsequent to the date hereof. Such transfer shall be effective
as of the applicable Purchase Date, and this Lease shall terminate on the
closing of that transfer (the “Termination Date”).

 

15

ARTICLE XIX

ACCEPTANCE OF SURRENDER

 

SECTION 19.1 Acceptance of Surrender. No surrender to the Lessor of this Lease
or of the Real Property or of any part thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by the Lessor
and, prior to the payment or performance of all obligations under this Lease,
and no act by the Lessor other than a written acceptance, shall constitute an
acceptance of any such surrender.

 

ARTICLE XX

NO MERGER OF TITLE

 

SECTION 20.1 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same person
or entity may acquire, own or hold, directly or indirectly, in whole or in part,
(a) this Lease or the leasehold estate created hereby or any interest in this
Lease or such leasehold estate or (b) the fee [or ground leasehold estate] in
the Real Property, except as may expressly be stated in a written instrument
duly executed and delivered by the appropriate person or entity.

 

ARTICLE XXI

INTENT OF THE PARTIES

 

Section 21.1 Fair Market Rental. It is the intent of the parties hereto that for
all purposes (other than financial accounting purposes), including, state, real
estate, commercial law, bankruptcy and federal, state and local income tax
purposes, the rent payable under this Lease constitutes fair market rental for
the lease of the Real Property pursuant to the terms hereof.

 

ARTICLE XXII

MISCELLANEOUS

 

SECTION 22.1 Survival; Severability, Etc. Anything contained in this Lease to
the contrary notwithstanding, all claims against and liabilities of the Lessee
or the Lessor arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier termination
for a period of one year except as to indemnification which shall continue to
survive as provided in Section 15.4. If any term or provision of this Lease or
any application thereof shall be declared invalid or unenforceable, the
remainder of this Lease and any other application of such term or provision
shall not be affected thereby.

 

SECTION 22.2 Amendments and Modifications. This Lease shall not be amended,
waived, discharged or terminated except by an instrument in writing in
recordable form signed by the Lessor and the Lessee.

 

SECTION 22.3 No Waiver. No failure by the Lessor or the Lessee to insist upon
the strict performance of any term hereof or to exercise any right, power or
remedy upon a default hereunder, and no acceptance of full or partial payment of
Rent during the continuance of any such default or of any such term shall be
deemed a waiver or relinquishment of Lessor’s right to enforce any of its
rights, powers or remedies with respect to such default. To the fullest extent
permitted by law, no waiver of any default shall affect or alter this Lease, and
this Lease shall continue in full force and effect with respect to any other
then existing or subsequent default.

 

16

SECTION 22.4 Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and directed to the addresses
described below, by U.S. certified mail, return receipt requested, directed to
the parties at the following addresses or at some other address of which one
party subsequently authorizes the other by the authorization procedure required
herein:

 

To Lessor:    West Virginia Economic Development Authority

          160 Association Drive

          NorthGate Business Park

          Charleston, West Virginia 25311-1217

 

To Lessee:    American Woodmark Corporation

          3102 Shawnee Drive

          Winchester, Virginia 22601

 

SECTION 22.5 Successors and Assigns. All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

 

SECTION 22.6 Headings and Table of Contents. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

 

SECTION 22.7 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WEST VIRGINIA WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

SECTION 22.8 Limitations on Recourse. Anything in this Lease to the contrary
notwithstanding, neither the Lessee nor any of its successors or assigns shall
have any claim, remedy or right to proceed against the Lessor in its individual
capacity or any past, present or future board member, officer or employee of the
Lessor whether by virtue of any statute or rule of law or by enforcement of any
penalty or assessment or otherwise or for the payment of any liability resulting
from the breach of any representation, agreement or warranty of any nature
whatsoever in this Lease, from any source other than the Lessor’s interest in
the Real Property; and the Lessee by the execution of this Lease waives and
releases any liability of the Lessor in its individual capacity or any past,
present or future board member, officer, or employee of the Lessor for and on
account of such liability, agrees to look solely to the Lessor’s interest in the
Real Property for the satisfaction of such liability; provided, however, that
nothing herein contained shall limit, restrict or impair the rights of the
Lessee, subject to the limitations hereinabove described, to bring suit and
obtain a judgment against the Lessor or to exercise all rights and remedies
provided under this Lease or otherwise realize upon the Lessor’s interest in the
Real Property, other than the pursuit of any claim of personal liability; and
provided, further, that the Lessor shall be liable in its individual capacity
for its own willful misconduct or gross negligence, and any tax based on or
measured by any income, fees or rents received by it for acting as the Lessor.

 

SECTION 22.9 Counterparts. This Lease may be signed in any number of
counterparts, and any single counterpart or set of counterparts signed by all of
the parties hereto shall constitute a full and original agreement for all
purposes.

 

SECTION 22.10 Expenses. Lessee shall pay all of the reasonable costs and
expenses incurred by Lessor in the negotiation, drafting and execution of this
Lease and the related documents including, without limitation, attorneys fees
and expenses.

 

[Remainder of this page intentionally left blank]

 

17

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and
delivered as of the date first above written.

 

WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY,

a West Virginia public corporation

By:

 

 

--------------------------------------------------------------------------------

   

David A. Warner

   

Its Executive Director

AMERICAN WOODMARK CORPORATION,

a Virginia corporation

By:

 

 

--------------------------------------------------------------------------------

   

Glenn E. Eanes

   

Its Vice President and Treasurer

 

STATE OF WEST VIRGINIA,

 

COUNTY OF KANAWHA, to-wit:

 

The foregoing instrument was acknowledged before me this              day of
                    , 2004, by David A. Warner, the Executive Director of the
West Virginia Economic Development Authority, a West Virginia corporation, on
behalf of the corporation.

 

My commission expires:                                         
                                                         .

 

--------------------------------------------------------------------------------

Notary Public

 

[NOTARY SEAL]

 

18

COMMONWEALTH OF                             ,

 

COUNTY OF                             , to-wit:

 

The foregoing instrument was acknowledged before me this              day of
                    , 2004, by Glenn E. Eanes, Vice President and Treasurer of
American Woodmark Corporation, a Virginia corporation, on behalf of the
corporation.

 

My commission expires:                                         
                                                         .

 

--------------------------------------------------------------------------------

Notary Public

 

[NOTARY SEAL]

 

WMH:307589 (001916.0399)

 

19

EXHIBIT A

 

DESCRIPTION OF SURVEY

for

HARDY COUNTY DEVELOPMENT AUTHORITY

of a

PROPOSED LAND PARTITION

and

PROPOSED ROAD RIGHT-OF-WAY

MOOREFIELD DISTRICT, HARDY COUNTY, WV

TAX MAP 285 P/O PARCEL

1 DEED BOOK 221 PAGE 555

 

A CERTAIN TRACT OR PARCEL OF LAND SITUATE ON THE WATERS OF FORT RUN, NEAR WEST
VIRGINIA ROUTE 55, MOOREFIELD DISTRICT, HARDY COUNTY, WEST VIRGINIA BEING MORE
PARTICULARLY BOUNDED AND DESC.RIBED AS FOLLOWS:

 

AMERICAN WOODMARK PARCEL:

 

Beginning at a fence post in concrete found at a common comer of Hardy County
Development Authority, Lot #2 of the Robert C. Byrd Industrial Park (Tax Map 285
Parcel l, Deed Book 221 Page 555) and Patti B. Michael (Tax Map 285 Parcel 95
Will Book 25 Page 272) and other lands of said Hardy County Development
Authority;

 

Thence, leaving said Lot #2 and with said Michael, North 52 degrees 40 minutes
09 seconds West, a distance of 1,431.38 feet to a ½” iron rebar found at a
common comer of said Michael and Betty Branson (Tax Map 284A Parcel 8, Deed Book
158 Page 602);

 

Thence, leaving said Michael and partially with said Branson and Donald and
Carol Smith (Tax Map 284A Parcel 7.1, Deed Book 185 Page 326), Bill and Stacy
Newhouse (Tax Map 284A Parcel 7, Deed Book 276 Page 34), and Tamra Whipp (Tax
Map 284A Parcel 6.1, Deed Book 211 Page 629), North 52 degrees 19 minutes 12
seconds West, a distance of 503.95 feet to a ¾” iron rebar set at a common comer
of Fort Pleasant Farms, Inc. (Tax Map 264 Parcel 12, Deed Book 261 Page 247),
which bears, South 52 degrees 19 minutes 12 seconds East, a distance of 147.58
feet from a 1/2” iron rebar (bent) found at a common comer of said Whipp;

 

Thence, leaving said Whipp and with said Fort Pleasant Farm, Inc., North 35
degrees 08 minutes 19 seconds East, a distance of 839.36 feet to a ¾” iron rebar
set on the proposed southerly controlled access right of way line of U.S. Route
33 (Corridor “H”) at a distance of 224.00 feet right of and perpendicular to
centerline station 1761 +56.70;

 

Thence, leaving said Fort Pleasant Farm, Inc. and with said proposed southerly
controlled access right of way line for two (2) lines, South 76 degrees 25
minutes 47 seconds East, a distance of 592.16 feet to a ¾” iron rebar set at a
distance of 177.00 feet right of and perpendicular to centerline station
1767+47; .

 

1

Thence, South 83 degrees 22 minutes 13 seconds East, a distance of 396.94 feet
to a ¾” iron rebar set at a distance of 98.00 feet right of and perpendicular to
centerline station 1771 +36;

 

Thence, leaving said proposed southerly controlled access right of way line and
with a proposed right of way line of said U.S. Route 33 (Corridor “H”) for four
(4) lines, South 01 degrees 17 minutes 18 seconds East, a distance of 150.55
feet to a ¾” iron rebar set at a distance 240.00 feet right of and perpendicular
to centerline station 1771+86;

 

Thence, South 68 degrees 49 minutes 12 seconds East, a distance of 261.38 feet
to a ¾” iron rebar set at a distance of 254.00 feet right of and perpendicular
to centerline station 1774+47;

 

Thence, South 38 degrees 22 minutes 21 seconds East, a distance of 92.36 feet to
a ¾” iron rebar set at a distance of 305.00 feet right of and perpendicular to
centerline station 1775+24;

 

Thence, North 53 degrees 09 minutes 32 seconds East, a distance of 81.84 feet to
a ¾” iron rebar set at a distance of 238.00 feet right of and perpendicular to
centerline station 1775+71;

 

Thence, leaving said proposed southerly right of way line and through the lands
of said Hardy County Development Authority for six (6) lines, South 06 degrees
04 minutes 19 seconds East, a distance of 583.23 feet to a ¾” iron rebar set;

 

Thence, South 75 degrees 43 minutes 41 seconds East, distance of 146.14 feet to
a ¾” iron rebar set;

 

Thence, South 16 degrees 56 minutes 26 seconds East, a distance of 432.06 feet
to a ¾” iron rebar set a corner common to said Hardy County Development
Authority Lot #11-A and a point on the easterly right-of-way line of Hardy
County Route 55/11, which bears, South 41 degrees 07 minutes 43 seconds West, a
distance of 246.60 feet from a ¾” iron rebar found, a corner common to said Lot
#11-A and Lot #11-B of said Robert C. Byrd Industrial Park;

 

Thence, leaving said Lot #11-A and with said right-of-way for three (3) lines,
South 41 degrees 07 minutes 38 seconds West, a distance of 70,18 feet to a
point;

 

Thence, South 64 degrees 28 minutes 06 seconds West, a distance of 45 .56 feet
to a point;

 

Thence, South 25 degrees 31 minutes 54 seconds East, a distance of 19.66 feet to
a point;

 

Thence, leaving said right-of way and said Hardy County Development Authority
Lot #2, South 41 degrees 07 minutes 38 seconds West, a distance of 22.08 feet
passing a point on the westerly line of said right-of-way, a total distance of
384.82 feet to the PLACE OF BEGINNING, containing 46.64 acres, less 6.64 acres
of road right-of-way, leaving a net acreage of 40.00 acres MORE OR LESS, as
shown on a plat attached hereto and made apart of this description.

 

2

PROPOSED ROAD OF RIGHT-OF-WAY

 

Beginning at a 3/4” iron rebar set on the lands of Hardy County Development
Authority, which bears, South 80 degrees 41 minutes 53 seconds West, a distance
of 575.60 feet from a ¾” iron rebar found, a corner common to said Lot #11-B and
Lot #11-C of the said Robert “C. Byrd Industrial Park;

 

Thence, through said Hardy County Development Authority lands, South 16 degrees
56 minutes 26 seconds East, a distance of 432.06 feet to a 3/4” iron rebar set
a. comer common to said Lot #11-A and a point on the easterly right-of-way line
of Hardy County Route 55/11;

 

Thence, leaving said Lot #11-A and with said right-of-way for four (4) lines,
South 41 degrees 07 minutes 38 seconds West, a distance of 70.18 feet to a
point;

 

Thence, South 64 degrees 28 minutes 06 seconds West, a distance of 45.56 feet to
a point;

 

Thence, South 25 degrees 31 minutes 54 seconds East, a distance of 19.66 feet to
a point;

 

Thence, South 41, degrees 07 minutes 38 seconds West, a distance of 22.08 feet
to a point a corner common to said Lot #11-A and a point on the easterly line of
said right-of-way;

 

Thence, leaving said right-of-way and through said Hardy County Development
Authority for thirty one (31) lines, North 35 degrees 28 minutes 46 seconds
West, a distance of 48.35 feet to a point;

 

Thence, South 53 degrees 27 minutes 48 seconds West, a distance of 170.75 feet
to a point;

 

Thence, South 70 degrees 03 minutes 52 seconds West, a distance of 118.29 feet
to a point;

 

Thence, North 87 degrees 32 minutes 19 seconds West, a distance of 59.84 feet to
a point;

 

Thence, North 66 degrees 10 minutes 15 seconds West, a distance of 117.95 feet
to a point;

 

Thence, North 52 degrees 56 minutes 10 seconds West, a distance 9f 1,000.00 feet
to a point;

 

Thence, North 48 degrees 21 minutes 32 seconds West, a distance of 110.42 feet
to a point;

 

Thence, North 23 degrees 02 minutes 16 seconds West, a distance of 118.75 feet
to a point;

 

Thence, North 05 degrees 36 minutes 37 seconds East, a distance of 118.7S feet
to a point;

 

Thence, North 37 degrees 55 minutes 02 seconds East, a distance of 160.93 feet
to a point;

 

3

Thence, North 37 degrees OS minutes 28 seconds East, a distance of 242.57 feet
to a point;

 

Thence, North 88 degrees 21 minutes 50 seconds East, a distance of 467.41 feet
to a point;

 

Thence, South 52 degrees 43 minutes 1.5 seconds East, a distance of 645:48 feet
to, a point;

 

Thence, South 22 degrees 15 minutes 05 seconds East, a distance of 223.09 feet
to a point;

 

Thence, South 13 degrees 43 minutes 02 seconds East, a distance of 69.28 feet 10
a reference line;

 

Thence, with said reference line, South 22 degrees 54 minutes 48 seconds West, a
distance of 131.18 feet to a point;

 

Thence, South 08 degrees 46 minutes 36 seconds East, a distance of 1.85.27 feet
to a point;

 

Thence, South 37 degrees 28 minutes 00 seconds West, a distance of 259.32 feet
to a point;

 

Thence, South 57 degrees 55 minutes 28 seconds West, a distance of 81.52 feet to
a point;

 

Thence, North 73 degrees 07 minutes 50 seconds West, a distance of 125.14 feet
to a point;

 

Thence, North 52 degrees 56 minutes 10 seconds West, a distance of 1,000.00 feet
to a point;

 

Thence, North 49 degrees 01 minutes 27 seconds West, a distance of 91.49 feet to
a point;

 

Thence, North 23 degrees 02 minutes 16 seconds West, a distance of 84.12 feet to
a point;

 

Thence, North 05 degrees 36 minutes 37 seconds East, a distance of 84.12 feet to
a point;

 

Thence, North 34 degrees 00 minutes 14 seconds East, a distance of 140.46 feet
to a point;

 

Thence, North 52 degrees 54 minutes 32 seconds West, a distance of 14.00 feet to
a. point;

 

Thence, North 49 degrees 53 minutes 54 seconds East, a distance of 255.72 feet
to a point;

 

Thence, South 89 degrees 57 minutes 56 seconds East, a distance of 328.50 feet
to a point;

 

Thence, South 78 degrees 34 minutes 02 seconds East, a distance of 55.10 feet to
a point;

 

Thence, South 53 degrees 30 minutes 42 seconds East, a distance of 564.23 feet
to a point;

 

Thence, South 27 degrees 07 minutes 55 seconds East, a distance of 92.70 feet to
a point;

 

4

Thence, South 13 degrees 23 minutes 18 seconds East, a distance of 296.45 feet
to a point, the said reference June;

 

Thence, with said reference line, North 22 degrees 54 minutes 48 seconds East, a
distance of 131.18 feet to the PLACE OF BEGINNING, containing 6.64 acres, MORE
OR LESS, as shown on a plat attached hereto and made a part of this description.

 

The above described tract or parcel being a part of the same lands conveyed to
Hardy County Development Authority as recorded in the Office of the Clerk, Hardy
County, West Virginia, in Deed Book 221 at Page 555.

 

Revised July 2004