Exhibit 10.3

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into by and between A.L.
DOUGHERTY—TENNESSEE II, LLC, an Indiana Limited Liability Company, or its
assigns, hereinafter referred to as “Landlord”, and BWAY CORPORATION, a Delaware
corporation, hereinafter referred to as “Tenant”;

WITNESSETH:

1. Premises and Term. In consideration of the obligation of Tenant to pay rent
as herein provided, and in consideration of the other terms, provisions and
covenants hereof, Landlord hereby demises and Leases to Tenant, and Tenant
hereby accepts and Leases from Landlord certain Premises situated within the
County of Shelby, State of Tennessee, consisting of:

Approximately 120,000 square feet of industrial space, together with adjoining
ramps, loading docks and parking areas, as shown on Exhibit “A” attached hereto
and incorporated herein by reference (herein referred to as the “Premises” or
the “Leased Premises”). The Premises are located in a Building known as 4651
Hickory Hill Road, Memphis, Shelby County, Tennessee (such building is herein
referred to as the “Building;” the Building and surrounding grounds, including
surrounding grounds for a property known as 4605 Hickory Hill Road, are herein
referred to collectively as “Shelby Park II”). Subject to certain restrictions
set forth below, the rights granted to Tenant hereunder include the exclusive
right to park vehicles (including trucks and trailers) within the property
comprising the “Premises”; the non-exclusive right (in common with Landlord, the
other tenants of the Building and their respective permittees) to park in the
“non-exclusive parking and access areas” identified on Exhibit “A” hereto in
connection with Tenant’s usage of the Premises; the non-exclusive right (in
common with Landlord, the other tenants of the Building and their respective
permittees) to continuous driveway access through such “non-exclusive parking
and access areas” to public roads adjacent to Shelby Park II; and the
non-exclusive right (in common with Landlord, the other tenants of the Building
and their respective permittees) to use the walkways, hallways, sidewalks and
all other common areas adjacent to or serving the Premises or the Building,
together with all rights, privileges, easements, and appurtenances belonging to
or in any way pertaining to any of the foregoing rights. Notwithstanding
anything herein to the contrary, Tenant shall not permit vehicles to be parked
in such a manner that will interfere with the free flow of traffic through any
of the “non-exclusive parking and access areas” identified on Exhibit “A.” From
and after the date on which the premises immediately adjacent to the Premises
are occupied by a tenant, Tenant shall not permit any vehicle to be wholly or
partially parked within the area reserved for the exclusive use of such tenant,
such space being identified on Exhibit “A” hereto.

 

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TO HAVE AND TO HOLD the same for a term of 60 months (the “Term”) commencing on
December 1, 2006 (“Commencement Date”) and, subject to Tenant’s renewal option
set forth in Section 28 hereof, ending November 30, 2011 (“Termination Date”).

Tenant is currently in possession of the Premises pursuant to the Existing Lease
Agreements (as defined in Section 27 hereof). Tenant acknowledges that the
Premises are in good and satisfactory condition as of the date hereof. Tenant
acknowledges that no representations as to the repair of the Premises, nor
promises to alter, remodel or improve the Premises have been made by Landlord,
unless such are expressly set forth in this Lease. For the purposes hereof a
“lease year” shall be a calendar year concluding December 31 and a partial lease
year shall be (a) from the Commencement Date until December 31,2006 and (b) from
January 1 of the final calendar year of the Lease until the Termination Date.

2. Base Rent.

A. Tenant agrees to pay to Landlord base rent for the Premises, in advance,
without demand, deduction or set off, for the entire initial Term hereof at the
rate of Thirty Eight Thousand One Hundred Dollars and 00/100 ($38,100.00) per
month (the “Base Rent”). One monthly installment of Base Rent shall be due and
payable on the Commencement Date and shall be applied to the first calendar
month’s Base Rent. Subsequent monthly installments shall be due and payable in
advance, on or before the first day of each calendar month. The Base Rent for
any fractional calendar month at the commencement or end of the Term shall be
prorated; any payment for a partial first calendar month shall be due and
payable on the first day of the following month and any payment for any final
partial calendar month shall be due and payable on the first day of the final
partial calendar month.

3. Use. The Premises shall be used only for the purpose of manufacturing,
receiving, storing, shipping and selling (other than retail) products, materials
and merchandise made and/or distributed by Tenant, and for such other lawful
purposes as may be incidental thereto, including without limitation, office
purposes. Outside storage, including without limitation, trucks and other
vehicles, is prohibited without Landlord’s prior written consent; provided
however, that, notwithstanding the foregoing: Tenant shall have the right to
park trucks and trailers at the designated dock doors on the Premises. Tenant
shall at its own cost and expense obtain any and all licenses and .permits
necessary for any such use. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Premises, and shall
promptly comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances caused by Tenant in or upon, or connected
with, the Premises, all at Tenant’s sole expense. Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
emanate from the Premises, nor take any other action which would constitute a
nuisance or would disturb or endanger other tenants of the Building or
unreasonably interfere with the use of their respective premises. Without
Landlord’s written consent, Tenant shall not receive, store or otherwise handle
any product, material or merchandise which is explosive or highly flammable,
except for such items which are customarily used in Tenant’s business operations
and are used in compliance with applicable laws and insurance requirements
binding upon Tenant. Tenant, at its

 

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sole cost and expense, shall comply with all fire codes, laws and ordinances
related to the use and occupancy of the Premises. Tenant will not permit the
Premises to be used for any purpose or in any manner (including without
limitation any method of storage) which would render the insurance thereon void
or the insurance risk more hazardous or cause the State Board of Insurance or
other insurance authority to disallow any sprinkler credits. Tenant shall abide
by the rules and regulations attached hereto as Exhibit “C”, as reasonably
amended from time to time by Landlord (after reasonable notice of any such
amendment is provided by Landlord to Tenant).

4. Taxes.

A. Landlord agrees to pay before they become delinquent all taxes, assessments
and governmental charges of any kind and nature whatsoever (hereinafter
collectively referred to as “Taxes”) lawfully levied or assessed against the
Building and the grounds, parking areas, driveways and alleys around the
Building. Tenant agrees to pay to Landlord upon demand, as additional rent
hereunder, its proportionate share (as defined in Subparagraph B below) of such
Taxes . Tenant shall pay to Landlord monthly 1/12 of the amount of Tenant’s
proportionate share of Taxes based on Taxes for the preceding calendar year. If
actual Taxes for any calendar year exceed the amount of estimated Taxes paid
monthly by Tenant with respect to such year, as stated above, then following the
conclusion of each calendar year, Tenant shall pay such excess amount to
Landlord. If the amount of estimated Taxes paid monthly by the Tenant, as stated
above, exceed actual Taxes, then following the conclusion of each calendar year,
Landlord shall pay such excess amount to Tenant or credit said amount against
future rent. In the event any such amount is not paid within thirty (30) days
after the date of Landlord’s invoice to Tenant, the unpaid amount shall bear
interest at the then current “prime rate” plus 3.0% (not to exceed the maximum
legal rate of interest) from the date of such invoice until payment by Tenant.

B. Tenant’s “proportionate share”, as used in this Lease, shall mean a fraction,
the numerator of which is the square footage of the Premises (as specified in
the opening section of this Lease) contained in the Premises and the denominator
of which is the total leaseable area (calculated consistently with the
calculation of square footage within the Premises) contained in the Building. As
of today’s date, Tenant’s proportionate share is 72.73% [120,000 ÷ 165,000].
Landlord has disclosed to Tenant that it also owns an industrial building known
as 4605 Hickory Hill Road, which property is adjacent to 4651 Hickory Hill Road
to the north (collectively referred to as “Shelby Park II”). To the extent that
such practice results in a lower Operating Expense contribution from Tenant (as
described in Section 6 below), Landlord reserves the right to perform certain
common area maintenance obligations (e.g., landscaping, parking area and
driveway maintenance) pursuant to a single service contract for both projects.
For any maintenance obligation which is administered in this manner, Tenant’s
“proportionate share” shall be 36.36%, calculated as 120,000 ÷ 330,000 (which
number is the total leasable area contained in the Building and in the Shelby
Park II project).

C. If at any time during the term of this Lease, the present method of taxation
shall be changed so that in lieu of the whole or any part of any taxes,
assessments or governmental charges levied, assessed or imposed on real estate
and the improvements thereon, there shall be

 

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levied, assessed or imposed on Landlord a capital levy or other tax directly on
the rents received therefrom and/or a franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rents for the present or
any future building or buildings on the Premises, then all such taxes,
assessments, levies or charges, or the part thereof so measured or based, shall
be deemed to be included within the term “Taxes” for the purposes hereof, and
Tenant shall reimburse Landlord on demand (as additional rent) for all such
Taxes directly related to the Premises.

D. The Landlord shall have the right to employ a tax consulting firm to attempt
to assure a fair tax burden on the Building and related grounds within the
applicable taxing jurisdiction. Tenant shall pay to Landlord upon demand from
time to time, as additional rent, the amount of Tenant’s “proportionate share”
(as defined in subparagraph 4(B) above) of the cost of such service, up to, but
not to exceed Tenant’s proportionate share of any savings actually realized as
the result of such services in the lease year in which such services are billed.

E. Any payment to be made pursuant to this Paragraph 4 with respect to the real
estate tax year in which this Lease commences or terminates shall be prorated.

5. Landlord’s Repairs. Landlord shall at its expense maintain only the roof,
foundation and the structural soundness of the exterior walls of the Building,
together with all underground or other utility lines serving the Premises, in
good and usable repair, reasonable wear and tear excepted. Landlord shall also
repair and pay for any damage caused by the negligence of Landlord or Landlord’s
employees, agents or invitees, or caused by Landlord’s default hereunder. All
other repairs shall be at the sole expense of Tenant. Tenant shall repair and
pay for any damage caused by the negligence of Tenant, or Tenant’s employees,
agents or invitees, or caused by Tenant’s default hereunder. The term “walls” as
used herein shall not include windows, glass or plate glass, doors, special
storefronts or office entries. Tenant shall immediately give Landlord written
notice of any defect or need for repairs, after which Landlord shall have a
reasonable opportunity to repair same or cure such defect. Landlord’s liability
with respect to any defects, repairs or maintenance for which Landlord is
responsible under any of the provisions of this Lease shall be limited to the
cost of such repairs or maintenance or the curing of such defect. During the
making of such repairs, Landlord shall take all reasonable steps not to
interfere with Tenant’s operations in the Premises.

6. Tenant’s Repairs and Operating Expenses.

A. Tenant shall at its own cost and expense keep and maintain all parts of the
Premises and the loading dock areas attendant thereto (except those for which
Landlord is expressly responsible under the terms of this Lease) in good
condition, promptly making all necessary repairs and replacements, including but
not limited to, windows, glass and plate glass, doors, any special office entry,
interior walls and finish work, floors and floor covering, downspouts, gutters,
heating and air conditioning systems, dock boards, truck doors, dock bumpers,
paving, plumbing work and fixtures, termite and pest extermination, regular
removal of trash and debris directly related to Tenant’s occupancy of the
Premises. Any private security guards or security systems required by Tenant
shall be provided by Tenant and maintained by Tenant at Tenant’s sole costs and
expense. Tenant shall also pay its proportionate share of the costs of regular
mowing of any grass, trimming,

 

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utilities relating to common areas, weed removal and general landscape
maintenance, keeping and repairing the parking areas, driveways and alleys,
management fees (provided that management fees for the Building shall not exceed
4.0% of Landlord’s rental income for the Building in any lease year), fire
protection monitoring, security, common area utilities, and maintenance (except
as noted in Paragraph 5). Said expenses in the aggregate being referred to as
“Operating Costs”. Tenant shall not be obligated to repair any damage caused by
fire, tornado or other casualty.

B. Tenant shall not damage any demising wall or disturb the integrity and
support provided by any demising wall and shall, at its sole cost and expense,
promptly repair any damage or injury to any demising wall caused by Tenant or
its employees, agents or invitees.

C. In the event the Premises constitute a portion of a multiple occupancy
building, Tenant and its employees, customers and licensees shall have the right
to use the parking areas, if any, as may be designated by Landlord in writing,
subject to such reasonable rules and regulations as Landlord may from time to
time prescribe and subject to rights of ingress and egress of other tenants.
Landlord shall not be responsible for enforcing Tenant’s parking rights against
any third parties.

D. Landlord reserves the right to perform any repair obligations which are
otherwise Tenant’s obligations under subparagraph (A) above, and Tenant shall,
in lieu of the obligations set forth under subparagraph (A) above with respect
to such items, be liable for its proportionate share (as defined in subparagraph
4(B) above) of the Operating Cost incurred by Landlord with respect to such
items; provided that if Tenant (or any other tenant of the Building) can be
clearly identified as being responsible for obstructions or stoppage of the
common sanitary sewage line, then Tenant, if Tenant is responsible (or such
other tenant, if such other tenant is responsible), shall pay the entire cost
thereof, upon demand, as additional rent; provided, however, that Tenant shall
have no obligation to pay any cost related to such obstruction or stoppage
unless Tenant has received at least three (3) business days written notice and
opportunity to begin diligently to pursue the cure thereof (or to demonstrate
that such obstruction or stoppage has not been caused by Tenant) and provided
that in an emergency situation the foregoing provision shall not be deemed to
prevent Landlord from promptly causing such obstructions or blockage to be
repaired. Tenant shall pay to Landlord monthly 1/12 of the amount of Tenant’s
proportionate share of Operating Costs for the preceding lease year. If actual
Operating Costs for any lease year exceed the amount of estimated Operating
Costs paid monthly by Tenant for any year, as stated above, then following the
conclusion of each lease year, Tenant shall pay such excess amount to Landlord.
If the amount of estimated Operating Costs paid monthly by the Tenant for any
lease year, as stated above, exceed actual Operating Costs for such lease year,
then following the conclusion of such lease year, Landlord shall pay such excess
amount to Tenant or credit said amount against future rent.

E. Tenant shall, at its own cost and expense, enter into a regularly scheduled
preventive maintenance/service contract with a maintenance contractor for
servicing all hot water, heating and air conditioning systems and equipment
within the Premises. Tenant may select the maintenance contractor, subject to
Landlord’s prior written approval. The service contract must

 

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include all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective (and a copy thereof
delivered to Landlord) within thirty (30) days of the date Tenant takes
possession of the Premises.

7. Alterations. Tenant shall not make any alterations, additions or improvements
to the Premises (including but not limited to roof and wall penetrations)
without the prior written consent of Landlord, such conduct not to be
unreasonably withheld. Tenant may, without the consent of Landlord, but at its
own cost and expense and in a good workmanlike manner erect such shelves, bins,
machinery and trade fixtures as it may deem advisable, without altering the
basic character of the building or improvements and without overloading or
damaging such building or improvements, and in each case complying with all
applicable governmental laws, ordinances, regulations and other requirements.
All additional improvements and partitions erected by Tenant shall be and remain
the property of Tenant during the term of this Lease and Tenant shall, unless
Landlord otherwise elects as hereinafter provided, remove all alterations,
additional, improvements and partitions erected by Tenant and restore the
Premises to their original condition, reasonable wear and tear excluded, by the
date of termination of this Lease or upon earlier vacating of the Premises;
provided, improvements and partitions shall become the property of Landlord as
of the date of termination of this Lease or upon earlier vacating of the
Premises and shall be delivered upon to the Landlord with the Premises. All
shelves, bins, machinery and trade fixtures installed by Tenant may be removed
by Tenant prior to the termination of this Lease if Tenant so elects, and shall
be removed by the date of termination of this Lease or upon earlier vacating of
the Premises if required by Landlord; upon any such removal Tenant shall restore
the Premises to their original condition, reasonable wear and tear excluded. All
such removals and restoration shall be accomplished in a good workmanlike manner
so as not to damage the primary structure or structural qualities of the
buildings and other improvements situated on the Premises.

8. Signs. Tenant shall, if required by Landlord in writing, install a sign upon
the Premises as per Exhibit “D” attached. Landlord’s approval of all sign
designs is required prior to sign manufacture and installation. Such signs shall
be subject to any applicable governmental laws, ordinances, and regulations.
Tenant shall remove all such signs by the Termination Date of this Lease. Sign
installations and removals shall be made in such manner as to avoid injury or
defacement of the building and other improvements, and Tenant shall repair any
injury or defacement, including without limitation discoloration, caused by such
installation and/or removal.

9. Inspection. Landlord and Landlord’s agents and representatives shall have the
right to enter and inspect the Premises at any reasonable time during business
hours, for the purpose of ascertaining the condition of the Premises or in order
to make such repairs as may be required or permitted to be made by Landlord
under the terms of this Lease. During the period that is six (6) months prior to
the end of the term hereof, Landlord and Landlord’s agents and representatives
shall have the right to enter the Premises at any reasonable time during
business hours for the purpose of showing the Premises and shall have the right
to erect on the Premises a suitable sign indicating the Premises for lease by
Landlord. In the event of Tenant’s failure to arrange such joint inspection,
Landlord’s inspection at or after Tenant’s vacating the Premises shall be
conclusively deemed correct for purposes of determining Tenant’s responsibility
for repair and restoration.

 

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10. Utilities. Landlord agrees to provide at its cost water, electricity and
telephone service connections into the Premises; but Tenant shall pay for all
water, gas, heat, light, power, telephone, sewer, sprinkler charges and other
utilities and services used on or from the Premises, together with any taxes,
penalties, surcharges or the like pertaining thereto and any maintenance charges
for utilities and shall furnish all electric light bulbs and tubes. If any such
services are not separately metered to Tenant, Tenant shall pay a reasonable
proportion as determined by Landlord of all charges jointly metered with other
Premises. Landlord shall in no event be liable for any interruption or failure
of utility services on the Premises.

11. Assignment and Subletting. Tenant shall not have the right to assign this
Lease or to sublet the whole or any part of the Premises without the prior
written consent of Landlord, such consent not to be unreasonably withheld,
conditioned or delayed. Notwithstanding any permitted assignment or subletting,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent and all other charges herein specified and
for compliance with all of its other obligations under the terms, provisions of
this Lease. Upon the occurrence of an “event of default” as hereinafter defined,
if the Premises or any part thereof are then assigned or sublet, Landlord, in
addition to any other remedies herein provided, or provided by law, may at its
option collect directly from such assignee or subtenant all rents becoming due
to Tenant under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant hereunder, and no such collection shall be construed
to constitute a novation or a release of Tenant from the further performance of
Tenant’s obligations hereunder.

12. Insurance.

A. Insurance on Landlord’s Property. During the Term, Landlord agrees to
maintain (subject to availability) standard fire and extended coverage
insurance, including coverage for vandalism, malicious mischief and rental
interruption, and earthquake (to the extent available) on so much of the
Building and related real estate as is insurable and is owned by Landlord, in an
amount not less than ninety (90%) of the insurable value of the Building, in
form reasonably satisfactory to Landlord, but not including any improvements,
betterments or fixtures of Tenant. In addition, Landlord shall maintain
liability insurance covering its risks with respect to use and operation of the
Building. Subject to the provisions of Paragraph 14 (A), (B) and (C) below, such
insurance shall be for the sole benefit of Landlord and under its sole control.
Tenant agrees to pay to Landlord, as additional rental, tenant’s proportionate
share (as defined in subparagraph 4(B) above) of such costs. Said payments shall
be made to Landlord within ten (10) days after presentation to Tenant of
Landlord’s statement setting forth the amount due. Any payment to be made
pursuant to this subparagraph (A) with respect to the year in which this lease
commences or terminates shall bear the same ratio to the payment which would be
required to be made for the full year as the part of such year covered by the
term of this Lease bears to a full year.

B. Insurance on Tenant’s Property. During the Term, Tenant shall maintain fire
and extended coverage insurance on all of the property of Tenant located in the
Premises, the Building, or on the grounds surrounding the Building, including
improvements, betterments and fixtures

 

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located in or attached to the Building by Tenant. Within ten (10) days following
written request by Landlord, Tenant shall demonstrate to Landlord that such
insurance is in full force and effect and is adequate to protect Tenant from
significant loss in the event of total destruction of the Leased Premises.

C. Increased Risk. Tenant agrees that it will not act or fail to act in such
manner as to cause an increase in Landlord’s fire and extended coverage
insurance premiums or a cancellation or threatened cancellation of any insurance
policy. If premiums are increased, then Tenant shall, within ten (10) days after
demand, pay all of the increases in such premiums. If cancellation of coverage
is threatened or made as a result of Tenant’s activities, then immediately upon
demand by Landlord, Tenant shall either (i) alter its use of the Leased Premises
to allow reinstatement of the insurance on or before the effective date of any
cancellation thereof, or (ii) provide to Landlord an acceptable substitute
insurance carrier who will issue a policy or policies equal to or better than
those then or formerly carried by Landlord. In the event such substitute carrier
and coverage is acceptable, Tenant shall pay to Landlord all of the net premium
increase resulting from the use of Tenant and change in carrier and policies. In
the event of a threatened cancellation of coverage and failure of Tenant to
abide by the terms of this Paragraph 12(c) relating thereto, Landlord shall have
the right to declare a default by Tenant under this Lease upon ten (10) days’
written notice to Tenant and exercise any and all remedies provided herein in
the event of default as to rent payable hereunder.

D. Public Liability Insurance-Tenant. Tenant shall maintain in full force and
effect throughout the Term of this Lease polices of general public liability
insurance, issued by a company or companies and in form satisfactory to
Landlord, naming both Tenant and Landlord as insureds, and covering any and all
claims for injuries to or death of persons and damage to property occurring in
or upon the Leased Premises in amounts not less than Three Million Dollars
($3,000,000.00) for injury to or death of any one person, Three Million Dollars
($3,000,000.00) for injury to or death of any one person in the same accident or
occurrence, and Three Million Dollars ($3,000,000.00) for property damage
arising out of any one accident or occurrence. If it becomes customary for other
similar facilities in the metropolitan area of the Building to carry higher
limits of liability coverage, Tenant, if requested by Landlord, shall increase
the foregoing coverage to such customary limits. All such insurance shall be for
the benefit of Tenant and Landlord and shall name Landlord and Landlord’s
designated agent, if any, as additional insured. Tenant agrees to furnish
certificates of such insurance to Landlord beginning with the Commencement Date
and deliver certified memorandum copies of current policies of such insurance on
or before thirty (30) days following the Possession Date, and Tenant’s right of
possession shall at all times be subject to the existence of such satisfactory
insurance policies and certificates. No policies shall be cancelable with
respect to Landlord except upon not less than thirty (30) days’ prior written
notice to Landlord.

E. Waiver of Claims and Subrogation. Each of the parties hereto hereby waives
and releases any and all rights of recovery which it might have against the
other for any loss or damage, whether or not caused by an alleged negligence of
the other party, its agents, licensees or invitees, to the extent that such loss
or damage is or would be covered by any insurance required to be maintained
under the Lease. All insurance policies maintained by the Landlord or Tenant as

 

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provided in this Paragraph 12 shall contain an agreement by the insurer waiving
the insurer’s right of subrogation against the other party to this Lease or
agreeing not to acquire any rights of recovery which the insured has expressly
waived prior to the loss. Each of the parties hereto agrees that if the
provision of waiving subrogation and any of such policies of insurance requires
that notice of such waiver be served upon the insurer, such notice shall be
promptly served by the party obtaining such insurance.

13. Liability. Landlord shall not be liable to Tenant or Tenant’s employees,
agents, patrons or visitors, or to any other person whomsoever, for any injury
to person or damage to property on or about the Premises, resulting directly
from and/or caused in part or whole by the negligence or misconduct of Tenant,
its agents, servants or employees, or of any other person entering upon the
Premises, or caused by the buildings and improvements located on the Premises
becoming out of repair, or caused by leakage of gas, oil, water or steam or by
electricity, the Landlord (including without limitation the trustee and
beneficiaries if Landlord is a trust), Landlord’s agents and employees shall be
held safe and harmless from any loss, liability, claims, suits, costs, expenses,
including without limitation attorney’s fees and damages, both real and alleged,
arising out of any such damage or injury; except injury to persons or damage to
property to the extent caused by the negligence of Landlord or the failure of
Landlord to repair any part of the Premises which Landlord is obligated to
repair and maintain hereunder within a reasonable time after the receipt of
written notice from Tenant of needed repairs.

14. Fire and Casualty; Condemnation.

A. If the Premises should be damaged or destroyed by fire, tornado or other
casualty, Tenant shall give immediate written notice thereof to Landlord (the
“Casualty Notice”).

B. If the Premises should be totally destroyed by fire, tornado or other
casualty, or if they should be so damaged thereby that rebuilding or repairs
cannot, in Landlord’s reasonable estimation, be completed within two hundred
(200) days after Landlord’s receipt of the Casualty Notice; then either Landlord
or Tenant may terminate this Lease upon written notice to the other party, and
the rent shall be abated during the unexpired portion of this Lease, effective
upon the date of the occurrence of such damage.

C. If the Premises should be damaged by any peril covered by the insurance to be
provided by Landlord under subparagraph 12(A) above, but only to such extent
that rebuilding or repairs can in Landlord’s reasonable estimation be completed
within two hundred (200) days after Landlord’s receipt of the Casualty Notice,
this Lease shall not terminate, and Landlord shall at its sole cost and expense
thereupon proceed with reasonable diligence to rebuild and repair the Premises
to substantially the condition in which they existed prior to such damage,
except that Landlord shall not be required to rebuild, repair or replace any
part of the partitions, fixtures, additions and other improvements which may
have been placed in, on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the rent payable
hereunder during the period in which they are untenantable shall be reduced by a
fraction, the numerator of which is the number of untenantable square feet and
the denominator of which is

 

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equal to the total amount of square feet of the Premises. In the event that
Landlord should fail to complete such repairs and rebuilding within two hundred
(200) days after Landlord’s receipt of the Casualty Notice, Tenant may, as its
sole remedy, terminate this Lease by delivering written notice of termination to
Landlord, whereupon all rights and obligations hereunder shall cease and
terminate.

D. Notwithstanding anything herein to the contrary, in the event the holder of
any indebtedness secured by a mortgage or deed of trust covering the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after such requirement
is made by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.

E. If the whole or any substantial part of the Premises should be taken for any
public or quasi-public use under governmental law, ordinance or regulation, or
by right of eminent domain, or by private purchase in lieu thereof and the
taking would prevent or materially interfere with the use of the Premises, in
the reasonable judgment of Tenant, for the purpose for which they are being
used, Tenant may terminate this Lease upon written notice to Landlord and the
rent shall be abated during the unexpired portion of this Lease, effective when
the physical taking of said Premises shall occur.

F. If part of the Premises shall be taken for any public or quasi-public use
under any governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this Lease is not terminated
as provided in the subparagraph above, this Lease shall not terminate but the
rent payable hereunder during the unexpired portion of this Lease shall be
reduced by a fraction, the numerator of which is the number of untenantable
square feet and the denominator of which is equal to the total amount of square
footage of the Premises. Upon any such taking, Landlord shall, at its sole cost
and expense restore the Premises, as reduced by such taking, as necessary to
permit the use thereof by Tenants (except that Landlord shall not be required to
rebuild, repair or replace any part of the partitions, fixtures, additions and
other improvements which may have been placed in, on or about the Premises by
Tenant).

G. In the event of any such taking or private purchase in lieu thereof, Landlord
and Tenant shall each be entitled to receive and retain such separate awards
and/or portion of lump sum awards as may be allocated to their respective
interests in any condemnation proceedings. However, all compensation awarded for
any such taking of all or part of the Premises shall be the property of
Landlord.

15. Holding Over. Tenant will, at the termination of this Lease by lapse of time
or otherwise, yield up immediate possession to Landlord. If Landlord agrees in
writing that Tenant may hold over after the expiration or termination of this
Lease, unless the parties hereto otherwise agree in writing on the terms of such
holding over, the hold over tenancy shall be subject to termination by either
party upon not less than sixty (60) days advance written notice, and all of the
other terms and provisions of this Lease shall be applicable during that period,
including Base Rent,

 

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which shall continue to be payable monthly in advance at the same rate as the
Base Rent in effect immediately prior to the Termination Date. If Landlord does
not agree in writing that Tenant may hold over after expiration or termination
of this Lease, then the holdover tenancy may be terminated by Landlord at will,
without advance notice to Tenant, and all of the other terms and conditions of
this Lease shall be applicable during the holdover period, except that Tenant
shall pay Landlord from time to time upon demand, as Base Rent for the period of
any hold over, an amount equal to one and one-half of the Base Rent in effect
immediately prior to the Termination Date (or earlier expiration, if this Lease
terminates prior to the Termination Date). No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided. The preceding provisions of this paragraph 15
shall not be construed as Landlord’s consent for Tenant to hold over.

16. Quiet Enjoyment. Landlord covenants that it now has, or will acquire before
Tenant takes possession of the Premises, good title to the Premises, free and
clear of all liens and encumbrances, excepting only the lien for current taxes
not yet due, such mortgage or mortgages as are permitted by the terms of this
lease, zoning ordinances and other building and fire ordinances and governmental
regulations relating to the use of such property, and easements, restrictions
and other conditions of record. Tenant, upon paying the rental herein set forth
and performing its other covenants and agreements herein set forth, shall
peaceably and quietly have, hold and enjoy the Premises for the term hereof
without hindrance or molestation from Landlord, subject to the terms and
provisions of this Lease.

17. Events of Default. The following events shall be deemed to be events of
default by Tenant under this Lease:

(a) Tenant shall fail to pay any installment of the rent herein reserved when
due, or any payment with respect to taxes or operating costs hereunder when due,
or any other payment or reimbursement to Landlord required herein when due, and
such failure shall continue for a period often (10) days from receipt of written
notice of non-payment from Landlord.

(b) Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.

(c) Tenant shall file a petition under any section or chapter of the National
Bankruptcy Act, as amended, or under any similar law or statute of the United
States or any State thereof; or Tenant shall be adjudged bankrupt or insolvent
in proceedings filed against Tenant thereunder.

(d) A receiver or trustee shall be appointed for all or substantially all of the
assets of Tenant.

(e) Tenant shall desert or vacate any substantial portion of the Premises.

 

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(f) Tenant shall fail to comply with any term, provision or covenant of this
Lease (other than the foregoing provisions of this Paragraph 17), and shall not
cure such failure within twenty (20) days after written notice thereof to
Tenant.

18. Remedies. Upon the occurrence of any of such events of default described in
Paragraph 17 hereof, Landlord shall have the option to pursue any one or more of
the following remedies without any additional notice or demand whatsoever:

(a) Terminate this Lease, in which event Tenant shall immediately surrender the
Premises to Landlord, and if Tenant fails so to do, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying such Premises or any part thereof, by
force if necessary, without being liable for prosecution or any claim of damages
therefor; and Tenant agrees to pay to Landlord on demand the amount of all
direct loss and damage which Landlord may actually suffer by reason of such
termination, whether through inability to relet the Premises on reasonably
satisfactory terms or otherwise.

(b) Enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying such Premises or any part thereof, by
reasonable force if necessary, without being liable for prosecution or any claim
for damages therefor, and relet the Premises and receive the rent therefor; and
Tenant agrees to pay to the Landlord on demand any deficiency that may arise by
reason of such reletting. In the event Landlord is successful in reletting the
Premises at a rental in excess of that agreed to be paid by Tenant pursuant to
the terms of this lease, Landlord and Tenant each mutually agree that Tenant
shall not be entitled, under any circumstances, to such excess rental, and
Tenant does hereby specifically waive any claim to such excess rental.

(c) Enter upon the Premises, by force if necessary, without being liable for
prosecution or any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this Lease; and Tenant agrees to reimburse
Landlord within thirty (30) days following written demand by Landlord for any
reasonable expenses which Landlord may actually incur in thus effecting
compliance with Tenant’s obligations under this Lease, and Tenant further agrees
that Landlord shall not be liable for any damages resulting to the Tenant from
such action, whether caused by the negligence of Landlord or otherwise.

Landlord hereby agrees to use commercially reasonable efforts in good faith to
mitigate such loss and damage suffered by Landlord.

In the event Tenant fails to pay any installment of rent hereunder as and when
such installment is due, to help defray the additional cost to Landlord for
processing such late payments Tenant shall pay to Landlord on demand a late
charge in an amount equal to five percent (5%) of such installment; and the
failure to pay such amount within ten (10) days after demand therefor shall be
an event of default hereunder. The provision for such late charge shall be in
addition to all of Landlord’s other rights and remedies hereunder or at law and
shall not be construed as liquidated damages or as limiting Landlord’s remedies
in any manner.

 

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Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, provisions and covenants herein
contained. No act or thing done by the Landlord or its agents during the term
hereby granted shall be deemed a termination of this Lease or an acceptance of
the surrender of the Premises, and no agreement to terminate this Lease or
accept a surrender of said Premises shall be valid unless in writing signed by
Landlord. No waiver by Landlord of any violation or breach of any of the terms,
provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants herein contained. Landlord’s acceptance of the payment
of rental or other payments hereunder after the occurrence of an event of
default shall not be construed as a waiver of such default, unless Landlord so
notified Tenant in writing. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default or of Landlord’s right to
enforce any such remedies with respect to such default or any subsequent
default. If, on account of any breach or default by either party in its
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for either party to employ or consult with an attorney
concerning or to enforce or defend any of Landlord’s rights or remedies
hereunder, the prevailing party in any such legal action shall be entitled to
receive from the other party any reasonable attorney’s fees so incurred by the
prevailing party.

19. Landlord’s Lien Waiver. Contemporaneously with the execution of this Lease,
Landlord has agreed to execute a Landlord-Lender Agreement in favor of Tenant’s
current primary lender, Deutsche Bank Trust Company, substantially in the form
attached as Exhibit “F” hereto. Landlord agrees, from time to time, if requested
by Tenant, to execute a replacement of such agreement with respect to any future
loan facility secured in whole or in part by any property of Tenant now or
hereafter located within the Premises, any such new agreemenf to be
substantially similar to the attached Landlord-Lender Agreement.

20. Mortgages (Landlord). Tenant accepts this Lease subject and subordinate to
any mortgage(s) and/or deed(s) of trust now or at any time hereafter
constituting a lien or charge upon the Premises or the improvements situated
thereon, provided, however, that if the mortgagee elects to have this Lease and
the interest of Tenant hereunder superior to any interest or right of such
mortgagee, trustee, or holder, then by notice to Tenant from such mortgagee,
trustee or holder, this Lease shall be deemed superior to such lien, whether
this Lease was executed before or after said mortgage or deed of trust. Tenant
shall at any time hereafter on demand execute any instruments, releases or other
documents in form and substance reasonably acceptable to Tenant which may be
required by any mortgagee for the purpose of subjecting and subordinating this
Lease to the lien of any such mortgage.

 

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21. Mechanic’s Liens. Tenant shall have no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord in the Premises or to charge
the rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs, and each such claim shall affect and each such lien
shall attach to, if at all, only the leasehold interest granted to Tenant by
this instrument, or materials furnished in connection with any work performed on
the Premises on which any lien is or can be validly and legally asserted a loss,
cost or expense based on or arising out of asserted claims or liens against the
leasehold estate or against the right, title and interest of the Landlord in the
Premises or under the terms of this Lease.

22. Environmental.

A. Hazardous Materials. Except as expressly permitted herein, Tenant agrees that
(i) it will not use, handle, generate, treat, store or dispose of, or permit the
use, handling, generation, treatment, storage or disposal of any Hazardous
Materials (as hereinafter defined) in, on, under, around or above the Premises
(and, for purposes of this Section 22, “Premises” shall be deemed to include the
Building and the grounds surrounding the Building) now or at any future time in
any manner which is in violation of any Environmental Law (as hereinafter
defined) and (ii) it will indemnify, defend and save Landlord harmless from any
and all actions, proceedings, claims, costs, expenses and losses of any kind,
including, but not limited to, those arising from injury to any person,
including death, damage to or loss of use or value of real or personal property,
and costs of investigation and cleanup or other environmental remedial work,
which may arise in connection with the existence of Hazardous Materials on the
Premises occurring or caused in whole or in part during the Term hereof. The
term “Hazardous Materials,” when used herein, shall include, but shall not be
limited to, any substances, materials or wastes that are regulated by any local
governmental authority, the state where the Premises are located, or the United
States of America because of toxic, flammable, explosive, corrosive, reactive,
radioactive or other properties that may be hazardous to human health or the
environment, including without limitation, above or underground storage tanks,
flammables, explosives, radioactive materials, radon, petroleum and petroleum
products, asbestos, urea formaldehyde foam insulation, methane, lead-based
paint, polychlorinated biphenyl compounds, hydrocarbons or like substances and
their additives or constituents, pesticides and toxic or hazardous substances on
materials of any kind, including without limitation, substances now or hereafter
defined as “hazardous substances,” “hazardous materials,” “toxic substances” or
“hazardous wastes” under the following statutes, as amended: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601,
et seq. “CERCLA”); the Hazardous Materials Transportation Act (49 U.S.C. §1801,
et seq. “HMTA”), the Toxic Substances Control Act (15 U.S.C. §2601, et seq.
“TSCA”); the Resource Conservation and Recovery Act (42 U.S.C. 6901, et seq.,
“RCRA”); the Clean Air Act (42 U.S.C. 7401 et seq., “CAA”); the Clean Water Act
(33 U.S.C. §1251, et seq., “CWA”); the Rivers and Harbors Act, (33 U.S.C. §401
et seq., “RHA”); the Emergency Planning and Community Right-to-Know Act of 1986
(41 U.S.C. §11001 et seq., “EPCRA”), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. 136 to 136y, “FIFRA”); the Oil Pollution Act of 1990
(33 U.S.C. 2701 et seq., “OPA”); and the Occupational Safety and Health Act (29
U.S.C. 651 et seq. “OSHA”); and any so-called “Super

 

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Fund law”; and in the regulations promulgated pursuant thereto, and any other
applicable federal, state or local law, common law, code, rule, regulation,
order, policy or ordinance, presently in effect or hereafter enacted,
promulgated or implemented, or any other applicable governmental regulation
imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous substances, waste or material, now or hereafter in effect (the
foregoing statutes are herein individually and collectively referred to as
“Environmental Law(s)”).

B. Conduct of Tenant.

 

  (i) Landlord acknowledges that Tenant’s use of the Premise involves the use of
certain Hazardous Materials, the usage of which shall be consistent with
Tenant’s permitted use of the Premises and all applicable Environmental Laws.
Such materials used as of the date hereof include flux (a flammable substance),
oils and greases typical to manufacturing processes and a limited amount of
solvents typical to manufacturing operations. Tenant shall, at its own cost and
expense, comply with all Environmental Laws relating to the use, transport,
storage, treatment or disposal of such Hazardous Materials. Landlord
acknowledges that it may in the future become necessary for Tenant to employ
other or additional Hazardous Materials at the Premises in the ordinary course
of Tenant’s business. Landlord shall consent to Tenant’s use of such Hazardous
Materials in the ordinary course of its business on the Premises upon notice to
Landlord, except in the case of materials that are not reasonably associated
with the uses allowed pursuant to Section 3 above. Tenant agrees to provide
Landlord with a list of any additional Hazardous Materials which it will use on
the Premises, along with a description of the nature of Tenant’s use of the
Hazardous Materials, and an estimate of the quantity of the Hazardous Materials
to be used by Tenant. The Hazardous Materials described above and as may be
later approved shall be used and stored on the Premises only in quantities
necessary for Tenant’s uses allowed pursuant to Section 3 and disposed of off
the Premises in compliance with law.

 

  (ii) Without limiting the generality of Section 22(A) above, Tenant shall
(a) not dispose of any Hazardous Materials in dumpsters or trash containers on
the Premises; (b) not discharge any Hazardous Materials into drains or sewers;
(c) not cause or allow the release, discharge, emission or run-off of any
Hazardous Materials to air, to surface waters, to the land, to ground water,
whether directly or indirectly; (d) at Tenant’s own cost and expense arrange for
the lawful transportation and off-site disposal of any and all Hazardous
Materials generated by Tenant; (e) provide secondary containment around all
Hazardous Materials storage containers, storage facilities and above ground
storage tanks; (f) comply with all reporting requirements under any local, state
or federal ordinance, statute or regulation; (h) use only highly skilled people
to address environmental issues associated with Tenant’s occupation of the
Premises;

 

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  (iii) Tenant shall promptly provide Landlord with copies of all
communications, permits or agreements with any governmental authority or agency
(federal, state or local) or any private entity relating in any way to the
violation or alleged violation of any Environmental Laws or to any violation of
Tenant’s obligations under subparagraph (i) above:

(iv) If the presence, release, threat of release, placement on or in the
Premises occurs or is caused in whole or in part during the Term of this Lease,
or the generation, transportation, storage, treatment, or disposal at the
Premises occurs or is caused in whole or in part during the Term of this Lease
of any Hazardous Materials gives rise to liability (including, but not limited
to, a response action, remedial action, or removal action) under any
environmental laws or common law theory, including, but not limited to nuisance,
strict liability, negligence and trespass, Tenant shall promptly take any and
all remedial and removal action necessary to clean up the Premises containing
such Hazardous Materials and mitigate exposure to liability arising from the
Hazardous Material, whether or not required by law.

C. Tenant’s Environmental Indemnity. Except as expressly limited below, Tenant
does hereby indemnify, defend and hold harmless Landlord and its agents and
their respective officers, directors, beneficiaries, lenders, shareholders,
partners, agents and employees and their respective successors and assigns from
all fines, suits, procedures, claims liabilities, damages and actions of every
kind, and all costs associated therewith (including reasonable attorneys’,
experts’ and consultants’ fees and costs of testing) arising out of or in any
way connected with any deposit, spill, discharge or other release of Hazardous
Materials that occurs or is caused in whole or in part during the Term of this
Lease, at or from the Premises, or which arises at any time from (i) Tenant’s
failure to provide all information, make all submissions, and take all steps
required by all applicable governmental authorities with respect to
Environmental Laws; (ii) any Hazardous Materials on, in, under or affecting all
or any portion of the Premises or the groundwater as a result of Tenant’s use or
occupation of the Premises during the Term of this Lease; (iii) any violation by
Tenant or claim of a violation by Tenant of any Environmental Law; (iv) the
imposition of any lien for damages caused by, or the recovery of any costs for,
the remediation cleanup of Hazardous Material as a result of events that took
place during the Term of this Lease and resulting from Tenant’s use or
occupation of the Premises; (v) costs of removal of any and all Hazardous
Material from all or any portion of the Premises, which Hazardous Material were
placed on the Premises during the Term of this Lease by Tenant, its employees,
agents, contractors, subtenants or invitees; (vi) costs incurred to comply, in
connection with all or any portion of the Premises, with all governmental
regulations with respect to Hazardous Materials on, in, under or affecting the
Premises, which Hazardous Materials were placed on the Premises during the Term
of this Lease by Tenant, its employees, agents, contractors, subtenants or
invitees; or (vii) any spills, discharges, leaks, escapes, releases, dumping,
transportation, storage, treatment or disposal of any Hazardous Substances which
occur during the Term of this Lease, but only to the extent that such Hazardous
Materials originated from or were or are located on the Premises as a result of
the actions of Tenant, its employees, agents, contractors or invitees. Tenant’s
obligations and liabilities under this Paragraph 22(C) shall survive the
expiration of this Lease. The indemnities set forth in this paragraph shall in
no event extend to events caused by Landlord or any other tenant of the
Building, or any of their respective agents, employees, contractors, subtenants
or invitees.

 

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D. Landlord’s Right to Enter Premises. If Landlord reasonably believes that
Tenant is in violation of its obligations under this Section 22, then Landlord
shall have the right and privilege (but not the obligation) to enter the
Premises to make inspections and other tests (including, but not limited to,
drilling) of its condition, including, but not limited to, air, soil and
groundwater sampling and other inspections for Hazardous Materials. In the event
any Hazardous Materials are discovered during the inspections (except as
permitted hereby), Tenant shall reimburse Landlord for the cost of all
inspections and tests in addition to its liability under Paragraph 22 (C).

E. Tenant’s Notification Requirements. Notwithstanding anything to the contrary
contained in Paragraph 23 of this Lease, Tenant agrees to provide immediate
telephonic notification to Landlord in the event of any release of Hazardous
Material in any manner within or outside of the Premises, except for minor
spills which are not in excess of amounts permitted by Environmental Laws and
could not reasonably be expected to lead to future contamination of the Premises
or to future violations of Environmental Laws. Tenant shall further utilize its
reasonable efforts to report to Landlord any other release of Hazardous
Materials within or outside of the Premises by any party other than Tenant.

F. Covenant Against Waste; Rubbish Removal. Tenant shall not cause or permit
injury or waste to the Premises or the Building, or any exterior spaces used
primarily for Tenant’s operations, and shall keep the Premises and the loading,
unloading, service and public areas used by Tenant clean and free from rubbish,
dirt and debris at all times, and shall store all trash, garbage, and debris
within the Premises and arrange for regular pickup of such trash and garbage at
Tenant’s expense; provided, however, that Tenant shall not be responsible for
the removal of and trash or garbage placed on the Premises by Landlord, any
other tenant of the Building, or any of their respective employees, agents,
contractors, subtenants or invitees. Landlord hereby reserves the right to place
on or about the Premises one or more sites for collection of rubbish, dirt,
debris, trash, and garbage and may, but shall not be obligated to, make
available to Tenant such “dumpsters” or other common means of collecting and
disposing of such garbage, etc., as Landlord may reasonably deem appropriate for
such purposes. In the event that Landlord shall create such common places and
facilities for the collection and disposal of garbage, etc., Landlord shall be
allowed to charge a reasonable rate for the providing of such places,
facilities, and disposal services and Tenant shall, upon delivery of written
notice from Landlord to Tenant, pay such reasonable charges within a reasonable
time following receipt of Landlord’s invoice for such services. Tenant shall not
burn anything in or about the Premises or the Building. Tenant shall not use or
permit the use of the Premises in any manner that creates an unreasonable
nuisance or if there shall be more than one tenant at the Building, Tenant shall
not use or permit the use of the Premises in any manner that shall tend to
unreasonably disturb such other tenants.

 

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23. Payments, Notices.

(a) All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at its address hereinbelow, set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith. Tenant’s obligation to pay rent and any
other amounts to Landlord under the terms of this Lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Landlord.

(b) All payments required to be made by Landlord to Tenant hereunder shall be
payable to Tenant at its address hereinbelow set forth, or at such other address
within the continental United States as Tenant may specify from time to time by
written notice delivered in accordance herewith.

(c) All notices, requests, demands or other communications with respect to this
Lease, whether or not herein expressly provided for, shall be in writing and
shall be deemed to have been duly given either (a) forty-eight (48) hours after
being mailed by United States First-Class, certified or registered mail, postage
prepaid, return receipt requested, (b) the next business day after being
deposited (in time for delivery by such service on such business day) with
Federal Express or another national overnight courier service, or (c) by
personal service and shall be effective on the same day as service, or
(d) facsimile transmission and shall be effective on the date of transmission
(so long as a confirmation copy is concurrently sent by one of the delivery
methods set forth in (a), (b) or (c) above), for delivery to the parties at the
following addresses (which such addresses may be changed by either party by
giving written notice thereof to the other):

If to Landlord:

A. L. Dougherty—Tennessee II, LLC

c/o Sigma Property Management Company

1208 Highway 83

Hartland, Wisconsin 53029

Facsimile: (262) 369-4701

With a copy to:

A. L. Dougherty—Tennessee II, LLC

2 East Main Street, Suite 200J

Danville, Illinois 61832

Facsimile: (217) 443-4154

 

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If to Tenant:

BWAY Corporation

8607 Roberts Drive

Suite 250

Atlanta, Georgia 30350

Attn: Kevin Kern or Jeffrey O’Connell

A copy of any notice of Default shall also be sent to:

Morris, Manning & Martin, LLP

3343 Peachtree Road

Suite 1600

Atlanta, Georgia 30326

Attn: Jeffrey Schulte, Esq.

24. Mortgagee Approval and Subordination to Mortgages.

(a) Mortgage Approval. The terms and provisions of this Lease do NOT require
approval by a Mortgagee, herein defined as any person who shall have been
granted a mortgage interest or who is the beneficiary of a Deed of Trust
encumbering all or any part of the Real Estate by Landlord or a successor or
assign of Landlord. A “Proposed Mortgagee” is any person who shall have issued a
binding written commitment to Landlord or a successor or assign of Landlord for
the extending of credit or the further securing of credit to be secured by a
mortgage interest in all or any part of the real estate on which the Premises
are situated.

(b) Subordination, Non-Disturbance and Attornment. At Landlord’s request, Tenant
shall enter into a Subordination, Non-Disturbance and Attornment Agreement by
and among Landlord, Tenant and any Mortgagee, pursuant to which the parties
agree that (i) this Lease and the rights of Tenant hereunder shall be
subordinate to the mortgage on the Real Estate held by such Mortgagee, (ii) upon
the acquisition of Landlord’s interests in this Lease by such Mortgagee, Tenant
shall attorn to and recognize such Mortgagee, and any subsequent purchaser of
the Real Estate, as “Landlord” in the place and stead of Landlord herein and
(iii) such Mortgagee (on behalf of itself and any subsequent purchaser of the
Real Estate) shall grant to Tenant a non-disturbance covenant in consideration
of such attornment.

(c) Estoppel Certificates. Tenant agrees to execute such reasonable estoppel
certificates as may be required by any Mortgagee or Proposed Mortgagee of
Landlord within twenty (20) days following written request therefor from
Landlord, said mortgagee or said Proposed Mortgagee, including, without
limitation, at least the following representations, provided that such
representations are true and correct; (i) that this Lease is in full force and
effect as written unmodified except as indicated in said certificate; (ii) that
Tenant shall not consent to any modification of the terms of this Lease without
the prior written consent of said mortgagee or Proposed Mortgagee; (iii) that
Tenant accepted possession of the Leased Premises as of the

 

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Possession Date, and indicating the agreed upon Possession Date; (iv) that to
the best of Tenant’s knowledge, all requirements of Landlord under the Lease,
including completion of the Leased Premises, have been satisfied by Landlord to
the satisfaction of Tenant; (v) that Landlord is not then in default under this
Lease, and any and all prior defaults are thereby waived; (vi) that Tenant is
not then in default under this Lease; (vii) the monthly Rental then being paid
by Tenant and the date through which rental shall then have been paid;
(viii) that Tenant has, at that time, no defense, charge, lien, claim or offset
under this Lease or otherwise against the Rental, obligations or stipulations
due or to become due or required of Tenant under this Lease; (ix) that Tenant
does not possess any right, title or interest in the Premises or the real
property on which the Premises are situated (except as Tenant under this Lease)
evidenced by option, contract, agreement or deed, for the purchase.

25. Special Provisions. See Exhibit “E” attached hereto and is incorporated
herein, by reference. In the event of any conflict between the terms hereof and
the terms contained in such Exhibit “E”, the terms of Exhibit “E” shall control.

26. Miscellaneous

A. If and when included within the term “Landlord”, as used in this instrument,
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice specifying some
individual at some specific address for the receipt of notices and payments to
Landlord; if and when included within the term “Tenant”, as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Tenant, All parties
included within the terms “Landlord” and “Tenant”, respectively, shall be bound
by notices given in accordance with the provisions of this paragraph to the same
effect as if each had received such notice.

B. Words of any gender used in this Lease shall be held and construed to include
any other gender, and words in the singular number shall be held to include the
plural, unless the context otherwise requires.

C. The terms, provisions and covenants and conditions contained in this Lease
shall apply to, inure to the benefit of, and be binding upon, the parties hereto
and upon their respective heirs, legal representatives, successors and permitted
assigns, except as otherwise herein expressly provided. Landlord shall have the
right to assign any of its rights and obligations under this Lease. Each party
agrees to furnish to the other, promptly upon demand, a corporate resolution,
proof of due authorization by partners, or other appropriate documentation
evidencing the due authorization of such party to enter into this Lease.

D. The captions inserted in this Lease are for convenience only and in no way
define, limit or otherwise describe the scope or intent of this Lease, or any
provision hereof, or in any way affect the interpretation of this Lease.

 

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E. Tenant agrees from time to time within ten (10) business days after written
request of Landlord, to deliver to Landlord, or Landlord’s designee, an estoppel
certificate stating that this Lease is in full force and effect, the date to
which rent has been paid, the unexpired term of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. It is
understood and agreed that Tenant’s obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord’s
execution of this Lease. Landlord agrees to execute and deliver to Tenant a
similar estoppel certificate within ten (10) business days after Tenant’s
written request therefor.

F. This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.

G. All obligations of Tenant hereunder not fully performed as of the expiration
or earlier termination of the term of this Lease shall survive the expiration or
earlier termination of the term hereof, including without limitation all payment
obligations with respect to taxes, operating costs, insurance and all
obligations concerning the condition of the Premises. Upon the expiration or
earlier termination of the term hereof, and prior to Tenant vacating the
Premises, Tenant shall pay to Landlord any amount reasonably estimated by
Landlord as necessary to put the Premises, including without limitation all
heating and air conditioning systems and equipment therein, in good condition
and repair. Tenant shall also, prior to vacating the Premises, pay to Landlord
the amount, as estimated by Landlord, of Tenant’s obligation hereunder for real
estate taxes, operating costs and insurance premiums for the year in which the
Lease expires or terminates. All such amounts shall be used and held by Landlord
for payment of such obligations of Tenant hereunder, with Tenant being liable
for any additional costs therefor upon demand by Landlord, or with any excess to
be returned to Tenant after all such obligations have been determined and
satisfied, as the case may be.

H. If any clause or provision of this Lease is illegal, invalid or unenforceable
under present or future laws effective during the term of this Lease, then and
in that event, it is the intention of the parties hereto that the remainder of
this Lease shall not be affected thereby, and it is also the intention of the
parties to this Lease that in lieu of each clause or provision of this Lease
that is illegal, invalid or unenforceable, there be added as a part of this
Lease contract a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.

I. [RESERVED]

J. All references in this Lease to “the date hereof or similar references shall
be deemed to refer to the last date, in point of tune, on which all parties
hereto have executed this Lease.

K. This Lease shall be interpreted according to the laws of the State of
Tennessee.

 

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L. This Lease may be signed in multiple counterparts, with the signatures of the
parties on different pages. When a counterpart of this Lease has been signed by
both parties, then this Agreement shall be effective just the same as if both
parties had signed the same page(s). As long as this Agreement is signed by only
one party, it constitutes an offer which may be withdrawn by the signing party
at any time until this Agreement is signed by the other party.

M. The parties hereto have agreed to permit the use of signatures transmitted by
facsimile in order to expedite the transaction contemplated by this Agreement,
(b) intend to be bound by their respective signatures even though transmitted by
facsimile, (c) are aware that the other will rely upon the signatures of the
others which have been transmitted by facsimile, and (d) acknowledge such
reliance and waive any defense to the enforcement of the documents affecting
this transaction based on the fact that a signature was transmitted by facsimile
only. At the request of either party, the parties will confirm facsimile
transmitted signatures by signing an original document.

27. Existing Lease Agreements. Tenant currently occupies the Premises pursuant
to (a) that certain Lease Agreement dated November 15, 1996 by and between
Landlord (as successor in interest to Shelby Distribution Park) and Tenant (as
successor in interest to Brockway Standard, Inc.), as amended (which lease
relates to 75,000 square feet of the Premises) and (b) that certain Lease
Agreement dated May 31, 2000 between Landlord (as successor in interest to
Shelby Distribution Park) and Tenant (which lease relates to 45,000 square feet
of the Premises)(collectively, the ”Existing Lease Agreements”). Effective as of
the Commencement Date, this Lease supersedes and replaces the Existing Lease
Agreements in their entirety. Notwithstanding the foregoing, for purposes of
calculating Tenant’s percentage share of various expenses, as set forth herein,
2006 shall be treated as a single “lease year” hereunder, rather than as a
partial lease year under the Existing Lease Agreements and a partial lease year
hereunder.

28. Renewal Option. Provided that Tenant is not then in default (giving effect
to any period for notice or cure as herein provided) of any of the terms and/or
conditions of this Lease, Tenant shall have the option to renew the term hereof
for one (1) five (5) year period on all the same terms and conditions as in
effect for the initial Term hereof, except that the Base Rent shall be $3.96 per
square foot of space within the Premises per year ($39,600.00) per month).
Tenant shall have the right to exercise the foregoing renewal option on written
notice given to Landlord not later than June 1, 2011, which notice shall be
irrevocable when given. In the event that such irrevocable written notice is not
given by such date, Tenant’s renewal option shall expire and shall be of no
further force or effect. If the renewal option is validly exercised, then the
Term hereof shall be extended until November 30, 2016.

 

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IN WITNESS WHEREOF, the parties hereunto have executed this Lease Agreement as
of the 1st day of November, 2006.

 

LANDLORD:     TENANT: A. L. Dougherty - Tennessee II, L.L.C.     BWAY
CORPORATION By:   A. L. Dougherty Co., Inc.,     By:  

/s/ Jeffrey O’Connell

Its   Sole Member       Jeffrey O’Connell, Vice President By:  

/s/ Phyllis R. Dougherty

        Phyllis R. Dougherty       Its:   President       WITNESS:      
WITNESS:

/s/ Sara Dougherty Ungari

     

/s/ Lisa Vallery

Signature       Signature Sara Dougherty Ungari       Lisa Vallery Print Name  
    Print Name

 

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EXHIBIT “A”

MAP OF THE PREMISES

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EXHIBIT “B”

IMPROVEMENTS TO BE PERFORMED BY LANDLORD

LANDLORD’S IMPROVEMENT ALLOWANCE

Tenant accepts the Premises AS-IS.

Landlord Improvement Allowance: Not Applicable.

Tenant shall indemnify and hold Landlord harmless from and against any and all
mechanics lien claims, and also from and against any and all claims, causes of
action or damages, including reasonable attorney fees and any costs of
litigation, arising out of or in any way relating to any personal injury,
property damage, or other claim, relating to construction of any improvements.
This does not constitute Landlord’s consent to any improvements. The provisions
of the Lease govern tenant improvements.

 

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EXHIBIT “C”

RULES AND REGULATIONS

The following are subject to change at the discretion of Landlord.

 

1. Outside storage, including without limitation, trucks and other vehicles, is
prohibited without Landlord’s prior written consent, except for the parking of
trucks and trailers at dock doors on the premises.

 

2. Tenant shall not permit any unreasonably quantities of objectionable or
unpleasant odors, smoke, dust, gas, heat, noise or other vibrations to emanate
from the Premises, nor take any other action which would constitute a nuisance
or would disturb or endanger any other tenants of the building in which the
Premises are situated or unreasonably interfere with their use of their
respective premises.

 

3. [reserved]

 

4. Blocking of any of the parking drive or truck turn around area is prohibited.

 

5. Tenant shall not permit any dogs (except seeing eye dogs), cats or other
animals to occupy the Premises.

 

6. Landlord and Tenant shall each obtain the other’s prior approval of all
contractors before the commencement of any work within the Premises, such
approval not to be unreasonably withheld or delayed.

 

7. Tenant shall not display any signs, posters or literature of any description
without Landlord’s prior written consent, such approval not to be unreasonably
withheld or delayed.

 

8. Tenant to properly dispose of all garbage and to store garbage in containers
acceptable to Landlord. Landlord to have the right to approve the location of
any compactors, dumpsters or other equipment used in the disposal of trash.
Tenant shall not allow trash or debris to overflow from its trash containers. If
Tenant is responsible for trash overflowing on the grounds or parking lot,
Tenant shall pay the entire cost to clean up areas affected by Tenant’s trash as
additional rent upon demand by Landlord.

 

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EXHIBIT “D”

SIGN SPECIFICATIONS

 

1. Non-illuminated signage shall be centered above the front entrance to the
Premises, on the facia panel of the building.

 

2. A scaled drawing of the proposed tenant signage must be presented to Landlord
for approval prior to the manufacture and installation of the sign. Tenant shall
be solely responsible for the cost of sign design, manufacture, and
installation.

 

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EXHIBIT “E”

SPECIAL STIPULATIONS TO LEASE AGREEMENT

TO BWAY CORPORATION AS TENANT

 

1. Notwithstanding the provisions of Section 3 of this Lease, if at any time
Landlord believes that any activities of Tenant in the Premises will cause a
material adverse effect on Landlord’s insurance on the Premises, Landlord shall
provide Tenant with thirty (30) day’s prior notice of such belief and Tenant’s
specific activity involved, and Tenant shall not be deemed in default under this
Lease as long as Tenant diligently undertakes to cure or cease any such activity
within such period.

 

2. No Operating Costs payable to Tenant shall include any executive salaries,
interest, payments due under note, mortgage or other security instrument or
encumbrance secured by the Building or under any underlying superior lease or
any expenses of a capital nature. Tenant shall have the right to examine and
audit Landlord’s books and records with regard to all Operating Costs at
Tenant’s request. Landlord shall promptly reimburse Tenant in cash for any
overcharge and overpayment revealed by such audit and, if such overcharge
exceeds three percent (3%) of the actual amount of the Operating Costs which
should have been charged to Tenant, Landlord shall also promptly reimburse
Tenant for the reasonable costs of Tenant’s audit.

 

3. Notwithstanding the provisions of Section 9 of this Lease, Landlord shall not
be entitled to enter the Premises for inspection or any other purpose without at
lease one (1) days prior written notice to Tenant, except in the event of
legitimate emergency. Landlord shall not allow any such inspection or entry to
disrupt or disturb Tenant’s normal conduct of its business within the Premises.

 

4. Notwithstanding the provisions of Section 11 of this Lease, Tenant shall have
the right to assign its right, title and interest under this Lease or to enter
into a sublease of all or a portion of the premises, without the prior consent
of the Landlord, if such assignment or sublease is made to a corporation,
partnership or limited liability company under common control with Tenant or to
a subsidiary or successor to Tenant by corporate merger or by change of
corporate name, whether by transfer of a majority interest of stock, merger,
dissolution, or is made in connection with an asset purchase to which Tenant is
a party. In the event of any such assignment or subleasing the original Tenant
under this Lease shall remain liable to Landlord under the terms of this Lease
unless released in writing by Landlord. Any such assignee shall be required to
agree to assume this Lease prior to any such assignment.

 

5.

Notwithstanding any provisions of Section 14 of this Lease, in the event the
Premises are taken or damaged by condemnation to the extent that the Premises
are reduced in size by twenty-five percent (25%) or more, Tenant shall have the
right to terminate this Lease by written notice to Landlord. If Tenant elects
not to so terminate this Lease or if less than

 

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twenty-five percent (25%) of the Premises are damaged, Landlord shall promptly
repair and restore the Premises at Landlord’s expense to at least as good a
condition as existed prior to such damage, and all rental under this Lease shall
be equitably reduced based on both the square footage and the degree of use lost
to Tenant by such reduction in size of the Premises.

 

6. No default will be deemed to have occurred pursuant to subsections (b),
(c) and (d) of Section 17 of this Lease if Tenant in good faith commences to
cure any default referred to in such subsections within thirty (30) business
days after Tenant’s receipt of written notice from Landlord. Notwithstanding the
provisions of subsections (e) of said Section 17 of this Lease, Tenant shall not
be deemed to have deserted or vacated the Premises unless Tenant is otherwise in
default under this Lease and permanently vacates the Premises.

 

7. Notwithstanding the provisions of Section 18 of this Lease, Tenant shall be
entitled to two (2) late payments of rental in each lease year during the term
of this Lease before being required to pay any late charge, penalty or interest
thereon; provided that the foregoing exception shall not apply to any payment
made more than seven (7) days after the due date thereof.

 

8. The Landlord acknowledges that at the same time of execution of this Lease,
there is no mortgage on the building.

 

9. Landlord hereby agrees with Tenant that, at any time that Landlord is
required to or has the right to give consent or approval or that Landlord has
the right to make any judgment affecting the rights of Tenant under this Lease
or under the Rules and Regulations attached to this Lease or as hereafter
promulgated, no such approval or consent shall be unreasonably withheld or
delayed, and all such judgments required of Landlord or its agents shall be made
both reasonably and with reasonable promptness. Where any provisions contained
in the Rules and Regulations set forth on Exhibit “C” of this Lease are in
conflict with any provisions of this Lease, the provisions of this Lease shall
be controlling. Where Landlord is entitled under any provisions of this Lease to
make any payment on behalf of or reimbursable by Tenant, including without
limitation the payment of expenses, costs or fees whatsoever, all such payments,
expenses, costs and fees shall be reasonable in amount and shall be contracted
for and paid by Landlord in a commercially reasonable manner.

 

10.

If Landlord shall fail to keep or perform any of its obligations under this
Lease in respect to the making of any payment to Tenant or the performance by
Landlord of any other obligation on its part to be performed under this Lease,
then (i) either in the event of an emergency or (ii) if Landlord does not begin
the performance of such obligation within five (5) days after receipt by
Landlord of a written notice from Tenant specifying such failure and thereafter
diligently pursue such performance to completion, Tenant shall have the right to
(but shall not be obligated to do so) perform such obligation, and all
reasonable and actual costs of such performance so paid by Tenant, including all
reasonable and actual necessary and incidental costs and reasonable and actual
attorneys’ fees, together with interest thereon

 

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at the then-current prime rate per annum from the date such cost is incurred,
shall be paid by Landlord to Tenant within thirty (30) days after demand, and if
not so paid by Landlord, Tenant shall have the right and option to offset the
cost of such cure against the next-arising installment(s) of monthly rental and
any other amounts due from Tenant under this Lease until all such costs are
reimbursed to Tenant. If Tenant offsets any monies and (i) Landlord contests
Tenant’s right to do so under this Special Stipulation 11 and (ii) prevails on
the merits in any such contest, Tenant shall pay in addition to all monies
improperly offset, interest on all monies improperly offset, from the date of
offset, at the default rate provided for in this Lease.

 

11. Landlord and Tenant hereby agree that, anything hereinabove provided under
this Lease to the contrary notwithstanding:

 

  (a) Any utilities provided to the Premises by Landlord, if billable to the
Premises under the terms of the Lease, shall be provided at the same rate at
which Landlord purchased the same from the utilities supplier

 

  (b) At Tenant’s expense Tenant shall have the right, but not the obligation,
to make additional improvements to the Premises without Landlord’s consent so
long as the cost of such improvements does not exceed $50,000 and so long as
such improvements do not reduce the value of the Premises and are in compliance
with all applicable codes.

 

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EXHIBIT “F”

LANDLORD-LENDER AGREEMENT

[ATTACHED]

 

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Memphis, Tennessee

LANDLORD-LENDER AGREEMENT

This LANDLORD-LENDER AGREEMENT (this “Agreement”) is made and entered into
between DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (“Lender”),
and A. L. DOUGHERTY-TENNESSEE II, LLC, an Indiana limited liability company
(“Landlord”).

Recitals

A. Landlord is the owner of certain real property located at 4651 Hickory Hill
Road, Memphis, Tennessee 38141 and more particularly described in the Lease
Agreement described below (the “Premises”). Landlord and BWAY Corporation (the
“Tenant”) are the parties to that certain Lease Agreement dated as of
November 1, 2006, covering the Premises (the “Lease”).

B. Lender, certain other financial institutions, Tenant and certain affiliates
of Tenant have entered into, or intend to enter into, a Credit Agreement (as the
same may be amended, modified, supplemented, extended, refinanced or replaced
from time to time, the “Credit Agreement”) which provides, or will provide for
the making of certain loans and other extensions of credit by Lender and such
other financial institutions to Tenant.

C. In accordance with the requirements of the Credit Agreement, and as security
for the Obligations under, and as defined in, the Credit Agreement, Tenant will
be granting to Lender a security interest in Tenant’s inventory, equipment and
other personal property now or any time hereafter located on the Premises (the
“Personal Property”).

D. The Credit Agreement requires that this Agreement be duly executed and
delivered by Landlord to Lender. Landlord is willing to do so upon the terms and
subject to the conditions set forth in this Agreement.

Agreement

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

1. Landlord Lien. Landlord waives and relinquishes any landlord’s lien, all
rights of levy or distraint, security interest or other interest that Landlord
may now or hereafter have, whether by statute, contract (including the Lease) or
by common law, in any of the Personal Property whether for rent or otherwise.

2. Nature of Personal Property. The Personal Property may be installed in or
located on the Premises and is not and shall not be deemed to be a fixture or
part of underlying real estate but shall at all times be considered personal
property.

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3. Ownership of Personal Property. Landlord disclaims any interest in the
Personal Property and agrees not to assert any claim to the Personal Property
while Tenant is indebted under (or in respect of) the Credit Agreement. Landlord
acknowledges that Lender shall have a first priority security interest in the
Personal Property and Landlord acknowledges that Lender shall have the right to
file Uniform Commercial Code financing statements against the Personal Property.

4. Lender Access. Landlord agrees that Lender or its representatives may enter
upon the Premises at any time to inspect or remove the Personal Property.

5. Exercise of Remedies by Lender. Any provision in the Lease notwithstanding,
Landlord agrees that Lender, at any time Lender believes necessary to protect
its security interest, may enter the Premises for the purpose of repossessing,
removing, selling or otherwise dealing with the Personal Property. Lender shall,
at its sole cost and expense, repair and damage to the Premises caused by its
removal of the Personal Property. Lender shall not be liable for any diminution
in value of the Premises caused by the absence of the Personal Property actually
removed or by the need to replace the Personal Property after such removal.
Landlord acknowledges Lender shall have no obligation to remove the Personal
Property from the Premises.

6. Status of Lease. Landlord certifies that: (i) the Lease is in full force and
effect, (ii) no amendment has been made to the Lease, (iii) no default exists
under the Lease, and (iv) rent and other charges have been paid to the extent
payable and have not been prepaid more than one month in advance. Landlord
further certifies that no consent is required by any mortgagee of the Premises
as a condition precedent to Landlord executing this Agreement.

7. Notices under Lease. Landlord shall simultaneously deliver copies of any
notices to Tenant with respect to an event of default or an election by Landlord
to terminate the Lease to Lender at the same time and in the same manner as the
notice given by Landlord to Tenant, addressed to Lender at its address set forth
hereinbelow or such other address that Lender may have subsequently furnished to
Landlord. Any notice of default shall state the nature of the default and shall
specify the amounts of rent or other payments herein provided for that are
claimed to be in default. Lender shall also be given notice of any arbitration
or other proceeding or dispute between Landlord and Tenant. Further, Lender
shall receive notice, and a copy, of any award or decision made in such
arbitration or other proceeding. Notices to Lender shall be sent to its address
at Deutsche Bank Trust Company Americas, 90 Hudson Street, Sixth Floor, Jersey
City, New York 07302, Attention: Shirley Subianto.

8. Default and Cure Rights. In the event of a default by Tenant under the Lease,
Landlord shall accept any curative acts undertaken by or at the instigation of
Lender in accordance with the terms of this Agreement as if they had been
undertaken by Tenant.

9. Lender’s Rights upon Lease Termination. If Landlord shall elect to terminate
the Lease by reason of any default of Tenant, Lender shall have the following
rights (exercisable in Lender’s sole discretion):

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(a) to nullify any notice of termination by curing such default prior to the
effective date of termination; and

(b) to postpone and extend the specified date for such termination as fixed by
Landlord in its notice of termination, for a period of not more than sixty
(60) days, provided that Lender shall agree with Landlord (by giving a notice to
that effect to Landlord) before the effective date of termination, to accomplish
the following within the times hereinafter provided and shall, in fact,
accomplish the following in a timely manner:

(i) cure or cause to be cured within thirty (30) days of such notice any
then-existing monetary defaults of which Lender has knowledge;

(ii) pay or cause to be paid during such 60-day period any rent and other
monetary obligations of Tenant under the Lease, as the same fall due;

(iii) promptly cure or cause to be cured any other defaults that Lender can cure
and of which Lender has knowledge;

(iv) take steps to acquire or sell Tenant’s interest in the Lease provided that
the time period for commencement of such steps shall be extended one day for
each day that Lender is under any statutory or judicial restraint precluding the
taking of such steps; and

(v) prosecute to completion with reasonable diligence the steps commenced
pursuant to the preceding clause.

If, at the end of such 60-day period, as it may be extended as aforesaid, Lender
shall be actively engaged in steps to acquire or sell Tenant’s interest in the
Lease and is in compliance with the other conditions set forth in clauses
(i) through (iii) above, the time for completion of such steps shall be further
extended upon the same conditions for such period not to exceed thirty (30) days
as shall be reasonably necessary to complete such steps with reasonable
diligence. If Tenant’s interest is acquired or sold by foreclosure of the
Mortgage or otherwise during such 60-day period, as it may be extended as
aforesaid, the intended termination of the Lease by Landlord under the aforesaid
notice will be automatically nullified, and the Lease will continue as if said
notice of termination had never been given.

10. Assignment. Should Lender acquire Tenant’s interest in the Lease, whether by
entering into a new lease pursuant to Section 12 hereof, by reason of Lender’s
exercise of its security interest in the stock of Tenant or Tenant’s parent or
affiliated company, or otherwise, Landlord prospectively consents thereto.
Lender, after acquiring Tenant’s interest in the Lease, may not assign the
Lease, except as otherwise provided in the Lease, without the prior written
consent of Landlord which consent will not be unreasonably withheld, conditioned
or delayed. If Landlord consents to the assignment by Lender after review of the
financial statements of a proposed assignee, then Lender shall thereupon be
released from all liability as Tenant under the Lease from and after the date of
such assignment.

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11. Extension Options. If Tenant fails to exercise an option, if any, to extend
the term of the Lease within the time period set forth therein for such
exercise, then such extension option shall not expire until: (a) Landlord has
given Lender written notice of such failure to exercise; and (b) Lender has
failed for a period of fifteen (15) days following its receipt of such notice to
exercise the extension option. Landlord agrees to accept the exercise of an
extension option by Lender within such period.

12. New Lease. If the Lease, without the consent of Lender, is terminated for
any reason before the end of its stated term, as such stated term may be
extended, then Landlord shall, upon written request from Lender made within
forty five (45) days after such termination, enter into a new lease of the
Premises with Lender. The new lease shall be on the same terms and conditions as
the Lease (including without limitation any rights or options to extend the
terms of the lease or acquire the Premises) and shall have the same priority as
the Lease. Landlord’s obligation to enter into such a new lease shall be
conditioned upon the following: (a) Lender shall have cured all monetary
defaults and commenced, and diligently prosecuted, the cure for all reasonably
curable non-monetary defaults; and (b) Lender shall reimburse Landlord for all
reasonable costs and expenses incurred in entering into such new lease.

13. Amendment. The cancellation, surrender or amendment of the Lease by Tenant
shall not be effective as against Lender without the written consent of Lender.

14. Estoppel Certificate. Within fifteen (15) days after written request
therefor from Lender, Landlord shall deliver to Lender (and any other party
identified by Lender) an estoppel certificate signed by Landlord in form
reasonably designated by Lender that certifies as to: (a) the rent payable under
the Lease; (b) the term of the Lease and the rights of Tenant, if any, to extend
the term of the Lease; (c) the nature of any defaults by Tenant alleged by
Landlord; and (d) any other matters reasonably requested by Lender.

15. Amendments. This Agreement may not be changed or terminated orally and is
binding upon, and inures to the benefit of, the parties hereto and each of their
respective successors and assigns. Landlord will disclose the terms and
provisions of this Agreement to any purchaser or successor to Landlord’s
interest in the Premises.

16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

17. Counterparts. This Agreement may be executed in counterparts.

18. Credit Agreement. Lender may, without in any way affecting or limiting this
Agreement, and without notice to Landlord, modify, supplement, restate (in whole
or in part) or refinance the Credit Agreement.

19. Prior Agreements. All prior agreements given by Landlord to Lender with
respect to the Lease are superceded and replaced in their entirety by this
Agreement.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day and year first above-written.

 

LANDLORD:

A. L. DOUGHERTY-TENNESSEE II, LLC,

an Indiana limited liability company

By:  

 

Name:   Phyllis K. Dougherty Title:   President COLLATERAL AGENT: DEUTSCHE BANK
TRUST COMPANY AMERICAS, as Collateral Agent By:  

 

Name:  

 

Title: