exv10w53



 




Lease
Agreement dated December 16, 2002.


Exhibit 10.53




Lease Agreement 




Basic Lease Information




	 	 	 
	A. Lease Date

	 	December 16, 2002
	 
	 	 
	B. Landlord

	 	Clariant Corporation
	 
	 	 
	C. Landlord’s Address

	 	4000 Monroe Road, Charlotte, NC 28205
	 
	 	 
	D. Tenant

	 	SCR-Tech LLC
	 
	 	 
	E. Tenant’s Address

	 	11701 Mt. Holly Road, Charlotte, NC 28214
	 
	 	 
	F. Premises

	 	as identified on attached Schedule F
	 
	 	 
	G. Premises Address

	 	11701 Mt. Holly Road, Charlotte, NC 28214
	 
	 	 
	H. Buildings

	 	as identified on attached Schedule F
	 
	 	 
	I. Occupancy Dates

	 	as identified on attached Schedule I
	 
	 	 
	J. Initial Term of Lease

	 	December 12, 2002 to June 30, 2012 (ten years); each “Lease Year” is from July 1 to June 30
	 
	 	 
	K. Renewal Terms

	 	two (2) sequential 5 year terms, at Tenant’s option
	 
	 	 
	L. Base Rent

	 	as identified on attached Schedule L
	 
	 	 
	M. Adjustments to Base Rent

	 	as identified on attached Schedule M
	 
	 	 
	N. Security Deposit

	 	as identified on attached Schedule N
	 
	 	 
	O. Site Service Expenses

	 	Tenant pays as per attached Schedule O
	 
	 	 
	P. Tax Expenses

	 	Tenant pays as per attached Schedule P
	 
	 	 
	Q. Utility Expenses

	 	Tenant pays as per attached Schedule Q
	 
	 	 
	R. Permitted Uses

	 	production, R&D, lab, storage and administration (office)
	 
	 	 
	S. Brokers, if any

	 	none
	 
	 	 
	T. Right of Recession

	 	either party may rescind lease without any further
liability to the other party if WWTP re-permitting is
finally denied






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Lease
Agreement dated December 16, 2002.


Schedules to Lease Agreement




Schedule F Premises (see also Attachment 2 — Plot Plan)




	 	 	 
	Parcel “A” —

	 	Building 48 (28,800 sf) — Production
	Parcel “B1” —

	 	Building 21A (13,280 sf) — Warehouse
	Parcel “B2” —

	 	Building 21 (20,477 sf) — Warehouse
	Parcel “C” —

	 	Building 37 South Wing (800 sf) — Office
	Parcel “D” —

	 	Building 11 (400 sf) — Laboratory






Schedule I Occupancy Dates




	 	 	 
	Parcels “A & C” —

	 	on lease commencement date (July 1, 2002)
	Parcel “B1” —

	 	no later than June 30, 2003
	Parcel “B2” —

	 	at Tenant option to lease and right of first refusal within 3 yrs. (June 30, 2005)
	Parcel “C” —

	 	on lease commencement date (July 1, 2002), at Tenant option can expand to 3,185
sf within 1 yr. (June 30, 2003)
	Parcel “D” —

	 	at Tenant production start date (est. Oct. 2002)






Schedule L Base Rent




	 	 	 	 	 
	Initial Term:

	 	Parcel A
	 	$ 4.00/sf yr. ($115,200 per year, or $9,600.00 per month)
	 

	 	Parcels B1 & B2
	 	$ 2.40/sf yr.
	 

	 	Parcels C & D
	 	$11.00/sf yr. ($13,200 per year, or $1,100.00 per month)





Renewal Terms: carry-over basis (rent in effect on June 30, 2012 will be the new base rent as of
the 1st day of the first optional Renewal Term; rent in effect on June 30, 2017 will be
the new base rent as of the
1st day
of the second optional Renewal Term)


All rent payments are due on 1st day of each month.




Schedule M Adjustments to Base Rent



Initial Term: CPI-based adjustments of the Base Rent after 1st 2 yrs., then annually. On
July 1, 2004, and annually thereafter, Base Rent for all Parcels will be adjusted by the percentage
change in the U. S. Dept. of Labor’s Consumer Price Index (“All Urban Consumers, U.S. City Average”
[“CPI-U”], South Region, All Items [1982-84= 100]) between the last published monthly CPI Index
before July 1st, and the corresponding CPI Index 12 months earlier (“Adjusted Base
Rent”).





	 	 	Example: On July 1, 2004, the last published monthly CPI Index is for the month of May 2004,
and such CPI Index is “182.” The corresponding CPl Index 12 months earlier is May 2003, and
such CPI Index is “176.” The percentage change is

[182 -178] +176 = .034, or 3.40%. The annual Base Rent for the period July 1, 2004 to June 30,
2005 will be increased by 3.40%.




Adjusted Base Rent, as calculated above, becomes the Base Rent applicable for the next annual
period.


Renewal
Terms: annual CPI-based adjustments, using the same methodology as
described above.


CPI Index data to be relied upon is as published by the U.S. Dept of Labor at
http://www.bls.gov/news.release/cpi




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Lease
Agreement dated December 16, 2002.


Schedule N Security Deposit



(a) 3 months rent as security deposit due on lease signing ($32,100.00).


(b) an additional 3 months rent as security deposit due on December 1, 2002 ($32,100.00).


(c) first security deposit ($32,100.00) to be refunded to Tenant on December 1, 2003 if Tenant is
not then in default under any material terms of the Lease Agreement.


(d) second security deposit ($32,100.00) to be refunded to Tenant at expiration of Lease Agreement
if Tenant is not then in default under any material terms of the Lease Agreement.




Schedule O Site Service Expenses



In addition to Base Rent, Tenant shall pay a Site Service Expense fee to Landlord, to help defray
Landlord’s cost by reason of and associated with the Premises of providing for insurance and taxes,
site security, land-scaping, firewater system, ERT, common area maintenance, lockers, canteen, site
administration, janitorial etc.




The fee shall be $1.67/sf yr during years 1 & 2 (July 1, 2002 — June 30, 2004), escalating to
$1.92/sf yr. in year 3 (July 1, 2004 — June 30, 2005). The fee is payable monthly, in advance on
the 1st day of each succeeding month during the Term, and is based on the Parcels leased
by Tenant during the preceding month.




As of the beginning of the 4th Lease Year (July 1, 2005) the fee will be adjusted
annually for CPI increases, using the same data and methodology as described in Schedule M.




Additionally, Landlord may pass-through to Tenant. Tenant’s proportionate share of any year over
year increases in property tax or insurance expenses by reason of the Premises that exceed ten
percent (10%). Landlord shall provide at least thirty (30) days advance written notice of any such
pass-through.




Professional Services: Professional services by Landlord’s employees may be provided to Tenant on
an “as needed/when needed” basis. Tenant is not obligated to take any such services. Professional
services will be invoiced at $65.00/hr. As of the beginning of the 3rd Lease Year (July 1, 2004)
the fees for Professional Services will be adjusted annually for CPI increases, using the same data
and methodology as described in Schedule M.




Schedule P Tax Expenses



The Site Service Expense Fee (Schedule O) includes the amount for covering Landlord’s real property
taxes and assessments, which shall be due by reason of the Premises. Tenant shall be solely
responsible for all property taxes on its own improvements, installations, additions, machinery,
equipment, inventory and the like. Tenant shall pay such taxes directly to the taxing authorities,
but if Landlord for any reason pays such taxes, then Tenant will promptly reimburse Landlord upon
Landlord’s delivery of an invoice to Tenant.




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Lease
Agreement dated December 16, 2002.


Schedule Q Utility Expenses



Unless otherwise agreed in writing, during the initial Term Landlord shall provide to Tenant, and
Tenant shall accept from Landlord, the following utility services and services at the indicated
rates/costs:




	 	 	 
	(a) Electricity:

	 	metered actual cost
	(b) Steam:

	 	metered, price = natural gas cost + fixed cost + mark-up
	(c) Proc. H2O:

	 	metered $1.75/1000 gal.
	(d) Waste H2O:

	 	$0.03/gal. during lease years 1 & 2 (July 1, 2002 — June 30, 2004);
then $0.032/gal. during lease years 3 & 4 (July 1, 2004 — June 30,
2006); then $0.035/gal. thereafter for remainder of Initial Term.
	(e) Permitting:

	 	Cost reimbursement for re-permitting WWTP (cost estimation: $18,000)
	(f) Solid waste:

	 	Production/office debris disposal included in Site Service Expense
fee (disposal of production chemical sludge by Tenant)
	(g) Admin. fee for (a)-(f):

	 	$350 per month





The utilities and services shall be billed to Tenant based on the actual consumption at the end of
each month.




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Lease
Agreement dated December 16, 2002.


DATE: This Lease is made and entered into as of the Lease Date set forth on Page 1. The Basic Lease
Information set forth on Page 1, the Schedules set forth in pages 2-4. and this Lease with
Attachment No. 1 are and shall be construed as one single instrument and shall be the entire
contract between Landlord and Tenant (the entire agreement hereinafter collectively the “Lease”). In case of any conflict, the
Schedules set forth in pages 2–4 shall be controlling.




1. PREMISES; OPTIONAL PREMISES: (a) Landlord hereby leases the Premises to Tenant upon the terms
and conditions contained herein. For purposes of this Lease the term “Premises” shall mean and
refer to the entirety of the Parcels and Buildings. Only for definition purposes of this Lease the
term “Lot” is also covered by the term “Premises” and shall mean and refer to those portions of the
Premises exclusive of the Building and shall include, but not be limited to, parking areas, access
and perimeter roads, sidewalks, rail spurs, landscaped areas and similar areas and facilities,
which are not leased by Tenant, but Tenant shall have the non-exclusive right to use the Lot and
shall have access to the Lot and shall utilize its proportionate share of parking areas for parking
vehicles. (b) Tenant has option to determine the commencement date for Parcel “B1” and/or
additional occupancy of Parcel “C” in accordance with the provisions of Schedule I, by giving
written notice to Landlord at least thirty (30) days before occupying such Parcel or parts thereof.
(c) Tenant has the option to lease the optional portions of Parcels “B2” in accordance with the
provisions of Schedule I, by giving written notice to Landlord at least thirty (30) days before
occupying such optional portion. If Landlord desires to lease the optional portion of Parcel “B2”
it shall give Tenant written notice thereof, and Tenant shall have thirty (30) days within which to
decide to lease such optional portion, by providing written notice to Landlord. If Tenant decides
to lease such optional portion of Parcel “B2” after receipt of Landlord’s notice, the lease for
such portion shall be effective upon the date of Tenants written notice. If Tenant decides not to
lease such optional portion of Parcel “B2,” then such optional portion of Parcel “B2” shall no
longer be available to Tenant and Landlord may lease it to third parties. (d) Base Rent shall be
adjusted if, as and when additional and optional portions are leased by Tenant. Notwithstanding
anything contained in this Lease to the contrary, Tenant is not leasing, and the Premises, Parcels,
Buildings and Lots shall not be deemed to include, any subsurface property, including, without
limitation, any subsurface soil and subsurface groundwater.




2. COMMENCEMENT DATE; INITIAL TERM AND OPTIONAL RENEWAL TERMS: (a) The Commencement Date of this
Lease is July 1, 2002. (b) The Initial Term shall be from the Commencement Date to June 30, 2012,
or ten (10) years. (c) Tenant has the option to renew this Lease for one or two five (5) year
Renewal Terms, the first Renewal Term being July 1, 2012 to June 30, 2017; and the second Renewal
Term being July 1, 2017 to June 30, 2022. If Tenant opts to renew for the first Renewal Term, it
shall notify Landlord in writing on or before December 31, 2011 (six months in advance). If Tenant
opts to renew for the second Renewal Term, it shall notify Landlord in writing on or before
December 31, 2016 (six months in advance).




3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to Landlord the original
executed Lease, the sum of Ten Thousand Fifty-eight and 33/100 ($10,058.33), which amount equals
the Base Rent for the first month of the Initial Term of the Lease, and all insurance certificates
evidencing the insurance required to be obtained by Tenant under Section 12 of this Lease. Tenant
agrees to pay Landlord, without prior notice or demand, or abatement, offset, deduction or claim
(except as otherwise set forth in Section 26 hereof or elsewhere in the Lease), the Base Rent
specified in the Basic Lease Information plus, if applicable, any additional Rent based on
additional or optional lease
 of Parcels, payable in advance at Landlord’s address specified in the
Basic Lease Information on the actual Commencement Date and thereafter on the first (1st) day of
each succeeding month throughout the balance of the Term of this Lease after first giving Tenant
credit for the advanced Rent.




Any additional Rent for any partial month shall be payable in advance and shall be prorated on a
daily basis. Any Rent is subject to adjustment in accordance with Schedule M. If any change is made
in the base year used to calculate the CPI (i.e. 1982-84=100), the new index numbers shall be
substituted for the old index numbers in making the calculation provided for herein. In the event
the Bureau of Labor Statistics ceases to publish the CPI, or if the CPI otherwise is unavailable,
the parties hereto shall substitute a comparable index reflecting changes in the cost of living or
purchasing power of the consumer dollar published by any other




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 Lease
Agreement dated December 16, 2002.


governmental agency, bank or other financial institution, or any recognized authority (the
“Substitute Index”). The Substitute Index shall thereafter be used to determine the Adjusted Base
Rent.




4. SECURITY DEPOSIT: Upon Tenant’s execution of this Lease, Tenant shall deliver to Landlord the
first Thirty-two Thousand One Hundred No/100 ($32,100.00) installment and on December 1, 2002 the
second Thirty-two Thousand One Hundred No/100 ($32,100.00) installment (both installments as per
Schedule N), as a Security Deposit for the performance by Tenant of its obligations under this
Lease. If Tenant is in default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord for all damages to
the Premises sustained by Landlord resulting from Tenant’s default. Tenant shall, immediately on
demand, pay to Landlord a sum equal to the portion of the Security Deposit so applied or used so as
to replenish the amount of the Security Deposit held to increase such deposit to the amount
initially deposited with Landlord. As soon as practicable after the termination of this Lease (but
in no event later than sixty (60) days after such termination). Landlord shall return the Security
Deposit to Tenant, less such amounts as are reasonably necessary, to remedy Tenant’s default(s)
hereunder (if any), or to otherwise restore the Premises to a clean and safe condition, reasonable
wear and tear excepted. Landlord shall not be required to keep the Security Deposit separate from
other funds, and, unless otherwise required by law. Tenant shall not be entitled to interest on the
Security Deposit. In no event or circumstance shall Tenant have the right to any use of the
Security Deposit and, specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to, Rent or any
portion thereof.




Without any written notice, Landlord shall refund the first Security Deposit ($32,100.00) to Tenant
on December 1, 2003 and second Security Deposit ($32,100.00) to Tenant at expiration of Lease, if
Tenant is not then in default under any material terms of the Lease and beyond all applicable
notice and periods.




5. TENANT IMPROVEMENTS: Tenant hereby agrees to accept Parcels “A,” “B1” and “B2” on the
Commencement Date as suitable for Tenant’s intended use, in cleaned and as-is condition. Tenant
hereby agrees to accept Parcels “C” and “D” on the Commencement Date as suitable for Tenant’s
intended use, as currently furnished and outfitted by Landlord. Tenant acknowledges and agrees that
neither Landlord nor any of Landlord’s agents, representatives or employees has made any
representations as to the suitability, fitness or condition of the Premises for the conduct of
Tenant’s business or for any other purpose, including without limitation, any storage incidental
thereto. Any exception to the foregoing provisions must be made by express written agreement by
both parties.




6. ADDITIONAL RENT: It is intended by Landlord and Tenant that this Lease be a “triple net lease,”
excepting only the portion of Site Services Expenses as set forth in Schedule O, Tenant’s Utility
Expenses as set forth in Schedule Q, and Tenant’s responsibility for maintenance of the interior of
the Premises. The costs and expenses described in this Section 6 and all other sums, charges, costs
and expenses specified in this Lease as Tenant’s responsibility are to be paid by Tenant directly
to the suppliers of the services. If any of such expenses are paid by Landlord, then Tenant shall
reimburse Landlord in the form of additional rent (collectively, “Additional Rent”).



     6.1 CERTAIN OPERATING EXPENSES: In addition to the Base Rent set forth in Section 3, Tenant
shall directly pay certain operating expenses. The term “Tenant Operating Expenses” as used herein
shall mean the total amounts paid or payable by Tenant in connection with the maintenance, repair
and operation of the Premises on account of, caused by Tenant. The Tenant Operating Expenses may
include, but are not limited to, the following:





     6.1.1 cost of insurance of Tenant’s property insuring against fire and extended coverage.




     6.1.2 if Tenant uses any additional rail spur for its own business, cost for the
maintenance and repair of any rail spur, and for the creation and negotiation of, and pursuant
to, any rail spur or track agreements, licenses, easements or other similar undertakings;




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Lease
Agreement dated December 16, 2002.


     6.2 TAX EXPENSES: As set forth in Schedule P, in addition to the Base Rent set forth in
Section 3, Tenant shall pay (either directly to the taxing authorities or by reimbursing Landlord
for) all real property
taxes applicable to Tenant’s improvements, installations, additions, machinery, equipment,
inventory and the like, and one hundred percent (100%) of all personal property taxes now or
hereafter assessed or levied against Tenant’s personal property. Landlord’s Tax Expenses, which
shall be due by reason of the Premises, are included in the Site Service Expenses according to
Schedule O. Additionally, Landlord may pass-through to Tenant, Tenant’s proportionate share of any
year over year increases in property tax expenses associated with the Premises that exceed ten
percent (10%). Landlord shall provide at least thirty (30) days advance written notice of any such
pass-through. The term “Tax Expenses” shall mean and include, without limitation, any form of tax
and assessment (general, special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license fees, license tax, business license fee,
rental tax, transaction tax, levy, or penalty imposed by authority having the direct or indirect
power of tax (including any city, county, state or federal government, or any school, agricultural,
lighting, drainage or other improvement district thereof) as against any legal or equitable
interest of Landlord in the Premises, as against Landlord’s right to rent or as against Landlord’s
business of leasing the Premises or the occupancy of Tenant or any other tax, fee, or excise,
however described, including, but not limited to, any value added tax, or any tax imposed in
substitution (partially or totally) of any tax previously included within the definition of real
property taxes, or any additional tax the nature of which was previously included within the
definition of real property taxes. The term “Tax Expenses” shall not include any franchise, estate,
inheritance, net income, or excess profits tax imposed upon Landlord.


7. UTILITIES: Landlord represents and warrants that the Premises will be served with utilities for
Tenant’s operations as set forth on Schedule Q, and Utility Expenses shall be handled as set forth
on Schedule Q. If at any time during the Term of this Lease Tenant shall fail to timely and fully
pay any of such Utility Expenses after the lapse of the 10-day notice and cure period specified in
Section 18.3 hereof, in addition to all other remedies available to Landlord hereunder, Landlord
may, but without obligation to do so, pay any of such Utility Expenses. With the consent of Tenant,
Landlord may assign responsibility for delivery of a specific utility to the wholesale service
provider (e.g., electricity from Duke Power).




8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are considered part of
Additional Rent. Tenant acknowledges that late payment (the sixth (6th) day of each month or any
time thereafter) by Tenant to Landlord of Base Rent, or other sums due hereunder, will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without limitation, processing
and accounting charges, and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties due to the late
payment of real property taxes on the Premises. Therefore, if any installment of Base Rent or any
other sum due from Tenant is not received by Landlord within five (5) calendar days of the date
due, Tenant shall promptly pay to Landlord all of the following, as applicable: (a) an additional
sum equal to seven percent (7%) of such delinquent amount plus interest on such delinquent amount
at the rate equal to the prime rate plus three percent (3%) for the time period exceeding thirty
(30) days that such payments are delinquent as a late charge for the first instance during any
calendar year in which Landlord does not receive Rent within said five (5) day period. If Tenant
delivers to Landlord a check for which there are not sufficient funds, Landlord may, at its sole
option, require Tenant to replace such check with a cashier’s check for the amount of such check
and all other charges payable hereunder. The parties agree that this late charge and the other
charges referenced above represent a fair and reasonable estimate of the costs that Landlord will
incur by reason of late payment by Tenant. Acceptance of any late charge or other charges shall not
constitute a waiver by Landlord of Tenant’s default with respect to the delinquent amount, nor
prevent Landlord from exercising any of the other rights and remedies available to Landlord for any
other breach of Tenant under this Lease.




9. USE OF PREMISES:




     9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS: The Premises are to be
used solely for the purposes and uses specified in the Basic Lease Information, which includes
production, R&D, laboratories, storage and administration, which are already accepted and




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Lease
Agreement dated December 16, 2002.


acknowledged by Landlord at the Commencement Date, and for no other uses or purposes without
Landlord’s prior written consent, which consent shall not be unreasonably withheld or delayed so
long as the proposed use (i) does not involve the unlawful use of Hazardous Materials and other use
than as expressly permitted under the provisions of Section 27 below, (ii) does not require any
additional parking in excess of the parking spaces required by law, and (iii) conforms with all
zoning ordinances and Laws then in effect. The use of the Premises by Tenant and its employees,
directors, officers, affiliates, representatives, agents, invitees, licensees, subtenants,
customers or contractors (collectively, “Tenant’s Representatives”) shall be subject to, and at all
times in compliance with, the following:






     (a) any and all applicable laws, ordinances, statutes, orders and regulations as same
exist from time to time (collectively, the “Laws”);




     (b) any and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements thereto, each of
which has been recorded prior to the Commencement Date in any official or public records with
respect to any portion of the Premises (the “Recorded Matters”);




     (c) any and all documents, matters, or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements thereto, that are
recorded after the Lease Date, and any amendments, modification and/or cancellations of the
Recorded Matters that are recorded after the Commencement Date (collectively, “Subsequently
Recorded Matters”). If Landlord agrees to any such Subsequently Recorded Matters (to which it
is a party or with respect to which Landlord has direct approval of) without Tenant’s prior
written consent then this Lease shall be deemed to supersede such Subsequently Recorded
Matters in the event of any conflict. Notwithstanding anything herein to the contrary, if any
of the Subsequently Recorded Matters to which Landlord is not a party or with respect to which
Landlord has no direct approval of (i.e., Subsequently Recorded Matters which are recorded or
imposed by any applicable governmental authorities) adversely affect Tenant’s use under this
Lease (excluding any liens related to any mortgage, deed of trust or similar type of security
interest, and any improvements to be made to the Premises), then Landlord, upon receipt of
written notice of such matters, shall notify Tenant, in writing, of all such Subsequently
Recorded Matters. The consequences of these Subsequently Recorded Matters shall be
reconsidered by Landlord and Tenant and mutually agreed on its effect to the Lease.




     9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit anything to be done in or
about the Premises nor keep or bring anything therein which will in any way conflict with any of
the requirements of the Board of Fire Underwriters or similar body now or hereafter constituted or
in any way increase the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance policy; provided,
however, notwithstanding the foregoing, if Tenant permissibly uses the Premises for the purposes
allowed by the provisions of this Lease and such permissible use increases the rate of premiums
paid for such insurance, then Tenant shall not be considered in breach of the foregoing
restriction. No auctions may be held or otherwise conducted in, on or about the Premises without
Landlord’s written consent thereto, which consent may be given or withheld in Landlord’s sole
discretion. Tenant shall not do or permit anything to be done in or about the Premises which will
in any way materially obstruct or interfere with the rights of Landlord or other persons or
businesses in the area, or use or allow the Premises to be used for any unlawful purpose; nor shall
Tenant cause, maintain or permit any private or public nuisance in, on or about any portion of the
Premises. including, but not limited to, any offensive odors, noises, fumes or vibrations (other
than (i) customary odors resulting from food preparation, provided such food preparation is in
compliance with all Laws, including without limitation, the requirements of the Department of
Health, (ii) fumes associated with vehicle exhaust, and (iii) vibrations associated with Tenant’s
equipment and other equipment and vehicles of Tenant or Tenant’s Representatives). Tenant shall not
damage or deface or otherwise commit or suffer to be committed any waste in, upon or about the
Premises. Tenant shall not permit any live animals, including, but not limited to, any household
pets, to be brought or kept in or about the Premises. Tenant shall place no loads upon the floors,
walls, or ceilings in excess of the maximum designed load permitted by the applicable Uniform
Building Code or which may damage the Building or outside areas; nor place
any chemicals or corrosive materials in the drainage systems that cause damage to such systems
other than normal wear and tear; nor unlawfully dump or store waste materials,



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Lease
Agreement dated December 16, 2002.


refuse or other such materials, or allow such to remain outside the Buildings, except for any
non-hazardous or non-harmful materials which may be stored in refuse dumpsters or in any enclosed
trash areas provided.




10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:




     10.1 ALTERATIONS AND ADDITIONS: Tenant shall be permitted to make, at its sole cost and
expense, alterations and additions to the Premises without obtaining Landlord’s prior written
consent, (the “Permitted Improvements”). Tenant, however, has already informed and notified
Landlord of such alterations or additions (see Attachment 1) for preparing Parcel A for production
purposes. Landlord explicitly acknowledges and agrees to these Permitted Improvements. Upon the
expiration or earlier termination of this Lease, Tenant shall remove, at its own cost and expense,
all Permitted Improvements made by it and restore the Premises to its condition as of the
commencement of the term of this Lease, ordinary wear and tear and damage by casualty excepted,
unless Landlord shall agree in writing with Tenant to allow such Permitted Improvements or a
designated portion thereof, to remain. Tenant shall also remove upon expiration or earlier
termination, at its own cost and expense, all of its equipment, including any equipment previously
acquired by Tenant from Landlord. Except for the Permitted Improvements, Tenant shall not Install
any signs, fixtures, improvements, nor make or permit any other alterations or additions to the
Premises without the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed. If any such alteration or addition is expressly permitted by
Landlord, Tenant shall deliver at least twenty (20) days prior notice to Landlord, from the date
Tenant intends to commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility, in all events, Tenant shall obtain all permits or other governmental approvals
prior to commencing any of such work and deliver a copy of same to Landlord. All alterations and
additions shall be installed by a licensed contractor approved by Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed, at Tenant’s sole expense in compliance with all
Laws (including, but not limited to, the ADA as defined herein), Recorded Matters, and Rules and
Regulations, applicable after Commencement Date. According to Attachment1, Tenant has already
informed Landlord of its contractors for Permitted improvements to be done at Parcel A. Tenant
shall keep the Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred by or on behalf of
Tenant.




     10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether by forfeiture, lapse
of time or otherwise, or upon the termination of Tenant’s right to possession of the Premises.
Tenant will at once surrender and deliver up the Premises, together with the attached fixtures
(other than trade fixtures, and other than any furniture bolted for earthquake purposes which shall
be deemed to be not attached to the Premises), additions and Improvements which Landlord has agreed
in writing with Tenant not to remove, to Landlord in good condition and repair (including, but not
limited to, replacing all light bulbs and ballasts not in good working condition) and in the
condition in which the Premises existed as of the Commencement Date, except for reasonable wear and
tear, and repairs not required to be made by Tenant as expressly provided in this Lease, or to the
extent Landlord has actually received insurance proceeds for such casualty damage. Reasonable wear
and tear shall not include any damage or deterioration to the floors of the Premises arising from
the use of forklifts in, on or about the Premises (including, without limitation, any marks or
stains of any portion of the floors caused by forklifts), and any damage or deterioration that
would have been prevented by proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall remove the
Permitted Improvements (to the extent Landlord has agreed with Tenant in writing, at the time set
forth in Section 10.1, that it will require such removal), all tenant signage, trade fixtures,
non-attached fixtures, furniture, furnishings, equipment, personal property, additions, and other
improvements (to the extent Landlord has agreed with Tenant, in writing,) unless Landlord and
Tenant agree in writing, that Tenant not remove some or all of such attached fixtures (other than
trade fixtures), additions or improvements installed by, or on behalf of Tenant or situated in or
about the Premises. By the date which is forty-five (45) days prior to such termination of this
Lease, Landlord and Tenant shall agree in writing of those attached fixtures (other than
trade fixtures), alterations, additions and other non-attached improvements which Landlord
shall require Tenant not to remove from the Premises. Tenant shall repair any damage caused by the
installation or removal of such signs, trade fixtures, furniture, furnishings, equipment, fixtures,
additions and improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord falls to so notify Tenant at least forty-five (45) days prior to such termination of this
Lease, then Tenant shall remove all tenant signage, alterations, furniture, furnishings, trade
fixtures,



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Agreement dated December 16, 2002.


equipment, cabling and other lines of a non-standard nature, additions and other improvements
(other than the Tenant Improvements and those improvements or alterations not required to be
removed by Landlord at the time of installation) installed in or about the Premises by, or on
behalf of Tenant. Tenant shall cause the removal of such items and the repair of the Premises to be
completed prior to such termination of this Lease. For purposes hereof, and notwithstanding
anything to the contrary contained herein, Tenant’s racking and in-rack sprinkler systems shall be
deemed to be part of Tenant’s trade fixtures and shall be removed from the Premises by Tenant upon
the expiration or earlier termination of this Lease.




11. REPAIRS AND MAINTENANCE:




     11.1 TENANT’S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for Landlord’s repair and
maintenance obligations set forth in Section 11.2., Tenant shall, at Tenant’s sole cost and
expense, keep and maintain the Premises in good, clean and safe condition and repair to the
reasonable satisfaction of Landlord any damage caused by Tenant or Tenant’s Representatives and
replacing any property so damaged by Tenant or Tenant’s Representatives. Without limiting the
generality of the foregoing, Tenant shall be solely responsible for maintaining, repairing and
replacing (a) all interior lighting (including, without limitation, light bulbs and/or ballasts)
and exterior lighting serving the Premises or adjacent to the Building #48, (b) all glass, windows,
window frames, window casements, skylights, interior and exterior doors, door frames and door
closers, (c) all roll-up doors, ramps and dock equipment, including without limitation, dock
bumpers, dock plates, dock seals, dock levelers and dock lights, (d) all tenant signage, (e) lifts
for disabled persons, (f) the Lots within the Premises, if only used by Tenant, and (f) all
partitions, fixtures, equipment, interior painting, and interior walls and floors of the Premises
and every part thereof. In addition to the foregoing, Tenant shall be solely responsible for the
provision of any security measures uniquely or specifically relating to Tenant’s operations,
including without limitation, security measures for any items of personal property, inventory or
equipment placed or otherwise temporarily stored outside of the Buildings. Notwithstanding the
foregoing, Landlord shall, at its own cost and expense, make such repairs caused by the negligence
or willful acts of Landlord or its agents and employees.




     11.2 LANDLORD’S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs rendered necessary by
the intentional or negligent acts or omissions of Tenant or any of Tenant’s Representatives,
Landlord agrees, at Landlord’s sole cost and expense without any reimbursement as part of Operating
Expenses specified herein, to (a) keep in good repair the structural portions of the floors,
foundations, exterior perimeter walls of the Building and load-bearing walls not altered by Tenant
(exclusive of glass and exterior doors), (b) replace the structural portions of the roof of the
Building, and (c) maintain and repair all other portions of the Premises, for which Landlord is
responsible for, including, but not limited to the common and parking areas and the HVAC,
electrical and plumbing systems, serving Parcel C and D. All such maintenance and repairs shall be
of the same type, nature and scope as Landlord undertakes the same for the other buildings at the
Mt. Holly East plant as per Commencement Date in order to ensure a proper and reliable function and
operation.




     11.3 TENANT’S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS: Except for normal
maintenance and repair of the items described above, Tenant shall have no right of access to or
right to install any device on the roof of the Buildings nor make any penetrations of the roof of
the Buildings without the express prior written consent of Landlord. If Tenant refuses or neglects
to repair and properly maintain the Premises as required herein and to the reasonable satisfaction
of Landlord, upon prior notice to Tenant and after expiration of the applicable cure period, both
as specified in Section 18.3 hereof Landlord may, but without obligation to do so, at any time
thereafter make such repairs and/or maintenance without Landlord having any liability to Tenant for
any loss or damage that may accrue to
Tenant’s merchandise, trade fixtures, equipment, fixtures or other property, or to Tenant’s
business by reason thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In the event Landlord
makes such repairs and/or maintenance, upon completion thereof Tenant shall pay to Landlord, as
additional rent, the Landlord’s costs for making such repairs and/or maintenance, plus ten percent
(10%) for overhead, upon presentation of a bill therefor.



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Agreement dated December 16, 2002.


12. INSURANCE:




     12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect at all times during
the Term of this Lease, at Tenant’s sole cost and expense, for the protection of Tenant and
Landlord, as their interests may appear, policies of insurance issued by a carrier or carriers
reasonably acceptable to Landlord and its lender(s) which afford the following coverages: (i)
workers’ compensation: statutory limits; (ii) employer’s liability, as required by law, with a
minimum limit of $1,000,000 per employee and $2,000,000 per occurrence; (iii) commercial general
liability insurance (occurrence form) providing coverage against any and all claims for bodily
injury and property damage occurring in, on or about the Premises arising out of Tenant’s and
Tenant’s Representatives’ use and/or occupancy of the Premises. Such insurance shall include
coverage for blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising. Such insurance shall have a combined
single limit of not less than $5,000,000 per occurrence with a $5,000,000 aggregate limit. If
Tenant has other locations which it owns or leases, the policy shall include an aggregate limit per
location endorsement if necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability insurance: a combined
single limit of not less than $1,000,000 per occurrence and insuring Tenant against liability for
claims arising out of the ownership, maintenance, or use of any owned, hired or non-owned
automobiles; (v) “all risk” or “special purpose” Tenant’s property insurance, including without
limitation, sprinkler leakage, if applicable, covering damage to or loss of any Tenant’s personal
property, trade fixtures, inventory, fixtures and equipment located in, on or about the Premises,
together with, if the property of Tenant’s invitees is to be kept in the Premises, warehouse’s
legal liability or bailee customers insurance for the full replacement cost of the property
belonging to invitees and located in the Premises, and (vi) “pollution legal liability” insurance
with limits of not less than $2,000,000 per occurrence.




     12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant shall be written by
companies (i) licensed to do business in the State of North Carolina, (ii) domiciled in the United
States of America, and (iii) having a “General Policyholders Rating” of at least A-X as set forth
in the most current issue of “A.M. Best’s Rating Guides Tenant shall deliver to Landlord
certificates of insurance and true and complete copies of any and all endorsements required herein
for all insurance, except insurance coverage under Section 12.1. (v), when it is in place, and
required to be maintained by Tenant hereunder at the time of execution of this Lease by Tenant.
Tenant shall, at least thirty (30) days prior to expiration of each policy, furnish Landlord with
certificates of renewal or “binders” thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except after thirty (30) days
prior written notice to the parties named as additional insured as required in this Lease (except
for cancellation for nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days’ notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this Lease under a
blanket insurance policy, provided such blanket policy expressly affords coverage for the Premises
and for Landlord as required by this Lease.




     12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord shall be named as additional insured under all
of the policies required in Section 12.1(iii) above. Additionally, such policies shall provide for
severability of interest. All insurance to be maintained by Tenant shall, except for workers’
compensation and employer’s liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella/excess liability policy (which shall be in
“following form”) shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by Tenant shall not limit
Tenant’s liability under this Lease. It is the parties’ intention that the insurance to be procured
and maintained by Tenant as required herein shall provide coverage for
any and all damage or injury arising from or related to Tenant’s operations of its business
and/or Tenant’s or Tenant’s Representatives’ use of the Premises. It is not contemplated or
anticipated by the parties that the aforementioned risks of loss be borne by Landlord’s insurance
carriers, rather it is contemplated and anticipated by Landlord and Tenant that such risks of loss
be borne by Tenant’s insurance carriers pursuant to the insurance policies procured and maintained
by Tenant as required herein.



     12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event Tenant does not
purchase the insurance required in this Lease or keep the same in full force and effect throughout
the Term of this Lease (including any renewals or extensions), Landlord may after having given
Tenant ten (10) days prior written notice, but without obligation to do so, purchase the necessary
insurance and pay the premiums therefor. If Landlord so elects to purchase such insurance, Tenant
shall promptly pay to Landlord




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Lease
Agreement dated December 16, 2002.


as additional rent, the amount so paid by Landlord, upon Landlord’s demand therefor. If Tenant
fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses,
damages and costs resulting from such failure.




     12.5. LANDLORD’S INSURANCE: During the Term hereof and for the benefit of Landlord, the
Premises including HVAC system shall be insured against loss or damage by fire and all extended
coverage for the full replacement cost thereof. In addition Landlord shall also maintain, during
the entire term of the Lease, and provide commercial General Liability Insurance in the amount of
at least US $ 5,000,000 per occurrence, providing coverage against any and all claims for death,
bodily injury and property damage occurring in, on or about the Premises including the Lot and
other common areas. Landlord shall purchase and keep in force such insurance policy or policies
with commercial reasonable deductibles and with Tenant as a named insured. Tenant shall reimburse
for the cost thereof as provided below and as per Schedule O - Site Services Expenses.



     13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss of, or damage to, either parties’ property to the extent
that such loss or damage is insured by an insurance policy required to be in effect at the time of
such loss or damage. Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party. This provision is
intended to waive fully, and for the benefit of the parties hereto, any rights and/or claims which
might give rise to a right of subrogation in favor of any insurance carrier. The coverage obtained
by Tenant and Landlord pursuant to Section 12 of this Lease shall include, without limitation, a
waiver of subrogation endorsement attached to the certificate of insurance. The provisions of this
Section 13 shall not apply in those instances in which such waiver of subrogation would invalidate
such insurance coverage or would cause either party’s insurance coverage to be voided or otherwise
limited.


14. LIMITATION OF LIABILITY AND INDEMNITY: Except to the extent caused by the gross negligence or
willful misconduct of Landlord or its agents or employees, Tenant agrees to protect, defend (with
counsel reasonably acceptable to Landlord) and hold Landlord and Landlord’s lenders, partners,
members, property management company (if other than Landlord), agents, directors, officers,
employees, representatives, successors and assigns (collectively, the “Landlord’s Indemnitees”)
harmless and indemnify the Landlord’s Indemnitees from and against all liabilities, damages,
claims, losses, judgments, charges and expenses (including reasonable attorneys’ fees, costs of
court and expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from Tenant’s gross negligence or willful misconduct, which
in any way are related to, (i) Tenant’s or Tenant’s Representatives’ use of the Premises, (ii) the
conduct of Tenant’s business, (iii) from any activity, work or thing done, permitted or suffered by
Tenant in or about the Premises, (iv) any liability for injury to person or property of Tenant,
Tenant’s Representatives, or third party persons, and/or (v) Tenant’s failure to perform any
covenant or obligation of Tenant under this Lease and arising from. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination of this Lease.
This provision restricts or limits in no way the indemnification of Tenant by Landlord in Sect.
27.3.




     Except to the extent caused by the gross negligence or willful misconduct of Tenant or its
agents or employees, Landlord agrees to protect, defend (with counsel reasonably acceptable to
Tenant) and hold Tenant and Tenant’s lenders, partners, members, agents, directors, officers,
employees, representatives, shareholders, successors and assigns and each of their respective
lenders, partners, members, agents, directors, officers, employees, representatives, shareholders,
successors and assigns (collectively, the “Tenant’s Indemnitees”) harmless and indemnify the
Tenant’s indemnitees from and against all liabilities, damages, claims, losses, judgments, charges
and expenses (including reasonable attorneys’ fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this provision) arising from
Landlord’s gross negligence or willful misconduct. Landlord agrees that the obligations of Landlord
herein shall survive the expiration or earlier termination of this Lease. Tenant shall not, in any
event or circumstance, be permitted to offset or otherwise credit against any payments of Rent
required herein for matters for which Landlord may be liable hereunder. This provision restricts or
limits in no way the indemnification of Landlord by Tenant in Sect. 27.3.




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Agreement dated December 16, 2002.


15. ASSIGNMENT AND SUBLEASING: Tenant shall not assign, mortgage, hypothecate, encumber, grant any
license or concession, pledge or otherwise transfer this Lease (collectively, “assignment”), in
whole or in part, whether voluntarily or involuntarily or by operation of law, nor sublet or permit
occupancy by any person other than Tenant of all or any portion of the Premises without in each
instance first obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if at the time of Tenant’s request for Landlord’s
consent to any proposed assignee or subtenant (i) Tenant is in default of its obligations under
this Lease beyond applicable notice and cure periods, or (ii) the use to be made of the Premises by
the proposed assignee or subtenant differs from the uses permitted under this Lease. Tenant further
agrees that Landlord may withhold its consent to any proposed sublease or assignment if the
proposed sublessee or assignee or its business is subject to compliance with additional
requirements of the ADA (Title III of the Americans with Disabilities Act) for which Landlord would
be responsible hereunder and/or Environmental Laws (defined below) beyond those requirements which
are applicable to Tenant, unless the proposed sublessee or assignee shall (a) first deliver plans
and specifications for complying with such additional ADA requirements and/or Environmental Laws
and obtain Landlord’s written consent thereto, and (b) comply with all Landlord’s reasonable
conditions for or contained in such consent, including without limitation, requirements for
security to assure the lien-free completion of such improvements. No consent to any assignment or
sublease shall constitute a waiver of the provisions of this Section 15, and all subsequent
assignments or subleases may be made only with the prior written consent of Landlord, which consent
shall not be unreasonably withheld, delayed or conditioned, but which shall be subject to the
provisions of this Section 15.




16. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the Premises upon
twenty-four (24) hours prior written or verbal notice (except in an emergency, in which event no
prior notice shall be required) during business hours for purposes of inspection, exhibition,
posting of notices, repair or alteration, provided such entry does not interfere with Tenant’s use
of Premises. It is further agreed that Landlord shall have the right to use any and all means
Landlord deems necessary to enter the Premises in an emergency. Landlord shall have the right to
place “for rent” or “for lease” signs on the outside of the Premises during the last three (3)
months of the Lease Term.




17. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by any lender or ground
lessor) and deliver to Landlord, within ten (10) business days after Landlord provides such to
Tenant, a statement in writing certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification), the date to which the Rent and
other charges are paid in advance, if any, acknowledging and if applicable that there are not, to
Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder or specifying such
defaults as are claimed, and such other matters as Landlord may reasonably require. Any such
statement may be conclusively relied upon by Landlord and any prospective purchaser or encumbrancer
of the Premises. Tenant’s failure to deliver such statement within such time shall be conclusive
upon the Tenant that (a) this Lease is in full force and effect, without modification except as may
be represented by Landlord; (b) there are no uncured defaults in
Landlord’s performance;
 and (c) not more than one month’s Rent has been paid in advance. Failure by
Tenant to so deliver such certified estoppel certificate shall be a material default of the
provisions of this Lease.




18. TENANT’S DEFAULT: The occurrence of any one or more of the following events shall, at
Landlord’s option, constitute a material default by Tenant of the provisions of this Lease:




     18.1 The abandonment (as statutorily defined) of the Premises by Tenant. Tenant agrees to
notice and service of notice as provided for in this Lease and waives any right to any other or
further notice or service of notice which Tenant may have under any statute or law now or hereafter
in effect;




     18.2 The failure by Tenant to make any payment of Base Rent, Additional Rent or any other
payment required hereunder within ten (10) business days after receipt of Landlord’s written notice
to Tenant that said payment is past due. Tenant agrees that any such written notice delivered by
Landlord, to the




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Lease
Agreement dated December 16, 2002.


fullest extent permitted by law, shall serve as the statutorily required notice under applicable
law. In addition to the foregoing, Tenant agrees to notice and service of notice as provided for in
this Lease;




     18.3 The failure by Tenant to observe, perform or comply with any of the conditions, covenants
or provisions of this Lease (except failure to make any payment of Rent and/or Additional Rent) and
such failure is not cured within (i) thirty (30) days after receipt of Landlord’s written notice or
such failure to Tenant; provided, if the failure complained of is a failure other than one which
may be cured by the payment of money, no default on the part of Tenant in the performance of work
required to be performed or acts to be done or conditions to be met shall be deemed to exist if,
within the aforesaid thirty (30) period, steps shall have been in good faith commenced promptly by
Tenant to rectify the same and shall be prosecuted to completion with diligence and continuity;




     18.4 The making of a general assignment by Tenant for the benefit of creditors, the filing of
a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant’s
creditors seeking the rehabilitation, liquidation, or reorganization of Tenant under any law
relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary
action, the failure to remove or discharge the same within sixty (60) days of such filing, the
appointment of a receiver or other custodian to take possession of substantially all of Tenant’s
assets or this leasehold, Tenant’s insolvency or inability to pay Tenant’s debts or failure
generally to pay Tenant’s debts when due, any court entering a decree or order directing the
winding up or liquidation of Tenant or of substantially all of Tenant’s assets. Tenant taking any
action toward the dissolution or winding up of Tenant’s affairs, the cessation or suspension of
Tenant’s use of the Premises, or the attachment, execution or other judicial seizure of
substantially all of Tenant’s assets or this leasehold;



19. REMEDIES FOR TENANT’S DEFAULT:




     19.1 LANDLORD’S RIGHTS: In the event of Tenant’s material default under this Lease beyond any
applicable cure periods as provided in Section 18 herein, Landlord may terminate Tenant’s right to
possession of the Premises by any lawful means in which case upon delivery of written notice by
Landlord this Lease shall terminate on the date specified by Landlord in such notice and Tenant
shall immediately surrender possession of the Premises to Landlord. In addition, the Landlord shall
have the immediate right of re-entry, and if this right of re-entry is exercised following
abandonment (as statutorily defined) of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises for a period of time exceeding thirty (30)
days to also have been abandoned; provided, however, that said thirty (30) days is not in addition
to the statutorily required time period under applicable law. No re-entry or taking possession of
the Premises by Landlord pursuant to this Section 20 shall be construed as an election to terminate
this Lease unless a written notice of such intention is given to Tenant. No act by Landlord other
than giving written notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to
re-let the Premises or the appointment of a receiver on Landlord’s initiative to protect Landlord’s
interest under this Lease shall not constitute a termination of Tenant’s right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy any default of
Tenant, to maintain or improve the
Premises, to cause a receiver to be appointed to administer the Premises and new or existing
subleases and to add to the Rent payable hereunder all of Landlord’s reasonable costs in so doing,
with interest at the maximum rate permitted by law from the date of such expenditure. Landlord
shall use commercially reasonable efforts to mitigate its damages hereunder.




     19.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the Premises before the
end of the Term, or if Tenant’s right to possession is terminated by Landlord because of a breach
or default under this Lease, then in either such case, Landlord may recover from Tenant all damages
suffered by Landlord as a result of Tenant’s failure to perform its obligations hereunder.




     19.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies of Landlord are not
exclusive; they are cumulative in addition to any rights and remedies now or hereafter existing at
law, in equity by statute or otherwise; or to any equitable remedies Landlord may have, and to any
remedies Landlord may have under bankruptcy laws or laws affecting creditor’s rights generally.




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 Lease
Agreement dated December 16, 2002.


     19.4 WAIVER OF A TENANT DEFAULT: The waiver by Landlord of any default of any provision of
this Lease shall not be deemed or construed a waiver of any other default by Tenant hereunder or of
any subsequent default of this Lease, except for the default specified in the waiver.


20. HOLDING OVER: If Tenant holds possession of the Premises after the expiration of the Term of
this Lease with Landlord’s consent, Tenant shall become a tenant from month-to-month upon the terms
and provisions of this Lease, provided the monthly Base Rent during such hold over period shall be
150% of the Base Rent due on the last month of the Lease Term, payable in advance on or before the
first day of each month, unless otherwise agreed by Landlord and Tenant in writing. Acceptance by
Landlord of the monthly Base Rent without the additional fifty percent (50%) increase of Base Rent
shall be deemed or construed as a waiver by Landlord of any of its rights to collect the increased
amount of the Base Rent as provided herein at any time. Such month-to-month tenancy shall not
constitute a renewal or extension for any further term. All options, if any, granted under the
terms of this Lease shall be deemed automatically terminated and be of no force or effect during
said month-to-month tenancy. Termination of such tenancy shall occur by either Landlord or Tenant
giving written notice of termination to the other party at least thirty (30) days prior to the
effective date of termination. This paragraph shall not be construed as Landlord’s permission or
lack of permission for Tenant to hold over. Acceptance of Base Rent by Landlord following
expiration or termination of this Lease shall not constitute a renewal of this Lease.




21. LANDLORD’S DEFAULT: Landlord shall not be deemed in breach or “Default” of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be performed by
Landlord hereunder. For purposes of this provision (except as otherwise set forth below), a
reasonable time shall not be less than thirty (30) days after receipt by Landlord of written notice
specifying the nature of the obligation Landlord has not performed; provided, however, that if the
nature of Landlord’s obligation is such that more than thirty (30) days, after receipt of written
notice, is reasonably necessary for its performance, then Landlord shall not be in breach or
default of this Lease if performance of such obligation is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.




If Landlord has not commenced to cure the same within said thirty (30) day period or any other
mutually agreed period and thereafter diligently prosecutes the same to completion and Landlord
shall not thereafter cure such default. Tenant shall be entitled, in addition to all remedies
otherwise available in law or equity under the laws of the United States and/or North Carolina, to
(a) cure such default and/or deduct all such amounts from Rent, (b) bring suit for the collection
of any amounts for which Landlord may be in default, or for the performance of any other covenant
or agreement devolving upon Landlord, without terminating this Lease and/or (c) in an emergency,
cure any such breach or failure prior to the expiration of the notice period if reasonably
necessary to protect the Premises and/or parking for or access to the Premises, to prevent injury
or damage to persons or property, or in the event of any other emergency and deduct all such
amounts from rent.



22. PARKING: Tenant shall have the right to use on a non-exclusive basis all parking spaces on the
Lot during the Term of this Lease. Landlord shall exercise reasonable efforts to insure that such
spaces are available to Tenant for its use, but Landlord shall not be required to enforce Tenant’s
right to use the same.




23. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or the cessation
otherwise of Landlord’s interest therein, Landlord shall be and is hereby entirely released from
any and all of its obligations to perform or further perform under this Lease and from all
liability hereunder accruing from or after the date of such sale or transfer; and the purchaser, at
such sale or any subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and any such purchaser,
to have assumed and agreed to carry out any and all of the covenants, liabilities and obligations
of the Landlord under this Lease. For purposes of this Section 23, the term “Landlord” means only
the owner and/or agent of the owner as such parties exist as of the date on which Tenant executes
this Lease. A ground lease or similar long term lease by Landlord of the entire Premises shall be
deemed a sale within the meaning of this Section 23. Tenant agrees to attorn to such new owner
provided such new owner agrees not to disturb Tenant’s use, occupancy or quiet enjoyment of the
Premises so long as Tenant is not in default of any of the provisions of this Lease beyond
applicable cure periods.




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Lease
Agreement dated December 16, 2002.


24. WAIVER: No delay or omission in the exercise of any right or remedy of either party on any
default by the other party shall impair such a right or remedy or be construed as a waiver. The
subsequent acceptance of Rent by Landlord after default by Tenant of any covenant or term of this
Lease shall not be deemed a waiver of such default, other than a waiver of timely payment for the
particular Rent payment involved, and shall not prevent Landlord from maintaining an unlawful
detainer or other action based on such breach. No payment by Tenant or receipt by Landlord of a
lesser amount than the monthly Rent and other sums due hereunder shall be deemed to be other than
on account of the earliest Rent or other sums due, nor shall any endorsement or statement on any
check or accompanying any check or payment be deemed an accord and satisfaction; and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover the balance of such
Rent or other sum or pursue any other remedy provided in this Lease. No failure, partial exercise
or delay on the part of either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.




25. CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case a Building shall be
so damaged by fire or other casualty that fifty percent (50%) or more of the Building requires
substantial alteration or reconstruction, in Landlord’s reasonable opinion, Landlord or Tenant may
terminate this Lease as to such Building only or Tenant may terminate this Lease in whole by
notifying the other party in writing of such termination within ninety (90) days after the date of
such damage, in which event the Rent shall be abated as of the date of such damage but only to the
extent and during the time period Tenant is not reasonably able, in Tenant’s good faith business
judgment, to conduct its operations in the Building during such ninety (90) day period. If the
Building or any part thereof shall be damaged by fire or other casualty such that the repair of
such damage or casualty shall require more than nine (9) months to complete [subject to extension
for delays attributable to Tenant’s or any of Tenant’s Representatives’ acts or omissions
(collectively, “Tenant Delays”), or to acts or events beyond Landlord’s control including, but not
limited to, acts of God, earthquakes, strikes, lockouts, boycotts, discontinuance of any utility or
other service required for performance of the reparation work, moratoriums, governmental agencies,
delays on the part of governmental agencies, weather, and the lack of availability or shortage of
specialized materials used in the construction of the Building (collectively, “Force Majeure
Delays”)], then either Tenant or Landlord may terminate this Lease as to such Building only by
notifying the other party of such election to terminate this Lease within thirty (30) days after
the date on which it is determined by Landlord and Tenant of the length of time necessary to
substantially complete such repairs, in which event the Rent shall be abated as of the date of such
damage but only to the extent and during the time period Tenant is not reasonably able, in Tenant’s
good faith business judgment, to conduct its operations in the damaged portion of the Building.
Landlord and Tenant shall determine in writing of the determination of the percentage of the
Building damaged or the length of time to complete the reparation of such damage as soon as
reasonably possible
after Landlord is notified in writing of the damage, but in all events within ninety (90) days of
Landlord’s receipt of such notification from Tenant in writing. If neither party exercises their
rights to so elect to terminate this Lease in accordance with the aforesaid provisions, and
provided insurance
 proceeds are available to fully repair the damage (excluding any deductible),
Landlord shall within ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building (except that
Landlord shall not be responsible for any Tenant Delays or any Force Majeure Delays and all time
periods for performance by Landlord shall be extended commensurately by the period of time
attributable to such delays) to substantially the same condition in which it was immediately prior
to the happening of the casualty; provided, Landlord shall not be required to rebuild, repair, or
replace any part of Tenant’s furniture, furnishings, fixtures, equipment removable by Tenant, the
Tenant Improvements or any other improvements, alterations or additions installed by or for the
benefit of Tenant under the provisions of this Lease, or Tenant’s initial Alterations. If they are
not becoming part of the Building, which requires insurance coverage under Landlord’s Property
Insurance. Landlord shall not in any event be required to spend for such work an amount in excess
of the insurance proceeds (excluding any deductible) actually received by Landlord as a result of
the fire or other casualty, provided that Landlord has complied with its insurance obligations
under Sect. 12.5.. Landlord shall not be liable for any inconvenience or annoyance to Tenant,
injury to the business of Tenant, loss of use of any part of the Premises by the Tenant or loss of
Tenant’s personal property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow Tenant a fair diminution
of Rent during the time and to the extent the Building is unfit for occupancy. Notwithstanding
anything to the contrary contained herein (except as set forth below), if the Building or any
portion




16









 




Lease
Agreement dated December 16, 2002.


thereof be damaged by fire or other casualty resulting from the Intentional or negligent acts or
omissions of Tenant or any of Tenant’s Representatives, (i) the Rent shall not be diminished during
the repair of such damage, (ii) Tenant shall not have any right to terminate this Lease due to the
occurrence of such casualty or damage, and (iii) Tenant shall be liable to Landlord for the cost
and expense of the repair and restoration of all or any portion of the Building caused thereby
(including, without limitation, any deductible) to the extent such cost and expense is not covered
by insurance proceeds and Landlord has no responsibility for the lack of insurance coverage.
However, Landlord expressly hereby releases Tenant to the extent of Landlord’s insurance coverage
(but only the amount in excess of Landlord’s deductible), from any liability for loss or damage
caused by fire or any casualties even if such fire or other casualties should be brought about by
the negligence of Tenant or Tenant’s Representatives. In the event the holder of any indebtedness
secured by the Building 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 the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder except for those obligations
expressly intended to survive any such termination of this Lease.




26. CONDEMNATION: If the whole or a substantial portion of the Premises is condemned by eminent
domain, inversely condemned or sold in lieu of condemnation for any public or quasi-public use or
purpose (“Condemned”), then Tenant or Landlord may terminate this Lease as of the date when
physical possession of the Premises is taken and title vests in such condemning authority, and Base
Rent shall be adjusted to the date of termination. Tenant shall not because of such condemnation
assert any claim against Landlord or the condemning authority for any compensation because of such
condemnation, and Landlord shall be entitled to receive the entire amount of any award without
deduction for any estate of interest or other interest of Tenant; provided, however, the foregoing
provisions shall not preclude Tenant, at Tenant’s sole cost and expense, from obtaining any
separate award to Tenant for loss of or damage to Tenant’s trade fixtures, equipment, Permitted
Improvements and removable personal property or for damages for cessation or interruption of
Tenant’s business provided such award is separate from Landlord’s award in addition to the
foregoing, Tenant shall be entitled to seek compensation for loss of business, any and all the
relocation costs or the taking of Tenant’s trade fixtures, Permitted Improvements or equipment
recoverable by Tenant pursuant to the provisions of North Carolina law. If neither party elects to
terminate this Lease, Landlord shall, if necessary, promptly proceed to restore the Premises to
substantially the same condition
then existing prior to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, for the Base Rent
corresponding to the time during which, and to the part of the Premises of which, Tenant is
deprived on account of such partial condemnation and restoration. Landlord shall not be required to
spend funds for restoration in excess of the amount received by Landlord as compensation awarded.




27. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:




     27.1 TENANT’S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord immediate verbal and
follow-up written notice of any spills, releases, discharges, disposals, emissions, or migrations,
of any Hazardous Materials in violation of Environmental Laws on, under or about any portion of the
Premises or in any of the Lot thereof; provided, however, that Tenant has actual knowledge of such
event(s). Tenant, at its sole cost and expense, covenants and warrants to promptly investigate,
clean up, remove, restore and otherwise remediate (including, without limitation, preparation of
any feasibility studies or reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, or migration of any Hazardous Materials in violation of
Environmental Laws arising from or related to the intentional or negligent acts or omissions of
Tenant or Tenant’s Representatives such that the affected portions of the Premises and any adjacent
property are returned to substantially the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and other remediation
shall only be performed after Tenant has obtained Landlord’s prior written consent, which consent
shall not be unreasonably withheld so long as such actions would not potentially have a material
adverse long-term or short-term effect on any portion of the Premises. Notwithstanding the
foregoing, Tenant shall be entitled to respond immediately to an emergency without first obtaining
Landlord’s prior written consent. Tenant, at its sole cost and expense, shall conduct and perform,
or cause to be conducted and performed, all closures as required by any Environmental Laws or any
agencies or other governmental authorities having jurisdiction




17









 




Lease
Agreement dated December 16, 2002.


thereof for any Hazardous Materials released on the Premises in violation of Environmental Laws
caused by the Tenant or Tenant’s Representatives. If Tenant fails to so promptly Investigate, clean
up, remove, restore, provide closure or otherwise so remediate, Landlord may, but without
obligation to do so, take any and all steps necessary to rectify the same and Tenant shall promptly
reimburse Landlord, upon request by Landlord, for all costs and expenses to Landlord of performing
investigation, clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so as to enable
Landlord to make reasonably equivalent economic use of the Premises after the satisfactory
completion of such work. Notwithstanding anything to the contrary contained in this Lease, Landlord
acknowledges and agrees that Tenant shall have the right to handle, use and store Hazardous
Materials on and about the Premises as part of and incidental to Tenant’s intended use of the
Premises as set forth in the Basic Lease Information, provided such Hazardous Materials are
handled, used and stored in compliance with all applicable Environmental Laws. The term “Hazardous
Materials” as used in the Lease shall mean any waste, pollutant, chemical, hazardous material,
hazardous substance, toxic substance, hazardous waste, special waste, solid waste (or any
constituent or decomposition product of any pollutant, materials or substance) regulated under any
Environmental Laws, including without limitation asbestos, petroleum or petroleum by-products,
radon gas, polychlorinated biphenyls, urea formaldehyde or toxic mold. The term “Environmental
Laws” shall mean all federal, state and local laws, statutes, regulations, rules, ordinances and
common law, and all judgments, decrees, orders, agreements, or permits, issued, promulgated,
approved or entered thereunder by any governmental authority relating to pollution or Hazardous
Materials or protection of human health or the environment.





     27.2 WASTEWATER SERVICES: Subject to the approval by the State of North Carolina of the
Landlord’s application for re-permitting of its wastewater treatment plant, Landlord agrees that
Landlord’s wastewater treatment system has the capacity and capability to receive and treat
Tenant’s wastewater in accordance with all applicable Environmental Laws, and at the rates
established in Schedule Q of this Lease. Landlord agrees to obtain required permits under all
applicable Environmental Laws for treatment and discharge of Tenant’s wastewater. Landlord agrees
to accept Tenant’s wastewater for treatment and to treat and discharge Tenant’s wastewater, all in
compliance with all applicable Environmental Laws and at
the rates established in Schedule Q of this Lease. Landlord warrants and agrees that it is the
owner and operator of the wastewater treatment facility and is the permit holder for the facility.
Landlord warrants and agrees that it is acting as an independent contractor for Tenant’s wastewater
treatment services. Landlord warrants and agrees that Landlord is solely responsible for the
wastewater treatment facility, for the property (including the subsurface) on which the wastewater
treatment facility sits, and for discharges from the wastewater treatment facility. Basic Lease
Information section “T” shall apply if the Landlord’s re-permitting application is finally denied.




     27.3 ENVIRONMENTAL INDEMNITY: In addition to Tenant’s obligations as set forth hereinabove,
Tenant agrees to, and shall, protect, indemnify, defend (with counsel reasonably acceptable to
Landlord) and hold Landlord and Landlord’s Indemnitees harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including, without limitation,
diminution in value of any portion of the Premises, damages for the loss of or restriction on the
use of rentable or usable space, and from any adverse impact of Landlord’s marketing of any space
within the Premises), suits, administrative proceedings and costs (including, but not limited to,
reasonable attorneys’ and consultant fees and court costs) arising at any time during or after the
Term of this Lease in connection with or related to, directly or indirectly, the use, presence,
transportation, storage, disposal, migration, removal, spill, release or discharge of Hazardous
Materials on, in or about any portion of the Premises as a result of, and to the extent caused by
the Tenant or Tenant’s Representatives. Neither the written consent of Landlord to the presence,
use or storage of Hazardous Materials in, on, under or about any portion of the Premises nor the
strict compliance by Tenant with all Environmental Laws shall excuse Tenant from its obligations of
indemnification pursuant hereto. Tenant shall not be relieved of its indemnification obligations
under the provisions of this Section 28.2 due to Landlord’s status as either an “owner” or
“operator” under any Environmental Laws.




In addition to Landlord’s obligations as set forth hereinabove, Landlord agrees to, and shall,
protect, indemnify, defend (with counsel reasonably acceptable to Landlord) and hold Tenant and
Tenant’s Representatives harmless from and against any and all claims, judgments, damages,
penalties, fines, liabilities, losses,



18









 





Lease
Agreement dated December 16, 2002.


suits, administrative proceedings and costs (including, but not limited to, reasonable attorneys’
and consultant fees and court costs) arising at any time during or after the Term of this Lease in
connection with or related to, directly or indirectly, the use, presence, transportation, storage,
disposal, migration, removal, spill, release or discharge of Hazardous Materials on, in or about
any portion of the Premises including the Lot or any portion thereof (i) that existed as of the
Commencement Date and / or (ii) that occurs at any time during or after the Commencement Date, if
caused by the Landlord or any of Landlord’s Representatives, agents, invitees, licensees,
contractors or any other person other than Tenant, including services provided by Landlord under
Section 27.2. of this Lease.




     27.4 SURVIVAL: Tenant’s and Landlord’s obligations and liabilities pursuant to the provisions
of this Section 27 shall survive the expiration or earlier termination of this Lease.




     27.5 TENANT’S EXCULPATION: The Landlord and the Tenant acknowledge the status of the soil and
groundwater as per Commencement Date, and which is established at least partly in the Tier 2 2001
report dated by March 2002. The intent of this Section 27.5. of the Lease is to exculpate Tenant
and Tenant’s Representatives from responsibility for any contamination for any environmental media,
that existed prior to the Commencement Date and any contamination that is caused by Landlord or any
other person or entity other than Tenant and Tenant’s Representatives after the Commencement Date.
Tenant shall not be liable for nor otherwise obligated to Landlord or any other person or entity
under any provision of the Lease with respect to (i) any claims (including without limitation,
third-party claims), remediation obligation, investigation obligation, liability, cause of action,
attorneys’ fees, consultants’ cost, expense or damage resulting from any Hazardous Material present
in, on or about the Premises to the extent not caused nor otherwise permitted, directly or
indirectly, by Tenant or Tenant’s Representatives; or (ii) the removal, investigation, monitoring
or remediation of any Hazardous Material present in, on or about the Premises caused by any source,
including third parties other than Tenant or any of Tenant’s Representatives, as a
result of or in connection with the acts or omissions of persons other than Tenant or Tenant’s
Representatives; provided, however, with respect only to Parcels “A,” “B1” and “B2” Tenant shall be
liable for and otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including without limitation,
attorneys’ and experts’ fees and costs) and losses to the extent (a) Tenant or Tenant’s
Representatives contributes to the presence of such Hazardous Materials or Tenant and/or Tenant’s
Representatives exacerbates the conditions caused by such Hazardous Materials, or (b) Tenant and/or
Tenant’s Representatives allows or permits persons over which Tenant or Tenant’s Representatives
has control and/or for which Tenant or Tenant’s Representatives are legally responsible for, to
cause such Hazardous Materials to be present in, on, under, through or about any portion of the
Premises or does not take all reasonably appropriate actions to prevent such persons over which
Tenant or Tenant’s Representatives has control and/or for which Tenant or any of Tenant’s
Representatives are legally responsible from causing the presence of Hazardous Materials in, on,
under, through or about any portion of the Premises in violation of Environmental Laws.



28. GENERAL PROVISIONS:




     28.1 TIME: Time is of the essence in this Lease and with respect to each and all of its
provisions in which performance is a factor.




     28.2 SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and
assigns of the parties hereto.




     28.3 LANDLORD’S PERSONAL LIABILITY: The liability of Landlord (which, for purposes of this
Lease, shall include Landlord and the owner of the Premises if other than Landlord and any and all
Landlord’s indemnitees) to Tenant for any default by Landlord under the terms of this Lease other
than termination of Lease not caused by default of Tenant shall be limited to the actual interest
of Landlord and its present or future partners or members in the Premises and all insurance and
condemnation proceeds received therefrom, and Tenant agrees to look solely to the Premises for
satisfaction of any liability and shall not look to other assets of Landlord nor seek any recourse
against the assets of the individual partners, members, directors, officers, shareholders, agents
or employees of Landlord (including without limitation, any property




19









 




Lease
Agreement dated December 16, 2002.


management company of Landlord); it being intended that Landlord and the individual partners,
members, directors, officers, shareholders, agents and employees of Landlord (including without
limitation, any property management company of Landlord) shall not be personally liable in any
manner whatsoever for any judgment or deficiency. The liability of Landlord under this Lease is
limited to its actual period of ownership of title to the Premises, and Landlord shall be
automatically released from further performance under this Lease upon transfer of Landlord’s
interest in the Premises or the Buildings, except for obligations or liabilities accruing during
Landlord’s actual period of ownership prior to the date of transfer of ownership.





     28.4 SEPARABILITY: Any provisions of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provisions hereof and such other
provision shall remain in full force and effect.




     28.5 CHOICE OF LAW: This Lease shall be governed by, and construed in accordance with, the
laws of North Carolina.




     28.6 ATTORNEYS’ FEES: In the event any dispute between the parties results in litigation or
other proceeding, the prevailing party shall be reimbursed by the party not prevailing for all
reasonable costs and expenses, including, without limitation, reasonable attorneys’ and experts’
fees and costs incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be included in and made a
part of the judgment recovered by the prevailing party, if any.



     28.7 ENTIRE AGREEMENT: This Lease (which includes the Basic Lease Information and the
Schedules and Attachment I) supersedes any prior agreements, representations, negotiations or
correspondence between the parties, and contains the entire agreement of the parties on matters
covered. No other agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.




     28.8 WARRANTY OF AUTHORITY: Each person executing this Lease on behalf of a party represents
and warrants that (1) such person is duly and validly authorized to do so on behalf of the entity
it purports to so bind, and (2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. Each party hereby warrants that this Lease is valid and
binding upon itself and enforceable against itself in accordance with its terms.




     28.9 NOTICES: Any and all notices and demands required or permitted to be given hereunder to
Landlord shall be in writing and shall be sent: (a) by United States mail, certified and postage
prepaid; or (b) solely for purposes associated with any legal proceeding involving or relating to
this Lease, by personal delivery; or (c) by overnight courier, addressed to Landlord at 4000 Monroe
Road, Charlotte, NC 28205. Note: address is the same for notices as it is for rental payments. Any
and all notices and demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage prepaid; or (ii) solely
for purposes associated with any legal proceeding involving or relating to this Lease, by personal
delivery; or (iii) by overnight courier, all of which shall be addressed to Tenant at the Premises.
Notice and/or demand shall be deemed given upon the earlier of actual receipt or the third day
following deposit in the United States mail.




     28.10 JOINT AND SEVERAL: If Landlord or Tenant consists of more than one person or entity, the
obligations of all such persons or entities shall be joint and several.




     28.11 COVENANTS AND CONDITIONS: Each provision to be performed by Tenant hereunder shall be
deemed to be both a covenant and a condition.




     28.12 WAIVER OF JURY TRIAL: The parties hereto shall and they hereby do waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto against the other on
any matters whatsoever arising out of or in any way related to this Lease, the relationship of
Landlord and Tenant,




20









 




Lease Agreement dated December 16, 2002.

Tenant’s use or occupancy of the Premises, the Buildings or the Lot, and/or any claim of injury,
loss or damage.




     28.13 COUNTERCLAIMS: In the event Landlord commences any proceedings for nonpayment of Base
Rent, Additional Rent, or any other sums or amounts due hereunder, Tenant shall not interpose any
counterclaim of whatever nature or description in any such proceedings, unless such counterclaim
must, as a matter of law, be joined with Landlord’s proceeding; provided, however, nothing
contained herein shall be deemed or construed as a waiver of the Tenant’s right to assert such
claims in any separate action brought by Tenant or the right to offset the amount of any final
judgment owed by Landlord to Tenant.




     28.14 MERGER: The voluntary or other surrender of this Lease by Tenant, the mutual termination
or cancellation hereof by Landlord and Tenant, or a termination of this Lease by Landlord for a
material default by Tenant hereunder, shall not work a merger, and, at the sole option of Landlord,
(i) shall terminate all or any existing subleases or subtenancies, or (ii) may operate at an
assignment to Landlord of any or all of such subleases or subtenancies. Landlord’s election of
either or both of the foregoing options shall be exercised by delivery by Landlord of written
notice thereof to Tenant and all known subtenants under any sublease.




     28.15. QUIET ENJOYMENT. Landlord covenants and agrees that Tenant, so long as Tenant is not in
default beyond all applicable notice and cure periods, shall lawfully, peaceably and quietly hold,
occupy and enjoy the Premises during the Term without hindrance, ejection or molestation. Landlord
covenants
and warrants that it is lawfully seized of the Premises and has good, right and lawful
authority to enter into this Lease for the full Term aforesaid, that the Premises are free and
clear of all encumbrances and any restrictions preventing Tenant’s use of the Premises as
contemplated herein, and that Landlord will put the Tenant in actual possession of the Premises on
the Commencement Date.



     28.16. RIGHT OF RECISSION. Tenant or Landlord may terminate this Lease by written notice to
the other without any further liability for each party. If Landlord is unable to obtain the WWTP
permits required for Tenant’s use of the Premises as contemplated by Tenant. This right of
termination shall be valid if the WWTP permits are finally denied by the government authorities.


29. SIGNS: All signs and graphics of every kind visible in or from public view or corridors or the
exterior of the Premises shall be subject to Landlord’s prior written approval and any applicable
governmental laws, ordinances, and regulations, which approval shall not be unreasonably withheld
or delayed. Tenant shall remove all such signs and graphics prior to the termination of this Lease.
Such installations and removals shall be made in a manner as to avoid damage or defacement of the
Premises; and Tenant shall repair any damage or defacement, including without limitation,
discoloration caused by such installation or removal. If Tenant fails to do so upon the expiration
or earlier termination of this Lease, Landlord shall have the right, at its option, to deduct from
the Security Deposit such sums as are reasonably necessary and actually expended to remove such
signs, including, but not limited to, the costs and expenses associated with any repairs
necessitated by such removal. Notwithstanding the foregoing, in no event shall any neon, flashing
or moving sign(s) or banners be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing as may be approved
in good condition and repair at all times.



30. REPRESENTATIONS OF TENANT: Tenant hereby represents to Landlord, for the express benefit of
Landlord, that Tenant has undertaken a complete and independent evaluation of the risks inherent in
the execution of this Lease and the operation of the Premises for the use permitted hereby, and
that, based upon said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further represents to Landlord, for
the express benefit of Landlord, that in entering into this Lease, Tenant has not relied upon any
statement fact promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise or representation
(whether express or implied, written or oral) made at any time to Tenant, which is not expressly
incorporated herein in writing, is hereby waived by Tenant.




21









 




Lease
Agreement dated December 16, 2002.

32. LANDLORD’S ABILITY TO PERFORM TENANT’S UNPERFORMED OBLIGATIONS: Notwithstanding anything to the
contrary contained in this Lease, if Tenant shall fail to perform any of the terms, provisions,
covenants or conditions to be performed or complied with by Tenant pursuant to this Lease, after
Landlord’s notice and beyond applicable cure periods as provided in Section 18 herein, and/or if
the failure of Tenant relates to a matter which in Landlord’s judgment reasonably exercised is of
an emergency nature and such failure shall remain uncured for a period of time commensurate with
such emergency, then Landlord may, at Landlord’s option without any obligation to do so, and in its
sole but reasonable discretion as to the necessity therefor, perform any such term, provision,
covenant or condition, or make any such payment and Landlord by reason of so doing shall not be
liable or responsible for any loss or damage thereby sustained by Tenant or anyone holding under or
through Tenant. If Landlord so performs any of Tenant’s obligations hereunder, the full amount of
the cost and expense entailed or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon demand,
as Additional Rent, the full amount thereof with interest thereon from the date of payment at the
greater of (i) ten percent (10%) per annum, or (ii) the highest rate permitted by applicable law.





     IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease Date referenced on
Page 1 of this Lease.




	 	 	 	 	 	 	 
	LANDLORD: CLARIANT CORPORATION	 	 	 	 
	 
	 

	 	/s/ C Barnard
	 	12 -16-2002	 	 
	 	 	 	 	 
	By:

	 	Signature
	 	Date	 	 
	Title:

	 	Sr. V.P.—Legal	 	 	 	 
	 
	 	 	 	 	 	 
	TENANT: SCR-TECH LLC	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Brigitte Hartenstein
	 	12 -16-2002	 	 
	 	 	 	 	 
	By:

	 	Signature
	 	Date	 	 
	Title:

	 	CFO	 	 	 	 






22









 




Lease
Agreement dated December 16, 2002.


	 	 	 
	 
	 	 
	First Amendment to Lease Clariant / SCR-Tech, LLC

	 	2/18/2004
	 
	 	 





FIRST AMENDMENT TO LEASE AGREEMENT




     THIS FIRST AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered into
effective the 1st day of January 1, 2004 (“Effective Date”) by and between
Clariant Corporation (“Landlord”), with an address of 4000 Monroe Road, Charlotte, NC
28205, Attention: Christopher S. Barnard, and SCR-Tech, LLC (“Tenant”), with an address of
11701 Mt. Holly Road, Charlotte, NC 28214, Attention: Brigitte Hartenstein.




Recitals




     A. Landlord is the owner of those certain buildings as per Schedule F of the Lease Agreement
dated 12/16/2002 (the “Lease”), located at 11701 Mt. Holly Road, Charlotte, North Carolina.




     B. Tenant wishes to lease an additional building (Parcel “C2” — Building # 51,
“Office”) as an office and to relinquish its rights to its entire offices in Building # 37.
Tenant agrees to lease the Office in an as-is condition including its current furniture and
equipment. Landlord agrees to transfer title and ownership of the equipment at no cost to Tenant,
free of all liens and encumbrances and makes no representations as to suitability, fitness or
condition of the furniture and equipment (“Transferred Office Property”).




     C. Referring to the Lease Schedule F — Premises; Tenant is occupying 552 square feet in
Building # 34 instead of 400 square feet in Building # 11, which is Parcel “D”.




     NOW, THEREFORE, the mutual promises herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:


1.
Additional Leased Space. Notwithstanding anything to the contrary in the
Lease, Landlord hereby agrees to lease to Tenant and Tenant’s agents, employees, and
representatives Parcel C2 — Building # 51 (the “Office”) and Tenant hereby surrenders all
of its interest in Parcel C — Building # 37 (the “Surrendered Office”). All references to
the Surrendered Office in the Lease shall be considered deleted and replaced with the Office. The
Office shall be used, pursuant to the Lease, for general office and clerical use. In addition,
Landlord hereby consents to all work, demolition and construction performed in, upon and about the
Office prior to the Effective Date and up to the date of Landlord’s execution of this Amendment.
Any further work, demolition and construction performed in, upon and about the Office shall be
performed in accordance with the terms of the Lease.


2.
Surrender of Surrendered Office. Landlord hereby agrees to the
surrender of the Surrendered Office in its “as-is” condition as of the date hereof, and agrees that
Tenant shall have no further liability or obligation with regard to the surrender of the
Surrendered Office.




 









 




Lease
Agreement dated December 16, 2002.




     3. Expense Adjustment: In consideration of the surrender of the Surrendered Office and the
lease of the Office, Schedule L and Schedule O shall be adjusted as follows:





		A)	 	Schedule L — Base Rent. As of the Effective Date, the existing
reference to Base Rent for Parcels C&D in Schedule L shall be deleted
and replaced with the following:
		 
		 	 	Parcels C&D — $11.00/sf-yr, ($ 38,522 per year or $3210.16 per month) based on 3502 sq.
ft (reflecting 552 sq. ft of laboratory space in Parcel D and 2950 square feet of space
in Parcel C-2, Building 5), subject to the terms of paragraph 4 of the Amendment.
		 
		B)	 	Schedule O — Site Services. The Site Service Expenses for the Office
shall be calculated as follows:
		 
		 	 	2.950 sqft. x US$ 1.67 = US $ 4,926.50 per year subject to the terms of paragraph 4
below.




4. Notwithstanding anything to the contrary contained herein, in consideration of the amounts spent
by Tenant on the renovation of the Office, Landlord hereby agrees that until January 1, 2005,
Tenant shall only pay Base Rent and Site Service Expenses on 1435 square feet of the Office.


5. Based on the foregoing, as of the Effective Date, Schedule F of the Lease is hereby deleted in
its entirety and replaced with the following:


Schedule F Premises (See also attachment 2-Plot Plan as modified by the First Amendment to Lease)




Parcel “A”-Building 48 (28,800 sf) — Production

Parcel “Bl”-Building 21A (13,280 sf) — Warehouse

Parcel “B2”-Building 21 (20,477 sf) — Warehouse

Parcel “C”-Building 51 (2,950 sf) — Office

Parcel “D”- Building 11- (552 sf) — Laboratory



6. Term. This Amendment shall commence effective the Effective Date.


7. Bill of Sale. Landlord agrees to execute a bill of sale in form attached hereto as
Exhibit A to acknowledge the transfer of the Transferred Office Property to Tenant.


All other terms and conditions of the Lease remain unchanged.




[Signatures continued on next page]




2









 




Lease
Agreement dated December 16, 2002.



			
	 	 	 
	First Amendment to Lease Clariant / SCR-Tech, LLC
	 	2/18/2004
	 	 	 





     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment on this 18th day of
February, 2004.




	 	 	 	 	 	 	 
	 	 	Landlord:	 	 
	 
	 	 	 	 	 	 
	 	 	CLARIANT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Heiner Meier	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:
	 	Sr. V.P. & C.F.O	 	 
	 

	 	Print	 	 	 	 
	 

	 	Name:
	 	Heiner Meier	 	 
	 

	 	Date:
	 	02-18-04	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	[SEAL]	 	 
	 
	 	 	 	 	 	 
	 	 	Tenant	 	 
	 
	 	 	 	 	 	 
	 	 	SCR-TECH, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brigitte Hartenstein	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:
	 	CFO and VP Contract Management	 	 
	 

	 	Print	 	 	 	 
	 

	 	Name:
	 	Brigitte Hartenstein	 	 
	 

	 	Date:
	 	02-18-04