Lease Agreement

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

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 1 ^st day of the first optional Renewal Term; rent in effect on June 30, 2017 will be the new base rent as of the 1 ^st day of the second optional Renewal Term)

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

Schedule M Adjustments to Base Rent

Initial Term: CPI-based adjustments of the Base Rent after 1 ^st 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 1 ^st , 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

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 1 ^st 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 4 ^th 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.

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. H 2 O:		metered $1.75/1000 gal.
(d) Waste H 2 O:		$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.

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

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;

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

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,

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,

Lease 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.

Lease 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) license