HomeMy WebLinkAboutNCG050110_Name-Owner Change Supporting Info_2018061945316027;6
ASSIGNMENT AND ASSUMPTION OF LEASE
This Assignment and Assumption Lease (this “Assignment”) is entered into as of the
_____ day of _______________, 2018 (the “Effective Date”), by and between LLFLEX, LLC,
an Illinois limited liability company, successor by merger to Oracle Flexible Packaging, Inc., a
North Carolina corporation (“Assignor”) and TRI-SEAL OPCO, LLC, a Delaware limited
liability company (“Assignee”) with reference to the following facts:
A.Assignor is “Lessee” under that certain Lease Agreement dated July 3, 2008 by and
between Assignor and UB II (ORACLE), LLC, a Delaware limited liability company
(“Landlord”) (the “Original Lease”), as amended by that certain First Amendment to Lease dated
March 1, 2010 (the “First Amendment”), that certain Second Amendment to Lease dated May
24, 2010 (the “Second Amendment”), that certain Third Amendment to Lease dated August 1,
2012 (the “Third Amendment”), that certain Fourth Amendment to Lease dated October 30, 2012
(the “Fourth Amendment”, together with the First Amendment, Second Amendment, Third
Amendment and Original Lease hereinafter collectively referred to as the “Lease”), a true and
correct copy of which is attached hereto as Exhibit A, pertaining to that certain real property
located at 220 Polo Road, Winston-Salem, North Carolina 27105, all as more particularly
described in the Lease (the “Premises”);
B.Assignor now desires, pursuant to the terms and provisions hereinafter set forth, to
assign all of its rights, title, interests and obligations under the Lease to Assignee; and
C.Assignee desires to assume and be bound by the terms of the Lease.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1.Recitals. The recitals set forth above are incorporated herein by this reference with
the same force and effect as if fully set forth hereinafter.
2.Assignment. Assignor hereby assigns, sets over and transfers to Assignee all of its
right, title and interest in and to the Lease effective as of the Effective Date.
3.Acceptance. Assignee hereby accepts this Assignment and agrees to assume and
be bound by all of the terms and provisions of the Lease, a copy of which Assignee acknowledges
it has received and reviewed, respecting the duties and obligations of the “Lessee” thereunder
whenever arising, and Assignee covenants and agrees to timely perform all duties and satisfy all
obligations of “Lessee” under the Lease.
4.Security Deposit. Assignor hereby agrees that the security deposit currently held
by Landlord under the terms of the Lease shall now be deemed to be Assignee’s security deposit.
Assignor hereby relinquishes any and all rights it has to such security deposit.
5.Authority. Assignor and Assignee each hereby represents and warrants that it has
the full right, legal power and actual authority to enter into this Assignment and undertake the
18th June
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obligations hereunder and the person signing on behalf of each party has the authority to bind such
party under the terms of this Assignment.
6.Binding Effect. This Assignment shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective heirs, successors and permitted assigns.
7.Entire Agreement. The parties hereto acknowledge and confirm that the terms,
covenants and conditions of the Lease remain unchanged and in full force and effect, unmodified
except in accordance with this Assignment. This Assignment sets forth the entire agreement
between the parties with respect to the subject matter set forth herein and may not be modified,
amended, or altered except by subsequent written agreement among the parties. A determination
that any provision of this Assignment is unenforceable or invalid shall not affect the enforceability
or validity of any other provision hereof. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. A facsimile or .pdf copy of this Assignment shall be deemed an
original for all relevant purposes. This Assignment will be governed by and construed under the
laws of the State of North Carolina without regard to conflicts-of-laws principles that would
require the application of any other law.
[Signatures on following page]
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EXHIBIT A
LEASE
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LEASE AGREEMENT
between
NL VENTURES VI ORACLE, L.L.C.
as Lessor
and
ORACLE FLEXIBLE PACKAGING, INC.
as Lessee
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TABLE OF CONTENTS
Page
ARTICLE I
Section 1.01 Lease of Premises; Title and Condition 1
Section 1.02 Use 2
Section 1.03 Term 2
Section 1.04 Rent 2
ARTICLE II
Section 2.01 Maintenance and Repair 3
Section 2.02 Alterations, Replacements and Additions 4
ARTICLE III
Section 3.01 Severable Property 5
Section 3.02 Removal 5
Section 3.03 License of Incidental Rights 5
ARTICLE IV
Section 4.01 Lessee's Assignment and Subletting 5
Section 4.02 Transfer by Lessor 6
Section 4.03 Assignment/Subletting Exceptions 6
ARTICLE V
Section 5.01 Net Lease 8
Section 5.02 Taxes and Assessments; Compliance With Law 9
Section 5.03 Liens 10
Section 5.04 Indemnification 11
Section 5.05 Permitted Contests 12
Section 5.06 Environmental Compliance 13
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VI
Section 6.01 Condemnation and Casualty 16
Section 6.02 Insurance 18
ARTICLE VII
Section 7.01 Conditional Limitations; Default Provisions 20
Section 7.02 Bankruptcy or Insolvency 24
Section 7.03 Additional Rights of Lessor 24
ARTICLE VIII
Section 8.01 Notices and Other Instruments 25
Section 8.02 Estoppel Certificates; Financial Information 26
ARTICLE IX
Section 9.01 No Merger.. 28
Section 9.02 Surrender 28
Section 9.03 Time 28
Section 9.04 Separability; Binding Effect; Governing Law 28
Section 9.05 Table of Contents and Headings; Internal References 28
Section 9.06 Counterparts 29
Section 9.07 Lessor's Liability 29
Section 9.08 Amendments and Modifications 29
Section 9.09 Additional Rent 29
Section 9.10 Consent of Lessor 29
Section 9.11 Quiet Enjoyment 29
Section 9.12 Holding Over 30
Section 9.13 Compliance with Terrorism Laws 30
Section 9.14 Financing and Subordination, Non-Disturbance and Attornment 30
Section 9.15 Disclaimer of Purchase Rights 31
Section 9.16 Security Deposit 31
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TABLE OF CONTENTS
(continued)
Page
Section 9.17 Guaranty 32
Section 9.18 Short Form Memorandum of Lease 32
Section 9.19 Separation of Lease 33
Section 9.20 Brokers 33
Section 9.21 Waiver of Jury Trial 33
Section 9.22 No Partnership 33
Section 9,23 No Construction Against Drafter 33
Section 9.24 Security Interest and Security Agreement 33
EXHIBIT A LEGAL DESCRIPTION
EXHIBIT B PERMITTED EXCEPTIONS
EXHIBIT C BASIC RENT SCHEDULE
EXHIBIT D SEVERABLE PROPERTY
EXHIBIT E GUARANTY OF LEASE [FORM]
EXHIBIT F REPAIRS
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") dated as of v3. , 2008, is
made and entered into between NL VENTURES VI ORACLE, L.L.C., Delaware limited
liability company ("Lessor"), and ORACLE FLEXIBLE PACKAGING, INC., a North
Carolina corporation ("Lessee").
ARTICLE I
Section 1.01 Lease of Premises; Title and Condition. Upon and subject to the terms
and conditions herein specified, Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the premises (the "Premises") consisting of the following:
(a) those parcels of land more particularly described in Exhibit A attached hereto and
made a part hereof for all purposes having the following address: 220 Polo Road, Winston-
Salem, North Carolina 27105, together with all of Lessor's right, title and interest, if any, in and
to all easements, rights-of-way, appurtenances and other rights and benefits associated with such
parcel(s) of land and to all public or private streets, roads, avenues, alleys or pass ways, open or
proposed, on or abutting such parcel(s) of land (collectively, the "Land"); and
(b) all of the cranes, if any, buildings, structures, fixtures, facilities, installations and
other improvements of every kind and description now or hereafter in, on, over and under the
Land and all plumbing, gas, electrical, ventilating, lighting and other utility systems, ducts, hot
water heaters, oil burners, domestic water systems, elevators, escalators, canopies, air
conditioning systems and all other building systems and fixtures attached to or comprising a part
of the buildings, including, but not limited to, all other building systems and fixtures necessary to
the ownership, use, operation, repair and maintenance of the buildings, structures, fixtures,
facilities, installations and other improvements of every kind, but excluding all Severable
Property (as defined in Section 3.01 hereof) (collectively, the "Improvements").
The Premises are leased to Lessee in their present condition without representation or
warranty by Lessor and subject to the rights of parties in possession, to the existing state of title,
to all applicable Legal Requirements (as defined in Section 5.02(b)) now or hereafter in effect
and to liens and encumbrances listed in Exhibit B attached hereto and made a part hereof
(collectively, "Permitted Exceptions") for all purposes. Lessee has examined the Premises and
title to the Premises and has found all of the same satisfactory for all purposes. LESSOR
LEASES AND WILL LEASE AND LESSEE TAKES AND WILL TAKE THE PREMISES
"AS IS", "WHERE-IS" and "WITH ALL FAULTS". LESSEE ACKNOWLEDGES THAT
LESSOR (WHETHER ACTING AS LESSOR HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE NOR SHALL LESSOR BE DEEMED TO HAVE MADE,
ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF THE PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS
TO (1) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR
PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii)
THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LESSOR'S TITLE
THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION,
(viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii)
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DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY
OR (xvi) COMPLIANCE OF THE PREMISES WITH ANY LAW; AND ALL RISKS
INCIDENT THERETO ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES
THAT THE PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS AND
THAT THE PREMISES HAVE BEEN INSPECTED BY LESSEE AND ARE
SATISFACTORY TO LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN
ANY OF THE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LESSOR
SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO
OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). The provisions of this paragraph have been negotiated and are intended
to be a complete exclusion and negation of any warranty by Lessor, express or implied, with
respect to any of the Premises, arising pursuant to the Uniform Commercial Code or any other
law now or hereafter in effect or arising otherwise.
Section 1.02 Use. Lessee may use the Premises for any purpose allowed under current
zoning requirements and for no other purpose. Lessee shall not knowingly use or occupy or
permit any of the Premises to be used or occupied, nor knowingly do or permit anything to be
done in or on any of the Premises, in a manner which would (i) make void or voidable or cause
any insurer to cancel any insurance required by this Lease, or make it difficult or impossible to
obtain any such insurance at commercially reasonable rates, (ii) make void or voidable, cancel
or cause to be canceled or release any warranty, guaranty or indemnity running to the benefit of
the Premises or Lessor, (iii) cause structural injury to any of the Improvements, (iv) constitute a
public or private nuisance or waste, or (v) violate any Legal Requirements (as defined below).
Section 1.03 Term. This Lease shall be for an Interim Term, if any, beginning as of
the date hereof and ending at 11:59 p.m. on the last day of the current month including the date
hereof and a Primary Term of eighteen (18) years beginning on August 1, 2008, and ending at
11:59 p.m. on July 31, 2026. The time period during which this Lease shall actually be in
effect, including the Interim Term and the Primary Term, as any of the same may be terminated
prior to their scheduled expiration pursuant to the provisions hereof, is referred to herein as the
"Term." The term "Lease Year" shall mean, with respect to the first Lease Year, the period
commencing on the date hereof and ending at 11:59 p.m. on July 31, 2009, and each succeeding
twelve (12) month period during the Term.
Section 1.04 Rent. In consideration of this Lease, during the Term, Lessee shall pay to
Lessor the amounts set forth in Exhibit C as annual basic rent for the Premises ("Basic Rent").
Lessee shall pay Basic Rent and all other sums payable to Lessor hereunder to Lessor (or, upon
Lessor's request, to any mortgagee(s) or beneficiary(ies) identified by Lessor (whether one or
more, the "Mortgagee") under any mortgages, deeds of trust or similar security instruments
creating a lien on the interest of Lessor in the Premises (whether one or more, the "Mortgage"))
by wire transfer, in immediately available funds, as follows:
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Bank: LaSalle Bank, Chicago, Illinois
ABA Routing #: 071 000 505
Account Number: 5801029140
Account Name: NL Ventures VI LP Rent Account
Bank Contact: Mindy Christenson @ (312) 992-2862,
or at such other address or to such other person as Lessor from time to time may designate.
Lessor shall give Lessee not less than fifteen (15) days prior written notice of any change in the
address to which such payments are to be made. If the party entitled to receive Basic Rent or
such party's address shall change, Lessee may, until receipt of notice of such change from the
party entitled to receive Basic Rent or other sums payable hereunder immediately preceding such
change, continue to pay Basic Rent and other sums payable hereunder to the party to which, and
in the manner in which, the preceding installment of Basic Rent or other sums payable
hereunder, as the case may be, was paid. Such Basic Rent shall be paid in equal monthly
installments in advance on the first day of each month, except for any Basic Rent due for the
rental of the Premises during the Interim Term which shall be payable in advance on or before
the date hereof. Any rental payment made in respect of a period which is less than one month
shall be prorated by multiplying the then applicable monthly Basic Rent by a fraction the
numerator of which is the number of days in such month with respect to which rent is being paid
and the denominator of which is the total number of days in such month. Lessee shall perform
all its obligations under this Lease at its sole cost and expense, and shall pay all Basic Rent, and
other sums payable hereunder when due and payable, without notice or demand.
ARTICLE II
Section 2.01 Maintenance and Repair.
(a) Lessee acknowledges that it has received the Premises in the condition disclosed
in the Property Condition Report prepared by LandAmerica Assessment Corporation and dated
April 30, 2008 (the "Property Condition Report"). Lessee, at its own expense, agrees to repair or
cause to be repaired all of the necessary repairs cited in the Property Condition Report, as shown
on Exhibit F attached hereto, within the time period shown thereon. On the date hereof, Lessee
shall deposit with Lessor $114,000 as an "Immediate Repair Escrow" to be held by Lessor until
Lessee completes the repairs shown as items 1 and 3 on Exhibit F (the "Immediate Repairs").
Lessee shall be entitled to receive funds from the Immediate Repair Escrow, but only against
(i) certificates of Lessee delivered to Lessor from time to time but no more often than monthly as
the Immediate Repairs progress, each such certificate describing the work for which Lessee is
requesting payment and the cost incurred by Lessee in connection therewith and stating that
Lessee has not theretofore received payment for such work and (ii) such additional
documentation or conditions as Lessor may reasonably require, including, but not limited to,
copies of all contracts and subcontracts relating to repairs, architects' or contractor's
certifications, and lien waivers or releases. Any Immediate Repair Escrow funds remaining after
final payment has been made for the Immediate Repairs shall be paid to Lessee. Any new roof
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shall have a transferable warranty customary for the roofing industry with a minimum useful life
of twenty (20) years.
(b) Lessee, at its own expense, will maintain all parts of the Premises in good repair,
appearance and condition and will take all action and will make all structural and nonstructural,
foreseen and unforeseen and ordinary and extraordinary changes and repairs which may be
required to keep all parts of the Premises in good repair and condition (including, but not limited
to, all painting, glass, utilities, conduits, fixtures and equipment, foundation, roof, exterior walls,
heating and air conditioning systems, wiring, plumbing, sprinkler systems and other utilities, and
all paving, sidewalks, roads, parking areas, curbs and gutters and fences). Lessor may retain an
independent consultant to conduct inspections of the roof and the heating and air conditioning
systems of the Premises and to provide Lessee and Lessor with a written report of its findings.
Lessee shall promptly cause a licensed contractor to perform any necessary repairs or
maintenance measures reflected in such report. Lessor, its contractors, subcontractors, servants,
employees and agents, shall have the right to enter upon the Premises with prior notice (except in
the event of an emergency, in which case no notice shall be required) to inspect same to ensure
that all parts of the Premises are maintained in good repair and condition, and Lessee shall not be
entitled to any abatement or reduction in rent by reason thereof. Lessor shall not be required to
maintain, repair or rebuild all or any part of the Premises. Lessee waives the right to require
Lessor to maintain, repair or rebuild all or any part of the Premises or make repairs at the
expense of Lessor pursuant to any Legal Requirements, agreement, contract, covenant, condition
or restrictions at any time.
(c) If all or any part of the Improvements shall encroach upon any property, street or
right-of-way adjoining or adjacent to the Premises, or shall violate the agreements or conditions
affecting the Premises or any part thereof, or shall hinder, obstruct or impair any easement or
right-of-way to which the Premises are subject, or any improvement located on an adjoining or
adjacent property to the Premises shall encroach onto the Premises, then, promptly after written
request of Lessor (unless such encroaclunent, violation, hindrance, obstruction or impairment is
a Permitted Exception) or of any person so affected, Lessee shall, at its expense, either (i) obtain
valid and effective waivers or settlements of all claims, liabilities and damages resulting
therefrom or (ii) if Lessor consents thereto, make such changes, including alteration or removal,
to the Improvements and take such other action as shall be necessary to remove or eliminate such
encroachments, violations, hindrances, obstructions or impairments. To the extent any easements
are, in Lessor's good faith judgment, necessary for Lessee's use and occupancy of the Premises
as contemplated by this Lease, upon Lessee's written request, Lessor will execute such
easements.
Section 2.02 Alterations, Replacements and Additions. Lessee may, at its expense,
make additions to and alterations of the Improvements, and construct additional Improvements,
provided that (i) the fair market value, the utility, the square footage or the useful life of the
Premises shall not be lessened thereby, (ii) such work shall be expeditiously completed in a
good and workmanlike manner and in compliance with all applicable Legal Requirements and
the requirements of all insurance policies required to be maintained by Lessee hereunder,
(iii) no structural alterations shall be made to the Improvements or structural demolitions
conducted in connection therewith unless Lessee shall have obtained Lessor's consent and
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furnished Lessor with such surety bonds or other security acceptable to Lessor as shall be
reasonably acceptable to Lessor (but in no event greater than the cost of such alterations or
demolitions), (iv) no additions, replacements or alterations (other than cosmetic, interior or
nonstructural alterations) which cost in excess of $100,000 shall be made unless prior written
consent from Lessor and Mortgagee shall have been obtained, and (v) no Event of Default
exists. Cosmetic, interior or 'nonstructural alterations (including demolition or construction of
interior demising walls that are non-structural and non load-bearing) that cost $100,000 or less
shall not require prior written consent from Lessor or Mortgagee. All additions and alterations
of the Premises, without consideration by Lessor, shall be and remain part of the Premises (not
subject to removal upon termination) and the property of Lessor and shall be subject to this
Lease. To the extent that Lessor shall fail to respond to any request for consent by Lessee
pursuant to this Section 2.02 within fifteen (15) days after receipt of such request, Lessee may
make a second request for consent. if such second request states on its face that the consent of
Lessor will be deemed given if not responded to within fifteen (15) days after receipt of such
second request, Lessor's consent will be deemed given fifteen (15) days after Lessor receives
such second request.
ARTICLE III
Section 3.01 Severable Property. Lessee may, at its expense, install, assemble or
place on the Premises and remove and substitute any severable property used or useful in
Lessee's business, all as more particularly described in Exhibit D attached hereto and made a
part hereof for all purposes (collectively, the "Severable Property"). Upon the written request
of Lessee, Lessor will subordinate any of its claims or interests in the Severable Property to the
lienholders or lessors of such Severable Property.
Section 3.02 Removal. So long as no Event of Default exists, Lessee may remove the
Severable Property at any time during the Term. Any of Lessee's Severable Property not
removed by Lessee prior to the expiration of this Lease or thirty (30) days after an earlier
termination shall be considered abandoned by Lessee and may be appropriated, sold, destroyed
or otherwise disposed of by Lessor without obligation to account therefor. Lessee will repair at
its expense all damage to the Premises necessarily caused by the removal of Lessee's Severable
Property, whether effected by Lessee or by Lessor.
Section 3.03 License of Incidental Rights. During the Term, Lessor hereby grants a
license to Lessee for the use of the "Incidental Rights," "Plans" and "Property Agreements"
that were conveyed to Lessor by and as defined in that certain Bill of Sale and Assignment of
Incidental Rights and Plans of even date herewith.
ARTICLE IV
Section 4.01 Lessee's Assignment and Subletting. Lessee may, for its own account,
assign this Lease or sublet the use of all or any part of the Premises for the Term of this Lease
so long as no Event of Default shall exist hereunder and Lessee shall have obtained Lessor's
and, if Mortgagee shall require, such Mortgagee's prior written consent to such assignment or
sublease. Lessor's consent shall be granted or denied in Lessor's commercially reasonable
discretion as set forth below. Any transfer of all or substantially all of the assets or stock of
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Lessee, any merger of Lessee into another entity, or any transfer occurring by operation of law
shall be deemed to constitute an assignment by Lessee of its interest hereunder for the purposes
hereof. Lessor's determination as to whether or not to consent to any proposed assignment or
sublease will be made in Lessor's commercially reasonable discretion taking into account,
among other factors, the following: (i) the business reputation and credit-worthiness of the
proposed subtenant or assignee, (ii) the intended use of the Premises by the proposed subtenant
or assignee, (iii) the nature of the business conducted by such subtenant or assignee and
whether such business would be deleterious to the condition or reputation of the Premises or
Lessor, (iv) the estimated pedestrian and vehicular traffic in and about the Premises that would
be generated by the proposed subtenant or assignee, and (v) whether the proposed subtenant or
assignee is a department, representative, agency or instrumentality of any governmental body,
foreign or domestic. Each such assignment or sublease shall expressly be made subject to the
provisions hereof. No such assignment or sublease shall modify or limit any right or power of
Lessor hereunder or affect or reduce any obligation of Lessee hereunder, and all such
obligations shall be those of Lessee and shall continue in full effect as obligations of a principal
and not of a guarantor or surety, as though no subletting or assignment had been made, such
liability of the Lessee named herein to continue notwithstanding any subsequent modifications
or amendments of this Lease; provided, however, that (other than with respect to any
modifications required by law or on account of bankruptcy or insolvency) if any modification
or amendment is made without the consent of Lessee named herein, such modification or
amendment shall be ineffective as against Lessee named herein to the extent, and only to the
extent, that the same shall increase the obligations of Lessee, it being expressly agreed that
Lessee named herein shall remain liable to the full extent of this Lease as if such modification
had not been made. Neither this Lease nor the Term hereby demised shall be mortgaged by
Lessee, nor shall Lessee mortgage or pledge its interest in any sublease of the Premises or the
rentals payable thereunder. Any sublease made otherwise than as expressly permitted by this
Section 4.01 and any assignment of Lessee's interest hereunder made otherwise than as
expressly permitted by this Section 4.01 shall be void. Lessee shall, within twenty (20) days
after the execution of any assignment or sublease, deliver a conformed copy thereof to Lessor.
Section 4.02 Transfer by Lessor. Lessor shall be free to transfer its fee interest in the
Premises or any part thereof or interest therein, and any assignee shall be bound by the terms
and provisions of this Lease. Any such transfer shall relieve the transferor of all liability and
obligation hereunder (to the extent of the interest transferred) accruing after the date of the
transfer and any assignee shall be bound by the terms and provisions of this Lease.
Section 4.03 Assignment/Subletting Exceptions. Notwithstanding the provisions of
Section 4.01, Lessee shall have the right to assign its interest in this Lease or sublet all or any
portion of the Premises at any time without the consent of Lessor or Mortgagee to (i) the
surviving entity of any merger or consolidation between Lessee and its parent, (ii) any Affiliate
of Lessee, or (iii) to any person or entity who purchases substantially all of the assets or stock
of Lessee, so long as any proposed assignee or sublessee has a tangible net worth equal to or
greater than the greater of (i) the tangible net worth of Lessee at such time, or (ii)
$20,000,000.00, as shown on such prospective assignee's or sublessee's balance sheet prepared
in accordance with GAAP within three (3) months prior to such assignment or sublease.
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The exceptions afforded Lessee above in this Section shall be conditioned on the
following:
(a) Lessee is not then in default beyond applicable notice and cure periods hereunder;
(b) Lessor is provided a copy of such assignment or sublease;
(c) Any subletting or assignment of the Premises shall be subject to the terms of this
Lease and, in the case of a subletting, Lessee shall remain liable hereunder, as same may be
amended from time to time, but, in the case of an assignment under this Section 4.03, Lessee
shall remain liable hereunder unless the proposed assignee has a tangible net worth equal to or
greater than $20,000,000.00, as shown on such prospective assignee's balance sheet prepared in
accordance with GAAP within three (3) months prior to such assignment, and in which case
Lessee shall be released from any liability accruing from and after the effective date of such
assignment;
(d) Each sublease permitted under this Section shall contain provisions to the effect
that (i) such sublease is only for actual use and occupancy by the sublessee; (ii) such sublease is
subject and subordinate to all of the terms, covenants and conditions of this Lease and to all of
the rights of Lessor hereunder; (iii) that any security deposit paid by sublessee shall be pledged
to Lessor subject to the terms of the sublease and subject to Lessee's right to apply the security
deposit in accordance with the sublease; and (iv) in the event this Lease shall terminate before
the expiration of such sublease, the sublessee thereunder will, at Lessor's option, attorn to Lessor
and waive any rights the sublessee may have to terminate the sublease or to surrender possession
thereunder, as a result of the termination of this Lease;
(e) Lessee agrees to pay, or to cause the assignee or sublessee, as applicable, to pay,
on behalf of Lessor any and all reasonable out-of-pocket costs of Lessor, including reasonable
attorneys' fees paid or payable to outside counsel, occasioned by such subletting or assignment.
Further, Lessee agrees that Lessor shall in no event be liable for any leasing commissions, finish-
out costs, rent abatements or other costs, fees or expenses incurred by Lessee in subleasing or
assigning or seeking to sublease or assign its leasehold interest in the Premises, and Lessee
agrees to indemnify, defend and hold harmless Lessor and its partners, and their respective
officers, directors, shareholders, agents, employees and representatives from, against and with
respect to any and all such commissions, costs, fees and expenses; and
(0 Such assignee agrees in writing to honor and perform all of the obligations of
Lessee hereunder from and after the date of such assignment.
For the purposes of this Section, "Affiliate" shall be defined as with respect to any
Person, any other Person that, directly or indirectly, controls or is controlled by or is under
common control with such Person, and shall include the spouse of any natural person, with the
term "control" and any derivatives thereof meaning the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract, or otherwise, "Person" shall mean an
individual, partnership, association, corporation or other entity.
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ARTICLE V
Section 5.01 Net Lease.
(a) It is expressly understood and agreed by and between the parties that this Lease is
an absolute net lease, and the Basic Rent and all other sums payable hereunder to or on behalf of
Lessor shall be paid without notice or demand and without setoff, counterclaim, abatement,
suspension, deduction or defense.
(b) Except as otherwise expressly provided in this Lease, this Lease shall not
terminate, nor shall Lessee have any right to terminate this Lease or be entitled to the abatement
of any rent or any reduction thereof, nor shall the obligations hereunder of Lessee be otherwise
affected, by reason of any damage to or destruction of all or any part of the Premises from
whatever cause, the taking of the Premises or any portion thereof by condemnation or otherwise,
the prohibition, limitation or restriction of Lessee's use of the Premises, any default on the part
of Lessor, any latent or other defect in any of the Premises, the breach of any warranty of any
seller or manufacturer of any of the Improvements or Severable Property, any violation of any
provision of this Lease by Lessor, the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or winding-up of, or other proceeding affecting Lessor, the
exercise of any remedy, including foreclosure, under any mortgage or collateral assignment, any
action with respect to this Lease (including the disaffirmance hereof) which may be taken by
Lessor, any trustee, receiver or liquidator of Lessor or any court under the Federal Bankruptcy
Code or otherwise, and market or economic changes, or interference with such use by any
private person or corporation, or by reason of any eviction by paramount title resulting by a
claim from Lessor's predecessor in title, or for any other cause whether similar or dissimilar to
the foregoing, any present or future law to the contrary notwithstanding, it being the intention of
the parties hereto that the rent and all other charges payable hereunder to or on behalf of Lessor
shall continue to be payable in all events and the obligations of Lessee hereunder shall continue
unaffected, unless the requirement to pay or perform the same shall be terminated pursuant to an
express provision of this Lease. Nothing contained in this Section 5.01 shall be deemed a waiver
by Lessee of any rights that it may have to bring a separate action with respect to any default by
Lessor hereunder or under any other agreement.
(c) The obligations of Lessee hereunder shall be separate and independent covenants
and agreements. Lessee covenants and agrees that it will remain obligated under this Lease in
accordance with its terms, and that Lessee will not take any action to terminate, rescind or avoid
this Lease, notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding affecting Lessor or any
assignee of Lessor in any such proceeding and notwithstanding any action with respect to this
Lease which may be taken by any trustee or receiver of Lessor or of any assignee of Lessor in
any such proceeding or by any court in any such proceeding.
(d) Except as otherwise expressly provided in this Lease, Lessee waives all rights
now or hereafter conferred by law (i) to quit, terminate or surrender this Lease or the Premises or
any part thereof or (ii) to any abatement, suspension, deferment or reduction of the rent, or any
other sums payable hereunder to or on behalf of Lessor, regardless of whether such rights shall
arise from any present or future constitution, statute or rule of law.
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Section 5.02 Taxes and Assessments; Compliance With Law.
(a) Lessee shall pay, as additional rent, prior to delinquency, the following
(collectively, "Taxes"): (i) all taxes, assessments, levies, fees, water and sewer rents and charges
and all other governmental charges, general and special, ordinary and extraordinary, foreseen
and unforeseen, which are, at any time prior to or during the Term imposed or levied upon or
assessed against or which arise with respect to (A) the Premises, (B) any Basic Rent, additional
rent or other sums payable hereunder, (C) this Lease or the leasehold estate hereby created or
(D) the operation, possession or use of the Premises; (ii) all gross receipts or similar taxes (i.e.,
taxes based upon gross income which fail to take into account deductions with respect to
depreciation, interest, taxes or ordinary and necessary business expenses, in each case relating to
the Premises) imposed or levied upon, assessed against or measured by any Basic Rent,
additional rent or other sums payable hereunder; (iii) all sales, value added, ad valorem, use and
similar taxes at any time levied, assessed or payable on account of the leasing, operation,
possession or use of the Premises; and (iv) all charges of utilities, communications and similar
services serving the Premises. Notwithstanding the foregoing, "Taxes," as used herein, shall not
include, and Lessee shall not be required to pay any franchise, estate, inheritance, transfer,
income, capital gains or similar tax of or on Lessor unless such tax is imposed, levied or assessed
in substitution for any other tax, assessment, charge or levy which Lessee is required to pay
pursuant to this Section 5.02(a); provided, however, that if, at any time during the Term, the
method of taxation shall be such that there shall be assessed, levied, charged or imposed on
Lessor a capital levy or other tax directly on the rents received therefrom, or upon the value of
the Premises or any present or future improvement or improvements on the Premises, then all
such levies and taxes or the part thereof so measured or based shall be included in the term
"Taxes" and payable by Lessee, and Lessee shall pay and discharge the same as herein provided.
Lessee will furnish to Lessor, promptly after request therefor, proof of payment of all items
referred to above which are payable by Lessee. If any such assessment may legally be paid in
installments, Lessee may pay such assessment in installments; in such event, Lessee shall be
liable only for installments which become due and payable with respect to any tax period
occurring in whole or in part during the Term hereof; provided, however, that all amounts
referred to in this Section 5.02(a) for the fiscal or tax year in which the Term shall expire shall be
apportioned so that Lessee shall pay those portions thereof which correspond with the portion of
such year as are within the Term hereby demised.
(b) Lessee shall comply with and cause the Premises to comply with and shall assume
all obligations and liabilities with respect to (i) all laws, ordinances and regulations and other
governmental rules, orders and determinations presently in effect or hereafter enacted, made or
issued, whether or not presently contemplated (collectively, "Legal Requirements"), as applied
to the Premises or the ownership, operation, use or possession thereof, including, but not limited
to, maintaining an adequate number of vehicular parking spaces, and (ii) all contracts, insurance
policies (including, without limitation, to the extent necessary to prevent cancellation thereof and
to insure full payment of any claims made under such policies), agreements, covenants,
conditions and restrictions now or hereafter applicable to the Premises or the ownership,
operation, use or possession thereof (other than covenants, conditions and restrictions imposed
by Lessor subsequent to the date of this Lease without the consent of Lessee), including, but not
limited to, all such Legal Requirements, contracts, agreements, covenants, conditions and
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restrictions which require structural, unforeseen or extraordinary changes; provided, however,
that, with respect to any of the obligations of Lessee in clause (ii) above which are not now in
existence, Lessee shall not be required to so comply unless Lessee is either a party thereto or has
given its written consent thereto, or unless the same is occasioned by Legal Requirements or
Lessee's default (including any failure or omission by Lessee) under this Lease. Nothing in
clause (ii) of the immediately preceding sentence or the following sentence shall modify the
obligations of Lessee under Section 5.04 of this Lease.
(c) On the date hereof and promptly after any future date on which the Taxes are
increased by an applicable taxing authority, Lessee shall pay to Lessor that amount necessary to
ensure there will be on deposit with Lessor an amount which when added to the Tax Escrow
Payments will result in there being an amount on deposit sufficient to pay the Taxes at least two
(2) months prior to the due date thereof ("Initial Tax Escrow Payment"). Thereafter, Lessee
shall, in addition to and concurrently with the payment of Basic Rent as required in Section 1.04
hereof, pay one-twelfth of the amount (as estimated by Lessor) of the annual Taxes (each such
payment, a "Tax Escrow Payment," and together with the Initial Tax Escrow Payment,
hereinafter collectively referred to as the "Tax Escrow Payments") next becoming due and
payable with respect to the Premises. Lessee shall also pay to Lessor on demand therefor the
amount by which the actual Taxes exceed the payment by Lessee required in this subsection.
Notwithstanding anything to the contrary contained in this Lease, so long as Lessee shall have
complied with its obligations under this Section 5.02(c), Lessor shall be solely liable for the
application of the Tax Escrow Payments to the actual payment of Taxes as and when the same
become due. Absent an Event of Default, any excess Tax Escrow Payments remaining at the
expiration of the Term shall be refunded to Lessee.
Section 5.03 Liens. Lessee will remove and discharge any charge, lien, security
interest or encumbrance upon the Premises or upon any Basic Rent, additional rent or other
sums payable hereunder which arises for any reason, including, without limitation, all liens
which arise out of the possession, use, occupancy, construction, repair or rebuilding of the
Premises or by reason of labor or materials furnished or claimed to have been furnished to
Lessee or for the Premises, but not including (i) the Permitted Exceptions, (ii) this Lease and
any assignment hereof or any sublease permitted hereunder and (iii) any mortgage, charge, lien,
security interest or encumbrance created or caused by or through Lessor or its agents,
employees or representatives without the consent of Lessee. Lessee may provide a bond or
other security reasonably acceptable to Lessor (but in no event greater in amount than the
amount of such encumbrance) to remove or pay all costs associated with the removal of any
such lien, provided the conditions of Section 5.05 shall be satisfied, Nothing contained in this
Lease shall be construed as constituting the consent or request of Lessor, express or implied, to
or for the performance (on behalf of or for the benefit of Lessor) by any contractor, laborer,
materialman or vendor, of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to the Premises or any part thereof.
NOTICE IS HEREBY GIVEN THAT LESSOR WILL NOT BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO
ANYONE HOLDING AN INTEREST IN THE PREMISES OR ANY PART THEREOF
THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR
ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
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THE INTEREST OF LESSOR IN AND TO THE PREMISES UNLESS BY OR THROUGH
LESSOR OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES.
Section 5.04 Indemnification.
(a) Except for the gross negligence, bad faith, or willful misconduct of any
Indemnified Party (as defined herein), Lessee shall defend all actions against Lessor and any
partner, officer, director, member, employee or shareholder of the foregoing (collectively,
"Indemnified Parties"), with respect to, and shall pay, protect, indemnify and save harmless the
Indemnified Parties from and against, any and all liabilities, losses, damages, costs, expenses
(including, without limitation, reasonable attorneys' fees 'and expenses), causes of action, suits,
claims, demands or judgments of any nature arising from (i) injury to or death of any person, or
damage to or loss of property, on or about the Premises, or connected with the use, condition or
occupancy of any thereof, (ii) default by Lessee under this Lease, (iii) use, act or omission of
Lessee or its agents, contractors, licensees, sublessees or invitees, (iv) contest referred to in
Section 5.05 of this Lease, and (v) liens against the Premises in violation of Section 5.03 of this
Lease. LESSEE UNDERSTANDS AND AGREES THAT THE FOREGOING
INDEMNIFICATION OBLIGATIONS OF LESSEE ARE EXPRESSLY INTENDED TO AND
SHALL INURE TO THE BENEFIT OF THE INDEMNIFIED PARTIES EVEN IF SOME OR
ALL OF THE MATTERS FOR WHICH SUCH INDEMNIFICATION IS PROVIDED ARE
CAUSED OR ALLEGED TO HAVE BEEN CAUSED BY THE SOLE, SIMPLE, JOINT OR
CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED
PARTIES, BUT NOT TO THE EXTENT CAUSED BY THE INDEMNIFIED PARTIES'
GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT. The obligations of
Lessee under this Section 5.04 shall survive any termination, expiration, rejection in bankruptcy,
or assumption in bankruptcy of this Lease.
(b) The rights and obligations of Lessor and Lessee with respect to claims by Lessor
against Lessee brought pursuant to this Section 5.04 and Section 5.06 shall be subject to the
following conditions:
(i) If Lessor receives notice of the assertion of any claim for which it intends
to seek indemnification under this Section 5.04 or Section 5.06, Lessor shall promptly provide
written notice of such assertion to Lessee; provided that failure of Lessor to give Lessee prompt
notice as provided herein shall not relieve Lessee of any of its obligations hereunder, except to
the extent the Lessee is prejudiced by such failure. The notice shall describe in reasonable detail
the nature of the claim and the basis for an indemnification claim under Section 5.04 or
Section 5.06, and shall be accompanied by all papers and documents which have been served
upon Lessor and such other documents and information as may be appropriate to an
understanding of such claim and the liability of Lessee to indemnify Lessor hereunder. Except
as required by law, the Lessor shall not answer or otherwise respond to such claim or take any
other action which may prejudice the defense thereof unless and until Lessee has been given the
opportunity to assume the defense thereof as required by this Section 5.04 and refused to do so.
(ii) Upon receipt of an indemnification notice under this Section 5.04, the
Lessee shall have the right, but not the obligation, to promptly assume and take exclusive control
of the defense, negotiation and/or settlement of such claim; provided, however, that if the
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representation of both parties by Lessee would be inappropriate due to actual or potential
differing interests between them, then the Lessee shall not be obligated to assume such defense,
but such conflict shall not lessen Lessee's indemnity obligation hereunder. In the event of a
conflict of interest or dispute or during the continuance of an Event of Default, Lessor shall have
the right to select counsel, and the cost of such counsel shall be paid by Lessee. The parties
acknowledge that, with respect to claims for which insurance is available, the rights of the
parties to select counsel for the defense of such claims shall be subject to such approval rights as
the insurance company providing coverage may have.
(iii) The party controlling the defense of a claim shall keep the other party
reasonably informed at all stages of the defense of such claim. The party not controlling the
defense of any claim shall have the right, at its sole cost and expense, to participate in, but not
control, the defense of any such claim. Each party shall reasonably cooperate with the other in
the defense, negotiation and/or settlement of any such claim. In connection with any defense of
a claim undertaken by Lessee, Lessor shall provide Lessee, and its counsel, accountants and
other representatives, with reasonable access to relevant books and records and make available
such personnel of Lessor as Lessee may reasonably request.
Section 5.05 Permitted Contests.
(a) Lessee, at its expense, may contest, by appropriate legal proceedings conducted in
good faith and with due diligence, any Legal Requirements with which Lessee is required to
comply pursuant to Section 5.02(b) or any Environmental Law under Section 5.06, or the amount
or validity or application, in whole or in part, of any tax, assessment or charge which Lessee is
obligated to pay or any lien, encumbrance or charge not permitted by Sections 2.01, 2.02,
5.02(a), 5.03 and 6.01, provided that unless Lessee has already paid such tax, assessment or
charge (i) the commencement of such proceedings shall suspend the enforcement or collection
thereof against or from Lessor and against or from the Premises, (ii) neither the Premises nor any
rent therefrom nor any part thereof or interest therein would be in any danger of being sold,
forfeited, attached or lost, (iii) Lessee shall have furnished such security, if any, as may be
required in the proceedings and as may be reasonably required by Lessor, and (iv) if such contest
be fi nally resolved against Lessee, Lessee shall promptly pay the amount required to be paid,
together with all interest and penalties accrued thereon. Lessor, at Lessee's expense, shall
execute and deliver to Lessee such authorizations and other documents as reasonably may be
required in any such contest. Lessee shall indemnify and save Lessor harmless against any cost
or expense of any kind that may be imposed upon Lessor in connection with any such contest
and any loss resulting therefrom. Notwithstanding any other provision of this Lease to the
contrary, Lessee shall not be in default hereunder in respect to the compliance with any Legal
Requirements with which Lessee is obligated to comply pursuant to Section 5.02(b), any
Environmental Law under Section 5.06, or in respect to the payment of any tax, assessment or
charge which Lessee is obligated to pay or any lien, encumbrance or charge not permitted by
Section 2.01, 2.02, 5.02(a), 5.03 and 6.01 which Lessee is in good faith contesting.
(b) Without limiting the provisions of Section 5.05(a), so long as no Event of Default
exists and the conditions set forth in Section 5.05(a) are satisfied, Lessor hereby irrevocably
appoints Lessee as Lessor's attorney-in-fact solely for the purpose of prosecuting a contest of
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any tax, assessment or charge which Lessee is obligated to pay. Such appointment is coupled
with an interest. Notwithstanding the foregoing appointment, if Lessee determines it to be
preferable in.prosecution of a contest of a tax, assessment or charge, upon Lessee's prior request,
Lessor shall execute the real estate tax complaint and/or other documents reasonably needed by
Lessee to prosecute the complaint as to such tax, assessment or charge and return same to Lessee
within ten (10) days. In such event, Lessee shall pay all of Lessor's costs and expenses in
connection therewith, including, without limitation, reasonable attorneys' fees and Lessee shall
arrange for preparation of such documentation at Lessee's sole cost and expense.
Section 5.06 Environmental Compliance.
(a) For purposes of this Lease:
(i) the term "Environmental Laws" shall mean and include the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste Amendments of
1984, the Comprehensive Environmental Response, Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act and all applicable federal, state and local
environmental laws, ordinances, rules, requirements, regulations and publications, as any of the
foregoing may have been or may be from time to time amended, supplemented or supplanted and
any and all other federal, state or local laws, ordinances, rules, requirements, regulations and
publications, now or hereafter existing, relating to (i) the preservation or regulation of the public
health, welfare or environment, (ii) the regulation or control of toxic or hazardous substances or
materials, or (iii) any wrongful death, personal injury or property damage that is caused by or
related to the presence, growth, proliferation, reproduction, dispersal, or contact with any
biological organism or portion thereof (living or dead), including molds or other fungi, bacteria
or other microorganisms or any etiologic agents or materials; and
(ii) the term "Regulated Substance" shall mean and include any, each and all
substances, biological and etiologic agents or materials now or hereafter regulated pursuant to
any Environmental Laws, including, but not limited to, any such substance, biological or
etiological agent or material now or hereafter defined as or deemed to be a "regulated
substance," "pesticide," "hazardous substance" or "hazardous waste" or included in any similar
or like classification or categorization thereunder.
(b) Lessee shall:
(i) not cause or permit any Regulated Substance to be placed, held, located,
released, transported or disposed of on, under, at or from the Premises in violation of
Environmental Laws;
(ii) contain at or remove from the Premises, or perform any other necessary
remedial action regarding, any Regulated Substance in any way affecting the Premises if, as and
when such containment, removal or other remedial action is required under any Legal
Requirements and, whether or not so required, shall perform any containment, removal or
remediation of any kind involving any Regulated Substance in any way materially adversely
affecting the Premises in compliance with all Legal Requirements and, upon reasonable request
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of Lessor after consultation with Lessee (which request may be given only if Lessor has received
information such that it reasonably believes that environmental contamination exists which may
have a material adverse effect on the Premises), shall arrange a Site Assessment (as such term is
defined in Section 5.06(c)), or such other or further testing or actions as may be required by
Legal Requirements or as may be mutually agreed to by Lessor and Lessee, to be conducted at
the Premises by qualified companies retained by Lessee specializing in environmental matters
and reasonably satisfactory to Lessor in order to ascertain compliance with all Legal
Requirements and the requirements of this Lease, all of the foregoing to be at Lessee's sole cost
and expense;
(iii) provide Lessor with written notice (and a copy as may be applicable) of
any of the following within ten (10) days of receipt thereof: (A) Lessee's obtaining knowledge
or notice of any kind of the material presence, or any actual or threatened release, of any
Regulated Substance in any way materially adversely affecting the Premises; (B) Lessee's
receipt or submission, or Lessee's obtaining knowledge or notice of any kind, of any report,
citation, notice or other communication from or to any federal, state or local governmental or
quasi-governmental authority regarding any Regulated Substance in any way materially
adversely affecting the Premises; or (C) Lessee's obtaining knowledge or notice of any kind of
the incurrence of any cost or expense by any federal, state or local governmental or quasi -
governmental authority or any private party in connection with the assessment, monitoring,
containment, removal or remediation of any kind of any Regulated Substance in any way
materially adversely affecting the Premises, or of the filing or recording of any lien on the
Premises or any portion thereof in connection with any such action or Regulated Substance in
any way materially adversely affecting the Premises; and
(iv) in addition to the requirements of Section 5.04 hereof, defend all actions
against the Indemnified Parties and Mortgagee and pay, protect, indemnify and save harmless the
Indemnified Parties and Mortgagee from and against any and all liabilities, losses, damages,
costs, expenses (including, without limitation, reasonable attorneys' fees and expenses), causes
of action, suits, claims, demands or judgments of any nature relating to any Environmental Laws,
Regulated Substances or• other environmental matters concerning the Premises; except to the
extent caused by or through Lessor, Mortgagee, or their agents, employees or representatives.
The indemnity contained in this Section 5.06 shall survive the expiration or earlier termination of
this Lease, unless at such time Lessee provides Lessor a Site Assessment (as defined below)
acceptable to Lessor showing the Premises to be free of Regulated Substances and not in
violation of Environmental Laws and that there exists no condition which could result in any
violations of Environmental Laws.
(c) Upon reasonable cause and prior written notice from Lessor, Lessee shall permit
Such reasonably qualified persons as Lessor may designate ("Site Reviewers") to visit the
Premises and perform environmental site investigations and assessments ("Site Assessments")
on the Premises for the purpose of determining whether there exists on the Premises any
Regulated Substance or violation of Environmental Laws or any condition which could result in
any violations of Environmental Laws. Such Site Assessments may include both above and
below the ground environmental testing for violations of Environmental Laws and such other
tests as may be necessary, in the reasonable opinion of the Site Reviewers, to conduct the Site
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Assessments. Lessee shall supply to the Site Reviewers such historical and operational
information regarding the Premises as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments, and shall make available for meetings with the Site Reviewers
appropriate personnel having knowledge of such matters. The cost of performing and reporting a
Site Assessment shall be paid by Lessee,
(d) If any violation of Environmental Laws occurs or is found to exist and, in Lessor's
reasonable judgment based upon the written bids of reputable environmental professionals, the
cost of remediation of, or other response action with respect to, the same is likely to exceed
$100,000, Lessee shall provide to Lessor, within ten (10) days after Lessor's request therefor,
adequate financial assurances that Lessee will effect such remediation in accordance with
applicable Environmental Laws. Such financial assurances shall be a bond or letter of credit
reasonably satisfactory to Lessor in form and substance and in an amount equal to two hundred
percent (200%) of Lessor's reasonable estimate of the anticipated cost of such remedial action,
based upon a Site Assessment performed pursuant to Section 5.06(c). Notwithstanding any other
provision on this Lease, if a violation of Environmental Laws occurs or is found to exist and the
Term would otherwise terminate or expire, and the Premises cannot be rented to another lessee
on commercially reasonable terms during the remedial action, then, at the option of Lessor, the
Term shall be automatically extended beyond the date of tennination or expiration and this Lease
shall remain in full force and effect beyond such date until the earlier to occur of (i) the
completion of all remedial action in accordance with applicable Environmental Laws, or (ii) the
date specified in a written notice from Lessor to Lessee terminating this Lease.
(e) If Lessee fails to correct any violation of Environmental Laws which occurs or is
found to exist, Lessor shall have the right (but no obligation) to take any and all actions as
Lessor shall reasonably deem necessary or advisable in order to cure such violation of
Environmental Laws.
(f) All future leases, subleases or concession agreements permitted by this Lease
relating to the Premises entered into by Lessee shall contain covenants of the other party not to
knowingly at any time (i) cause any violation of Environmental Laws to occur or (ii) permit any
Person occupying the Premises through said subtenant or concessionaire to knowingly cause any
violation of Environmental Laws to occur.
(g) Lessor and Lessee acknowledge the existence of Regulated Substances on the
Premises as more particularly set forth in that certain Phase I Environmental Site Assessment
Report dated May 1, 2008 (Project Number: 08-58600.1) by LandAmerica Assessment
Corporation (the "Phase I Report"). The Phase 1 Report references groundwater and soil impacts
from a former solvent AST farm, located in the vicinity of the groundwater treatment shed on the
southern portion of the Premises, and the existence of a former solvent UST farm located
beneath the current propane AST farm. Such existence of Regulated Substances is referred to
herein as the "Existing Contamination." Lessee agrees to take any remedial action necessary
with regard to Regulated Substances on the Premises, including, but not limited to, continued
implementation of the groundwater remediation systems and appropriate communication with
the state environmental agency, and to indemnify, defend and hold harmless the Indemnified
Parties and Lessor's Mortgagee, as more particularly set forth in Section 5.04 and this Section
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5.06. Lessee's obligations set forth in this Section 5.06(g) are in addition to and not in
substitution for Lessee's obligations set forth in Sections 5.04 hereof.
ARTICLE VI
Section 6.01 Condemnation and Casualty.
(a) General Provisions. Except as provided in Section 6.01(b) and (c), Lessee
hereby irrevocably assigns to Lessor any award, compensation or insurance payment to which
Lessee may become entitled by reason of Lessee's interest in the Premises (i) if the use,
occupancy or title of the Premises or any part thereof is taken, requisitioned or sold in, by or on
account of any actual or threatened eminent domain proceeding or other action by any person
having the power of eminent domain ("Condemnation") or (ii) if the Premises or any part thereof
is damaged or destroyed by fire, flood or other casualty ("Casualty"). All awards,
compensations and insurance payments on account of any Condemnation or Casualty are herein
collectively called "Compensation." Lessee may not unilaterally negotiate, prosecute or adjust
any claim fbr any Compensation. Lessee must consult with and obtain Lessor's consent thereto.
If the parties are unable to so agree, then they shall appoint an entity or individual that
specializes in such negotiations who shall negotiate, prosecute and adjust a claim for
Compensation. Lessor shall be entitled to participate in any such proceeding, action,
negotiation, prosecution, appeal or adjustment as contemplated herein. Notwithstanding
anything to the contrary contained in this Article VI, if permissible under applicable law, any
separate Compensation made to Lessee for its moving and relocation expenses, anticipated loss
of business profits, loss of goodwill or fixtures and equipment paid for by Lessee and which are
not part of the Premises (including, without limitation, the Severable Property) shall be paid
directly to and shall be retained by Lessee (and shall not be deemed to be "Compensation"). All
Compensation shall be applied pursuant to this Section 6.01, and all such Compensation (less the
expense of collecting such Compensation) is herein called the "Net Proceeds." Except as
specifically set for herein, all Net Proceeds shall be paid to the Proceeds Trustee (as defined
herein) and applied pursuant to this Section 6.01. If the Premises or any part thereof shall be
damaged or destroyed by Casualty, and if the estimated cost of rebuilding, replacing or repairing
the same shall exceed $50,000, Lessee promptly shall notify Lessor thereof.
(b) Substantial Condemnation During the Term. If a Condemnation shall, in
Lessee's good faith judgment, affect all or a substantial portion of the Premises and shall render
the Premises unsuitable for restoration for continued use and occupancy in Lessee's business,
then Lessee may, not later than sixty (60) days after a determination has been made as to when
possession of the Premises must be delivered with respect to such Condemnation, deliver to
Lessor (i) notice of its intention ("Notice of Intention") to terminate this Lease on the next rental
payment date which occurs not less than ninety (90) days after the delivery of such notice (the
"Condemnation Termination Date"), and (ii) a certificate of an authorized officer of Lessee
describing the event giving rise to such termination and stating that Lessee has determined that
such Condemnation has rendered the Premises unsuitable for restoration for continued use and
occupancy in Lessee's business. This Lease shall terminate on the Condemnation Termination
Date, except with respect to obligations and liabilities of Lessee hereunder, actual or contingent,
which have accrued on or prior to the Condemnation Termination Date, upon payment by Lessee
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of all Basic Rent, additional rent and other sums due and payable hereunder to and including the
Condemnation Termination Date. The Net Proceeds shall belong to Lessor.
(c) Substantial Casualty During the Last Two Years of the Term. If an insured
Casualty shall, in Lessee's good-faith judgment, affect all or a substantial portion of the Premises
during the last two (2) years of the Term and shall render the Premises unsuitable for restoration
for continued use and occupancy in Lessee's business, then Lessee may, not later than one
hundred and fifty (150) days after such Casualty, deliver to Lessor (i) notice of its intention to
terminate this Lease on the next rental payment date which occurs not less than thirty (30) days
after the delivery of such notice (the "Casualty Termination Date"), (ii) a certificate of an
authorized officer of Lessee describing the event giving rise to such termination and stating that
Lessee has determined that such Casualty has rendered the Premises unsuitable for restoration
for continued use and occupancy in Lessee's business, and (iii) documentation to the effect that
termination of this Lease will not be in violation of any agreement then in effect with which
Lessee is obligated to comply pursuant to this Lease. Upon payment by Lessee of all Basic Rent,
additional rent and other sums then due and payable hereunder to and including the Casualty
Termination Date, this Lease shall terminate on the Casualty Termination Date except with
respect to obligations and liabilities of Lessee hereunder, actual or contingent, which have
accrued on or prior to the Casualty Termination Date, and the Net Proceeds shall belong to
Lessor.
(d) Less Than Substantial Condemnation or Any Casualty. If, after a
Condemnation or Casualty, Lessee does not give or does not have the right to give notice of its
intention to terminate this Lease as provided in subsection 6.01(b) or (c), then this Lease shall
continue in full force and effect and Lessee shall, at its expense, rebuild, replace or repair the
Premises in conformity with the requirements of subsections 2.01, 2.02 and 5.03 so as to restore
the Premises (in the case of Condemnation, as nearly as practicable) to the condition, and
character thereof immediately prior to such Casualty or Condemnation; provided that Lessee and
Lessor shall use reasonable efforts to consider modifications which would make the
Improvements a more contemporary design. To the extent the Net Proceeds with respect to any
Casualty are less than $100,000, such amount shall be paid to Lessee to be used to rebuild,
replace or repair the Premises in a lien free and good and workmanlike manner. To the extent
the Net Proceeds from any Casualty are $100,000 or greater, such amount shall be paid to the
Proceeds Trustee and prior to any such rebuilding, replacement or repair, Lessee shall determine
the maximum cost thereof (the "Restoration Cost"), which amount shall be reasonably
acceptable to Lessor. The Restoration Cost shall be paid fi rst out of Lessee's own funds to the
extent that the Restoration Cost exceeds the Net Proceeds payable in connection with such
occurrence, after which expenditure Lessee shall be entitled to receive the Net Proceeds from the
Proceeds Trustee, but only against (i) certificates of Lessee delivered to Lessor and the Proceeds
Trustee from time to time but no more often than monthly as such work of rebuilding,
replacement and repair progresses, each such certificate describing the work for which Lessee is
requesting payment and the cost incurred by Lessee in connection therewith and stating that
Lessee has not theretofore received payment for such work and (ii) such additional
documentation or conditions as Lessor or the Proceeds Trustee may reasonably require,
including, but not limited to, copies of all contracts and subcontracts relating to restoration,
architects' certifications, title policy updates and lien waivers or releases. Any Net Proceeds
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remaining after final payment has been made for such work and after Lessee has been
reimbursed for any portions it contributed to the Restoration Cost with respect to any Casualty
shall be paid to Lessee and with respect to any Condemnation shall be paid to Lessor. In the
event of any temporary Condemnation, this Lease shall remain in full effect and Lessee shall be
entitled to receive the Net Proceeds allocable to such temporary Condemnation, except that any
portion of the Net Proceeds allocable to the period after the expiration or termination of the Term
shall be paid to Lessor. If the cost of any rebuilding, replacement or repair required to be made
by Lessee pursuant to this subsection 6.01(d) shall exceed the amount of such Net Proceeds, the
deficiency shall be paid by Lessee.
(e) Notwithstanding anything to the contrary in this Lease, all of the foregoing
provisions of this Section 6.01 shall be subject and subordinate to any provisions to the contrary
contained in any Subordination, Non-Disturbance and Attornment Agreement, Mortgage or other
document evidencing or securing a loan made by Mortgagee to Lessor.
Section 6.02 Insurance.
(a) Lessee will maintain insurance on the Premises of the following character:
(i) Insurance (on an occurrence basis) against all risks of direct physical loss
("Causes of Loss — Special Form"), including loss by fire, lightning, flooding (if the Premises are
in a flood zone), earthquakes (if the Premises are in an earthquake zone), and other risks which
at the time are included under "extended coverage" endorsements, on ISO form CP1030, or its
equivalent, in amounts sufficient to prevent Lessor and Lessee from becoming a coinsurer of any
loss but in any event in amounts not less than 100% of the actual replacement value of the
ImproVements, exclusive of foundations and excavations, without any exclusions other than
standard printed exclusions and without exclusion for terrorism and with deductibles of not more
than $100,000 per occurrence;
(ii) Commercial general liability insurance and/or umbrella liability insurance
(on an occurrence basis), on ISO form CG 0001 0798, or its equivalent, against claims for bodily
injury, death or property damage occurring on, in or about the Premises in the minimum amounts
of $5,000,000 for bodily injury or death to any one person, $6,000,000 for any one accident and
$5,000,000 for property damage to others or in such greater amounts as are then customary for
property similar in use to the Premises, with deletions of contractual liability exclusions with
respect to personal injury and with defense to be provided as an additional benefit and not within
the limits of liability and with deductibles of not more than $25,000 per occurrence;
(iii) Rent loss insurance or business interruption insurance in an amount
sufficient to cover loss of rents from the Premises pursuant to this Lease for a period of at least
twelve (12) months, with endorsements to cover interruption of utilities outside of the Premises;
(iv) Worker's compensation insurance to the extent required by the law of the
state in which the Premises are located;
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(v) Boiler and machinery insurance in respect of any boilers and similar-
apparatus located on the Premises in the minimum amount of $500,000 or in such greater
amounts as to adequately insure the Premises;
(vi) During any period of construction on the Premises, builder's risk
insurance on a completed value, non-reporting basis for the total cost of such alterations or
improvements, and workers' compensation insurance as required by applicable law. This
coverage may be provided by Lessee's all risk property insurance pursuant to Section 6.02(a)(i)
herein; and
(vii) Such other insurance in such kinds and amounts, with such deductibles
and against such risks, as Mortgagee may require or as is commonly obtained in the case of
property similar in use to the Premises and located in the state in which the Premises are located
by prudent owners of such property.
Such insurance shall be written by companies authorized to do business in the state where
the Premises are located and carrying a claims paying ability rating of at least A:XII by A.M.
Best or A by Standard and Poor's, as applicable, and with the exception of workers'
compensation insurance, shall name Lessor as an additional insured as its interest may appear.
(b) Every such policy provided pursuant to Section 6.02(a)(i), above shall (i) bear a
mortgagee endorsement in favor of Mortgagee under any Mortgage, and any loss under any such
policy shall be payable to the Mortgagee which has a first lien on such interest (if there is more
than one first Mortgagee, then to the trustee for such Mortgagees) to be held and applied by
Mortgagee toward restoration pursuant to Section 6.01, and (ii) contain an ordinance or law
coverage endorsement. Every such policy with the exception of workers' compensation
insurance, shall name the Mortgagee as an additional insured as its interest may appear. Every
policy referred to in subsection 6.02(a) shall provide that it will not be cancelled or amended
except after thirty (30) days written notice to Lessor and the Mortgagee and that it shall not be
invalidated by any act or negligence of Lessor, Lessee or any person or entity having an interest
in the Premises, nor by occupancy or use of the Premises for purposes more hazardous than
permitted by such policy, nor by any foreclosure or other proceedings relating to the Premises,
nor by change in title to or ownership of the Premises. The "Proceeds Trustee" shall be a
financial institution selected by Lessor and reasonably approved by Lessee and may be the
Mortgagee.
(c) Lessee shall deliver to Lessor and Mortgagee (i) upon request copies of the
applicable insurance policies and (ii) original or duplicate certificates of insurance, satisfactory
to Lessor and Mortgagee evidencing the existence of all insurance which is required to be
maintained by Lessee hereunder and payment of all premiums therefor, such delivery to be made
(i) upon the execution and delivery hereof and (ii) at least ten (10) days prior to the expiration of
any such insurance. Lessee shall not obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required by this Section 6.02 unless Lessor is named an
additional insured therein and unless there is a mortgagee endorsement in favor of Mortgagee
with loss payable as provided herein. Lessee shall immediately notify Lessor whenever any such
separate insurance is obtained and shall deliver to Lessor and Mortgagee the policies or
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certificates evidencing the same. Any insurance required hereunder may be provided under
blanket policies, provided that the Premises are specified therein.
(d) If required by Mortgagee at any time during the Term, or if an Event of Default
shall occur, upon the request of Lessor, Lessee shall, in addition to and concurrently with the
payment of Basic Rent as required in Section 1.04 hereof, pay one-twelfth of the amount (as
estimated by Lessor or Mortgagee, as applicable) of the annual premiums for insurance
(collectively, the "Insurance Escrow Payments") required under this Section 6.02 next becoming
due and payable with respect to the Premises. Notwithstanding the foregoing, Lessee shall also
be required to pay into escrow any other amounts required by Mortgagee. Lessee shall also pay
to Lessor on demand therefor the amount by which the actual insurance premiums exceed the
payment by Lessee required in this subsection.
(e) The requirements of this Section 6.02 shall not be construed to negate or modify
Lessee's obligations under Section 5.04.
(f) Notwithstanding anything contained in this Lease to the contrary, each party
hereto hereby waives any and all rights of recovery, claim, action or cause of action, against the
other party and its agents, officers, and employees, for any loss or damage that may occur to the
Premises, including the Improvements, regardless of cause or origin, including the negligence of
the other party and its agents, officers, and employees, without prejudice to any waiver or
indemnity provisions applicable to Lessee and any limitation of liability provisions applicable to
Lessor hereunder, of which provisions Lessee shall notify all insurers. Lessor and Lessee agree
that any policies presently existing or obtained on or after the date hereof (including renewals of
present policies) shall include a clause or endorsement to the effect that any such release shall
not adversely affect or impair said policies or prejudice the right of the insured to recover
thereunder and that the insurer expressly waives its rights of subrogation against Lessor or
Lessee, as the case may be, with respect to any claims under any such policies.
ARTICLE VII
Section 7.01 Conditional Limitations; Default Provisions.
(a) Any of the following occurrences or acts shall constitute an Event of Default
under this Lease:
(i) If Lessee shall (1) fail to pay any Basic Rent, recurring additional rent or
other recurring sum when due (provided that Lessor shall not exercise any of its remedies
hereunder for such failure to pay unless such monetary Event of Default continues to exist after
Lessor has provided Lessee with five (5) days written notice of Lessee's failure to timely pay
such sums and provided that Lessor is obligated to provide such written notice no more than two
times for any consecutive twelve (12) month period before exercising its remedies) or (2) fail to
observe or perform any other provision hereof and such non-monetary failure shall continue for
thirty (30) days after written notice to Lessee of such failure (provided that, in the case of any
such failure which cannot be cured by the payment of money and cannot with diligence be cured
within such thirty (30) day period, if Lessee shall commence promptly to cure the same and
thereafter prosecute the curing thereof with diligence, the time within which such failure may be
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cured shall be extended for such period not to exceed one hundred and eighty (180) days as is
necessary to complete the curing thereof with diligence);
(ii) If any representation or warranty of Lessee set forth in any certificate
provided by Lessee pursuant to this Lease, shall prove to be incorrect in any material adverse
respect as of the time when the same shall have been made in a way adverse to Lessor and
Lessor shall suffer a loss or detriment as a result thereof, including, without limitation, the taking
of any action (including, without limitation, the demise of the Premises to Lessee herein) in
reliance upon such representation or warranty and, in each case, the facts shall not be conformed
to the representation and warranty as soon as practicable in the circumstances (but in no event to
exceed thirty (30) days) after written notice to Lessee from Lessor of such inaccuracy and Lessor
restored to the position it would have enjoyed had such representation or warranty been accurate
at the time it was made;
(iii) If Lessee shall file a petition in bankruptcy or for reorganization or for an
arrangement pursuant to any federal or state law or shall be adjudicated a bankrupt or become
insolvent or shall make an assignment for the benefit of creditors, or if a petition proposing the
adjudication of Lessee as a bankrupt or its reorganization pursuant to any federal or state
bankruptcy law or any similar federal or state law shall be filed in any court and Lessee shall
consent to or acquiesce in the filing thereof or such petition shall not be discharged or denied
within ninety (90) days after the filing thereof;
(iv) If a receiver, trustee or conservator of Lessee or of all or substantially all
of the assets of Lessee or of the Premises or Lessee's or estate therein shall be appointed in any
proceeding brought by Lessee, or if any such receiver, trustee or conservator shall be appointed
in any proceeding brought against Lessee and shall not be discharged within ninety (90) days
after such appointment, or if Lessee shall consent to or acquiesce in such appointment;
(v) If the Premises shall have been abandoned for a period of ten (10)
consecutive days;
(vi) If a Letter of Credit has been posted as the Security Deposit or other
security hereunder, and the issuer of the Letter of Credit cancels, terminates or refuses to honor
it, and Lessee shall fail to renew the Letter of Credit within thirty (30) days or shall fail to post a
cash equivalent amount of the Letter of Credit or a replacement letter of credit within fifteen (15)
days after notice of such cancellation, termination or refusal;
(vii) Unless this Lease has been previously assigned to a Person unrelated to
Lessee, if there is an Event of Default by Lessee under that certain Lease Agreement dated of
even date hereof between Lessee and Lessor, for Lessee's facilities located at 1300 Cunningham
Avenue, Winston-Salem, North Carolina 27107;
(viii) If an Event of Default occurs under this Lease more than three (3) times
within any consecutive twelve (12) month period, irrespective of whether or not such Event of
Default is cured; and
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(ix) If Guarantor (hereinafter defined) fails to timely provide the financial
information required by that certain Guaranty of Lease substantially in the form attached hereto
as Exhibit E and made a part hereof for all purposes (the "Guaranty of Lease").
(b) If an Event of Default shall have happened and be continuing, Lessor shall have
the right to give Lessee notice of Lessor's termination of the Term. Upon the giving of such
notice, the Term and the estate hereby granted shall expire and terminate on such date as fully
and completely and with the same effect as if such date were the date herein fixed for the
expiration of the Term, and all rights of Lessee hereunder shall expire and terminate, but Lessee
shall remain liable as hereinafter provided.
(c) If an Event of Default shall have happened and be continuing, Lessor shall have
the immediate right, whether or not the Term shall have been terminated pursuant to
subsection 7.01(b), to reenter and repossess the Premises and the right to remove all persons and
property (subject to Section 3.02) therefrom by summary proceedings, ejectment or any other
legal action or in any lawful manner Lessor determines to be necessary or desirable. Lessor shall
be under no liability by reason of any such reentry, repossession or removal. No such reentry,
repossession or removal shall be construed as an election by Lessor to terminate the Term unless
a notice of such termination is given to Lessee pursuant to subsection 7.01(b) or unless such
termination is decreed by a court.
(d) At any time or from time to time after a reentry, repossession or removal pursuant
to subsection 7.01(c), whether or not the Term shall have been terminated pursuant to
subsection 7.01(b), Lessor may relet the Premises for the account of Lessee, in the name of
Lessee or Lessor or otherwise. Lessor may collect any rents payable by reason of such reletting.
Lessor'shall not be liable for any failure to relet the Premises or for any failure to collect any rent
due upon any such reletting. Notwithstanding the foregoing, Lessor agrees to make reasonable
efforts to mitigate its damages under this Lease in the event Lessee actually vacates or advises
Lessor that it is, as of a specified date, to vacate the Premises. The phrase "reasonable efforts,"
as it relates to Lessor's duty to attempt to relet the Premises, shall require Lessor to do only the
following: (i) notify Lessor's management company, if any, in writing of the availability of the
Premises for reletting and authorize same to advertise as appropriate, (ii) post Lessor's leasing
contact telephone number in an appropriate area of the Premises, and (iii) show the Premises to
any prospective lessee interested in the Premises and to any prospective lessee specifically
referred to Lessor by Lessee. Under any requirement of Lessor to use "reasonable efforts" as
described herein, (i) Lessor shall not be required to relet the Premises ahead of any other
properties in the same market not producing any income to Lessor; (ii) Lessor shall be entitled to
consider lessee quality, lessee-mix, the financial condition of any prospective lessee, the nature
of the Premises, the proposed use of the Premises by any prospective lessee, and any rights of
existing sublessees located in the Premises, in making any leasing decision without being
deemed to have violated its mitigation requirement hereunder; and (iii) under any new lease
entered into by Lessor, Lessor may relet all or any portion of the Premises to create an
appropriate block of space for a new lessee, may relet for a greater or lesser term than that
remaining at that time under this Lease, and may include free rent, concessions, inducements,
alterations and upgrades in the new lease. If a reletting occurs, Lessor shall recoup all of its
expenses of reletting (including, without limitation, all expenses relating to remodeling,
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alterations, repairs, capital improvements, brokerage fees, decorating fees, and fees for
architects, designers, space planners and attorneys) before Lessee is entitled to a credit on the
damages owed by Lessee hereunder. If Lessor shall do all the foregoing then, anything in this
Lease, or any statute, or common law rule to the contrary notwithstanding, Lessor shall be
deemed to have met its duty (if any) to mitigate its damages hereunder.
(e) No expiration or termination of the Term pursuant to subsection 7.01(b), by
operation of law or otherwise, and no reentry, repossession or removal pursuant to
subsection 7.01(c) or otherwise, and no reletting of the Premises pursuant to subsection 7.01(d)
or otherwise, shall relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive such expiration, termination, reentry, repossession, removal or reletting.
(f) In the event of any expiration or termination of the Term or reentry or
repossession of the Premises or removal of persons or property therefrom by reason of the
occurrence of an Event of Default, Lessee shall pay to Lessor all Basic Rent, additional rent and
other sums required to be paid by Lessee, in each case to and including the date of such
expiration, termination, reentry, repossession or removal, and, thereafter, Lessee shall, until the
end of what would have been the Term in the absence of such expiration, termination, reentry,
repossession or removal and whether or not the Premises shall have been relet, be liable to
Lessor for, and shall pay to Lessor, as liquidated and agreed current damages: (i) all Basic Rent,
all additional rent and other sums which would be payable under this Lease by Lessee in the
absence of any such expiration, termination, reentry, repossession or removal, together with all
expenses of Lessor in connection with such reletting (including, without limitation, all
repossession costs, brokerage commissions, reasonable attorneys' fees and expenses (including,
without limitation, fees and expenses of appellate proceedings), employee's expenses, alteration
costs and expenses of necessary preparation for such reletting), less (ii) the net proceeds, if any,
of any reletting effected for the account of Lessee pursuant to subsection 7.01(d). Lessee shall
pay such liquidated and agreed current damages on the dates on which rent would be payable
under this Lease in the absence of such expiration, termination, reentry, repossession or removal,
and Lessor shall be entitled to recover the same from Lessee on each such date.
(g) At any time after any such expiration or termination of the Term or reentry or
repossession of the Premises or removal of persons or property therefrom by reason of the
occurrence of an Event of Default, whether or not Lessor shall have collected any liquidated and
agreed current damages pursuant to subsection 7.01(f), Lessor shall be entitled to recover from
Lessee, and Lessee shall pay to Lessor on demand, as and for liquidated and agreed final
damages for Lessee's default and in lieu of all liquidated and agreed current damages beyond the
date of such demand (it being agreed that it would be impracticable or extremely difficult to fix
the actual damages), an amount equal to the excess, if any, of (a) the aggregate of all Basic Rent,
additional rent and other sums which would be payable under this Lease, in each case from the
date of such demand (or, if it be earlier, to date to which Lessee shall have satisfied in full its
obligations under subsection 7.01(f) to pay liquidated and agreed current damages) for what
would be the then unexpired Term in the absence of such expiration, termination, reentry,
repossession or removal, discounted at the rate equal to the then current yield on United States
Treasury Notes having a maturity as of the stated date for expiration of the then existing Term of
this Lease, plus 2% per annum (the "Reference Rate"), over (b) the then fair rental value of the
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Premises, discounted at the Reference Rate for the same period. If any law shall limit the
amount of liquidated final damages to less than the amount above agreed upon, Lessor shall be
entitled to the maximum amount allowable under such law.
Section 7.02 Bankruptcy or Insolvency.
(a) If Lessee shall become a debtor in a case filed under Chapter 7 or Chapter 11 of
the Bankruptcy Code and Lessee or Lessee's trustee shall fail to elect to assume this Lease
within ninety (90) days after the filing of such petition or such additional time as provided by the
court within such ninety (90) day period, this Lease shall be deemed to have been rejected.
Immediately thereupon, Lessor shall be entitled to possession of the Premises without further
obligation to Lessee or Lessee's trustee, and this Lease, upon the election of Lessor, shall
terminate, but Lessor's right to be compensated for damages (including, without limitation,
liquidated damages pursuant to any provision hereof) or the exercise of any other remedies in
any such proceeding shall survive, whether or not this Lease shall be terminated.
(b) Neither the whole nor any portion of Lessee's interest in this Lease or its estate in
the Premises shall pass to any trustee, receiver, conservator, assignee for the benefit of creditors
or any other person or entity, by operation of law or otherwise under the laws of any state having
jurisdiction of the person or property of Lessee, unless Lessor shall have consented to such
transfer. No acceptance by Lessor of rent or any other payments from any such trustee, receiver,
assignee, person or other entity shall be deemed to constitute such consent by Lessor nor shall it
be deemed a waiver of Lessor's right to terminate this Lease for any transfer of Lessee's interest
under this Lease without such consent.
Section 7.03 Additional Rights of Lessor.
(a) Except as provided in Section 7.01(g), no right or remedy hereunder shall be
exclusive of any other right or remedy, but shall be cumulative and in addition to any other right
or remedy hereunder or now or hereafter existing. Failure to insist upon the strict performance
of any provision hereof or to exercise any option, right, power or remedy contained herein shall
not constitute a waiver or relinquishment thereof for the future. Receipt by Lessor of any Basic
Rent, additional rent or other sums payable hereunder with knowledge of the breach of any
provision hereof shall not constitute waiver of such breach, and no waiver by Lessor of any
provision hereof shall be deemed to have been made unless made in writing. Lessor shall be
entitled to injunctive relief in case of the violation, or attempted or threatened violation, of any of
the provisions hereof, or to a decree compelling performance of any of the provisions hereof, or
to any other remedy allowed to Lessor by law or equity.
(b) Lessee hereby waives and surrenders for itself and all those claiming under it,
including creditors of all kinds, (i) any right and privilege which it or any of them may have to
redeem the Premises or to have a continuance of this Lease after termination of Lessee's right of
occupancy by order or judgment of any court or by any legal process or writ, or under the terms
of this Lease, or after the termination of the Term as herein provided, (ii) the benefits of any law
which exempts property from liability for debt and (iii) Lessee specifically waives any rights of
redemption or reinstatement available by law or any successor law.
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(c) If an Event of Default on the part of Lessee shall have occurred hereunder and be
continuing, then, without thereby waiving such default, Lessor may, but shall be under no
obligation to, take all action, including, without limitation, entry upon the Premises, to perform
the obligation of Lessee hereunder immediately and without notice in the case of any emergency
as may be reasonably determined by Lessor and upon five (5) business days notice to Lessee in
other cases. All reasonable expenses incurred by Lessor in connection therewith, including,
without limitation, attorneys' fees and expenses (including, without limitation, those incurred in
connection with any appellate proceedings), shall constitute additional rent under this Lease and
shall be paid by Lessee to Lessor upon demand.
(d) If Lessee shall be in default in the performance of any of its obligations under this
Lease beyond any applicable grace or cure period hereunder, Lessee shall pay to Lessor, on
demand, all expenses incurred by Lessor as a result thereof, including, without limitation,
reasonable attorneys' fees and expenses (including, without limitation, those incurred in
connection with any appellate proceedings) and any additional sums (including any late charge,
default penalties, interest and fees of the counsel of Mortgagee) which are payable by Lessor to
its Mortgagee by reason of Lessee's late payment or non-payment of Basic Rent. If Lessor shall
be made a party to any litigation commenced against Lessee and Lessee shall fail to provide
Lessor with counsel approved by Lessor and pay the expenses thereof, Lessee shall pay all costs
and reasonable attorneys' fees and expenses in connection with such litigation (including,
without limitation, fees and expenses incurred in connection with any appellate proceedings).
(e) If Lessee shall fail to pay when due any Basic Rent, additional rent or other sum
required to be paid by Lessee hereunder, Lessor shall be entitled to collect from Lessee as
additional rent and Lessee shall pay to Lessor, in addition to such Basic Rent, additional rent or
other sum, annual interest on the delinquency equal to the Late Rate from the date due until paid.
The Late Rate shall be the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate
permitted by applicable law. In addition to all other remedies Lessor has hereunder, if Lessee
shall fail to pay any Basic Rent, additional rent or other sum, as and when required to be paid by
Lessee hereunder prior to the expiration for the period of payment pursuant to
subsection 7.01(a)(i)(1), Lessor shall be entitled to collect from Lessee, and Lessee shall pay to
Lessor, as additional rent, a late payment charge in an amount equal to 1% of the amount shown
in the notice as unpaid.
ARTICLE VIII
Section 8.01 Notices and Other Instruments. All notices, offers, consents and other
instruments given pursuant to this Lease shall be in writing and shall be validly given when
hand delivered or sent by a courier or express service guaranteeing overnight delivery or by
telecopy, with original being promptly sent as otherwise provided above, addressed as follows:
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If to Lessor:
With a copy to:
If to Lessee:
NL Ventures VI Oracle, L.L.C.
do AIC Ventures
8080 North Central Expressway, Suite 1220
Dallas, TX 75206
Attention: Peter S. Carlsen
Telephone: (214) 363-5620
Facsimile: (214) 363-4968
AIC Ventures, L.P.
301 Congress Avenue, Suite 320
Austin, Texas 78701
Attention: Heath D. Esterak, Acquisitions Counsel
Telephone: (512) 476-5009
Facsimile: (512) 476-7779
Oracle Flexible Packaging, Inc.
2431 East 61 st Street, Suite 260
Tulsa, Oklahoma 74136
Attn: Hank Bird, Vice President
Telephone 918-744-5400
Facsimile 918-744-4340
With copy to: Conner & Winters, LLP
4000 One Williams Center
Tulsa, OK 74172
Attn: Lynnwood R. Moore, Jr. (Lynn)
Telephone 918-586-5691
Facsimile 918-586-8691
Lessor and Lessee each may from time to time specify, by giving fifteen (15) days notice
to each other party, (i) any other address in the United States as its address for purposes of this
Lease and (ii) any other person or entity in the United States that is to receive copies of notices,
offers, consents and other instruments hereunder. Notice under the terms of this Lease shall be
deemed delivered, whether or not actually received, upon the earlier of (i) the date of actual
receipt by such party, or (ii) the day after said notice is either deposited with such overnight
delivery service, transmitted by telecopier, or personally delivered, as applicable, pursuant to the
above provisions.
Section 8.02 Estoppel Certificates; Financial Information.
(a) Lessee will, upon ten (10) business days written notice at the request of Lessor,
execute, acknowledge and deliver to Lessor a certificate of Lessee, stating that this Lease is
unmodified and in full force and effect (or, if there have been modifications, that this Lease is in
full force and effect as modified, and setting forth such modifications) and stating the dates to
which Basic Rent, additional rent and other sums payable hereunder have been paid and either
stating that to the knowledge of Lessee no default exists hereunder or specifying each such
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default of which Lessee has knowledge and whether or not Lessee is still occupying and
operating the Premises and such other information as Lessor shall reasonably request. Any such
certificate may be relied upon by any actual or prospective mortgagee or purchaser of the
Premises. Lessor will, upon ten (10) business days written notice at the request of Lessee,
execute, acknowledge and deliver to Lessee a certificate of Lessor, stating that this Lease is
unmodified and in full force and effect (or, if there have been modifications, that this Lease is in
full force and effect as modified, and setting forth such modifications) and the dates to which
Basic Rent, additional rent and other sums payable hereunder have been paid, and either stating
that to the knowledge of Lessor no default exists hereunder or specifying each such default of
which Lessor has knowledge. Any such certificate may be relied upon by Lessee or any actual
or prospective assignee or sublessee of the Premises.
(b) Lessee shall deliver to Lessor within one hundred and twenty (120) days of the
close of each fiscal year, annual internally prepared financial statements of Lessee (which, at a
minimum, shall include a balance sheet of Lessee and its consolidated subsidiaries, if any, as of
the end of such year, a statement of profits and losses of Lessee and its consolidated subsidiaries,
if any, for such year and a statement of cash flows of Lessee and its consolidated subsidiaries, if
any, for such year, setting forth in each case, in comparative form, the corresponding figures for
the preceding fiscal year in reasonable detail and scope) prepared by Lessee's chief financial
officer. Lessee shall also furnish to Lessor within forty five (45) days after the end of each
quarter unaudited internal financial statements and all other quarterly reports of Lessee (which,
at a minimum, shall include a balance sheet of Lessee and its consolidated subsidiaries, if any, as
of the end of such quarter and statements of profits and losses of Lessee and its consolidated
subsidiaries, if any, for such quarter, setting forth in each case, in comparative form, the
corresponding figures for the similar quarter of the preceding year in reasonable detail and
scope) certified by Lessee's chief financial officer. All annual fi nancial statements shall be
accompanied by the affidavit of the president or a vice president of Lessee, dated within five (5)
days of the delivery of such statement, stating that (1) the affiant knows of no Event of Default,
or event which, upon notice or the passage of time or both, would become an Event of Default,
which has occurred and is continuing hereunder, or, if any such event has occurred and is
continuing, specifying the nature and period of existence thereof and what action Lessee has
taken or proposes to take with respect thereto and (2) except as otherwise specified in such
affidavit, to the best of such affiant's knowledge, Lessee has fulfilled all of its obligations under
this Lease which are required to be fulfilled on or prior to the date of such affidavit.
Notwithstanding anything to the contrary in this Section 8.02(b), if Guarantor fails to provide the
financial statements required under the Guaranty of Lease that include the fi nancial details of
Lessee, then Lessee shall also provide annual audited financial statements within one hundred
and twenty (120) days of the close of each fiscal year prepared by a firm of independent certified
public accountants approved by Lessor, along with an opinion of said accountants stating that
(A) there are no qualifications as to the scope of the audit except as specifically enumerated and
(B) the audit was perfonned in accordance with GAAP.
(c) Lessor and its agents and designees may enter upon and examine the Premises
and examine the records and books of account and discuss the finances and business with the
officers of the Lessee at reasonable times during normal business hours and on reasonable
advance written notice. Lessee shall provide the requesting party with copies of any information
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to which such party would be entitled in the course of a personal visit. Except in the event of
emergency, Lessee may designate an employee to accompany Lessor, its agents and designees
on such examinations. Lessee will provide, upon Lessor's request, all information regarding the
Premises, including, but not limited to, a current rent roll, an operating statement reflecting all
income from subleases and all operating expenses for the Premises. Lessor and its agents and
designees may enter upon and examine the Premises and show the Premises to prospective
mortgagees and/or purchasers at reasonable times during normal business hours and on
reasonable advance written notice.
ARTICLE IX
Section 9.01 No Merger. There shall be no merger of this Lease or of the leasehold
estate hereby created with the fee estate in the Premises by reason of the fact that the same
person acquires or holds, directly or indirectly, this Lease or the leasehold estate hereby created
or any interest herein or in such leasehold estate, as well as the fee estate in the Premises or any
interest in such fee estate.
Section 9.02 Surrender. Upon the expiration or termination of this Lease, Lessee shall
surrender the Premises to Lessor in as good repair and condition as received under
Section 2.01(a) except for any damage resulting from Condemnation or Casualty or normal
wear and tear not required to be repaired by Lessee. The provisions of this Section shall
survive the expiration or other termination of this Lease.
Section 9.03 Time. Time is of the essence with respect to this Lease, and the
respective time periods set forth herein.
Section 9.04 Separability; Binding Effect; Governing Law, Each provision hereof
shall be separate and independent, and the breach of any provision by Lessor shall not
discharge or relieve Lessee from any of its obligations hereunder. Each provision hereof shall
be valid and shall be enforceable to the extent not prohibited by law. If any provision hereof or
the application thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remaining provisions hereof, or the application of such provision to persons
or circumstances other than those as to which it is invalid or unenforceable, shall not be
affected thereby. All provisions contained in this Lease shall be binding upon, inure to the
benefit of and be enforceable by the successors and assigns of Lessor to the same extent as if
each such successor and assign were named as a party hereto. All provisions contained in this
Lease shall be binding upon the successors and assigns of Lessee and shall inure to the benefit
of and be enforceable by the permitted successors and assigns of Lessee in each case to the
same extent as if each successor and assign were named as a party hereto. This Lease shall be
governed by and interpreted in accordance with the laws of the state in which the Premises are
located.
Section 9.05 Table of Contents and Headings; Internal References. The table of
contents and the headings of the various paragraphs and exhibits of this Lease have been
inserted for reference only and shall not to any extent have the effect of modifying the express
terms and provisions of this Lease. Unless stated to the contrary, any references to any Section,
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subsection, Exhibit and the like contained herein are to the respective Section, subsection,
Exhibit and the like of this Lease.
Section 9.06 Counterparts. This Lease may be executed in two or more counterparts
and shall be deemed to have become effective when and only when one or more of such
counterparts shall have been executed by or on behalf of each of the parties hereto (although it
shall not be necessary that any single counterpart be executed by or on behalf of each of the
parties hereto, and all such counterparts shall be deemed to constitute but one and the same
instrument) and shall have been delivered by each of the parties to the other.
Section 9.07 Lessor's Liability. Notwithstanding anything to the contrary provided in
this Lease, it is specifically understood and agreed, such agreement being a primary
consideration for the execution of this Lease by Lessor, that there shall be absolutely no
personal liability on the part of any partner, director, member, officer or shareholder of Lessor,
its successors or assigns with respect to any of the terms, covenants and conditions of this
Lease, and any liability on the part of Lessor shall be limited solely to Lessor's interest in the
Premises, such exculpation of liability to be absolute and without any exception whatsoever.
Section 9.08 Amendments and Modifications. Except as expressly provided herein,
this Lease may not be modified or terminated except by a writing signed by Lessor and Lessee.
Section 9.09 Additional Rent. All amounts other than Basic Rent which Lessee is
required to pay or discharge pursuant to this Lease, including the charge provided for by
Section 7.03(e) hereof, shall constitute additional rent which shall include, but not be limited to
all reasonable costs and expenses of Lessee and Lessor which are incurred in connection or
associated with (A) the use, occupancy, possession, operation, condition, design, construction,
maintenance, alteration, repair or restoration of any of the Premises, (B) the performance of any
of Lessee's obligations under this Lease, (C) the prosecution, defense or settlement of any
litigation involving or arising from any of the Premises or this Lease, (D) the enforcement by
Lessor, its successors and assigns, of any of its rights under this Lease, (E) any amendment to
or modification of this Lease made at the request of Lessee, (F) costs of Lessor's counsel
incurred in connection with any act undertaken by Lessor (or its counsel) at the request of
Lessee, or incurred in connection with any act of Lessor performed on behalf of Lessee
pursuant to this Lease.
Section 9.10 Consent of Lessor. Except as specifically set forth in this Lease, all
consents and approvals to be granted by Lessor shall not be unreasonably withheld or delayed,
and Lessee's sole remedy against Lessor for the failure to grant any consent shall be to seek
injunctive relief. In no circumstance will Lessee be entitled to damages with respect to the
failure to grant any consent or approval.
Section 9.11 Quiet Enjoyment. Lessor agrees that, subject to the rights of Lessor
under this Lease, Lessee shall hold and enjoy the Premises during the term of this Lease, free
from any hindrance or interference from Lessor or any party claiming by, through or under
Lessor.
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Section 9.12 Holding Over. If Lessee remains in possession of the Premises, or any
part thereof, after the expiration or other termination of the Term, without Lessor's express
written consent, Lessee shall be guilty of an unlawful detention of the Premises and shall be
liable to Lessor for damages for use of the Premises during the period of such unlawful
detention at a rate equal to two (2) times the Basic Rent and all other amounts which would be
payable during the Term hereof (collectively, "Holdover Rent"). In the event of such unlawful
detention, Lessee shall indemnify and hold Lessor harmless from and against any and all
claims, suits, proceedings, losses, damages, liabilities, costs and expenses, including, without
limitation, attorneys' fees and disbursements, asserted against or incurred by Lessor, as a result
of such unlawful detention. Notwithstanding the foregoing, Lessor shall be entitled to such
other remedies and damages provided under this Lease or at law or in equity.
Section 9.13 Compliance with Terrorism Laws. Lessee represents and warrants that
neither Lessee nor any Person controlling Lessee (i) is included on any Government List (as
hereinafter defined); (ii) has been determined by competent authority to be subject to the
prohibitions contained in Presidential Executive Order No. 133224 (September 23, 2001) or in
any enabling or implementing legislation or other Presidential Executive Orders in respect
thereof; (iii) has been previously indicted for or convicted of any felony involving a crime or
crimes of moral turpitude or for any offense under the criminal laws against terrorists, the
criminal laws against money laundering, the Bank Secrecy Act, as amended, the Money
Laundering Control Act of 1986, as amended, or the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorists (USA PATRIOT
ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended; (iv) is currently under
investigation by any governmental authority for alleged criminal activity; or (v) has a
reputation in the community for criminal or unethical behavior. For purposes of this Lease, the
term "Government List" means (1) the Specialty Designated Nationals and Blocked Persons
Lists maintained by the Office of Foreign Assets Control, United States Department of the
Treasury ("OFAC"), (2) the Denied Persons List and the Entity List maintained by the United
States Department of Commerce, (3) the List of Terrorists and List of Disbarred Parties
maintained by the United States Department of State, (4) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the lists, laws, rules and
regulations maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation, (5) any other similar list maintained by the United States Department of State, the
United States Department of Commerce or any other governmental authority or pursuant to any
Executive Order of the President of the United States of America and (6) any list or
qualification of "Designated Nationals" as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515, as all such Government Lists may be updated from time to time.
Section 9.14 Financing and Subordination, Non-Disturbance and Attornment.
Notwithstanding anything to the contrary in this Lease, this Lease and Lessee's interest
hereunder shall be subject, subordinate and inferior to any mortgage or other security
instrument granted or entered into by Lessor in connection with the loan by which Lessor
acquired the Premises from Lessee, and any mortgage or other security instrument hereafter
placed upon the Premises by Lessor, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and extensions thereof,
provided that any such mortgage (or a separate non-disturbance agreement entered into between
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Lessee and the Mortgagee in whose favor such mortgage was granted) shall provide for the
recognition of this Lease and all Lessee's rights hereunder unless and until an Event of Default.
If Lessor desires to obtain or refinance any loan, Lessee shall execute any and all documents
that such Mortgagee reasonably requires in connection with such financing, so long as the same
do not materially adversely affect any right, benefit or privilege of Lessee under this Lease or
materially increase Lessee's obligations under this Lease.
Section 9.15 Disclaimer of Purchase Rights. Nothing in this Lease is intended or
shall operate to grant to Lessee any right of first refusal, right of first offer, purchase option, or
similar right to elect to purchase or acquire the Premises or any portion thereof, and Lessee
hereby expressly waives any and all such rights.
Section 9.16 Security Deposit.
(a) Lessee will deposit or cause to be deposited with Lessor or Mortgagee, as Lessor
shall designate, on or before the date hereof, Seven Hundred Fifteen Thousand Six Hundred
Ninety and no/100 Dollars ($715,690.00) as an "Initial Security Deposit" and an additional Two
Hundred Thirty-Eight Thousand Five Hundred Sixty and no/100 Dollars ($238,560.00) (the
"Additional Security Deposit"), payable in twelve equal monthly installments of Nineteen
Thousand Eight Hundred Eighty and no/100 Dollars ($19,880.00), beginning August 1, 2008
(the Initial Security Deposit and the Additional Security Deposit, collectively, the "Security
Deposit"), for a total Security Deposit of Nine Hundred Fifty-Four Thousand Two Hundred Fifty
and no/100 Dollars ($954,250.00), for its full and faithful performance of the terms of this Lease,
it being expressly understood that such Security Deposit shall not be considered an advance
payment of any Basic Rent, additional rent or other sums payable under this Lease or a measure
of LesSor's damages in case of an Event of Default. Payment of said Security Deposit shall be
satisfied by Lessee's deposit of cash or a Letter of Credit in said amount. Lessee shall have the
right to freely substitute cash for a Letter of Credit or vice versa, and if paid in cash, any interest
earned shall remain as an additional Security Deposit. If Lessor transfers its interest in the
Premises during the Term to a transferee who assumes Lessor's obligations hereunder and to
whom the Security Deposit is transferred, Lessor may assign the Security Deposit to the
transferee and, thereafter, Lessor shall have no further liability for the return of such Security
Deposit to Lessee. For the purposes herein, "Letter of Credit" shall mean an irrevocable standby
letter of credit issued to Lessor by a financially sound national banking association or state
chartered bank having a Standard & Poor's bank rating of no less than A+ and which is
otherwise reasonably acceptable to Lessor, the proceeds of which shall be available to Lessor
without the need for Lessor to satisfy any requirements or conditions whatsoever other than
delivery of (a) the original Letter of Credit along with Lessor's sight draft to the issuing
institution with reference to the appropriate letter of credit number for the Letter of Credit, as set
forth therein and (b) (i) a certificate signed by Lessor certifying that an Event of Default has
occurred and is continuing under the Lease, or (ii) a certificate signed by Lessor certifying that
Lessee has failed to renew the Letter of Credit at least thirty (30) days prior to its stated
expiration date. The Letter of Credit shall be valid for an initial period of one (1) year from and
after the date of its issuance and, by its express terms, shall provide (1) that its term shall
automatically be extended for successive one (1) year periods unless at least thirty (30) days
prior to the expiration of the initial one year term or any one year extension (as applicable) the
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issuer provides Lessor with written notification that it will not be extended, and (ii) that Lessor
may assign (whether by way of outright or collateral assignment) all or any portion of its interest
in the Letter of Credit to Mortgagee or any other person (including, without limitation, any third
party purchaser).
(b) Beginning with delivery of the 2009 annual audited financial statement delivered
pursuant to Section 8.02(b) by Lessee, if Lessee has maintained both GAAP net income greater
than $3,000,000 and a GAAP net worth greq$er than $10,000,000 (GAAP net income and net
worth being determined in accordance with GAAP accounting rules) for the prior year as shown
on such financial statements, then, so long as there is no uncured Event of Default, Lessee may
request that the Security Deposit be reduced by one-quarter to $715,687 (the "First Reduction").
(c) Beginning with delivery of the 2010 annual audited financial statement delivered
pursuant to Section 8.02(b) by Lessee, if Lessee has maintained both GAAP net income greater
than $4,000,000 and a GAAP net worth greater than $15,000,000 (GAAP net income and net
worth being determined in accordance with GAAP accounting rules) for the prior year as shown
on such financial statements, then, so long as there is no uncured Event of Default, Lessee may
request that the Security Deposit be reduced by one-quarter to $715,687, unless the Security
Deposit has already been reduced to that level as the result of the First Reduction, in which case
it will be reduced by another one-quarter to $477,124 (the "Second Reduction").
(d) If Lessee makes a request for a reduction of the Security Deposit and the amount
of the Security Deposit then held by Lessor is greater than required, then so long as there is no
uncured Event of Default, Lessor shall promptly wire to Lessee any cash amounts of Security
Deposit held in excess of the adjusted Security Deposit amount or exchange any Letter of Credit
then being held for a new Letter of Credit (a "New LC") in the adjusted Security Deposit
amount. In the event Lessee causes a New LC to be issued and delivered to Lessor, and such
New LC meets the requirements for a Letter of Credit set forth in 9.16(a) above, Lessor shall
promptly cause the then existing Letter of Credit held by it to be returned to Lessee and each of
Lessee and Lessor agree that such existing Letter of Credit shall be deemed terminated and of no
force or effect upon receipt of the New LC by Lessor. If Lessor, however, holds an amount of
Security Deposit in cash less than required, Lessee shall pay such difference to Lessor promptly.
In no event shall the Security Deposit be less than $477,124. In the event of an Event of Default,
Lessor shall have the right to apply the Security Deposit to Lessee's liabilities hereunder, and if
any sum remains after applying said funds, the remainder, if any, of the Security Deposit shall be
returned to Lessee upon the expiration or earlier termination of the Lease.
Section 9.17 Guaranty. Simultaneously with the execution hereof, Lessee shall cause
Pinnacle Packaging Company, Inc., an Oklahoma corporation (the "Guarantor"), to execute and
deliver to Lessor the Guaranty of Lease.
Section 9.18 Short Form Memorandum of Lease. Upon Lessor's or Lessee's
request, the parties shall record a "short form" Memorandum of Lease identifying the Term
granted to Lessee by this Lease, and any other terms to which the parties may agree. Any
recording costs associated with the memorandum or short form of this Lease shall be borne by
Lessee. Upon the expiration or earlier termination of this Lease, Lessee shall promptly execute
and deliver to Lessor an instrument, in recordable form, wherein Lessee acknowledges the
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expiration or earlier termination of this Lease. Upon transfer or conveyance of the Premises by
Lessor, Lessee agrees to execute an amendment to the memorandum indicating the change of
Lessor.
Section 9.19 Intentionally Deleted.
Section 9.20 Brokers. Lessor and Lessee mutually represent and warrant to each other
that it dealt with no real estate brokers in the transactions contemplated by this Lease, and that
no brokerage fees, commissions, or other remuneration of any kind are due in connection
herewith. Lessor shall forever indemnify and hold harmless Lessee against and in respect of
any and all claims, losses, liabilities and expenses, including, without limitation, reasonable
attorney's fees and court costs, which Lessee may incur on account of any claim by any broker
or agent or other person on the basis of any arrangements or agreements made or alleged to
have been made by or on behalf of Lessor in respect to the transactions herein contemplated.
Lessee shall forever indemnify and hold harmless Lessor against and in respect of any and all
claims, losses, liabilities and expenses, including, without limitation, reasonable attorney's fees
and court costs, which Lessor may incur on account of any claim by any broker or agent or
other person on the basis of any arrangements or agreements made or alleged to have been
made by or on behalf of Lessee in respect to the transactions herein contemplated. The
provisions of this Section shall survive expiration or termination of this Lease.
Section 9.21 Waiver of Jury Trial. Lessor and Lessee each hereby expressly,
irrevocably, fully and forever release, waive and relinquish any and all -right to trial by jury.
Section 9.22 No Partnership. Nothing herein contained shall be deemed or construed
either by the parties hereto, or by a third party, to create a relationship between the parties of
principal and agent, partnership, or joint venture. None of computation of rent, or any other
provision contained herein, or any acts of the parties hereto, shall be deemed to create any
relationship between the parties hereto other than the relationship of landlord and tenant.
Section 9.23 No Construction Against Drafter. Each of the parties hereto
acknowledges that it is sophisticated and experienced in transactions of the nature contemplated
hereby and that it has been represented by counsel of its choosing in connection herewith;
accordingly, each party hereto waives to the fullest extent permitted by law the application of
any law or rule of construction requiring that this Lease be construed or interpreted against the
drafting party or in favor of the non-drafting party.
Section 9.24 Security Interest and Security Agreement. This Lease shall also create
a security interest in, and Lessee hereby grants to Lessor a security interest in, all sums on
deposit with Lessor (or Lessor's Mortgagee, as applicable) pursuant to the provisions of this
Lease, including, but not limited to, the Immediate Repair Escrow, the Tax Escrow Payments,
the Insurance Escrow Payments, and the Security Deposit (said funds and accounts are
hereinafter referred to collectively as the "Collateral"). This Lease constitutes a security
agreement between Lessee and Lessor with respect to the Collateral in which Lessor is granted a
security interest hereunder, and, cumulative of all other rights and remedies of Lessor hereunder,
Lessor shall have all of the rights and remedies of a secured party under the Uniform
Commercial Code. "Uniform Commercial Code" means the Uniform Commercial Code as now
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or hereafter in effect in the state where the Premises is located; provided that, in the event that,
by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of,
or remedies with respect to, the Lessor's security interest in any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than such state, the
term "Uniform Commercial Code" shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions related to such
provisions. Lessee hereby agrees to execute and deliver on demand and hereby irrevocably
constitutes and appoints Lessor the attorney-in-fact of Lessee to execute and deliver and, if
appropriate, to file with the appropriate filing officer or office such security agreements,
financing statements, continuation statements or other instruments as Lessor may request or
require in order to impose, perfect or continue the perfection of the lien or security interest
created hereby. Lessee hereby authorizes Lessor at any time and from time to time to file any
initial financing statements, amendments thereto and continuation statements with or without the
signature of Lessee as authorized by applicable law, as applicable to all or part of the Collateral.
For purposes of such filings, Lessee agrees to furnish any information requested by the Lessor
promptly upon request therefor by Lessor. Lessee also ratifies its authorization for the Lessor to
have filed any like initial financing statements, amendments thereto or continuation statements,
if filed prior to the date of this Lease. Lessee agrees to furnish Lessor with notice of any -change
in the name, identity, organizational structure, residence, state of incorporation, state of
organization or state of formation or principal place of business or mailing address of Lessee
within ten (10) days of the effective date of any such change. Upon the occurrence of any Event
of Default, Lessor shall have the rights and remedies as prescribed in this Lease, or as prescribed
by general law, or as prescribed by any applicable Uniform Commercial Code, all at Lessor's
election.
[Signatures of Lessor and Lessee Follow on Next Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed as of
the date first above written.
LESSOR:
NL VENTURES VI ORACLE, L.L.C.,
a Delaware limited liability company
By:
Name: Peter S. Gdfsr en
Title: President
Oracle Lease (Polo)
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LESSEE:
ORACLE FLEXIBLE PACKAGING, INC.,
a North Carolina corporation
Na e:
Title: r < a.
Oracle Lease (Polo)
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EXHIBIT A
LEGAL DESCRIPTION
Being a 67.591 Ac.± tract of land known as tax PIN 6827-92-1815 and tax PIN 6837-02-
0179 as situated within the city limits of Winston-Salem, county of Forsyth, state of
North Carolina and being more particularly described as follows:
Beginning at a point on a disturbed concrete "RJR" monument. Said monument lying in
the southerly right-of way line of Polo Road (60' public right-of-way) and being located
at the Northeast corner of Lot 1 of "Daltonia No. 2" subdivision as recorded in Plat Book
9, Page 161, Forsyth County Registry; thence, running with the southerly right-of way
line of said Polo Road the following two (2) courses and distances: (1) N53°12'15" E a
distance of 446.65' to an existing concrete "RJR" monument, and (2) N53°05'33" E a
distance of 293.81' to an existing magnetic nail in concrete (top broken off) at the
intersection of the southerly right-of-way line of said Polo Road and the westerly right-
of-way line of Norfolk-Southern Railway (50' from centerline of southbound track),
thence running with the westerly right-of-way line of said railway the following four (4)
courses and distances: (1) along a curve to the right, having a radius of 2814.93', an arc
distance of 588.76', a chord bearing of S54°17'15"E, a chord distance of 587.69' to an
existing concrete "RJR" monument; (2) along a curve to the right, having a radius of
2814.93', an arc distance of 440.05', a chord bearing of S43°47'07" E, a chord distance
of 439.60', to an existing concrete "RJR" monument; (3) along a curve to the right,
having a radius of 2814.93', an arc distance of 118.90', a chord bearing of S38°07'32" E,
a chord distance of 118.89', to an existing concrete "RJR" monument, and (4)
S36°54'32"E a distance of 1678.81' to an existing 5/8" rebar w/cap at the northeast
corner of the R. J. Reynolds Tobacco Company property {multiple deed listings} [current
tax property parcel identification number (PIN) 6837-01-4081]; thence, leaving the said
railway right-of-way line and running with the northern lines of said R. J. Reynolds
Tobacco Company property the following seventeen (17) courses and distances: (1)
S70°48'40"W a distance of 168.73' to an existing 5/8" rebar w/cap; (2) N73°10'56"W a
distance of 385.84' to an existing 5/8" rebar w/cap; (3) 859°46'27"W a distance of 79.57'
to an existing 5/8" rebar w/cap; (4) S05°29'56"W, crossing a railroad service rail, a
distance of 30.46' to an existing 5/8" rebar w/cap; (5) along a line running approximately
10' southerly of and parallel to the centerline of said railroad service rail, N84°36'37"W a
distance of 66.45' to an existing 5/8" rebar w/cap; (6) continuing along the southerly side
of said service rail, N84°54'57"W a distance of 161.57' to an existing 5/8" rebar w/cap;
(7) continuing along the southerly side of said service rail, N85°00'30"W a distance of
189.62' to an existing 5/8" rebar w/cap; (8) continuing along the southerly side of said
service rail, N84°52'20"W a distance of 251.76' to an existing 5/8" rebar w/cap; (9)
continuing along the southerly side of said service rail, N84°49'27"W a distance of
258.58' to an existing 5/8" rebar w/cap; (10) continuing along the southerly side of said
service rail, along a curve to the left, having a radius of 266.42', an arc distance of
90.75', a chord bearing of S84°57'30"W, a chord distance of 90.31', to an existing 5/8"
rebar w/cap; (11) crossing over said service rail, N14°49'46"W a distance of 39.07' to an
Oracle (Polo)
Exhibit A
Legal Description
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existing 5/8" rebar wlcap; (12) S89°56'02"W a distance of 29.19' to an existing concrete
"RJR" monument; (13) S89°56'12"W a distance of 6E98' to an existing concrete "RJR"
monument; (14) S47°48'37"W a distance of 254.83' to an existing concrete "RJR"
monument; (15) S76°55'07"W a distance of 158.37' to an existing concrete "RJR"
monument at the southeast corner of the R. J. Reynolds Tobacco Company property
(Deed Book 1459, Page 1707)(portion of electric substation); (16) along the eastern line
of said R. J. Reynolds Tobacco Company property, NO2°01'03"W, a distance of 30.82' to
a disturbed concrete "RJR' monument; and (17) along the northern line of said R. J.
Reynolds Tobacco Company property 588°06'21"W a distance of 55.62' to an existing
concrete "RJR" monument at the northwest corner of said R. J. Reynolds Tobacco
Company property in the eastern property line of Duke Power Company property (Deed
Book 795, Page 322); thence, running with the said Duke Power Company's eastern line
and with the eastern lines of Lots 53 and 52 of said "Daltonia No. 2" subdivision,
N08°26'21"W a distance of 330.90' to an existing concrete "RJR" monument in the
eastern line of Lot 52; thence, continuing with the eastern line of Lots 52 through 17 and
Lots 1 and 2 of said "Daltonia No. 2" subdivision, N08'25'38"W a distance of 1282.83'
to an existing concrete "RJR" monument; thence, with the eastern line of Lot 1 of said
"Daltonia No. 2" subdivision, N37°20'49"W a distance of 170.60' to the point and place
of beginning, containing 67.591± Acres, as surveyed by Triad Land Surveying, P.C., on
April 29, 2008, having job #12716-4.
Parcel ID: 6827-92-1815 and 6837-02-0179
Street Address: 190 Polo Road
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Exhibit A
Legal Description
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EXHIBIT B
PERMITTED EXCEPTIONS
1. Taxes and assessments for 2008, not yet due and payable.
2. Accretion, erosion, reliction, and avulsion associated with, and riparian rights of others
incidental to the existing creek meandering across the Land.
Rights of the Railroad, if any, to use the railroad tracks and spur situate upon the Land,
and the protrusion of the existing Railroad Spur onto Tax Lots 7T and 6G.
4. Existing fences meandering on and off the property lines.
5. Easement(s) and/or right(s) of way in favor of R. J. Reynolds Tobacco Company
recorded in Book 2663, Page 3937.
6. Easement for sewer line recorded in Book 2581, Page 2396.
7 Easement(s) and/or right(s) of way in favor of Duke Power Company recorded in Book
800, Page 195, together with leasehold rights in favor of Duke Power Company, pursuant
to the terms and conditions as set forth in a Lease recorded in Book 794, Page 299.
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Oracle (Polo)
Exhibit B
Permitted Exceptions
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EXHIBIT C
BASIC RENT SCHEDULE
The annual Basic Rent for the Interim Term (as prorated) and the first Lease Year of the
Term shall be $954,250.
The Basic Rent shall increase annually by three percent (3.0%) as shown below:
Lease
Year
Dates Annual
Rent
Monthly Rent
Interim
Term
Date of closing through July 31, 2008 $954,250 prorated
1 August 1, 2008 through July 31, 2009 $954,250 $79,521
2 August 1, 2009 through July 31, 2010 $982,878 $81,906
3 August 1, 2010 through July 31, 2011 $1,012,364 $84,364
4 August 1, 2011 through July 31, 2012 $1,042,735 $86,895
5 August 1, 2012 through July 31, 2013 $1,074,017 $89,501
6 August 1, 2013 through July 31, 2014 $1,106,237 $92,186
7 August 1, 2014 through July 31, 2015 $1,139,424 $94,952
8 August 1, 2015 through July 31, 2016 $1,173,607 $97,801
9 August 1, 2016 through July 31, 2017 $1,208,815 $100,735
10 August 1, 2017 through July 31, 2018 $1,245,080 $103,757
11 August 1, 2018 through July 31, 2019 $1,282,432 $106,869
12 August 1, 2019 through July 31, 2020 $1,320,905 $110,075
13 August 1, 2020 through July 31, 2021 $1,360,532 $113,378
14 August 1, 2021 through July 31, 2022 $1,401,348 $116,779
15 August 1, 2022 through July 31, 2023 $1,443,389 $120,282
16 August 1, 2023 through July 31, 2024 $1,486,690 $123,891
17 August 1, 2024 through July 31, 2025 $1,531,291 $127,608
18 August 1, 2025 through July 31, 2026 $1,577,230 $131,436
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EXHIBIT E
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GUARANTY OF LEASE
THIS GUARANTY OF LEASE ("Guaranty") is made and given effective as of
, 2008, by Pinnacle Packaging Company, Inc., an Oklahoma corporation
("Guarantor").
RECITALS
A. NL Ventures VI Oracle, L.L,C., a Delaware limited liability company ("Lessor"),
proposes to purchase real property located at 220 Polo Road, Winston-Salem, North Carolina
27105, being more particularly described in Exhibit A attached hereto and made a part hereof for
all purposes, together with all improvements thereon and all appurtenances thereto (collectively,
the "Property") from Colonial Commercial Properties LLC, a North Carolina limited liability
company ("Seller"), and to immediately lease the Property back to Oracle Flexible Packaging,
Inc., a North Carolina corporation ("Lessee"), pursuant to that certain Lease Agreement dated of
even date herewith by and between Lessor and Lessee (the "Lease"), to which reference is here
made for all of the terms and provisions thereof.
B. Lessor is unwilling to purchase the Property or enter into the Lease with Lessee
unless Guarantor executes and delivers to Lessor this Guaranty; therefore, Guarantor executes
and delivers this Guaranty to Lessor in order to induce Lessor to purchase the Property and to
enter into the Lease with Lessee.
' C. Guarantor has received a copy of the Lease, has examined the Lease and is
familiar with all of the terms, covenants and provisions contained therein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to them in the
Lease.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and in further consideration of
the sum of TEN and NO/100 DOLLARS ($10.00) paid to Guarantor, the receipt and sufficiency
of which are hereby expressly acknowledged, and for other good and valuable consideration,
Guarantor hereby agrees with Lessor as follows:
1. Guarantor unconditionally guarantees the payment of all sums, costs, expenses,
charges, payments and deposits (including sums payable as damages upon a default under the
Lease) which, are at any time payable by Lessee under the Lease in accordance with the Lease,
and the full and timely performance of each covenant and condition of the Lease to be performed
or observed by Lessee (all of the foregoing are sometimes herein collectively referred to as the
"Guaranteed Obligations").
2. This Guaranty is an unconditional, irrevocable and absolute guarantee of payment
and performance. If for any reason any provision of the Lease shall not be faithfully performed
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or observed by Lessee as required thereby, or if the rental or any other sums, costs, expenses,
charges, payments or deposits, or any part thereof, payable under the Lease shall not be paid
when due in accordance with the provisions of the Lease, Guarantor will promptly perform or
observe, or cause the performance or observance of each such provision, and will immediately
pay such rental or other sums, costs, expenses, charges, payments or deposits then due and
payable to the entity entitled thereto pursuant to the provisions of the Lease. Guarantor also
agrees to pay to such entity the costs and expenses of collecting any such rental or any other
sum, cost, expense, charge, payment or deposit at any time payable by Lessee under the Lease.
Lessor shall have the right to enforce this Guaranty regardless of the receipt by Lessor of
additional security or the enforcement of any remedies against such security or the release of
such security.
3. Guarantor shall deliver to Lessor within one hundred and twenty (120) days of the
close of each fiscal year, annual audited financial statements of Guarantor (which, at a minimum,
shall include a balance sheet of Guarantor and its consolidated subsidiaries, if any, as of the end
of such year, a statement of profits and losses of Guarantor and its consolidated subsidiaries, if
any, for such year and a statement of cash flows of Guarantor and its consolidated subsidiaries, if
any, for such year, setting forth in each case, in comparative form, the corresponding figures for
the preceding fiscal year in reasonable detail and scope) prepared by a firm of independent
certified public accountants approved by Lessor. Guarantor shall also furnish to Lessor within
forty five (45) days after the end of each quarter unaudited internal financial statements and all
other quarterly reports of Guarantor (which, at a minimum, shall include a balance sheet of
Guarantor and its consolidated subsidiaries, if any, as of the end of such quarter and statements
of profits and losses of Guarantor and its consolidated subsidiaries, if any, for such quarter,
setting forth in each case, in comparative form, the corresponding figures for the similar quarter
of the 'preceding year in reasonable detail and scope) certified by Guarantor's chief financial
officer. Guarantor shall also provide audited financial statements at any other time upon Lessor's
written request. All annual financial statements shall be accompanied (i) by an opinion of said
accountants stating that (A) there are no qualifications as to the scope of the audit except as
specifically enumerated and (B) the audit was performed in accordance with GAAP, and (ii) by
the affidavit of the president or a vice president of Guarantor, dated within five (5) days of the
delivery of such statement, stating that (1) the affiant knows of no Event of Default (as such term
is defined in the Lease), or event which, upon notice or the passage of time or both, would
become an Event of Default, which has occurred and is continuing hereunder, or, if any such
event has occurred and is continuing, specifying the nature and period of existence thereof and
what action Lessee and/or Guarantor has taken or proposes to take with respect thereto and (2)
except as otherwise specified in such affidavit, to the best of such affiant's knowledge, Lessee
has fulfilled all of its obligations under this Lease which are required to be fulfilled on or prior to
the date of such affidavit.
4. Anything in this Guaranty to the contrary notwithstanding, Guarantor shall not
take any action, or cause or permit any person or entity to take any action, and Guarantor hereby
irrevocably waives any and all rights which it may otherwise have at law or in equity, to enjoin,
interfere with, restrict or limit, in any way whatsoever, any demand or any payment to Lessor
under the Lease or this Guaranty. If Guarantor, or any person or entity on Guarantor's behalf or
at Guarantor's discretion, brings any proceeding or action to enjoin, interfere with, restrict, or
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limit, in any way whatsoever, any one or more demands or payments under the Lease or this
Guaranty, Guarantor shall be liable for any and all direct, indirect, consequential, special, and
punitive damages resulting therefrom or arising in connection therewith, including, without
limitation, reasonable attorney's fees and costs.
5. Guarantor's duty to perform the Guaranteed Obligations shall in no way be
affected or impaired by reason of the happening from time to time of any of the following with
respect either to the Lease or to this Guaranty, even without notice to or the further consent of
Guarantor:
the waiver by Lessor or its successors or assigns of the performance or
observance by Lessee of any provision of the Lease;
(b) the extension of the time for payment by Lessee of any rental or any sums, costs,
expenses, charges, payments or deposits or any part thereof, owing or payable
under the Lease, or of the time for performance by Lessee of any other obligations
under or arising out of or on account of the Lease or any extension or renewal
thereof;
(c) the assignment, subletting or mortgaging or the purported assignment, subletting
or mortgaging of all or part of Lessee's interest in the Lease, whether or not
permitted by the Lease;
(d) the modification or amendment (whether material or otherwise) of any obligation
of Lessee as set forth in the Lease;
(e) the taking or the omission of any actions referred to in the Lease;
(f) the failure, omission or delay of Lessor to enforce, assert or exercise any right,
power or remedy conferred on Lessor in the Lease or by law or any action on the
part of Lessor granting indulgence or extension in any form;
(g) the voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all of the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting Lessee or any of its assets, or the disaffinnance of the Lease
in any such proceeding;
(h) the release of Lessee from performance or observance of any provision of the
Lease by operation of law;
any disability or other defense of Lessee;
the receipt and acceptance by Lessor of notes, checks or other instruments for the
payment of money made by Lessee, or any extensions or renewals thereof., or
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(k) the renewal or extension of the term of the Lease.
6. Notice of acceptance of this Guaranty and any obligations or liabilities contracted
or incurred by Lessee are all hereby waived by Guarantor.
7. This Guaranty shall be governed by and construed in accordance with the laws of
the state in which the Property is located, and Guarantor hereby expressly waives any and all
protections or rights afforded to it as a guarantor under the laws of said state.
8. This Guaranty may not be modified or amended except by written agreement
executed by Guarantor with the consent in writing of Lessor and any attempted modification or
amendment without such consent by Lessor shall be void and without force and effect.
9. No waiver by Lessor of the payment by Guarantor of any of its obligations
contained in this Guaranty, nor any extension of time for the payment by Guarantor of any such
obligations, shall affect or impair this Guaranty or constitute a waiver or relinquishment of any
rights of Lessor hereunder for the future. No action brought under this .Guaranty against
Guarantor and on recovery had in pursuance thereof shall be any bar or defense to any further
action or recovery which may be brought or had under this Guaranty by reason of any further
default of Lessee.
10. All of the provisions of this Guaranty shall inure to the benefit of Lessor and its
grantees, successors and assigns, and shall inure to the benefit of any future owner of the
Property; and all of the provisions of this Guaranty shall be binding upon the Guarantor and its
successors and assigns. Without limiting the generality of the foregoing, the provisions of this
Guaranty shall inure to the benefit of and be enforceable by any mortgagee of Lessor which is
the holder of a note secured by a lien on the Property or secured by an assignment of leases
which assigns all of Lessor's right, title and interest in and to the Lease. No attornment by
Lessee in favor of any such mortgagee shall diminish any of Guarantor's Obligations hereunder,
and following any such attornment, Guarantor's obligations shall continue in full force and effect
as if the mortgagee were the original Lessor pursuant to the Lease.
11. Until all obligations of every nature of Guarantor hereunder shall have been
performed or satisfied in full, Guarantor shall have no right of subrogation and waives any right
to enforce any remedy which Lessor now has or may hereafter have against Lessee; and
Guarantor waives any benefit of and any right to participate in any security now or hereafter held
by Lessor.
12. Guarantor represents and warrants to Lessor as follows:
(a) Guarantor is a corporation, duly formed, validly existing and in good standing
under the laws of the State of Oklahoma.
(b) Guarantor has the requisite power and authority to enter into this Guaranty. The
execution and delivery of this Guaranty by Guarantor has been duly and validly
authorized.
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(c) The execution and delivery of this Guaranty by Guarantor will not: (i) violate any
provision of the charter documents or the by-laws of Guarantor; (ii) violate any
law, government regulation, decree or judgment applicable or relating to
Guarantor, or (iii) violate or constitute a breach under any document, agreement
or instrument to which Guarantor is bound.
(d) This Guaranty constitutes the legal, valid and binding obligations of Guarantor,
enforceable against Guarantor, in accordance with its terms.
13. All notices, offers, consents and other instruments given pursuant to this Guaranty
shall be in writing and shall be validly given when hand delivered or sent by a courier or express
service guaranteeing overnight delivery or by telecopy, with original being promptly sent as
otherwise provided above, addressed as follows:
If to Lessor:
With a copy to:
If to Guarantor:
With a copy to:
NL Ventures VI Oracle, L.L.C.
c/o AIC Ventures
8080 North Central Expressway, Suite 1220
Dallas, TX 75206
Attention: Peter S. Carlsen
Facsimile: (214) 363-4968
AIC Ventures
301 Congress Avenue, Suite 320
Austin, Texas 78701
Attention: Heath D. Esterak, Acquisitions Counsel
Facsimile: (512) 476-7779
c/o Oracle Flexible Packaging, Inc.
2431 East 61st Street, Suite 260
Tulsa, Oklahoma 74136
Attention: Hank Bird, Vice President
Facsimile: (918) 744-4340
Conner & Winters, LLP
4000 One Williams Center
Tulsa, OK 74172
Attention: Lynnwood R. Moore, Jr. (Lynn)
Facsimile: (918) 586-8691
From time to time by giving fifteen (15) days notice to the other party, Lessor and Guarantor
each may specify (i) any other address in the United States as its address for purposes of this
Guaranty and (ii) any other person or entity in the United States that is to receive copies of
notices, offers, consents and other instruments hereunder. Notice under the terms of this
Guaranty shall be deemed delivered, whether or not actually received, upon the earlier of (i) the
date of actual receipt by such party, or (ii) the day after said notice is either deposited with such
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overnight delivery service, transmitted by telecopier, or personally delivered, as applicable,
pursuant to the above provisions.
14. The liability of Guarantor, in accordance with the other provisions of this
Guaranty, is coextensive with that of Lessee and also joint and several, and action may be
brought against Guarantor and carried to final judgment either with or without making Lessee a
party thereto. Guarantor's obligations hereunder shall not be assigned or delegated.
15. All of Lessor's rights and remedies under the Lease and under this Guaranty shall
be distinct, separate and cumulative, and no such right or remedy shall be exclusive of or a
waiver of any of the others.
16. Guarantor will pay to Lessor all of Lessor's out-of-pocket expenses incurred in
enforcing this Guaranty, including, but not limited to reasonable attorneys' fees.
17. If any provision of this Guaranty or the application of any provision to any person
or any circumstance shall be determined to be invalid or unenforceable, such determination shall
not affect any other provisions of this Guaranty or the application of such provision to any other
person or circumstance, all of which other provisions shall remain in full force and effect. •
18. The Recitals in this Guaranty are incorporated into this Guaranty for all purposes.
19. This Guaranty may be executed in multiple counterparts, and by facsimile
counterparts, each of which shall be deemed an original for purposes of making proof, and all of
which together shall constitute but one and the same instrument.
[Signature of Guarantor on Next Page]
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty, as of the day and year
first above written.
GUARANTOR:
JFORM ONLY—DO NOT SIGN],
By:
Name:
Title:
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, on this day personally appeared
, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of
, 2008.
Notary Public, State of
(Print Name of Notary)
My Commission Expires:
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EXHIBIT A
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EXHIBIT F
REPAIRS
COMPLETION DATE ITEM
1
120 days from the date hereof Asphalt replacements of damaged paved areas primarily on
the eastern side of Property
2
24 months from the date
hereof
Exterior maintenance to buildings including fist removals,
'as-needed repairs and as-needed painting
3 120 days from the date hereof Repair miscellaneous damage to concrete pavement, curbs,
etc.
4
90 days from the date hereof Interior improvements to main restrooms and door hardware
located along the accessible route to reach ADA compliance
5 90 days from the date hereof Install six ADA parking spaces near the main building
entrance
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1 Oracle
Third Amendment to Lease_2 (Polo)
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE (“Amendment”) is made and entered into
effective as of the 1st day of August, 2012 (“Effective Date” or “Amendment Date”), between
NL VENTURES VI ORACLE, L.L.C., a Delaware limited liability company (“Lessor”), and
ORACLE FLEXIBLE PACKAGING, INC., a North Carolina corporation (“Lessee”).
RECITALS
A. Lessor and Lessee entered into that certain Lease Agreement dated as of July 3,
2008, as modified by that certain First Amendment to Lease dated as of March 1, 2010, as
modified by that certain Second Amendment to Lease dated as of May 24, 2010 (as amended, the
“Lease”), which covered certain real property located at 220 Polo Road, Winston-Salem, North
Carolina 27105, together with certain improvements located thereon, all as more particularly
described in the Lease.
B. Lessor and Lessee desire to execute this Amendment to amend the Lease as more
particularly set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and for other good, fair and valuable considerations, the receipt and sufficiency of
which are hereby acknowledged, Lessor and Lessee agree that the terms and provisions of the
Lease are amended as follows:
1. Defined Terms and Related Matters.
A. Unless otherwise defined herein, the capitalized terms used herein which are
defined in the Lease shall have the meanings specified therein.
B. The words “hereof,” “herein” and “hereunder” and words of similar import when
used in this Amendment with respect to this Amendment shall refer to this Amendment as a
whole and not to any particular provision of this Amendment.
2. Amendment.
Lessor and Lessee agree to amend the Lease as follows:
A. The first sentence of Section 1.03 is deleted in its entirety and replaced with the
following:
This Lease shall be for an Interim Term, if any, beginning as of the date hereof and
ending at 11:59 p.m. on the last day of the current month including the date hereof and a Primary
Term of twenty two (22) years beginning on August 1, 2008, and ending at 11:59 p.m. on July
31, 2030.
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2 Oracle
Third Amendment to Lease_2 (Polo)
B. Section 1.04 is amended by the adding the following sentence:
Notwithstanding anything in this Lease to the contrary, the Lessor acknowledges and
agrees that the obligation of Lessee to pay all past due Basic Rent through the end of July 2012
(the “Past Due Rent”) is hereby waived, and the failure by Lessee to pay the Past Due Rent shall
not constitute an Event of Default; provided, that Lessee will pay Basic Rent and all other sums
due under the Lease and otherwise comply with each term, covenant, condition and provision of
the Lease, for the period from the Amendment Date through the end of the Term; and, provided
further, that Lessee will pay Lessor all past due Taxes (which equal $24,975.00 as of August 1,
2012)
C. Exhibit C of the Lease is hereby deleted in its entirety and replaced with the
Exhibit C attached hereto.
D. Section 9.16 (a), (b), (c) and (d) are hereby deleted in their entirety and replaced
with the following:
Lessee will deposit or cause to be deposited with Lessor or Mortgagee, as Lessor shall
designate, on or before the date hereof, Two Hundred Thirty Eight Thousand Five Hundred Sixty
Two and 50/100 Dollars ($238,562.50) as a “Security Deposit”, for its full and faithful
performance of the terms of this Lease, it being expressly understood that such Security Deposit
shall not be considered an advance payment of any Basic Rent, additional rent or other sums
payable under this Lease or a measure of Lessor's damages in case of an Event of Default.
Payment of said Security Deposit shall be satisfied by Lessee’s deposit of cash or a Letter of
Credit in said amount. Lessee shall have the right to freely substitute cash for a Letter of Credit
or vice versa, and if paid in cash, any interest earned shall remain as an additional Security
Deposit. If Lessor transfers its interest in the Premises during the Term to a transferee who
assumes Lessor's obligations hereunder and to whom the Security Deposit is transferred, Lessor
may assign the Security Deposit to the transferee and, thereafter, Lessor shall have no further
liability for the return of such Security Deposit to Lessee. For the purposes herein, “Letter of
Credit” shall mean an irrevocable standby letter of credit issued to Lessor by a financially sound
national banking association or state chartered bank having a Standard & Poor’s bank rating of
no less than A+ and which is otherwise reasonably acceptable to Lessor, the proceeds of which
shall be available to Lessor without the need for Lessor to satisfy any requirements or conditions
whatsoever other than delivery of (a) the original Letter of Credit along with Lessor’s sight draft
to the issuing institution with reference to the appropriate letter of credit number for the Letter of
Credit, as set forth therein and (b) (i) a certificate signed by Lessor certifying that an Event of
Default has occurred and is continuing under the Lease, or (ii) a certificate signed by Lessor
certifying that Lessee has failed to renew the Letter of Credit at least thirty (30) days prior to its
stated expiration date. The Letter of Credit shall be valid for an initial period of one (1) year
from and after the date of its issuance and, by its express terms, shall provide (i) that its term
shall automatically be extended for successive one (1) year periods unless at least thirty (30)
days prior to the expiration of the initial one year term or any one year extension (as applicable)
the issuer provides Lessor with written notification that it will not be extended, and (ii) that
Lessor may assign (whether by way of outright or collateral assignment) all or any portion of its
interest in the Letter of Credit to Mortgagee or any other person (including, without limitation,
any third party purchaser).
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3 Oracle
Third Amendment to Lease_2 (Polo)
E. Section 9.26 is hereby added as follows:
As of the Amendment Date, the equity owners of Lessee will have invested a minimum
of $12,000,000 of equity into Lessee. Within 90 days after the Amendment Date, either CLP
LLFLEX Holdings, LLC, a Delaware limited liability company (“CLP LLFLEX”), or LLFLEX,
LLC, an Illinois limited liability company and wholly-owned subsidiary of CLP LLFLEX
(“LLFLEX”), will become a guarantor of this Lease and such guarantor will have a minimum
GAAP net worth greater than $20,000,000. Such guaranty shall be on the same form as that
certain Guaranty of Lease attached as Exhibit E. Should Lessee fail to timely provide such
guaranty, or otherwise meet the requirements of this Section 9.26, the Security Deposit shall
immediately increase from $238,562.50 to $954,250.00.
3. In the event that any one or more of the provisions contained in this Amendment
shall be determined invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision or provisions in every other respect and the
remaining provisions of this Amendment shall not be impaired in any way.
4. When required or implied by the context used, defined terms used herein shall
include the plural as well as the singular, and vice versa.
5. This Amendment shall be governed by and construed in accordance with the
internal laws of the State of North Carolina and, to the extent controlling, applicable federal laws
of the United States of America.
6. This Amendment shall be binding upon and inure to the benefit of all parties
hereto and their respective successors and assigns; provided, however, that neither Lessee nor
any of its respective successors or assigns may, without the prior written consent of Lessor or its
respective successors or assigns, assign any rights, powers, duties or obligations hereunder.
7. This Amendment may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute but one and the same instrument.
8. This Amendment does not constitute a waiver of, or a consent to, any present or
future violation of or default under, any provision of the Lease, or a waiver of the Lessor’s rights
to insist upon future compliance with each term, covenant, condition and provision of the Lease,
and the Lease shall continue to be binding upon, and inure to the benefit of, the Lessee and the
Lessor and their respective successors and assigns.
9. Other than as set out herein, the Lease shall be and remains in full force and
effect.
[Signatures begin on following page]
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Third Amendment to Lease_2 (Polo)
EXHIBIT C
BASIC RENT SCHEDULE
The annual Basic Rent for the Interim Term (as prorated) and the first Lease Year of the
Term shall be $954,250.
The Basic Rent shall increase as shown below:
Lease
Year
Dates Annual
Rent
Monthly Rent
Interim
Term
Date of closing through July 30, 2008 $954,250 prorated
1 August 1, 2008 through July 31, 2009 $954,250 $79,521
2 August 1, 2009 through July 31, 2010 $982,878 $81,906
3 August 1, 2010 through July 31, 2011 $1,012,364 $84,364
4 August 1, 2011 through July 31, 2012 $1,042,735 $86,895
5 August 1, 2012 through July 31, 2013 $1,068,803 $89,067
6 August 1, 2013 through July 31, 2014 $1,095,523 $91,294
7 August 1, 2014 through July 31, 2015 $1,122,911 $93,576
8 August 1, 2015 through July 31, 2016 $1,150,984 $95,915
9 August 1, 2016 through July 31, 2017 $1,179,759 $98,313
10 August 1, 2017 through July 31, 2018 $1,209,253 $100,771
11 August 1, 2018 through July 31, 2019 $1,239,484 $103,290
12 August 1, 2019 through July 31, 2020 $1,270,471 $105,873
13 August 1, 2020 through July 31, 2021 $1,295,880 $107,990
14 August 1, 2021 through July 31, 2022 $1,321,798 $110,150
15 August 1, 2022 through July 31, 2023 $1,348,234 $112,353
16 August 1, 2023 through July 31, 2024 $1,375,199 $114,600
17 August 1, 2024 through July 31, 2025 $1,402,703 $116,892
18 August 1, 2025 through July 31, 2026 $1,430,757 $119,230
19 August 1, 2026 through July 31, 2027 $1,459,372 $121,614
20 August 1, 2027 through July 31, 2028 $1,488,559 $124,047
21 August 1, 2028 through July 31, 2029 $1,518,330 $126,528
22 August 1, 2029 through July 31, 2030 $1,548,697 $129,058
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