THE RIGHTS AND INTEREST OF THE EFFINGHAM COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY IN THIS LEASE AGREEMENT AND CERTAIN REVENUES AND RECEIPTS DERIVED HEREUNDER, EXCEPT FOR CERTAIN UNASSIGNED RIGHTS, AS DEFINED HEREIN, HAVE BEEN ASSIGNED AND PLEDGED AS...

“Additional Rent” means the amounts payable by the Company, described in Section 5.3(b) of this Lease.

“Additions or Alterations” means modifications, upgrades, alterations, additions, enlargements, or expansions to property comprising the Project.

“Affiliate” means a Person which is controlled by the Company or its corporate successor, which controls the Company or its successor, or which is under common control with the Company or its successor (direct or indirect ownership of more than fifty percent (50%) of the voting power constituting “control” of a Person for such purpose).

“Authorized Company Representative” means any officer or duly authorized signatory of the Company who executes this Lease or any other person at the time designated to act on behalf of the Company by written certificate furnished to the Issuer, the Holder and the Custodian, containing the specimen signature of such person and signed on behalf of the Company by an officer or duly authorized signatory of the Company; more than one person may be designated as an Authorized Company Representative.

“Authorized Issuer Representative” means any officer or official of the Issuer who executes this Lease and any other person at the time designated to act on behalf of the Issuer by written certificate furnished to the Company, the Holder and the Custodian, containing the specimen signature of such person and signed on behalf of the Issuer by the Chairman or other officer of the Issuer; more than one person may be designated as an Authorized Issuer Representative.

“Basic Rent” means the rent payable by the Company to the Issuer, described in Section 5.3(a) of this Lease.

“Bond Documents” means the documents, the forms of which are attached to the Bond Resolution as Exhibits B through F thereto.

“Bond Purchase Loan Agreement” means the Bond Purchase Loan Agreement, dated as of the Document Date, between the Issuer and the Company (in its capacities as the tenant hereunder and as the “Purchaser” thereunder), in substantially the form attached as Exhibit C to the Bond Resolution, as it may hereafter be amended in accordance with the Bond Resolution.

“Bond Resolution” means the resolution, adopted by the Issuer, as it may hereafter be amended in accordance with the terms thereof, providing the terms and provisions under which the Bond will be issued and pursuant to which the Pledged Security is assigned and pledged as security for the payment of the principal of, premium, if any, and interest on the Bond; the term “Bond Resolution” shall include any resolution supplemental or amendatory thereto.

“Business Day” means a day which is not a Saturday, Sunday, a legal holiday, or any other day on which banking institutions are authorized to be closed in the State.

(1)

the use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate;

(2)

“this Lease” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more leases supplemental to this Lease and entered into pursuant to the applicable provisions hereof;

(3)

all references in this instrument to designated “Articles,” “Sections,” and other subdivisions are to the designated articles, sections, and other subdivisions of this instrument;

(4)

the words “herein, “hereof,” and “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular article, section, or other subdivision;

(5)

the terms defined in this Article shall have the meanings assigned to them in this Article and include the plural as well as the singular; and

(6)

all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as promulgated by the American Institute of Certified Public Accountants, on and as of the date of this Lease.

(a)

Creation and Authority. The Issuer is an instrumentality of the State and a public corporation duly created and validly existing under the laws of the State. The Issuer has all requisite power and authority under the Act and the laws of the State (i) to issue the Bond, (ii) to acquire the Project and to lease the same to the Company for the purposes set forth in, and in accordance with, the Bond Resolution, and (iii) to enter into, perform its obligations under, and exercise its rights under the Issuer Documents. The Issuer has found that the Project will develop and promote for the public good and welfare industry and trade within the County and reduce unemployment, and has found that the Project is for the lawful and valid public purposes set forth in the Act.

(b)

Pending Litigation. There are no actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the Issuer, after making due inquiry with respect thereto, threatened against or affecting the Issuer in any court or by or before any governmental authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the transactions contemplated by the Issuer Documents or which, in any way, would adversely affect the validity or enforceability of the Bond, the Bond Resolution, this Lease, or any agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby, nor is the Issuer aware of any facts or circumstances presently existing which would form the basis for any such actions, suits, proceedings, inquiries, or investigations.

(c)

Issue, Sale, and Other Transactions Are Legal and Authorized. The issue and sale of the Bond, the execution and delivery by the Issuer of the Issuer Documents, and the adoption by the Issuer of the Bond Resolution and the compliance by the Issuer with all of the provisions of each thereof (i) are within the purposes, powers, and authority of the Issuer, (ii) have been done in full compliance with the provisions of the Act and have been approved by the Governing Body of the Issuer, and (iii) have been duly authorized by all necessary action on the part of the Issuer, (iv) have been duly executed and delivered on the part of the Issuer, (v) are legal, valid and binding as to the Issuer, and (vi) do not conflict with or constitute on the part of the Issuer a violation of or a breach of or a default under, or result in the creation or imposition of any lien, charge, restriction, or encumbrance upon any property of the Issuer under the provisions of, any charter instrument, bylaw, indenture, mortgage, deed to secure debt, pledge, note, lease, loan, or installment sale agreement, contract, or other agreement or instrument to which the Issuer is a party or by which the Issuer or its properties are otherwise subject or bound, or any license, judgment, decree, law, statute, order, writ, injunction, demand, rule, or regulation of any court or governmental agency or body having jurisdiction over the Issuer or any of its activities or properties.

(d)

Governmental Consents. Neither the nature of the Issuer nor any of its activities or properties, nor any relationship between the Issuer and any other Person, nor any circumstance in connection with the offer, issue, sale, or delivery of the Bond is such as to require the consent, approval, permission, order, license, or authorization of, or the filing, registration, or qualification with, any governmental authority on the part of the Issuer in connection with the execution, delivery, and performance of the Issuer Documents, the adoption of the Bond Resolution, the consummation of any transaction therein contemplated, or the offer, issue, sale, or delivery of the Bond, except as shall have been obtained or made and as are in full force and effect.

(e)

No Defaults. To the knowledge of the Issuer, after making due inquiry with respect thereto, no event has occurred and no condition exists which would constitute an Event of Default (as such term is used in the various Issuer Documents) or which, with the lapse of time or with the giving of notice or both, would become an Event of Default under any of the Issuer Documents. To the knowledge of the Issuer, after making due inquiry with respect thereto, the Issuer is not in default or violation in any material respect under the Act or under any charter instrument, bylaw, or other agreement or instrument to which it is a party or by which it may be bound.

(f)

No Prior Pledge. Neither the Project, this Lease, nor any of the payments or amounts to be received by the Issuer hereunder have been or will be mortgaged, pledged, or hypothecated by the Issuer in any manner or for any purpose or have been or will be the subject of a grant of a security interest by the Issuer other than (i) as security for the payment of the Bond, as provided in the Bond Resolution and the Security Document, or (ii) with the consent of the Company and the Holder, as may be provided in a Trustee’s Security Document.

(g)

Disclosure. The representations of the Issuer contained in the Issuer Documents and any certificate, document, written statement or other instrument furnished to the Company by or on behalf of the Issuer in connection with the transactions contemplated thereby do not contain any untrue statement of a material fact relating to the Issuer and do not omit to state a material fact relating to the Issuer necessary in order to make the statements contained herein and therein relating to the Issuer not misleading. Nothing has come to the attention of the Issuer which would materially and adversely affect or in the future may (so far as the Issuer can now reasonably foresee) materially and adversely affect the acquisition and installation of the Project by the Issuer (and by the Company, as agent of the Issuer) or any other transactions contemplated by the Issuer Documents and the Bond Resolution which has not been set forth in writing to the Company and the Purchaser or in the certificates, documents, and instruments furnished to the Company and the Purchaser by or on behalf of the Issuer prior to the date of execution of this Lease in connection with the transactions contemplated hereby.

(h)

Compliance with Conditions Precedent to the Issuance of the Bond. All acts, conditions, and things required to exist, happen, and be performed precedent to and in the execution and delivery by the Issuer of the Bond do exist, have happened, and have been performed in due time, form, and manner as required by law; the issuance of the Bond, together with all other obligations of the Issuer, do not exceed or violate any constitutional or statutory limitation.

(a)

Organization and Power. The Company is a corporation duly incorporated, validly existing, and in good standing under and by virtue of the laws of the State of Nevada, and has all requisite power and authority to lease the Project from the Issuer and to enter into, and perform its obligations and exercise its rights under, the Company Documents.

(b)

Agreements Are Legal and Authorized. The Company Documents, the consummation of the transactions therein contemplated, and the fulfillment of or the compliance with all of the provisions thereof (i) are within the power, legal right, and authority of the Company, (ii) have been duly authorized by all necessary and appropriate action on the part of the Company, (iii) have been duly executed and delivered on the part of the Company, (iv) are legal, valid and binding as to the Company, subject to bankruptcy, moratorium and other equitable principles and (v) will not conflict with or constitute on the part of the Company a violation of, or a breach of or a default under, any charter instrument, bylaw, indenture, mortgage, deed to secure debt, pledge, note, lease, loan, installment sale agreement, contract, or other agreement or instrument to which the Company is a party or by which the Company or its properties are otherwise subject or bound which would have a material adverse impact on the Company’s ability to perform its obligations hereunder, or any judgment, order, writ, injunction, decree, or demand of any court or governmental agency or body having jurisdiction over the Company or any of its activities or properties.

(c)

No Defaults. No event has occurred and no condition exists that would constitute an Event of Default by the Company or which, with the lapse of time or with the giving of notice or both, would become an Event of Default by the Company hereunder.

(d)

Disclosure. The representations of the Company contained in the Company Documents and any certificate, document, written statement, or other instrument furnished by or on behalf of the Company to the Issuer or Purchaser in connection with the transactions contemplated hereby, do not contain any untrue statement of a material fact and do not omit to state a material fact necessary to make the statements contained herein or therein not misleading. To the actual knowledge of the signatory of the Company hereto, there is no fact that the Company has not disclosed to the Issuer and to the Purchaser in writing that materially and adversely affects or in the future may (so far as the Company can now reasonably foresee) materially and adversely affect the acquisition of the Project or the ability of the Company to perform its obligations under the Company Documents or any of the documents or transactions contemplated thereby which has not been set forth in writing to the Issuer and to the Purchaser or in the certificates, documents, and instruments furnished to the Issuer and to the Purchaser by or on behalf of the Company prior to the date of execution of this Lease in connection with the transactions contemplated hereby.

(e)

Inducement. The issuance of the Bond by the Issuer for the benefit of the Company has induced the Company to lease the Project and thereby to develop and promote for the public good and welfare industry and trade within the County and to reduce unemployment.

(i)

Limitation on Nature of Company’s Use. This Lease provides that the Project may be used only for the limited purposes permitted by the Act and imposes other restrictions on the Company’s use of the Project; thus, the Company does not have the right to use the Project in as absolute a manner as it would have if it were the owner of an estate for years.

(ii)

Interest Not Freely Assignable. This Lease contains certain limited restrictions on the right of the Company to assign its rights hereunder.

(iii)

Issuer’s Right to Enforce Compliance With Applicable Laws. In order that the Issuer, as landlord, may control the use of the Project in order to assure that such use is at all times lawful, the parties have provided in this Lease that the Company’s use and occupancy of the Project and its activities thereat shall be conducted at all times in accordance with all applicable laws, ordinances, rules and regulations and that the Issuer, as landlord, has the right to enforce such covenants. Notwithstanding anything contained herein to the contrary, the Company shall be entitled, at its sole cost and expense and with prior notice to the Issuer, to contest the application or validity of any such laws, ordinances, rules or regulations.

(iv)

Landlord’s Rights of Inspection. In order that the Issuer may monitor compliance by the Company, as tenant, with the restrictions and covenants contained in this Lease, this Lease provides that the Issuer shall be entitled to inspect the Project, subject to the conditions provided herein.

(v)

Repair and Maintenance Covenants. Under current law, if this Lease were to create an “estate for years,” the Company, as tenant, would have, under law, the duty to maintain the Project, normal wear and tear excepted, and it would not be necessary to so provide in this Lease; in this Lease, the parties hereto, by operation of express covenant and not by operation of law, have provided for the Company, as tenant, to repair and maintain the Project.

(vi)

Insurance Covenants. Under current law, the granting of a usufruct and bailment for hire does not impose upon the tenant any obligation to insure the property that is the subject of such grant; however, in this Lease, the parties, by operation of express covenant and not by operation of law, have provided that the tenant shall be responsible for insuring the Project.

(vii)

Taxes and Governmental Charges. Under current law, the granting of a usufruct or a bailment for hire does not impose upon the tenant any obligation to pay taxes, or other governmental charges against the Project that is the subject of such lease; however, in this Lease, the parties, by operation of express covenant and not by operation of law, have provided that the tenant shall be responsible for any actual ad valorem taxes and any governmental charges lawfully levied on the Project and payments in lieu of taxes in accordance with the Economic Development Agreement.

The Bond may be issued in exchange for the Project as it then exists. An amount equal to the Costs of the Project theretofore incurred and any issuance costs of the Bond that the Company elects to include in the initial request for advance under the Bond Purchase Loan Agreement shall be submitted to the Purchaser and the amount thereof shall be the initial Principal Balance of the Bond. Thereafter, the Company, as agent for the Issuer, may request additional advances under the Bond Purchase Loan Agreement, if any are needed, to evidence additional amounts expended by the Company for Costs of the Project, provided that the aggregate amounts drawn down from time to time shall not exceed the Maximum Principal Amount of the Bond, and no draws shall be made after the “Expiration Date” provided for in the Bond Purchase Loan Agreement. In the case of advances for equipment or other personal property, a ▇▇▇▇ of sale transferring such equipment or personal property shall be attached to the request for advance. Amounts so drawn down shall be deemed disbursed at the direction of the Company, as agent of the Issuer, to pay or to reimburse the Company for Costs of the Project described in this Section and Section 5.3 of the Bond Resolution. Draw requests shall comply with the requirements of the Bond Purchase Loan Agreement and any other agreements between the Company and the Issuer. The amounts drawn down are to be noted by the Holder on the Schedule of Advances and Payments attached to the Bond.

Notwithstanding the foregoing, the Company, when requesting draws under the Bond Purchase Loan Agreement on behalf of the Issuer, may request the Purchaser, or any successor Holder that has assumed the Purchaser’s obligations, to advance cash under the Bond Purchase Loan Agreement, to make payments for Costs of the Project and payments in reimbursement for Costs of the Project directly to (i) contractors, materialmen, vendors and Persons providing services in connection with the Project and the Bond, (ii) the Company or any Affiliate of the Company to reimburse Costs of the Project, or (iii) any combination of the foregoing, in which case the Company shall reflect such draws and payments on its books relating to the Project.

(a)

The Issuer hereby authorizes the Company, as agent of the Issuer or in its own behalf, to take such action and institute such proceedings as the Company may elect in its sole discretion to cause and require all manufacturers, fabricators, vendors, contractors and subcontractors and suppliers to complete their contracts relating to the Project diligently in accordance with the terms of such contracts, including, without limitation, the correction of any defects. The Issuer agrees that the Company may, from time to time, in its own name, or in the name of the Issuer, take such action as the Company may elect in its sole discretion against such manufacturers, fabricators, vendors, contractors and subcontractors and suppliers, and their sureties, to insure the proper acquisition, construction and equipping of the Project.

(b)

All plans, specifications, drawings and similar documentation governing the planning, development, construction and improvement of the Project or any portion thereof may be prepared, amended, supplemented or replaced, as the case may be, at the sole discretion of the Company so long as the elements of the Project covered thereunder are consistent with the objectives and requirements of the Act and the general description of the Project in this Lease. The Company may engage or disengage architects, engineers and other professionals in the preparation of all such work product.

(c)

All warranties, bonds, letters of credit or other security or other undertakings furnished by or on behalf of any contractors, subcontractors, fabricators, vendors, manufacturers or suppliers which provide labor or materials (including building fixtures) for the Project shall be in the name of the Company for the benefit of the Issuer, the Holder and the Company, and may be enforced by the Company, at its own risk and expense, without consultation with or direction by either the Issuer or the Holder.

(d)

The Issuer hereby authorizes the Company, as agent of the Issuer or on its own behalf, and at the sole expense of the Company, to take such action and institute such proceedings as the Company may elect in its sole discretion to cause and require any contractors, subcontractors, fabricators, vendors, manufacturers and suppliers that have provided labor or materials (including building fixtures) for the Project to fulfill their warranties and contractual responsibilities diligently in accordance with the terms of any purchase or installation contracts, including, without limitation, the correction of any defective parts or workmanship. The Issuer agrees that the Company may, from time to time, take such action as the Company may elect, in its sole discretion, to insure the conformity of the Project to the specifications therefor.

(a)

requesting advances to pay Costs of the Project pursuant to the Bond Purchase Loan Agreement;

(b)

serving as, or appointing a, Registrar, Custodian and Paying Agent for the Bond;

(c)

requesting funds from the Custodian of the Project Fund for the Project to pay the costs thereof, as provided in the Lease, provided that any contracts in connection therewith shall be by the Company as a principal and not as agent of the Issuer.

During the Term of this Lease, the Company hereby accepts the appointment described above and agrees to perform the duties contemplated thereby in accordance with general agency principles and the terms of the Bond Resolution, this Lease and the Bond Purchase Loan Agreement. The Company agrees to perform such services, without charge, in consideration of the Issuer's issuance of the Bond and the leasing of the Project to the Company. The Company shall be entitled to reimbursement for expenditures that constitute Costs of the Project, but only to the extent that proceeds of the Bond are available for such purpose, and shall be entitled to reimbursement for expenditures relating to the restoration or replacement of the Project, or portions thereof, which are damaged or destroyed by casualty or taken by eminent domain, but only to the extent that the amounts in the Project Fund for the Project (including Net Proceeds of casualty insurance or any eminent domain award, any funds deposited therein by the Company, and any investment income thereon) are available therefor under the terms of this Lease.

(a)

The Additional Rent provided for in Section 5.3(b)(i) and any interest on late payments thereof shall be payable directly to the Issuer. The Additional Rent provided for in Section 5.3(b)(ii) and any interest on late payments thereof shall be payable directly to the Holder. The Preferred Rent provided for under Section 5.3(c) shall be paid directly to the Issuer.

(a)

Nothing contained in this Section shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained. In the event the Issuer should fail to perform any such agreement on its part, the Company may institute such action against the Issuer as the Company may deem necessary to compel performance so long as such action does not abrogate the Company’s obligations hereunder. The Issuer hereby agrees, to the extent legally permissible, that it shall not take or omit to take any action that would cause this Lease to be terminated without the prior written consent of the Holder of the Bond.

(b)

The Company may, however, at its own cost and expense and in its own name or in the name of the Issuer, prosecute or defend any action or proceeding or take any other action involving third persons which the Company deems reasonably necessary in order to secure or protect its right of possession, occupancy, and use hereunder, and in such event the Issuer hereby agrees to cooperate fully with the Company and to take all action necessary to effect the substitution of the Company for the Issuer in any such action or proceeding if the Company shall so request, including without limitation, to join in any legal or administrative proceeding, at the request of the Company, so long as the Company reimburses the Issuer in accordance with Section 5.3(b) hereof.

(a)

The Company shall, throughout the Lease Term, duly pay and discharge, as the same become due and payable: (i) all taxes, special assessments for benefits and governmental charges of any kind whatsoever that may (on account of a change in law or otherwise) at any time be lawfully assessed or levied against or with respect to the interests of the Issuer, of the Company and of the Holder in the Project, (ii) any taxes levied upon or with respect to the lease revenues and receipts of the Issuer from the Project which, if not paid, will become a lien on the Project or a charge on the revenues and receipts therefrom prior to or on a parity with the charge, pledge, and assignment thereof created and made in the Bond Resolution and in the Security Document, (iii) all utility and other charges incurred in the operation, maintenance, use, occupancy, and upkeep of the Project, and (iv) other levies, permit fees, inspection and license fees and all other charges imposed upon or assessed against the Project or any part thereof or upon the revenues, rents, issues, income and profits of the Project or arising in respect of the occupancy, uses or possession thereof. Both the Issuer and the Holder shall be entitled to enforce the provisions of this Section, and the Issuer’s right to enforce the same is one of the Unassigned Rights. It is the understanding of the parties that, under the Act, the Issuer does not pay property taxes on its interest in the Project. The Company’s interest in the Project is a mere usufruct and bailment for hire (which are not separately taxable estates) and not an estate for years (which would be an estate in which the leasehold interest would be taxable based on the value of the leasehold interest). Thus, while this Lease is in effect, the parties hereto contemplate that the Company shall be liable for no actual taxes on its leasehold or bailment for hire interest in the Project. However, in order to prevent the taxing authorities from being deprived of revenues relating to the Project during the period title thereto is in the Issuer, the Company shall, in consideration of the lease structure and other benefits, make payments in lieu of taxes in accordance with the payment percentages and terms provided in the Economic Development Agreement. Notwithstanding anything herein to the contrary, the Issuer cannot and does not warrant, guaranty or promise any particular ad valorem tax treatment resulting from this Lease. The Company shall exhibit to the Issuer and to the Holder, upon request, validated receipts showing the payment of any taxes, payments in lieu of taxes and other charges which may be or become a lien or encumbrance on the Project.

(b)

Upon notifying the Holder and the Issuer of its intention to do so, the Company may, at its own expense and in its own name and behalf or in the name and behalf of the Issuer and in good faith, contest any such taxes, assessments, and other charges and, in the event of any such contest, may permit the taxes, assessments, or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom, but only so long as neither the Project nor any part thereof will be subject to imminent loss or forfeiture by reason of such nonpayment; provided, that no such contest may be made in the name of the Issuer unless (i) it is necessary to protect or assert the rights or interests of the Company; and (ii) the Company has received concurrence of such necessity from the Issuer in writing.

(c)

Both the Issuer and the Holder shall be entitled to enforce the provisions of this Section, and the Issuer’s right to enforce the same is one of the Unassigned Rights.

(a)

The Company, at its expense, throughout the Term, shall carry the following insurance:

(i)

hazard and casualty insurance (including flood insurance of the project is located in a high hazard flood zone and if available at reasonable cost) on the Leased Improvements and any Leased Equipment, exclusive of the foundation of the Leased Improvements, in amounts (taking into account a deductible of not more than $25,000 per occurrence) not less than the lesser of (A) an amount not less than 100% of replacement cost of the Project or (B) full insurable value of the Project; all hazard, casualty, and flood insurance policies obtained by the Company as required by this Section 6.4(a)(i) shall be endorsed to name the Issuer and any Lender as co-loss payees and shall be payable to the Issuer or the Holder, as assignee of the Issuer, without contribution, under a standard mortgagee clause (the deductible amount specified above may be increased with the written consent of the Issuer);

(ii)

general liability insurance, in amounts of $1,000,000 per occurrence and $2,000,000 in the aggregate, subject to deductibles per occurrence not to exceed $25,000; such policy or policies shall name the Issuer and the Holder as additional insureds (the deductible amount specified above may be increased with the written consent of the Issuer and the Holder); and

(iii)

worker’s compensation insurance as required by law relating to the Company’s employees working at the Project.

(b)

The Issuer, by the Security Agreement, shall assign its interest in the casualty insurance described in (a)(i) above to the Holder, together with all unearned premiums as further security for the Bond.

(c)

The Issuer, the Holder and any Lender shall each, respectively, be entitled to enforce the provisions of this Article insofar as their rights are concerned and the Issuer’s right to enforce this Article shall be one of the Unassigned Rights. So long as the Company or an Affiliate is the owner of the Bond, the Company shall, however, have the exclusive right to make all elections, determinations, settlements, or decisions with respect to any hazard and casualty insurance policy or the proceeds thereof that may be affected by the provisions of this Section 6.4. So long as the Company or an Affiliate is the owner of the Bond and without limiting the foregoing, the Company shall have the right to make all settlements as to any casualties that affect the Project without the consent of the Issuer. Furthermore, so long as the Company or an Affiliate is the owner of the Bond, the Company shall have the right to pledge to a Lender all of the hazard and casualty insurance proceeds with respect to a casualty affecting the Project and to grant to the Lender the right to govern the distribution of such funds, which shall be superior to the rights of the Holder thereto. The Issuer acknowledges and agrees that, so long as the Company or an Affiliate is the owner of the Bond, the Lender may require the application of the insurance proceeds to the indebtedness owed to the Lender by the Company and, in such event, the insurance proceeds may not be applied in their entirety to the restoration of the Project.

(a)

The Company shall, and agrees to, indemnify and save the Issuer and the Holder and their respective officials, directors, officers, members, counsel, agents and employees (the “Indemnified Persons”) harmless against and from all claims by or on behalf of any Person arising from the conduct or management of or from any work or thing done on or at the Project and against and from all claims arising from or relating to (i) any condition of the installation of or the operation of the Project, (ii) any act or negligence of the Company or of any of its agents, contractors, servants, employees, or licensees, (iii) any act or negligence of any assignee or subtenant of the Company or of any agents, contractors, servants, employees, or licensees of any assignee or subtenant of the Company, (iv) any violation or alleged violation of any federal or State securities laws, or (v) any legal proceeding relating to the non-taxability or taxability of this Lease or the Project or the interest of the Issuer in the Project. However, with respect to matters referred to in the preceding clauses (i), (ii), (iii) or (iv), this indemnity shall not apply, as to the Issuer, to any acts of gross negligence or willful misconduct or intentional misconduct of the Issuer and, as to the Holder, to any acts of gross negligence or willful misconduct or intentional misconduct of the Holder, or in the case of matters referred to in clause (iv), this indemnity shall not apply to the Holder if the Holder has acquired the Bond other than in a bona fide private placement and has failed to perform a thorough due diligence investigation in connection therewith. The Company shall indemnify and save the Issuer and the Holder (and the other Persons and entities referred to above, as appropriate) harmless from and against all reasonable costs and expenses incurred in or in connection with any such claim or in connection with any action or proceeding brought thereon, including reasonable attorneys’ fees, and upon notice from the Issuer, the Company shall defend it (and the other persons and entities referred to above, as and to the extent appropriate) in any such action or proceeding, except for the gross negligence or willful or intentional misconduct of the Indemnified Person or its failure to comply with applicable local, state or federal law in any material respect. The indemnities set forth above specifically extend to, but are in no way limited to, governmental or other claims relating to any actual or alleged violation of any Environmental Laws, regardless of whether or not any such violation relates to any period prior to the acquisition of the Project by the Issuer or its acquisition theretofore by the Company.

(b)

Notwithstanding the fact that it is the intention of the parties that the Indemnified Persons referred to in (a), above, shall not incur pecuniary liability by reason of the terms of this Lease or the Bond Resolution, or the undertakings required of the Issuer hereunder or by reason of (i) the issuance of the Bond, (ii) the execution of this Lease or the adoption of the Bond Resolution, (iii) the performance of any act required by this Lease or the Bond Resolution, (iv) the performance of any act requested by the Company, or (v) any other costs, fees, or expenses incurred by the Issuer with respect to the Project or the acquisition thereof, including all claims, liabilities, or losses arising in connection with the violation of any statutes or regulations pertaining to the foregoing, nevertheless, if any such Indemnified Person should incur any such pecuniary liability, then in such event the Company shall indemnify and hold harmless such Indemnified Person against all claims by or on behalf of any Person arising out of the same and all reasonable costs and expenses incurred in connection with any such claim or in connection with any action or proceeding brought thereon, including reasonable attorneys’ fees, and upon notice from the Issuer, the Company shall defend the Issuer in any such action or proceeding; provided that if a court of competent jurisdiction determines that any of the provisions of this Section violate O.C.G.A. § 13-8-2 and are applicable to this Lease, the indemnity contained in this Section 8.4 shall not extend to any indemnification which is prohibited by O.C.G.A. § 13-8-2.

(c)

Nothing contained in this Section 8.4 shall require the Company to indemnify any Indemnified Person for any claim or liability for which the Company was not given any opportunity to contest or for any settlement of any such action effected without the Company’s consent (assuming such rights are available and have not been waived in writing by the Company). The indemnity of the Indemnified Persons contained in this Section 8.4 shall survive the termination of this Lease.

The Issuer and the Holder shall each be entitled to enforce its right to indemnification under this Section, and the Issuer’s right to indemnification hereunder shall be one of the Unassigned Rights.

The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Issuer and in good faith, contest any allegation that it has not complied with the laws described in this Section 8.6 and, in the event of any such contest, the provisions of this Section 8.6 shall not apply to any such alleged violations of law during the period of such contest and any appeal therefrom. The Issuer shall, at the expense of the Company, cooperate fully with the Company in any such contest.

The Issuer and the Holder shall each be entitled to enforce the provisions of this Section, and the Issuer’s right to enforce this Section shall be one of the Unassigned Rights.

(a)

The Company may sublease the Project, as a whole or in part. No sublease shall relieve the Company from primary liability for any of its obligations hereunder, and in the event of any such sublease, the Company shall continue to remain primarily liable for payment of the rents specified in Section 5.3 hereof and for the payment, performance, and observance of the other obligations and agreements on its part herein provided to be performed and observed by it. The Company shall furnish or cause to be furnished to the Issuer, upon request, assurances reasonably satisfactory to the Issuer that the Project will continue to be operated in compliance with the provisions hereof and for purposes permitted by the Act. The Issuer shall have the right, at any time and from time to time, to notify any sublessee of the rights of the Issuer as provided by this Section. The Issuer, at the request of the Company, shall enter into a non-disturbance agreement with any subtenant of the Project recognizing its rights and benefits under its sublease so long as the terms and conditions thereof do not conflict with this Lease.

(b)

The Company may not assign this Lease except as permitted by this Section. This Lease may be assigned in whole but not in part to a company that is the survivor of a consolidation, merger or transfer of substantially all of the assets of the Company without obtaining the consent of the Issuer or of the Holder. This Lease may be assigned to the Holder of the Bond without the consent of the Issuer. This Lease may be assigned to an Affiliate of the Company with the prior written consent of the Holder and without the consent of the Issuer. Except as provided herein, this Lease may be assigned only with the prior written consent of the Holder and of the Issuer. The Issuer’s consent shall not unreasonably be withheld, conditioned or delayed.

(c)

Notwithstanding anything to the contrary set forth in this Lease, the Company may assign its interest in this Lease pursuant to an Exempt Assignment (hereinafter defined) without the approval of the Issuer or the Holder of the Bond.

(1)

An “Exempt Assignment” means any of the following assignments:

(i)

Any bona fide Leasehold Mortgage;

(ii)

The acquisition by any grantee or a Leasehold Mortgagee or its designee of the Company’s interest in this Lease through the exercise of any right or remedy of such Leasehold Mortgagee under a bona fide Leasehold Mortgage, including any assignment of the Company’s interest in this Lease to a Leasehold Mortgagee or its designee made in lieu of foreclosure;

(iii)

Any foreclosure sale by any Leasehold Mortgagee pursuant to any power of sale contained in a bona fide Leasehold Mortgage;

(iv)

Any sale or assignment of the Company’s interest in this Lease by any Leasehold Mortgagee (or its designee) which has acquired the Company’s interest in this Lease by means of any transaction described above;

(v)

Any sale or assignment of the Company’s interest in this Lease to the holder of a Trustee’s Security Document;

(vi)

Any sale or assignment of the Company’s interest in this Lease to any Qualified Real Estate Investor (hereinafter defined);

(vii)

Any sale or assignment of the Company’s interest in this Lease to any person if (a) the Company or the proposed assignee provides Adequate Financial Assurance (hereinafter defined) of the payment of rent and other financial obligations under this Lease for the period the proposed assignee is the Company under this Lease, and (b) the proposed assignee has sufficient experience with properties similar to the Project to properly manage, or oversee the management of, the Project; and

(viii)

(ix)

Any sale or assignment to any of the following:

(A)

(B)

(C)

(D)

(E)

(F)

(G)

(H)

Any partnership having as a general partner any Person or entity described in the preceding subparagraphs of this definition, or any corporation, limited liability company or other Person or entity controlling, controlled by or under common control with any Person or entity described in the preceding subparagraphs of this Section 9.1(c)(1)(ix).

(2)

“Adequate Financial Assurance” means a guaranty of payment of the rent and other financial obligations of the Company under this Lease made by a Qualified Real Estate Investor for the period of time that a proposed assignee of this Lease is the Company under this Lease.

(3)

“Qualified Real Estate Investor” means any Person domiciled within the United States of America that has, together with its Affiliates, a minimum net worth (treating any subordinated or mezzanine financing as equity) at least equal to the lesser of (i) $10,000,000 or (ii) 20% of the appraised value of the Project, as of the date of its (or their) last audited financial statements or as otherwise certified by an independent certified public accountant or firm thereof, provided the managers of such Person or its Affiliates have sufficient experience with respect to developments similar to the Project or have hired a manager or separate management company that has such experience and will manage, or oversee the management of, the Project. For purposes of the above the term “last audited financial statements” shall be deemed to include unaudited financial statements compiled by an independent certified public accountant or firm thereof accompanied by an accountant’s letter or unaudited financial statements certified by a member of the management of the proposed assignee of this Lease.

(d)

Any assignment authorized by this Section 9.1 shall be subject to each of the following conditions:

(i)

Any such assignee shall agree to fully and unconditionally assume all obligations of the Company under this Lease, including, without limitation, all indemnity provisions contained in this Lease and the obligation to pay the Preferred Rent; and

(ii)

The Company shall, within thirty (30) days prior to the execution of any assignment or any merger, consolidation or sale of substantially all of its assets, furnish or cause to be furnished to the Issuer a true and complete copy of such proposed assignment or documents of merger, consolidation or sale of assets, as the case may be. The Company or such assignee shall, within thirty (30) days after the execution thereof, furnish or cause to be furnished to the Issuer a true and complete copy of such assignment or documents of merger or consolidation or sale of assets, as the case may be, as actually executed. The Issuer and the Holder shall have the right, at any time and from time to time, to notify any assignee of their rights under this paragraph.

Any purported assignment in violation of this Section shall be void, as the interest of the Company, being a usufruct and bailment for hire, is not assignable except as herein provided. In the case of an assignment that is permitted hereby or that is consented to as herein described, the assignee may not further assign this Lease except in accordance with this Section. As set forth in Section 2.7(b) of the Bond Resolution, the Bond may be assigned to any assignee of this Lease.

The Issuer, at the written request of the Company and subject to the conditions described below, shall join the Company in the execution and delivery a fee deed to secure debt to a corporate trustee (the “Trustee”) for the benefit of the Issuer and the Senior Lender (the “Trustee’s Security Deed”) to facilitate the Company's obtaining senior debt financing (the "Senior Debt", and such lender or lenders, the "Senior Lender") for the Project. Any such Trustee’s Security Document shall be prepared at the expense of the Company and reviewed at the expense of the Company and shall be subject to approval by the Issuer, which approval shall not unreasonably be withheld, conditioned or delayed. The trust indenture related to the Trustee’s Security Deed shall contain provisions normal for an intercreditor agreement and consistent with this Lease and the Economic Development Agreement.  The Issuer, the Company, the Trustee and the Senior Lender shall all be parties to the trust indenture. Accordingly, the Issuer agrees to join in a grant by the Company of the Trustee’s Security Deed encumbering the fee interest in the Project, provided that such grant and joinder shall be non-recourse to the Issuer (except for its interest in the Project) and subject to the following conditions: (i) the Issuer’s right to receive payment in full of all of the unpaid installments of Preferred Rent (without escalation as provided in Exhibit A to Schedule 5.3(c) attached hereto, such amount being the “Preferred Rent Cap”) shall not be subordinated to the Senior Lender’s interests under the Trustee’s Security Deed, related trust documents and any Senior Debt Documents, (ii) the Company, the Senior Lender and the Issuer shall agree that the obligation to pay the unpaid installments of Preferred Rent, subject to the Preferred Rent Cap, is secured by a first priority interest under the Trustee’s Security Deed and related trust documents, and the Senior Lender must agree to otherwise standstill on other enforcement rights until the Issuer is paid the Preferred Rent (subject to the Preferred Rent Cap) in full and to subordinate the payments currently due to the Senior Lender to the Preferred Rent payments currently due to the Issuer, and the Senior Lender must acknowledge and agree that it will not assert that the Company has legal title to the Project until all installments of Preferred Rent have been paid; (iii) any foreclosure by the Trustee will be for the benefit of the Issuer and the Senior Lender, and the Issuer’s first priority right under Trustee’s Security Deed and related trust documents to receive the Preferred Rent, subject to the Preferred Rent Cap, will not be subordinate to any rights of the Senior Lender under the Trustee’s Security Deed, the related trust documents or the Senior Debt Documents; and (iv) a national title insurance company acceptable to the Issuer issues to the Trustee or the Issuer at the time that the Trustee’s Security Deed is to be conveyed a mortgagee title insurance policy in form and substance acceptable to the Issuer that insures the Issuer’s interest as a grantee or as a beneficiary of the grantee under the Trustee’s Security Deed subject only to existing matters of record. Simultaneously with the grant of the Trustee’s Security Deed, the Company shall provide to the Trustee a quit-claim deed that the Trustee shall file upon foreclosure of the Trustee’s Security Deed further assuring the extinguishment of any interest by the Company in the Project. Further, the documentation of the Senior Debt, the Trustee’s Security Deed and the related Senior Debt Documents must be reasonably satisfactory to the Issuer and its counsel (including, without limitation, notice and cure rights in favor of the Issuer), and each such transaction must be without liability or expense to the Issuer, including payment by the Company of the Issuer’s reasonable counsel fees and disbursements in connection therewith.  None of the Senior Debt Documents (including, without limitation, the Trustee’s Security Deed) shall subordinate or affect the obligation of the Company to pay, or the Issuer’s right to receive, all installments of Preferred Rent, subject to the Preferred Rent Cap.  The Trustee’s Security Deed shall provide in the event that the Trustee foreclose under the Trustee’s Security Deed, then the following alternatives would apply in the following order:

1.

The Senior Lender could prepay the unpaid Preferred Rent to the Issuer, without discount and subject to the Preferred Rent Cap, and the Issuer and the Senior Lender would authorize the Trustee to bid on the Project in an amount equal to the outstanding Senior Debt (and if this is the successful bid, then the Senior Lender would take title to the Project).

2.

If the Senior Lender does not prepay the unpaid Preferred Rent to the Issuer, as provided in paragraph 1, above, then a foreclosure “reserve price” would apply (i.e., a third party would have to bid at least the total of the Preferred Rent, without discount and subject to the Preferred Rent Cap, and the Senior Debt in order to be the successful foreclosure bidder).

3.

The Trustee would bid on the Project in an amount equal to the unpaid Preferred Rent, without discount and subject to the Preferred Rent Cap, plus the amount of the Senior Debt. If this was the successful bid, then the Senior Lender would take title to the Project, provided that the Senior Lender grants the Issuer a first priority security deed on the Project, to secure the Preferred Rent and all other debts and obligations owed to the Issuer, in which case the Senior Lender would have the option to either: (i) pay the Preferred Rent, without discount and subject to the Preferred Rent Cap, over time as provided in Schedule 5.3(c) (and promissory note), or (ii) prepay the unpaid Preferred Rent, without discount and subject to the Preferred Rent Cap, at any time, on or after acquiring title to the Project.

4.

If a third party bid is at least equal to the reserve price and the third party is the successful bidder at foreclosure, then foreclosure proceeds are paid first to the Issuer in an amount equal to the unpaid Preferred Rent, without discount and subject to the Preferred Rent Cap, and then to the Senior Lender.

The Company acknowledges that any foreclosure of the Trustee’s Security Deed will extinguish the Bond Lease, and any purchaser at any foreclosure sale of the Trustee’s Security Deed, shall own the Project free and clear of the leasehold created hereby.  The Senior Debt Documents, including, without limitation, the Trustee’s Security Deed, must be reasonably satisfactory to the Issuer in form and substance, and contain provisions implementing the foregoing and the other relevant provisions of the Bond Documents and, in any event and without limitation, foreclosure proceedings and other proceedings to exercise rights or remedies under or pursuant to the Trustee’s Security Deed shall recognize and perfect the rights of the Issuer to receive payment of unpaid installments of Preferred Rent, without discount and subject to the Preferred Rent Cap.  The Issuer agrees in good faith to consider provisions alternative to the foregoing proposed by the Senior Lender provided that in no event shall the Issuer be obligated to accept any provision that it deems in its sole discretion to increase its risk or otherwise to be to its disadvantage.

(a)

a failure of the Company to pay Basic Rent in the amounts and at the times required by Section 5.3(a) of this Lease, provided that if the Company is then the Holder of the Bond such Basic Rent shall be deemed to have been paid and the corresponding Debt Service on the Bond shall be deemed to have also been paid, subject, however, to Section 5.4 hereof; or

(b)

a failure of the Company to pay Preferred Rent in the amounts and at the times required by Section 5.3(c) and Schedule 5.3(c) of this Lease; or

(c)

the Company’s failure to observe, perform, or comply with any other covenant, condition, or agreement in this Lease or in any other Company Documents on the part of the Company to be observed or performed (other than as referred to in subsection (a) of this Section) in all material respects, if such covenant, condition or agreement is for the benefit of the Issuer and constitutes any of the Unassigned Rights, for a period of thirty (30) days after the Company’s receipt of written notice from the Issuer specifying such breach or failure and requesting that it be remedied, unless the Issuer shall agree in writing to an extension of such time prior to its expiration. It shall not constitute an Event of Default if corrective action is instituted by or on behalf of the Company within the thirty (30) day period and diligently pursued until the breach or default is corrected; or

(d)

the Company’s failure to observe, perform, or comply with any covenant, condition, or agreement in this Lease or in the other Company Documents on the part of the Company to be observed or performed in all material respects, which covenant, condition or agreement is for the benefit of the Holder other than as referred to in subsections (a) and (b) of this Section, for a period of thirty (30) days after the Company’s receipt of written notice from the Holder specifying such breach or failure and requesting that it be remedied, unless the Holder shall agree in writing to an extension of such time prior to its expiration. It shall not constitute an Event of Default if corrective action is instituted by the Company or on behalf of the Company within the applicable thirty (30) day period and diligently pursued until the breach or default is corrected; or

(e)

any default under any of the Senior Debt Documents, if the Lender that is a party thereto notifies the Issuer, the Company and the Holder that the same should be deemed an Event of Default hereunder, in the Lender’s sole judgment, and the curative period for such default has not been thereafter extended or such default has not been waived by the Lender. It shall not constitute an Event of Default if corrective action is instituted by the Company or on behalf of the Company within the applicable curative period and diligently pursued until such default is corrected.

The Issuer shall notify the Company, any Lender that has requested such notice and provided its address for such notice to the Issuer, and the Holder in writing of any Event of Default hereunder of which the Issuer has knowledge.

(a)

from time to time, take whatever action at law or in equity or under the terms of this Lease may appear necessary or desirable to collect the rents and other amounts payable by the Company hereunder then due or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Company under this Lease; or

(b)

terminate this Lease and recover, as and for liquidated and agreed final damages for the Company’s default, all amounts that have theretofore become due plus an amount equal to all unpaid installments of Basic Rent and Preferred Rent, and if any statute or rule of law shall validly limit the amount of such liquidated final damages to less than the amount agreed upon, the Issuer shall be entitled to the maximum amount allowable under such statute or rule of law; no termination of this Lease pursuant to this Section shall relieve the Company from its obligations pursuant to Section 8.4 hereof.

Any amounts of Basic Rent collected pursuant to action taken under this Section shall be applied in payment of the then-Outstanding Bond. Any amounts collected as Additional Rent shall be paid to the Person or Persons to whom such Additional Rent is due and owing hereunder. Any amounts collected as Preferred Rent shall be paid to the Issuer.

Notwithstanding that this Lease (except for Unassigned Rights) is to be assigned to the Holder, the Issuer shall be entitled to enforce this Lease if any Event of Default relates to such Unassigned Rights or exposes the Issuer, its assets (other than the Pledged Security) or its members, officers, employees or agents to any liability. The Holder shall be entitled to enforce the provisions hereof that affect its interests hereunder. Notwithstanding the foregoing and notwithstanding any statutory, decisional, or other law to the contrary, in no event shall the Issuer have any right, without the prior written consent of the Holder, to terminate this Lease or to enter upon or otherwise to obtain possession of the Project, by reason of the occurrence of any Event of Default by the Company hereunder unless (i) such Event of Default is a failure of the Company to pay Preferred Rent or Additional Rent to the Issuer when due and (ii) neither the Company or the Holder have paid the same within ninety (90) days after a written demand for payment thereof has been made on the Company and the Holder.

Any person designated in this Section 11.3 may, by notice given to each of the others, designate any additional or different addresses to which subsequent notices, certificates, or other communications shall be sent.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

IN WITNESS WHEREOF, each of the parties have caused this Lease to be duly executed and delivered, under seal, by its respective duly authorized representatives, all being done as of the day and year first above written.

EFFINGHAM COUNTY INDUSTRIAL

DEVELOPMENT AUTHORITY

By:

Chairman

ATTEST:

Secretary/Treasurer

[SEAL]

[SIGNATURES CONTINUE ON FOLLOWING PAGE]