EFFINGHAM COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (an instrumentality of the State of Georgia and a public corporation, as Lessor), and MEDIENT STUDIOS, INC. (a Nevada corporation, as Lessee) LEASE AGREEMENT Dated as of July 1, 2013

TABLE OF CONTENTS

(This Table of Contents is not a part of this Lease
Agreement and is only for convenience of reference.)

Page

ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1.   Definitions.

Section 1.2.   Construction of Certain Terms.

Section 1.3.   Table of Contents; Titles and Headings.

Section 1.4.   Contents of Certificates or Opinions.

ARTICLE II REPRESENTATIONS AND UNDERTAKINGS

Section 2.1.   Representations by the Issuer.

Section 2.2.   Representations by the Company.

ARTICLE III LEASING CLAUSE; SECURITY; TITLE

Section 3.1.   Lease of the Project.

Section 3.2.   Security for Payments Under the Bond.

Section 3.3.   Warranties and Covenants of Issuer as to Title.

Section 3.4.   Warranties and Covenants of Company as to Title.

ARTICLE IV ACQUISITION AND INSTALLATION OF THE PROJECT; ISSUANCE OF THE BOND; FUNDS  

Section 4.1.   Agreement to Acquire and Install the Project.

Section 4.2.   Agreement to Issue the Bond.

Section 4.3.   Application of Proceeds.

Section 4.4.   Draws under Bond Purchase Loan Agreement.

Section 4.5.   Obligation of the Parties to Cooperate in Furnishing Documents; Reliance of the Custodian.  

Section 4.6.   Excess Costs.

Section 4.7.   Authorized Company and Issuer Representatives and Successors.

Section 4.8.   Enforcement of Remedies Against Contractors and Subcontractors and Their Sureties and Against Manufacturers and Vendors.  

Section 4.9.   Appointment of Agent.

ARTICLE V EFFECTIVE DATE OF THIS LEASE; DURATION OF LEASE TERM; RENTAL PROVISIONS; NATURE OF OBLIGATIONS OF COMPANY  

Section 5.1.   Effective Date of this Lease; Duration of Lease Term.

Section 5.2.   Delivery and Acceptance of Possession.

Section 5.3.   Rents and Other Amounts Payable.

Section 5.4.   Place of Rental Payments.

Section 5.5.   Nature of Obligations of Company Hereunder.

Section 5.6.   Restrictions on the Use of Project.

ARTICLE VI MAINTENANCE, TAXES, INSURANCE AND EMINENT DOMAIN

Section 6.1.   Maintenance of Project.

Section 6.2.   Removal of Fixtures or Equipment.

Section 6.3.   Taxes, Other Governmental Charges, and Utility Charges.

Section 6.4.   Insurance Required.

Section 6.5.   Application of Net Proceeds of Insurance.

Section 6.6.   Advances by the Issuer or the Holder.

Section 6.7.   Eminent Domain.

ARTICLE VII DAMAGE, DESTRUCTION, AND CONDEMNATION

Section 7.1.   Election to Repair, Restore or Replace.

Section 7.2.   Election Not to Repair, Restore or Replace.

ARTICLE VIII ADDITIONAL COVENANTS; ADDITIONAL BONDS

Section 8.1.   No Warranty of Condition or Suitability by the Issuer.

Section 8.2.   Access to the Project and Records.

Section 8.3.   Good Standing in the State.

Section 8.4.   Indemnity.

Section 8.5.   Licenses and Permits.

Section 8.6.   Compliance with Laws.

Section 8.7.   Granting and Release of Easements.

ARTICLE IX ASSIGNMENT, SUBLEASING, ENCUMBERING, AND SELLING; REDEMPTION; RENT PREPAYMENTS; ABATEMENT; AND EQUIPMENT  

Section 9.1.   Assignment and Subleasing.

Section 9.2.   Provisions Relating to Sale, Encumbrance, or Conveyance of the Project by the Issuer.  

Section 9.3.   Pledge of this Lease by the Company.

Section 9.4.   Redemption of Bond.

Section 9.5.   Prepayment of Rents.

Section 9.6.   Company Entitled to Basic Rent Abatements if Bond Paid Prior to Maturity.

Section 9.7.   Installation of Other Machinery and Rented Equipment.

Section 9.8.   Reference to Bond Ineffective After Bond Paid.

Section 9.9.   Subordinate Financing.

ARTICLE X EVENTS OF DEFAULT AND REMEDIES

Section 10.1.   Events of Default Defined.

Section 10.2.   Remedies on Default.

Section 10.3.   Remedies Not Exclusive.

Section 10.4.   Company to Pay Fees and Expenses.

Section 10.5.   Waiver of Events of Default.

ARTICLE XI MISCELLANEOUS

Section 11.1.   Company’s Option to Terminate Lease.

Section 11.2.   Quiet Enjoyment.

Section 11.3.   Notices.

Section 11.4.   Construction and Binding Effect.

Section 11.5.   Severability.

Section 11.6.   Amounts Remaining in the Funds.

Section 11.7.   Fees Paid by the Company.

Section 11.8.   No Issuer Liability; Immunity of Members, Officers, and Employees of Issuer.  

Section 11.9.   Amendments, Changes, and Modifications.

Section 11.10.   Execution of Counterparts.

Section 11.11.   Law Governing Construction of this Lease.

Section 11.12.   Covenants Run with Project.

Section 11.13.   Subordination to Security Document.

Section 11.14.   Net Lease.

Section 11.15.   Surrender of Project.

Section 11.16.   Immunity of Directors and Employees of Company.

Section 11.17.   Payments Due on Other than Business Days.

Section 11.18.   Holder of Pledged Interest.

Section 11.19.   Required Consent of Leasehold Mortgagee.

Section 11.20.   Estoppel Certificates.

Section 11.21.   Holdover.

Section 11.22.   Option Agreement.

EXHIBIT A

DESCRIPTION OF THE LAND

SCHEDULE 5.3(c)

PREFERRED RENT

i

LEASE AGREEMENT

This LEASE AGREEMENT (this “Lease”), dated as of July 1, 2013, is by and between the EFFINGHAM COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the “Issuer”), an instrumentality of the State of Georgia (the “State”) and a public corporation created and existing under the laws of the State and MEDIENT STUDIOS, INC. (the “Company”), a Nevada corporation.

W I T N E S S E T H:

WHEREAS, the Issuer is an instrumentality of the State and a public corporation duly created by local amendment to the Georgia constitution, Ga. L. 1968, p. 1733, ratified by electors in 1968, and continued by Ga. L. 1986, p. 3886, as supplemented by Ga. L. 1986, p. 3873, Ga. L. 2001, p. 4139, and Ga. L. 2007, p. 3650 (the “Act”); and

WHEREAS, the Act provides that the Issuer is created for the public purpose, among other purposes, of developing and promoting for the public good industry and trade within Effingham County (the “County”) and is authorized by the Act to issue its revenue bonds to acquire “projects” (as defined in the Act) to be located in the County; the Issuer’s revenue bonds are to be issued and validated under and in accordance with the applicable provisions of the Revenue Bond Law (O.C.G.A. § 36-82-60, et seq.); and

WHEREAS, the Act further authorizes and empowers the Issuer: (i) to lease any such projects; (ii) to pledge, mortgage, convey, assign, hypothecate or otherwise encumber such projects and the revenues therefrom as security for the Issuer’s revenue bonds; and (iii) to do any and all acts and things necessary or convenient to accomplish the purpose and powers of the Issuer; and

WHEREAS, the Issuer currently owns approximately 1550 acres of land located in the County and more particularly described in Exhibit A attached hereto and incorporated herein by reference (the “Land”) which is to be leased by the Issuer to the Company hereunder in consideration of the payment by the Company to the Issuer of rent therefor, as provided herein; and

WHEREAS, the Company desires to lease a capital project in the County consisting of the Land, improvements located or to be located thereon, and equipment installed and to be installed thereat (the “Project”); and

WHEREAS, it is desirable for the Issuer to issue and sell its revenue bond (the “Bond”) in an amount of up to $300,000,000 (the “Maximum Principal Amount”), to acquire the Project and to lease the Project to the Company under this Lease; and

WHEREAS, pursuant to the Bond Resolution (defined below) adopted by the Issuer, authorizing the issuance and sale of the Bond to the Company, as both the “Purchaser” and the initial “Bondholder,” the execution of this Lease and the other Issuer Documents (identified in the Bond Resolution) relating to the Bond, the Issuer is pledging as security for the payment of the Bond the Pledged Security (as defined in the Bond Resolution).

NOW, THEREFORE, in consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows, provided that, in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall not constitute a general obligation of the Issuer but shall be payable solely out of the Pledged Security for the Bond, and the Bond shall not constitute a general obligation of the Issuer nor constitute an indebtedness or general obligation of the State or any other agency or political subdivision of the State, within the meaning of any constitutional or statutory provision whatsoever:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1.  Definitions. Certain capitalized words and terms used in this Lease are defined in the text hereof or in the Bond Resolution. In addition to the words and terms defined elsewhere herein and in the Bond Resolution, the following words and terms are defined terms under this Lease:

“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.

“Company” means Medient Studios, Inc., a Nevada corporation, and any successor tenant under this Lease.

“Company Documents” means those of the Bond Documents to which the Company is a party signatory.

“Corporate Successor” and “corporate successor” mean any corporation or limited liability company into which the Company may merge, any corporation or limited liability company resulting from a consolidation to which the Company is a party or any corporation or limited liability company to which the Company transfers its interest under this Lease, and also includes any Corporate Successor (as above defined, but substituting “corporate successor” for “Company”) of a Corporate Successor.

“Costs of the Project” shall have the meaning set forth in the Bond Resolution.

“Custodian” means the Company, or any other Person that is serving from time to time as Custodian of the Funds.

“Debt Service” and “debt service” mean, as to the Bond, the principal of, interest on and redemption amount, if any, payable on the Bond.

“Debt Service Payment Date” means, as to the Bond, any Principal Payment Date or Interest Payment Date and any date on which the Bond is to be redeemed, in whole or in part, and includes any special Debt Service Payment Date established as provided in the Bond Resolution.

“Default Interest Rate” means, as to the Bond, as to delinquent payments of Basic Rent under this Lease and the Debt Service on the Bond, the Stated Interest Rate, and as to delinquent payments of Additional Rent under this Lease, means the lesser of the Prime Rate plus 300 basis points or the maximum rate allowed by law.

“Document Date” means the date of this Lease.

“Economic Development Agreement” means the instrument entitled “Economic Development Agreement” between the Issuer and the Company, in substantially the form attached as Exhibit F to the Bond Resolution.

“Environmental Laws” means all federal, state, and local laws, rules, regulations, ordinances, programs, permits, guidance, orders, and consent decrees relating to health, safety, and environmental matters, including, but limited to, all current Environmental Laws as of the date hereof, or as those Environmental Laws may be amended, revised or superseded, of any governmental authority having jurisdiction over the Project addressing pollution or the protection of human health or the environment, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq.; the Clean Air Act, 42 U.S.C. § 7401, et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701, et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001, et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; and all similar laws (including implementing regulations) of any governmental authority having jurisdiction over the Project, regardless of whether or not any such liability or violation relates to any period prior to the acquisition of the Project by the Issuer or its acquisition theretofore by the Company.

“Event of Default” means, when used with respect to this Lease, the events specified in Section 10.1 of this Lease, and when used with reference to any other instrument any “Event of Default, “event of default,” “Default,” or “default” (as such term is defined in such other instrument).

“Governing Body” means, as to the Issuer, the members of the Issuer acting as its board of directors.

“Government Obligations” means any direct and general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of Treasury of the United States of America) or obligations the payment of the principal of and interest on which when due are fully and unconditionally guaranteed by the United States of America.

“Holder” and “Bondholder” mean the Person in whose name the Bond is registered on the registration books of the Issuer and, as stated in Section 4.2 of this Lease, initially means the Company.

“Interest Payment Date” means the first July 1 following the issue date of the Bond and each July 1 thereafter, with the final interest payment being due on the Maturity Date, unless the Bond is earlier retired in full by redemption.

“Issuer Documents” means those of the Bond Documents to which the Issuer is to be a party signatory.

“Land” means the land described in Exhibit A attached hereto.

“Leased Equipment” means any equipment that the Company elects to include in the Project.

“Leased Improvements” means all of the improvements located and to be located on the Land and all Additions or Alterations, replacements and substitutions for any portion thereof.

“Leasehold Mortgage” means any leasehold mortgage or leasehold deed to secure debt pursuant to which the Company pledges its interest in this Lease herein to a Lender.

“Leasehold Mortgagee” means a holder of a Leasehold Mortgage.

“Lease Term” means the term of this Lease as specified in Section 5.1 hereof.

“Lender” means any financial institution which has advanced credit to the Company with respect to the Project.

“Loan Documents” means the loan documents with respect to the Company’s Leasehold Mortgage.

“Net Proceeds” means, when used with respect to any proceeds of casualty insurance received with respect to any damage or destruction of the Project, proceeds of sale or any eminent domain award (or proceeds of sale in lieu of a taking by eminent domain) or with respect to any other recovery on a contractual claim or claim for damage to or for taking of the Project, or any part thereof, the gross proceeds from such insurance, eminent domain award, sale or recovery with respect to which that term is used remaining after payment of all costs and expenses (including attorneys’ fees and reimbursable expenses) incurred in the collection of such gross proceeds.

“Option Agreement” means the Option Agreement, dated as of the Document Date, from the Issuer to the Company, in substantially the form attached as Exhibit E to the Bond Resolution, as it may hereafter be amended in accordance with its terms and the terms of the Bond Resolution.

“Permitted Encumbrances” means, as of any particular time, (i) liens for ad valorem taxes and special assessments not then delinquent or permitted to exist as provided in Section 6.3 hereof, (ii) this Lease; (iii) the Security Document, (iv) utility, access or other easements and rights of way, restrictions, reservations, reversions and exceptions in the nature of easements that the Company certifies will not materially interfere with or impair the operations being conducted at the Project leased hereunder, (v) unfiled and inchoate mechanics’ and materialmen’s liens for construction work in progress, (vi) architects’, contractors’, subcontractors’, mechanics’, materialmen’s, suppliers’, laborers’ and vendors’ liens or other similar liens not then payable or permitted to exist hereunder, (vii) such minor defects, irregularities, encumbrances, easements, rights-of-way, and clouds on title as the Company, by an Authorized Company Representative, certifies do not, in the aggregate, materially impair the portions of the Project affected thereby for the purpose for which it was acquired or is held by the Issuer, (viii) existing encumbrances of record, (ix) exceptions described in any policy of title insurance that may be procured by the Company for itself or for a Lender, (x) any Leasehold Mortgage (xi) any Trustee’s Security Deed and (xii) any Superior Encumbrances.

“Person” means a natural person, business organization, public body, or other legal entity.

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

“Preferred Rent Payment Date” means on or before the end of each February during the Term of this Lease as provided in Schedule 5.3 hereof.

“Project” means the Land, the Leased Improvements and the Leased Equipment, as the same shall exist from time to time.

“Security Document” means the instrument entitled “Assignment of Rents and Leases and Security Agreement,” dated as of the Document Date, between the Issuer and the Purchaser, its successors and assigns, in substantially the form attached as Exhibit D to the Bond Resolution, securing the Bond.

“Senior Debt Documents” means the loan documents with respect to the Trustee’s Security Deed.

“State” means the State of Georgia.

“Superior Encumbrances” means all encumbrances and title exceptions on the Project in existence at the time of recording of the Security Document relating to the Project and any encumbrances created by any Trustee’s Security Document.

“Trustee’s Security Deed” means any deed to secure debt or similar instrument or instruments in which the Company or the Issuer (at the request of the Company), or both, pledges the Project or its interest in this Lease to a corporate trustee for the benefit of the Issuer and the Lender to facilitate the Company's obtaining the Senior Debt Documents or other financing for the Project; the Issuer may be a grantor or debtor thereunder, but the Issuer’s obligations thereunder shall be non-recourse, except that recourse may be had against the Issuer’s interest in the collateral pledged under such instrument and shall be subject to the Issuer’s unconditional right to receive the Preferred Rent.

“Unassigned Rights” means all of the rights of the Issuer (i) to receive reimbursements and payments pursuant to Sections 5.3(b)(i), 5.3(c) and 10.4 hereof, (ii) to receive notices under or pursuant to any provision of this Lease or the Bond Resolution, (iii) certain consensual and enforcement rights pursuant to Sections 5.6, 6.3, 6.4, 8.6 and 10.2 hereof and (iv) to be indemnified as provided in Sections 6.6 and 8.4 of this Lease.

Section 1.2.  Construction of Certain Terms. For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply:

(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.

Section 1.3.  Table of Contents; Titles and Headings. The table of contents, the titles of the articles, and the headings of the sections of this Lease are solely for convenience of reference, are not a part of this Lease, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions.

Section 1.4.  Contents of Certificates or Opinions. Every certificate or written opinion delivered by any director or official of the Issuer or the Company with respect to the compliance by the Issuer or the Company with any condition or covenant provided for in this Lease shall be delivered only after the person or persons signing the same has made such examination or investigation as is necessary to enable him, her or them to express an informed opinion as to whether or not such covenant or condition has been complied with. Any such certificate or opinion made or given by any director or official of the Issuer or the Company, insofar as it relates to legal or accounting matters, may be made or given in reliance upon an opinion of counsel or a letter of such accountant. Any such opinion of counsel or accountant’s letter may be based (insofar as it relates to factual matters with respect to information which is in the possession of a director or an official of the Issuer, the Company or any third party) upon the certificate or opinion of, or representations by, such director or official of the Issuer, the Company or such third party on whom such counsel or accountant may reasonably rely, unless such counsel or such accountant knows that the certificate or opinion or representations with respect to the matters upon which his legal opinion or accountant’s letter may be based, as aforesaid, is erroneous or in the exercise of reasonable care should have known that the same was erroneous. The same director or official of the Issuer, the Company or third party, or the same counsel or accountant, as the case may be, need not certify or opine to all of the matters required to be certified or opined under any provision of this Lease, but different directors, officials, counsel, or accountants may certify or opine to different matters, respectively.

ARTICLE II

REPRESENTATIONS AND UNDERTAKINGS

Section 2.1.  Representations by the Issuer. The Issuer makes the following representations and warranties as the basis for the undertakings on its part herein contained:

(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.

Section 2.2.  Representations by the Company. The Company makes the following representations and warranties as the basis for the undertakings on its part herein contained:

(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.

ARTICLE III

LEASING CLAUSE; SECURITY; TITLE

Section 3.1.  Lease of the Project. The Issuer, as landlord, hereby rents the Project to the Company, as tenant, and the Company hereby rents the Project from the Issuer at the rental set forth in Section 5.3 hereof and for the Term, in accordance with the provisions of this Lease. This Lease shall be effective on its delivery. It is the intention of the parties that the interest of the Company hereunder shall be a usufruct under O.C.G.A. § 44-7-1(a) as to real property of the Project, and as a bailment for hire under O.C.G.A. § 44-6-101, as to the personal property of the Project, and not an estate for years. The parties hereto further agree such usufruct and bailment status is evidenced by the fact that various provisions of this Lease restrict and limit the tenant’s rights in the Project to such an extent that 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 the Project or a lessee with an estate for years (subject only to rules prohibiting waste), to-wit:

(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.

Section 3.2.  Security for Payments Under the Bond. Pursuant to the Bond Resolution and as security for the payment of the Bond, the Issuer shall execute and deliver to the Purchaser the Security Document, in which the Issuer shall assign unto the Purchaser, its successors and assigns, all of the right, title, interest, and remedies of the Issuer in, to, and under this Lease (except the Unassigned Rights), together with all rents, revenues, and amounts to be received by the Issuer hereunder (except for amounts the Issuer shall be entitled to receive and retain on account of being included in such Unassigned Rights), as security for, among other things, the payment of the Bond. Subject to Section 5.4 hereof and applicable provisions of the Bond Resolution and the Bond Documents, the Company hereby agrees that its obligations to pay Basic Rent under this Lease shall be absolute and shall not be subject to any defense, except payment, or to any right of set off, counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Company, whether hereunder or otherwise, or arising out of any indebtedness or liability at any time owing to the Company by the Issuer; provided, however, the Company shall not be obligated to pay Basic Rent if for any reason the Company is prevented or prohibited from receiving Debt Service during a period when the Company is also the Holder. Notwithstanding anything to the contrary herein, the Issuer and the Company agree that all payments of Basic Rent required to be made by the Company under this Lease shall be paid directly or credited against the Debt Service due to the Holder as provided in the Bond Resolution and the applicable Bond Documents. The Holder shall have all rights and remedies herein accorded to the Issuer (except for Unassigned Rights), and any reference herein to the Issuer shall be deemed, with the necessary changes in detail, to include the Purchaser or if the Bond shall have been transferred to a successor Holder, shall be deemed to include such successor Holder and the Purchaser or successor Holder shall be deemed to be and is a third party beneficiary of the representations, covenants, and agreements of the Company in favor of the Issuer herein contained (except for covenants and agreements pertaining to the Unassigned Rights).

Section 3.3.  Warranties and Covenants of Issuer as to Title. The Issuer disclaims any interest in any items of equipment and related personal property that are neither acquired with proceeds of the Bond nor Additions or Alterations, replacements or substitutions therefor. The Issuer warrants and covenants that, except for this Lease and the Security Document, the Issuer shall not otherwise encumber the Project or any part thereof without the prior written consent of the Company, the Holder and any Lender (if any is known to the Issuer). The Issuer covenants to take all acts necessary to defend its title to the Project and will do no act (except as permitted by Section 9.2 hereof) to impair such title, provided that the cost of such action is paid for in advance by the Company, or the Issuer is indemnified for such costs by the Company to the Issuer’s satisfaction. The Issuer makes no warranty as to the design, suitability, condition or fitness for purpose of the Project.

Section 3.4.  Warranties and Covenants of Company as to Title. The Company shall take such actions as are necessary to cause title to the Project to vest in the Issuer subject to this Lease and the Permitted Encumbrances. The Company further covenants to pay all costs and expenses which are necessary to defend the title of the Issuer to the Project, and will do no act that will impair such title, except as may be expressly permitted by the Bond Resolution, this Lease and the other Bond Documents.

ARTICLE IV

ACQUISITION AND INSTALLATION OF THE PROJECT;
ISSUANCE OF THE BOND; FUNDS

Section 4.1.  Agreement to Acquire and Install the Project. The Issuer possesses title to the Land and will, simultaneously with the issuance and sale of the Bond, acquire title to the Project as it exists on such date of issuance. The Company will thereafter provide for the construction, installation and equipping of premises contained therein, and will otherwise, to the extent necessary, in the Company’s sole discretion, perform such construction, equipment, repair, renovation and replacement of the Project as may be required to manage and operate the Project from time to time during the term of this Lease. Items of used equipment, as well as new equipment, may be included in the Project. The Company may, using its own funds, pay any of the Costs of the Project, and acquire any property which is to be a part of the Project in its own name, for the purpose of the later transfer of such property by the Company to the Issuer pursuant hereto. The Company is not authorized to and will not obligate the Issuer for any of the Costs of the Project. The Company may make changes in the Project, so long as such changes do not cause the Project to be unsuitable for its intended purpose or to fail to constitute a “project” under the Act or to violate any applicable provisions of law. Any contracts for the construction of any improvements that are a part of the Project shall be let by the Company as a principal, and not as agent of the Issuer. Without limitation, the Company shall require any contractor and its subcontractors to acknowledge and agree that the Issuer is the owner of legal title to the Land and that they have no lien rights with respect to the Issuer’s interest in the Land.  The Company shall provide the Issuer written evidence reasonably satisfactory to the Issuer that is in compliance at all times with the preceding sentence.

Section 4.2.  Agreement to Issue the Bond. In order to provide funds for payment of the Costs of the Project, the Issuer, contemporaneously with the delivery of this Lease, is issuing the Bond to the Purchaser.

Section 4.3.  Application of Proceeds. Any cash proceeds of the Bond shall be used to pay or reimburse Costs of the Project and issuance costs of the Bond.

Section 4.4.  Draws under Bond Purchase Loan Agreement. In Section 4.9 below, the Issuer has authorized the Company to act as its agent for the purpose of requesting advances under the Bond Purchase Loan Agreement to pay or reimburse the Costs of the Project in one or more disbursements, upon the submission by the Company to the Purchaser of a disbursement request in the form attached to the Bond Purchase Loan Agreement. Such disbursement requests must be signed by an Authorized Company Representative. It is agreed that advances under the Bond Purchase Loan Agreement may be made by the Purchaser transferring to the Issuer, at the Purchaser’s cost, items of property that are to be a part of the Project, and in such case the same shall be treated as a receipt by the Project Fund of an amount equal to such Costs of the Project and a disbursement of such amount to the Purchaser in payment of the purchase price of such property.

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 bill 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.

Section 4.5.  Obligation of the Parties to Cooperate in Furnishing Documents; Reliance of the Custodian. Upon payment of any expenses of the Issuer incurred pursuant to Section 5.3(b)(i) hereof, the Issuer agrees to cooperate with the Company in furnishing to the Purchaser the documents referred to in Section 4.4 hereof that are required to effect disbursements of Bond Proceeds in accordance with Section 4.4 hereof. In making any such disbursements, the Purchaser may rely on any such orders and certifications delivered to it pursuant to Section 4.4 hereof.

Section 4.6.  Excess Costs. The Issuer does not make any warranty, either express or implied, that the amounts which may be drawn down under the Bond Purchase Loan Agreement will be sufficient for the payment of all of the Costs of the Project. The Company agrees that it shall not be entitled to any reimbursement for any costs in excess of the Maximum Principal Amount of the Bond from the Issuer or from the Holder, nor shall it be entitled to any diminution of the amounts payable under Section 5.3(a) hereof.

Section 4.7.  Authorized Company and Issuer Representatives and Successors. See the definitions in Section 1.1 hereof, of the terms “Authorized Company Representative” and “Authorized Issuer Representative” relating to the designation thereof. In the event that any person so designated should become unavailable or unable to take any action or make any certificate provided for or required in this Lease, a successor or additional Authorized Company Representative or Authorized Issuer Representative shall be appointed.

Section 4.8.  Enforcement of Remedies Against Contractors and Subcontractors and Their Sureties and Against Manufacturers and Vendors.

(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.

Section 4.9.  Appointment of Agent. The Issuer hereby appoints the Company as its agent and authorizes the Company to act as its agent of and attorney-in-fact for the Issuer for purposes of:

(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.

ARTICLE V

EFFECTIVE DATE OF THIS LEASE; DURATION OF LEASE TERM;
RENTAL PROVISIONS; NATURE OF OBLIGATIONS OF COMPANY

Section 5.1.  Effective Date of this Lease; Duration of Lease Term.  This Lease shall become effective upon its delivery in accordance with Section 3.1 above. The term of this Lease shall expire at 11:59 p.m., Effingham County, Georgia time, on July 1, 2033, subject to the provisions of this Lease permitting earlier termination (including particularly Articles X and XI hereof). Notwithstanding any expiration or termination of this Lease, those covenants and obligations that by the provisions hereof are stated to survive the expiration or termination of this Lease shall survive the expiration or earlier termination of this Lease.

Section 5.2.  Delivery and Acceptance of Possession. The Company shall, commencing with the date of delivery of this Lease (or such later date as is provided for in Section 3.1 hereof), have possession, custody and control of the Project as it exists on such date, and the Company hereby accepts such possession, custody and control, subject to the Permitted Encumbrances. The Issuer covenants and agrees that it shall not take any action, other than pursuant to Article X of this Lease, to prevent the Company from having possession and enjoyment of the Project during the Lease Term and shall, at the request of the Company, if indemnified by the Company, cooperate with the Company in order that the Company may have peaceful possession and enjoyment of the Project.

Section 5.3.  Rents and Other Amounts Payable.

(a)

Basic Rent: Until the Principal Balance of, redemption premium, if any, and interest on the Bond shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Bond Resolution, the Company shall pay to the Holder, for the account of the Issuer, as Basic Rent for the Project on or before 11:00 a.m., Effingham County, Georgia time, on each date on which Debt Service on the Bond is due, a sum equal to the amount payable on that date as Debt Service on the Bond, as provided in the Bond and in the Bond Resolution. Such Basic Rent payments shall be applied to and credited as Debt Service payments on the Bond.

(b)

Additional Rent:

(i)

The Company agrees that, during the Lease Term, it shall pay directly to the Issuer, as Additional Rent, an amount sufficient to reimburse the Issuer for all reasonable expenses and advances incurred by the Issuer in connection with the Project subsequent to the execution of this Lease, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer actually incurred as a result of the failure of the Company to comply with the terms of this Lease or are subject to payment or indemnification by the Company under this Section 5.3(b)(i) or Sections 6.6, 8.4 or 10.4 hereof. All payments of Additional Rent described in this paragraph shall be billed to the Company by the Issuer from time to time, together with a statement certifying that the amount for which reimbursement is sought for one or more of the above-described expenditures has been incurred or paid by the Issuer. Amounts so billed shall be paid by the Company within thirty (30) days after receipt of the bill, which shall contain reasonable detail, by the Company; the right of the Issuer to payments under this paragraph is one of the Unassigned Rights. In the event the Company shall fail to make any of the payments required in this Section 5.3(b)(i), the unpaid amount shall continue as an obligation of the Company until fully paid, and shall accrue interest from such thirtieth day at the Default Interest Rate.

(ii)

The Company agrees that, during the Lease Term, if at any time the Company is not the Holder, it shall pay directly to the Holder, as Additional Rent, an amount sufficient to reimburse the Holder for all expenses and advances reasonably incurred by the Holder hereunder in connection with the Project subsequent to the execution of this Lease, including, but not limited to, the reasonable fees and expenses of counsel for the Holder actually incurred as a result of the failure of the Company to comply with the terms of this Lease or are subject to indemnification by the Company under this Section 5.3(b)(ii) or Sections 6.6, 8.4 or 10.4 hereof. All payments of Additional Rent described in this paragraph shall be billed to the Company by the Holder from time to time, together with a statement. If the bill relates to a reimbursement, such statement shall certify that the amount for which reimbursement is sought for one or more of the above-described expenditures has been incurred or paid by the Holder. Amounts so billed shall be paid by the Company within thirty (30) days after receipt of the bill by the Company. In the event the Company shall fail to make any of the payments required by this Section 5.3(b)(ii), the unpaid amount shall continue as an obligation of the Company until fully paid, and shall accrue interest from such thirtieth day at the Default Interest Rate. The Holder shall be a third-party beneficiary of this Section 5.3(b)(ii) and shall be entitled to enforce the same against the Company, subject to the provisions of this Lease.

(c)

Preferred Rent: During the Lease Term, the Company shall pay to the Issuer, as Preferred Rent in the amounts and at the times as provided on Schedule 5.3(c) attached hereto and incorporated herein by reference. Preferred Rent shall be payable without notice or demand at the office of the Issuer as designated pursuant to Section 11.3 herein (or such other place as the Issuer may from time to time designate in writing). The Preferred Rent is based on a principal value of $10 million in the aggregate, as and if escalated pursuant to Schedule 5.3(c), without interest, representing a discounted purchase price for the Land, payable in installments as provided in Schedule 5.3(c). Said discount has been allowed based on the bargained-for public benefit to be received by the Issuer and the citizens of the County from the Company carrying out the Project as contemplated herein.  The Company’s obligation to pay the Preferred Rent shall be absolute, unconditional and non-terminable. Without limitation, the Issuer shall have the absolute right to retain all payments of Preferred Rent notwithstanding any default by the Company, a termination of this Lease or any foreclosure under the Leasehold Mortgage or the Trustee’s Security Deed. Since the payments of the Preferred Rent represents, in effect, installments of the purchase price being paid by the Company for the Land, the Company shall pay the Preferred Rent regardless of whether or not this Lease is in effect when any payment of the Preferred Rent is due.  The Company may not obtain legal title to the Land, and the Issuer shall have no obligation to convey title to the Land to the Company or any other party, until and unless all unpaid installments of Preferred Rent have been paid in full. Without limitation, the Preferred Rent shall be subject to mandatory prepayment, and all unpaid installments thereof, calculated as provided on Schedule 5.3(c) hereof, shall become immediately due and payable, automatically, without notice or demand, upon the occurrence of any one or more of the following events:

(i)

the expiration or earlier termination of this Lease, including, without limitation, termination as a result of the foreclosure of the Trustee’s Security Deed by a Senior Lender;

(ii)

any default on the part of the Company occurring under the Bond Documents that has not been cured in accordance with any applicable cure period;

(iii)

the exercise by the Company of the Option Agreement, provided, that the Issuer shall have no obligation to perform under the Option Agreement until it has received payment of the mandatory prepayment of the Preferred Rent.  

Without limitation, the Preferred Rent shall, inasmuch as it represents payment of the purchase price for the Land, be subject to acceleration for default (uncured, if cure is permitted) by the Company as provided above.  The Company may prepay the Preferred Rent, from time to time, in whole or in part, without penalty.  

Section 5.4.  Place of Rental Payments. The Basic Rent provided for in Section 5.3(a) hereof, shall be paid directly to the Holder for the account of the Issuer in the manner provided in the Bond or in the Bond Resolution for the payment of Debt Service on the Bond. Such payments shall be made in lawful money of the United States of America; provided, however, that so long as the Company is both the tenant of the Project and the Holder of the Bond, such payments shall be deemed to have been made, without the necessity of any funds being transmitted or any records being maintained with respect to the Sinking Fund.

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.

Section 5.5.  Nature of Obligations of Company Hereunder. The obligations of the Company to make the payments required in Section 5.3 hereof shall be absolute and unconditional irrespective of any defense or any rights of set-off, recoupment, or counterclaim, except payment, it may otherwise have against the Holder; provided, however, the Company shall not be obligated to pay Basic Rent if, for any reason, the Company is prevented or prohibited from receiving Debt Service during a period when the Company is also the Holder, irrespective of the reason therefor. The Company agrees that it shall not suspend, abate, reduce, abrogate, diminish, postpone, modify, or discontinue any payments provided for in Section 5.3 hereof, or except as provided in Section 11.1 hereof, terminate its obligations under this Lease, for any contingency, act of God, event, or cause whatsoever, including, without limiting the generality of the foregoing, failure of the Company to occupy or to use the Project as contemplated in this Lease or otherwise, any change or delay in the time of availability of the Project, any acts or circumstances which may impair or preclude the use or possession of the Project, any defect in the title, design, operation, merchantability, fitness, or condition of the Project or in the suitability of the Project for the Company’s purposes or needs, failure of consideration, any declaration or finding that the Bond is unenforceable or invalid, the invalidity of any provision of this Lease, any acts or circumstances that may constitute an eviction or constructive eviction, destruction of or damage to the Project, the taking by eminent domain of title to or the use of all or any part of the Project, failure of the Issuer’s title to the Project or any part thereof, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or in the rules or regulations of any governmental authority, or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability, or obligation arising out of or connected with this Lease.

(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.

Section 5.6.  Restrictions on the Use of Project. The Project may be used only for the limited purposes permitted by the Act. The Company shall not permit the Project, or any part thereof, to be used in any fashion that would violate any applicable law. The Issuer’s right to enforce this covenant shall be among the Unassigned Rights.

ARTICLE VI

MAINTENANCE, TAXES, INSURANCE
AND EMINENT DOMAIN

Section 6.1.  Maintenance of Project. The Issuer shall not be under any obligation to renew, repair, or maintain any portion of the Project or to remove and replace any inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary portion thereof. The Company, shall maintain, or cause to be maintained, the Project at the expense of the Company. Subject to the provisions of Article VII hereof, the Company, at its own expense, may from time to time make any Additions or Alterations and any modifications, upgrades, replacements and substitutions to the Project that it may deem desirable for its purposes, and expenses incurred in connection with such Additions or Alterations, modifications, upgrades, replacements and substitutions shall be deemed Costs of the Project, unless otherwise elected by the Company pursuant to Section 4.1 hereof. Subject to the provisions of Sections 3.3, 4.1, and 9.7 hereof, such Additions or Alterations and any modifications, upgrades, replacements and substitutions to the Project so made shall become a part of the Project. The Company shall not do, or permit any other Person under its control to do, any work in or about the Project or related to any repair, rebuilding, restoration, replacement, alteration of, or addition to the Project, or any part thereof, unless the Company or such other Person shall have first procured and paid for all requisite municipal and other governmental permits and authorizations. All such work shall be done in a good and workmanlike manner and in compliance with all applicable laws, ordinances, governmental regulations, and requirements. Notwithstanding the foregoing, in the event any part of the Project, or any part thereof, is damaged or destroyed by casualty, the Company’s obligations to repair or replace the Project, or such portion thereof so damaged or destroyed, shall be governed exclusively by Article VII hereof.

Section 6.2.  Removal of Fixtures or Equipment. The Company shall not be under any obligation to renew, repair, or replace any inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary fixtures or items of Leased Equipment that are a part of the Project. If any fixture, item of Leased Equipment or parts thereof have become obsolete or worn out, the Company, in its sole and absolute discretion, at its own expense may remove from the Project such fixtures, item of Leased Equipment or parts thereof and dispose of them (as a whole or in part) without any responsibility or accountability to the Issuer therefor, in which case the removed property shall cease to be a part of the Project. If the Company, in its sole and absolute discretion, determines that any fixtures, item of Leased Equipment or parts thereof should be sold or traded in then the Company may do so provided that it either: (a) replaces such fixture or item of Leased Equipment or parts with other items of property having a value at least equal to the net book value of the property sold or traded in and causes title to such replacement property to be transferred to the Issuer, whereupon the replacement property shall become a part of the Project; or (b) prepays in part the principal of the Bond (or if the Company or an Affiliate of the Company then owns the Bond, the Company causes a credit to be reflected on the Schedule of Payments attached to the Bond as a partial payment of principal) in an amount equal to the net book value of the property sold or traded in. At the written request of the Company, the Issuer shall execute such instruments as shall be required to convey title to any such removed fixture or parts thereof to the Company, to the purchaser thereof or to the person accepting the same as a trade in and the Bondholder shall release the lien and security interest of the Security Document therein. The removal from the Project of any fixture, item of Leased Equipment or parts thereof pursuant to the provisions of this Section shall not entitle the Company to any abatement or diminution of the rental payments payable under Section 5.3 hereof (except to the extent that a prepayment of principal or a credit in reduction of principal of the Bond may result in a reduction of Debt Service on the Bond and a corresponding reduction in the Basic Rent hereunder). The Company, in its sole and absolute discretion, at its own expense may remove any personal property or equipment that is not Leased Equipment or a parts thereof and dispose of them (as a whole or in part) without any responsibility or accountability to the Issuer therefor.

Section 6.3.  Taxes, Other Governmental Charges, and Utility Charges.

(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.

Section 6.4.  Insurance Required.

(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.

Section 6.5.  Application of Net Proceeds of Insurance. The Net Proceeds of the liability insurance carried pursuant to the provisions of Section 6.4 shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. The Net Proceeds of casualty insurance carried pursuant to Section 6.4 shall be paid jointly to the Holder and the Company, and shall be transferred to the Custodian and deposited in the Project Fund to be applied as provided in Article VII hereof, or if the same has been pledged to a Lender, the same shall be transferred to such Lender.

Section 6.6.  Advances by the Issuer or the Holder. If the Company shall fail to do or cause to be done any act or pay any taxes, assessments, charges or insurance premiums required by this Article, the Issuer or the Holder may (but shall be under no obligation to), after expiration of applicable notice and cure periods, do any such act or pay any such taxes, assessments, charges or premiums required by this Article, and all amounts so advanced therefor by the Issuer or the Holder shall become an additional obligation of the Company to the one making the advancement, which amounts shall constitute Additional Rent which shall be payable, with interest as provided in Section 5.3(b). Any remedy herein vested in the Issuer for the collection of rent shall also be available to the Holder for the collection of any Additional Rent payable to the Holder on account thereof.

Section 6.7.  Eminent Domain. If the Issuer or the Company obtains knowledge of the institution or threat of institution of any proceedings for the taking of the Project or any portion thereof by exercise of the power of eminent domain, it shall immediately notify the other party hereto and shall also notify the Holder of such proceedings. The Holder may participate in any such proceedings and the Issuer and the Company from time to time shall deliver to the Holder all instruments requested by it to permit such participation. The Issuer and the Company shall not settle any eminent domain proceeding relating to the Project or any part thereof or sell the Project or any part thereof under threat of eminent domain without the prior written consent of the Holder, which consent shall not unreasonably be withheld, conditioned or delayed. The Net Proceeds of any eminent domain award or any sale in lieu of a taking by eminent domain shall be paid jointly to the Holder and the Company, and shall be transferred to the Custodian and deposited in the Project Fund to be applied as provided in Article VII hereof. Notwithstanding the foregoing, with the consent of the Holder, the Net Proceeds of eminent domain may be pledged to a Lender, which shall be superior to the rights of the Holder thereto, and if so pledged, shall be applied in accordance with the terms of such pledge.

ARTICLE VII

DAMAGE, DESTRUCTION, AND CONDEMNATION

Section 7.1.  Election to Repair, Restore or Replace. If any portion of the Project is damaged, destroyed or taken by eminent domain or is sold (under threat of eminent domain or otherwise), the Net Proceeds shall be deposited upon receipt in the Project Fund, which shall be held by the Custodian, unless the same are otherwise required to be used as may be provided in any pledge thereof to a Lender. Subject to the rights of any Lender, the Company may, within 210 days following the receipt of such Net Proceeds, elect to use such Net Proceeds, in whole or in part, to repair, restore or replace the Project. Any property repaired, restored or acquired to replace any property which was a part of the Project shall become a part of the Project. Upon the completion of such repair, restoration or replacement of the Project and payment of all costs thereof, any unspent Net Proceeds and investment income remaining in the Project Fund may be used, at the election of the Company, to acquire additional property for the Project or to prepay and redeem principal of the Bond.

Section 7.2.  Election Not to Repair, Restore or Replace. If an election to repair, restore or replace damaged, destroyed or taken portions or all of the Project is not made within the time provided in Section 7.1, above, or if prior to such time the Company notifies the Issuer and the Custodian that it elects not to repair, restore or replace damaged, destroyed or taken portions or all of the Project, the Custodian of the Project Fund shall immediately apply such moneys to prepay principal of the Bond, unless otherwise provided in a pledge to a Lender. If the Bond is not fully retired, the obligation to pay Basic Rent hereunder shall remain in full force and effect, without abatement or diminution (except to the extent the amount of Basic Rent is reduced on account of such prepayment). If the Company is then the Holder of the Bond, and the Bond is not fully retired, the Company may surrender the Bond for cancellation, whereupon the obligation for payment of Basic Rent shall terminate, and any obligation for Additional Rent theretofore accrued shall become immediately due and payable.

ARTICLE VIII

ADDITIONAL COVENANTS; ADDITIONAL BONDS

Section 8.1.  No Warranty of Condition or Suitability by the Issuer. THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, CONDITION, OR WORKMANSHIP OF ANY PART OF THE PROJECT OR THAT THE SAME WILL BE SUITABLE FOR THE COMPANY’S PURPOSES OR NEEDS.

Section 8.2.  Access to the Project and Records. The Issuer, the Holder, any Lender and their respective duly authorized representatives and agents, shall have the right, upon reasonable notice to the Company and subject to any reasonable restriction imposed by the Company for safety purposes or for the protection of its patents, trademarks, trade secrets, and other confidential or proprietary information, to enter the Project at all reasonable times during the Lease Term, if accompanied by a Company representative, for the purpose of (i) examining and inspecting the Project and (ii) performing such work relating to the Project as has been made necessary by reason of an Event of Default.

Section 8.3.  Good Standing in the State. The Company agrees that, if required by law, it will be in good standing in the State while this Lease is in effect.

Section 8.4.  Indemnity.

(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.

Section 8.5.  Licenses and Permits. The Company shall do all things necessary to obtain, maintain, modify, supplement and renew, from time to time, as necessary, all public filings, permits, licenses, franchises, and other governmental approvals necessary for its ownership of and activities relating to the Project, the lack of which would have a material adverse effect upon the Company’s ability to meet its obligations under this Lease.

Section 8.6.  Compliance with Laws. The Company warrants that throughout the Lease Term it shall, at its own expense, maintain the Project in all material respects, in compliance with all applicable life and safety codes and all applicable building and zoning, health, environmental, and safety ordinances and laws, including the Occupational Health and Safety Act and all applicable Environmental Laws, and all other applicable laws, ordinances, rules, and regulations of the United States of America, the State, and any political subdivision or agency thereof having jurisdiction over the Project and which relate to the operations of the Project, any violation of which would have a material adverse effect on the Company’s ability to fully perform its obligations under this Lease. The Company’s use of the Project shall, in all material respects, conform to all laws and regulations of any governmental authority possessing jurisdiction thereof, and the Company shall, in its use or operation of the Project, not discriminate or permit discrimination on the basis of race, sex, color or national origin in any manner prohibited by local state or federal laws, rules, orders or regulations.

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.

Section 8.7.  Granting and Release of Easements. If no Event of Default shall have happened and be continuing, the Company may at any time or times cause to be granted, modified, amended, released or terminated conveyances to public authorities or utilities, easements, licenses, rights of way (temporary or perpetual and including the dedication of public highways), plats, covenants, restrictions and agreements with respect to any property included in the Project and other contracts or agreements helpful in effecting the development, construction, maintenance, operation or restoration of the Project and such grant will be free from the lien or security interests created by the Security Document or this Lease and the Issuer agrees that it shall execute and deliver any instrument necessary or appropriate to confirm, grant, amend, modify, terminate or release any such matters within fourteen (14) business days upon receipt of: (i) a copy of the operative instrument, and (ii) a written application of the Company signed by an Authorized Company Representative requesting such instrument and stating (1) that such matter is not detrimental to the proper conduct of the business of the Company, and (2) that such matter will not impair the effective use or materially interfere with the operation of the Project and will not weaken, diminish or impair the security intended to be given by or under the Security Document.

ARTICLE IX

ASSIGNMENT, SUBLEASING, ENCUMBERING,
AND SELLING; REDEMPTION; RENT PREPAYMENTS;
ABATEMENT; AND EQUIPMENT

Section 9.1.  Assignment and Subleasing.

(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)

Any sale or assignment in connection with any sale/leaseback or other arrangement entered into by the Company in connection with a financing transaction.

(ix)

Any sale or assignment to any of the following:

(A)

Any savings bank, savings and loan association, commercial bank, or trust company having shareholder equity (as determined in accordance with GAAP accounting) of at least $10,000,000;

(B)

Any college, university, credit union, trust or insurance company having assets of at least $10,000,000;

(C)

Any employment benefit plan subject to ERISA having assets held in trust of $10,000,000 or more;

(D)

Any pension plan established for the benefit of the employees of any state or local government, or any governmental authority, having assets of at least $10,000,000;

(E)

Any limited partnership, limited liability company or other investment entity having committed capital of $10,000,000 or more;

(F)

Any corporation, limited liability company or other Person having shareholder equity (or its equivalent for non-corporate entities) of at least $10,000,000;

(G)

Any lender which performs real estate lending functions similar to any of the foregoing, and which has assets of at least $10,000,000; and

(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.

Section 9.2.  Provisions Relating to Sale, Encumbrance, or Conveyance of the Project by the Issuer. Except pursuant to the Security Document or a Trustee’s Security Document executed by the Issuer at the written request of the Company, and except for any sale under threat of a taking by eminent domain or a sale pursuant to Article VI hereof, the Issuer agrees that, during the Lease Term, it shall not, except pursuant to or as permitted by the Security Document or a Trustee’s Security Document: (1) directly, indirectly, or beneficially sell, convey, or otherwise dispose of any part of its interest in the Project, (2) permit any part of the Project to become subject to any lien, claim of title, encumbrance, security interest, conditional sale contract, title retention arrangement, finance lease, or other charge of any kind, without the written consent of the Company, and (3) assign, transfer, or hypothecate (other than pursuant to the Bond Resolution and the Security Document) any payment of rent (or analogous payment) then due or to accrue in the future under any lease of the Project, except that if the laws of the State at the time shall permit, nothing contained in this Section shall prevent the consolidation of the Issuer with, or merger of the Issuer into, or transfer of the Project as an entirety to, any public body of the State whose property and income are not subject to taxation and which has authority to carry on the business of owning and leasing the Project, provided, that upon any such consolidation, merger, or transfer, the due and punctual payment of the principal of, premium, if any, and interest on the Bond according to its tenor, and the due and punctual performance and observance of all the agreements and conditions of this Lease, the Bond Resolution and the Security Document to be kept and performed by the Issuer, shall be expressly assumed in writing by the public body resulting from such consolidation or surviving such merger or to which the Project shall be transferred as an entirety. All such trade fixtures, machinery, equipment, software and other personal property may be removed from the Project by the Company, any such subtenant, any such equipment lessor, or any Person to which the same is pledged, and the Issuer and the Company shall provide access, ingress and egress to any such Person for purposes of inspection. repair, maintenance or removal of any such trade fixtures, machinery, equipment, software and other personal property.

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.

Section 1.1.  Pledge of this Lease by the Company. The Company may pledge its leasehold interest hereunder with the consent of the Issuer, which consent chall not be unreasonably withheld. The Issuer and Company acknowledge and agree that in the event of a foreclosure of any Leasehold Mortgage, the purchaser at such foreclosure shall become the “Company” hereunder and shall assume all of the Company’s obligations hereunder, including, without limitation, the provisions related to the Company’s indemnification of the Issuer and the payment of the Preferred Rent.

Section 1.2.  Redemption of Bond. The Issuer, at the written request of the Company and if the Company provides funds therefor, shall forthwith take all steps that may be necessary under the redemption or defeasance provisions of the Bond Resolution to effect the redemption or defeasance of all or part of the then Outstanding Bond, as may be specified by the Company, on the earliest date on which such redemption or defeasance may be made under such applicable provisions. If there is an acceleration of the Bond, the Company shall immediately cause the Bond to be redeemed or cancelled.

Section 1.3.  Prepayment of Rents. There is expressly reserved to the Company the right, and the Company is authorized and permitted, at any time it may choose, to prepay all or any part of the Basic Rent payable under Section 5.3(a) hereof, and the Issuer agrees that it shall accept such prepayments of rents when the same are tendered by the Company. All Basic Rent so prepaid shall at the written direction of the Company be credited toward the Basic Rent payments specified in Section 5.3(a) hereof, in the same manner as such payments are applied to the payment of Debt Service in accordance with terms of the Bond and the Bond Resolution. The Company may also prepay the Preferred Rent as herein provided. The Company shall also have the right to surrender the Bond, if it is then owned by the Company, to the Issuer for cancellation, and such Bond, upon such surrender and cancellation, shall be deemed to be paid and no further Basic Rent shall be paid, as provided in Section 9.6, below.

Section 1.4.  Company Entitled to Basic Rent Abatements if Bond Paid Prior to Maturity. If at any time the Bond shall cease to be Outstanding, under circumstances not resulting in termination of the Lease Term, and if the Company is not at the time otherwise in default hereunder, the Company shall be entitled to use the Project from the date such Bond is no longer Outstanding to, and including the end of, the Lease Term, with no obligation to make payments of Basic Rent specified in Section 5.3(a) hereof during that interval (but otherwise on the terms and conditions hereof).

Section 1.5.  Installation of Other Machinery and Rented Equipment. The Company may from time to time, in its sole discretion and at its own expense, install trade fixtures, machinery, equipment, and other personal property at the Project. All such trade fixtures, machinery, equipment, and other personal property which are not transferred to the Issuer as part of the Project shall remain the sole property of the Company (or of any leasing company from whom the Company may be renting such items), and the Company (or such leasing company) may remove the same from the Project at any time, in its sole discretion and at its own expense, provided, however, that the Company or such leasing company shall not be prohibited from transferring its interest in trade fixtures, machinery, equipment, and other personal property at the Project to the Issuer in a bond transaction. The Company or such leasing company, as applicable, may create any mortgage, encumbrance, lien, or charge on any such trade fixtures, machinery, equipment, and other personal property that is not a part of the Project. Unless so transferred to the Issuer in such a bond transaction, the Issuer shall not have any interest in and waives any lessor’s lien that it may have on any such trade fixtures, machinery, equipment, or other personal property so installed pursuant to this Section, and all such trade fixtures, machinery, equipment, software and other personal property shall be and remain identified as the property of the Company or such leasing company on its books and/or by appropriate tags or other markings.

Section 1.6.  Reference to Bond Ineffective After Bond Paid. Upon payment in full of the Bond (or provision for payment thereof having been made in accordance with the defeasance provisions of the Bond Resolution), all references in this Lease to the Bond and the Holder shall be ineffective, and the owner of the Bond shall not thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested. For purposes of this Lease the Bond shall be deemed fully paid if it is defeased as provided in the Bond Resolution.

Section 1.7.  Subordinate Financing. The Company may, upon the written approval of the Issuer, and as necessary to secure adequate financing for the Project, arrange for and secure financing that is be subordinate to any loans, leases, assignments or other financial arrangements reflected by and contained in the Senior Debt Documents, including but not limited to financial arrangements subordinate to those of the Senior Lender, the Equipment Lender and the Senior Leasehold Lender, all as defined in that certain Memorandum of Understanding between the Company and the Issuer dated March 19, 2013.

ARTICLE II

EVENTS OF DEFAULT AND REMEDIES

Section 2.1.  Events of Default Defined. The following shall be “Events of Default” under this Lease, and the terms “Event of Default” or “Default” shall mean, whenever they are used in this Lease, any one or more of the following events:

(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.

Section 2.2.  Remedies on Default. Whenever any Event of Default referred to in Section 10.1 hereof shall have happened and be subsisting, the Issuer, to the extent permitted by law, may take any one or more of the following remedial steps:

(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.

Section 2.3.  Remedies Not Exclusive. Subject to the limitations herein, the remedies herein expressly conferred upon the Issuer and the Holder are intended to be in addition to other remedies existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article, the Holder, any pledgee of the Bond and any Lender that is the holder of a Trustee’s Security Document must consent to such exercise.

Section 2.4.  Company to Pay Fees and Expenses. In the event the Company should default under any of the provisions of this Lease and the Issuer or the Holder should employ attorneys, accountants, or other experts or incur other expenses for the collection of amounts due it hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Company herein contained for its benefit, the Company agrees that it shall on demand therefor pay to such Person the reasonable fees and expenses of such attorneys, accountants, or other experts and such other expenses so incurred by the Issuer. Any attorneys’ fees required to be paid by the Company under this Lease shall include attorneys’ and paralegal’s fees through all proceedings, including, but not limited to, negotiations, administrative hearings, trials, and appeals, court costs and reimbursable expenses of such attorneys. The Company and the Holder shall be entitled to enforce their respective rights under this Article and the Issuer’s rights under this Article shall be one of the Unassigned Rights. This section shall survive the termination of this Lease.

Section 2.5.  Waiver of Events of Default. The Issuer may waive any Event of Default hereunder and its consequences or rescind any declaration of acceleration of payments of the rents and other amounts due hereunder provided that the Issuer shall not waive any Event of Default (other than Events of Default relating to the Unassigned Rights) without the prior written consent of the Holder. The Holder may waive any Event of Default hereunder other than Events of Default relating to the Unassigned Rights, which may be waived only by the Issuer. In case of any such waiver or rescission, or in case any proceeding taken by the Issuer or the Holder on account of any such Event of Default shall be discontinued or abandoned or determined adversely to the Issuer or the Holder, then and in every such case the Issuer, the Holder and the Company shall be restored to their former positions and rights hereunder, but no such waiver or rescission shall extend to or affect any subsequent or other Event of Default or impair or exhaust any right, power, or remedy consequent thereon.

ARTICLE III

MISCELLANEOUS

Section 3.1.  Company’s Option to Terminate Lease. The Company shall have, and is hereby granted, at any time and without notice, the option to terminate this Lease by (i) causing the Bond to be paid or defeased in accordance with the provisions of the Bond Resolution, (ii) paying any amounts due the Issuer or the Holder for Additional Rent and the Preferred Rent, and (iii) giving the Issuer notice in writing of such termination which shall forthwith become effective. If the Company terminates this Lease it shall lose all interest in the Project and the Project shall belong solely to the Issuer irrespective of how much Preferred Rent was theretofore paid.

Section 3.2.  Quiet Enjoyment. The Issuer agrees that so long as the Company shall fully and punctually pay all of the rents and other amounts provided to be paid hereunder by the Company and shall fully and punctually perform all of its other covenants and agreements hereunder, the Company shall peaceably and quietly have, hold, and enjoy the Project during the Lease Term, and the Issuer warrants and covenants that it will defend the Company in such peaceable and quiet possession of the Project.

Section 3.3.  Notices. Any request, demand, authorization, direction, notice, consent, or other document provided or permitted by this Lease to be made upon, given or furnished to, or filed with, the Issuer, the Company or the initial Holder as set forth below shall be sufficient for every purpose hereunder if in writing and (except as otherwise provided in this Lease) either (i) delivered personally to the party or, if such party is not an individual, to an officer or other legal representative of the party to whom the same is directed, or (ii) mailed by registered or certified mail, return receipt requested, postage prepaid, or (iii) sent via nationally recognized overnight courier for next business day delivery, as follows:

If to the Issuer:	Effingham County Industrial Development Authority 520 W. Third Street Springfield, Georgia 31329 Attn: Chief Executive Officer
with a copy to:	Carellas & Newberry, P.C. 440 Silverwood Centre Dr. Rincon, Georgia 31326 Attn: Theodore T. Carellas, Esq.
and a copy to:	Seyfarth Shaw LLP 1075 Peachtree Street, N.E. Suite 2500 Atlanta, Georgia 30309 Attn: Daniel M. McRae, Esq.
If to the Company:	Medient Studios, Inc. 1635 Old Rivers Road Bloomingdale, Georgia 31302 Attn: Manu Kumaran, Chief Executive Officer and         Graham Bradstreet, Executive Operations Officer
with a copy to:	Medient Studios, Inc. 3651 Peachtree Parkway – Suite E Suwanee, Georgia 30024 Attn: Parth S. Munshi, Esq

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.

Section 3.4.  Construction and Binding Effect. This Lease constitutes the entire agreement of the parties concerning the subject matter hereof and supersedes any prior agreements with respect thereto. This Lease shall inure to the benefit of the Issuer, the Company, the Holder and their respective successors and assigns, and shall be binding upon the Issuer and the Company, subject, however, to the limitations contained in Sections 9.1 and 9.2 hereof.

Section 3.5.  Severability. In the event any provision of this Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 3.6.  Amounts Remaining in the Funds. It is agreed by the parties hereto that any amounts remaining in the Funds upon expiration or sooner termination of the Lease Term, as provided in this Lease, after payment or defeasance of the Bond in full and all sums due and owing to the Issuer and the Holder shall have been paid, shall belong to and shall be paid to the Company as an overpayment of rent.

Section 3.7.  Fees Paid by the Company. Except as Section 4.3 hereof permits the payment or reimbursement thereof, the Company shall pay all fees and expenses relating to this Lease, including but not limited to, any recording fee and tax upon this Lease, and reasonable attorneys’ fees. In case the Issuer, with the written consent of the Company, pays or advances any money for recording, preparation of documents, any expenses incurred in the completion of this transaction, the payment of any insurance premiums, encumbrances, tax, assessment, or other charge or lien upon the Project, or any other amounts necessary for the payment of the Costs of the Project, the same shall be advances payable in accordance with Section 6.6 of this Lease.

Section 3.8.  No Issuer Liability; Immunity of Members, Officers, and Employees of Issuer. The Company, assumes full responsibility for the acquisition and installation of the Project and for any Additions or Alterations thereto replacements thereof and substitutions therefor, and hereby releases the Issuer for any responsibility or liability with respect to the foregoing. No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Issuer contained in this Lease or for any claim based hereon or otherwise in respect hereof or upon any obligation, covenant, promise, or agreement of the Issuer contained in the Bond Resolution against any director, member, officer, or employee, as such, in his/her individual capacity, past, present, or future, of the Issuer, or any successor Person, whether by virtue of any constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that this Lease is solely a corporate obligation of the Issuer payable only from the funds and assets of Issuer herein specifically provided to be subject to such obligation and that no personal liability whatsoever shall attach to, or be incurred by, any director, member, officer, or employee, as such, past, present, or future, of the Issuer, or of any successor Person, either directly or through the Issuer, or any successor Person, under or by reason of any of the obligations, covenants, promises, or agreements entered into between the Issuer and the Company whether contained in this Lease or in the Bond, in the Bond Resolution, in the Bond Documents or to be implied hereunder or thereunder as being supplemental hereto or thereto, and that all personal liability of that character against every such director, member, officer, and employee of the Issuer or any such successor Person is, by the execution of this Lease and as a condition of and as part of the consideration for the execution of this Lease, expressly waived and released by the Company. The immunity of directors, members, officers, and employees of the Issuer under the provisions contained in this Section shall survive the completion of the Project and the termination of this Lease.

Section 3.9.  Amendments, Changes, and Modifications. This Lease may not be amended, modified, altered, or terminated, except as provided in the Bond Resolution.

Section 3.10.  Execution of Counterparts. This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 3.11.  Law Governing Construction of this Lease. This Lease is prepared and entered into with the intention that the laws of the State of Georgia, exclusive of such State’s rules governing choice of law, shall govern its construction.

Section 3.12.  Covenants Run with Project. The covenants, agreements, and conditions herein contained shall run with the Project hereby leased and shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors and assigns. Time is of the essence under this Lease.

Section 3.13.  Subordination to Security Document. This Lease and the rights and privileges hereunder of the Company are specifically made subject and subordinate to the rights and privileges of the Holder, as set forth in the Security Document. The Issuer’s fee simple interest in the Project and Issuer’s right to Preferred Rent are not subject to the Security Document.

Section 3.14.  Net Lease. This Lease shall be deemed and construed to be a “triple net lease,” and the Company shall pay absolutely net, during the Lease Term, the rent and all other payments required hereunder, free of any deductions, without abatement, diminution, or set off other than those herein expressly provided.

Section 3.15.  Surrender of Project. Except as otherwise provided in this Lease, at the expiration or sooner termination of the Lease Term, the Company agrees to surrender possession of the Project peaceably and promptly to the Issuer in as good condition as at the commencement of the Lease Term, excepting only ordinary wear, tear, and obsolescence, and damage by fire or other casualty or a taking by eminent domain which the Company is not obligated by this Lease to repair.

Section 3.16.  Immunity of Directors and Employees of Company. No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Company contained in this Lease or for any claim based hereon or otherwise in respect hereof, against any stockholder, director, limited partner (but not general partner), member, manager, employee, trustee for, or agent of the Company or any successor entity, in his or her individual capacity, past, present, or future, whether by virtue of any constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that this Lease is solely an obligation of the Company and that no personal liability whatsoever shall attach to, or be incurred by, any such stockholder, director, limited partner (but not general partner), member, manager, employee, trustee for, or agent, either directly or through the Company, or any successor entity, under or by reason of any of the obligations, covenants, promises, or agreements contained in this Lease or to be implied here from, and that all personal liability of that character against every such stockholder, director, limited partner (but not general partner), member, manager, employee, trustee for, or agent is, by the execution of this Lease and as a condition of and as part of the consideration for the execution of this Lease, expressly waived and released. The immunity of each such stockholder, director, limited partner (but not general partner), member, manager, employee, trustee for, or agent of the Company under the provisions contained in this Section shall survive the termination of this Lease.

Section 3.17.  Payments Due on Other than Business Days. Whenever a date upon which a payment is to be made under this Lease falls on a date which is not a Business Day, such payment may be made on the next succeeding Business Day without interest for the intervening period.

Section 3.18.  Holder of Pledged Interest. The Issuer agrees and the Holder, by its acceptance of the Bond, shall be deemed to have agreed, that upon receipt of notice from the Holder of a pledged interest in this Lease, all elections, options, or rights of the Company to terminate this Lease shall be effective only if consented to in writing by the holder of the pledged interest.

Section 3.19.  Required Consent of Leasehold Mortgagee. Notwithstanding anything contained herein to the contrary, whenever the provisions of this Lease require the Company’s consent, the consent of any Lender which holds a Leasehold Mortgage or Trustee’s Security Document must also be obtained.

Section 3.20.  Estoppel Certificates. Upon ten (10) business days’ written request of the Company, the Issuer will provide a statement to any Lender which is the beneficiary of any Trustee’s Security Document or any Leasehold Mortgage concerning, to the best of its knowledge, (i) the outstanding amount of the Bond; (ii) whether a default exists under this Lease or the other Company Documents, and if so specifying the nature of such default; (iii) whether this Lease or the Company Documents have been amended, and if so, specifying the amendments; and (iv) any other matter concerning this Lease or the Company Documents reasonably requested by such holders.

Section 3.21.  Holdover. In the event the Company remains in possession of the Project after the expiration of the Term without the Issuer's written consent, the Company shall be a tenant at will. The Company shall be obligated to pay rent for each month that it holds over without written consent at a monthly rental of $1.00. All of the Company’s obligations under this Lease shall apply during such holdover period and Company shall also be liable for any Additional Rent as herein provided. There shall be no renewal of this Lease by operation of law or otherwise.

Section 3.22.  Option Agreement. Notwithstanding anything in this Lease to the contrary, in the event of expiration, scheduled or other termination of this Lease for any reason whatsoever, the Company in all events shall have the right to exercise the purchase option set forth in the Option Agreement, subject to and in accordance with the terms and conditions set forth therein and in this Lease. To the extent the Closing Date (as such term is defined in the Option Agreement) occurs after the scheduled expiration or earlier termination of this Lease, notwithstanding such scheduled expiration or earlier termination, the Issuer and the Company acknowledge and agree that this Lease shall continue in full force and effect, except that, during the period after the scheduled expiration or earlier termination and prior to the Closing Date, the Company shall pay rent in accordance with Section 11.21 above, such that the Company may continue to operate the Project for the purposes set forth in this Lease, the Bond Resolution and the other Bond Documents without interruption.

[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]

[SIGNATURE PAGE TO LEASE AGREEMENT]

MEDIENT STUDIOS, INC., a Nevada corporation

By:

Manu Kumaran, Chief Executive Officer

[SEAL]

[SIGNATURE PAGE TO LEASE AGREEMENT]

EXHIBIT A

DESCRIPTION OF THE LAND

SCHEDULE 5.3(c)

PREFERRED RENT

(a)

The installments of Preferred Rent shall be as follows:

(1)

Year 1 and Year 2: no payment

(2)

Year 3: $555,565

(3)

Year 4 – Year 20: $555,555 per year, payable on or before the end of February in each Year.

(b)

The foregoing notwithstanding, if the Company has not attained jobs and investment levels corresponding at least to the goals specified in the Community Goals Table for Year 5 (i.e., $90 million in investment and 1,000 jobs) on or before the end of Year 5, then commencing for Year 6, the annual installment for each Year shall be escalated and shall increase to the amount for each Year set forth on Exhibit “A” attached hereto and incorporated herein by reference, provided, that such escalation shall cease (without affecting the obligation to pay $555,555 per Year) for the first Year after the Year in which the Company attains jobs and investment levels corresponding at least to the goals specified in the Community Goals Table for Year 5 (regardless of the Year in which attainment occurs).

(c)

If it is necessary for any purpose of this Agreement to calculate the amount of unpaid installments of Preferred Rent at any time when an escalation is in effect as provided in (b), above, then it shall be assumed for such purpose that installments of Preferred Rent accrue at the amount for each Year set forth on Exhibit “A” hereto, notwithstanding any event that might intervene (such as attainment of investment or jobs levels).

EXHIBIT “A”

ESCALATED INSTALLMENTS OF PREFERRED RENT

Year	Installment Amount
6	$   680,555
7	$   805,555
8	$   930,555
9	$1,055,555
10	$1,180,555
11	$1,305,555
12	$1,430,555
13	$1,555,555
14	$1,680,555
15	$1,805,555
16	$1,930,555
17	$2,000,000
18	$2,000,000
19	$2,000,000
20	$2,000,000