Document:

EX-10.1

 

EXHIBIT
10.1

This Lease Agreement has been executed in several counterparts. No assignments of an
ownership or security interest this Lease Agreement may be made other than by transfer of
counterpart number 1.

 

Adel Industrial Development Authority

(a public body corporate and politic created and existing

under the laws of the State of Georgia)

as Lessor

And

Sanderson Farms, Inc. (Production Division)

(a Mississippi corporation)

as Lessee

 

Lease Agreement

 

 

The rights and interest of the Adel Industrial Development Authority in this Lease Agreement
and the revenues and receipts derived therefrom, except for its Unassigned Rights, as defined
herein, have been assigned and are the subject of a grant of a security interest to the Bondholder
under a Bond Purchase Agreement dated as of even date herewith.

 

 

	 	 	 
	State of Georgia

	 	)
	 
	 	 
	Cook County

	 	)

Parties and Recitals

     This Lease Agreement, dated as of July 1, 2006, by and between the Adel
Industrial Development Authority, a public body corporate and politic created and existing
under the laws of the State of Georgia (the “Lessor”), party of the first part, and Sanderson
Farms, Inc. (Production Division), a duly organized and validly existing Mississippi
corporation (the “Lessee”), party of the second part;

W  i  t  n  e  s  s  e  t  h:

     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
Lessor herein contained, any obligation it may thereby incur for the payment of money shall not
constitute a general obligation of the Lessor but shall be payable solely out of the rents,
revenues, receipts, and other payments derived from this Lease, and the Bonds (as hereinafter
defined) shall not constitute a general obligation of the Lessor nor constitute an indebtedness or
general obligation of the State of Georgia or any other agency or political subdivision of the
State of Georgia, within the meaning of any constitutional or statutory provision whatsoever:

 

 

Definitions and Other Provisions of General Application

     Section 1.01. Definitions. Certain words and terms used in this Lease are defined
herein. When used herein, such words and terms shall have the meanings given to them by the
language employed in this Article I defining such words and terms, unless the context clearly
indicates otherwise. In addition to the words and terms defined elsewhere herein, the following
words and terms are defined terms under this Lease:

     “Act” means an act titled “Development Authorities Law,” codified as Chapter 62 of Title 36 of
the Official Code of Georgia Annotated, as amended, as the same may be from time to time
supplemented and amended.

     “Additional Rent” means the rent payable by the Lessee to the Lessor, described under the
subheading “Additional Rent” in Section 5.03 of this Lease.

     “Additions or Alterations” means modifications, improvements, alterations, additions,
enlargements, or expansions in, on, or to the Project.

     “Authorized Lessee Representative” means the person at the time designated to act on behalf of
the Lessee by written certificate furnished to the Lessor and the Depositary, containing the
specimen signature of such person and signed on behalf of the Lessee by the President or a Vice
President of the Lessee. Such certificate or any subsequent or supplemental certificate so
executed may designate an alternate or alternates.

     “Basic Rent” means the rent payable by the Lessee to the Lessor, described under the
subheading “Basic Rent” in Section 5.03 of this Lease.

     “Bond Documents” means, collectively, this Lease, the Bond Resolution, and the Bond Purchase
Agreement.

     “Bondholder” means the Persons in whose name the Bonds are registered on the registration
books of the Lessor, which initially shall be the Purchaser.

     “Bond Purchase Agreement” means the Bond Purchase Agreement, dated as of even date herewith,
between the Lessor and the Purchaser, under the terms of which the Lessor agreed to issue and sell
the Bonds to the Purchaser and the Purchaser agreed to purchase the Bonds from the Lessor, and the
Lessor assigned, pledged, and granted a first priority security interest in the Bond Rent as
security for the payment of principal of, and premium, if any, and interest on, the Bonds. The
term Bond Purchase Agreement shall include any amendments or supplements thereto.

     “Bond Rent” means all the Lessor’s right, title, interest, remedies, powers, options,
benefits, and privileges in, to, and under this Lease (reserving, however, to the Lessor the
Unassigned Rights, as defined herein) and all amounts due and to become due to the Lessor under and
pursuant to this Lease.

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     “Bond Resolution” means the resolution or resolutions adopted by the Governing Body of the
Lessor authorizing the issuance and sale of the Bonds and the security therefor.

     “Bonds” means the revenue Bonds designated “Adel Industrial Development Authority Revenue
Bonds (Sanderson Farms, Inc. (Production Division) Project), Series 2006,” to be dated as of even
date herewith, in the aggregate principal amount of $17,200,000, to be issued pursuant to the Bond
Purchase Agreement, and any Bond issued in substitution or exchange therefor.

     “Building” means those certain buildings and all other fixtures, structures, and improvements
that are, or will be, constructed or installed on the Leased Premises in accordance with this
Lease.

     “Completion Date” means the date of substantial completion of the acquisition, construction,
equipping, and installation of a Project, as that date shall be certified as provided in Section
4.06.

     “Construction Contracts” means the contracts among the Lessor, the Lessee, and the general
contractor for the construction and installation of the Building and the contracts among the
Lessor, the Lessee, and suppliers for the acquisition of the Leased Equipment.

     “Construction Period” means the period between the beginning of construction and installation
of the Building and the Completion Date.

     “Consulting Architect” means the architect or architectural firm at the time employed by the
Lessee and designated to act on behalf of the Lessor by written certificate furnished to the
Bondholder, containing the signature of such person or the signature of a partner or officer of
such firm, and signed on behalf of the Lessor by the Chairman of the Lessor. The Consulting
Architect shall be registered and qualified to practice architecture under the laws of the State
and shall not be an employee of the Lessor or the Lessee.

     “Costs of the Project” means those costs and expenses paid or incurred in connection with the
acquisition, construction, equipping, and installation of the Project and permitted by Section 4.03
to be paid or reimbursed from Bond proceeds.

     “County” means Cook County, Georgia.

     “Depositary” means initially the Company, and its successors and assigns, or any successor
depositary for the Project Fund hereafter appointed by the Lessor at the direction of the Lessee.

     “Environmental Laws” means all federal, state, and local laws, rules, regulations, ordinances,
programs, permits, guidances, orders, and consent decrees relating to health, safety, and
environmental matters, including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, the Toxic Substances Control Act, as amended,
the Resource Conservation and Recovery Act, as amended, the Clean Water Act, as amended, the Clean
Air Act, as amended, the Superfund Amendments and

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Reauthorization Act of 1986, as amended, state and federal superlien and environmental cleanup
programs and laws, and U.S. Department of Transportation regulations.

     “Event of Default” means the events specified in Section 10.01 of this Lease.

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

     “Government Obligations” means direct 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.

     “Gross Rent” means the Basic Rent and the Additional Rent, as well any other amounts payable
under Section 5.03.

     “Independent Counsel” means an attorney or firm of attorneys duly admitted to practice law
before the highest court of any state of the United States and not in the full-time employment of
the Lessor or the Lessee.

     “Lease” means the within Lease Agreement between the Lessor and the Lessee, as the same may be
amended from time to time in accordance with the provisions hereof.

     “Leased Equipment” means the fixtures, trade fixtures, equipment, machinery, and other
personal property described in Exhibit B attached hereto which, by this reference thereto, is
incorporated herein, and all replacements, substitutions, and additions thereto.

     “Leased Premises” means the real estate described in Exhibit A attached hereto which, by this
reference thereto, is incorporated herein.

     “Lease Term” means the duration of the leasehold estate created under this Lease as specified
in Section 5.01.

     “Lessee” means Sanderson Farms, Inc. (Production Division), a duly organized, existing, and in
good standing under and by virtue of the laws of the State of Mississippi, the party of the second
part hereto, and its successors and assigns.

     “Lessee Contracts” means, collectively, this Lease and the PILOT Agreement.

     “Lessor” means the Adel Industrial Development Authority, a public body corporate and politic
created and existing under the laws of the State, and its successors and assigns.

     “Lessor Contracts” means, collectively, this Lease, the PILOT Agreement, and the Bond Purchase
Agreement.

     “Net Proceeds,” when used with respect to any insurance or condemnation award or with respect
to any other recovery on a contractual claim or claim for damage to or for taking of

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property, means the gross proceeds from the insurance or condemnation award or recovery with
respect to which that term is used remaining after payment of all costs and expenses (including
reasonable and actual attorneys’ fees) incurred in the collection of such gross proceeds.

     “Permitted Encumbrances” means all encumbrances on any portion of the Project on the date
Lessor acquires title thereto, encumbrances to which the Lessee has consented or which the Lessor
has granted, and vendors’, mechanics’, and materialmen’s liens arising from the acquisition,
construction, and equipping of the Project, or the repair, replacement, or renovation of the
Project, or any part thereof, but any such venders’, mechanics’, or materialmen’s liens must be
discharged prior to any foreclosure thereof.

     “Permitted Investments” means any of the following classes of securities, to the extent to
which investment in such securities is permitted under State law:

     (1) the local government investment pool created in Chapter 83 of Title 36 of the Official
Code of Georgia Annotated;

     (2) bonds or obligations of the Lessor or bonds or obligations of the State or other counties,
municipal corporations, and political subdivisions of the State;

     (3) bonds or other obligations of the United States or of subsidiary corporations of the
United States government which are fully guaranteed by such government;

     (4) obligations of agencies of the United States government issued by the Federal Land Bank,
the Federal Home Loan Bank, the Federal Intermediate Credit Bank, or the Central Bank for
Cooperatives;

     (5) bonds or other obligations issued by any public housing agency or municipal corporation in
the United States, which bonds or obligations are fully secured as to the payment of both principal
and interest by a pledge of annual contributions under an annual contributions contract or
contracts with the United States government, or project Bonds issued by any public housing agency,
urban renewal agency, or municipal corporation in the United States which are fully secured as to
payment of both principal and interest by a requisition, loan, or payment agreement with the United
States government;

     (6) securities of or other interests in any no-load, open-end management type investment
company or investment trust registered under the Investment Company Act of 1940, as from time to
time amended, or any common trust fund maintained by any bank or trust company which holds such
proceeds as trustee or by an affiliate thereof so long as:

     (A) the portfolio of such investment company or investment trust or common trust fund
is limited to the obligations described in clause (3) above and repurchase agreements fully
collateralized by any such obligations;

     (B) such investment company or investment trust or common trust fund takes delivery of
such collateral either directly or through an authorized custodian;

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     (C) such investment company or investment trust or common trust fund is managed so as
to maintain its shares at a constant net asset value; and

     (D) securities of or other interests in such investment company or investment trust or
common trust fund are purchased and redeemed only through the use of national or state banks
having corporate trust powers and located within the State; and

     (7) certificates of deposit of national or state banks located within the State that have
deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of
federal savings and loan associations and state building and loan or savings and loan associations
located within the State that have deposits insured by the Savings Association Insurance Fund of
the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance
Corporation, including the certificates of deposit of any bank, savings and loan association, or
building and loan association acting as depository, custodian, or trustee for any such Bond
proceeds.

     The portion of the certificates of deposit described in clause (7) above in excess of the
amount insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund
of the Federal Deposit Insurance Corporation, or the Georgia Credit Union Deposit Insurance
Corporation, if any, must be secured by deposit, with the Federal Reserve Bank of Atlanta, Georgia,
or with any national or state bank or federal savings and loan association or state building and
loan or savings and loan association located within the State, of one or more of the following
securities in an aggregate principal amount equal at least to the amount of such excess: direct and
general obligations of the State or of any county or municipal corporation in the State,
obligations of the United States or subsidiary corporations described in clause (3) above,
obligations of the agencies of the United States government described in clause (4) above, or
bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or
municipalities described in clause (5) above.

     “Person” means natural persons, firms, joint ventures, associations, trusts, partnerships,
corporations, and public bodies.

     “PILOT Agreement” means the PILOT Agreement, dated as of even date herewith, between the
Lessor, the Lessee, and Cook County, Georgia.

     “Plans and Specifications” means the detailed plans and specifications for the construction,
equipping, and installation of the Building prepared by the Consulting Architect or by architects
and engineers acceptable to the Consulting Architect, as amended from time to time by the Lessee, a
copy of which are or will be on file with the Lessor.

     “Project” means, collectively, the Leased Premises, the Building, and the Leased Equipment,
the collective cost of which shall be not less than $17,200,000. The Lessee may designate
subsequent Projects by delivery of a notice to that effect to the Lessor and the Purchaser
describing such Project in detail.

     “Project Fund” means the fund created in Section 5.1 of the Bond Purchase Agreement and
referred to herein.

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     “Purchaser” means Sanderson Farms, Inc. (Production Division), a Mississippi corporation.

     “Security” means the Bond Rent and any and all property subject to the pledge and grant of
security interest contained in the Bond Purchase Agreement.

     “State” means the State of Georgia.

     “Unassigned Rights” means all of the rights of the Lessor to receive reimbursements and
payments pursuant to Sections 6.07, 8.06, and 10.04, and to be held harmless and indemnified
pursuant to Section 8.06.

     Section 1.02. 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 hereto
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. 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.
	 
	 	(4)	 	All words used herein in the singular or plural shall be deemed to have been
used in the plural or singular where the context or construction so requires. 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.
	 
	 	(5)	 	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
instrument.
	 
	 	(6)	 	“Or” is not exclusive.
	 
	 	(7)	 	The words “herein,” “hereof,” “hereto,” “hereby,” 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.
	 
	 	(8)	 	The term “hereafter” shall mean after, and the term “heretofore” shall mean
before, the date of execution and delivery of this Lease.

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     Section 1.03. 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 1.04. Contents of Certificates or Opinions. Every certificate or opinion
with respect to the compliance with a condition or covenant provided for in this Lease shall
include: (i) a statement that the person or persons making or giving such certificate or opinion
have read such covenant or condition and the definitions herein relating thereto, (ii) a brief
statement as to the nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (iii) a statement that, in the
opinion of the signers, they have made or caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not such covenant or
condition has been complied with, and (iv) a statement as to whether, in the opinion of the
signers, such condition or covenant has been complied with.

     Any such certificate or opinion made or given by an officer of the Lessor or the Lessee may be
based, insofar as it relates to legal or accounting matters, upon a certificate or an opinion of
counsel or an accountant, which certificate or opinion has been given only after due inquiry of the
relevant facts and circumstances, unless such officer knows that the certificate or opinion with
respect to the matters upon which his certificate or opinion may be based is erroneous or in the
exercise of reasonable care should have known that the same was erroneous. Any such certificate or
opinion made or given by counsel or an accountant may be based (insofar as it relates to factual
matters with respect to information which is in the possession of an officer of the Lessor or the
Lessee or any third party) upon the certificate or opinion of or representations by an official of
the Lessor or the Lessee or any third party on whom counsel or an accountant could reasonably rely
unless such counsel or such accountant knows that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion may be based as aforesaid are
erroneous or in the exercise of reasonable care should have known that the same were erroneous.
The same officer of the Lessor or the Lessee, or the same counsel or accountant, as the case may
be, need not certify to or render an opinion as all of the matters required to be certified or
cover by an opinion under any provision of this Lease, but different officers, counsel, or
accountants may certify or cover by an opinion as to different matters, respectively.

[End of Article I]

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REPRESENTATIONS AND UNDERTAKINGS

     Section 2.01. Representations by the Lessor. The Lessor makes the following
representations and warranties as the basis for the undertakings on its part herein contained:

     (a) Creation and Authority. The Lessor is a public body corporate and politic duly
created and validly existing under the laws of the State. The Lessor has all requisite power and
authority under the Act and the laws of the State (1) to issue the Bonds, (2) to acquire,
construct, equip, and install the Project and to lease the Project to the Lessee, and (3) to enter
into, perform its obligations under, and exercise its rights under this Lease. The Act authorizes
the Lessor to borrow money and to issue its obligations and to use the proceeds thereof for the
purpose of paying all or part of the cost of any “project,” which includes buildings or structures
to be used in the production, manufacturing, processing, assembling, storing, or handling of any
manufactured product, including the cost of extending, adding to, or improving the project, to
otherwise carry out the purposes of the Act, and to pay all other costs of the Lessor incident to
or necessary and appropriate to such purposes, including the providing of funds to be paid into any
fund or funds to secure such bonds. The Act authorizes the Lessor to construct, acquire, own,
repair, remodel, maintain, extend, improve, and equip projects located on land owned by the Lessor
and to lease and grant options for any real or personal property or interest therein. The Act also
authorizes the Lessor as security for repayment of its obligations, to pledge, convey, assign,
hypothecate, or otherwise encumber any property, real or personal, of the Lessor and to execute any
trust agreement, indenture, or security agreement containing any provisions not in conflict with
law. The Lessor has found that the Project constitutes a “project” within the meaning of that term
as defined in the Act, has found that the Project will develop and promote trade, commerce,
industry, and employment opportunities for the public good and the general welfare, will promote
the general welfare of the State, and will increase or maintain employment in the territorial area
of the Lessor, and has found that the Project is for the lawful and valid public purposes set forth
in the Act.

     (b) Pending Litigation. Except as set forth on Schedule A hereto, there are no
actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the
Lessor, after making due inquiry with respect thereto, threatened against or affecting the Lessor
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 this
Lease or which, in any way, would adversely affect the validity or enforceability of the Bonds, the
Lessor Contracts, or any agreement or instrument to which the Lessor is a party and which is used
or contemplated for use in the consummation of the transactions contemplated hereby or thereby, nor
is the Lessor aware of any facts or circumstances presently existing which would form the basis for
any such actions, suits, proceedings, inquiries, or investigations.

     (c) Transactions Are Legal and Authorized. The issue and sale of the Bonds, the
execution and delivery by the Lessor of the Lessor Contracts, and the compliance by the Lessor with
all of the provisions of each thereof, (i) are within the purposes, powers, and authority of the
Lessor, (ii) have been done in full compliance with the provisions of the Act and have been

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approved by the Lessor and are legal and will not conflict with or constitute on the part of
the Lessor 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 Lessor 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 Lessor is a party or by which the Lessor 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 Lessor or any
of its activities or properties, and (iii) have been duly authorized by all necessary action on the
part of the Lessor.

     (d) Governmental Consents. Neither the nature of the Lessor nor any of its activities
or properties, nor any relationship between the Lessor and any other Person, nor any circumstance
in connection with the offer, issue, sale, or delivery of the Bonds 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 Lessor in connection with the
execution, delivery, and performance of the Lessor Contracts, the consummation of any transaction
therein contemplated, or the offer, issue, sale, or delivery of the Bonds, except as shall have
been obtained or made and as are in full force and effect.

     (e) No Defaults. To the knowledge of the Lessor, after making due inquiry with
respect thereto, no event has occurred and no condition exists which would constitute an event of
default under this Lease or the Bond Purchase Agreement, or which, with the lapse of time or with
the giving of notice or both, would become an event of default. To the knowledge of the Lessor,
after making due inquiry with respect thereto, the Lessor 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 Lessor Contracts, the Project, nor any of the
payments or amounts to be received by the Lessor under the Lessor Contracts or with respect to the
Project have been or will be mortgaged, pledged, or hypothecated in any manner or for any purpose
or have been or will be the subject of a grant of a security interest by the Lessor other than as
provided in the Bond Purchase Agreement as security for the payment of the Bonds.

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

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

     Section 2.02. Representations by the Lessee. The Lessee makes the following
representations and warranties as the basis for the undertakings on its part herein contained:

     (a) Organization and Power. The Lessee is a corporation duly organized, validly
existing, and in good standing under and by virtue of the laws of the State of Mississippi is duly
qualified to transact business in the State, and has all requisite power and authority to lease the
Project from the Lessor and to enter into, perform its obligations under, and exercise its rights
under this Lease.

     (b) Pending Litigation and Taxes. There are no actions, suits, proceedings,
inquiries, or investigations pending or, to the knowledge of the Lessee, after making due inquiry
with respect thereto, threatened against or affecting the Lessee 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 properties, business, prospects, profits, operations, or
condition (financial or otherwise) of the Lessee, or the ability of the Lessee to perform its
obligations under this Lease or the transactions contemplated by this Lease or which, in any way,
would adversely affect the validity or enforceability of this Lease or any agreement or instrument
to which the Lessee is a party and which is used or contemplated for use in the consummation of the
transactions contemplated hereby or thereby, nor is the Lessee aware of any facts or circumstances
presently existing which would form the basis for any such actions, suits, proceedings, inquiries,
or investigations. The Lessee is not in default with respect to any judgment, order, writ,
injunction, decree, demand, rule, or regulation of any court, governmental authority, or
arbitration board or tribunal. All tax returns (federal, state, and local) required to be filed by
or on behalf of the Lessee have been duly filed, and all taxes, assessments, and other governmental
charges shown thereon to be due, including interest and penalties, except such, if any, as are
being actively contested by the lessee in good faith, have been paid or adequate reserves have been
made for the payment thereof.

     (c) Agreements Are Legal and Authorized. The execution and delivery by the Lessee of
this Lease, the consummation of the transactions herein contemplated, and the fulfillment of or the
compliance with all of the provisions hereof (i) are within the power, legal right, and authority
of the Lessee, and (ii) are legal and will not conflict with or constitute on the part of the
Lessee 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 an property of the Lessee under the provisions
of, any organic document, indenture, mortgage, deed to secure debt, pledge, Bond, lease, loan, or
installment sale agreement, contract, or other agreement or instrument to which the Lessee is a
party or by which the Lessee or its properties are otherwise subject or bound, or any license, law,
statute, rule, regulation, judgment, order, writ, injunction, decree, or demand of any court or
governmental agency or body having jurisdiction over the Lessee or any of its activities or
properties, and (iii) have been duly authorized by all necessary and appropriate corporate action

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on the part of the Lessee. This Lease is the valid, legal, binding, and enforceable
obligation of the Lessee. The officers of the Lessee executing this Lease are duly and properly in
office and are fully authorized and empowered to execute the same for and on behalf of the Lessee.

     (d) Governmental Consents. To the knowledge of the Lessee, no circumstances in
connection with the execution, delivery, and performance by the Lessee of its obligations under
this Lease or the offer, issue, sale, or delivery by the Lessor of the Bonds are 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 Lessee in
connection with the execution, delivery, and performance of this Lease, the consummation of any
transaction herein contemplated, or the offer, issue, sale, or delivery of the Bonds, except as
shall have been obtained or made and as are in full force and effect and except as are not
presently obtainable. To the knowledge of the Lessee, after making due inquiry with respect
thereto, the Lessee will be able to obtain all such additional consents, approvals, permissions,
orders, licenses, or authorizations of governmental authorities as may be required on or prior to
the date the Lessee is legally required to obtain the same in connection with the performance of
its obligations under this Lease.

     (e) No Defaults. No event has occurred and no condition exists that would constitute
an Event of Default or which, with the lapse of time or with the giving of notice or both, would
become an Event of Default. To the knowledge of the Lessee, after making due inquiry with respect
thereto, the Lessee is not in default or violation in any material respect under any organic
document or other agreement or instrument to which it is a party or by which it may be bound.

     (f) Compliance with Law. Except as disclosed in writing from the Lessee to the
Lessor, to the knowledge of the Lessee, after making due inquiry with respect thereto, the Lessee
is not in violation of any laws, ordinances, or governmental rules or regulations (including,
without limitation, all Environmental Laws) to which it or its properties are subject and has not
failed to obtain any licenses, permits, franchises, or other governmental authorizations (which are
presently obtainable) necessary to the ownership of its properties or to the conduct of its
business, which violation or failure to obtain might materially and adversely affect the business,
prospects, profits, and financial condition of the Lessee, and there have been no citations,
notices, or orders of noncompliance issued to the Lessee under any such law, ordinance, rule, or
regulation.

     (g) Restrictions on the Lessee. The Lessee is not a party to or bound by any
contract, instrument, or agreement, or subject to any other restriction, that materially and
adversely affects its business, properties, assets, operations, or condition (financial or
otherwise). The Lessee is not a party to any contract or agreement that restricts the right or
ability of the Lessee to incur indebtedness for borrowed money or to enter into long-term leases.

     (h) Disclosure. The representations of the Lessee contained in this Lease and any
certificate, document, written statement, or other instrument furnished by or on behalf of the
Lessee to the Lessor 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. There is no fact that the Lessee has not
disclosed to the Lessor in writing that materially and adversely affects or in the future may (so

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far as the Lessee can now reasonably foresee) materially and adversely affect the acquisition,
construction, equipping, or installation of the Project or the ability of the Lessee to perform its
obligations under this Lease or any of the documents or transactions contemplated hereby or thereby
or any other transactions contemplated by this Lease which has not been set forth in writing to the
Lessor or in the certificates, documents, and instruments furnished to the Lessor by or on behalf
of the Lessee prior to the date of execution of this Lease in connection with the transactions
contemplated hereby.

     (i) Undertakings Required by the Act. The issuance of the Bonds by the Lessor for the
benefit of the Lessee and the acquisition, construction, equipping, and installation of the Project
for lease to the Lessee has induced the Lessee to lease the Project from the Lessor to develop and
promote trade, commerce, industry, and employment opportunities for the public good and the general
welfare, to promote the general welfare of the State, and to increase or maintain employment in the
territorial area of the Lessor, all to the public benefit and good.

     (j) Compliance. The Lessee will comply, in all material respects, with all applicable
laws, regulations, and orders pertaining to the operation of the Project as contemplated by this
Lease, such compliance to include, without limitation, paying and discharging, as the same may
become due and payable, all taxes, assessments, and other governmental charges or levies against or
on any of its property, as well as claims of any kind which, if unpaid, might become a lien upon
any of its properties, except those laws, regulations, and orders, the non-compliance of which
would not have a material adverse effect upon the ability of the Lessee to perform its obligations
under this Lease; provided, however, that the foregoing shall not require the Lessee to comply with
any such law, regulation, or order so long as it in good faith shall contest the validity thereof
and shall, with respect to the payment of any such tax, assessment, charge, levy, or lien, in
accordance with generally accepted accounting principles, set aside and maintain on its books
adequate reserves with respect thereto.

[End of Article II]

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DEMISING CLAUSE; SECURITY; TITLE

     Section 3.01. Demise of the Project. The Lessor hereby demises and leases to the
Lessee, and the Lessee hereby leases from the Lessor, the Project at the Gross Rent and for the
Lease Term and in accordance with the provisions of this Lease. Nothing in this Lease shall be
construed to require the Lessor to operate the Project other than as lessor.

     Section 3.02. Security for Payments under the Bonds. As security for the payment of
the Bonds, the Lessor has executed and delivered the Bond Purchase Agreement. The Lessee hereby
consents to the assignment and grant of a first priority security interest made in the Bond
Purchase Agreement, and hereby agrees that its obligations to make all payments under this Lease
shall be absolute and shall not be subject to any defense, except payment, or to any right of
setoff, counterclaim, or recoupment arising out of any breach by the Lessor of any obligation to
the Lessee, whether hereunder or otherwise, or arising out of any indebtedness or liability at any
time owing to the Lessee by the Lessor. The Lessee further agrees that all payments of rent
required to be made under this Lease, except for those arising out of Unassigned Rights, shall be
paid directly to the Bondholder for the account of the Lessor. The Bondholder shall have all
rights and remedies herein accorded to the Lessor (except for Unassigned Rights), and any reference
herein to the Lessor shall be deemed, with the necessary changes in detail, to include the
Bondholder, and the Bondholder is deemed to be and is a third party beneficiary of the
representations, covenants, and agreements of the Lessee herein contained.

     Section 3.03. Warranty of Title. The Lessor warrants that (a) it has acquired good
and marketable fee simple title to the Leased Premises, and (b) it will be the legal owner of all
Leased Equipment and the Building and will have good and merchantable title to the Leased
Equipment.

[End of Article III]

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ACQUISITION AND CONSTRUCTION OF THE PROJECT;

ISSUANCE OF THE BONDS; FUNDS

     Section 4.01. Agreement to Acquire, Construct, Equip, and Install the Project.
Promptly following the issuance and sale of the Bonds, the Lessor will acquire the Leased Premises;
acquire, construct, equip, and install the Building; and acquire and install therein the Leased
Equipment. The Lessor hereby authorizes the Lessee to, on its behalf and as its agent, acquire,
construct, equip, and install the Project. The Lessee agrees (i) that it will exercise the
foregoing authorizations given to it by the Lessor, (ii) that the Project will be acquired or
leased and constructed and installed, without material deviation from the Plans and Specifications,
and (iii) that it will cause the Leased Equipment to be acquired or leased in the name of the
Lessor. The Lessor will enter into, or accept the assignment of, such contracts as the Lessee may
request in order to effectuate the purposes of this Section. The Lessor will not execute any
contract or give any order for the acquisition, construction, equip, or installation of any portion
of the Project unless and until the Lessee shall have approved the same in writing and advanced the
funds necessary to carry out such contract or order pursuant to Section 4.03. The Lessor shall not
be required to enter into any lease of Leased Equipment or any other contract providing for the
payment of money unless its liability under such lease or contract is limited to amounts on deposit
in the Project Fund or payments received from the Lessee.

     The Lessee further agrees that it will, at all times during the construction of the Project,
maintain or cause the general contractor to maintain in full force and effect Builder’s Risk -
Completed Value Form insurance insuring the Building against fire, lightning, and all other risks
covered by the extended coverage endorsement then in use in the State to the full insurable value
of the Building. Such policy or policies of insurance shall name the Lessee and the Lessor as
insureds, as their respective interests may appear, and all Net Proceeds received under such policy
or policies by the Lessee or the Insurer shall be applied as directed by the Lessee. In addition,
the Lessee shall cause the general contractor at all times during the construction of the Building
to maintain general liability insurance in an amount not less than that required to be maintained
by the Lessee under Section 6.04, and the Lessee shall cause the general contractor to maintain
worker’s compensation insurance as required by law. Such insurance policy or policies shall
contain a provision that such insurance may not be canceled by the issuer thereof without at least
thirty- (30-) days’ advance written notice to the Lessor and the Lessee. All such policies, or
copies thereof, or certificates that such insurance is in full force and effect shall be delivered
to the Lessor at or prior to the commencement of construction.

     The Lessee covenants to cause the Project to be constructed, equipped, and installed in
accordance with the Plans and Specifications and the Construction Contracts and warrants that the
construction, equipping, and installation of the Building and the Leased Equipment in accordance
with the Plans and Specifications will result in a facility suitable for use by the Lessee and that
all real and personal property provided for therein is necessary or appropriate in connection with
the Project. The Lessee may make changes in or additions to the Plans and Specifications;
provided, however, changes in or additions to the Plans and Specifications which are material shall
be subject to the prior written approval of the Consulting Architect.

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     The Lessee shall not permit any mechanics’ or materialmen’s or other liens to be perfected or
remain against the Project for labor or materials furnished in connection with the construction of
the Project, provided that it shall not constitute an event of default hereunder if such a lien is
filed if the Lessee notifies the Lessor of the existence of such lien and if the Lessee in good
faith promptly contests such lien in accordance with the provisions of Section 6.08 of this Lease.

     The Lessee agrees, on behalf of the Lessor, to complete the acquisition, construction,
equipping, and installation of the Project as promptly as practicable and with all reasonable
dispatch after the date of issuance of the Bonds. All Leased Equipment that is to be subject to
the operation of this Lease shall be acquired in the name of the Lessor on or before the date that
is one year after the Completion Date. No Leased Equipment that is to be subject to the operation
of this Lease shall be acquired in the name of the Lessor after the date that is one year after the
Completion Date.

     Section 4.02. Agreement to Issue the Bonds; Application of Proceeds. In order to
provide funds for payment of the Costs of the Project, the Lessor agrees that it shall execute and
deliver the Bond Purchase Agreement and will sell and cause to be delivered to the Purchaser the
Bonds in the aggregate principal amount not to exceed $17,200,000, and will thereupon deposit in
the Project Fund all advances of purchase price of the Bonds made from time to time under the terms
of the Bond Purchase Agreement as provided therein.

     Section 4.03. Application of Moneys in the Project Fund. The Lessor shall in the
Bond Purchase Agreement authorize and direct the Depositary to use the moneys in the Project Fund
to pay the following (but for no other purposes):

     (a) (i) the cost of the preparation of Plans and Specifications (including any
preliminary study or planning of the Project or any aspect thereof), (ii) the cost of
acquisition, construction, equipping, and installation of the Project and all acquisition,
construction, equipping, and installation expenses required to provide utility services or
other facilities and all real or personal properties deemed necessary in connection with the
Project (including development, architectural, engineering, and supervisory services with
respect to any of the foregoing), and (iii) any other costs and expenses relating to the
Project;

     (b) (i) the purchase price of the Leased Premises, the Building, and the Leased
Equipment, including all costs incident thereto, (ii) labor, services, materials, and
supplies used or furnished in site improvement and in the construction of the Project,
including all costs incident thereto, (iii) the cost of the acquisition, construction,
equipping, and installation of utility services or other facilities, (iv) all real and
personal property deemed necessary in connection with the Project, (v) consulting and
development fees payable to the Lessee or others, and (vi) the miscellaneous expenses
incidental to any of the foregoing items including the premium on any surety bond;

     (c) to such extent as they shall not be paid by a contractor for construction or
installation with respect to any part of the Project, the premiums on all insurance required

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to be taken out and maintained during the Construction Period under this Lease, or
reimbursement thereof if paid by the Lessee;

     (d) the taxes, assessments, and other charges, if any, referred to in Section 6.03 that
may become payable during the Construction Period, or reimbursement thereof if paid by the
Lessee;

     (e) expenses incurred in seeking to enforce any remedy against any contractor or
subcontractor in respect of any default under a contract relating to the Project;

     (f) the fees or out-of-pocket expenses of the Lessee, if any, including, but not
limited to, architectural, engineering, and supervisory services with respect to the
Project;

     (g) the fees, or out-of-pocket expenses, if any, of those providing services with
respect to the Project, including, but not limited to, architectural, engineering, and
supervisory services;

     (h) the Lessee or the Lessor of such amounts, if any, as shall be necessary to
reimburse the Lessee or the Lessor in full for all advances and payments made by either of
them for any of the items set forth in (a) through (g) above; and

     (i) any other costs and expenses relating to the Project that would constitute a “cost
of the Project” permitted to be paid by the Lessor under the Act.

     (j) All proceeds of the Bonds remaining in the Project Fund after the Completion Date,
less amounts retained or set aside to meet costs not then due and payable or which are being
contested, shall be used to redeem the Bonds on the next succeeding Payment Date.

     Section 4.04. Disbursements from the Project Fund.

     (a) Subject to compliance by the Lessee with all of the terms, provisions, and conditions of
this Lease, including, but not limited to, the applicable conditions for disbursements set forth in
this Section, the Lessor will cause the Depositary to disburse sums in the Project Fund to the
Lessee or to the appropriate payee for Costs of the Project in one or more disbursements, upon the
submission by the Lessee to the Depositary of a disbursement request in the form attached hereto as
Exhibit C (a “Certificate and Requisition for Payment”), accompanied by an itemization of Costs of
the Project in such detail as the Depositary shall require, and the accuracy of such cost and fee
itemization shall be certified by the Lessee. The disbursement request must be signed by the
Authorized Lessee Representative.

     (b) The Depositary shall fund, on the same banking day on which it receives the fully executed
Certificate and Requisition for Payment, each Certificate and Requisition for Payment, provided
that sufficient funds are then available in the Project Fund.

     (c) Notwithstanding any other terms and provisions set forth herein, the Depositary may, in
the discretion of the Lessee, make all disbursements or any disbursement directly to the Lessee, or
to subcontractors, laborers, materialmen, or persons furnishing labor, services, or

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materials used or to be used on or in the construction of the Project (including authorized
extras) or to any combination of them. Any such disbursement shall be deemed to have been made to
the Lessee or for its account.

     (d) The execution of each Certificate and Requisition for Payment submitted for disbursements
relating to Costs of the Project by the Lessee shall constitute the certification, warranty, and
agreement of the Lessee as follows:

     (i) all evidence, statements, and other writings required to be furnished under the
terms of this Lease are true and omit no material fact, the omission of which may make them
misleading; and

     (ii) all moneys previously disbursed have been used solely to pay for Costs of the
Project, and the Lessee has written evidence to support this item of warranty.

     (e) The Lessee covenants and agrees that, upon the request of the Lessor from time to time, it
shall furnish the Lessor with evidence which is reasonably satisfactory to the Lessor (including,
but not limited to, certificates and affidavits of the Lessee and/or the Consulting Architect or
any contractor or such other person as the Lessor may reasonably require) showing that the Lessee
has substantially complied with all of the Lessee’s obligations hereunder.

     (f) Each Certificate and Requisition for Payment shall constitute a representation by the
Lessee that the moneys therein referred to have been or are to be used for one of the purposes set
forth in Section 4.03 of this Lease and that none of the items for which payment is requested has
formed the basis for any payment previously made from the Project Fund, and the Depositary shall be
entitled to rely thereon and shall be held harmless by the Lessee for all liability in connection
therewith.

     (g) All disbursements (except the disbursement required to be made at the time of issuance of
the Bonds) shall be made on the same banking day on which the Depositary receives the completed
Certificate and Requisition for Payment and shall be made at the office of the Depositary or at
such other place as the Depositary may designate. If sufficient liquid funds are not available to
the Depositary at the time of presentment of a Certificate and Requisition for Payment due to the
particular form of Project Fund investments or a lack of funds, payment of such Certificate and
Requisition for Payment shall be delayed until liquid funds or additional funds sufficient to
satisfy the requirements of this Section are received by the Depositary.

     (h) The Depositary shall not make any disbursements from the Project Fund for Leased Equipment
or any other personal property unless the Depositary shall have first received copies of the bills
of sale or other evidence that title to such Leased Equipment and other property has been taken in
the name of the Lessor.

     Section 4.05. Obligation of the Parties to Cooperate in Furnishing Documents; Reliance of
the Depositary. Upon payment of any expenses of the Lessor incurred in connection therewith
pursuant to Section 5.03, the Lessor agrees to cooperate with the Lessee in furnishing to the
Depositary the documents referred to in Sections 4.03 and 4.04 that are required to effect payments
out of the Project Fund, and the Lessor agrees to cause such orders to be

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directed to the Depositary as may be necessary to effect payments out of the Project Fund, in
accordance with Sections 4.03 and 4.04. Such obligation of the Lessor is subject to any provisions
of the Bond Purchase Agreement requiring additional documentation with respect to payments and
shall not extend beyond the moneys in the Project Fund available for payment under the terms of the
Bond Purchase Agreement. In making any such payment from the Project Fund, the Depositary may rely
on any such orders and certifications delivered to it pursuant to Sections 4.03 and 4.04.

     Section 4.06. Establishment of Completion Date. The Completion Date shall be
evidenced to the Lessor by a certificate of substantial completion listing the items to be
completed or corrected, if any, and the amounts to be withheld therefor, signed by the Authorized
Lessee Representative and approved by the Consulting Architect stating that, except for amounts
retained by the Depositary for Costs of the Project not then due and payable, (i) construction of
the Project has been substantially completed without material deviation from the Plans and
Specifications and all labor, services, materials, and supplies used in such construction have been
paid or provided for, (ii) all other facilities necessary in connection with the construction of
the Project have been constructed, acquired, equipped, and installed substantially in accordance
with the Plans and Specifications and all costs and expenses incurred in connection therewith have
been paid or provided for, (iii) according to the “as built” survey of the Leased Premises or a
certificate of the surveyor, the Building does not encroach on any other property or violate any
setback or sideline requirements applicable to the Leased Premises, and (iv) a certificate of
occupancy for the Project has been issued by appropriate local governmental authorities.
Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any
rights against third parties which exist at the date of such certificate or which may subsequently
come into being. The Consulting Architect shall certify the matters covered by (i) and (ii) above.
It shall be the duty of the Lessee to cause the certificate contemplated by this Section to be
furnished as soon as the construction of the Project shall have been substantially completed. If
the Lessee undertakes additional Projects, it shall establish a Completion Date in accordance with
the foregoing procedures.

     Section 4.07. Lessee Required to Pay Acquisition and Construction Costs in Event Project
Funds Insufficient. In the event the moneys in the Project Fund advanced under the Bonds
available for payment of the Costs of the Project shall not be sufficient to pay the Costs of the
Project in full, the Lessee agrees to complete the acquisition, construction, equipping, and
installation of the Project and to pay all that portion of the Costs of the Project as may be in
excess of such moneys. The Lessor does not make any warranty, either express or implied, that such
moneys which, under the provisions of this Lease, will be available for payment of the Costs of the
Project, will be sufficient to pay all Costs of the Project. The Lessee agrees that if after
exhaustion of such moneys the Lessee shall pay any portion of the Costs of the Project pursuant to
the provisions of this Section, it shall not be entitled to any reimbursement therefor from the
Lessor or from the Depositary or from the owner of the Bonds, nor shall it be entitled to any
diminution of the Gross Rent. The obligation of the Lessee to complete the construction of the
Project shall survive any termination of this Lease.

     Section 4.08. Authorized Lessee Representatives and Successors. The Lessee shall
designate, in the manner prescribed in Section 1.01, the Authorized Lessee Representative. In

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the event that any person so designated and his alternate or alternates, if any, should become
unavailable or unable to take any action or make any certificate provided for or required in this
Lease, a successor shall be appointed in the same manner.

     Section 4.09. Enforcement of Remedies against Contractors and Subcontracts and Their
Sureties and Against Manufacturers. The Lessee covenants that it will take such action and
institute such proceedings as shall be necessary to cause and require all contractors and
subcontractors and material suppliers to complete their contracts diligently in accordance with the
terms of such contracts, including, without limitation, the correction of any defective work, with
all expenses incurred by the Lessee in connection with the performance of its obligations under
this Section to be considered part of the Costs of the Project. The Lessor agrees that the Lessee
may, from time to time, in its own name, or in the name of the Lessor, take such action as may be
necessary or advisable, as determined by the Lessee, to insure the construction of the Project in
accordance with the terms of the Construction Contracts and the Plans and Specifications, to insure
the peaceable and quiet enjoyment of the Project for the Lease Term, and to insure the performance
by the Lessor of all covenants and obligations of the Lessor under this Lease, with all costs and
expenses incurred by the Lessee in connection therewith to be considered as part of the Costs of
the Project. Any amounts recovered by way of penalties or damages, whether liquidated or actual,
for delays in completion by a contractor, and any other amounts recovered by way of damages,
refunds, adjustments, or otherwise in connection with the foregoing prior to the Completion Date,
less any unreimbursed legal expenses incurred to collect the same, shall be paid into the Project
Fund and, after the Completion Date, shall be disbursed to the Lessee.

     The Lessee covenants that it will take such action and institute such proceedings as shall be
necessary to cause and require any manufacturers of the Leased Equipment and any dealer to fulfill
their warranties and contractual responsibilities diligently in accordance with the terms of any
purchase, lease, or installation contracts, including, without limitation, the correction of any
defective parts or workmanship, with all expenses incurred by the Lessee in connection with the
performance of its obligations under this Section to be considered part of the Costs of the
Project. The Lessor agrees that the Lessee may, from time to time, take such action as may be
necessary or advisable, as may be determined by the Lessee, to insure the conformity of the Leased
Equipment to the specifications therefor, with all costs and expenses incurred by the Lessee in
connection therewith to be considered as part of the Costs of the Project.

     Section 4.10. No Agency Relationships. The Lessor and the Bondholder do not assume
the duties of the contractor or architect of the Project or of any Additions or Alterations and
shall be under no obligation to construct or supervise the construction of any Additions or
Alterations or to make any inspections of the improvements related thereto, and it is further
understood and agreed that any inspection by the Lessor or its agents of the Project or of any
Additions or Alterations, whether paid for by the Lessee or its successors in title, is for the
sole purpose of protecting the title of the Lessor to the Project, and the Lessee shall not be
entitled to claim any loss or damage against the Lessor or its agents or employees for the failure
of the Lessor’s agents or employees to properly discharge their responsibilities to the Lessor.

     Section 4.11. Investment of Funds and Accounts. Subject to Section 5.3 of the Bond
Purchase Agreement, any moneys held as a part of the Project Fund, or any other special trust

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funds shall be invested or reinvested by the Depositary at the written direction of the
Authorized Lessee Representative, to the extent permitted by State law, in such Permitted
Investments as may be designated by the Lessee. The Depositary may make any and all such
investments through its own bond or investment department.

     The investments so purchased shall be held by the Depositary and shall be deemed at all times
a part of the Project Fund or the trust account described in the preceding paragraph, as the case
may be, and the interest accruing thereon and any profit realized therefrom shall be credited as
provided in Section 5.3 of the Bond Purchase Agreement to such fund or account, and any losses
resulting from such investments shall be charged to such fund or account therein and paid by the
Lessee.

[End of Article IV]

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EFFECTIVE DATE OF THIS LEASE; DURATION OF LEASE TERM;

RENTAL PROVISIONS; NATURE OF OBLIGATIONS OF LESSEE

     Section 5.01.  Effective Date of this Lease; Duration of Lease Term. This Lease shall
become effective upon its delivery and shall be in full force and effect until midnight, July 1,
2017 subject to the provisions of this Lease permitting earlier termination or extension of the
Lease Term (including particularly Articles X and XI), or if the Bonds have not been paid or
retired, until such date as such payment or provision shall have been made; provided, however, that
the covenants and obligations expressed herein to so survive shall survive the expiration or
earlier termination of this Lease.

     Section 5.02. Delivery and Acceptance of Possession. The Lessor agrees to deliver to
the Lessee sole and exclusive possession of the Leased Premises upon execution and delivery of this
Lease (subject to the right of the Lessor to enter thereon for inspection purposes and subject to
the other provisions of Section 8.02), and the Lessee hereby accepts possession of the Leased
Premises. The Lessor shall be permitted such continued possession of the Leased Premises as shall
be necessary and convenient for it to construct or install or cause to be constructed or installed
the Project and any Additions or Alterations and to make or cause to be made any repairs or
restorations required or permitted to be made by the Lessor pursuant to the provisions hereof. The
Lessor covenants and agrees that it shall not take any action, other than pursuant to Article X of
this Lease, to prevent the Lessee from having quiet and peaceable possession and enjoyment of the
Project during the Lease Term and shall, at the request of the Lessee and at the cost of the
Lessee, cooperate with the Lessee in order that the Lessee may have quiet and peaceable possession
and enjoyment of the Project.

     Section 5.03. Rents and Other Amounts Payable.

     (a) Basic Rent: Until the principal of, redemption premium, if any, and interest on
the Bonds shall have been fully paid, the Lessee shall pay to the Bondholder for the account of the
Lessor as rent for the Project the following amounts:

     (i) on or before each July 1, a sum equal to the amount payable on such date as
interest on the Bonds, as provided in the Bond Purchase Agreement, and

     (ii) on or before July 1, 2017, a sum equal to the principal due on such date, which is
the maturity date of the Bonds, as provided in the Bond Purchase Agreement.

     (b) Basic Rent General Provisions: Each payment of Basic Rent under this Section, due
on an interest or principal payment date or redemption date until the Bonds are fully paid shall in
all events be sufficient to pay the total amount of interest, principal, redemption requirement,
and premium, if any, payable on the Bonds on the principal or interest payment date or on the
redemption date. Any payment of Basic Rent not received by the Bondholder when
due shall continue as an obligation of the Lessee until paid and shall bear interest at the
rate of interest on the Bonds.

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     (c) Additional Rent:

     (i) The Lessee agrees that during the Lease Term it shall pay directly to the Lessor an
amount sufficient to pay the amounts set forth in Section 12.07. Such payments of
Additional Rent shall be billed to the Lessee by the Lessor from time to time, together with
a statement certifying that the amount billed has been incurred or paid by it for one or
more of the above items. Amounts so billed shall be paid by the Lessee within thirty- (30-)
days after receipt of the bill by the Lessee.

     (ii) The Lessee agrees that during the Lease Term it shall pay directly to any lessor
of Leased Equipment to the Lessor, for the account of the Lessor, all rentals due under the
leases relating to such Leased Equipment, as and when the same become due and payable.

     In the event the Lessee shall fail to make any of the payments required in this Section, the
unpaid amount shall continue as an obligation of the Lessee until fully paid.

     Section 5.04. Place of Rental Payments. The Basic Rent shall be paid in lawful money
of the United States of America directly to the Bondholder for the account of the Lessor. The
Additional Rent provided for in clause (a) under the heading “Additional Rent” in Section 5.03
shall be payable directly to the Lessor. The Additional Rent provided for in clause (b) under the
heading “Additional Rent” in Section 5.03 shall be paid directly to the lessor of the Leased
Equipment.

     Section 5.05. Nature of Obligations of Lessee Hereunder.

     (a) The obligations of the Lessee to make pay the Gross Rent and the payments required in
other sections hereof and to perform and observe any and all of the other covenants and agreements
on its part contained herein shall be a general obligation of the Lessee and shall be absolute and
unconditional irrespective of any defense or any rights of setoff, recoupment, or counterclaim,
except payment, it may otherwise have against the Lessor. The Lessee agrees that it shall not (i)
suspend, abate, reduce, abrogate, diminish, postpone, modify, or discontinue any payments provided
for in Section 5.03, (ii) fail to observe any of its other agreements contained in this Lease, or
(iii) except as provided in Section 11.01 and 11.02, 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 Lessee 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 Lessee’s purposes or needs, failure of consideration, any
declaration or finding that the Bonds are 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 Lessor’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 Lessor to perform and observe any agreement, whether express or implied, or any duty, liability, or
obligation arising out of or connected with this Lease.

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     (b) Nothing contained in this Section shall be construed to release the Lessor from the
performance of any of the agreements on its part herein contained. In the event the Lessor should
fail to perform any such agreement on its part, the Lessee may institute such action against the
Lessor as the Lessee may deem necessary to compel performance so long as such action does not
abrogate the Lessee’s obligations hereunder. The Lessor hereby agrees that it shall not take or
omit to take any action that would cause this Lease to be terminated. The Lessee may, however, at
its own cost and expense and in its own name or in the name of the Lessor, prosecute or defend any
action or proceeding or take any other action involving third persons which the Lessee deems
reasonably necessary in order to secure or protect its right of possession, occupancy, and use
hereunder, and in such event the Lessor hereby agrees to cooperate fully with the Lessee and to
take all action necessary to effect the substitution of the Lessee for the Lessor in any such
action or proceeding if the Lessee shall so request.

[End of Article V]

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MAINTENANCE, TAXES, AND INSURANCE

     Section 6.01. Maintenance and Modification of Project by the Lessee. The Lessee
agrees that during the Lease Term it shall at its own expense (i) keep the Project in as reasonably
safe condition as its operations shall permit, (ii) keep the Building and all other improvements
forming a part of the Project in good repair and in good operating condition, making from time to
time, subject to the provisions of Section 6.02, all necessary and proper repairs thereto and
renewals and replacements thereof, including external and structural repairs, renewals, and
replacements, and (iii) use the Leased Equipment in the regular course of its business only, within
the normal capacity of the Leased Equipment, without abuse, and in a manner contemplated by the
manufacturer thereof, and cause the Leased Equipment to be maintained in accordance with the
manufacturer’s then currently published standard maintenance recommendations. Subject to the
provisions of Section 8.10, the Lessee may, also at its own expense, from time to time make any
Additions or Alterations to the Project that it may deem desirable for its purposes that do not
adversely affect the operation or value of the Project. Subject to the provisions of Section 9.06,
Additions or Alterations to the Project so made by the Lessee shall be on the Leased Premises and
shall become a part of the Project, and shall become subject to the demise of this Lease. The
Lessee further agrees that at all times during the construction of Additions or Alterations that
cost in excess of $500,000 it shall maintain or cause to be maintained in full force and effect
Builder’s Risk-Completed Value Form insurance to the full insurable value of such Additions or
Alterations. The Lessee shall not permit any mechanics’ or materialmen’s or other statutory liens
to be perfected or remain against the Project for labor or materials furnished in connection with
any Additions or Alterations so made by it, provided that it shall not constitute an event of
default hereunder upon such lien being filed, if the Lessee shall promptly notify the Lessor of any
such liens, and the Lessee in good faith promptly contests such liens in accordance with the
provisions of Section 6.08. The Lessee shall not do or permit others 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 Lessee 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
building, zoning, and other laws, ordinances, governmental regulations, and requirements and in
accordance with the requirements, rules, and regulations of all insurers under the policies
required to be carried under the provisions of this Lease.

     Section 6.02. Removal of Leased Equipment. The Lessor shall not be under any
obligation to renew, repair, or replace any inadequate, obsolete, worn out, unsuitable,
undesirable, or unnecessary Leased Equipment. If no Event of Default under this Lease shall have
happened and be continuing, in any instance where the Lessee in its discretion determines that any
items of Leased Equipment or parts thereof have become inadequate, obsolete, worn out, unsuitable,
undesirable, or unnecessary, the Lessee may remove such items of Leased Equipment or parts thereof
from the Leased Premises and (on behalf of the Lessor) sell, trade
in, exchange, or otherwise dispose of them (as a whole or in part) without any responsibility or
accountability to the Lessor therefor.

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     The removal from the Project of any portion of the Leased Equipment pursuant to the provisions
of this Section shall not entitle the Lessee to any abatement or diminution of the Gross Rent.

     Upon compliance with this Section, the Lessor agrees to deliver any bills of sale or releases
in form and substance acceptable to the Lessee and which are deemed necessary by the Lessee with
respect to the removal of such Leased Equipment from the demise of this Lease. The Lessee shall
execute and deliver to the Lessor such documents as it may from time to time require to confirm the
title of the Lessor (subject to this Lease) to any items of equipment and other personal property
which under the provisions of this Section are to become a party of the Leased Equipment and shall
pay all costs (including reasonable and actual attorneys’ fees) incurred in connection therewith.

     Section 6.03. Taxes, Other Governmental Charges, and Utility Charges. The Lessee
shall duly pay and discharge, as the same become due and payable, (i) all taxes and governmental
charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with
respect to the Project or any machinery, equipment, furnishings, or other property installed by the
Lessee thereon, including, without limiting the generality of the foregoing, any taxes levied upon
or with respect to the lease revenues and receipts of the Lessor from the Project, including all ad
valorem taxes or payments in lieu of such taxes lawfully assessed upon the Lessee’s rights in and
to the Project and all payments due under the PILOT Agreement, (ii) all utility and other charges
incurred in the ownership, operation, maintenance, use, occupancy, and upkeep of the Project, and
(iii) all assessments and charges lawfully made by any governmental body for public improvements
that may be secured by a lien on the Project; provided, that with respect to special assessments or
other governmental charges that may lawfully be paid in installments over a period of years, the
Lessee shall be obligated to pay only such installments as are required to be paid during the Lease
Term.

     If the Lessee shall first notify the Lessor of its intention so to do, the Lessee may, at its
own expense and in its own name and behalf or in the name and behalf of the Lessor and in good
faith, contest any such taxes, assessments, and other charges in accordance with the provisions of
Section 6.08 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.

     Section 6.04. Insurance Required. Throughout the Lease Term, the Lessee shall keep
the Project or cause the same to be kept continuously insured against such casualties,
contingencies, and risks as are customarily insured against with respect to facilities of like size
and type, paying as the same become due all premiums in respect thereto.

     Section 6.05. Application of Net Proceeds of Insurance. The Net Proceeds of the
insurance carried pursuant to the provisions of Section 6.04 shall be paid and applied as provided
in Section 7.01 or applied toward extinguishment or satisfaction of the liability with respect to
which such insurance proceeds have been paid.

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     Section 6.06. Additional Provisions Respecting Insurance. All insurance required by
Section 6.04 shall be taken out and maintained in generally recognized responsible insurance
companies qualified to do business in the State, selected by the Lessee and subject to the approval
of the Lessor, which approval shall not be unreasonably withheld. All policies evidencing such
insurance shall be subject to the approval of the Lessor, which approval shall not be unreasonably
withheld. All policies evidencing such insurance shall provide for payment to the Lessor and the
Lessee, as their respective interests may appear and the policies required by Section 6.04 shall
name the Lessor as additional insured. A certificate or certificates of the insurers that such
insurance is in force and effect shall be deposited with the Lessor, and prior to the expiration of
any such policy the Lessee shall furnish the Lessor with evidence reasonably satisfactory to the
Lessor that the policy has been renewed or replaced or is no longer required by this Lease. In
lieu of separate policies, the Lessee may maintain one or more blanket policies of insurance having
the coverage required by Section 6.04. All such policies shall provide that such insurance may not
be modified adversely to the interests of the Lessor or canceled by the Lessor thereof before the
Bonds have been fully paid without at least thirty (30) days’ notice to the Lessee and the Lessor.

     Section 6.07. Advances by the Lessor or the Bondholder. If the Lessee shall fail to
maintain the insurance coverages required by this Lease or shall fail to pay the taxes and other
charges required to be paid by this Lease or shall fail to keep the Project in as reasonably safe
condition as its operation will permit or shall fail to keep the Building and the Leased Equipment
in good repair and good operating condition, the Lessor or the Bondholder may (but shall be under
no obligation to), after notifying the Lessee of its intention to do so, take out the required
policies of insurance and pay the premiums on the same or pay the taxes or other charges or make
the required repairs, renewals, and replacements, and all amounts so advanced therefor by the
Lessor or the Bondholder shall become an additional obligation of the Lessee to the one making the
advancement, which amounts, together with interest thereon from the date of payment at the
prevailing rate charged prime corporate borrowers from time to time per annum on demand loans as
announced from time-to-time as the “prime rate” in the Wall Street Journal plus two percent (2%),
the Lessee agrees to pay on demand. Any remedy herein vested in the Lessor for the collection of
rent shall also be available to the Lessor and the Bondholder for the collection of all such
amounts so advanced.

     Section 6.08. Contest of Liens. In the event the Lessee in good faith contests
amounts pursuant to Sections 6.01 or 6.03 of this Lease, the Lessee may permit the items so
contested to remain undischarged and unsatisfied during the period of such contest and any appeal
therefrom, provided the Lessee shall furnish the Lessor with an opinion of Independent Counsel
stating that by nonpayment of such items the title of the Lessor as to any material part of the
Project will not be materially and imminently endangered and neither the Project nor any material
part thereof will be subject to imminent loss or forfeiture. If the Lessee is unable or otherwise
fails to obtain such an opinion of Independent Counsel, the Lessee shall promptly cause to be
satisfied and discharged all such unpaid items by payment thereof, by causing the lien to be
transferred from the Project to other security as permitted by State law, or by payment of the
amount so contested into a reserve held by the Lessor. Such reserve may be used by the Lessor to
satisfy the items if action is taken to enforce the lien and such action is not stayed. Such
reserve will be returned to the Lessee if the items are successfully contested. In the event the
Lessee shall fail to pay any of

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the foregoing items required by this Section to be paid by the Lessee, the Lessor may (but
shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Lessor
shall become an advance repayable in accordance with Section 6.07 of this Lease. The Lessor shall,
at the expense of the Lessee, cooperate fully with the Lessee in any such contest.

[End of Article VI]

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DAMAGE, DESTRUCTION, AND CONDEMNATION

     Section 7.01. Damage and Destruction. If, prior to the termination of this Lease,
the Project is destroyed or is damaged (in whole or in part) by fire or other casualty, the Lessee
shall promptly repair, rebuild, restore, or re-equip the Project to substantially the same
condition thereof as existed prior to the event causing such damage or destruction with such
changes, alterations, and modifications (including the substitution and addition of other property)
as may be desired by the Lessee, and as will not impair the value or the character of the Project
and shall apply for such purpose so much as may be necessary of any Net Proceeds of insurance
resulting from such recovery, and the Lessee shall be obligated to continue to pay the Gross Rent.
In the event the Net Proceeds are not sufficient to pay in full the costs of any such repair,
rebuilding, restoration, or re-equipping, the Lessee shall nonetheless complete such work and shall
pay that portion of the costs thereof in excess of the amount of such Net Proceeds.

     Section 7.02. Condemnation and Failure of Title. In the event that title to the
Project shall fail or title to or the temporary use of the Project or any part thereof shall be
taken under the exercise of the power of eminent domain by any governmental body or by any Person
acting under governmental authority, the Lessee shall be obligated to continue to pay the Gross
Rent.

     The Lessor shall cooperate fully with the Lessee in handling and conducting any prospective or
pending condemnation proceeding with respect to the Project or any part thereof and shall, to the
extent it may lawfully do so, permit the Lessee to litigate in any such proceeding in the name and
behalf of the Lessor. In no event shall the Lessor voluntarily settle, or consent to the
settlement of, any prospective or pending condemnation proceeding with respect to the Project or
any part thereof without the prior written consent of the Lessee.

[End of Article VII]

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ADDITIONAL COVENANTS

     Section 8.01. No Warranty of Condition or Suitability by the Lessor. The
Lessor makes no warranty, either express or implied, as to the habitability, merchantability,
condition, or workmanship of any part of the Project or that it will be suitable for the Lessee’s
purposes or needs.

     Section 8.02. Access to Leased Premises and Records. The Lessor, for itself and its
duly authorized representatives and agents, shall have the right, upon reasonable prior notice, to
enter the Project at all reasonable times during the Lease Term for the purpose of (i) examining
and inspecting the same, including any construction or reconstruction thereof, insofar as necessary
to ascertain compliance with this Lease, and (ii) performing such work in and about the Project
made necessary by reason of an Event of Default. The Lessor shall also have the right at all
reasonable times to examine and make extracts from the books and records of the Lessee, insofar as
such books and records relate to the repair and maintenance of the Project and insofar as necessary
to ascertain compliance with this Lease.

     Section 8.03. Lessee to Maintain its Existence; Conditions Under Which Exceptions
Permitted. Except as provided in the following sentence, the Lessee agrees that while this
Lease is in effect it shall maintain its legal existence as a Mississippi corporation, shall not
consolidate with or merge into another Person or permit one or more other Persons to consolidate
with or merge into it, and shall not dissolve or otherwise dispose of all or substantially all of
its assets. The Lessee may, without violating the agreement contained in this Section, consolidate
with or merge into another domestic corporation (that is, a corporation organized and existing
under the laws of one or more states of the United States of America), or permit one or more such
domestic corporations to consolidate with or merge into it, or sell or otherwise transfer to
another Person all or substantially all of its assets as an entirety and thereafter dissolve,
provided the surviving, resulting, or transferee Person (i) is authorized to do business in the
State, (ii) is a domestic corporation, partnership, or other entity, or if a natural person, is a
resident of the United States of America, (iii) assumes in writing all of the obligations of the
Lessee under this Lease, and (iv) obtains all licenses and permits required by law to operate the
Project.

     Section 8.04. Qualification in the State. The Lessee warrants that it is, and while
this Lease is in effect it will continue to be, duly qualified to do business in the State.

     Section 8.05. Granting of Easements. If no Event of Default under this Lease shall
then be continuing, the Lessor, at the request of the Lessee, shall at any time or times grant
easements, licenses, rights of way (including the dedication of public highways), and other rights
or privileges in the nature of easements with respect to any property included in the Project, or
the Lessor, at the request of the Lessee, shall release existing easements, licenses, rights of
way, and other rights or privileges with or without consideration, and the Lessor agrees that it
shall execute and deliver any instrument necessary or appropriate to confirm and grant or release
any
such easement, license, right of way, or other right or privilege upon receipt of (i) a copy
of the instrument of grant or release, (ii) a written application signed by the Authorized Lessee

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Representative requesting such instrument, and (iii) a certificate executed by the Authorized
Lessee Representative stating that such grant or release will not impair the effective use or
interfere with the operation of the Project. Any money consideration received in connection with
the granting or release of an easement pursuant to this Section shall be paid to the Lessee. No
grant or release effected under the provisions of this Section shall entitle the Lessee to any
abatement or diminution of the Gross Rent.

     Section 8.06. Indemnity.

     (a) The Lessee shall and agrees to indemnify and save the Lessor and its directors, officers,
members, and employees 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 the Project and against and
from all claims arising from (i) any condition of or operation of the Project, (ii) any breach or
default on the part of the Lessee in the performance of its obligations under this Lease, (iii) any
act or negligence of the Lessee or of any its agents, contractors, servants, employees, or
licensees, or (iv) any act or negligence of any assignee or sublessee of the Lessee or of any
agents, contractors, servants, employees, or licensees of any assignee or sublessee of the Lessee,
provided, however, this indemnity shall not apply to any act of negligence or willful or
intentional misconduct of the Lessor. The Lessee shall indemnify and save the Lessor harmless from
and against all costs and expenses incurred in or in connection with any such claim arising as
aforesaid from clauses (i), (ii), (iii), or (iv) above, or in connection with any action or
proceeding brought thereon, including reasonable and actual attorneys’ fees as provided in Section
10.04 hereof, and upon notice from the Lessor, the Lessee shall defend it in any such action or
proceeding.

     (b) Notwithstanding the fact that it is the intention of the parties that the Lessor and its
directors, officers, members, and employees shall not incur pecuniary liability by reason of the
terms of the Lessor Contracts, or the undertakings required of the Lessor thereunder or by reason
of (i) the issuance of the Bonds, (ii) the execution of the Lessor Contracts, (iii) the performance
of any act required by the Lessor Contracts, (iv) the performance of any act requested by the
Lessee, or (v) any other costs, fees, or expenses incurred by the Lessor with respect to the
Project or the financing thereof, including all claims, liabilities, or losses arising in
connection with the violation of any statutes or regulations pertaining to the foregoing,
nevertheless, if the Lessor should incur any such pecuniary liability, then in such event the
Lessee shall indemnify and hold harmless the Lessor against all claims by or on behalf of any
Person arising out of the same and all costs and expenses incurred in connection with any such
claim or in connection with any action or proceeding brought thereon, including reasonable and
actual attorneys’ fees as provided in Section 10.04 hereof, and upon notice from the Lessor, the
Lessee shall defend the Lessor in any such action or proceeding; provided that if a court of
competent jurisdiction determines that the provisions of Section 13-8-2 of the Official Code of
Georgia Annotated are applicable to this Lease, the parties hereto agree that any agreement to
indemnify contained in this Lease shall not extend to any liability for damages arising out of
bodily injury to persons or damage to property caused by or resulting from the sole negligence of
the Lessor or its agents or employees relative to the construction, alteration, repair, or
maintenance of a building, structure, appurtenances, and appliances, including moving,
demolition, and excavating connected therewith, it being understood and agreed that this

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exception
is included herein to assure the validity and enforceability of the indemnity provision hereof
under Georgia law, and, in particular, Section 13-8-2 of the Official Code of Georgia Annotated,
and is not otherwise intended by the parties to narrow the indemnity provision hereof. The
indemnity contained in this Section shall not apply to any acts of negligence or willful misconduct
or intentional misconduct of the Lessor.

     (c) Nothing contained in this Section shall require the Lessee to indemnify the Lessor or its
officials, directors, members, or employees for any claim or liability which the Lessee was not
given any opportunity to contest or for any settlement of any such action effected without the
Lessee’s consent (assuming such rights are available and have not been waived in writing by the
Lessee). The indemnity of the Lessor and its officials, directors, members, and employees
contained in this Section shall survive the termination of this Lease.

     Section 8.07. Use of Party Walls. If the Lessee purchases any unimproved part of or
interest in the Leased Premises, pursuant to the provisions of Section 11.04 of this Lease, or
otherwise acquires or leases other real property adjacent to the Leased Premises, the Lessee and
the Lessor agree that all walls presently standing or hereafter erected by the Lessor or the Lessee
as a part of the Project on or contiguous to the boundary line of the portion of or interest in the
Leased Premises or other real property so purchased, acquired, or leased shall be party walls, and
each party grants to the other a 10-foot easement adjacent to any such party wall for the purpose
of inspection, maintenance, repair, and replacement thereof and the tying-in of new construction.
If the Lessee utilizes any party wall for the purpose of tying in new construction that will be
utilized under common control with the Project, the Lessee may also tie into the utility facilities
on the Leased Premises for the purpose of serving the new construction and may remove any
non-loadbearing wall panels in the party wall; provided, however, that if the property so owned,
purchased, acquired, or leased by the Lessee ceases to be operated under common control with the
Project, the Lessee covenants that it shall install non-loadbearing wall panels similar in quality
to those that have been removed and shall provide separate utility services for the new
construction.

     Section 8.08. Operation of Project and Safety Code. The Lessee warrants that
throughout the Lease Term it shall operate the Project as poultry feed mill, administration,
hatchery and live-haul facilities or cause the same to be operated as poultry feed mill,
administration, hatchery, and live-haul facilities and shall continue to maintain the Project in
compliance in all material respects with all applicable life and safety codes and all applicable
building and zoning, health, and safety ordinances and laws, 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, except
those laws, ordinances, rules, and regulations, the non-compliance with which would not have a
material adverse effect upon the ability of the Lessee to perform its obligations under this Lease.

     Section 8.09. Hazardous Waste. (a) In addition to and without limitation of all
other representations, warranties, and covenants made by the Lessee under this Lease, the Lessee
further represents, warrants, and covenants that, except as disclosed in writing to the Lessor, the
Lessee has not and, to the best of its knowledge, any contractors with respect to the Project
have not, used Hazardous Materials (as hereinafter defined) on, from, or affecting the Project in
any

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manner which violates in any material respect any Environmental Laws, and that, to the best of
the Lessee’s knowledge, after due investigation, no prior owner of the Project or any tenant,
subtenant, prior tenant, or prior subtenant have used Hazardous Materials on, from, or affecting
the Project in any manner which violates Environmental Laws. The Lessee shall keep or cause the
Project to be kept free of Hazardous Materials except as otherwise provided in this Section.

     (b) Without limiting the generality of the foregoing, the Lessee shall not cause or permit the
Project or any part thereof to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce, or process Hazardous Materials, except in substantial
compliance with all applicable Environmental Laws, nor shall the Lessee cause or permit, as a
result of any intentional or unintentional act or omission on the part of the Lessee or any tenant
or subtenant, a release of a reportable quantity of Hazardous Materials onto the Project or onto
any other property. The Lessee shall substantially comply with and ensure substantial compliance
by all tenants and subtenants with all applicable Environmental Laws, whenever and by whomever
invoked, and shall obtain and comply with, and ensure that all tenants and subtenants obtain and
comply with, any and all approvals, registrations, or permits required thereunder. The Lessee
shall (i) conduct and complete all investigations, studies, samplings, and testing and all
remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials on,
from, or affecting the Project during the Lease Term in accordance with all applicable
Environmental Laws, and (ii) defend, indemnify, and hold harmless the Lessor from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or otherwise arising out of or in any way
related to (x) the presence, disposal, release, or threatened release of any Hazardous Materials
during the Lease Term which are on, from, or affecting the soil, water, vegetation, buildings,
personal property, persons, animals, or otherwise of the Project, or (y) any violation during the
Lease Term of Environmental Laws or any policies or requirements of the Lessor, which are based
upon or in any way related to such Hazardous Materials including, without limitation, reasonable
and actual attorneys’ fees, investigation and laboratory fees, court costs, and litigation
expenses. In the event of the termination of this Lease, the Lessee shall deliver the Project free
of any and all Hazardous Materials so that the condition of the Project shall conform to all
applicable Environmental Laws affecting the Project.

     (c) For purposes of this Section, “Hazardous Materials” includes, without limitation, any
flammable explosives, radioactive materials, hazardous materials or wastes, hazardous or toxic
substances, or related materials defined in any Environmental Law; provided, however, that
Hazardous Materials shall not include, for purposes of this Section, nonfriable asbestos-containing
products or cleaning products, medical supplies, or other substances used by the Lessee in the
ordinary course of conduct of its operations at the Project. The provisions of this Section shall
be in addition to any and all other obligations and liabilities the Lessee may have to the Lessor
at common law or under Section 8.05 hereof and shall survive the termination of this Lease.

[End of Article VIII]

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ASSIGNMENT, SUBLEASING, ENCUMBERING, AND SELLING;

REDEMPTION; RENT PREPAYMENTS AND ABATEMENT;

INSTALLATION OF LESSEE’S OWN MACHINERY AND EQUIPMENT

     Section 9.01. Assignment and Subleasing. The rights and obligations of the Lessee
under this Lease may be assigned and delegated, and the Project may be subleased, as a whole or in
part, by the Lessee without the necessity of obtaining the consent of the Lessor, subject, however,
to each of the following conditions:

     (a) The assignee or sublessee shall meet the requirements for a successor corporation
set forth in Section 8.03 hereof.

     (b) No assignment or sublease shall relieve the Lessee from primary liability for any
of its obligations hereunder, and in the event of any such assignment or sublease, the
Lessee shall continue to remain primarily liable for payment of the Gross Rent 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.

     (c) The assignee or sublessee shall assume in writing the obligations of the Lessee
under the Lessee Contracts to the extent of the interest assigned or subleased.

     (d) The Lessee shall furnish or cause to be furnished to the Lessor assurances
reasonably satisfactory to the Lessor that the Project will continue to be operated as a
“project” within the meaning of the Act.

     (e) No such assignment or sublease shall give rise to a novation.

     (f) The Lessee shall, within thirty (30) days after the execution thereof, furnish or
cause to be furnished to the Lessor a true and complete copy of each such assignment or
sublease, or assumption of the obligation, as the case may be. The Lessor shall have the
right, at any time and from time to time, to notify any assignee or sublessee of the rights
of the Lessor as provided by this Section.

     The Lessor confirms and recognizes that the right of possession of sublessees of the Lessee to
the Leased Premises and their other rights arising out of the subleases shall not be affected or
disturbed in any way by the Lessor or by the exercise of any rights or remedies by the Lessor for
any reason other than one which would entitle the Lessee under the subleases to dispossess the
sublessees from the Leased Premises or which would constitute an event of default under the
subleases.

     This Lease has been executed in several counterparts. No assignments of an ownership or
security interest this Lease may be made other than by transfer of counterpart number 1.

     Section 9.02. Restrictions on Sale, Encumbrance, or Conveyance of the Project by the
Lessor. The Lessor agrees that it shall not (1) directly, indirectly, or beneficially sell,

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convey, or otherwise dispose of any part of its interest in the Project during the Lease Term,
(2) permit any part of the Project or the Leased Premises 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 Lessee, and (3)
assign, transfer, or hypothecate (other than pursuant to the Bond Purchase Agreement) any payment
of rent (or analogous payment) then due or to accrue in the future under any lease of the Project
or the Leased Premises, except that if the laws of the State at the time shall permit, nothing
contained in this Section shall prevent the consolidation of the Lessor with, or merger of the
Lessor 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 Bonds
according to their tenor, and the due and punctual performance and observance of all the agreements
and conditions of the Lessor Contracts to be kept and performed by the Lessor, 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.

     Section 9.03. Redemption of Bonds. The Lessor, at the written request of the Lessee
at any time and if the Bonds are then callable or available for purchase, and if there are funds
available therefor, shall forthwith take all steps that may be necessary under the applicable
redemption or purchase provisions of the Bond Purchase Agreement to effect redemption or purchase
of all or part of the then outstanding Bonds, as may be specified by the Lessee, on the earliest
date on which such redemption or purchase may be made under such applicable provisions.

     Section 9.04. Prepayment of Rents. There is expressly reserved to the Lessee the
right, and the Lessee is authorized and permitted, at any time it may choose, to prepay all or any
part of the Gross Rent, and the Lessor agrees that the Bondholder shall accept such prepayments of
rents when the same are tendered by the Lessee. All rents so prepaid shall at the written
direction of the Lessee be credited toward the Gross Rent, in the order of their due dates, or
applied to the retirement of the Bonds prior to maturity (either by redemption or purchase) in
accordance with the Bond Purchase Agreement.

     Section 9.05. Installation of Lessee’s Own Machinery and Leased Equipment. The
Lessee may from time to time, in its sole discretion and at its own expense, install fixtures,
trade fixtures, machinery, equipment, furnishings, and other personal property in the Building or
on the Leased Premises, which may be attached or affixed to the Building or the Leased Premises.
All such fixtures, trade fixtures, machinery, equipment, furnishings, and other personal property
shall remain the sole property of the Lessee, and the Lessee may remove the same from the Building
or the Leased Premises at any time, in its sole discretion and at its own expense. The Lessee may
create any mortgage, encumbrance, lien, or charge on any such fixtures, trade fixtures, machinery,
equipment, furnishings, and other personal property. The Lessor shall not have any interest in or
landlord’s lien on any such fixtures, trade fixtures, machinery, equipment, furnishings, or
personal property so installed pursuant to this Section, and all such fixtures, trade fixtures,
machinery, equipment, furnishings, and personal property shall be and remain identified as the
property of the Lessee by appropriate tags or other markings.

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     Section 9.06. Reference to Bonds Ineffective after Bonds Paid. Upon payment in full
of the Bonds, all references in this Lease to the Bonds shall be ineffective, and the Bondholder
shall not thereafter have any rights hereunder, saving and excepting those that shall have
theretofore vested.

[End of Article IX]

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EVENTS OF DEFAULT AND REMEDIES

     Section 10.01. 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) The Lessee’s failure to pay the Gross Rent at the times specified therein and
continuing for a period of five (5) days after notice by telegram, or if telegraphic service
is not available, then after notice by mail, in the manner provided in Section 12.02 of this
Lease, given to the Lessee by either the Lessor or the Bondholder, that the payment referred
to in such notice has not been received.

     (b) The Lessee’s breach in any material respect of any representation or warranty
contained in this Lease or the Lessee’s failure to observe, perform, or comply with any
covenant, condition, or agreement in the Lessee Contracts on the part of the Lessee to be
observed or performed, other than as referred to in subsection (a) of this Section, for a
period of thirty (30) days after written notice specifying such breach or failure and
requesting that it be remedied, given to the Lessee by the Lessor, unless the Lessor shall
agree in writing to an extension of such time prior to its expiration. In the case of any
such breach or default which cannot with due diligence be cured within such thirty (30) day
period, it shall not constitute an Event of Default if corrective action is instituted by
the Lessee within the applicable period and diligently pursued until the breach or default
is corrected.

     Section 10.02. Remedies on Default. Whenever any Event of Default referred to in
Section 10.01 hereof shall have happened and be subsisting, the Lessor, to the extent permitted by
law, may take any one or more of the following remedial steps:

     (a) The Lessor may 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 Lessee hereunder then due or thereafter to become due, or to enforce
performance and observance of any obligation, agreement, or covenant of the Lessee under
this Lease.

     (b) Whether or not the Lessor shall have collected any current damages, the Lessor
shall, at its option, be entitled to recover from the Lessee, and the Lessee shall pay to
the Lessor on demand, as and for liquidated and agreed final damages for the Lessee’s
default and in lieu of all current damages beyond the date of such demand, an amount equal
to all unpaid installments of Basic Rent and other amounts payable as hereinafter defined if
the Bonds are then outstanding and unpaid, 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
Lessor shall be entitled to the maximum amount allowable under such statute or rule of law.
The term “all unpaid installments of Basic Rent and other amounts payable” shall mean an
amount equal to the entire principal amount of the Bonds then

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outstanding, together with any applicable redemption premiums and all interest accrued
or to accrue on and prior to the next succeeding redemption date, and plus any other
payments due or to become due hereunder.

     (c) If the Event of Default results from the Lessee’s failure to pay any amount due
under the PILOT Agreement, then the Lessor shall have the right to terminate this Lease by
giving an additional written notice to the Lessee of the Lessor’s intention to exercise its
right of termination unless the Event of Default is cured within forty-five (45) days after
the date of the Lessee’s receipt thereof. If the Event of Default is cured within such
forty-five (45) day period, this Lease shall remain in full force and effect. If the Event
of Default is not cured within such forty-five (45) day period, then the Lessor shall
complete the exercise of its right of termination by execution and delivery of a quitclaim
deed of all of the Lessor’s right, title, and interest in and to the Project, whereupon the
Lease Term shall end and terminate.

     No action taken pursuant to this Section shall relieve the Lessee from its obligation to pay
the Gross Rent, which shall survive any such action, and the Lessor may take whatever action at law
or in equity as may appear necessary and desirable to collect the rents and other amounts then due
and thereafter to become due or to enforce the performance and observance of any obligation,
agreement, or covenant of the Lessee hereunder.

     Section 10.03. Remedies Exclusive. The remedies herein expressly conferred upon the
Lessor are intended to be exclusive of all other remedies existing at law or in equity or by
statute. Without limiting the generality of the foregoing, and notwithstanding the foregoing
provisions of this Article, and notwithstanding any other term or provision of this Lease, and
notwithstanding any statutory, decisional, or other law to the contrary, in no event shall the
Lessor have any right to terminate this Lease, to enter upon and take possession of the Project, to
judicially obtain the dispossession of the Lessee or the repossession of the Project, or otherwise
to obtain possession of the Project, by reason of the occurrence of any Event of Default by the
Lessee hereunder. No delay or omission to exercise any right or power accruing upon any 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 Lessor to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein expressly required. The
Bondholder shall be deemed a third party beneficiary of all covenants and agreements herein
contained.

     Section 10.04. Lessee to Pay Fees and Expenses. In the event the Lessee should
default under any of the provisions of this Lease and the Lessor should employ attorneys,
accountants, or other experts or incur other expenses for the collection of rents and other amounts
due hereunder or the enforcement of performance or observance of any obligation or agreement on the
part of the Lessee herein contained, the Lessee agrees that it shall on demand therefor pay to the
Lessor the reasonable and actual fees of such attorneys, accountants, or other experts and such
other expenses so incurred by the Lessor. Any attorneys’ fees required to be paid by the Lessee
under this Lease shall include attorneys’ and paralegals’ fees through all proceedings, including,
but not limited to, negotiations, administrative hearings, trials, and appeals.

-38-

 

     Section 10.05. Waiver of Events of Default. The Lessor 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. In case of any such waiver or rescission, or in case
any proceeding taken by the Lessor on account of any such Event of Default shall be discontinued or
abandoned or determined adversely to the Lessor, then and in every such case the Lessor and the
Lessee shall be restored to their former position 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.

     Section 10.06. Force Majeure. If by reason of force majeure the Lessee is unable in
whole or in part to carry out its agreement on its part herein contained, other than the
obligations on the part of Lessee to pay the Gross Rent, Lessee shall not be deemed in default
during the continuance of such inability. The term “force majeure” as used herein shall mean,
without limitation, the following: acts of God, strikes, lockouts or other industrial disturbances;
act of public enemies, orders or restraints of any kind of the government of the United States of
America or the State or any of their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods; or
explosions.

[End of Article X]

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OPTIONS IN FAVOR OF LESSEE; OPTIONS IN FAVOR OF AUTHORITY

     Section 11.01. General Options to Terminate Lease Term. Notwithstanding the
existence of an Event of Default, or an event or circumstance that could, with the passage of time
give rise to an Event of Default, the Lessee shall have, and is hereby granted, the following
options to terminate the Lease Term:

     (a) at any time prior to full payment of the Bonds, the Lessee may terminate the Lease
Term by (i) paying to the Bondholder an amount which will be sufficient to pay, retire, and
redeem the Bonds in accordance with the provisions of the Bond Purchase Agreement
(including, without limiting the generality of the foregoing, principal, redemption premium,
if any, and interest to maturity or earliest applicable redemption date, as the case may
be), (ii) in the case of redemption, making arrangements satisfactory to the Lessor for the
giving of the required notice of redemption, (iii) paying to the Lessor any and all sums
then due to the Lessor under this Lease, and (iv) otherwise complying with the provisions of
Section 7.2 of the Bond Purchase Agreement, and

     (b) upon full payment of the Bonds and of any and all sums then due to the Lessor under
this Lease prior to the end of the Lease Term, the Lessee may terminate the Lease Term by
giving the Lessor notice in writing of such termination, which shall forthwith become
effective.

     At any time within one hundred eighty (180) days after the expiration or sooner termination of
the Lease Term, the Lessee shall also have, and is hereby granted, the option to purchase the
Project for a purchase price of One Dollar ($1.00), which shall be paid directly to the Lessor for
its own account and any and all other sums then due to the Lessor under this Lease. To exercise
such option, the Lessee shall give written notice of exercise to the Lessor. The purchase of the
Project shall be closed within sixty- (60-) days from the date of such notice.

     Section 11.02. Option to Prepay Rent and Redeem Bonds at Prior Optional Redemption
Dates. The Lessee shall have the option to prepay rent due related to the Bonds and other
amounts payable under this Lease in such manner and amounts as will enable the Lessor to redeem the
Bonds prior to maturity, in whole or in part on any date, as provided in Section 7.2 of the Bond
Purchase Agreement in accordance with the procedures set forth in the Bond Purchase Agreement. The
rents and other amounts payable by the Lessee in the event of its exercise of the option granted
under this Section shall be the amount necessary to pay principal, all interest to accrue to the
redemption date, the applicable redemption premium, as provided in Section 7.2 of the Bond Purchase
Agreement, and any redemption expense.

     Section 11.03. Option to Purchase Unimproved Land. If no Event of Default under this
Lease shall have occurred and then be continuing, the Lessee shall have, and is hereby granted, the
option to purchase any part of the Leased Premises on which neither the Building nor any of the
Leased Equipment is situated (although transportation or utility facilities may be located
thereon), at any time following the Completion Date and from time to
time thereafter, at and for a purchase price of One Dollar ($1.00), provided that the Lessee furnishes the Lessor
with the following:

-40-

 

     (a) a notice in writing containing (i) an adequate legal description of that portion of
the Leased Premises with respect to which such option is to be exercised, and (ii) a
statement that the Lessee intends to exercise its option to purchase such portion of the
Leased Premises on a dated stated, which shall not be less than thirty (30) days nor more
than one hundred twenty (120) days from the date of such notice,

     (b) a certificate of the Lessee to the effect that neither the Building nor the Leased
Equipment are located on the portion of the Leased Premises with respect to which the option
is to be exercised, accompanied by a plat of survey of the Leased Premises certified by a
registered surveyor of the State, depicting (i) the boundaries of the portion of the Leased
Premises with respect to which the option is to be exercised, (ii) all improvements located
on the property surveyed and the relation of the improvements by distances to the boundaries
of the portion of such property with respect to which the option is to be exercised, and
(iii) all easements and rights of way with recording data and instruments establishing the
same, and

     (c) an amount of money equal to the purchase price computed as provided in this
Section, to be deposited with the Lessor.

     Section 11.04. No Obligation to Purchase Project. The Lessee shall be under no
obligation to purchase the Project.

     Section 11.05. Conveyance on Exercise of Option to Purchase. At the closing of any
purchase pursuant to the exercise of any option to purchase granted herein, the Lessor shall upon
receipt of the purchase price deliver to the Lessee documents conveying to the Lessee good and
marketable title (of the same quality as received by the Lessor) to the property being purchased,
as such property then exists, subject to the following: (i) those liens and encumbrances (if any)
to which title to said property was subject immediately following the execution and delivery of the
Bonds but excluding the Lessor Contracts, (ii) those liens and encumbrances created by the Lessee
or to the creation or suffering of which the Lessee consented, and (iii) those liens and
encumbrances resulting from the failure of the Lessee to perform or observe any of the agreements
on its part contained in this Lease.

     Section 11.06. Public Purpose of Option to Purchase. The Lessor and the Lessee
acknowledge that the options to purchase the Project granted in this Article are a material
inducement to the Lessee to operate the Project on behalf of the Lessor and that in granting such
options the Lessor is considering the entire transaction as a whole, including the promotion and
expansion for the public good and welfare industry and trade within Cook County and the reduction
of unemployment to the greatest extent possible, and the fact that as a condition to the exercise
of the options all indebtedness with respect to the Project will have been paid in full.

[End of Article XI]

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MISCELLANEOUS

     Section 12.01. Quiet Enjoyment. The Lessor agrees that so long as the Lessee shall
fully and punctually pay all of the rents and other amounts provided to be paid hereunder by the
Lessee and shall fully and punctually perform all of its other covenants and agreements hereunder,
the Lessee shall peaceably and quietly have, hold, and enjoy the Project during the Lease Term
without hindrance or molestation from parties claiming by, through, or under the Lessor.

     Section 12.02. Notices. All notices, certificates, or other communications hereunder
shall be sufficiently given and shall be deemed given when mailed by certified mail, postage
prepaid, return receipt requested, addressed as follows:

	 	 	 	 	 
	 

	 	If to the Lessor:
	 	Adel Industrial Development Authority
	 

	 	 	 	201 E. Fifth Street
	 

	 	 	 	P.O. Box 854
	 

	 	 	 	Adel, Georgia 31620-0854
	 

	 	 	 	Attention: Chairman
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Howard E. McClain, Esq.
	 

	 	 	 	201 E. Fifth Street
	 

	 	 	 	P.O. Box 854
	 

	 	 	 	Adel, Georgia 31620-0854
	 
	 	 	 	 
	 

	 	If to the Lessee:
	 	Sanderson Farms, Inc. (Production Division)
	 

	 	 	 	225 North 13th Avenue
	 

	 	 	 	P.O. Box 988
	 

	 	 	 	Laurel, Mississippi 39441
	 

	 	 	 	Attention: CFO

     Any party named in this Section 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 12.03. Recording. This Lease, or an appropriate notice hereof, shall be
recorded in all offices as may at the time be provided by law as the proper place for recordation.

     Section 12.04. 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 and shall be binding upon the
Lessor, the Lessee, and their respective successors and assigns subject, however, to the
limitations contained in Sections 8.03, 9.01, and 9.02.

-42-

 

     Section 12.05. 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 12.06. Amounts Remaining in Funds. It is agreed by the parties hereto that
any amounts remaining in the Project Fund or other funds provided for herein upon expiration or
sooner termination of the Lease Term, as provided in this Lease, after payment in full of the Bonds
and all sums due and owing to the Lessor, shall belong to and be paid to the Lessee by the Lessor
as overpayment of rents.

     Section 12.07. Fees Paid by the Lessee. Except as Section 4.03 hereof permits the
payment or reimbursement thereof, the Lessee shall pay all fees and expenses relating to this
Lease, including but not limited to, the expense of examination of title, premiums of owner’s title
insurance, costs of all supplemental examinations and certifications of title, any recording fee
and tax upon this Lease, and reasonable and actual attorneys’ fees of the Lessor and the County.
In case the Lessor, with the written consent of the Lessee, pays or advances any money for fees,
surveys, recording, recording tax, examination of title, an owner’s title insurance policy,
preparation of documents, any expenses incurred in the completion of this transaction, the payment
of any insurance premiums, encumbrance, tax, assessment, or other charge or lien upon the Project,
or any other amounts necessary for the payment of the cost of improvements, the same shall be
advances payable in accordance with Section 6.07 of this Lease.

     Section 12.08. Amendments, Changes, and Modifications. This Lease may not be
amended, modified, altered, or terminated, and the observance of any term thereof may not be
waived, except in a writing signed by both the Lessor and the Lessee, and consented to by the
Bondholder.

     Section 12.09. 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 12.10. 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 12.11. Covenants Run with Leased Premises. The covenants, agreements, and
conditions herein contained shall run with the property and premises 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.

     Section 12.12. No Merger. There shall be no merger of this Lease or the leasehold
estate created hereby with the fee simple estate in the Project or any part thereof, by reason of
the fact that the same person or entity may acquire, own, or hold, directly or indirectly, this
Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and the fee simple estate in the Project or any interest in such fee simple estate, and
this Lease shall not be terminated except as expressly provided herein.

-43-

 

     Section 12.13. Net Lease. This Lease shall be deemed and construed to be a “net,
net, net lease,” and the Lessee 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 12.14. Surrender of Project. Except as otherwise provided in this Lease, at
the expiration or sooner termination of the Lease Term, the Lessee agrees to surrender possession
of the Project peaceably and promptly to the Lessor 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 condemnation which the Lessee is not obligated by this Lease to repair.

     Section 12.15. Immunity of Members, Officers, and Employees of Lessor. No recourse
shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Lessor
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 Lessor contained in the Lessor Contracts against
any director, member, officer, or employee, as such, in his individual capacity, past, present, or
future, of the Lessor, or any successor corporation, 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 the Lessor Contracts are solely corporate
obligations of the Lessor payable only from the funds and assets of the Lessor 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 Lessor, or of any successor corporation, either directly or through the Lessor, or
any successor corporation, under or by reason of any of the obligations, covenants, promises, or
agreements entered into between the Lessor and the Lessee whether contained in the Lessor Contracts
or to be implied herefrom or therefrom as being supplemental hereto or thereto, and that all
personal liability of that character against every such director, member, officer, and employee 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 directors, members,
officers, and employees of the Lessor under the provisions contained in this Section shall survive
the completion of the Project and the termination of this Lease.

[End of Article XII]

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Signatures and Seals

     In Witness Whereof, the Lessor has executed this Lease by causing its name to be
hereunto subscribed by its Chairman and by causing the official seal of the Lessor to be impressed
hereon and attested by its Secretary; and the Lessee has executed this Lease by causing its name to
be hereunto subscribed by its Treasurer and Chief Financial Officer and by causing the corporate
seal of the Lessee to be impressed hereon and attested by its Secretary; all being done as of the
day and year first above written but actually executed by the Lessor on August 14, 2006, and by the
Lessee on August 15, 2006.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	Adel Industrial Development Authority
	 
	 	 	 	 
	(Seal)

	 	By:
	 	/s/ Ray Brooks
	 

	 	 	 	 
	 

	 	 	 	Chairman

	 	 	 	 	 
	 

	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	/s/ Billy A. Barfield
	 	 	 	 
	 	 	 	 	 
	Secretary
	 	 	 	 
	 
	 	 	 	 
	The foregoing is hereby agreed to as of the date
thereof.	 	 
	 
	 	 	 	 
	Sanderson Farms, Inc. (Production Division)	 	 
	 
	 	 	 	 
	/s/ D. Michael Cockrell
	 	 	 	 
	 	 	 	 	 
	Authorized Officer
	 	 	 	 

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Exhibit A

Description of Leased Premises

PARCEL 1 (Part of Feed Mill Site):

All that tract or parcel of land situate, lying and being in Land Lot 408 in the 9th
Land District of Cook County, Georgia, containing 97.42 acres and being more particularly described
as follows: Begin at the intersection of the south land lot line of Land Lot 408 with the westerly
right of way of the Southern Railroad; thence South 88 degrees 04 minutes 06 seconds West a
distance of 558.04 feet; thence North 88 degrees 31 minutes 54 seconds West a distance of 1244.92
feet; thence North 19 degrees 31 minutes 41 seconds West a distance of 1457.27 feet; thence North
70 degrees 28 minutes 19 seconds East a distance of 478.27 feet; thence North 19 degrees 31 minutes
41 seconds West a distance of 350.04 feet; thence South 70 degrees 28 minutes 19 seconds West a
distance of 478.27 feet; thence North 19 degrees 31 minutes 41 seconds West a distance of 366.38
feet; thence North 85 degrees 41 minutes 22 seconds East a distance of 72.41 feet; thence South 83
degrees 45 minutes 16 seconds East a distance of 45.49 feet; thence North 12 degrees 57 minutes 59
seconds East a distance of 29.85 feet; thence North 63 degrees 10 minutes 45 seconds East a
distance of 59.69 feet; thence North 27 degrees 52 minutes 39 seconds East a distance of 125.53
feet; thence North 33 degrees 13 minutes 50 seconds East a distance of 94.82 feet; thence North 27
degrees 17 minutes 55 seconds East a distance of 74.95 feet; thence North 57 degrees 58 minutes 15
seconds East a distance of 104.07 feet; thence North 67 degrees 53 minutes 30 seconds East a
distance of 105.35 feet; thence South 77 degrees 36 minutes 03 seconds East a distance of 114.63
feet; thence North 87 degrees 05 minutes 21 seconds East a distance of 57.85 feet; thence South 78
degrees 55 minutes 19 seconds East a distance of 142.84 feet; thence North 79 degrees 28 minutes 57
seconds East a distance of 68.33 feet; thence North 85 degrees 32 minutes 26 seconds East a
distance of 76.51 feet; thence South 68 degrees 44 minutes 41 seconds East a distance of 85.28
feet; thence North 60 degrees 20 minutes 55 seconds East a distance of 36.34 feet; thence North 86
degrees 38 minutes 33 seconds East a distance of 55.38 feet; thence North 55 degrees 23 minutes 36
seconds East a distance of 109.76 feet; thence North 73 degrees 55 minutes 13 seconds East a
distance of 77.07 feet; thence North 71 degrees 55 minutes 11 seconds East a distance of 65.08
feet; thence North 10 degrees 58 minutes 08 seconds East a distance of 50.99 feet; thence North 52
degrees 20 minutes 38 seconds East a distance of 53.41 feet; thence North 72 degrees 00 minutes 06
seconds East a distance of 57.72 feet; thence South 71 degrees 37 minutes 18 seconds East a
distance of 59.90 feet; thence North 25 degrees 43 minutes 40 seconds East a distance of 64.53
feet; thence North 46 degrees 07 minutes 18 seconds East a distance of 64.22 feet; thence South 19
degrees 31 minutes 41 seconds East a distance of 2882.64 feet to the point of beginning.

Said property is depicted as Tract 2 on a plat of survey prepared by Hogan Surveying Company, Inc.
April 30, 2004, revised June 15, 2004 and recorded in Plat File 239, page 4, Cook County Deed
Records. Said plat is by reference herein incorporated into and made a part of this description.

-46-

 

PARCEL 2 (Part of Feed Mill Site):

All that tract or parcel of land situate, lying and being in Land Lot 421 in the 9th
Land District of Cook County, Georgia containing 10.30 acres and being more particularly described
as follows: Begin at the intersection of the north land lot line of Land Lot 421 with the westerly
right of way of Southern Railroad; thence South 19 degrees 31 minutes 41 seconds East a distance of
262.32 feet; thence South 88 degrees 04 minutes 06 seconds West a distance of 552.96 feet; thence
North 88 degrees 31 minutes 54 seconds West a distance of 1277.67 feet; thence North 19 degrees 31
minutes 41 seconds West a distance of 260.28 feet; thence South 88 degrees 31 minutes 54 seconds
East a distance of 1244.92 feet; thence North 88 degrees 04 minutes 06 seconds East a distance of
585.04 feet to the point of beginning.

Said property is depicted as Tract 3 on a plat of survey prepared by Hogan Surveying Company, Inc.
April 30, 2004, revised June 15, 2004 and recorded in Plat File 239, page 4, Cook County Deed
Records. Said plat is by reference herein incorporated into and made a part of this description.

PARCEL 3 (Hatchery Site):

All that tract or parcel of land situate, lying and being in Land Lots 361 and 376 in the
9th Land District of Cook County, Georgia, containing 16.42 acres and being more
particularly described as follows: To locate the point of beginning commence at the intersection
of the centerlines of Industrial Park Drive and Old Quitman Highway; thence North 86 degrees 42
minutes 01 seconds west a distance of 1248.50 feet to the point of beginning. From said point of
beginning thence South 15 degrees 06 minutes 54 seconds East a distance of 376.55 feet; thence
South 17 degrees 39 minutes 27 seconds East a distance of 315.83 feet; thence South 48 degrees 26
minutes 32 seconds West a distance of 247.42 feet; thence South 48 degrees 25 minutes 46 seconds
West a distance of 231.80 feet; thence North 73 degrees 03 minutes 50 seconds West a distance of
615.42 feet; thence North 06 degrees 56 minutes 10 seconds East a distance of 801.20 feet to the
southerly right of way of Industrial Park Drive; thence along an arc a distance of 22.48 feet which
arc has a radius of 2204.28 feet a chord bearing of North 87 degrees 48 minutes 11 seconds East a
chord length of 22.48 feet; thence North 87 degrees 30 minutes 40 seconds East a distance of 201.16
feet; thence along an arc a distance of 235.19 feet which arc has a radius of 3605.91 feet, a chord
bearing of North 89 degrees 22 minutes 47 seconds East and a chord length of 235.15 feet; thence
South 88 degrees 45 minutes 20 seconds East a distance of 198.06 feet to the point of beginning.

Said tract is depicted on a plat of survey prepared by Hogan Surveying Company, Inc. June 16, 2004
and recorded in Plat File 239, page 3B, Cook County Deed Records, which plat is by reference herein
incorporated into and made a part of this description.

-47-

 

Exhibit B

Description of Leased Equipment

     All fixtures, trade fixtures, equipment, machinery, and other personal property located or to
be located on the Leased Premises, which are acquired by the Lessor with proceeds of its Revenue
Bonds (Sanderson Farms, Inc. (Production Division) Project), Series 2006, dated as of July 1, 2006.

 

 

Exhibit C

Project Fund Requisition

[Attached]

 

 

Certificate and Requisition for Payment

Date:                                         ,                    

Draw Request [                    ]

     Sanderson Farms, Inc. (Production Division) (the “Lessee”) hereby requests, pursuant to the
Lease Agreement, dated as of July 1, 2006 (the “Lease”), by and between the Lessee and the Adel
Industrial Development Authority (the “Lessor”), that the following amounts be disbursed to the
following parties for the account of the Lessee from the Project Fund created under the Bond
Purchase Agreement, dated as of July 1, 2006, between the Lessor and Sanderson Farms, Inc.
(Production Division), as Purchaser:

	 	 	 	 	 	 	 
	 

	 	Name of Payee
	 	Nature of Disbursement
	 	Amount

     The Lessee does hereby certify to the Lessor that, as of the date hereof, (1) the
representations and warranties of the Lessee in the Lease are hereby ratified and confirmed and (2)
the above-listed items are properly included within the definition “Costs of the Project” included
within the Lease.

	 	 	 	 	 
	 	Sanderson Farms, Inc. (Production Division)

 	 
	 	By:  	 	 
	 	 	Authorized Lessee Representative 	 
	 	 	 	 
	 

 

 

Schedule A

Pending Litigation

None.

-2-EX-10.2

 

EXHIBIT
10.2

 

Adel Industrial Development Authority

$17,200,000

Revenue Bonds

(Sanderson Farms, Inc. (Production Division) Project),

Series 2006

 

Bond Purchase Agreement

 

Dated as of July 1, 2006

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	1.
	 	 	 	ISSUANCE OF THE BONDS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	     Authorization of the Bonds	 	 	1	 
	 
	 	1.2	 	     Terms of the Bonds	 	 	1	 
	 
	 	1.3	 	     Security for the Bonds	 	 	2	 
	 
	 	1.4	 	     Limited Obligation	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	SALE AND PURCHASE OF THE BONDS; ADVANCES	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	 	 	CLOSING	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	4.
	 	 	 	CONDITIONS TO CLOSING	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	     Representations and Warranties	 	 	3	 
	 
	 	4.2	 	     Performance; No Default	 	 	3	 
	 
	 	4.3	 	     Purchase Permitted by Applicable Law, etc	 	 	4	 
	 
	 	4.4	 	     Lease Agreement	 	 	4	 
	 
	 	4.5	 	     Lien Documents	 	 	4	 
	 
	 	4.6	 	     Proceedings and Documents	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	5.
	 	 	 	PROJECT FUND	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	     Creation of the Project Fund	 	 	4	 
	 
	 	5.2	 	     Disbursements	 	 	5	 
	 
	 	5.3	 	     Investments	 	 	5	 
	 
	 	5.4	 	     Depositary	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	6.
	 	 	 	REPRESENTATIONS OF THE PURCHASER	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	7.
	 	 	 	REDEMPTION OF THE BONDS	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	     Mandatory Redemption	 	 	6	 
	 
	 	7.2	 	     Redemption at Option of Lessee	 	 	6	 
	 
	 	7.3	 	     Partial Redemptions	 	 	7	 
	 
	 	7.4	 	     Maturity	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	8.
	 	 	 	COVENANTS	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	     Payment of Principal, Interest, and Premium	 	 	7	 
	 
	 	8.2	 	     Performance of Covenants; Authority of the Issuer	 	 	7	 
	 
	 	8.3	 	     Instruments of Further Assurance	 	 	7	 
	 
	 	8.4	 	     Inspection of Project Books	 	 	8	 
	 
	 	8.5	 	     Rights Under and Possession of the Lease	 	 	8	 
	 
	 	8.6	 	     Recording and Filing	 	 	8	 
	 
	 	8.7	 	     Maintenance of Existence; Compliance with Laws	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	9.
	 	 	 	EVENTS OF DEFAULT AND REMEDIES	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	     Events of Default	 	 	9	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	9.2	 	     Acceleration	 	 	10	 
	 
	 	9.3	 	     Other Remedies	 	 	10	 
	 
	 	9.4	 	     Rescission	 	 	11	 
	 
	 	9.5	 	     No Waivers or Election of Remedies	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	10.
	 	 	 	REGISTRATION; TRANSFER; SUBSTITUTION OF THE BOND	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.1	 	     Registration of the Bond	 	 	11	 
	 
	 	10.2	 	     Transfer of the Bond	 	 	12	 
	 
	 	10.3	 	     Replacement of the Bonds	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	11.
	 	 	 	PAYMENTS ON THE BONDS	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	12.
	 	 	 	AMENDMENT AND WAIVER	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	12.1	 	     Requirements	 	 	13	 
	 
	 	12.2	 	     Binding Effect, etc	 	 	13	 
	 
	 	12.3	 	     Lease	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	13.
	 	 	 	NOTICES	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	14.
	 	 	 	SUBSTITUTION OF PURCHASER	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	15.
	 	 	 	INTERPRETATION	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	 
	 	15.1	 	     Definitions	 	 	14	 
	 
	 	15.2	 	     Construction of Certain Terms	 	 	15	 
	 
	 	15.3	 	     Table of Contents; Titles and Headings	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	16.
	 	 	 	MISCELLANEOUS	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.1	 	     Successors and Assigns	 	 	15	 
	 
	 	16.2	 	     Payments Due on Non-Business Days	 	 	16	 
	 
	 	16.3	 	     Severability	 	 	16	 
	 
	 	16.4	 	     Construction	 	 	16	 
	 
	 	16.5	 	     Counterparts	 	 	16	 
	 
	 	16.6	 	     Governing Law	 	 	16	 
	 
	 	16.7	 	     No Liability of Issuer’s Officers	 	 	16	 
	 
	 	16.8	 	     Third Party Beneficiary	 	 	17	 

Exhibit A
— Form of Bonds

Exhibit B
— Form of Investment Letter

 

 

Bond Purchase Agreement

July 1, 2006

Sanderson Farms, Inc. (Production Division),

  a Mississippi corporation

(the “Purchaser”)

Ladies and Gentlemen:

     The Adel Industrial Development Authority (the “Issuer”), a public body corporate and politic
created and existing under the laws of the State of Georgia, agrees with you as follows:

Issuance of the Bonds

Authorization of the Bonds.

     The Issuer has duly authorized the issuance and sale of $17,200,000 in principal amount of its
Revenue Bonds (Sanderson Farms, Inc. (Production Division) Project), Series 2006 (the “Bonds,” such
term to include any such Bonds issued in substitution therefor pursuant to Section 10 of this
Agreement). The Bonds shall be substantially in the form set out in Exhibit A, with such changes
therefrom, if any, as may be approved by you and the Issuer. Certain capitalized terms used in
this Agreement are defined in Section 15 of this Agreement; references to an “Exhibit” are, unless
otherwise specified, to an Exhibit attached to this Agreement. Capitalized terms not otherwise
defined herein shall be defined as forth in the Lease Agreement of even date (the “Lease
Agreement”) between the Issuer and Sanderson Farms, Inc. (Production Division) (the “Lessee”), a
Mississippi corporation.

Terms of the Bonds.

     The Bonds shall be dated the date of Closing and shall be designated “Adel Industrial
Development Authority Revenue Bonds (Sanderson Farms, Inc. (Production Division) Project), Series
2006.” The Series 2006 Bonds (the “Bonds”) shall be issued as a single, fully registered Bond
without coupons in an aggregate principal amount not in excess of $17,200,000 and shall be numbered
R-1, substantially in the form set forth in Exhibit A.

     The Bonds shall bear interest from the date advances are made under this Agreement on the
outstanding principal amount thereof at the rate per annum of 6.00%, computed on the basis of a
360-day year for the number of days actually elapsed, payable on July 1, 2007, and annually
thereafter on July 1 of each year and shall mature on July 1, 2017 (each such date, a “Payment
Date”), unless earlier called for redemption.

 

 

     The Bonds shall bear interest on any overdue installment of principal or premium, if any, and,
to the extent permitted by applicable law, on any overdue installment of interest, at the aforesaid
rate.

Security for the Bonds.

     As security for the payment of the Bonds, the Issuer hereby assigns and pledges, and grants a
security interest in, all of its right, title, and interest in the Bond Rent and in the amounts
pledged pursuant to Section 5.1 and, pursuant to an Assignment and Security Agreement, dated the
date hereof (the “Assignment”) between the Issuer and the Purchaser, all of its right, title and
interest in the Lease Agreement (collectively, the “Security”) to the Bondholder, and this
Agreement shall be deemed a security agreement with respect to the security interest so created.

Limited Obligation.

     The Bonds shall be special or limited and not general obligations of the Issuer giving rise to
no pecuniary liability of the Issuer, shall be payable solely from the Security, and shall be a
valid claim of the Bondholder only against the Security, which Security is hereby again
specifically pledged and assigned for the payment of the Bonds and shall be used for no other
purpose than to pay the principal of, and premium, if any, and interest on, the Bonds, except as
may be otherwise expressly authorized in the Bond Documents. The Bonds shall not constitute a
general or moral obligation of Cook County nor a debt, indebtedness, or obligation of, or a pledge
of the faith and credit or taxing power of, Cook County or the State of Georgia or any political
subdivision thereof, within the meaning of any constitutional or statutory provision whatsoever.
Neither the faith and credit nor the taxing power of the State of Georgia, Cook County, or any
political subdivision thereof is pledged to the payment of the principal of, or premium, if any, or
interest on, the Bonds or other costs incident thereto. The Issuer has no taxing power. Neither
the members of the Governing Body nor any person executing the Bonds shall be liable personally on
the Bonds by reason of the issuance thereof.

Sale and Purchase of the Bonds; Advances.

     Subject to the terms and conditions of this Agreement, the Issuer shall issue and sell the
Bonds to you and you shall purchase from the Issuer, at the Closing provided for in Section 3, the
respective Bonds at the purchase price of 100% of the principal amount thereof. You shall pay the
purchase price of the Bonds by making advances to the Issuer, from time to time on or prior to
December 31, 2016, at the request of the Lessee, upon delivering to the Issuer documents conveying
to the Issuer good and marketable title to the Project, as such property now exists, subject to
those liens and encumbrances (if any) to which title to said property is subject on the date of
delivery of the Bond but excluding the Lessor Contracts. The parties hereto hereby agree and
stipulate, solely for purposes of this Agreement, that the value of the Project is equal to 100% of
the principal amount of the Bonds being purchased by you. All advances shall be immediately
deposited in the Project Fund and shall be held, invested, and disbursed as provided in this
Agreement. The purchase price of the Bonds may be disbursed in one or more advances, but your
obligation to pay the purchase price of the Bonds shall be reduced by each advance with respect to
the Bonds made hereunder, and any purchase price so advanced hereunder may not be repaid and then
re-advanced hereunder. Your obligation hereunder to make advances of the

-2-

 

purchase price of the Bonds shall expire on December 31, 2016. All advances by you of the
purchase price of the Bonds under this Agreement shall constitute principal advanced under the
Bonds, shall bear interest at the rate provided in Section 1.2 from the dates of the advances until
paid, and shall be secured as provided in Section 1.3. All your rights under the Bonds and the
Bond Documents shall continue in full force and effect with respect to all such advances.

     The principal represented by all advances of the purchase price of the Bonds hereunder,
including the date and amount of principal represented by each advance, shall be endorsed by you on
the Schedule of Advances attached to the Bonds with respect to which such advance is being made;
provided, however, that any failure by you to endorse such information on such Schedule shall not
in any manner affect the obligation of the Issuer to make payments of principal and interest in
accordance with the terms of the Bonds. The Issuer hereby irrevocably authorizes and directs you
to enter on the Schedule of Advances attached to the Bonds the date and amount of principal
represented by each advance of purchase price of the Bonds.

Closing.

     The sale and purchase of the Bonds shall occur at the offices of Kilpatrick Stockton LLP,
Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309, at 10:00 a.m., local time, at a closing
(the “Closing”) on August ___, 2006, or on such other Business Day thereafter on or prior to
December 31, 2016, as may be agreed upon by the Issuer, the Lessee, and you. At the Closing the
Issuer shall deliver to you the Bonds duly executed in the form described in Section 1.2 and
registered in your name (or in the name of your nominees), against delivery by you to the Issuer or
its order of immediately available funds in the amount of the initial advance of the purchase price
therefor, which shall be immediately deposited in the Project Fund. If at the Closing the Issuer
shall fail to tender the Bonds to you as provided above in this Section, or any of the conditions
specified in Section 4 shall not have been fulfilled to your satisfaction, you may, at your
election, be relieved of all further obligations under this Agreement, without thereby waiving any
rights you may have by reason of such failure or such nonfulfillment.

Conditions to Closing.

     Unless waived by you in writing, your obligation to purchase and pay for the Bonds at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the
following conditions:

Representations and Warranties.

     The representations and warranties of the Issuer and the Lessee in the Lease Agreement shall
be correct when made and at the time of the Closing.

Performance; No Default.

     The Issuer and the Lessee shall have performed and complied with all agreements and conditions
contained in this Agreement and the Lease Agreement required to be performed or complied with by
them prior to or at the Closing and after giving effect to the issue and sale of

-3-

 

the Bonds (and the application of the proceeds thereof as contemplated by the Lease Agreement)
no Event of Default under the Lessor Contracts shall have occurred and be continuing.

Purchase Permitted by Applicable Law, etc.

     On the date of the Closing, your purchase of the Bonds shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, (ii) not violate any applicable law or
regulation, and (iii) not subject you to any tax, penalty, or liability (including, without
limitation, Regulation G, T, or X of the Board of Governors of the Federal Reserve System), under
or pursuant to any applicable law or regulation, which law or regulation was not in effect on the
date hereof.

Lease Agreement.

     You shall have received in form and substance satisfactory to you original duly executed
counterpart of the Lease Agreement.

Lien Documents.

     You shall have received in form and substance satisfactory to you (a) evidence to the effect
that all appropriate filings and other steps then necessary for perfection of the liens and
security interests created by this Agreement and in the Security, as against third party creditors
of and purchasers for value in good faith from the Issuer, have been taken, and (b) certified
copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, listing all
effective financing statements that name the Issuer as debtor and that are filed in Cook County,
Georgia, together with copies of such financing statements, none of which shall cover the
collateral purported to be covered by this Agreement, except as shall be terminated on the date of
the Closing or as shall constitute Permitted Encumbrances.

Proceedings and Documents.

     All corporate and other proceedings in connection with the transactions contemplated by this
Agreement and the other Bond Documents and all documents and instruments incident to such
transactions shall be satisfactory to you and your counsel, and you and your counsel shall have
received all such counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

Project Fund.

Creation of the Project Fund.

     There is hereby created by the Issuer and ordered established with the Depositary a trust fund
in the name of the Issuer to be designated the “Project Fund.” All advances of the purchase price
of the Bonds shall be immediately deposited into the Project Fund. The Depositary hereby accepts
and agrees to perform the duties and obligations as herein specified.

     The Issuer hereby grants a security interest in the moneys and investments in the Project Fund
held by the Depositary for the benefit of the Bondholder and this Agreement shall be

-4-

 

deemed a security agreement with respect to the security interest so created. The Depositary
shall be deemed to be (1) the secured party under the Uniform Commercial Code of Georgia, as
representative of the Bondholder, or (2) a bailee that under the Uniform Commercial Code of Georgia
holds collateral for the benefit of the Bondholder as secured party, in either case with an
obligation to use moneys in the Project Fund solely as provided herein. If as a result of the
occurrence of an Event of Default under this Agreement the Bondholder declares the unpaid principal
balance and accrued interest on the Bonds to be immediately due and payable, the Depositary shall,
upon the written direction of the Bondholder, apply all moneys in the Project Fund to the immediate
payment of the Bonds, in the same manner as a redemption. Any such application shall reduce and
discharge the amount then due and payable on the Bonds to the extent of such application. The
Depositary shall promptly notify the Lessee and the Issuer of the amount of such reduction.

Disbursements.

     Moneys in the Project Fund shall be expended in accordance with the provisions of the Lease
Agreement, particularly Sections 4.03 and 4.04 thereof. The Depositary is hereby authorized and
directed to issue its checks for each disbursement required by the aforesaid provisions of the
Lease Agreement. The Depositary shall keep and maintain adequate records pertaining to the Project
Fund and all disbursements therefrom, and the Depositary shall, if requested by the Lessee, file an
accounting thereof with the Issuer and the Lessee.

Investments.

     The Depositary shall invest and reinvest any moneys held in the Project Fund at the direction
of the Lessee as provided in the Lease Agreement, particularly Section 4.11 thereof. The
Depositary shall not be required to invest or reinvest any moneys in the Project Fund or any
earnings therefrom unless directed by the Lessee. The Depositary shall not be liable for interest
upon any moneys held in the Project Fund during any period of time that such moneys are uninvested.
Such investments shall be held by or under the control of the Depositary and shall be deemed at
all times a part of the Project Fund, and the interest accruing thereon and any profit realized
therefrom shall be credited to the Project Fund, and any loss therefrom shall be charged against
the Project Fund. The Depositary is directed to sell and convert to cash a sufficient amount of
such investments whenever the cash held in the Project Fund is insufficient to pay a requisition
for payment from the Project Fund when presented. Neither the Depositary nor the Issuer shall be
liable or responsible for any loss resulting from any such investment or resulting from the
redemption or sale of any such investment as herein authorized.

Depositary.

     The Company is hereby designated as Depositary of the Project Fund. The Issuer and the
Bondholder may, from time to time, with the prior written consent of the Lessee, designate a
successor Depositary. All moneys received by the Depositary under this Agreement shall, until used
or applied as herein provided, be held in trust for the purposes for which they were received but
need not be segregated from other funds except to the extent required by this Agreement or by law.
In making any disbursement or payment from the Project Fund as provided herein, the Depositary may
rely upon all requisitions, certificates, and other items submitted to it pursuant to

-5-

 

this Agreement, and the Depositary shall be relieved of all liability with respect to
disbursements or payments made in accordance with this Agreement. The Depositary shall be
protected in acting upon any requisition, certificate, or other item believed to be genuine and
correct and to have been signed or sent by the proper person or persons.

     The duties of the Depositary hereunder shall be entirely administrative and not discretionary.
The Depositary shall be obligated to act only in accordance with written directions or written
instructions received by it as provided in this Agreement. The Issuer hereby waives any suit,
claim, demand, or cause of action of any kind that it may have or may assert against the Depositary
arising out of or relating to the execution or performance by the Depositary of this Agreement,
unless such suit, claim, demand, or cause of action is based upon the negligence or willful
misconduct of the Depositary.

Representations of the Purchaser.

     You represent that you are purchasing the Bonds for your own account or for one or more
separate accounts maintained by you for investment purposes or for your loan portfolio and not with
a view to the distribution thereof, provided that the disposition of your property shall at all
times be within your control. You agree (1) to execute and deliver to the Issuer and the Lessee an
Investment Letter substantially in the form attached hereto as Exhibit B, at or prior to the
Closing, and (2) that the Bonds may not be resold unless the purchaser executes and delivers to the
Issuer and the Lessee an Investment Letter substantially in the form attached hereto as Exhibit B,
at or prior to such resale.

Redemption of the Bonds.

Mandatory Redemption.

     The Bonds shall be subject to mandatory redemption by the Issuer prior to maturity on the
earliest available Payment Date from excess moneys in the Project Fund to the extent required in
Section 4.03(j) of the Lease Agreement. If the Bonds are called for redemption in the event
described in the preceding sentence, the Bonds shall be redeemed by the Issuer in a principal
amount equal to the excess moneys in the Project Fund at a redemption price equal to one hundred
percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date,
but without premium or penalty.

Redemption at Option of Lessee.

     The Bonds shall be subject to optional redemption by the Issuer upon the written request of
the Lessee prior to maturity, in whole on any date or in part on any Payment Date, and if in part
in amounts not less than $10,000, at a redemption price equal to one hundred percent (100%) of the
principal amount being redeemed plus accrued interest to the redemption date, but without premium
or penalty. As a condition precedent to each optional redemption under this Section, the
Bondholder shall receive written notice of such optional redemption not less than 30 days and not
more than 60 days prior to the date fixed for such redemption. Each such notice shall specify the
date of redemption and the principal amount of the Bonds to be redeemed on

-6-

 

such date, and the accrued interest (if the same can be calculated) to be paid on the
redemption date with respect to the principal amount being redeemed.

Partial Redemptions.

     Any partial redemptions of the Bonds shall be applied to the principal portions due on the
Bonds, and in the ratios of their respective principal amounts to the aggregate principal amount of
the Bonds.

Maturity.

     In the case of each redemption of the Bonds pursuant to this Section, the principal amount of
the Bonds to be redeemed shall mature and become due and payable on the date fixed for such
redemption, together with interest on such principal amount accrued to such date and the applicable
premium, if any. From and after such date, unless the Issuer shall fail to pay such principal
amount when so due and payable, together with the interest and premium, if any, as aforesaid,
interest on such principal amount shall cease to accrue.

Covenants.

Payment of Principal, Interest, and Premium.

     The Issuer covenants that it will promptly pay or cause to be paid the principal of, and
premium, if any, and interest on, the Bonds at the place, on the dates, and in the manner provided
herein and in the Bonds according to the true intent and meaning thereof, but solely from the
Security. The principal of, and premium, if any, and interest on, the Bonds are payable solely
from the sources as provided herein, which sources are hereby specifically pledged to the payment
thereof in the manner and to the extent specified herein, and nothing in the Bonds or in this
Agreement shall be construed as pledging any other funds or assets of the Issuer.

Performance of Covenants; Authority of the Issuer.

     The Issuer covenants that it shall faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in this Agreement, in the Bonds, and in all
proceedings pertaining thereto. The Issuer represents that it is duly authorized under the
Constitution and laws of the State, including particularly the Act, to issue the Bonds and to
execute this Agreement, and to pledge the Security pledged in the manner and to the extent set
forth herein, that all action required on its part for the issuance of the Bonds and the execution
and delivery of this Agreement have been duly and effectively taken, and that the Bonds in the
hands of the Bondholder are and will be the valid and enforceable obligations of the Issuer
according to the import thereof.

Instruments of Further Assurance.

     The Issuer agrees that the Bondholder may defend its rights to the payments and other amounts
due under the Lease against the claims and demands of all persons whomsoever. The Issuer covenants
that it will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and
delivered such agreements and such further acts, instruments, and transfers

-7-

 

as the Bondholder may reasonably require for the better assuring, transferring, conveying,
pledging, assigning, and confirming unto the Bondholder the Security. The Issuer covenants and
agrees that, except as herein and in the Lease Agreement provided, it has not and will not sell,
transfer, convey, assign, pledge, encumber, grant a security interest in, or otherwise dispose of,
or create or suffer to be created any lien, encumbrance, security interest, or charge upon, any
part of the Security or the income and revenues therefrom or of its rights under the Lease or enter
into any contract or take any action by which the rights of the Bondholder may be impaired.

Inspection of Project Books.

     The Issuer covenants and agrees that all books and documents in its possession relating to the
Project and the income and revenues derived from the Project shall at all reasonable times be open
to inspection by such accountants or other agents as the Bondholder may from time to time
designate.

Rights Under and Possession of the Lease.

     The Lease, duly executed originals or counterparts of which have been filed with you, set
forth the covenants and obligations of the Issuer and the Lessee, including provisions that
subsequent to the initial issuance of the Bonds and prior to its payment in full, the Lease may not
be effectively amended, changed, modified, altered, or terminated (other than as provided therein)
without the written consent of the Bondholder, and reference is hereby made to the Lease for a
detailed statement of such covenants and obligations of the Lessee under the Lease, and the
Bondholder in its own name or in the name of the Issuer may enforce all rights of the Issuer and
all obligations of the Lessee under and pursuant to the Lease, whether or not the Issuer is in
default hereunder.

     So long as the Bonds remain outstanding, and for such longer period when required by the
Lease, the Issuer shall faithfully and punctually perform and observe all obligations and
undertakings on its part to be performed and observed under the Lease. The Issuer covenants to
maintain, at all times, the validity and effectiveness of the Lease and (except as expressly
permitted thereby) shall take no action, shall permit no action to be taken by others, and shall
not omit to take any action or permit others to omit to take any action, which action or omission
might release the Lessee from its liabilities or obligations under the Lease or result in the
surrender, termination, amendment, or modification of, or impair the validity of, the Lease.

     The Issuer covenants to diligently enforce all covenants, undertakings, and obligations of the
Lessee under the Lease, and the Issuer hereby authorizes and directs the Bondholder to enforce any
and all of the Issuer’s rights relating to the payment of the Bond Rent under the Lease on behalf
of the Issuer.

Recording and Filing.

     The Short Form Lease and the Assignment shall be recorded and indexed in the real estate
records of the Office of the Clerk of the Superior Court of Cook County, Georgia, and any other
place provided by law as the proper place for the recordation thereof. The security interest of
the Bondholder created by this Agreement shall be perfected by the filing of financing

-8-

 

statements required to be filed pursuant to the State of Georgia Uniform Commercial Code or by
the taking of possession of appropriate collateral. Such financing or continuation statements
shall be filed from time to time, and the appropriate parties shall take or maintain possession of
appropriate collateral, as is necessary to preserve the security interest of this Agreement.

Maintenance of Existence; Compliance with Laws.

     The Issuer shall at all times maintain its corporate existence or assure the assumption of its
obligations under the Lessor Contracts by any other entity succeeding to its powers. The Issuer
shall comply with all valid acts, rules, regulations, orders, and directions of any legislative,
executive, administrative, or judicial body known to it to be applicable to the Lessor Contracts.

Events of Default and Remedies.

Events of Default.

     (a) If any of the following events occur, it is hereby defined as and declared to be and to
constitute a default and an “Event of Default”:

	 	(1)	 	default in the due and punctual payment of any interest on the Bonds,
	 
	 	(2)	 	default in the due and punctual payment of any principal of the Bonds
(or premium thereon, if any), whether at the stated maturity thereof, or upon
proceedings for redemption thereof, or upon the maturity thereof by declaration,
	 
	 	(3)	 	the occurrence of an “Event of Default” under any of the Lessee
Contracts,
	 
	 	(4)	 	any material breach by the Issuer of any representation or warranty
made in the Lessor Contracts or default in the performance or observance of any
other of the covenants, agreements, or conditions on the part of the Issuer in the
Lessor Contracts or in the Bonds contained,
	 
	 	(5)	 	the issuance of an order of relief by the Bankruptcy Court of the
United States District Court having valid jurisdiction, granting the Issuer relief
under federal bankruptcy law, or the issuance by any other court having valid
jurisdiction of an order or decree under applicable federal or state law providing
for the appointment of a receiver, liquidator, assignee, trustee, or sequestrator
(or other similar official) of the Issuer or any substantial part of its property,
affairs, or assets, and the continuance of any such decree or order unstayed and
in effect for a period of sixty (60) consecutive days, or
	 
	 	(6)	 	the consent by the Issuer to the institution of proceedings in
bankruptcy against it, or to the institution of any proceeding against it under
any federal or state insolvency laws, or to the filing of any petition,
application, or complaint
seeking the appointment of a receiver, liquidator, assignee, trustee,
or sequestrator (or other similar official) of the Issuer or of any substantial
part of its property, affairs, or assets.

-9-

 

     (b) Anything herein to the contrary notwithstanding, no default under Section 9.1(a)(1), (2),
(3), (4), and (6) shall constitute an Event of Default until actual written notice of such default
by registered or certified mail shall be given by the Bondholder to the Lessee and the Issuer, and
the Lessee and Issuer shall have had 30 days after receipt of such notice to correct such default
or cause such default to be corrected and shall not have corrected such default or caused such
default to be corrected within the applicable period; provided, however, if such default be such
that it cannot with due diligence be cured within the applicable period but can be wholly cured
within a period of time not materially detrimental to the rights of the Bondholder, to be
determined conclusively by the Bondholder, it shall not constitute an Event of Default if
corrective action is instituted by the Lessee or the Issuer, as the case may be, within the
applicable period and diligently pursued until the default is corrected in accordance with and
subject to any directions or limitations of time established by the Bondholder.

     With regard to any alleged default concerning which notice is given to the Lessee under the
provisions of this Section, the Issuer hereby grants the Lessee full authority for the account of
the Issuer to perform any covenant or obligation alleged in such notice to constitute a default, in
the name and stead of the Issuer with full power to do any and all things and acts to the same
extent that the Issuer could do and perform any such things and acts and with power of
substitution.

     In addition, the Bondholder shall give written notice of all other Events of Default by
registered or certified mail to the Lessee, provided, however, such notice shall not be a condition
precedent to the Bondholder exercising any right or remedy granted to it hereunder.

Acceleration.

     If an Event of Default has occurred and is continuing, the Bondholder may at any time at its
option, by notice or notices to the Issuer and the Lessee, declare the Bonds to be immediately due
and payable.

     Upon the Bonds becoming due and payable under this Section by declaration, the Bonds shall
forthwith mature and the entire unpaid principal amount of the Bonds plus all accrued and unpaid
interest thereon shall all be immediately due and payable, in each and every case without
presentment, demand, protest, or further notice, all of which are hereby waived.

Other Remedies.

     Upon the occurrence of an Event of Default, you may, in your discretion, by written notice to
the Issuer and the Lessee, terminate your remaining commitment (if any) hereunder to make any
further advances of purchase price of the Bonds, whereupon any such commitment shall terminate
immediately.

     If any Event of Default has occurred and is continuing, and irrespective of whether the Bonds
have become or have been declared immediately due and payable under Section 9.2, the

-10-

 

Bondholder may
exercise any right, power, or remedy permitted to it by law or under the terms of the Bond
Documents and may proceed to protect and enforce the rights of the Bondholder by an action at law,
suit in equity, or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained herein, in the other Bond Documents, or in the Bonds, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.

Rescission.

     At any time after the Bonds have been declared due and payable pursuant to Section 9.2, the
Bondholder, by written notice to the Lessee and the Issuer, may rescind and annul any such
declaration and its consequences if (a) the Issuer has paid all overdue interest on the Bonds, all
principal of and premium, if any, on the Bonds that are due and payable and are unpaid other than
by reason of such declaration, and all interest on such overdue principal and premium, if any, and
(to the extent permitted by applicable law) any overdue interest in respect of the Bonds, at the
rate specified in the Bonds with respect to overdue payments, (b) all Events of Default, other than
non-payment of amounts that have become due solely by reason of such declaration, have been cured
or have been waived pursuant to Section 11, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Bonds. No rescission and annulment under this
Section shall extend to or affect any subsequent Event of Default or impair any right or power
consequent thereon.

No Waivers or Election of Remedies.

     No course of dealing and no delay or omission on the part of the Bondholder in exercising any
right, power, or remedy shall operate as a waiver thereof or otherwise impair or prejudice the
Bondholder’s rights, powers, or remedies, but any such right, power, or remedy may be exercised
from time to time and as often as may be deemed expedient. No right, power, or remedy conferred by
this Agreement, by any other Bond Document, or by the Bonds upon the Bondholder shall be exclusive
of any other right, power, or remedy referred to herein or therein or now or hereafter available at
law, in equity, by statute, or otherwise, but each and every such right, power, or remedy shall be
cumulative and shall be in addition to every other right, power, or remedy given under this
Agreement, any other Bond Document, or the Bonds or now or hereafter existing at law, in equity, by
statute, or otherwise.

Registration; Transfer; Substitution of the Bond.

Registration of the Bond.

     The Issuer shall keep at its office a register for the registration and registration of
transfers of the Bonds. The name and address of the Bondholder, each transfer thereof, and the
name and address of each transferee of the Bonds shall be registered in such register. Prior to
due presentment for registration of transfer, the Person in whose name the Bonds shall be
registered shall be deemed and treated as the owner and holder thereof for all purposes hereof
(including the receipt of payments of principal of, and premium, if any, and interest on, the
Bonds), whether or not the Bonds shall be overdue, and the Issuer shall not be affected by any
notice or knowledge to the contrary.

-11-

 

Transfer of the Bond.

     Upon surrender of the Bonds at the office of the Issuer for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the registered owner
of the Bonds or its attorney duly authorized in writing and accompanied by the address for notices
of the transferee of the Bonds, the Issuer shall execute and deliver, at the Lessee’s expense
(except as provided below), a new Bond in exchange therefor, in a principal amount equal to the
unpaid principal amount of the surrendered Bond. Each such new Bond shall be payable to such
Person as the former Bondholder may request and shall be issued as a single, fully registered Bond
substantially in the form of Exhibit A. Each such new Bond shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Bond or dated the date of the
surrendered Bond if no interest shall have been paid thereon. The Issuer may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such
transfer of the Bonds. The Bonds shall not be transferred in a denomination of less than the
unpaid principal amount of the surrendered Bonds. No transfer of the Bonds shall be made until (1)
the transferring Bondholder has caused its interest in the Bond to be endorsed to the order of the
transferee of the Bond and has assigned all of its right, title, and interest in this Agreement and
the Security to such transferee, and (2) the transferee has assumed in writing the transferring
Bondholder’s obligations under this Agreement and has executed and delivered to the Lessee and the
Issuer an Investment Letter substantially in the form of Exhibit B.

Replacement of the Bonds.

     Upon receipt by the Issuer of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction, or mutilation of any Bond, and, in the case of loss, theft, or
destruction, of indemnity reasonably satisfactory to it (provided that, if the Bondholder is, or is
a nominee for, you or another Bondholder with a minimum net worth of at least $17,200,000, such
Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or, in the case
of mutilation, upon surrender and cancellation thereof, the Issuer at the expense of the Lessee
shall execute and deliver, in lieu thereof, a new single, fully registered Bond, dated and bearing
interest from the date to which interest shall have been paid on such lost, stolen, destroyed, or
mutilated Bond or dated the date of such lost, stolen, destroyed, or mutilated Bond if no interest
shall have been paid thereon.

Payments on the Bonds.

     All sums becoming due on the Bonds for principal, premium, if any, or interest shall be paid
in lawful money of the United States by the method and at the address specified for such purpose by
the Bondholder in writing to the Lessee and the Issuer, without the presentation or surrender of
the Bonds or the making of any notation thereon, except that upon written request of the Lessee
made concurrently with or reasonably promptly after payment or redemption in full of the Bonds, you
shall surrender the Bonds for cancellation, reasonably promptly after any such request, to the
Lessee. Prior to any sale or other disposition of the Bonds held by you or your
nominee, you shall endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon.

-12-

 

     All payments of principal of the Bonds (whether at maturity or upon redemption), including the
date and amount of each payment, shall be endorsed by you on the Schedule of Payments and
Redemptions attached to the Bonds; provided, however, that any failure by you to endorse such
information on such Schedule shall not in any manner affect the obligation of the Issuer to make
payments of principal and interest in accordance with the terms of the Bonds. The Issuer hereby
irrevocably authorizes and directs you to enter on the Schedule of Payments and Redemptions the
date and amount of each payment of principal of the Bonds.

     You shall permit the Issuer or the Lessee at any time during regular business hours to make at
your principal office an appropriate notation on the Bonds of payments of principal thereof, if at
least five days prior thereto the Issuer or the Lessee shall have given written notice of its
intention to do so and if it shall not have received from you a written confirmation that the
requested notation has been made.

     In the event that on any date the Issuer shall pay less than the amount then due on the Bonds,
such partial payment shall be applied to the amounts then due in the following order of priority:
(i) reimbursable expenses and indemnities, (ii) accrued interest and premium, if any, on the Bonds,
(iii) principal of the Bonds, and (iv) any other amounts due under the Bonds or the Bond Documents.

Amendment and Waiver.

Requirements.

     This Agreement and the Bonds may be amended, changed, and modified, and the observance of any
term hereof or of the Bonds may be waived (either retroactively or prospectively), by the written
agreement of the parties hereto, with (and only with) the prior written consent of the Lessee.

Binding Effect, etc.

     Any amendment, change, modification, or waiver consented to as provided in this Section shall
be binding upon you and upon each future Bondholder and upon the Issuer without regard to whether
the Bonds have been marked to indicate such amendment, change, modification, or waiver. No such
amendment, change, modification, or waiver will extend to or affect any obligation, covenant,
agreement, or Event of Default not expressly amended, changed, modified, or waived, or impair any
right consequent thereon.

Lease.

     The Issuer shall not amend, change, or modify the Lease, or waive the observance of any term
thereof, without the prior written consent of the Bondholder.

Notices.

     All notices, certificates, and other communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a
recognized overnight delivery service (charges prepaid), or (b) by registered or

-13-

 

certified mail
with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent to the Bondholder at the address first
specified above or to the Issuer at the following address, or to such other address as any party
hereto shall have specified in writing to the other party:

	 	 	 
	 

	 	Adel Industrial Development Authority
	 

	 	201 E. Fifth Street
	 

	 	P.O. Box 854
	 

	 	Adel, Georgia 31620-0854
	 

	 	Attention: Chairman

Notices under this Section will be deemed given only when actually received. A duplicate copy of
each notice, certificate, or other communication given hereunder shall also be given to the Lessee.

Substitution of Purchaser.

     You shall have the right to substitute any one of your affiliates as the purchaser of the
Bonds, by written notice to the Issuer and the Lessee, which notice shall be signed by both you and
such affiliate, shall contain such affiliate’s agreement to be bound by this Agreement and shall
contain a confirmation by such affiliate of the accuracy with respect to it of the representations
set forth in Section 6. Upon receipt of such notice, wherever the word “you” is used in this
Agreement (other than in this Section), such word shall be deemed to refer to such affiliate in
lieu of you. In the event that such affiliate is so substituted as a purchaser hereunder and such
affiliate thereafter transfers to you the Bonds then held by such affiliate, upon receipt by the
Issuer and the Lessee of notice of such transfer, wherever the word “you” is used in this Agreement
(other than in this Section ), such word shall no longer be deemed to refer to such affiliate, but
shall refer to you, and you shall have all the rights of the original Bondholder under this
Agreement.

Interpretation.

Definitions.

     In addition to the words and terms defined elsewhere herein, the following words and terms
shall have the meanings set forth below. When used herein, such words and terms shall have the
meanings given to them in this Section, unless the context or use clearly indicates otherwise.

     “Business Day” means any day other than a Saturday, a Sunday, or a day on which commercial
banks in Atlanta, Georgia, are required or authorized to be closed.

     “Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.

     “Bondholder” means the Person in whose name the Bond is registered on the Bond registration
books kept and maintained by the Issuer.

-14-

 

Construction of Certain Terms.

     For all purposes of this Agreement, 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) Any defined term used in the singular preceded by “any” shall be taken to indicate
any number of the members of the relevant class.

     (3) All words used herein in the singular or plural shall be deemed to have been used
in the plural or singular where the context or construction so requires. The definitions in
this Agreement are applicable whether the terms defined are used in the singular or the
plural.

     (4) “Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.

     (5) “Or” is not exclusive.

     (6) All references in this instrument to designated “Sections” and other subdivisions
are to the designated Sections and other subdivisions of this instrument. The words
“herein,” “hereof,” “hereto,” “hereby,” and “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular Section or other subdivision.

     (7) The term “hereafter” shall mean after, and the term “heretofore” shall mean before,
the date of execution and delivery of this Agreement.

Table of Contents; Titles and Headings.

     The table of contents, the titles of the sections, and the headings of the subdivisions of
this Agreement are solely for convenience of reference, are not a part of this Agreement, and shall
not be deemed to affect the meaning, construction, or effect of any of its provisions.

Miscellaneous.

Successors and Assigns.

     All covenants and other agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent Bondholder) whether so expressed or not.

-15-

 

Payments Due on Non-Business Days.

     Anything in this Agreement or the Bonds to the contrary notwithstanding, any payment of
principal of, or premium, if any, or interest on, the Bonds that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including the additional
days elapsed in the computation of the interest payable on such next succeeding Business Day.

Severability.

     Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall (to the full extent permitted by law) not invalidate or render
unenforceable such provision in any other jurisdiction.

Construction.

     Each covenant contained herein shall be construed (absent express provision to the contrary)
as being independent of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.

Counterparts.

     This Agreement may be executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one instrument. Each counterpart may consist
of a number of copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

Governing Law.

     This Agreement shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of Georgia excluding choice-of-law principles of
the law of such State that would require the application of the laws of a jurisdiction other than
such State.

No Liability of Issuer’s Officers.

     No recourse under or upon any obligation, covenant, or agreement contained in this Agreement,
or in the Bonds, or for any claim based thereon, or under any judgment obtained against the Issuer,
or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable
proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under
any other circumstances, under or independent of this Agreement, shall be had against any
incorporator, member, director, or officer, as such, past, present, or future, of the Issuer, or
any incorporator, member, director, or officer of any successor corporation, as such,

-16-

 

either
directly or through the Issuer or any successor corporation, or otherwise, for the payment for or
to the Issuer or any receiver thereof, or for or to the Bondholder or otherwise, of any sum that
may be due and unpaid by the Issuer under this Agreement or upon the Bonds. Any and all personal
liability of every nature, whether at common law or in equity, or by statute or by constitution or
otherwise, of any such incorporator, member, director, or officer, as such, to respond by reason of
any act or omission on his part or otherwise, for the payment for or to the Issuer or any receiver
thereof, or for or to the Bondholder or otherwise, of any sum that may remain due and unpaid under
this Agreement or upon the Bonds, is hereby expressly waived and released as a condition of and in
consideration for the execution of this Agreement and the issuance of the Bonds.

Third Party Beneficiary.

     The Lessee is and shall be deemed to be a third party beneficiary of this Agreement. The
provisions of this Agreement are otherwise solely for the benefit of the Issuer and the Purchaser
and no other Person shall have any rights as a third party beneficiary of any of the provisions
hereof.

[SIGNATURES AND SEALS APPEAR ON FOLLOWING PAGE]

-17-

 

Signatures and Seals

     If you are in agreement with the foregoing, please sign the form of agreement on the
accompanying counterpart of this Agreement and return it to the Issuer, whereupon the foregoing
shall become a binding agreement between you and the Issuer.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	ADEL INDUSTRIAL DEVELOPMENT AUTHORITY	 	 
	 
	 	 	 	 	 	 
	(Seal)

	 	By:
	 	/s/ Ray Brooks	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Chairman	 	 

	 	 	 
	Attest:

	 	 
	 
	 	 
	/s/ Billy A. Barfield
	 	 
	 	 	 
	Secretary
	 	 
	 
	 	 
	The foregoing is hereby agreed to as of the date
thereof.
	 
	 	 
	SANDERSON FARMS, INC.
	 	 
	      (PRODUCTION DIVISION)
	 	 
	 
	 	 
	/s/ D. Michael Cockrell
	 	 
	 	 	 
	Authorized Officer
	 	 

-18-

 

Exhibit A

Form of Bonds

 

 

THIS BOND AND THE INSTRUMENTS HEREINAFTER DESCRIBED ARE SUBJECT TO AN INVESTMENT LETTER AGREEMENT
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO THE TERMS
OF SUCH INVESTMENT LETTER AGREEMENT AND THE HEREINAFTER DESCRIBED BOND PURCHASE AGREEMENT.

UNITED STATES OF AMERICA

State of Georgia

Adel Industrial Development Authority

Revenue Bonds

(Sanderson Farms, Inc. (Production Division) Project), Series 2006

	 	 	 
	Number R-1

	 	Principal Amount: $17,200,000
	 
	 	 
	Maturity Date: July 1, 2017

	 	Dated: July 1, 2006

Registered Owner: Sanderson Farms, Inc. (Production Division)

     KNOW ALL MEN BY THESE PRESENTS that the Adel Industrial Development Authority (the “Issuer”),
a public body corporate and politic duly created and existing under the laws of the State of
Georgia, for value received, hereby promises to pay, but only from the source as hereinafter
provided, to the registered owner shown above, or registered assigns, the principal sum stated
above, or so much of the principal sum stated above as shall have been advanced and shall be
outstanding, as indicated on the Schedule of Advances and the Schedule of Payments and Redemptions
attached to this Bond, payable as provided herein.

     The principal represented by all advances of purchase price of this Bond under the hereinafter
defined Bond Purchase Agreement, including the date and amount of principal represented by each
advance, shall be endorsed by the registered owner of this Bond on the Schedule of Advances
attached to this Bond; provided, however, that any failure by the registered owner of this Bond to
endorse such information on such Schedule shall not in any manner affect the obligation of the
Issuer to make payments of principal and interest in accordance with the terms of this Bond. The
Issuer hereby irrevocably authorizes and directs the registered owner of this Bond to enter on the
Schedule of Advances attached to this Bond the date and amount of principal represented by each
advance of purchase price of this Bond.

     This Bond shall bear interest from the dates advances are made under the Bond Purchase
Agreement on the outstanding principal amount hereof at the rate per annum of 6%, computed on the
basis of a 360-day year for the number of days actually elapsed.

 

 

     Interest on this Bond shall be payable on July 1, 2007 and annually thereafter on July 1 of
each year. Principal of this Bond shall be payable on July 1, 2017, unless earlier called for
redemption.

     This Bond shall bear interest on any overdue installment of principal and, to the extent
permitted by applicable law, on any overdue installment of interest, at the aforesaid rate.

     All sums becoming due on this Bond for principal, premium, if any, and interest shall be paid
in lawful money of the United States by the method and at the address specified for such purpose by
the registered owner of this Bond in writing to the Lessee and the Issuer, without the presentation
or surrender of this Bond or the making of any notation hereon, except that upon the written
request of the Lessee made concurrently with or reasonably promptly after payment or redemption in
full of this Bond, the registered owner of this Bond shall surrender this Bond for cancellation,
reasonably promptly after any such request, to the Lessee. Prior to any sale or other disposition
of this Bond the registered owner of this Bond shall endorse hereon the amount of principal paid
hereon and the last date to which interest has been paid hereon.

     All payments of principal of this Bond (whether at maturity or upon redemption), including the
date and amount of each payment, shall be endorsed by the registered owner of this Bond on the
Schedule of Payments and Redemptions attached to this Bond; provided, however, that any failure by
the registered owner of this Bond to endorse such information on such Schedule shall not in any
manner affect the obligation of the Issuer to make payments of principal and interest in accordance
with the terms of this Bond. The Issuer hereby irrevocably authorizes and directs the registered
owner of this Bond to enter on the Schedule of Payments and Redemptions the date and amount of each
payment of principal of this Bond.

     THIS BOND SHALL NEVER CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE OF
GEORGIA, THE COUNTY OF COOK, GEORGIA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA,
WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION WHATSOEVER, NOR A PLEDGE
OF THE FAITH AND CREDIT OR TAXING POWER OF ANY OF THE FOREGOING, NOR SHALL ANY OF THE FOREGOING BE
SUBJECT TO ANY PECUNIARY LIABILITY HEREON. THE ISSUER HAS NO TAXING POWER. THIS BOND SHALL NOT BE
PAYABLE FROM NOR A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES PLEDGED TO THE PAYMENT HEREOF AND
SHALL BE A LIMITED OR SPECIAL OBLIGATION OF THE ISSUER PAYABLE SOLELY FROM THE FUNDS PROVIDED
THEREFOR IN THE BOND PURCHASE AGREEMENT. NO OWNER OF THIS BOND SHALL EVER HAVE THE RIGHT TO COMPEL
THE EXERCISE OF THE TAXING POWER OF THE STATE OF GEORGIA, THE COUNTY OF COOK, GEORGIA, OR ANY OTHER
POLITICAL SUBDIVISION OF THE STATE OF GEORGIA TO PAY THE PRINCIPAL OF THIS BOND OR THE INTEREST OR
ANY PREMIUM HEREON, OR TO ENFORCE PAYMENT HEREOF AGAINST ANY PROPERTY OF THE FOREGOING, NOR SHALL
THIS BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE
FOREGOING OTHER THAN THE REVENUES PLEDGED TO THE PAYMENT HEREOF. NEITHER THE MEMBERS OF THE
GOVERNING BODY OF THE ISSUER NOR ANY PERSON EXECUTING THIS BOND SHALL BE LIABLE PERSONALLY ON THIS BOND BY REASON OF THE ISSUANCE HEREOF.

-2-

 

     This Bond is the only Bond of an authorized issue limited in original principal amount to
$17,200,000, authorized to be issued pursuant to a resolution duly adopted by the governing body of
the Issuer for the purpose of financing the costs of acquiring, constructing, and installing land,
buildings, improvements, fixtures, machinery, equipment, and other real and personal property
located within the corporate limits of the County of Cook, Georgia constituting poultry feed mill,
administration, hatchery, and live-haul facilities to be located on a tract of land containing
approximately 125 acres known as Whitehurst Farm and located on US 41 South and adjacent to the
city limits of Adel, Georgia (the “Project”). The Project will be owned by the Issuer, and
Sanderson Farms, Inc. (Production Division) (the “Lessee”), a corporation duly formed and existing
under and by virtue of the laws of the State of Mississippi, will lease the Project from the Issuer
pursuant to a Lease Agreement (the “Lease Agreement”), dated as of July 1, 2006, between the Issuer
and the Lessee. The Lessee is obligated pursuant to the Lease Agreement to pay to the Issuer such
rentals (the “Bond Rent”) as will always be sufficient to pay the principal of, premium, if any,
and interest on this Bond, as the same mature and become due, and under the Lease Agreement it is
the obligation of the Lessee to pay all expenses of operating and maintaining the Project in good
repair, to keep it properly insured, and to pay all taxes, assessments, and other charges levied or
assessed against or with respect to the Project.

     The Issuer issued and delivered this Bond to Sanderson Farms, Inc. (Production Division) (the
“Purchaser”) pursuant to, and the Purchaser purchased this Bond from the Issuer pursuant to, the
terms and conditions of a Bond Purchase Agreement (the “Bond Purchase Agreement”) and an Assignment
and Security Agreement (the “Security Agreement”), each dated as of even date herewith, between the
Issuer and the Purchaser. Pursuant to the Bond Purchase Agreement and the Security Agreement, to
secure the payment of the principal of, premium, if any, and interest on this Bond, the Issuer
assigned and pledged to the Purchaser, and granted a first priority security interest in, all of
its right, title, and interest in the Bond Rent and the Lease Agreement. Reference is hereby made
to Bond Purchase Agreement and the Security Agreement for a description of the security for this
Bond, the provisions, among others, with respect to the nature and extent of the security for this
Bond, the rights, duties, and obligations of the Issuer, the Lessee, and the registered owner of
this Bond, and the provisions regulating the manner in which the terms of Bond Purchase Agreement,
the Security Agreement, the Lease Agreement, and this Bond may be modified, to all of which
provisions the owner of this Bond, on behalf of itself and its successors in interest, assents by
acceptance hereof.

     This Bond shall be issued as a single, fully registered Bond without coupons in the original
principal amount set forth on the face hereof. Upon surrender of this Bond at the office of the
Issuer for registration of transfer, duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered owner of this Bond or its attorney duly authorized in
writing and accompanied by the address for notices of each transferee of this Bond, the Issuer
shall execute and deliver, at the Lessee’s expense (except as provided below), a new Bond in
exchange herefor, in a principal amount equal to the unpaid principal amount of the surrendered
Bond. Each such new Bond shall be payable to such person as the former registered owner of this
Bond may request and shall be issued as a single, fully registered Bond. Each such new

-3-

 

Bond shall be dated and bear interest from the date to which interest shall have been paid on
the surrendered Bond or dated the date of the surrendered Bond if no interest shall have been paid
hereon. The Issuer may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of this Bond. This Bond shall not be transferred in
a denomination of less than the unpaid principal amount of the surrendered Bond. No transfer of
this Bond shall be made until (1) the transferring registered owner hereof has assigned all of its
right, title, and interest in the Bond Purchase Agreement to the transferee of this Bond, and (2)
the transferee has assumed in writing the registered owner’s obligations under the Bond Purchase
Agreement and has executed and delivered to the Lessee and the Issuer an Investment Letter
substantially in the form of Exhibit B to the Bond Purchase Agreement.

     This Bond shall be subject to optional redemption by the Issuer upon the written request of
the Lessee prior to maturity, in whole on any date or in part on any scheduled interest payment
date, and if in part in amounts not less than $10,000, at a redemption price equal to one hundred
percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date,
but without premium or penalty. As a condition precedent to each optional redemption pursuant to
the preceding sentence, the registered owner of this Bond shall receive written notice of such
optional redemption not less than 30 days and not more than 60 days prior to the date fixed for
such redemption. Each such notice shall specify the date of redemption, the principal amount of
this Bond to be redeemed on such date, and the accrued interest to be paid on the redemption date
with respect to the principal amount being redeemed.

     In the case of each redemption of this Bond, the principal amount of this Bond to be redeemed
shall mature and become due and payable on the date fixed for such redemption, together with
interest on such principal amount accrued to such date and the applicable premium, if any. From
and after such date, unless the Issuer shall fail to pay such principal amount when so due and
payable, together with the interest and premium, if any, as aforesaid, interest on such principal
amount shall cease to accrue.

     This Bond is issued pursuant to and in full conformity with a resolution duly adopted by the
governing body of the Issuer under the authority of and in full conformity with an act titled
“Development Authorities Law,” codified as Chapter 62 of Title 36 of the Official Code of Georgia
Annotated, as amended (the “Act”). This Bond is not a general obligation of the Issuer but is
payable solely from the Bond Rent. Pursuant to the provisions of the Lease Agreement, Bond Rent
sufficient for the prompt payment when due of the principal of, premium, if any, and interest on
this Bond is to be paid to the registered owner of this Bond for the account of the Issuer and has
been and is hereby again duly pledged for that purpose. The obligations hereunder shall be limited
as provided in Section 36-62-10 of the Act. This Bond is issued by the Issuer to aid in the
financing or refinancing of a “project”; as such term is defined in the Act, to accomplish the
public purposes of the Act.

     In certain events, on the conditions, in the manner, and with the effect set forth in the Bond
Purchase Agreement, the principal of this Bond may become or may be declared due and payable before
the stated maturity hereof, together with interest accrued hereon. Modifications or alterations of
the Bond Purchase Agreement, or of any supplements thereto, may be made only to the extent and in
the circumstances permitted by the Bond Purchase Agreement.

-4-

 

     IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions, and things required
to exist, happen, and be performed precedent to and in the issuance of this Bond do exist, have
happened, and have been performed in due time, form, and manner as required by law in order to make
this Bond a valid and legal revenue obligation of the Issuer and that the issuance of this Bond,
together with all other obligations of the Issuer, does not exceed or violate any constitutional or
statutory limitation applicable to the Issuer.

     IN WITNESS WHEREOF, the Adel Industrial Development Authority has caused this Bond to be
executed by its Chairman by his manual signature, has caused its official seal to be impressed
hereon, and has caused this Bond to be attested by its Secretary by his manual signature, all as of
July 1, 2006.

	 	 	 	 	 	 	 
	 	 	 	 	Adel Industrial Development Authority
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Chairman
	 
	 	 	 	 	 	 
	(Issuer Seal)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Secretary
	 	 	 	 	 	 

 

 

SCHEDULE OF ADVANCES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date of	 	Amount of	 	 	Notation	 	 	Date of	 	 	Amount of	 	 	Notation	 
	Advance	 	Advance	 	 	Made By	 	 	Advance	 	 	Advance	 	 	Made By	 
	     /     /200   
	 	$	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

SCHEDULE OF PAYMENTS AND REDEMPTIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date of	 	Amount of	 	 	Notation	 	 	Date of	 	 	Amount of	 	 	Notation	 
	Payment	 	Payment	 	 	Made By	 	 	Payment	 	 	Payment	 	 	Made By	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

SCHEDULE OF PAYMENTS AND REDEMPTIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date of	 	Amount of	 	 	Notation	 	 	Date of	 	 	Amount of	 	 	Notation	 
	Payment	 	Payment	 	 	Made By	 	 	Payment	 	 	Payment	 	 	Made By	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

ASSIGNMENT AND TRANSFER

     FOR VALUE RECEIVED, the undersigned,                                         , hereby sells, assigns, and
transfers unto                                          (Tax Identification or Social Security No.                     ) the within Bond and all rights thereunder (including all of its right,
 title, and
interest in and to the Bond Purchase Agreement and the Lease Agreement referenced therein) and
hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept
for registration thereof, with full power of substitution in the premises.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature
	 	 

			
	NOTICE:	 	The signature(s) to this assignment must correspond with the name as it appears upon the
face of the within Bond in every particular, without alteration or enlargement or any change
whatsoever.

 

 

Exhibit B

Form of Investment Letter

 

 

Investment Letter

                    ,           

Adel Industrial Development Authority

Adel, Georgia

Sanderson Farms, Inc. (Production Division)

Laurel, Mississippi

			
	     Re:	 	$17,200,000 Adel Industrial Development Authority Revenue Bonds (Sanderson
Farms, Inc. (Production Division) Project), Series 2006

Ladies and Gentlemen:

     In consideration of the sale to the undersigned by the Adel Industrial Development Authority
(the “Issuer”) of one of the above-captioned Bonds (the “Bonds”) and in consideration of Sanderson
Farms, Inc. (Production Division) (the “Lessee”) providing the source and the security for the
payment of the Bonds, the undersigned hereby represents, warrants, covenants, and agrees as
follows:

     1. The undersigned is an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act of 1933, as amended (the “1933 Act”).

     2. The undersigned is purchasing the Bond for investment for its own account and is not
purchasing the Bond for resale or other disposition, and the undersigned has no present intention
of reselling or otherwise disposing of all or any part of the Bond or dividing its interest
therein, but the undersigned reserves the right to sell or otherwise dispose of the Bond as it
chooses. The undersigned agrees that it will not sell, transfer, assign, or otherwise dispose of
the Bond (1) unless it obtains from the purchaser and delivers to the Issuer and the Lessee an
agreement similar in form and substance to this Agreement and (2) except in compliance with the
1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”), any rules and
regulations promulgated under either Act, and the applicable securities laws of any other
jurisdiction, and in connection therewith, the undersigned agrees that it shall furnish to any
purchaser of the Bond all information required by applicable law.

     3. The undersigned, through its agents and employees, has investigated the poultry feed mill,
administration, hatchery, and live-haul facilities to be located on a tract of land containing
approximately 125 acres known as Whitehurst Farm and located on US 41 South and adjacent to the
city limits of Adel, Cook County, Georgia (the “Project”) to be financed or refinanced with the
proceeds of the Bond, and has investigated the Lessee, which will lease the Project from the
Issuer. The undersigned acknowledges that it has been furnished with or has been given access,
without restriction or limitation, to all of the underlying documents in

 

 

connection with this transaction, the Bonds, the Project, and the Lessee, as well as all other
information that a reasonable, prudent, and knowledgeable investor would desire in evaluating the
purchase of the Bonds The undersigned acknowledges that the Lessee and other knowledgeable parties
have made available to it and its representatives the opportunity to obtain any additional
information which it may desire and the opportunity to ask any questions it may desire of and
receive satisfactory answers from the Lessee concerning the security and the source of payment of
the Bonds, the Project, and the Lessee.

     4. The undersigned acknowledges that the Bonds are limited obligations of the Issuer payable
solely from funds paid by the Lessee and from collateral furnished by the Lessee and that the Bonds
will not be a general obligation or indebtedness of the State of Georgia, the County of Cook,
Georgia, or any other political subdivision of the State of Georgia to which the faith and credit
or taxing power of any of the foregoing will be pledged. The undersigned further acknowledges that
the Issuer has no taxing power and receives no appropriations from the County of Cook, Georgia or
any other governmental body and that neither the members of the board of directors of the Issuer
nor any person executing the Bonds will be liable personally on the Bonds by reason of the
execution thereof.

     5. In reaching the conclusion that it desires to acquire the Bonds, the undersigned has
carefully evaluated all risks associated with this investment and acknowledges that it is able to
bear the economic risk of this investment. The undersigned, by reason of its knowledge and
experience in financial and business matters, is capable of evaluating the merits and risks of the
investment in the Bonds. The representations in this letter shall not relieve the Lessee from any
obligation to disclose any information required by the documents entered into in connection with
the issuance of the Bonds or required by any applicable law.

     6. If the proposal and offer herein contained is satisfactory to each of you, you may so
indicate by having the following acceptance executed by your duly authorized officers and by
returning a copy to us. This Investment Letter and your acceptance will then constitute an
agreement with respect to the matters herein contained as of the date hereof. This Investment
Letter is expressly for your benefit and may not be relied upon by any other party.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Officer	 	 

 

 

	 	 	 	 	 
	Accepted as of
the date first above written:	 	 
	 
	 	 	 	 
	Adel Industrial Development Authority
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 
	 

	Chairman	 	 
	 
	 	 	 	 
	Sanderson Farms, Inc. (Production Division)
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 
	  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]