LEASE AGREEMENT

1.

USE of FACILITIES

2.

DELIVERY OF RIGHT TO USE THE FACILITIES

3.

TERM

4.

FACILITIES USE PAYMENT

5.

DEPOSITS

a.

Security-Deposit. Within fifteen (15) business days of the effective date of this Agreement, TENANT shall pay a security deposit to AO in an amount equal to the amount of one (1) monthly payment as stated in Article 4. above as security for the faithful performance of the TENANT’s obligations under this Agreement (the "Security Deposit"), AO may claim and retain such amount of the Security Deposit as is reasonably necessary to cure any defaults of the TENANT. If AO applies any part of the Security Deposit to cure any default of the TENANT, the TENANT shall deposit with AO upon demand, the amount so applied, so that AO shall have the full amount of the initial Security Deposit on hand at all times during the term of this Agreement. AO may commingle the Security Deposit with other AO funds. The Security Deposit shall be retained by AO for no more than thirty (30) days after the termination of this Agreement; and thereafter, AO shall return the Security Deposit or any remaining balance thereof, if any, to the TENANT and AO shall pay TENANT interest accumulated on any undisbursed amount of the Security Deposit at the rate of 2% per annum simple interest.

b.

Disposal Deposit. Within fifteen (15) business days of the effective date of this Agreement, TENANT shall pay a disposal deposit of $56,250 to AO to cover the cost of disposal of any material remaining at the Facilities after the end of the lease term ("the Disposal Deposit"). AO may commingle the Disposal Deposit with other AO funds. The Disposal Deposit shall be retained by AO for no more than thirty (30) days after the termination of this Agreement; and thereafter, AO shall return the Disposal Deposit or any remaining balance thereof, if any, to the TENANT and AO shall pay TENANT interest accumulated on any undisbursed amount of the Disposal Deposit at the rate of 2% per annum simple interest.

6.

CONDITION, CARE, MAINTENANCE AND ALTERATION OF FACILITIES

a.

Representations by AO regarding condition of the Facilities. AO represents and warrants to TENANT that:

1)

The Facilities have a right of access to a public road.

2)

Except for the agreement between the TENANT and AO and AO’s prime contract with the U.S. Government, AO has no knowledge of any other outstanding leases or other agreements relating to the Facilities.

3)

There are no employees of AO that would, by reason of any governmental regulations, employment contract or other reason become employees of TENANT as a result of this Agreement.

4)

All utilities necessary to service the Facilities are available to the Facilities without the consent of any other person, other than the payment of service charges to the utility provider. There are no facts or conditions in existence that will result in the termination of the present access from the Facilities to any utility services or to existing highways and roads and AO has not done any act which will result in the termination of such access or services, to the best of AO’s knowledge.

5)

The Facilities are serviced by water and sewer (sanitary and storm service) and all plumbing, heating, HVAC, sewer, electrical and lighting fixtures and systems at the Facilities are currently in good working order and shall be in good working order on a mutually agreed upon date.

6)

There are no claims, actions, litigation, arbitration or other proceedings pending against AO which relates to the Facilities or the transaction contemplated by this Agreement and to the best of AO’s knowledge, there is currently no governmental investigation, threatened litigation or arbitration proceedings to which AO is or would be a party which relates to the Facilities except for those described in Appendix D, Paragraph 1.

7)

To the best of AO’s knowledge, except as disclosed in the reports listed on attached Appendix D (the "Appendix D Reports"), complete copies of which reports shall be made available to TENANT prior to the effective date of this Agreement, the Facilities are not in violation of any federal, state or local law, ordinance or regulation relating to any Hazardous Materials, as hereafter defined, industrial hygiene or other environmental conditions on, under or about the Facilities including but not limited to soil and ground water conditions. Hazardous Materials ("Hazardous Materials") shall mean any flammable explosives, radioactive materials, hazardous wastes or substances, toxic waste or substances, and other related materials including without limitation any substances defined as or included in the definition of "Hazardous Substances", "Hazardous Waste", "Hazardous Materials" or "Toxic Substances" under any applicable federal, state or local law or regulations.

b.

Care. The TENANT shall exercise due diligence in the use of the Facilities from any and all causes. TENANT shall not be responsible for any condition that exists at the Facilities prior to the effective date ("Pre-existing Condition"). The TENANT shall be responsible for and at "All Risk" for any and all loss of or damage to the Facilities only to the

extent that such loss or damage is caused by the acts or omissions of the TENANT or the TENANT’s agents, representatives, tenants or invitees. The TENANT shall promptly repair or replace, to the reasonable satisfaction of AO, any of the foregoing property described in Article 1 so lost or damaged or upon mutual agreement, pay to AO, at AO’s option, an amount equal to the decrease in value or replacement cost.

c.

Maintenance. After the delivery of the Facilities by AO to the TENANT, the TENANT, at the TENANT’s own expense and at all times, shall maintain the Facilities in good, safe, neat, clean and sanitary condition, to include the perimeter fencing and associated land areas inside as well as the parking areas outside the fence, and shall surrender the Facilities, upon the termination of this Agreement, in as good condition as received, normal wear and tear excepted. Tenant shall not be responsible for structural repairs to the roof, load bearing walls, floors or foundation unless such repairs are required due to the acts or omissions of TENANT, its employees, agents or invitees.

d.

Alterations. The TENANT shall not make any alterations, additions or improvements, in, to or about the Facilities without the prior, written approval of an authorized AO official representative, which approval shall not be unreasonably withheld.

e.

Unsafe Conditions. If AO or the TENANT discovers any condition that arises out of the TENANT’s activity at the MLAAP that presents an immediate threat to the safety or health of any person or that threatens to endanger life, property or the environment the TENANT shall take immediate steps to correct the condition or activity and eliminate the danger. If the TENANT fails to take such immediate steps, AO, in addition to any other right AO may have, including the right to terminate this Agreement if the condition or activity constitutes a breach of this Agreement, may deny the TENANT access to the MLAAP and AO may-take action to correct the condition or activity and collect the cost of doing so from the TENANT. The TENANT shall have no claim for damages against AO, the U. S. Government or any director, officer, employee, other tenant or agent of either of them on account of action taken in good faith pursuant to this provision, nor shall AO’s failure to take action pursuant to this provision relieve the TENANT of any obligations the TENANT has under this Agreement. If AO or the Tenant discovers any Pre-existing Condition or any condition that arises out of AO’s activity at the MLAAP that presents an immediate threat to the safety or health of any person or that threatens to endanger life, property or the environment, AO shall take immediate steps to correct the condition or activity and eliminate the danger. If AO fails to take such immediate steps, TENANT, in addition to any other right TENANT may have, including the right to terminate this Agreement if the condition or activity constitutes a material breach of this Agreement, may take action to correct the condition or activity and collect the cost of doing so from AO, including the right to set off such cost from the facilities use payment due under the terms of Article 4 of this Agreement.

7.

INSURANCE

a.

Minimum Scope and Coverage. The TENANT, at the TENANT’s own expense, shall maintain during the term of this Agreement the following insurance coverage written with insurance companies that are A. M. Best’s rated A except that Workers’ Compensation insurance may be provided through the Tennessee State Workers’ Compensation Fund:

1)

All insurance coverage provided by the TENANT under this Agreement shall contain or be endorsed to contain, coverage of the U. S. Government and AO as additional insureds (except for the Workers’ Compensation Coverage) and insurance coverage will not be canceled or reduced without the insurer providing AO with at least thirty (30) days (ten [10] days for notice of cancellation for non-payment) written notice.

2)

Workers’ Compensation insurance in compliance with statutory requirements and with Employer’s Liability insurance of $100,000 each accident, $100,000 each employee and $500,000 policy limit. The coverage shall contain or be endorsed to contain, a waiver of subrogation in favor of AO.

3)

Commercial General Liability (CGL) insurance written on an occurrence basis with Combined Single Limits for bodily injury and property damage of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate and a deductible of not more than $1,000 per occurrence. The CGL policy shall provide coverage for Facilities Operations, Broad Form Property Damage, and Contractual Liability. Automobile Liability insurance with Combined Single Limits for bodily injury and property damage of $500,000 per occurrence.

b.

Verification of Coverage. Prior to the delivery of the use of the Facilities to the TENANT and for the coverage required to be provided by the TENANT by this Agreement, the TENANT shall deliver to AO a Certificate of Insurance signed by a person authorized by the insurer. The receipt by AO of an incomplete, inaccurate or invalid

Certificate of Insurance shall not relieve or decrease the liability of the TENANT for the TENANT’s obligations under this Article 7 of this Agreement. If requested by AO, the TENANT, at the TENANT’s expense, shall provide AO with certified copies of all insurance policies required by this Agreement.

c.

TENANT shall insure Facilities for loss or property damage from fire or other casualty from an insurance company licensed in the State of Tennessee in an amount of at least $5,000,000 or an amount which will not otherwise result in coinsurance and with TENANT, AO and the U.S. Government as named insureds as their interest may appear. TENANT shall provide to AO a Certificate of Insurance fifteen (15) days after the effective date.

8.

ORDINANCES, STATUTES-AND PERMITS

a.

The TENANT shall conduct the TENANT’s activities at the MLAAP in compliance at all times with all applicable city, county, state or federal statutes, regulations and ordinances, including all requirements of Department of Defense Instruction (DoD) 4145.26-M and the TENANT shall obtain and maintain, at the TENANT’s own cost and expense, any and all licenses, consents, and pe