LEASE AGREEMENT

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Exhibit 10.1

LEASE AGREEMENT

by and between

DORCHESTER COUNTY, SOUTH CAROLINA

and

LATI INDUSTRIES, INC.

Dated as of December 7, 1998

Certain rights of LATI Industries, Inc. under this Lease Agreement have been or may be assigned and pledged, and, if so assigned and pledged, are or may be subject to, a financing or other security interests. Information concerning such financing or other security interest may be obtained from LATI Industries, Inc. at the address provided in Section 12.03 herein.

TABLE OF CONTENTS

LEASE AGREEMENT

        THIS LEASE AGREEMENT made and entered into as of December 7, 1998 by and between Dorchester County, South Carolina (the "County"), a body politic and corporate and a political subdivision of the State of South Carolina, and LATI Industries, Inc., a corporation duly organized and existing under the laws of the State of South Carolina (the "Tenant").

W I T N E S S E T H:

        WHEREAS, Title 4, Chapter 12, Code of Laws of South Carolina 1976, as amended (the "Act"), in conjunction with other parts and provisions of Title 4 of the Code of Laws of South Carolina including, without limitation, Chapters 9 and 29, authorizes and empowers the several counties of the State of South Carolina to acquire, or cause to be acquired, enlarge, improve and expand one or more projects (as such term is defined in the Act), to allow financing agreements with any industry to construct and thereafter operate, maintain and improve a project, and to enter into lease agreements which require the industry to make payments to the county, municipality, school district and other political units in which the project is located in lieu of taxes as an inducement for the acquiring, enlarging, improving or expanding such project by construction and purchase; and

        WHEREAS, as inducement for the Tenant to acquire land within the County and construct a facility thereon to manufacture thermoplastic compounds, the County has agreed to enter into this Lease Agreement with provisions for payments in lieu of taxes for the purpose of acquiring, by construction and purchase, certain land, buildings and other improvements constituting a project (as defined in the Act) necessary, suitable or useful by the Tenant in the construction of the facility for the manufacturing of thermoplastic compounds, (the "Project" as more particularly defined herein), all to be located within the limits of the Industrial Park (hereinafter defined), and as a result thereof to lease the Project to the Tenant in accordance with the terms and conditions hereinafter set forth; and

        WHEREAS, the Project will be located in a multi-county industrial park (the "Industrial Park") established by the County and Orangeburg County in accordance with Title 4, Chapter 1, Section 170 of the Code of laws of South Carolina (the "Park").

        NOW, THEREFORE, in consideration of the respective representations and agreements hereinafter contained, the County and the Tenant agree as follows provided that in the performance of the agreements of the County herein contained, it shall not incur any obligation for the payment of money, but, the foregoing notwithstanding, any obligation it may thereby incur shall not create a pecuniary liability or a charge upon its general credit or taxing powers but shall be a limited obligation of the County payable solely out of the moneys derived by it from this Lease, and certain insurance proceeds and condemnation awards as provided herein and in the Act.

ARTICLE I

DEFINITIONS

        SECTION 1.01. Definitions . In addition to the words and terms elsewhere defined in this Lease, the following words and terms as used herein and in the preambles hereto shall have the following meanings unless the context or use indicates another or different meaning or intent. Furthermore, terms not defined herein which are defined in the Act shall have the meaning ascribed to them in the Act.

        " Act " shall mean Title 4, Chapter 12, Code of Laws of South Carolina 1976, as amended, and all future acts amendatory thereof.

        " Additional Rent " shall have the meaning ascribed to it in Section 6.04 of this Lease.

        " Administrative Expenses " shall mean the reasonable and necessary expense incurred by the County with respect to the Project and this Lease, including the fees and expenses of counsel to the County; provided, however, that no such expenses shall be considered an Administration Expense until the County has furnished to the Tenant a statement in writing indicating the amount of such expense and the reason it has been or will be incurred.

        " Authorized County Representative " shall mean the person or persons at the time designated to act on behalf of the County by written certificate furnished to the Tenant containing the specimen signature of such person and signed on behalf of the County by the County Administrator.

        " Authorized Tenant Representative " shall mean any person or persons at the time designated to act on behalf of the Tenant by a written certificate furnished to the County containing the specimen signature of each such person and signed on behalf of the Tenant by its President or Chief Information and Financial Officer.

        " Basic Rent " shall have the meaning ascribed to it in Section 5.02 of this Lease.

        " Code " shall mean the Code of Laws of South Carolina 1976, as amended.

        " Completion Date " shall mean the date on which the acquisition, construction and installation of the Project or any one of its Increments is completed in its entirety as certified in accordance with Section 4.03 of this Lease.

        " Cost " or " Cost of the Project " shall mean the cost of acquiring, by construction and purchase, the Project and shall be deemed to include, whether incurred prior to or after the date of this Lease: (a) the cost of acquisition of the Leased Improvements including, but not limited to, (i) obligations of the Tenant or the County incurred for labor, materials and other expenses to contractors, builders and materialmen in connection with the acquisition, construction and installation of the Project; (ii) the cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project, which are not paid by the contractor or contractors or otherwise provided for; (iii) the expenses of the Tenant or the County for test borings, surveys, test and pilot operations, estimates, plans and specifications and preliminary investigations therefor, and for supervising construction, as well as for the performance of all other duties required by or reasonably necessary in connection with the acquisition, construction and installation of the Project; (b) the cost of acquisition of the Leased Equipment; (c) legal, accounting, financial and printing expenses, fees and all other expenses incurred in connection with the execution and delivery of this Lease; (d) all other costs which the Tenant shall be required to pay under the terms of any contract or contracts for the acquisition, construction and installation of the Project; and (e) any suns required to reimburse the Tenant or the County for advances made by either of them for any of the above items, or for any other work done and costs incurred by the Tenant or the County which are for the acquisition of property of a character

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subject to the allowance or depreciation provided for under Section 167 of the Internal Revenue Code of 1986, as amended, and included in the Project.

        " County " shall mean Dorchester County, South Carolina, a body politic and corporate and a political subdivision of the State of South Carolina, and its successors and assigns.

        " County Council " shall mean the governing body of the County and its successors.

        " Default " shall mean an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default as defined in Section 11.01 hereof.

        " FILOT Payments " shall mean the payments in lieu of taxes which the Tenant is obligated to pay to the County as set forth in Section 6.03 hereof.

        " Increments " shall mean those increments of the Project which are completed and fit for their intended use as prescribed by Section 12-37-670 of the Code.

        " Independent Counsel " shall mean an attorney duly admitted to practice law before the highest court of any state.

        " Industrial Park " shall mean the multi-county industrial park established between the County and Orangeburg County, South Carolina.

        " Land " shall mean the real property to be acquired by Tenant and located in the Industrial Park.

        " Lease " or " Agreement " shall mean this agreement as originally executed and from time to time supplemented or amended as permitted herein.

        " Leased Equipment " shall mean all equipment acquired by the Tenant and conveyed to the County pursuant to this Lease, and all equipment acquired by Tenant in the name of the County, all of which shall be operated by the Tenant on the Land and leased by the County to the Tenant pursuant to this Lease.

        " Leased Improvements " shall mean the buildings and improvements to the Land, including fixtures comprising real property, to be constructed or undertaken as part of the Project and conveyed to the County and described in Exhibit B hereto, as it may be supplemented or amended.

        " Permitted Encumbrances " shall mean as of any particular time, (i) liens for ad valorem taxes and special assessments not then delinquent; (ii) this Lease, any sublease, and any financing or other security instrument including any leasehold mortgage; (iii) utility, access and other easements and rights of way, flood rights, leases, subleases, restrictions and exceptions that an Authorized Tenant Representative certifies will not interfere with or impair the operations being conducted at the Project (or, if no operations are being conducted therein, the operations for which the Project was designed or last modified); (iv) such minor defects, irregularities, encumbrances, easements, rights of way, and clouds on title as normally exist with respect to properties similar in character to the Project and as do not, according to the written certification of an Authorized Tenant Representative delivered to the County, materially impair the property affected thereby for the purpose for which it was acquired or is held by the County; (v) mechanic's and materialman's liens in effect on the date hereof or otherwise; (vi) any mortgage, lease or security interest with respect to machinery and equipment not constituting part of the Project to be used or installed at the Project; and (vii) any security interest held by a third party lender in the Leased Improvements or in the Leased Equipment or other personal property that comprises the Project.

        " Person " shall mean and include any individual, association, unincorporated organization, corporation, partnership, joint venture, or government or agency or political subdivision thereof.

        " Plans and Specifications " shall mean the plans and specifications prepared for the portion of the Project comprising the Leased Improvements, on file at the Tenant's office, as the same may be

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implemented and detailed from time to time and as the same may be revised from time to time prior to the completion of the acquisition, construction and installation of the Project in accordance with Section 4.03 hereof.

        " Project " shall mean, to the extent placed in service in the initial five-year period described in Section 4-12-30(C) of the Act, or within the seven-year period described in Section 4-12-30(C) and as authorized by the extension executed by the County and the Company, or constituting replacement property therefor within the meaning of Section 4-12-30(F) of the Act, (i) the Leased Improvements, (ii) the Leased Equipment; (iii) all other machinery, equipment, other fixtures or personal property which is installed in or on the Land in substitution or replacement of the Leased Improvements or the Leased Equipment; and (iv) any personal property acquired hereafter which becomes so attached, integrated or affixed to any item described in the foregoing clauses that it cannot be removed without damaging such items or impairing the operating utility of such items as originally designated.

        " Reserved Rights " shall mean the rights of the County hereunder to receive notices, to inspect the Project and any books and records relating to the Project, to receive payment of Administration Expenses for costs incurred by the County, to receive payments in lieu of taxes pursuant to Section 6.03 hereof, and to receive payments under Section 6.04 hereof.

        " School District " shall mean the applicable school district in which the Project is located.

        " State " shall mean the State of South Carolina.

        " Tenant " shall mean LATI Industries, Inc. and any surviving, resulting or transferee corporation in any merger, consolidation or transfer of assets permitted under Section 8.09 hereof.

        " Term " shall mean the duration of the leasehold estate as set forth in Section 5.01 hereof.

        All terms used herein which are not otherwise defined shall have the meaning ascribed to them in the Act.

        SECTION 1.02. References to Lease . The words "hereof," "herein," "hereunder" and other words of similar import this Lease as a whole.

[End of Article I]

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ARTICLE II

REPRESENTATIONS AND COVENANTS

        SECTION 2.01. Representations and Covenants by County . The County makes the following representations and covenants as the basis for the undertakings on its part herein contained:

        (a)   The County is a body politic and corporate and a political subdivision of the State of South Carolina and is authorized and empowered by the provisions of the Act to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder. The Project constitutes and will constitute a "project" within the meaning of the Act. By proper action by the County Council, the County has been duly authorized to execute and deliver this Lease and any and all agreements collateral thereto.

        (b)   The County is acquiring the Project, either in its own name or pursuant to a conveyance from the Tenant, and proposes to lease the Project to the Tenant in accordance with the terms hereof and to sell the Project to the Tenant at the expiration or sooner termination of the Term of the Lease, if the Tenant, at its sole option, shall elect to purchase the same for the total consideration of One Dollar ($1.00), all for the purpose of promoting the industrial development, developing the trade, and utilizing and employing the manpower, agricultural products and natural resources of South Carolina and benefiting the general public welfare of the County by providing services, employment, recreation, or other public benefits not otherwise provided locally.

        (c)   The County is not in default under any of the provisions of the laws of the State whereby any such default would adversely affect the transactions contemplated by this Lease.

        (d)   The authorization, execution and delivery of this Lease, and the compliance by the County with the provisions hereof, will not conflict with, violate, or constitute a breach of, or a default under any existing law, ordinance, court or administrative regulation, decree, order or any provision of the Constitution or laws of the State relating to the establishment of the County or its affairs, or any agreement, mortgage, lease or other instrument to which the County is subject or by which it is bound.

        (e)   No actions, suits, proceedings, inquiries or investigations are pending or threatened against or affecting the County in any court or before any governmental authority or arbitration board or tribunal, any of which materially and adversely affect the transactions contemplated by this Lease or which adversely affect the validity or enforceability of this Lease or any agreement or instrument to which the County is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby. The Lease is a valid and legally enforceable agreement of the County.

        (f)    The County hereby covenants that it will, upon the expiration or earlier termination of this Lease, and at the sole option of the Tenant, reconvey the Project to the Tenant in the same quality of title as received, in fee simple absolute, by a limited warranty deed in substantially the form set forth in Exhibit C hereto and by a bill of sale in substantially the form set forth in Exhibit D hereto, for the purchase price set forth in Section 10.03 hereof.

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

        (a)   The Tenant is a corporation duly incorporated and having legal corporate existence and good standing under the laws of the State of South Carolina and has power to enter into this Lease and by proper corporate action has been duly authorized to execute and deliver this Lease and any and all agreements collateral thereto. The Lease is a valid and legally enforceable agreement of the Tenant.

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        (b)   Neither the execution and delivery of this Lease, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Lease, will result in a material breach of any of the terms, conditions or provisions of any corporate restriction or any agreement or instrument to which the Tenant is now a party or by which it is bound, or will constitute a default under any of the foregoing, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Tenant which materially restricts the Tenant's ability to make any payments hereunder, other than as may be created or permitted by this Lease.

        (c)   No event has occurred and no condition exists with respect to the Tenant which would constitute an "Event of Default" as defined herein which with the lapse of time or with the giving of notice or both would become an "Event of Default" under this Lease.

        (d)   The Project constitutes and will constitute a "project" within the meaning of the Act and the Tenant intends to operate the Project for the purpose of manufacturing thermoplastic compounds and for such other purposes permitted under the Act as the Tenant may deem appropriate.

        (e)   The acquisition, by construction and purchase, of the Project by the County, whether in its own name or pursuant to a conveyance from the Tenant, in order to authorize FILOT Payments under the Act and the leasing of the Project to the Tenant have been instrumental in inducing the Tenant to locate and construct the Project in the Industrial Park.

        (f)    No actions, suits, proceedings, inquiries or investigations are pending or threatened against or affecting the Tenant in any court or before any governmental authority or arbitration board or tribunal, any of 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 any financing arrangement, this Lease or any agreement or instrument to which the Tenant is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby.

        (g)   The Tenant intends on the date hereof to make capital expenditures with respect to the Project equal to or in excess of $19,000,000 within seven years of the close of the property tax year in which this Agreement is executed.

[End of Article II]

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ARTICLE III

DEMISING CLAUSE

         Project. The County demises and leases to the Tenant, and the Tenant leases from the County, the Project for the Term and at the rental set forth in Sections 5.01, 5.02 and 5.03 hereof in accordance with the provisions of this Lease.

[End of Article III]

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ARTICLE IV

ACQUISITION OF PROJECT;
MODIFICATION, IMPROVEMENT AND ADDITIONS TO PROJECT;
AMENDMENTS TO EXHIBITS

        SECTION 4.01. Acquisition by Construction and Purchase of Project . The Tenant hereby agrees to acquire in the name of the County by construction and purchase, or convey to the County after acquisition by Tenant, the Project, to the extent comprising the Leased Improvements, in accordance with the Plans and Specifications, and all other things deemed necessary by the Tenant in connection with the Project. The Tenant agrees to maintain such records in connection with the acquisition by construction and purchase of the Project as to permit ready identification thereof. The Tenant further agrees (a) to use its best efforts to cause such acquisition as promptly as practicable and (b) to expend upon the acquisition of the Project not less than $19,000,000 prior to seven years following the end of the property tax year in which this Agreement is executed. The Tenant agrees to convey to the County, from time to time and in any event prior to the end of each calendar year, by bill of sale or other instrument of conveyance reasonably satisfactory to the County, all property comprising the Project which is placed in service during the year by the Tenant. Title to the Project shall thereafter be and remain in the name of the County throughout the Term of this Lease.

        SECTION 4.02. Revision of Plans and Specifications . The Tenant may revise the Plans and Specifications at any time and from time to time prior to the Completion Date, so long as the Project remains within the minimum investment figures set forth in Section 4.01.

        SECTION 4.03. Completion Date . The Completion Date shall be evidenced to the County by a certificate of an Authorized Tenant Representative certifying the Completion Date and stating that the acquisition of the Project has been completed in accordance with the Plans and Specifications and that payment of the Cost of the Project or provision therefor has been made except for any items of Cost of the Project not then due and payable or the liability for payment of which is being contested or disputed by the Tenant. Notwithstanding the foregoing, the Certificate of Completion 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.

        SECTION 4.04. Completion of the Project if Financing Arrangement Proceeds are Insufficient . Whether or not the proceeds of any financing arrangement authorized by this Agreement are sufficient to pay the Cost of the Project in full, the Tenant will complete or cause to be completed the Project at least to the level of the minimum investment cited in Section 4.01, above, and pay or cause to be paid all of that portion of the Cost of the Project in excess of the moneys available therefor under the financing arrangement. The County does not make any warranty, either express or implied, or accept any obligation regarding the Cost of the Project. If the Tenant shall pay any portion of the Cost of the Project pursuant to the provisions of this Section 4.04, it shall not be entitled to any reimbursement therefor, nor shall it be entitled to any diminution in or postponement of the payments required in Article V of this Lease to be paid by the Tenant.

        SECTION 4.05. Amendments to Exhibits . The Tenant may supplement Exhibit B from time to time with the written consent of the County, which consent will not be unreasonably withheld.

[End of Article IV]

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ARTICLE V

LEASE TERM AND RENT PROVISIONS

        SECTION 5.01. Term . Subject to the terms and provisions herein contained, this Lease shall be and remain in full force and effect for a term commencing on the date hereof and ending at midnight twenty (20) years from the date of the final investment with respect to the Project under Section 4-12-30(C) of the Act, unless sooner terminated as herein permitted.

        SECTION 5.02. Basic Rent . In consideration of the public benefits accruing to the citizens of the County a