Exhibit 10.11


CITY OF FORDYCE, ARKANSAS


and


INTERNATIONAL PAPER COMPANY




LEASE AGREEMENT





Dated as of January 1, 1997


















LEASE AGEREMENT


THIS LEASE AGREEMENT, dated as of January 1, 1997, by
and between the CITY OF FORDYCE, ARKANSAS, a municipality under the laws of the
State of Arkansas, as lessor (the “City”), and INTERNATIONAL PAPER COMPANY, a
corporation organized and existing under and by virtue of the laws of he State
of New York, as lessee (the “Company”).


WITNESSETH:


WHEREAS, the City is authorized and empowered under
the laws of the State of Arkansas, including particularly Title 14, Chapter
164, Subchapter 2 of the Arkansas Code of 1987 Annotated (the “Act”), to issue
revenue bonds and expend the proceeds thereof to finance the cost of acquiring,
constructing and equipping lands, buildings or facilities for securing or
developing industry; and


WHEREAS, the City has undertaken
to furnish permanent financing of the cost of acquiring certain industrial facilities located
in Fordyce, Arkansas by the issuance of its Industrial Development Revenue
Bonds - International Paper Company Project, in the aggregate principal amount
of $1,050,000 (the “Bonds”), and in connection therewith the City and the Company have entered into this Lease
Agreement); and


NOW, THEREFORE, for valuable consideration, receipt of
which is hereby acknowledged by the City and
the Company, and in consideration of the mutual benefits and covenants herein
contained, the City and the Company AGREE as follows:









 



ARTICLE I

DEFINITIONS


Section 1.1             Definitions.  In addition to the words and terms elsewhere
defined in this Lease Agreement, the following words and terms as used in this
Lease Agreement shall have the following meanings:


“Act” — Title 14, Chapter 164, Subchapter 2
of the Arkansas Code of 1987 Annotated, as amended and enacted from time to
time.


“Bonds” — The City of Fordyce, Arkansas Industrial
Development Revenue Bonds - International Paper Company Project, Series A and
B, in the aggregate principal amount of $1,050,000, issued pursuant to the Bond
Purchase Agreement.  Two Bonds designated
“Series A” shall be issued in the principal amount of $450,000 each, and one
Bond designated “Series B” shall be issued in the principal amount of $150,000.


“Bond Purchase Agreement” — The Bond Purchase
Agreement dated as of January 1, 1997, between the City and the Purchasers, and
any amendments and supplements thereto.


“City” — City of Fordyce, Arkansas, a municipality
under the laws of the State of Arkansas, and its successors and assigns.


“Company” International Paper Company, a corporation
organized and existing under the laws of the State of New York, and any assign
that assumes the obligations of the Company pursuant to the provisions of this Lease Agreement.


“Environmental Laws” — Any federal, state or local law,
statute, ordinance or regulation pertaining to health, industrial
hygiene or the environmental conditions on, under or about the Premises, now or
hereafter enacted or interpreted, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act
of 1980 (“CERCLA’’), as
amended, 42 U.S.C. Sections 9601 et
seq., and the Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. Section 6901 et seq.


“Event of Default” — Any event of default specified in
Section 6.1 hereof.


“Hazardous Substances” — (a)  Those substances included within the
definitions of “hazardous substances”, “Hazardous
materials”, “toxic substances” or “solid waste” in CERCLA, RCRA and the
Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq. and in
the regulations promulgated pursuant to said laws;


(b)           Those
substances defined as “hazardous wastes” or “PCB” in the applicable statutes of
the State of Arkansas as amended from time to time, and in the
regulations promulgated thereunder;



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(c)           Those substances listed in the United
States Department of Transportation Tab1e (49 CFT 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto);


(d)           Such
other substances, materials and wastes which are or become regulated under
applicable local, state or federal law, which are classified as hazardous,
corrosive, ignitable, or toxic under federal, state or local laws or
regulations; and


(e)           Any
material, waste or substance which is (i) petroleum; (ii) asbestos; (iii) polychlorinated biphenyls;
(iv) designated as a “hazardous substance” pursuant to Section 311 of the
Clean Water Act, 33 U.S.C. Sections 1251 at seq. (33 U.S.C. 1321) or listed
pursuant to Section 3078 of the Clean Water Apt (33 U.S.C. 1317); (v) flammable
explosives; or (vi) radioactive materials.


“Lease Agreement” — This Lease Agreement and any
amendments and supplements hereto.


“Mortgage” — The Mortgage dated as of January 1, 1997,
between the City and the Purchasers, and any amendments and supplements
thereto.


“Permitted Encumbrances” — (i) This Lease Agreement,
the Mortgage, and the Bond Purchase
Agreement, (ii) liens for taxes and assessments not then delinquent; (iii) any
mechanic’s, laborer’s, materialmen’s, supplier’s, or vendor’s lien for work or
services performed or materials furnished which are not yet due and payable; (iv)
utility, access and other easements and rights of way, restrictions,
reversions and exceptions that will not
interfere with or impair the
operations being conducted on the Premises, (v) 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 Premises and as do not materially impair the value
or utility of the Premises; and (vi) any other defect, irregularity,
encumbrance, easement, right of way or cloud on title which is waived or
permitted in writing by the City and Company.


“Premises” — The land, buildings, improvements and
facilities leased by this Lease Agreement and described in Section 2.1 hereof.


“Purchasers”
— Citizens First Bank, Fordyce, Arkansas (“Citizens”), Fordyce Bank
& Trust Company, Fordyce, Arkansas (“FB&T”), and the Arkansas
Development Finance Authority (“ADFA”). 
Citizens and FB&T are the original purchasers of the Series A Bonds,
and ADFA is the original purchaser of the
Series B Bond, and the references include any subsequent owners of the
Bonds.


“State” — The State of Arkansas.


Section 1.2             Use of Words and Phrases.  “Herein”, “hereby”, “hereunder”, “hereof”, “hereinabove”,
“hereinafter”, and other equivalent words and phrases refers to this Lease
Agreement and not solely to the particular portion thereof in which any such
word is used.  The definitions act forth
In Section 1.1 hereof include both singular and plural. Whenever used herein,
any pronoun shall be deemed to include both singular and plural and to cover
all genders.



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ARTICLE II

DEMISING CLAUSES; DURATION OF LEASE TERM; 

RENTAL PROVISIONS


Section 2.1             Lease of Premises.  Subject to the tarns and provisions hereinafter
set forth, and in consideration of the rent to be paid by the Company and in
consideration of the covenants and agreements herein contained to be kept and
performed by the Company, the City does hereby lease, demise and let unto the
Company, subject to Permitted Encumbrances, and the Company does hereby hire
and take from the City, subject to Permitted Encumbrances, for the uses and
purposes hereinafter set out, a parcel of property and all improvements,
located in the City of Fordyce,
Dallas County, Arkansas, with the specific premises outlined on Exhibit “A”,
which is attached hereto and made a part hereof (the “Premises”) .


TO HAVE AND TO HOLD the Premises unto the
Company for the team of this Lease Agreement as hereafter set forth.


Section 2.2             Term.  (a)  Initial
Term.  Unless sooner terminated or
extended as hereinafter provided, this Lease Agreement shall be for a period of
twenty (20) years, commencing on January 10, 1997 (the “Commencement Date”) and
ending an January 10, 2017.


(b)           Option
Terms.  Provided the Company is not
then in default, the City hereby grants to the Company the option to extend the
term of this Lease Agreement for two (2) additional periods.  The Company may exercise the first option for
five (5) years (“First Option Term”) by giving the City written notice not
later than twelve (12) months before the expiration of the is initial
term.  The Company may exercise the
second option for four (4) years (“Second Option Term”) by giving the City
written notice not later than twelve (12) months before the expiration of the
First  Option Term. Time is of the
essence with respect to the Company’s exercise of those options.  Such renewals shall be on the same terms and conditions as
contained herein except that the annual base rent for both Option Terms shal1
be Nine Thousand Nine Hundred Eighty-Four and 00/100 ($9,984.00), payable in
equal monthly installments of Eight Hundred Thirty-Two and 00/100 Dollars ($832.00).


Section 2.3             Rent.  (a) 
The Company agrees to pay
to the City, without demand, deduction or set-off, except as provided in this
Lease Agreement, an initial annual base rental at the rate of One Hundred
Thirteen Thousand One Hundred Ninety-six and 00/100 Dollars ($113,196.00) per
annum, payable in equal monthly installments on the tenth day of each calendar
month, commencing February 10, 1997, during the term of this Lease Agreement in
the amount of Nine Thousand Four Hundred Thirty-Three Thousand and 00/100
($9,433.00).


(b)           Upon the
seventh (7th) anniversary of the commencement date, the annual rent shall be
adjusted to reflect the then current
interest rate on the Series A Bonds (the interest on which shall be Two Hundred
(200) basis points over the
interest rate of similar eight (8) year U.S. Treasury Notes, in no event exceeding
nine percent (9%) per annum, determined as provided in the Bond Purchase
Agreement).  The adjusted annual rent
shall not exceed One Hundred Sixteen Thousand Nine Hundred Forty and 00/100
Dollars ($116,940.00), payable in




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monthly installments of Nine
Thousand Seven Hundred Forty-Five and 00/100 Dollars ($9,745.00).


(c)           Upon
the fifteenth (15th) anniversary of the Commencement Date the annual base rent shall be Nine Thousand Nine Hundred Eighty-Four and 00/100 ($9,984.00), payable in equal monthly installments of
Eight Hundred Thirty-Two and 00/100 Dollars
($832.00).


(d)           Each
payment made pursuant to this Section 2.3 shall be made in immediately
available funds directly to the Purchasers
for the account of the City at the address of the
Purchasers set forth herein or, in the
case of each subsequent owner of
the Bonds, at the place designated in the notice of
assignment of the Bonds provided in Section 2.09 of the Bond Purchase Agreement,
or at such other place as shall from time to time be designated by the
Purchasers or such subsequent owner of the Bonds in each case after notice in writing to the City and the Company.


(e)           In
the event the Company should fail to make, or cause to be made, any of the
payments required in this Section, the item or installment so in default
shall continue as an obligation of the Company until the amount in default shall have been fully paid.



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ARTICLE III

USE OF PREMISES


Section 3.1             Use of Premises.  The Premises shall be used by the Company for
general office and warehouse use, manufacturing of paper products and uses
incidental thereto.


The City represents that the Company’s use as set forth herein
complies with all zoning ordinances and covenants and restrictions of record
applicable to the Premises.


Section 3.2             Compliance with Laws.  During the term of this Lease
Agreement, the Company shall, at the Company’s own cost and expense, comply with all
laws, ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments and appropriate departments, commissions,
boards and officers thereof relating
to the Premises, whether or not
the same require repairs or alterations to the Premises.  The Company shall have the right to contest
by appropriate legal proceedings, without cost or expense to the City, the
validity of any law, ordinance, order, rule, regulation or requirement,
applicable to the Premises, if no lien, charge or liability shall be imposed
against the Premises or the City’s interest therein by reason thereof, and in such event, the Company may postpone compliance therewith until the final
determination of any such proceeding.


Section 3.3             Services and Utilities.  The City shall furnish, at its own cost and
expense, sewer, water, electric, gas and telephone connections into the Premises.


The Company shall pay all utility bills, including,
but not limited to water, sewer, gas, electricity, telephone, fuel, light, and heat bills, for the Premises
which services shall be separately
monitored for the Premises.


Section 3.4             Maintenance and Repairs.  The Company shall, at all times during the term and at is own cost and expense, keep and maintain the Premises in good
order and condition, except as such repairs are rendered necessary by the
negligence of the City, its agents, employees, or invitees.


Section 3.5             Damage and Destruction.  (a)  In
the event of the total destruction of the Premises by fire or other casualty
during the term hereof, including any casualty attributable to any condition of
the Premises which pre-exists the
Commencement Data of this Lease Agreement or in the event of such partial destruction thereof as to render the Premises
untenantable or unfit for occupancy, therein
either event, unless such damages can, in the reasonable opinion of the City and the Company, be repaired
within one hundred eighty (180) days after the occurrence, this Lease Agreement
and the term hereby created shall cease from the date of such damage or destruction and the Company shall upon written notice from the City
surrender the Premises to the City and the
Company shall pay rent within said term only to the time of such damage or destruction.


If, however, in
the reasonable opinion of the City and the Company, the damage as aforesaid can be repaired within one hundred
eighty (180) days from the occurrence thereof, the City shall repair the Premises with all reasonable speed, and this Lease Agreement shall continue in full force and effect.



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(b)           In
the event or the partial destruction of the Premises by fire or other casualty
during the term hereof, including any casualty attributable to any condition of
the Premises which pre-exists the Commencement Date of this Lease Agreement, which partial destruction
does not render the Premises untenantable or unfit for occupancy, the City
shall repair the damage with all reasonable speed within Sixty (60) days
thereafter, and this Lease Agreement shall continue in full force and effect.


(c)           If
the City does not restore the Premises or the affected portion to tenantability
within the periods set forth in subsections (a) and (b) above, the Company may
then terminate this Lease Agreement, retroactive to the date of casualty by
written notice delivered to the City within fifteen (15) days after the end of
those periods.


(d)           All
insurance money paid on account of such casualty shall be paid to the City and
used to repair or restore the damaged or destroyed property.  It requested by the Company, all insurance
proceeds delivered to the City
pursuant to the terms of this
Lease Agreement shall be held in
a separate account in any bank or trust company selected by the City and acceptable to the Company.  The Company shall have the right to
audit the expenditure and handling of such proceeds.


(e)           The
City’s obligation to repair or restore the Premises pursuant to this Section
3.5 shall be limited to the insurance proceeds received by the City for such purpose. 
If the insurance money
shall he insufficient to pay all coats of such repair or restoration, the City shall not be liable for the deficiency.  Any balance of the insurance proceeds
remaining over and above the cost of such repair or restoration shall be used
to prepay or redeem the outstanding principal of the Bonds, in accordance with
the provisions of the Bond Purchase Agreement, and the rent payable under
Section 2.3 hereof shall be
adjusted downwards accordingly.


Section 3.6             Building Alterations.  The Company may, at its own cost and
expense, with the City’s prior written consent, which consent shall not be
unreasonably withheld, make alterations, additions, or improvements in or to
the Premises providing (i) the structural integrity and market value of the
Premises are not materially lessened by reason thereof, (ii) such work is
completed in a good and
workmanlike manner and in compliance with all applicable laws, rules, regulations and ordinances, and (iii) the specifications for
such work equals or exceeds the specifications for the original construction of
the Premises, taking into consideration any changes in construction practices
and technology which may exist at the time
of such alterations.


All alterations, additions, and improvements which may be erected, installed or affixed on or
in the Premises during the term are and shall be deemed to be and immediately
become part of the realty and the sole
and absolute property of the City and shall be deemed to be part of the
Premises, except that all furniture, trade fixtures or demountable partitions
installed by the Company shall be and remain the property of the Company.


The Company may, at its own
cost and expense, without the City’s consent, install,
replace or remove any of the Company’s trade
fixtures, furniture, demountable partitions and equipment (all hereinafter referred to as “Trade Fixtures”).  Any or all such Trade Fixtures shall be and
remain the property of the Company, and may, at the Company’s option and 



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expense, be removed by
the Company at any time during the term of the Lease Agreement or at the Lease
Agreement expiration date.  Thu Company
shall be liable for damaged to the Premises caused by the Company’s removal of its Trade Fixtures.


Section 3.7             Signs.  The Company shall not attach or erect or permit anyone
to attach or erect any signs, symbols, lettering of any kind on the walls or roof of the Premises without the prior written consent of the City, which
consent shall not be unreasonably
withheld.


Section 3.8             Access and Inspection.  The Company shall have access to the Premises
twenty-four (24) hours a day, cloven (7) days a week.


The City and the Purchasers shall have the right to enter upon the Premises during
reasonable business hours for the purpose of inspection or for maintenance work
or repairs in accordance with the provisions hereof, provided that prior notice
shall be given to the Company.  The City
and the Purchasers shall also have the right to enter at any time without
notice in the event of fire, explosion or other emergency, for the purposes of controlling, extinguishing or
abating the same.


Section 3.9             Insurance.  The Company
shall, at the Company’s sole cost and expense, keep the Premises and
improvements thereon covered by Fire and Extended Coverage insurance against
the perils of fire, flood, lightning, windstorm, hurricane, hail, explosion,
radioactive contamination, riot, civil commotion, vandalism, malicious
mischief, smoke, aircraft or land vehicle, sonic shock wave, molten material,
liquid and leakage of fire protection equipment, in an amount not less than one hundred percent (100%) of the
replacement value thereof, including all improvements, alterations and
additions which may be made.  The Company
is responsible to pay all deductible amounts under this insurance.  The Company shall also procure and maintain a
policy or policies of Comprehensive General Liability insurance, including
contractual liability, with minimum limits of $1,000,000 combined single limit
for bodily injury and property damage. 
The Company shall have the right to self insure the risks consistent
with the Company’s practices at similar facilities.


In addition, the Company shall procure and maintain
during the entire term of this agreement, a policy or policies insuring: (i) Worker’s Compensation with minimum limits meeting statutory
requirements, or a state approved self insurance plan; and (ii) Comprehensive
General Liability insurance, including contractual, liability coverage, with a
minimum combined single limit of $1,000,000 for bodily injury and property
damage.  The Company shall have the right
to self insure the risk consistent with the Company’s practices at similar
facilities.  The Company is responsible
for any and all deductible amounts under all policies required to be carried.


The insurance required by
this Section shall name the City as an
insured and the Purchasers as loss
payees with respect to such insurance. 
If requested, the Company shall provide the City and the Purchasers with
a certificate or certificates of insurance providing evidence of this
coverage.  (Requests for certificates of
insurance should be directed to the International Paper Risk Management
Department, 6400 Poplar Avenue, Memphis, TN, 30197.  A copy of this executed Lease Agreement must
be sent with any requests for
certificates.)  All certificates issued
on the Company’s behalf shall contain a standard thirty (30) day
notice of 



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cancellation or material
change.  The Company shall have the right
to audit the expenditure
and handling of proceeds of any insurance required by this Section.


Section 3.10           Taxes and Assessments.  The Company shall pay all general real estate
taxes on the Premises and all special assessments, levies and any other typo of
levy on real estate, prior to the date when such taxes shall become delinquent.  The Company shall reimburse the City for the
foregoing taxes.


Notwithstanding the foregoing, taxes shall not include
taxes or
assessments for (i) improvements or alterations made by the City outside of the
Premises, (ii) additions to the land or building, and (iii) the
City’s federal or state income, franchise, inheritance or estate taxes.


The Company shall have the unrestricted right to
contest the amount or validity of any taxes and special assessments required to
be borne by it pursuant to this Section by appropriate legal proceedings
provided, however, this shall not be deemed or construed in any way as
relieving, modifying or extending the Company’s covenant to pay the same as
required in this Section.  The City shall
not be required to join in any such
proceeding unless it shall be
necessary for it to do so in order to
properly prosecute such proceeding, in which event the City agrees to
join in the proceeding.


The parties hereto recite knowledge of the decision of
the Supreme Court of the state of Arkansas in Wayland v. Snapp, 232 Ark.
57, 334 S.W. 2d 633 (1960), concerning the exemption of properties owned by
municipalities and used for securing and developing industry under and pursuant
to the provisions of the Act.  The City
has represented to the Company, and the City and the Company acknowledge that
under their and other interpretations of present law, no part at the Premises
will be subject to ad valorem taxation by the State or by any political or
taxing subdivision thereof, and these factors, among others, materially induced
the Company to enter into this Lease
Agreement.


Section 3.11           Condemnation.  If the whole or any part of the Premises hereby leased shall be take by any
public authority under the power of eminent domain, or shall be sold to such
authority under the threat of such power, then this Lease Agreement shall cease
on the part so taken or sold from the date the possession of such part shall be
required for such public purpose, and the rent provided hereunder shall be paid
to such date.  The net amount awarded as
damages or paid as a result of such taking (being the gross award less attorney’s
fees and other expenses and costs incurred in the condemnation proceedings)
shall be paid to the Purchasers and used to prepay or redeem the outstanding
principal of the Bonds in accordance with the provisions of the Bond Purchase
Agreement.


If the portion of the Premises taken or sold is such
as to destroy or impair the usefulness of the Premises for the purpose for
which same have been leased hereunder, then the Company may elect to terminate
this Lease Agreement and declare the same null and void as of the date of such
taking or sale by giving written notice thereof to the City within thirty (30) days after the
date of such taking or sale.  If the
Company deem not elect to terminate this Lease Agreement than the rent payable
by the Company under Section 2.3 hereof from and after the date when such
possession is taken shall be reduced in the same proportion that the usefulness
of the Premises is diminished for the Company’s business operation, such
proportion to be mutually 



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agreed upon by both
parties, with due consideration being given to all pertinent factors, including
the square footage of the space and the improvements involved.


Each party shall be entitled separately to assert
against the condemning authority and to recover such damages as may have
accrued to and for its respective estate.



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ARTICLE IV

SPECIAL COVENANTS AND AGREEMENTS


Section 4.1             Indemnification.  The Company agrees to indemnify and save the
City harmless against and from all claims by or on behalf of any person, firm,
corporation or other legal entity arising from the conduct, use, operation or
management of, or from any work or thing done on, the Premises during the term
of this Lease Agreement from (i) the operations
conducted by the Company on the Premises, (ii) any breach or default on the
part of the Company in the performance of any of its obligations under this Lease Agreement, (iii) any act
or negligence of the Company or any of its agents, contractors, servants,
employees or licensees or (iv) any act or negligence of any assignee or
sublessee of the Company, or of any agents, contractors, servants, employees or
licensees of any assignee or sublessee of the Company.


The Company further agrees to indemnify and save the
City harmless against and from all claims by or on behalf of any person, firm,
corporation or other legal entity, but only if such claims are made not later
than one year following the termination of this Lease Agreement, arising from
the damages resulting in whole or in part from the escape, seepage, leakage,
spillage, discharge, emission, discharging or release from or on, the Premises
of any Hazardous Substance during the term of this Lease Agreement, including,
but not limited to, any losses, liabilities, damages, injuries, costs
(including response costs), expenses or claims asserted or arising under the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, any so-called “Superfund” or “Superlien”
law, or any other Federal, State or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, to the extant caused by or resulting directly from the
acts or omissions of the Company.


The Company agrees that,
in the event any suit or action is brought against the City, its agents or
employees to recover for or on
account of any such claim, cause of action, loss, damage or cost, the Company
will, at the request of the City, appear and defend said suit or action at the
sole cost and expense of the Company, and will pay any judgment, including
principal, interest and cost, that may be entered against the City therein when
said suit or action is finally determined.


Section 4.2             Hazardous Substances; Compliance
with Environmental Laws. 
(a)  Except in strict compliance with all Environmental Laws,
the Company shall not acquire, use, generate, manufacture, produce, store,
release, discharge, dispose of, or arrange for the disposal of on, under or
about the Premises or transport to or from the Premises any
Hazardous Substance or allow any other person or entity to do so.


(b)           The
Company shall keep and maintain the Premises in compliance with, and shall not
cause or permit the Premises to be in violation of, any Environmental Law.


(c)           The
Company shall give prompt written notice to the City and the Purchasers of:



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(i)            Any
proceeding by any government authority with respect to the presence of any
Hazardous Substance on the Premises or the migration thereof from or to other
property,


(ii)           All
claims made by any third party against the Company or the Premises relating to
loss or injury from any Hazardous Substance;


(iii)          The
Company’s discovery of any occurrence or condition on the Premises or adjoining
real property or in the vicinity of the Premises that could cause the Premises
or part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of the Premises under any Environmental Law or to be
subject to response or cleanup costs.


Section 4.3             Quiet Enjoyment.  The City covenants that the Company, upon paying said rent and performing the
covenants and agreements contained herein, shall and may peaceably and quietly hold and enjoy the Premises for their
term provided herein.



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ARTICLE V

ASSIGNMENT AND SUBLEASING


Section 5.1             By Company.  Except as provided herein, the Company shall
not assign this Lease Agreement nor sublet the Premises, in whole or in part,
without the prior written consent of the City, which consent shall not be unreasonably
withheld.  The consent of the City need
not be obtained if the assignment or subletting is to a subsidiary or an affiliate of the Company.


No consent by the City to any assignment or sublease by the Company
shall relieve the Company of any obligation to be performed by the Company
under this Lease Agreement.


The Company shall, within fifteen (15) days after the
delivery thereof, furnish to the City and the Purchasers a true and complete
copy of the agreements or other documents effectuating any such assignment or
sublease.


Section 5.2             By City.  The city shall have the right to sell, assign, transfer, in whole or
in part, all of its rights in the Premises provided that any successor to the
City agrees in writing that so long as the Company is not in default in the
payment of rent or in the performance of any of the terms, covenants and
conditions of this Lease Agreement upon the Company’s part to be performed (a)
the Company shall not be disturbed in its possession and said successor shall
carry out the City’s obligations under this Lease Agreement; and (b) the
Company shall not be named in any action or proceedings by the holder of any
mortgage to foreclosure thereunder, and any such action shall not result in the
cancellation or termination of this Lease Agreement.  It is understood and agreed that (a) this
Lease Agreement (and the payments due hereunder) will be assigned to the
Purchasers as security for the payment of the principal of and interest on the
Bonds, and (b) the Premises will be mortgaged to the Purchasers pursuant to the
Mortgage as security for the payment of the principal of and interest on the
Bonds.



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ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES


Section 6.1             Events of Default.  The occurrence of any one of the following
shall constitute an Event of Default:


(a)           Failure
by the Company to pay when due any payment required to be made under Section
2.3 hereof, which failure shall continue for a period of ten (10) days.


(b)           Failure
by the Company to observe and perform any covenant, condition or agreement on
its part to be observed or performed, which failure shall continue (i) for a
period of thirty (30) days after written notice, specifying such failure and
requiring that it be remedied, is given to the Company by the City or the
Purchasers, unless the City and the Purchasers shall agree in writing to an
extension of such time prior to its expiration, or (ii) for such longer period
as may be necessary to remedy such default provided corrective action is
instituted by the Company within the applicable period and is being diligently
pursued.


(c)           The
dissolution or liquidation of the Company or the filing by the Company of a
voluntary or involuntary petition it bankruptcy, or failure by the Company
promptly to lift any execution, garnishment or attachment of such consequence
as will impair its ability to carry out its obligations under this Lease
Agreement, or an assignment by the Company for the benefit of its creditors, or
the entry by the Company into an agreement of composition with its creditors,
or the approval by a court of competent jurisdiction of a .petition applicable to the Company in any
proceeding for its reorganization instituted under the provisions of any bankruptcy act, or under any
similar act which may hereafter be enacted.


Section 6.2             Remedies on Default.  Whenever any Event of Default hereunder shall
have happened and be continuing, the Purchasers, or the City with the prior
consent oaf the Purchasers, may
take one or any combination of the following remedial steps:


(a)           Re-enter
and take possession of the Premises, enforcing this Lease Agreement or
terminating this Lease Agreement, and sell or lease the Premises, holding the
Company liable for all rent and other payments due up to the effective date of such selling or leasing
and for the difference in the purchase price, rent and other amounts paid by
the purchaser or lessee pursuant to such sale or lease and the rents and other
amounts payable by the Company hereunder; and


(b)           Take
whatever action at law or in equity may appear necessary or desirable to
collect the rent then due and thereafter to become due, or to enforce
performance and observance of any obligation, agreement or covenant of the
Company under this Lease Agreement.


Any amounts collected pursuant to action taken under
this Section shall be applied in accordance with the Bond
Purchase Agreement.


Section 6.3             No Remedy Exclusive.  No remedy conferred upon or reserved to the
City or the Purchasers by this Lease Agreement is intended to be exclusive of
any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other 



 14
 






 



remedy given under this Leave Agreement or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or
power accruing
upon any Event of Default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order
to entitle the City or the Purchasers 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 required in this Article.


Section 6.4             Waiver of Breach.  In the event that any agreement contained
herein shall be breached by either the
Company or the City and such breach shall thereafter be waived by the
other party, such waiver shall be limited to the particular breach so waived
and shall not be deemed to waive any other breach hereunder.  In view of the assignment of the City’s
rights in and under this Lease Agreement to the Purchasers under the Bond
Purchase Agreement, the City shall have no power to waive any default hereunder
by the Company without the consent of the Purchasers, and the Purchasers may
exercise any of the rights of the City hereunder.



 15
 






 



ARTICLE VII

MISCELLANEOUS


Section 7.1             Surrender of Premises.  At the expiration or termination of this Lease Agreement, or any
extension or renewal hereof, the Company
agrees to surrender the Premises to the
City in as good condition and state of repair as when received, ordinary
wear, tear, depreciation, decay and loss by and casualty excepted.


Notwithstanding the foregoing, any claims relating to the condition of the Premises,
including but not limited to the Company’s
obligation, if any, to maintain or repair the Premises or to make improvements
or alterations or to remove or restore such items, must be presented in writing by the City to the Company within
forty-five (45) days (which time is of the essence) after expiration or
termination of this Lease Agreement or such claims sha11 be irrevocably waived.


Section 7.2             Holding Over.  In the event the Company remains in
possession of the Premises after the expiration or termination of this Lease Agreement or any
extension or renewal hereof, such holding over shall not serve to renew or
extend this Lease Agreement.  The Company
shall be deemed to be occupying the Premises as a month-to-month tenant with a
rental rate of one hundred percent
(100%) of the rental rate in
effect at the end of the Lease Agreement.


Section 7.3             Notices.  Except as otherwise provided in this Lease
Agreement, all notices, certificates or other communications shall be
sufficiently given and shall be deemed given when delivered by hand delivery or
when the same has been mailed by registered or certified
mail, postage prepaid, to the City, the
Company, or the Purchasers.  Copies of
each notice, certificate or other communication given hereunder by or to the
Company shall be mailed by registered or certified mail, postage prepaid, to the Purchasers; provided, however, that the effectiveness of any such notice shall not be affected
by the failure to send any such copies. 
Notices, certificates or other communications shall be sent to the
following addresses:




	
  City:

  	
   

  	
  City of Fordyce,
  Arkansas

  City Hall, 101 South Main

  Fordyce, Arkansas 71742

  Attention:    Mayor

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
  International Paper Company

  South Edgar Street

  Fordyce, Arkansas 71742
Attention: Plant Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  International Paper Company

  One Maynard Drive

  Park Ridge, NJ 07656

  Attention:      Counsel.

  
	
   

  	
   

  	
   

  






 



 16
 






 



 


	
  Purchasers:

  	
   

  	
  Citizens First Bank 611

  W. 4th Stoat
Fordyce, Arkansas 71742
Attention:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fordyce Bank and Trust Company

  200 W. 4th Street

  Fordyce, Arkansas71742

  Attention:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Arkansas Development Finance Authority

  100 Main Street, Suite 200

  Little Rook, Arkansas 72201-8023

  Attention:  President

  



 


Any of the foregoing may, by notice given hereunder, designate any
further or different address to which subsequent notices, certificates or other
communications shall be sent.


Section 7.4             Successors and Assigns.  Except as may be hereinabove, specifically provided to the contrary, this Lease Agreement shall be binding
upon and inure to the benefit or the parties hereto, and their respective successors and assigns.


Section 7.5             Captions.  The captions of the Articles herein are
inserted only as a matter of convenience and for reference, and in no way
define, limit, or describe the scope of this Least Agreement, nor the intent of
the provisions hereof.


Section 7.6             Title.  The City covenants that it has full
power and authority to enter into this Lease Agreement as fee title owner of
the Premises.


Section 7.7             Brokerage.  The City and the Company warrant that no
broker was involved in this Least Agreement or the transactions contemplated
hereby.  Each party agrees to defend and
indemnify the other party from claims for real estate commissions or fees
arising out of any acts or negotiations of the indemnifying party with any
broker, realtor or finder.


Section 7.8             Recordability of Lease.  (a) 
This Lease Agreement shall be recorded and filed in such manner and in
such places as may be required by law in order to fully preserve and
protect the security of the owners of the Bonds and to perfect the security
interest created by the Bond Purchase Agreement.


(b)           A photocopy or other reproduction of this Lease Agreement
may be filed as a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the Company and the City on such reproduction are
not original manual signatures.


Section 7.9             Consent of the City and the
Company.  If any of the provisions
under the term of this Lease Agreement require the consent or approval of the
City or the Company before either party can do any act, such consent or
approval shall not be unreasonably withheld or delayed.



 17
 






 



Section 7.10           Mutual Attorneys’ Fees.  In the event either party institutes
legal proceedings against the other for breach of any of the terms, conditions
or covenantal of this Lease Agreement, or legal proceedings seeking an
interpretation of this Lease Agreement, the losing party shall pay all costs,
charges and expenses relative thereto, including reasonable attorneys’ fees of
the prevailing party.


Section 7.11           Time of Essence.  Time is of the essence of this Agreement.


Section 7.12           Governing Law.  This Lease Agreement and the rights
and obligations of the parties hereto shall be interpreted, construed, and
enforced in accordance with the laws of the State of Arkansas.


Section 7.13           Severability.  If any provision of this Lease Agreement shall be held or
deemed to be or shall in fact, be illegal, inoperative or unenforceable, the
same shall not affect any other provision or provisions herein contained or
render the same invalid, inoperative, or unenforceable to any extent
whatsoever.


Section 7.14           No Personal Liability.  No covenant or agreement contained in this
Lease Agreement shall be deemed to be the covenant or agreement of any
official, officer, agent, or employee of the City or the Company in his
individual capacity, and no such person shall be subject to any personal
liability or accountability by reason of the issuance thereof.


Section 7.15           Amendments,
Changes and Modifications.  Except an otherwise provided in this Lease Agreement or the Bond
Purchase Agreement, subsequent to the initial issuance of Bonds and prior to
payment in full of the Bonds (or the provision for payment thereof having been
made in accordance with this provisions of the Bond Purchase Agreement), this Lease Agreement may not be effectively amended,
changed, modified, altered or
terminated nor any provision waived, without the written consent of the
Purchasers.


Section 7.16           Limitation of City’s Obligations.  Any obligation of the City created by or arising out at this Lease Agreement shall be
payable solely out of the revenues derived from this Lease Agreement or the
sale of the Bonds or income earned on invested funds as provided in the Bond
Purchase Agreement and shall not constitute, and no breach of this Lease
Agreement by the City shall impose, a pecuniary liability upon the Issuer or a
charge upon the City’s general credit.


Section 7.17           Execution of Counterparts.  This Lease Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.



 18
 






 



IN WITNESS WHEROF, the City and The Company have
caused this Lease Agreement to be executed in their respective corporate names
and their respective corporate seals to be hereunto affixed and attested by
their duly authorized officers, all as of the date first above written.


	
  

  ATTEST:

  	
   

  	
  LESSOR:

  CITY OF FORDYCE, ARKANSAS

  
	
   

  	
   

  	
   

  
	
  /s/

  	
   

  	
  By:

  	
  /s/

  
	
  City Clerk

  	
   

  	
  Mayor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESSEE:

  INTERNATIONAL PAPER COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  NAME/TITLE:

  	
  Martin M. Molot

  
	
   

  	
   

  	
   

  	
  Manager — Bulk Dispositions

  
	
   

  	
   

  	
   

  	
             &
  Leasing

  
						



 



 19
 






 



ACKNOWLEDGMENT


	
  STATE OF ARKANSAS

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF DALLAS

  	
  )

  



Before me, a Notary Public duly commissioned,
qualified and acting, within and for the County and State aforesaid, appeared
in person the within named William Lyon and Janice McDaniel, Mayor and City
Clerk, respectively, of the City of Fordyce, Arkansas, a municipality of the
State of Arkansas, to me personally well known, who stated that they were duly
authorized in their respective capacities to execute the foregoing instrument
for and in the name of the City, and further stated and acknowledged that they
had so signed, executed and delivered the foregoing instrument for the
consideration, uses and purposes therein mentioned and set forth.


IN TESTIMONY WHEROF, I have hereunto set my hand and
official seal this 10th day of January, 1997.


	
  

  	
   

  	
  /s/

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
  My Commission
  expirers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [12/14/02]

  	
   

  	
   

  
	
  (SEAL)

  	
   

  	
   

  



 



 20
 






 



ACKNOWLEDGMENT


	
  STATE OF NEW JERSEY

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF BERGEN

  	
  )

  



Before me, a Notary Public duly commissioned,
qualified and acting, within and for the County and State aforesaid, appeared


Martin M. Molot, Manager
Bulk Disposition and Leasing


respectively, of
International Paper Company, a New York corporation, to me personally well
known, who stated that they were duly authorized in their respective capacities
to execute the foregoing instrument for and in the name and behalf of the
corporation, and further stated and acknowledged that they had so signed,
executed and delivered the foregoing instrument for the consideration, uses and
purposes therein mentioned and set forth.


IN TESTIMONY WHEROF, I have hereunto set my hand and
official seal this 10th day of January, 1997.


	
  

  	
   

  	
  /s/

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
  My Commission
  expirers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (SEAL)

  	
   

  	
   

  



 



 21
 






 



EXHIBIT A


Description of Land


The following described land situated in Denser
County, Arkansas, to-wit:


Start at the northwest
corner of the SE 1/4 NW 1/4 Section 34, Township 10 South, Range 13 West and run
east 15 feet, thence south 50 feet to the point of beginning; thence south 1270
feet, thence west 15 feet, to the southwest corner of the SE 1/4 NW 1/4, thence
south 815.15 feet
to a point in the center of Edgar
Street on the north right of way
line of the Cotton Belt Railroad , thence N 44
degrees 12 minutes 02 seconds East 1360.57 feet along said right of way, thence
North 56.6 feet to an existing 3/4” rebar., thence west 90 feat to an existing 1” pipe, thence
North 640 feet, thence west 165 feet along a fence, thence north 415 feet along
a fence to a 1/2” rebar and the south side of said street, thence west 678.55
feet back to the point of beginning, containing 30.63 acres, more or less;


AND


Start at the northwest
corner of the SE 1/4 NW 1/4, Section 34, Township 10 South, Range 13 West and
run east 15 feat, thence south 1320 feet, thence west 15 feet, to the southwest
corner of the SE 1/4 NW 1/4, thence south 815.15 feet to a point in the center
of Edgar Street on the north right of way line of the Cotton Belt Railroad, thence N 44 degrees 12
minutes 02 seconds east 1418.71 feet
along said right of way to the point of beginning; thence North 199.32 foot to
an existing 1/2” rebar, thence east 188.54 feet to an existing 3/4” rebar on said railroad right of
way, thence 44 degrees 12 minutes 02 seconds went 274.46
feet along said railroad right of
way, back to the point of beginning, containing 0.43 acres,
more or less.


This land lies as
follows:

7.42 acres in the NE1/4 SW1/4,
23.64 acres in the SE1/4 NW1/4,

Section 34, Township
10 South, Range 13 West.


CERTIFICATE OF RECORD


STATE OF ARKANSAS


COUNTY OF DALLAS


I, Norma Castleberry, Clerk of the Circuit Court and
ex-Officio Recorder for the county aforesaid, do hereby certify that the
annexed and foregoing instrument was filed for record in my office on the 14th day of January A.D., 1997, at 9:17
o’clock A.M., and the same is now duly recorded, with the acknowledgment
           and certificate
thereon, in Record Book 167, Page 158.



 22
 






 



IN TESTIMONY WHEREOF, I have set my hand and affixed
the seal of said court this 14th day of January, A.D., 1997.


NORMA CASTLEBERRY, CLERK



 23














 


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  2

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  2

  	
   

  
	
  Section 1.2

  	
   

  	
  Use of Words and
  Phrases

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II DEMISING
  CLAUSES; DURATION OF LEASE TERM; RENTAL PROVISIONS

  	
   

  	
  4

  	
   

  
	
  Section 2.1

  	
   

  	
  Lease of Premises

  	
   

  	
  4

  	
   

  
	
  Section 2.2

  	
   

  	
  Term

  	
   

  	
  4

  	
   

  
	
  Section 2.3

  	
   

  	
  Rent

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III USE OF
  PREMISES

  	
   

  	
  6

  	
   

  
	
  Section 3.1

  	
   

  	
  Use of Premises

  	
   

  	
  6

  	
   

  
	
  Section 3.2

  	
   

  	
  Compliance with Laws

  	
   

  	
  6

  	
   

  
	
  Section 3.3

  	
   

  	
  Services and Utilities

  	
   

  	
  6

  	
   

  
	
  Section 3.4

  	
   

  	
  Maintenance and Repairs

  	
   

  	
  6

  	
   

  
	
  Section 3.5

  	
   

  	
  Damage and Destruction

  	
   

  	
  6

  	
   

  
	
  Section 3.6

  	
   

  	
  Building Alterations

  	
   

  	
  7

  	
   

  
	
  Section 3.7

  	
   

  	
  Signs

  	
   

  	
  8

  	
   

  
	
  Section 3.8

  	
   

  	
  Access and Inspection

  	
   

  	
  8

  	
   

  
	
  Section 3.9

  	
   

  	
  Insurance

  	
   

  	
  8

  	
   

  
	
  Section 3.10

  	
   

  	
  Taxes and Assessments

  	
   

  	
  9

  	
   

  
	
  Section 3.11

  	
   

  	
  Condemnation

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV SPECIAL
  COVENANTS AND AGREEMENTS

  	
   

  	
  11

  	
   

  
	
  Section 4.1

  	
   

  	
  Indemnification

  	
   

  	
  11

  	
   

  
	
  Section 4.2

  	
   

  	
  Hazardous Substances;
  Compliance with Environmental Laws

  	
   

  	
  11

  	
   

  
	
  Section 4.3

  	
   

  	
  Quiet Enjoyment

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V ASSIGNMENT
  AND SUBLEASING

  	
   

  	
  13

  	
   

  
	
  Section 5.1

  	
   

  	
  By Company

  	
   

  	
  13

  	
   

  
	
  Section 5.2

  	
   

  	
  By City

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI EVENTS OF
  DEFAULT AND REMEDIES

  	
   

  	
  14

  	
   

  
	
  Section 6.1

  	
   

  	
  Events of Default

  	
   

  	
  14

  	
   

  
	
  Section 6.2

  	
   

  	
  Remedies on Default

  	
   

  	
  14

  	
   

  
	
  Section 6.3

  	
   

  	
  No Remedy Exclusive

  	
   

  	
  14

  	
   

  
	
  Section 6.4

  	
   

  	
  Waiver of Breach

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
   

  	
  16

  	
   

  
	
  Section 7.1

  	
   

  	
  Surrender of Premises

  	
   

  	
  16

  	
   

  
	
  Section 7.2

  	
   

  	
  Holding Over

  	
   

  	
  16

  	
   

  
	
  Section 7.3

  	
   

  	
  Notices

  	
   

  	
  16

  	
   

  
	
  Section 7.4

  	
   

  	
  Successors and Assigns

  	
   

  	
  17

  	
   

  



 



 i
 






 



 


	
  Section 7.5

  	
   

  	
  Captions

  	
   

  	
  17

  	
   

  
	
  Section 7.6

  	
   

  	
  Title

  	
   

  	
  17

  	
   

  
	
  Section 7.7

  	
   

  	
  Brokerage

  	
   

  	
  17

  	
   

  
	
  Section 7.8

  	
   

  	
  Recordability of Lease

  	
   

  	
  17

  	
   

  
	
  Section 7.9

  	
   

  	
  Consent of the City and
  the Company

  	
   

  	
  17

  	
   

  
	
  Section 7.10

  	
   

  	
  Mutual Attorneys’ Fees

  	
   

  	
  18

  	
   

  
	
  Section 7.11

  	
   

  	
  Time of Essence

  	
   

  	
  18

  	
   

  
	
  Section 7.12

  	
   

  	
  Governing Law

  	
   

  	
  18

  	
   

  
	
  Section 7.13

  	
   

  	
  Severability

  	
   

  	
  18

  	
   

  
	
  Section 7.14

  	
   

  	
  No Personal Liability

  	
   

  	
  18

  	
   

  
	
  Section 7.15

  	
   

  	
  Amendments, Changes and
  Modifications

  	
   

  	
  18

  	
   

  
	
  Section 7.16

  	
   

  	
  Limitation of City’s
  Obligations

  	
   

  	
  18

  	
   

  
	
  Section 7.17

  	
   

  	
  Execution of Counterparts

  	
   

  	
  18

  	
   

  



 



 ii