Document:

Exhibit
10.32

 

LEASE
AGREEMENT

 

 

Dated March 1,
1999

 

By and
between

 

 

THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PIEDMONT

 

and

 

BOSTROM
SEATING, INC.

 

 

 

The interest
of The Industrial Development Board of the City of Piedmont in any rents,
revenues and receipts derived by it under this Lease Agreement has been
assigned to NBD Bank.  as Trustee under
the Trust Indenture dated as of March 1, 1999.

 

This Lease
Agreement was prepared by Heyward C. 
Hosch of Walston, Wells, Anderson & Bains, LLP, Financial Center,
505 20th Street North, Suite 500, Birmingham, Alabama 35203

 

 

LEASE
AGREEMENT

 

TABLE OF
CONTENTS

 

	
  RECITALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
  Representations by the Issuer

  	
   

  
	
  SECTION 2.02

  	
  Representations by the User

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  DEMISING CLAUSES; 1973 LEASE TO REMAIN

  IN EFFECT; CONSTRUCTION OF LEASE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  ACQUISITION OF THE PROJECT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
  Agreement to Acquire

  	
   

  
	
  SECTION 4.02

  	
  No Warranty of Suitability of Issuer

  	
   

  
	
  SECTION 4.03

  	
  Pursuit of Remedies Against Vendors, Contractors
  and Subcontractors and Their Sureties

  	
   

  
	
  SECTION 4.04

  	
  Completion of the Project

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  DURATION OF LEASE TERM
  AND RENTAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
  Duration
  of Term

  	
   

  
	
  SECTION 5.02

  	
  Basic Rental Payments; Draws Under Letter
  of Credit

  	
   

  
	
  SECTION 5.03

  	
  Additional Rental Payments

  	
   

  
	
  SECTION 5.04

  	
  Advances by Issuer or Trustee

  	
   

  
	
  SECTION 5.05

  	
  Indemnity of Issuer, Trustee and Paving
  Agent

  	
   

  
	
  SECTION 5.06

  	
  Obligations of User Unconditional

  	
   

  
	
  SECTION 5.07

  	
  This Lease a Net Lease

  	
   

  

 

 

	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  MAINTENANCE,
  ALTERATIONS, REPLACEMENTS, INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
  Maintenance and Repairs, Alterations and
  Improvements, Party Walls and Liens; Utility Charges

  	
   

  
	
  SECTION 6.02

  	
  Removal of Substitution and Replacement for
  Equipment

  	
   

  
	
  SECTION 6.03

  	
  Installation of Machinery and Equipment
  Owned or Leased by the User or Subject to a Security Interest in Third
  Parties

  	
   

  
	
  SECTION 6.04

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  PROVISIONS RESPECTING
  DAMAGE, DESTRUCTION AND CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
  Damage and Destruction

  	
   

  
	
  SECTION 7.02

  	
  Condemnation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  CERTAIN PROVISIONS RELATING TO ASSIGNMENT,

  SUBLEASING, MORTGAGING AND THE BONDS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
  Provisions Relating to Assignment and
  Subleasing

  	
   

  
	
  SECTION 8.02

  	
  Assignment of Lease Agreement and Rents by
  the Issuer

  	
   

  
	
  SECTION 8.03

  	
  Transfer or Encumbrance Created by Issuer:
  Corporate Existence of Issuer

  	
   

  
	
  SECTION 8.04

  	
  Redemption of Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS OF THE USER

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
  Events
  of Default

  	
   

  
	
  SECTION 10.02

  	
  Remedies on Default

  	
   

  
	
  SECTION 10.03

  	
  Availability of Remedies

  	
   

  
	
  SECTION 10.04

  	
  Agreement to Pay Attorneys’ Fees and
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01

  	
  Options to Terminate

  	
   

  

 

2

 

	
  SECTION 11.02

  	
  Option
  to Renew

  	
   

  
	
  SECTION 11.03

  	
  Option to Purchase Prior to Payment of the
  Bonds

  	
   

  
	
  SECTION 11.04

  	
  Option to Purchase Project After Payment of
  the Indenture Indebtedness

  	
   

  
	
  SECTION 11.05

  	
  Option to Purchase Portions of Project Site

  	
   

  
	
  SECTION 11.06

  	
  Conveyance of Exercise of Option to
  Purchase

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
  INTERNAL REVENUE CODE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01

  	
  Covenants Regarding Section 103 and
  Sections 141-150 of the Internal Revenue Code

  	
   

  
	
  SECTION 12.02

  	
  User’s Obligation Upon Determination of
  Taxability

  	
   

  
	
  SECTION 12.03

  	
  Federal Rebate Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
  PROVISIONS OF GENERAL APPLICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01

  	
  Covenant of Quiet Environment

  	
   

  
	
  SECTION 13.02

  	
  Investment of Funds

  	
   

  
	
  SECTION 13.03

  	
  Issuer’s Liabilities Limited

  	
   

  
	
  SECTION 13.04

  	
  Prior
  Agreements

  	
   

  
	
  SECTION 13.05

  	
  Execution Counterparts

  	
   

  
	
  SECTION 13.06

  	
  Binding Effect. Governing Law

  	
   

  
	
  SECTION 13.07

  	
  Enforceability

  	
   

  
	
  SECTION 13.08

  	
  Article and Section Captions

  	
   

  
	
  SECTION 13.09

  	
  Notices

  	
   

  
	
  SECTION 13.10

  	
  Amendment of Indenture and this Lease
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  TESTIMONIAL

  	
   

  
	
  SIGNATURES

  	
   

  
	
  ACKNOWLEDGMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
   

  

 

3

 

STATE OF ALABAMA

 

CALHOUN COUNTY

 

LEASE
AGREEMENT

 

LEASE
AGREEMENT dated as of March 1, 1999, between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PIEDMONT, a public corporation under the laws of the State
of Alabama (the “Issuer”), and BOSTROM SEATING, INC., a Delaware corporation
(the “User”).

 

Recitals

 

Pursuant to
and for the purposes expressed in Division 1 of Article 4 of Chapter 54 of
Title 11 of the Code of Alabama 1975 (the “Enabling Law”), the Issuer
and the User are parties to that certain Lease Agreement dated as of September 1,
1973, as defined herein (the “1973 Lease”), and the Issuer and the User
have executed and delivered this Lease Agreement simultaneously with the
issuance and sale by the Issuer of its $3,100,000 Variable\Fixed Rate
Industrial Development Revenue Bonds (Bostrom Seating, Inc. Project), dated the
date of delivery and payment therefor, under and pursuant to that certain Trust
Indenture dated as of March 1, 1999 from the Issuer to NBD Bank, as
trustee, to finance the acquisition, construction and installation of a “project”
within the meaning of the Enabling Law, as more particularly described in said
Trust Indenture.

 

Agreement

 

NOW,
THEREFORE, for and in consideration of the premises, and the mutual covenants
and agreements herein contained, the Issuer and the User hereby covenant, agree
and bind themselves as follows:

 

The 1973 Lease
is hereby amended by deleting the provisions of Articles I through XII,
inclusive, save and excepting Section 5.1 of the 1973 Lease, in the
entirety thereof and substituting therefor the following:

 

ARTICLE 1

 

Definitions

 

For all
purposes of this Lease Agreement:

 

(a)                                  Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in the Indenture.

 

(b)                                 The
following general rules of construction shall apply:

 

(1)                                  The terms defined in
this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.

 

 

(2)                                  All
accounting terms not otherwise defined herein have the meanings assigned to
them, and all computations herein provided for shall be made, in accordance
with generally accepted accounting principles. 
All references herein to “generally accepted accounting principles” refer
to such principles as they exist at the date of application thereof.

 

(3)                                  All
references in this instrument to designated “Articles”, “Sections” and other
subdivisions are to the designated Articles, Sections and subdivisions of this
instrument as originally executed.

 

(4)                                  The
terms “herein”, “hereof’ and “hereunder” and other words of similar import
refer to this Lease Agreement as a whole and not to any particular Article, Section or
other subdivision.

 

(c)                                  The
following terms shall have the following meanings:

 

Additional
Rental Payments shall mean the payments to be made
pursuant to Section 5.03.

 

Basic Rental
Payments shall mean the Payments payable pursuant to Section 5.02.

 

Bond Fund
shall mean the fund established pursuant to Section 8.01 of the Indenture.

 

Bond Guaranty
shall mean that certain Bond Guaranty Agreement dated March 1, 1999,
executed by User in favor of the Trustee.

 

Bond Payment
Date shall mean each date on which any principal of,
premium (if any) or interest on the Bonds is due and payable (whether on the
maturity or due dates thereof, by call for optional or mandatory or
extraordinary redemption, by acceleration, or by optional or mandatory tender).

 

City
shall mean the City of Piedmont, Alabama and any successor to its functions.

 

Construction
Fund shall mean the fund established pursuant to Section 7.02
of the Indenture.

 

Credit
Documents shall mean collectively all agreements,
documents, guaranties, instruments, notes, notices, and other writings executed
and delivered by the User or any other persons or persons which evidence,
guarantee or provide security for the obligations of the User with respect to
the Letter of Credit, including any amendments or supplements to any thereof
from time to time entered into pursuant to the applicable provisions thereof,
until a Substitute Letter of Credit shall have been accepted by the Trustee,
and thereafter “Credit Documents” shall mean collectively all agreements,
documents, guaranties, instruments, notes, notices, and other writings which evidence,
guarantee or provide security for the obligations of the User with respect to
such Substitute Letter of Credit.

 

2

 

Debt Service
shall mean the principal of, premium (if any) and interest on the Bonds.

 

Enabling Law
shall mean Division 1 of Article 4 of Chapter 54 of Title 11 of the Code
of Alabama 1975.

 

Environmental
Law shall mean and include all laws, rules,
regulations, ordinances, judgments, decrees, codes, orders, injunctions,
notices and demand letters of any Governmental Authority applicable to the User
or the Project Site (including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et
seq.) relating to pollution or protection of human health or the environment, including
any relating to Hazardous Substances.

 

Equipment
shall have the meaning assigned in Demising Clause III of Article 3.

 

Financing
Documents shall mean the Indenture, the Lease
Agreement, the Bond Guaranty, the Credit Documents, the Remarketing Agreement,
and the Letter of Credit.

 

Governmental
Authority shall mean any federal, state, county,
municipal, or other government, domestic or foreign, and any agency, authority,
department, commission, bureau, board, court or other instrumentality thereof.

 

Hazardous
Substances shall mean and include all pollutants,
contaminants, toxic or hazardous wastes and other substances (including
asbestos, urea formaldehyde, foam insulation and materials containing either
petroleum or any of the substances referenced in Section 101(14) of
CERCLA), the removal of which is required or the manufacture, use, maintenance
and handling of which is regulated, restricted, prohibited or penalized by an
Environmental Law, or, even though not so regulated, restricted, prohibited or
penalized, might pose a hazard to the health and safety of the public or the
occupants of the property on which it is located or the occupants of the
property adjacent thereto.

 

Improvements
shall have the meaning assigned in Demising Clause II of Article 3.

 

Indenture
shall mean that certain Trust Indenture dated as of March 1, 1999 between
the Issuer and the Trustee as originally executed or as it may from time to
time be supplemented, modified or amended by one or more indentures or other
instruments supplemental hereto entered into pursuant to the applicable
provisions thereof.

 

Indenture
Indebtedness shall mean all indebtedness of the Issuer
at the time secured by the Indenture, including without limitation (i) all
principal of, premium (if any) and interest on the Bonds and (ii) all
reasonable and proper fees, charges and disbursements of the Trustee and Paying
Agent for services performed and disbursements made under the Indenture.

 

Internal
Revenue Code shall mean whichever of the following
shall be applicable in the context:  the
Internal Revenue Code of 1954, as amended; the Internal Revenue Code of 1986,
as amended; and the transition rules of related legislation.

 

3

 

Issuer
shall mean The Industrial Development Board of the City of Piedmont, a public
corporation under the laws of the State of Alabama, until a successor
corporation shall have become such pursuant to the applicable provisions of the
Indenture and this Lease Agreement, and thereafter “Issuer” shall mean such
successor corporation.

 

Lease
Agreement shall mean this instrument including any
amendments or supplements to such instrument from time to time entered into
pursuant to the applicable provisions thereof.

 

Lease Default
shall have the meaning stated in Article 10 of this Lease Agreement.

 

Lease Term
means the duration of the leasehold estate granted in Section 5.01 of this
Lease Agreement.

 

Net Proceeds
when used with respect to any insurance or condemnation award, means the gross
proceeds from the insurance or condemnation award with respect to which that
term is used remaining after payment of all reasonable expenses (including
reasonable attorneys’ fees and any extraordinary fee of the Trustee) incurred
in the collection of such gross proceeds.

 

1973 Lease
shall mean that certain Lease Agreement dated as of September 1, 1973
between the Issuer and Universal Oil Products Company, recorded in Book 1362 at
page 123 et seq. in the Office of the Judge of Probate of Calhoun County,
Alabama, as assigned to and assumed by the User pursuant to Lease Assignment
and Assumption Agreement dated May 14, 1993 between the User and Universal Oil
Products Company, recorded in Book        at Page     
et seq. in said office.

 

Permitted
Encumbrances means, as of any particular time, (i) the
Financing Documents, (ii) liens for taxes, assessments or other governmental
charges or levies not due and payable or which are currently being contested in
good faith by appropriate proceedings, (iii) utility, access and other
easements and rights of way, party walls, restrictions and exceptions that may
be granted or are permitted under this Lease Agreement, (iv) any mechanic’s,
laborer’s, materialman’s, supplier’s or vendor’s lien or right or purchase
money security interest if payment is not yet due and payable under the
contract in question, (v) such minor defects, irregularities, encumbrances,
easements, rights of way and clouds on title as do not, in the opinion of an
independent Counsel, materially impair the Project for the purpose for which it
was acquired or is held by the Issuer, and (vi) such encumbrances, mortgages,
and other matters which appear of public record prior to the date of recording
of this Lease Agreement.

 

Project
shall mean the Project Site, the Improvements and the Equipment, as the same
may at any time exist, and all other property and rights referred to or
intended so to be in Demising Clauses I through III, inclusive, hereof.

 

Project Costs
shall mean all costs of acquiring, constructing, equipping and improving the Project,
including without limitation:

 

(1)                                  the purchase price
and related costs for the acquisition of real property or any interest therein,

 

4

 

(2)                                  the cost of labor,
materials and supplies furnished or used in the acquisition, construction and
installation of the Improvements and the costs of acquiring and installing the
Equipment,

 

(3)                                  acquisition,
transportation and installation costs for personal property and fixtures,

 

(4)                                  fees for
architectural, engineering and supervisory services to such architects,
engineers, developers and construction supervisors as the User shall approve,

 

(5)                                  expenses incurred in
the enforcement of any remedy against any contractor, subcontractor,
materialmen, vendor, supplier or surety,

 

(6)                                  interest accruing on
the Bonds until the Project is placed in service,

 

(7)                                  expenses incurred by
the Issuer and the User in connection with the financing of the Project including
legal, consulting and accounting fees,

 

(8)                                  reimbursement to the
User for any of the foregoing costs, fees and expenses set forth in (1) through
(7) above, paid by it with its own finds.

 

Project Site
shall mean the real property described in Demising Clause I of Article 3.

 

Rental
Payments shall mean collectively the Basic Rental
Payments and the Additional Rental Payments.

 

State
shall mean the State of Alabama.

 

Trustee
shall mean NBD Bank, until a successor Trustee shall have become such pursuant
to the applicable provisions of the Indenture, and thereafter “Trustee” shall
mean such successor.

 

Unimproved
when used with reference to the Project Site shall mean any part of the Project
Site upon which no part of a building or other structure rests.

 

User
shall mean Bostrom Seating, Inc., and its successors and assigns.

 

ARTICLE 2

 

Representations

 

SECTION 2.01              Representations
by the Issuer

 

The Issuer
makes the following representations

 

(a)                                  The
Issuer is duly incorporated under the provisions of the Enabling Law and has
the power to enter into the transactions contemplated by this Lease Agreement
and to carry out its obligations hereunder. 
The Issuer is not in default under any of the provisions contained

 

5

 

in its certificate of
incorporation, its by-laws, or in the laws of the State.  By proper corporate action the Issuer has
duly authorized the execution and delivery of this Lease Agreement, the
Indenture, and the Bonds.

 

(b)                                 The
Issuer has determined that the issuance of the Bonds, the acquisition,
construction and equipping of the Project and the leasing of the Project to the
User will be in furtherance of the purposes of the Enabling Law.

 

(c)                                  The
Bonds will be issued and delivered contemporaneously with the delivery of this
Lease Agreement.

 

SECTION 2.02              Representations
by the User

 

The User makes
the following representations:

 

(1)                                  The User is duly
organized and in good standing as a corporation under the laws of the State of
Delaware and is not in default under any of the provisions contained in its
articles of incorporation, as amended, or bylaws or in the laws of the State of
Delaware.  The User is duly qualified to
do business in the State.

 

(2)                                  The User has the
corporate power and authority to own its properties, carry on the business in
which it is presently engaged, and consummate the transactions contemplated by
the Financing Documents to which it is a party.

 

(3)                                  By proper corporate
action the User has duly authorized the execution, delivery and performance of
the Financing Documents to which it is a party and the consummation of the
transactions contemplated therein.

 

(4)                                  The User has obtained
all consents, approvals, authorizations and orders of, and made all filings
with, each Governmental Authority that are required to be obtained or made by
it as a condition to the execution and delivery of the Financing Documents to
which it is a party.

 

(5)                                  The execution and
delivery by the User of the Financing Documents to which it is a party and the
consummation by it of the transactions contemplated therein will not conflict
with, be in violation of, or result in a default under, its articles of
incorporation or bylaws, or any agreement, contract, instrument, order, writ,
decree or judgment to which the User is a party or is subject.

 

(6)                                  The Financing
Documents to which the User is a party constitute legal, valid and binding
obligations of the User and are enforceable against the User in accordance with
the terms of such instruments, except as enforcement thereof may be limited by
(i) the exercise of judicial discretion and (ii) bankruptcy, insolvency, or
other similar laws affecting the enforcement of creditors’ rights, to the
extent constitutionally applicable.

 

(7)                                  There is no action,
suit, proceeding, inquiry or investigation pending before any Governmental
Authority, or threatened against or affecting the User or its properties,

 

6

 

that (a) involves (i) the consummation of the
transactions contemplated by, or the validity or enforceability of, the
Financing Documents, (ii) its organization, (iii) the election or qualification
of its directors or officers, (iv) its powers, or (b) could have a materially
adverse effect upon the financial condition or operations of the User.

 

(8)                                  The User is not an “investment
company” or a company “controlled” by an “investment company”, as such terms
are defined in the Investment Company Act of 1940, as amended.

 

(9)                                  The financing of the
Project through the issuance of the Bonds and the leasing of the Project to the
User has induced the User to enlarge, expand and improve existing operations in
the State as provided in the Enabling Law.

 

(10)                            The User intends to operate
the Project for manufacturing, production, assembling, processing, storing and
distribution of such agricultural, manufactured or mineral products as the User
shall determine and in such a manner that it will constitute a “project” within
the meaning of the Enabling Law.

 

(11)                            This Lease Agreement is
necessary to promote and further the financial and economic interests of the
User and the assumption by the User of its obligations hereunder will result in
direct financial benefits to the User.

 

ARTICLE 3

 

Demising Clauses; 1973 Lease to Remain

in Effect; Construction of Lease Agreement

 

The Issuer,
for and in consideration of the rents, covenants and agreements hereinafter
reserved, mentioned and contained on the part of the User to be paid, kept and
performed, does hereby demise and lease to the User, and the User does hereby
lease, take and hire from the Issuer, the following property:

 

I.

 

The real
property described on Exhibit A hereto and all other real property, or
interests therein, acquired by the Issuer with proceeds of the Bonds or with
funds advanced or paid pursuant to this Lease Agreement (the “Project Site”),
together with all easements, permits, licenses, rights-of-way, contracts,
leases, tenements, hereditaments, appurtenances, rights, privileges and
immunities pertaining or applicable to said real property.

 

II.

 

All buildings,
structures and other improvements now or hereafter constructed or situated on
the Project Site, including without limitation all buildings, structures and
other improvements constructed on the Project Site with proceeds of the Bonds
or with funds advanced or paid by the User pursuant to this Lease Agreement
(the “Improvements”).

 

7

 

III

 

The machinery,
equipment, personal property and fixtures described on Exhibit B attached hereto
and all other machinery, equipment, personal property and fixtures acquired
with the proceeds of the Bonds or with funds advanced or paid by the User
pursuant to this Lease Agreement, together with all personal property and
fixtures acquired in substitution therefor or as a renewal or replacement
thereof (the “Equipment”).

 

SUBJECT,
HOWEVER, to Permitted Encumbrances;

 

PROVIDED:  this Lease Agreement is executed and delivered
in continuation of the leasehold estate created by the Issuer in the Project
pursuant to the 1973 Lease, in accordance with Section 5.1 thereof and as
amendatory to the provisions of the 1973 Lease, and the 1973 Lease shall remain
in effect, as amended by this Lease Agreement, solely with respect to the
leasehold estate created in the property covered hereby.

 

ARTICLE 4

 

Acquisition of the Project

 

SECTION 4.01              Agreement
to Acquire

 

(a)                                  Simultaneously
with the delivery of this Lease Agreement the Issuer shall cause the Bond
proceeds to be deposited in the Construction Fund.  The Issuer shall cause the proceeds of the
Bonds to be advanced to the User by withdrawal from the Construction Fund, in
accordance with the requirements of the Indenture, for the payment of Project
Costs at such times and in such amounts as shall be directed by the User.  The proceeds of the Bonds shall be used
solely for the payment of Project Costs as provided in the Indenture.

 

(b)                                 The
User will acquire and construct the Project with all reasonable dispatch and
due diligence and will cause the Project to be placed in service as promptly as
practicable.  The Issuer will not execute
any contract or purchase orders for the Project without the prior written
consent of the User.

 

(c)                                  Compliance
with laws and regulations necessary to realize any sales and use tax exemption
with respect to the acquisition, construction and equipping of the Project
shall be the sole responsibility of the User and the Issuer does not assume any
responsibility or give any assurance with respect to any possible exemption
from sales and use taxes.

 

(d)                                 The
User may, with the prior written consent of the Credit Obligor, cause changes
or amendments to be made in the plans and specifications for such acquisition
and construction of the Project, provided (1) such changes or amendments will
not change the nature of the Project to the extent that it would not constitute
a “project” as authorized by the Enabling Law, and (2) such changes or
amendments will not materially affect the utility of the Project for its
intended use.  The Issuer will make only
such changes or amendments in the plans and specifications for the acquisition
and construction of the Project as may be requested in writing by the User.

 

8

 

(e)                                  The
Issuer and the User shall from time to time each appoint by written instrument
an agent or agents authorized to act for each respectively in any or all
matters relating to the acquisition and construction of the Project and
payments to be made out of the Construction Fund.  One of the agents appointed by the User shall
be designated its Project Supervisor. 
Either the Issuer or the User may from time to time revoke, amend or
otherwise limit the authorization of any agent appointed by such party to act
on such party’s behalf or designate another agent or agents to act on such
party’s behalf, provided that there shall be at all times at least one agent authorized
to act on behalf of the Issuer, and at least one agent (who shall be the
Project Supervisor) authorized to act on behalf of the User, with reference to
all the foregoing matters.  The Project
Supervisor at any time designated by the User is hereby irrevocably appointed
as agent for the Issuer to issue and execute, for and in the name and behalf of
the Issuer and without any further approval of the governing body or any
officer, employee or other agent thereof, a payment requisition on the
Construction Fund.

 

(f)                                    In
the event the proceeds derived from the sale of the Bonds are insufficient to
pay in full all Project Costs, the User shall be obligated to complete the
acquisition and construction of the Project at its own expense and the User
shall pay any such deficiency and shall save the Issuer whole and harmless from
any obligation to pay such deficiency. 
The User shall not by reason of the payment of such deficiency from its
own funds be entitled to any diminution in Rental Payments.

 

SECTION 4.02              No
Warranty of Suitability of Issuer

 

THE USER
RECOGNIZES AND AGREES THAT THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR
IMPLIED, NOR OFFERS ANY ASSURANCES THAT THE PROJECT WILL BE SUITABLE FOR THE
USER’S PURPOSES OR NEEDS OR THAT THE PROCEEDS DERIVED FROM THE SALE OF THE
BONDS WILL BE SUFFICIENT TO PAY IN FULL ALL PROJECT COSTS.

 

SECTION 4.03              Pursuit
of Remedies Against Vendors, Contractors and Subcontractors and Their Sureties

 

The User may,
in its own name or in the name of the Issuer, prosecute or defend any action or
proceeding or take any other action involving any vendor, contractor,
subcontractor or surety under any contract or purchase order for acquisition
and construction of the Project which the User deems reasonably necessary, and
the Issuer hereby irrevocably appoints the User as its agent with respect to
any such action or proceeding and agrees that it will cooperate fully with the
User and will take all action requested by the User in any such action or
proceeding.  Any amounts recovered by way
of damages, refunds, adjustments or otherwise in connection with the foregoing
shall be paid into the Construction Fund and applied as provided for funds on
deposit therein.  The User will pay all
costs, fees and expenses incurred which are not paid from the Construction
Fund.

 

SECTION 4.04              Completion
of the Project

 

(a)                                  The
completion of the Project shall be evidenced to the Trustee by a certificate
signed by the Project Supervisor on behalf of the User stating that (1)
construction of the

 

9

 

Improvements has been completed
in accordance with the plans and specifications approved by the User, (2) the
Equipment has been acquired and installed in accordance with the User’s
instructions, (3) all Project Costs have been paid, and (4) all facilities and
improvements necessary in connection with the Project have been acquired and
installed and all costs and expenses incurred in connection therewith have been
paid.  Notwithstanding the foregoing,
such certificate shall state that it is given without prejudice to any rights
against any vendor, contractor, subcontractor or other person not a party to
this Lease Agreement which exist at the date of such certificate or which may
subsequently come into being.  The Issuer
and the User will cooperate in causing such certificate to be furnished to the
Trustee.

 

(b)                                 After
the delivery of the aforesaid certificate to the Trustee, any moneys then
remaining in the Construction Fund shall be applied as provided in the
Indenture.

 

ARTICLE 5

 

Duration
of Lease Term and Rental Provisions

 

SECTION 5.01              Duration
of Term

 

The term of
this Lease Agreement and of the lease herein made shall begin on the date of
the delivery of this Lease Agreement and, subject to the provisions of this
Lease Agreement, shall continue until midnight of March 1, 2014.  The Issuer will deliver to the User
possession of the Project on the commencement date of the Lease Term, subject
to the inspection and other rights reserved in this Lease Agreement, and the
User will accept possession thereof at such time; provided, however, the Issuer
will be permitted such possession of the Project as shall be necessary and
convenient for it to construct or install any additions or improvements and to
make any repairs or restorations required or permitted to be constructed,
installed or made by the Issuer pursuant to the provisions hereof.

 

SECTION 5.02              Basic
Rental Payments; Draws Under Letter of Credit

 

(a)                                  On
or before 10:00 a.m. (Birmingham, Alabama time) on each Bond Payment Date, the
User shall pay to the Trustee, for the account of the Issuer, an amount equal
to the Debt Service on the Bonds (other than Pledged Bonds) due and payable on
such Bond Payment Date; provided, however, that (i) any amount already on
deposit in the Bond Fund on the due date of such Basic Rental Payment and
available for the payment of the Debt Service on the Bonds on such Bond Payment
Date shall be credited against the amount of such Basic Rental Payment, and
(ii) any amount drawn by the Trustee pursuant to the Letter of Credit for the
payment of the Debt Service on the Bonds on such Bond Payment Date shall be
credited against such Basic Rental Payment.

 

(b)                                 On
each Bond Payment Date prior to 10:30 a.m. (Birmingham, Alabama time) the
Trustee shall, without making any prior claim or demand on the User for the
payment of Basic Rental Payments with respect to Bonds other than Pledged Bonds,
make a draw on the Letter of Credit in an amount equal to the amount of Debt
Service on the Bonds due and payable on such Bond Payment Date on Bonds other
than Pledged Bonds (except as may otherwise be provided in Section 8.02(f)
of the Indenture).  The User shall
receive a credit against Basic

 

10

 

Rental Payments for the amount
so drawn.  No draw shall be made under
the Letter of Credit with respect to Pledged Bonds, and the User shall receive
no credit against Basic Rental Payments with respect to Pledged Bonds for any
amounts drawn under the Letter of Credit.

 

(c)                                  The
User hereby authorizes and directs the Trustee to draw moneys under the Letter
of Credit in accordance with the provisions of the Indenture and this Lease
Agreement to the extent necessary to pay the Debt Service on the Bonds (other
than Pledged Bonds) when due and payable pursuant to the Indenture and the
Bonds.

 

(d)                                 All
Basic Rental Payments shall be made in funds immediately available to the
Trustee at its Principal Office on the related Bond Payment Date.

 

(e)                                  If
any Basic Rental Payment is due on a day which is not a Business Day, such
payment may be made on the first succeeding day which is a Business Day with
the same effect as if made on the day such payment was due.

 

(f)                                    The
User acknowledges, covenants, and agrees that until the Indenture Indebtedness
is paid in full the User shall make Basic Rent Payments in such amounts and at
such times as shall be necessary to enable the Trustee to pay in full in
accordance with the Indenture the Debt Service on the Bonds (other than Pledged
Bonds) when and as the same becomes due and payable.

 

(g)                                 Any
overdue Basic Rental Payment shall bear interest from the related Bond Payment
Date until paid at the Post-Default Rate for overdue Debt Service payments specified
in the Indenture.

 

SECTION 5.03              Additional
Rental Payments

 

(a)                                  The
User shall make Additional Rental Payments as follows:

 

(1)                                  the
acceptance fee of the Trustee and the annual (or other regular) fees, charges
and expenses of the Trustee, Paying Agent and Remarketing Agent;

 

(2)                                  any
amount to which the Trustee may be entitled under Section 13.07 of the
Indenture; and

 

(3)                                  the
reasonable expenses of the Issuer incurred at the request of the User, or in
the performance of its duties under any of the Financing Documents, or in
connection with any litigation which may at any time be instituted involving
the Project, the Financing Documents, or in the pursuit of any remedies under
the Financing Documents.

 

(b)                                 All
Additional Rental Payments shall be due and payable within 10 days after
receipt by the User of an invoice therefor.

 

(c)                                  Any
overdue Additional Rental Payment shall bear interest from the date due until
paid at the Post-Default Rate for such Additional Rental Payments specified in
the Indenture.

 

11

 

SECTION 5.04              Advances
by Issuer or Trustee

 

If the User
shall fail to perform any of its covenants in this Lease Agreement, the Issuer
or the Trustee may, at any time and from time to time, after written notice to
the User if no Lease Default exists, make advances to effect performance of any
such covenant on behalf of the User.  Any
money so advanced by the Issuer or the Trustee, together with interest at the
base or prime rate of the Trustee plus two percent, shall be paid upon demand.

 

SECTION 5.05              Indemnity
of Issuer, Trustee and Paving Agent

 

(a)                                  The
User covenants and agrees to pay and to indemnify and hold the Issuer, the
Trustee and the Paying Agent (and each officer, director, member, employee or
agent of each thereof) harmless against, any and all liabilities, losses,
damages, claims or actions (including all reasonable attorneys’ fees and
expenses of the Issuer, Trustee and the Paying Agent), of any nature whatsoever
incurred by the Issuer, the Trustee and the Paying Agent without gross
negligence or willful misconduct on their part arising from or in connection
with (i) their performance or observance of any covenant or condition on their
part to be observed or performed under any of the Financing Documents, (ii) any
injury to, or the death of, any person or any damage to property at the
Project, or in any manner growing out of or connected with the use, nonuse,
condition or occupation of the Project or any part thereof, (iii) any damage,
injury, loss or destruction of the Project, (iv) any other act or event
occurring upon, or affecting, any part of the Project, (v) violation by the
User of any contract, agreement or restriction affecting the Project or the use
thereof of which the User has notice and which shall have existed at the commencement
of the Lease Term hereof or shall have been approved by the User, or of any
law, ordinance or regulation affecting the Project or any part thereof or the
ownership, occupancy or use thereof, (vi) any violation of, or non-compliance
of the Project Site with, Environmental Laws, or the presence of Hazardous
Substances now or hereafter on or under or included in the Project Site and any
investigation, clean up or removal of, or other remedial action or response
costs with respect to, any Hazardous Substances now or hereafter located on or
under or included in the Project Site, or any part thereof, that may be
required by any Environmental Law or Governmental Authority (specifically
including without limitation any and all liabilities, damages, fines,
penalties, response costs, investigatory or other costs pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601 et seq.) and including without limitation
claims alleging non-compliance with Environmental Laws which seek relief under
or are based on state or common law theories such as trespass or nuisance, and
(vii) liabilities, losses, damages, claims or actions arising out of the offer
and sale of the Bonds or a subsequent sale or distribution of any of the Bonds,
unless the same resulted from a representation or warranty of the Issuer or the
Trustee or the Paying Agent in any of the Financing Documents or any
certificate delivered by the Issuer or the Trustee or the Paving Agent pursuant
thereto being false or misleading in a material respect and such representation
or warranty was not based upon a similar representation or warranty of the User
furnished to the Issuer or the Trustee or the Paying Agent in connection
therewith.

 

(b)                                 The
User hereby agrees that the Issuer, the Trustee and the Paying Agent shall not
incur any liability to the User, and shall be indemnified against all liabilities,
in exercising or refraining from asserting, maintaining or exercising any
right, privilege or power of the Issuer, or the Trustee, or the Paying Agent
under any of the Financing Documents if the Issuer,

 

12

 

or the Trustee, or the Paying
Agent as the case may be is acting in good faith and without willful misconduct
or in reliance upon a written request by the User.

 

(c)                                  If
any indemnifiable party (whether the Issuer or the Trustee) shall be obligated
to pay any claim, liability or loss, and if in accordance with all applicable
provisions of this Section the User shall be obligated to indemnify and
hold such indemnifiable party harmless against such claim, liability or loss,
then, in such case, the User shall have a primary obligation to pay such claim,
liability or loss on behalf of such indemnifiable party and may not defer
discharge of its indemnity obligation hereunder until such indemnifiable party
shall have first paid such claim, liability or loss and thereby incurred actual
loss.

 

(d)                                 The
covenants of indemnity by the User contained in this Section shall survive
the termination of this Lease Agreement with respect to events or occurrences
happening prior to or upon the termination of this Lease Agreement and shall
remain in full force and effect until the commencement of an action with
respect to any such event or occurrence shall be prohibited by law.

 

SECTION 5.06              Obligations
of User Unconditional

 

The obligation
of the User to make all Rental Payments and all other payments provided for
herein and to perform and observe the other agreements and covenants on its
part herein contained shall be absolute and unconditional, irrespective of any
rights of set-off, recoupment or counterclaim it might otherwise have against
the Issuer.  The User will not suspend or
discontinue any such payment or fail to perform and observe any of its other
agreements and covenants contained herein or terminate any of the Financing
Documents, for any cause whatsoever, including, without limiting the generality
of the foregoing, any acts or circumstances that may constitute an eviction or
constructive eviction, failure of consideration or commercial frustration of
purpose, the invalidity or unenforceability of the Bonds or any of the
Financing Documents or any provision thereof, the invalidity or
unconstitutionality of the Enabling Law or any provision thereof, any damage to
or destruction of the Project or any part thereof, the taking by eminent domain
of title to or the right to temporary use of all or any part of the Project,
any failure of the Credit Obligor to make a payment pursuant to the Letter of
Credit or to reinstate the appropriate amount thereof, any change in the tax or
other laws or administrative rulings, actions or regulations of the United
States of America or of the State or any political or taxing subdivision of
either thereof, or any failure of the Issuer to perform and observe any
agreement or covenant, whether express or implied, any duty, liability or
obligation arising out of or in connection with this Lease Agreement.  Notwithstanding the foregoing, the User may,
at its own cost and expense and in its own name or in the name of the Issuer,
prosecute or defend any action or proceeding, or take any other action
involving third persons which the User deems reasonably necessary in order to
secure or protect its rights of use and occupancy and the other rights
hereunder.  The provisions of the first
and second sentences of this Section shall apply only so long as any of
the Bonds remains Outstanding.

 

SECTION 5.07              This
Lease a Net Lease

 

The User
recognizes, understands and acknowledges that it is the intention hereof that
this Lease Agreement be a net lease and that as long as any of the Bonds are
Outstanding all

 

13

 

Basic Rent be
available for payment of the Debt Service on the Bonds and that all Additional
Rent shall be available for the purposes specified therefor.  This Lease Agreement shall be construed to
effectuate such intent.

 

ARTICLE 6

 

Maintenance,
Alterations, Replacements,
Insurance

 

SECTION 6.01              Maintenance
and Repairs, Alterations and Improvements, Party Walls and Liens; Utility
Charges

 

(a)                                  The
User shall, at its own expense, (1) keep the Project in as reasonably safe
condition as its operations permit, (2) from time to time make all necessary
and proper repairs, renewals and replacements thereto, including external and
structural repairs, renewals and replacements and (3) pay all gas, electric,
water, sewer and other charges for the operation, maintenance, use and upkeep
of the Project.

 

(b)                                 The
User may, at its own expense, make structural changes, additions, improvements,
alterations or replacements to the Improvements that it may deem desirable, provided
such structural changes, additions, improvements, alterations or replacements
do not change the character of the Project as a “project” under the Enabling
Law, and that such additions, improvements, alterations or replacements will
not adversely affect the utility of the Project or substantially reduce its
value.  All such changes, additions,
improvements, alterations and replacements whether made by the User or the
Issuer shall become a part of the Project and shall be covered by this Lease Agreement.

 

(c)                                  The
User may connect or “tie-in” walls of the Improvements and utility and other
facilities located on the Project Site to other structures and facilities owned
or leased by it on real property adjacent to the Project Site.  The User may use as a party wall any wall of
the Improvements which is on or contiguous to the boundary line of real
property owned or leased by it, and in the event of such use, each party hereto
hereby grants to the other a ten-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
User utilizes any wall of the Improvements as a party wall for the purpose of
tying in new construction that will be utilized under common control with the
Project, the User may also remove any non-loadbearing wall panel in the party
wall; provided however, if the adjacent property ceases to be operated under common
control with the Project, the User shall, at its own expense, install wall
panels similar in quality to those that have been removed.  Prior to the exercise of any one or more of
the rights granted by this subsection (c), the User shall demonstrate to
the reasonable satisfaction of the Issuer and Trustee that the operation of the
Project will not be adversely affected by the exercise of such rights.

 

(d)                                 The
Issuer shall also, upon request of the User, grant such utility and other
similar easements over, across or under the Project Site as shall be necessary
or convenient for the furnishing of utility and other similar services to the
Project or to real property adjacent to or near the Project Site and owned or
leased by the User; provided that such easements shall not adversely affect the
operation of the facilities forming a part of the Project.

 

14

 

(e)                                  The
User shall not permit any mechanics’ or other liens to stand against the
Project for labor or material furnished with respect to the Project.  The User may, however, in good faith contest
any such mechanics’ or other liens and in such event may permit any such liens
to remain unsatisfied and undischarged during the period of such contest and
any appeal therefrom unless by such action the lien of the Indenture on the
Project or any part thereof, or the Project or any part thereof shall be
subject to loss or forfeiture, in either of which events such mechanics’ or
other liens shall be promptly satisfied.

 

SECTION 6.02              Removal
of Substitution and Replacement for Equipment

 

If the User in
its sole discretion determines that any item of Equipment has become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary in the
operation of the Project, the User may remove such Equipment from the
Improvements or the Project Site and (on behalf of the Issuer) sell, trade in,
exchange or otherwise dispose of it without any responsibility or
accountability to the Issuer or the Trustee therefor, provided that the User
shall either:

 

(a)                                  substitute
and install in or on the Project Site other personal property or fixtures which
shall (1) have equal or greater utility (but not necessarily the same value or
function) in the operation of the Project, (2) be free of all liens and
encumbrances except for purchase money liens or encumbrances reasonably
acceptable to the Trustee, (3) be the sole property of the Issuer, subject to
the demise hereof, (4) be held by the User on the same terms and conditions as
the items originally comprising the Equipment, and (5) not impair the Project
or change the nature of the Project as a “project” under the Enabling Law; or

 

(b)                                 forthwith
upon such sale apply the price or amount obtained upon the sale of such
Equipment to the redemption of the principal of the Bonds in accordance with
the terms thereof.

 

SECTION 6.03              Installation
of Machinery and Equipment Owned or Leased by the User or Subject to a Security
Interest in Third Parties

 

(a)                                  The
User, may, at its own expense, or permit any sublessee of the Project to, at
its own expense, install at the Project any machinery, equipment or other
personal property which will facilitate the operation of the Project.  Any such property which is installed and does
not constitute a part of the Project under the terms of this Lease Agreement
shall be and remain the property of the User or such sublessee and may be
removed thereby at any time while no Lease Default exists under this Lease
Agreement; provided, that any damage to the Project occasioned by such removal
shall be repaired by such party at its own expense.

 

(b)                                 If
(i) any machinery, equipment or other personal property is leased by the User
or the User shall have granted a security interest in any such property in
connection with the acquisition thereof by the User, (ii) such property is
installed or is located on the Project Site, and (iii) such property does not
constitute a part of the Project under the terms of this Lease Agreement, then
the lessor of such property or the party holding a security interest therein,
as the case may be, may remove such property from the Project Site even though
a Lease Default may then exist hereunder or this Lease Agreement may have been
terminated following a Lease Default hereunder, provided, that the foregoing
permission to remove shall be subject to the agreement 

 

15

 

by such lessor or secured party
to repair at its own expense any damage to the Project occasioned by such
removal.

 

SECTION 6.04              Insurance

 

(a)                                  The
User will cause to be taken out and continuously maintained in effect the
following insurance with respect to the Project, paying as the same become due
all premiums with respect thereto:

 

(1)                                  Insurance
to the extent of the full insurable value of the Project against loss or damage
by fire, tornado, windstorm, flood and other hazards and casualties, with
uniform standard extended coverage endorsement limited only as may be provided
in the standard form of extended coverage endorsement at the time in use in the
State.

 

(2)                                  Insurance
against liability for bodily injury to or death of persons and for damage to or
loss of property occurring on or about the Project or in any way related to the
condition or operation of the Project, in the minimum amounts of $1,000,000
combined single limit for death of or bodily injury to any one person, and for
property damage, all on a per occurrence basis.

 

(3)                                  Flood
insurance under the national flood insurance program established by the Flood
Disaster Protection Act of 1973, as at any time amended, only during such times
while the Project is eligible under such program, in an amount at least equal
to the principal amount of the Bonds Outstanding or to the maximum limit of
coverage made available with respect to the Project under said Act, whichever
is less.

 

(4)                                  Title
insurance in an amount equal to the initial stated amount of the Letter of
Credit, insuring the Credit Documents subject to no liens and encumbrances
other than such encumbrances as shall be approved by the Trustee and the Credit
Obligor.  Any proceeds of such title
insurance shall be applied, at the direction of the Credit Obligor, to cure the
title defect in respect of which such proceeds are made available or shall be
deposited in the Bond Fund with the Trustee and applied to the extraordinary
redemption of the Bonds in accordance with the terms of the Indenture and the
Bonds.

 

(5)                                  Use
and occupancy insurance (or business interruption or risk insurance) covering
suspension or interruption of the User’s operations at the Project in whole or
in part, with such exemptions as are customarily imposed by insurers, covering
a period of suspension or interruption of at least six months with a minimum
limit in an amount equal to 100 % of the maximum amount to be paid as Rental
Payments and other payments under Article 5 hereof during the then current
or any subsequent year.

 

(6)                                  During
the period of acquisition and construction of any part of the Project builders’
risk insurance in the amount of the full replacement value of the Project
against all losses which are normally covered by such builders’ risk
insurance.  The User may satisfy its
obligations with respect to the builder’s risk insurance by causing such
insurance to be carried by a construction contractor for any part of the
Project.

 

16

 

(b)                                 All
policies evidencing the insurance required by the terms of the preceding
paragraph shall be taken out and maintained in generally recognized responsible
insurance companies, qualified under the laws of the State to assume the
respective risks undertaken.  All such
insurance policies shall name as either loss payee or additional insureds the
Credit Obligor, the Issuer and the Trustee (as their respective interests shall
appear) and shall contain, where appropriate, standard mortgage clauses providing
for all losses thereunder in excess of $250,000 to be paid to the Credit
Obligor or, if there be no Credit Obligor, to the Trustee; provided that all
losses (including those in excess of $250,000) may be adjusted by the User,
subject, in the case of any single loss in excess of $250,000, to the approval
of the Credit Obligor, or if there be no Credit Obligor, the Trustee.  The User may insure under a blanket policy or
policies.

 

(c)                                  Each
insurance policy required to be carried by this Section shall contain, to
the extent obtainable, an agreement by the insurer that (1) the User may not,
without the consent of the Credit Obligor, the Issuer and Trustee, cancel or
materially amend such insurance or sell, assign or dispose of any interest in
such insurance, policy or any proceeds thereof, (2) such insurer shall notify
the Credit Obligor, the Issuer and the Trustee if any premium is not paid when
due or if any such policy is not renewed prior to the expiration thereof, and
(3) such insurer shall not materially amend or cancel any such policy except on
30 days’ prior written notice to the Credit Obligor, the Issuer and the
Trustee.

 

(d)                                 The
User shall deposit with the Trustee a certificate or certificates of the
respective insurers attesting the fact that all policies evidencing the
insurance required to be carried by this Section are in force and
effect.  Upon the expiration of any such
policy, the User shall furnish to the Trustee evidence reasonably satisfactory
to the Trustee that such policy has been renewed or replaced by another policy
or that there is no necessity therefor under this Lease Agreement.

 

ARTICLE 7

 

Provisions Respecting Damage, Destruction and Condemnation

 

SECTION 7.01              Damage
and Destruction

 

(a)                                  If
no Lease Default shall have occurred and be continuing and the Letter of Credit
is in effect and the Credit Obligor has not dishonored any draws thereunder and
a Credit Obligor Insolvency Date shall not have occurred, then all Net Proceeds
of insurance resulting from claims for losses in respect of damage to or
destruction of the Project (in whole or in part) shall be applied as provided
in the Credit Documents.

 

(b)                                 If
no Lease Default shall have occurred and be continuing and the Letter of Credit
is not in effect, or if the Credit Obligor has dishonored any draw thereunder
or if a Credit Obligor Insolvency Date shall have occurred, then the following
provisions shall apply in event of damage to or destruction of the Project (in
whole or in part):

 

(1)                                  If
the Project is destroyed (in whole or in part) or is damaged the User shall
continue to make Rental Payments and will promptly give written notice of such
damage and destruction to the Trustee and the Issuer.  All Net Proceeds of insurance resulting

 

17

 

from claims for such losses shall be paid to the Trustee and deposited
in the Construction Fund, whereupon (i) the User, or the Issuer at the User’s
direction, shall proceed promptly to repair, rebuild or restore the property
damaged or destroyed to substantially the same condition in which it 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 User and as will not impair the operating
unity or productive capacity of the Project or its character as a “project”
under the Enabling Law, and (2) the User shall cause withdrawals to be made
from the Construction Fund to pay the costs of such repair, rebuilding or restoration,
either on completion thereof or as the work progresses.  The balance (if any) of Net Proceeds
remaining after the payment of all of the costs of such repair, rebuilding or
restoration shall be deposited in the Bond Fund and applied to the extraordinary
redemption of Bonds in accordance with the provisions thereof and of the
Indenture, or, if none of the Bonds are then Outstanding, shall be paid to the
User.

 

(2)                                  In
the event the Net Proceeds are not sufficient to pay in full the costs of
repairing, rebuilding and restoring the Project as provided in this Section,
the User shall nonetheless complete the work thereof and shall pay that portion
of the costs thereof in excess of the amount of said proceeds or shall pay to
the Trustee for the account of the Issuer the moneys necessary to complete said
work.  The User shall not by reason of
the payment of such excess costs (whether by direct payment thereof or payment
to the Trustee therefor) be entitled to any reimbursement from the Issuer or
any abatement or diminution of the Rental Payments hereunder.

 

(3)                                  Anything
in this Section to the contrary notwithstanding, if, as a result of such
damage or destruction the User is entitled to exercise an option to purchase
the Project and duly does so in accordance with the applicable provisions of Section 11.03
hereof, then neither the User nor the Issuer shall be required to repair,
rebuild or restore the property damaged or destroyed, and so much (which may be
all) of any Net Proceeds referable to such damage or destruction as shall be
necessary to provide for full payment of the Indenture Indebtedness shall be
paid to the Trustee for deposit in the Bond Fund and applied to the
extraordinary redemption of the Bonds in accordance with the Indenture and the
Bonds and the excess thereafter remaining (if any) shall be paid to the User.

 

(c)                                  If
a Lease Default shall have occurred and be continuing, and the Letter of Credit
is not in effect or the Credit Obligor has dishonored any draw thereunder or a
Credit Obligor Insolvency Date shall have occurred, then all Net Proceeds of
insurance resulting from claims for losses in respect to damage to or
destruction of the Project (in whole or in part) shall be deposited in the Bond
Fund and applied to the extraordinary redemption of the Bonds in accordance
with the terms of the Indenture and the Bonds.

 

SECTION 7.02              Condemnation

 

(a)                                  If
no Lease Default shall have occurred and be continuing and the Letter of Credit
is in effect and the Credit Obligor has not dishonored any draws thereunder and
a Credit Obligor Insolvency Date shall have occurred, then all Net Proceeds
resulting from any

 

18

 

taking by eminent domain of the
Project (in whole or in part) shall be applied as provided in the Credit
Documents.

 

(b)                                 If
no Lease Default shall have occurred and be continuing and the Letter of Credit
is not in effect, or if the Credit Obligor has dishonored any draw thereunder
or if a Credit Obligor Insolvency Date shall have occurred, then the following
provisions shall apply in event of any taking by eminent domain of the Project
(in whole or in part):

 

(1)                                  In
the event that 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 and as
a result thereof the User is entitled to exercise an option to purchase the
Project and duly does so in accordance with the applicable provisions of Section 11.03
hereof, so much (which may be all) of the Net Proceeds referable to such
taking, including the amounts awarded to the Issuer and the Trustee and the
amount awarded to the User for the taking of all or any part of the leasehold
estate of the User in the Project created by this Lease Agreement, as shall be
necessary to provide for full payment of the Indenture Indebtedness shall be
paid to the Trustee for deposit in the Bond Fund and applied to the
extraordinary redemption of the Bonds in accordance with the Indenture and the
Bonds and the excess of such Net Proceeds remaining (if any) shall be paid to
the User.

 

(2)                                  If
as a result of such taking, the User is not entitled to exercise an option to
purchase the Project under Section 11.03 hereof, or, having such option,
fails to exercise the same in accordance with the terms thereof or notifies the
Issuer and the Trustee in writing that it does not propose to exercise such
option, the User shall be obligated to continue to make the Rental Payments and
the entire Net Proceeds hereinabove referred to shall, be paid to the Trustee and
applied in one or more of the following ways as shall be directed in writing by
the User:

 

(i) To the restoration of the remaining
improvements located on the Project Site to substantially the same condition in
which they existed prior to the exercise of the power of eminent domain;

 

(ii) To the acquisition, by construction or
otherwise, by the Issuer of other lands or improvements suitable for the User’s
operations at the Project, which land or improvements shall be deemed a part of
the Project and available for use and occupancy by the User without the payment
of any Rental Payments other than that herein provided to the same extent as if
such land or other improvements were specifically described herein and demised
hereby, and which land or improvements shall be acquired by the Issuer subject
to no liens or encumbrances.

 

(3)                                  Any
balance of such Net Proceeds remaining after the application thereof as
provided in subsection (b) of this Section shall be deposited in the
Bond Fund and applied to the extraordinary redemption of the Bonds in
accordance with the terms of the Indenture and the Bonds, or, if the Indenture
Indebtedness is paid in full, shall be paid to the User.

 

19

 

(4)                                  The
Issuer shall cooperate fully with the User in the handling and conduct of 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
User to litigate in any such proceeding in the name and behalf of the
Issuer.  In no event shall the Issuer
settle, or consent to the settlement of, any prospective or pending
condemnation proceeding without the prior written consent of the User.

 

(5)                                  The
User shall be entitled to the Net Proceeds of any award or portion thereof made
for damage to or taking of its own property not included in the Project,
provided that any Net Proceeds resulting from the taking of all or any part of
the leasehold estate of the User in the Project created by this Lease Agreement
shall be paid and applied in the manner provided in this Section 7.02.

 

(c)                                  If
a Lease Default shall have occurred and be continuing, and the Letter of
Credit is not in effect or the Credit Obligor has dishonored any draw
thereunder or a Credit Obligor Insolvency Date shall have occurred, then all
Net Proceeds of condemnation awards resulting from condemnation of the Project
(in whole or in part) shall be deposited in the Bond Fund and applied to the
extraordinary redemption of the Bonds in accordance with the terms of the Bonds
and the Indenture.

 

ARTICLE 8

 

Certain Provisions Relating to Assignment,

Subleasing, Mortgaging and the Bonds

 

SECTION 8.01              Provisions
Relating to Assignment and Subleasing

 

With the
consent of the Trustee and the Credit Obligor, the User may assign this Lease
Agreement and the leasehold interest created hereby and may sublet the Project
or any part thereof, subject, however, to the following conditions:

 

(1)                                  No such assignment or
subleasing and no dealings or transactions between the Issuer or the Trustee
and any assignee or sublessee shall in any way relieve the User from primary
liability for any of its obligations hereunder. 
In the event of any such assignment or subleasing the User shall
continue to remain primarily liable for the payment of all Rental Payments
herein provided to be paid by it and for the performance and observance of the
other agreements and covenants on its part herein provided to be performed and
observed by it.

 

(2)                                  The User will not
assign the leasehold interest created hereby nor sublease the Project to any
person unless the operations of such assignee or sublessee are consistent with,
and in furtherance of, the purpose of the Enabling Law.  The User shall, prior to any such assignment
or sublease, demonstrate to the reasonable satisfaction of the Trustee that the
operations of such assignee or sublessee will preserve the character of the
Project as a “project” under the Enabling Law, if applicable, and deliver to
the Trustee an Opinion of Bond Counsel acceptable to the Trustee to the effect
that such assignment or sublease will not cause the interest on the Bonds to be
Taxable.

 

20

 

(3)                                  The User shall,
within 30 days after the delivery thereof, furnish to the Issuer and the
Trustee a true and complete copy of each such assignment or sublease.

 

SECTION 8.02              Assignment
of Lease Agreement and Rents by the Issuer

 

The Issuer
has, simultaneously with the delivery of this Lease Agreement, assigned its
interest in and pledged any money receivable under this Lease Agreement (other
than certain rights to indemnification and reimbursement) to the Trustee as security
for payment of the Bonds, and the User hereby consents to such assignment and
pledge.  The Issuer has in the Indenture
obligated itself to follow the instructions of the Trustee or the Owners or a
certain percentage thereof in the election or pursuit of any remedies herein
vested in it.  The Trustee shall have all
rights and remedies herein accorded to the Issuer and any reference herein to
the Issuer shall be deemed, with the necessary changes in detail, to include
the Trustee, and the Trustee and the Owners are deemed to be third party
beneficiaries of the covenants, agreements and representations of the User
herein contained.  Neither the Issuer nor
the User will unreasonably withhold any consent herein or in the Indenture
required of either of them.  The User
shall not be deemed to be a party to the Indenture or the Bonds and reference
in this Lease Agreement to the Indenture and the Bonds shall not impose any
liability or obligation upon the User other than its specific obligations and
liabilities undertaken in this Lease Agreement.

 

SECTION 8.03              Transfer
or Encumbrance Created by Issuer: Corporate Existence of Issuer

 

(a)                                  Without
the prior written consent of the Trustee, the Credit Obligor, and the User, the
Issuer (1) will not sell, transfer or convey the Project or any part thereof,
except as provided in this Lease Agreement, and (2) will not create or incur or
suffer or permit to be created or incurred or to exist any mortgage, lien,
charge or encumbrance on the Project or any part thereof.

 

(b)                                 The
Issuer shall not consolidate with or merge into any other corporation or
transfer its property substantially as an entirety, except as provided in the
Indenture.

 

SECTION 8.04              Redemption
of Bonds

 

(a)                                  The
Issuer will redeem any or all of the Bonds in accordance with the Indenture and
upon the occurrence of any event or contingency requiring the mandatory redemption
of Bonds, all in accordance with the applicable provisions of the Bonds and the
Indenture.

 

(b)                                 If
no Lease Default exists, the Issuer will exercise any right of optional redemption
with respect to the Bonds only upon the written request of the User.

 

ARTICLE 9

 

Covenants of the User

 

Until the
Indenture Indebtedness is paid in full:

 

21

 

(a)                                  The
User shall not do or permit anything to be done at the Project that will affect,
impair or contravene any policies of insurance that may be carried on the
Project.  The User will, in the use of
the Project and the public ways abutting the same comply with all lawful requirements,
the violation of which would have a material adverse effect on the Project, of
all governmental bodies; provided, however, the User may, at its own expense in
good faith contest the validity or applicability of any such requirement.

 

(b)                                 The
User shall permit the Issuer, the Trustee, the Credit Obligor and their duly
authorized agents at all reasonable times to enter upon, examine and inspect
the Project.

 

(c)                                  The
User will maintain proper books of record and account, in which full and
correct entries will be made, in accordance with generally accepted accounting
principles, of all its business and affairs. 
The User shall furnish to the Trustee with reasonable promptness such
financial information of the User as the Trustee shall reasonably request.

 

(d)                                 The
User will duly pay and discharge all taxes, assessments and other governmental
charges and liens lawfully imposed on the User and upon the properties of the
User, and the Project; provided, however, the User will not be required to pay
any taxes, assessments or other governmental charges so long as in good faith
it shall contest the validity thereof by appropriate legal proceedings, the
User has given notice of such contest to the Trustee, the User has established
reasonable reserves therefor, and no part of the Project shall, in the opinion
of the Trustee, be subject to loss or forfeiture.

 

(e)                                  The
User will maintain and preserve its existence (as a corporation or as another
form of entity as may be determined by the User) and will not voluntarily
dissolve without first discharging its obligations under this Lease Agreement
(except as permitted herein) and will comply with all valid laws, ordinances,
regulations and requirements applicable to it or to its property and the
Project.

 

(f)                                    The
User will not in any manner transfer or convey any substantial portion of its
property, assets and licenses without receipt of adequate consideration
therefor.

 

The User will
do, execute, acknowledge and deliver such further acts, conveyances, mortgages,
financing statements and assurances as the Issuer or the Trustee shall require
for accomplishing the purposes of the Financing Documents.  The User will cause this Lease Agreement, any
amendments to this Lease Agreement and other instruments of further assurance,
including financing statements and continuation statements, to be promptly
recorded, registered and filed, and at all times to be kept recorded,
registered and filed in such places as may be required by law fully to preserve
and protect the rights of the Issuer and the Trustee to all property comprising
the Project.

 

22

 

ARTICLE 10

 

Events of Default and Remedies

 

SECTION 10.01       Events of
Default

 

Any one or
more of the following shall constitute an event of default (a “Lease Default”)
under this Lease Agreement (whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

 

(1)                                  default in the
payment of any Basic Rental Payment when such Basic Rental Payment becomes due
and payable; or

 

(2)                                  default in the
performance, or breach, of any covenant or warranty of the User in this Lease
Agreement (other than a covenant or warranty, a default in the performance or
breach of which is elsewhere in this Section specifically described), and
the continuance of such default or breach for a period of 30 days after there
has been given, by registered or certified mail, to the User and the Credit
Obligor by the Issuer or by the Trustee a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a “notice of default” hereunder; or

 

(3)                                  The dissolution or
liquidation of the User or the filing by the User of a voluntary petition in
bankruptcy, or failure by the User promptly to lift any execution, garnishment
or attachment of such consequence as will impair its ability to carry on its
operations at the Project, or the User’s seeking of or consenting to or
acquiescing in the appointment of a receiver of all or substantially all its
property or of the Project, or the adjudication of the User as a bankrupt, or
any assignment by the User for the benefit of its creditors, or the entry by
the User into an agreement of composition with its creditors, or if a petition
or answer is filed by the User proposing the adjudication of the User as a
bankrupt or its reorganization, arrangement or debt readjustment under any
present or future federal bankruptcy code or any similar federal or state law
in any court, or if any such petition or answer is filed by any other person
and such petition or answer shall not be stayed or dismissed within 60 days;

 

(4)                                  The occurrence of an
event of default under any of the other Financing Documents and the expiration
of any applicable grace period; or

 

(5)                                  Receipt by the
Trustee of written notice from the Credit Obligor that an event of default has
occurred and is continuing under the Credit Documents or any other related
documents to which the User and the Credit Obligor are parties thereto.

 

SECTION 10.02       Remedies
on Default

 

Whenever any
such Lease Default shall have occurred and be continuing, the Issuer or the Trustee
may, with the consent of the Credit Obligor (if the Letter of Credit is in
effect

 

23

 

and the Credit
Obligor shall not have dishonored a draw thereunder and a Credit Obligor Insolvency
Date shall not have occurred), take any of the following remedial steps:

 

(1)                                  Declare all
installments of Basic Rental Payments for the remainder of the Lease Term to be
immediately due and payable, whereupon the same shall become immediately due
and payable;

 

(2)                                  Reenter the Project,
without terminating this Lease Agreement, and, upon ten days’ prior written
notice to the User and Credit Obligor, relet the Project or any part thereof
for the account of the User, for such term (including a term extending beyond
the Lease Term) and at such rentals and upon such other terms and conditions,
including the right to make alterations to the Project or any part thereof, as
the Issuer may, with the approval of the Trustee and Credit Obligor, deem advisable,
and such reentry and reletting of the Project shall not be construed as an
election to terminate this Lease Agreement nor relieve the User of its
obligations to pay Basic Rent and Additional Rent or to perform any of its
other obligations under this Lease Agreement, all of which shall survive such
reentry and reletting, and the User shall continue to pay Basic Rent and all Additional
Rent provided for in this Lease Agreement until the end of the Lease Term, less
the net proceeds, if any, of any reletting of the Project after deducting all
of the Issuer’s and Trustee’s expenses in connection with such reletting,
including, without limitation, all repossession costs, brokers’ commissions,
attorneys’ fees, alteration costs and expenses of preparation for reletting;

 

(3)                                  Terminate this Lease
Agreement, exclude the User from possession of the Project and, if the Issuer
or Trustee elects so to do, lease the same for the account of the Issuer,
holding the User liable for all rent due up to the date such lease is made for
the account of the Issuer; or

 

(4)                                  Take whatever legal
proceedings may appear necessary or desirable to collect the Rental Payments
then due, whether by declaration or otherwise, or to enforce any obligation or
covenant or agreement of the User under this Lease Agreement or by law.

 

SECTION 10.03       Availability
of Remedies

 

(a)                                  No
remedy herein conferred upon or reserved to the Issuer or the Trustee 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 remedy given under this Lease Agreement or now or hereafter existing at
law or in equity or by statute.

 

(b)                                 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 or power may be exercised from time to time and as
often as may be deemed expedient.

 

(c)                                  In
the event any agreement contained in this Lease Agreement should be breached by
either party and thereafter 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.

 

24

 

(d)                                 All
rights, remedies and powers provided by this Article may be exercised only
to the extent the exercise thereof does not violate any applicable provision of
law in the premises, and all the provisions of this Article are intended
to be subject to all applicable mandatory provisions of law which may be
controlling in the premises and to be limited to the extent necessary so that
they will not render this Lease Agreement invalid or unenforceable.

 

SECTION 10.04       Agreement
to Pay Attorneys’ Fees and Expenses

 

In the event
the User should default under any of the provisions of this Lease Agreement and
the Issuer or the Trustee (in its own name or in the name and on behalf of the
Issuer) should employ attorneys or incur other expenses for the collection of
Rental Payments or the enforcement of performance or observance of any
obligation or agreement on the part of the User herein contained, the User will
on demand therefor pay to the Issuer or the Trustee (as the case may be) the
reasonable fee of such attorneys and such other reasonable expenses so incurred.

 

ARTICLE 11

 

OPTIONS

 

SECTION 11.01       Options to
Terminate

 

The User shall
have, if it is not in default hereunder, the option to cancel or terminate the
term of this Lease Agreement at any time after full payment of the Indenture
Indebtedness and termination of the Letter of Credit by giving the Issuer
notice in writing of such termination and such termination shall forthwith
become effective.  This Lease Agreement
may not be terminated prior to payment in full of the Indenture Indebtedness
even if all amounts due hereunder have been paid in full.

 

SECTION 11.02       Option
to Renew

 

There shall be
no option to renew the term of this Lease Agreement.

 

SECTION 11.03       Option
to Purchase Prior to Payment of the Bonds

 

(a)                                  The
User, if not in default hereunder, shall have the option to purchase the
Project at any time prior to the full payment of the Indenture Indebtedness if
any of the following shall have occurred:

 

(i)                                     The Project or any
part thereof shall have been damaged or destroyed (A) to such extent that, in
the opinion of the User, it cannot be reasonably restored within a period of
four consecutive months substantially to the condition thereof immediately
preceding such damage or destruction, or (B) to such extent that, in the
opinion of the User, the User is thereby prevented from carrying on its normal
operations at the Project for a period of four consecutive months, or (C) to
such extent that the cost of restoration thereof would exceed by more than
$50,000 the Net Proceeds of insurance carried thereon pursuant to the requirements
of this Lease Agreement; or

 

25

 

(ii)                                  Title to the Project
or any part thereof or the leasehold estate of the User in the Project created
by this Lease Agreement or any part thereof shall have been taken under the
exercise of the power of eminent domain by any governmental authority or
person, firm or corporation acting under governmental authority, which taking
may result, in the opinion of the User, in the User being thereby prevented
from carrying on its normal operations at the Project for a period of four
consecutive months; or

 

(iii)                               As a result of any
changes in the Constitution of the State or the Constitution of the United
States of America or of legislative or administrative action (whether state or
Federal), or by final decree, judgment or order of any court or administrative
body (whether state or Federal) entered after the contest thereof by the User
in good faith, this Lease Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purpose of the
parties as expressed herein, or unreasonable burdens or excessive liabilities
shall have been imposed on the Issuer or the User, including without
limitation, the imposition of taxes of any kind on the Project or the income or
profits of the Issuer therefrom, or upon the interest of the User therein,
which taxes were not being imposed on the date of this Lease Agreement.

 

(b)                                 To
exercise such option, the User shall, within 30 days following the event authorizing
the exercise of such option, give written notice to the Issuer and to the
Trustee and shall specify therein the date of closing such purchase, which date
shall be not less than 30 days from the date such notice is mailed, and shall
make arrangements satisfactory to the Trustee for the giving of the required notice
for the redemption of the Bonds.  The
purchase price payable by the User in the event of its exercise of the option
granted in this Section shall be that amount required to pay in full all
Indenture Indebtedness and shall be paid to the Trustee for deposit in the Bond
Fund for application to the extraordinary redemption of the Bonds in accordance
with the terms of the Bonds and the Indenture.

 

(c)                                  Upon
the exercise of the option granted in this Section and the payment of the
option price, any Net Proceeds of insurance or condemnation award then on hand
or thereafter received shall be paid to the User.

 

SECTION 11.04       Option
to Purchase Project After Payment of the Indenture Indebtedness

 

(a)                                  The
User shall have the option to purchase the Project at any time following full
payment of the Indenture Indebtedness for a purchase price of ten dollars plus
all expenses of the Issuer incurred in connection therewith.  To exercise the option granted in this
Section, the User shall notify the Issuer of its intention so to exercise such
option prior to the proposed date of purchase and shall on the date of purchase
pay such purchase price to the Issuer. 
The User may not purchase the Project prior to payment in full of all
Indenture Indebtedness even if all amounts due hereunder shall have been paid
in full.

 

26

 

(b)                                 In
the event the option granted in this Section 11.04 shall not have been
exercised prior to the end of the Lease Term, then said option shall be
automatically exercised upon the end of the Lease Term.

 

SECTION 11.05       Option
to Purchase Portions of Project Site

 

(a)                                  The
User, if not in default hereunder, shall have the option to purchase any
Unimproved portion of the Project Site at any time and from time to time with
the prior written consent of the Trustee and for a purchase price equal to the
pro-rata cost of such portion of the Project Site to be so purchased, provided
that the User furnish the Issuer and the Trustee with the following:

 

(1)                                  A
notice in writing containing (i) an adequate legal description of that portion
of the Project Site with respect to which such option is to be exercised, which
portion may include rights granted in party walls, the right to “tie-into”
existing utilities, the right to connect and join any building, structure or
improvement with existing structures, facilities and improvements on the
Project Site, and the right of ingress or egress to and from the public highway
which shall not interfere with the use and occupancy of existing structures,
improvements and buildings, and (ii) a statement that the User intends to
exercise such option to purchase such portion of the Project Site on a date
stated.

 

(2)                                  A
certificate of an Independent Engineer or of an Independent Architect stating
that, in the opinion of the person signing such certificate, (i) the portion of
the Project Site with respect to which the option is exercised is not needed
for the operation of the then existing Project and (ii) the severance of such
portion of the Project Site and the location or construction thereon of
buildings, structures and improvements, if any, will not impair the usefulness
of the then existing Project or the means of ingress and egress to and from the
remaining portions of the Project or impair or deny highway access, rail access
or utility services to such remaining portions of the Project.

 

(3)                                  An
amount of money equal to the purchase price computed as provided in this
Section, which amount shall be paid to the Trustee and applied to the redemption
of the Bonds in accordance with the terms thereof.

 

(b)                                 Upon
receipt of the notice and certificate required in this Section to be
furnished by the User and the payment by the User to the Trustee of the
purchase price, the Issuer will promptly deliver to the User the documents
referred to in Section 11.06.

 

(c)                                  If
such option relates to portions of the Project Site on which transportation or
utility facilities are located, the Issuer shall retain an easement to use such
transportation or utility facilities to the extent necessary for the efficient
operation of the Project.

 

(d)                                 No
purchase effected under the provisions of this Section shall affect the
obligation of the User for the payment of Rental Payments and other payments in
the amounts and at the times provided in this Lease Agreement or the
performance of any other agreement, covenant or provision hereof, and there
shall be no abatement or adjustment in Rental Payments by reason of the release
of any such portion of the Project Site and the obligations of the User

 

27

 

shall continue in all respects
as provided in this Lease Agreement, excluding, however, any portion of the
Project Site so purchased.

 

SECTION 11.06       Conveyance
of Exercise of Option to Purchase

 

At the closing
of the purchase pursuant to the exercise of any option to purchase granted
herein, the Issuer shall upon receipt of the purchase price deliver to the User
documents conveying to the User the property with respect to which such option
was exercised, as such property then exists, subject to the following: (a) all
easements or other rights, if any, required to be reserved by the Issuer under
the terms and provisions of the option being exercised by the User; (b) those
liens and encumbrances, if any, to which title to said property was subject
when conveyed to the Issuer; (c) those liens and encumbrances created by the
User or to the creation or suffering of which the User consented; and (d) those
liens and encumbrances resulting from the failure of the User to perform or
observe any of the agreements on its part contained in this Lease Agreement.

 

ARTICLE 12

 

Internal
Revenue Code

 

SECTION 12.01       Covenants
Regarding Section 103 and Sections 141-150 of the Internal Revenue Code

 

(a)                                  The
Issuer and the User do each hereby covenant and agree for the benefit of the
Bondholders that neither the Issuer nor the User will take any action, omit to
take any action, permit any action to be taken or fail to require any action to
be taken, which would cause the interest on the Bonds to be or become
Taxable.  Without limiting the generality
of the foregoing, the User covenants and agrees that (a) the proceeds of the
Bonds shall not be used or applied in such manner as to cause any Bond to be or
become an “arbitrage bond” as that term is defined in Section 148 of the
Internal Revenue Code, (b) ninety-five percent (95 %) or more of the net
proceeds will be used for the acquisition, construction, reconstruction, or
improvement of land or property of a character subject to the allowance for
depreciation, within the meaning of Section 144(a) of the Internal Revenue
Code, (c) the proceeds will be used solely for the acquisition and construction
of the Project, which shall constitute facilities solely for the manufacturing,
including processing, of tangible personal property, or for issuance expenses,
or shall be rebated to the United States of America as provided in this Lease
Agreement and the Indenture, and no part of the proceeds will be used by the
User, directly or indirectly, for working capital or to finance inventory, or
to acquire any facility or asset which may not be financed, in whole or in
part, with the proceeds of obligations the interest on which is excludable from
gross income for federal income taxation, (d) the net proceeds shall not be
used for the acquisition, construction, reconstruction or improvement of any
property which would cause the average maturity of the Bonds to exceed one
hundred twenty percent (120%) of the average reasonably expected economic life
of the facilities financed with the net proceeds of the Bonds, within the
meaning of Section 147(b) of the Internal Revenue Code, (e) none of the
net proceeds shall be used to acquire (directly or indirectly) any land (or any
interest therein) to be used for farming purposes; (f) less than twenty-five
percent (25 %) of the net proceeds shall be used to acquire (directly or indirectly)
the Project Site or any other land (or any interest therein), (g) none of the
net proceeds shall be used to acquire

 

28

 

any property or any interest
therein (including, without limitation, buildings, structures, facilities,
improvements, equipment, machinery or other personal property) the first use of
which property was not pursuant to such acquisition with the proceeds, (h)
neither the Bonds nor any proceeds therefrom shall ever be federally
guaranteed, as such term is defined in Section 149(b) of the Internal Revenue
Code, except as expressly permitted by said Section 149(b), (i) neither
the User nor any related person shall ever have allocated to it and outstanding
tax-exempt facility related bonds (as such term is used in Section 144(a)
(10) of the Internal Revenue Code) in an aggregate principal amount exceeding
$40,000,000, (j) no party shall ever be allowed to use or otherwise occupy or
derive any benefit whatsoever from the Project, or any part thereof, if the
effect of the foregoing shall result in a test period beneficiary (as defined
in Section 144(a) (10) of the Internal Revenue Code) having allocated to
it and outstanding in excess of $40,000,000 in aggregate principal amount of
tax-exempt facility related bonds, (k) no more than two percent of the face
amount of the Bonds shall be used to pay issuance costs.

 

(b)                                 The
Issuer has elected and does hereby elect to have the provisions relating to the
$10,000,000 limit in Section 144(a)(4) of the Internal Revenue Code apply
to the Bonds.

 

(c)                                  The
User covenants and agrees that (i) the limitation set forth in Section 144(a)(4)(A)
of the Code will not be exceeded during the applicable six-year period with
respect to “facilities” described in Section 144(a)(4)(B) of the Code, and
(ii) during such six-year period it will not make, or permit to be made, “capital
expenditures” (as described in Section 144(a)(4) of the Code and
applicable regulations thereunder) in an aggregate amount that would exceed the
limitation set forth in said Section.

 

(d)                                 The
Issuer and the User will each cooperate to assure compliance with the
provisions of Section 12.03 of this Lease Agreement and Article XVII
of the Indenture.

 

SECTION 12.02       User’s
Obligation Upon Determination of Taxability

 

(a)                                  Upon
the occurrence of a Determination of Taxability, the Trustee shall notify the
User in writing that all Outstanding Bonds shall be subject to mandatory
redemption on the date specified by the Trustee in accordance with the
Indenture irrespective of whether a Lease Default shall have occurred and be
continuing.  Within seven days after the
receipt of such notice the User shall purchase the Project from the Issuer for
the price specified in subsection (b) of this Section, which purchase
price shall be paid to the Trustee.

 

(b)                                 The
price payable by the User for the Project in the event of a Determination of
Taxability shall be equal to the amount required to pay in full all Indenture
Indebtedness.  There shall be credited
against such payment otherwise required by this paragraph all amounts which
shall have been paid to the Trustee pursuant to the Letter of Credit with
respect to such payment of the Bonds then Outstanding.

 

(c)                                  Any
other options of the User to purchase the Project shall be superseded by its
mandatory obligation to purchase the Project pursuant to this section 12.02.

 

29

 

SECTION 12.03       Federal
Rebate Payments

 

The provisions
of Article XVII of the Indenture are incorporated herein by reference, and
the User shall comply with said provisions and shall perform and discharge all
obligations, duties and responsibilities imposed upon the User under said
Article, including without limitation the payment of all required rebates to
the United States of America.

 

ARTICLE 13

 

Provisions
of General Application

 

SECTION 13.01       Covenant
of Quiet Environment

 

So long as the
User performs and observes all the covenants and agreements on its part herein
contained, it shall peaceably and quietly have, hold and enjoy the Project
during the Lease Term subject to all the terms and provisions hereof.

 

SECTION 13.02       Investment
of Funds

 

The Issuer
shall cause any money held as a part of the Special Funds which may by the
terms of the Indenture be invested to be so invested or reinvested by the
Trustee solely at the request of, and solely as directed in writing by, the
User and as provided in the Indenture.

 

SECTION 13.03       Issuer’s
Liabilities Limited

 

(a)                                  (a)
The covenants and agreements contained in this Lease Agreement shall never
constitute or give rise to a personal or pecuniary liability or charge against
the general credit of the Issuer, and in the event of a breach of any such
covenant or agreement, no personal or pecuniary liability or charge payable
directly or indirectly from the general assets or revenues of the Issuer shall
arise therefrom.  Nothing contained in
this Section, however, shall relieve the Issuer from the observance and
performance of the covenants and agreements on its part contained herein.

 

(b)                                 (b)
No recourse under or upon any covenant or agreement of this Lease Agreement
shall be had against any past, present or future incorporator, officer or
member of the Board of Directors of the Issuer, or of any successor
corporation, either directly or through the Issuer, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Lease
Agreement is solely a corporate obligation, and that no personal liability
whatever shall attach to, or is or shall be incurred by, any incorporator,
officer or member of the Board of Directors of the Issuer or any successor
corporation, or any of them, under or by reason of the covenants or agreements
contained in this Lease Agreement.

 

SECTION 13.04       Prior
Agreements

 

Except for any
deed, bill of sale, or other instrument by which the Project, any part thereof,
or any interest therein has been transferred and conveyed by the User to the
Issuer, this Lease Agreement shall completely and fully supersede all prior
agreements, both written and

 

30

 

oral, between
the Issuer and the User relating to the acquisition of the Project Site, the
construction of the Improvements, the acquisition and installation of the
Equipment, the leasing of the Project and any options to purchase.  Neither the Issuer nor the User shall
hereafter have any rights under such prior agreements, except as otherwise
herein provided, but shall look solely to this Lease Agreement for definition
and determination of all of their respective rights, liabilities and responsibilities
relating to the Project.

 

SECTION 13.05       Execution
Counterparts

 

This Lease
Agreement 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 13.06       Binding
Effect.  Governing Law

 

This Lease
Agreement shall inure to the benefit of, and shall be binding upon, the Issuer,
the User and their respective successors and assigns.  This Lease Agreement shall be governed exclusively
by the applicable laws of the State.

 

SECTION 13.07       Enforceability

 

In the event
any provision of this Lease Agreement 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 13.08       Article and
Section Captions

 

The Article and
Section headings and captions contained herein are included for
convenience only and shall not be considered a part hereof or affect in any
manner the construction or interpretation hereof.

 

SECTION 13.09       Notices

 

(a)                                  Any
request, demand, authorization, direction, notice, consent, or other document
provided or permitted by this Lease Agreement to be made upon, given or
furnished to, or filed with, the Issuer, the User, the Trustee or the Credit
Obligor shall be sufficient for every purpose hereunder if in writing and
(except as otherwise provided in this Lease Agreement) either (i) delivered
personally to the party or, if such party is not an individual, to an officer,
or other legal representative of the party to whom the same is directed
(provided that any document delivered personally to the Trustee must be
delivered to a corporate trust officer at its Principal Office during normal
business hours) at the hand delivery address specified in Section 1.10 of
the Indenture or (ii) mailed by registered or certified mail, postage prepaid,
addressed as specified in Section 1.10 of the Indenture.  Any of such parties may change the address
for receiving any such notice or other document by giving notice of the change
to the other parties as provided in this Section.

 

(b)                                 Any
such notice or other document shall be deemed delivered when actually received
by the party to whom directed (or, if such parry is not an individual, to an
officer, or other legal representative of the parry) at the address specified
pursuant to this Section, or, if

 

31

 

sent by mail, three days after
such notice or document is deposited in the United States mail, proper postage
prepaid.  addressed as provided above.

 

SECTION 13.10       Amendment
of Indenture and this Lease Agreement

 

(a)                                  The
Issuer will not cause or permit the amendment of the Indenture or the execution
of any amendment or supplement to the Indenture without the prior written
consent of the User and the Credit Obligor. 
The Issuer and the User shall have no power to modify, alter, amend or
terminate this Lease Agreement without the prior written consent of the Credit
Obligor.  Prior to the payment in full of
the Indenture Indebtedness, the Issuer and the User shall have no power to
modify, alter, amend or terminate this Lease Agreement without the prior
written consent of the Trustee and then only as provided in the Indenture.

 

(b)                                 This
Lease Agreement may not be amended unless there has first been delivered to the
Trustee, the User and the Remarketing Agent an opinion of Bond Counsel that
such action will not, whether solely or in conjunction with any other fact or
circumstance, cause the interest on the Bonds to be or to become Taxable.

 

32

 

IN WITNESS WHEREOF, the Issuer and the User
have each caused this Lease Agreement to be executed, sealed and attested in
its name by officers thereof duly authorized thereunto, and the parties hereto
have caused this Lease Agreement to be dated as of March 1, 1999.

 

	
   

  	
  THE
  INDUSTRIAL DEVELOPMENT BOARD

  
	
   

  	
  OF THE CITY
  OF PIEDMONT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Illegible

  	
   

  
	
   

  	
   

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  S E A L

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  /s/
  Illegible

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOSTROM
  SEATING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  C. Mueller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  S E A L

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  /s/
  Illegible

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Secretary

  	
   

  	
   

  	
   

  
											

 

 

	
  STATE OF
  ALABAMA

  	
  )

  
	
  CALHOUN
  COUNTY

  	
  )

  

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that James Bennett, whose name as Chairman of The Industrial
Development Board of the City of Piedmont, a public corporation, is signed to
the foregoing Lease Agreement and who is known to me, acknowledged before me on
this day that, being informed of the contents of said Lease Agreement, he, as
such officer and with full authority, executed the same voluntarily for and as
the act of said municipal corporation.

 

Given under my
hand and seal this the 24th day of February, 1999.

 

 

	
   

  	
  /s/
  Illegible

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  NOTARIAL
  SEAL

  	
   

  
	
   

  	
   

  
	
  My
  commission expires: June 19, 2000

  	
   

  

 

 

	
  STATE OF
  ILLINOIS

  	
  )

  
	
  COOK COUNTY

  	
  )

  

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that Donald C. Mueller whose name as Treasurer of Bostrom Seating,
Inc., a Delaware corporation, is signed to the foregoing Lease Agreement, and
who is known to me, acknowledged before me on this day that, being informed of
the contents of said Lease Agreement, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said corporation.

 

Given under my
hand and seal this the 26th day of March, 1999.

 

 

	
   

  	
  /s/ Lynn M. Pass

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
  NOTARIAL
  SEAL

  	
   

  
	
   

  	
   

  
	
  My commission
  expires: August 19, 2000

  	
   

  
				

 

 

EXHIBIT A

TO

LEASE AGREEMENT

DATED AS OF MARCH 1, 1999

BETWEEN

THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PIEDMONT

AND

BOSTROM SEATING, INC.

 

Description
of Real Proper

 

A parcel of
land situated partially in the NE 1/4-SE 1/4 and the SE 1/4-NE 1/4, both in Section 4,
Twp 13 S, Rn 10 E, as recorded in the Office of the Judge of Probate, Calhoun
County, Alabama, and more particularly described as follows:

 

From the SE
corner of the SE 1/4-SE 1/4, Section 4, Twp 13 S, Rn 10 E thence N 00°-52’E
and along the East line of the said Section 4 a distance of 1471.0 feet
for the point of beginning of described parcel of land;

 

Thence N
79°-02’W and along the North side of a County Road, no dedicated right-of way
width, a distance of 1340.20 feet, thence N 00°-52 ‘E a distance of 1892.40
feet, thence N 89°-14’E a distance of 1320.0 feet to the East line of the said
SE 1/4-NE 1/4, thence S 00°-52’W and along the East line of said Section 4,
a distance of 2165.00 feet to the point of beginning, all being situated in the
NE 1/4-SE 1/4 and the SE 1/4-NE 1/4, Section 4, Twp 13 S, Range 10 E,
Calhoun County, Alabama, and containing 61.45 acres.

 

 

EXHIBIT B

TO

LEASE AGREEMENT

DATED AS OF MARCH 1, 1999

BETWEEN

THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PIEDMONT

AND

BOSTROM SEATING, INC.

 

EQUIPMENT
LIST

 

Description of Personal Property and
Fixtures

 

(a)                                  Heating
and air conditioning and ventilating equipment, electrical equipment, plumbing
fixtures and furnishings, fire detection, suppression and extinguishment apparatus,
equipment and fixtures, and building materials and supplies to be incorporated
in the Project.

 

(b)                                 The
personal property and fixtures described on the following pages.Exhibit
10.33

 

 

 

REMARKETING AGENT AGREEMENT

among

BOSTROM SEATING, INC.

as User

THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PIEDMONT

as Issuer

And

MERCHANT CAPITAL, L.L.C.

as Remarketing Agent

Dated March 1, 1999

 

 

 

REMARKETING
AGENT AGREEMENT

This Remarketing Agent
Agreement (the “Remarketing Agreement”) is made and entered into by the
undersigned BOSTROM SEATING, INC., THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF PIEDMONT, and MERCHANT
CAPITAL, LLC., as of March 1, 1999. 
For and in consideration of the covenants herein made, and subject to
the conditions herein set forth, the parties hereto agree as follows:

Section 1.                                          Definitions.

All capitalized terms used
herein without definition shall have the meaning ascribed to them in the Trust
Indenture dated as of March 1, 1999 between The Industrial Development Board of
the City of Piedmont and NBD Bank, as Trustee, unless a different meaning
clearly appears from the context.

Section 2.                                          Appointment of
Remarketing Agent; Responsibilities of Remarketing Agent.

(a)           Subject to the terms and conditions
herein contained and pursuant to Section 15.01 of the Indenture, the Issuer has
appointed and the User hereby appoints Merchant Capital, L.L.C., and Merchant
Capital, L.L.C.  hereby accepts such
appointment, as exclusive remarketing agent (the “Remarketing Agent”) in
performing the respective functions of determining the Variable Rate and the
Fixed Rate from time to time and the remarketing of the Bonds from time to time
in the secondary market subsequent to the initial offering, issuance and sale
of the Bonds, all as more fully provided herein.

(b)           The Remarketing Agent, as the agent
of the Issuer, agrees to determine the Variable Rate for each interest period
during the Variable Rate Period, and the Fixed Rate for each Fixed Rate Period,
all pursuant to and in accordance with Sections 4.02 and 4.03 of the Indenture.

(c)           During the Variable Rate Period, the
Remarketing Agent, as agent for the User, shall, so long as no Event of Default
under the Indenture has occurred and is continuing, pursuant to the terms and
provisions of the Indenture and upon receipt of telegraphic or telephonic
notice from the Trustee (such notice to be promptly confirmed in writing)
specifying the principal amount of Bonds which have been tendered for purchase
pursuant to Section 4.04 of the Indenture and the Optional Tender Date, use its
best efforts to remarket all Bonds so tendered for purchase at a price of 100%
of the principal amount thereof, plus accrued interest, if any, to such Optional
Tender Date; provided that the Remarketing Agent shall not undertake to
remarket such Bonds if otherwise directed by the User.

(d)           Upon receipt of telegraphic or
telephonic notice from the Trustee (such notice to be promptly confirmed in writing)
specifying the principal amount of Bonds which have been tendered or deemed to
be tendered pursuant to Section 4.05 of the Indenture, and so long as no Event
of Default under the Indenture has occurred and is continuing, the Remarketing
Agent, as agent of the User, agrees to use its best efforts to remarket such
Bonds which are tendered or are deemed to be tendered at a price equal to 100%
of the principal amount thereof, plus accrued interest, if any, subject to the
following conditions:

 

1

 

(i)      satisfactory compensation and other terms
and conditions shall have been agreed upon by the User and the Remarketing
Agent;

(ii)     the Remarketing Agent shall have received
all documents, including opinions of counsel, required to be delivered to it
under the terms of the Indenture;

(iii)    the Remarketing Agent shall have received an
offering memorandum, or other appropriate disclosure document satisfactory in
form and substance to the Remarketing Agent, to be used in connection with its
efforts to remarket the Bonds; and

(iv)    the Remarketing Agent shall have received
such additional documents, certificates and legal opinions as it may reasonably
request.

Further details regarding
such remarketing shall be negotiated between the User and the Remarketing Agent
prior to the applicable Mandatory Tender Date.

(e)           To the extent that the Remarketing
Agent has not arranged for the secondary sale of Bonds tendered or deemed
tendered pursuant to the Indenture, at the written direction of the User and so
long as no Event of Default under the Indenture has occurred and is continuing,
the Remarketing Agent shall continue to use its best efforts to remarket such
Bonds, at a price equal to 100% of the principal amount thereof, plus accrued
interest, if any, to the date such Bonds are to be taken up and paid for
pursuant to such remarketing.

(f)            Notwithstanding any of the
foregoing, the Remarketing Agent shall not offer for sale or sell Bonds to the
Issuer or the User or any guarantor of the User.  The User may at any time, upon written direction
to the Remarketing Agent, direct the Remarketing Agent to cease or resume the
remarketing of some or all of the Bonds.

(g)           The Remarketing Agent shall make
appropriate settlement arrangements for the purchase of Bonds which have been
remarketed as hereinabove provided between the purchasers of such remarketed
Bonds and the Trustee, and shall direct said purchasers by appropriate
instructions to pay all moneys for the purchase price of such remarketed Bonds
to the Trustee at the time and as provided in the Indenture.

Section 3.                                          Exclusive
Agent; Resignation and Removal of Remarketing Agent.

The Issuer has agreed and
the User hereby agrees that, unless this Remarketing Agreement has been
previously terminated pursuant to the terms hereof, the Remarketing Agent shall
act as exclusive Remarketing Agent for the User in connection with the remarketing
of Bonds tendered or deemed tendered with respect to the Bonds on the terms and
conditions herein contained at all times.

Upon the notice and in the
manner provided in Section 15.01 of the Indenture the Remarketing Agent may at
any time resign or be removed and be discharged of the duties and obligations
created by this Remarketing Agreement or may be removed at any time.

 

2

 

Section 4.                                          Furnishing of
Offering Materials.

(a)           The User agrees to furnish the
Remarketing Agent at the User’s expense, with as many copies as the Remarketing
Agent may reasonably request of the Official Statement (the
“Official Statement”) in connection with the issuance of the Bonds and
any subsequent remarketing of the same as herein provided, and shall, at the
User’s expense, amend or supplement the Official Statement (and/or the
documents incorporated by reference therein), so that at all times the Official
Statement will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.  In addition, the User will, at its own
expense, take all steps reasonably requested by the Remarketing Agent which the
Remarketing Agent or its counsel may consider necessary or desirable (i) to
register the sale of the Bonds by the Remarketing Agent under any federal or
state securities law or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended, or (ii) to enable the Remarketing Agent to establish a “due
diligence” defense to any action commenced against the Remarketing Agent in
respect of the Official Statement and any supplement or amendment thereto.

(b)           In the event the Remarketing Agent is
asked to remarket the Bonds in any situation which requires compliance with
Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the “Rule”),
including without limitation one of the following circumstances:

(i)      where the Bonds are to be converted from a
Fixed Rate Period of nine months or less to a Fixed Rate Period of more than
nine months; or

(ii)     where the authorized denomination of the Bonds
will be reduced from $100,000 or more to less than $100,000; or

(iii)    where the authorized denominations of the
Bonds are currently less than $100,000 (whether or not the remarketing involves
a conversion to a different interest period and regardless of the length
thereof),

(1)           the Issuer will provide such
Remarketing Agent, prior to the date such Remarketing Agent bids for, offers or
sells any Bonds, an official statement the Issuer deems final as of its date (exclusive
of pricing and other sales information);

(2)           if a preliminary official statement
or other disclosure document is prepared, the Issuer will provide such
Remarketing Agent with such number of copies thereof as such Remarketing Agent
may need to supply at least one copy thereof to each potential customer who
requests it; and

(3)           the Issuer shall cooperate with such
Remarketing Agent and the User to enable the User to provide such Remarketing
Agent, within 7 Business Days after the interest rate is determined or by the
time “money confirmations” are to be sent to customers, whichever is earlier,
with a number of copies of the final official statement or disclosure document
adequate to supply at least one copy of such final official statement or
disclosure document to any customer or any potential customer for a period
commencing on the date such final official 

 

3

 

statement
or disclosure document is available and extending for the underwriting period
as defined in the Rule (the “Underwriting Period”) and, thereafter, for
as long as may be required by the Rule.  During
the Underwriting Period, if requested by such Remarketing Agent or the User,
the Issuer agrees to cooperate with such Remarketing Agent and the User in
updating, by written supplement or amendment or otherwise, the final official
statement or disclosure document.

Section 5.                                          Representations,
Warranties, Covenants and Agreements of the Remarketing Agent.

The Remarketing Agent, by
its acceptance hereof, represents, warrants, covenants and agrees with the
Issuer and the User as follows:

(a)           The Remarketing Agent is a
corporation authorized by law to perform all the duties imposed upon it as Remarketing
Agent by the Indenture and this Remarketing Agreement;

(b)           The Remarketing Agent has full power
and authority to take all actions required or permitted to be taken by the
Remarketing Agent by or under, and to perform and observe the covenants and
agreements on its part contained in, the Indenture and this Remarketing
Agreement;

(c)           The Remarketing Agent will keep such
books and records with respect to its duties as Remarketing Agent as shall be
consistent with prudent industry practice and to make such books and records
available for inspection by the Trustee, the Issuer, the User and the Credit
Obligor at all reasonable times; and

(d)           The Remarketing Agent hereby
designates its principal office as the address
specified in Section 14(a) hereof.

Section 6.                                          Representations,
Warranties, Covenants and Agreements of the User.

The User, by its acceptance
hereof, represents, warrants, covenants and agrees with the Issuer and the
Remarketing Agent as follows:

(a)           The User has full power and authority
to take all actions required or permitted to be taken by the User by or under,
and to perform and observe the covenants and agreements on its part contained
in, this Remarketing Agreement, the Lease Agreement, the Guaranty Agreement
between the User and the Trustee respecting the Bonds (the “Guaranty”),
the Credit Agreement and any other instrument or agreement relating thereto to
which the User is a party;

(b)           The User has, on or before the date
hereof, duly taken all action necessary to be taken by it prior to such date
for:  (i) the execution, delivery and
performance of this Remarketing Agreement, the Lease Agreement, the Guaranty,
the Credit Agreement and any other instrument or agreement to which the User is
a party and which has been or will be executed in connection with the
transactions contemplated by the foregoing 

 

4

 

documents
and (ii) the carrying out, giving effect to, consummation and performance of
the transactions and obligations contemplated by the foregoing agreements and
by the Official Statement;

(c)           This Remarketing Agreement, the Lease
Agreement, the Guaranty, the Credit Agreement and any other instrument or
agreement to which the User is a party and which has been or will be executed
in connection with the consummation of the initial offering and sale of the
Bonds, when executed and delivered by the parties hereto and thereto,
constitute or will constitute valid and binding obligations of the User,
enforceable against the User in accordance with their respective terms, except
as the enforcement (but not the validity) thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws, judicial decisions or
principles of equity relating to or affecting the enforcement of creditors’
rights or contractual obligations generally;

(d)           The execution and delivery of this
Remarketing Agreement, the Lease Agreement, the Guaranty, the Credit Agreement
and any other instrument or agreement to which the User is a party and which
has been or will be executed in connection with the consummation of the initial
offering and sale of the Bonds, the compliance with the terms, conditions or
provisions hereof and thereof, and the consummation of the transactions herein
and therein contemplated do not upon the date of execution and delivery thereof
and will not violate any law or any regulation, order, writ, injunction or
decree of any court or governmental instrumentality applicable to the User, or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, any mortgage, indenture, agreement or instrument to
which the User is a party or by which it or any of its properties is bound;

(e)           The User will cooperate with the
Remarketing Agent in the qualification of the Bonds for offering and sale and
the determination of the eligibility of the Bonds for investment under the laws
of such jurisdictions as the Remarketing Agent shall designate and will use its
best efforts to continue any such qualification in
effect so long as required for the offer and sale of the Bonds by the Remarketing
Agent pursuant to this Remarketing Agreement, provided that the User shall not
be required to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject;

(f)            The User has no knowledge or reason
to believe that any information contained in the Official Statement heretofore
furnished to the Remarketing Agent contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, or that any supplement or amendment to the Official
Statement, as of the date of such supplement or amendment, will contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading; and

(g)           The User shall provide written notice
to the Remarketing Agent prior to the execution of any amendment or supplement
to the Lease Agreement, the Guaranty, or the Credit Agreement.

 

5

 

Section 7.                                          Conditions to
Remarketing Agent’s Obligations.

The obligations of the
Remarketing Agent under this Remarketing Agreement have been undertaken in
reliance on, and shall be subject to, the due performance by the User of its
obligations and agreements to be performed hereunder and to the accuracy of and
compliance with the respective representations, warranties, covenants and
agreements of the User contained herein (including, without limitation, those
set forth in Sections 2(d) and 4) in each case on and as of the date of delivery
of this Remarketing Agreement and on and as of each date on which Bonds are to
be offered and sold pursuant to this Remarketing Agreement.  The obligations of the Remarketing Agent
hereunder with respect to each date on which Bonds are to be offered and sold
pursuant to this Remarketing Agreement are also subject, in the discretion of
the Remarketing Agent, to the following further conditions:

(a)           The Indenture, the Lease Agreement,
the Guaranty, the Credit Agreement and the Letter of Credit shall be in full
force and effect and shall not have been amended, modified or supplemented in
any way which would materially and adversely affect the Bonds and there shall
be in full force and effect, to the extent applicable, such additional
resolutions, agreements, certificates (including such certificates as may be
required by regulations of the Internal Revenue Service in order to establish
the tax-exempt character of interest on the Bonds) and opinions as shall be
necessary to effect the transactions contemplated by this Remarketing
Agreement, which resolutions, agreements, certificates and opinions, at the
request of the Remarketing Agent, shall be satisfactory in form and substance
to the Remarketing Agent and to its counsel;

(b)           There shall have been no adverse
change, in the opinion of the Remarketing Agent, in the condition, financial or
otherwise, of the User or the Credit Obligor material to the transactions contemplated
by the Official Statement or this Remarketing Agreement since the date of the
Official Statement and no Event of Default shall have occurred and be
continuing and no event shall have occurred and be continuing which, with the
passage of time or giving of notice or both, would constitute an Event of Default;
and

(c)           The Bonds, in the opinion of counsel
to the Remarketing Agent, shall be exempt from registration pursuant to the
Securities Act of 1933, as amended, and the Bonds shall not be Taxable, and, in
such counsel’s opinion, the Indenture shall be exempt from qualification as an
indenture pursuant to the Trust Indenture Act of 1939, as amended.

Section 8.                                          Term and
Termination of Remarketing Agreement.

This Remarketing Agreement
shall become effective upon execution by the Remarketing Agent, the Issuer, the
Trustee and the User and shall continue in full force and effect until the
Bonds are Fully Paid, subject to the right of the Remarketing Agent, the Issuer
or the User to terminate this Remarketing Agreement at any time in accordance
with the terms hereof.

 

6

 

Section 9.                                          Payment of Fees
and Expenses.

(a)           In consideration of the services to
be performed by the Remarketing Agent under this Remarketing Agreement, the
User agrees to pay to the Remarketing Agent such amounts as are required to reimburse
it for or pay the reasonable expenses (including, without limitation, the fees
and disbursements of its counsel, and the expenses and costs of the
preparation, printing, photocopying, execution and delivery of any supplement
to the Official Statement, if any) incurred, advances made and compensation for
services rendered pursuant to the Indenture or this Remarketing Agreement.

(b)           Additionally, the User agrees to pay
to Remarketing Agent a continuing fee for services rendered as remarketing
agent pursuant to the Indenture and this Agreement as follows:

(1)           So long as the Bonds bear interest at
the Variable Rate, the User shall pay for the services of the Remarketing Agent
hereunder an annual fee equal to one-eighth of one percent (.125%) per annum of
the Outstanding Bonds payable quarterly in arrears on June 1, 1999 and on the
first day of each March, June, September and December thereafter, it being understood
that upon termination of this Agreement, fees will be paid only for that number
of days during such period during which this Agreement is in effect.  Fees shall be paid upon receipt of an invoice
and shall be based on months of 30 days and years of 360 days.

(2)           In addition to the annual fee
described in paragraph (1), on each Conversion Date, the User shall pay the
Remarketing Agent a mutually acceptable fee on the day prior to such Conversion
Date, as compensation for the Remarketing Agent’s services in remarketing the
Bonds at the Fixed Rate.

(c)           With respect to the remarketing of
Bonds that bear interest at a Fixed Rate the Remarketing Agent shall be entitled
to reimbursement of expenses and compensation for services in amounts as shall
be agreed upon by the User and Remarketing Agent.

(d)           Notwithstanding anything herein or in
the Indenture to the contrary, the Remarketing Agent shall not have any
obligation hereunder or under the Indenture to remarket the Bonds or otherwise
perform any services with respect thereto if the User shall have failed to pay
when due any amounts due hereunder or, in the case of Bonds to bear interest at
a Fixed Rate, failure of the parties hereto to agree on the compensation referred
to in paragraph (c) above not less than thirty (30) days prior to the
remarketing date.

Section 10.                                   Indemnification.

(a)           The User agrees to indemnify and hold
harmless the Remarketing Agent and its officers, employees and each person, if
any, who controls the Remarketing Agent within the meaning of Section 15 of the
Securities Act of 1933 (collectively, the “Indemnified Persons” and
individually, an “Indemnified Person”) from and against any losses,
claims, damages or liabilities to which any Indemnified Person may become
subject insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Official Statement
or 

 

7

 

other information provided
by the User pursuant to Section 4 hereof, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, and will reimburse each Indemnified
Person for any legal or other expenses reasonably incurred by such Indemnified
Person in investigating, defending or preparing to defend any such action or
claim; provided, however, that the User shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Official Statement in reliance upon and in
conformity with written information furnished to the User by or on behalf of
any Indemnified Person specifically for inclusion therein.  The indemnity agreement in this paragraph
shall be in addition to any liability which the User may otherwise have to any
Indemnified Person.

(b)           Promptly after receipt by an
Indemnified Person under paragraph (a) of this Section of notice of the commencement
of any action, such Indemnified Person shall, if a claim in respect thereof is
to be made against the User under such paragraph, notify the User in writing of
the commencement thereof.  Failure of an
Indemnified Person to give such notice will reduce the liability of the User
under this Remarketing Agreement by the amount of damages attributable to the
failure to give such notice, but such failure shall not relieve the User from
any liability which it may have to such Indemnified Party otherwise than under
the indemnity agreement contained in this Section.  In case any such action shall be brought
against any Indemnified Person, and such Indemnified Person shall notify the
User of the commencement thereof, the User shall be entitled to participate in and,
to the extent that it wishes, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Person, and after notice from the
User to such Indemnified Person of its election so to assume the defense
thereof, the User shall not be liable to such Indemnified Person under such
paragraph for any legal or other expenses subsequently incurred by such
Indemnified Person in connection with the defense thereof other than reasonable
costs of any investigation; provided, however, that if the named parties to any
such action (including any impleaded parties) include both the Remarketing
Agent (or its officers or employees or any person so controlling the
Remarketing Agent) and the User, and the Remarketing Agent (or such officers or
employees or such person so controlling the Remarketing Agent) shall have
reasonably concluded that there may be one or more legal defenses available to
it or him which are different from or additional to those available to the User
(in which case the User shall not have the right to assume the defense on
behalf of the Remarketing Agent or such officers or employees or such person so
controlling the Remarketing Agent), the Remarketing Agent (or such officers or
employees or such person so controlling the Remarketing Agent) shall have the
right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of the Remarketing Agent
(or such officers or employees or such person so controlling the Remarketing
Agent); provided further, however, that the User shall not, in connection with
any one such action or separate but substantially similar or related actions
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys at any point in
time for the Remarketing Agent and its officers and employees and all persons
so controlling the Remarketing Agent.

(c)           The indemnity agreements contained in
this Section shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Remar-

 

8

 

keting Agent or the User and
shall survive the termination or cancellation of this Remarketing Agreement.

Section 11.                                   Nature of
Remarketing Agent’s Obligations.

Without limiting the
foregoing, the Remarketing Agent is hereby expressly authorized and directed to
honor its obligations under and in compliance with the terms of this Remarketing
Agreement without regard to, and without any duty on its part to inquire into,
the existence of any disputes or controversies between the Issuer, the User,
the Trustee, the Credit Obligor or any other person or the respective rights,
duties or liabilities of any of them, or whether any facts or occurrence
represented in any of the documents presented under this Remarketing Agreement
are true and correct.  Furthermore, the
Issuer and the User fully understand and agree that the Remarketing Agent’s
sole obligation to the Issuer and the User shall be limited to honoring its
obligations under and in compliance with the terms of this Remarketing
Agreement.

Section 12.                                   Dealing in
Bonds by Remarketing Agent.

The Remarketing Agent, in
its individual capacity, may in good faith buy, sell, own, hold and deal in any
of the Bonds, and may join in any action which any Bondholder may be entitled
to take with like effect as if it did not act in any capacity hereunder.  The Remarketing Agent, in its individual
capacity, either as principal or agent, may also engage in or be interested in
any financial or other transaction with the Issuer or the User as freely as if
it did not act in any capacity hereunder.

Section 13.                                   Intention of
Parties.

It is the express intention
of the parties hereto that neither the fixing of any interest rate on the Bonds
nor any purchase, sale or transfer of any Bonds, as herein provided, shall
constitute or be construed to be the extinguishment of any Bonds or the indebtedness
represented thereby or the reissuance of any Bonds.

Section 14.                                   Miscellaneous.

(a)           Except as otherwise specifically
provided in this Remarketing Agreement, all notices, demands and formal actions
under this Remarketing Agreement shall be in writing and mailed, telegraphed or
delivered to the addresses specified in the Indenture for the delivery of
notices, or in the case of the Remarketing Agent, to:

Merchant Capital, L.L.C.

250 Commerce Street

Montgomery, Alabama  36104

The parties hereto may, by
notice given under this Remarketing Agreement, designate other addresses to
which subsequent notices, requests, reports or other communications shall be
directed.

(b)           This Remarketing Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.  The terms “successors”
and “assigns” shall not include any purchaser of any of the Bonds merely
because of such purchase.

 

9

 

The issuer of a Letter of
Credit securing the Bonds shall be a beneficiary of the obligations of the
User, the Trustee and the Remarketing Agent hereunder, as though a signatory
hereto, and may enforce such obligations in its own name and behalf.

(c)           Section 10 of this Remarketing
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of the Remarketing Agent or the
User, (ii) delivery of and any payment for any Bonds hereunder, or (iii)
termination or cancellation of this Remarketing Agreement.

(d)           Section headings have been inserted
in this Remarketing Agreement as a matter of convenience of reference only, and
it is agreed that such section headings are not a part of this Remarketing
Agreement and will not be used in the interpretation of any provisions of this
Remarketing Agreement.

(e)           If any provision of this Remarketing
Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative
or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions because it conflicts with any provisions
of any constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question
invalid, inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions of this Remarketing Agreement invalid,
inoperative or unenforceable to any extent whatever.

(f)            This Remarketing Agreement may be
executed in several counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same document.

 

10

 

IN WITNESS WHEREOF, the
parties hereto have caused this Remarketing Agreement to be duly executed as of
the date and year first above written.

	
   

  	
  MERCHANT CAPITAL, L.L.C.,

  
	
   

  	
  as Remarketing Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Illegible

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  BOSTROM SEATING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Mueller

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  THE INDUSTRIAL DEVELOPMENT
  BOARD OF THE CITY OF PIEDMONT

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Illegible

  
	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
  Chairman

  

 

11

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